[House Report 104-874]
[From the U.S. Government Publishing Office]



                                                 Union Calendar No. 477
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-874
_______________________________________________________________________

 
  ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

                      ONE HUNDRED FOURTH CONGRESS

                       FIRST AND SECOND SESSIONS

                               1995-1996

                   (Pursuant to House Rule XI, 1(d))

                                     


                                     

January 2, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


                                                 Union Calendar No. 477
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-874
_______________________________________________________________________

                               ACTIVITIES

                                 of the

                     HOUSE COMMITTEE ON GOVERNMENT

                          REFORM AND OVERSIGHT

                      ONE HUNDRED FOURTH CONGRESS

                       FIRST AND SECOND SESSIONS

                               1995-1996

                   (Pursuant to House Rule XI, 1(d))

                                     


                                     

January 2, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


              COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

     WILLIAM F. CLINGER, Jr., 
      Pennsylvania, Chairman
CARDISS COLLINS, Illinois            BENJAMIN A. GILMAN, New York
HENRY A. WAXMAN, California          DAN BURTON, Indiana
TOM LANTOS, California               J. DENNIS HASTERT, Illinois \1\
ROBERT E. WISE, Jr., West Virginia   CONSTANCE A. MORELLA, Maryland
MAJOR R. OWENS, New York             CHRISTOPHER SHAYS, Connecticut
EDOLPHUS TOWNS, New York             STEVEN SCHIFF, New Mexico
JOHN M. SPRATT, Jr., South Carolina  ILEANA ROS-LEHTINEN, Florida
LOUISE McINTOSH SLAUGHTER, New York  WILLIAM H. ZELIFF, Jr., New 
PAUL E. KANJORSKI, Pennsylvania      Hampshire
GARY A. CONDIT, California           JOHN M. McHUGH, New York
COLLIN C. PETERSON, Minnesota        STEPHEN HORN, California
KAREN L. THURMAN, Florida            JOHN L. MICA, Florida
CAROLYN B. MALONEY, New York         PETER BLUTE, Massachusetts
THOMAS M. BARRETT, Wisconsin         THOMAS M. DAVIS, Virginia
GENE TAYLOR, Mississippi \5\         DAVID M. McINTOSH, Indiana
BARBARA-ROSE COLLINS, Michigan       JON D. FOX, Pennsylvania \7\
ELEANOR HOLMES NORTON, District of ColumbiaTATE, Washington
JAMES P. MORAN, Virginia             DICK CHRYSLER, Michigan
GENE GREEN, Texas                    GIL GUTKNECHT, Minnesota
CARRIE P. MEEK, Florida              MARK E. SOUDER, Indiana
FRANK MASCARA, Pennsylvania \3\      WILLIAM J. MARTINI, New Jersey
CHAKA FATTAH, Pennsylvania           JOE SCARBOROUGH, Florida
BILL K. BREWSTER, Oklahoma \2\       JOHN B. SHADEGG, Arizona
TIM HOLDEN, Pennsylvania \4\         MICHAEL PATRICK FLANAGAN, Illinois
ELIJAH CUMMINGS, Maryland \6\        CHARLES F. BASS, New Hampshire
            ------                   STEVEN C. LaTOURETTE, Ohio
BERNARD SANDERS, Vermont (Independent)ARSHALL ``MARK'' SANFORD, South 
                                     Carolina
                                     ROBERT L. EHRLICH, Jr., Maryland
                                     SCOTT L. KLUG, Wisconsin \8\
  James L. Clarke, Staff Director
  Kevin M. Sabo, General Counsel
     Judith McCoy, Chief Clerk
Bud Myers, Minority Staff Director

----------
\1\ Elected to Committee May 25, 1995 (H. Res. 157).
\2\ Elected to Committee June 13, 1995 (H. Res. 166).
\3\ Resigned from Committee July 11, 1995 (Communication to the 
Speaker).
\4\ Elected to Committee July 18, 1995 (H. Res. 186).
\5\ Resigned from Committee February 28, 1996 (Communication to the 
Speaker).
\6\ Elected to Committee April 25, 1996 (H. Res. 414).
\7\ Resigned from Committee June 25, 1996 (H. Res. 462).
\8\ Elected to Committee July 22, 1996 (H. Res. 485).



                         LETTER OF TRANSMITTAL

                              ----------                              

                                  House of Representatives,
                                   Washington, DC, January 2, 1997.
Hon. Robin H. Carle,
Clerk of the House of Representatives
Washington, DC.
    Dear Ms. Carle: I am pleased to submit the enclosed report 
entitled ``Activities of the House Committee on Government 
Reform and Oversight, 104th Congress, First and Second 
Sessions.''
    This report follows the committee's past practice of 
publishing its activities report annually as an interim report 
at the end of each first session of a Congress and as a 
separate final report at the end of a full Congress.
    The present report includes matters required by Rule XI, 
1(d) to be reported to the House not later than January 2, 
1997, on the activities of the committee and in carrying out 
its duty under Rule X to ``review and study, on a continuing 
basis, the application, administration, execution, and 
effectiveness'' of laws whose subject matter is within the 
jurisdiction of the committee.
    The present report describes fully the committee's 
jurisdiction and organization, and details its activities. Of 
particular note, in an extraordinarily productive Congress are 
committee efforts in Procurement Reform, the Line-Item Veto, 
the Federal Government Management: Examining Government 
Performance as We Near the Next Century investigative report, 
and the committee investigations of the White House Travel 
Office and FBI Background files matter.
            Sincerely yours,
                                 William F. Clinger, Jr., Chairman.




                            C O N T E N T S

                              ----------                              
                                                                   Page
Part One. General statement of organization and activities.......     1
  I. Jurisdiction, authority, powers, duties..........................1
 II. Historical background............................................9
III. Organization....................................................13
        A. Subcommittees.........................................    13
        B. Rules of the Committee on Government Reform and 
            Oversight............................................    14
 IV. Activities, 104th Congress......................................21
        A. Investigative Reports.................................    21
        B. Legislation...........................................    23
        C. Reorganization plans..................................    30
        D. Committee Prints......................................    30
        E. Committee Action on Reports of the Comptroller General    31
Part Two. Report of Committee Activities.........................    33

                 I. Matters of Interest, Full Committee

        A. General...............................................    33
              1. Oversight plans of the committees of the U.S. 
                House of Representatives.........................    33
              2. Views and Estimates for Fiscal Year 1997........    35
              3. Investigations..................................    36
                  a. The Financial Holdings and Activities of 
                      Secretary of Commerce Ronald H. Brown......    36
                  b. The White House Travel Office Investigation.    37
                  c. The Security of FBI Background Investigation 
                      Files......................................    49
                  d. Questions Concerning Campaign Contributions 
                      Made to or Solicited by Lippo Group, John 
                      Huang and Others...........................    52
                  e. Misuse of Political Influence within the 
                      Disciplinary Enforcement System at the 
                      Department of Defense......................    53
                  f. Health Care Task Force......................    54
                  g. Labor Department Taxpayer Funded ``Toll-
                      Free'' Hotline.............................    54
                  h. National Reconnaissance Office..............    54
                  i. Abuse of the American Express Government 
                      Travel Payment Program.....................    54
                  j. Taxpayer Funded Trip to Disney World........    55
              4. Legislation.....................................    56
                  a. H.R. 5, the Unfunded Mandates Reform Act of 
                      1995 (Public Law 104-4)....................    56
                  b. H.R. 2, Line Item Veto Act of 1995..........    57
                  c. H.R. 1038, a bill to Revise and Streamline 
                      the Acquisition Laws of the Federal 
                      Government.................................    58
                  d. H.R. 1670, the Federal Acquisition Reform 
                      Act of 1995................................    59
                  e. H.R. 830, the Paperwork Reduction Act of 
                      1995.......................................    60
                  f. S. 790, the Federal Reports Elimination and 
                      Sunset Act of 1995.........................    63
                  g. H.R. 3864, General Accounting Office 
                      Management Reform Act of 1996..............    65
                  h. H.R. 3136, title III, subtitle E, the 
                      ``Congressional Review of Agency 
                      Rulemaking,'' (Public Law No. 104-121, 
                      title II, subtitle E)......................    66
                  i. S. 1577, to Amend Title 44, United States 
                      Code, to authorize appropriations for the 
                      National Historical Publications and 
                      Records Commission.........................    68
                  j. H.R. 2326, Health Care Fraud and Abuse 
                      Prevention Act of 1995.....................    68
                  k. H.R. 3078, Federal Agency Anti-Lobbying Act.    69
                  l. ``Proceedings Against John M. Quinn, David 
                      Watkins, and Matthew Moore (Pursuant to 
                      Title 2, United States Code, Sections 192 
                      and 194,'' House Report 104-598, May 29, 
                      1996.......................................    70
        B. Budget Process........................................    72
        C. Federal Procurement Policy--An Era of Reform..........    74
              1. Oversight of the Implementation of the Federal 
                Acquisition Streamlining Act of 1994 (FASA) 
                (Public Law 103-355).............................    75
              2. Review of the Federal Government's Acquisition 
                Strategy Regarding the Post Federal 
                Telecommunications System 2000 Program (Post-
                FTS2000).........................................    76
              3. Review of the Department of Defense's 
                Acquisition of the Defense Information Systems 
                Network (DISN)...................................    77
              4. Review of the General Services Administration's 
                (GSA) Management of the Multiple Award Schedule 
                (MAS) Program....................................    78
              5. Oversight of Reform of the Acquisition System of 
                the Federal Aviation Administration (FAA)........    79
        D. Government Performance and Results Act of 1993 (GPRA).    79

                           II. Investigations
             a. investigations resulting in formal reports

Committee on Government Reform and Oversight, Hon. William F. 
  Clinger, Jr., Chairman.........................................    81
      1. ``A Citizen's Guide on Using the Freedom of Information 
          Act and the Privacy Act of 1974 to Request Government 
          Records,'' House Report No. 104-156, June 22, 1995, 
          First Report by the Committee on Government Reform and 
          Oversight..............................................    81
      2. ``Creating a 21st Century Government,'' House Report No. 
          104-434, December 21, 1995, Second Report by the 
          Committee on Government Reform and Oversight, Together 
          with Additional Views..................................    81
      3. ``Laws Related to Federal Financial Management as 
          Amended Through December 31, 1995,'' House Report No. 
          104-745, August 2, 1996, Ninth Report by the Committee 
          on Government Reform and Oversight.....................    83
      4. ``Sampling and Statistical Adjustment in the Decennial 
          Census: Fundamental Flaws,'' House Report No. 104-821, 
          September 24, 1996, Fourteenth Report by the Committee 
          on Government Reform and Oversight, Together with 
          Additional and Dissenting Views........................    84
      5. ``Investigation of the White House Travel Office Firings 
          and Related Matters,'' House Report No. 104-849, 
          September 26, 1996, Fifteenth Report by the Committee 
          on Government Reform and Oversight, Together with 
          Minority and Additional Views..........................    86
      6. ``Federal Government Management: Examining Government 
          Performance As We Near the Next Century,'' House Report 
          No. 104-861, September 28, 1996, Eighteenth Report by 
          the Committee on Government Reform and Oversight, 
          Together with Additional and Minority Views............    90
      7. ``Investigation into the White House and Department of 
          Justice on Security of FBI Background Investigation 
          Files,'' [Interim Report], House Report No. 104-862, 
          September 28, 1996, Nineteenth Report by the Committee 
          on Government Reform and Oversight, Together with 
          Additional Views.......................................    92
Government Management, Information, and Technology Subcommittee, 
  Hon. Stephen Horn, Chairman....................................    97
      1. ``Making Government Work: Fulfilling the Mandate for 
          Change,'' House Report No. 104-435, December 21, 1995, 
          Third Report by the Committee on Government Reform and 
          Oversight, Together with Additional Views..............    97
      2. ``Year 2000 Computer Software Conversion: Summary of 
          Oversight Findings and Recommendations,'' House Report 
          No. 104-857, September 27, 1996, Sixteenth Report by 
          the Committee on Government Reform and Oversight.......   105
      3. ``Crude Oil Undervaluation: The Ineffective Response of 
          the Minerals Management Service,'' House Report No. 
          104-858, September 27, 1996, Seventeenth Report by the 
          Committee on Government Reform and Oversight...........   109
Human Resources and Intergovernmental Relations Subcommittee, 
  Hon. Christopher Shays, Chairman...............................   113
      1. ``The FDA Food Additive Review Process: Backlog and 
          Failure to Observe Statutory Deadline,'' House Report 
          No. 104-436, December 21, 1995, Fourth Report by the 
          Committee on Government Reform and Oversight, Together 
          with Additional Views..................................   113
      2. ``The Federal Takeover of the Chicago Housing 
          Authority--HUD Needs to Determine Long-Term 
          Implications,'' House Report No. 104-437, December 21, 
          1995, Fifth Report by the Committee on Government 
          Reform and Oversight, Together with Additional Views...   116
      3. ``Fraud and Abuse in Medicare and Medicaid: Stronger 
          Enforcement and Better Management Could Save 
          Billions,'' House Report No. 104-641, June 27, 1996, 
          Eighth Report by the Committee on Government Reform and 
          Oversight, Together with Additional Views..............   118
      4. ``Health Care Fraud: All Public and Private Payers Need 
          Federal Criminal Anti-Fraud Protections,'' House Report 
          No. 104-747, August 2, 1996, Eleventh Report by the 
          Committee on Government Reform and Oversight...........   120
      5. ``Protecting the Nation's Blood Supply From Infectious 
          Agents: The Need for New Standards to Meet New 
          Threats,'' House Report No. 104-746, August 2, 1996, 
          Tenth Report by the Committee on Government Reform and 
          Oversight, Together with Additional Views..............   121
National Security, International Affairs, and Criminal Justice 
  Subcommittee, Hon. William H. Zeliff, Jr., Chairman............   124
      1. ``National Drug Policy: A Review of the Status of the 
          Drug War,'' House Report No. 104-486, March 19, 1996, 
          Seventh Report by the Committee on Government Reform 
          and Oversight, Together with Additional Views..........   124
      2. ``A Two-Year Review of the White House Communications 
          Agency Reveals Major Mismanagement, Lack of 
          Accountability, and Significant Mission Creep,'' House 
          Report No. 104-748, August 2, 1996, Twelfth Report by 
          the Committee on Government Reform and Oversight, 
          Together with Dissenting Views.........................   131
      3. ``Investigation into the Activities of Federal Law 
          Enforcement Agencies Toward the Branch Davidians,'' 
          House Report No. 104-749, August 2, 1996, Thirteenth 
          Report by the Committee on Government Reform and 
          Oversight, prepared in conjunction with the Committee 
          on the Judiciary, Together with Additional and 
          Dissenting Views.......................................   135
Postal Service Subcommittee, Hon. John M. McHugh, Chairman.......   145
      1. ``Voices for Change,'' House Report No. 104-438, 
          December 21, 1995, Sixth Report by the Committee on 
          Government Reform and Oversight........................   145

                        b. other investigations

Civil Service Subcommittee.......................................   146
      1. Restructuring of the Office of Personnel Management.....   146
      2. Federal Workforce Restructuring Statistics..............   147
      3. Examining the Federal Retirement System.................   147
      4. Contracting Out.........................................   148
      5. Examination and review of the Federal Workforce 
          Restructuring Act of 1994..............................   150
      6. Review of the Ramspeck Act..............................   151
      7. Review of the Combined Federal Campaign.................   151
      8. Contracting Federal Investigations--Policy and Oversight   152
      9. Administration's AIDS Training Program..................   153
      10. Privatization of OPM Training Responsibilities.........   154
      11. Review of Civilian Health and Medical Program of the 
          Uniformed Services (CHAMPUS)...........................   155
      12. Review of Current Civil Service Reform Initiatives.....   156
      13. Continuation of Civil Service Reform Review: 
          Performance and Accountability.........................   156
      14. Review of Federal Employee Appeals Procedures..........   157
      15. Shutdowns of Federal Agencies Due to Lapses in 
          Appropriations.........................................   158
      16. Employee Benefits in the Context of Total Compensation.   159
      17. Medical Savings Accounts (MSA's) in the Federal 
          Employees Health Benefits Plan.........................   160
      18. Veterans' Preference...................................   161
      19. Soft Landings to Enhance Federal Downsizing?...........   163
      20. Workforce Reductions: RIFs v. Buyouts: A Cost-Benefit 
          Comparison.............................................   166
      21. Illegal Use of Buyouts.................................   169
      22. Civil Service Reform Proposals.........................   171
      23. Review of the Federal Employees Health Benefit (FEHB) 
          Program................................................   173
      24. Taxpayer Subsidy of Federal Unions.....................   176
      25. Review of Federal Firefighters Pay and Benefits........   177
      26. Drug Testing Policies in the White House...............   180
      27. Effects of Privatizing OPM Investigations..............   183
District of Columbia Subcommittee................................   184
      1. Closing of Pennsylvania Avenue..........................   184
      2. Traffic Disruptions.....................................   186
      3. District of Columbia Economic Recovery Act..............   187
      4. Public Law 104-8, District of Columbia Financial 
          Responsibility and Management Assistance Authority Act 
          of 1995................................................   187
Government Management, Information, and Technology Subcommittee..   189
      1. Capital Budgeting.......................................   189
      2. Integrity of Government Documents.......................   191
      3. Federal Role in Privatization...........................   193
      4. National Performance Review.............................   194
      5. Strengthening Departmental Management...................   196
      6. Consolidating Federal Programs and Organizations........   197
      7. Corporate Structures for Government Functions...........   199
      8. Streamlining Federal Field Structures...................   201
      9. Performance Measurement, Benchmarking, and Re-egineering   203
      10. Agency Initiatives to Implement the Government 
          Performance and Results Act of 1993....................   205
      11. The General Services Administration's (GSA) Security 
          Measures at Federal Office Buildings...................   207
      12. Controls Over Illegal Immigration--Along the Border and 
          Within the Interior....................................   208
      13. Budget and Financial Information--Annual Shareholders 
          Report: How Does the Citizen Know What is Going On?....   209
      14. The Inspector General Act of 1978......................   211
      15. Implementation of the Chief Financial Officers Act of 
          1990 and the Government Management Reform Act of 1994..   213
      16. Department of Defense's Financial Management Problems..   215
      17. Electronic Reporting Streamlining Act of 1995..........   217
      18. Use of Transportation by Senior Executive Branch 
          Officials in compliance with Federal Travel Guidelines.   218
      19. The Government's Response to the Northridge Earthquake.   220
      20. OMB 2000 Reforms: Where are they Heading?..............   221
      21. Using the Best Practices of Information Technology in 
          Government.............................................   223
      22. Oversight of IRS Financial Management..................   224
      23. Is January 1, 2000 the Date for Computer Disaster?.....   226
      24. Oversight of the General Accounting Office.............   228
      25. Oversight of the General Services Administration.......   229
      26. Federal Information Policy Oversight...................230230
      27. Oil Royalties..........................................   231
      28. Field Hearing on the U.S. Border Patrol's Operation 
          Gatekeeper.............................................   232
      29. Oversight of the Smithsonian Institution...............   234
Human Resources and Intergovernmental Relations Subcommittee.....   235
      1. Efforts to Reorganize and Improve Program Performance 
          and Efficiency at the U.S. Department of Housing and 
          Urban Development (HUD)................................   235
      2. Efforts to Improve Program Performance and Efficiency at 
          the U.S. Department of Health and Human Services (HHS).   235
      3. Efforts to Reorganize and Improve Program Performance 
          and Efficiency at the U.S. Department of Labor (DOL)...   236
      4. Efforts to Reorganize and Improve Program Performance 
          and Efficiency at the U.S. Department of Education 
          (DOED).................................................   237
      5. Efforts to Reorganize and Improve Program Performance 
          and Efficiency at the U.S. Department of Veteran 
          Affairs (VA)...........................................   238
      6. Examination of Programs and Operations of the 
          Corporation for National and Community Service.........   239
      7. Revelations of Medicaid Fraud and Scams.................   240
      8. Fraud and Abuse in Medicare and Medicaid................   242
      9. Lengthy FDA Delays in Reviewing Food Additive Petitions.   242
      10. Bringing Health and Support Services to Women, 
          Minorities and Adolescents--Growing Segments of the 
          AIDS Population........................................   243
      11. Debating the Defining Federalism--the Sharing of Power 
          between the Federal Government and the States..........   244
      12. Joint Hearing on the FDA Regulation of Medical Devices, 
          including Silicone Gel Breast Implants.................   245
      13. Federal Takeover of the Chicago Housing Authority......   246
      14. Management of Threats to the Nation's Blood Supply.....   247
      15. The Occupational Safety and Health Administration's 
          (OSHA) New Strategy for Changing the Way it Does 
          Business...............................................   248
      16. Management of U.S. Department of Housing and Urban 
          Development Funds in Public Housing Tenant Programs....   249
      17. Status of Major Computer System Development............   250
      18. Radioactive Contamination of 27 People, including 
          Researcher Dr. Maryann Ma, in June 1995 at the National 
          Institutes of Health (NIH).............................   251
      19. Unfunded Mandates in Medicaid..........................   251
      20. HUD Management of Tenant Initiative Programs...........   252
      21. The Status of Efforts to Identify Persian Gulf War 
          Syndrome...............................................   253
      22. Unfunded Mandates Reform Act of 1995: A One Year Review   256
      23. Job Training That Works/Common Factors in Effective Job 
          Training Programs......................................   257
      24. Preventing Teen Pregnancy: Coordinating Community 
          Efforts................................................   257
      25. Food Safety: Oversight of the Food and Drug 
          Administration's Center for Veterinary Medicine........   258
      26. Food Safety: Monitoring of Food Borne Illnesses by the 
          Centers for Disease Control, Food and Drug 
          Administration and U.S. Department of Agriculture......   259
      27. The Development of Successful Public Housing Resident 
          Management (Field Hearing).............................   260
      28. Department of Education Oversight: Gatekeeping.........   260
      29. Oversight of the Department of Labor's Efforts Against 
          Labor Racketeering.....................................   261
      30. Oversight of the Department of Education and the 
          National Institute of Mental Health: Current Approaches 
          to Attention Deficit/Hyperactivity Disorders...........   262
      31. Consumers and Health Informatics.......................   262
      32. The Management of HUD's Section 8 Multi-Family Housing 
          Portfolio..............................................   263
      33. Off-Label Drug Use and FDA Review of Supplemental Drug 
          Applications...........................................   264
      34. Investigation into Possible Misuse of ``New Age'' 
          Training Programs by Federal Departments and Agencies..   265
National Economic Growth, Natural Resources, and Regulatory 
  Affairs Subcommittee...........................................   266
      1. Grantee Lobbying........................................   266
      2. Investigation of Improper EPA Lobbying on Pending 
          Legislation............................................   267
      3. OSHA's Ergonomics Standards.............................   270
      4. Improper FDA Rulemaking.................................   271
      5. Regulatory Reform.......................................   273
      6. Privatization of Sallie Mae and Connie Lee..............   278
      7. Mismanagement of Grants by the Environmental Protection 
          Agency.................................................   279
      8. Investigation of the White House Database (WhoDB).......   280
      9. The Effects of a Minimum Wage Increase..................   281
      10. The Impact of Regulations on Employment................   283
      11. Travel Practices of Department of Transportation 
          Administrators.........................................   285
      12. Travel Practices of SEC Chairman Arthur Levitt.........   287
      13. Travel Practices of NTSB Chairman Jim Hall.............   288
      14. Cleaning Up the Superfund Program......................   288
      15. Havertown Superfund Site...............................   292
National Security, International Affairs, and Criminal Justice 
  Subcommittee...................................................   294
      1. Office of National Drug Control Policy..................   294
      2. Federal Law Enforcement Actions in Relation to the 
          Branch Davidian Compound in Waco, TX...................   318
      3. The Bureau of Census and its planning for the 2000 
          Census.................................................   327
      4. Counterterrorism Activities in the United States........   329
      5. Army Ranger Training Deaths of February 15, 1995........   331
      6. The Ballistic Missile Defense Program...................   332
      7. National Drug Control Strategy..........................   334
      8. Department of Defense Bulk Fuel: Appropriations v. Usage   346
      9. Oversight of the National Aeronautics and Space 
          Administration.........................................   348
      10. INS....................................................   350
Postal Service Subcommittee......................................   358
      1. General Oversight of the U.S. Postal Service: The 
          Postmaster General and the General Accounting Office...   358
      2. General Oversight of the U.S. Postal Service: The Postal 
          Rate Commission........................................   358
      3. General Oversight of the U.S. Postal Service: The Board 
          of Governors...........................................   359
      4. General Oversight of the U.S. Postal Service: Major 
          Mailing Customers......................................   360
      5. General Oversight of the U.S. Postal Service: Postal 
          Employee Unions and Organizations......................   360
      6. General Oversight of the U.S. Postal Service: Postal 
          Reliant Businesses and Competitors.....................   361
      7. General Oversight Hearing on the Postal Service: Return 
          of the Postmaster General..............................   361
      8. General Oversight of the U.S. Postal Service: Postal 
          Service Inspector General..............................   362
      9. Review of International Mail Market.....................   362
      10. General Oversight of the U.S. Postal Service: The Board 
          of Governors, the Postmaster General, the Postal Rate 
          Commission, the Chief Postal Inspector and the General 
          Accounting Office......................................   363
      11. Joint Hearing with the Senate Subcommittee on Post 
          Office and Civil Service, of the Committee on 
          Governmental Affairs on International Postal Reform....   365
      12. Postal Reform: H.R. 210, a bill to provide for the 
          Privatization of the United States Postal Service; H.R. 
          3717, the Postal Reform Act of 1996; H.R. 3690, the 
          Postal Service Core Business Act of 1996...............   366
      13. Field Hearing on Chicago Mail Service and Postal 
          Operations.............................................   368
      14. Qui Tam Provisions within the False Claims Act.........   369
      15. USPS Contract for 8,879 Cargo Minivans.................   370
      16. Review of Postal Service Bulk Business Mail Acceptance 
          Practices; Assessment of the Adequacy of the Postal 
          Service's Systems for Assessing, Collecting, and 
          Otherwise Protecting Revenue and/or Accountable Paper..   371
      17. Review of Selected Major Postal Service Procurements...   372
      18. Evaluation of USPS Oversight of National Change of 
          Address Program Licensees..............................   372
      19. Final-Offer Arbitration as an Alternative Means of 
          Resolving Contract Disputes Between Postal Management 
          and Labor Unions.......................................   373
      20. Review of the Quality and Quantity of Data Produced by 
          the Postal Service for the Rate Setting Process........   374
      21. Evaluation of the Management Practices, Working 
          Conditions, and Security at Postal facilities in 
          Southern California....................................   374
      22. Miscellaneous Investigative Issues.....................   375
      23. Review of the Postal Service Board of Governors........   376
      24. Review of the Status of USPS Initiatives to Improve 
          Employee Working Conditions and Organizational 
          Performance............................................   377
      25. Continued Oversight of Internal Audits of the Existing 
          Inspector General......................................   378
      26. Oversight of the Implementation of the new Office of 
          Inspector General for the Postal Service as provided in 
          Public Law 104-208.....................................   379
      27. Continued Oversight of Labor-Management Relations 
          within the Postal Service..............................   380
      28. Continuing Review of the Competitive Role of the U.S. 
          Postal Service.........................................   380
      29. Continuing Review of Universal Mail Service and 
          Ratemaking in Canada...................................   381
      30. Continuing Review of Mailing Costs for the Federal 
          Government.............................................   382
      31. Continuing Review of Growth in Postal Service 
          Employment.............................................   382
      32. Continuing Review of the Statutory Mail Box Restriction   383
      33. Express Mail Accounts and Insufficient Controls for 
          Revenue Protection.....................................   383
      34. Continuing Review of the role of the U.S. Postal 
          Service in the Electronic Information Age..............   384
      35. Review of Postal Inspection Service Investigations of 
          the Public Threat to the U.S. Mails in the Unabomber 
          Case...................................................   384

                            III. Legislation
                            a. new measures

Civil Service Subcommittee.......................................   385
      1. H.R. 3586, Veterans' Employment Opportunities Act of 
          1996...................................................   385
      2. H.R. 3481, Omnibus Civil Service Reform Act of 1996.....   385
      3. S. 868, Federal Employees Emergency Leave Transfer Act..   386
District of Columbia Subcommittee................................   387
      1. H.R. 1345, District of Columbia Financial Responsibility 
          and Management Assistance Act of 1995..................   387
      2. H.R. 2108, District of Columbia Convention Center and 
          Sports Arena Authorization Act of 1995.................   388
      3. H.R. 2661, District of Columbia Fiscal Protection Act of 
          1995...................................................   389
      4. H.R. 461, Closing of Lorton Correctional Complex........   390
      5. H.R. 1855, To amend Title 11, District of Columbia Code, 
          to restrict the authority of the Superior Court of the 
          District of Columbia over certain pending cases 
          involving child custody and visitation rights..........   391
      6. H.R. 3663, District of Columbia Water and Sewer 
          Authority Act of 1996..................................   391
      7. H.R. 3336, Bill granting the District of Columbia 
          temporary authority to waive reduction for early 
          retirement under the Civil Service Retirement System...   392
      8. H.R. 3389, District of Columbia Pension Liability 
          Funding Reform Act of 1996.............................   393
      9. H.R. 3664, District of Columbia Government Improvement 
          and Efficiency Act of 1996.............................   393
Government Management, Information, and Technology Subcommittee..   393
      1. H.R. 1271, Family Privacy Protection Act of 1995........   393
      2. H.R. 1756, The Department of Commerce Dismantling Act...   397
      3. H.R. 2234, Debt Collection Improvement Act of 1995......   399
      4. H.R. 1162, Lockbox Deficit Reduction Proposals..........   401
      5. H.R. 1698, Mandatory Electronic Funds Transfer Expansion 
          Act of 1995............................................   402
      6. H.R. 1907, The Federal-aid Facility Privatization Act of 
          1995...................................................   402
      7. H.R. 2521, the Statistical Consolidation Act of 1995....   403
      8. H.R. 3184, the Single Audit Act Amendments of 1996......   405
      9. H.R. 3869, the Electronic Reporting Streamlining Act of 
          1996...................................................   406
      10. H.R. 3189, to delay privatization of the Office of 
          Federal Investigations of the Office of Personnel 
          Management.............................................   407
      11. H.R. 1281, War Crimes Disclosure Act...................   408
      12. H.R. 3802, Electronic Freedom of Information Amendments 
          of 1996................................................   409
      13. H.R. 3452, the Presidential and Executive Office 
          Accountability Act.....................................   410
      14. H.R. 3872, the White House Inspector General Act of 
          1996...................................................   411
      15. H.R. 3637, the Travel Reform and Savings Act of 1996...   412
      16. S. 1130, Federal Financial Management Improvement Act 
          of 1996................................................   413
      17. Federal Budget Process Reform..........................   414
      18. Health Information Privacy Protection Act..............   418
Human Resources and Intergovernmental Relations Subcommittee.....   419
      1. H.R. 2086, the Local Empowerment and Flexibility Act of 
          1995...................................................   419
      2. H.R. 2326, the Health Care Fraud and Abuse Prevention 
          Act of 1995 and H.R. 1850, the Health Care Fraud and 
          Abuse Act of 1995......................................   420
National Economic Growth, Natural Resources, and Regulatory 
  Affairs Subcommittee...........................................   421
      1. H.R. 450, the Regulatory Transition Act of 1995.........   421
      2. H.R. 994, the Regulatory Sunset and Review Act of 1995..   423
      3. Grantee Lobbying Legislation............................   424
      4. Corrections Day.........................................   424
Postal Service Subcommittee......................................   424
      1. H.R. 1026, To designate the United States Post Office 
          building located at 201 East Pikes Peak Avenue in 
          Colorado Springs, Colorado, as the ``Winfield Scott 
          Stratton Post Office''.................................   424
      2. H.R. 2077, To designate the United States Post Office 
          building located at 33 College Avenue in Waterville, 
          Maine, as the ``George J. Mitchell Post Office 
          Building''.............................................   425
      3. H.R. 1826, To repeal the authorization of transitional 
          appropriations for the United States Postal Service, 
          and for other purposes.................................   425
      4. H.R. 210, A bill to provide for the privatization of the 
          United States Postal Service...........................   426
      5. H.R. 1963, The Postmark Prompt Payment Act of 1995......   426
      6. H.R. 1398, To designate the United States Post Office 
          located at 1203 Lemay Ferry Road, St. Louis, Missouri 
          as the ``Charles J. Coyle Post Office Building''.......   427
      7. H.R. 1606, To designate the United States Post Office 
          building located at 24 Corliss Street, Providence, 
          Rhode Island, as the ``Harry Kizirian Post Office 
          Building''.............................................   428
      8. H.R. 1880, To designate the United States Post Office 
          located at 102 South McLean, Lincoln, Illinois as the 
          ``Edward Madigan Post Office Building''................   428
      9. H.R. 2262, To designate the United States Post Office 
          located at 218 North Alston Street in Foley, Alabama as 
          the ``Holk Post Office Building''......................   429
      10. H.R. 2704, A bill to provide that the United States 
          Post Office building located on the 2600 block of East 
          75th Street in Chicago, Illinois shall be known as the 
          ``Charles A. Hayes Post Office Building''..............   429
      11. H.R. 855, to designate the United States Post Office 
          Building located at 153 East 110th Street, New York, 
          New York, as the ``Oscar Garcia Rivera Post Office 
          Building''.............................................   430
      12. H.R. 2700, a bill to designate the United States Post 
          Office Building located at 7980 FM 327, Elmendorf, 
          Texas, as the ``Amos F. Longoria Post Office Building''   430
      13. H.R. 3139, a bill to redesignate the United States Post 
          Office building located at 245 Centereach Mall on 
          Middle Country Road in Centereach, New York, as the 
          ``Rose Y. Caracappa United States Post Office 
          Building''.............................................   431
      14. H.R. 3768, a bill to designate a United States Post 
          Office to be located in Groton, Massachusetts, as the 
          ``Augusta `Gusty' Hornblower United States Post 
          Office''...............................................   431
      15. H.R. 3834, a bill to redesignate the Dunning Post 
          Office in Chicago, Illinois, as the ``Roger P. 
          McAuliffe Post Office''................................   432
      16. H.R. 3877, a bill to designate the United States Post 
          Office Building in Camden, Arkansas, as the ``Honorable 
          David H. Pryor Post Office Building''..................   432
      17. H.R. 3610, the Omnibus Appropriations Act of 1996......   433
      18. H.R. 3690, the Postal Service Core Business Act of 1996   433
      19. H.R. 3717, the Postal Reform Act of 1996...............   434

           b. review of laws within committee's jurisdiction

Full Committee...................................................   439
Civil Service Subcommittee.......................................   441
District of Columbia Subcommittee................................   449
Government Management, Information, and Technology Subcommittee..   450
Human Resources and Intergovernmental Relations Subcommittee.....   458
National Economic Growth, Natural Resources, and Regulatory 
  Affiars Subcommittee...........................................   459
National Security, International Affairs, and Criminal Justice 
  Subcommittee...................................................   461
Postal Service Subcommittee......................................   462

                      IV. Other Current Activities
                  a. general accounting office reports

Civil Service Subcommittee.......................................   465
District of Columbia Subcommittee................................   501
Government Management, Information, and Technology Subcommittee..   503
Human Resources and Intergovernmental Relations Subcommittee.....   541
National Economic Growth, Natural Resources, and Regulatory 
  Affairs Subcommittee...........................................   598
National Security, International Affairs, and Criminal Justice 
  Subcommittee...................................................   634
Postal Service Subcommittee......................................   752

                    b. other reports and statements

District of Columbia Subcommittee................................   759
Government Management, Information, and Technology Subcommittee..   760

                          c. committee prints

Standing committee...............................................   764
Postal Service Subcommittee......................................   764

         V. Prior Activities of Current or Continuing Interest

District of Columbia Subcommittee................................   767
Human Resources and Intergovernmental Relations Subcommittee.....   767
National Economic Growth, Natural Resources, and Regulatory 
  Affairs Subcommittee...........................................   768
National Security, International Affairs, and Criminal Justice 
  Subcommittee...................................................   769
Postal Service Subcommittee......................................   770


                                                 Union Calendar No. 477
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-874
_______________________________________________________________________

  ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

                                _______
                                

January 2, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                                 REPORT

  FINAL REPORT ON THE ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT 
  REFORM AND OVERSIGHT, 104TH CONGRESS, 1ST AND 2D SESSIONS, 1995 AND 
                                  1996

       PART ONE. GENERAL STATEMENT OF ORGANIZATION AND ACTIVITIES

             I. Jurisdiction, Authority, Powers, and Duties

    The Rules of the House of Representatives provide for 
election by the House, at the commencement of each Congress, of 
19 named standing committees, one of which is the Committee on 
Government Reform and Oversight.\1\ Pursuant to House 
Resolutions 11 and 12 (adopted January 5, 1995), and House 
Resolution 13 (adopted January 5, 1995), House Resolution 31 
(adopted January 9, 1995) the membership of the Committee on 
Government Reform and Oversight was set at 50, including one 
independent. Subsequently, the membership was increased to 51, 
pursuant to House Resolution 157 (adopted May 25, 1995), on 
June 13, 1995, membership increased to 52, pursuant to House 
Resolution 166 (adopted June 13, 1995), on July 12, 1995, 
membership was decreased to 51 pursuant to communication to 
Speaker, and on July 12, 1995, membership was set at 52, 
pursuant to House Resolution 186 (adopted July 12, 1995); on 
February 28, 1996, membership was decreased to 51, pursuant to 
communication to Speaker; on April 25, 1996, membership was 
increased to 52, pursuant to House Resolution 414 (adopted 
April 25, 1996); on June 25, 1996, membership was decreased to 
51, pursuant to communication to Speaker; and on July 22, 1996, 
membership was increased to 52, pursuant to House Resolution 
485 (adopted July 22, 1996).
---------------------------------------------------------------------------
    \1\ Rule X.
---------------------------------------------------------------------------
    Rule X sets forth the committee's jurisdiction, functions, 
and responsibilities as follows:

                                 RULE X

         Establishment and Jurisdiction of Standing Committees

                 the committees and their jurisdiction

    1. There shall be in the House the following standing 
committees, each of which shall have the jurisdiction and 
related functions assigned to it by this clause and clauses 2, 
3, and 4; and all bills, resolutions, and other matters 
relating to subjects within the jurisdiction of any standing 
committee as listed in this clause shall (in accordance with 
and subject to clause 5) be referred to such committees, as 
follows:
          * * * * * * *

            (g) Committee on Government Reform and Oversight

    (1) The Federal Civil Service, including intergovernmental 
personnel; the status of officers and employees of the United 
States, including their compensation, classification, and 
retirement.
    (2) Measures relating to the municipal affairs of the 
District of Columbia in general, other than appropriations.
    (3) Federal paperwork reduction.
    (4) Budget and accounting measures, other than 
appropriations.
    (5) Holidays and celebrations.
    (6) The overall economy and efficiency of Government 
operations and activities, including Federal procurement.
    (7) National archives.
    (8) Population and demography generally, including the 
Census.
    (9) Postal service generally, including the transportation 
of the mails.
    (10) Public information and records.
    (11) Relationship of the Federal Government to the States 
and municipalities generally.
    (12) Reorganizations in the executive branch of the 
Government.
    In addition to its legislative jurisdiction under the 
preceding provisions of this paragraph (and its oversight 
functions under clause 2(b) (1) and (2)), the committee shall 
have the function of performing the activities and conducting 
the studies which are provided for in clause 4(c).
          * * * * * * *

                   general oversight responsibilities

    2. (a) In order to assist the House in--
          (1) its analysis, appraisal, and evaluation of (A) 
        the application, administration, execution, and 
        effectiveness of the laws enacted by the Congress, or 
        (B) conditions and circumstances which may indicate the 
        necessity or desirability of enacting new or additional 
        legislation, and
          (2) its formulation, consideration, and enactment of 
        such modifications of or changes in those laws, and of 
        such additional legislation, as may be necessary or 
        appropriate,
the various standing committees shall have oversight 
responsibilities as provided in paragraph (b).
    (b)(1) Each standing committee (other than the Committee on 
Appropriations and the Committee on the Budget) shall review 
and study, on a continuing basis, the application, 
administration, execution, and effectiveness of those laws, or 
parts of laws, the subject matter of which is within the 
jurisdiction of that committee, and the organization and 
operation of the Federal agencies and entities having 
responsibilities in or for the administration and execution 
thereof, in order to determine whether such laws and the 
programs thereunder are being implemented and carried out in 
accordance with the intent of the Congress and whether such 
programs should be continued, curtailed, or eliminated. In 
addition, each such committee shall review and study any 
conditions or circumstances which may indicate the necessity or 
desirability of enacting new or additional legislation within 
the jurisdiction of that committee (whether or not any bill or 
resolution has been introduced with respect thereto) and shall 
on a continuing basis undertake future research and forecasting 
on matters within the jurisdiction of that committee. Each such 
committee having more than twenty members shall establish an 
oversight subcommittee, or require its subcommittees, if any, 
to conduct oversight in the area of their respective 
jurisdiction, to assist in carrying out its responsibilities 
under this subparagraph. The establishment of oversight 
subcommittees shall in no way limit the responsibility of the 
subcommittee with legislative jurisdiction from carrying out 
their oversight responsibilities.
    (2) The Committee on Government Reform and Oversight shall 
review and study, on a continuing basis, the operation of 
Government activities at all levels with a view to determining 
their economy and efficiency.
          * * * * * * *
    (c) Each standing committee of the House shall have the 
function of reviewing and studying on a continuing basis the 
impact or probable impact of tax policies affecting subjects 
within its jurisdiction as described in clauses 1 and 3.
          * * * * * * *

                   additional functions of committees

    4. * * *
    (c)(1) The Committee on Government Reform and Oversight 
shall have the general function of--
          (A) receiving and examining reports of the 
        Comptroller General of the United States and of 
        submitting such recommendations to the House as it 
        deems necessary or desirable in connection with the 
        subject matter of such reports;
          (B) evaluating the effects of laws enacted to 
        reorganize the legislative and executive branches of 
        the Government; and
          (C) studying intergovernmental relationships between 
        the United States and the States, and municipalities, 
        and between the United States and international 
        organizations of which the United States is a member.
    (2) In addition to its duties under subparagraph (1), the 
Committee on Government Reform and Oversight may at any time 
conduct investigations of any matter without regard to the 
provisions of clause 1, 2, or 3 (or this clause) conferring 
jurisdiction over such matter upon another standing committee. 
The committee's findings and recommendations in any such 
investigation shall be made available to the other standing 
committee or committees having jurisdiction over the matter 
involved (and included in the report of any such other 
committee when required by clause 2(1)(3) of Rule XI).
          * * * * * * *
    Rule XI provides authority for investigations and studies, 
as follows:

                                RULE XI

                   Rules of Procedure for Committees

                               in general

    1. * * *
    (b) Each committee is authorized at any time to consider 
such investigations and studies as it may consider necessary or 
appropriate in the exercise of its responsibilities under Rule 
X, and (subject to the adoption of expense resolutions as 
required by clause 5) to incur expenses (including travel 
expenses) in connection therewith.
          * * * * * * *
    (d) Each committee shall submit to the House, not later 
than January 2 of each odd-numbered year, a report on the 
activities of that committee under this rule and Rule X during 
the Congress ending at noon on January 3 of such year.
          * * * * * * *

                            committee rules

          * * * * * * *

Power to sit and act; subpoena power

    (m)(1) For the purpose of carrying out any of its functions 
and duties under this rule and Rule X (including any matters 
referred to it under clause 5 of Rule X), any committee, or any 
subcommittee thereof, is authorized (subject to subparagraph 
(2)(A) of this paragraph)--
          (A) to sit and act at such times and places within 
        the United States, whether the House is in session, has 
        recessed, or has adjourned, and to hold such hearings, 
        and
          (B) to require, by subpoena or otherwise, the 
        attendance and testimony of such witnesses and the 
        production of such books, records, correspondence, 
        memorandums, papers, and documents as it deems 
        necessary.
The chairman of the committee, or any member designated by such 
chairman, may administer oaths to any witness.
    (2)(A) A subpoena may be authorized and issued by a 
committee or subcommittee under subparagraph (1)(B) in the 
conduct of any investigation or series of investigations or 
activities, only when authorized by a majority of the members 
voting, a majority being present. The power to authorize and 
issue subpoenas under subparagraph (1)(B) may be delegated to 
the chairman of the committee pursuant to such rules and under 
such limitations as the committee may prescribe. Authorized 
subpoenas shall be signed by the chairman of the committee or 
by any member designated by the committee.
    (B) Compliance with any subpoena issued by a committee or 
subcommittee under subparagraph (1)(B) may be enforced only as 
authorized or directed by the House.

Use of committee funds for travel

    (n)(1) Funds authorized for a committee under clause 5 are 
for expenses incurred in the committee's activities; however, 
local currencies owned by the United States shall be made 
available to the committee and its employees engaged in 
carrying out their official duties outside the United States, 
its territories or possessions. No appropriated funds, 
including those authorized under clause 5, shall be expended 
for the purpose of defraying expenses of members of the 
committee or its employees in any country where local 
currencies are available for this purpose; and the following 
conditions shall apply with respect to travel outside the 
United States or its territories or possessions:
          (A) No Member or employee of the committee shall 
        receive or expend local currencies for subsistence in 
        any country for any day at a rate in excess of the 
        maximum per diem set forth in applicable Federal law, 
        or if the Member or employee is reimbursed for any 
        expenses for such day, then the lesser of the per diem 
        or the actual, unreimbursed expenses (other than for 
        transportation) incurred by the Member or employee 
        during that day.
          (B) Each Member or employee of the committee shall 
        make to the chairman of the committee an itemized 
        report showing the dates each country was visited, the 
        amount of per diem furnished, the cost of 
        transportation furnished, any funds expended for any 
        other official purpose and shall summarize in these 
        categories the total foreign currencies and/or 
        appropriated funds expended. All such individual 
        reports shall be filed no later than sixty days 
        following the completion of travel with the chairman of 
        the committee for use in complying with reporting 
        requirements in applicable Federal law and shall be 
        open for public inspection.
    (2) In carrying out the committee's activities outside of 
the United States in any country where local currencies are 
unavailable, a member or employee of the committee may not 
receive reimbursement for expenses (other than for 
transportation) in excess of the maximum per diem set forth in 
applicable Federal law, or if the member or employee is 
reimbursed for any expenses for such day, then the lesser of 
the per diem or the actual, unreimbursed expenses (other than 
for transportation) incurred, by the member or employee during 
any day.
    (3) A member or employee of a committee may not receive 
reimbursement for the cost of any transportation in connection 
with travel outside the United States unless the member or 
employee has actually paid for the transportation.
    (4) The restrictions respecting travel outside of the 
United States set forth in subparagraphs (2) and (3) shall also 
apply to travel outside of the United States by Members, 
officers, and employees of the House authorized under clause 8 
of rule I, clause 1(b) of this rule, or any other provision of 
these Rules of the House of Representatives.
    (5) No local currencies owned by the United States may be 
made available under this paragraph for the use outside of the 
United States for defraying the expenses of a member of any 
committee after--
          (A) the date of the general election of Members in 
        which the Member has not been elected to the succeeding 
        Congress; or
          (B) in the case of a Member who is not a candidate in 
        such general election, the earlier of the date of such 
        general election or the adjournment sine die of the 
        last regular session of the Congress.
The committee also exercises authority under a number of 
congressional mandates.\2\
---------------------------------------------------------------------------
    \2\ For legislation imposing duties specifically on the committee, 
see, for example, sec. 203(e)(6) of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 484(6)(e)), relating to 
negotiated disposal of Federal surplus property. It requires that, with 
limited exceptions, explanatory statements be sent ``to the appropriate 
committees of the Congress'' in advance of negotiated disposal under 
the act. It covers disposal of all real and personal property whose 
estimated fair market is over $15,000 in the case of personal property 
and over $100,000 in the case of real property. The current language 
stems from a 1988 amendment (Public Law 100-612), which retained the 
explanatory statement requirement but changed the dollar value 
thresholds, which theretofore had been $1,000 for both personal 
property and real property. The House and Senate Government Operations 
Committees are expressly identified as the appropriate panels in House 
Report 1763, 85th Congress, which accompanied the measure that 
contained the 1958 amendment. See also GSA's Federal Property 
Management Regulations at 41 CFR-47.304-12(d).
    [N. B. The further examples given in the original footnote text 
cover sections (section 414 of the 1969 Housing Act and section 304 of 
the Intergovernmental Cooperation Act) have been repealed. The 
reference to sections 191-194 of title 2, U.S.C., does not deem 
pertinent here.]
---------------------------------------------------------------------------

                           5 U.S.C. sec. 2954

            Information to committees of Congress on request

    An Executive agency, on request of the Committee on 
Government Operations of the House of Representatives or of any 
seven members thereof, or on request of the Committee on 
Government Operations of the Senate, or any five members 
thereof, shall submit any information requested of it relating 
to any matter within the jurisdiction of the committee.

                          18 U.S.C. sec. 1505

Obstruction of proceedings before departments, agencies, and committees

    Whoever, with intent to avoid, evade, prevent, or obstruct 
compliance, in whole or in part, with any civil investigation 
demand duly and properly made under the Antitrust Civil Process 
Act, willfully withholds, misrepresents, removes from any 
place, conceals, covers up, destroys, mutilates, alters, or by 
other means falsifies any documentary material, answers to 
written interrogatories, or oral testimony, which is the 
subject of such demand; or attempts to do so or solicits 
another to do so; or
    Whoever corruptly, or by threats or force, or by any 
threatening letter or communication influences, obstructs, or 
impedes or endeavors to influence, obstruct, or impede the due 
and proper administration of the law under which any pending 
proceeding is being had before any department or agency of the 
United States, or the due and proper exercise of the power of 
inquiry under which any inquiry or investigation is being had 
by either House, or any committee of either House or any joint 
committee of the Congress--
    Shall be fined not more than $5,000 or imprisoned not more 
than five years, or both.

                           31 U.S.C. sec. 712

                 Investigating the use of public money

    The Comptroller General shall--
          * * * * * * *
    (3) analyze expenditures of each executive agency the 
Comptroller General believes will help Congress decide whether 
public money has been used and expended economically and 
efficiently;
    (4) make an investigation and report ordered by either 
House of Congress or a committee of Congress having 
jurisdiction over revenue, appropriations, or expenditures; and
    (5) give a committee of Congress having jurisdiction over 
revenue, appropriations, or expenditures the help and 
information the committee requests.

                           31 U.S.C. sec. 719

                      Comptroller General reports

          * * * * * * *
    (e) The Comptroller General shall report on analyses 
carried out under section 712(3) of this title to the 
Committees on Governmental Affairs and Appropriations of the 
Senate, the Committee on Government Operations and 
Appropriations of the House, and the committees with 
jurisdiction over legislation related to the operation of each 
executive agency.\3\
---------------------------------------------------------------------------
    \3\ For other requirements which relate to General Accounting 
Office reports to Congress and which affect the committee, see secs. 
232 and 236 of the Legislative Reorganization Act of 1970 (Public Law 
91-510).
                       II. Historical Background

    The committee was initially named the ``Committee on 
Expenditures in the Executive Departments.'' Its antecedents 
are summarized in Cannon's Precedents of the House of 
Representatives, vol. VII, sec. 2041, p. 831 (1935), as 
follows:
          This committee was created, December 5, 1927, by the 
        consolidation of the eleven Committees on Expenditures 
        in the various Departments of the Government, the 
        earliest of which has been in existence since 1816. As 
        adopted in 1816, the rule did not include the 
        committees for the Departments of Interior, Justice, 
        Agriculture, Commerce, and Labor. The committees for 
        these Departments date, respectively, from 1860, 1874, 
        1889, 1905 and 1913.
    The resolution providing for the adoption of the rules of 
the 70th Congress discontinued the several committees on 
expenditures and transferred their functions to the newly 
created Committee on Expenditures in the Executive Departments:
          On March 17, 1928, the jurisdiction of the committee 
        was further enlarged by the adoption of a resolution, 
        reported from the Committee on Rules, including within 
        its jurisdiction the independent establishments and 
        commissions of the Government.\4\
---------------------------------------------------------------------------
    \4\ Examples of the wide-ranging scope of the committee's 
jurisdiction may be found in Cannon's Precedents, supra VII, secs. 
2042-2046, pp. 831-833 (1935).
---------------------------------------------------------------------------
    From 1928 until January 2, 1947, when the Legislative 
Reorganization Act of 1946 became effective, the committee's 
jurisdiction was set forth in Rule XI, 34, of the House Rules 
then in force (H. Doc. 810, 78th Cong., 2d Sess. (1945)), as 
follows:

                    powers and duties of committees

          * * * * * * *
    34. The examination of the account and expenditures of the 
several departments, independent establishments, and 
commissions of the Government, and the manner of keeping the 
same; the economy, justness, and correctness of such 
expenditures; their conformity with appropriation laws; the 
proper application of public moneys; the security of the 
Government against unjust and extravagant demands; 
retrenchment; and enforcement of the payment of moneys due the 
United States; the economy and accountability of public 
officers; the abolishment of useless offices, shall all be 
subjects within the jurisdiction of the Committee on 
Expenditures in the Executive Departments.
    The Legislative Reorganization Act of 1946, section 121(b), 
as adopted in paragraphs (a), (b), and (c) of Rule XI, 8, of 
later Rules of the House (XI, 9, the 93d Congress), provided:

                   committee on government operations

    (a) Budget and accounting measures, other than 
appropriations.
    (b) Reorganizations in the executive branch of Government.
    (c) Such committee shall have the duty of--
          (1) receiving and examining reports of the 
        Comptroller General of the United States and of 
        submitting such recommendations to the House as it 
        deems necessary or desirable in connection with the 
        subject matter of such reports;
          (2) studying the operation of Government activities 
        at all levels with a view to determining the economy 
        and efficiency;
          (3) evaluating the effects of laws enacted to 
        reorganize the legislative and executive branches of 
        the Government;
          (4) studying intergovernmental relationships between 
        the United States and the States and municipalities, 
        and between the United States and international 
        organizations of which the United States is a member.
    (d) For the purpose of performing such duties the 
committee, or any subcommittee thereof when authorized by the 
committee, is authorized to sit, hold hearings, and act at such 
times and places within the United States, whether or not the 
House is in session, is in recess, or has adjourned, to require 
by subpoena or otherwise the attendance of such witnesses and 
the production of such papers, documents, and books, and to 
take such testimony as it deems necessary. Subpoenas may be 
issued under the signature of the chairman of the committee or 
of any subcommittee, or by any member designated by any such 
chairman, and may be served by any person designated by any 
such chairman or member.\5\
---------------------------------------------------------------------------
    \5\ Paragraph (d) was adopted by the House Feb. 10, 1947.
---------------------------------------------------------------------------
    Rule X, 1(h), of later Rules of the House, effective 
January 3, 1975 (H. Res. 988, 93d Congress), added the 
additional jurisdiction of general revenue sharing (formerly 
within the jurisdiction of the Committee on Ways and Means), 
and the National Archives (formerly within the jurisdiction of 
the Committee on Post Office and Civil Service).
    Rule X, 1(j)(6), of later Rules of the House listed the 
additional jurisdiction of measures providing for off-budget 
treatment of Federal agencies or programs, which was added by 
sec. 225 of Public Law 99-177, the Balanced Budget and 
Emergency Deficit Control Act of 1985 (December 12, 1985).
    The 1946 act contained the following proviso:
          Provided: That unless otherwise provided herein, any 
        matter within the jurisdiction of a standing committee 
        prior to January 2, 1947, shall remain subject to the 
        jurisdiction of that committee or of the consolidated 
        committee succeeding to the jurisdiction of that 
        committee.
This proviso was omitted from the Rules of the House adopted 
January 3, 1954.\6\
---------------------------------------------------------------------------
    \6\ H. Res. 5, 83d Cong. (99 Cong. Rec. 15). Cf. rules in H. Doc. 
562, 82d Congress, 2d session p. 328 and in H. Doc. 739, 81st Congress, 
2d session, p. 326.
---------------------------------------------------------------------------
    Under the Constitution (Art. I, sec. 5, cl. 2), ``Each 
House may determine the Rules of its Proceedings.'' Omission of 
the proviso made no substantive change, since the scope of the 
committee's jurisdiction prior to January 2, 1947, was embraced 
within the committee's jurisdiction as stated in existing rules 
and precedents.
    The committee's membership, which was fixed at 21 when it 
was consolidated on December 5, 1927, was increased to 25 when 
the Legislative Reorganization Act of 1946 became effective on 
January 2, 1947. In 1951, the committee's membership was 
increased to 27.\7\ From 1953 until January 1963, the 
committee's membership remained at 30.\8\
---------------------------------------------------------------------------
    \7\ H. Res. 60, 83d Congress, 1st session (97 Cong. Rec. 194).
    \8\ H. Res. 98, 83d Cong. (99 Cong. Rec. 436); H. Res. 94, 84th 
Cong. (101 Cong. Rec. 484); H. Res. 89, 85th Cong. (103 Cong. Rec. 
412); H. Res. 120, 86th Cong. (105 Cong. Rec. 841); H. Res. 137, 87th 
Cong. (107 Cong. Rec. 1677).
---------------------------------------------------------------------------
    Pursuant to H. Res. 108, 88th Congress, adopted January 17, 
1963, the committee was enlarged to 31 members. In the 89th 
Congress the membership of the committee was increased to 34 
through passage of H. Res. 114, January 14, 1965. The committee 
membership in the 90th and 91st Congresses of 35 was first 
established by H. Res. 128, 90th Congress, approved January 16, 
1967. The committee membership in the 92d Congress of 39 was 
established by H. Res. 192, approved February 4, 1971. It was 
raised to 41 by H. Res. 158, adopted January 24, 1973. The 
committee membership of 42 was established by H. Res. 1238, 
adopted July 17, 1974. It was increased to 43 by H. Res. 76 and 
101, adopted January 20 and 28, 1975. Membership was maintained 
at 43 in the 95th Congress by H. Res. 117 and 118, adopted 
January 19, 1977. The committee membership was set at 39 in the 
96th Congress by H. Res. 62 and 63, adopted January 24, 1979. 
The committee membership was set at 40 in the 97th Congress by 
H. Res. 44 and 45, adopted January 28, 1981. The committee size 
was increased to 41 by the adoption of H. Res. 370 on February 
24, 1982. Pursuant to House Res. 26 and 27, adopted January 6, 
1983, the committee membership for the 98th Congress was set at 
39.
    In the 99th Congress, the membership of the committee was 
set at 39, pursuant to House Res. 34 and 35, adopted January 
30, 1985.
    In the 100th Congress, the membership of the committee was 
set at 39, pursuant to House Res. 45 and 54, adopted January 21 
and 22, 1987, respectively.
    The committee membership in the 101st Congress was 
established at 39 by H. Res. 29 and H. Res. 45, adopted January 
19 and 20, 1989. In the 102d Congress, the membership of the 
committee was set at 41, pursuant to H. Res. 43, 44, and 45, 
adopted January 24, 1991. The committee membership was set at 
42 in the 103d Congress by adoption of H. Res. 8 and 9 on 
January 5, 1993; H. Res. 34 on January 21, 1993; H. Res. 67 on 
February 4, 1993; and H. Res. 92 and 93 on February 18, 1993. 
The membership was increased to 44 by the adoption of H. Res. 
185 on May 26, 1993 and H. Res. 219 on July 21, 1993. Beginning 
September 28, 1949, the moneys appropriated to the committee 
were, by House resolution in each session of Congress, 
available for expenses incurred in conducting studies and 
investigations authorized under Rule XI, whether made within or 
without the United States.\9\ In the 103d Congress, these 
matters are covered in paragraph (b) of clause 1 of Rule XI, as 
set forth above and by clause 5 of Rule XI. The funds for the 
committee's studies and oversight function during the first 
session of the 103d Congress were provided by H. Res. 107 
adopted March 30, 1993 (H. Rept. 103-38).
---------------------------------------------------------------------------
    \9\ See items under (1) in footnote 3, of the final calendar of the 
committee for the 93d Congress (Dec. 31, 1974).
---------------------------------------------------------------------------
    The committee's name was changed to ``Committee on 
Government Operations'' by House resolution adopted July 3, 
1952.\10\ The Congressional Record indicates the reasons 
underlying that change in name were, in part, as follows: \11\
---------------------------------------------------------------------------
    \10\ H. Res. 647, 82d Cong. (98 Cong. Rec. 9217). The Senate had 
made a similar change of name on Mar. 3, 1952, after conference between 
the chairman of the House and Senate Committees on Expenditures in the 
Executive Departments to ensure both Houses would adopt the change in 
name. S. Res. 280, 82d Cong. (98 Cong. Rec. 1701-1702). See also S. 
Rept. No. 1231, 80th Congress, 2d Session, p. 3 (May 3, 1948).
    \11\ Letter of Feb. 19, 1952, from the chairman, Senate Committee 
on Expenditures in the Executive Departments, Senator McCellan to 
Senator Hayden (98 Cong. Rec. 1702).
---------------------------------------------------------------------------
          This committee is proposing the indicated change in 
        the present title, in view of the fact that it is 
        misleading and the committees' functions and duties are 
        generally misunderstood by the public.
          * * * * * * *
    In suggesting the proposed change the committee based its 
decision on what it considers to be the major or primary 
function of the committee under the prescribed duties assigned 
to it to study ``the operations of Government activities at all 
levels with a view to determining its economy and efficiency.'' 
It was the unanimous view of the members of the committee that 
the proposed new title would be more accurate in defining the 
purposes for which the committee was created and in clearly 
establishing the major purpose it serves.
    On January 4, 1995, the 104th Congress opened with a 
Republican majority for the first time in 40 years. The shift 
in power from Democrats to Republicans has resulted in a 
realignment of the legislative priorities and committee 
structure of the House of Representatives. Perhaps more than 
any other committee, the Government Reform and Oversight 
Committee embodies the changes taking place in the House of 
Representatives. The committee itself was created by 
consolidating three committees into one, resulting in budget 
and staff cuts of nearly 50 percent. The committees that were 
merged include the Committee on Government Operations, the 
Committee on the Post Office and Civil Service, and the 
Committee on the District of Columbia.
    In order to fulfill the Republican Contract with America, 
the committee held a record number of hearings and mark-ups, 
and members cast more votes during this 100 day period than in 
any of the previous committees' histories. Over the course of 
the first session, 295 bills and resolutions were referred to 
the committee and its subcommittees, and 180 hearings and mark-
ups were held. Five of these measures have been signed into 
law.
    In addition to its greatly expanded legislative 
jurisdiction, the Government Reform and Oversight Committee 
serves as the chief investigative committee of the House, with 
the authority to conduct governmentwide oversight. Because the 
committee only authorizes money for a small number of Federal 
agencies and programs, it is able to review government 
activities with an independent eye.
                           III. Organization

                         A. SUBCOMMITTEES \12\

    In the 104th Congress, significant steps were taken to 
reduce the number of committees, subcommittees, and the number 
of congressional staff. As a result, the Congress eliminated 
the District of Columbia Committee and the Post Office and 
Civil Service Committee. The jurisdiction of these committees 
were merged into the Government Operations Committee and its 
name was changed to the Committee on Government Reform and 
Oversight.
---------------------------------------------------------------------------
    \12\ The chairman and the ranking minority member of the committee 
are ex-officio members of all subcommittees on which they do not hold a 
regular assignment (committee Rule 9).
---------------------------------------------------------------------------
    In order to perform its functions and to carry out its 
duties as fully and as effectively as possible, the committee 
under the leadership of its chairman, Hon. William F. Clinger, 
Jr., of Pennsylvania, at the beginning of the 104th Congress, 
established seven standing subcommittees, which cover the 
entire field of executive expenditures and operations. The 
names, chairpersons, and members of these subcommittees are as 
follows:
          Civil Service Subcommittee, John Mica, Chairman; 
        members: Charles Bass, Ben Gilman, Dan Burton, Connie 
        Morella, James Moran, Bernard Sanders, and Tim Holden.
          District of Columbia Subcommittee, Tom Davis, 
        Chairman; members: Gil Gutknecht, John M. McHugh, Steve 
        LaTourette, Michael P. Flanagan, Eleanor Holmes Norton, 
        Barbara-Rose Collins, and Edolphus Towns.
          Government Management, Information, and Technology 
        Subcommittee, Stephen Horn, Chairman; members: Michael 
        P. Flanagan, Peter Blute, Tom Davis, Jon Fox, Randy 
        Tate, Joe Scarborough, Charles Bass, Carolyn Maloney, 
        Major Owens, John Spratt, Paul Kanjorski, Collin 
        Peterson, and Tim Holden.
          Human Resources and Intergovernmental Relations 
        Subcommittee, Christopher Shays, Chairman; members: 
        Mark Souder, Steven Schiff, Connie Morella, Tom Davis, 
        Dick Chrysler, Bill Martini, Joe Scarborough, Mark 
        Sanford, Edolphus Towns, Tom Lantos, Bernard Sanders, 
        Thomas Barrett, Gene Green, Chaka Fattah, and Henry 
        Waxman.
          National Economic Growth, Natural Resources, and 
        Regulatory Affairs Subcommittee, David McIntosh, 
        Chairman; members: Jon Fox, J. Dennis Hastert, John M. 
        McHugh, Randy Tate, Gil Gutknecht, Joe Scarborough, 
        John Shadegg, Bob Ehrlich, Collin Peterson, Henry 
        Waxman, John Spratt, Louise M. Slaughter, Paul 
        Kanjorski, Gary Condit, and Carrie Meek.
          National Security, International Affairs, and 
        Criminal Justice Subcommittee, William H. Zeliff, Jr., 
        Chairman; members: Bob Ehrlich, Steven Schiff, Illeana 
        Ros-Lehtinen, John Mica, Peter Blute, Mark Souder, John 
        Shadegg, Karen Thurman, Robert Wise, Gene Taylor, Tom 
        Lantos, Louise M. Slaughter, Gary Condit, Bill K. 
        Brewster, and Elijah Cummings.
          Postal Service Subcommittee, John M. McHugh, 
        Chairman; members: Mark Sanford, Ben Gilman, 
        Christopher Shays, David McIntosh, Bob Ehrlich, 
        Barbara-Rose Collins, Major Owens, Gene Green, and 
        Carrie Meek.

      B. RULES OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

    Rule XI, 1(a)(1) of the House of Representatives provides:
          The Rules of the House are the rules of its 
        committees and subcommittees so far as applicable, 
        except that a motion to recess from day to day, and a 
        motion to dispense with the first reading (in full) of 
        a bill or resolution, if printed copies are available, 
        are nondebatable motions of high privilege in 
        committees and subcommittees.
    Rule XI, 2(a) of the House of Representatives provides, in 
part:
          Each standing committee of the House shall adopt 
        written rules governing its procedures.
    In accordance with the foregoing, the Committee on 
Government Reform and Oversight, on January 10, 1995, adopted 
the rules of the committee. The rules read as follows:

                     Rule 1.--Application of Rules

    Except where the terms ``full committee'' and 
``subcommittee'' are specifically referred to, the following 
rules shall apply to the Committee on Government Reform and 
Oversight and its subcommittees as well as to the respective 
chairmen.
        [See House Rule XI, 1.]

                           Rule 2.--Meetings

    The regular meetings of the full committee shall be held on 
the second Tuesday of each month at 10:00 a.m., unless when 
Congress has adjourned. The chairman is authorized to dispense 
with a regular meeting or to change the date thereof, and to 
call and convene additional meetings, when circumstances 
warrant. A special meeting of the committee may be requested by 
members of the committee following the provisions of House Rule 
XI, 2(c)(2). Subcommittees shall meet at the call of the 
subcommittee chairmen. Every member of the committee or the 
appropriate subcommittee, unless prevented by unusual 
circumstances, shall be provided with a memorandum at least 
three calendar days before each meeting or hearing explaining 
(1) the purpose of the meeting or hearing; and (2) the names, 
titles, background and reasons for appearance of any witnesses. 
The ranking minority member shall be responsible for providing 
the same information on witnesses whom the minority may 
request.
        [See House Rule XI, 2(b).]

                            Rule 3.--Quorums

    A majority of the members of the committee shall form a 
quorum, except that two members shall constitute a quorum for 
taking testimony and receiving evidence, and one-third of the 
members shall form a quorum for taking any action other than 
the reporting of a measure or recommendation. If the chairman 
is not present at any meeting of the committee or subcommittee, 
the ranking member of the majority party on the committee or 
subcommittee who is present shall preside at that meeting.
        [See House Rule XI, 2(h).]

                       Rule 4.--Committee Reports

    Bills and resolutions approved by the committee shall be 
reported by the chairman following House Rule XI, 2(l).
    Every investigative report shall be approved by a majority 
vote of the committee at a meeting at which a quorum is 
present. Supplemental, minority, or additional views may be 
filed following House Rule XI, 2(l)(5). The time allowed for 
filing such views shall be three calendar days (excluding 
Saturdays, Sundays, and legal holidays) unless the committee 
agrees to a different time, but agreement on a shorter time 
shall require the concurrence of each member seeking to file 
such views. A proposed report shall not be considered in 
subcommittee or full committee unless the proposed report has 
been available to the members of such subcommittee or full 
committee for at least three calendar days (excluding 
Saturdays, Sundays, and legal holidays) before the 
consideration of such proposed report in subcommittee or full 
committee. If hearings have been held on the matter reported 
upon, every reasonable effort shall be made to have such 
hearings available to the members of the subcommittee or full 
committee before the consideration of the proposed report in 
such subcommittee or full committee.
    Only those reports approved by a majority vote of the 
committee may be ordered printed, unless otherwise required by 
the Rules of the House of Representatives.

                          Rule 5.--Proxy Votes

    In accordance with the Rules of the House of 
Representatives, members may not vote by proxy on any measure 
or matter before the committee or any subcommittee.
        [See House Rule XI, 2(f).]

                          Rule 6.--Roll Calls

    A roll call of the members may be had upon the request of 
any member upon approval of a one-fifth vote.
        [See House Rule XI, 2(e).]

                  Rule 7.--Record of Committee Actions

    The committee staff shall maintain in the committee offices 
a complete record of committee actions from the current 
Congress including a record of the rollcall votes taken at 
committee business meetings. The original records, or true 
copies thereof, as appropriate, shall be available for public 
inspection whenever the committee offices are open for public 
business. The staff shall assure that such original records are 
preserved with no unauthorized alteration, additions, or 
defacement.
        [See House Rule XI, 2(e).]

                   Rule 8.--Subcommittees; Referrals

    There shall be seven subcommittees with appropriate party 
ratios that shall have fixed jurisdictions. Bills, resolutions, 
and other matters shall be referred by the chairman to 
subcommittees within two weeks for consideration or 
investigation in accordance with their fixed jurisdictions. 
Where the subject matter of the referral involves the 
jurisdiction of more than one subcommittee or does not fall 
within any previously assigned jurisdiction, the chairman shall 
refer the matter as he may deem advisable. Bills, resolutions, 
and other matters referred to subcommittees may be reassigned 
by the chairman when, in his judgment, the subcommittee is not 
able to complete its work or cannot reach agreement therein. In 
a subcommittee having an even number of members, if there is a 
tie vote with all members voting on any measure, the measure 
shall be placed on the agenda for full committee consideration 
as if it had been ordered reported by the subcommittee without 
recommendation. This provision shall not preclude further 
action on the measure by the subcommittee.
        [See House Rule XI, 1(a)(2).]

                      Rule 9.--Ex Officio Members

    The chairman and the ranking minority member of the 
committee shall be ex officio members of all subcommittees. 
They are authorized to vote on subcommittee matters; but, 
unless they are regular members of the subcommittee, they shall 
not be counted in determining a subcommittee quorum other than 
a quorum for taking testimony.

                            Rule 10.--Staff

    Except as otherwise provided by House Rule XI, 5 and 6, the 
chairman of the full committee shall have the authority to hire 
and discharge employees of the professional and clerical staff 
of the full committee and of subcommittees.

                       Rule 11.--Staff Direction

    Except as otherwise provided by House Rule XI, 5 and 6, the 
staff of the committee shall be subject to the direction of the 
chairman of the full committee and shall perform such duties as 
he may assign.

                 Rule 12.--Hearing Dates and Witnesses

    The chairman of the full committee will announce the date, 
place, and subject matter of all hearings at least one week 
before the commencement of any hearings, unless he determines 
that there is good cause to begin such hearings sooner. So that 
the chairman of the full committee may coordinate the committee 
facilities and hearing plans, each subcommittee chairman shall 
notify him of any hearing plans at least two weeks before the 
date of commencement of hearings, including the date, place, 
subject matter, and the names of witnesses, willing and 
unwilling, who would be called to testify, including, to the 
extent he is advised thereof, witnesses whom the minority 
members may request. The minority members shall supply the 
names of witnesses they intend to call to the chairman of the 
full committee or subcommittee at the earliest possible date. 
Witnesses appearing before the committee shall, so far as 
practicable, submit written statements at least 24 hours before 
their appearance.
        [See House Rules XI, 2 (g)(3), (g)(4), (j), and (k).]

                        Rule 13.--Open Meetings

    Meetings for the transaction of business and hearings of 
the committee shall be open to the public or closed in 
accordance with Rule XI of the House of Representatives.
        [See House Rules XI, 2 (g) and (k).]

                       Rule 14.--Five-Minute Rule

    A committee member may question a witness only when 
recognized by the chairman for that purpose. In accordance with 
House Rule XI, 2(j)(2), each committee member may request up to 
five minutes to question a witness until each member who so 
desires has had such opportunity. Until all such requests have 
been satisfied, the chairman shall, so far as practicable, 
recognize alternately based on seniority of those majority and 
minority members present at the time the hearing was called to 
order and others based on their arrival at the hearing. After 
that, additional time may be extended at the direction of the 
chairman.

              Rule 15.--Investigative Hearings; Procedure

    Investigative hearings shall be conducted according to the 
procedures in House Rule XI, 2(k). All questions put to 
witnesses before the committee shall be relevant to the subject 
matter before the committee for consideration, and the chairman 
shall rule on the relevance of any questions put to the 
witness.

                     Rule 16.--Stenographic Record

    A stenographic record of all testimony shall be kept of 
public hearings and shall be made available on such conditions 
as the chairman may prescribe.

                  Rule 17.--TV, Radio, and Photographs

    An open meeting or hearing of the committee or a 
subcommittee may be covered, in whole or in part, by television 
broadcast, radio broadcast, and still photography, or by any of 
such methods of coverage, unless closed subject to the 
provisions of House Rule XI, 3.

                Rule 18.--Additional Duties of Chairman

    The chairman of the full committee shall:
          (a) Make available to other committees the findings 
        and recommendations resulting from the investigations 
        of the committee or its subcommittees as required by 
        House Rule X, 4(c)(2);
          (b) Direct such review and studies on the impact or 
        probable impact of tax policies affecting subjects 
        within the committee's jurisdiction as required by 
        House Rule X, 2(c);
          (c) Submit to the Committee on the Budget views and 
        estimates required by House Rule X, 4(g), and to file 
        reports with the House as required by the Congressional 
        Budget Act;
          (d) Authorize and issue subpoenas as provided in 
        House Rule XI, clause 2(m), in the conduct of any 
        investigation or activity or series of investigations 
        or activities within the jurisdiction of the committee; 
        and
          (e) Prepare, after consultation with subcommittee 
        chairmen and the minority, a budget for the committee 
        which shall include an adequate budget for the 
        subcommittees to discharge their responsibilities.
          (f) Make any necessary technical and conforming 
        changes to legislation reported by the committee upon 
        unanimous consent.

              Rule 19.--Special Affidavits and Depositions

    If the House provides the committee with authority to take 
affidavits and depositions, the following rules apply:
          (a) The Chairman, upon consultation with the ranking 
        minority member or the committee, may authorize the 
        taking of affidavits, and of depositions pursuant to 
        notice or subpoena. Such authorization may occur on a 
        case-by-case basis, or by instructions to take a series 
        of affidavits or depositions. Notices for the taking of 
        depositions shall specify a time and place for 
        examination. Affidavits and depositions shall be taken 
        under oath administered by a member or a person 
        otherwise authorized by law to administer oaths. 
        Consultation with the ranking minority member will 
        include three (3) business days written notice before 
        any deposition is taken, unless otherwise agreed to by 
        the ranking minority member or committee.
          (b) The committee shall not initiate procedures 
        leading to contempt proceedings in the event a witness 
        fails to appear at a deposition unless the deposition 
        notice was accompanied by a committee subpoena 
        authorized and issued by the chairman. Notwithstanding 
        committee Rule 18(d), the chairman shall not authorize 
        and issue a subpoena for a deposition without the 
        concurrence of the ranking minority member or the 
        committee.
          (c) Witnesses may be accompanied at a deposition by 
        counsel to advise them of their constitutional rights. 
        Absent special permission or instructions from the 
        chairman, no one may be present in depositions except 
        members, staff designated by the chairman or ranking 
        minority member, an official reporter, the witness and 
        any counsel; observers or counsel for other persons or 
        for the agencies under investigation may not attend.
          (d) A deposition will be conducted by members or 
        jointly by--
                  (1) No more than two staff members of the 
                committee, of whom--
                          (A) One will be designated by the 
                        chairman of the committee, and
                          (B) One will be designated by the 
                        ranking minority party member of the 
                        committee, unless such member elects 
                        not to designate a staff member.
                  (2) Any member designated by the chairman. 
                Other staff designated by the chairman or 
                ranking minority member may attend, but are not 
                permitted to pose questions to the witness.
          (e) Questions in the deposition will be propounded in 
        rounds. A round will include as much time as necessary 
        to ask all pending questions, but not more than one 
        hour. In each round, the member or staff member 
        designated by the chairman will ask questions first, 
        and the member or staff member designated by the 
        ranking minority member will ask questions second.
          (f) Objections by the witness as to the form of 
        questions shall be noted for the record. If a witness 
        objects to a question and refuses to answer, the 
        members or staff may proceed with the deposition, or 
        may obtain, at that time or at a subsequent time, a 
        ruling on the objection by telephone or otherwise from 
        the chairman or his designee. The committee shall not 
        initiate procedures leading to contempt for refusals to 
        answer questions at a deposition unless the witness 
        refuses to testify after his objection has been 
        overruled and after he has been ordered and directed to 
        answer by the chairman or his designee upon a good 
        faith attempt to consult with the ranking minority 
        member or her designee.
          (g) The committee staff shall insure that the 
        testimony is either transcribed or electronically 
        recorded, or both. If a witness' testimony is 
        transcribed, he shall be furnished with an opportunity 
        to review a copy. No later than five days thereafter, 
        the staff shall enter the changes, if any, requested by 
        the witness, with a statement of the witness' reasons 
        for the changes, and the witness shall be instructed to 
        sign the transcript. The individual administering the 
        oath, if other than a member, shall certify on the 
        transcript that the witness was duly sworn in his 
        presence, the transcriber shall certify that the 
        transcript is a true record of the testimony, and the 
        transcript shall be filed, together with any electronic 
        recording, with the clerk of the committee in 
        Washington, D.C. Affidavits and depositions shall be 
        deemed to have been taken in Washington, D.C. once 
        filed there with the clerk of the committee for the 
        committee's use. The ranking minority member will be 
        provided a copy of the transcripts of the deposition 
        once the procedures provided above have been completed.
          (h) Unless otherwise directed by the committee, all 
        depositions and affidavits received in the 
        investigation shall be considered nonpublic until 
        received by the committee. Once received by the 
        committee, use of such materials shall be governed by 
        the committee rules. All such material shall unless 
        otherwise directed by the committee, be available for 
        use by the members of the committee in open session.
          (i) A witness shall not be required to testify if 
        they have not been provided a copy of the House 
        Resolution and the amended committee Rules.
          (j) Committee Rule 19 expires on July 8, 1996.
                     IV. Activities, 104th Congress

                                SUMMARY

    1. In the 104th Congress, the committee approved and 
submitted to the House of Representatives 19 investigative 
reports. In addition, the committee issued 15 committee prints.
    2. In the 104th Congress, 436 bills and resolutions were 
referred to the committee and studied. Of these, the committee 
reported 42. In addition, 14 Memorials, 4 Petitions, and 8 
Presidential messages were referred to the committee.
    3. Pursuant to its duty of studying reports of the 
Comptroller General, the committee received officially and 
studied 1,536 such reports during the 104th Congress. In 
addition, 1,237 executive communications, were referred to the 
committee under clause 2 of rule XXIV of the House of 
Representatives.
    4. The full committee met 43 days during the 104th 
Congress, while the subcommittees met a total of 270 days in 
public hearings, markups, and meetings.
    The significant actions taken by the committee with respect 
to these and a considerable number of other matters are 
discussed in detail below.

                        A. INVESTIGATIVE REPORTS

    During the 104th Congress, the Committee on Government 
Reform and Oversight approved and submitted to the Congress 19 
reports of an investigative nature.
    For convenience, the published reports are listed here with 
the names of the originating subcommittees. A more detailed 
discussion of the material will be found in part two below in 
the breakdown of the committee's activities by subcommittee:
          First Report (H. Rept. 104-156): ``A Citizen's Guide 
        on Using the Freedom of Information Act and the Privacy 
        Act of 1974 to Request Government Records.''
          Second Report (H. Rept. 104-434): ``Creating a 21st 
        Century Government.'' *
---------------------------------------------------------------------------
    * Denotes report accompanied by additional, dissenting, minority, 
separate, or supplemental views.
---------------------------------------------------------------------------
          Third Report (H. Rept. 104-435): ``Making Government 
        Work; Fulfilling the Mandate for Change.'' * 
        (Subcommittee on Government Management, Information, 
        and Technology)
          Fourth Report (H. Rept. 104-436): ``The FDA Food 
        Additive Review Process: Backlog and Failure to Observe 
        Statutory Deadlines.'' * (Subcommittee on Human 
        Resources and Intergovernmental Relations)
          Fifth Report (H. Rept. 104-437): ``The Federal 
        Takeover of the Chicago Housing Authority--HUD Needs to 
        Determine Long-Term Implications.'' * (Subcommittee on 
        Human Resources and Intergovernmental Relations)
---------------------------------------------------------------------------
    * Denotes report accompanied by additional, dissenting, minority, 
separate, or supplemental views.
---------------------------------------------------------------------------
          Sixth Report (H. Rept. 104-438): ``Voices for 
        Change.'' (Subcommittee on the Postal Service)
          Seventh Report (H. Rept. 104-486): ``National Drug 
        Policy: A Review of the Status of the Drug War.''* 
        (Subcommittee on National Security, International 
        Affairs, and Criminal Justice)
          Eighth Report (H. Rept. 104-641): ``Fraud and Abuse 
        in Medicare and Medicaid: Stronger Enforcement and 
        Better Management Could Save Billions.''* (Subcommittee 
        on Human Resources and Intergovernmental Relations)
          Ninth Report (H. Rept. 104-745): ``Laws Related to 
        Federal Financial Management As Amended Through 
        December 31, 1995.''
          Tenth Report (H. Rept. 104-746): ``Protecting the 
        Nation's Blood Supply From Infectious Agents: The Need 
        For New Standards to Meet New Threats''* (Subcommittee 
        on Human Resources and Intergovernmental Relations)
          Eleventh Report (H. Rept. 104-747): ``Health Care 
        Fraud: All Public and Private Payers Need Federal 
        Criminal Anti-Fraud Protection.'' (Subcommittee on 
        Human Resources and Intergovernmental Relations)
          Twelfth Report (H. Rept. 104-748): ``A Two-Year 
        Review of the White House Communications Agency Reveals 
        Major Mismanagement, Lack of Accountability, and 
        Significant Mission Creep.''* (Subcommittee on National 
        Security, International Affairs, and Criminal Justice)
          Thirteenth Report (H. Rept. 104-749): ``Investigation 
        into the Activities of Federal Law Enforcement Agencies 
        Toward the Branch Davidians.''* (Subcommittee on 
        National Security, International Affairs, and Criminal 
        Justice prepared in conjunction with the Committee on 
        the Judiciary)
          Fourteenth Report (H. Rept. 104-821): ``Sampling and 
        Statistical Adjustment in the Decennial Census: 
        Fundamental Flaws.''*
          Fifteenth Report (H. Rept. 104-849): ``Investigation 
        of the White House Travel Office Firings and Related 
        Matters.''*
          Sixteenth Report (H. Rept. 104-857): ``Year 2000 
        Computer Software Conversion: Summary of Oversight 
        Findings and Recommendations.'' (Subcommittee on 
        Government Management, Information, and Technology)
          Seventeenth Report (H. Rept. 104-858): ``Crude Oil 
        Undervaluation: The Ineffective Response of the 
        Minerals Management Service.'' (Subcommittee on 
        Government Management, Information, and Technology)
          Eighteenth Report (H. Rept. 104-861): ``Federal 
        Government Management: Examining Government Performance 
        as We Near the Next Century.''*
          Nineteenth Report (H. Rept. 104-862): ``Investigation 
        into the White House and Department of Justice on 
        Security of FBI Background Investigation Files.''*
---------------------------------------------------------------------------
    * Denotes report accompanied by additional, dissenting, minority, 
separate, or supplemental views.
---------------------------------------------------------------------------

                             B. LEGISLATION

    The legislative jurisdiction of the Committee on Government 
Reform and Oversight covers a wide range of important 
governmental operations. In accordance with jurisdiction 
assumed from the former Committee on Government Operations, the 
committee receives all budget and accounting measures other 
than appropriations; all measures relating to the overall 
economy and efficiency of Government operations and activities, 
including Federal procurement, intergovernmental relationships, 
general revenue sharing (the latter subject was formerly within 
the jurisdiction of the Committee on Ways and Means), and the 
National Archives (formerly within the jurisdiction of the 
Committee on Post Office and Civil Service); all reorganization 
plans and bills providing for the establishment of new 
departments in the executive branch such as the Department of 
Energy and the Department of Education; and most other 
reorganization legislation, examples of which are legislation 
to reorganize the intelligence community, international trade, 
and regulatory agencies. Other legislation includes debt 
collection and proposals relating to delinquent payments and 
paperwork reduction. It also receives legislation dealing with 
the General Services Administration, including the Federal 
Property and Administrative Services Act of 1949 and special 
bills authorizing the Administrator of General Services to make 
specific transfers of property, plus legislation dealing with 
the General Accounting Office, the Office of Management and 
Budget, the Administrative Expenses Act, the Travel Expenses 
Act, the Employment Act of 1946, and the Javits-Wagner-O'Day 
Act relating to the sale of products and services of blind and 
other handicapped persons. In addition, the committee has 
jurisdiction over the Freedom of Information provisions of the 
Administrative Procedure Act, the Privacy Act, the Government 
in the Sunshine Act, and the Federal Advisory Committee as well 
as the Inspector General Act.
    Rule X, 2(b) of the standing Rules of the House, requires 
the committee to see and review the administration of all laws 
in the legislative jurisdiction, and Rule XI, 1(d) requires 
that the committee report to the House thereon by the end of 
each Congress. The present report outlines the extent and 
nature of the committee and subcommittee activities 
constituting the review.
    On January 4, 1995, as the first session of the 104th 
Congress convened, the new Republican House majority moved to 
fulfill its promise of true government reform by implementing 
its Contract with America. Pursuant to the Contract, 14 bills 
were introduced as the opening bells rang to promote jobs, 
enhance wages, take back our Nation's streets, and restore 
openness, accountability, and fiscal responsibility in our 
Federal Government. Of the Contract bills, four were referred 
to the Committee on Government Reform and Oversight for 
immediate review and action. They included: H.R. 2, the Line-
Item Veto Act; H.R. 5, the Unfunded Mandates Reform Act; H.R. 
9, the Job Creation and Wage Enhancement Act; and H.R. 450, 
(830) the Paperwork Reduction Act. The actions taken on each 
are described below.
    During the 104th Congress, as noted above, the committee 
studied 436 bills and resolutions referred to it and reported 
42 to the House. The measures reported or ordered reported are 
discussed more fully in part two below. However, they are 
listed here for convenience in the order of approval by the 
committee and with the name of the subcommittee that initially 
considered them:
          H.R. 5, To curb the practice of imposing unfunded 
        Federal mandates on States and local governments, to 
        ensure that the Federal Government pays the costs 
        incurred by those governments in complying with certain 
        requirements under Federal statutes and regulations, 
        and to provide information on the cost of Federal 
        mandates on the private sector, and for other purposes. 
        (H. Rept. 104-1, Pt. 2, S. 1; Public Law 104-4.)
          H.R. 2, To give the President item veto authority 
        over appropriation acts and targeted tax benefits in 
        revenue acts. (H. Rept. 104-11, Pt. 2, S. 4; Public Law 
        104-50.)
          H.R. 830, To amend chapter 35 of title 44, United 
        States Code, to further the goals of the Paperwork 
        Reduction Act to have Federal agencies become more 
        responsible and publicly accountable for reducing the 
        burden of Federal paperwork on the public, and for 
        other purposes. (H. Rept. 104-37, S. 244; Public Law 
        104-13.)
          H.R. 450, To ensure economy and efficiency of Federal 
        Government operations by establishing a moratorium on 
        regulatory rulemaking actions, and for other purposes. 
        (Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs, H. Rept. 104-39, Pt. 
        1, S. 219.)
          H.R. 1271, To provide protection for family privacy. 
        (Subcommittee on Government Management, Information, 
        and Technology, H. Rept. 104-94.)
          H.R. 1345, To eliminate budget deficits and 
        management inefficiencies in the government of the 
        District of Columbia through the establishment of the 
        District of Columbia Financial Responsibility and 
        Management Assistance Authority, and for other 
        purposes. (Subcommittee on the District of Columbia, H. 
        Rept. 104-96, Public Law 104-8.)
          H.R. 1826, To repeal the authorization of 
        transitional appropriations for the United States 
        Postal Service, and for other purposes. (Subcommittee 
        on the Postal Service, H. Rept. 104-174.)
          H.R. 1606, To designate the United States Post Office 
        building located at 24 Corliss Street, Providence, 
        Rhode Island, as the ``Harry Kiziran Post Office 
        Building.'' (Subcommittee on the Postal Service, Public 
        Law 104-100.)
          H.R. 1026, To designate the United States Post Office 
        building located at 201 East Pikes Peak Avenue in 
        Colorado Springs, Colorado, as the ``Winfield Scott 
        Stratton Post Office.'' (Subcommittee on the Postal 
        Service, passed House and Senate as H.R. 1026; Public 
        Law 104-44.)
          H.R. 1655, To authorize appropriations for fiscal 
        year 1996 for intelligence and intelligence-related 
        activities of the U.S. Government, the Community 
        Management Account, and the Central Intelligence Agency 
        Retirement and Disability System, and for other 
        purposes. (H. Rept. 104-138, Pt. 2, S. 922; Public Law 
        104-93.)
          H.R. 1670, To revise and streamline the acquisition 
        laws of the Federal Government, to reorganize the 
        mechanisms for resolving Federal procurement disputes, 
        and for other purposes. (H. Rept. 104-222, Pt. 1.)
          H.R. 2108, To permit the Washington Convention Center 
        Authority to expend revenues for the operation and 
        maintenance of the existing Washington Convention 
        Center and for preconstruction activities relating to a 
        new convention center in the District of Columbia, to 
        permit a designated authority of the District of 
        Columbia to borrow funds for the preconstruction 
        activities relating to a sports arena in the District 
        of Columbia and to permit certain revenues to be 
        pledged as security for the borrowing of such funds, 
        and for other purposes. (Subcommittee on the District 
        of Columbia, H. Rept. 104-227; Public Law 104-28.)
          H.R. 1756, To abolish the Department of Commerce, 
        (Title 1.) (H. Rept. 104-260, Pt. 1, S. 929.)
          S. 790, To provide for the modification or 
        elimination of Federal reporting requirements. (H. 
        Rept. 104-327; Public Law 104-66.)
          H.R. 994, To require the periodic review and 
        automatic termination of Federal regulations. 
        (Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs, H. Rept. 104-284, 
        Pt. 1.)
          H.R. 2661, To amend the District of Columbia Self-
        Government and Government Reorganization Act to permit 
        the District of Columbia to expend its own funds during 
        any portion of a fiscal year for which Congress has not 
        enacted the budget of the District of Columbia for the 
        fiscal year, and to provide for the appropriation of a 
        monthly pro-rated portion of the annual Federal payment 
        to the District of Columbia for such fiscal year during 
        such portion of the year. (Subcommittee on the District 
        of Columbia, H. Rept. 104-408.)
          H.R. 1398, To designate the United States Post Office 
        building located at 1203 Lemay Ferry Road, St. Louis, 
        Missouri, as the ``Charles J. Coyle Post Office 
        Building.'' (Subcommittee on the Postal Service, passed 
        House.)
          H.R. 1880, To designate the United States Post Office 
        building located at 102 South McLean, Lincoln, 
        Illinois, as the ``Edward Madigan Post Office 
        Building.'' (Subcommittee on the Postal Service; Public 
        Law 104-157.)
          H.R. 2262, To designate the United States Post Office 
        building located at 218 North Alston Street in Foley, 
        Alabama, as the ``Holk Post Office Building.'' 
        (Subcommittee on the Postal Service, passed House.)
          H.R. 2704, To provide that the United States Post 
        Office building that is to be located on the 2600 block 
        of East 75th Street in Chicago, Illinois, shall be 
        known and designated as the ``Charles A. Hayes Post 
        Office Building.'' (Subcommittee on the Postal Service, 
        passed House.)
          H.R. 2202, Immigration in the Natural Interest Act of 
        1995. (Subcommittee on Civil Service, H. Rept. 104-469, 
        Pt. II.)
          H.R. 2700, To designate the United States Post Office 
        building located at 7980 FM 327, Elmendorf, Texas, as 
        the ``Amos F. Longeria Post Office Building.'' 
        (Subcommittee on the Post Office; Public Law 104-255.)
          H.R. 3184, To streamline and improve the 
        effectiveness of chapter 75 of title 31, United States 
        Code (commonly referred to as the ``Single Audit 
        Act.'') (Subcommittee on Government Management, 
        Information, and Technology, H. Rept. 104-607; Public 
        Law 104-156.)
          H.R. 2086, To increase the overall economy and 
        efficiency of Government operations and enable more 
        efficient use of Federal funding, by enabling local 
        governments and private, nonprofit organizations to use 
        amounts available under certain Federal assistance 
        programs in accordance with approved local flexibility 
        plans. (Subcommittee on Human Resources and 
        Intergovernmental Relations, H. Rept. 104-847.)
          H.R. 885, To designate the United States Post Office 
        building located at 153 East 110th Street, New York, 
        New York, as the ``Oscar Garcia Rivera Post Office 
        Building.'' (Subcommittee on the Postal Service, passed 
        House.)
          H.R. 3139, To redesignate the United States Post 
        Office building located at 245 Centereach Mall on 
        Middle Country Road in Centereach, New York, as the 
        ``Rose Y. Caracappa United States Post Office 
        Building.'' (Subcommittee on the Postal Service; Public 
        Law 104-187.)
          H.R. 3663, To amend the District of Columbia Self-
        Government and Governmental Reorganization Act to 
        permit the Council of the District of Columbia to 
        authorize the issuance of revenue bonds with respect to 
        water and sewer facilities, and for other purposes. 
        (Subcommittee on the District of Columbia, H. Rept. 
        104-635; Public Law 104-184.)
          H.R. 3664, To make miscellaneous and technical 
        corrections to improve the operations of the government 
        of the District of Columbia. (Subcommittee on the 
        District of Columbia.)
          H.R. 3586, To amend title 5, United States Code, to 
        strengthen veterans' preference, to increase employment 
        opportunities for veterans, and other purposes. 
        (Subcommittee on Civil Service, H. Rept. 104-675.)
          H.R. 3452, To make certain laws applicable to the 
        Executive Office of the President, and for other 
        purposes. (Subcommittee on Government Management, 
        Information, and Technology, H. Rept. 104-820, Pt. 1; 
        Public Law 104-331.)
          H.R. 1281, To amend title 5, United States Code, and 
        the National Security Act of 1947 to require disclosure 
        under the Freedom of Information Act of information 
        regarding certain individuals who participated in Nazi 
        war crimes during the period in which the United States 
        was involved in World War II. (Subcommittee on 
        Government Management, Information, and Technology, H. 
        Rept. 104-819, Pt. 1; Public Law 104-309.)
          H.R. 3841, To amend the civil service laws of the 
        United States, and for other purposes. (Subcommittee on 
        Civil Service, H. Rept. 104-831, passed House.)
          H.R. 3864, To reform the management practices of the 
        General Accounting Office, and for the other purposes. 
        (Public Law 104-316.)
          H.R. 3802, To amend section 552 of title 5, United 
        States Code, popularly known as the Freedom of 
        Information Act, to provide for public access to 
        information in an electronic format, and for other 
        purposes. (Subcommittee on Government Management, 
        Information, and Technology, H. Rept. 104-795; Public 
        Law 104-231.)
          H.R. 3869, To amend the Federal Advisory Committee 
        Act to direct the Director of the Office of Management 
        and Budget to conduct a negotiated rulemaking for the 
        purpose of establishing electronic data reporting 
        standards for the electronic interchange of certain 
        data that is required to be reported under existing 
        Federal law. (Subcommittee on Government Management, 
        Information, and Technology.)
          H.R. 3637, To amend chapter 57 of title 5, United 
        States Code, and title 31, United States Code, to 
        provide employees who transfer in the interest of the 
        Government more effective and efficient delivery of 
        relocation allowances by reducing administrative costs 
        and improving services, and for other purposes. 
        (Subcommittee on Government Management, Information, 
        and Technology.)
          H.R. 3625 (S. 1577), To authorize appropriations for 
        the National Historical Publications and Records 
        Commission for fiscal years 1998, 1999, 2000, and 2001. 
        (Subcommittee on National Security, International 
        Affairs, and Criminal Justice, S. Rept. 104-283; Public 
        Law 104-274.)
          H.R. 3768, To designate a United States Post Office 
        to be located in Groton, Massachusetts, as the 
        ``Augusta `Gusty' Hornblower United States Post 
        Office.'' (Subcommittee on the Postal Service.)
          H.R. 3834, To redesignate the Dunning Post Office in 
        Chicago, Illinois, as the ``Roger P. McAuliffe Post 
        Office.'' (Subcommittee on the Postal Service; Public 
        Law 104-189.)
          H.R. 3877, To designate the United States Post Office 
        building in Camden, Arkansas, as the ``Honorable David 
        H. Pryor Post Office Building.'' (Subcommittee on the 
        Postal Service; Public Law 104-268.)
          S. 868, To provide authority for leave transfer for 
        Federal employees who are adversely affected by 
        disasters or emergencies, and for other purposes. 
        (Subcommittee on Civil Service, S. Rept. 104-151; 
        passed House.)

                        OTHER LEGISLATIVE ACTION

    The following bills were referred to the Committee on 
Government Reform and Oversight, however, the committee was 
discharged from further consideration, therefore, the bills 
were not reported by the committee. Latest action is shown:
          H.R. 9, to create jobs, enhance wages, strengthen 
        property rights, maintain certain economic liberties, 
        decentralized and reduce the power of the Federal 
        Government with respect to the States, localities, and 
        citizens of the United States, and to increase the 
        accountability of Federal officials. (Reported amended 
        by Committee on Commerce, H. Rept. 104-33, Pt. I; 
        amended from Committee on Science, Pt. II; passed House 
        amended and received in Senate and referred to 
        Governmental Affairs.)
          H.R. 564, a bill to provide that receipts and 
        disbursements of the Highway Trust Fund, the Airport 
        and Airway Trust Fund, the Inland Waterways Trust Fund, 
        and the Harbor Maintenance Trust Fund shall not be 
        included in the totals of the budget of the U.S. 
        Government as submitted by the President or the 
        congressional budget. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 842, a bill to provide off-budget treatment for 
        the Highway Trust Fund, the Airport and Airway Trust 
        Fund, the Inland Waterways Trust Fund, and the Harbor 
        Maintenance Trust Fund. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 1022, a bill to provide regulatory reform and to 
        focus national economic resources on the greatest risks 
        to human health, safety, and the environment through 
        scientifically objective and unbiased risk assessments 
        and through the consideration of costs and benefits in 
        major rules, and for other purposes. (Subcommittee on 
        National Economic Growth, Natural Resources, and 
        Regulatory Affairs. Considered by House Unfinished 
        Business. Committee Amendment in the Nature of a 
        Substitute Considered as an Original Bill for the 
        Purpose of Amendment. House agreed to Amendments 
        Adopted by the Committee of the Whole. Motion to 
        Recommit with Instructions Failed in House by Yea-Nay 
        Vote: 174-250 (Record Vote No. 182). Passed House 
        (Amended) by Recorded Vote: 286-141 (Record Vote No. 
        183). Received in the Senate and referred to Senate 
        Committee on Governmental Affairs.)
          H.R. 1182, a bill to permit certain Federal employees 
        who retired or became entitled to receive compensation 
        for work injury before December 9, 1980, to elect to 
        resume coverage under the Federal employees' group life 
        insurance program. (Subcommittee on Civil Service.)
          H.R. 1508, a bill to require the transfer of title to 
        the District of Columbia of certain real property in 
        Anacostia Park to facilitate the construction of 
        National Children's Island, a cultural, educational, 
        and family oriented park. (Subcommittee on the District 
        of Columbia. Reported Amended by the Committee on 
        Resources, H. Rept. 104-277, Pt. I; called up by House 
        under Suspension of Rules and passed House. Received in 
        the Senate and referred to Governmental Affairs.)
          H.R. 1530, to authorize appropriations for fiscal 
        year 1996 for military activities of the Department of 
        Defense, to prescribe military personnel strengths for 
        fiscal year 1996, and for other purposes. (Reported 
        amended by the Committee on National Security, H. Rept. 
        104-131; passed House amended; passed Senate amended; 
        House agreed to Conference Rept. 104-406; called up by 
        House as Privileged Matter. Public Law No. 104-106.)
          H.R. 2017, to authorize an increased Federal share of 
        the costs of certain transportation projects in the 
        District of Columbia for fiscal years 1995 and 1996, 
        and for other purposes. (Subcommittee on the District 
        of Columbia. Reported Amended by the Committee on 
        Transportation and Infrastructure, H. Rept. 104-217, 
        Pt. 1; called up by House under Suspension of Rules and 
        passed House and Senate. Public Law 104-21.)
          H.R. 2077, to designate the U.S. Post Office building 
        located at 33 College Avenue in Waterville, Maine, as 
        the ``George J. Mitchell Post Office Building.'' 
        (Called up by House by Unanimous Consent. Passed House 
        and Senate by Voice Vote. Public Law No. 104-27.)
          H.R. 2564, to provide for the disclosure of lobbying 
        activities to influence the Federal Government, and for 
        other purposes. (Reported by the Committee on 
        Judiciary, H. Rept. 104-339, Pt. 1; called up by House 
        by Suspension of Rules and passed House by Voice Vote. 
        Public Law 104-65.)
          H.R. 2276, to establish the Federal Aviation 
        Administration as an independent establishment in the 
        executive branch, and for other purposes. (Reported 
        amended from the Committee on Transportation and 
        Infrastructure, H. Rept. 104-475, Pt. I. Passed House 
        amended March 12, 1996 and received in Senate and 
        referred to Commerce, Science and Transportation March 
        13, 1996.)
          H.R. 2636, to transfer jurisdiction over certain 
        parcels of Federal real property located in the 
        District of Columbia, and for other purposes. (Reported 
        amended from the Committee on Transportation and 
        Infrastructure, H. Rept. 104-368, Pt. I. In addition, 
        it was reported amended from the Committee on 
        Resources, H. Rept. 104-368, Pt. II. Passed House 
        amended on July 31, 1996, and received in the Senate 
        and referred to the Committee on Energy and Natural 
        Resources on August 1, 1996, S. Rept. 104-391.)
          H.R. 3107, to impose sanctions on persons exporting 
        certain goods or technology that would enhance Iran's 
        ability to explore for, extract, refine, or transport 
        by pipeline petroleum resources, and for other 
        purposes. (Reported amended from International 
        Relations Committee, H. Rept. 104-523, Pt. I; reported 
        amended from Ways and Means Committee, H. Rept. 104-
        523, Pt. II. Passed House as amended, passed Senate 
        with amendments. Presented to the President July 24, 
        1996 became Public Law 104-172.)
          H.R. 3235, to amend the Ethics in Government Act of 
        1978, to extend the authorization of appropriations for 
        the office of Government Ethics for 3 years, and for 
        other purposes. (Reported from the Committee on the 
        Judiciary, H. Rept. 104-595, Pt. I. Passed House under 
        suspension of rules and passed Senate on July 24, 1996. 
        Presented to the President July 26, 1996, became Public 
        Law 104-179.)
          H.R. 3237, to provide for improved management and 
        operation of intelligence activities of the Government 
        by providing for a more corporate approach to 
        intelligence, to reorganize the agencies of the 
        Government engaged in the intelligence activities so as 
        to provide an improved Intelligence Community for the 
        21st century, and for other purposes. (Reported amended 
        from Intelligence Committee, H. Rept. 104-620, Pt. I, 
        and reported amended from National Security Committee, 
        H. Rept. 104-620, Pt. II.)
          H.R. 3936, to encourage the development of a 
        commercial space industry in the United States, and for 
        other purposes. (Reported amended the Committee on 
        Science, H. Rept. 104-801, Pt. I, passed House under 
        suspension of rules and received in the Senate on 
        September 18, 1996.)

                        C. REORGANIZATION PLANS

    The most recent authority of the President to transmit 
reorganization plans to Congress was reestablished by Public 
Law 98-614. Approved November 8, 1984, this authority expired 
on December 31, 1984. Legislation extending executive 
reorganization authority was not enacted during the first 
session of the 104th Congress.

                          D. COMMITTEE PRINTS

    Fifteen committee prints, resulting from work by the 
committee staff, were issued during the 104th Congress, as 
follows:
          ``Rules of the Committee on Government Reform and 
        Oversight, House of Representatives, Together with 
        Selected Rules of the House of Representatives 
        (Including Clause 2 of House Rule XI) and Selected 
        Statutes of Interest.'' (Full committee.) (January 
        1995.)
          ``Oversight Plans for all House Committees with 
        Accompanying Recommendations by the Committee on 
        Government Reform and Oversight, House of 
        Representatives (Required by Clause 2 of House Rule 
        XI).'' (Full committee.) (March 1995.)
          ``Mail Service in the United States: Exploring 
        Options for Improvement.'' Report of the U.S. Postal 
        Service and the Postal Rate Commission, to the 
        Committee on Government Reform and Oversight. (Full 
        committee.) (December 1995.)
          ``Legislative Manual (1st Edition) of the Committee 
        on Government Reform and Oversight.'' (Full committee.) 
        (February 1996.)
          ``The Federal Acquisition Reform Act of 1996 and the 
        Information Technology Management Reform Act of 1996--
        Divisions D and E of the National Defense Authorization 
        Act of Fiscal Year 1996.'' (Full committee.) (February 
        1996.)
          ``Rules of the Committee on Government Reform and 
        Oversight, House of Representatives Together with 
        Selected Rules of the House of Representatives 
        (Including Clause 2 of House Rule XI) and Selected 
        Statutes of Interest.'' (Full committee.) (March 1996.)
          ``Correspondence Between the White House and Congress 
        in the Proceedings Against John M. Quinn, David 
        Watkins, and Matthew Moore As Part of the Committee 
        Investigation into the White House Travel Office 
        Matter.'' (Full committee.) (May 1996.)
          ``Interim Report of the Activities of the House 
        Committee on Government Reform and Oversight 104th 
        Congress, First Session.'' (Full committee.) (May 
        1996.)
          ``Deposition Transcripts from the Committee 
        Investigation into the White House Office Travel 
        Matter, Volume 1.'' (Full committee.) (May 1996.)
          ``Business Meeting in the Proceedings Against John M. 
        Quinn, David Watkins, and Matthew Moore As Part of the 
        Committee Investigation into the White House Travel 
        Office Matter.'' (Full committee.) (June 1996.)
          ``Deposition Transcripts from the Committee 
        Investigation into the White House Office Travel 
        Matter, Volume 2.'' (Full committee.) (October 1996.)
          ``Deposition Transcripts from the Committee 
        Investigation into the White House Office Travel 
        Matter, Volume 3.'' (Full committee.) (October 1996.)
          ``Deposition Transcripts from the Committee 
        Investigation into the White House Office Travel 
        Matter, Volume 4.'' (Full committee.) (October 1996.)
          ``Deposition Transcripts from the Committee 
        Investigation into the White House Office Travel 
        Matter, Volume 5.'' (Full committee.) (October 1996.)
          ``United States Government Policy and Supporting 
        Positions (Plum Book).'' (Full committee.) (November 
        1996.)

       E. COMMITTEE ACTION ON REPORTS OF THE COMPTROLLER GENERAL

    Rule X, 4(c)(1)(A), of the rules of the House, imposes the 
duty upon this committee to receive and examine reports of the 
Comptroller General referred to and to make such 
recommendations to the House as it deems necessary or desirable 
in connection with the subject matter of the reports.
    In discharging this responsibility, each report of the 
Comptroller General received by the committee is studied and 
analyzed by the staff and referred to the subcommittee of this 
committee to which has been assigned general jurisdiction over 
the subject matter involved.
    The committee has received a total of 35 General Accounting 
Office Reports to the Congress for processing during the 104th 
Congress. After preliminary staff study, these reports were 
referred to subcommittees of this committee as follows:

Civil Service Subcommittee........................................     6
District of Columbia Subcommittee.................................     4
Government Management, Information, and Technology Subcommittee...     3
Human Resources and Intergovernmental Relations Subcommittee......     7
National Economic Growth, Natural Resources, and Regulatory 
    Affairs Subcommittee..........................................     5
National Security, International Affairs, and Criminal Justice 
    Subcommittee..................................................     4
Postal Service Subcommittee.......................................     6
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................    35

    Furthermore, in implementation of section 236 of the 
Legislative Reorganization Act of 1970, the committee now 
regularly receives GAO reports that are not addressed to 
Congress but contain recommendations to heads of the Federal 
agencies. These are generally reports to the agency heads their 
written statements of actions taken with respect to such 
recommendations, as required by section 236. The committee 
received a total of 1,065 such GAO reports to Federal agencies 
or other committees and Members within the legislative branch.
    Periodic reports are received from the subcommittees on 
actions taken with respect to individual reports, and monthly 
reports are made to the chairman as to reports received. During 
the 104th Congress, the committees used the reports to further 
specific investigations and reviews. In most cases, additional 
information concerning the findings and recommendations of the 
Comptroller General was requested and received from the 
administrative agency involved, as well as from the General 
Accounting Office. More specific information on the actions 
taken appears in part two below.
    Complete files are maintained by the committee on all 
Comptroller General's reports received. Detailed records are 
kept showing the subcommittee to which the report is referred, 
the date of referral, and the subsequent action taken.
    The committee will review all of the Comptroller General's 
reports received during the Congress in the light of additional 
information obtained and actions taken by the subcommittees, 
and determinations will be made whether specific 
recommendations to the House are necessary or desirable under 
rule X.
                PART TWO. REPORT OF COMMITTEE ACTIVITIES

                 I. Matters of Interest, Full Committee

                               A. GENERAL

1. Oversight Plans of the Committees of the U.S. House of 
        Representatives.
    The 104th Congress adopted a new Rule that provides for 
each standing committee of the House to formally adopt 
oversight plans at the beginning of each year. Specifically, 
the Rule states in part:

          Rule X, clause (2)(d)(1). Not later than February 15 
        of the first session of a Congress, each standing 
        committee of the House shall, in a meeting that is open 
        to the public and with a quorum present, adopt its 
        oversight plans for that Congress. Such plans shall be 
        submitted simultaneously to the Committee on Government 
        Reform and Oversight and to the Committee on House 
        Oversight.

    On March 31, 1995, Committee Chairman William F. Clinger, 
Jr., submitted the oversight plans of each committee together 
with recommendations to ensure the most effective coordination 
of such plans.

  RECOMMENDATIONS OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

             Oversight Plans of the Committees of the House

    Collectively, the committee oversight plans cover a wide 
array of Federal programs and management issues. The challenges 
of dealing with the serious, pervasive problems that continue 
to impede effective management and efficient program delivery 
is formidable.
    A major breakthrough in prospects for improving Federal 
management, as well as congressional oversight of Federal 
programs, has been provided by two recent laws: the Chief 
Financial Officers Act and Government Performance and Results 
Act. Together, these acts provide a framework necessary to help 
achieve improved government accountability and stewardship and 
to lower costs by focusing on results. The Congress framed it 
this way: Set goals, operate programs, and measure results 
using reliable financial and management information.
    While these acts are still in the process of being 
implemented, efforts already completed or underway in response 
to both acts offer committees a valuable source of information 
and insight into the management problems and issues. These 
include issues that impact individual programs, as well as 
those that cut across agency programs and organizational 
boundaries.
    The committees of the House should: (1) conduct oversight 
to ensure that these statutes are being aggressively 
implemented, and (2) use the information produced by the 
implementation of these statutes and the General Accounting 
Office's (GAO) high risk list to assess the management 
weaknesses in the agencies within their jurisdiction.

                      Chief Financial Officers Act

    One of the underlying historical impediments to better 
management of government programs has been the lack of reliable 
financial information. With passage of the CFO Act, the 
Congress has said that this must change and change quickly. The 
long-needed fiscal accountability that the act is designed to 
bring about is essential to effective program management and 
congressional oversight.
    Agencies, which represent organizations larger than the 
Nation's largest private corporations, have typically not been 
able to perform even the most rudimentary bookkeeping 
functions. Agency financial management systems are badly 
deteriorated-OMB reports that most do not meet standards and 
almost all agencies have been unable to pass the test of an 
independent financial statement audit.
    A primary element of the Chief Financial Officers Act, as 
expanded by the Government Management Reform Act of 1994, is 
the requirement for all 24 major agencies to have audited 
financial statements. (The act also calls for governmentwide 
financial statements, audited by GAO, by fiscal year 1997.) 
Also, agencies must now have:
     financial information that is linked with program 
and budget data for use in both management control and 
planning;
     reports on program cost trends and other 
performance indicators from which managers can make informed 
decisions on running government operations effectively and 
efficiently
    Since passage of the initial legislation in 1990, the CFO 
Act has already provided:
     significantly more accurate information on the 
government's financial status and operations, as well as an 
understanding of how unreliable the financial information being 
provided to the Congress and program managers has been;
     a better understanding of the pervasiveness of 
management control problems; and
     substantial savings from recoveries and better use 
of funds.
    Annual financial statement audits, which are done by the 
agency Inspectors General (IGS) or by GAO, continue to provide 
valuable information on the results of program operations and 
the current financial condition of agencies. This information 
can be of great use to committees in their oversight efforts. 
Audits, for example, have identified:
     Despite over $400 billion in adjustments needed to 
correct errors in Defense's financial data over the last 3 
years, Defense is still unable to render an accurate accounting 
of its hundreds of billions of dollars in assets. This 
unreliable data has traditionally served as the basis for 
Defense's reports to the Congress.
     Duplicate, erroneous, and even fraudulent payments 
to Defense contractors totaling billions of dollars.
     Unneeded Defense inventories of almost $40 
billion.
     The IRS being unable to effectively collect or 
accurately account for $1.25 in annual revenues; audits show 
that only a fraction of over $100 billion in recorded tax 
receivables was collectible.
    GAO's ongoing financial audit work includes the IRS, the 
Bank Insurance Fund, the Resolution Trust Corporation, and the 
Pension Benefit Guaranty Corporation, all for fiscal year 1994, 
and the Department of the Navy for fiscal year 1995. IG's are 
conducting (in some instances with contracted assistance from 
accounting firms) fiscal year 1994 audits in the Departments of 
Education, HHS, Army, Air Force, NASA, Veterans Affairs, EPA, 
Labor, Agriculture, HUD, Interior, and other agencies.

                 Government Performance and Results Act

    Effective implementation of the Chief Financial Officers 
Act is also a vital element to the success of the Government 
Performance and Results Act (GPRA). GPRA seeks to change the 
focus of Federal management and accountability from a 
preoccupation with inputs, such as the amount of program 
appropriations, to measured results and outcomes of Federal 
programs. Successful implementation of the act will help 
address the question: What are the American people getting for 
their investment in the Federal Government? Information on 
performance in relation to agency goals can also be helpful to 
the Congress.
    Experiences of State governments and foreign countries that 
are leaders in public management show that GPRA's three key 
elements: strategic planning; performance measurement; and 
public reporting and accountability could influence the basic 
culture of the government so that is more results-oriented. 
Accurate results-oriented information will greatly assist the 
Congress in its efforts to oversee current programs and in 
making informed decisions for the future.
    But making the major changes in the way Federal agencies 
are managed and held accountable called for under GPRA will 
require agencies to develop the capacity to manage for results. 
This will not be accomplished quickly or easily. Therefore, the 
act's provisions are being phased in with a series of pilot 
projects over the next several years.
    Already, 70 pilots have been designated ranging in size 
from small programs to entire agencies, including the IRS, SSA, 
and the Defense Logistics Agency. As agencies implement the 
act, oversight committees should have opportunities to work 
with agencies in improving performance by providing managers 
freedom to experiment and find innovative ways to improve 
program results, while increasing accountability for achieving 
those results.
2. Views and Estimates for Fiscal Year 1997.
    On February 27, 1996, pursuant to section 301(d) of the 
Congressional Budget and Impoundment Control Act of 1974, as 
amended by the Balanced Budget and Emergency Deficit Control 
Act of 1985, the committee submitted its views and estimates to 
the Committee on the Budget on matters that were included in 
the President's fiscal year 1997 budget within the committee's 
jurisdiction.
3. Investigations.
    a. The Financial Holdings and Activities of Secretary of 
Commerce Ronald H. Brown.--Beginning in February 1994, 
Representative William F. Clinger, Jr., then-ranking member of 
the Committee on Government Operations, wrote to Secretary of 
Commerce, Ronald H. Brown, requesting that Secretary Brown 
answer questions arising from his Financial Disclosure 
Statement. The questions focused on appearances of a conflict 
in Secretary Brown's holdings and/or role in such companies as 
Harmon International, Inc., First International Communication, 
Inc., Corridor Communication, Inc., Albimar Communications, 
Inc., and Kellee Communications Inc., as well as his business 
relationship with Ms. Nolanda Hill, the owner of First 
International Communications and Corridor Communications.
    Secretary Brown's responses, through intermediaries, 
generated follow-up letters by Representative Clinger on March 
23, 1994, July 11, 1994, July 20, 1994, and at least one 
meeting between committee staff and Commerce Department 
officials before Mr. Clinger requested that Mr. Stephen D. 
Potts, Director of the U.S. Office of Government Ethics, 
investigate the matter pursuant to 5 C.F.R. Section 2638.401 
et. seq. on October 5, 1994. On that same day, Representative 
Clinger asked Department of Commerce Inspector General, Frank 
DeGeorge, to investigate Secretary Brown's relationship with 
the aforementioned companies as well as Boston Bank of Commerce 
and Boston Bank of Commerce Associates to determine whether it 
raised any conflicts of interest with Secretary Brown's 
official responsibilities.
    In a December 21, 1994, letter, Inspector General DeGeorge 
deferred to OGE Director Potts, stating, ``this office and OGE 
agreed that if issues or problems arose during their review 
which needed investigation, OGE, pursuant to their statutory 
authority, would refer those matters to this office for 
appropriate investigation. To date, we have not been asked by 
OGE to look into any matter. At the end of the OGE review, we 
will review their findings to determine whether there are any 
indications of conflicts or other violations warranting further 
investigation.''
    In a letter dated December 29, 1994, Office of Government 
Ethics Director Stephen D. Potts stated, ``We found that the 
manner in which Commerce's ethics officials reviewed the 
financial disclosure forms was consistent with the manner in 
which we require and expect agencies to carry out these 
responsibilities.'' Despite acknowledging in his letter 
repeated discrepancies in Secretary Brown's disclosure reports, 
Director Potts concluded that appearances of conflict had been 
avoided due to Secretary Brown's divestiture of holdings, 
resignation from managerial roles or receipt of waivers.
    These responses, however, failed to address fully the 
concerns of Representative Clinger who on January 4, 1995, 
became chairman of the Government Reform and Oversight 
Committee of the 104th Congress, thus necessitating further 
investigation into Secretary Brown's activities.
    Chairman Clinger noted in a January 23, 1995, letter to 
Secretary Brown that Secretary Brown had failed to disclose 
income he received during his Commerce tenure from First 
International Communications Limited Partnership during 1993. 
Furthermore, First International Communications Limited 
Partnership's primary source of income was a debt instrument 
payable by Corridor Broadcasting Corporation, an entity 
controlled by Nolanda Hill, Secretary Brown's business 
associate in First International. In addition, Corridor 
Broadcasting Corporation had defaulted on a $26 million loan 
held by the Federal Deposit Insurance Corporation, which 
ultimately cost American taxpayers some $23 million.
    Secretary Brown's failure to address the potential 
conflicts of interest involving his business affiliations, 
coupled with ongoing efforts by the committee's investigative 
staff, led to Chairman Clinger's February 27, 1995, request 
that Attorney General Janet Reno appoint an Independent 
Counsel, under the Independent Counsel Act, 28 U.S.C. Sec. 591 
et. seq., to investigate the holdings and activities of 
Secretary Brown. Chairman Clinger raised allegations concerning 
Secretary Brown's: (i) submission of incomplete, inaccurate and 
misleading financial disclosure statements; (ii) 
supplementation of salary; (iii) potential conflicts of 
interest; (iv) misinformation to Congress; and (v) refusing to 
respond to Congress.
    In addition to questions raised concerning Secretary 
Brown's affiliation with the business previously mentioned, the 
February 27, 1995, request noted that Secretary Brown: (i) 
failed to disclose either as a gift or loan, $108,000 used as a 
down-payment for a townhouse purchased by Secretary Brown and 
his son, Michael Brown, in Washington, DC; (ii) failed to 
report future income of some $190,955, which he knew he would 
receive in the wake of his divestiture of his interest in First 
International; (iii) supplemented his Federal salary by 
receiving some $412,000, in direct payments, loan forgiveness 
and payments to his creditors by business partners; (iv) 
undertook official actions which benefited his business 
partners and associates; and (v) misled the Congress concerning 
compensation paid by business partners to members of his 
immediate family.
    On July 6, 1995, a three-judge Federal appeals court panel 
announced its selection of former Federal prosecutor Daniel S. 
Pearson to serve as an independent counsel in the matter of 
Secretary Ronald H. Brown.
    No committee hearings were held during the first session of 
the 104th Congress on the matter of Secretary of Commerce 
Ronald H. Brown. In the wake of Secretary Brown's death in 
April 1996, Independent Counsel Pearson suspended his 
investigation and turned over matters remaining open--including 
the Nolanda Hill inquiry--to the Justice Department, Criminal 
Division.
    b. The White House Travel Office Investigation.--At 
approximately 10 a.m., on May 19, 1993, all seven members of 
the White House Travel Office staff were fired and the five 
Travel Office employees present in the White House that day 
were ordered to vacate the White House compound within 2 hours. 
Returning to the Travel Office by 10:30 a.m., the fired Travel 
Office employees found their desks already occupied by 
employees of World Wide Travel, the Arkansas travel agency 
which arranged for press charters during the Clinton 
Presidential campaign, Catherine Cornelius and others.
    Two White House Travel Office employees were out of the 
White House Travel Office on May 19, 1993, one on a White House 
advance trip to South Korea, the other on vacation. They 
learned of their firings, respectively, via CNN telecast and a 
son who saw Tom Brokaw announce the firings on network news 
that night. The seven White House Travel Office employees had 
served from 9 to 32 years in the White House Travel Office.
    The five Travel Office employees who were present in the 
White House for their firings ultimately were given additional 
time to complete their White House out-processing. By early 
afternoon, they heard then-White House Press Secretary Dee Dee 
Myers announce at a press briefing that they were subject of an 
FBI criminal investigation. They had been given no such 
indication at the time of their dismissals. After completing 
out-processing, the five Travel Office employees present on May 
19, 1993, were driven out of the White House compound in a 
panel van with no passenger seats. They were seated on the 
floor and wheel wells of the van along with boxes of their 
gathered personal effects.
    While the Travel Office employees served at the pleasure of 
the President, their precipitous firings and replacement by the 
Clinton campaign's primary travel agency immediately raised a 
storm of criticism. Administration claims that it had acted in 
order to save the press and taxpayers money were met with 
skepticism by a White House press corps which responded with a 
litany of complaints of over billing and undocumented billings 
by World Wide itself throughout the 1992 campaign. In addition, 
the Clinton administration's announcement that an FBI criminal 
investigation had been launched was highly improper and, in 
fact, questionable when it was announced. Furthermore, White 
House contacts with the FBI in the days leading up to and 
immediately following the Travel Office firings also were 
considered improperly handled by Attorney General Janet Reno, 
who publicly admonished the administration for them.
    Members of the House and the Senate immediately raised 
concerns about the manner in which the Travel Office firings 
took place. In the face of press, public and congressional 
outcry, the White House placed five of the seven Travel Office 
employees on administrative leave with pay on May 25, 1993, and 
announced that it would conduct a White House Management Review 
of the Travel Office and the administration's role in the 
Travel Office firings. The fired Travel Office director and 
deputy director retired.
    On June 1, 1993, William F. Clinger, Jr., the then-ranking 
minority member of the House Government Operations Committee, 
requested that then Chairman John Conyers, Jr., hold hearings 
on the White House Travel Office firings.
    Then-White House Chief Thomas F. (Mack) McLarty and then-
Office of Management and Budget Director Leon Panetta released 
the White House Travel Office Management Review on July 2, 
1993, and announced the reprimands of four White House 
staffers. Reprimanded were: Associate Counsel to the President, 
William H. Kennedy III; Assistant to the President for 
Management and Administration, David Watkins; former Special 
Assistant to the President for Management and Administration, 
Catherine A. Cornelius; and Deputy Assistant to the President 
and Director of Media Affairs, Jeff Eller. At least three of 
the four first learned of the ``reprimands'' during their 
televised announcement. None of the reprimands were documented 
in the personnel files of any of the four.
    Also on July 2, 1993, the Supplemental Appropriations Act 
of 1993 (Public Law 103-50) required the U.S. General 
Accounting Office (GAO) to ``conduct a review of the action 
taken with respect to the White House Travel Office.''
    In addition to the White House Management Review and the 
GAO Report entitled White House Travel Office Operations 
(released on May 2, 1994), at least three other reports were 
prepared concerning various aspects of the White House Travel 
Office firings. These reports were prepared by: the Office of 
Professional Responsibility (OPR) of the U.S. Department of 
Justice (dated March 18, 1994, and released by the committee on 
October 24, 1995); a Federal Bureau of Investigation Internal 
Review of FBI Contacts with the White House (dated June 1, 
1993), and the Department of Treasury Inspector General Report 
``Allegation of Misuse of IRS RE: ULTRAIR'' (dated June 11, 
1993).
    On September 23, 1993, after consultations with majority 
staff of the Government Operations Committee, Mr. Clinger 
withdrew his request for committee hearings on the White House 
Travel Office firings, ``contingent upon the adequacy of the 
GAO effort'' which had been mandated by Congress through Public 
Law 103-50.
    Individually and collectively, the five reports prepared 
concerning the White House Travel Office left many questions 
unanswered and, in fact, raised many more. Several Members of 
Congress, including Mr. Clinger, sought to have these questions 
answered through further investigation and congressional 
hearings. In a letter dated October 7, 1994, Mr. Clinger and 16 
other House Members again requested congressional hearings on 
the White House Travel Office in order to ``address serious 
questions arising from, or unanswered by, the General 
Accounting Office (GAO) Report to Congress, White House Travel 
Office Operations (GAO/GGD-94-132).''
    Mr. Clinger's request was accompanied by a 71-page minority 
analysis of issues unaddressed by any of the previous five 
reports. This analysis reviewed contradictions concerning: 
memoranda drafted by Catherine Cornelius outlining its new 
organizational structure and placing her in charge; activities 
of Harry Thomason and Darnell Martens; mismanagement by David 
Watkins; White House reasons justifying the Travel Office 
firings; contacts between Dee Dee Myers and Darnell Martens; 
public disclosure of the FBI investigation; possible influence 
on the FBI; the integrity of Travel Office records; the role of 
the President; the reprimands, and inaccuracies and 
insufficiencies in the GAO report on the White House Travel 
Office.
    Soon after the November 1994 congressional elections, Mr. 
Clinger, chairman of the Government Reform and Oversight 
Committee of the 104th Congress, announced that he would hold 
hearings on the White House Travel Office firings. In December 
1994, the Public Integrity Division of the U.S. Department of 
Justice indicted former White House Travel Office Director 
Billy R. Dale on one charge of embezzlement and one charge of 
conversion.
    The committee investigative staff conducted interviews and 
gathered documents from various participants in the Travel 
Office matter on a voluntary basis throughout the spring and 
summer of 1995. White House document production, however, 
proved problematic and led to numerous meetings and phone 
conversations with Clinton administration representatives in 
the White House Counsel's Office, the Department of Justice, 
Department of the Treasury as well as the General Accounting 
Office.
    In the fall of 1995, Chairman Clinger scheduled the 
committee's first hearing on the White House Travel Office for 
October 24, 1995. The hearing focused on the accuracy and 
completeness of the five White House Travel Office reports and 
to consider whether further hearings were required to address 
unanswered issues. The panel at the October 24, 1995, hearing 
included authors of each of the five reports, respectively. 
This hearing purposely avoided all areas that might have 
impacted upon the trial of former Travel Office Director Billy 
R. Dale which was to commence on October 26, 1995.
    The committee reviewed which of seven key Travel Office 
issues each report addressed. These issues were: the 
completeness of the review of references to ``Highest Levels'' 
involvement at the White House in the Travel Office firings; 
whether any assessment of White House Standards of Conduct was 
performed and whether administration staffers had violated 
those standards; whether inquiries were made into the role of 
Hollywood producer Harry Thomason in the firings; the role of 
Mr. Thomason's and his firm, Thomason, Richland and Martens 
(TRM) in seeking contracts involving the Interagency Committee 
on Aviation Policy (ICAP); whether the issue of competitive 
bidding by the White House Travel Office and by the White House 
itself in dealing with the Travel Office was reviewed; and 
whether thorough investigations into FBI and IRS actions and 
reactions to the White House inquiries had been undertaken.
    The hearing made clear that, given limitations on their 
scopes, none of the reports had addressed fully the issues 
raised by the Travel Office firings. The Treasury Inspector 
General IRS report redactions made it impossible to determine 
whether the IRS addressed any of the seven issues. The OPR and 
FBI reports only partially addressed two issues, ``FBI 
actions'' and references to ``Highest Levels of the White 
House'' and never addressed the other five. Despite its far 
greater understanding of the participants and circumstances 
leading to the Travel Office firings--or because of it--the 
White House Travel Office Management Review only briefly and 
superficially addressed Harry Thomason's role, FBI actions and 
references to ``Highest Levels'' of the White House while 
ignoring competitive bidding, IRS action, standards of conduct 
and ICAP contracts. Similarly, the GAO relied on the White 
House Management Review in its report on Mr. Thomason's role 
and only partially addressed FBI actions and ``Highest Levels'' 
while leaving ICAP, competitive bidding and standards of 
conduct unaddressed. IRS disclosure laws prevented the GAO from 
publicly addressing IRS actions.
    The October 24, 1995 hearing also made clear that the GAO 
and OPR reports, the most independent of the five, were hobbled 
by what their respective authors referred to as an 
unprecedented lack of cooperation by the White House in their 
investigations. It was determined in the hearing that the White 
House had denied both GAO and OPR documents which were critical 
to their investigations, documents which well might have 
affected their conclusions. Accordingly, both GAO and OPR never 
received any of the documents subsequently produced by the 
White House.
    The criminal trial of former Travel Office Director Billy 
R. Dale began on October 26, 1995, and concluded on November 
17, 1995, with Mr. Dale's acquittal of both charges. After the 
acquittal was announced, Chairman Clinger requested that the 
Public Integrity Section of the Department of Justice turn over 
all documents related to the criminal prosecution for review by 
the committee.
    At year-end 1995, the committee planned hearings on: the 
role of Mr. David Watkins in the Travel Office firings; the 
experiences of the fired seven Travel Office employees; the 
role of Mr. Harry Thomason; and the role of the FBI and IRS. In 
January 1996, the committee subpoenaed all of Mr. Thomason's 
documents related to the Travel Office and filed a ``6103 
Waiver'' with the IRS in which representatives of UltrAir 
authorized the IRS, Department of Treasury and others to 
release all relevant documents concerning the IRS audit of 
UltrAir in the wake of the Travel Office firings. The 
Department of the Treasury had promised prompt delivery of all 
documents pending receipt of the expanded 6103 waiver.
    At 8:30 p.m. on January 3, 1996, the White House delivered 
a document production to committee offices. Included in that 
production was a 9-page, undated draft memorandum written by 
David Watkins, a copy of which was simultaneously released to 
the media. Mr. Watkins wrote in this memorandum, which he 
characterized as a ``soul cleansing'' memorandum, that he had 
made his ``first attempt to be sure the record is straight, 
something I have not done in previous conversations with 
investigators--where I have been as vague and protective as 
possible.'' The Watkins draft memo ascribed a far greater 
Travel Office role to First Lady Hillary Rodham Clinton than 
the White House or Mrs. Clinton ever had admitted:

          On Monday morning you [then-White House Chief of 
        Staff McLarty] came to my office and met with me and 
        Patsy Thomasson. At that meeting you explained that 
        this was on the First Lady's ``radar screen.'' I 
        explained to you that I had decided to terminate the 
        Travel Office employees and you expressed relief that 
        we were finally going to take action (to resolve the 
        situation in conformity with the First Lady's wishes). 
        We both knew there would be hell to pay if, after our 
        failure in the Secret Service situation earlier, we 
        failed to take swift and decisive action in conformity 
        with the First Lady's wishes.

Mr. Watkins concluded that his memo:

          [Made] clear that the Travel Office incident was 
        driven by pressures for action originating outside my 
        Office. If I thought I could have resisted those 
        pressures, undertaken more considered action, and 
        remained in the White House, I certainly would have 
        done so. But after the Secret Service incident, it was 
        made clear that I must more forcefully and immediately 
        follow the direction of the First Family. I was 
        convinced that failure to take immediate action in this 
        case would have been directly contrary to the wishes of 
        the First Lady, something that would not have been 
        tolerated in light of the Secret Service incident 
        earlier in the year.

    The Watkins draft memorandum was responsive to the 
September 1995, document request by the committee. Moreover, 
back in October 1995, the White House Counsel's Office had 
informed the committee that it had produced most of the 
substantive documents pursuant to that request.
    The White House explained weeks afterwards that it first 
discovered the Watkins draft memorandum on December 29, 1995. 
The memorandum was reviewed by the White House Counsel's office 
and copied to several administration officials as well as the 
personal attorneys for Mack McLarty, Patsy Thomasson, Harry 
Thomason, and the President and First Lady by January 2, 1996. 
The White House released the Watkins draft memorandum to the 
media on the evening of January 3, 1996, at the same time it 
released the documents to the committee.
    On January 5, 1996, Chairman Clinger issued subpoenas to 
both David Watkins and Harry Thomason for all records 
concerning the White House Travel Office and related matters. 
On January 11, 1996, Chairman Clinger issued interrogatories 
concerning the origin and chain-of-custody of the original and 
all copies of the Watkins draft memorandum to be answered in 
writing and under oath by:
          Jane C. Sherburne, Special Counsel to the President.
          Jon Yarowsky, Associate Counsel to the President.
          Natalie Williams, Associate Counsel to the President.
          Miriam R. Nemetz, Associate Counsel to the President.
          Christopher D. Cerf, Associate Counsel to the 
        President.
          Nelson Cunningham, General Counsel, Office of 
        Administration.
          Patsy Thomasson, Deputy Director of White House 
        Personnel.
    Also on January 11, 1996, the committee issued bipartisan 
subpoenas for all relevant records to the White House Executive 
Office of the President and the White House Office of 
Administration as well as bipartisan personal subpoenas to Mack 
McLarty, Bruce Lindsey, Todd Stern, Patsy Thomasson, Catherine 
Cornelius and Margaret Williams. The documents subpoenaed were 
due on January 22, 1996.
    In the wake of the White House's release of the Watkins 
draft memorandum, Clinton officials, attorneys and surrogates 
launched attacks on the character and managerial skills of 
former Travel Office Director Billy Dale. First Lady Hillary 
Rodham Clinton also assailed Mr. Dale's management in various 
interviews. As a result, Chairman Clinger wrote President 
Clinton on January 16, 1996, requesting that the White House 
cease its continued attack on Mr. Dale.
    On January 17, 1996, the committee held its second hearing 
on the Travel Office matter. David Watkins was the sole witness 
at this hearing, at which he requested that no still or video 
cameras be allowed to record his testimony, invoking a House 
rule. In the hearing, he testified under oath regarding his 
draft memorandum and other records he had turned over to the 
committee pursuant to a personal subpoena. Watkins testified, 
``Was there pressure? Did I feel pressure of the desires and 
wishes of others? Yes, I did.'' Watkins testified he had felt, 
``a lot of internal pressure,'' and was asked by whom. ``The 
pressure that I felt was coming from the First Lady was 
conveyed primarily through Harry Thomason and Vince Foster.'' 
Mr. Watkins' May 12, 1993, notes, first received by the 
committee under personal subpoena, stated that Harry Thomason 
told him on that day that the First Lady wanted the Travel 
Office staff fired that day. In a May 14, 1993, telephone call 
to the First Lady, Watkins testified, he was told, ``We should 
get our people in and get those people out.''
    In the wake of the discovery of the Watkins memorandum 
where inconsistencies between Mr. Watkins' statements to the 
GAO and his undated memorandum and contemporaneous notes became 
clear, Chairman Clinger asked GAO to advise the committee 
concerning what sanctions exist for intentionally providing 
false information to GAO. GAO responded in a letter dated 
January 17, 1996, which addressed the relevant statutes and 
legal precedents. In a January 23, 1996, response to GAO, 
Chairman Clinger asked that GAO compare and contrast the notes 
of its interviews with Mr. Watkins with copies of interviews 
conducted with Mr. Watkins by various investigative agencies, 
Mr. Watkins' draft memorandum and contemporaneous notes and 
other materials. Chairman Clinger asked that GAO identify all 
of the material inconsistencies between the documents provided 
and GAO's own interview notes and to determine whether they met 
the materiality test required by any applicable statute.
    The seven fired Travel Office employees testified on 
January 24, 1996, when the committee held its third hearing on 
the White House Travel Office firings. The seven fired Travel 
Office employees testified about their work in the White House 
Travel Office and the management of press charters, the events 
leading to their firings on May 19, 1993, and their 
investigation at the hands of the FBI and IRS. Individually, 
they testified of the costs of their respective legal defenses 
which, all told, amounted to some $700,000.
    While all seven acknowledged that they served at the 
pleasure of the President, they questioned the manner in which 
the firings were undertaken. Mr. Dale testified:

          If the President or the First Lady or anyone else 
        wanted us out in order to give the business to their 
        friends and supporters, that was their privilege. But 
        why can't they just admit that is what they wanted to 
        do rather than continue to make up accusations to hide 
        that fact?

    Mr. Billy Dale testified in the hearing that records 
disappeared from the Travel Office in the period immediately 
preceding the firings and disputed allegations of Travel Office 
mismanagement as a ``convenient excuse'' intended to justify 
the firings. Five of the Travel Office employees testified 
about being placed on administrative leave within a week of the 
firings and subsequently finding employment elsewhere in the 
Federal Government. Mr. Dale and former White House Travel 
Office Deputy Director Gary Wright had retired from Federal 
service in the aftermath of the firings in 1993.
    In a letter to the committee dated January 23, 1996, Mr. 
David L. Clark, Director of Audit Oversight and Liaison for the 
General Accounting Office, evaluated current White House Travel 
Office management using the 29 criteria identified in its May 
1994, report on the Travel Office. The evaluation was based on 
work performed by GAO in the Travel Office in the fall of 1995. 
GAO stated:

          We found that the Travel Office had developed 
        policies and implemented procedures during the period 
        January 1995 through August 1995 to address all but 3 
        of the 29 criteria. For those three, we found that the 
        Travel Office had not (1) billed customers within its 
        stated 15-day requirement, (2) paid vendors within its 
        stated 45-day requirement, and (3) performed bank 
        reconciliations regularly.

GAO also reported:

          [T]he Travel Office had a policy requiring monthly 
        reconciliations of its checkbook with the cash balance 
        reported by its bank. As of April 1994, we found that 
        staff were performing the reconciliations as required. 
        However, from January 1995 through August 1995, Travel 
        Office staff performed no bank reconciliations because 
        other tasks were given a higher priority. Immediately 
        prior to our review, the Travel Office reconciled all 
        outstanding bank statements and found deposits totaling 
        $200,000 that had not been entered into its checkbook. 
        These funds were all owed to vendors who had previously 
        furnished goods and services for press trips. White 
        House officials informed us that future monthly 
        reconciliations will be performed as required.

    GAO's discovery of a $200,000 discrepancy in White House 
Travel Office deposits for calendar year 1995 is a matter of 
some concern given that the White House alleged in May 1993, 
that it had fired the entire Travel Office staff and launched 
an FBI criminal investigation on the basis of a $18,200 
discrepancy in Travel Office petty cash funds.
    On January 30, 1996, General Counsel Robert P. Murphy of 
the General Accounting Office wrote Chairman Clinger addressing 
inconsistencies between statements made by David Watkins to GAO 
and Watkins' undated draft memorandum and notes taken by 
Watkins which were dated May 31, 1993, and Watkins' GAO 
interview and other relevant documents.
    On February 1, 1996, Chairman Clinger and Senate Judiciary 
Committee Chairman Orrin Hatch (R-UT) introduced a bill to 
reimburse the legal expenses of the seven fired White House 
Travel Office employees. The bill would reimburse nearly 
$500,000 spent by Mr. Billy Dale on his defense as well as the 
Travel Office expenses still due by his six colleagues. In a 
1994 appropriation, Congress previously reimbursed $150,000 in 
their legal expenses.
    On February 7, 1996, the committee issued additional 
bipartisan personal subpoenas to a number of current and former 
White House employees, volunteers, friends and others involved 
in the Travel Office matter, including Matt Moore.
    On February 13, 1996, following consultation with Chairman 
Clinger, the GAO asked Federal prosecutors to investigate 
possible false statements made to GAO by David Watkins, having 
concluded that statements made or attributed to Mr. Watkins 
were inconsistent with statements he made in his GAO interview. 
Justice Department officials submitted the referral to the 
Independent Counsel and asked the court to approve the 
expansion of the scope of Independent Counsel Kenneth Starr to 
include this referral.
    The Government Reform and Oversight Committee submitted a 
list of 26 interrogatories to First Lady Hillary Rodham Clinton 
on February 15, 1996. These interrogatories were to be answered 
in writing and under oath by the First Lady by February 29, 
1996. The White House subsequently asked for an extension and 
the chairman of the Committee on Government Reform and 
Oversight agreed to a 3-week extension. The White House 
provided the First Lady's sworn responses to the committee on 
the second due date, March 21, 1996. Her responses were 
released to the media at the same time. In the responses, the 
First Lady insisted she had no decisionmaking role in the 
Travel Office firings and that her statements to GAO were 
accurate. As to conversations with Harry Thomason, Vince Foster 
and David Watkins, the First Lady had very few specific 
recollections.
    Chairman Clinger submitted H. Res. 369, which was referred 
to the Committee on Rules, on February 29, 1996. H. Res. 369 
provided special authority to the Committee on Government 
Reform and Oversight to obtain testimony for purposes of 
investigation and study of the White House Travel Office 
matter. The bill was limited, deliberately, to provide 
deposition authority to the Committee on Government Reform and 
Oversight only for its investigation of the Travel Office 
matter. Deposition authority allowed the committee to obtain 
sworn testimony from witnesses while minimizing the number of 
hearings needed in order to complete the investigation.\13\
---------------------------------------------------------------------------
    \13\ Precedents for such deposition authority have included: 1) 
President Nixon Impeachment Proceedings (93d Congress, 1974, H. Res. 
803); 2) Assassinations Investigation (95th Congress, 1977, H. Res. 
222); 3) Koreagate (95th Congress, 1977, H. Res. 252 and H. Res. 752); 
4) Abscam (97th Congress, 1981, H. Res. 67); 5) Iran-Contra (100th 
Congress, 1987, H. Res. 12); 6) Judge Hastings Impeachment Proceedings 
(100th Congress, 1987, H. Res. 320); 7) Judge Nixon Impeachment 
Proceedings (100th Congress, 1988, H. Res. 562); and 8) October 
Surprise (102d Congress, 1991, H. Res. 258.
---------------------------------------------------------------------------
    The House approved H. Res. 369 on March 7, 1996. Thereupon, 
the Committee on Government Reform and Oversight notified 
witnesses it wished to testify under oath before the committee. 
Depositions commenced in late March 1996. Initially, they were 
expected to be completed by June 1996.\14\
---------------------------------------------------------------------------
    \14\ With the subsequent revelation that the White House improperly 
had obtained some 900 confidential FBI background files on former 
officials of the Reagan and Bush administrations, the last of the 
depositions in fact was conducted in mid-September 1996.
---------------------------------------------------------------------------
    The White House made a March 15, 1996, production of 
documents pursuant to the committee's January 11, 1996, 
subpoena. That production contained yet another unproduced May 
3, 1994, handwritten letter from David Watkins to Mrs. Clinton. 
No explanation for the White House's failure to produce this 
document for nearly 2 years during the course of numerous other 
document requests was proffered until two requests for a chain-
of-custody were made. Mr. Quinn finally responded on April 8, 
1996, stating only that the letter was located in a stack of 
unsorted, miscellaneous papers and memorabilia in the Office of 
Personal Correspondence having been forwarded to Carolyn Huber 
from the First Lady. Ms. Huber forwarded the original letter to 
the First Lady on March 4, 1996. Mr. Quinn stated that Mrs. 
Clinton did not look at the letter until March 12, 1996, at 
which time she immediately sent the only copy of the White 
House document to her personal lawyer, David Kendall. Mr. 
Kendall reviewed the original and returned a copy, and later 
the original, to Special White House Counsel Jane Sherburne.
    On March 22, 1996, the three-judge Federal appeals panel 
which appointed Kenneth K. Starr Whitewater Independent Counsel 
approved an expansion of Independent Counsel Starr's mandate to 
include the issue of whether David Watkins lied about First 
Lady Hillary Rodham Clinton's role in the Travel Office firings 
and related matters. Attorney General Janet Reno referred the 
Watkins matter to the three-judge panel after the Justice 
Department had concluded the Watkins could be investigated by 
an independent counsel.
    By a vote of 350 to 43 on March 19, 1993, the House of 
Representatives passed H.R. 2937, a bill to reimburse the legal 
expenses and related fees incurred by former employees of the 
White House Travel Office with respect to the termination of 
their employment in that office on May 19, 1993.
    In document productions from individuals subpoenaed, the 
committee was provided with a copy of a February 15, 1996, 
White House Memorandum from John M. Quinn, Counsel to the 
President and Jane Sherburne, Special Counsel to the President, 
to a witness who had been subpoenaed by the Committee on 
Government Reform and Oversight to provide all records related 
to the White House Travel Office matter in the witness' 
possession to the committee. The memorandum from Mr. Quinn and 
Ms. Sherburne stated, in part:

          Last week, the Committee [on Government Reform and 
        Oversight] issued personal subpoenas to you and other 
        current and former White House employees. These 
        personal subpoenas call for personal as well as White 
        House records. The Counsel's Office will handle 
        production of your responsive White House records, 
        i.e., records created or obtained during the course of 
        your official duties. Accordingly, you should forward 
        any White House records you believe may be responsive 
        to the Counsel's Office and we will determine whether 
        they should be produced to the Committee. You should 
        provide any responsive personal records directly to the 
        Committee. [Emphasis in original.]

    The existence of the February 15, 1996, memorandum from Mr. 
Quinn and Ms. Sherburne greatly concerned the committee because 
the February 7, 1996, subpoenas served were personal subpoenas. 
Those subpoenaed to provide all relevant White House Travel 
Office records in their possession remain personally 
responsible for making a complete production, whether or not 
the White House chooses to withhold any or all of their 
documents from production to the committee. Given the White 
House's continuing unwillingness to make a complete production 
of records it has been subpoenaed to provide the committee, its 
instructions in the February 15, 1996, memo by Mr. Quinn and 
Ms. Sherburne to witnesses served personal subpoenas suggests 
that the White House intends to play an intermediary role in 
the case of current and former White House staffers, volunteers 
and others in a manner which may lead to their being held 
personally liable for a failure to produce all relevant 
records.
    In the wake of its discovery of the February 15, 1996, 
memorandum by Mr. Quinn and Ms. Sherburne, the committee wrote 
letters to each individual who had been issued a personal 
subpoena informing them that all records responsive to the 
committee's January and February 1996, subpoenas must be 
produced by May 8, 1996. Chairman Clinger sent similar letters 
to White House Counsel Quinn and Attorney General Reno 
informing them that all records responsive to White House and 
Justice Department subpoenas were to be produced by May 8, 
1996.
    Chairman Clinger also announced on May 2, 1996, that he had 
scheduled a committee business meeting for Thursday, May 9, 
1996, at 9 a.m. to consider a privileged resolution to compel 
production of any subpoenaed records relating to the White 
House Travel Office which were not provided to the committee by 
May 8, 1996.
    On May 9, 1996, the Government Reform and Oversight 
Committee voted to hold White House Counsel Jack Quinn and 
former White House aides David Watkins and Matthew Moore in 
contempt of Congress for failing to turn over subpoenaed 
documents. Also on May 9, 1996, White House Counsel Quinn wrote 
Chairman Clinger a letter claiming blanket privilege on behalf 
of President Clinton over 3,000 pages of documents being 
withheld from the committee. Attached to this letter was a 
letter from Attorney General Janet Reno endorsing the claim of 
executive privilege. At that time, however, the Attorney 
General had not reviewed any of the documents for which she had 
approved the President's claim of executive privilege.
    On May 30, 1996, the day on which the contempt resolution 
against White House Counsel Quinn was scheduled for a vote on 
the floor of the House, the White House delivered to the 
committee 1,000 of the 3,000 pages responsive to the 
committee's subpoenas over which it previously had claimed 
executive privilege. Accompanying this production was a 
privilege log of 2,000 documents which the White House 
continued to withhold. In the wake of this production, the 
committee postponed the contempt vote on the floor of the House 
against White House Counsel Quinn in order to review the 
records produced and the privilege log.
    In reviewing the 1,000 pages of documents produced on May 
30, 1996, the committee discovered Bernard W. Nussbaum's 
December 20, 1993, request of Billy Dale's confidential FBI 
background file from the FBI Liaison Office. Even though it was 
dated 7 months after Mr. Dale's firing, the form indicated that 
the White House was requesting Mr. Dale's confidential FBI file 
because it was considering him for ``Access (S).'' Chairman 
Clinger immediately called on the White House and the FBI to 
explain why the Dale file had been requested by and provided to 
the White House even as the Justice Department was undertaking 
a criminal investigation of Mr. Dale. (See The Security of FBI 
Background Investigation Files, below.)
    In the wake of this development, Chairman Clinger called on 
the White House to release the remaining 2,000 pages of 
documents over which it had claimed executive privilege, as it 
once had claimed executive privilege--inappropriately--over the 
Billy Dale FBI file request memo. After the White House refused 
this request, claiming that the remaining 2,000 pages were 
``unquestionably within the scope of [executive] privilege,'' 
Ranking Member Cardiss Collins agreed to act as an intermediary 
in a successful effort to allow the committee to review 
documents it deemed essential to its investigation while having 
the White House certify that no other documents remained 
outstanding.
    Chairman Clinger and committee staff began a review of the 
remaining 2,000 pages of documents in the presence of White 
House personnel on June 27, 1996. The chairman found these 
documents heavily redacted and also found that the White House 
privilege log released the previous month provided insufficient 
detail of their contents. The chairman advised the White House 
of these concerns in a June 28, 1996, letter to White House 
Counsel Quinn.
    After personally spending 6 hours reviewing redacted White 
House documents, Chairman Clinger wrote a July 31, 1996, letter 
to the White House requesting that it produce all responsive 
documents, in unredacted form, in three categories: 1) 
communications with outside attorneys relating to interviews, 
depositions or Grand Jury appearances; 2) briefing materials 
and questions prepared for Congress; and 3) the review of the 
late Vince Foster's White House office. The White House 
produced these documents, some 1,400 pages in all, on August 
15, 1996.
    Meanwhile, in response to a press inquiry on August 1, 
1996, President Clinton angrily denied having made any pledge 
to reimburse Billy Dale's legal expenses despite the fact that 
White House spokesman Mike McCurry had said in January 1996, 
that the President would sign such a bill if it came to his 
desk and a second White House spokesman had repeated those 
remarks the very morning of the President's outburst. In 
addition, President Clinton improperly referred to Mr. Dale's 
Justice Department plea bargain negotiations. The details of 
those negotiations were leaked under highly questionable 
circumstances by the Clinton Justice Department in the days 
following Mr. Dale's November 1995, acquittal by a jury in less 
than 2 hours of the two charges against him. Mr. Robert 
Bennett, who is defending President Clinton against charges of 
sexual harassment made by Ms. Paula Jones, first raised--and 
mischaracterized--these plea negotiations in the days following 
the Dale acquittal.
    The provision to reimburse the Travel Office-related legal 
expenses of Mr. Dale and his six colleagues was passed in the 
Senate on September 28, 1996, as part of the Omnibus 
Consolidated Appropriations Act of 1997, and signed into law by 
President Clinton on September 30, 1996.
    On September 18, 1996, the Committee on Government Reform 
and Oversight approved the committee's report of its 
``Investigation of the White House Travel Office Firings and 
Related Matters'' by voice vote and submitted it to the full 
House to be printed.
    On October 15, 1996, Chairman Clinger wrote a letter to 
Independent Counsel Kenneth W. Starr enclosing copies of the 
committee's Travel Office Report and its interim report on the 
FBI Background Investigation Files matter. This letter also 
addressed Chairman Clinger's concerns about the internal 
discrepancies in testimony, witnesses' lack of recall of 
material events, and conflicts between the White House's 
documentary evidence and the sworn accounts of Jane Sherburne, 
Harry Thomason, Craig Livingstone, Anthony Marceca, William 
Kennedy, Bernard Nussbaum and Thomas F. ``Mack'' McLarty.
    c. The Security of FBI Background Investigation Files.--On 
May 30, 1996, in the course of its Travel Office investigation, 
the committee discovered a December 20, 1993, White House 
request of Billy Dale's confidential FBI background file from 
the FBI Liaison Office. Even though it was dated 7 months after 
Mr. Dale's firing, the form indicated that the White House was 
requesting Mr. Dale's confidential  FBI  file  because  it  was 
 considering  him  for ``Access (S).'' The Billy Dale FBI 
background file request memo was found in a White House 
production of 1,000 pages of documents over which the White 
House previously had claimed executive privilege. Chairman 
Clinger immediately called on the White House and the FBI to 
explain why the Dale file had been requested by and provided to 
the White House even as the Justice Department was undertaking 
a criminal investigation of Mr. Dale.
    By June 5, 1996, the White House had claimed that the Billy 
Dale FBI background file request was a routine request 
mistakenly made by an unnamed file clerk. In response, Chairman 
Clinger requested of the White House and Attorney General Janet 
Reno a list of all such White House requests for confidential 
FBI background reports on private citizens and government 
employees not seeking employment by the Clinton administration 
or access to the White House. The following day, the White 
House claimed that the General Accounting Office had requested 
the Dale Confidential FBI background file. The GAO denied this 
immediately.
    By June 7, 1996, the White House had acknowledged that it 
obtained the FBI files of approximately 338 former White House 
employees, including many former Reagan and Bush administration 
employees but alleged that the files never were read. Then 
Anthony Marceca, a former detailee hand-picked by White House 
Office of Personnel Security Director Craig Livingstone to work 
in that office, contradicted the White House when he told 
Livingstone's attorney that he, Marceca, in fact had read all 
the files and had passed on any derogatory information to 
Livingstone.
    The White House admitted to having an additional 71 
improperly sought FBI background files by June 14, 1996, the 
day that FBI Director Louis J. Freeh released the findings of 
an FBI review of the matter. Freeh concluded that 408 files had 
been sought and received by the White House ``without 
justification.'' Director Freeh further stated, ``The prior 
system of providing files to the White House relied on good 
faith and honor. Unfortunately, the FBI and I were victimized. 
I promise the American people that it will not happen again on 
my watch.''
    Also on June 14, 1996, Livingstone revealed problems in his 
own background in a sworn deposition before the Committee on 
Government Reform and Oversight, including problems with his 
employment history and the use of illegal drugs. On June 15, 
1996, the White House delivered a document production to the 
committee which included letters from former Associate White 
House Counsel William H. Kennedy III, to then-Defense Secretary 
Les Aspin and others seeking the assignment of Army 
investigator Anthony Marceca to a White House detail in the 
Office of Personnel Security.
    The committee held four hearings on the FBI files matter in 
the summer of 1996. The first hearing on June 19 addressed the 
issue of how confidential FBI background files were handled 
during previous administrations. Among the witnesses were 
former White House Counsels and Deputy White House Counsels, 
the head of the Office of Personnel Security during the Reagan 
and Bush administrations and her assistant of 12 years. These 
witnesses testified that access to confidential FBI background 
files historically had been strictly limited to at most the 
White House Counsel, his Deputy and the Director of the Office 
of Personnel Security. By contrast, the assistant to the former 
Office of Personnel Security Director testified that during 7 
months of service in the Clinton administration, White House 
interns 18-20 years old--and without any security clearance--
had access to the confidential FBI background files.
    On June 21, Attorney General Janet Reno turned over the 
investigation of the White House requests for confidential FBI 
background files to Independent Counsel Kenneth W. Starr. 
General Reno stated, ``I have concluded it would constitute a 
conflict of interest for the Department of Justice itself to 
investigate the matter involving an interaction between the 
White House and the FBI, a component of the Department of 
Justice.''
    The committee's second hearing on the FBI files matter was 
held on June 26, with former White House Counsel Bernard 
Nussbaum, former Associate White House Counsel Bill Kennedy, 
Office of Personnel Security Director (then on administrative 
leave) Craig Livingstone and former Army detailee Anthony 
Marceca and Lisa Wetzl, a former assistant to Livingstone, 
testifying as to the handling of these files during the Clinton 
administration. While Livingstone announced his resignation 
from this position at the June 26 hearing and the White House 
immediately announced a replacement, the question, ``Who hired 
Craig Livingstone?'' never was answered definitively by any of 
the witnesses. Mr. Livingstone testified that it had been his 
life-long dream to serve in the White House of a Democratic 
administration yet most improbably could not recall who made 
him the offer which made that dream come true. Nor was this 
question answered in the months to follow.
    It was learned during this hearing that whoever did hire 
Livingstone was able to overrule or overcome Kennedy's concerns 
about Livingstone's background. Mr. Livingstone admitted his 
drug history in committee depositions and during the June 26 
hearing. It had also been reported that he was fired from a 
previous job for lying about his employment history and was 
fired by a store which had employed him for improperly 
returning merchandise.
    Messrs. Livingstone and Marceca and Ms. Wetzl testified 
that the improper request and receipt of hundreds of 
confidential FBI background files of former Reagan and Bush 
administration officials was undertaken due to their reliance 
on a faulty White House access list provided by the Secret 
Service.
    In order to pursue the committee's investigation into the 
FBI files matter, Chairman Clinger initially had sought to 
depose FBI agents. Director Freeh recommended, instead, that 
the committee be allowed to review relevant FBI background 
files, and the chairman agreed to this. On July 16, committee 
Chief Investigative Counsel Barbara Olson reviewed the FBI 
background files of Livingstone and Marceca. In the Livingstone 
FBI file, notes of a Nussbaum interview indicated Nussbaum's 
understanding that Livingstone came highly recommended by Mrs. 
Clinton, who knew Livingstone's mother. Summarizing an 
interview with then-White House Counsel Nussbaum concerning 
Livingstone, FBI Agent Sculimbrene wrote, in part, in a 
memorandum:

          Bernard Nussbaum, Counsel to the President, advised 
        that he has known [Livingstone] for the period of time 
        that he has been employed in the new administration. 
        [Livingstone] had come highly recommended to him by 
        HILLARY CLINTON, who has known his mother for a longer 
        period of time.

While the White House--and Livingstone's mother--subsequently 
claimed that Mrs. Clinton did not know Livingstone's mother, 
the factual accuracy of such a relationship was far less 
important than the fact that, at the time of Livingstone's 
hiring, Nussbaum understood him to come highly recommended to 
the position by a First Lady who knew his mother, details he 
had denied under oath.
    No less troubling was the committee's subsequent discovery 
of continuing FBI involvement in this matter despite General 
Reno's obvious concern about the inherent conflict of interest 
between the White House and the Department of Justice in the 
FBI files investigation. The committee learned that despite the 
Attorney General's concerns, FBI Counsel Howard Shapiro 
provided the White House with a ``heads-up'' concerning Chief 
Investigative Counsel Olson's visit to the FBI and review of 
the Livingstone and Marceca files, including the Nussbaum 
interview summary which contradicted Nussbaum's testimony to 
the committee in a deposition and a hearing. Counsel Shapiro 
called Deputy White House Counsel Kathleen Wallman with this 
``heads-up.'' Ms. Wallman in turn contacted White House Special 
Counsel Jane Sherburne who informed numerous others of the 
Livingstone file, including Mr. Nussbaum in advance of his 
grand jury appearance.
    On July 17, 1996, two FBI agents appeared at the home of 
Dennis Sculimbrene, the FBI agent whose interview summary 
referred to the hiring of Livingstone, showed him the summary 
and asked him for notes of the interview. FBI agents also 
searched his work area for information related to Livingstone's 
hiring and his background investigation. This, too, appeared to 
violate General Reno's sentiments that such actions would, 
``constitute a conflict of interest for the Department of 
Justice itself to investigate the matter involving an 
interaction between the White House and the FBI, a component of 
the Department of Justice.''
    The question of whether a faulty White House access list 
could explain what the Clinton administration had called a 
``bureaucratic snafu'' was addressed in the committee's third 
hearing on the FBI files matter on July 17, 1996. Secret 
Service Special Agents Arnold Cole, John Libonati and Jeffrey 
Undercoffer testified at this hearing. Their testimony, based 
on recovered lists, charted the transitions of nearly 500 
former White House officials from ``Active'' to ``Inactive'' 
status from 1982 through 1993. The Secret Service agents also 
testified the lists it provided the White House would indicate 
``Active'' or ``Inactive'' status or ``A'' and ``I'' for those 
listed unless a custom list had been requested. Special Agent 
Cole also testified that, soon after the Clinton White House 
blamed the FBI files ``snafu'' on a faulty Secret Service list, 
Livingstone came to him and explained that the office knew 
which lists to use even as it improperly requested hundreds of 
confidential FBI background files.
    Chairman Clinger reviewed Livingstone's file for the first 
time on July 18, 1996, in the company of Chief Investigative 
Counsel Olson. Chairman Clinger requested information 
concerning any communication of information in Livingstone's 
file to the White House. On July 19, 1996, FBI Counsel Howard 
Shapiro wrote Chairman Clinger a letter informing him that the 
FBI had advised the White House as to the contents of the 
Livingstone file: ``because issues raised in Mr. Nussbaum's 
interview [in Livingstone's FBI file] has been discussed in 
connection with the committee's oversight investigation, it was 
determined that the Bureau had a responsibility to advise 
affected parties. Therefore, after arrangements were made for 
your staff to review the files, the Department of Justice, and 
then the White House, were advised of the results of this 
review.''
    On August 1, 1996, the committee held a hearing on 
Shapiro's ``heads up'' to the White House on the Livingstone 
matter. Shapiro not only admitted to the ``heads up;'' he also 
acknowledged hand-carrying retired FBI Agent Gary Aldrich's 
manuscript on the Clinton White House, ``Unlimited Access'' to 
White House Counsel Quinn.
    On October 15, 1996, Chairman Clinger wrote a letter to 
Independent Counsel Kenneth W. Starr enclosing copies of the 
committee's Travel Office Report and its interim report on the 
FBI Background Investigation Files matter. This letter also 
addressed Chairman Clinger's concerns about the internal 
discrepancies in testimony, witnesses' lack of recall of 
material events, and conflicts between the White House's 
documentary evidence and the sworn accounts of Jane Sherburne, 
Harry Thomason, Craig Livingstone, Anthony Marceca, William 
Kennedy, Bernard Nussbaum and Thomas F. ``Mack'' McLarty.
    d. Questions concerning campaign contributions made to or 
solicited by Lippo Group, John Huang and others.--In September 
and October 1996, it was reported that two former Department of 
Commerce employees had been involved in political activities 
while working at the Commerce Department. Former Deputy 
Assistant Secretary for International Economic Policy John 
Huang and Melinda Yee, former Special Assistant to the late 
Secretary of Commerce Ron Brown, allegedly were involved in 
fund raising and/or other political activities on behalf of the 
Clinton campaign while on the Federal Government payroll. 
Following his tenure at Commerce, Huang became a senior fund 
raiser at the Democratic National Committee. Some of the 
largest campaign contributions he solicited while there 
allegedly were made in violation of Federal Election Commission 
laws.
    Prior to joining the Clinton administration, Mr. Huang was 
a senior executive of the Lippo Group, an Indonesia-based 
conglomerate which provided him an $800,000 bonus shortly 
before he accepted a Commerce Department post where his work 
raised conflict of interest issues with his former employer. 
Mr. Huang and James Riady, whose family controls the Lippo 
Group, had known President Clinton since the 1980's. Throughout 
that period, Huang and Riady raised substantial sums of money 
for Clinton's gubernatorial and Presidential campaigns. 
Subsequently, it was reported that together they participated 
in scores of meetings in the Clinton White House. Policy 
matters were discussed at some of these meetings, possibly in 
violation of Federal Election Commission campaign law. Follow-
up articles addressed a number of other campaign finance 
irregularities arising during the course of the Clinton 
campaign, including contributions made by individuals barred by 
law from making them.
    In October 1996, Chairman Clinger initiated a series of 
document requests for materials relevant to this inquiry, which 
is ongoing. The Democratic National Convention has refunded 
$1.5 million in contributions from illegal or questionable 
sources.
    e. Misuse of political influence within the disciplinary 
enforcement system at the Department of Defense.--On August 2, 
1996, the committee received allegations that high-level White 
House and Department of Defense (DOD) officials had misused 
their positions and influence to circumvent the DOD 
disciplinary enforcement system. The allegations charged that 
White House officials had pressured the Deputy Under Secretary 
of Defense to employ a former Air Force officer who had 
recently been dismissed following confirmed charges of official 
misconduct. The former officer was alleged to have been re-
hired to a senior Schedule-C political appointee position 
within the Office of the Secretary of Defense (OSD).
    Pursuing the allegations, the committee first confirmed 
that the former officer had, in fact been re-hired within OSD, 
then reviewed the charges of TDY fraud, government cell phone 
fraud, government AMEX Travel Card abuse and sexual harassment 
which had originally been lodged against the officer. The 
committee examined the complete Defense Systems Information 
Agency Inspector General (DISA IG) and Air Force Office of 
Special Investigations (AFOSI) investigative files on the case. 
Staff interviewed the DISA IG and AFOSI case investigators, the 
reviewing Air Force Staff Judge Advocate and Deputy Staff Judge 
Advocate, and the retired officer's former commanding officers. 
All records and interviews substantiated the validity of the 
initial charges. The Staff Judge Advocate confirmed that while 
the evidence was sufficient to warrant administrative action, 
the Air Force had agreed to forego disciplinary proceedings in 
return for the officer's resignation.
    Committee staff then met with the Deputy Under Secretary of 
Defense and representatives of the Secretary of Defense to 
discuss the decision to employ the dismissed officer as a high-
level political appointee at an annual salary of well over 
$100,000. Although both the Deputy Under Secretary and the 
Secretary's senior staff were made aware of the past misconduct 
and the officer's forced resignation, the Secretary declined to 
take action to remove the officer from his subsequent 
employment.
    The committee then referred the matter to the appropriate 
House and Senate authorizing and appropriating committees for 
additional action.
    f. Health Care Task Force.--In February 1993, 
Representative Clinger called into question the secretive 
manner in which the administration's Health Care Task Force was 
conducting business. After requesting information from an 
unresponsive White House on whether the Task Force was meeting 
in compliance with statutes concerning open meetings, 
recordkeeping, conflict of interest requirements and costs, 
Representative Clinger requested a GAO audit. In a required 
charter, the Clinton administration claimed Task Force costs 
would be less than $100,000. The GAO audit, however, placed the 
total cost at $13.8 million.
    g. Labor Department Taxpayer Funded ``Toll-Free'' 
Hotline.--Following reports of a telephone hotline set up by 
the Department of Labor to gather support for increasing the 
minimum wage from minimum wage earners, Chairman Clinger sent a 
letter to Secretary Reich requesting information on the costs 
and purpose of the telephone bank, and to ascertain whether the 
Department was in compliance with appropriate information 
collection laws. Shortly thereafter, the hotline was shut down. 
After several delays, the Department reported that, although 
total costs were not yet available, the Department had capped 
the total cost of the politically inspired hotline at $25,000. 
The minimum wage brings workers an annual salary of $8,840.
    h. National Reconnaissance Office.--Chairman Clinger and 
subcommittee Chairman Horn have asked the GAO to review reports 
due from Defense Department and the Central Intelligence Agency 
on revelations that the National Reconnaissance Office secretly 
accumulated $1.7 billion in unspent appropriated funds. After 
the GAO report has been completed and reviewed, the committee 
will determine if further action, including possible financial 
management reforms, is warranted.
    i. Abuse of the American Express Government Travel Payment 
Program.--In the fall of 1995, the Committee on Government 
Reform and Oversight reviewed two audit reports, one from the 
Commerce Department and the other from the U.S. Information 
Agency. Each of these reports highlighted problems associated 
with the American Express Government Travel Payment Program.
    At the U.S. Information Agency, the audit report cited 
$2,200,000 in delinquent funds for the Agency's centrally 
billed credit card account, and $240,000 in delinquent funds 
for the Agency employees' individually billed credit card 
accounts. At the Commerce Department, delinquency was found 
among 293 employees. The committee also learned from these 
reports that American Express Travel Cards were being used for 
personal expenditures on a large scale. At the Commerce 
Department, 567 employees were found to have used the travel 
cards for personal use. At the U.S. Information Agency, 
employees were found to have charged $116,000 in retail 
purchases, much of which was found to be for personal use.
    As a result of these reports, the committee endeavored to 
study the breadth of the problems associated with the American 
Express Government Travel Payment Program throughout the 
Federal Government. In March 1996, committee staff met with 
members of the Office of Management and Budget and the General 
Services Administration and agreed on parameters by which 
agencies would submit records and/or analysis of the 
irregularities in their offices.
    The number and amount of delinquent charges on Government 
employees' American Express cards is massive. At the Department 
of Justice, the Inspector General reports that the sum of 
Centrally Billed Accounts and Individually Billed Accounts 
brings monthly delinquency to $1.1 million and identified 768 
transactions as ``possible misuse.'' Upon investigation, the 
Department of Justice Inspector General found charges to retail 
establishments like Victoria's Secret and Gucci. One such 
personal charge was to the Boston Red Sox.
    The Environmental Protection Agency chose to examine only 
its Region 5 office. In that region, misuse ranged from $10.40 
to $21,281. Twenty-four Environmental Protection Agency 
employees improperly charged $2,000 or more on their Government 
credit cards.
    Although the State Department Inspector General reported 
only $82,000 in possible misuse over a 6 month period, of the 
$6.4 million in retail charges, $3.2 million represents cash 
transactions from automatic teller machines or traveler checks. 
The State Department Inspector General reports total 
delinquency among Government credit card holders at between 
$847,805 and $1,093,034 each month.
    On September 25, 1996, Chairman Clinger wrote to Franklin 
D. Raines, the Director of the Office of Management and Budget, 
for his assurance that these abuses are being corrected. In 
addition, the chairman sought to ensure that provisions in a 
new contract being negotiated by the General Services 
Administration were designed to prevent the widespread abuse 
discovered in the course of the committee's investigation. The 
committee is awaiting a response from Director Raines.
    j. Taxpayer Funded Trip to Disney World.--After learning of 
a Disney World training seminar conducted at taxpayer expense 
for as many as 400 Federal employees, Chairman Clinger wrote on 
behalf of the committee to the Departments of Interior, 
Agriculture, and Defense to obtain an accounting of the exact 
costs of the trip, the number of employees involved, and an 
explanation of how the training related to the Departments' 
missions. The trip was taken just 1 week after the Federal 
Government shut down as a result of disagreements on how to 
achieve a balanced budget. Chairman Clinger spelled out his 
concern that hundreds of thousands of dollars may have been 
spent for what appears to be a lavish, taxpayer-funded 
vacation.
4. Legislation.
            a. H.R. 5, the Unfunded Mandates Reform Act of 1995 (Public 
                    Law 104-4)
    a. Report Number and Date.--House Report No. 104-1, Pt. 2; 
January 13, 1995.
    b. Summary of Measure.--The Unfunded Mandates Reform Act of 
1995 was intended to relieve the burden of unfunded Federal 
mandates on State, local and tribal governments and the private 
sector. It was designed to ensure that Congress and the 
executive branch (1) had information on the costs of unfunded 
Federal mandates, and (2) were accountable to States and 
localities, the private sector, and the public for imposing new 
mandates without paying for them.
    Title I of the Unfunded Mandates Reform Act (Public Law 
104-4) amended Title IV of the Congressional Budget Act to 
provide that Congress must have Congressional Budget Office 
(CBO) estimates for the costs of mandates it would impose on 
State and local governments and the private sector through 
reported legislation. Intergovernmental mandates projected to 
cost State, local or tribal governments over $50 million in the 
aggregate must be funded. Legislation that does not meet these 
requirements will be subject to a point of order on the House 
and Senate floor, where a majority of members must vote to 
waive the point of order before Congress can consider an 
intergovernmental mandate without paying its costs.
    Title II of the law requires Federal agencies to analyze 
the effects of their rules on State and local governments and 
the private sector, and prepare written statements detailing 
the costs and benefits of rules expected to cost either State, 
local and tribal governments or the private sector over $100 
million in the aggregate. Agencies must consult with State and 
local elected officials throughout the process. Agencies also 
must select the least costly or most cost-effective rule where 
possible.
    Title III provides for a look back at existing mandates. It 
requires the Advisory Commission on Intergovernmental Relations 
to re-evaluate existing mandates and to make recommendations to 
Congress and the President within 1 year as to whether some or 
all should be changed or repealed.
    Title IV provides for limited judicial review of agency 
actions under Title II.
    The differences between H.R. 5 as reported by the committee 
and Public Law 104-4 are fairly technical in nature and do not 
dramatically alter the purpose or effect of the legislation.
    c. Legislative History/Status.--Government Reform and 
Oversight Committee Chairman William F. Clinger, Jr., joined 
with Representatives Rob Portman (R-OH), Gary Condit (D-CA) and 
Tom Davis (R-VA) to introduce H.R. 5, the Unfunded Mandates 
Reform Act, on January 4, 1995. The bill was referred to the 
Committee on Government Reform and Oversight, with secondary 
referrals given to the Committees on Rules, Budget, and 
Judiciary.
    d. Hearings and Committee Actions.--On January 10, 1995, 
the committee voted to report H.R. 5 by a voice vote after a 
mark up in which 18 amendments were offered and 4 were adopted. 
Of those amendments adopted, three were offered by 
Representative Steve Horn (R-CA) and one was offered by 
Representative Paul Kanjorski (D-PA). The committee did not 
consider sections 201, 202, or Title III of H.R. 5 based on 
consultations with the Parliamentarian that those provisions 
were not in the committee's jurisdiction.
    S. 1, the companion bill in the Senate (also titled the 
Unfunded Mandates Reform Act of 1995), moved through the Senate 
Governmental Affairs Committee on a parallel track.
    House floor consideration of H.R. 5 began on January 19, 
1995, and concluded on February 1, 1995. The Conference Report 
on S. 1 was passed by the House on March 16, 1995, and was 
signed into law on March 22, 1995.
            b. H.R. 2, Line Item Veto Act of 1995
    a. Report Number and Date.--House Report No. 104-11, Pt. 
II, January 30, 1995, together with minority and additional 
views.
    b. Summary of Measure.--H.R. 2, the House-passed Line Item 
Veto Act of 1995, was designed to supplement the President's 
existing impoundment authority by creating a new enhanced 
rescission process for individual appropriations and targeted 
tax benefits contained in Federal tax and spending bills. The 
bill as sent to the President addresses not only individual 
appropriations and limited tax benefits, but also provides 
item-veto authority for increases in new direct spending.
    Under the Line Item Veto Act, the President may strike any 
whole dollar amount of discretionary spending in an 
appropriations act, conference report, or joint explanatory 
statement to accompany a conference report.
    In the case of entitlements, the President is permitted to 
cancel specific provisions of law which provide new direct 
spending relative to the current budget baseline. Any new 
direct spending program or legislative expansion of an existing 
entitlement would therefore be subject to the line item veto.
    For limited tax benefits, the act permits the Joint 
Committee on Taxation to determine which provisions, if any, in 
a revenue or reconciliation bill meet the definition of a 
limited tax benefit. If the Joint Committee's determinations 
are included in the revenue or reconciliation bill which is 
sent to the President, its determinations are binding upon the 
President's cancellation authority. If no Joint Committee 
determinations are included in the bill, the President is 
permitted to make his own determination of what qualifies as a 
limited tax benefit using the definition contained in the Line 
Item Veto Act.
    Tax or spending items item-vetoed by the President are 
automatically canceled and may only be reinstated if both 
Houses of Congress vote to disapprove the President's 
cancellations within a fixed time period. All moneys saved are 
set aside in a lockbox account for the purposes of deficit 
reduction. If both Houses disapprove the President's 
recommendations by a bill or joint resolution, the President 
retains his constitutional authority to veto the disapproval 
measure, forcing the Congress to obtain a two-thirds vote in 
each House to override. The Line Item Veto Act permits the 
President to choose between using its new item-veto process or 
the existing impoundment process contained in title X of the 
Congressional Budget Act.
    c. Legislative History/Status.--H.R. 2 was introduced on 
January 4, 1995, and was approved and ordered reported, as 
amended, by the Committee on Government Reform and Oversight on 
January 25, 1995. On January 26, 1995, the Committee on Rules 
asserted its sequential referral by marking-up the bill. The 
Rules Committee ordered the bill reported with two amendments 
which more closely defined the format of the President's 
special disapproval message. An amendment in the nature of a 
substitute to H.R. 2, incorporating both the Government Reform 
and Oversight and Rules Committee amendments, passed the House 
of Representatives on February 6, 1995.
    On February 14, 1995, the Senate Budget Committee reported 
two competing versions of S. 4 while the Senate Committee on 
Governmental Affairs reported its version of the bill on March 
7, 1995. The Senate approved the bill, as amended on March 23, 
1995, and requested a conference. The bill S. 4 passed the 
House on March 28, 1996 and was signed into law by the 
President on April 9, 1996, to become Public Law 104-130.
    d. Hearings and Committee Actions.--A joint hearing was 
held on January 12, 1995, by the House Committee on Government 
Reform and Oversight and the Senate Committee on Governmental 
Affairs. In the first panel, testimony was received from 
Senators John McCain and Dan Coats, and from Representatives 
Gerald Solomon, Jack Quinn, Mark Neumann and Michael Castle. 
All spoke in favor of the bill. Governor William Weld of 
Massachusetts then testified to the effectiveness of the line-
item veto in controlling State expenditures. Dr. Alice Rivlin, 
Director of the Office of Management and Budget, spoke on 
behalf of the Clinton administration and expressed support for 
the legislation as enhancing the President's authority to cut 
spending. Dr. Robert Reischauer, Director of the Congressional 
Budget Office, then cautioned that the bill would provide the 
President with greater potential power than a constitutionally 
approved item-veto. Judge Gilbert S. Merritt, Chief Judge of 
the Sixth Circuit and chairman of the Executive Committee of 
the Judicial Conference, expressed concern over applying the 
line-item veto to appropriations acts for the judiciary. The 
hearing ended with the final panel, which consisted of Joseph 
Winkelmann of Citizens Against Government Waste, David Keating 
of the National Taxpayers' Union, and Dr. Norman Ornstein of 
the American Enterprise Institute, taking different views of 
the bill. Mr. Winkelmann and Mr. Keating strongly supported 
H.R. 2, while Dr. Ornstein regarded the bill as more of a 
transfer of congressional power to the President than a process 
for true spending restraint.
            c. H.R. 1038, a bill to revise and streamline the 
                    acquisition laws of the Federal Government.
    a. Report Number and Date.--None.
    b. Summary of Measure.--On February 24, 1995, Chairman 
William F. Clinger, Jr., of the Committee on Government Reform 
and Oversight, Chairman Floyd D. Spence of the Committee on 
National Security, and Chairman Benjamin A. Gilman of the 
Committee on International Relations, introduced H.R. 1038 to 
revise and streamline the acquisition laws of the Federal 
Government. The bill addressed two issues: repeal of the 
recoupment of research and development costs, and a rewrite of 
the Procurement Integrity laws.
    c. Legislative History/Status.--Included as part of H.R. 
1670, the Federal Acquisition Reform Act of 1995 in May 1995, 
which subsequently was modified and included in the conference 
report to S. 1124, the Fiscal Year 1996 Department of Defense 
Authorization Act (Public Law 104-106).
    d. Hearings and Committee Actions.--The bill was referred 
to the Subcommittee on Government Management, Information, and 
Technology, which met pursuant to notification on February 28, 
1995, to solicit additional proposals for further simplifying 
and streamlining the Federal procurement system. At the 
hearing, testimony was received from various procurement 
specialists in the contracting community representing 
government and industry.
    Generally, the comments of the witnesses were as follows: 
those representing the government expressed the need for less 
congressional micro-management and greater flexibility and 
authority for agency contracting officers; those representing 
businesses, both large and small, reiterated their long held 
views about reducing government rules and regulations so they 
could sell to government agencies like they do to private 
sector buyers; and those representing other groups complained 
that existing laws are too complicated and too confusing.
    The various proposals for reform brought forward by the 
witnesses ranged from minor technical corrections to a complete 
overhaul of the system.
            d. H.R. 1670, The Federal Acquisition Reform Act of 1995
    a. Report Number and Date.--Report No. 104-222, Pt. 1, 
together with additional minority views; August 1, 1995.
    b. Summary of Measure.--During this time of declining 
Federal budgets, Chairman Clinger and his colleagues sought to 
eliminate the mass of requirements littering the current 
Federal procurement system that has led to too much money being 
spent for too little product. H.R. 1670 would remove from 
statute many of these unnecessary government-unique 
requirements which are often non-value added obstacles to doing 
business with the Federal Government.
    This legislation would make changes to the current 
competition standard; increase the government's purchase of 
commercial items; streamline current procurement integrity 
statutes; provide that it is the policy of the Federal 
Government to acquire goods and services from the private 
sector; and consolidate current contract disputes and bid 
protest forums into two streamlined entities, one for 
Department of Defense acquisitions and the other for the 
civilian agencies.
    c. Legislative History/Status.--On June 14, 1995, a version 
of H.R. 1670 was offered on the floor of the House of 
Representatives as an amendment to the fiscal year 1996 
Department of Defense Authorization Act; adopted and amended by 
Congresswoman Cardiss Collins' second degree amendment to 
remove Title I of H.R. 1670, and replace it with language which 
would retain the current statutory competition standard and 
include further statutory revisions.
    An amendment in the nature of a substitute to H.R. 1670 was 
developed prior to committee mark-up to reflect the views of 
other Members of Congress (both Republican and Democrat), 
industry associations, senior industry executives, the 
administration, government contracting officials, 
representatives of both large and small business, and from 
other interested individuals. The Committee on Government 
Reform and Oversight met on July 27, 1995, to consider H.R. 
1670. The bill, as amended, was favorably reported to the House 
by voice vote and without further amendment by the full 
committee.
    H.R. 1670 was passed on the floor of the House of 
Representatives on September 14, 1995, by an overwhelming vote 
of 423-0. The bill was sent to the Senate and referred to the 
Committee on Governmental Affairs.
    H.R. 1670 was included in a modified form as Division D in 
the final conference report to accompany S. 1124, the 
Department of Defense Authorization Act for Fiscal Year 1996. 
S. 1124 was signed by the President on February 10, 1996, and 
became Public Law 104-106.
    Included in the Omnibus Consolidated Appropriations Act for 
Fiscal Year 1997 (Public Law 104-208) was language to change 
the short titles of both Division D and Division E (the 
Information Technology Management Reform Act of 1996) of Public 
Law 104-106 to the Clinger-Cohen Act of 1996.
    d. Hearings and Committee Actions.--A joint hearing by the 
Committee on Government Reform and Oversight and the Committee 
on National Security was held on May 25, 1995, to solicit views 
on H.R. 1670 as introduced on May 18, 1995. Procurement experts 
representing both government and industry provided comment.
    Statements presented by industry representatives emphasized 
that H.R. 1670 would shift presumptions of private and public-
sector business interaction from a negative one to a positive 
one, and would permit things to be done cheaper, faster, and 
better than currently is being done today. These 
representatives identified H.R. 1670 as clearly making a long-
term mark on the acquisition system to prepare it for the 21st 
century.
            e. H.R. 830, The Paperwork Reduction Act of 1995
    a. Report Number and Date.--Report No. 104-37, February 15, 
1995.
    b. Summary of Measure.--The Paperwork Reduction Act is 
intended to:
          1. Reauthorize appropriations for the Office of 
        Management and Budget's (OMB) Office of Information and 
        Regulatory Affairs (OIRA) to carry out the provisions 
        of the Paperwork Reduction Act of 1980 as amended.
          2. Strengthen OIRA and agency responsibilities for 
        the reduction of paperwork burdens on the public, 
        particularly through the inclusion of all federally 
        sponsored collections of information in a clearance 
        process involving public notice and comment, public 
        protection, and OIRA review.
          3. Establish policies to promote the dissemination of 
        public information on a timely and equitable basis, and 
        in useful forms and formats.
          4. Strengthen agency accountability for managing 
        information resources in support of efficient and 
        effective accomplishment of agency missions and 
        programs.
          5. Improve OIRA and other central management agency 
        oversight of agency information resources management 
        (IRM) policies and practices.
    The legislation was premised on the committee's continuing 
belief in the principles and requirements of the Paperwork 
Reduction Act of 1980. All of the legislation's amendments to 
the 1980 act, as amended in 1986, are intended to further its 
original purposes--to strengthen OMB and agency paperwork 
reduction efforts, to improve OMB and agency information 
resources management, including in specific functional areas 
such as information dissemination, and to encourage and provide 
for more meaningful public participation in paperwork reduction 
and broader information resources management decisions.
    With regard to the reduction of information collection 
burdens the legislation increases the act's 1986 goal of an 
annual 5 percent reduction in the public paperwork burdens to 
10 percent during the first 2 years of authorization and 5 
percent thereafter. OMB is required to include in its annual 
report to Congress recommendations to revise statutory 
paperwork burdens if this goal is not reached. The legislation 
includes third-party disclosure requirements in the definition 
of collection of information to overturn the Supreme Courts 
decision, Dole v. United Steelworkers of America (494 U.S. 26 
(1990)). This will ensure that collection and disclosure 
requirements are covered by the OMB paperwork clearance 
process. The act is also amended to require each agency to 
develop a paperwork clearance process to review and solicit 
public comment on proposed information collections before 
submitting them to OMB for review. Public accountability is 
also strengthened through requirements for public disclosure of 
communications with OMB regarding information collections (with 
protections for whistle blowers complaining of unauthorized 
collections), and for OMB to review the status of any 
collection upon public request. In combination with more 
general requirements, such as encouraging data sharing between 
the Federal Government and State, local and tribal governments, 
the legislation strives to further the act's goals of 
minimizing Government information collection burdens, while 
maximizing the utility of Government information.
    The legislation also adds further detail to strengthen 
other functional areas such as statical policy and information 
dissemination. The dissemination provisions, for example, 
delineate clear policies that were not articulated in the act's 
previous references to dissemination. The provisions require 
OMB to develop governmentwide policies and guidelines for 
information dissemination and to promote public access to 
information maintained by Federal agencies. In turn, the 
agencies are to: ensure that the public has timely and 
equitable access to public information; solicit public input on 
their information dissemination activities; and not establish 
restrictions on dissemination or redissemination. Emphasis is 
placed on efficient and effective use of new technology and a 
reliance on a diversity of public private sources of 
information to promote dissemination of Government information, 
particularly in electronic formats.
    With regard to over-arching information resources 
management (IRM) policies, the legislation charges agency heads 
with the responsibility to carry out agency IRM activities to 
improve agency productivity, efficiency, and effectiveness. It 
makes program officials responsible and accountable for those 
information resources supporting their program. The IRM mandate 
is strengthened by focusing on managing information resources 
in order to improve program performance, including the delivery 
of services to the public and the reduction of information 
collection burdens on the public.
    To improve accountability for agency IRM responsibilities, 
as well as responsibilities for paperwork reduction, the agency 
responsibilities provided in the act are amended to complement 
and more directly parallel OMB's functional responsibilities. 
Further, to prompt agencies to reform their management 
practices, the bill requires each agency head to establish an 
IRM steering committee, develop an IRM strategic planning 
process, and develop IRM performance measures linked to program 
performance. In these various pursuits, the goal is to 
integrate the management of information resources with program 
management and assure the use of the resources to achieve 
agency missions. With the Federal Government spending 
approximately $25 billion a year on information technology, the 
stakes are too high not to press for the most efficient and 
effective management of information resources. The reduction of 
information collection burdens on the public and maximizing the 
utility of Government information will not otherwise occur.
    c. Legislative History/Status.--H.R. 830, the Paperwork 
Reduction Act of 1995, was introduced on February 6, 1995, by 
Government Reform and Oversight Committee Chairman William F. 
Clinger, Jr., for himself, Congressmen Norman Sisky, David 
McIntosh, chairman of the Subcommittee on National Economic 
Growth, Natural Resources, and Regulatory Affairs, and other 
Members of Congress.
    The President signed the bill on May 22, 1995, as Public 
Law 104-13.
    d. Hearings and Committee Actions.--After introduction, 
H.R. 830 was referred to the Committee on Government Reform and 
Oversight. On February 6, 1995, Chairman Clinger referred the 
bill to the Subcommittee on National Economic Growth, Natural 
Resources, and Regulatory Affairs for consideration. On 
February 7, 1995, the subcommittee, under the direction of 
Chairman McIntosh, held a hearing to consider reauthorization 
of appropriations for the Paperwork Reduction Act, OIRA's 
implementation of the act, and OIRA's conduct of regulatory 
review under Presidential Executive order. Testimony included 
comment and discussion of H.R. 830.
    Witnesses at the February 8, 1995 hearing were: Sally 
Katzen, Administrator, Office of Information and Regulatory 
Affairs; Mr. James McIntyre, former Director of the Office of 
Management and Budget and currently an attorney; Mr. James 
Miller, former Director of the Office of Management and Budget 
and current chairman of the Citizens for a Sound Economy; Mr. 
Gene Dodaro, Assistant Comptroller General, General Accounting 
Office accompanied by Mr. Chris Hoenig, also of GAO; Mr. Robert 
Coakley, executive director, Council on Regulatory and 
Information Management; Jack Sheehan, legislative director, 
United Steelworkers of America; and Bob Stolmeier, president, 
KLC Corp.
    At the hearing, Clinton administration witness Sally Katzen 
testified squarely in support of H.R. 830:

          It is truly gratifying to be here today in what I 
        hope is the last phase of improving and strengthening 
        the Paperwork Reduction Act. For more than 2 years 
        Congress has had legislative proposals to update and 
        expand the Paperwork Reduction Act consistent with and 
        building upon its original purposes. My commendations 
        to the congressional staff who have worked 
        professionally and constructively to develop a 
        consensus, a bipartisan approach, which is contained in 
        H.R. 830 and in the Senate, 244, which the Senate 
        Governmental Affairs Committee reported out on February 
        1. We are pleased to report that the administration 
        supports those efforts.

    After taking into consideration the testimony of the 
witnesses at the February 7 hearing, and after further 
consultation with the staff of the House Small Business 
Committee, the Senate Committee on Governmental Affairs, and 
with staff of the General Accounting Office and Office of 
Management and Budget, the subcommittee held a mark-up of H.R. 
830 on February 8, 1995. The full committee held its mark-up on 
February 10, 1995, and voted, 40 in favor and 4 against, to 
report H.R. 830, as amended, favorably to the full House.
            f. S. 790, The Federal Reports Elimination and Sunset Act 
                    of 1995
    a. Report Number and Date.--Report No. 104-327, November 8, 
1995.
    b. Summary of Measure.--During consideration of S. 244 the 
Paperwork Reduction Act of 1995 (PRA), the Senate adopted two 
amendments which dealt with the elimination or modification of 
certain congressionally mandated reporting requirements and 
also placed a sunset on other similar reports. These amendments 
were offered by Senators John McCain (R-AZ) and Carl Levin (D-
MI). Conferees meeting to resolve differences between the House 
and Senate versions of the PRA agreed to offer the McCain and 
Levin amendments as separate and freestanding legislation. The 
PRA was signed into law on May 22, 1995, as Public Law 104-13 
without the McCain and Levin amendments.
    After the President signed the Paperwork Reduction Act of 
1995 into law, House and Senate staffers in both the majority 
and minority began meeting to initiate the work necessary to 
present this bill to the House Government Reform and Oversight 
Committee and the Senate Governmental Affairs Committee.
    The Paperwork Reduction Act sets the standard by which 
Congress can continue to alleviate the paperwork burden on 
executive branch agencies. The Federal Report Elimination and 
Sunset Act of 1995 continues that work. By mandate, executive 
branch agencies annually produce thousands of reports to 
Congress. Many are outdated and no longer necessary. This bill 
eliminates or modifies nearly 200 such reporting requirements 
and establishes a sunset on all others.
    S. 790 was needed not merely to alleviate the burden on the 
executive branch but to also allow the Government to focus its 
energy on more important issues, thereby better utilizing their 
time. On December 21, 1982, President Ronald Reagan signed the 
Congressional Reports Elimination Act of 1982 into law (Public 
Law 97-375) and 13 years later the Federal Reports Elimination 
and Sunset Act continues, with the same strong bi-partisan 
support that the 1982 act received, to relieve the Federal 
Government of needless and burdensome paperwork. President 
Reagan said in his statement that this was a, ``useful and 
constructive step in reducing unnecessary paperwork and in 
improving executive branch operations.'' Also, given increasing 
costs of report production, this bill will help control costs 
in keeping with this committee's efforts to increase the 
efficiency of the Federal Government.
    c. Legislative History/Status.--Senators McCain and Levin 
introduced S. 790, the Federal Reports Elimination and Sunset 
Act of 1995, on May 11, 1995. It was reported favorably by the 
Senate Committee on Governmental Affairs and was approved by 
the Senate by a unanimous voice vote on July 17, 1995.
    In his floor speech, Senator Levin compared S. 790 to S. 
2157, which he and Senator Cohen introduced in 1994. The 
Senator explained that the list of reports included in S. 790 
was first compiled by sending out letters asking all 89 
executive and independent agencies to identify those reports 
required by law which were no longer necessary or useful and 
could be eliminated or modified. Agencies were asked to produce 
a clear and substantiated justification for each recommendation 
made.
    Following Senate approval, S. 790 was sent to the U.S. 
House of Representatives on July 18, 1995, and held at the 
Clerk's desk. On September 12, 1995, S. 790 was referred to the 
House Committee on Government Reform and Oversight. On 
September 14, 1995, Congressman Robert Ehrlich (R-MD) 
introduced the House companion to S. 790, H.R. 2331, with 9 
additional co-sponsors. Congressman Ehrlich echoed the concerns 
of the Paperwork Reduction Act conferees by urging his 
colleagues to co-sponsor H.R. 2331 and, ``lighten the red tape 
burden on executive branch agencies so that our government can 
operate with fewer restrictions and greater efficiency.'' The 
Congressman also stated that he has, ``the upmost confidence 
that the President will want to sign this important piece of 
legislation into law because it allows executive branch 
agencies to focus more resources on important current issues as 
opposed to focusing on outdated and unnecessary reporting 
requirements.''
    d. Hearings and Committee Actions.--The Government Reform 
and Oversight Committee, working in cooperation with the Senate 
Governmental Affairs Committee, distributed a copy of this 
report to all the House and Senate full committee chairmen and 
ranking minority members to elicit their views as to whether 
the changes being made would impede their committees 
legislative and oversight functions. Their responses were 
incorporated into the final amendments to this bill.
    On September 21, 1995, S. 790 was amended and reported by a 
unanimous voice vote by the full Committee on Government Reform 
and Oversight. Committee Chairman William F. Clinger, Jr. (R-
PA) praised the Reports Elimination and Sunset Act of 1995 by 
stating, ``this legislation will continue the very positive 
work this committee started with the Paperwork Reduction Act in 
a continuing effort to eliminate Federal paperwork burdens.'' 
Congresswoman Cardiss Collins (D-IL), the committee's ranking 
minority member, also expressed her support.
    During the committee's September 21, 1995 consideration of 
S. 790, two en-bloc amendments were offered and passed without 
objection. The first, by Congresswoman Collins, modified the 
bill as requested by the International Relations Committee, 
deleting some of the reports that were slated for elimination 
and making some minor technical changes. It was approved by a 
voice vote.
    The second amendment was offered by Congressman Ehrlich and 
also passed by a voice vote. A portion of the Ehrlich amendment 
reinstated the Estimated expenditures under the Food Stamp 
Program report, at the request of the House Agriculture 
Committee. The information contained in this report was 
necessary to the committee as it prepared to vote on the Farm 
bill.
    Also included in this en-bloc amendment was a request from 
the U.S. Railroad Retirement Board modifying a report dealing 
with 5-year retirement fund projections to allow for greater 
accuracy in projecting funds numbers. S. 790 was approved by 
the Government Reform and Oversight Committee by a unanimous 
voice vote.
            g. H.R. 3864, General Accounting Office Management Reform 
                    Act of 1996
    a. Report Number and Date.--None.
    b. Summary of Measure.--Title I eliminates over 100 
existing statutory mandates affecting GAO that do not represent 
the most efficient and effective use of GAO's limited 
resources. Most of the provisions of title II fall into one of 
the following two categories:
          Elimination of ``executive'' type functions. These 
        provisions relieve GAO of statutory functions that do 
        not further GAO's current mission and are more 
        appropriate for performance by the executive branch. 
        Functions that are still relevant to government 
        operations are transferred to executive branch 
        agencies. Some of the functions are simply obsolete; 
        these functions are repealed.
          Elimination of auditing and reporting mandates. These 
        provisions relieve GAO of statutory auditing and 
        reporting requirements, while preserving GAO's 
        authority to conduct the audit pursuant to a specific 
        Congressional request or at its own initiative. Thus, 
        the provisions give GAO flexibility to apply its 
        resources where they are most needed.
    Title I includes a number of other provisions that will 
enhance the efficiency of GAO's operations, and eliminate 
paperwork requirements for GAO as well as executive branch 
agencies.
    Section 211 of the Legislative Branch Appropriations Act, 
1996 (Public Law 104-53, 109 Stat. 535) transferred a number of 
GAO's ``executive'' type functions to the OMB, effective on 
June 30, 1996, and authorized the Director of OMB to delegate 
those functions to other Federal agencies. In all but a few 
cases, the Director has now delegated the functions.
    Title II of the bill makes conforming amendments to the 
statutes underlying the functions covered by section 211 of the 
1996 Appropriations Act in order to reflect the transfers to 
OMB and further delegations by OMB of those functions. For the 
most part, the conforming amendments of title II delete 
references to the Comptroller General or GAO in these 
underlying statutes and substitute references to the officials 
or agencies now vested with responsibility for the functions 
pursuant to section 211 of the 1996 Appropriations Act. Where 
the delegation of a function has not been completed, the 
conforming amendment reflects the transfer to OMB and preserves 
the OMB Director's authority to delegate further.
    c. Legislative History/Status.--Government Reform and 
Oversight Committee member, Representative Steve LaTourette (R-
OH), introduced H.R. 3864. The bill was referred to the 
Committee on Government Reform and Oversight on July 22, 1996, 
and was approved as amended on July 25, 1996. H.R. 3864 passed 
the House of Representatives on September 4, 1996, by voice 
vote. The bill was passed by unanimous consent of the Senate on 
October 3, 1996. It was signed by the President on October 19, 
1996 and became Public Law No. 104-316.
    d. Hearings and Committee Actions.--On April 30, 1996, the 
Subcommittee on Government Management, Information, and 
Technology held hearings on the oversight of the General 
Accounting Office. Subcommittee Chairman Stephen Horn presided 
over the testimony of John A. Koskinen, Deputy Director for 
Management, Office of Management and Budget; R. Scott Fosler, 
president, National Academy of Public Administration; Thomas V. 
Fritz, president and chief of Executive Officer, Private Sector 
Council; Cornelius E. Tierney, professor of accountancy, 
director, Center for Public Financial Management, School of 
Business and Public Management, the George Washington 
University; Charles A. Bowsher, Comptroller General of the 
United States; and James F. Hinchman, Special Assistant to the 
Comptroller General.
            h. H.R. 3136, title III, subtitle E, the ``Congressional 
                    Review of Agency Rulemaking,'' (Public Law No. 104-
                    121, title II, subtitle E)
    a. Report Number and Date.--Although there was no committee 
report on the ``Small Business Regulatory Enforcement Fairness 
Act of 1996'' (title II) or the ``Congressional Review of 
Agency Rulemaking'' (subtitle E), the Committees of 
Jurisdiction in the House and Senate filed a joint statement in 
the Congressional Record in lieu of a statement of managers. 
See 142 Cong. Rec. E571, 574-79 (daily ed. April 19,1996) 
(statement of March 28, 1996 by Chairman Hyde for the 
committees of jurisdiction); 142 Cong. Rec. S3683-87 (daily ed. 
April 18, 1996) (statement of Senator Nickles for himself and 
for Senators Reid and Stevens).
    b. Summary of Measure.--The Congressional Review Act (CRA) 
adds a new chapter 8 to the Administrative Procedure Act that 
requires executive branch agencies to submit their new rules to 
Congress for congressional review. See 5 U.S.C. chapter 8 
(Supp. 1996). The CRA allows Congress to review each new rule 
and consider a joint resolution of disapproval to overrule it 
under expedited House and Senate procedures. Under the 
Congressional Review Act, no rule may go into effect until it 
is delivered to the House, the Senate, and to GAO. Although the 
CRA applies to almost all rules, ``major rules'' are delayed in 
their effectiveness for 60 calender days to provide Congress 
with a chance to reject problematic rules before they have an 
adverse impact. Moreover, the term ``rule'' is defined very 
broadly to include all general agency statements that affect 
the public, including ``interpretive'' rules, agency ``policy 
statements,'' ``guidelines,'' and ``staff manuals.'' In 
addition to submitting the rules themselves, agencies will have 
to submit a report to Congress on each rule stating whether 
they have complied with the Unfunded Mandates Reform Act, the 
Regulatory Flexibility Act, and whether they have conducted a 
valid cost-benefit analysis, taking analysis, and federalism 
assessment as set forth in the Reagan, Bush, and Clinton 
Executive orders. If a resolution of disapproval is introduced 
to overturn a problematic regulation, Congress may reject the 
rule using expedited procedures that eliminate the Senate 
filibuster and require only a simple majority in each House for 
passage. If Congress does reject a rule, the rule may not be 
reissued in substantially the same form without congressional 
authorization.
    The intent of the CRA is to bring increased accountability 
to the rulemaking process. It is also expected that increased 
congressional involvement will make the agencies more open and 
responsive to comments from regulated entities during the 
rulemaking process and during enforcement proceedings. This 
will foster a more cooperative, less threatening, regulatory 
environment. As a result, it is the committee's hope and 
intention that agencies will issue more flexible and less 
burdensome rules that achieve the same or superior level of 
protection of health, safety, and the environment.
    c. Legislative History/Status.--The Senate passed four 
different versions of the ``Congressional Review Act'' (CRA) 
and the House passed two different versions of it before the 
act was incorporated in H.R. 3136 and became part of Public Law 
104-121 (title II, subtitle E). Senator Don Nickles introduced 
the first version of the CRA, S. 219, as a companion bill to 
H.R. 450, the Regulatory Transition Act of 1995, which 
originated in the House Subcommittee on National Economic 
Growth, Natural Resources, and Regulatory Affairs. The Senate 
passed S. 219 by a recorded vote of 100-0 on March 29, 1995. On 
November 9, 1995, the House and Senate then passed an identical 
version of the CRA as section 3006 of title III of H.R. 2586, 
the first debt limit bill. Chairman Bob Walker included section 
3006 in his amendment to the debt limit bill at the request of 
Chairman William F. Clinger, Jr. and Representative David M. 
McIntosh who were the principal House sponsors of the 
legislation. The President vetoed H.R. 2586 for reasons 
unrelated to section 3006. On March 19, 1996, the Senate passed 
a third version of the CRA as part of S. 942, the Small 
Business Regulatory Enforcement Fairness Act, by a recorded 
vote of 100-0. The language of the final bill was the product 
of informal discussions between the House and Senate sponsors 
and committees of jurisdiction during March 1996. On March 28, 
1996, the House and Senate passed H.R. 3136, the Contract with 
America Advancement Act of 1996, which included the CRA. (The 
CRA was originally subtitle E of title III, but was 
redesignated as subtitle E of title II in Public Law 104-121.) 
The President signed the act on March 29, 1996.
    d. Hearings and Committee Actions.--None were held.
            i. S. 1577, To amend Title 44 United States Code, to 
                    authorize appropriations for the National 
                    Historical Publications and Records Commission.
    a. Report Number and Date.--No House report was filed.
    b. Summary of Measure.--S. 1577 reauthorizes appropriations 
for the National Historical Publications and Records Commission 
at $10 million annually for Fiscal Years 1998, 1999, 2000, and 
2001.
    c. Legislative History/Status.--The Committee on Government 
Reform and Oversight reported out H.R. 3625, the identical 
companion bill to S. 1577. S. 1577 was reported from the Senate 
Governmental Affairs Committee on June 19, 1996 (S. Rept. No. 
104-283). S. 1577 passed the Senate on July 25, 1996 and was 
received in the House on July 26, 1996 and held at the desk. 
Rules were suspended and the measure passed the House on 
September 27, 1996, and was signed into law by the President on 
October 9, 1996, to become Public Law 104-274.
    d. Hearings and Committee Actions.--None were held.
            j. H.R. 2326, Health Care Fraud and Abuse Prevention Act of 
                    1995
    a. Report Number and Date.--None.
    b. Summary of Measure.--The purpose of H.R. 2326 is to 
prevent, detect, control and penalize fraud and abuse in the 
provision of health care. The bill provides for improved 
coordination and data sharing among Federal, State and local 
law enforcement agencies and private insurers. It creates a new 
source of funds comprised of fines, penalties, damages and 
proceeds from forfeitures collected from those in violation of 
Federal health care fraud and abuse provisions; such funds to 
be used by Federal and State law enforcement agencies to 
supplement regularly appropriated funds. The measure 
establishes, recognizes and defines health care fraud and abuse 
as a Federal crime and prescribes penalties for violation 
thereof. Additionally, the legislation details initiatives to 
be taken in control of fraud and abuse.
    c. Legislative History/Status.--H.R. 2326 was introduced on 
September 13, 1995, and referred to Government Reform and 
Oversight, Commerce, and Ways and Means. On October 16, 1995, 
Title II of H.R. 2326 was offered by Mr. Schiff as an amendment 
to H.R. 2425 ``The Medicare Preservation Act of 1995,'' while 
Mr. Shays offered Title III as an amendment to that measure. 
The Rules Committee found the Schiff Amendment in order and it 
was incorporated into H.R. 2425. The Shays amendment was not. 
Following mark-up by Commerce, H.R. 2425, which included Title 
II of H.R. 2326, was incorporated, as amended, into H.R. 2491, 
``The Balanced Budget Act of 1995,'' which passed the House on 
November 20, 1995. The bill was then passed by the Senate and 
subsequently vetoed by the President.
    d. Hearings and Committee Actions.--A hearing was held on 
September 28, 1995, before the Subcommittee on Human Resources 
and Intergovernmental Relations to consider both H.R. 2326 and 
H.R. 1850 introduced by Mr. Towns. Testimony was heard from 
Helen Smits, M.D., Deputy Administrator, Health Care Financing 
Administration, accompanied by Bill Gould, Special Assistant to 
the Administrator; Gerald Stern, Special Counsel for Health 
Care Fraud, Department of Justice; Lovola Burgess, past 
president, American Association of Retired Persons; William J. 
Mahon, executive director, National Health Care Anti-Fraud 
Association; and Thomas A. Schatz, president, Citizens Against 
Government Waste. Dr. Smits was wholly in favor of the 
legislation pointing out the benefits in coordination of law 
enforcement. Mr. Stern also spoke in favor of the bill, but 
voiced some concerns held by the Department of Justice 
specifically regarding the proposed authority of the FBI to 
issue administrative subpoenas. Ms. Burgess, Mr. Mahon, and Mr. 
Schatz all spoke in support of both bills although the 
provisions in H.R. 2326 are more far reaching than H.R. 1850. 
The hearing ended with the panel members being encouraged by 
the Members to speak to their own Members and urge co-
sponsorship of H.R. 2326.
            k. H.R. 3078, Federal Agency Anti-Lobbying Act
    a. Report Number and Date.--None.
    b. Summary of Measure.--The purpose of the bill is to 
prohibit the expenditure of appropriated funds in an attempt by 
executive agencies to create public opposition to pending 
legislation. Such actions clearly violate the provisions of 18 
U.S.C. 1913, however the present and previous administrations 
have interpreted this section narrowly in a fashion that limits 
all restrictions. As a consequence, this bill expands and 
clarifies the limitation on using public money for grassroots 
lobbying designed to affect the legislative process.
    This important legislation emanates from a series of 
investigations conducted by several congressional committees. 
The Government Reform and Oversight, Transportation and 
Infrastructure, and Commerce Committees have all identified 
instances where carefully designed public relations campaigns 
have appealed for public support without directing citizens to 
contact their Congressional representatives.
    c. Legislative History/Status.--H.R. 3078, The Federal 
Agency Anti-Lobbying Act was introduced on March 13, 1996 and 
referred to the Committee on Government Reform and Oversight. 
On May 15, 1996, a full committee hearing was conducted on the 
issue.
    d. Hearings and Committee Actions.--The Government Reform 
and Oversight Committee held a hearing on this legislation on 
May 15, 1996. Testimony was heard from Jonathan Cannon, General 
Counsel, U.S. Environmental Protection Agency; Joseph B. Dial, 
commissioner, Commodity Futures Trading Commission; Robert 
Nordhaus, General Counsel, Department of Energy; J. Davitt 
McAteer, Acting Solicitor General, Department of Labor; Al 
Cors, Jr, director of government relations, National Taxpayers 
Union; Robert P. Murphy, General Counsel, U.S. General 
Accounting Office; Louis Fisher, Senior Specialist in American 
National Government, Congressional Research Service; N. Jerold 
Cohen, chairman, Section on Taxation, American Bar Association; 
Hon. Senator Ted Stevens of Alaska; and Hon. Congressman W.J. 
(Billy) Tauzin of Louisiana.
            l. ``Proceedings Against John M. Quinn, David Watkins, and 
                    Matthew Moore (Pursuant to Title 2, United States 
                    Code, Sections 192 and 194,'' House Report 104-598, 
                    May 29, 1996.
    a. Summary.--Weeks after the Travel Office firings, 
President Clinton staved off a congressional inquiry into the 
controversy by committing to then-House Judiciary Committee 
Chairman Jack Brooks in a July 13, 1993, letter: ``. . . you 
can be assured that the Attorney General will have the 
Administration's full cooperation in investigating those 
matters which the Department wishes to review.'' In fact, that 
cooperation was by no means forthcoming from the White House. 
Not only was this established in the committee's October 24, 
1995, hearing (see Part Two I.A.3.b. above), it was the 
conclusion of the Clinton administration's own Justice 
Department. In a September 8, 1994, memo to Acting Criminal 
Division Chief Jack Keeney, Justice's Chief of the Public 
Integrity Division, Lee Radek, wrote:

          At this point we are not confident that the White 
        House has produced to us all documents in its 
        possession relating to the Thomason allegations . . . 
        the White House's incomplete production greatly 
        concerns us because the integrity of our review is 
        entirely dependent upon securing all relevant 
        documents.

    In the course of its investigation, the committee came to 
share in these concerns. Beginning in the fall of 1995, the 
Clinton White House repeatedly assured the committee that it 
had produced all documents relevant to the committee's 
Travelgate investigation. Despite these assurances, White House 
documents critical to the investigation continued to surface 
throughout 1996 until August. White House delays, denials and 
general obfuscation frustrated the committee's investigative 
efforts throughout the 104th Congress.
    One such document was an undated 9-page memo written by 
David Watkins--likely drafted in the fall of 1993--in which 
Watkins cited pressures by First Lady Hillary Rodham Clinton as 
a major factor in his decision to fire the Travel Office 
employees. Mr. Watkins wrote that this self-styled ``soul 
cleansing'' memo represented his ``first attempt to be sure the 
record is straight, something I have not done in previous 
conversations with investigators--where I have been as vague 
and protective as possible.''
    The White House released this memo to the committee at 8:30 
p.m. on January 3, 1996, after it had been released to the 
press. Though it was responsive to subpoenas and document 
requests made by several previous investigations, including 
those of Independent Counsel Fiske, the General Accounting 
Office and the Justice Department, this document was produced 
to none of them.
    The Watkins memo clearly contradicted repeated assertions 
by the White House and First Lady Hillary Rodham Clinton that 
the First Lady had had minimal involvement in the Travel Office 
firings:

          On Monday morning you [then-White House Chief of 
        Staff McLarty] came to my office and met with me and 
        Patsy Thomasson. At that meeting, you explained that 
        this was on the First Lady's ``radar screen.'' I 
        explained to you that I had decided to terminate the 
        Travel Office employees and you expressed relief that 
        we were finally going to take action (to resolve the 
        situation in conformity with the First Lady's wishes). 
        We both knew there would be hell to pay if, after our 
        failure to take swift and decisive action in conformity 
        with the First Lady's wishes.

Mr. Watkins concluded in this memo:

          [Made] clear that the Travel Office incident was 
        driven by pressures for action originating outside my 
        Office. If I thought I could have resisted those 
        pressures, undertaken more considered action, and 
        remained in the White House, I certainly would have 
        done so. But after the Secret Service incident, it was 
        made clear that I must more forcefully and immediately 
        follow the direction of the First Family. I was 
        convinced that failure to take immediate action in this 
        case would have been directly contrary to the wishes of 
        the First Lady, something that would not have been 
        tolerated in light of the Secret Service incident 
        earlier in the year.

The apparent contradictions between Watkins' previous ``vague 
and protective'' responses made to investigators looking into 
the Travel Office matter and the ``soul cleansing'' memo led to 
a criminal referral of the matter to Independent Counsel Starr 
in early 1996.
    In the wake of this memo's production, the committee issued 
several subpoenas to the White House and current and former 
White House officials and others to compel the production of 
all relevant documents previously withheld. Months of 
negotiations followed the failure of three parties in 
particular to complete their productions in compliance with 
their subpoenas: White House Counsel John M. Quinn, David 
Watkins, and Matthew Moore, whom the committee learned had 
copies of various drafts of the Watkins memo in his possession.
    b. Hearings.--On May 8, 1996, the full committee voted to 
hold Messrs. Quinn, Watkins and Moore in contempt for their 
refusals to produce all documents responsive to the committee's 
subpoenas.
    c. Resolution.--The committee, in its May 8, 1996, vote:
          Resolved, That pursuant to 2 U.S.C. 192 and 194, the 
        Speaker of the House certify the report of the 
        Committee on Government Reform and Oversight, detailing 
        the refusal of John M. Quinn to produce papers to the 
        Committee on Government Reform and Oversight, to the 
        United States Attorney for the District of Columbia, 
        for him to be proceeded against in the manner and form 
        provided by law; and be it further
          Resolved, That pursuant to 2 U.S.C. 192 and 194, the 
        Speaker of the House certify the report of the 
        Committee on Government Reform and Oversight, detailing 
        the refusal of David Watkins to produce papers to the 
        Committee on Government Reform and Oversight, to the 
        United States Attorney for the District of Columbia, 
        for him to be proceeded against in the manner and form 
        provided by law; and be it further
          Resolved, That pursuant to 2 U.S.C. 192 and 194, the 
        Speaker of the House certify the report of the 
        Committee on Government Reform and Oversight, detailing 
        the refusal of Matthew Moore to produce papers to the 
        Committee on Government Reform and Oversight, to the 
        United States Attorney for the District of Columbia, 
        for him to be proceeded against in the manner and form 
        provided by law.
    d. Follow-up.--Mr. Moore eventually produced the documents 
subpoenaed to the committee. Mr. Watkins, by now the subject of 
an Independent Counsel investigation, declined to do so. Nor 
had White House Counsel Quinn produced the documents required 
as the May 30, 1996 date for a House vote on the contempt 
resolution approached.
    On May 30, 1996, the day on which the committee's contempt 
resolution against White House Counsel Quinn was scheduled for 
a vote on the floor of the House, the White House delivered 
1,000 of the 3,000 pages of documents responsive to the 
committee's subpoenas over which it previously had claimed 
executive privilege. The White House also provided a privilege 
log for documents it continued to withhold. As a result, the 
committee postponed the contempt vote in order to review the 
materials produced.
    A critical document long-withheld from the committee under 
unjustified claims of executive privilege was turned over in 
the May 30 production. The committee previously had been 
unaware of the existence of this document: the White House's 
December 1993 request of Billy Dale's confidential FBI 
background file--ostensibly made because Dale was being 
considered for ``Access (S)''--7 months after Dale was fired 
from the Travel Office. This request was made even as the 
Justice Department was conducting a criminal investigation of 
Dale and its discovery led to revelations that the Clinton 
administration wrongly had requested and received hundreds of 
confidential FBI background files of former Reagan and Bush 
administration officials. (See Part Two I.A.3.c. above.)
    After further discussion and correspondence, the White 
House and the committee came to an agreement whereby the White 
House produced to the committee some 1,400 of the remaining 
2,000 pages of documents on August 15, 1996.

                           B. BUDGET PROCESS

    House Rule X(1)(g) (4) and (6) confers upon the Committee 
on Government Reform and Oversight jurisdiction over, 
``[b]udget and accounting measures, generally,'' and ``[t]he 
overall economy, efficiency and management of government 
operations and activities.'' As explained in the Statement of 
Understanding between the Committee on Government Reform and 
Oversight and the Committee on the Budget, the Committee on 
Government Reform and Oversight's jurisdiction includes, 
``process changes in federal rescission or impoundment 
authority; measures relating to Executive agency budgeting, 
including the submission of agency performance reports or 
plans, or agency regulatory plans, reports or reviews as part 
of the budget process; measures relating to Executive agency 
financial management; and process changes leading to the 
required adoption of a Federal capital budget or joint capital/
operating budget which accounts for the fixed assets of the 
United States.'' In addition, the committee enjoys jurisdiction 
over ``special funds, accounts or spending set asides created 
to reduce the deficit.''
    The Committee on Government Reform and Oversight exercised 
its budget jurisdiction extensively in the 104th Congress. In 
addition to leading the campaign to enact the long-awaited line 
item veto, the committee held hearings on performance-based 
budgeting, financial and accounting improvements, entitlement 
spending reductions, regulatory accountability and cost-benefit 
comparisons, and biennial budgeting proposals.
    The committee was extensively involved in the development 
of the congressional budget resolutions for fiscal years 1996 
and 1997, H. Con. Res. 67 and H. Con. Res. 178. Working with 
the House and Senate Budget Committees, the Senate Committee on 
Governmental Affairs, and the congressional leadership, the 
committee developed a plan for mandatory spending reforms 
within its jurisdiction totaling savings of more than $10 
billion through fiscal year 2002. The committee's entitlement 
spending reduction package included: Members and staff 
congressional pension reforms to provide parity between the 
congressional and civil service retirement systems; a 
continuation of existing the 3 month cost of living increase 
(COLA) delay for Federal retirees; a 0.5% increase in the 
contribution Federal employees make to their own individual 
retirement accounts; a 1.51% increase in the employing agency 
contribution to the retirement accounts of their Civil Service 
Retirement System (CSRS) employees; and a repeal of the 
transitional appropriations currently provided to the U.S. 
Postal Service. The committee package also included a proposal 
to reform the McKinney Homeless Assistance Act to permit 
homeless assistance organizations to obtain preferential access 
to surplus Federal property. Pursuant to the directions of the 
congressional budget resolution, the Government Reform and 
Oversight Committee's reconciliation package was included in 
H.R. 2491, the Balanced Budget Act of 1995. The bill was vetoed 
by the President on December 6, 1995. It is the committee's 
firm intent to pursue similar reforms in the 105th Congress.
    The committee also considered legislation to require the 
President to submit a Congressional Budget Office (CBO) scored 
balanced budget for fiscal year 1997. The proposal was included 
in H.J. Res. 134, which was signed into law on Jan. 6, 1996. 
Public Law 104-94. Further attempts to require the permanent 
submission of annual balanced budget plans by the President 
were considered in conjunction with H.R. 4278, the Omnibus 
Consolidate Appropriations Act of 1997, but were rejected by 
the Senate.
    Finally, the committee considered proposals to provide for 
a deficit reduction ``lock box'' account, to set aside savings 
gained through appropriation bill amendments for the purposes 
of deficit reduction. The legislation, initially included in 
H.R. 2127, the FY 1996 Labor, Health and Human Services, and 
Education appropriations bill, was vetoed by the President. The 
lockbox proposal was then attached by the House to H.R. 3019, 
to provide further Omnibus Continuing Appropriations for 1996. 
While the provision was dropped by the Senate, the committee 
expects to revisit the measure in the 105th Congress.

            C. FEDERAL PROCUREMENT POLICY--AN ERA OF REFORM

    Each year the government spends about $200 billion on goods 
and services, ranging from weapons systems to computer systems 
to everyday commodities. Studies have shown that the current 
system has cost too much, involved too much red tape, and ill-
served the taxpayer and industry.
    In December 1994, a report prepared for the Secretary of 
Defense found that, on average, the government pays an 
additional 18 percent on what it buys solely because of 
requirements it imposes on its contractors. That confirmed the 
average estimate by major contractors surveyed by the General 
Accounting Office that the additional costs incurred in selling 
to the government are about 19 percent. While some of the 
government's unique requirements certainly have been needed, we 
clearly are paying an enormous premium for them--billions of 
dollars annually.
    And that has been only part of the government's inflated 
cost of doing business--for it has included only what is paid 
to contractors, not the cost of the government's own 
administrative system. The government's contracting officials 
have been confronted with a daunting array of mandates of their 
own, often amounting to step-by-step prescriptions that 
increase staff and equipment needs. This rigid, rule-based 
process has left little room for the exercise of business 
judgement, initiative, and creativity and often has forced the 
professional staff to assume the role of box-checking robots.
    These requirements have been well-intentioned. From the 
time the Second Continental Congress established a Commissary 
General in 1775, the procurement system commanded the attention 
of both public officials and the American public. Unfortunately 
and all too often, the attention has focused on individual 
abuses rather than the operations of the system as a whole. In 
response, Congress and the executive branch have maintained a 
constant effort to correct wrongs or add particular 
initiatives. Inevitably, after a while, often-uncoordinated 
incremental efforts will tilt any system out of balance, until 
the cost of requirements outweigh benefits. And, over the 
years, that has become the state of our procurement system--an 
unbalanced mass of requirements that lead, simply, to too much 
money for too little product. Mr. Philip K. Howard in an 
editorial on the government's procurement process in the Wall 
Street Journal aptly described the state of the current process 
as follows:

        The rigid procedures designed to prevent squandering of 
        public money, as it turns out, function almost 
        perfectly to guarantee that the money gets squandered.

    The committee recognized that it was critical in these 
times of declining budgets to bring the government's 
procurement system into balance.
    The 103d Congress took a significant step toward 
establishing a more commercial-like Federal contracting system 
with the passage of the Federal Acquisition Streamlining Act of 
1994 (FASA) (Public Law 103-355). FASA established a preference 
for commercial items and simplified procedures for contracts 
under $100,000, as well as addressing a wide spectrum of issues 
regarding the administrative burden--on all sides--associated 
with the government's specialized requirements. These ranged 
from socio-economic laws to the government's oversight tools, 
which over the years have resulted in major differences between 
the government and commercial marketplaces.
    But FASA went only part of the way, and as important as 
that effort was, the committee recognized that more needed to 
be done, particularly in these times of declining budgets, to 
bring the government's procurement system into balance. In 
addition to the fundamental legislative reforms made by the 
Clinger-Cohen Act of 1996 (see Part Two I.A.4.d.), the 
following issues were initiated/completed by the committee to 
foster a procurement system which allows industry sellers and 
government buyers to offer and acquire, respectively, maximum 
value for the taxpayer.

1. Oversight of the Implementation of the Federal Acquisition 
        Streamlining Act of 1994 (FASA) (Public Law 103-355).

    a. Summary.--At the time of its enactment, the Federal 
Acquisition Streamlining Act of 1994 (FASA) (see House Report 
103-884) was considered the most comprehensive procurement 
reform effort in more than a decade. Yet, the committee 
recognized that its true impact would not be realized fully 
until the regulations were written to implement the new law. 
The committee believed that much of the hard work was left to 
the executive branch in seeing through the goals and purposes 
of FASA. The committee expected that the regulation writers 
would not only execute the letter of the law fully and 
promptly, but would also carry out the spirit of what Congress 
intended. This included not just writing and revising 
regulations pursuant to the new law, but looking at and 
attacking internal agency regulations and procedures which are 
contrary to FASA's letter and spirit.
    b. Hearings.--On February 21, 1995, the committee met to 
review the Clinton administration's implementation plan for 
FASA, begin the process of determining if the regulations will 
carry out the spirit of what was intended by Congress, and 
allow industry and other interested parties to comment on the 
regulatory implementation for the record. The committee 
received testimony from administration witnesses, Steven 
Kelman, Administrator for Federal Procurement Policy at the 
Office of Management and Budget; and Mrs. Colleen Preston, the 
Deputy Under Secretary of Defense for Acquisition Reform, 
regarding the progress-to-date on the implementation of FASA. 
Industry representative submitted written testimony for the 
record.
    Dr. Kelman noted that the ``message of reform'' was being 
heard by the administration and that the follow-on rules to 
FASA were being written on an accelerated schedule. He stated 
that 4 interim rules had been published, 15 proposed rules were 
published, and 6 were expected to be released in the near 
future. Mr. Kelman also discussed the establishment of Process 
Action Teams, which were created by both he and Mrs. Preston in 
order to expedite the regulatory writing process and FASA 
implementation.
    Mrs. Preston focused on the need for further reform so that 
agencies such as the Department of Defense and others could be 
``world class customers and suppliers.'' She emphasized the 
need for continuing the effort to remove government-unique laws 
and regulations from the acquisition of commercial products. 
She also stated that the government must move from a risk 
adverse system to one which understands and manages risk.

2. Review of the Federal Government's Acquisition Strategy Regarding 
        the Post Federal Telecommunications System 2000 Program (Post-
        FTS2000).

    a. Summary.--Currently the Federal Telecommunications 
System 2000 (FTS 2000) is the government's long distance 
telecommunications service. This multi-billion dollar program 
provides telecommunications services to approximately 1.7 
million users across the Federal Government. Through the hard 
work of the General Services Administration (GSA) and an 
interagency group of information resources management and 
telecommunications professionals, the current FTS 2000 program 
was largely successful in leveraging the emerging competition 
in long-distance markets to save billions of dollars over GSA's 
prior Federal Telecommunications Service network. The current 
FTS 2000 contracts which were awarded in 1988 will expire in 
December 1998, affording the government great opportunities and 
challenges as it prepares to transition to a Post-FTS2000 
environment.
    Clearly, the telecommunications industry has changed 
significantly since the initial contracts were awarded: the 
array of available commercial services is broader; the number 
of service providers has increased; and the availability and 
nature of the underlying technologies themselves continue to 
change. The government's appetite for communications services 
has changed as well, with demand for more advanced data and 
video services outdistancing growth in basic voice 
communications services. Therefore, it is imperative that the 
Post-FTS2000 program embrace a sensible acquisition approach 
based on commercial practices and maximize the use of 
commercially-available services to meet agency needs while 
following an appropriate strategy for managing complex 
government operations.
    Monitoring the development of the next phase procurement 
for the Federal Government's telecommunications system ensures 
that the Federal Government receives technically-effective and 
cost-efficient telecommunications services in a Post FTS2000 
environment. It allows the government and the taxpayer to take 
maximum advantage of the economies associated with increasing 
competition in the new telecommunications environment and reap 
the benefits for the best prices and excellent service quality 
which helps the executive agencies to do their jobs of serving 
the citizens more efficiently and effectively.
    While GSA spent much time with the interagency group and a 
broad cross-section of industry preparing an acquisition 
strategy, initial proposals failed to take full advantage of 
telecommunications reform along with today's rapidly changing 
landscape of advancing technologies, new services, and emerging 
service providers. Through months of working with this 
committee, GSA ultimately developed a proposal which addressed 
many of the issues raised by this committee and others and 
which will enable the government to take full advantage of 
rapid changes in the telecommunications services environment. 
GSA is proceeding with this Post-FTS2000 acquisition strategy.
    b. Hearings.--On March 21, 1995, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing to solicit comment from the General Accounting Office, 
the long distance carriers, system integrators and the Regional 
Bell Operating Companies on the initial Post-FTS2000 
acquisition strategy developed by the government. The General 
Accounting Office raised several areas of concern and testified 
that these concerns must be addressed before proceeding to the 
next phase of the program. Other witnesses made reference to 
the strategy as presented and gave comment according to the 
particular segment of the industry.

3. Review of the Department of Defense's Acquisition of the Defense 
        Information Systems Network (DISN).

    The Defense Information Systems Network (DISN) is the 
Department of Defense's (DOD) worldwide telecommunications 
infrastructure that provides the end-to-end information 
transfer network for supporting military operations. DISN must 
be transparent to its users, facilitate the management of 
information resources, and be responsive to national security 
and defense needs under all conditions in the most effective 
manner. DOD has described its objective as being able to 
provide military personnel with a secure, seamless, network 
capable of operating across strategic and tactical 
communications boundaries. Global interoperability and 
information warfare-protection are two of DISN's key features 
to deliver protected voice, video, data, and imagery services.
    Since DISN will be the information transport vehicle for 
the next century, its acquisition strategy was designed to 
introduce new cost-effective technology, including space-based 
capabilities, on a global basis over the life of the system. 
This strategy will allow DOD to manage DISN services while 
maintaining a balance in three areas: exploitation of leading-
edge technology opportunities, consolidation of geographically 
disparate network, and operation within fiscal constraints.
    Given the importance of consolidating and modernizing 
defense telecommunications capabilities to meet the emerging 
national security challenges facing the Nation, the committee 
along with the Committee on National Security, was active in 
urging DOD to move forward without delay on the DISN program. 
The committees recognized that a multitude of providers now 
compete to offer an increasingly broad array of commercially-
available telecommunications services and that competition 
continues to drive the development and deployment of advances 
in the underlying technologies used to deliver enhanced 
performance and new capabilities. Therefore, in letters and 
through a series of meetings, the committees urged DOD to 
transition to DISN on schedule in order to ensure the 
availability of state-of-the-art telecommunications to meet the 
Nation's defense needs.
    To date, DOD is proceeding and has awarded the contracts 
for global support services (valued at $2 billion) and 
switching services for the continental United States (valued at 
$400 million). It is expected that in the early part of 1997, 
DOD will award the contracts for transmission services for the 
continental United States (valued at $5 billion) and global 
video services (valued at $125 million).

4. Review of the General Services Administration's (GSA) Management of 
        the Multiple Award Schedule (MAS) Program.

    The Multiple Award Schedule (MAS) Program is the primary 
and simplified method to enable Federal agencies purchase 
relatively small quantities of commercially-available, common 
use, off-the-shelf items and services while securing the 
benefits of the Federal Government's aggregate purchasing 
volume. The General Services Administration (GSA) awards 
contracts to multiple suppliers of similar items. Federal 
agencies order products and services through the MAS Program at 
prenegotiated prices commensurate with the vendors' commercial 
discounts granted for comparable purchase volumes, given terms 
and conditions, and pay vendors directly for their purchases. 
There are 121 schedules which generate an annual market of $5-7 
billion. The MAS program includes 4,000-5,000 contractors, two-
thirds of which are small businesses.
    The efficiency and effectiveness of the MAS Program has 
been debated since its inception. After many studies by GAO, 
reviews by Congress, and input from industry, GSA made many 
significant changes to the MAS Program. These changes will 
allow the MAS Program to meet a broader range of customer 
requirements at a time when agencies are looking for easy to 
use, low cost procurement solutions. Among these were: 
eliminating the contract-wide price reduction clause, changing 
the price reduction clause to enable contractors to offer 
reduced prices to Federal agencies on a spot basis; and 
removing the ``maximum order limitation'' to permit agencies to 
place large-scale orders through the schedule program. The 
committee supported and urged changes like these to increase 
the use of the MAS program as a governmentwide vehicle for the 
acquisition of commercial products and services.
    However, GSA also proposed to established some rules which 
would permit post-award audits of commercial products under the 
MAS program. The committee, along with the Committee on 
National Security, concluded that this would be inappropriate 
and contrary to the intent of the Clinger-Cohen Act. The 
committees believed that, when Congress repealed the authority 
of Federal agencies to perform post-award audits of suppliers 
of commercial items in the Clinger-Cohen Act, Congress clearly 
did not intend Federal agencies to subsequently determine 
though agency supplements to the Federal Acquisition Regulation 
whether and to what extent post award audit access is 
appropriate on commercial item contracts. The committees' 
opposition to the proposed rule was communicated to the Office 
of Management and Budget through letters and meetings. A final 
rule on this issue is pending at GSA.

5. Oversight of Reform of the Acquisition System of the Federal 
        Aviation Administration (FAA).

    As a result of the steady growth in air traffic operations 
and the failures of aging equipment in the air traffic control 
system, the Federal Aviation Administration's (FAA) timely 
acquisition of new equipment became increasingly critical for 
aviation safety and efficiency. However, the procurement system 
at FAA had many problems which raised questions about the 
agency's ability to field new equipment within cost, schedule, 
and performance parameters.
    Thus, the reform of FAA's procurement system became the 
focus of much debate. The FAA claimed it was choking from the 
mandated governmentwide procurement laws and argued that its 
failures in its procurements of high technology equipment could 
be solved if only it could break clear of the Federal 
procurement system. Some Members of Congress disagreed and 
believed that FAA's failures in the past were due to its own 
management problems and were not due to Federal procurement 
laws.
    Nonetheless, the Department of Transportation 
Appropriations Act for Fiscal Year 1996 (Public Law 104-50) 
included language which gave FAA the authority to establish a 
completely new acquisition management system. The law exempted 
the FAA from virtually all Federal procurement laws and 
regulations. Prior to putting in place its new system by the 
April 1, 1996 effective date, FAA met with the committee and 
briefed the committee on its activities. Review of the new 
acquisition management system continues.
    In addition, H.R. 2276 which established FAA as an 
independent agency exempted FAA from the same laws and 
regulations as did Public Law 104-50. While H.R. 2276 was 
passed by the House on March 12, 1996, it was never considered 
by the Senate. However, during consideration of H.R. 2276 in 
the House, the committee expressed its support for fundamental 
government reforms generally and FAA procurement reform 
specifically.

        D. GOVERNMENT PERFORMANCE AND RESULTS ACT OF 1993 (GPRA)

    On March 6, 1996, the Senate Governmental Affairs Committee 
joined the committee in holding an informational hearing on the 
purpose and foundation for the Government Performance and 
Results Act of 1993 (Public Law 103-62). The purpose of the 
hearing was to explore the foundations of the act and draw 
parallels between previous experiments with performance 
measurement in foreign governments and at the State and 
municipal level and its application at the Federal level.
    The hearing consisted of two panels. The first witness was 
Comptroller General of the General Accounting Office, Charles 
Bowsher. Mr. Bowsher gave testimony on the Government 
Performance and Results Act, its purpose and provisions. He 
also emphasized the importance of continued Congressional 
involvement to the long-term success of the act. Noting that 
consultation with Congress is mandated by the statute, the 
Comptroller General stressed that the act could become a 
meaningless management exercise unless the information prepared 
by agencies is a decisionmaking tool for members and 
committees. Mr. Bowsher took numerous questions from the 
Members of the House and Senate.
    The second panel began with testimony from Dr. Donald F. 
Kettl, senior fellow of the Brookings Institution and professor 
of Public Policy and Political Science at the University of 
Madison as Wisconsin. Dr. Kettl advised the committees that due 
to the current fiscal constraints, government needs to increase 
productivity in order to meet current service needs. One 
promising way to meet increased demands with reduced, stable on 
only slowly increasing resources is through managing for 
performance. This technique has a very long time-horizon, 
however, and the Federal Government is at least a decade behind 
New Zealand, Australia and Great Britain, which have been 
experimenting with performance measurement and management. 
Reports from overseas indicate that those governments are still 
working with great diligence to master this extremely complex 
task. Finally the committees heard from the Commonwealth of 
Virginia, the city of Phoenix, AZ and the government of 
Australia each of which has been measuring government 
performance as a means to increase government efficiency and 
citizen satisfaction with government services.
    The hearing was intended to be the first of three hearings 
on GPRA. Two additional hearings were to have reviewed the 
status of GPRA pilot projects and departmental progress in 
implementing the act. The sequence of events involving the FBI 
files scandal preempted the committees' planned follow-on 
hearings.
                           II. Investigations

             A. INVESTIGATIONS RESULTING IN FORMAL REPORTS

               GOVERNMENT REFORM AND OVERSIGHT COMMITTEE

                 Hon. William F. Clinger, Jr., Chairman

1. ``A Citizen's Guide on Using the Freedom of Information Act and the 
        Privacy Act of 1974 To Request Government Records,'' House 
        Report No. 104-156, June 22, 1995, First Report by the 
        Committee on Government Reform and Oversight.
    a. Summary.--The Freedom of Information Act (FOIA), enacted 
in 1966, presumes those records of the executive branch of the 
U.S. Government are accessible to the public. The Privacy Act 
of 1974 is a companion to FOIA and regulates Government agency 
recordkeeping and disclosure practices. The Freedom of 
Information Act provides that citizens have access to Federal 
Government files with certain restrictions. The Privacy Act 
provides certain safeguards for individuals against an invasion 
of privacy by Federal agencies and permits them to see most 
records pertaining to them maintained by the Federal 
Government.
    A Citizen's Guide on Using the Freedom of Information Act 
and Privacy Act of 1974 To Request Government Records, House 
Report 104-156, dated June 22, 1995, and issued by the House 
Committee on Government Reform and Oversight, explains how to 
use the two laws and serves as a guide to obtaining information 
from Federal agencies. The complete texts of the Freedom of 
Information Act, as amended (5 U.S.C. 552), and the Privacy 
Act, as amended (5 U.S.C. 552a), are reprinted in the committee 
report.
    b. Benefits.--Federal agencies use the Citizen's Guide in 
training programs for government employees who are responsible 
for administering the Freedom of Information Act and the 
Privacy Act of 1974. The Guide enables those who are unfamiliar 
with the laws to understand the process and to make requests. 
In addition, the complete text of each law is included in an 
appendix. The Government Printing Office and Federal agencies 
subject to the Freedom of Information Act and the Privacy Act 
of 1974, distribute this report widely. The availability of 
these acts to all Americans allows executive branch information 
to be widely available.
    c. Hearings.--None.
2. ``Creating a 21st Century Government,'' House Report No. 104-434, 
        December 21, 1994, Second Report by the Committee on Government 
        Reform and Oversight, Together With Additional Views.
    a. Summary.--The purpose of the Government Reform and 
Oversight Committee field hearings on ``Creating a 21st Century 
Government'' was to learn from the American public, State and 
local government officials and the private sector their 
suggestions and experiences on creating innovative, 
streamlined, and cost effective organizations. The committee 
intends that Congress learns from and adopt some of these 
successful strategies in an effort to restructure the executive 
branch and better meet the needs of Americans today and in the 
21st century.
    In its effort to hear from people outside Washington, DC, 
the committee invited witnesses from State and local 
government, the private sector, and the American public to 
testify or participate in an open forum in which members could 
hear their experiences and ideas with regard to organizational 
downsizing. Members of the committee traveled to Parma Heights, 
OH; Upper Montclair, NJ; Federal Way, WA; Long Beach, CA; 
Albuquerque, NM; and Charlotte, NC. Each one of these cities 
has recently challenged inefficient government by revitalizing 
its main functions in order to survive, compete, prosper and 
provide for the needs of its citizens. Identifying what has 
worked, what has hindered their reorganization efforts and how 
best to implement a plan will aid congressional initiatives to 
revitalize government at the Federal level.
    State and local government witnesses, business 
representatives, and the public all advocate looking at each 
Federal department and agency to determine which of the 
functions it provides are vital to the service delivery needs 
of Americans and which can be better carried out by State or 
local governments or the private sector. The widely shared view 
was that the Federal Government is not meeting the needs of it 
customers, the American public, and is less effective, less 
efficient and more costly than it should be. It must be fixed.
    b. Benefits.--As a result of the nationwide field hearing 
series and consultation with experts in the private and public 
sectors, the committee was successful in identifying strategies 
and principles used by corporate, State and local government 
organizations in restructuring their entities, and learning how 
their most successful and creative ideas might be applied to 
the Federal Government. We now have a better understanding of 
what States and local governments expect from the Federal 
Government, what private business expects from the Federal 
Government, and most importantly the American public's thoughts 
and ideas for a more responsive Federal Government designed to 
meet their needs.
    Six fundamental points, or practices, were raised at all 
six field hearings, each to promote the efficiency, 
effectiveness, high quality and low cost of service delivery. 
The first three of these common reorganization principles in 
particular affect the culture of an organization, while the 
other three are more practical in application. The committee 
found--
          (1) Clear missions and a solid organization mission 
        statement are necessary for establishing priorities and 
        goals and maintaining focus on established objectives.
          (2) Open and honest communication with employees 
        about each step of the reorganization process is vital 
        to maintaining employee morale, as is affording 
        employees an opportunity to convey their views on 
        downsizing and reorganization.
          (3) Innovative management techniques are enabling 
        States, localities and businesses to empower employees 
        and to strip layers of bureaucratic management in favor 
        of more streamlined structures. The result has been 
        more efficient, more responsive organizations with high 
        morale and greater productivity.
          (4) Privatization is clearly one of the most 
        advocated means of taking government out of functions 
        which are not inherently governmental and which can be 
        performed more efficiently and cost-effectively by the 
        private sector.
          (5) Competitive bidding will improve service while 
        saving money. The government should be forced to 
        compete with private business for effective, efficient 
        service delivery.
          (6) The Federal Government must replace old and 
        outdated computer systems with advanced technology that 
        allows for open communication both internally and with 
        the public. Using such technology will facilitate 
        ``one-stop shopping'' and other innovations in service 
        delivery.
    The committee made the following recommendations as a 
result of its oversight findings:
          (1) Establish a citizens commission on 21st century 
        government.
          (2) Identify and remove statutory and regulatory 
        barriers to reorganization and innovation.
          (3) Increase privatization and competitive bidding.
          (4) Enlist the aid of the private sector in 
        reorganization and innovation efforts.
          (5) Restore responsibilities to the States and local 
        governments without imposing unfunded mandates.
          (6) Establish, communicate and adhere to a clear 
        mission for Federal agencies.
          (7) Maintain open lines of communication with agency 
        employees.
          (8) Promote innovation by managers and employees.
          (9) Use technology to improve service and increase 
        efficiency.
    The committee intends that Congress learn from and adopt 
some of these successful strategies and recommendations in an 
effort to restructure the executive branch to better meet the 
needs of Americans today and in the 21st century.
    c. Hearings.--Members of the committee began the ``Creating 
a 21st Century Government'' field hearing series on July 14, 
1995, in Parma Heights, OH, and continued the series in Upper 
Montclair, NJ, on September 9, 1995. The committee's following 
three hearings were held over Columbus Day weekend traveling to 
Federal Way, WA, on October 6, 1995; Long Beach, CA, on October 
7, 1995; and Albuquerque, NM; on October 9, 1995. The final 
hearing in the series was held on October 20, 1995, in 
Charlotte, NC.
3. ``Laws Related to Federal Financial Management as Amended Through 
        December 31, 1995,'' House Report No. 104-745, August 2, 1996, 
        Ninth Report by the Committee on Government Reform and 
        Oversight.
    a. Summary.--This report outlines the laws and procedure 
related to Federal financial management. Included in the report 
are sections related to money and finance (Title 31, U.S.C.); 
general provisions (Title 1, U.S.C.); the Congress (Title 2, 
U.S.C.); government organization and employees (Title 5, 
U.S.C.); commerce and trade (Title 15, U.S.C.); Postal Service 
(Title 39, U.S.C.); public buildings, property, and works 
(Title 40, U.S.C.); public contracts (Title 41, U.S.C.); and 
public printing and documents (Title 44, U.S.C.). Also included 
in the report are the Debt Collection and Improvement Act of 
1996, the Single Audit Act amendments of 1996 and other major 
laws on financial management.
    b. Benefits.--The Committee on Government Reform and 
Oversight believes that effective financial management is 
critically important in making worthwhile decisions on the use 
of public resources in support of the well-being and security 
of the American taxpayer. This report helps fulfill the 
committee's oversight responsibility and serves as a valuable 
reference guide in assisting Congress, Federal entities, and 
all others interested in good stewardship of Federal resources.
    c. Hearings.--None were held on this measure.
4. ``Sampling and Statistical Adjustment in the Decennial Census: 
        Fundamental Flaws,'' House Report No. 104-821, September 24, 
        1996, Fourteenth Report by the Committee on Government Reform 
        and Oversight, Together with Additional and Dissenting Views.
    a. Summary.--Since 1994, the Subcommittee on National 
Security, International Affairs, and Criminal Justice and the 
full committee have been conducting an investigation into the 
planning and preparation for the 2000 Decennial Census. Based 
on this study and one subcommittee hearing and two full 
committee hearings, the committee adopted its fourteenth report 
to the 104th Congress on September 24, 1996.
    The Decennial Census is mandated by the Constitution in 
order to apportion the Congress. Census data are used by every 
State for congressional and State redistricting. They are also 
used to enforce the Voting Rights Act. Numerous Federal and 
State programs, distributing billions of dollars each year, use 
Decennial Census data, or the intercensal estimates derived 
therefrom, for their implementation.
    In 1995, the committee learned that the Census Bureau was 
seriously considering dramatic changes to its approach in 
taking the Decennial Census of the population. On February 28, 
1996, the U.S. Department of Commerce and the Bureau of the 
Census publicly announced their formal plans for a ``re-
engineered 2000 Census.'' The plans call for the use of 
statistical methods in two separate instances: (1) to sample 
and estimate the final 10 percent of the population failing to 
respond in the actual enumeration (``sampling''), and (2) to 
use a separate sample of houses to estimate those persons 
missed in the actual enumeration and the sample for non-
response and revise it accordingly (``adjustment'').
    Statistical techniques have been used by the Census Bureau 
to assess the accuracy of census counts since 1950, but have 
never been used to ``complete'' and/or ``correct'' the original 
number for use in apportioning Congress.
    After the Secretary of Commerce decided in July 1991 not to 
make a statistical adjustment to the 1990 Census, over 50 
lawsuits erupted, culminating in the 1995 case considered by 
the Supreme Court, United States v. City of New York. The 
Court's decision, handed down in March 1996, upheld the 
Secretary's decision not to adjust the 1990 census.
    The report finds that the problems that surrounded the 
issue of statistical adjustment in the 1990 Census also plague 
the plans for the 2000 Census. This is compounded by the plans 
to incorporate sampling to complete the actual enumeration. 
Specific findings include:
          1. Sampling/statistical adjustment are inherently 
        problematic given the subjectivity in the various 
        decisions comprising the methodology.
          2. The legal provisions that concern the use of 
        sampling for apportionment purposes, both in the 
        Constitution and in Federal law, are variously 
        interpreted.
          3. The inherent uncertainties of sampling/statistical 
        adjustment may undermine public confidence in the 
        Decennial Census and reduce public participation.
          4. The sampling method for nonresponse follow-up 
        introduces additional error into the process and may 
        compromise the accuracy of small-area data which are 
        important for congressional and State legislative 
        redistricting.
          5. The complexity of the two different sampling 
        techniques being planned for the 2000 Census adds a 
        great deal of risk to the operational feasibility of 
        the Bureau's current approach.
    Based on the committee's findings, the committee made the 
following recommendations:
          1. Congress should work to clarify existing Federal 
        statutes with regard to the use of sampling to make 
        statistical adjustments to the census for apportionment 
        purposes.
          2. The Bureau should not use sampling methods to 
        complete or adjust the actual enumeration of the 2000 
        Census which is constitutionally mandated for purposes 
        of apportionment.
          3. The Department of Commerce and the Bureau of the 
        Census should prioritize the constitutional mandate of 
        the Decennial Census--apportionment of the House of 
        Representatives.
          4. The Bureau should emphasize and strengthen its 
        cooperative relationships with State and local elected 
        officials, as well as members of local organizations, 
        who are vital in helping increase response rates to the 
        Decennial Census.
          5. The Bureau should strengthen its plans for a 
        thorough quality check of the 2000 Census and maintain 
        open access to all processes for internal and external 
        review and analysis.
    b. Benefits.--The report sets aside political 
considerations regarding the winners and losers in an 
adjustment situation and addresses the problems with sampling 
and adjustment on their technical merits. In laying important 
groundwork regarding the technical problems with sampling and 
statistical adjustment in the Decennial Census, the report 
could provide the necessary basis and justification for taking 
legislative action in future Congresses. The report also 
represents an important marker in Federal legislative history 
regarding the issues of sampling and statistical adjustment.
    c. Hearings.--On October 25, 1995, Congressman William H. 
Zeliff, Jr., chairman of the Subcommittee on National Security, 
International Affairs, and Criminal Justice, held an oversight 
hearing entitled, ``Oversight of the Census Bureau: Preparation 
for the 2000 Census'' to examine testimony from Census Bureau 
officials regarding their plans for conducting the 2000 
Decennial Census. Witnesses included Dr. Martha Riche 
(Director, Bureau of the Census, U.S. Department of Commerce), 
Francis DeGeorge (Inspector General, U.S. Department of 
Commerce), and Nye Stevens (Director of Federal Management and 
Workforce Issues, U.S. General Accounting Office). At the 
hearing, the Bureau announced a number of new initiatives, 
including the use of statistical sampling to complete the 
actual enumeration.
    On February 29, 1996, the Committee on Government Reform 
and Oversight held a hearing ``Census 2000: Putting Our Money 
Where It Counts'' to gather testimony from Members of Congress 
and outside experts regarding the Bureau's new methodology. 
Witnesses included Senator Herb Kohl (D-WI), Congressman Thomas 
Sawyer (D-OH), Congressman Thomas Petri (R-WI), Bruce Chapman 
(president, Discovery Institute, Seattle, WA), Dr. Barbara 
Bailar (vice president, Survey Research, National Opinion 
Research Center), Dr. Steve Murdock (director, Department of 
Rural Sociology, Texas A&M University), Dr. Kenneth Wachter 
(professor of statistics and demography, University of 
California at Berkeley), Dr. Charles Schultze (senior fellow, 
the Brookings Institution, and Dr. James Trussell (director, 
Office of Population Research, Princeton University).
    On June 6, 1996, the Committee on Government Reform and 
Oversight held another hearing, ``Census 2000: The Challenge of 
the Count'' to air questions and concerns about statistical 
methods planned for the Census 2000. The witnesses were Dr. 
Everett Ehrlich (Undersecretary of Commerce for Economic 
Affairs, U.S. Department of Commerce), and Dr. Martha Riche 
(Director, Bureau of the Census, U.S. Department of Commerce). 
Congressman Thomas Petri delivered a brief statement on his 
bill, H.R. 3589, to prohibit the use of sampling in the 2000 
Census. However, he did not receive questioning by members of 
the committee.
5. ``Investigation of the White House Travel Office Firings and Related 
        Matters,'' House Report No. 104-849, September 26, 1996, 
        Fifteenth Report by the Committee on Government Reform and 
        Oversight, Together with Minority and Additional Views.
    a. Summary.--On May 19, 1993, the Clinton administration 
fired seven long-time employees of the White House Travel 
Office and ordered them to depart the White House premises in 2 
hours. Then-White House press secretary Dee Dee Myers 
simultaneously--and inappropriately--announced a criminal 
investigation of the Travel Office by the FBI. The Clinton 
administration replaced the Travel Office employees with 
employees of World Wide Travel, the Clinton/Gore '92 campaign 
travel agency. World Wide Travel departed the White House 
Travel Office within 2 days as a firestorm of press and public 
criticism over the firings engulfed the White House. World Wide 
was replaced by a combination of government workers and 
American Express personnel.
    Various aspects of the Travel Office matter were 
investigated by the White House, the Justice Department Office 
of Professional Responsibility and Public Integrity Division, 
the FBI, the General Accounting Office and the Internal Revenue 
Service. Individually and collectively, the resulting reports 
raised more questions than they answered. For example, in an 
October 7, 1994, letter to then-Chairman Conyers of the 
Government Operations Committee, Ranking Minority Member 
William F. Clinger, Jr., and 16 other House Members requested 
hearings into the Travel Office matter. This request was 
accompanied by a 71-page minority analysis of contradictions 
arising from or issues unaddressed by any of the previous 
reports. In response to this report, then-Chairman Conyers 
wrote then-Ranking Minority Member Clinger, ``You have raised 
serious questions about GAO's report to Congress'' and asked 
that GAO provide ``a detailed response'' to those issues.
    When Independent Counsel Fiske concluded in July 1994 that 
the Travel Office matter had been a major factor in the late 
Vince Foster's suicidal depression, it became all the more 
important to have a full understanding of what transpired at 
the White House Travel Office. Prior to Mr. Fiske's report, 
little was known of Foster's role in the Travel Office firings. 
In fact, the committee later learned that the White House had 
withheld Foster's Travel Office notebook from previous Travel 
Office investigations.
    Soon after becoming chairman of the reconstituted 
Government Reform and Oversight Committee, Mr. Clinger 
announced that the committee would investigate the Travel 
Office matter.
    b. Benefits.--The committee resolved upon the following 
findings and recommendations.

                                Findings

    1.) Plans to fire the White House Travel Office employees 
and replace them with campaign personnel were in place from the 
earliest days of the Clinton administration;
    2.) Harry Thomason, who had a financial stake in the travel 
business, instigated the firings. Mr. Thomason's personal and 
financial interests in the Travel Office made it clearly 
inappropriate for him to have any involvement in the matter;
    3.) President Clinton approved Harry Thomason's ``Image 
Project'' at the White House, giving Thomason an ``Official 
Status'' which facilitated Thomason's efforts to obtain 
lucrative government contracts;
    4.) Harry Thomason abused his official status and White 
House access at a time when he had a financial stake in the 
travel business. Mr. Thomason's activities at the White House 
made him a special government employee to whom conflict of 
interest laws applied;
    5.) The White House Communications Office, in conjunction 
with the White House Counsel's Office, publicly accused the 
Travel Office employees of criminal conduct and misused and 
manipulated the FBI to further their political agenda;
    6.) President Clinton inappropriately allowed his cousin 
Catherine Cornelius to remain in a position where she had a 
clear conflict of interest. Cornelius pursued an investigation 
of employees of an office in which she coveted the top job and 
for which she planned a reorganization;
    7.) Mrs. Clinton, acting on Harry Thomason's baseless 
allegations of wrongdoing against the Travel Office employees, 
exerted pressure on senior White House staff to fire the Travel 
Office employees;
    8.) Associate White House Counsel Bill Kennedy misused the 
FBI by repeatedly invoking concerns at the ``Highest Levels'' 
of the White House in meetings with the FBI;
    9.) White House officials covered-up the real reasons for 
the Travel Office firings. The firings were not based on the 
Peat Marwick review but rather were decided before Peat Marwick 
examiners ever set foot inside the White House;
    10.) The White House misrepresented the Peat Marwick 
review. It was neither an audit nor independent and was 
directed by a White House which did not want an audit to be 
conducted;
    11.) The FBI allowed the White House to control its 
investigation;
    12.) The FBI mishandled the Travel Office investigation 
from the beginning, allowing the White House to control the 
investigation. The FBI did not adequately secure Travel Office 
records in a timely fashion;
    13.) The White House engaged in a conspiracy of silence of 
the true story behind the firings from the very beginning for 
damage control purposes;
    14.) President Clinton established a cover-up situation 
when he inappropriately placed Mack McLarty, the person who had 
approved the Travel Office firings, in charge of the White 
House Management Review. McLarty withheld information during 
the course of the investigation. It is inappropriate for the 
White House to investigate itself in conflict-of-interest 
matters;
    15.) The internal White House Management Review was a 
catalog of ``mistakes and deception'' which omitted 
incriminating information about the President, Mrs. Clinton and 
Harry Thomason. The White House chose to cover-up incriminating 
information for political expediency;
    16.) The White House Management Review reprimanded people 
who were only following orders of the real instigators of the 
Travel Office firings;
    17.) The White House's obstruction of the review of Vince 
Foster's documents was due in part to concerns about Travelgate 
documents in Foster's custody;
    18.) Mrs. Clinton instructed White House staff on the 
handling of Foster documents and the Foster note found on July 
26, 1993, and senior White House staff covered up this 
information and withheld it from investigators;
    19.) The Justice Department deferred to the White House 
during its investigations of the White House Travel Office and 
Harry Thomason. The Justice Department ignored the obstructive 
behavior exhibited by the Counsel's Office;
    20.) White House officials engaged in a pattern of delay, 
deceit and obstruction over the course of 3 years of 
investigations into the Travel Office and matters related to 
Vince Foster's death;
    21.) David Watkins' ``soul cleansing'' memo account of the 
Travel Office is substantially corroborated by numerous records 
and witness testimony; and
    22.) President Clinton has engaged in an unprecedented 
misuse of the executive power, abuse of executive privilege and 
obstruction of numerous investigations into the Travel Office.

                            Recommendations

    The committee recommends that:
    1.) The ``special government employee'' provisions of the 
United States Code should be reformed to prevent its 
requirements from being ignored;
    2.) The Executive Office of the President should establish 
financial and internal review controls consistent with the 
requirements of the Chief Financial Officers Act and the 
Inspector General Act, including the development of annual, 
audited financial statements of all business activities and the 
establishment of an internal review system;
    3.) The Presidential Records Act and the Federal Records 
Act should be amended to provide for jurisdiction of Federal 
courts to ensure that Government records are not unlawfully 
destroyed, but are managed and preserved as required by law;
    4.) The Office of Counsel to the President should return to 
its traditional mission of providing traditional legal counsel 
to the President and his immediate staff;
    5.) Congress should consider the feasibility of prohibiting 
the Executive Office of the President from procuring goods and 
services through its own procurement operations and requiring 
the Executive Office of the President, where possible, to 
procure using existing contracts of other agencies, such as the 
General Service Administration's Federal Supply Schedules; and
    6.) Only individuals of the highest quality and ethics 
should be employed by and volunteer services to the Government.
    c. Hearings.--The committee held three hearings on the 
White House Travel Office matter:
    1.) October 24, 1995. Testifying before the committee were 
representatives of the organizations which had prepared various 
White House Travel Office reports: Mr. John Podesta (White 
House Management Review); Ms. Nancy Kingsbury (GAO's White 
House Travel Office Operations); Mr. Michael Shaheen 
(Department of Justice Office of Professional Responsibility 
Report); Inspector Ivian C. Smith (FBI Report) and Chief 
Inspector Gary Bell (IRS Report). The committee learned in the 
course of this hearing that the scopes of all five 
investigations were limited and that the White House Management 
Review, GAO and OPR Reports in particular were denied access to 
witnesses and even knowledge of critical documents subsequently 
obtained by the committee. As a result, none of the previous 
investigations could claim to have fully accounted for the 
actions leading up to and following the White House Travel 
Office firings.
    2.) January 17, 1996. Testifying before the committee was 
former White House Director of Management and Administration 
David Watkins. Mr. Watkins testified about his own undated 
``soul cleansing'' memo, first released by the White House to 
the committee in early January 1996. In this memo, which had 
not been made available to any of the previous Travel Office 
investigations, Watkins wrote that he had fired the Travel 
Office employees in the wake of pressure by First Lady Hillary 
Rodham Clinton. Mr. Watkins stood by that characterization 
during his testimony before the committee. This appeared to 
contradict Watkins' previous statements to GAO and other 
investigators as well as Mrs. Clinton's own assertions that she 
played no role in the firings. Subsequently, these 
contradictions led to a criminal referral of Watkins to 
Independent Counsel Starr.
    3.) January 24, 1996. Testifying before the committee were: 
former White House Travel Office Director Billy Dale and Deputy 
Director Gary Wright, as well as Travel Office staffers Barney 
Brasseux, John Dreylinger, Ralph Maughan, John McSweeney and 
Bob Van Eimeren. The fired Travel Office employees addressed 
such issues as their work in the Travel Office and management 
of it, and the circumstances surrounding their firings and 
subsequent investigations and audits--or threats of same--by 
the FBI and IRS. Mr. Dale in particular addressed his 30-month 
investigation by the Department of Justice, his indictment and 
trial on two charges, and his acquittal by a jury of his peers 
in only 2 hours. Mr. Dale also strongly challenged allegations 
of mismanagement in the White House Travel Office and testified 
to the disappearance of records which he claimed would have 
exonerated him. Those records disappeared during the period 
immediately preceding the firings when Clinton administration 
staffer Catherine Cornelius was removing documents from the 
office and taking them home. The FBI did not make any effort to 
secure the Travel Office records until 3 weeks after the 
firings and 3 weeks after its criminal investigation of the 
Travel Office had begun.
    In the wake of these three hearings and the continued 
withholding of documents by the White House, it became clear 
that the Travel Office investigation could not proceed without 
the ability to depose witnesses under oath. As a result, on 
March 7, 1996, the House of Representatives approved H. Res. 
369, providing special authority to the Committee on Government 
Reform and Oversight to obtain testimony for purposes of 
investigation and study of the White House Travel Office 
matter. The Resolution was limited to provide deposition 
authority to the Committee on Government Reform and Oversight 
only for its investigation of the Travel Office matter. 
Committee investigative staff deposed more than 70 witnesses 
under this authority in the course of the Travel Office and 
related FBI background files investigations.
6. ``Federal Government Management: Examining Government Performance As 
        We Near the Next Century,'' House Report No. 104-861, September 
        28, 1996, Eighteenth Report by the Committee on Government 
        Reform and Oversight, Together with Additional and Minority 
        Views.
    a. Summary.--In mid-1996 the committee undertook to prepare 
a report that would update information available on the status 
of overall government management, both in terms of cross-
cutting and governmentwide areas of management and in specific 
programs. The report dispassionately examined mismanagement, 
waste, fraud and abuse in Federal departments and programs. 
What we found was truly alarming. The report focussed on actual 
management and accomplishments, or lack thereof, rather than on 
policy. By no means, however, should it be considered 
comprehensive. Serious management deficiencies of the executive 
branch of Government are too numerous to inventory in a single 
report. Only some of the more obvious problems facing the 
cabinet departments and several independent agencies were 
reviewed.
    Some of the problems reviewed were unique to their 
departments, such as the failure of the Department of Labor to 
focus sufficient management resources on eliminating organized 
crime in labor unions, or the rising delinquency rates in 
agricultural loans managed by the U.S. Department of 
Agriculture. Other problems, such as mismanagement of 
contracts, abuses of the personnel system and failure to 
collect debts owed the Federal Government can be found in 
almost all departments and agencies.
    The report was initiated to raise the visibility of weak 
management practices, the lack of oversight and inconsistency 
in evaluating the effects of agency actions in the Federal 
Government. It briefly reviewed the administration's highly 
publicized National Performance Review (NPR), which was 
developed to make government ``work better, and cost less.'' 
The NPR is clearly a laudable initiative, but to date, has 
produced few concrete results.
    On the positive side, the 104th Congress enacted 
legislation that, if implemented effectively, should make 
specific improvements in problem areas of the Federal sector. 
For example, comprehensive procurement reform, the Unfunded 
Mandates Reform Act, and the Line Item Veto are a but a few of 
the refreshing management improvements enacted during the past 
2 years.
    The report concluded that public perceptions of pervasive 
waste, fraud and mismanagement in the Federal Government are, 
unfortunately, accurate. Other alarming developments in the 
Federal Government which demonstrate the need for greater 
accountability include the expansion of the General Accounting 
Office's (GAO's) ``High Risk'' list of Federal program areas. 
That catalog of government hot spots grew from 14 in 1990 to 20 
today--a net increase of six areas.
    Of the ``Twelve Worst Examples of Government Waste'' 
outlined for priority attention for this administration by a 
1992 House Committee on Government Operations majority report, 
11 are the same or worse now. Some, like the failure of the 
Internal Revenue Service and the Department of Justice to 
collect outstanding debt and the growth of health care fraud 
and abuse are much worse now. Taken individually, these items 
are cause for concern; taken in the aggregate, they are cause 
for alarm and an indication that leadership, both at the 
various agencies and at the helm of Government is lacking. With 
some exceptions, key appointees apparently do not understand or 
care to learn about effective management of their programs. 
Bureaucrats cannot operate programs in the absence of strong 
guidance and oversight at the highest levels of their 
organizations.
    Poor financial management, wasteful procurement and 
inventory practices, sloppy contract management, personnel 
abuses and manipulation of personnel rules, silly or even 
harmful regulations are among the consequences of bad 
management. Acts such as the Chief Financial Officers Act and 
the Government Performance and Results Act were passed by 
Congress in frustration over managerial anarchy and program 
disaggregation. These acts are being implemented, and Congress 
is overseeing their implementation, in an effort to counter the 
tendency of management and budget to separate at the Federal 
level, and of management to receive less and less attention 
over time. As this report amply demonstrated, the Office of 
Management and Budget exacerbated that problem by merging its 
management and budget functions. Budget Officers at OMB have 
now also been made responsible for management oversight.
    The report's quick review of fraud, abuse and mismanagement 
uncovered $350 billion in easy savings that could be achieved 
if greater resources were devoted to good management practices. 
Hundreds of billions more will be wasted in the near term on 
cost over runs, programs delays, delinquent payments, loans, 
grants and unfulfilled contracts. Additional costs for the 
Department of Energy's nuclear waste cleanup alone is estimated 
to cost as much as $350 billion.
    Although the report is critical of the executive branch of 
Government, it is not intended as an indictment of dedicated 
career civil servants, including managers, who are functioning 
in an increasingly complex and sometimes inflexible 
environment. The committee recognized that Federal employees 
are operating under greater, rather than fewer, constraints. It 
was and is the committee's intent that the report serve as a 
stimulus to discussion, an inducement to action and result in 
positive reforms in Federal management, efficiency and 
productivity.
    b. Benefits.--The rules of the House of Representatives 
give jurisdiction over general government management and 
efficiency to the Committee on Government Reform and Oversight. 
In accordance with that responsibility, the predecessor to this 
committee produced an overview of government management in 
1992. This report, entitled ``Federal Government Management: 
Examining Government Performance As We Near the Next Century,'' 
continued the committee's tradition in reporting on 
comprehensive government program efficiency and cost-
effectiveness. It is essentially a report card on the 
management practices of the first Clinton administration and 
also reviews the Vice President's National Performance Review 
(NPR), which was intended to improve government efficiency and 
morale.
    c. Hearings.--None were held.
7. ``Investigation into the White House and Department of Justice on 
        Security of FBI Background Investigation Files,'' [Interim 
        Report], House Report No. 104-862, September 28, 1996, 
        Nineteenth Report by the Committee on Government Reform and 
        Oversight, Together with Additional Views.
    a. Summary.--On May 30, 1996, in the course of its Travel 
Office investigation, the committee discovered a December 20, 
1993, White House request of Billy Dale's confidential FBI 
background file from the FBI Liaison Office. Even though it was 
dated 7 months after Dale's firing, the form indicated that the 
White House was requesting Dale's confidential FBI file because 
it was considering him for ``Access (S).'' The Dale FBI 
background file request was found in a production of 1,000 
pages of documents over which the White House previously had 
claimed executive privilege. Chairman Clinger immediately 
called on the White House and the FBI to explain why the Dale 
file had been requested by and provided to the White House at a 
time when the Justice Department was undertaking a criminal 
investigation of Mr. Dale.
    On June 5, 1996, the White House claimed the Dale request 
was made mistakenly by an unnamed file clerk. On June 6, it 
claimed that the General Accounting Office had requested the 
Dale FBI background file. The GAO denied this immediately. By 
June 7, 1996, the White House acknowledged obtaining some 338 
FBI files of former White House employees, but alleged that 
they never were read. Then Anthony Marceca, a former detailee 
hand-picked by White House Office of Personnel Security 
Director Craig Livingstone, contradicted the White House when 
he told Livingstone's attorney that he in fact read all the 
files and passed derogatory information on to Livingstone.
    The White House admitted obtaining an additional 71 
improperly sought FBI background files by June 14, 1996, as FBI 
Director Louis J. Freeh released an FBI report indicating that 
408 files were provided to the White House ``without 
justification'' and were ``egregious violations of privacy.'' 
Director Freeh added, ``The prior system of providing files to 
the White House relied on good faith and honor. Unfortunately, 
the FBI and I were victimized. I promise the American people 
that it will not happen again on my watch.''
    Also on June 14, 1996, Livingstone admitted to problems of 
his own background in a sworn deposition before the committee. 
These included problems with his employment history and the use 
of illegal drugs and gave added impetus to the still-unanswered 
question, ``Who hired Craig Livingstone?'' On June 15, 1996, 
the White House delivered a document production to the 
committee which included letters from former Associate White 
House Counsel William H. Kennedy, III, to then-Defense 
Secretary Les Aspin and others seeking the assignment of Army 
investigator Anthony Marceca to a White House detail in the 
Office of Personnel Security.
    b. Benefits.--The committee resolved upon the following 
findings and recommendations.

                                Findings

    1.) FBI background files often include the most sensitive 
and confidential personal and financial information about the 
individual being reviewed;
    2.) The White House improperly requested hundreds of 
confidential FBI background files without any justification. 
This violated the constitutional rights and privacy of many 
former Republican officials whose files improperly were 
requisitioned and reviewed by Clinton White House employees;
    3.) The White House Office of Personnel Security and the 
FBI maintained a system which allowed low level staff to access 
any file without question by the FBI. The Clinton 
administration has, on a number of occasions, failed to 
implement safeguards that would have prevented lapses in 
security at the White House and in fact exploited the FBI's 
longstanding policy of relying on the honor of White House 
employees in turning over such files;
    4.) FBI General Counsel Howard Shapiro provided 
confidential FBI law enforcement information about Mrs. 
Clinton's role in bringing Craig Livingstone into the White 
House. When Shapiro realized that the information contained in 
Livingstone's FBI background file could damage former White 
House Counsel Bernard Nussbaum and Mrs. Clinton, he immediately 
contacted the Office of White House Counsel and read verbatim 
the incriminating contents of Livingstone's file;
    5.) Once White House Special Counsel Jane Sherburne learned 
that the information contained in Livingstone's file could 
damage Nussbaum and Mrs. Clinton, Sherburne contacted Mrs. 
Clinton regarding the information;
    6.) Ms. Sherburne may have violated ethical standards by 
informing private attorneys for Nussbaum and Livingstone about 
confidential FBI law enforcement information. On the day before 
reports of his testimony before a grand jury, lawyers for 
Nussbaum were informed of evidence uncovered in a search of 
Livingstone's file that contradicted Nussbaum's testimony 
before the Committee on Government Reform and Oversight. Mr. 
Livingstone's attorneys received the same information;
    7.) White House Office of Personnel Security staff failed 
to properly secure confidential FBI law enforcement files. The 
committee was provided with testimony and evidence that staff 
and interns without the necessary clearances had access to the 
highly sensitive material in the FBI background files including 
that of more than 400 Bush and Reagan administration officials;
    8.) The FBI continued to involve itself in the 
investigation of the FBI files matter even after receiving 
notice from the Attorney General that a conflict of interest 
existed between the FBI and the White House concerning this 
matter. Mr. Shapiro notified the White House about the 
incriminating contents of Livingstone's background file before 
the committee was allowed to review it. Mr. Shapiro assisted 
the White House in preparing correspondence for the FBI 
regarding the FBI files matter and the committee's 
investigation of it;
    9.) Army detailee Anthony Marceca was given unfettered 
access to confidential FBI law enforcement files and allowed to 
remove confidential information from the White House despite 
his own inability to receive White House clearance. Marceca's 
removal of information in those files from the White House was 
inappropriate;
    10.) Without any valid basis for doing so, FBI General 
Counsel Shapiro provided the White House Counsel a pre-
publication copy of Gary Aldrich's book which the former agent 
had provided to the FBI under an employment agreement. There 
was no apparent reason for providing the manuscript to the 
White House; and
    11.) The White House asserted executive privilege over 
documents over which it had no basis for claiming privilege. 
Thousands of pages of these documents contained routine 
administrative information or communications, as opposed to 
issues of national security or others for which a claim might 
be appropriate.

                            Recommendations

    Having undertaken a preliminary investigation, the 
committee is not satisfied that the public has been provided 
the answers to many of the concerns raised by the FBI 
background files matter. This makes it imprudent to make 
recommendations at this time. The committee feels those 
individuals whose files were improperly obtained by the White 
House deserve a complete explanation of the following 
questions:
    1.) Who hired Craig Livingstone?
    2.) What list was used by the White House in requesting the 
improperly-obtained FBI background files?
    3.) Who reviewed the contents of the FBI background files 
of former Reagan and Bush administration officials?
    4.) Were the contents of the FBI background files ever 
transmitted electronically to any computer data base within or 
outside the White House complex?
    5.) What effect have the new procedures implemented by the 
Clinton administration had on the White House pass process and 
FBI background checks?
    6.) What standard procedures are in place to ensure that 
those without proper clearances do not have access to materials 
protected by the Privacy Act which are stored in the White 
House?
    7.) What policies should be implemented to ensure that FBI 
officials do not interfere with ongoing investigations outside 
the FBI's jurisdiction?
    c. Hearings.--The committee held four hearings on the FBI 
background files matter:
    1.) June 19, 1996. Testifying before the committee were 
former White House Counsels or Deputy Counsels A.B. Culvahouse 
and Richard Houser (Reagan administration), C. Boyden Gray 
(Bush administration), and former Office of Personnel Security 
Director Jane Dannenhauer and her deputy, Ms. Nancy Gemmell. 
Both Ms. Dannenhauer and Ms. Gemmell had served in the Reagan 
and Bush administrations and briefly in the Clinton 
administration. At this hearing, the care and discretion with 
which FBI background investigation files were handled in the 
Carter, Reagan and Bush administrations was established. For 
example, access to these files was strictly limited to Ms. 
Dannenhauer and one or two members of the White House Counsel's 
Office. Those with access to these files themselves had been 
cleared for such access after undergoing background 
investigations of their own. By contrast, White House interns 
were assigned to the White House Office of Personnel Security 
for the first time during the Clinton administration. These 
interns, aged 18 to 20 years old and without security 
clearances or background investigations, nonetheless had access 
to confidential FBI background files in the Clinton White 
House.
    2.) June 26, 1996. Testifying before the committee were: 
former Clinton administration Director of Personnel Security D. 
Craig Livingstone; former Clinton administration detailee 
Anthony Marceca; former Office of Personnel Security staffer 
Lisa Wetzl; former White House Counsel Bernard W. Nussbaum, and 
former Associate White House Counsel William H. Kennedy, III. 
At this hearing, Mr. Livingstone formally announced his 
resignation from his position, from which he had been on leave 
since the FBI files scandal broke. Witnesses also testified 
that hundreds of FBI background files had been requested due to 
faulty Secret Service lists. No one, including Mr. Livingstone, 
could answer the question, ``Who hired Craig Livingstone?'' 
although Messrs. Nussbaum and Kennedy testified that the First 
Lady had no role in Livingstone's hiring. Apparent 
contradictions between Nussbaum's testimony and previous 
statements he had made to an FBI agent in the course of an 
interview subsequently led to a criminal referral of these 
matters to Independent Counsel Starr.
    3.) July 17, 1996. Testifying before the committee were 
Secret Service Agents John Libonati, Jeffrey Undercoffer and 
Arnold Cole. The Secret Service agents established in their 
testimony that the Secret Service's own records properly 
recorded as ``inactive'' passholders all but a handful of the 
individuals whose FBI files were requested and that it thus 
would have been difficult for the White House to mistakenly 
request hundreds of FBI background investigation files of 
former ``inactive'' Republican officials. Special Agent Cole 
also testified that, when the FBI files matter first was 
reported in the press, Livingstone told him he knew that the 
Secret Service lists were indeed accurate and that his office 
had used the wrong lists. The agents also testified at this 
hearing about the incidence of recent drug usage among White 
House staffers, 21 of whom were forced by recent extensive drug 
usage to be tested twice a year in a special, individualized 
random drug testing program.
    4.) August 1, 1996. Testifying before the committee were: 
Howard M. Shapiro, FBI General Counsel; Thomas Kelley, FBI 
Deputy General Counsel; Vernon Thornton, retired former FBI 
Unit Chief of Executive Agencies Dissemination and Personnel 
Unit; and Peggy J. Larson, FBI Supervisory Research Analyst.
    At this hearing, General Counsel Shapiro testified 
concerning his ``heads-up'' warning to the White House 
concerning materials in D. Craig Livingstone's FBI background 
file. Mr. Shapiro acknowledged it was ``a horrific blunder'' 
warning the White House of the existence of an FBI report 
stating the First Lady ``highly recommended'' Livingstone for 
his White House position. In his opening statement and, later 
while responding to questions, Shapiro acknowledged that the 
substance of this ``heads-up'' in turn was widely disseminated 
throughout the White House and beyond. (Former White House 
Counsel Bernard Nussbaum, who reportedly told the FBI of the 
First Lady's recommendation of Livingstone, was informed in 
advance of an appearance before a grand jury.) Mr. Shapiro also 
testified about his July 16, 1996, decision to send FBI agents 
out to the home of the agent whose interview summary report 
related the First Lady's recommendation. He testified that the 
interview of the FBI agent was not intended to intimidate, as 
some majority Members suspected. Mr. Shapiro also testified 
about his delivery to White House Counsel Jack Quinn of retired 
FBI agent Gary Aldrich's manuscript of a proposed book which 
discussed activities at the White House. The other three 
witnesses testified more generally on the handling of FBI 
files.

    GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY SUBCOMMITTEE

                      Hon. Stephen Horn, Chairman

1. ``Making Government Work: Fulfilling the Mandate for Change,'' House 
        Report No. 104-435, December 21, 1995, Third Report by the 
        Committee on Government Reform and Oversight, Together With 
        Additional Views.
    a. Summary.--On December 14, 1995, the Committee on 
Government Reform and Oversight approved and adopted a report 
entitled, ``Making Government Work: Fulfilling the Mandate for 
Change.'' The committee's report is based on a series of 
hearings conducted by the Subcommittee on Government 
Management, Information, and Technology. The subcommittee 
convened eight oversight hearings on various aspects of 
government management to solicit advice and recommendations 
for: (a) changing what the Federal Government does; (b) 
improving the overall economy, efficiency, and management of 
its operations and activities; and (c) effectively planning, 
measuring, and reporting the results to the American public. 
The inquiry reflected public expectation that provided a 
mandate to the Congress to consider with care the various 
Government functions, and to determine whether they should 
continue to be performed, and, if retained, how they can be 
made more effective.
    The experience of American industry also influenced the 
committee. In the past decade, corporations and other entities 
have reexamined their roles and redefined their institutional 
objectives and purposes. Many corporate changes have been 
facilitated by technology that speeds information to 
decisionmakers and thereby reduces the need for traditional 
hierarchies. While such changes have been at times wrenching to 
the people in these institutions, the result has been to make 
American industry far more productive and competitive. The 
Federal Government has yet to implement a similar 
transformation on any appreciable scale. While the committee 
recognizes fundamental differences between the purposes and the 
cultures of business and Federal Government organizations, it 
remains receptive to the suggestion that ``rethinking'' and 
``re-engineering'' methods successfully used in the private 
sector can be and should be adapted for use in the Federal 
Government.
    Because of the administration's management responsibilities 
for the Federal Government, the point of reference for all 
material reviewed was the National Performance Review, Phases I 
and II.

                                Findings

    Based upon the investigation and oversight hearings 
conducted by the subcommittee, the committee found the 
following:
1. The Management of the Federal Government Needs Improvement.
    (a) The capacity of the President as the Chief Executive 
Officer of the Federal Government and its principal manager has 
been diminished over several administrations. The Executive 
Office of the President has abrogated its responsibility to 
oversee and improve the Government's management structure.
    (b) The capacity available to the President in the Office 
of Management and Budget [OMB] to reform or improve management 
has steadily declined and now barely exists, despite a 
competent Director of OMB and a Deputy Director of Management, 
whose talents in this area are underutilized. Federal 
management organization, oversight authority, and general 
influence have been consistently overridden by recurring budget 
crises and budget cycle demands, despite conscientious 
intention to give ``Budget'' and ``Management'' equal voice 
within OMB.
    (c) The NPR, in its ad-hoc and episodic approach to 
management issues, reveals the weakened state of management 
capacity of the Executive Office of the President.
    (d) The NPR-inspired announcement of a reduction of over a 
quarter-million Federal jobs may have been warranted; however, 
without first having a solid empirical rationale for doing so 
and not knowing where or how, it reflected a lack of strategic 
vision as to the Federal Government's role, and as such it 
seriously eroded Federal workers' morale, productivity, and 
planning for the future.
    (e) The capacity of the Office of Personnel Management to 
provide leadership to a revitalized career service has been 
seriously impaired.
    (f) Short-term political appointees have layered and 
``thickened'' the Federal Government's upper echelons of 
organization to a point where productivity, management, and 
continuity of operation have become seriously affected.
    (g) Some potential candidates for political appointment 
believe that service on Federal organizations will hinder their 
careers, imposing a protracted and intrusive nomination process 
as well as numerous restrictions on financial and employment 
activities during and following Federal Government assignments. 
As a result, the pool of available talent qualified for 
appointment and willing to serve has been diminished.
    (h) Qualified people considering careers in public 
administration are discouraged from Federal career employment 
by layers of political appointees of uneven quality which 
preclude advancement to positions of senior responsibility.
    (i) Career Federal public administrators have a long record 
of faithfully executing clearly established policy and 
rendering effective political leadership. However, political 
appointees as a group have tended to display more loyalty to 
individual political sponsors and special interests than to the 
President, who is elected by and ultimately accountable to the 
people.
    (j) Employee-buyout programs in Federal organizations have 
not worked as well as intended, resulting in the loss of 
employees with the most marketable skills, leaving in the 
workplace many of the poorer performers.
    (k) Programs for Federal-employee professional education, 
training, and development are vital to a smaller workforce 
adopting modern management methods and achieving desired 
productivity improvements.
    (l) The Federal Government must follow the best practices 
of private and public organizations for exploiting information 
technology in reforming management, reducing size, and raising 
productivity and market competitiveness. A recent General 
Accounting Office report provides valuable insights on how the 
Federal Government can lower costs, improve productivity, and 
provide better services to its citizens.
2. The Federal Intergovernmental Roles Are Poorly Defined.
    (a) The Federal role has evolved in a patchwork manner. The 
Federal Government lacks a clear and comprehensive statement of 
its proper role. The result is similar redundant programs 
throughout disparate departments and agencies.
    (b) Many citizens view the Federal Government as having 
overreached its proper role, by ``meddling'' in affairs such as 
elementary and secondary education (better left to States and 
communities), marketing and distribution of energy resources 
(better left to market forces) and applied research and 
development (better left to private investment and 
competition).
    (c) Many State governments are willing to risk accepting 
large Federal block grants, with fewer dollars, in return for 
greater flexibility and fewer restrictions. There is some 
concern that any residual reporting burdens and controls from 
Washington may interfere with States' roles and as such 
constitute an ``unfunded mandate,'' contrary to a law sponsored 
by this committee.
    (d) In the current environment, many agencies and States 
are trying to develop program partnerships. Federal-State 
program partnership agreements reached a high point during the 
Johnson and early Nixon administrations. State and Federal 
leaders need to be aware that those intergovernmental 
agreements later deteriorated because roles and 
responsibilities were not clearly defined and accepted by all 
interested parties. Another cause was that the Federal 
Government seized a decisionmaking role disproportionate to the 
resources it provided.
3. Organization of Federal Functions Is Uneven and Duplicative.
    (a) No Cabinet-level department has been eliminated 
outright in our Nation's history, although many have been 
reorganized, renamed, combined, or split.
    (b) Today's Federal Government is even more enmeshed in red 
tape, replicated functions and controls than it was in 1971, 
when President Nixon tried unsuccessfully to reorganize and 
streamline Cabinet departments.
    (c) The proposed ``Department of Commerce Dismantling Act 
of 1995'' contains a model for dismantling any high-level 
Federal organization using a traditional organization within 
the Office of Management and Budget.
    (d) Approximately a million Federal employees work in some 
30,000 field offices outside of Washington, DC. Although some 
field offices only have five or fewer staff, closing them has 
consistently proven to be a difficult, almost intractable 
political problem. The committee notes progress by the U.S. 
Department of Agriculture in addressing the problem.
4. Public Accountability Is Weak.
    (a) The National Performance Review [NPR] contributed to 
identifying the need to improve the Federal Government and 
lower its operating costs.
    (b) By not establishing first what activities the Federal 
Government should be performing, the NPR was flawed from the 
outset and did not achieve enough progress.
    (c) NPR neglected to place sufficient emphasis on fiscal 
accountability by failing to address the Federal Government's 
responsibility for stewardship of public resources.
    (d) The ad-hoc, even disjointed, nature of NPR is a telling 
sign of the disconnect between policy and management, evidence 
of atrophy of the tools of management, and an admission that 
the President has no organized capacity to manage the executive 
branch.
    (e) The NPR recommended a doubling of the existing 1-to-7 
supervisory span of control to a 1-to-14 or 1-to-15 supervisor 
to subordinate ration. This recommendation was without 
appropriate foundation and ignored the Government's widely 
varying missions, and threatens public accountability.
    (f) With more Federal work being done under contract, with 
private vendors, effective contract administration is 
critically important in ensuring efficiency, effectiveness, and 
accountability.
    (g) The growth of ``contract government'' is a direct by-
product of the emphasis on personnel reduction. As successive 
administrations have sought to limit or reduce the number of 
Federal employees, more and more activities have been 
contracted out.
    (h) The experiences of other foreign and Federal, State and 
local governments in carrying out significant management and 
accountability reforms are valuable to Federal agency managers 
as they implement the Government Performance and Results Act of 
1993 [GPRA].
    (i) Government corporations and other Government-sponsored 
enterprises have assumed roles and responsibilities very 
different from those for which the Government Corporation 
Control Act of 1945 was intended. Today, a conceptual framework 
is needed for setting up these kinds of enterprises and 
centralized oversight of their management operations.
    (j) Executive branch accountability is made more difficult 
by the complex congressional budget process and by additional 
legislative branch restrictions and controls placed on 
Government agencies, such as prohibitions on closing outdated 
Federal field offices.

                            Recommendations

    Based on the foregoing findings, the committee recommends 
as follows:
1. Strengthen the President's Role as Chief Executive Officer of the 
        Executive Branch.
    (a) Management of the Federal Government should be a 
Presidential priority. Among the President's many roles is the 
responsibility to serve as Chief Executive Officer or general 
manager of the Federal Government. Many broad initiatives 
intended to make the Federal Government work better depend on 
the commitment by the President and his staff in the Executive 
Office of the President. By approaching the Federal Government 
almost exclusively from a budget or policy perspective, 
Presidents limit their capacity to reform management in the 
Federal Government.
    (b) The President, acting jointly with Congress through a 
Federal management office, should establish intergovernmental 
partnerships, with clearly defined Federal and State roles and 
responsibilities, and allow local Federal managers the 
authority and flexibility needed to assist State and local 
officials in managing devolved programs, functions, and 
resources.
    (c) To make the President's executive office more 
accountable to the public, Congress should establish an Office 
of Inspector General in the Executive Office of the President.
2. Establish an Office of Management.
    (a) To enhance the President's management capability 
throughout the executive branch, Congress should establish, in 
the Executive Office of the President, a top-level management 
and organizational oversight office headed by an administrator 
who has direct access to the President. Sustained attention to 
management issues beyond recurring budget crises is vital to 
ensure effectiveness. The new Federal management office would 
combine the management functions of the OMB, the residual 
policy and oversight functions of the Office of Personnel 
Management, and the policy functions from the General Services 
Administration into an entity separate from but equal in 
stature to the remaining Office of the Budget.
    (b) The executive branch is in serious need of an office 
with responsibility for departmental reorganizations such as 
the proposed dismantling of the Department of Commerce. The 
current legislative initiative in that regard will be a model 
for managing large-scale reductions in the Federal Government's 
organizational structure and scope of work.
    (c) An Office of Management could encourage the 
implementation of the strategic information management and 
technology practices increasingly common in high quality 
private and public organizations. It could stress the need to 
focus management attention on technology improvements that 
attain goals; and assert senior management control over 
technology investment decisions.
    (d) Executive agencies should exploit, publicize, and 
replicate successful private sector ventures in making Federal 
Government organizations work more effectively by drawing upon 
past successes.
3. Convene a Commission on Federal Reorganization.
    (a) Congress should establish a blue-ribbon inquiry 
commission of experts from the business, academic, and 
nonprofit sectors and Federal, State and local government to 
recommend to the President and Congress in early 1997: (i) ways 
to organize more efficiently the functions that the Federal 
Government performs; and (ii) changes in law that would reduce, 
transfer or eliminate Federal functions. If resources permit, 
such a commission should produce a reorganization plan.
    (b) Such a commission should apply the guideline criteria 
for agency elevation to Cabinet department status which were 
developed in 1988 by the National Academy of Public 
Administration [NAPA]. Such a review ought to result in a new 
alignment and grouping of the tasks and functions of the 
Federal role by major purpose.
    (c) Congress should concurrently provide the President 
broad authority, including optional fast-track authority, to 
restructure executive branch departments and agencies, similar 
to past (and now expired) Reorganization Acts.
    (d) Congress should be fully involved in the consolidation 
of the many Federal programs it enacts and funds; the proposed 
commission should look for additional opportunities to 
consolidate or combine Federal programs, and make 
recommendations accordingly.
    (e) Once changes have been made in the structure of the 
executive branch, Congress should conform its own committee 
organization and jurisdictions to parallel the executive branch 
changes.
4. Reshape the Federal Civil Service.
    (a) Congress should proceed with legislation that would 
reduce the allowable number of political appointees to an 
initial level of 2,000--aimed principally at Schedule C (not 
subject to Senate confirmation) positions--and set lower 
targets for future years as additional executive branch 
organizations are consolidated or abolished.
    (b) Congress should appropriate the professional education, 
training, and development funds for executive agencies, not as 
separate line items, but as an integral part of total personnel 
costs. That would afford managers the flexibility to choose 
between training and hiring to upgrade collective 
organizational skills.
    (c) Any future Federal employee ``buyout'' legislation 
should be limited to serving the needs of the downsized Federal 
Government by focusing agency buyouts on those with less-needed 
skills, functions, and capabilities.
5. Strengthen Public Accountability.
    (a) Both the President and Congress should complete the 
work to implement the Government Performance and Results Act, 
in order to make the executive branch both performance-driven 
and accountable. The act's performance measurement provisions 
ought to be used in all steps of the budget and management 
process.
    (b) To make public accountability in the executive branch 
less cumbersome and counterproductive, Congress should simplify 
the present complex structure of 13 separate appropriations 
bills by combining them into a lesser number, possibly 
comparable to the internal budget review structure in the 
Office of Management and Budget. Congress should adjust its own 
internal authorizing and appropriating committee structure 
correspondingly.
    (c) Congress should amend the Government Corporation 
Control Act of 1945 to raise the efficiency and effectiveness 
of the Federal Government's business-type operations and 
organizations and to set standards consistent with today's 
marketplace conditions.
    (d) In its quest to attain the objective of balancing the 
Federal budget by fiscal year 2002, Congress must recognize 
three critical needs: (i) to preserve the Federal Government's 
accountability to the governed throughout the transformation 
process; (ii) to foster that objective by making investments in 
human and technological development during that process; and 
(iii) to accept the hard lessons learned by industry that 
workforce strength is to be cut only after--not before or 
while--the Federal roles have been determined and 
organizational structures have been reduced or eliminated.
    b. Benefits.--Implementing the recommendations in this 
report will result in a Federal Government that is less 
expensive, more efficient, and more accountable to the 
taxpayer. Federal customers and partners in all program areas 
will benefit from sharper definition of the roles and 
relationships between levels of government, as well as between 
the government and the private sector, elimination of 
duplicative Federal organizations and activities, and 
performance measures that facilitate public discussion and 
decision about the ongoing value of government activities. A 
strengthened career civil service, well trained and well tooled 
in the best management practices of both the public and private 
sector, and empowered to employ them, is vital to making these 
benefits a reality.
    c. Hearings.--The series of eight hearings began on May 2, 
1995, with an overview of the NPR process. Testimony was 
received from Alice M. Rivlin, Director, and John A. Koskinen, 
Deputy Director for Management, Office of Management and Budget 
(OMB); Charles A. Bowsher, Comptroller General of the United 
States, General Accounting Office (GAO); Tony Dale, Budget 
Manager of the New Zealand Treasury (in his capacity as 
Harkness Fellow, 1994-5), the Commonwealth Fund of New York; 
Duncan Wyse, executive director, Oregon Benchmarking Project; 
Dwight A. Ink, president emeritus, Institute of Public 
Administration and former Assistant Director for Management, 
Bureau of the Budget and OMB; R. Scott Fosler, president, 
National Academy of Public Administration; Donald F. Kettl, 
nonresident senior fellow, Center for Public Management, The 
Brookings Institution, and professor at the University of 
Wisconsin, Madison; and Herbert N. Jasper, senior associate, 
McManis Associates.
    The subcommittee focused next, on May 9, on the appropriate 
role of Federal executive leadership in strengthening the 
management of Cabinet level departments, hearing testimony from 
Thomas P. Glynn, Deputy Secretary of Labor; George Munoz, 
Assistant Secretary for Management and Chief Financial Officer, 
Department of the Treasury; Assistant Comptroller General 
Johnny C. Finch, General Government Programs, and Gene L. 
Dodaro, Accounting and Information Management Division, GAO; 
Alan L. Dean, former Assistant Secretary of Transportation for 
Management and coordinator of President Nixon's plan for 
departmental reorganization; William D. Hansen, former 
Assistant Secretary of Education for Management and Chief 
Financial Officer under President Bush; and Roger L. Sperry, 
director of management studies, National Academy of Public 
Administration.
    The third hearing, on May 16, turned to consolidating and 
restructuring the executive branch, assessing alternative ideas 
for rearranging or reducing several departments and agencies. 
Witnesses were Representative Robert S. Walker of Pennsylvania, 
chairman of the Committee on Science; Representative Sam 
Brownback of Kansas; Representative Dick Chrysler of Michigan; 
Representative Todd Tiahrt of Kansas; Robert A. Mosbacher, 
Secretary of Commerce in the Bush administration; Scott A. 
Hodge, Grover M. Hermann Fellow in Federal Budgetary Affairs, 
the Heritage Foundation; Jerry Taylor, director, Natural 
Resources Studies, Cato Institute; and Herbert N. Jasper, 
senior associate, McManis Associates.
    In its fourth session, on May 16 and 23, the subcommittee 
examined the consolidation of a large number of Federal 
programs and organizations. The subcommittee heard testimony 
from Secretary of Energy Hazel R. O'Leary, Donald P. Hodel, 
former Secretary of Energy under President Reagan; Admiral 
James D. Watkins, U.S.N. (ret.) former Secretary of Energy 
under President Bush; John S. Herrington, former Secretary of 
Energy in the Reagan administration; Shelby T. Brewer, former 
Under Secretary of Energy during the Reagan administration; 
Donna R. Fitzpatrick, former Under Secretary of Energy during 
the Bush administration; Marshall S. Smith, Under Secretary of 
Education; Donald Wurtz, Chief Financial Officer, Department of 
Education; Chester E. Finn, Jr., John Olin Fellow, the Hudson 
Institute and former Assistant Secretary of Education during 
the Reagan administration; William D. Hansen, executive 
director of the nonprofit Education Finance Council and 
Assistant Secretary of Education for Management in the Bush 
administration; George Munoz, Assistant Secretary for 
Management and Chief Financial Officer, Department of the 
Treasury; and Paul Posner, Director, Budget Issues, Accounting 
and Information Management Division, GAO.
    Attention turned in June to the Federal Government's field 
establishment. After reviewing several types of possible 
corporate structures for Federal aviation, electric power, and 
transportation on June 6, the subcommittee heard testimony from 
several regional administrators on June 13 to understand their 
roles and hear their suggestions, then returned to Chicago on 
June 19 for a firsthand look at the Federal Government's 
operations from the field perspective. Witnesses at the June 6 
hearing were Donald H. Rumsfeld, former Secretary of Defense 
under President Ford and chief executive officer of General 
Instruments Corp.; Roger W. Johnson, Administrator of General 
Services; Jack Robertson, Deputy Administrator and Paul Majkut, 
general counsel, Bonneville Power Administration; Daniel V. 
Flanagan, Jr., president, Flanagan Consulting Group; Harold 
Seidman, senior fellow, National Academy of Public 
Administration; Jack Johnson, president, Professional Airways 
Systems Specialists; and Barry Krasner, president, National Air 
Traffic Controllers Association. Witnesses at the hearing on 
June 13 and 19 were Dwight A. Ink, president emeritus, 
Institute of Public Administration; Alan L. Dean, senior 
fellow, National Academy of Public Administration; Charles F. 
Bingham, visiting professor of public administration, the 
George Washington University; Wardell C. Townsend, Jr., 
Assistant Secretary of Agriculture for Administration; Shirley 
Sears Chater, acting Commissioner, Social Security 
Administration; Mary Barrett Chatel, president, National 
Council of Social Security Management Associations; D. Lynn 
Gordon, Miami District Director, U.S. Customs Service, 
Department of the Treasury and George Rodriguez, Houston Area 
Coordinator, Department of Housing and Urban Development; 
William Burke, Great Lakes Regional Administrator, General 
Services Administration and chair, Chicago Federal Executive 
Board; Gretchen Schuster, Chicago Regional Director, Passport 
Agency, Department of State and Federal Executive Board member; 
Joseph A. Morris, former General Counsel, Office of Personnel 
Management; Michael P. Huerta, Associate Deputy Secretary of 
Transportation and Director, Office of Intermodalism, 
Department of Transportation; Kenneth A. Perret, Garrome 
Franklin, and Donald Gismondi, Federal Regional Administrators 
in Chicago for highways (FHA), aviation (FAA), and transit 
(FTA) respectively; and Colonel Richard Craig, North Central 
Division Engineer, U.S. Army Corps of Engineers.
    The seventh hearing, on June 20, in Washington, emphasized 
improving government results through performance measurement, 
benchmarking, and re-engineering, as many private corporations 
have done. Witnesses providing testimony were Donald F. Kettl, 
Center for Public Management, the Brookings Institution, and 
professor at the University of Wisconsin, Madison; Harry P. 
Hatry, Director of State and Local Government Research 
Programs, the Urban Institute; Herbert N. Jasper, senior 
associate, McManis Associates, Johnny C. Finch, Assistant 
Comptroller General, General Government Programs, GAO; Linda 
Kohl, director of Minnesota State Planning; Sheron K. Morgan, 
North Carolina Office of State Planning; Joseph G. Kehoe, 
Managing Partner for Government Services, Coopers and Lybrand, 
LLP; and Laura Longmire, National Director, Benchmarking, KPMG 
Peat Marwick LLP.
    The series of hearings ended on June 27, 1995, focused on 
agencies' preparation for compliance with the Government 
Performance and Results Act of 1993 (GPRA).
    Testifying at the final hearing were OMB Deputy Director 
for Management John. A. Koskinen; Johnny C. Finch, Assistant 
Comptroller General for General Government Programs, GAO; Paul 
C. Light, director, Public Policy Programs, the Pew Charitable 
Trusts; R. Scott Fosler, president, National Academy of Public 
Administration; Anthony A. Williams, Chief Financial Officer, 
Department of Agriculture; Vice Admiral A.E. (Gene) Henn, Vice 
Commandant, U.S. Coast Guard, Department of Transportation; 
Joseph Thompson, New York Regional Director, Department of 
Veterans Affairs; and Colonel F. Edward Ward, Jr., Director, 
Field Offices, Department of Defense Finance and Accounting 
Service, formerly with the Air Force Air Combat Command.
2. ``Year 2000 Computer Software Conversion: Summary of Oversight 
        Findings and Recommendations,'' House Report No. 104-857, 
        September 27, 1996, Sixteenth Report by the Committee on 
        Government Reform and Oversight.
    a. Summary.--After midnight, December 31, 1999, computer 
systems throughout the world are at risk of failing by 
confusing the year 2000 with the year 1900 on January 1, 2000, 
and going backward in time instead of forward with the new 
century. Congress has learned that if businesses and 
governments continue to ignore this issue, disruption of 
routine business operations and the inability of the Federal 
Government to deliver services to the American public could 
result.
    According to an April 12, 1996, Congressional Research 
Service (CRS) memorandum, ``Many people initially doubted the 
seriousness of this problem, assuming that a technical fix will 
be developed. Others suspect that the software services 
industry may be attempting to overstate the problem to sell 
their products and services. Most agencies and businesses, 
however, have come to believe that the problem is real, that it 
will cost billions of dollars to fix, and that it must be fixed 
by January 1, 2000 to avoid a flood of erroneous automatic 
transactions.''
    On April 16, 1996, subcommittee Chairman Stephen Horn 
convened a hearing of the Subcommittee on Government 
Management, Information, and Technology to determine what steps 
Federal agencies are taking to prevent a possible computer 
disaster. Among the questions raised were whether agencies are 
taking appropriate steps to identify the problem and mobilizing 
the necessary human and capital resources to it.
    As noted by Representative Tom Davis, ``think for a moment 
how dates play a part in each one of our lives and how the 
failure of a computer system or computer scanner to recognize 
and understand a date can affect us. Our driver's license may 
prematurely expire and the Social Security Administration may 
recognize 25-year-olds as 75-year-olds, without conversion that 
is needed for the year 2000.''
    Examples of what could occur if industry and government 
ignore this issue ranged from unexpected expiration of drivers' 
licenses to erroneous dates for final mortgage payments if two-
digit date fields remain unable to recognize the year 2000. 
Given that this information technology project has a fixed date 
for completion, January 1, 2000, subcommittee Chairman Horn 
asked hearing witness, Kevin Schick, research director, Gartner 
Group, to estimate the cost of a solution. Mr. Schick estimated 
$600 billion worldwide, including $300 billion in the United 
States and $30 billion for the Federal Government. Subcommittee 
Chairman Horn then asked Schick what the administration's and, 
in particular, the Office of Management and Budget's was doing 
to convey the urgency of the problem. Mr. Schick responded 
``there is no sense of urgency . . . if [Federal agencies] are 
not already well into this project by October of 1997, [the 
Federal Government] will be doing a disservice to the very 
constituents that depend on [it] to prevent something like this 
from happening to them . . .''
    On September 10, 1996, a joint hearing with the Committee 
on Science was held to review the Year 2000 impact on personal 
computers, States and the Federal Government. Larry Olson, 
Pennsylvania's Deputy Secretary for Information, presented 
Pennsylvania's plan and noted that the key to success of any 
plan is senior level support. Mr. Olson testified that in his 
first year as Governor, Tom Ridge recognized the implications 
of the Year 2000 date field problem and acted to ensure 
Pennsylvania businesses and governments will be prepared before 
January 1, 2000.
    Also at the hearing Harris Miller, the president of the 
Information Technology Association of America, outlined three 
problem areas for personal computer users in homes and 
businesses nationwide: 1) the machines' BIOs--basic input/
output systems--chips; 2) their operating systems; and 3) their 
commercial software. Most equipment manufacturers have modified 
their products in the past 18 months. Operating system software 
remains an issue but most operating systems can be fixed by a 
simple procedure using the computer's mouse. Commercial 
software may or may not be Year 2000 compliant. Another serious 
concern is their increasing interconnectedness with other 
systems. To ensure that computer systems are operational in 
2000, most systems will need modification.
    Miller also testified that personal computer users and 
mainframe information technology managers need to be aware of 
this issue and take appropriate corrective steps.
    In her testimony, OMB's Office of Information and 
Regulatory Affairs Administrator Sally Katzen outlined the 
Clinton administration's strategy to resolve the problem: 1) 
raise the awareness of the most senior managers in Federal 
agencies to the problem; 2) promote the sharing of management 
and technical expertise; and 3) remove barriers impeding 
technicians fixing systems.
    b. Benefits.--The subcommittee found the following:
1. The Year 2000 Problem Results From the Unanticipated Consequences of 
        Decisions Made Decades Ago.
    Computer systems use the two-digit-year date field to 
perform such functions as calculating the age of U.S. citizens, 
sorting information by date, and comparing multiple dates. 
Twenty years ago, disk storage was so expensive that a four-
digit-year date format was rejected. In addition to the cost 
factor, many programmers assumed that the programs then using 
two-digit-year date fields would be obsolete by the year 2000, 
if not within 10 years. In fact, systems now in place nearly 30 
years continuously were enhanced by technological developments 
while remaining programmed for the 20th century. Given these 
developments, many experts in the public and private sectors 
were confident further advances would provide ``silver bullet'' 
solutions to such issues as this one. Others believed the 
software services industry was overstating the problem to sell 
products. While correcting the date field is technically 
simple, the process of inventorying, correcting, testing and 
integrating software and hardware among all interactive systems 
(among industry and government) is very complex.
2. Senior Management Involvement Is Required To Address the Year 2000 
        Problem.
    Various witnesses appearing before the subcommittee 
emphasized the value of senior level support to fix the 
systems. Many experts, aware of this issue for up to a decade, 
were unable to take corrective action because the problem was 
considered irrelevant to agencies' missions.
    In the Federal Government, an ``Interagency Committee on 
the Year 2000,'' established to raise awareness of the task 
facing Federal information technology managers, has required 
that vendor software in future procurement schedules be Year-
2000 compliant, among other things.
3. The Year 2000 Deadline Cannot Be Extended.
    According to Mr. Schick, the crisis revolves around time, 
cost and risk. Businesses, Federal agencies, and State and 
local governments must understand that this information 
technology project cannot be allowed to slip: Saturday, January 
1, 2000 cannot be postponed. Mr. Schick added that all parties 
may be required to shift resources from other projects to 
complete this one.
4. Addressing The Year 2000 Problem Will Be Costly.
    Estimates as high as $600 billion for systems worldwide, 
$300 billion in the United States and $30 billion for the 
Federal Government alone reflect the costs of: inventorying 
current programs; analyzing the percentage of code affected; 
implementing a fix, and testing to ensure the changes are 
correct. All must be completed while current information 
technology remain in use.
    Only six agencies furnished any cost estimates for 
resolving the problem in response to the April 29, 1996 
oversight letter: the Departments of Agriculture, Education, 
Health and Human Services and State, as well as the Office of 
Personnel Management, and the Small Business Administration. In 
fact, Agriculture and Health and Human Services only provided 
partial estimates.
5. There Is a High Risk of System Failure if the Year 2000 Computer 
        Problem Is Not Corrected.
    If, as suggested by CRS, it is too late to correct every 
system nationwide before January 1, 2000, businesses need to 
know how to minimize disruptions in their operations. Federal, 
State and local governments must prioritize mission critical 
systems and immediately correct systems with the greatest human 
impact.
    Federal, State and local governments, must ensure that 
Americans are not at risk of losing government services. 
Additionally, the Department of Defense, Federal Aviation 
Administration and similar agencies must ensure that their 
computers do not go haywire on January 1, 2000, causing severe 
disruptions of a strategic nature.
    On June 7, 1996, the CRS provided the House and Senate with 
a memorandum discussing various issues complicating the Year 
2000 project and potential consequences resulting from a 
failure to address this problem at the Federal level, 
including:
         Social Security Administration miscalculation 
        of the ages of citizens, causing payments to be sent to 
        ineligible persons and/or denying payments to the 
        eligible;
         IRS miscalculations of standard deductions on 
        income tax returns for persons over 65, causing 
        incorrect records of revenues and payments due;
         Malfunctioning Department of Defense weapon 
        systems;
         Erroneous flight schedules generated by the 
        FAA's air traffic controllers;
         State and local systems being corrupted by 
        false records, resulting in errors in income and 
        property tax records, payroll, retirement systems, 
        motor vehicle registrations, and more;
         Erroneous records by securities firms and 
        insurance companies; and
         False billing by telephone or similar 
        companies resulting in billing errors or lapses in 
        service.
6. Potential Liability Issues Arise If the Year 2000 Computer Date 
        Conversion Is Not Completed.
    Businesses--in particular banks, securities firms and 
insurance companies, among others--face potential liability for 
failing to provide Year 2000 compliant products or services and 
must ensure that their data bases are not corrupted by bad data 
from external sources. Governments and businesses also must 
protect themselves from purchasing noncompliant software and 
services through use of commercial market warranties.
    c. Hearings.--The Subcommittee on Government Management, 
Information, and Technology held a hearing on April 16, 1996, 
entitled, ``Is January 1, 2000, the Date for Computer 
Disaster?'' and on September 10, 1996, a joint hearing was held 
with the Committee on Science, entitled, ``Solving the Year 
2000 Computer Problems.''
3. ``Crude Oil Undervaluation: The Ineffective Response of the Minerals 
        Management Service,'' House Report No. 104-858, September 27, 
        1996, Seventeenth Report by the Committee on Government Reform 
        and Oversight.
    a. Summary.--Between 1978 and 1993, oil companies underpaid 
royalties on crude oil drilled on Federal lands by as much as 
$2 billion nationwide. The Department of the Interior's 
Minerals Management Service (MMS) has failed to seriously 
address this problem.
    California is our fourth largest oil-producing State with 
1994 crude-oil production of 345 million barrels, a large 
amount of which is produced on Federal lands. In 1975, the 
State of California and the city of Long Beach sued seven major 
oil companies operating in California alleging they had 
conspired to keep posted oil prices low, thereby reducing 
royalties to the litigants. Similarly, insofar as the posted 
price was kept below fair market value, the Federal Government 
lost royalties due it for oil production on Federal lands.
    In 1986, MMS contacted California officials to assess the 
appropriateness of posted prices as the royalty value basis. 
MMS' conclusion that posted prices fairly represented market 
value reflected the failure of California and Long Beach to 
prove their antitrust claims in court. The Department of 
Justice looked into the issue but declined to investigate.
    In 1991, six companies (ARCO, Shell, Chevron, Mobil, 
Texaco, and Unocal) settled with California and Long Beach for 
some $345 million. Exxon, the seventh defendant, went to trial 
and was exonerated of antitrust charges relating to State oil 
leases. Exxon also won an appeal in January 1995. A separate 
appeal covering a different time period is pending.
    In the wake of the 1991 settlement, MMS attempted to 
estimate royalty underpayments for oil produced on Federal 
lands. However, since MMS lacked such crucial information as 
internal oil company records, California urged it to begin a 
more formal investigation. In 1994, MMS responded by creating 
an interagency task force consisting of representatives from 
MMS and the Departments of Interior, Commerce, Energy and 
Justice.
    The State of California assisted the Federal team in 
obtaining court records which proved instrumental in 
demonstrating the undervaluation of crude oil to the Federal 
interagency team. In May 1996, the interagency team released a 
report concluding that companies often received gross proceeds 
higher than their posted prices.
    The bulk of crude oil produced in California was not sold 
in competitive markets but rather through intra-company 
transfers; straight exchanges (where a company trades oil at 
one location with another having oil at a second location, 
thereby reducing transportation costs) and buy/sell contracts 
including such costs as transportation in the cost of the oil. 
It is difficult to determine a proxy for the market value of 
oil when oil companies hide its true value via complex 
contracts.
    The interagency report estimated underpayments of Federal 
oil royalties on California leases alone to be as high as $856 
million from 1978 through 1993. It recommended:
         That MMS focus collection efforts on some 10 
        companies producing 90 percent of Federal crude oil in 
        California;
         That for the period beginning March 1, 1988, 
        Federal royalties be based on the premium paid on 
        competitive arm's length contracts for oil produced 
        from the same field or area;
         The Assistant Secretary of the Interior issue 
        a royalty payor letter ordering targeted oil companies 
        to submit all relevant arm's length records to minimize 
        audit expenses;
         That the Federal Government submit a bill for 
        1989 and 1993 to Texaco, since MMS audited those 
        records, and found royalty underpayments and/or crude 
        oil undervaluations;
         That MMS's oil royalty valuation regulations 
        be revised to consider alternatives to reliance on 
        posted prices and improve clarity; and
         That a method be chosen to determine royalties 
        owed.
    MMS announced it would accept part of the task force's 
recommendations and attempt to collect approximately $440 
million. The $856 million figure was reduced due to global 
settlements between Interior and the oil companies, payments-
in-kind, and other factors. These figures do not include 
underpayments outside of California.
    In August 1996, the subcommittee obtained a November 1995, 
draft report by the Interior Department Inspector General from 
various press sources. The report criticized Interior for 
improper procedures during oil company negotiations which 
reduced the estimated value of items being negotiated by more 
than $350 million without documentation. A year after it was 
written, the report has yet to be released.

                                FINDINGS

    The subcommittee found:
1. The Minerals Management Service Has Delayed Collecting Royalty 
        Undervaluations.
    In the June 17, 1996, subcommittee hearing, members 
expressed concern that MMS delayed the release of the 
interagency report: in a 1994 e-mail to his supervisor, task 
force leader David Hubbard stated he had ``stalled long 
enough.''
    When it announced it would attempt to collect $440 million, 
MMS set no timetable for the task. MMS will not simply bill the 
oil companies based on Alaska North Slope crude prices but will 
audit every contract. With scarce audit resources, this could 
take many years. Nor does MMS' audit division appear committed 
to collect: unpublished Interior notes quote the head of the 
MMS audit division dismissing the interagency task force report 
in November 1995 as ``a piece of [expletive deleted].'' Giving 
control of the audit process to staff who disparage its results 
appears unwise.
    MMS also declined to outline interim steps to be taken. The 
interagency task force audited Shell's California contracts for 
1984 and Texaco's for 1989 and 1993 and recommended billing 
those companies immediately for those periods. At the June 17 
hearing, however, Interior's Assistant Secretary for Land and 
Minerals Management stated that bills would be sent out within 
4 to 6 weeks.
2. Global Settlements May Have Harmed U.S. Interests.
    MMS' global settlements covering multiple of issues and 
claims allowed two oil companies with large underpayments to 
avoid payment despite full knowledge of substantial problems 
with California underpayments. These agreements may have 
extinguished the Federal Government's claim to amounts owed. 
The Inspector General draft report concluded the royalty 
settlements were not conducted in accordance with ``Minerals 
Management Service Settlement Negotiation Procedures'' and 
faulted MMS for including ``no documentation for the estimated 
values of the issues concerning the underpayment of royalties 
to be negotiated. . . .''
    Prior to negotiations, an MMS Royalty Management Program 
division estimated the value of a particular issue to be 
negotiated in a global settlement as $439 million. A 
negotiation team listing valued the same issue at $78.2 
million. No documentation explained the $360.4 million 
discrepancy.
3. The California Undervaluation Problem Exists In Other States.
    During the June 17, 1996, subcommittee hearing, Robert 
Berman, an economist in Interior's Office of Policy Analysis, 
testified that the amount of the undervaluation of oil 
extracted from Federal lands ranges from 3 to 10 percent 
outside California or as much as $1.3 billion.
4. Royalty-In-Kind Transactions May Have Jeopardized U.S. Interests.
    The May 1996 interagency task force report acknowledged it 
had not ``investigated recoupment of additional revenues on 
royalty-in-kind crude oil that might have been undervalued'' 
and recommended Interior, ``should consider the effects of RIK 
[royalty-in-kind] volumes in its decisionmaking, including 
potential collections where these volumes were undervalued.''
    In theory, Interior sells RIK oil directly to a refiner. In 
practice, it allows the Federal leaseholder and refiner-
purchaser to arrange the terms of sale and transfer. RIK 
purchasers may in fact pay, through excessive transportation 
charges, more for this oil than the government receives.
5. Pipelines Which Cross Federal Lands Harm Federal Interest By 
        Depressing Royalty Revenues and Preventing an Efficient Oil 
        Market.
    The task force recognized the problem of proprietary 
pipelines:

          The market restrictions imposed by proprietary 
        pipelines operated by the major oil refiners had two 
        critical effects. First, it greatly restricted open-
        market trading in California crude oil. Second, it 
        segregated the crude oil markets of the San Joaquin 
        Valley and Ventura Basin from the refining centers in 
        San Francisco and Los Angeles. The reports [of two 
        consultants employed by the task force] concluded that 
        the pipeline situation contributed to postings 
        substantially understating California crude oil values.

    The Department of Energy also recognized this problem and 
indicated that the administration's Domestic Natural Gas and 
Oil Initiative included a pipeline reform plank. Energy 
requested that Interior require pipelines crossing Federal 
lands operate as common carriers. Interior has taken no action.

                            RECOMMENDATIONS

    The subcommittee recommends:
1. The Minerals Management Service Should Establish a Timetable For 
        Collections.
    The MMS and Interior should develop a timetable to collect 
unpaid royalties. This would assist Congress in providing 
oversight and commit the administration to taking action.
2. Audit Staff Must Advance the Management Agenda.
    If the audit staff is unwilling to support program goals 
determined by the administration, then MMS should contract out 
the project. California took this approach and received a $345 
million settlement. California now contracts with a certified 
public accounting firm to manage its oil sales.
3. The Department of Justice Should Review Global Settlements.
    Interior should ask Justice to prepare an opinion 
concerning royalties negotiated away by MMS. Interior also 
should review its compromise procedures, which are more 
sweeping than almost any other Federal agency. Agencies are 
limited in their authority to compromise debts under Federal 
law. Interior, along with Justice and OMB, should examine 
whether the persistent mismanagement of global settlements by 
MMS warrants review by Justice.
4. The MMS Should Collect Underpayments in All States Where it is Owed.
    Interior should develop a strategy to address this and 
advise the committee of its plan.
5. The Department of the Interior Should Review Competition on Common 
        Carrier Pipelines.
    Interior should alter its policy to comply with the 
administration's recommendations regarding the Domestic Natural 
Gas and Oil Initiative. It also should advise California 
officials of problems arising from proprietary pipelines, and 
the harm which unregulated pipelines can bring to consumers, 
producers and royalty owners.
    b. Benefits.--The report addresses a problem which is 
costing the Federal Government up to $2 billion in lost 
revenue. MMS has delayed the collection of oil royalties due.
    c. Hearings.--On June 17, 1996, testimony was received 
from: Hon. Ken Calvert, Member of Congress; Cynthia Quarterman, 
Director, Minerals Management Service, Department of the 
Interior; Robert Berman, Economist, Office of Policy Analysis, 
Department of the Interior; Abraham Haspel, Acting Principal 
Deputy Assistant Secretary for Policy and International 
Affairs, Office of Policy and International Affairs, Department 
of Energy; Robert Speir, Economist, Office of Oil and Natural 
Gas Policy, Department of Energy; Hon. Robert Armstrong, the 
Assistant Secretary of the Interior for Land and Minerals 
Management, Department of the Interior; M. Brian McMahon, 
attorney for the city of Long Beach, Trustee for the State of 
California; Robert Shannon, assistant city attorney, city of 
Long Beach; and James McCabe, deputy city attorney, city of 
Long Beach.

      HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE

                    Hon. Christopher Shays, Chairman

1. ``The FDA Food Additive Review Process: Backlog and Failure To 
        Observe Statutory Deadline,'' House Report No. 104-436, 
        December 21, 1995, Fourth Report by the Committee on Government 
        Reform and Oversight, Together With Additional Views.
    a. Summary.--Since April 1995, the Human Resources and 
Intergovernmental Relations Subcommittee has been conducting an 
oversight investigation into the delays in the Food and Drug 
Administration's (FDA) review and decisionmaking on food 
additive petitions. This is the first comprehensive oversight 
investigation into the FDA's management of the food additives 
program since the food additive amendments were passed in 1958. 
Based on this study and two subcommittee oversight hearings, 
the committee adopted its fourth report to the 104th Congress 
on December 14, 1995.
    The Federal Food, Drug, and Cosmetic Act (FFDCA) of 1938 
gave the FDA authority over food and food ingredients. The Food 
Additive Amendments to the FFDCA were passed by Congress in 
1958 to require FDA's pre-market approval for the use of an 
additive prior to its inclusion in food. This authority is now 
found in section 409 of the FFDCA. (21 U.S.C. 348) An 
``additive'' is ``any substance the intended use of which 
results or may reasonably be expected to result, directly or 
indirectly, in its becoming a component or otherwise affecting 
the characteristics of any food.'' This definition covers any 
substance used in the production, processing, treatment, 
packaging, transportation or storage of food such as colors, 
packaging materials, artificial sweeteners and fat substitutes. 
Food additives are commonly used to impart or maintain desired 
consistency, improve or maintain nutritive value, maintain 
palatability and wholesomeness, produce texture, control 
acidity/alkalinity and enhance flavor or impart color.
    Food additive petitions must be reviewed and acted upon by 
the FDA ``not more than 180 days after the date of filing of 
the petition.'' (21 U.S.C. 348(c)(2)). The regulatory scheme in 
the United States for food additive review is dysfunctional, 
and as a result, the American consumer and patient are deprived 
of technologies that could increase the variety and nutritional 
benefits of foods, improve diet and advance public health. The 
statutory deadline is not being met. Statutory changes are 
needed to establish more realistic and binding timeframes for 
petition reviews.
    On June 22 and June 29, 1995, the subcommittee held 
oversight hearings to address these issues. At these hearings, 
testimony was received from FDA officials with primary 
responsibility for food safety and operation of the food 
additive petition process, academicians, food manufacturers, 
trade associations, food scientists, and consumer groups.
    The committee report contained nine major oversight 
findings:
          1. FDA does not meet the 180 day statutory deadline 
        to review and make a decision on food additive 
        petitions.
          2. As of June 1995, there were 295 pending food 
        additive petitions, some of which were filed in the 
        1970's.
          3. The lack of fixed deadlines and the increased 
        scientific ability to detect and measure potential 
        hazards have resulted in a review process that is risk-
        averse.
          4. FDA is reluctant to decline incomplete or 
        inadequate petitions, and consequently, allows 
        incomplete and inadequate petitions to remain under 
        review at FDA for more than 180 days.
          5. FDA has committed insufficient resources to its 
        food additive review responsibilities.
          6. FDA does not set food additive petition review 
        priorities appropriately.
          7. FDA's failure to expeditiously review food 
        additive petitions has stifled innovation and the 
        introduction of new ingredients by the food industry.
          8. A petition review process with no fixed deadlines 
        can be manipulated for anti-competitive purposes.
          9. FDA does not make sufficient use of independent 
        scientific resources for food additive petition review.
    Based upon this investigation, the report made the 
following detailed recommendations:
          1. Congress should amend the Federal Food, Drug, and 
        Cosmetic Act review period for food additive petitions 
        from 180 days to 360 days for the most scientifically 
        complex reviews, and the deadline should be strictly 
        observed by FDA.
          2. The FDA should recognize that the approval of 
        useful and safe new products can be as important to the 
        public health as preventing the marketing of harmful or 
        ineffective products.
          3. The FDA should eliminate the backlog of pending 
        food additive petitions within 1 year by reallocating 
        the necessary agency resources.
          4. The FDA should utilize outside expertise in its 
        evaluation of food additive petitions but retain 
        authority for petition approval.
          5. The relevance of the ``Delaney clause'' should be 
        studied in view of modern scientific standards so that 
        better distinctions can be made between nominal hazards 
        and actual risks. The Delaney clause stipulates that no 
        food additive can be deemed safe if it has been found 
        to induce cancer when ingested by man or animal. The 
        FDA should establish a level of acceptable risk for 
        food additives, below which there is no hazard to 
        humans through consumption under normal or intended 
        use.
          6. The FDA should amend the review process to 
        prohibit anonymous submissions of data or comments.
    b. Benefits.--The investigation into delays in the food 
additive petition review process allowed FDA officials, food 
industry representatives, and others involved in the process of 
approving or requesting the approval of food additive petitions 
the opportunity to articulate their views of flaws in the 
regulatory system. When fixed, FDA's food additive petition 
review process could benefit the American public by providing a 
vast new array of useful and safe products which could add to 
or replace less effective products.
    c. Hearings.--The subcommittee convened two hearings on 
this subject, both entitled ``Delays in the FDA's Food Additive 
Petition Process and GRAS Affirmation Process.'' These hearings 
provided subcommittee members the opportunity to say directly 
to those involved in FDA's food additive petition process that 
Congress was not receptive to the agency's failure to meet its 
statutory deadlines, but would consider amendments to FDA's 
food additive petition review process to give the agency and 
petitioners a more reasonable timeframe within which to work.
    On Thursday, June 22, 1995, the subcommittee received 
testimony from: Linda Suydam, Acting Deputy Commissioner for 
Operations of the FDA; Dr. Fred Shank, Director of the Center 
for Food Safety & Applied Nutrition of the FDA; Dr. Alan Rulis, 
Acting Director of the Office of Premarket Review of the FDA; 
Dr. Sanford Miller of the University of Texas Health Sciences 
Center; Dr. Richard Hall, chairman of the Food Forum of the 
National Academy of Sciences; Al Clausi of the Institute of 
Food Technologists; Dr. Stephen Ziller of the Grocery 
Manufacturers of America; Dr. Rhona Applebaum of the National 
Food Processors Association; Robert Gelardi of the Calorie 
Control Council; Dr. Stephen Saunders of Frito-Lay; Dr. C. 
Wayne Callaway of the George Washington University School of 
Medicine; and Dr. Michael Davidson of the Chicago Center for 
Clinical Research, the Rush-Presbyterian-St. Luke's Medical 
Center.
    On Thursday, June 29, 1995, the subcommittee's second FDA 
oversight hearing, testimony was received from: Dr. Kenneth 
Fisher of the Federation of American Societies for Experimental 
Biology; Jerome Heckman of the Society of the Plastics 
Industry; Stuart Pape of the National Soft Drink Association; 
Donald Farley of Pfizer, Inc.; and Dr. Michael Jacobson of the 
Center for Science in the Public Interest.
2. ``The Federal Takeover of the Chicago Housing Authority--HUD Needs 
        to Determine Long-Term Implications,'' House Report No. 104-
        437, December 21, 1995, Fifth Report by the Committee on 
        Government Reform and Oversight, Together With Additional 
        Views.
    a. Summary.--On May 30, 1995, the U.S. Department of 
Housing and Urban Development (HUD) assumed control over the 
day to day operations of the ``troubled'' Chicago Housing 
Authority (CHA). A declared breach of contract between CHA and 
HUD signed by HUD Secretary Henry Cisneros on June 2, 1995, 
made the takeover legally effective. Executed in the wake of 
the resignation of CHA's Board of Commissioners on May 26, 
1995, the takeover was an unprecedented HUD action.
    Although HUD has authority to intervene in troubled housing 
agency operations at any time, HUD has never before assumed 
responsibility for the day-to-day operations of a housing 
agency the size of CHA. CHA is the Nation's third largest 
public housing authority and is surpassed in size only by those 
of Puerto Rico and New York City. The CHA, created in 1937 by a 
resolution of the city of Chicago pursuant to the Housing 
Authorities Act of the State of Illinois, administers over 
55,000 public and assisted housing units and serves over 
150,000 residents.
    On June 1, 1995, Congresswoman Cardiss Collins (D-IL), 
ranking member of the Government Reform and Oversight 
Committee, submitted a request to Committee Chairman William F. 
Clinger, Jr. (R-PA) that hearings be conducted in Chicago on 
the role of the U.S. Department of Housing and Urban 
Development (HUD) in the operation of the Chicago Housing 
Authority (CHA). Subsequent to this letter, the subcommittee 
began an investigation into the Federal takeover at CHA.
    The subcommittee submitted an initial inquiry and document 
request to HUD on July 11, 1995, regarding HUD's role in the 
takeover of the CHA. The July 11 letter requested information 
concerning CHA's demolition and redevelopment initiatives, 
HUD's previous efforts to reform CHA administration and the CHA 
budget reconciliation for fiscal year 95.
    HUD responded to the inquiry on August 1, 1995. 
Additionally, Assistant Secretary Joseph Shuldiner and HUD 
staff met with the subcommittee and Member staff on August 21, 
1995, to address other issues raised regarding the takeover. On 
August 28, 1995, the subcommittee directed another document 
request and inquiry to HUD's Office of General Counsel. The 
Office of General Counsel staff met with the subcommittee staff 
the next day to provide a response and to answer staff 
questions.
    The subcommittee staff also conducted numerous interviews 
with members of the Chicago community including: former CHA 
Executive Director Vince Lane, Mayor Richard Daley, CHA 
residents, former CHA staff and local housing and community 
development experts. Further, on August 25, 1995, majority and 
minority staff conducted onsite investigations and interviews 
in the city of Chicago.
    On September 5, 1995, the subcommittee held an oversight 
hearing in Chicago to investigate the Federal takeover of the 
Chicago Housing Authority. The hearing focused on HUD's 
progress at CHA since the May 30 takeover, the agency's short 
and long term strategies for reforming CHA and its plans for 
installing new leadership and management at the CHA. At the 
hearing, testimony was received from top level HUD officials, 
including Henry Cisneros, HUD Secretary; the U.S. General 
Accounting Office (GAO); panels of tenants; public housing 
management experts; and representatives from the city of 
Chicago and the private sector.
    Based on the investigation and the oversight hearing, the 
committee adopted its fifth report to the 104th Congress on 
December 14, 1995.
    The report contained seven major oversight findings:
          1. HUD's takeover of CHA was a necessary response to 
        the resignation of the CHA Board of Commissioners.
          2. HUD implemented a 120 day-plan to stabilize CHA 
        finances, management, security and physical inventory.
          3. Three months following the takeover, HUD lacked a 
        long term strategy for reforming CHA, and extricating 
        itself from CHA management.
          4. HUD's presence at CHA will be required beyond 
        January 1, 1996.
          5. HUD lacks clear statutory or regulatory standards 
        to trigger intervention at troubled housing agencies.
          6. HUD does not have the staff resources necessary to 
        run several troubled housing agencies at once.
          7. The Resident Management Corp. at 1230 North 
        Burling, Cabrini Green in Chicago has improved living 
        conditions and economic opportunities for public 
        housing residents.
    Based upon its investigation, the committee report made the 
following detailed recommendations:
          1. HUD should promptly secure strong, long term 
        leadership at CHA.
          2. HUD and new CHA management should develop a long 
        term strategy for the recovery of CHA.
          3. HUD should maintain a clear distinction between 
        its actions as a Federal agency and its actions as CHA 
        manager.
          4. HUD's takeover of CHA should be evaluated as a 
        pilot program to determine the effectiveness of direct 
        HUD intervention at other troubled housing agencies.
          5. Clear statutory or regulatory standards should be 
        established for HUD intervention at troubled housing 
        agencies.
          6. HUD should do more to support viable Resident 
        Management Corp.'s, particularly those operating in 
        troubled public housing developments.
    The report includes additional views by Mrs. Collins and 
Mr. Towns expresssing general support for the report, and 
noting that a briefing by HUD on December 5, 1995, provided 
additional information, not reflected in the report, that some 
of the subcommittee's recommendations have already been 
adopoted by HUD. The additional views include references to 
facts that can be found in the hearing record that provide a 
more complete picture of the status of the intervention effort, 
the rationale for the takeover, and the capacity of HUD to 
intervene in other troubled housing authorities.
    Mrs. Collins and Mr. Towns noted that HUD had acted on the 
subcommittee's recommendation regarding hiring of CHA staff and 
regarding formulation of a long range plan for the CHA. The 
additional views also pointed out that HUD offered information 
to support the conclusion that the Department does have the 
capability to intervene in other troubled housing authorities. 
Finally, the ranking members expressed the view that budget 
constraints must be acknowledged in any evaluation of the HUD 
intervention at CHA.
    Mr. Shays' additional views concurred with those of Mrs. 
Collins and Mr. Towns regarding HUD's action on the 
subcommittee's recommendation.
    b. Benefits.--The investigation found that HUD's takeover 
of the day-to-day operations of the Chicago Housing Authority 
(CHA) was necessary given the magnitude and severity of the 
problems faced by the housing authority and its residents. 
Significant investment of Federal funds are at risk as a result 
of the mismanagement of the CHA. Taxpayers and residents will 
benefit from this intervention by HUD. Moreover, the 
subcommittee's continued oversight with respect to this matter 
may spare the Chicago Housing Authority future years of 
deferred maintenance, administrative waste and further 
deterioration.
    c. Hearings.--On Tuesday, September 5, 1995, the 
subcommittee convened an oversight hearing entitled ``HUD's 
Takeover of Chicago Housing Authority,'' to receive testimony 
from: Hon. Henry Cisneros, Secretary of the Department of 
Housing and Urban Development (HUD); Joseph Shuldiner, 
Assistant Secretary for Public and Indian Housing at HUD; Kevin 
Marchman, Deputy Assistant Secretary for Distressed and 
Troubled Housing at HUD; Artensia Randolph, president of the 
Central Advisory Committee; Hattie Calvin, president of the 
Cabrini Green Leadership Advisory Council; Cora Moore, 1230 
North Burling, Cabrini Green, Resident Management Corp.; 
Jeffrey Lines, a Kansas City receiver and president of TAG 
Associates; Judy England-Joseph, Director of Housing and 
Community Development Issues for the U.S. General Accounting 
Office (GAO); Rosanna Marquez, director of programs for the 
city of Chicago; George Murray, chief of the CHA Police 
Department; and William Wallace, managing director of the 
Housing Technology Corp.
3. ``Fraud and Abuse in Medicare and Medicaid: Stronger Enforcement and 
        Better Management Could Save Billions,'' House Report No. 104-
        641, June 27, 1996, Eighth Report by the Committee on 
        Government Reform and Oversight, Together with Additional 
        Views.
    a. Summary.--Fraud and abuse are serious drains on Medicare 
and Medicaid programs. The General Accounting Office (GAO) 
estimates that as much as 10 percent of annual Government 
outlays in Federal health care programs are lost to fraudulent 
and wasteful provider claims. If that estimate is correct, it 
would mean almost $32 billion was lost in FY 95. Given that 
Medicare and Medicaid together account for $269.16 billion in 
Federal health care spending in FY 1995, Federal losses to 
these programs associated with fraudulent and abusive practices 
approached $27 billion. Finding new ways to curb these losses 
has been a major bi-partisan concern in recent years.
    Both the Medicare and Medicaid programs are vulnerable to 
fraud and abuse. There are strong incentives to over provide 
services; weak fraud and abuse controls to detect questionable 
billing practices; few limits on those who can bill; and 
ineffective enforcement tools. The Medicare program is 
particularly vulnerable because the Department of Health and 
Human Service's (HHS) Health Care Finance Administration (HCFA) 
continues to pay higher than market rates for certain services 
and supplies. This makes the program an attractive target for 
increasingly sophisticated, multi-state or national fraud 
schemes.
    Medicare is also vulnerable because perpetrators know there 
is little chance of being caught. Federal enforcement 
activities have been uncoordinated and ineffectively carried 
out, and HCFA's anti-fraud-and-abuse controls fail to 
systematically prevent the unquestioned payment of claims. 
Screening of claims for medical necessity and other criteria is 
inconsistently applied. Vendors sanctioned for fraud or abuse 
are not effectively barred from continued participation in 
Federal health programs because the exclusion sanction is under 
utilized. This points to insufficient coordination between 
those charged with enforcing existing anti-fraud statutes.
    HCFA, the HHS-OIG, and DOJ have outlined initiatives for 
curtailing fraudulent and abusive practices in Medicare and 
Medicaid programs. However, the extent to which these 
initiatives will result in improvements to the Federal 
Government's health care anti-fraud capabilities is uncertain. 
HCFA has under development the Medicare Transaction System 
(MTS) to centralize claims review and processing functions now 
handled by 72 contractors.
    The GAO characterized MTS a system ``at risk'' in terms of 
cost and scheduling. Meanwhile, near-term opportunities for 
more effective anti-fraud programs may be missed while HCFA 
places most of its hopes on the far-off prospect of the MTS.
    Waste, fraud and abuse in Medicare and Medicaid will never 
be completely eliminated. However, billions could be saved by 
stronger enforcement and better management--actions which would 
not place excessive demands on available budgets.
    The report contained the following findings:
          1. There is insufficient coordination among 
        government agencies combating waste, fraud and abuse in 
        the Medicare and Medicaid programs.
          2. HCFA does not require Medicare Part B contractors 
        to use software capable of screening out claims for 
        inappropriate medical services.
          3. HCFA is reluctant to exercise its statutory 
        ``inherent reasonableness'' authority to adjust 
        reimbursement rates for durable medical equipment and 
        supplies because the process is costly and cumbersome. 
        This makes Medicare an attractive target for fraud and 
        abuse. As a result, the Government too often pays more 
        than the market price for certain equipment and 
        supplies costing taxpayers billions of dollars.
          4. HCFA's Medicare Transaction System (MTS) project 
        is vulnerable to cost overruns and schedule delays due 
        to the agency's lack of a disciplined management 
        process.
    Based on these findings, the report contained the following 
recommendations:
          1. Congress should require HCFA, HHS IG, DOJ, State 
        Medicaid Fraud Control Units and other appropriate law 
        enforcement entities establish a joint program to 
        coordinate fraud detection and prevention activities, 
        and to apply the exclusion sanction against vendors 
        more effectively.
          2. HCFA should require its contractors to use 
        autoadjudication prepayment screens to ensure that 
        Medicare does not continue to pay claims for medically 
        unnecessary services.
          3. Congress should revise HCFA's ``inherent 
        reasonableness authority'' to require a price 
        adjustment for a Medicare item or service within 1 year 
        of initiating a review of that item or service through 
        the issuance of an interim final regulation.
          4. HCFA should develop a comprehensive management 
        plan to address the cost and scheduling challenges 
        associated with the Medicare Transaction System (MTS). 
        Until that plan is developed, HCFA should focus greater 
        resources on effective, near-term anti-fraud efforts.
    b. Benefits.--This report's detailed findings and 
recommendations strengthened the bi-partisan consensus in 
support of improved anti-fraud efforts in Federal health care 
programs. Federal program administrators generally concur with, 
and will be guided by, the recommendations to reduce 
vulnerability to fraud, waste and abuse while increasing 
preventive enforcement activities in order to limit the 
unproductive ``pay and chase'' cycle of current enforcement 
efforts.
    c. Hearings.--A hearing entitled ``Waste in Human Service 
Programs: Other Perspectives'' was held on May 23, 1995. A 
hearing entitled, ``Keeping Fraudulent Providers Out of 
Medicare and Medicaid'' was held on June 15, 1995. A hearing 
entitled, ``Screening Medicare Claims for Medical Necessity'' 
was held on February 8, 1996. A hearing entitled, ``Excluding 
Fraudulent Providers from Medicaid'' was held on September 5, 
1996.

4. ``Health Care Fraud: All Public and Private Payers Need Federal 
        Criminal Anti-fraud Protections,'' House Report No. 104-747, 
        August 2, 1996, Eleventh Report by the Committee on Government 
        Reform and Oversight.

    a. Summary.--Health care fraud, by some estimates a $100 
billion problem, does not stay within the jurisdictional 
boundaries that divide Federal, State and local health care 
finance and law enforcement. Sophisticated patterns of fraud 
and abuse have been detected operating simultaneously against 
private insurers as well as Federal and State health programs. 
These scams victimize patients and payers across multiple 
States, even nationally.
    Faced with increasing health care costs, and the growing 
price of health care fraud, Congress and Federal policymakers 
are aware of the need for a more coordinated, unified approach 
to anti-fraud enforcement. One essential element of that 
approach is the availability of Federal criminal health care 
offenses to prosecute frauds against any and all payers 
victimized by the same scheme.
    Current Federal enforcement tools are inefficient and 
inadequate against increasingly sophisticated patterns of fraud 
and abuse. Health care fraud cases, prosecuted mainly under 
mail and wire fraud statutes, money laundering and false claims 
laws, are complex, costly and time-consuming.
    Scarce enforcement resources are wasted when Federal 
enforcement efforts to protect Medicare and Medicaid only 
result in ``fraud shifting'' to private payers. In that event, 
the general public continues to pay the price for health care 
fraud in the form of higher insurance premiums and higher costs 
for Government health programs.
    Support for creation of Federal health care fraud crimes is 
both longstanding and bi-partisan. The previous and current 
administration endorsed making health care fraud a Federal 
crime. Legislation in both the 103d and 104th Congress has 
enjoyed bi-partisan sponsorship and support.
    Based upon the product of investigative inquiries and 
hearing testimony, the committee reported the following 
findings:
          1. Health care fraud schemes steal billions of 
        dollars from public and private payers each year.
          2. The Department of Justice (DOJ) needs stronger and 
        more direct statutory authority to deter fraud and 
        abuse against public and private health care plans.
          3. Scarce enforcement resources are wasted in pursuit 
        of the same fraudulent scheme against public and 
        private health care plans in multiple jurisdictions.
    The report contains one recommendation: Congress should 
enact legislation to make health care frauds against all public 
and private payers Federal criminal offenses.
    b. Benefits.--This report put a bi-partisan focus on the 
need for new Federal criminal health care fraud offenses. It 
provided Members of Congress and the administration with a 
useful historical perspective and current policy rationale to 
guide efforts to strengthen enforcement efforts, particularly 
when frauds are committed against both public and private 
health care payers. Federal ``all payer'' offenses were 
included in the Health Care Portability and Accountability Act, 
Public Law 104-191.
    c. Hearings.--A joint hearing entitled H.R. 1850: Health 
Fraud and Abuse Act of 1995, H.R. 2480: Inspector General for 
Medicare and Medicaid Act of 1995, and H.R. 3224: The Health 
Care Fraud and Abuse Prevention Act of 1996 (Joint Hearing) was 
held on May 2, 1996.

5. ``Protecting the Nation's Blood Supply from Infectious Agents: The 
        Need for New Standards to Meet New Threats,'' House Report No. 
        104-746, August 2, 1996, Tenth Report by the Committee on 
        Government Reform and Oversight, Together with Additional 
        Views.

    a. Summary.--In the early 1980's, 10,000 hemophiliacs and 
12,000 other patients were infected with the human 
immunodeficiency virus (HIV) through blood and blood products. 
Approximately 300,000 people were infected with the Hepatitis C 
virus (HCV), many of whom have never been told of their 
exposure to infection.
    The lessons of these tragedies compel greater vigilance and 
higher regulatory standards to protect the Nation's blood 
supply from emerging infectious agents and blood borne 
pathogens. Threats to blood safety are both natural and man-
made, as aggressive new infectious agents emerge and blood 
safety practices evolve. As a result, substantial improvements 
are needed in coordination between the Public Health Service 
(PHS) agencies within the Department of Health and Human 
Services (HHS), particularly the Food and Drug Administration 
(FDA), the Centers for Disease Control and Prevention (CDC) and 
the National Institutes of Health (NIH).
    At the first of two subcommittee hearings on blood safety 
issues, HHS Secretary Donna Shalala announced that the 
Department's focus on blood safety issues will be expanded and 
elevated, with the Assistant Secretary for Health charged to 
improve the coordination and effectiveness of blood safety 
policy.
    Current FDA and CDC regulatory systems are not adequate to 
meet the aggressive nature of emerging threats to blood safety. 
Product recalls and notification regarding possible exposure to 
blood borne pathogens are not well communicated to physicians, 
pharmacists, patients or the public. Regulation of blood 
collection, testing and the production of blood-derived 
therapeutics is not well coordinated or consistently managed to 
minimize known risks.
    The public is not well served if patients are permitted to 
believe there is no risk in blood transfusions or in the use of 
blood derived therapies. While such risks are extremely small, 
and the U.S. blood supply is as safe as it has ever been, 
greater efforts should be made to convey known risks to 
consumers who may wish to minimize even those risks through the 
use of alternative procedures or therapies.
    After a year-long investigation of blood safety issues, the 
Committee on Government Reform and Oversight issued House 
Report 104-746 ``Protecting The Nation's Blood Supply From 
Infectious Agents: The Need For New Standards To Meet New 
Threats;'' which addressed the need for reform in the 
regulation of blood products. The report's findings included:
          1. The blood supply is safer than it has ever been.
          2. The blood supply continues to face new infectious 
        disease challenges.
          3. In response to the recommendations of the 
        Institute of Medicine (IOM), HHS has begun to implement 
        higher regulatory standards to protect the Nation's 
        blood supply from emerging infectious diseases and 
        blood borne pathogens.
          4. The public is provided insufficient information on 
        the risks of blood and blood products.
          5. The FDA has not effectively managed regulatory 
        review of blood issues, particularly its advisory 
        committee on blood safety issues, the Blood Products 
        Advisory Committee (BPAC).
          6. Despite a BPAC recommendation to the contrary, the 
        FDA took the first step toward closing the ``window 
        period'' of possible HIV transmission by licensing the 
        p24 antigen test for screening of donated blood.
          7. Fifteen years after the AIDS virus emerged as a 
        threat to the blood supply, FDA still has not developed 
        an effective system for communicating blood product 
        recalls to pharmacists, doctors or patients.
          8. The size of plasma pools for fractionated products 
        can increase the risk of infectious disease 
        transmission.
    The report recommended:
          1. Congress should establish the Blood Safety Council 
        and the Advisory Committee on Blood Safety and 
        Availability in statute.
          2. Congress should consider establishing an 
        indemnification system for individuals who suffer 
        adverse consequences from the use of blood and blood 
        products.
          3. HHS should take steps to ensure that the estimated 
        300,000 living recipients of blood and blood products 
        who were infected with Hepatitis C virus before 1990 
        are notified of their potential infection so that they 
        might seek diagnosis and treatment.
          4. HHS should disseminate more clinically useful 
        information to providers of care and to the public 
        regarding blood safety issues.
          5. FDA should immediately develop an effective system 
        of recall notification for blood and plasma products.
          6. FDA should immediately cease its practice of 
        providing advance notice of safety and compliance 
        inspections to some plasma fractionators.
          7. Plasma fractionators should limit the size of 
        plasma pools, with pool sizes determined as much by 
        public health risk factors as by production economies 
        of scale.
    During the 1980's, 10,000 hemophiliacs and 12,000 others 
were infected with the Human Immunodeficiency Virus (HIV), 
which causes Acquired Immune Deficiency Syndrome (AIDS), 
through the use of blood and blood-derived therapies. The 
report found that current scientific and regulatory standards 
to detect and remove emerging blood borne pathogens lack both 
consistency and vigor. The report recommended greater 
cooperation and coordination between Federal public health 
agencies, more effective communication of the risks of blood 
products to consumers, and more effective recall of 
contaminated blood and blood products.
    b. Benefits.--The subcommittee's investigation and hearing 
allowed FDA officials, patients, physicians, blood collection 
industry representatives and plasma product manufacturers the 
opportunity to articulate their concerns and solutions 
regarding threats to the safety of the blood supply presented 
by emerging pathogens, complacency and regulatory 
mismanagement. The lessons of HIV and Hepatitis-C infections 
compel greater vigilance and higher regulatory standards to 
protect the Nation's blood supply from emerging infectious 
agents and blood borne pathogens. This report provides an 
outline of existing problems in the blood regulatory system as 
well as recommendations for resolution of these issues.
    c. Hearings.--Hearings entitled ``Protecting the Nation's 
Blood Supply from Infectious Agents: The Need for New Standards 
to Meet New Threats'' were held October 12 and November 2, 
1995.

     NATIONAL SECURITY, INTERNATIONAL AFFAIRS AND CRIMINAL JUSTICE 
                              SUBCOMMITTEE

                 Hon. William H. Zeliff, Jr., Chairman

1. ``National Drug Policy: A Review of the Status of the Drug War,'' 
        House Report No. 104-486, March 19, 1996, Seventh Report by the 
        Committee on Government Reform and Oversight, Together with 
        Additional Views.

    a. Summary.--Pursuant to the National Narcotics Leadership 
Act of 1988 (21 U.S.C. 1501 et seq.), the Director of the 
Office of National Drug Control Policy (ONDCP) developed a 
strategy and budget for anti-narcotics efforts, including both 
supply and demand reduction. In order to evaluate the strategy 
and find ways to both improve and supplement in the public and 
private sector, the Subcommittee on National Security, 
International Affairs, and Criminal Justice held five hearings 
and conducted a fact-finding trip to the Caribbean drug transit 
zone. The findings and recommendations of these activities are 
detailed in the March 19, 1996 committee report.
    The National Narcotics Leadership Acts requires that the 
strategy: ``(A) include comprehensive, research based, long-
range goals for reducing drug abuse in the United States; (B) 
include short-term measurable objectives which the Director 
determines may be realistically achieved in the 2 year period 
beginning on the date of the submission of the strategy; (C) 
describe the balance between resources devoted to supply 
reduction and demand reduction; and (D) review state and local 
drug control activities to ensure the United States pursues 
well-coordinated and effective drug control at all levels of 
government.'' The subcommittee held five hearings in order to 
determine whether the current strategy and its execution 
continues to meet these statutory obligations.
    The threats posed by illegal drug use, especially among the 
Nation's youth, have continued to grow since the subcommittee 
investigation began in January 1995. All national studies show 
a rise in drug use among teenagers. Both minority and majority 
members of the subcommittee have demonstrated a commitment to 
enhancing the drug control strategy by their active 
participation in these hearings.
    b. Benefits.--As a result of its investigation into the use 
of illegal drugs in America and the Nations fight against 
drugs, the subcommittee confirmed the following facts:
          (1) Casual teenage drug use trends have suffered a 
        marked reversal over the past 4 years, and are 
        dramatically up in virtually every age group and for 
        every illicit drug, including heroin, crack, cocaine 
        hydrochloride, LSD, non-LSD hallucinogens, 
        methamphetamine, inhalants, stimulants, and marijuana.
          (2) Rising casual teenage drug use is closely 
        correlated with rising juvenile violent crime.
          (3) If rising teenage drug use and the close 
        correlation with violent juvenile crime continue to 
        rise on their current path, the Nation will experience 
        a doubling of violent crime by 2010.\15\
---------------------------------------------------------------------------
    \15\ See Juvenile Offenders and Victims: A National Report, OJJDP, 
Department of Justice, September 1995.
---------------------------------------------------------------------------
          (4) The nature of casual teenage drug use is 
        changing. Annual or infrequent teenage experimentation 
        with illegal drugs is being replaced by regular, 
        monthly or addictive teenage drug use.\16\
---------------------------------------------------------------------------
    \16\ See 1995 surveys conducted by PRIDE, The National Household 
Survey, and The University of Michigan's Monitoring the Future Survey.
---------------------------------------------------------------------------
          (5) The nationwide street price for most illicit 
        drugs is lower than at any time in recent years, and 
        the potency of those same drugs, particularly heroin 
        and crack, is substantially higher.
          (6) Nationwide, drug related emergencies have 
        steadily climbed and have now reached an all time high.
          (7) The 1994, 1995, and 1996 White House ONDCP 
        strategies consciously shift resources away from 
        priorities set in the late 1980's, namely from 
        prevention and interdiction to treatment of ``hardcore 
        addicts'' and source country programs.
          (8) During 1993, 1994 and most of 1995, the President 
        put little emphasis on, and manifested little interest 
        in, either the demand side war against illegal drug use 
        or the supply side war against international narcotics 
        traffickers. An objective look at the President's 
        public addresses and his actions including dramatic 
        cuts in ONDCP staffing, interactions with Congress, and 
        discussions with foreign leaders reveals that attention 
        to the rising tide of illegal drug use is a low 
        Presidential priority.
          (9) The President's actual attention to this problem, 
        measured by other than the paucity of speeches and 
        proposed budget cuts, has been uniformly low. In 
        addition to the absence of direct Presidential 
        involvement in the drug war, the President produced no 
        1993 Annual Strategy, despite a statutory duty to do so 
        under the 1988 Antidrug Abuse Act; delayed appointment 
        of a White House Drug Czar, or ONDCP Director, until 
        half way through 1993; and produced only a terse 
        ``interim'' 1993 Strategy.
          (10) The Drug War appears also to have been expressly 
        reduced to a low national security priority early in 
        the administration, and not to have been formally 
        elevated at any time since.\17\
---------------------------------------------------------------------------
    \17\ Reportedly, the drug war's national security priority during 
the first 3 years of the Clinton administration was number 29 out of 
29.
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          (11) While the position is contested by the 
        administration's ONDCP Director, a wide cross section 
        of drug policy experts inside and outside of the 
        administration concur that the absence of direct 
        Presidential involvement in foreign and domestic 
        counter narcotics efforts is one reason for the recent 
        reversal in youth drug use trends, reduced street 
        prices for most narcotics, and increased potency of 
        most illicit drugs.
          (12) Prevention programs that teach a right-wrong 
        distinction in drug use, or ``no use,'' such as 
        D.A.R.E., G.R.E.A.T., the Nancy Reagan After School 
        Program, community-based efforts run by groups such as 
        C.A.D.C.A., PRIDE, the National Parents Foundation, and 
        Texans War on Drugs, as well as other local school and 
        workplace programs, have proven both successful and 
        popular where they have been well-managed and 
        accountable--despite the 1995 White House ONDCP 
        Strategy statement that ``[a]ntidrug messages are 
        losing their potency among the Nation's youth.''
          (13) Federal drug prevention programs, such as Safe 
        and Drug Free Schools, while supporting successful 
        prevention programs in many parts of the country, have 
        also been subject to misapplication, waste and abuse.
          (14) The Nation's law enforcement community needs 
        greater flexibility and support from the Federal 
        Government in addressing the rise in juvenile and drug 
        related crime. While certain developments are 
        promising, such as the $25 million increase in Byrne 
        Grant funding in fiscal 1996, a law enforcement block 
        grant to supersede the COPS program, and increased 
        reliance on joint interagency task forces, valuable 
        time has been lost in addressing this need. Renewed 
        attention to strengthening Local, County, State and 
        Federal law enforcement's counter narcotics efforts is 
        required.
          (15) The Nation's interdiction effort has been 
        dramatically curtailed over the past 3 years, due to 
        lack of White House support for interdiction needs, 
        reduced funding, a tiny staff at the U.S. Interdiction 
        Coordinator's Office, the absence of an ONDCP Deputy 
        for Supply Reduction, reduced support for National 
        Guard container search days, the elimination of certain 
        cost effective assets in the Eastern Caribbean, 
        reassignment or absence of key intelligence gathering 
        assets, reluctance by the Department of State to 
        elevate counter narcotics to a top priority in certain 
        source and transit countries, unnecessary interagency 
        quarreling over asset management and personnel issues, 
        and the apparent inability or unwillingness of the 
        White House Drug Czar to bring essential interdiction 
        community concerns to the attention of the President or 
        to aid the President's Interdiction Coordinator in 
        doing so; and
          (16) There has been poor management and interagency 
        coordination in source country counter-drug activities.
    c. Hearings.--In 1995, the subcommittee held five days of 
hearings in conjunction with its investigation of ONDCP. Those 
hearings include the following: ``Effectiveness of the National 
Drug Control Strategy and the Status of the Drug War'' on March 
9 and April 6, 1995; ``Illicit Drug Availability: Are 
Interdiction Efforts Hampered by a Lack of Agency Resources?'' 
on June 27 and 28, 1995; and ``The Drug Problem in New 
Hampshire: A Microcosm of America,'' September 25, 1995.
    On March 9, 1995, the subcommittee investigation resulted 
in its first hearing entitled, ``Effectiveness of the National 
Drug Control Strategy and the Status of the Drug War.'' The 
purpose of this hearing was to examine President Clinton's 1995 
National Drug Control Strategy, and to begin an assessment of 
how effectively the Nation is fighting illegal drug abuse, 
domestically and internationally. Acknowledged components of 
the Drug War under review include prevention, treatment, 
interdiction, law enforcement, and source country programs.
    At this hearing, testimony was received from four panels. 
The subcommittee heard first from former First Lady of the 
United States, Nancy Reagan. The second panel included William 
J. Bennett, former Director of the Office of National Drug 
Control Policy (ONDCP); Robert C. Bonner, former Administrator 
of the Drug Enforcement Administration; and John Walters, 
former Acting Director of ONDCP. The subcommittee also heard 
testimony from Dr. Lee Brown, Director of ONDCP. Finally, the 
subcommittee heard from Admiral Paul A. Yost, Jr., former Coast 
Guard Commandant; and several nationally recognized drug abuse 
prevention experts, including Thomas Hedrick, Jr., senior 
representative of the Partnership for a Drug-Free America; G. 
Bridget Ryan, executive director of California's BEST 
Foundation; James Copple, national director of the Community 
Antidrug Coalitions of America (CADCA); and Charles Robert 
Heard, III, director of program services for Texans' War on 
Drugs.
    With varying degrees of emphasis, all panels acknowledged 
that current Federal efforts are under strain from reduced 
emphasis on certain components of the Drug War, budgetary 
pressure, and in some cases accountability.
    The panels also acknowledged that, over the past several 
years, there has been a marked reversal in several important 
national trends including most notably a rise in casual drug 
use by juveniles, but also reaching to perceived drug 
availability (up), perceived risk of use (down), average street 
price (down), drug related medical emergencies (up), drug 
related violent juvenile crime (up), total Federal drug 
prosecutions (down), and parental attention to the drug issue 
(down).\18\
---------------------------------------------------------------------------
    \18\ Press release, the University of Michigan, ``Drug Use Rises 
Again in 1995 Among American Teens:'' December 15, 1995; press release, 
PRIDE, ``Teen Drug Use Rises for Fourth Straight Year,'' November 2, 
1995; preliminary estimates from the Drug Abuse Warning Network, U.S. 
Department of Health and Human Services, September 1995; James E. 
Burke, ``Presentation: An Overview of Illegal Drugs in America,'' 
Partnership for a Drug-Free America, fall 1995. The subcommittee found 
that these reversals have continued through the period 1993 to 1995, 
although certain trend lines, including a shift from falling to rising 
casual use, typically among juveniles, began in 1992. In addition, a 
shift of certain interdiction resources, which were earlier a part of 
the counter narcotics force structure, began in late 1991 with the 
advent of the Persian Gulf War.
---------------------------------------------------------------------------
    All panels agreed that renewed national leadership, 
including both Presidential and congressional leadership, will 
be necessary to combat these recent trend reversals, especially 
the rise in juvenile drug abuse and drug related violent 
juvenile crime.
    The subcommittee continued its investigation into the 
Nation's drug control strategy with a second hearing on April 
6, 1995, which was a follow-up to the March 9 hearing. 
Testimony was received only from Dr. Lee P. Brown, Director of 
ONDCP, who continued testimony he gave the subcommittee on 
March 9, 1995. Dr. Brown testified on a range of topics, 
including treatment, prevention, law enforcement, interdiction 
and source country programs.
    On June 27 and June 28, 1995, the subcommittee held 
hearings entitled, ``Illicit Drug Availability: Are 
Interdiction Efforts Hampered by a Lack of Agency Resources?'' 
to examine efforts to limit supply and availability by 
interdicting drugs before they cross our borders. On June 27, 
the subcommittee received testimony from a number of witnesses, 
beginning with a technology and K-9 demonstration,\19\ and 
proceeding through testimony from high school students. The 
hearing continued with testimony from the Administrator of the 
Drug Enforcement Administration and three investigators from 
the General Accounting Office (GAO), who evaluated the 
effectiveness of the Clinton administration's source country 
programs.
---------------------------------------------------------------------------
    \19\ The U.S. Customs Service Canine Training Center provided a 
demonstration on the utilization of drug sniffing dogs in illicit 
narcotic interdiction. Also, a representative from the U.S. Coast 
Guard's Miami Law Enforcement Division demonstrated how an Ionscan and 
the Compact Integrated Narcotic Detection Instrument (CINDI) operate to 
detect and locate illicit narcotics.
---------------------------------------------------------------------------
    The subcommittee first heard from four students affected by 
drugs in their schools, including Michael Taylor of Browne 
Junior High School, Natasha Surles of Roper Junior High School, 
Willie Brown of McFarland Middle School, and Lan Bui of Bell 
Multicultural School.
    Subsequently, the subcommittee heard testimony by Thomas A. 
Constantine, Administrator of the Drug Enforcement 
Administration, and expert witnesses Joseph Kelley, Allan 
Fleener and Ron Noyes of the General Accounting Office. Mr. 
Kelley is Director-In-Charge of the International Affairs 
Section and Mr. Fleener and Mr. Noyes are investigators who 
principally assisted in producing a June 1995 GAO report on 
source country anti-narcotics programs.
    Finally, the subcommittee heard testimony from Jane E. 
Becker, Acting Assistant Secretary of State for International 
Narcotics and Law Enforcement Affairs, U.S. Department of 
State; and Brian Sheridan, Deputy Assistant Secretary for Drug 
Enforcement Policy and Support at the Department of Defense.
    During this hearing, the subcommittee examined the current 
drug interdiction efforts of the major Federal agencies engaged 
in the national drug control strategy, namely DEA, the U.S. 
Coast Guard, U.S. Customs, and the Departments of Defense and 
State.
    Collectively, the expert witnesses confirmed that on 
November 3, 1993, President Clinton signed a Presidential 
Decision Directive for Counter narcotics (PDD-14), which 
instructed Federal agencies to shift the emphasis in U.S. 
international antidrug programs from the transit zones such as 
Mexico, Central America and the Caribbean to the source 
countries such as Colombia, Peru, and Bolivia. PDD-14 provided 
that the Director of the Office of National Drug Control Policy 
(ONDCP) should appoint a Coordinator for Drug Interdiction ``to 
ensure that assets dedicated by the Federal drug program 
agencies for interdiction are sufficient and that their use is 
properly integrated and optimized.'' [PDD-14, November 3, 
1993.]
    The aim of this hearing was to offer the administration's 
principals on interdiction, those whose mission was affected by 
PDD-14, an opportunity to assess their own efforts and explain 
the impact on their agencies of PDD-14 and its concomitant 
``controlled shift'' of resources.
    Continuing these hearings on June 28, 1995, the 
subcommittee received testimony on interdiction policy from 
additional administration witnesses, including Admiral Robert 
E. Kramek, Commandant of U.S. Coast Guard and U.S. Interdiction 
Coordinator, and George Weise, Commissioner of the U.S. Customs 
Service.
    Admiral Robert E. Kramek, U.S. Interdiction Coordinator and 
Commandant of the U.S. Coast Guard, serves a dual role in the 
Nation's interdiction efforts. He testified before the 
subcommittee in both capacities. He explained that the U.S. 
Coast Guard serves as the lead agency for maritime interdiction 
and as co-lead with Customs for air interdiction, adding that 
drug interdiction takes only 9 percent of the Coast Guard 
budget and emphasizing the important role intelligence plays in 
drug interdiction. On this topic, he testified that 70 percent 
of our operations are based on intelligence.
    Admiral Kramek took particular note of the importance of 
national leadership on this issue. Offering implicit criticism 
of a reduced interdiction effort in the Clinton administration, 
he testified that, when the smugglers see our foreign policy 
priorities change and make drug interdiction much lower on the 
priority list than other things, they're quick to take 
advantage of that.
    George Weise, Commissioner, U.S. Customs, testified 
regarding efforts to interdict drugs at our Nation's borders. 
Mr. Weise reiterated the importance of knocking out smuggling 
by private plane into this country, and attributes the 
increased shift to ground smuggling along the Southwest border 
to the efforts against air transport. He believes that the 
2,000 miles of the Nation's Southwest border has now emerged as 
the primary entry point for cocaine, although he did not 
contradict Admiral Kramek's assessment that Puerto Rico has 
recently taken on new significance as a port of entry into the 
United States.
    The subcommittee's investigation also included an 
examination of the fight against drugs on the streets of 
America's cities. At the subcommittee's September 25, 1995 
hearing on the drug problem in New Hampshire entitled ``The 
Drug Problem in New Hampshire: A Microcosm of America,'' 
members received testimony from a number of witnesses fighting 
on the front lines at the local levels.
    The purpose of the field hearing was to continue an 
examination of national drug control policy, focusing on the 
successful drug fighting efforts of Manchester, NH, which had 
recently participated in a joint interagency task force called 
``Operation Streetsweeper.''
    Collectively, the expert testimony confirmed the following 
facts: Early in 1995, statistics showed that the overall crime 
rate in Manchester, which is New Hampshire's largest city, had 
declined. However, these statistics also showed that arrests 
for drug offenses had increased dramatically, as they had for 
other drug related crimes. After a number of murders were 
linked to drug distribution and usage, the community came 
together to rid their city of this scourge.
    Manchester Police Chief Peter Favreau received a $100,000 
grant to help pay for State Police Officers to patrol city 
streets with city police, and a short time later Manchester 
Police were joined by the Sheriff's Department, the State 
Attorney General's Drug Task Force, the State Police Special 
Investigations Unit, the Drug Enforcement Administration, the 
Bureau of Alcohol, Tobacco and Firearms (ATF), and the 
Immigration and Naturalization Service (INS). This Federal-
State-Local interagency task force put jurisdictional issues 
aside and singularly pursued the aim of getting drug dealers 
off the streets of Manchester.
    As various panelists and community representatives 
testified, the change on the streets of Manchester could be 
felt immediately. As Chief Favreau testified, ``With as much 
coverage as we have out there, I honestly feel [the criminals] 
are going elsewhere. It's almost impossible not to have that 
happen.''
    In an effort to understand how the interagency task force 
worked and what made it so effective, the principals in this 
successful antidrug effort testified before the subcommittee. 
Since illegal drugs and associated violent crime plague 
virtually every city in America, the accounts these witnesses 
told offer valuable insights into how best to tackle drugs and 
violent crime in other cities around this country.
    Witnesses included: Jeff Howard, attorney general for the 
State of New Hampshire; Geraldine Sylvester, the director of 
New Hampshire's Office of Alcohol and Drug Abuse Prevention; 
Paul Brodeur, commissioner of New Hampshire Department of 
Corrections; Neal Scott, assistant unit commander of the 
Narcotics Investigation Unit with the New Hampshire State 
Police; Billy Yout, Special Agent in Charge of Drug Enforcement 
Administration; Ray Wieczorek, the mayor of Manchester; Peter 
Favreau, chief of the Manchester Police Department (MPD); Paul 
Gagnon, U.S. attorney for New Hampshire; Alice Sutphen, a 
representative from the citizen's group Take Back Our 
Neighborhoods; Dana Mitchell, captain, Dover Police; Michael 
Plourde, executive director of the Nashua Youth Council; John 
Ahman, regional program director for Marathon House, and; Dick 
Tracy, sergeant, Crime Prevention Division, Manchester Police 
Department.
    d. Fact-finding Trip.--The subcommittee's investigation 
included one fact finding trip to the Drug War's front line. 
Subcommittee members, the United States Coast Guard and staff, 
traveled to the Seventh Coast Guard District in the Caribbean 
transit zone between June 16 and June 19, 1995. In the transit 
zone, subcommittee members and staff attended briefings at 
Seventh District Headquarters in Miami, Coast Guard 
interdiction initiatives at sea, DEA activities in the Greater 
Antilles, high level interagency briefings in Puerto Rico by 
the FBI, DEA, Customs, Border Patrol, and local authorities, 
and received in depth briefings by Admiral Granuzo and others 
at Joint Interagency Task Force East (JIATF East) in Key West, 
dedicated to drug interdiction in the transit zone.
    This interdiction trip was arranged in coordination with 
the U.S. Coast Guard, and invitations were extended to minority 
and majority members.
    In briefings, a number of interdiction facts became more 
clear. Agents participating in OBAT (Operation Bahamas, Turks 
and Caicos), a multi-agency, international operation based in 
Nassau, Bahamas, made clear that they have lost major assets 
over the past 2 years.
    At the Greater Antilles Section Coast Guard Base (GANTSAC) 
in Puerto Rico, which covers 1.3 million square miles, multi-
agency briefers expressed the view that, if 70 percent of the 
cocaine coming into the United States comes over the Southwest 
border, the rest comes through Puerto Rico, which has seen as 
much as $40 million in money laundering in recent years. In 
attendance at the briefing were representatives of the FBI, 
DEA, Border Patrol, Coast Guard, INS, Customs, Department of 
Defense and Puerto Rico.
    Summarizing the briefing, the assets most needed are: more 
radars (including a suggested radar in Belize); more Jayhawk 
helicopters; more 378-foot Coast Guard Cutters; ion scanners 
and CINDI's; air rights agreements with more Caribbean nations 
(perhaps Cuba); and more senior level staff. The Coast Guard 
also indicated that they have recently lost 4 of 10 HU-25 
intercepter aircraft by re-deployment or demobilization.
    At JIATF East, briefers included Rear Admiral Andrew A. 
Granuzo, who admitted that the central obstacle to waging a 
more effective drug war, particularly in interdiction, is that 
``there is no one in charge.'' This assessment mirrored the 
testimony of Admiral Yost, Bill Bennett, John Walters, and 
Robert Bonner.
    JIATF East was created by Presidential Decision Directive 
14 (PDD 14), which ordered a review of the Nation's counter 
narcotics command and control intelligence centers. Creation of 
three joint interagency task forces and a domestic air 
interdiction center was authorized by the White House Drug Czar 
in April 1994. Accordingly, JIATF East is joined in its 
interdiction mission by JIATF West in Alameda, CA; JIATF South 
in Panama; the DAICC at March Air Force Base, CA; and JTF-6 in 
El Paso, TX.
    JIATF East is dedicated to supporting all counterdrug 
activities in the transit zone. The command integrates 
intelligence with operations, and coordinates the employment of 
the U.S. Navy and U.S. Coast Guard ships and aircraft, U.S. Air 
Force aircraft, and aircraft and ships from allied nations, 
such as Great Britain and the Netherlands. The command's 
mission boils down to maximizing the disruption of drug 
transhipment, collecting, integrating and disseminating 
intelligence, and guiding detection and monitoring forces for 
tactical action.
    Just as importantly, JIATF East integrates law enforcement 
personnel, primarily from Customs, into the international 
interdiction effort. For that reason, the command includes FBI, 
DEA and State Department, in addition to the Department of 
Defense.

2. ``A Two-Year Review of the White House Communications Agency Reveals 
        Major Mismanagement, Lack of Accountability, and Significant 
        Mission Creep,'' House Report No. 104-748, August 2, 1996, 
        Twelfth Report by the Committee on Government Reform and 
        Oversight, Together with Dissenting Views.

    a. Summary.--In March 1994, alarmed by allegations of 
waste, fraud and abuse within the White House Communications 
Agency (WHCA), Chairman William F. Clinger, Jr., and 
subcommittee Chairman William H. Zeliff, Jr., requested the 
General Accounting Office to conduct a comprehensive audit of 
the mission, functions and operations of that agency. WHCA, a 
military unit within the Department of Defense (DOD), is 
responsible for providing communications support to the White 
House.
    The committee's request was met with strong and consistent 
opposition from the Clinton administration which argued that 
any inspection of WHCA would create an extreme national 
security risk and endanger the personal safety of the 
President. Nevertheless, after blocking the investigation for 
nearly a year, and as a result of continued pressure by 
Chairmen Clinger and Zeliff, the administration agreed to 
permit the DOD Inspector General (IG) to conduct the requested 
review.
    The IG audit resulted in a two-part report which confirmed 
that WHCA was suffering from severe mission creep, internal 
mismanagement, and a lack of oversight and accountability. The 
IG concluded that WHCA had significantly expanded its original 
mission of providing secure communications to the President, 
and that the agency was now providing extensive unrelated 
services to the President, First Lady, Vice-President, and to 
White House staffers in general. The IG further concluded that 
these extraneous services, which were provided and paid for by 
DOD, should have been funded by the White House. Although the 
IG did not provide a total dollar figure for inappropriate DOD-
WHCA spending, they identified specific services amounting to 
more than $16 million in fiscal years 1994 and 1995 which were 
improperly paid from DOD's budget.
    The reports concluded that WHCA's mission creep had been 
fostered primarily by vague and ambiguous mission statements 
and the gradual transfer of operational control of WHCA from 
DOD to the White House.
    While WHCA and its predecessor agencies were initially 
devoted solely to military, strategic and national security 
support for the President, a broader mission statement was 
adopted by DOD in 1962 and subsequently refined in the 1970's 
and 1980's to, ``provide telecommunications and other related 
support to the President of the United States and to other 
elements related to the President. . . . Elements related to 
the President are his staff, the First Family, the Vice 
President, the U.S. Secret Service Protective Forces, and 
others as directed.'' In other words, the DOD had allowed the 
agency's mission to be broadened to include almost any task to 
support almost any member of the President's family or staff.
    The second factor contributing to WHCA's mission creep was 
the transfer of operational control of WHCA from the Department 
of Defense to the White House. Although WHCA exists as a DOD 
agency under the command of the Defense Information Systems 
Agency (DISA), DISA does not in fact direct the operations of 
WHCA. Rather, WHCA receives its day-to-day orders and 
directions from the White House Military Office (WHMO), which 
is staffed by political appointees and is part of the Executive 
Office of the President. The Director of WHMO--a civilian, 
political appointee who holds the position of Deputy Assistant 
to the President--directs the activities of WHCA and writes the 
annual Officer Evaluation Report which determines the future 
career prospects of the WHCA Commander. This Officer Evaluation 
Report is reviewed, supplemented and signed by the White House 
Chief of Staff.
    Thus, although WHCA is technically a sub-command of DISA, 
and is theoretically under the supervision of DISA, in practice 
the power relationship is exactly reversed. Because of WHCA's 
proximity and direct responsibility to the President, DISA has 
generally taken a deferential and subservient attitude toward 
WHCA, and has focused on ministering to the requirements of 
WHCA rather than exercising effective supervision. In light of 
that fact, WHCA was willing to expand its mission to 
accommodate successive Presidents, even though many of the new 
missions should have been funded and performed by other 
agencies. This unique role reversal was fundamental to WHCA's 
profound mission creep, as well as its parent agency's lack of 
program oversight or operational control.
    In addition to mission creep and a lack of effective 
oversight, the subcommittee's investigation found significant 
failings in the areas of procurement, disbursements, property 
and inventory management, and obligation controls.
    The IG audit revealed that WHCA has routinely avoided 
statutorily required competitive bidding procedures for the 
purchase of goods and services, relying instead on ``best 
guesses'' in assessing the reasonableness of prices quoted. The 
agency has frequently ignored fundamental contract law, using 
unwritten oral agreements in lieu of clearly negotiated, 
verifiable contracts. As a consequence, the agency has often 
been held liable for questionable contracts with suspect terms. 
WHCA has also habitually bypassed required independent DOD 
review of major purchases. These contracting failures have 
resulted in millions of dollars of wasted taxpayers' money.
    Specific examples of procurement waste cited in the IG 
reports included the $4.9 million purchase of two air-
transportable mobile communications systems that did not meet 
WHCA's operational needs, and the agency's failed acquisition 
of replacement satellite terminals. While WHCA had planned and 
justified the purchase of 12 units at a cost of $269,000 each, 
the belated discovery that the terminals cost more than twice 
that amount, or $618,000 each, forced WHCA to reduce its 
purchase by half, thus failing to achieve the needed upgrade.
    Additional management difficulties uncovered by the 
subcommittee included a lack of control over disbursements 
leading to untold numbers of duplicate vendor payments, the 
routine late payment of bills and invoices resulting interest 
and penalty charges, and the agency's inability to determine 
the validity of over $14.5 million in unliquidated payment 
obligations.
    In the area of property management, the IG audit unearthed 
serious problems with WHCA's inventory controls. The reports 
disclosed $555,000 worth of computers and $22,000 worth of 
photographic equipment which was never recorded in the agency's 
property book. In testimony before the subcommittee, the IG 
conjectured that the total value of non-recorded property may 
have been as high as $738,000. In addition, the auditors noted 
that the lack of accountability often made it difficult for 
WHCA managers to determine whether non-expendable property 
which had been ordered and paid for had actually been received.
    The subcommittee's investigation further disclosed that 
WHCA failed to follow DOD regulations requiring the regular 
inventory and re-validation of major equipment needs. As a 
result, the agency was paying over $117,000 a year to lease 
telecommunications circuits which were no longer required.
    Upon completing its audit and in testimony before the 
subcommittee, the IG stated that ``the Assistant Secretary of 
Defense (Command, Control, Communications and Intelligence) 
management control program needs improvement because a material 
weakness exists in that administrative, financial and 
operational oversight was not provided to the White House 
Communication Agency.'' The IG identified the Assistant 
Secretary of Defense for Command, Control, Communications and 
Intelligence (the ASD/C3I) as the responsible entity because 
the ASD/C3I is in charge of DISA, WHCA's commanding unit.
    b. Benefits.--DOD's management response to the IG audit was 
provided by Hon. Emmett Paige, Jr., the ASD/C3I, who submitted 
joint comments on his own behalf and on behalf of the Director 
of DISA and the Commander of WHCA. In response to the IG's 
findings of mission creep, the ASD/C3I denied the existence of 
any problem. However, the ASD/C3I did concur with almost all of 
the IG's findings and recommendations regarding WHCA's lack of 
accountability and internal controls. The ASD/C3I acknowledged 
not only that each individual accountability problem needed to 
be corrected, but also that the scope and nature of WHCA's 
accountability problems, taken as a whole, demanded an over-
arching, systemic solution. To that end, the ASD/C3I entered 
into negotiations with White House administrators to resolve 
questions of WHCA's accountability. As a result of those 
meetings, a Memorandum of Agreement (MOA) was executed between 
the ASD/C3I and the White House to establish the terms and 
conditions governing WHCA's future operations and DISA's 
oversight responsibilities.
    To address unresolved concerns over mission creep and 
further define DISA's oversight responsibilities, the committee 
issued a report, House Rept. 104-748, which recommended the 
adoption of legislation to statutorily limit WHCA's mission to 
providing national security-related telecommunications services 
required by the President. The subcommittee recommended that 
all other functions presently performed by WHCA either be 
transferred to the Executive Office of the President (EOP) or 
require EOP reimbursement. This recommendation was 
substantially adopted as an amendment to the 1996 Department of 
Defense Authorization Act.
    The subcommittee further recommended that the WHCA 
Commander be given annual performance evaluations by the 
Director of DISA.
    Finally, the subcommittee recommended the adoption of a 5 
year period of annual reporting to monitor the agency's 
progress in resolving the problems identified by the DOD IG and 
by the subcommittee. This recommendation was also included in 
the 1996 Defense Authorization Act.
    c. Hearings.--On May 16, 1996, the subcommittee convened a 
hearing to receive testimony from Hon. Emmett Paige, Jr., ASD/
C3I; Colonel Joseph J. Simmons, IV, the Commander of WHCA; Mr. 
Robert J. Lieberman, Assistant Inspector General for Auditing 
for the DOD IG; and Mr. Henry L. Hinton, Jr., Assistant 
Comptroller General for the GAO's National Security and 
International Affairs Division.
    While testimony was received from Messrs. Hinton and 
Lieberman, concerns over the submission of two differing sets 
of testimony on behalf of Colonel Simmons caused subcommittee 
Chairman Zeliff to adjourn the hearing to reconvene at a later 
date. When the subcommittee reconvened on Jule 13, 1996, 
testimony was received from Secretary Paige and Colonel 
Simmons.

3. ``Investigation Into the Activities of Federal Law Enforcement 
        Agencies Toward the Branch Davidians,'' House Report No. 104-
        749, August 2, 1996, Thirteenth Report by the Committee on 
        Government Reform and Oversight, Prepared in Conjunction with 
        the Committee on the Judiciary, Together with Additional and 
        Dissenting Views.

    a. Summary.--The conduct of three executive branch 
departments and subsidiary agencies came under intense scrutiny 
following the raid and standoff at the Branch Davidian 
residence in West Texas in 1993. Accordingly, the subcommittee 
conducted a 5-month prehearing investigation into executive 
branch conduct of these departments and agencies and accepted 
testimony by 97 witnesses during 10 days of hearings in 1995.
    In June 1992, the Austin, TX Office of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) opened a formal 
investigation into allegations that members of a Waco, TX 
religious group, the Branch Davidians, and in particular their 
leader, Vernon Howell (a.k.a. David Koresh), possessed illegal 
firearms and explosive devices. A Federal judge issued a 
warrant for the search of the Branch Davidian residence and a 
warrant for the arrest of David Koresh.
    On February 28, 1993, a force of 76 ATF agents stormed the 
Davidian residence to serve the arrest and search warrants. 
Prior to the commencement of the raid, however, the Davidians 
had learned of the ATF's plans. As the agents arrived at the 
Davidians' residence, the Davidians engaged the ATF agents in a 
gun battle which continued for almost 90 minutes. Four ATF 
agents were killed in the battle and more than 20 agents 
wounded. Two Davidians were killed by ATF agents and several 
others, including Koresh, were wounded. After a cease-fire was 
arranged, the Federal Bureau of Investigation dispatched 
members of its Hostage Rescue Team to Waco to take control of 
the situation at the request of the ATF. At 6 a.m. the next 
morning, the FBI formally took control of the situation and a 
51-day standoff with the Davidians ensued.
    In addition to continual negotiations with the Davidians, 
FBI officials took other steps to induce the Davidians to 
surrender. These tactics included tightening the perimeter 
around the Davidian residence, cutting off electricity to the 
residence, and at one point, shining bright lights at the 
residence and playing loud music and irritating sounds over 
loudspeakers.
    During the week of April 12, senior Justice Department 
officials began considering a plan developed by the FBI to end 
the standoff. Attorney General Janet Reno, other senior Justice 
Department officials, and FBI officials held several meetings 
concerning the plan. The proposed plan centered around the 
injection of a chemical riot control agent through the walls of 
the Davidian residence in order to induce the residents to 
leave the structure. The plan provided for the methodical 
insertion of the riot control agent into different parts of the 
building over a 48 hour period. The plan also contained a 
contingency clause which called for the insertion of the riot 
control agent into all portions of the residence 
simultaneously, if the Davidians failed to obey orders or 
responded violently.
    At approximately 6 a.m., on April 19, 1992, FBI agents 
using unarmed military vehicles with mounted booms began to 
insert the riot control agent into the compound by ramming 
holes into the sides of the building and then spraying the riot 
control agent into the holes in the walls. Almost immediately 
the Davidians began to fire on the vehicles used by the FBI to 
insert the agent. Shortly thereafter, the commander of the 
Hostage Rescue Team ordered that the contingency provision of 
the operations plan be implemented and that the riot control 
agent be inserted in all portions of the residence at once.
    At approximately 12:07 p.m., a fire was observed in one 
portion of the residence. Within 2 minutes, two other fires 
developed. Soon the three fires engulfed the entire structure, 
destroying it completely. Nine persons escaped from the 
structure during the course of the fire, but more than 70 other 
residents remained inside and all of these persons died.
    Pursuant to its oversight jurisdiction over the Federal law 
enforcement community, the committee's National Security, 
International Affairs, and Criminal Justice Subcommittee, 
jointly with the Crime Subcommittee of the House Committee on 
the Judiciary, conducted an investigation into the initial 
raid, ensuing standoff, and eventual fire at the Branch 
Davidian Compound near Waco, TX.
    b. Benefits.--Throughout the investigation and the 
hearings, the subcommittee had difficulty obtaining information 
from certain agencies and offices under investigation. 
Correspondence files attest to a constant battle for documents 
and evidence relating to the situation at Waco. Nonetheless, 
the investigation and the hearings brought to light a great 
deal of new information, educated the public on a matter that 
remained unsettling, and put to rest many errant theories about 
the incident.
    The central purpose of this investigation was to initiate 
internal reforms that would prevent any such tragedy from 
occurring again. As a result of this investigation, agencies 
have begun to change their policies such that they will 
approach future investigations and operations with less 
likelihood of tragedy and greater opportunity for success. 
Specifically, ATF has experienced an entire change of 
leadership. Moreover, the FBI now has 30 Senior Agents 
specially trained as ``crisis managers,'' who can be called on 
at any time to assist in any similar crisis. The FBI's Hostage 
Rescue Team (HRT) has increased personnel and equipment, as 
well as the size and training of its negotiating team. Today, 
there are nine FBI SWAT teams around the country to assist the 
HRT in any similar emergency. The FBI has also established a 
working relationship with the crisis resolution centers at 
Michigan State University and George Mason University, and now 
keeps a resource list of experts on marginal eclectic or 
unusual religious groups. In addition, FBI Director Louis Freeh 
has implemented a new policy regarding the use of force in 
crisis situations that reinforces the FBI's standing policy in 
favor of a negotiated solution, and has disposed of the prior 
FBI policy permitting a barrage of unseemly noisemaking in 
hostage or barricade situation.
    Perhaps the most beneficial aspect of the investigation of 
Waco was refutation of various conspiracy theories and 
accusations of malfeasance on the part of particular government 
agencies. The subcommittee made some of the following findings 
and recommendations:

                                FINDINGS

    1. But for the criminal conduct and aberrational behavior 
of David Koresh and other Branch Davidians, the tragedies that 
occurred in Waco would not have occurred. The ultimate 
responsibility for the deaths of the Davidians and the four 
Federal law enforcement agents lies with Koresh.
    2. While not dispositive, the evidence presented to the 
subcommittees indicates that some of the Davidians 
intentionally set the fires inside the Davidian residence.
    3. The gunshot wounds which were the cause of death of 19 
of the Davidians on April 19 were either self-inflicted, 
inflicted by other Davidians, or the result of the remote 
possibility of accidental discharge from rounds exploding in 
the fire.
    4. Treasury Secretary Lloyd Bentsen and Deputy Secretary 
Roger Altman acted highly irresponsibly and were derelict in 
their duties in failing to even meet with the Director of the 
ATF in the month or so they were in office prior to the 
February 28 raid on the Davidians residence, in failing to 
request any briefing on ATF operations during this time, and in 
wholly failing to involve themselves with the activities of the 
ATF.
    5. Senior Treasury Department officials routinely failed in 
their duty to monitor the actions of ATF officials, and as a 
result were uninvolved in the planning of the February 28 raid. 
This failure eliminated a layer of scrutiny of the plan during 
which flaws in it might have been uncovered and corrected.
    6. The ATF's investigation of the Branch Davidians was 
grossly incompetent. It lacked the minimum professionalism 
expected of a major Federal law enforcement agency.
    7. David Koresh could have been arrested outside the 
Davidian compound. The ATF chose not to arrest Koresh outside 
the Davidian residence and instead were determined to use a 
dynamic entry approach. In making this decision ATF agents 
exercised extremely poor judgment, made erroneous assumptions, 
and ignored the foreseeable perils of their course of action.
    8. ATF agents misrepresented to Defense Department 
officials that the Branch Davidians were involved in illegal 
drug manufacturing. As a result of this deception, the ATF was 
able to obtain some training from forces which would not have 
otherwise provided it, and likely obtained other training 
within a shorter period of time than might otherwise have been 
available. Because of its deception, the ATF was able to obtain 
the training without having to reimburse the Defense 
Department, as otherwise would have been required had no drug 
nexus been alleged.
    9. The ATF's raid plan for February 28 was significantly 
flawed. The plan was poorly conceived, utilized a high risk 
tactical approach when other tactics could have been 
successfully used, was drafted and commanded by ATF agents who 
were less qualified than other available agents, and used 
agents who were not sufficiently trained for the operation. 
Additionally, ATF commanders did not take precautions to ensure 
that the plan would not be discovered.
    10. There was no justification for the rehiring of the two 
senior ATF raid commanders after they were fired. The fact that 
senior Clinton administration officials approved their rehiring 
indicates a lack of sound judgment on their part.
    11. The decision by Attorney General Janet Reno to approve 
the FBI's plan to end the standoff on April 19 was premature, 
wrong, and highly irresponsible. In authorizing the assault to 
proceed Attorney General Reno was seriously negligent. The 
Attorney General knew or should have known that the plan to end 
the stand-off would endanger the lives of the Davidians inside 
the residence, including the children. The Attorney General 
knew or should have known that there was little risk to the FBI 
agents, society as a whole, or to the Davidians from continuing 
this standoff and that the possibility of a peaceful resolution 
continued to exist.
    12. The CS riot control agent insertion and assault plan 
was fatally flawed. The Attorney General believed that it was 
highly likely that the Davidians would open fire, and she knew 
or should have known that the rapid insertion contingency would 
be activated, that the Davidians would not react in the manner 
suggested by the FBI, and that there was a possibility that a 
violent and perhaps suicidal reaction would occur within the 
residence. The Attorney General should have rejected the plan 
and demanded the preparation of an alternative.
    13. Following the FBI's April 19 assault on the Branch 
Davidian compound, Attorney General Reno offered her 
resignation. In light of her ultimate responsibility for the 
disastrous assault and its resulting deaths the President 
should have accepted it.
    14. The FBI should have sought and accepted more expert 
advice on the Branch Davidians and their religious views and 
been more open-minded to the advice of the FBI's own experts.
    15. While it cannot be concluded with certainty, it is 
unlikely that the CS riot control agent, in the quantities used 
by the FBI, reached lethal toxic levels. However, the presented 
evidence does indicate that CS insertion into the enclosed 
bunker, at a time when women and children were assembled inside 
that enclosed space, could have been a proximate cause of or 
directly resulted in some or all of the deaths attributed to 
asphyxiation in the autopsy reports.
    16. There is no evidence that the FBI intentionally or 
inadvertently set the fires on April 19.
    17. The activities of active duty military personnel in 
training the ATF and in supporting the FBI's activities during 
the standoff did not violate the Posse Comitatus Act because 
their actions did not constitute direct participation in the 
government's law enforcement activities.

                            RECOMMENDATIONS

    1. Federal law enforcement agencies should verify the 
credibility and the timeliness of the information on which it 
relies in obtaining warrants to arrest or search the property 
of an American citizen.
    2. The ATF should revise its National Response Plan to 
ensure that its best qualified agents are placed in command and 
control positions in all operations.
    3. Senior officials at ATF headquarters should assert 
greater command and control over significant operations. The 
ATF's most senior officials should be directly involved in the 
planning and oversight of every significant operation.
    4. The ATF should be constrained from independently 
investigating drug-related crimes.
    5. Congress should consider applying the Posse Comitatus 
Act to the National Guard with respect to situations where a 
Federal law enforcement entity serves as the lead agency.
    6. The Department of Defense should streamline the approval 
process for military support so that Posse Comitatus Act 
conflicts and drug nexus controversies are avoided in the 
future.
    7. Federal law enforcement agencies should redesign their 
negotiation policies and training to avoid the influence of 
physical and emotional fatigue on the course of future 
negotiations.
    8. The government should further study and analyze the 
effects of CS riot control agent on children, persons with 
respiratory problems, pregnant women, and the elderly.
    c. Hearings.--Oversight hearings on Federal Law Enforcement 
Actions in Relation to the Branch Davidian Compound in Waco, 
TX, July 19, 20, 21, 24, 25, 26, 27 28, 31, and August 1, 1995. 
Witnesses testified regarding the involvement of different 
agencies on ``agency days.'' Since several agencies were 
investigated, the evidence collected at these hearings is 
grouped under agency headings.
    (i) The Bureau of Alcohol, Tobacco and Firearms.--The 
initial investigation of Vernon Howell was conducted by ATF. 
ATF's investigation began in late May 1992. A Federal judge 
issued warrants based on evidence uncovered in that 
investigation. The attempt to serve that warrant on February 
28, 1993 went badly awry, resulting in an armed confrontation 
which cost the lives of four Federal agents and several Branch 
Davidians. Based on those facts, the subcommittee initiated an 
investigation into ATF's actions leading to the raid. The 
subcommittee submitted document requests to the Department of 
the Treasury for all documents in its possession pertaining to 
the initial investigation of Vernon Howell. The subcommittee 
carefully analyzed the documents relating to the investigation 
and interviewed numerous individuals involved in the 
investigation and the raid. ATF agents, supervisors and 
legislative affairs personnel briefed subcommittee staff on 
events surrounding the investigation of Vernon Howell and 
preparations for the initial raid on the Mt. Carmel complex. 
Surviving Branch Davidians instructed the subcommittee about 
conditions at Mt. Carmel and events surrounding the initial 
raid. In addition to the defense attorneys for certain Branch 
Davidians, representatives of the National Association of 
Criminal Defense Lawyers gave their interpretation of the 
sufficiency of the warrant that the ATF attempted to serve on 
Vernon Howell.
    July 19 marked the first day of hearings. On that day, the 
subcommittee heard testimony from Dick Reavis, author of 
``Ashes of Waco;'' Stuart Wright, contributor and editor of 
``Armageddon in Waco;'' Ray Jahn, assistant U.S. attorney; 
Gerald Goldstein, president of the National Association of 
Criminal Defense Lawyers; Robert L. Descamps, president of the 
National District Attorneys' Association; Henry McMahon, 
firearms dealer; David Thibodeau, resident at Mt. Carmel; Kiri 
Jewell, resident at Mt. Carmel; David Jewell, father of Kiri 
Jewell; Lewis Gene Barber, former lieutenant with the McLennan 
County Sheriff's Office; Bill Johnson, assistant U.S. attorney; 
Davy Aguilera, ATF Special Agent; Chuck Sarabyn, former ATF 
ASAC in Houston; Earl Dunagan, former ATF acting SAC in Austin; 
Dan Hartnett, former ATF Deputy Director for Enforcement; Ed 
Owens, ATF Firearms Expert; H. Geoffrey Moulton, Jr., Project 
Director of Treasury Department Review Team; and Dr. Bruce 
Perry, Associate Professor of Psychiatry and Behavioral 
Sciences at Baylor College of Medicine.
    During the first day of hearings, former ATF Special Agent 
Davy Aguilera testified publicly for the first time in detail 
the fact that ATF agents knew the Branch Davidians were 
expecting the raid on Mt. Carmel. Aguilera testified about his 
desperate attempts to inform ATF Supervisory Special Agents not 
to go ahead with the raid, and tearfully recalled the results 
of not being able to turn back the raid.
    Chuck Sarabyn, former ATF Assistant Special-Agent-in-Charge 
in Austin, testified before the subcommittee about his decision 
to allow the raid to proceed in light of the fact that the 
Branch Davidians knew the ATF was planning to raid Mt. Carmel. 
Sarabyn defended his decision to go ahead with the raid and 
maintained that the ATF was afraid of mass suicide among the 
Branch Davidians.
    This second day of testimony concentrated on the 
investigation of Howell's collection of weapons and the alleged 
or initially asserted existence of a methamphetamine laboratory 
on the premises of Mt. Carmel. George Morrisson, of the Los 
Angeles Police Department, testified that ATF should have 
employed better investigative techniques and more organized 
methods for case management. He told the subcommittee that 
newspaper articles surfacing soon before the raid on Mt. Carmel 
could have assisted ATF in gathering information. Wade 
Ishomoto, of Sandia National Laboratories, told the 
subcommittee that the team assembled in Waco to serve the 
arrest warrant on Howell was inexperienced and that the raid 
plan lacked the sophisticated procedures necessary for such an 
operation. Several witnesses testified to the danger of 
explosive devices in the presence of chemicals necessary for 
the production of methamphetamine.
    On this day the hearing consisted of testimony regarding 
the actions of ATF and the subcommittee heard testimony from 
former Secretary of Treasury Lloyd Bentsen. Secretary Bentsen 
testified about the actions he took in response to ATF actions 
at Waco. He told the subcommittee that, upon hearing of the 
failure of the raid, he established an in-house review 
commission that investigated the incident for 5 months and 
compiled a report based on a number of interviews. Bentsen 
listed those agencies involved in the Treasury investigation: 
Secret Service, Customs, the IRS, and the Financial Crimes 
Enforcement Network. Bentsen was unable to explain why a 
warning from Mr. Altman, his aide at the time, was not viewed 
with seriousness or passed on to the FBI; the Altman warning 
indicated the possibility of ``tragedy'' if the Davidian 
Compound was, as occurred on April 19, 1993, confronted with 
what Davidians might perceive as an assault.
    Secretary Bentsen also mentioned corrective actions taken 
by ATF and Treasury in the wake of the incident at Waco. 
According to Bentsen, ATF leadership was replaced, the 
intelligence chief was demoted, and the two raid commanders 
were relieved of their law enforcement duties. In addition, 
Bentsen told the subcommittee that Treasury has enhanced the 
formal and informal communication between the Office of 
Enforcement and the bureaus within the department.
    The final day of hearings regarding the actions of ATF were 
held on July 24, 1995. The most compelling testimony this day 
was delivered by Robert Rodriguez. Rodriguez recounted how he 
warned Mr. Sarabyn and Mr. Chojnacki on the morning of the raid 
that the Davidians had been tipped off about the assault. 
Chojnacki and Sarabyn testified that Koresh often declared to 
followers that the government was coming. ``We didn't know if 
he meant in the physical sense or the metaphysical sense,'' 
Chojnacki said. ``These two men know what I told them,'' 
Rodriguez countered. ``They knew exactly what I meant . . . 
They lied to the public, and in doing so destroyed a great 
agency.'' Sarabyn and Chojnacki denied that they lied to the 
public. They insisted that Rodriguez did not provide a clear 
warning that Koresh knew the raid was imminent. Rodriguez's 
version of the events was supported by Lewis Merletti.
    (ii) The Federal Bureau of Investigation.--Almost 
immediately after the raid on Mt. Carmel, the FBI was called in 
to take over the operation of the standoff. The FBI Hostage 
Rescue team was in place and FBI negotiators were on the phone 
with Davidians almost continuously for the succeeding 51 days. 
Jeffrey Jamar, FBI Special Agent-in-Charge in San Antonio, 
commanded the FBI team and was charged with deciding which 
tactics to employ. The subcommittee investigation produced 
audiotapes and transcripts of these negotiations, as well as 
contemporaneous memoranda from both inside and outside experts 
attempting to explain the actions of Vernon Howell and the 
Branch Davidians. After 51 days of standoff, the siege ended 
tragically. The Branch Davidian compound burned to the ground 
and resulted in the death of 22 children and more than 60 
adults.
    Regarding the investigation into the role of the Department 
of Justice and the Federal Bureau of Investigation, the 
hearings continued with testimony from Jack Zimmerman and Dick 
DeGuerin, attorneys for Steve Schneider and Vernon Howell, 
testified before the subcommittee about their dealings with the 
Branch Davidians and explained in detail their attempts to 
assist in negotiating a surrender. DeGuerin testified about 
difficulties he personally encountered in brokering a potential 
surrender. DeGuerin told the subcommittee about his trips into 
Mt. Carmel and the breakthrough he had achieved upon receiving 
Howell's final promise to surrender. DeGuerin obtained a letter 
from Howell in which Howell promised to complete his 
interpretation of the ``Seven Seals,'' contained in the Bible, 
and then surrender with all the Branch Davidians.
    Also testifying on that day were several of the local Texas 
Rangers. The Texas Rangers were charged with investigating the 
deaths of the four ATF agents killed on the day of the initial 
raid. Captain Byrnes testified that the Texas Rangers had many 
disagreements with FBI's Jamar and generally felt excluded. 
Byrnes testified that, in addition to problems with destruction 
of the crime scene by FBI tactical personnel, the Rangers were 
disappointed about a lack of communication between FBI 
personnel and local officials.
    The sixth day of hearings, provided in greater detail, the 
facts surrounding the Department of Justice and FBI involvement 
in Waco. James Cavanaugh, although an ATF Special Agent, 
testified before the subcommittee regarding negotiations with 
the Branch Davidians and the transition from ATF control of the 
operation to FBI control. Cavanaugh was the first person to 
engage in serious negotiations with the Branch Davidians. He 
recounted the planning of the initial raid, the ensuing 
negotiations for a cease fire, the first surrender offer of the 
Branch Davidians and the lengthy negotiations for a surrender. 
Cavanaugh described the tension between negotiators and 
tactical personnel. He expressed the view that negotiators 
prefer to wait for a peaceful solution to a crisis and tactical 
personnel generally prefer to intercede with tactical measures.
    Peter Smerick was the Criminal Investigative Analyst the 
FBI used to profile Howell for the FBI negotiators and the 
FBI's Hostage Rescue Team. Smerick testified that his first 
four memoranda urged the FBI to ``wait Koresh out'' and advised 
against increasing the pressure from outside. Smerick told the 
subcommittee that he changed his final memorandum based on his 
knowledge that the FBI was not pleased with the tone of his 
memoranda and that, although he felt no overt pressure to 
change the approach of his memoranda, he knew that FBI agents 
on the ground in Waco wanted a view that supported a more 
clearly tactical approach.
    Jeffrey Jamar, the FBI Special Agent-in-Charge in San 
Antonio at the time, was the on-site commander of all forces in 
Waco. Jamar testified before the subcommittee that he was 
hopeful of a surrender based on Koresh's promise to come out of 
Mt. Carmel, when he completed his interpretation of the Seven 
Seals. In response to questions regarding the possibility of 
the withdrawal of the FBI from Mt. Carmel, Jamar explained that 
the danger of gun fire from the building, the risk to children 
inside, and the sanitary conditions in Mt. Carmel made 
withdrawal untenable. Jamar also testified regarding the 
decision to implement the CS gas plan. Jamar said, ``I would 
have waited a year if we had something to work with, if there 
was just something there we could attach something to. We did 
it from February 28 until a decision was made in late March 
that we thought we were going nowhere.'' Jamar told the 
subcommittee he was certain that Koresh would end the standoff 
``his way.'' Jamar also testified that he knew with ``99 
percent'' certainty that the Davidians would open fire on the 
FBI's Bradley vehicles inserting CS gas, an eventuality that he 
also knew would mean acceleration of the CS gas, under the 
FBI's CS gas insertion plan.
    The subcommittee heard compelling testimony from many 
decisionmakers and received testimony of Webster Hubbell, 
former Associate U.S. Attorney General; Mark Richard, Deputy 
Assistant Attorney General; William Sessions, former Director 
of the FBI; Floyd Clarke, former Deputy Director of the FBI; 
Larry Potts, former Assistant Director of the FBI, Criminal 
Investigations; Harry Salem, Ph.D., Defense Department 
Toxicologist; Rick Sherrow, fire expert; Paul Gray, Houston 
Fire Department and leader of the Fire Review Team; James 
Quintere, arson expert, University of Maryland; and Clive 
Doyle, former Branch Davidian.
    Webster Hubbell testified on the decisionmaking process 
that led to the implementation of the CS gas insertion plan. 
According to Hubbell, the decision to implement the CS gas 
insertion plan was based essentially on two facts: (1) a lack 
of progress in negotiations; and (2) military personnel 
assuring him that the inhabitants would exit the building upon 
insertion of CS gas. Hubbell testified that President Clinton 
wanted to be advised of any change in strategy from one of 
negotiation to one of tactical maneuvers. Hubbell testified 
before the subcommittee that he was told that Howell was 
manipulating the attorneys. Howell's statement that he would 
come out upon having interpreted the ``Seven Seals,'' according 
to Hubbell, was a ruse. Hubbell told the members of the 
subcommittee that Howell was responsible for the deaths of 
those inside Mt. Carmel.
    The assistant Director of the FBI at the time of the Waco 
standoff was Larry Potts. Potts testified before the 
subcommittee regarding the FBI's strategy for resolving the 
standoff. Potts stated that the strategy was: ``(1) to verbally 
negotiate a peaceful surrender of Koresh and his followers; 
and, (2) to gradually increase the pressure on those inside the 
compound by tightening the perimeter around the compound and 
denying the Davidians certain comforts.'' Potts recounted how 
this strategy was perceived as a failure, and he outlined the 
roles that the FBI and the Department of Justice played in the 
development of the CS gas insertion plan.
    Potts testified that the FBI, in response to questions 
about its conduct of the standoff at Waco, had improved three 
aspects of FBI crisis management. ``Jurisdictional issues are 
being clarified, crisis response operations have been 
reorganized and expanded, including the availability and use of 
outside experts; and research efforts have been enhanced,'' he 
stated. Potts displayed a diagram of the crisis management 
changes implemented as a result of the standoff at Waco.
    On the final day of hearings, the subcommittee heard from 
Attorney General Janet Reno. On August 1, 1995, Attorney 
General Reno gave her reasons for what she termed her decision 
to implement the plan to insert CS gas into Mt. Carmel. The 
Attorney General described the 51-day standoff, the efforts to 
negotiate a surrender, and the reasons that Howell was not 
trusted by FBI negotiators. Reno stressed changes the FBI had 
implemented since Waco. According to her testimony, the FBI now 
has 30 Senior Agents specially trained as ``crisis managers'' 
to be called on at any time to assist in a crisis the magnitude 
of Waco. These managers form an element of the Critical 
Incident Response Group, a group formed to deal with crisis 
situations. Reno told the subcommittee that the Hostage Rescue 
Team will increase its personnel, equipment, and the size and 
training of the negotiating team. Today, there are nine FBI 
SWAT teams around the country to assist the Hostage Rescue Team 
in an emergency. To assist the FBI in dealing with complex, 
psychological hostage takers in the future, Reno testified that 
the FBI will establish a working relationship with the crisis 
resolution centers at Michigan State University and George 
Mason University, and will keep a resource list of experts on 
marginal religious groups.
    Much of Reno's testimony involved her decision to implement 
the CS Gas Insertion Plan. The Attorney General told the 
subcommittee she thought she had all the information she needed 
to make her decision. She indicated however, that someone 
informed her of ongoing abuse in the compound; at no time could 
she recall who that individual was. She believed that briefings 
on CS gas were proper and complete. She did confirm that she 
had not read all pre-fire briefing material and was not in the 
command center when the tragedy occurred. In her statement to 
the subcommittee, Reno assured the members that the FBI was 
continuing its research into non-lethal technologies as 
alternatives to deadly force.
    (iii) The Department of Defense.--The subcommittee 
investigated the participation of the Department of Defense 
personnel in the events at Waco. Testimony was heard from 
Ambassador H. Allen Holmes, Assistant Secretary of Defense for 
Solic; Maj. Gen. John M. Pickler, U.S. Army, Commander Joint 
Task Force 6; Brig. Gen. Walter B. Huffman, U.S. Army, 
Assistant Judge Advocate General for Civil Law; Chris Crain, 
Special Forces Group; Lt. Col. Philip Lindley, U.S. Army, 
former Deputy Staff Judge Advocate for U.S. Army, Special 
Forces Command; Maj. Mark Petree, U.S. Army, formerly of 3/3D 
Special Forces Group; Staff Sgt. Steve Fitts, U.S. Army, 
formerly of 3/3D Special Forces Group; Staff Sgt. Robert W. 
Moreland, U.S. Army, formerly of 3/3D Special Forces Group; and 
Sgt. Chris Dunn, U.S. Army, formerly of 3/3D Special Forces 
Group.
    Ambassador Holmes testified on the role of the military in 
domestic law enforcement actions and about military 
participation before Waco. Holmes told the subcommittee that, 
in his opinion, the process developed to monitor military 
involvement in domestic law enforcement was a sound process. 
The Ambassador testified that, in his view, there were no 
violations of the law regarding military assistance at Waco and 
that the process regarding requests for military assistance had 
worked effectively.
    Staff Sgt. Steve Fitts testified regarding the military 
preparations for involvement in methamphetamine laboratories. 
He told the subcommittee that he conducted extensive research 
on the dangers and precautions required to ``take-down'' 
methamphetamine laboratories. According to Staff Sergeant 
Fitts, he wrote the paper at the instruction of Maj. Mark 
Petree. Staff Sergeant Fitts testified that Major Petree then 
presented the paper to ATF agents in Houston. According to 
Staff Sergeant Fitts, it was clear to him from the reaction of 
the ATF agents that these agents anticipated no actual 
methamphetamine laboratory at Mt. Carmel. Indeed, based on the 
lack of interest shown by ATF agents in the procedures 
necessary to dismantle a methamphetamine laboratory, it was 
Fitts' belief that ATF agents knew that no methamphetamine 
laboratory existed at Mt. Carmel.

                      POSTAL SERVICE SUBCOMMITTEE

                     Hon. John M. McHugh, Chairman

1. ``Voices for Change,'' House Report No. 104-438, December 21, 1995, 
        Sixth Report by the Committee on Government Reform and 
        Oversight.

    a. Summary.--``Voices for Change'' analyzes 10 hearings 
held by the Subcommittee on the Postal Service during the first 
session of the 104th Congress. Nearly 40 witnesses testified 
regarding the problems and challenges facing the current postal 
system. Witnesses urged members to consider fundamental reform 
of the quarter-century old Postal Reorganization Act because of 
the challenges confronting the Postal Service in a changing 
communications environment. Four key reform issues emerged in 
the hearings, including mail monopoly, labor-management 
relations, ratemaking and new postal products. Although 
witnesses raised a variety of issues and suggested a broad 
range of proposals for improving mail delivery, no unanimity 
appeared for any specific approach. However, the report notes 
that ``maintenance of universal service and a need to either 
strengthen or modify the postal ratesetting process were the 
legislative-related issues consistently discussed by a large 
majority of witnesses.''
    b. Benefits.--The report provides Congress a concise record 
of the testimony received by the subcommittee regarding the 
operations of the Postal Service and its capacity to perform 
its constitutional and statutory mandates. The eight general 
oversight hearings highlighted by the report indicate the need 
for Congress to review, systematically, the statutory structure 
under which the Postal Service operates. An efficient and 
fiscally sound Postal Service benefits the American people by 
providing a cost-effective and reliable communications system. 
In addition, the constitutional undergirding of the Postal 
Service requires additional congressional attention in order to 
preserve and ensure the future viability of the institution.
    c. Hearings.--On February 23, 1995, testimony was received 
from Marvin T. Runyon, U.S. Postmaster General, and Michael E. 
Motley, General Accounting Office. On March 2, 1995, testimony 
was received from the Postal Rate Commission: Edward J. 
Gleiman; W.H. LeBlanc; George W. Haley; Edward Quick, Jr.; and 
Wayne A. Schley. On March 8, 1995, the subcommittee heard 
testimony from Postal Service Governors: Sam Winters, LeGree S. 
Daniels, Einar V. Dyhrkopp, Susan E. Alvardo, Bert H. Mackie, 
and Norma Pace. On May 23, 1995, the subcommittee received 
testimony from Art Sackler, Mailers Council; Ian D. Volner, 
Advertising Mail Marketing Association; Richard Barton, Direct 
Marketing Association; David Todd, Mail Order Association of 
America; Timothy May, Parcel Shippers Association; Tonda Rush, 
National Newspaper Association; Cathleen P. Black, Newspaper 
Association of America; George Gross, Magazine Publishers of 
America; Steve Bair, Association of American Publisher; Alan 
Kline, Alliance of Nonprofit Mailers; and Lee Cassidy, National 
Federation of Nonprofits. The June 7, 1995, hearing testimony 
was received from Moe Biller, American Postal Workers Union; 
Vincent Sombrotto, National Association of Letter Carriers; 
Scottie Hicks, National Rural Letter Carriers Association; 
William Quinn, National Postal Mail Handlers Union; W. David 
Games, National Association of Postmasters; Bill Brennen, 
National League of Postmasters; and Vincent Palladino, National 
Association of Postal Supervisors. On June 14, 1995, the 
subcommittee received testimony from John V. Maraney, Nation 
Star Route Mail Contractors Association; Randall Holleschau, 
National Association of Presort Mailers; Don Harle, Mail 
Advertising Service Association; Robert Muma, Envelope 
Manufacturers Association of America; Anthony W. Desio, Mail 
Boxes, Etc.; Kathleen Synnott, Pitney-Bowes; Neal Mahlstedt, 
Ascom Hasler; George W. Gelfer, Postalia; James Rogers, United 
Parcel Service; James Campbell, Federal Express; Peter N. 
Hiebert, DHL Worldwide; and Harry Geller, Air Courier 
Conference of America. On June 28, 1995, Postmaster General, 
Marvin Runyon and Deputy Postmaster General, Michael Coughlin 
testified before the subcommittee. On July 25, 1995, hearing 
testimony was received from Kenneth J. Hunter, Inspector 
General.

                        B. OTHER INVESTIGATIONS

                       CIVIL SERVICE SUBCOMMITTEE

1. Restructuring of the Office of Personnel Management.

    a. Summary.--Vice President Gore's National Performance 
Review of 1993 (NPR) ``challenged'' the Office of Personnel 
Management (OPM) to become an agent for change. OPM, which 
oversees 2.1 million people in the Federal Civil Service 
System, announced it would meet this challenge by ``leading the 
initiative to reinvent Federal human resource management by 
working with all agencies to assess their needs in accepting 
more responsibility in this area.'' Since the release of the 
administration's NPR, OPM has focused on decentralizing many of 
its functions.
    OPM intends to concentrate on certain core functions and 
devolve other activities. Accordingly, the agency has already 
RIFed a large number of training staff and reduced its Federal 
investigative program in anticipation of privatization. The 
agency intends to cease all governmentwide training activities 
before the end of the fiscal year and to divest itself of the 
investigations function by the beginning of fiscal year 96.
    OPM also intends to delegate all recruitment and staffing 
responsibilities to Federal agencies. The functions the agency 
will retain include retirement and health benefit programs, 
compensation programs, testing and evaluation on a reimbursable 
basis, and some policy and oversight responsibilities.
    With deep reductions in its workforce, as well as the vast 
changes that will occur from the decentralization initiatives, 
concerns have been raised over what substantive role OPM will 
retain in the future. Of particular concern was OPM's continued 
ability to provide adequate oversight over and protection of 
the Merit System.
    b. Benefits.--The subcommittee will continue to monitor 
OPM's restructuring process, and how this downsizing and 
decentralization will effect its client agencies. Subcommittee 
Chairman Mica voiced his commitment to instituting whatever 
remedies necessary to unburden Federal employees from 
unnecessary rules and regulation, while ensuring that the 
process produces meaningful results that do not interfere with 
OPM's ability to carry out core functions and responsibilities.
    c. Hearings.--A hearing entitled, ``Restructuring Office of 
Personnel Management'' was held on February 7, 1995.

2. Federal Workforce Restructuring Statistics.

    a. Summary.--The Federal Workforce Restructuring Act of 
1994 established personnel ceilings for fiscal years 1994 
through 1996, while targeting 272,900 full-time-equivalent 
positions for elimination by the end of 1999. To accomplish 
this, without relying entirely on reductions-in-force (RIF's), 
the act established temporary financial retirement incentive 
programs to encourage voluntary separations from certain 
Federal agencies. However, the act does not specify where the 
cuts should occur, and preliminary figures indicate the 
Department of Defense is bearing the brunt of the reductions.
    All executive branch agencies were provided with detailed 
guidance by OMB, including steps to be taken to flatten 
hierarchies, reduce headquarters staff, and pare down 
management control structures. However, nearly three-fourths of 
the fiscal year 94 reductions were among civilian employees in 
the Department of Defense, and DOD is expected to experience an 
even larger share of the reductions in 1995--reportedly up to 
98 percent. From 1993 through the middle of fiscal year 95 over 
90 percent of total reductions can be attributed to defense 
base closures and downsizing activities at the Department of 
Defense. The chairman expressed concern over the 
disproportionate distribution of workforce reductions and 
raised questions about whether the administration's reinventing 
government initiatives will result in meaningful government 
restructuring or prove to be simply a reduction of the 
Department of Defense civilian workforce.
    b. Benefits.--This oversight review provided an early 
examination of restructuring activities in the executive branch 
and highlighted the disproportionate downsizing of the 
Department of Defense. The planning and out placement programs 
of the Department of Defense should serve as useful models for 
workforce reductions in other government agencies.
    c. Hearings.--A hearing entitled, ``Federal Workforce 
Restructuring Statistics'' was held on March 2, 1995.

3. Examining the Federal Retirement System.

    a. Summary.--The Federal pension system consists of two 
programs: the Civil Service Retirement System (CSRS) covers 
Federal employees hired prior to 1984, and the Federal 
Employees Retirement System (FERS) covers those employees hired 
after 1984. A total of 2.8 million active employees are 
covered, with 1.5 million in CSRS and 1.3 million in FERS. 
Currently, 2.3 million participants receive annuities. CSRS has 
2.2 million retirees and survivors, FERS has 37,800.
    Acccording to OPM's 1993 Annual Report on the Civil Service 
Retirement and Disability Fund (CSRDF) in 1996, the outlay for 
monthly payments for retirees of the Federal Government is 
estimated to be $39.2 billion. The CSRDF is projected to take 
in approximately $10 billion in cash receipts and payments from 
employee payroll deductions and from cash contributions from 
the U.S. Postal Service. Transfers from the General Treasury 
will make up the difference between receipts and payments--
nearly $30 billion. The annuities are projected to grow, while 
the cash receipts will stay relatively the same. In 2025, cash 
coming in will total $3.6 billion, while outlays will total 
$166.2 billion. And by 2035, cash receipts are estimated to be 
$5.6 billion, while outlays will top $218.5 billion. This 
increasing burden on the taxpayer and the overall financial 
stability of the Federal retirement system is of utmost 
importance to the chairman of the subcommittee.
    The subcommittee is involved in an ongoing analysis 
examining a host of various proposals concerning Federal 
pension reform.
    The subcommittee reviewed the retirement benefits available 
for Members of Congress, congressional staff, and executive 
branch employees under current law. In the 104th Congress a 
number of Members pension reform bills have been introduced and 
were reviewed by the subcommittee. Under current law, Members 
and staff under CSRS accrue benefits at 2.5 percent of 
preretirement pay for each year of service. Executive branch 
employees with 10 or more years of CSRS service accrue benefits 
at 2.0 percent per year. Members and staff under FERS accrue 
benefits at 1.7 percent per year of service up to 20 years, and 
1.0 percent per year over 20. Executive branch FERS employees 
benefits accrue at 1.0 percent per year, or 1.1 percent if the 
individual retires at age 62 or over. Members and staff 
contribute a greater portion of payroll in exchange for the 
greater benefit.
    b. Benefits.--The investigation exposed growing reliance of 
the Federal retirement system on general tax revenues. To 
stabilize the Federal retirement system the subcommittee will 
consider the creation of a new retirement system which would be 
fully funded outside of the Federal budget and would be subject 
to the same standards and requirements as private sector 
pension plans. Such a system would assure Federal retirees full 
payment of benefits without having to rely on the Treasury to 
subsidize their annuities. This is a responsible approach to 
financing the government's commitments to its employees and it 
allows for the permanent elimination of one entitlement program 
from the Federal budget.
    The retirement reform of Members and congressional staff 
was included in the Balanced Budget Act of 1995. Under this 
reform Members and staff retirement benefits and payroll 
contributions will conform to that available to executive 
branch employees.
    c. Hearings.--Hearings entitled ``Federal Retirement 
Systems: Overview,'' ``Federal Retirement: Congressional 
Pensions'' and ``Funding Civil Service Retirement'' were held 
on March 7, 1995, March 10, 1995, and June 28, 1995.

4. Contracting Out.

    a. Summary.--Federal policy, adopted during the Eisenhower 
administration and endorsed on a bipartisan basis by all 
subsequent Presidents, affirms that Federal agencies should not 
be performing commercial activities in competition with private 
sector businesses. Although Federal agencies contract for more 
than $200 billion in goods and services each year, the Office 
of Management and Budget estimated in a 1987 Report to the 
President's Commission on Privatization that more than 900,000 
civilian Federal employees were performing commercial 
functions. In spite of this substantial commercial activity by 
Federal agencies, previous hearings alleged that Federal 
agencies were involved in ``arbitrary and perhaps ill-conceived 
contracting out.''
    OMB Circular A-76 provides administrative guidance to 
agencies for conducting cost comparisons to evaluate the 
efficiency of proposed contracts. In spite of the established 
mechanism, few cost comparisons of commercial functions are 
completed, in part because Federal agencies consider the 
process itself costly and a disruption to the workforce, and in 
part because Congress has included numerous provisions of law 
that restrict agencies from conducting the studies and/or from 
contracting after the studies are completed. In a June 16, 
1995, release, the National Performance Review reported that 25 
such obstacles to privatization remain in law.
    Subcommittee Chairman Mica has routinely asserted his 
belief that it could and should be possible to contract out 
more than 50 percent of the services and activities of the 
Federal Government as we know it today. If the widespread 
contracting successes being achieved by State and local 
governments do not move the Federal Government in the direction 
of greater contracting for commercial services, inevitably 
budget constraints will.
    OMB's Circular A-76 maintains that the government should 
use competition to reduce the costs of goods and services so 
that it would pay no more than necessary for the quality 
services that it needs. The subcommittee's analysis has shown 
that the absence of competition results in excessive costs, 
with the salaries and benefits of government employees 
comprising approximately 60 percent of the cost of government 
operations. Wendell Cox of the American Legislative Exchange 
Council testified that between 1980 and 1991, Federal 
employees' wages increased approximately $4.56 for each dollar 
that private sector compensation increased. As a result, 
average Federal employees make 45 percent more than private 
sector employees and 30 percent more than State Government 
employees. Over the course of a 40-year career, the expected 
lifetime earnings of a Federal employee have been estimated to 
be $600,000 greater than that of a comparable private sector 
employee. Surveys of government managers have demonstrated 
savings in 98 percent of the cases where functions have been 
converted to contract, and that the mere fact of competition 
has the effect of restraining cost increases. Although 
government must retain full policy control of all its 
operations, contracting could be used much more extensively to 
minimize the costs of providing public services and performing 
government activities.
    b. Benefits.--The investigation highlighted the need to 
update OMB Circular A-76, and OMB reissued the circular in 
March 1996.
    c. Hearings.--Hearings entitled ``Contracting Out: Summary 
and Overview'' and ``Contracting Out: Current Issues'' were 
held on March 29, 1995, and April 5, 1995.

5. Examination and Review of the Federal Workforce Restructuring Act of 
        1994.

    a. Summary.--The Federal Workforce Restructuring Act of 
1994 authorized Federal agencies to provide voluntary 
separation incentives (``buyouts'') to Federal employees as one 
means of reducing Federal employment by 272,900 by fiscal year 
1999. Civilian agencies were authorized to offer buyout 
incentives not to exceed $25,000 each during a period which 
expired March 31, 1995, and the Department of Defense was 
allowed to continue offering buyout opportunities through 
September 30, 1999. By the end of fiscal year 1995, OPM 
reported that more than 112,500 former Federal employees had 
been paid buyouts and left their agencies, with more than 
68,000 of them leaving the Department of Defense. An additional 
50,000 are anticipated to accept Department of Defense offers 
during the coming 4 years. Total costs to the government of 
these incentive payments are expected to exceed $2.4 billion.
    Former Federal employees who accept the buyouts may not 
return to Federal employment for a 5-year period or are 
required to repay the full amount of the incentive. By 
encouraging voluntary separation, buyouts are intended to 
reduce reliance on reduction in force (RIF) procedures and 
enable agencies to retain relatively younger workers while 
senior employees (those eligible or nearly eligible for 
retirement) accept payments to leave. Separation rates, 
however, are severely affected by rumors that a buyout might be 
offered, as evidenced by the reduction in the number of 
voluntary retirements from Federal agencies while the buyout 
program was being authorized in legislation.
    The General Accounting Office (GAO) has reported that 38 
percent of buyout payments reported to date went to people in 
the overhead/administrative positions that were targeted by the 
National Performance Review. Nearly 70 percent went to 
employees at or above the GS-11 level, and 62.9 percent went to 
men. Minority members received 24 percent of the buyouts. The 
average age of people accepting buyouts was 60--about 1 year 
younger than regular retirement. Fifty-two percent of the 
buyout payments reported so far went to employees who were 
eligible for retirement. The GAO testified that there appears 
to have been some use of contract personnel to replace departed 
employees, but the absence, so far, of cost comparison studies 
required by Section 5(g) of the Workforce Restructuring Act 
makes difficult the tracking and analysis of buyout effects.
    b. Benefits.--Buyout authority may be a beneficial tool in 
downsizing and restructuring the Federal workforce, provided 
certain procedures are followed: agencies must engage in long 
range planning and know how they want the organization to look 
at the end of the restructuring; buyout window should be short 
to avoid generating rumors and behavior changes based upon 
expectation of buyouts; buyouts should not be done in 
successive waves; and buyouts should be effective early in the 
fiscal year to maximize savings. Additionally, buyouts should 
be targeted and never offered across the board to avoid 
additional funds being used to hire and train people with 
skills identical to those benefiting from buyouts. Downsizing 
and reorganization are most successful when the importance of 
directing restructuring efforts to a revised organizational 
goal is recognized, and detailed planning strategies are 
employed to achieve it. As a result, the committee has not 
recommended extending executive branch buyout authority at this 
time.
    c. Hearings.--A hearing entitled ``Buyouts: Boon or 
Boondoggle'' was held on May 17, 1995.

6. Review of the Ramspeck Act.

    a. Summary.--The Ramspeck Act is a 1940 law that enables 
members of congressional staffs who have served at least 3 
years to gain noncompetitive appointment to the career civil 
service if they lose their congressional positions through no 
fault of their own; often as a result of the defeat of a Member 
or a Member's choosing not to run again. GAO reported that more 
than 80 percent of recent Ramspeck appointments have been in 
offices of congressional affairs, public affairs, or policy and 
strategic planning.
    Congressman Porter Goss introduced legislation to repeal 
the Ramspeck Act, H.R. 913, which was referred to the Civil 
Service Subcommittee. Representative Goss recommended repeal of 
the Ramspeck authority, arguing that constituents view this law 
as merely another special privilege that Members of Congress 
arrange for their staffs. Ramspeck procedures give former 
congressional employees privileges that are not available to 
other citizens, who must compete for positions in the Federal 
service. He believes that Ramspeck authority is inconsistent 
with the Congressional Accountability Act, adopted early in 
this session, which holds Congress subject to the same laws 
that affect other citizens.
    b. Benefits.--Conditions have changed since the Ramspeck 
law was enacted, and it is no longer difficult to attract 
quality applicants to congressional staff positions. The 
committee was concerned that continued use of Ramspeck 
appointments creates situations where policies repudiated by 
the electorate in recent elections may gain continuity in the 
career civil service through non-competitive transfers of 
staff.
    Congress repealed the Ramspeck Act authority as part of the 
Lobbying Disclosure Act (H.R. 1564). The repeal, which becomes 
effective 2 years after the President signed the law, will 
eliminate this end run around the merit system.
    c. Hearings.--A hearing entitled ``Ramspeck: Repeal, Reform 
or Retentions'' was held on May 24, 1995.

7. Review of the Combined Federal Campaign.

    a. Summary.--The Combined Federal Campaign (CFC) is an 
annual, taxpayer-subsidized solicitation drive in the Federal 
workplace that began as an effort to aid genuine charities 
while minimizing workforce disruption. However, many political 
and ideological advocacy groups and others, who do not directly 
provide or support human health and welfare, litigated and 
lobbied their way into the CFC.
    On February 23, 1995, subcommittee Chairman Mica wrote to 
James B. King, the Director of the Office of Personnel 
Management (OPM), asking for his support and cooperation in 
restoring the Combined Federal Campaign to its rightful role of 
aiding genuine human health and welfare charities. While the 
chairman fully endorses and encourages supporting genuine 
charities, the presence of advocacy groups raises questions 
about requiring taxpayers to subsidize organizations with which 
they disagree. A 1988 Task Force on the CFC established by OPM 
estimated that the CFC costs taxpayers between $55-60 million a 
year. (OPM's current leadership estimates the cost of the CFC 
as $22.1 million.)
    b. Benefits.--Examination of this issue revealed the extent 
to which taxpayers are forced to subsidize numerous advocacy 
groups and other organizations with political agendas that 
participate in the CFC.
    c. Hearings.--A hearing entitled ``Combined Federal 
Campaign: Lawyers & Lobbyists v. People in Need?'' was held on 
June 7, 1995.

8. Contracting Federal Investigations--Policy and Oversight.

    a. Summary.--Since the Atomic Energy Act of 1954, 
background investigations have been an important factor in 
deciding the suitability, security, and public trust 
qualifications of Federal employees. President Eisenhower 
extended background investigation requirements through 
Executive Order 10450, but such investigation centered 
primarily around employee susceptibility to threats from 
foreign governments. Some critics believe that several Supreme 
Court decisions, the Freedom of Information Act, and the 
Privacy Act combine to make it difficult to gather the 
information essential to a meaningful adjudication of these 
areas. As part of the administration's initiatives to reinvent 
government, OPM abolished chapters of the Federal Personnel 
Manual establishing criteria for security, suitability, and 
public trust determinations required to oversee a diverse range 
of agency requirements in a unified civil service.
    The administration considers the transition of 
investigations to the private sector an important component of 
its effort to reinvent government. This reflects a 
reorientation of the agency from providing services to 
conducting policy direction and oversight. OPM proposed an 
employee stock ownership program (ESOP) as the privatization 
vehicle chosen for this transition. A sole source contract to 
the ESOP is an essential ingredient to successful 
implementation of this plan. Oversight of the investigation 
function would remain a Federal responsibility under the 
purview of OPM, but the bulk of the current workforce is 
expected to shift to the ESOP. Data bases essential to the 
system would remain government-owned but reside on contractor-
operated equipment. OMB testified that any savings from this 
program would be realized only when agencies became able to 
acquire investigative services competitively from private 
firms, thereby reducing the costs of background investigations. 
The ESOP would have to compete on an equal basis as a private 
provider.
    The committee is concerned that Federal agencies with 
legitimate concerns about the security and suitability of 
Federal employees have adequate access to investigative 
services. Many agencies already obtain background 
investigations through private contractors; work that amounts 
to more than $20 million each year. Even agencies with 
significant national security concerns, such as the Department 
of Defense, contract for significant portions of their 
background investigations. These agencies rely upon OPM's 
Federal Investigations Processing Center at Boyers, PA, for 
essential data and information to support their suitability 
determinations. In the 6 months between announcement of the 
privatization plan and the subcommittee's oversight hearing, 
OPM witnesses were unable to describe systematic planning for 
conversion, with most of the planning being contracted through 
a trustee organization.
    b. Benefits.--These hearings documented the deficiencies in 
the administration's planning for the transition from a 
government function to an ESOP operation. GAO and OPM testified 
that the gathering of information for background investigations 
is not an inherent function of the Government, the 
administration demonstrated less-than-effective planning for 
the proposed transition. Cost estimates included in OMB's 
budget submissions suggested that these initiatives would save 
4 percent per year. OPM awarded a trustee contract to develop a 
business plan and negotiate a transition on June 9, 1995, only 
a week before the hearing. These planning deficiencies 
strengthened the argument to delay implementation from the 
December 31, 1995, administration proposal to March 31, 1996, 
as approved in the OPM appropriation for fiscal year 1996.
    c. Hearings.--Hearings entitled ``Oversight of Federal 
Investigations Policy'' and ``Outsourcing of OPM's 
Investigations Program'' were held on June 14, 1995, and June 
15, 1995.

9. Administration's AIDS Training Program.

    a. Summary.--Title 5 authorizes training in the scientific, 
professional, technical, mechanical, trade, clerical, fiscal, 
administrative or other appropriate fields. Section 4101 
requires workplace training to be a ``planned, prepared, and 
coordinated program . . . which will improve individual and 
organizational performance and assist in achieving the agency's 
mission and performance goals.''
    Department heads are required, at least once every 3 years, 
to review training and other developmental needs essential to 
meeting mission and performance requirements. This review is an 
integral part of agency planning, the purpose of which is to 
ensure that public funds used to develop an organization's 
human resources have a direct relevance to (1) improving 
productivity; (2) fulfilling the organizational mission; and 
(3) providing quality products and services to the public.
    On September 30th, 1993, President Clinton delivered a 
memorandum to the heads of executive departments and agencies 
directing full implementation of comprehensive HIV/AIDS 
workplace policies and employee education and prevention 
programs by World AIDS Day, 1994. The Office of the National 
AIDS Policy Coordinator was authorized to implement the 
directive, and in a follow-up memo, then-Director Kristine 
Gebbie required mandatory employee attendance at HIV/AIDS 
education and prevention training.
    The HIV/AIDS mandatory training sessions received much 
adverse attention, due to reports that inappropriate and 
questionable materials were presented. The committee received 
numerous letters and calls from Federal employees objecting to 
being subjected to graphic talk about uncomfortable subjects in 
the midst of fellow workers. These recent reports raised 
questions as to whether the Federal HIV/AIDS education training 
is designed to meet the statutory requirements designated in 
Title 5: to improve individual and organizational performance, 
and assist in achieving the agency's mission and performance 
goals.
    b. Benefits.--Witnesses testified that many aspects of the 
administration's training program were not fit for the Federal 
workplace, either in content or method of presentation. They 
argued that Federal employees should not have to suffer 
training programs that assail their fundamental religious and 
moral principles on pain of losing their jobs, as was the case 
with the administration's mandatory AIDS training program. 
According to OPM's figures, Federal agencies spend more than $1 
billion on training. In light of the controversy generated by 
the administration's AIDS training, it is clear that closer 
oversight of employee training is necessary in order to assure 
that training is appropriate for the Federal workplace, both in 
content and method of presentation. Legislation has been 
proposed to protect Federal employees from improper training 
and to ensure that taxpayers' dollars are used only for 
appropriate workplace training.
    c. Hearings.--A hearing entitled ``Administration AIDS 
Training Program'' was held on June 22, 1995.

10. Privatization of OPM Training Responsibilities.

    a. Summary.--On May 16, 1995, the Office of Personnel 
Management and the U.S. Department of Agriculture Graduate 
School signed a memorandum of understanding (MOU) transferring 
OPM's Workforce Training Services, along with its office space, 
training obligations, and student lists, to the Graduate 
School, effective July 1, 1995. OPM separated 220 individuals 
from the agency, 134 of whom were extended offers of employment 
by the Graduate School. This transfer of functions moved a 
service from OPM's revolving fund to a ``non-appropriated fund 
instrumentality,'' a move that OPM Director James B. King 
described as a ``seamless transition'' enabling many former 
employees of the Workforce Training Services to retain 
employment while continuing arrangements through which Federal 
agencies could obtain training services without the burden of 
Federal procurement regulations.
    This initiative has been described among the 
``privatization'' initiatives advanced through the National 
Performance Review. Yet, by retaining authority to work through 
interagency agreements, this transition strategy reduced the 
exposure of the training services to competition--a critical 
factor in improving quality and reducing prices. Witnesses 
testified that full privatization--including the possibility of 
a sale of assets to interested private bidders--might have 
resulted in greater funds for the Treasury while increasing 
competitive pressures for quality. Moreover, OPM retains 
responsibility for oversight of training, even though the 
transition does not provide explicit description of that role.
    b. Benefits.--More direct privatization of training 
activities could have resulted in substantial cost-savings to 
the government. However, concerns have been raised that OPM is 
choosing to compete unfairly with the private sector and 
closing off an area that would thrive if full competition were 
the result. Instead, the USDA Graduate School became eligible 
to receive annually more than $72 million of noncompetitive 
work funded by taxpayers, despite the fact that these training 
activities are commercial services readily available from 
private competitors.
    c. Hearings.--A hearing entitled ``OPM Privatization 
Initiatives Training'' was held on July 26, 1995.

11. Review of Civilian Health and Medical Program of the Uniformed 
        Services (CHAMPUS).

    a. Summary.--Beneficiaries of the military health care 
system are eligible to receive medical care at military 
facilities. However, depending upon the level of demand and 
ready access to facilities, this care is not always assured. In 
1995, 6.6 million non-active duty people are eligible for care 
through the military health care system. The deficiencies of 
the overall military health system, of which the Civilian 
Health and Medical Program of the Uniformed Services (CHAMPUS) 
is a part, are identified by a July 1995 Congressional Budget 
Office (CBO) study. In that study, CBO reported that a major 
complaint among beneficiaries is that their access to health 
care at military medical facilities is poor, and that CHAMPUS 
is not a satisfactory alternative because of its high out-of-
pocket costs.
    CHAMPUS costs grew dramatically after the program's 
inception in 1966. Costs almost tripled from $1.2 billion in 
fiscal year 1984 to $3.18 billion in fiscal year 1990. Many of 
these costs were unanticipated and required supplemental 
appropriations or transfer authority. In 1983, in an attempt to 
put an end to the increasing costs of its health care system, 
and uneven access to health care services, the Department of 
Defense (DOD) began a managed care program, called TRICARE. 
TRICARE offers beneficiaries an alternative to the current 
CHAMPUS program. Beneficiaries are assigned a primary care 
physician to manage their care. In administering TRICARE, DOD 
has reorganized the military delivery system into 12 regions. 
TRICARE is scheduled to be implemented nationwide by May 1997. 
Four regional contracts have been awarded, all to the same 
civilian health care company, and all bid awards have been 
protested. However, while TRICARE is still in the early stages, 
some have suggested that it is unlikely to result in giving 
eligible military beneficiaries access to stable, high quality 
health care benefits, nor will it improve the efficiency of the 
military health care system.
    The Federal Employees Health Benefit Plan (FEHBP) provides 
voluntary health insurance coverage for over 9 million Federal 
Government employees, annuitants, and their dependents, and has 
long been considered the foremost health care plan in the 
country. The Federal Government and enrollees jointly pay for 
the cost, or premiums, of the FEHBP plans, according to a 
statutory formula. The Government's portion of each enrollee's 
premium is a fixed dollar amount equal to 60 percent of the 
average of the high option premiums for what are commonly known 
as the Big Six plans. The average premium contribution for both 
nonpostal and USPS employees and all annuitants was 72 percent 
in 1994, with the employees paying the remaining 28 percent.
    Federal employees and annuitants enroll voluntarily in 
FEHBP and may terminate their enrollment at any time. Employees 
are allowed to enroll in FEHBP or change from one plan to 
another during designated ``open season'' periods. In 1995, 
over 9 million individuals were covered: 2.3 million active 
employees, 1.8 million annuitants, and over 5 million 
dependents. Approximately 5 percent of enrollees change plans 
each year.
    b. Benefits.--The government could benefit from an overall 
reduction in the cost of medical services provided to military 
families and access to services could be greatly improved by 
moving to an FEHB type of program. However, the cost of 
transition to such an alternative delivery system could be high 
and disruptive of readiness requirements. Further study of this 
issue is required.
    c. Hearings.--A hearing entitled ``FEHB/CHAMPUS: Improving 
Access to Health Benefits for Military Families'' was held on 
September 12, 1995.

12. Review of Current Civil Service Reform Initiatives.

    a. Summary.--The Civil Service Reform Act of 1978 
reorganized the Civil Service Commission by creating the Office 
of Personnel Management to perform policy, oversight, and 
service functions; adding the Merit Systems Protection Board to 
adjudicate personnel disputes; and formed an Office of Special 
Counsel to investigate personnel management issues. In 
addition, the 1978 law enacted measures intended to make 
government more performance-oriented and to achieve greater 
accountability.
    Vice President Gore's National Performance Review (NPR) of 
1993 promised a Civil Service Reform program package that would 
be developed in conjunction with the President's Management 
Council. However, initiatives of NPR could rescind many of the 
Civil Service Reform Act's provisions. The administration's 
package considered a comprehensive range of changes, from 
hiring procedures through each phase of recruitment, retention, 
management, labor-management relations, dispute resolution 
procedures, termination, and Office of Personnel Management 
operations.
    Although this National Performance Review product was 
initially presented as a comprehensive package for civil 
service reform. The modifications included in the NPR package 
were never formally submitted as legislation, and generated 
limited support among five panels of witnesses. The committee 
continues to analyze such civil service reform proposals.
    b. Benefits.--Former OPM officials encouraged the 
subcommittee to approach civil service reform issues 
deliberatively, because the long-term effects of apparently 
sound proposals only surface after extensive experience. The 
normal constituencies share interests, especially increasing 
pay and benefits, in ways that do not easily surface in complex 
reviews of classification systems, performance evaluation 
systems, appeals procedures, and other details.
    c. Hearings.--A hearing entitled ``Civil Service Reform I: 
NPR and the Case for Reform'' was held on October 12, 1995.

13. Continuation of Civil Service Reform Review: Performance and 
        Accountability.

    a. Summary.--Federal agencies experience difficulties 
linking the activities of their employees to results intended 
when laws are enacted and policies implemented. The Civil 
Service Reform Act of 1978 included provisions to improve 
Federal personnel management, among them the creation of the 
Senior Executive Service, the GM-13-15 management grades, and 
greater incentives to better improved performance of agency 
managers. Oversight agencies reported that these incentives 
faced sustained resistance among the managers, who contended 
that the system limited the number of bonuses available and 
exacerbated the morale problems associated with performance 
ratings.
    Abundant evidence points to the failure of performance 
management systems in Federal agencies. Most agencies use a 
five-step scale where managers are asked to rate subordinates 
as ``outstanding,'' ``exceeds fully successful,'' ``fully 
successful,'' ``minimally successful,'' and ``unsuccessful.'' 
The Office of Personnel Management's report of fiscal year 1993 
ratings shows that 99.6 percent of Federal employees who 
received a rating were evaluated at least ``fully successful,'' 
and more than 73 percent were rated ``exceeds fully 
successful'' or ``outstanding.'' OPM recently issued 
regulations enabling agencies to replace these multi-step 
evaluations with ``pass-fail'' rating systems.
    Human resource professionals contend that performance 
management systems which focus on results or ratings 
concentrate attention on an end process and divert attention 
from earlier stages in the employee management process. Private 
sector consulting firms and corporations have testified before 
the subcommittee asserting a more comprehensive approach to 
personnel management can reduce the need for unsatisfactory 
ratings and/or firings to strengthen performance. The Hay 
Group, for example, encourages its clients to evaluate 
potential employees not only in terms of ``knowledge, skills, 
and abilities'' (factors identified on all Federal vacancy 
announcements), but also ``values, attitudes, and motives,'' 
factors that are seldom (if ever) incorporated in Federal 
hiring decisions.
    The 103d Congress repealed the Performance Management and 
Recognition System. With improved performance measures required 
by both the Chief Financial Officers Act of 1990 and the 
Government Performance and Results Act of 1993, Congress 
reaffirmed its commitment to pursue improved performance by 
attempting to shift attention to results rather than 
procedures.
    b. Benefits.--The Merit Systems Protection Board surveyed 
Federal managers and learned that although 78 percent reported 
managing a ``poor performer,'' only 23 percent of them 
initiated demotion or removal actions to address the problems. 
The hearing demonstrated that the challenges facing the Federal 
managers are identical to those in the private sector. The 
evaluation and management of poor performers must be linked to 
recruitment, hiring, promotion, and development activities if 
it is to be effective. This hearing provided additional 
material for deliberation related to civil service reform 
proposals.
    c. Hearings.--A hearing entitled ``Civil Service Reform II: 
NPR & the Case for Reform--Continuation'' was held on October 
26, 1995.

14. Review of Federal Employee Appeals Procedures.

    a. Summary.--Federal employees have at their disposal many 
avenues through which they can appeal a variety of personnel 
actions. The U.S. Merit Systems Protection Board (MSPB), the 
independent quasi-judicial agency in the executive branch which 
has a statutory mandate to adjudicate appeals of personnel 
actions for the government and its employees, decided 
approximately 8,500 cases in fiscal year 1994. Other agencies 
involved in the Federal employment complaints process, include: 
the Federal Labor Relations Authority (FLRA), the Office of 
Special Counsel (OSC), and the Equal Employment Opportunity 
Commission (EEOC). In addition, there are multiple levels of 
reviews of actions within employing agencies, internal agency 
grievance procedures, and negotiated grievance procedures in 
collective bargaining agreements, as well as special agency 
procedures for resolving discrimination claims.
    The complicated, lengthy means of appeals available to 
Federal employees led witnesses to testify that the maze of 
multi-layer, multi-agency appeals processes deters managers 
from disciplining poor performers or initiating action in 
conduct cases. Due to the extraordinary amount of time and 
unknown expense involved in a lengthy appeal, both GAO and the 
National Academy of Public Administration have expressed the 
need for consolidating the appeals process and adjudicatory 
agencies. A recent Issue Paper published by the MSPB emphasized 
that ``[t]he wide choice of review paths available to employees 
serves to exacerbate'' the hesitancy of Federal managers to 
take appropriate action against poor performers. That Issue 
Paper concluded that the ``current multi-level, multi-agency 
process should be reexamined,'' observing that the Federal 
Government needs ``a system that ensures fairness, not one that 
deters appropriate actions from being taken.''
    b. Benefits.--The committee heard extensive testimony that 
creating a simpler, more straightforward, less duplicative 
mechanism for resolving disputes in the Federal workplace could 
improve performance management in the executive branch. Some 
components of the current system, most notably the 
unnecessarily complex ``mixed case'' procedure, are simply 
inefficient and needlessly burden American taxpayers with 
unnecessary costs. Testimony before the subcommittee clearly 
demonstrated that there are several attractive alternatives for 
simplifying and consolidating the appeals process. Witnesses 
also recommended greater use of alternative dispute resolution 
methods, which will be the subject of a future subcommittee 
hearing.
    c. Hearings.--A hearing entitled ``Civil Service Reform IV: 
Streamlining Appeals Procedures'' was held on November 29, 
1995.

15. Shutdowns of Federal Agencies Due to Lapses in Appropriations.

    a. Summary.--President Clinton vetoed a continuing 
appropriations resolution on November 13, 1996, resulting in 
the 10th shutdown of government due to a lapse in 
appropriations since 1981. The first shutdown lasted from 
November 14 to November 21, 1995. Subsequent vetoes resulted in 
another shutdown of agencies covered by six appropriations 
bills that had not been enacted, with the second shutdown 
extending from December 16, 1995, to January 6, 1996.
    The Office of Management and Budget documented that the 
administration had been coordinating planning for a potential 
shutdown beginning in August. Although all agencies were 
required to submit shutdown plans to OMB, committee staff found 
that the plans revealed little consistency in planning and an 
absence of standards in assessing agency plans. Although the 
initial reason for the shutdown was a lapse of appropriations 
and fear of violating the Antideficiency Act, the President 
proposed to modify shutdown guidelines after only a few days, 
arguing that the shutdown had fostered conditions that would 
meet the legal exception for ``emergency'' recall of selected 
Federal employees. After hearing testimony from nine senior 
agency officials, several committee members expressed concern 
that many of the employees whose work could qualify as 
``emergency'' in only a few days, probably should not have been 
furloughed in the first place. The subcommittee also received 
testimony from 14 members who were proposing a variety of 
legislation to address disruptions caused by the shutdowns.
    b. Benefits.--The subcommittee's first hearing on the 
shutdown enabled members to identify functions that should not 
have been interrupted during the first shutdown. Those views 
were communicated to the President, and the designated 
functions remained open during the second shutdown, even though 
some of them still lacked appropriations.
    c. Hearings.--Hearings entitled ``Government Shutdown: 
What's Essential?'' and ``Government Shutdown II'' were held on 
December 6, 1995, and December 14, 1995.

16. Employee Benefits in the Context of Total Compensation.

    a. Summary.--Economic constraint is the primary factor that 
guides the level and design of compensation and benefit 
packages throughout the private sector. Some employment-based 
benefits, such as pensions, life insurance, and health 
insurance are provided voluntarily by employers. Employers and 
employees often jointly make payments to fund these voluntary 
employee benefit programs. Other benefits, including Social 
Security, Medicare, workers' compensation and unemployment 
insurance, are mandated by government. These mandatory programs 
are jointly funded by employers and employees, and provide 
retirement income and health care coverage for elderly and 
disabled workers and their dependents. Whether mandatory or 
voluntary, each of these programs is employment based and 
financed primarily through employer and employee payroll 
deductions. The government also promotes the granting of 
additional benefits through favorable treatment under the tax 
code.
    Compensation packages can be tailored to achieve the 
workforce goals of the employer while simultaneously 
accommodating the needs and preferences of workers. The 
integration of benefit policy, with both short and long range 
personnel planning, is essential in the private sector. 
Flexible benefits plans are growing in popularity in response 
to the changing demographics of the American population, and 
the dual income family. Within such arrangements, employees are 
permitted choices among benefits and/or benefit levels. 
Employees thus may exchange benefits that they consider less 
valuable for others better suited to their needs. The level of 
benefit provided can vary greatly, and tends to be directly 
related to the size of the business. According to the Employee 
Benefits Research Institute's Data Book on Employee Benefits, 
less than half of all small employers provide a retirement 
benefit for their workers.
    b. Benefits.--The Federal Government could benefit from a 
review of its compensation strategies to keep abreast of 
changing workforce demographics. As the population ages, as 
corporations face increasing competition in the global 
marketplace, and as the needs of their employees change, the 
private sector is adapting its human resource management 
strategies. As Congress seeks to better allocate available 
resources within realistic budget constraints, it makes sense 
to reevaluate our Federal personnel management strategies.
    c. Hearings.--A hearing entitled ``Civil Service Reform 
III: Private Sector Compensation Practices'' was held on 
October 31, 1995.

17. Medical Savings Accounts (MSA's) in the Federal Employees Health 
        Benefits Plan.

    a. Summary.--A number of proposals have been introduced 
during the 104th Congress to allow individuals and families to 
establish tax-favored Medical Savings Accounts (MSA's) for 
uninsured medical expenses. An MSA can be viewed as a savings 
account for uninsured medical expenses. MSA's are primarily 
designed to encourage workers to be more cost conscious in how 
they spend their money on routine health care, and are also 
aimed at controlling employer costs. An MSA allows the employer 
to put aside a fixed amount of money into an account for each 
employee to pay for his or her own health expenses. In lieu of 
giving the employee first-dollar or low-deductible coverage, 
the employer puts cash into a medical savings account and 
insures or covers the employees' health care costs in full 
above the amount in the MSA--often referred to as catastrophic 
coverage. Whatever funds are not spent on health care can be 
withdrawn at the end of the year and used for any other 
purpose, or saved for future use.
    MSA's make economic sense for the employee because out-of-
pocket spending can be substantially less with an MSA than 
under the traditional health plans, and employees can keep any 
money left in their account at the end of the year while still 
retaining major medical coverage. In effect, MSA's permit 
people to manage the spending of their own funds for non-
catastrophic health care.
    b. Benefits.--In examining the utilization of MSA's in the 
private sector and at the local government level, witnesses 
testified that MSA's are an extremely attractive health care 
option for all ages, and that they have not experienced the 
``adverse selection'' attributed to MSA's testimony also 
indicated that MSA's provided greater flexibility and freedom 
to choose doctors and services than do current plans. Witnesses 
also testified that with an MSA, an employee is less likely to 
neglect necessary or preventive care than with a traditional 
fee-for-service health care plan. Under conventional insurance, 
individuals receive no reimbursement until they have met the 
deductible. That places all the out-of-pocket spending on the 
first expenditures; expenditures that are most likely to cover 
preventive care. MSA's would actually provide a pool of money 
that could be used to pay for preventive care.
    c. Hearings.--A hearing entitled ``FEHB/MSA: Adding Medical 
Savings Accounts--Broadening Employee Options'' was held on 
December 13, 1995.

18. Veterans' Preference.

    a. Summary.--In general, veterans' preference laws give 
certain veterans preference in appointment to civilian 
employment with the Federal Government based upon their 
military service. The first such law was enacted in 1865. Until 
1919, the hiring preference extended only to honorably 
discharged disabled veterans. In 1919, the preference was 
extended to nondisabled veterans, widows of veterans, and 
spouses of injured veterans.
    The statutory basis for today's veterans preference is the 
Veterans Preference Act of 1944, as subsequently amended. Under 
that act, veterans were to be given ``augmented scores'' of 5 
or 10 points, (depending upon their status) in examinations for 
employment, and retention preference in the event of a 
reduction in force. The act also prohibited adverse actions 
against veterans without ``cause'' and required certain due 
process protection, such as notice and an opportunity to be 
heard, as well as appeals.
    The purpose of veterans preference has always been, as its 
name implies, to give veterans a legal leg up in acquiring and 
retaining civilian employment with the Federal Government. 
Federal employment statistics, however, draw into question 
whether this preference is having its intended effect.
    As recently as 1984, veterans representation in the Federal 
work force was nearly 38 percent. That number is now down to 28 
percent. Veterans have borne a disproportionate brunt of the 
government's downsizing. The number of veterans in the work 
force declined at nearly seven times the rate of the overall 
work force. In part, this reflects the concentration of 
veterans in the very defense-related agencies that account for 
the vast majority of the recent downsizing. OPM's figures show 
that in September 1994, 47 percent of all veterans were 
employed in one of the three military departments. It may also 
reflect the greater average age of veterans, who have accounted 
for over 50 percent of all retirements from Federal civil 
service in the last 5 years. These figures also suggest that 
veterans are under represented in many Federal agencies and 
support the claims that we need to create additional 
opportunities for veterans.
    b. Benefits.--The subcommittee's investigation disclosed a 
number of problems with the current application of veterans' 
preference and laid the groundwork for the legislative remedies 
proposed in H.R. 3586.
    c. Hearings.--A hearing entitled ``Veterans' Preference: A 
New Endangered Species?'' was held on April 30, 1996.
    The subcommittee held a hearing to examine whether the 
employment preferences accorded veterans by law are being 
faithfully applied by the Federal Government and ways in which 
opportunities can be improved.
    The first panel consisted of Hon. Stephen E. Buyer, 
chairman of the Subcommittee on Education, Training, 
Employment, and Housing of the Committee on Veterans' Affairs, 
and Hon. Jon D. Fox. Among other issues, Chairman Buyer 
addressed the need to strengthen veterans' preference 
protections during reductions in force and to provide veterans 
with an effective redress system. In particular, he pointed to 
the escalating use of single-position competitive levels in 
RIFs as a threat to veterans' preference. He noted that it 
allowed managers to ``effectively dictate who will retain 
employment,'' and pointed to recent RIFs at the U.S. Geological 
Survey, GAO, and the Army's Audit Agency as examples. Chairman 
Buyer also stated that, ``There is simply no effective means by 
which a veteran may air a preference grievance, especially if 
the veteran is not hired.'' Establishing a redress system that 
provides a reasonable remedy for veterans is, he testified, a 
``primary concern.''
    Congressman Fox testified in support of H.R. 2510, his bill 
to extend veterans' preference to those who served in 
connection with Operations Desert Shield and Desert Storm. In 
his testimony, Congressman Fox pointed out that many reservists 
and National Guard members were ordered to active duty during 
the Persian Gulf War. Some were deployed to the theater of 
operations. Others were ordered to serve outside the theater. 
Those who served in the theater now qualify for veterans' 
preference. But those who served elsewhere do not, even though 
their contributions were also essential to the ultimate success 
of our military operations in the Persian Gulf.
    On the second panel were James Daub, John Davis, and John 
Fales. Mr. Daub, a reservist who was called to active duty to 
support Operations Desert Shield and Desert Storm. He pointed 
out that his unit was split into two groups, one of which was 
sent to the Desert and his group was sent to Rhein Mein Air 
Force Base in Germany. The group in Germany performed aircraft 
maintenance that could not be performed in the theater. This 
was a task that was critical to the success of our combat 
operations and a task they performed proudly and to the utmost 
of their abilities. Those who served in Southwest Asia are now 
entitled to veterans preference, whereas those such as Mr. Daub 
who were uprooted from their families and their Federal jobs 
enjoy no more job protections than ``the non-veteran who was 
home with his family watching the war on CNN.'' This is a 
matter of great concern to these veterans in this era of 
government downsizing, particularly those employed at the 
Department of Defense.
    Mr. Davis, a Vietnam veteran who was awarded the 
Distinguished Flying Cross, the Bronze Star, and multiple 
awards of the Air Medal, described his experience during a RIF 
at the Army Corps of Engineers. He testified that in March 
1993, the Corps headquarters announced that it would conduct a 
50-person RIF. Mr. Davis was placed in a single-position 
competitive level. Consequently, Mr. Davis was the only 
employee covered by the RIF who was actually downgraded. (None 
were separated as a result of the RIF.) Moreover, Mr. Davis was 
not permitted assignment rights to positions for which he 
appeared capable of performing, including one job almost 
identical to the position he held before the RIF. In contrast, 
however, Mr. Davis testified that prior to the RIF, management 
went to great lengths to place other individuals whose jobs 
were to be abolished into positions at their current grade 
levels. In some cases, the agency actually created positions 
for these other employees that did not exist prior to the RIF. 
Nevertheless, both the Merit Systems Protection Board and the 
United States Court of Appeals for the Federal Circuit upheld 
the agency's action.
    Mr. Fales is a decorated blinded Vietnam veteran who is a 
full-time Federal employee and president of the Blinded 
American Veterans Foundation. In his testimony, Mr. Fales 
emphasized the importance of recognizing the important service 
of the hundreds of thousands of American troops supporting 
America's military missions around the world. He pointed out 
that in the past 5 years the military has released 800,000 men 
and women from the armed forces, many of whom were not eligible 
for veterans' preference, which made their transition and 
pursuit of a Federal job much more difficult. Mr. Fales also 
testified that there are many in the Federal bureaucracy who 
actively seek to circumvent veterans' preference, and 
emphasized the need for improved remedies to deter future 
violations.
    The subcommittee also heard testimony from Ronald W. Drach, 
the national employment director for the Disabled Veterans of 
America, and Emil Naschinski, assistant director, National 
Economics Commission, of the American Legion. Both testified 
that the lack of an effective redress system is the key defect 
in current veterans' preference law. Mr. Drach stated that 
``there has never been a meaningful appeal/ redress system 
available to an individual or a veterans service organization . 
. . if either thought veterans' preferences were being 
violated,'' and he contended that the Office of Personnel 
Management's ``less than aggressive enforcement of veterans' 
preference'' persuaded agencies they were free to ignore 
veterans' preference. Mr. Naschinski emphasized that, ``If 
Congress is serious about improving veterans' preference, it 
must provide a clear, independent and user friendly redress 
mechanism that can be utilized by veterans who believe their 
veterans' preference rights have been violated.'' Both 
witnesses also testified to the importance of strengthening 
protections for veterans during RIFs and warned of the 
potential erosion of veterans' preference through the 
proliferation of alternative personnel systems.

19. Soft Landings To Enhance Federal Downsizing?

    a. Summary.--Under the Federal Workforce Restructuring Act 
of 1994 and the Clinton administration's efforts to 
``reinvent'' government, Federal agencies initiated efforts to 
reduce the Federal workforce by 272,900 positions by 1999. The 
Federal Workforce Restructuring Act authorized agencies to pay 
``voluntary separation incentive payments,'' (buyouts) as a 
means of increasing attrition through voluntary separations 
rather than reductions-in-force. This buyout authority expired 
for nondefense agencies on March 31, 1995. The subcommittee 
conducted hearings on the buyout program on May 17, 1995, after 
which subcommittee Chairman Mica communicated four criteria for 
any future buyouts to Government Reform and Oversight Committee 
Chairman William F. Clinger, Jr. These criteria reflected a 
consensus of the General Accounting Office, the Congressional 
Budget Office, and two private consulting firms with extensive 
experience analyzing and managing corporate downsizing. They 
included a requirement that any future buyouts be implemented 
consistent with a strategic plan that describes the agency's 
operation after downsizing, that buyouts be done early in the 
fiscal year, that they be accomplished swiftly, and that they 
be a one-time event wherever they are used.
    Several agencies appear to have used previous buyout 
authority in ways that are inconsistent with workforce 
reduction objectives. The Environmental Protection Agency 
bought out 485 employees while reducing 97 positions. The 
Department of Education bought out 484 employees while reducing 
only 146 positions. The Department of Justice reported 835 
buyouts while increasing staff by 7,536 employees. Several 
other agencies approached the subcommittee about renewed buyout 
authority, but few of them had done the planning necessary to 
prepare for their effective use. In light of the likelihood of 
additional workforce reduction, and in the absence of effective 
planning on the part of agencies, this hearing opened a series 
that would assess the future of the Federal workforce and 
review legislation proposed to ease the impact of reductions on 
Federal employees who would be affected by them.
    b. Benefits.--This investigation enabled the subcommittee 
to review proposed legislation to ease the process of workforce 
reductions for Federal agencies. It identified several measures 
that were subsequently incorporated into H.R. 3841, the Omnibus 
Civil Service Reform Act of 1996.
    c. Hearings.--The subcommittee conducted a hearing on 
proposed legislation, ``Downsizing/Soft-Landings, and Related 
Legislation,'' on May 8, 1996.
    Mr. Burton reaffirmed his commitment to reducing the size 
of government while recognizing Congress' obligation to ease 
the transition of current employees to positions in the private 
sector. He noted the difficulties imposed on such transitions 
by the lack of portability in current pension systems.
    Mr. Moran lamented the lack of planning with which both 
Federal agencies and Federal employees approached recent 
workforce reductions. Although buyouts were available, 
employees often took them without adequate preparation for 
retirement or a different occupation, and agencies often 
awarded them without adequate planning for future operations.
    Mr. Wolf emphasized the he and his cosponsors of H.R. 2751 
had placed a priority on the avoidance of RIFs as Federal 
agencies reduce their workforces to implement either policy 
changes or budget reductions. He claimed that RIFs are 
disruptive, and asserted that Congress has a responsibility to 
make sure that reductions are achieved with as little 
disruption as possible. He sponsored the Federal Employee 
Separation Incentive and Reemployment Act to assist agencies in 
reducing workforces through attrition rather than RIFs. He 
observed that, regardless of congressional action, the 
legislation would have to be complemented with activities such 
as job fairs to assist Federal employees facing workforce 
reductions in finding new positions. He agreed with Mr. Mica 
that buyouts should be used only to avoid RIFs and save the 
government money, and observed that Federal agencies should be 
on notice that the Congress will follow their use of buyout 
authority closely.
    Mrs. Morella endorsed Mr. Wolf's bill and testified in 
support of complementary companion legislation that she 
introduced. H.R. 2826, the Early Retirement Incentive Act, 
would phase out the 2 percent per year reduction in annuities 
that Federal employees face if they retire before the age of 
55. Under her bill, this reduction would be adjusted annually 
so that full pensions would be restored incrementally at age 
55. She also recommended H.R. 2825, the Strategic Reemployment 
Training Act, for the subcommittee's consideration. This 
measure would foster partnerships with the private sector to 
facilitate placement of Federal employees who could no longer 
expect opportunities in other Federal agencies. The bill would 
allow Federal agencies to retrain their employees in ways that 
develop skills for private sector employment, a practice that 
is beyond the authority of Title 5.
    Mr. Hoyer claimed that Federal employees no longer face the 
long-term employment security experienced in previous years. He 
observed that the administration has beefed up priority 
placement programs, but was uncertain whether these programs 
would be adequate to serve the employees affected by 
reductions. He supported Mr. Wolf's initiatives in training and 
job fairs, and endorsed both of Mrs. Morella's bills. Although 
he acknowledged the cost of buyouts, he commented that ``a 
$25,000 payment up front may well be the cheapest incentive 
that the government can adopt.'' He conceded that he had not 
analyzed the fiscal note on any of the bills that he endorsed 
in this testimony. In response to questions, he commented that 
planning would be important to effective use of buyouts, but 
noted that abolished agencies such as the Bureau of Mines and 
the Interstate Commerce Commission were terminated through 
relatively quick appropriations actions. All Members supported 
provisions that would enable separated employees to extend 
their life and health insurance coverage.
    All Members also recognized that the workforce reduction 
targets are often arbitrary, and that the 5,500 nondefense 
workforce reductions proposed in the President's FY-1997 budget 
should be achievable through normal attrition. Mr. Moran 
observed that the workforce reductions to date have been done 
exactly the reverse of the way that they should have been done, 
by creating an arbitrary dollar reduction number and backing it 
into personnel conclusions. Mr. Moran also expressed his 
interest in developing a method of easing the transition to 
retirement.
    Mr. Shaw testified that the Senior Executives Association 
had ardently supported H.R. 2751. He noted that current 
reductions in the Federal workforce are targeted at middle and 
upper layers of agencies, and these are difficult cuts to 
achieve. He noted that public employees often face post-
employment restrictions that impede their ability to use their 
professional skills in the private sector. He argued that the 
most effective means of placing Federal employees during agency 
reductions is to place the employees in other agencies. He 
reported that, rather than accept separated Bureau of Mines 
employees, other components of the Department of the Interior 
canceled vacancy announcements. Such actions would vitiate 
priority placement programs.
    Ms. Chandler reported that the National Federation of 
Federal Employees believes that voluntary separation incentives 
are important to assist Federal agencies in downsizing. 
Attrition rates are lower than any recent years, and she 
believes that RIFs would be necessary without the buyouts.
    Mr. Gable agreed with the criteria for new buyout authority 
outlined by the chairman at the start of the hearing. He 
contended that the phased reduction of the buyout amount 
authorized by Mr. Wolf's bill might accelerate voluntary 
separations, and ease requirements for subsequent reductions. 
The Federal Managers Association recommends that buyout 
authority in nondefense agencies be extended to the 1999 
deadline for the Department of Defense. The testimony supported 
every benefit increase proposed in legislation under 
consideration by the subcommittee.

20. Workforce Reductions: RIFs v. Buyouts: A Cost-Benefit Comparison.

    a. Summary.--The subcommittee continued to monitor the 
administration's implementation of the buyout program 
authorized by the Federal Workforce Restructuring Act of 1994 
and to assess the need for renewal of buyout authority, in 
light of recommendations from Members who had sponsored H.R. 
2751. Although the administration was well on its way to 
meeting the 272,900 FTE workforce reduction required by the 
act, most reductions to date had come from downsizing at the 
Department of Defense rather than from efforts to ``Reinvent 
Government.'' The administration's FY-1997 budget recommended 
further Department of Defense downsizing--cutting 54,300 DOD 
positions--and eliminating a total of only 5,500 positions from 
nondefense agencies. This reduction in nondefense agencies is 
well within the scope of normal attrition, so these positions 
could be eliminated simply by exercising buyouts that were 
deferred from 1995. The President's budget showed that while 
downsizing discussions continued, the Departments of Justice, 
Labor, Health and Human Services, and Treasury planned staff 
increases during fiscal year 1997. Buyouts had cost the 
government $2.8 billion, and half of these expenditures went to 
employees eligible for full retirement benefits. GAO reported 
that better management of normal attrition could have enabled 
more cost-effective method of achieving workforce reductions. 
In addition to extensive use of buyouts, several agencies had 
used their authority to conduct ``reductions-in-force,'' (RIFs) 
in ways that caused concern about fair and equitable treatment 
of employees. As a result of provisions of the Legislative 
Branch Appropriations Act of 1995, GAO had secured authority to 
revise their RIF regulations, but the revisions that were 
promulgated provided no substantial changes from RIF rules 
governing other Federal agencies.
    b. Benefits.--This investigation revealed that the 
administration had allowed some agencies to use buyouts beyond 
the authority granted under the Federal Workforce Restructuring 
Act of 1994. It also demonstrated that, where an agency was 
granted extensive authority to revise RIF rules, those 
revisions were relatively minor, and did not jeopardize any of 
the protections that are often deemed burdensome in 
administering RIFs. The extensive use of single-person 
competitive levels used by the U.S. Geological Survey in 
conducting its RIF influenced the subcommittee's decision to 
include additional protection for veterans in the Veterans 
Employment Opportunities Act of 1996.
    c. Hearings.--The subcommittee conducted a hearing, 
``Reinventing Downsizing or Downsizing the Reinvention,'' on 
May 23, 1996.
    Mrs. Morella recognized that previous buyouts did not 
necessarily achieve their intended results, and added that we 
must ``avoid another situation whereby agencies pay the same 
employees both separation incentives and retention, 
recruitment, or relocation bonuses.''
    Mr. Bowling reported that, as of September 30, 1995, 
Federal agencies had paid buyouts to more than 112,000 
employees, enabling the agencies to exceed the workforce 
reduction targets required by law. Buyouts accounted for 48 
percent of those reductions, with RIFs accounting for an 
additional 6 percent. The balance was achieved through normal 
attrition--retirements, resignations, and other terminations. 
He observed, however, that these reductions have not 
consistently targeted the management positions identified in 
the National Performance Review. Instead, these positions have 
actually increased as a portion of the Federal workforce in 
some agencies, and the portion of supervisory personnel 
diminished only slightly, even though the administration had 
relied on questionable techniques, such as renaming supervisors 
as ``team leaders'' without actually altering responsibilities, 
to achieve these numbers. Although he saw no need for 
governmentwide buyout authority, he admitted that some agencies 
might have to reduce their workforces disproportionately and, 
in such cases, targeted authority might be appropriate.
    Mr. Koskinen contended that management of attrition through 
hiring freezes or similar measures might not provide agency 
managers the flexibility that they need to redesign their 
agencies during further workforce reductions. The 
administration submitted a proposed Federal Employment 
Reduction Assistance Act of 1996 that would authorize 
downsizing agencies to extend buyouts to employees at 
decreasing payment rates over a 4-year period. He expressed 
concern that, if distinct buyout legislation is approved for 
different agencies, differences between programs would result, 
and that some of these could be considered inequitable. He 
endorsed other ``soft landing'' measures, such as extending 
health and life insurance benefits for separated employees, but 
reported that the administration opposed measures, such as the 
so-called ``2 percent solution,'' that would exacerbate the 
financial problems of Federal retirement funds.
    Mr. King testified that buyouts had played an important 
role in enabling Federal agencies to reduce positions with 
minimal use of RIFs. He claimed that RIFs are much more 
disruptive of the morale and productivity of the workforce than 
voluntary reductions. He observed that future reduction 
requirements might result from budget reductions, and that 
renewed buyout authority could facilitate meeting future 
requirements. Mr. King denied that OPM had promoted radical 
changes in RIF policy during recent actions, and claimed that 
the portion of veterans among new hires had increased during 
the past 3 years.
    Mr. Koskinen conceded that the President's budget 
submission contains actual workforce levels from previous 
years, but only projections for future years, and added that 
the projections contained in the FY-1997 submission are at 
least 30,000 persons higher than actual employment levels will 
turn out to be. Mr. Bowling admitted that Federal personnel 
data are unreliable at times, in part because of difficulties 
in OPM's Central Personnel Data File. Mr. Bowling agreed that 
normal attrition should be sufficient to manage planned 
downsizing, but added that unanticipated budget reductions 
might justify some targeted buyouts at affected agencies.
    Mr. Mica questioned Mr. Koskinen about a Department of 
Energy legal opinion that was used to rationalize ``renewed'' 
buyout offers after the March 31, 1995, deadline enacted in the 
Federal Workforce Restructuring Act. Mr. Koskinen observed that 
the OMB General Counsel had reviewed the Department of Energy 
opinion, but had not issued its own opinion on the topic 
because OMB concluded that the DoE opinion was appropriate. Mr. 
Koskinen claimed that this authority was limited, and only 
agencies that had previously offered deferred buyouts could 
``recycle'' those buyouts if they were not used. Mr. Moran 
emphasized that the Congress had never intended to give 
employees a second chance at buyouts, and chastised OMB because 
no effort had been made to contact the Congress before allowing 
the Department of Energy to ``reoffer unused buyouts.'' Mr. 
Moran observed that when information about such actions first 
surfaces in unofficial channels, it establishes expectations 
among Federal employees, with adverse consequences for normal 
attrition rates. He requested GAO to provide a legal opinion 
assessing the Department of Energy's views on the authority to 
extend buyouts after the March 31, 1995, statutory deadline.
    Mr. Koskinen argued that conditions had changed since his 
testimony a year ago that buyouts would not be necessary. The 
Workforce Restructuring Act reductions are being attained, but 
some agencies are facing constraints on their spending, and 
that is a different factor than previous conditions. He noted, 
for examples, that OPM, GSA, and NASA had absorbed reductions 
proportionately greater than the Department of Defense's 12 
percent downsizing. Mr. Koskinen claimed that neither OMB nor 
the subcommittee would want to go through a period of guerilla 
warfare deciding on buyouts on an agency-by-agency basis 
through the appropriations process.
    Mr. King conceded that RIFs can be cheaper than buyouts 
where units are eliminated, but claimed that the buyout offers 
a ``more humane'' method of reducing the workforce. He claimed 
that, with ``bump and retreat'' rights, an average RIF affects 
2.5 other employees.
    Mr. Luke reported that GAO experienced a 25 percent budget 
reduction, with 15 percent in FY-1996 and 10 percent in FY-
1997. To reduce these expenditures while continuing to meet its 
responsibilities, the agency had to reduce personnel beyond 
rates that could be achieved through attrition. GAO offered 
buyouts that were accepted by 393 employees, and closed 
regional offices, which eliminated another 170 positions. A 
hiring freeze first imposed in 1992 remains in effect. GAO 
secured legislative authority to issue RIF regulations that 
differed from executive branch agencies, but included no major 
revisions in them. They did allow employees to volunteer for 
RIF, but retained the tenure, veterans' preference, 
performance, and length of service factors in conducting RIFs. 
Veterans' employment at GAO reduced slightly, a change that Mr. 
Luke attributed to more veterans taking advantage of buyouts.
    Mr. Leahy recounted the extensive deliberations planning 
for the RIF at the U.S. Geological Survey's Geologic Division. 
He attributed the necessity of a RIF to a decade-long trend 
during which payroll required an increasing portion of agency 
appropriations. This high portion of the annual budget 
allocated to salaries was increasingly constraining the 
agency's ability to conduct quality scientific research. He 
claimed that the planning was based on programmatic needs, and 
submitted copies of extensive materials distributed to keep 
agency personnel informed of this planning. The Survey began 
briefing employees about RIF planning at its three regional 
centers in March 1995. He testified that the Survey's old RIF 
plans did not conform to either current OPM guidelines or the 
Merit System Protection Board's standards, so revision of RIF 
procedures was a necessary element of this RIF planning. Along 
with this RIF, the Geologic Division engaged in a major 
reorganization to adapt its mission to current statutory 
authorities and to achieve savings by reducing managerial 
layers. Mr. Leahy testified that the 250 people managerial 
staff was cut nearly in half in the new organization. He 
reported that only 9 veterans were separated of the 292 
veterans on the Division's 2,192-member staff.
    Under questioning, neither Mr. Luke nor Mr. Leahy thought 
that their agencies needed additional buyout authority at this 
time. They also did not have any recommendations for statutory 
changes related to workforce downsizing. Under questioning from 
Mrs. Morella, Mr. Leahy reported that the RIF had generated 123 
appeals to the Merit Systems Protection Board, and that the 
Office of Special Counsel was reviewing the actions. Mr. Leahy 
noted that Representatives Davis and Wolf had sponsored a job 
fair for affected employees in northern Virginia. USGS also 
placed 110 of its employees in other divisions or within the 
Department of the Interior.

21. Illegal Use of Buyouts.

    a. Summary.--As a result of evidence presented at its May 
23, 1996 hearing, the Subcommittee on Civil Service requested 
the General Accounting Office to review a Department of Energy 
legal opinion that the administration had used to support the 
extension of buyout authority to several other agencies after 
the Federal Workforce Restructuring Act of 1994's deadline had 
expired. Although the Federal Workforce Restructuring Act 
provided authority to offer employees buyouts to ease the 
transition from the public sector, the administration had 
continued to offer buyouts after the March 31, 1995, deadline 
set by law. Documents submitted by OMB demonstrated that OMB 
Deputy Director for Management John A. Koskinen had approved 
the Department of Energy's plan to ``reoffer unused buyouts'' 
on October 4, 1995, even though the administration made no 
effort to inform the Congress of the decision until after it 
was publicized in a May 2, 1996, newspaper column. The 
Department of Commerce had offered a new--1 day--round of 
buyouts to some of its employees on the very day that the 
subcommittee had conducted its previous hearing.
    b. Benefits.--As a result of this oversight, the Office of 
Management and Budget directed Federal agencies to discontinue 
any further offers of buyouts to nondefense employees. These 
hearings also resulted in the development of legislative 
language to prevent repetition of the abuses revealed during 
these hearings. Buyout authority granted under the Omnibus 
Continuing Appropriations Act of 1996 prohibits employees from 
receiving buyouts if they have received a relocation bonus 
within the past 2 years, or if they received a retention bonus 
within the last year. The new buyout authority omitted any 
provision that might have allowed for deferred separation of 
employees who accept voluntary separation incentive payments.
    c. Hearings.--The subcommittee conducted a hearing, 
``Reinventing Downsizing or Downsizing the Reinvention,'' on 
June 11, 1996.
    Mr. Mica commented, ``[The GAO opinion] means . . . that at 
midnight on March 31, 1995, the Federal buyout window closed 
for nondefense agencies. . . . That GAO opinion means that 
neither OMB nor anyone else in the executive branch has the 
authority to create an additional application window.'' The 
subcommittee chairman concluded, ``I will entertain no further 
discussion of new laws until the Clinton administration 
demonstrates its compliance with the old law.''
    Mr. Moran observed that the issue is important because it 
sets a precedent in terms of the Federal workforce's 
expectations and the question of who writes the laws. He 
rejected the idea that this was an issue of conflicting legal 
opinion, because the language in the Workforce Restructuring 
Act is not even remotely ambiguous.
    Mr. Wray reported that the General Accounting Office had 
issued a legal opinion to the subcommittee on June 6, 1996, 
which concluded that the Department of Energy policy is 
inconsistent with the Federal Workforce Restructuring Act of 
1994. GAO concluded that the clear language of the act and the 
fundamental logic and context of the statute lead to the 
conclusion that agencies could lawfully approve buyouts only 
until March 31, 1995. The Secretary of Energy's decision to 
extend buyout offers after that date was inconsistent with the 
statute.
    Mr. Koskinen admitted that, in spite of the 
administration's claims about reinvention, ``No one has tracked 
FTE declines for each of these [eliminated] activities, and 
there is no efficient way to obtain that information at this 
time.'' He reiterated that reductions in spending, rather than 
any reinvention effort, is the driving factor behind any 
further workforce reductions. In spite of the GAO opinion, he 
denied that any member of the administration was operating 
deliberately in contravention of the law.
    Mrs. Morella concurred with the General Accounting Office's 
legal opinion that the law restricted buyouts to end on March 
31, 1995, and observed that this experience erects barriers to 
enacting soft-landing measures for other employees.
    Mr. Wray noted that the only practical corrective for the 
Congress would be to pass additional legislation. Mr. Mica 
explored options such as holding disbursing officers 
accountable for funds expended in violation of the law, but Mr. 
Wray did not view this remedy as effective. Mr. Moran argued 
that the consequence of the deficient legal opinion was to 
continue bad management practices, and Federal employees were 
subject to recurring rumors about new buyout opportunities. The 
fluctuations jeopardized the chance to bring stability to the 
workforce.
    Mr. Koskinen reported that OMB was in communication with 
agencies that have offered renewed buyouts, and had requested 
them to review their actions in light of the GAO opinion. Mr. 
Mica and Mr. Moran emphasized that the subcommittee had 
bipartisan agreement with the GAO opinion, a factor that OMB 
should consider in requesting further review by the agencies.
    Mr. King observed that OPM's recommendations had 
consistently supported the GAO opinion.

22. Civil Service Reform Proposals.

    a. Summary.--This oversight provided an opportunity to 
review issues related to preparation of the Omnibus Civil 
Service Reform Act of 1996 (H.R. 3841). This legislation drew 
from topics covered in hearings conducted by the subcommittee 
during October and November 1995 and legislation proposing soft 
landings for Federal employees which were the focus of a May 8, 
1996, hearing by the subcommittee. The legislation incorporated 
provisions that reflected concerns widely shared among Members 
and addressed pressing needs of a public service oriented 
toward workforce reductions rather than expansion of agencies' 
responsibilities and workforces.
    b. Benefits.--This hearing provided an opportunity for 
extensive discussion of issues related to H.R. 3841, and 
assisted in the modification of provisions necessary to secure 
House passage.
    c. Hearings.--The subcommittee conducted a hearing on the 
Omnibus Civil Service Reform Act of 1996 on July 16, 1996.
    Mr. Mica observed, ``Just as the private sector has 
adjusted to accommodate people changing career patterns, the 
Federal workplace must adapt to accommodate new technologies, 
changing agency missions, and eliminate old functions and 
assume new roles that are so necessary in our dynamic and fluid 
Federal workplace.'' Mr. Mica added, ``Throughout the past 
year, I have been struck by the challenges that Federal 
agencies face relating to managing poor performers. . . . We 
have heard from many witnesses that the current Federal service 
provides very limited incentives to our best employees while 
erecting enormous hurdles when it comes to improving or 
removing problem employees.'' The draft legislation included 
provisions to strengthen performance management, to streamline 
the Federal appeals processes, to expand benefits available 
through the Federal Retirement Board's Thrift Savings Plan, to 
provide soft-landings for Federal employees facing workforce 
reductions and to provide agencies flexibility in reorganizing, 
and several miscellaneous provisions to address technical and 
administrative problems in administering the Federal civil 
service.
    Mr. Bowling reaffirmed testimony presented by GAO during 
November 1995. That testimony described the appeals processes 
available to Federal employees as ``inefficient, expensive, and 
time consuming.'' He urged congressional action that would 
reduce the inefficiencies in the system, shorten the time 
involved, and save money. He contended that reforms needed to 
sustain two fundamental principles: fair treatment for Federal 
employees and efficient management of Federal agencies. He 
recommended measures to eliminate the mixed cases (where 
employees can appeal prohibited personnel practices to more 
than one agency), movement toward a private sector model for 
addressing employees' discrimination complaints, and increased 
use of alternative dispute resolution (ADR). He reported that, 
in FY-1994, agencies spent almost $34 million investigating 
discrimination complaints, and awarded more than $7 million in 
complainants' legal fees and discrimination settlements. 
Bowling noted, ``The redress system's protracted processes and 
requirements can divert Federal managers from more productive 
activities and inhibit some of them from taking legitimate 
actions in response to performance or conduct problems.'' He 
noted that Federal employees file six times the per capita rate 
of complaints as private sector employees, and that only 18 
percent of Federal filings are related to terminations, where 
47 percent of private sector discrimination complaints result 
from terminations. Bowling reported that the Merit Systems 
Protection Board and the Equal Employment Opportunity 
Commission rarely differ in their findings, but employees have 
little to lose by having both agencies review the issue. 
Eliminating mixed cases would eliminate both the jurisdictional 
overlap and the inefficiency that accompanies it. He cautioned, 
however, that the modification of procedures would require the 
EEOC to learn new approaches to its work.
    Mr. Heuerman thanked the subcommittee for incorporating 
several of the administration's recommendations in the 
consensus package. He welcomed expanded authority for 
demonstration projects, but the administration opposed allowing 
demonstration projects to modify leave and benefit programs. 
Although he welcomed the bill's inclusion of alternative 
dispute resolution provisions, he recommended thorough 
assessment of provisions consolidating appeals processes. The 
administration recognized the bill's interest in strengthening 
performance credit in developing RIF retention registers, but 
argued that this objective could be accomplished through 
regulation rather than statute.
    Mr. Mehle observed that the bill would make important 
improvements to the Thrift Savings Plan provisions of the 
Federal Employees Retirement System Act (FERSA). FERSA 
authorized the creation of three investment funds, and allowed 
Congress to authorize additional investment vehicles. This bill 
would create two additional funds: one a small capitalization 
fund and the other an international stock index fund. The Board 
had previously recommended both to the Congress, and could 
implement them within 2 years. The Board also supported 
allowing new Federal employees to begin contributing to their 
accounts immediately and the elimination of restrictions on 
withdrawals and borrowing from employees' accounts.
    Mr. Moyer thanked the subcommittee for the provisions that 
he saw as beneficial to members, especially expansion of the 
Thrift Savings Plan, provisions to assist agencies in 
reorganization, and soft landings for employees affected by 
workforce reductions. FMA supported provisions to extend 
liability insurance coverage to Federal employees acting in the 
line of duty. He advocated limiting demonstration projects to 
10 percent of the Federal workforce. Rather than retain EEOC 
jurisdiction, FMA supports consolidating Federal appeals 
through the MSPB, with appeal to the Federal Circuit. He 
opposed linking performance management and RIF retention 
criteria.
    Ms. Olsen welcomed the expansion of agencies' transition 
programs for Federal employees affected by downsizing. She 
opposed, however, giving employees additional credit in RIF 
processes for outstanding service. She also appreciated the 
liability insurance protection afforded to Federal managers 
under this bill, and supported to strengthened monitoring and 
reporting requirements directed toward Federal training.
    Mr. Sanders testified that the bill represents an important 
step in the right direction, and expressed strong support for 
swift passage. He commented that the bill addresses many of the 
critical needs for reform--especially of the appeals 
procedures--but questioned the benefits that might be derived 
from additional demonstration projects. Rather than a single 
solution to civil service problems, he argued that more 
particularized, tailored answers to limited questions are the 
most likely vehicle of future progress in managing Federal 
employees. He recommended consideration of reforms instituted 
in Australia and New Zealand, and also mentioned the private 
sector's cafeteria compensation plans as an appropriate model 
for future comparison. He strongly supported the bill's 90-day 
alternative dispute resolution provisions.
    Mr. Divine thanked the subcommittee for including the soft 
landing provisions that would benefit employees separated 
during agency workforce reductions. He would limit 
demonstration projects, however, to agencies with partnership 
agreements. Federal unions, in general, favored a 10 percent 
cap on the number of employees who could be involved in a 
demonstration project. They also opposed increasing the credit 
given performance during a RIF, contending that employees could 
be adversely affected by being under different rating systems.
    Mr. Donnellan expressed strong reservations about 
demonstration projects developed without the participation of 
employees' unions, and argued for retention of current appeals 
processes.
    Mr. Tobias expressed general support of the bill, but 
expressed reservations about the breadth of potential 
demonstration projects.
    Mr. Roth commented that several provisions in the bill do 
not have the support of employees represented by Federal 
employees' unions. He expressed concerns about waiver 
provisions related to demonstration projects. He asserted that 
Federal employee unions favor removing employees who do not 
perform their jobs, and contended that a ``two-tiered'' system 
(pass/fail) would enable agencies to remove those who fail. He 
also objected to including the increased rewards for 
outstanding performance in statute.

23. Review of the Federal Employees Health Benefit (FEHB) Program.

    a. Summary.--The FEHB program is the largest employer-
sponsored health insurance system in the country. In 1996, the 
$16 billion FEHB program will insure more than 9 million 
Federal employees, retirees, and their dependents. Partial 
portability, no preexisting conditions limitation, and an 
annual open enrollment period are facets of the FEHB program 
that make it an extremely attractive health care system. The 
program is administered by only 134 employees, and it serves 
more than 9 million enrollees.
    Over the past 2 years, a number of FEHB-related issues have 
arisen. Some effect the coverage and benefits provided to 
Federal employees, others affect the costs borne by employees 
and the government.
    In January 1, 1996, Blue Cross & Blue Shield (BCBS) changed 
their prescription drug benefit setting off a round of 
intensive lobbying by the National Association of Retail 
Druggists (NARD), the National Association of Chain Store 
Druggists (NACSD), the American Pharmaceutical Association 
(APHA), and by individual druggists and large chain stores.
    BCBS for 1996 stopped waiving the 20 percent co-pay on 
prescriptions purchased at preferred (network) pharmacies for 
those retirees who also have Medicare Part B coverage. All 
other BCBS standard contract holders have always been 
responsible for paying the 20 percent co-pay and, accordingly, 
are not affected by the 1996 benefit change. The benefit change 
is expected to save $200 million in 1996. OPM has stated that 
without the benefit change all 1996 monthly premiums for BCBS 
Standard Option enrollees would have increased by $5.42/month 
for self enrollments and $12.03/month for family enrollments.
    The pharmacists maintain that the benefit change is unfair, 
because the co-pay is still waived for prescriptions obtained 
through the mail order program. They see the benefit design as 
unfairly steering customers away from the community drug 
stores. Since the FEHB program is a government health care 
program, the pharmacists have sought to have Congress overturn 
this benefit decision by BCBS. Many stores posted signs telling 
all retirees that there is a new co-pay requirement and asking 
them to sign petitions to Congress and OPM.
    The controversy is really about the economic consequences 
of retail store versus mail order prescription drug sales. The 
pharmacists apparently hope to achieve a result similar to what 
happened in Maryland when the State rescinded a prescription 
drug contract in the wake of organized protests from Maryland 
druggists. (The Federal Trade Commission and the Maryland 
Attorney General are now investigating the possibility that the 
organized campaign constitutes an antitrust violation).
    Senators Pryor and Cohen, and Representatives Moran and 
Gilman, requested a GAO review of the prescription drug 
program. That request was narrowly drawn and could have 
elicited a skewed response. Subcommittee Chairman Mica 
requested the GAO conduct a more comprehensive and objective 
analysis of the prescription drug program in the FEHB and 
provide some external comparison with private sector programs. 
The external review will provide a better base of information 
to make a more informed judgement on the issue.
    During the 104th Congress, a number of bills have been 
introduced either mandating that health insurance carriers 
provide coverage for certain benefits or that they provide 
direct reimbursement for certain health care providers.
          H.R. 1057, introduced by Representative Ben Gilman 
        (R-NY), would provide for hearing care services by 
        audiologists to Federal civilian employees.
          H.R. 2009, introduced by Representative Lynn Woolsey 
        (D-CA), would include medical foods as a specific item 
        for which coverage may be provided under the FEHB 
        program; and
          H.R. 3292, introduced by Representative Maurice 
        Hinchey (D-NY), would provide for coverage of qualified 
        acupuncturists services under the FEHB program.
    b. Benefits.--The FEHB program is often cited as a model of 
efficiency and effectiveness that other public and private 
groups should seek to replicate. The free-enterprise-based FEHB 
program has effectively contained costs through private sector 
companies, with limited governmental intervention. The 
investigation reinforced the importance of the private sector 
competition that exists in the FEHB program, and that 
legislative efforts to mandate benefit levels would undermine 
the ability of health benefit carriers to contain costs. Any 
additional benefit mandates serve to increase the overall costs 
of the FEHB program, both to the government and the individual 
employee.
    c. Hearings.--A hearing entitled, ``FEHB Program Review and 
Oversight'' was held on September 5, 1996.
    The first panel was dedicated to examining the controversy 
involving the prescription drug benefit for FEHB Blue Cross and 
Blue Shield enrollees who also have Medicare. The panel 
consisted of GAO, Blue Cross and Blue Shield Association, 
Merck-Medco, and the National Association of Chain Drug Stores 
and the National Association of Retail Druggists.
    GAO testified that BCBS made the benefit change to try to 
control an average annual 21-percent increase in its Federal 
health plan's drug costs. In early 1996, the volume of 
prescription the mail order pharmacy received was much greater 
and occurred more quickly than anticipated. As a result, Medco 
could not meet its customer-service performance measure for 
prompt dispensing and delivery of prescriptions to enrollees 
for several weeks during the benefit change's implementation. 
NACDS and other critics of the benefit change are concerned 
about its economic impact on retail pharmacies.
    The second panel consisted of advocates for mandating that 
health insurance carriers provide coverage for certain benefits 
or that they provide direct reimbursement for certain health 
care providers. The American Academy of Audiology, the 
International Hearing Society, and the American Academy of 
Otolaryngology--Head and Neck Surgery, commented on legislation 
introduced by Representative Ben Gilman (R-NY) to mandate that 
audiologists be given reimbursement by FEHB carriers. The 
audiologists support the legislation, while both the Hearing 
Society and the Otolaryngologists were strenuously opposed. A 
professor from Florida International University testified on 
behalf of legislation that would add medical foods as an item 
for which coverage may be provided. The American Association of 
Pastoral Counselors testified regarding the possible direct 
reimbursement of their members by carriers. The issue of mental 
health parity was discussed by the American Psychiatric 
Association. The National Acupuncture Foundation testified on 
legislation proposing to mandate coverage of qualified 
acupuncture services.
    An OPM official testified for the Clinton administration 
that the FEHB program is flexible enough to address coverage 
for those services and supplies and that mandating them ``is 
contrary to the program's guiding philosophy of allowing 
flexibility for plans to respond to changing health care 
practices and individual enrollee needs.'' Regarding the 
prescription drug issue, OPM said that high percentages of 
enrollees in fee-for-service plans are satisfied with the mail-
order drug program.

24. Taxpayer Subsidy of Federal Unions.

    a. Summary.--According to OPM data, as of September 1995, 
approximately 54 percent of the Federal workforce was 
unionized, encompassing some 1,0157,017 employees. Although 
most Federal employees are ostensibly represented by a union, 
it is widely acknowledged that union membership among Federal 
employees is quite low. Data from 1994 show that 19.3 percent 
of Federal employees belong to a union. (Hirsch and McPherson, 
Union Membership and Earnings Data Book 1994.)
    The subcommittee has been investigating the extent to which 
taxpayers are forced to subsidize the activities of Federal 
employee unions. Federal employee unions receive substantial 
taxpayer subsidies. These come in the form of ``official 
time,'' i.e., time on the payroll, for performing union 
representational work and even lobbying Congress and the 
executive branch. In addition, unions benefit from taxpayer 
funds in other ways as well. Agencies often furnish the unions 
that represent their employees with office space, office 
equipment, meeting rooms, and the use of such agency facilities 
as e-mail and other communication tools.
    In addition, the Clinton administration has decided as a 
matter of policy to release the home addresses of employees in 
bargaining units to the unions representing those units. This 
has been a long-sought goal of Federal employee unions. 
Although ostensibly sought for the purposes of assisting 
unions' in discharging their duties as exclusive 
representatives, possession of these home addresses provides 
unions with invaluable mailing lists they can use for 
organizing and political activity.
    b. Benefits.--The subcommittee's investigation has revealed 
that substantial sums of taxpayer moneys are consumed to 
finance the activities of Federal unions. However, further 
investigation is necessary to adequately quantify the amount of 
the subsidy Federal unions receive from taxpayers.
    c. Hearings.--A hearing entitled ``Taxpayer Subsidies of 
Federal Unions'' was held on September 11, 1996
    In connection with its investigation, the subcommittee held 
a hearing and has requested a GAO study of the use of official 
time.
    The first panel at the hearing consisted of Sally Katzen, 
Administrator of the Office of Information and Regulatory 
Affairs of OMB, and Hon. Lorraine Green, Deputy Director of 
OPM. These witnesses focused primarily on the administration's 
decision to release home addresses to Federal unions. Both 
witnesses contended the decision to release home addresses was 
made after President Clinton shut much of the Government down 
as a result of his disagreement with congressional budget 
proposals and was justified by the ``confusion'' those 
shutdowns engendered among Government employees. However, they 
also conceded that OMB began examining options for complying 
with union requests for these addresses, at the request of Vice 
President Gore months before the first shutdown. They also 
conceded that despite these months of planning, there were no 
written safeguards to protect employees from further invasions 
of their privacy as a result of secondary disclosures.
    The second panel consisted of Timothy Bowling of the 
General Accounting Office (GAO), Michael P. Dolan, Deputy 
Commissioner of the Internal Revenue Service (IRS), and Robert 
Tobias, national president of the National Treasury Employees 
Union. Based upon GAO's analysis of the use of official time at 
the Social Security Administration and three other entities 
(the Postal Service, Department of Veterans Affairs, the IRS), 
Mr. Bowling testified there is insufficient data to estimate 
the amount or cost of official time government wide. He 
testified that these agencies either had no system for 
accounting for the use of official time or their systems had 
substantial limitations. Nevertheless, it is clear that these 
expenditures are substantial. GAO estimated that in calendar 
year 1995, the Social Security Administration alone spent about 
$11.4 million on an estimated 413,000 hours of official time. 
Both Deputy Commissioner Dolan and Mr. Tobias generally 
testified that the use of official time contributes to 
efficiency in the workplace and effective union-management 
relations. In addition, Deputy Commissioner Dolan also 
testified that the IRS has been required by the Federal Labor 
Relations Authority to release home addresses to the union 
since September 1995.

25. Review of Federal Firefighters Pay and Benefits.

    a. Summary.--The Federal Government employs approximately 
10,000 Federal structural firefighters. Structural firefighters 
fight fires in buildings, on airfields, and 94 percent are 
employed by the Department of Defense. Structural firefighters 
are also employed by the Veterans Administration, Coast Guard, 
Department of Interior, National Institutes of Health, and 
National Aeronautics and Space Administration. Wildland 
firefighters fight grass and forest fires and are employed by 
the Department of Interior and the Department of Agriculture. 
The subcommittee's investigation examined only the compensation 
package for Federal structural firefighters.
    The agency head establishes the work schedule or regular 
tour of duty for firefighters. The most common work schedule or 
tours of duty for these firefighters are 40 hours, 56 hours, 
and 72 hours per week. For the most part the 40 and 56 hour 
tours of duty are for supervisory positions. Generally, 8 hours 
of actual work, 8 hours of standby duty, and 8 hours of sleep 
time comprise each 24 hours of the 72-hour work schedule. Three 
shifts are worked on a weekly basis for a total of 72 hours. 
Six shifts are worked on a biweekly basis for a total of 144 
hours.
    Pay for firefighters consists of base General Schedule pay, 
including locality-based comparability payments, premium pay 
for standby duty, and the Fair Labor Standards Act (FLSA) 
overtime. Standby duty premium pay is in lieu of Title 5 
overtime pay for regularly scheduled overtime. The regular tour 
of duty determines the amount of standby duty premium pay a 
firefighter receives. Firefighters who work a 72-hour tour of 
duty receive 25 percent standby duty premium pay. Firefighters 
on these shifts receive 125 percent of base pay not to exceed 
125 percent of GS-10, step 1. Firefighters who work a 56-hour 
tour of duty receive 15 percent premium pay for standby duty. 
Firefighters on these shifts receive 115 percent of base pay 
not to exceed 115 percent of GS-10, step 1. Firefighters who 
work a 40-hour tour of duty do not receive this premium pay.
    Firefighters on a 72-hour tour of duty receive an 
additional pay adjustment for 19 hours of ``overtime.'' The 
``overtime'' rate is computed according to the formula:

                                                                                                                                                        
                                                                                                                                                        
                                                                           (basic pay + 25% premium)                                                    
                                          Overtime Rate =  ---------------------------------------------------------  x 0.5                             
                                                                                    72 hours                                                            
                                                                                                                                                        

    Firefighters on a 56-hour tour of duty receive a pay 
adjustment for three hours of ``overtime.'' The ``overtime'' 
rate is calculated as follows:

                                                                                                                                                        
                                                                                                                                                        
                                                                           (basic pay + 25% premium)                                                    
                                          Overtime Rate =  ---------------------------------------------------------  x 0.5                             
                                                                                    56 hours                                                            
                                                                                                                                                        

    For overtime hours beyond the regular work schedule (72 or 
56), the ``overtime'' rate is computed as follows:

                                                                                                                                                        
                                                                                                                                                        
                                                                           (basic pay + 25% premium)                                                    
                                          Overtime Rate =  ---------------------------------------------------------  x 1.5                             
                                                                                (72 or 56 hours)                                                        
                                                                                                                                                        

Overtime rates are capped at GS-10, step 1.
    Nearly 80 percent of firefighters are in grades GS-5 
through GS-7 of the General Schedule. A fire chief's grade may 
range from GS-7 through GS-13 depending on the duties and 
responsibilities of the position.
    Firefighters, like law enforcement officers, have special 
retirement provisions in the Federal retirement system. 
Firefighters may retire voluntarily at an early age with a 
special annuity computation if they are at least age 50 at the 
time of retirement and have 20 years of service. Firefighters 
are subject to mandatory separation at age 55. Firefighters pay 
an extra one-half percent of salary into the retirement system 
and in return they receive a higher accrual rate than other 
employees of the executive branch. The ``normal cost'' of 
retirement is the cost of the retirement benefit expressed as a 
percentage of payroll. The ``normal cost'' is 40 percent for 
firefighters, compared to the average 25.14 percent for all 
employees of the Federal Government enrolled in the Civil 
Service Retirement System (CSRS). The ``normal cost'' for 
firefighters enrolled in the Federal Employees Retirement 
System (FERS) is 25.6 percent, as opposed to the average 12.3 
percent for all employees in FERS.
    Under current law, DOD is prohibited from contracting out 
the Federal firefighter function. Funds appropriated to the 
Department of Defense may not be obligated or expended for the 
purpose of entering into a contract for the performance of 
firefighting or security guard functions at any military 
installation or facility.
    Federal structural firefighters and their unions have been 
critical of the firefighter pay system for more than 20 years. 
Legislation has been introduced to reform the pay system for 
firefighters since the 86th Congress in 1959. While three 
hearings were held on the issue over the years, only in 1978 
did any legislation move through the House and Senate. In 1978, 
President Jimmy Carter vetoed legislation to ``substantially 
reduce the workweek of Federal firefighters while maintaining 
their pay at nearly the present rate.'' In his veto measure, 
President Carter outlined three principal objections to the 
bill. First, the bill would reduce firefighters' workweek 
without reducing the premium pay which was designed for a 
longer standby schedule.
    Second, the bill would impair the ability of agency heads 
to manage the work force and regulate the workweek. Third, the 
bill would require DOD alone to hire 4,600 additional 
employees, at an annual cost of $46.7 million just to maintain 
existing fire protection.
    In the 104th Congress one proposal was introduced in the 
House of Representatives to amend the pay system for Federal 
structural firefighters. Representative Steny Hoyer (D-MD) 
introduced H.R. 858, the Firefighters Pay Fairness Act of 1995.
    The bill would pay firefighters the full General Schedule 
hourly rate for all non-overtime duty hours, including standby 
and sleep time. In addition, the FLSA overtime rate would be 
1\1/2\ times the hourly rate of basic pay.
    Under the bill firefighters annual base pay would be 
calculated on up to 106 hours of work biweekly and overtime 
would be paid at the rate of 1.5 times the hourly rate of pay 
for hours above 106. The bill would cap the overtime at the GS-
10, step 1 hourly rate. The new hourly and overtime rates of 
pay would be phased in.
    A draft document from the Department of Defense indicated 
that the legislation would provide a minimum of 44 percent pay 
increase for a firefighter working a 72-hour schedule. The 
Congressional Budget Office prepared a preliminary cost 
estimate and projected that the bill would cost more than $61 
million in the first year, and more than $723 million over 5 
years.
    b. Benefits.--The investigation revealed that the current 
pay system for Federal firefighters is complex and somewhat 
confusing. Nevertheless, it attempts to compensate for some of 
the demands and hardships of the occupation. It is fair to say 
that complex systems sometimes produce inequities. An 
examination of pay for Federal and municipal firefighters shows 
that in certain localities total compensation for Federal 
firefighters may be higher than their municipal counterparts. 
Employing agencies have refuted the claim that a recruitment 
and retention problem for Federal firefighters exists. It may 
be necessary to simplify the pay structure, while 
simultaneously addressing concerns over the current 72-hour 
tour of duty, of Federal firefighters. Enactment of H.R. 858 is 
opposed by the government's central personnel agency OPM, and 
the individual agencies employing firefighters. The bill is 
prohibitively expensive and may have a number of unintended 
consequences. The investigation found a legitimate need for pay 
simplification. However, justification for an across-the-board 
pay increase, similar to that contained in H.R. 858, does not 
exist. The subcommittee chairman has asked OPM and DOD, in 
cooperation with the unions representing Federal firefighters, 
to present a thoughtful, cost effective, comprehensive pay 
simplification proposal.
    c. Hearings.--A hearing entitled, ``Firefighter Pay and 
Benefits'' was held on September 17, 1996.
    The first panel consisted of two officials of the 
International Association of Fire Fighters; one from the 
National office and one from a local in San Francisco. 
Representatives from the OPM and the DOD made up the second 
panel. The hearing revealed disagreement between the National 
office of the IAFF and the OPM and DOD with regard to the pay 
gap between Federal firefighters and other Federal employees 
and the recruitment and retention issue. Brook Beesley, 
representative of IAFF's Local F-15 and F-259, said that the 
entry level pay gap for Federal firefighters in Northern 
California measured 67 percent in 1995.
    The IAFF National office testified that ``the pay rate of 
other Federal workers currently is 44 percent higher than the 
pay of a Federal firefighter at the exact same grade and 
step.'' The IAFF testified that ``. . . municipal fire fighters 
earn an astounding 86 percent more per hour than their Federal 
counterparts.'' Regarding recruitment and retention the IAFF 
testified that ``Turnover rates have been as high as 33 percent 
in recent years, with agencies finding it nearly impossible to 
retain entry-level firefighters. Reliable data show that the 
Federal fire service has a turnover rate twelve times higher 
than the industry norm.'' At the request of the subcommittee 
the Congressional Research Service examined the testimony 
presented at the hearing to resolve several inconsistent 
statistics cited by witnesses. The IAFF National office did not 
respond to the CRS request for documentation of its 
calculations. Data presented by CRS and hearing witnesses 
refuted the turnover claims and the claims of significant 
underpayment of Federal firefighters.

26. Drug Testing Policies in the White House.

    a. Summary.--In 1986, President Ronald Reagan issued 
Executive Order 12564 directing Federal agencies to institute 
drug free workplace policies. Congress enacted legislation that 
slowed the implementation of this Executive order in the course 
of providing a statutory foundation for these drug free 
workplace programs in all Federal agencies. All Federal 
employees are subject to pre-employment screening for use of 
illegal drugs, and employees in national security, safety-
related, or otherwise sensitive positions (commonly called 
``testing-designated positions'' or TDPs) are also subject to 
periodic random drug testing programs administered by their 
agencies. Nearly 40 percent of the Federal workforce is 
included in such TDPs.
    In spite of the White House's reassurances that it treated 
national security concerns related to the use of illegal drugs 
seriously, the General Accounting Office had reported extensive 
delays in the submission of the forms needed to initiate 
background investigations of new employees at the start of the 
Clinton administration. Previous Senate hearings, as well as 
hearings and Government Reform and Oversight Committee 
depositions related to the firing of White House Travel Office 
personnel had revealed not only that the White House operated a 
``special drug testing'' program for employees whom the Secret 
Service considered potential threats to the President, the Vice 
President, and the White House complex, but that the White 
House's Director of Personnel Security was one of the employees 
who had admitted previous use of illegal drugs during his own 
background investigation. The placement of a person with a 
history of previous drug use in such a sensitive position 
occasioned concern about the adequacy of the White House's drug 
free workplace program.
    b. Benefits.--This investigation provided an opportunity to 
assess whether the institution of a ``special testing'' program 
for the Executive Office of the President resulted in any 
compromise of the personnel or physical security of the White 
House, and allowed the subcommittee to assess the adequacy of 
current testing standards and monitoring procedures. It also 
enabled a comparison between the hiring and testing practices 
of key agencies--the Department of Defense, the Secret Service, 
and the Federal Bureau of Investigation--and the looser 
procedures in place at the White House.
    c. Hearings.--A hearing entitled, ``Drug Testing Policy: 
White House Standards,'' was conducted on September 20, 1996.
    Subcommittee Chairman Mica convened the hearing to reassure 
the American people that abuses identified in previous hearings 
did not compromise our country's national security interests, 
to confirm that the White House has instituted effective 
corrective measures, and to assess whether legislation might be 
necessary to correct any of these problems. Mr. Mica noted that 
the reports of illegal drug use by White House employees 
included recent use, and more serious hallucinogens than would 
be included in the experimental use of marijuana during college 
years. In a letter to Senator Richard Shelby, former White 
House Director of Administration Patsy Thomasson acknowledged 
that as many as 21 White House employees had participated in 
the ``special testing program.'' Mr. Mica denounced the Clinton 
administration's partisan efforts to divert attention from 
these concerns, and expressed his hope that the White House 
would assist efforts to resolve these concerns.
    Mr. Kanjorski reported that two White House employees had 
tested positive in random drug tests, and that both were career 
employees who were terminated as a result of these tests. He 
asserted that White House personnel during the Clinton 
administration have remained drug free, and he saw no reason to 
believe that this would change.
    Mr. Burton noted that much of the American people's concern 
on this topic is derived from the example established by the 
White House. The President's flippant perspective on his ``I 
didn't inhale'' remarks and the loose handling of FBI 
background checks for senior employees caused legitimate 
concern that this administration was setting a poor example 
that was resulting in a more relaxed approach to matters of 
serious concern.
    Mr. Nelson reported that the Security Policy Board was 
working under the National Security Council and the Department 
of Defense to implement President Clinton's Executive Order 
12968, which had directed the development of common 
adjudication guidelines for determining eligibility for access 
to classified information. These new guidelines were not 
completed, but would be submitted after approval.
    Ms. Vezeris testified that the Secret Service maintains 
strict standards for the selection of applicants for employment 
and for ensuring that employees continue drug free during their 
careers. The Service can continue employees who come forward 
voluntarily and work through an employee assistance program to 
resolve drug use problems, but even in such cases, there is no 
bar against disciplinary procedures, up to the level of 
dismissal. She emphasized under questioning that the Service 
can be very selective because they have thousands of applicants 
for relatively few positions.
    Mr. Reeder described the White House's drug free workplace 
program, and claimed that it had been the subject of regular 
reports to the Congress. He noted that all White House 
employees must pass pre-employment drug tests, that they are in 
TDPs throughout their employment, and that no administration 
employee has tested positive. Records of these tests are now 
maintained by career employees of the Office of 
Administration's Human Resource Division. He claimed that the 
White House has never overruled the Secret Service on questions 
of issuing a White House pass to an employee. He acknowledged 
that 11 individuals began in the ``special testing program'' in 
the spring of 1994. Under the terms of this program, these 
employees are subject to random testing at least twice per 
year, and can be included in other tests as well. Twenty-one 
employees out of more than 3,000 have been involved in the 
``special testing program'' during the administration, at a 
cost of $1,500. Current enrollment in the program is eight. Mr. 
Reeder, in response to questions, reported that the 
modification of security policy under consideration in the 
administration would restrict access to classified information 
among employees who hold the blue White House passes. These 
employees had previously been deemed eligible for access to all 
classified information. In response to questions from Chairman 
Clinger, Mr. Reeder acknowledged that employees could be in the 
White House for up to 180 days without having a background 
investigation completed. Similarly, contractors and 
consultants, who serve the White House but remain on private 
payrolls, are not subject to either the drug testing or the 
background investigation requirements that affect full-time 
employees. Mr. Reeder reaffirmed that the White House supports 
language in the Presidential and Executive Office 
Accountability Act that would clarify the status of special 
government employees. Chairman Clinger emphasized that the 
``special testing program'' was developed to address drug use 
that applicants admitted having occurred in the past 1 to 2 
years, not experimental use during college. He stressed the 
importance of resolving these concerns and implementing 
effective policies in these areas.

27. Effects of Privatizing OPM Investigations.

    a. Summary.--In April 1996, the Office of Personnel 
Management signed a sole source contract with U.S. 
Investigations Services, Inc., (USIS) that authorized the new 
company to conduct background investigations for Federal 
employees. USIS was incorporated in Butler County, PA, as an 
employee-owned corporation whose primary stockholders were to 
be the personnel who had performed these functions as Federal 
employees in OPM's Office of Federal Investigations. The 
concept of privatizing Federal functions by coverting them to 
employee ownership had been advanced by then-OPM Director 
Constance Horner in 1987. Current OPM Director James B. King 
embraced the concept when the President proposed to privatize 
this function as part of the National Performance Review 
initiatives recommended in his FY-1995 budget. The subcommittee 
conducted oversight hearings of this proposal in June 1995, and 
learned that the administration had not developed an adequate 
cost analysis of the proposal. The General Accounting Office 
conducted intensive review of the proposal, and had issued 
letter reports raising questions about the financial plan of 
the new corporation, the adequacy of its protections for 
records subject to the Privacy Act, and whether the privatized 
employees would have effective access to the Federal, State, 
and local law enforcement records needed to complete these 
investigations.
    b. Benefits.--This oversight was conducted in Butler, PA, 
which serves as the corporate headquarters for USIS and is the 
site of the OPM records management center. It provided an 
opportunity for the community most directly affected by this 
transition to learn the plans of both OPM and USIS for 
continued operation and development of new business 
opportunities. This development would provide substantial 
benefits to the community, where the firm is one of the largest 
employers in the northern section of Butler County.
    c. Hearings.--The subcommittee conducted a field hearing, 
``OPM Privatization: Community Impact,'' in Butler, PA, on 
October 17, 1996.
    Mr. King described the sequence of events leading to OPM's 
Office of Federal Investigations receiving RIF notices in early 
May, and all of the employees received employment offers from 
USIS the next day. On July 5, the employees were separated from 
OPM, and 94 percent of them accepted the offers to begin work 
with USIS on Monday, July 8. Rather than ease this transition, 
some facilities operated by the Department of Energy had 
revoked the security clearances of employees who were separated 
from OPM. OPM Director King and USIS CEO Harper testified that 
these transition problems were close to resolution. 
Subcommittee Chairman Mica noted that this transition could 
have been smoothed through more effective planning, and 
indicated that the GAO monitoring would continue. Mr. Harper 
indicated that the company had begun operations with some 
success, and already had hired 27 employees in addition to 
those inherited from OPM. In response to a petition from the 
American Federation of Government Employees, USIS held an 
election that allowed the employees to decide whether they 
would be represented for collective bargaining purposes. With 
94 percent of the employee-owners voting, USIS employees 
rejected the union, 65 percent to 35 percent.

                   DISTRICT OF COLUMBIA SUBCOMMITTEE

1. Closing of Pennsylvania Avenue.

    a. Summary.--The purpose of this subcommittee investigation 
is to explore issues concerning the closure of Pennsylvania 
Avenue. Called ``America's Main Street'', it is a major artery 
connecting the Capitol Building and the White House, as well as 
a major east-west connector for the city, and is part of the 
original L'Enfant Plan for the District of Columbia. Any 
closing of this historic street, whether temporary or 
permanent, has enormous impact on the orderly flow of city 
traffic. Existing law gives both the DC government and Congress 
key roles in local street closings.
    Subcommittee Chairman Davis convened a hearing on June 30, 
1995, to gather information on the legal authority necessary to 
make permanent changes to city streets in the District, and to 
assess the consequences of taking such actions including lost 
revenue, and disrupted traffic patterns. The need for 
Presidential security was not questioned.
    The subcommittee heard testimony from officials of the 
Washington municipal government including the Office of the 
City Administrator, the Departments of Public Works and Housing 
and Urban Affairs as well as the DC Council. The Municipal 
testimony stressed the loss of revenue from parking meters, and 
the dislocation caused by disrupted traffic patterns, as well 
as the cost of rerouting the transit system. The problem of 
jurisdiction between the Municipal and Federal law enforcement 
branches was discussed at length, and the matter of 
reimbursement of the city by the Federal Government.
    The Department of the Treasury was asked to present written 
testimony to be included in the record. Following the hearing, 
subcommittee Chairman Davis again wrote Secretary Rubin, 
seeking additional information and clarification of points made 
in the original written testimony. Information was also 
requested from the Federal Bureau of Investigation regarding 
the parking ban in effect around the perimeter of their 
building.
    The subcommittee also reviewed the Vulnerability Assessment 
of Federal Facilities report dated June 28, 1995, prepared by 
the U.S. Marshal Service of the Department of Justice in direct 
response to the April 19, 1995, bombing in Oklahoma City.
    Subcommittee Chairman Davis convened a second hearing on 
June 7, 1996, to ascertain what effects the closing of 
Pennsylvania Avenue was having upon the District, businesses, 
visitors, and tourists a year after the initial closing. 
Testimony was taken from municipal officials, civic and 
business representatives, the U.S. Department of the Treasury, 
and the United States Secret Service.
    b. Benefits.--This investigation furnished critical 
information to the Congress necessary to the formation of 
public policy regarding both government and commercial 
establishments in the effected area. The investigation, 
including the hearings, correspondence and several meetings 
with Treasury and Transportation officials, heightened the 
administration's awareness of the impact the closure of 
Pennsylvania Avenue has imposed on the District of Columbia and 
increased its willingness to address those impacts. As a result 
of the subcommittee investigation, the Federal Highway 
Administration has contracted for a ``Transportation Needs 
Assessment'' for the District of Columbia. Such a comprehensive 
review of the District's transportation systems has not been 
conducted in 30 years and is currently beyond the means of the 
District to perform for itself. It is expected that the report 
will provide useful information to the District, the Financial 
Responsibility and Management Assistance Authority (control 
board), FHA, the Washington Metropolitan Area Transit Authority 
(Metro), and the Metropolitan Transportation Planning 
Organization in their important work in transportation and 
environmental planning.
    c. Hearings.--On June 30, 1995, the subcommittee held an 
informational hearing on the closing of Pennsylvania Avenue. 
The hearing followed an order signed by Treasury Secretary 
Robert E. Rubin on May 19, 1995, prohibiting vehicular traffic 
on portions of Pennsylvania Avenue and certain other streets 
adjacent to the White House. Secretary Rubin delegated to the 
Director of the United States Secret Service ``all necessary 
authority to carry out such street closings.'' Those testifying 
at the June 30, 1995 hearing were, Michael C. Rogers, D.C. city 
administrator; deputy mayor for operations Larry King, director 
of Public Works; Hon. Frank Smith, chairman, Committee on 
Housing and Urban Affairs, D.C. City Council; Hon. David A. 
Clarke, chairman of the Council of D.C.; Gregory W. Fazakerley, 
president, D.S. Building Industry Association; Dr. Henry L. 
Fernandez, chairman, Advisory Neighborhood Commission 2B; 
Millard Seay, director of planning, Washington Metro Area 
Transit Authority; Margaret O. Jeffers, Esq., executive vice 
president, Apartment and Office Building Association of 
Metropolitan Washington; and Ken Hoeffer, executive director, 
Washington, DC Area Trucking Association.
    On June 7, 1996, the Subcommittee on the District of 
Columbia held a second hearing to ascertain what impact the 
closing of Pennsylvania Avenue has had on District residents, 
commuters, visitors, and the greater Washington Metropolitan 
area in general and administration actions or plans to deal 
with those impacts. The following witnesses testified: Senator 
Rod Gramms; Representative Jim Moran; James Johnson, Assistant 
Secretary for Enforcement, U.S. Department of the Treasury; 
Eljay Bowron, Director of the United States Secret Service; 
John Strauchs, CEO, SYSTECH Group, Inc.; Mayor Marion Barry; 
Larry King, director, DC Department of Public Works; Michael 
Rogers, DC city administrator; Rodney Slater, Administrator, 
Federal Highway Administration; William Lawson, Assistant 
Regional Administrator, General Services Administration; Dennis 
Galvin, Associate Director for Professional Services, National 
Park Service; Timothy Coughlin, president, Riggs National 
Corp.; Robert S. Krebs, vice president, Regional Affairs, 
Greater Washington Board of Trade; Tom Wilbur, president, DC 
Building Industry Association; Lon Anderson, staff director, 
AAA Potomac; Christopher Reutershan, District of Columbia 
Chamber of Commerce; Emily Vetter, president, Hotel Association 
of Washington, DC; William Lecos, president, Restaurant 
Association of Metropolitan Washington, and Jon P. Grove, 
executive vice president, American Society of Association 
Executives.

2. Traffic Disruptions.

    a. Summary.--The subcommittee held an oversight hearing 
into recent traffic disruptions in the District of Columbia 
organized by a local labor organization. The group, ``Justice 
for Janitors'' is organized and supported by the Service 
Industry Employees Union (SIEU). A concerted effort has been 
undertaken to pressure private companies to increase wages and 
benfits for service personnel through public demonstrations. 
The group repeatedly deliberately blocked major traffic 
arteries in the Nation's Capitol and caused massive traffic 
disruptions affecting both the public and private sectors. The 
subcommittee sought information into the consequences of the 
traffic disruption to area business, commuters, and police 
procedure.
    An incident on September 20, 1995, generated the hearing, 
in which morning commuter traffic was brought to a standstill 
on Interstate 66, Routes 50 and 110, the Theodore Roosevelt 
Memorial Bridge, and the George Washington Memorial Parkway. An 
estimated 100,000 motorists were affected. As part of the 
disruption, a bus was pulled across the Roosevelt Bridge and 
abandoned. Each of the 34 persons arrested was fined $50. 
According to news reports, the traffic disruption ``impeded an 
ambulance on call'' and caused ``neighboring small businesses 
untold losses of normal revenue.''
    Testimony at the hearing revealed the problems such 
demonstrations cause the law enforcement officers, and traffic 
management personnel. Additional testimony was heard that 
outlined the difficulties generated by the traffic disruption 
including a rise in the number of auto accidents. The impact on 
area businesses and medical facilities was discussed at length.
    Following a subsequent disruption on December 4, 1995, 
which created a huge traffic jam in Northwest Washington in the 
area of the DC Financial Control Board offices, the 
subcommittee is reviewing legislative options to prevent and 
control future non-permitted demonstrations.
    b. Benefits.--The investigation provided information 
critical to drafting legislation to discourage reoccurrence of 
deliberate traffic interruptions in Washington, DC. The refusal 
of the union instigating these disruptions to testify or 
attempt to justify such behavior strongly indicates that the 
objective of these incidents was publicity and maximum public 
disruption in an attempt to gain an advantage over private 
employers in labor negotiations. The subcommittee was able to 
encourage various law enforcement agencies to cooperate and 
plan for joint action to minimize the extent of any future 
demonstrations of this type. It should be noted that no more 
incidents of this nature have occurred since December 1995.
    c. Hearings.--The subcommittee held an oversight hearing on 
October 6, 1995, concerning the recent traffic disruptions in 
the District of Columbia organized by a local labor 
organization.

3. District of Columbia Economic Recovery Act.

    a. Summary.--In the past 2 years, individuals have 
suggested ways to help the District of Columbia improve its 
financial status and grow its economy. Most of the proposals 
that were brought contained various forms of tax reductions and 
incentives. District Delegate Eleanor Holmes Norton introduced 
H.R. 3244 to amend the DC Federal tax code to achieve some of 
these objectives. The bill was referred the Committee on Ways 
and Means. Due to the attention the District of Columbia's 
financial condition has generated and the widening national 
debate on the concept of the ``flat tax'' and other proposals, 
subcommittee Chairman Davis convened a hearing on July 31, 1996 
to obtain various points of view on the concepts the bill 
sought to address. Joining the subcommittee in ex officio 
capacity for the hearing were, Committee Chairman Clinger, 
Representatives Morella, Moran, and Wynn.
    b. Benefits.--This investigation furnished the 
subcommittee, Congress, and interested citizens with 
information that will assist them in considering tax and other 
remedies that have thus far been advanced. Witnesses presented 
statistical evidence in support of the plan and also indicating 
that it would have little immediate impact on the District of 
Columbia government or its performance. The hearing will give 
Congress and other interested parties significant data on the 
benefits and incentives of such tax reduction on individuals 
and whether such benefits by themselves could overcome concerns 
about safety, poor schools, and poor government services which 
are causing so many people to leave the city.
    c. Hearings.--On July 31, 1996, the subcommittee held an 
informational hearing on H.R. 3244. The following witnesses 
testified: Jack Kemp, co-director, Empower America; Senator 
Joseph I. Lieberman; Speaker Newt Gingrich; Wade Henderson, 
executive director, Leadership Conference on Civil Right; James 
Prost, Basile Baumann Prost and Associates; Martin A. Sullivan, 
tax analyst; Edwin Kee, George Washington University; Steven 
Fuller, George Mason University; Thomas B. Ripy, Congressional 
Research Service; Kenneth J. Kies, chief of staff, Joint 
Committe on Taxation; James R. Atwood, Covington and Burling; 
Diane Duff, Greater Washington Board of Trade; H. Hollister 
Cantur, Fairfax County Chamber of Commerce; Kwasi Holman, 
executive vice president, DC Chamber of Commerce; and Timothy 
C. Coughlin, president, Riggs National Corp.

4. Public Law 104-8, District of Columbia Financial Responsibility and 
        Management Assistance Authority Act of 1995.

    a. Summary.--The subcommittee held two oversight hearings 
on the implementation of the legislation that established the 
District of Columbia Financial Responsibility and Management 
Assistance Authority (the control board). At the first hearing, 
subcommittee Chairman Davis stressed the importance of the act 
and called upon the parties working under it to state their 
understanding of their respective roles and to give their view 
on the state of the city's financial condition. At the second 
hearing, subcommittee Chairman Davis reiterated the importance 
of the positions of Chief Financial Officer and Inspector 
General as essential parts of the District's government. He 
also reviewed their relationship with the control board. The 
rest of the hearing was devoted to the findings of an 
independent audit by KPMG Peat-Marwick of deficiencies and lack 
of controls in the District with regard to vender payments and 
information gathering and dissemination. In addition to holding 
public hearings on the implementation of Public Law 104-8, the 
subcommittee exercised its powers of oversight of the statute 
and the District of Columbia Financial Responsibility and 
Management Assistance Authority (control board) it created in 
several ways.
    b. Benefits.--To assist the subcommittee to fulfill its 
oversight responsibilities and to bring essential information 
before Congress and the public, the subcommittee has initiated 
monthly meetings and briefings between staff of the control 
board and various congressional committees and subcommittees. 
It established ongoing lines of communications with the Chief 
Financial Officer and Inspector General, posts established by 
the statute. It consulted with control board members and staff 
about legislation affecting the District, such as H.R. 3663, 
the District of Columbia Water and Sewer Authority Act of 1996 
and other measures Congress considered. Subcommittee Chairman 
Davis, Ranking Member Norton, and subcommittee staff met 
periodically with control board Chairman Brimmer and staff to 
ascertain the board's needs, assess its progress in meeting 
them, and to assure that the parameters under which the board 
operates conform to the letter and spirit of Public Law 104-
108. It will continue in these endeavors throughout the life of 
the control board, as specified in the statute.
    The benefits of Public Law 104-8 continue to mount as the 
control board moves aggressively to improve the performance of 
the District government, control its spending, and to improve 
revenue collection. The Chief Financial Officer, created by the 
legislation, has reformed the operation and personnel of the 
entire financial cluster in the District and has implemented 
firm control over financial management throughout the 
government. The Inspector General, which was substantially 
enhanced by the legislation, has initiated a number of 
management audits and performance improvements as well 
investigations of potential fraud, corruption, and waste.
    The control board has disbanded the Lottery Board and 
placed operation of the Lottery under the CFO. It has also 
removed the Superintendent of the DC school system, replacing 
him with a temporary Chief Executive Officer and has created a 
Board of Trustees with most of the powers of the Board of 
Education to revive and reform the entire operation of the DC 
public schools.
    Major financial reform has already taken place in the 
District government with longer term improvements still being 
worked on. The District was able to sell bonds on the private 
market in October 1996 at an acceptable interest rate without 
credit enhancements or other security instruments.
    The benefits to Congress of better information on the 
District of Columbia and its government cannot be 
overemphasized because of its impact on appropriation 
decisions. More and better information is critical to 
Congressional efforts to improve and reform the District 
government. In addition, placing an autonomous agency between 
Congress and the District government has greatly benefited the 
residents of the District and its government by providing much 
more direct and immediate assistance than would be possible for 
Congress as a body to provide while maintaining the home rule 
government of the Nation's capital.
    c. Hearings.--The subcommittee held hearings on March 19 
and 28, 1996. Those who testified were: Dr. Andrew Brimmer, 
chairman, District of Columbia Financial Responsibility and 
Management Assistance Authority; Stephen D. Harlan, vice 
chairman, DCFRMAA; DCFRMAA Members Dr. Joyce A. Ladner, 
Constance Berry Newman, and Edward A. Singletary, Mayor Marion 
Barry, DC City Council Chairman David Clark; Anthony Williams, 
DC Chief Financial Officer, Angela Avant, DC Inspector General; 
and John Hummel, KPMG Peat-Marwick, LLP.

    GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY SUBCOMMITTEE

1. Capital Budgeting.

    a. Summary.--Since the imposition of ever-tightening caps 
on discretionary spending in the 1990 Omnibus Budget 
Reconciliation Act, committee members have been concerned that 
long-term investments in capital have been neglected in favor 
of current consumption. Borrowing funds to invest in capital 
projects with long-term benefits is an appropriate activity, as 
the future generations that enjoy the benefits of the assets 
will also pay for them. However, the Federal Government lacks 
experience with capital budgeting concepts and techniques. 
Therefore, committee members were interested in examining the 
practices of State and local jurisdictions, as well as that of 
other nations.
    The subcommittee examined H.R. 767, the Federal Budget 
Structure Act, introduced on February 1, 1995, by Chairman 
William Clinger. Two hearings were held to review various 
proposals to implement a Federal capital budget and the manner 
in which such budgets impacted other government operations. The 
hearings examined the workings of capital budgets operated by 
Fairfax County, VA, New York, NY, Philadelphia, PA, and the 
government of New Zealand, as well as the work of scholars and 
private sector financial experts in the area of investment 
budgeting.
    b. Benefits.--Implementing a Federal capital budget will 
help rebuild the Nation's deteriorating capital stock, and will 
help improve Federal planning, investment and budgeting 
processes.
    c. Hearings.--Subcommittee Chairman Horn convened the first 
hearing on March 2, 1995, to examine the practices and 
experience of local jurisdictions in the area of capital 
budgeting. He opened the hearing by noting the importance of 
planning capital projects, and that the Federal Government has 
failed to adequately plan. Chairman Clinger noted his 
endorsement of Federal capital budgeting and that his bill, the 
Federal Budget Structure Act of 1995, H.R. 767, had been co-
sponsored by a number of committee members.
    Representative Bob Wise also mentioned that he supports the 
concept of capital budgeting and has introduced two bills on 
the issue. Representative Norman Mineta testified that 
borrowing funds to invest in capital projects with long-term 
benefits was an appropriate activity, as the future generations 
that enjoy the benefits of that asset will also pay for it. 
Representative Ray Thornton noted that Arkansas had 
successfully operated a capital budget for most of this 
century. Representative Thornton also referred to his support 
of a capital budget and his introduction of a bill to provide 
for a Federal capital budget.
    Katherine Hanley, chairwoman of the Fairfax County Board of 
Supervisors, accompanied by William J. Leidinger, county 
executive, Fairfax County, discussed Fairfax's capital budget. 
Mr. Leidinger testified that the county is prohibited from 
allowing capital costs to exceed 10 percent of total general 
fund disbursements. This is the centerpiece of the county's Ten 
Principles of Sound Financial Management, which has allowed 
Fairfax to maintain a AAA bond rating, 1 of only 33 local 
governments out of 30,000 jurisdictions to claim that honor.
    Thomas McMahon, director of Finance Division, New York City 
Council, testified on New York City's capital budget. Mr. 
McMahon noted that Federal adoption of a capital budget would 
help rebuild the Nation's deteriorating capital stock and 
testified that New York City has witnessed a decline in the 
quality and quantity of the city's capital stock.
    Ted Sheridan, the president of Sheridan Management Corp., 
and former CFO of Fairchild, testified on behalf of the 
Financial Executives Institute. Mr. Sheridan stressed that 
capital budgeting was essential to efficiently plan the Federal 
investment program. He proposed a pilot program for capital 
budgeting based on three assets: a weapons system, an 
information system, and a power generation station.
    David Chu, a fellow at the National Academy of Public 
Administration (NAPA), served on NAPA's expert panel on capital 
budgeting. Dr. Chu believes that capital budgeting has many 
strengths, including improving planning, investment and 
identifying budget expenditures for investments. Dr. Chu also 
mentioned technical problems with capital budgeting, such as 
the treatment of capital equipment, and the treatment of tax 
expenditures, government-sponsored enterprises.
    On June 29, 1995, His Excellency John Wood, Ambassador of 
New Zealand, described how government agencies in New Zealand 
changed their accounting, budgeting, and management systems 
beginning in 1984. These changes affected (1) the way 
department heads were chosen; (2) the way in which agencies 
define, measure and report performance; (3) delegation of input 
control to departments or agencies; and (4) the way government 
fiscal performance is measured and reported.
    Government departments in New Zealand are assessed a charge 
for capital controlled by the department, determined by 
multiplying total capital times a market rate of interest. In 
addition, agencies may sell surplus assets and use the proceeds 
to upgrade computer systems. These features make explicit to 
agencies the cost of owning assets.
    Edward Rendell, mayor of Philadelphia, noted that capital 
budgets are common to local and State governments, are 
enforceable by a borrower's bond rating, and force long-range 
prioritization and planning for capital projects.
    Mr. Paul Posner, Director of Budget Issues, Accounting and 
Information Management Division of the U.S. General Accounting 
Office, testified that if the Federal budget were balanced, the 
long-term boost to Gross Domestic Product would mean that GDP 
would be 34 percent larger in the year 2025 than if no action 
were taken to reduce the deficit. Similarly, Mr. Posner noted 
that within the budget process, care is needed to be taken to 
improve selection of investments to improve productivity.
    Mr. Posner noted the temptation that lawmakers would face 
to classify non-capital expenditures as capital in order to get 
more favorable budget treatment for the asset. He also noted 
that the Federal Government does not own many of the capital 
assets it funds in the budget. Many are owned by States or 
local governments and funded by subsidies or grants. In 
addition, Mr. Posner noted the need to impose long-term control 
over the obligation of public funds. Finally Mr. Posner noted 
the importance of recognizing the full cost of a long-term 
obligation up front in order to impose discipline on agencies.

2. Integrity of Government Documents.

    a. Summary.--On September 30, 1994, former U.S. 
Representative Barbara Jordan, as chair of the Commission on 
Immigration Reform, released the Commission's first report to 
the Congress on the status of the Nation's immigration policy. 
The report was required by the Immigration Act of 1990, Public 
Law 101-649. The Commission cited widespread counterfeiting of 
documents that entitle people to gain public benefits or to be 
hired for work as a major factor undermining current 
immigration policy. It recommended development of a ``simpler, 
more fraud-resistant system for verifying work authorization.''
    In the President's Budget for fiscal year 1996, the 
administration proposed to reform the Nation's immigration 
process, in part through development of a nationally available 
employment verification system. In that connection, the 
subcommittee met to consider a range of views on the nature, 
the role, the need, the cost, and the potential social 
consequences of using fraud-resistant personal identification 
documents as part of a national employment verification system.
    b. Benefits.--The shortcomings with regard to the security 
of government documents identified by the hearing will assist 
the committee in advising relevant Federal agencies on the need 
to develop more secure documents to verify work eligibility and 
immigration status.
    c. Hearings.--Subcommittee Chairman Horn called the hearing 
on March 7, 1995, to examine the situation regarding the 
integrity of government documents with testimony from 
representatives from the U.S. Commission on Immigration Reform 
and the Immigration and Naturalization Service (INS).
    Subcommittee Chairman Horn opened the hearing by describing 
it as a fact-gathering effort toward fraud-proofing personal 
identification documents. Congressman Becerra, the first 
witness, cautioned all concerned to remain sensitive to the 
considerations of personal privacy, data base accuracy, and 
total public cost as major factors bearing on U.S. immigration 
policy, ``big-brotherism,'' and perceptions of discrimination.
    Mr. Robert C. Hill and Dr. Susan Martin, U.S. Commission on 
Immigration Reform, summarized the Immigration Reform 
Commission's published recommendation for electronic validation 
of the Social Security number as the fairest, fastest, most 
reliable, and most efficient way to guard against employment 
authorization fraud. They advocated starting slow and small 
with one or more alternative ``pilot programs'' prior to 
constructing a nationwide employment verification registry, and 
letting the Commission monitor preliminary results.
    Mr. James A. Puleo, Executive Associate Commissioner for 
Programs, INS, explained his agency's telephone verification 
system (TVS) for checking identities of Los Angeles area 
``green card'' holders (immigrants) applying for work. TVS 
methodology is potentially usable in a national employment 
verification system. INS data bases on non-citizen U.S. 
residents need to be purified, reconciled, and integrated in 
order to be usable in a national employment verification 
system. The agency has taken some steps toward fraud-proofing 
``green cards'' (resident alien registration cards), but the 
current re-issuance program will take a year longer than 
planned. INS is working with the Social Security Administration 
(SSA) on a multi-stage plan that would ultimately lead to a 
national employment verification registry.
    Dr. Shirley S. Chater, Commissioner, Social Security 
Administration, emphasized that Social Security cards have 
never been intended to guarantee individual personal identity. 
Nonetheless, the current counterfeit-resistant Social Security 
card has been issued to 61 percent of active card holders. SSA 
has a toll-free telephone number which employers can use to 
verify Social Security numbers (SSN's) for payroll purposes, 
but it is not used much, and it could not handle a large 
nationwide verification workload at present. The agency's 
``enumeration at birth'' program has nearly eliminated 
fraudulent SSN's for infants and children. SSA's data base, 
recently much improved, still needs more work in order to 
support employment verification nationwide.
    Mr. Richard W. Velde, former head of the Law Enforcement 
Assistance Administration (LEAA), suggested that in today's 
established electronic data base networks for exchanging health 
and vital records, criminal history, and bad motor vehicle 
driving records, we may already have a framework for the 
proposed national employment registry. In addition, 
sophisticated moderate-cost biometric identification technology 
is available to produce encoded personal documents that 
definitively establish the bearer as either the person 
described on the document or as a different person. Several 
States use such technology in issuing drivers' licenses. A 
nationwide hookup of State motor-vehicle driver registries, 
coupled with uniform issuance of biometric State drivers' 
licenses, could serve as the functional equivalent of the 
Immigration Reform Commission's employment verification 
registry.
    Mr. Frank W. Reilly, Ms. Hazel E. Edwards, and Mr. John 
Chris Martin, Accounting and Information Management Division, 
General Accounting Office, commented briefly on INS and SSA 
data bases, TVS's, and plans for a two-step process to cross-
check each other's files for discrepant information. They 
described a newly implemented statewide system for managing 
public benefits eligibility in Connecticut. The system uses 
state-of-the-art technology in providing a one-step application 
for three Federal benefit programs that links nine separate 
supporting data bases. Connecticut's experience could help in 
developing the Federal employment verification registry.
    Joseph Eaton, professor at the Graduate School of Public 
and International Affairs, University of Pittsburgh, praised 
the Immigration Reform Commission's work and summarized the 
advantages and the ready availability of biometric 
identification technology. The protection of publicly stored 
private information can be assured and enhanced by (1) feedback 
to the individual whenever a privacy-sensitive personal file is 
accessed; (2) standards for data base matching; (3) bonding and 
licensing of sensitive data bank owners and employees; and (4) 
administrative and legal remedies.
    Mr. Robert Rasor, Special Agent, United States Secret 
Service, mentioned several different kinds of identification-
document fraud that the Secret Service pursues in conjunction 
with the INS's Forensic Identification Laboratory. He described 
his agency's role of coordinating and assisting the efforts of 
State bureaus of health and vital statistics and departments of 
motor vehicles to strengthen and standardize identification 
media and documents.
    Mr. Russell Meltzer, Head of Security, Schlumberger-Malco, 
Inc., explained in concept how the credit card industry's 
authorization system could be copied and retrofitted to serve 
as a national employment registry and verification system. The 
Federal Government would function analogously to a bank, an 
employer to a retail merchant, and a job applicant to a 
consumer. Inquiry terminals at work places would not allow 
users (inquirers) to alter anything in the data bank. An 
applicant's document would take the form of a ``smart 
(computer-chip) card,'' biometrically encoded to match to the 
individual bearer. Written testimony was provided by Mr. Lamar 
Smith of Visa USA, which described how today's credit card 
industry authorization process works.

3. Federal Role in Privatization.

    a. Summary.--The Budget of the United States Government, 
the President's budget request submitted on February 6, 1995, 
contained numerous proposals for privatization of government 
functions, assets, and agencies, including the helium program, 
the National Weather Service, U.S. Enrichment Corporation, four 
of the Power Marketing Administrations, and the Naval Petroleum 
Reserve. The committee examined the history of privatization in 
other countries and levels of government to determine lessons 
to be derived from these sources.
    b. Benefits.--This hearing demonstrated the necessity for 
additional private sector capital being deployed to meet public 
needs. From wastewater treatment to airports, many publicly 
owned assets are not receiving sufficient levels of investment. 
There are investors willing to provide this capital, and the 
experience of other nations proves that such measures can 
improve economic performance while increasing investment, and 
reducing the role of the Government in the economy.
    c. Hearings.--Subcommittee Chairman Horn opened the hearing 
by noting the historical increase in the number of 
privatizations all over the world, with the exception of the 
United States. Representative Klug, who chairs the Speaker's 
task force on privatization, listed the types of Federal 
agencies and activities which his task force has identified as 
possible candidates for privatization. Roy Bernardi, mayor of 
Syracuse, NY, testified about his city's plans for 
privatization. Chief among the plans is a proposal to privatize 
the airport. However, this sale is partially blocked by Federal 
rules regarding grant repayment of assets constructed with 
Federal dollars.
    Andrew Jones, worldwide privatization coordinator at Arthur 
Andersen Consulting, testified about privatizations in other 
countries and lessons to be learned from those experiences.
    Roger Leeds, managing director of Barents PLC, testified 
about his experience directing privatization efforts abroad. 
Mr. Leeds noted that the likeliest prospects for privatization 
in the Federal Government were services (though Leeds did 
mention the power marketing administrations).
    Louis Albano, president of Civil Service Technical Guild in 
New York City, testified about the dangers of contracting out 
additional government services. Mr. Albano suggested that 
government workers could do the same job cheaper and better 
than a private contractor whose motive was profit.
    Bert Concklin, president of Professional Services Council, 
testified that the Federal Government should contract out more. 
Mr. Concklin spoke against the system of cost comparison 
whereby costs of private contractors are compared against the 
cost of performing work in-house. He also testified that such 
cost comparisons were misleading, since Federal costs usually 
do not include many overhead items.
    Ralph L. Stanley, a senior vice president with United 
Infrastructure Corp., testified on the need for private 
infrastructure finance initiatives. He proposed an 
infrastructure bank which would take several billion Federal 
dollars and leverage them with private investment.
    Ronald Correll, president and CEO of United Water 
Resources, testified about the need for private financing of 
water system improvements.
    Viggo Butler, president of Lockheed Air Terminal, testified 
about the need for relief from the Federal grant repayment 
requirement.

4. National Performance Review.

    a. Summary.--On May 2, 1995, the subcommittee convened a 
hearing to evaluate the accomplishments of the National 
Performance Review. The National Performance Review (NPR) was 
initiated by Vice President Gore in 1993 and consisted of two 
phases. The purpose of the first phase was to make government 
work better and cost less; the second phase required agencies 
to fundamentally reevaluate their missions, goals, and 
objectives.
    b. Benefits.--Ongoing review of the National Performance 
Review process will help Congress and the public assess what 
the NPR has accomplished to date, and what can be expected from 
the second phase of the NPR initiative. This effort will help 
the Federal Government determine how to better serve the 
Nation.
    c. Hearings.--Witnesses were asked to give their opinions 
on the mission and role of the NPR, whether benchmarks for 
evaluating NPR's progress existed, whether NPR as implemented 
met their expectations for improving government, and whether 
NPR could achieve its stated objectives.
    Dr. Alice Rivlin, Director, Office of Management and 
Budget, supported NPR's effectiveness in improving executive 
branch departments and agencies. She noted that Vice President 
Gore, who spearheaded Phase I, encouraged the agencies to adopt 
the 1,200 recommendations developed by NPR. In describing Phase 
II, Ms. Rivlin stated that the focus switched from ``how'' 
government operates to ``what'' it should do. She urged 
Congress to help NPR with funding.
    Charles Bowsher, Comptroller General of the United States, 
applauded the concept and aims of the NPR, but saw many 
shortcomings. Two examples he cited were failing to address 
many critical management problems in the agencies and ignoring 
nearly three-fourths of other issues GAO had identified. He 
felt that the goals should be stated more clearly, reliable 
information should be available, and that the focus should be 
on outcome-based management.
    Tony Dale, budget manager of the New Zealand Treasury, 
describes the public sector reform of New Zealand in the mid-
eighties. The corporatization, privatization, and public sector 
reforms are the very reasons that New Zealand now has constant 
economic growth, a low inflation, a shrinking percentage in 
government expenditures, and instead of a 9 percent deficit, 
the country now has a 7 percent surplus. He strongly supports 
public sector reform.
    Duncan Wyse, executive director, Oregon Benchmarking 
Project, made three points: (1) most of the Federal agenda is 
delivered by State and local governments, and improvement must 
be made by taking this into consideration; (2) the system needs 
to be reformed; and (3) Congress as well as the executive 
branch needs to be reformed.
    Dwight Ink, Institute of Public Administration, thought 
that the implementation of NPR concepts has been very 
disappointing and he hoped the situation will change in the 
future. He pointed to the hiring process, the inconsistency 
among NPR agencies, and the inability of leadership as examples 
of NPR ineffectiveness. He blames the problems of organization 
and execution in the NPR on too much restructuring without 
establishing missions and roles.
    R. Scott Fosler, National Academy of Public Administration 
agreed with the scope and purpose of the NPR. He believed the 
move from the ``how'' of government to ``what'' government does 
is a positive step; however, NPR has to address key areas if it 
wants to sustain its energy. Such key areas are accountability, 
a coherent framework, and capacity within the agencies.
    Donald Kettl, senior nonresident fellow, the Brookings 
Institution, stated that NPR had made substantial progress, and 
achieved substantial savings, but the progress of NPR is not 
self-sustaining and that there are still many unanswered 
questions.
    Herbert Jasper, McManis Associates, lauded many of the 
accomplishments of the NPR, while expressing some misgivings. 
He cited as disappointing NPR's lack of analysis, statutory 
promises that are not backed up with resources, the ``command'' 
or top-down philosophies of some recommendations, and the 
``government bashing'' that permeates NPR reports.

5. Strengthening Departmental Management.

    a. Summary.--In the past 30 years, there has been a 
multiplication in the numbers of management functions, and a 
diffusion of their responsibility among numerous centers. These 
centers of management authority include Secretary, Chief of 
Staff, Inspector General, Chief Financial Officer, Chief 
Operating Officer, and Assistant Secretary for Management. The 
number of employees in executive levels I through V totaled 249 
in 1960 and 1626 in 1992. Similarly, occupants of the Senior 
Executive Service (SES) also increased dramatically in number 
during the same period. The larger number of management and 
control personnel resulted in increased layers of management, 
who delayed implementation of management program and distorted 
information passing between levels of management.
    b. Benefits.--The hearing demonstrated the need for a 
government focus on management issues. This was part of the 
subcommittee's ongoing interest in and oversight of the 
management practices at Federal agencies.
    c. Hearings.--On May 9, 1995, the subcommittee convened a 
hearing entitled, ``Strengthening Departmental Management.'' 
Subcommittee Chairman Horn opened the hearing by noting the 
framework of general management laws which exists to coordinate 
management reform efforts. Chairman Horn described his intent 
to bring together private and public sector experience to help 
solve the problems of government management.
    Tom Glynn, the Deputy Secretary of Labor, testified about 
his experience as a Chief Operating Officer at the Department 
of Labor. Mr. Glynn described his agency's reinvention efforts, 
including reducing the steps it takes to hire a new worker from 
120 to 41 steps. Chairman Horn and Glynn exchanged comments 
concerning the diffused nature of management responsibilities 
within the current organizational structure. The Chief 
Operating Officer, the Secretary's Chief of Staff, the 
Inspector General, the Assistant Secretary for Management and 
the Chief Financial Officer each have large management 
responsibilities. The proposed chief information officer would 
diffuse management responsibilities further.
    George Munoz, Assistant Secretary for Management and Chief 
Financial Officer, Department of the Treasury, testified 
concerning his agency's recent reinvention efforts. Mr. Munoz 
described the principles which have guided Treasury's 
management improvements: customer service, strategic planning 
and streamlining. Representative Michael Flanagan and Mr. Munoz 
gave their views on debt collection.
    Johnny Finch, Assistant Comptroller, General Government 
Division, and Gene Dodaro, Assistant Comptroller, Accounting 
and Information Management Division, GAO, testified on GAO's 
reviews of agency management improvement efforts. Mr. Finch 
noted that the Government Performance and Results Act, the 
Chief Financial Officers Act and the Paperwork Reduction Act 
have formed the basis of the agency management improvement 
efforts. Mr. Finch noted that agencies need to define their 
mission, improve operational effectiveness by using information 
technology to re-engineer, strengthen financial management, and 
build the capacity to manage the Federal workforce.
    Upon questioning, Mr. Dodaro outlined the problem areas in 
information technology investment and described weaknesses in 
financial management at the Department of Defense. Mr. Finch 
detailed differences between the National Performance Review 
and successful government reform efforts abroad.
    In panel III, Alan Dean, senior fellow of the National 
Academy of Public Administration, described recent changes in 
the Federal workforce, such as the increasing numbers of non-
career officials. Mr. Dean also discussed reorganization 
proposals, including the creation of an Office of Federal 
Management and restructuring executive departments. William 
Hansen, former Chief Financial Officer at the Department of 
Education, outlined the reorganization of the Department in the 
1980's, and the restructuring and block-granting of programs 
that occurred in 1981-1983. Mr. Dean testified that OMB's 
restructuring has denuded the agency of any expertise in 
government corporations.
    Roger Sperry, director of management studies of the 
National Academy of Public Administration, identified the five 
key areas to any efforts at government reform: strengthening 
Federal leadership, automating, integrating and streamlining 
government, focusing on performance, streamlining Federal field 
structures and congressional-executive relations. Mr. Sperry 
also commented on interagency and intergovernmental 
coordination in a region responding to a critical situation.

6. Consolidating Federal Programs and Organizations.

    a. Summary.--This is part of the Making Government Work 
series described in Section II.A.1.
    b. Benefits.--These are described in Section II.A.1.
    c. Hearings.--On Tuesday, May 16, 1995, the subcommittee 
began its third hearing in its ``Making Government Work'' 
series. The hearing was held in two parts and considered 
proposals for restructuring the programs and functions of the 
Departments of Energy and Education. The first part of the 
hearing will be held on May 16th; the second session was on May 
23rd.
    Subcommittee Chairman Horn noted at the opening of the 
hearing that a number of proposals recommended terminating the 
Departments of Education and Energy. He offered a criterion to 
be used when considering whether, if an agency or department 
did not already exist, it would make sense to create it.
    Ranking subcommittee member Mrs. Maloney noted that the 
country had little experience with abolishing Cabinet 
departments. She cautioned against not adequately providing for 
the continuation of many of the activities of the Energy 
Department that she regarded as important.
    In her testimony, Secretary O'Leary presented her agency's 
own plan to reduce its workforce by 27 percent and its budget 
by $14 billion over the next 5 years. She stated that the 
Department would still be required to perform its four critical 
missions. The Secretary identified these missions as national 
security protection and nuclear danger reduction, weapons site 
clean up and environmental management, science and technology 
management, and energy security enhancement. She concluded that 
the Energy Department, smaller in size, was still the best 
institutional vehicle to perform these tasks.
    In response to questions from the subcommittee, the 
Secretary stressed the advantages of maintaining civilian 
control over the Nation's nuclear weapons program. She 
criticized suggested alternatives to the Energy Department, 
such as the proposed Department of Science, as unwieldy and 
ill-advised. When asked by subcommittee Chairman Horn about the 
opportunities for closer policy coordination that a ``Natural 
Resources Department'' offered, as had been proposed by 
President Nixon, she responded that regular meetings by 
administration Cabinet members in related fields provided for 
policy coordination and the resolution of disputes.
    The subcommittee reconvened its hearing on ``Consolidating 
Federal Programs and Organizations'' on May 23, 1995. Donald 
Hodel, former Secretary of Energy told the subcommittee that in 
a market economy, the Energy Department had little to do with 
producing or generating energy. He concluded that the very 
existence of a Department of Energy was undesirable, as ``it 
suggests that the U.S. Government is doing or is going to do 
something about energy beyond what I believe government should 
do.''
    Former Energy Secretary Admiral James Watkins indicated 
that he appeared before the subcommittee neither as an advocate 
nor an opponent of the Department's elimination. Rather the 
Admiral stressed his concerns for the appropriate stewardship 
of the Nation's nuclear energy program. He called upon Congress 
to initiate a careful review, drawing upon outside experts, to 
determine which of the Department's functions should be 
retained, which ought to be transferred and which could be 
privatized.
    Former Energy Secretary John Herrington called for the 
elimination of the Department. He advocated ending all energy 
research and development and energy conservation programs. He 
further supported the privatization of government owned 
laboratories engaged in research, the five Power Marketing 
Administrations and the naval petroleum reserves. He proposed 
placing nuclear weapons functions under the jurisdiction of a 
newly created Under Secretary of Defense.
    Former Under Secretary of Energy Shelby T. Brewer observed 
that the Energy Department had strayed from its original 
mission of obtaining national energy security. He noted that as 
the Nation's energy circumstance had changed, the Department 
shifted its mission to become an environmental management 
department, a basic science department, and a biological and 
medical research department. As a result, according to Mr. 
Brewer, energy development and demonstration now accounts for a 
little over 10 percent of the total budget. Mr. Brewer also 
testified that a substantial contributory factor to the 
Department's lack of a clear mission was the multiplicity of 
congressional committees, each of which has its own set of 
interests, different from the others.
    Former Under Secretary of Energy Donna R. Fitzpatrick 
joined her former colleagues in calling for the elimination of 
the Department, suggesting that it had outlived its usefulness. 
She advocated placing weapons related activities into a sub-
cabinet agency independent of the Defense Department.
    As the hearing shifted its attention to the Department of 
Education, subcommittee Chairman Horn noted that several 
proposals would either eliminate the subcommittee and transfer 
its activities to the States, or else merge its functions into 
another Cabinet subcommittee, such as Labor.
    Under Secretary of Education Marshall S. Smith stressed in 
his testimony the strong public support for the Department and 
its programs. He commented that: Federal involvement in 
education supports democracy and our economy. This is not just 
a State and local interest; this is a national interest. He 
claimed that administrative costs account for only 2 percent of 
the budget, with the subcommittee having the smallest ratio of 
employees to total budget in the Federal Government.
    Accompanying Secretary Marshall was Donald Wurtz, Chief 
Financial Officer of the Department. Subcommittee Chairman Horn 
and Ranking Member Maloney engaged Wurtz in a discussion of the 
Department's efforts to improve its debt collection efforts for 
student loans.
    Chester Finn, of the Hudson Institute, testified that the 
Federal Government had become a meddlesome force in American 
education. He advocated eliminating the Department and 
transferring its grant programs into either strings-free block 
grants to the States, or transferring all the Department's 
functions to other Federal agencies.
    William Hansen echoed the views of Mr. Finn, adding that 
the number of the Department's categorical programs had grown 
from 130 in 1981 to over 250. According to Mr. Hansen the 
number of Federal employees and the extent of local intrusion 
could be reduced by greater use of program consolidation and 
block grants. Through program consolidation, he said, the 
Department could greatly reduce its staff.
    George Munoz, Assistant Secretary of Treasury and the 
Department's Chief Financial Officer testified that the 
Education Department has undertaken a number of management 
reforms. In particular he noted improvements in the 
Department's financial management practices.
    Paul Posner, Director of Budget Issues in the Accounting 
and Information Management Division of the General Accounting 
Office, testified on his office's conclusions on duplicative 
and overlapping Federal programs. Program consolidation, he 
reported, held out promising opportunities for increasing the 
efficiency of government operations and improving performance. 
He noted that savings were possible when programs with similar 
objectives and clients were brought together and conflicting 
requirements, duplication and overlap were reduced.

7. Corporate Structures for Government Functions.

    a. Summary.--As the Federal Government continues along the 
road of structural change, the demand for more efficient 
operations will become more evident. This hearing drew lessons 
from effective private and public sector managers on how to 
downsize institutions effectively. The hearing also probed 
recent proposals to create additional Federal entities (such as 
the Air Traffic Control Corporation, the Forrestal Corporation, 
and the Bonneville Power Corporation).
    b. Benefits.--Learning from the best practices in business 
will assist lawmakers and Federal managers to downsize and 
streamline institutions effectively, with the least detrimental 
impact on vital public services.
    c. Hearings.--On June 6, 1995, subcommittee Chairman Horn 
called the hearing which focused on the use of corporate forms 
of organization, examining various forms of government 
corporations and determining what advantages each possesses.
    Donald H. Rumsfeld, chief executive officer, General 
Instrument Corp., testified about the general concept of using 
corporate structure for government functions. Mr. Rumsfeld 
testified that in a reorganization, it is essential to question 
an agency's mission, and restructure based on that review. If 
an agency restructures prior to this review, the effort is 
wasted. Mr. Rumsfeld also described several of the successful 
restructuring of corporations in which he had been involved.
    Roger W. Johnson, Administrator, General Services 
Administration, testified on the reorganization underway at the 
General Services Administration. Mr. Johnson noted that the 
National Performance Review needs to make more progress, but 
this was blocked by risk aversion and governing by process 
rather than results. He also suggested that executives with 
profit-loss responsibility could be deployed in certain Federal 
jobs involved in operations. Johnson also criticized the 
capital planning and budget processes and the lack of 
incentives to invest in long-term systems to improve operations 
and the annual budget process.
    Jack Robertson, Deputy Administrator, Bonneville Power 
Administration, testified concerning the Bonneville Power 
Administration's proposal to become a government corporation. 
Mr. Robertson described the competitive forces driving 
Bonneville toward a corporate structure, including increases in 
compliance costs associated with the Endangered Species Act and 
enhanced competition between local power producers.
    Daniel V. Flanagan, the Flanagan Consulting Group, Inc., 
testified about the proposed Forrestal Corporation, which would 
funnel private sector investments into Federal energy 
improvement required by the 1990 Energy Act.
    Harold Seidman, senior fellow, the National Academy of 
Public Administration, explained the history of the Government 
Corporation Control Act of 1945, and the need to update it to 
reflect modern realities. Mr. Seidman outlined a ``Government 
Enterprise Standards Act'' which would improve oversight over 
government corporations. Mr. Seidman described the uses of a 
government corporation and the need to have a central body of 
expertise to govern the creation of such entities.
    Barry Krasner, president, National Air Traffic Controllers 
Association, and Jack Johnson, president, Professional Airways 
Systems Specialists, testified concerning the proposals to 
create an Air Traffic Control Corporation. Both endorsed the 
concept of corporatization, but advocated a government 
corporation rather than private ownership of such a 
corporation.

8. Streamlining Federal Field Structures.

    a. Summary.--These two hearings were part of the Making 
Government Work Report, see section II.A.1.
    b. Benefits.--See Section II.A.1. referenced above.
    c. Hearings.--On Tuesday, June 13, 1995, the subcommittee 
held its sixth hearing in its ``Making Government Work'' 
series. The hearing, entitled ``Streamlining Federal Field 
Structures'' considered whether the Federal Government's 
existing network of field offices is best suited for the 
Government's current responsibilities. The hearing further 
inquired into the impediments that hinder making field office 
networks more efficient.
    Subcommittee Chairman Horn noted at the opening of the 
hearing that close to a million Federal employees carry out the 
daily work of the Federal Government at some 30,000 filed 
offices, of which 12,000 have five or fewer employees. He 
observed that overlapping and conflicting agency 
responsibilities, programs, jurisdictions, and separate offices 
have often made an ordinary citizen's contact with the Federal 
Government a frustrating experience.
    Ranking subcommittee member Carolyn Maloney commented that 
over the past 50 years the number of Federal field offices has 
proliferated with the initiation of each new Federal program. 
She observed that many were set up when transportation and 
communications were quite different. She praised the reform 
efforts of the National Performance Review recommendations for 
field office service improvement.
    Mr. Dwight Ink, president emeritus of the Institute of 
Public Administration and a fellow of the National Academy of 
Public Administration, noted that field structure reforms ought 
to be the product of a comprehensive consideration of overall 
agency missions and activities. This review should consider 
three interdependent dimensions: structures, systems, and 
people. The review should also begin with a careful 
consideration of the agency's impact on the public. Mr. Ink 
noted that agency personnel ought to be well trained and that 
field employee grade levels should be increased relative to 
headquarters staff.
    Mr. Alan Dean, former chairman of the board of trustees and 
currently senior fellow of the National Academy of Public 
Administration, commented that no single model for field 
structure could be applied to all department and agencies. Each 
agency, consequently, should design its field offices at every 
level to reflect its mission and impact upon the public. Mr. 
Dean also testified that agencies needed to decentralize 
management to the lowest practicable level in order to achieve 
greater responsiveness and best use of resources.
    Professor Charles Bingman, of George Washington University, 
decried barriers to reform noting that once a program or 
activity had been enacted or implemented, all the relevant 
interests tend to resist efforts at change. The Federal 
Government, as a result, tended to lack the flexibility to 
accomplish reorganizations of operating structures.
    Mr. Wardell C. Townsend, Assistant Secretary for 
Administration for the Department of Agriculture Department, 
testified both on the President's Management Council Federal 
Field Office Study and the Agriculture Department's own 
progress in field office restructuring. He proposed four 
general guidelines for field office restructuring. First, where 
face-to-face contact is necessary, government presence should 
be maintained at the point of service delivery. Second, if 
face-to-face contact is unnecessary, communication technology 
should be used to upgrade service. Third, back-room operations 
should be centralized for efficiency. Fourth, unnecessary 
layers of control should be eliminated.
    Social Security Commissioner Shirley Chater testified on 
her agency's reappraisal of its own field structure. She 
reported her intention to reduce the number of its regional 
offices from 10 to 5. She also intends to reduce layers of 
management and increase the numbers of employees to supervisors 
from 1 to 7 to 1 to 15 by 1999. Commissioner Chater said that 
the changes were made possible, in part, by a 5-year, $1.1 
billion investment in automation.
    The Commissioner was followed by Ms. Mary Chatel, the 
president of the National Council of Social Security Management 
Associations. She presented her organization's plan for 
redeploying 30 percent of headquarters and regional office 
staff resources into the field. The plan would go farther than 
the Social Security Administration's own plan to reduce 
management layers.
    Lynn Gordon, District Director of the Bureau of Customs in 
Miami, FL, and George Rodriguez, Area Coordinator, Department 
of Housing and Urban Development presented their National 
Performance Review stories. Each were involved in local 
initiatives, highlighted by the National Performance Review, to 
improve ``customer service'' through enhanced agency 
administrative flexibility. Both initiatives also seek to 
improve communications with affected individuals and 
institutions that are in contact with the agencies.
    On June 19, 1995, the subcommittee held the second part of 
its ``Streamlining Federal Field Structures'' hearing in 
Chicago, IL, at the Chicago Historical Society. Subcommittee 
Chairman Stephen Horn, in his opening statement, noted that the 
subcommittee had come to Chicago for firsthand answers to four 
questions. How should agencies determine their most effective 
field structure? How can the management of field offices be 
improved? How can closer interagency cooperation in the field 
be encouraged? What factors deter agency heads from changing 
field structures?
    In his opening statement, Representative Michael Flanagan 
welcomed the subcommittee to his hometown and his district. He 
noted that the hearing would focus on transportation and 
infrastructure issues. Representative Flanagan recalled that 
the Chicago area had long been a leader in this area, beginning 
with its role as a railroad crossroads and extending through 
the development of O'Hare as the world's busiest airport.
    Mr. William Burke, the Regional Administrator of the 
General Services Administration (GSA) for the Great Lakes 
Region, reported both on GSA's and the Federal Government's 
presence in the area. Mr. Burke also serves as chair of the 
Chicago Federal Executive Board. This board coordinates certain 
activities of Federal agencies in the region. Among the 
initiatives that Mr. Burke described was the ``Cooperative 
Administrative Support Unit'' (CASU) program. CASUs are an 
effort to hold down administrative costs by sharing overhead 
costs among different agencies. He also cited telecommuting 
programs as another means to hold down administrative costs. 
Gretchen Schuster, Regional Director of the Department of 
State's Passport Agency testified on her involvement with the 
Chicago Federal Executive Board. She described the board's 
efforts in coordinating the work of 154 member agencies in the 
Chicago area.
    Mr. Joseph Morris, an attorney in private practice in 
Chicago, drew upon his prior experience as General Counsel for 
the Office of Personnel Management. In addition to recommending 
moving more of the Federal Government's work outside 
Washington, Mr. Morris advocated better coordination among 
field offices through the Federal Executive Boards and more 
reliance by the Federal Government on Federal managers in the 
field.
    A second panel of witnesses, led off by Michael Huerta, 
Associate Deputy Secretary of Transportation, covered field 
offices involved in transportation and infrastructure programs. 
Mr. Huerta explained to the subcommittee his Department's 
proposal to reorganize. The plan would combine several 
functions into a new Intermodal Transportation Administration, 
combining all surface transportation and civilian maritime 
functions. In response to questions, he noted that the 
Department had yet to determine how the reorganization would 
affect regional offices.
    Mr. Huerta was joined by Mr. Garrote Franklin, Regional 
Administrator of the Federal Aviation Administration, Mr. 
Kenneth Perret, acting Regional Administrator, Federal Highway 
Administration, and Mr. Donald Gismondi, Deputy Regional 
Administrator of the Federal Transit Administration. The 
regional officials discussed the cooperation among the various 
components of the Transportation Department located in Chicago. 
They noted that changes in Federal transportation grant process 
resulting from the Intermodal Surface Transportation Act of 
1991 had necessitated even more cooperation than had been the 
practice in the past.
    Col. Richard Craig, Commander and Division Engineer, North 
Central Division of the Army Corps of Engineers, described the 
current distribution of responsibility within the Corps among 
district, division and headquarters offices. The headquarters 
is primarily responsible for budget and broad policy issues, 
the division offices provide contact with State and local 
officials, program management and quality assurance. In 
response to questions, Col. Craig discussed the Corps' 
coordination with local governments on environmental regulatory 
issues.

9. Performance Measurement, Benchmarking, and Re-engineering.

    a. Summary.--Performance measurement uses indicators and 
measures to assess how well a program or organization is doing 
in terms of its mission, goals, and objectives. It focuses on 
results and outcomes, not processes or compliance. The 
indicators used are inputs, outputs, and outcomes. Inputs are 
dollars or time expended, outputs are the quantity and quality 
of services delivered, and outcomes are the quality and 
quantity of the results the outputs achieved. Measures are 
benchmarks to evaluate the indicators, such as a percentage 
increase or decrease.
    Performance measurement is necessary for benchmarking, 
which is the measuring of performance against some actual or 
desired standard of achievement, to be successful. Re-
engineering involves examining how a program or organization 
works, followed by improving performance by redesigning work 
processes.
    b. Benefits.--Developing strategic plans that include 
performance goals, and measuring and monitoring performance on 
an ongoing basis, improves the quality of the activities 
performed or services rendered, contributes to greater 
efficiency, and can help to offset reductions in funding. 
Focusing on results rather than on inputs will lead to 
improvement in managing government operations.
    c. Hearings.--On June 20, 1995, the subcommittee convened a 
hearing on performance measurement, benchmarking, and re-
engineering. It received testimony from witnesses representing 
States and think tanks.
    Representative Bass opened the hearing by stating that the 
subcommittee would examine performance measurement, bench-
marking, and re-engineering and learn how the private sector, 
other countries, and State governments are using these 
techniques to respond to the needs of their customers, boost 
the quality of their products and services and lower costs.
    Mr. Donald Kettl, professor of public affairs and political 
science, University of Wisconsin, and the LaFolette Institute 
of Public Affairs, and nonresident senior fellow, the Brookings 
Institute for Public Management, stressed that performance 
measurement offers the potential to measure success in terms of 
results produced. It requires a long-term view. Performance 
measurement is about communication and management, not number 
crunching. Citizens can find out how tax dollars are delivering 
and Congress can find out how programs are producing. It is 
very difficult to measure outcomes, easier to measure outputs.
    Mr. Harry P. Hatry, director, State and local government 
research programs, the Urban Institute, had three 
recommendations for Congress: seek and use information on 
program quality and outcomes; coordinate among authorizing, 
appropriations and oversight committees to review agency 
performance information; and encourage State and local 
governments to measure performance in terms of quality and 
service to the public.
    Mr. Herbert N. Jasper, senior associate, McManis 
Associates, Inc., cautioned that performance measurement is not 
a panacea, there are pitfalls such as gaming by selecting safe 
targets, selecting data because it is readily available, even 
if irrelevant, and ignoring the fact that it is labor-
intensive. He indicated that performance budgeting seeks to 
make budget decisionmaking more analytical and objective. 
However, the budget process is highly political and decisions 
will not always be made objectively. He called re-engineering 
the systematic application of common sense and described its 
basic steps.
    Mr. Johnny C. Finch, Assistant Comptroller General, General 
Government Division, GAO, reported that GAO studies on reform 
efforts show four actions to be critical if performance 
measurement is to be used effectively to improve programs: 
focus on mission and desired results; involve key stakeholders; 
develop performance measurement systems that have certain 
characteristics to provide relevant performance information for 
program managers, staff, and other decisionmakers; and use 
performance information in the selection and use of process 
improvement techniques that will further enhance performance. 
He emphasized that the number of measures chosen should be 
limited to significant ones.
    Ms. Linda Kohl, director of Minnesota Planning, described 
the comprehensive statewide benchmarking project known as 
Minnesota Milestones. It involved three stages. The first asked 
Minnesotans to decide on a long-term vision for the State. The 
second saw the development of measurable indicators called 
``milestones'' which are clear, valid, associated with 
available data, accurate, and outcome-based. The third phase 
involved soliciting feedback on the indicators. In her opinion, 
benchmarking and the Milestones can be a tool to assure 
accountability for block grants.
    Ms. Sheron Morgan, Office of State Planning, North 
Carolina, discussed North Carolina's use of performance 
measurement, known as Performance/Program Planning and 
Budgeting (P/PPB). It links policy and budgeting and shifts 
accountability from efforts to results. She mentioned the need 
for evaluation, analysis and agency buy-in for successful 
implementation of P/PPB, and for senior management involvement.
    Mr. Joseph G. Kehoe, managing partner, government services, 
Coopers and Lybrand, LLP, described activity-based costing 
(ABC). He explained how ABC can be used to determine how much a 
service or activity truly costs and the usefulness of value 
analysis in ABC. Significant savings can be found with no 
associated reduction in quality when managers focus on 
activities and processes and eliminate the ones which do not 
add value.
    Ms. Laura G. Longmire, national director of benchmarking, 
KPMG Peat Marwick, LLP, in discussing benchmarking, performance 
measurement, and business process re-engineering, made it clear 
that the key issue in adopting these techniques is enhancing 
accountability. She said that processes must be measurable to 
be improved. In her opinion, all processes can be measured both 
in terms of quality and response time. Successful projects 
share common themes: long-term scope; management commitment; 
investment in technologies and tools; and constant 
communication. The culture has to become one focused on results 
rather than compliance.

10. Agency Initiatives To Implement the Government Performance and 
        Results Act of 1993.

    a. Summary.--The Government Performance and Results Act of 
1993 required agencies to evaluate their missions, goals, and 
objectives; develop strategic plans and performance measurement 
systems, set goals, and then evaluate results in the context of 
those goals. Strategic plans are due by September 1997, annual 
performance plans beginning in fiscal year 1997, and annual 
performance reports, beginning in the year 2000. The 
performance plans must include performance goals for agency 
program activities, and performance indicators that will be 
used to measure performance. OMB designated a series of pilots 
for fiscal years 1994 through 1996 in performance planning and 
reporting. A second set of at least five pilots will focus on 
managerial flexibility and accountability for fiscal years 1995 
and 1996.
    b. Benefits.--Using performance measurement will change the 
focus of management from process and inputs to results and 
outcomes, increase efficiency and reduce costs by eliminating 
nonvalue-added activities.
    c. Hearings.--Subcommittee Chairman Horn opened the hearing 
by summarizing the series of hearings on ``Making Government 
Work''. This final hearing in the series focused on the 
administration and its success in implementing the GPRA.
    Mr. John A. Koskinen, Deputy Director for Management, 
Office of Management and Budget, gave an update on the 
administration's progress, saying that the pilot project stage 
is valuable because it provides time for experimentation. There 
are over 70 pilot projects in the first stage, none as yet in 
the second. OMB's aim is to integrate GPRA information into the 
budget and NPR processes.
    Mr. Johnny C. Finch, Assistant Comptroller General, General 
Government Division, GAO, suggested that there were five 
challenges for agencies preparing to implement the GPRA: 
developing and sustaining top management commitment; building 
the capacity within the agencies to implement GPRA and use 
performance information; creating incentives to implement GPRA 
and change the focus of management and accountability; 
integrating GPRA into daily operations; and building a more 
effective congressional oversight approach. He thought the 
hearing was an important first step in communicating to the 
agencies the importance to Congress of performance-based 
management.
    Dr. Paul C. Light, director, public policy program, the Pew 
Charitable Trusts, described the three types of accountability 
system, compliance based, capacity based, and performance based 
and these are not compatible, so changing from the compliance 
based system predominant in the administration currently to a 
performance based system will be difficult. He also discussed 
``thickening'' of government, how it affects results, and how 
it can be reversed. He suggested getting rid of one-to-one 
spans of control and abolishing regional office layers.
    Dr. R. Scott Fosler, president, National Academy of Public 
Administration, thought GPRA could be a critical tool in 
improving government performance, if properly understood and 
effectively implemented. GPRA changes the focus from inputs to 
results. Success of GPRA depends on leadership from the 
executive branch and support from Congress. He questioned 
whether the capacity was there in the agencies for GPRA 
implementation and suggested that GPRA implementation may lag 
behind schedule.
    Mr. Anthony A. Williams, then-Chief Financial Officer of 
the U.S. Department of Agriculture, is responsible for 
coordinating GPRA implementation and testified on Forest 
Service efforts which constitute one of eight USDA pilots. He 
described how it had developed a set of 8-10 outcome-oriented 
corporate performance measures and the All Resources Reporting 
System, an integrated financial and reporting system which 
tracks both output- and outcome-related accomplishments. 
Performance measurement is achieved through a Management 
Attainment Report. He mentioned that good cost accounting 
systems are necessary to capture the cost of achieving 
outcomes, and that it is important to provide incentives to 
build management support for GPRA.
    In his testimony, Vice Admiral Arthur E. (Gene) Henn 
described the Coast Guard's pilot project which was distilled 
from a business plan developed in the Vice Admiral's office. It 
is one of four pilots in the Department of Transportation. He 
described the process as using a simple formula to get the 
desired outcomes, set goals, empower, manage risks, and measure 
activities. He emphasized the need to get ``buy-in'' from 
everyone involved in the project and encouraged the 
subcommittee to review the reports sent to Congress by the 
agencies.
    Mr. Joseph Thompson, Director, New York Regional Office, 
U.S. Department of Veterans Affairs, testified on the status of 
the implementation of GPRA in the New York regional office of 
the VA, which is also an NPR reinvention lab. Organization was 
changed from a hierarchical model to a self-managed team 
structure; the step process was reduced from 30 to 20. He 
praised the GPRA as a tool for organizational improvement.
    Colonel F. Edward Ward, director of field offices, Defense 
Finance Accounting Service, reported on the Air Combat Command 
(ACC) GPRA pilot. ACC is involved in the performance 
measurement pilot now and hopes to take part in the performance 
budgeting pilot in 1988. He described how ACC had developed a 
cost accounting methodology to track costs per unit of output 
and capture cost associated with performance measures, the Job 
Order Cost Accounting System II. He stressed the need to link 
goals and performance measures, for measures to be quantifiable 
so that costs can be linked to the performance indicators, and 
to track areas important to the ACC's mission, not just areas 
that are easy to measure.

11. The General Services Administration's (GSA) Security Measures at 
        Federal Office Buildings.

    a. Summary.--On April 19, 1995, a bomb destroyed the Murrah 
Federal Office Building in Oklahoma City, killing 168 people, 
including 19 children, and injuring over 600 people. As a 
result of the bombing, security procedures were tightened and a 
thorough review conducted of security at Federal office 
buildings. In 1988, the Congress passed Public Law 100-440, 
which mandated that officer strength of the Federal Protective 
Service (FPS) be augmented by not less than 50 officers per 
year until a strength of 1,000 was reached. Instead, FPS 
personnel were reduced gradually to less than 400.
    b. Benefits.--This hearing, part of the subcommittee's 
ongoing activities relating to oversight of the GSA, revealed 
that GSA had not complied with Public Law 100-440. By 
identifying the barriers to improving workplace security, 
including low pay, inadequate recruitment, and the extension of 
buyouts to security personnel, the subcommittee pointed out 
methods for remedying the situation.
    c. Hearings.--Subcommittee Chairman Horn called the hearing 
on May 3, 1995, to examine GSA's security measures at Federal 
office buildings in the aftermath of the terrorist attack on 
the Oklahoma City Federal Building.
    Mr. Roger Johnson, then-Administrator, General Services 
Administration (GSA), testified as to GSA's initial response to 
the Oklahoma City bombing, and spoke about follow-up security 
measures to protect the Federal worker.
    Mr. Kenneth Kimbrough, then-Commissioner, Public Buildings 
Services, GSA, noted that Federal Protective Service officers 
were understaffed at the time of Oklahoma City with only 409 
positions filled. Mr. Kimbrough added that a 1988 law mandates 
that the Federal Protective Service shall be not less than 
1,000 officers. GSA under the current and previous 
administrations were not in compliance with this law.
    Mr. Gary Day, Assistant Commissioner for Federal Protective 
Services, Public Building Service, GSA, echoed Mr. Kimbrough's 
remarks and added that low pay and compensation have hindered 
the Federal Protective Service's ability to hire and retain up 
to its authorized complement of 1,000 officers.
    Ms. Faith Wohl, Director, Family Workplace Institute, GSA, 
testified that GSA has taken numerous preventive measures to 
deter kidnaping and child abuse in Federal child care 
facilities, but that it was not in GSA's experience to expect a 
terrorist attack.
    Ms. Julia Stasch, Deputy Administrator, GSA, testified as 
to the competence of contract security officers. Ms. Stasch 
noted that officers were well trained and worked in concert 
with local law enforcement forces.
    Ms. Emily Hewitt, General Counsel, GSA, was questioned 
about whether she had performed a compliance audit to determine 
which laws GSA was not complying with. Ms. Hewitt had not 
performed such an audit. Subcommittee Chairman Horn recommended 
that administration orientation for new agency heads include 
such an audit.

12. Controls Over Illegal Immigration--Along the Border and Within the 
        Interior.

    a. Summary.--In 1993 and 1994, Congress voted to increase 
funds available to control immigration at the border, and 
increase the numbers of Border Patrol officers by 6,000. As 
these officers are deployed, the subcommittee remained 
interested in determining how they were being used, and how 
they were being divided amongst border duty and interior duty.
    b. Benefits.--This hearing shed light on the problems faced 
by State and local officials as a result of Federal policies on 
illegal immigration. Moreover, the lack of intergovernmental 
coordination and Federal agency attention to the concerns of 
local government brought into relief the frustration of local 
officials: They have neither the policy levers to stop 
immigration, nor control of the Federal tools to minimize the 
impact, but still must bear the cost of criminal justice, 
health, and education related to illegal immigration.
    c. Hearings.--On June 12, 1995, the subcommittee held a 
hearing to explore the resources that should be used to control 
illegal immigration at the border and within the interior of 
the United States. Witnesses included California State and 
county officials and officials from the Immigration and 
Naturalization Service (INS). Subcommittee Chairman Horn called 
the hearing to examine what resources should be deployed to 
control illegal immigration at the border and the interior.
    Mr. Daniel E. Lungren, attorney general, State of 
California, testified on the impact of illegal immigration on 
California's prison population and crime problem. Mr. Lungren 
noted that the dramatic costs involved with illegal immigration 
drains California tax dollars.
    Mr. Bill Jones, secretary of State of California, noted 
that the Motor-Voter Act increases the opportunity for a large 
number of people to participate in the political system. 
However, Mr. Jones voiced concern that a number of illegal 
immigrants would also participate unless California is allowed 
to take preventive steps.
    Mr. Gustavo de la Vina, Director, Western Region, INS, 
testified that the INS has developed a comprehensive 
immigration enforcement strategy that consists of border 
enforcement and management, work site enforcement and 
verification, detention and removal of criminal and deportable 
aliens, and customer service and assistance to States. Mr. 
Richard K. Rogers, Western Region, Los Angeles District, INS, 
testified on a new L.A. initiative which will enable employers 
to become fraudulent document experts. Mr. Johnny N. Williams, 
Chief Patrol Agent, INS Border Patrol Sector Headquarters (San 
Diego), testified on the cooperation that his agency has 
received from State and local law enforcement agencies. Mr. 
Williams noted that the Border Patrol's interdiction rate has 
steadily increased.
    Mr. Frank Ricchiazzi, assistant director of research, 
California Department of Motor Vehicles, testified on 
California policy and technological initiatives designed to 
improve their ability to provide secure, authentic and durable 
driver's licenses and ID cards.
    Mr. Timothy J. Staffel, chairman of the board of 
supervisors, county of Santa Barbara, noted that local and 
county governments bear the brunt of costs associated with 
illegal aliens in California. For example, Mr. Staffel asserted 
that one in five births in Santa Barbara County were to illegal 
alien mothers whose deliveries were funded by Medicaid.
    Mr. Jim Thomas, sheriff, county of Santa Barbara, voiced 
concerns about the large number of illegal aliens in California 
jails, the increase in the illegal criminal element in narcotic 
and gang investigations, and the lack of effective illegal 
employment investigations.
    Mr. Thomas W. Sneddon, Jr., district attorney, county of 
Santa Barbara, described the responsibilities of the 
Immigration and Naturalization Service, the U.S. attorney's 
office and the Social Security Administration and the level of 
assistance given by those offices to local government. Mr. 
Sneddon faulted the Social Security Administration for not 
providing information to local government to assist in crime 
control by identifying illegal aliens.

13. Budget and Financial Information--Annual Shareholders Report: How 
        Does the Citizen Know What Is Going On?

    a. Summary.--Under the terms of the Congressional Budget 
Act, Congress passes a budget resolution outlining aggregate 
levels of discretionary spending and targets for 
reconciliation. Lacking from the annual budget process is a 
review of the total financial liabilities and assets of the 
Federal Government. The hearing examined ways to improve 
information to bring liabilities totaling trillions of dollars 
under the discipline of an annual budget.
    b. Benefits.--Increased public accessibility would enhance 
the Federal Government's accountability and demonstrate that it 
is fulfilling its stewardship duty to the American public. The 
hearing gave attention to the absence of important financial 
information in the budget process. It is important to regularly 
review this additional financial information and begin 
incorporating it into the annual budget process.
    c. Hearings.--Subcommittee Chairman Horn called the hearing 
on July 11, 1995. The hearing focused on information on the 
financial health of the Federal Government available to private 
citizens, and options for improving access to that information. 
At the hearing, testimony was received from witnesses from the 
General Accounting Office, the Office of Management and Budget, 
Citizens for Budget Reform, and America Report.
    Mr. Gene Dodaro, Assistant Comptroller General, Accounting 
and Information Management Division, General Accounting Office 
(GAO), noted the importance of having solid budgetary and 
financial information when making crucial policy decisions. Mr. 
Dodaro noted shortcomings in financial management, but asserted 
that progress in improving financial reporting was occurring as 
a result of the Chief Financial Officers Act and the creation 
of the Federal Accounting Standards Advisory Board (FASAB).
    Mr. Don Chapin, Chief Accountant, GAO, updated the 
subcommittee on the activities of FASAB. According to Mr. 
Chapin, FASAB is developing standards for reporting financial 
information which will allow Congress to improve its ability to 
provide oversight of Federal operations. Mr. Chapin noted the 
possibility that agencies might not be able to make operational 
the standards recommended by FASAB.
    Mr. G. Edward DeSeve, Controller, Office of Federal 
Financial Management, Office of Management and Budget, focused 
on three areas: the integration of the budget formulation and 
execution process with financial standards; the role of 
performance and program integrity in budgeting and financial 
management; and streamlining current reporting procedures.
    Mr. Harrison Fox, president, Citizens for Budget Reform, 
testified on the importance of including non-budgetary 
financial information in the annual budget process, to give 
greater attention to the deteriorating financial position of 
the Federal Government, as measured by the USA Report published 
by Citizens for Budget Reform. Mr. Fox advocated adoption of a 
financial plan to improve accessibility of information, risk 
assessment, and measuring outcomes and results.
    Mr. Brecht, publisher, America Report, testified about his 
project to make clear to citizens the financial health of the 
government in America Report, which is modeled on corporate 
annual reports. Mr. Brecht advocated a clearer vision of where 
the United States is headed, the role the Federal Government 
should play, and clarifying the core values which will guide 
these efforts. He also suggests that every agency be required 
to communicate its goals to citizens in an understandable 
fashion.

14. The Inspector General Act of 1978.

    a. Summary.--On Tuesday, August 1, 1995, the subcommittee 
held an oversight hearing of the Inspector General Act of 1978. 
Inspectors General (IG's) are charged with protecting the 
integrity of Federal programs and resources. Through their 
audits and investigations, Offices of Inspectors General 
(OIG's) seek to determine whether program offices, contractors, 
Federal workers, grantees and others are conforming with 
regulations and laws.
    Since the IG Act first established Inspectors General in 
1978, the number of departments and agencies with IG's has 
grown to 61. Of these, 29 IG's are Presidentially appointed and 
subject to Senate confirmation. Another 32 IG's in smaller 
agencies are appointed by their agency heads. Presidentially 
appointed IG's have staffs totaling about 10,000 employees, 
with budgets adding to $900 million. Last year IG's' findings 
led to more than 14,000 successful criminal and civil 
prosecutions, $1.9 billion in investigative recoveries, and $24 
billion in recommendations that agency funds be better used. 
Presidentially appointed IG's sit on the President's Council on 
Integrity and Efficiency (PCIE), chaired by the Deputy Director 
of the Office of Management and Budget; agency appointed IG's 
are on the Executive Council on Integrity and Efficiency 
(ECIE).
    To assure their independence, the IG Act gives them 
latitude in running their offices. They report directly to 
agency heads when identifying serious shortcomings, and 
directly to Congress in semiannual reports. IG's are 
effectively the only executive branch officials reporting 
directly to Congress without the need for clearance. They 
historically have been vigilant in protecting their autonomy, 
and this has led to differences with their bosses on issues of 
resources, staffing, and priorities. Critics have argued that 
IG autonomy has made them less responsive to management's 
legitimate need to use its audit and program evaluation 
function for managing agency operations. Also at issue is that 
IG's ``compliance'' orientation may lead to adversarial 
relationships between them and their agency managers.
    The National Performance Review (NPR) has led to a 
reappraisal of the IG mission. The NPR advocated that IG's 
broaden their focus ``from strict compliance auditing to 
evaluating management control systems.'' The NPR further argued 
that the IG compliance focus stifled agency innovation. IG's 
have answered, in part, with a vision statement that commits 
them to greater cooperation with program managers to strengthen 
operations.
    The PCIE is working on procedures for acting on allegations 
of OIG impropriety. The FBI would investigate criminal 
complaints, but the process is less clear on how to address 
non-criminal complaints, which might allege malfeasance or 
equal employment opportunity violations. The Associate FBI 
Director for Investigations usually serves as chair of the 
PCIE's Integrity Committee.
    The Federal Government's reliance on information technology 
systems raises several issues for IG's. GAO, for example, 
concluded that ``seriously inadequate automated financial 
management systems are currently the greatest barrier to timely 
and meaningful reporting'' at Federal agencies. Weak automated 
systems are more vulnerable to fraud, and they reduce 
management's ability to monitor operations.
    IG's have a stake in developments affecting Federal 
financial management. The Chief Financial Officer Act (CFOA) 
requires agencies to have audited financial statements 
beginning for fiscal year 1997. OIG's will perform most agency 
audits. Under the Government Performance and Results Act (GPRA) 
agencies will develop performance measures for agency 
management and eventually use the measures for allocating 
budgets.
    b. Benefits.--The IG's work reduces fraud, waste, and abuse 
in the Federal Government and contributes to improvement in 
efficiency and effectiveness of agency operations. The 
independent status of the IG's renders their opinions more 
objective, and therefore of greater value to lawmakers and 
other reviewers.
    c. Hearings.--Subcommittee Chairman Horn opened the hearing 
on August 1, 1995, stating that Inspectors General must be 
accountable. They should encourage improvement while not 
stifling innovation. He noted that the IG Community is working 
on increasing their cooperation with management.
    June Gibbs Brown, Inspector General of the Department of 
Health and Human Services and Vice Chair of the President's 
Council on Integrity and Efficiency, noted that the IG's are in 
a unique position to help program managers and the Congress 
find ways to achieve a more effective and efficient government.
    Hubert Sparks, the vice chair of the executive council on 
integrity and efficiency and inspector general of the 
Appalachian Regional Commission emphasized the unique role and 
relationship between IG's and the rest of their organization. 
IG's will always be in a position of balancing actions that 
will fulfill the requirements of the IG Act and contribute 
positively to improve government operations.
    In response to a question from Mr. Bass, Ms. Brown disputed 
the conclusion of Vice President Gore contained in a National 
Performance Review report, from which Mr. Bass quoted, that 
``At virtually every agency he visited, the Vice President 
heard Federal employees complain that the IG's basic approach 
inhibits innovation and risk-taking. Heavy-handed enforcement 
with the IG watchfulness compelling employees to follow every 
rule, document every decision, and fill out every form has had 
a negative effect in some agencies.'' Ms. Brown stated that 
very little of the IG resources are really directed internally 
to people filling out forms or doing that last ``i''-dotting.
    Ms. Valerie Lau, the chairman of the PCIE audit committee 
and the Inspector General of the Department of the Treasury 
testified on the ``substantial'' new audit responsibilities 
imposed on the Inspectors General as a result of the Chief 
Financial Officers Act. She commented on the inherent 
difficulty of the audits.
    Mr. Frank DeGeorge, Inspector General of the Commerce 
Department, reported on his office's experience with 
information technology evaluations. He testified that system 
acquisitions at Commerce are often disorganized and ad hoc.
    Mr. William Esposito, Deputy Assistant Director, Criminal 
Investigative Division, Federal Bureau of Investigation and 
chairman of the PCIE's integrity committee, reviewed the 
process for considering allegations of wrongdoing against 
Inspectors General. He noted that revisions to the policy were 
currently under consideration.
    Mr. Charles Dempsey, former vice-chair of the PCIE and 
former Inspector General of the Department of Housing and Urban 
Development thought the IG Act was the best piece of public 
administration legislation in the last 20 years.
    Mr. Sherman Funk, former Inspector General of the 
Departments of State and Commerce, also commented on the 
balancing act that the Inspectors General perform. He disputed 
the contention, which he attributed to his fellow witness Paul 
Light, that IG's are too often focused on peripheral issues 
rather than concerned with the performance of the activities 
for which they were responsible.
    Dr. Paul Light, Pew Charitable Trusts, recalled the 
observation from his book, Monitoring Government that the 
Inspectors General were not sufficiently focused on prevention. 
He was of the opinion that the IG's hide behind the Yellow Book 
too frequently when it comes time to give meaningful advice to 
their departments and agencies on how they might prevent 
mistakes before they happen.
    Mr. Dwight Ink, president emeritus, Institute of Public 
Administration, observing that he testified from the 
perspective of his experience as a program manager, urged a 
narrower focus for the IG's. He testified that because program 
managers are held accountable for program outcomes, they ought 
to have their own resources for ensuring the integrity of the 
programs for which they are responsible.

15. Implementation of the Chief Financial Officers Act of 1990 and the 
        Government Management Reform Act of 1994.

    a. Summary.--The Chief Financial Officers (CFO) Act of 1990 
required agencies to have audits of revolving funds, trust 
funds and all funds that resembled commercial enterprises. The 
1994 Government Management Reform Act (GMRA) extended the CFO 
requirements to cover all agency resources, with agency-wide 
audited financial statements due in March 1997, and Federal 
Governmentwide audited financial statements due in March 1998.
    b. Benefits.--Audited financial statements improve the 
quantity and quality of information provided to users of 
financial statements, allowing better decisionmaking concerning 
the allocation of scarce resources. Requiring agencies to 
prepare and have audited their financial statements requires 
them to strengthen their internal controls over waste, fraud 
and abuse, and enhances the reliability of the information 
contained in the financial statements. In all, the result for 
the executive branch will be greater efficiency and 
effectiveness of agency operations.
    c. Hearings.--Subcommittee Chairman Horn opened the hearing 
held on July 25, 1995, by stating that audited agency financial 
statements will minimize weak management controls, fraud and 
waste. The goal of each agency must be to produce a full 
statement on time and get an unqualified or ``clean'' opinion 
on the statement.
    Mrs. Maloney, in her statement, said that quick action was 
necessary to ensure compliance with the laws and stressed that 
there should be no delay in meeting the deadlines for audited 
financial statements.
    Mr. Charles A. Bowsher, Comptroller General of the United 
States, described the progress made by the 24 agencies of the 
executive branch in implementing the CFO Act and the GMRA and 
stressed that proper accounting and financial reporting leads 
to much better barriers against fraud, waste, and abuse.
    Mr. G. Edward De Seve, Controller, Office of Federal 
Financial Management (OFFM), Office of Management and Budget 
(OMB), discussed the role of the Federal Accounting Standards 
Advisory Board in developing Federal accounting standards. He 
hopes these will be available in time to be used for the fiscal 
year (FY) 1996 agency audited financial statements and the 
fiscal year 1997 Governmentwide audited financial statements.
    Mr. Gerald R. Riso, fellow of the National Academy of 
Public Administration and former Associate Director for 
Management and Chief Financial Officer, OMB, provided a 
historical perspective of the development of the CFO Act. In 
his view, the CFO Act has improved Federal financial management 
in many agencies, although the rate of progress in system 
improvement has slowed down.
    Mr. Edward J. Mazur, vice president for administration and 
finance, Virginia State University, and former Controller, 
OFFM, OMB, had several recommendations to strengthen the CFO 
Act, for instance the Controller of OFFM should report directly 
to the OMB Director, and that agencies should establish audit 
committees.
    Mr. Harold I. Steinberg, former Deputy Controller, OFFM, 
OMB, testified on four aspects of the CFO Act: its genesis and 
initial funding; agency CFO structures and appointments, 
financial management staffing; and the preparation of audited 
financial statements. In his opinion, agencies derive the real 
benefit from being audited from going through the process of 
preparing the financial statements, because they learn about 
and can correct weaknesses in their accounting and financial 
reporting systems.
    Mr. Buel T. Adams, vice president and treasurer, CBI 
Industries, representing the Financial Executives Institute, 
described the state of fiscal affairs of the Federal Government 
as ``woefully inadequate'', especially with respect to 
financial management systems. He said that management 
accountability must be improved and that taxpayers should hold 
Congress accountable for ensuring that their tax dollars are 
being spent efficiently.
    Mr. Thomas V. Fritz, president and chief executive officer 
of the Private Sector Council, listed benefits from audits 
required by the CFO Act: savings; knowledge about internal 
control and information systems problems; and clearer, more 
accurate and useful information about an agency's financial 
condition.
    Mr. Anthony A. Williams, then-Chief Financial Officer 
(CFO), U.S. Department of Agriculture, described USDA's 
accomplishments in financial management, including procurement 
reform, developing cost management techniques, oversight of the 
National Finance Center, and the Financial Vision and Strategy 
project.
    Mr. Alvin Tucker, Deputy CFO, Department of Defense, 
described steps the Department of Defense is taking to try to 
ensure that the goals of the CFO Act can be attained.
    Mr. Dennis Fischer, CFO, General Services Administration, 
described GSA's approach to CFO Act compliance. GSA is one of 
only four agencies that routinely receive unqualified opinions 
as a result of agency-wide audits. He credited GSA's success on 
having implemented the fundamental aspects of good financial 
management: CFO organization and responsibility well defined 
and strong controllers in place in major program areas such as 
the Public Buildings Service, Federal Supply Service, and 
Information Technology Service.
    Ms. Bonnie Cohen, Assistant Secretary for Administration 
and CFO, Department of the Interior, stressed the advantages of 
having responsibility for both budget and finance functions, 
and predicted that, with increased use of performance 
measurement, the link between budget and finance will become 
even stronger.

16. Department of Defense's Financial Management Problems.

    a. Summary.--The subcommittee has been examining certain 
indications, as expressed in news articles and in congressional 
hearings, of the Department's lack of ability to control 
problem disbursements, specifically negative unliquidated 
obligations and unmatched disbursements, as well as contractor 
overpayments which the Department of the Navy took years to 
recover. Additionally, as part of the ongoing subcommittee 
review of the Chief Financial Officers Act of 1990 and the 
Government Management Reform Act of 1994, it appears that the 
Department of Defense (DOD) will be unable to comply with the 
requirements of the GMRA for a considerable number of years, 
until they implement modern accounting and financial systems 
that currently they lack.
    Recent articles in the national press and other hearings on 
Capitol Hill have highlighted serious shortcomings in the 
Defense Department's financial management systems. The 
Washington Post reported that, in the past 10 years the 
Department of Defense had spent $15 billion that it could not 
account for. Contractors are routinely overpaid millions of 
dollars and are sometimes stonewalled when they try to give the 
money back. The systems are antiquated and make it difficult 
for staff to do their work accurately. The CFO Act of 1990 
required the preparation and audit of financial statements for 
the Departments of the Army, the Air Force and 22 funds. Out of 
24 parts of DOD examined in fiscal year (FY) 1994, only 1, a 
minor fund, received an unqualified opinion. Most were either 
not audited or received a disclaimer, meaning that the 
statements were not auditable, and therefore not in compliance 
with the CFO Act.
    b. Benefits.--The hearing addressed areas of needed 
improvement in financial management at the Department of 
Defense. If the millions of dollars that have been reported as 
overpayments to contractors had been used for necessary 
expenses, the Department would have been able to improve its 
readiness at a lesser cost than at present.
    c. Hearings.--A hearing was convened on November 14, 1995, 
to examine the Department of Defense's compliance with the 
Chief Financial Officers (CFO) Act of 1990 and the Government 
Management Reform Act of 1994. Subcommittee Chairman Horn 
opened the hearing by saying that strong financial management 
was needed and that the hearing would focus on what the 
Department was doing to strengthen its management control.
    Mrs. Maloney echoed Mr. Horn's statements and emphasized 
the need to follow generally accepted accounting principles 
(GAAP), citing the example of the improvement in the city of 
New York's fiscal situation after it adopted GAAP.
    Mr. John Hamre, Comptroller, Department of Defense, 
responded to the criticisms in the May 14, 1995 Washington Post 
article, and asked that the letter he had sent to Hon. Bill 
Young, chairman, Subcommittee on National Security, Committee 
on Appropriations, dated May 22, 1995, be included in the 
record. He gave his perspective on how DOD was doing in reform 
and improvement of financial management, and emphasized DOD's 
commitment to consolidate its accounting systems, and resolve 
the longstanding problem of unmatched disbursements.
    Mr. Richard Keevey, director, Defense Finance Accounting 
Systems, in answer to a question from subcommittee Chairman 
Horn as to how he would rate the DOD, on a scale of 1 to 10, 
with 10 being closest to getting clean audit opinions, he rated 
the Department as a 3.
    Mr. Alvin Tucker, Deputy CFO, DOD, discussed DOD problem 
disbursements, specifically the unmatched disbursements problem 
and overpayments to contractors. He then described DOD's plans 
for financial management reform. He stated that the overarching 
problem preventing an unqualified or qualified opinion on the 
DOD's financial statements is that the accounting systems which 
support the financial statements do not have an integrated 
general ledger or produce account-oriented transaction files, 
but gave no timetable for implementing a transaction-driven 
general ledger system.
    Mr. G. Edward DeSeve, Controller, Office of Federal 
Management, Office of Management and Budget, testified that OMB 
has been helping the Department of Defense move toward meeting 
the requirements of the CFO Act as set out in OMB Circular A-
127, Financial Management Systems (the Circular). OMB has 
recommended that DOD look outside of its own current financial 
management structure for system solutions, rather than building 
on the best of the in-house systems, since 76 percent of them 
do not meet the Circular's requirement to be consistent with 
the U.S. Standard General Ledger.
    Mr. Gene Dodaro, Assistant Comptroller General, General 
Accounting Office, gave the GAO's perspective on the challenges 
facing the DOD in meeting the objectives of the CFO Act. He 
stated that CFO Act audits have brought greater clarity to 
DOD's financial management problems. Progress is slow. 
According to a recent DOD IG report, general fund financial 
statements will remain unadaptable until September 1998 and the 
DOD IG will not be able to render an audit opinion on any of 
the services until the year 2000 at the earliest. He suggested 
the establishment of an independent, outside board of experts 
to aid in reform efforts.
    Ms. Helen T. McCoy, Assistant Secretary of the Army, 
described the improvements the Department of the Army has made 
in implementing the Chief Financial Officers (CFO) Act. The 
Army has prepared agency-wide audited financial statements as a 
pilot under the CFO Act since fiscal year (FY) 1991 but the 
auditors have been unable to express an opinion on the 
reliability of the financial statements because the accounting 
systems that provide the information for the statements do not 
have an integrated general ledger or produce account-oriented 
transaction files. The audit opinions, however, did note 
significant progress. The management control process has been 
restructured, and there is a new performance assessment process 
within Department of the Army headquarters.
    Ms. Deborah P. Christie, Assistant Secretary of the Navy, 
discussed the plans that the Department of the Navy has for 
financial management improvement. She emphasized the role of 
selection, upgrading, and deployment of financial systems. Four 
key activities in improving Navy financial operations are: 
organizing the Department, consolidating finance and accounting 
services in DFAS, standardizing and upgrading accounting 
systems, and improving the feeder systems and the quality of 
the data they contain. The final step will be to ensure the 
input of accurate data through modern feeder systems and a 
system of internal controls to provide sound financial 
information for internal decisionmaking and external reporting.
    Mr. Robert F. Hale, Assistant Secretary of the Air Force, 
discussed the progress the Department of the Air Force had made 
under his leadership. He has set up the Financial Improvement 
Policy Council, which works with senior Air Force and DOD 
leaders, and with organizations within the DOD such as DFAS and 
DBOF, the Financial Management Steering Committee, and the 
Senior Financial Management Oversight Council. He has called on 
the GAO and the Financial Executive Institute for advice and 
guidance on how to improve financial management. As a result, 
the Air Force has asked for assistance from Coopers and Lybrand 
and Electronic Data Systems in the area of systems 
certification and performance indicators. The Air Force is 
concentrating its efforts in the critical areas of inventory 
management, automated data processing security, internal 
controls, and streamlining the financial management process.
    Ms. Eleanor Hill, Inspector General, DOD, provided an 
assessment of the Department's ability to improve its finance 
and accounting operations and to comply with the acts. She also 
discussed the audit approach devised by the DOD IG's office. 
She stated that the financial statement data for the vast 
majority of DOD funds remain essentially not in condition for 
audit, because of a general lack of effective internal 
management controls. Neither the OIG nor the Service audit 
organizations were able to give audit opinions on the financial 
statements for the largest DOD funds covered by the CFO Act 
requirements for fiscal year 1994, funds totaling $715.5 
billion. The most fundamental problem was that accounting 
systems do not compile and report reliable audit information.

17. Electronic Reporting Streamlining Act of 1995.

    a. Summary.--The Paperwork Reduction Act of 1995 included a 
number of reforms designed to reduce the burden of government-
imposed paperwork on businesses and households. The Electronic 
Reporting Streamlining Act of 1995 would reduce the burden of 
regulatory reporting for business by allowing necessary data to 
be reported in an electronic format.
    b. Benefits.--This will improve the efficiency of Federal 
Government operations by allowing electronic filing of the 
necessary documents.
    c. Hearings.--Subcommittee Chairman Horn held a hearing on 
October 10, 1995, which focused on possibility of streamlining 
Federal operations, and easing the burden on private firms of 
reporting regulatory information, by adopting a scheme for 
electronic reporting.
    Mr. Thomas Kelly, Director, Regulatory Management and 
Information, Office of Policy, Planning and Evaluation of the 
U.S. Environmental Protection Agency (EPA) testified concerning 
his agency's use of information technology and the various 
initiatives related to electronic reporting and dissemination 
of information. Many of these initiatives were associated with 
the National Performance Review projects.
    Mr. Stephen Hanna, assistant for information technology, 
California EPA, explained his agency's pilot project for 
reporting regulatory information on hazardous waste manifests 
and other data required to be reported by private companies.
    Mr. Brad W. Lamont, vice president, Romic Environmental 
Technologies Corp., testified about his company's role in the 
California pilot. Mr. Lamont noted the large number of pages of 
data that Romic was required to submit to Cal-EPA, and that 
this volume of data was transferred by modem in 45 seconds. 
Upon questioning, Mr. Lamont noted the receptiveness of the 
Cal-EPA to new electronic reporting initiatives.
    Mr. David Roe, senior attorney, Environmental Defense Fund, 
noted the role that increased information about toxic release 
can play in improving enforcement and community information. 
Rose explained the manner in which electronic data in 
California eases the work of his organization in maintaining 
oversight of environmental data.
    Mr. Richard Ferguson, board member and executive director 
of Environment and Safety Data Exchange, is a leading expert on 
data exchange and standards issues. Mr. Ferguson explained the 
rationale for moving toward increased electronic reporting. 
According to Mr. Ferguson, the primary reason is that some will 
benefit from a reduced reporting burden, and it is those who 
must do the work to achieve the standards required for the plan 
to work.

18. Use of Transportation by Senior Executive Branch Officials in 
        Compliance with Federal Travel Guidelines.

    a. Summary.--Continuing its oversight investigation and 
pursuant to Rules X and XI of the Rules of the House, the 
subcommittee has reviewed more than 40,000 documents relating 
to travel by senior executive branch officials. A pattern of 
neglect, if not abuse, was discovered on the part of some 
Federal agencies.
    The Office of Management and Budget (OMB), in Circular A-
126, has developed standards for government aircraft use by 
senior executive branch officials. These requirements have been 
supplemented by a White House Memorandum (dated February 10, 
1993) and by OMB Bulletin 93-11. As President Clinton stated in 
the Memorandum: ``The taxpayers should pay no more than is 
absolutely necessary to transport government officials. The 
public should be asked to fund necessities, not luxuries, for 
its public servants.''
    In addition to covering the use of government aircraft, the 
President's Memorandum contains limitations on the use of 
regularly scheduled commercial aircraft. It further requires 
that travel documentation ``be disclosed to the public upon 
request, unless classified.'' The General Services 
Administration (GSA) is charged with compiling a semiannual 
``Senior Federal Travel Report,'' based on submissions from 
Federal agencies. It is incumbent upon the agency to supply 
full and accurate data in compliance with travel protocols and 
requirements. However, this has not been the case. OMB Circular 
A-126 requires the semi-annual publication of specific data in 
the Senior Federal Travel Report, published by the General 
Services Administration. Two problems exist in the reporting of 
senior official travel. First, agencies are frequently late in 
submitting completed reports to GSA. Second, agencies do not 
always supply all the needed data (specifically, cost to the 
government, reimbursable cost), intermediate destinations on 
round trip flights are frequently not reported, and costs are 
not pro-rated per individual.
    Additionally, the published copies of the Senior Federal 
Travel Reports are difficult to read and interpret. The 
International Civil Aviation Organization (ICAO) codes as 
listed in the text of the reports are not parallel to the ICAO 
codes as listed in the index. Important data elements are 
omitted from the final reports. There is no audit structure 
that enables GSA to enforce compliance.
    The subcommittee held two investigative hearings to examine 
the travel practices of Cabinet Secretaries and other senior 
executive branch officials. The first hearing was held on 
December 29, 1995, to examine the abuse of travel by Energy 
Secretary Hazel O'Leary, former White House staff official 
David Watkins, General Joseph Ashy, and the incomplete 
reporting by agencies such as NASA.
    The subcommittee received testimony from Representative 
Barlett regarding his 2 year involvement in examining the use 
of government aircraft by senior Federal officials. He became 
interested in the abuse of aircraft after David Watkins, at the 
time a White House staffer, used a Presidential ``whitetop'' 
helicopter for transportation to play golf at a Frederick, MD 
golf course.
    Mr. David E. Williams, research director, Citizens Against 
Government Waste, testified about the Citizens Against 
Government Waste's longstanding examination of the travel of 
Secretary O'Leary. Williams testified among other things that 
Secretary O'Leary retains a staff of 14 to handle her 
invitations and travel arrangements.
    Mr. Peter B. Zuidema, Director, Aircraft Management 
Division, Federal Supply Service, General Services 
Administration, testified that Federal aircraft can be used 
only for official purposes, and only when commercial airlines 
are not reasonably available. A cost comparison must also be 
performed.
    Mr. Dabis B. Buckley, Special Assistant to the Inspector 
General, Department of Defense, testified that as a result of 
investigations by the Office of the IG, the Department of 
Defense has taken steps to tighten its policy regarding the use 
of its aircraft.
    A second hearing was held on May 16, 1996, to investigate 
practices at three executive branch agencies, the Department of 
Interior, the Department of Veterans' Affairs, and the 
Department of Labor. Testimony was received from Gregory 
Walden, counsel, Mayer, Brown & Platt; Bonnie Cohen, Assistant 
Secretary for Policy, Management and Budget/Chief Financial 
Officer, the Department of Interior; Harold Gracey, Chief of 
Staff, Department of Veterans' Affairs; and Patricia Lattimore, 
Deputy Assistant Secretary for Administration and Management, 
Department of Labor.
    Mr. Walden testified that Government travel is something 
that is often abused and overlooked. He reiterated subcommittee 
Chairman Horn's point that the issues involved are not only 
about Government waste, but rather, Government ethics. Walden 
placed all travel violations discussed into an ethical context.
    b. Benefits.--Misuse of government aircraft and poor 
reporting of trips on government aircraft is a serious problem. 
Because of the casual reporting standards on the part of most 
Federal agencies it is difficult to determine which flights are 
in violation of Federal travel requirements. Subsequently it is 
difficult to determine how much money can be saved by 
eliminating abuse of the aircraft by senior Federal officials. 
With continuing congressional oversight, further hearings will 
instil some awareness into Federal agency management practices 
and that cost consciousness must be a factor in traveling on 
Government aircraft.
    c. Hearings.--December 29, 1995 a hearing was held 
entitled, ``The Use of Government Aircraft by Senior Federal 
Officials.'' May 16, 1996, a hearing was held entitled, 
``Senior Executive Branch Officials Compliance with Federal 
Travel Guidelines.''

19. The Government's Response to the Northridge Earthquake.

    a. Summary.--On January 17, 1994, the Los Angeles area was 
struck by one of the most damaging earthquakes in the Nation's 
history. The earthquake, referred to as the ``Northridge 
Earthquake'' resulted in more than 70 deaths, more than 18,000 
injuries and caused 25,000 residents to become homeless 
overnight. The General Accounting Office (GAO) estimated more 
than 55,000 structures were damaged; 1,600 of these were deemed 
uninhabitable. The area's freeway system sustained heavy damage 
which resulted in closures in a number of locations. Of the 
$25-$30 billion losses sustained, FEMA provided relief in the 
amount of $3.4 billion, not counting assistance from 27 other 
Federal agencies and the American Red Cross.
    On January 19, 1996, the subcommittee held an oversight 
hearing on the Federal Government's response to the 1994 
Northridge earthquake. The focus of the hearing was to receive 
testimony on preventive and cost-effective lessons that could 
be learned from the earthquake. Testimony was received from 
Hon. James Lee Witt, director, Federal Emergency Management 
Agency; Hon. Richard Riordan, mayor, city of Los Angeles, CA; 
Richard Andrews, director, Governor's Office of Emergency 
Services, State of California; Constance Perett, manager, 
Office of Emergency Services, County of Los Angeles; Maj. Gen. 
Robert Brandt, Assistant Adjutant General and Commander, 
California Army National Guard; Donald Jones, vice president 
for disaster services, American Red Cross; James Haigwood, CEO, 
American Red Cross, Los Angeles Chapter; Terri Jones, director 
of special projects, California Community Foundation; John 
Suggs, director of public policy and government affairs, United 
Way of Greater Los Angeles; Blenda Wilson, president, 
California State University, Northridge; Robert Maxson, 
president, California State University, Long Beach; and J. 
Richard Williams, dean of engineering, California State 
University, Long Beach.
    Mr. Witt outlined some of the steps FEMA took in the 
aftermath of the earthquake and some of the problems 
encountered with the recovery effort which included the 
distribution of benefits to eligible recipients, errors of 
mistakenly giving relief multiple times to the same people and 
to ineligible people such as illegal aliens. He acknowledged 
that FEMA needed to enhance its effort to work with State and 
local governments to promote mitigation efforts.
    Mayor Riordan described the efforts taken by the city of 
Los Angeles to provide relief from the earthquake, and 
suggested that in the future, the Federal Government could 
bypass FEMA and the Small Business Administration (SBA) and 
allocate disaster relief funds directly to local governments. 
This, he argued, would allow for a ``real-time'' relief 
process, expediting recovery efforts for victims. He added that 
the relief mechanism was not designed to enable localities to 
quickly provide assistance to multifamily apartment dwellings. 
He noted that SBA loans did not provide relief for multifamily 
apartments which sustained damage above the SBA limit of $1.5 
million. In addition, FEMA should make a distinction between 
commercial and residential units. He also pointed out that 
instead of importing temporary relief workers from out-of-
state, FEMA should make a concerted effort to hire local 
residents to provide assistance. In response to questioning, 
Mayor Riordan proposed that the SBA consider restructuring 
loans to allow for the decrease in value due to earthquake 
damage.
    b. Benefits.--This hearing enabled members of the 
subcommittee to learn first-hand the impact of one of the most 
damaging natural disasters to ever confront the United States, 
and learn how the agencies designed to respond to such crises 
fared in their response. The hearing also allowed members to 
learn of the efforts underway or planned which would allow 
manmade structures to withstand future disasters of this type.
    One of the actions taken was the establishment of a 24-hour 
disaster information network called the Recovery Channel which 
was broadcast on 125 cable television outlets. Another was the 
use of computer technology allowing for almost instantaneous 
assessments of relief available to victims of the earthquake.
    Donald Jones testified that more than 14,000 Red Cross 
volunteers responded to the earthquake. The Red Cross has an 
agreement with FEMA to provide emergency support services, 
including food, shelter, and clothing and spent more than $38 
million providing services to victims of the earthquake.
    c. Hearings.--A field hearing entitled, ``The Government 
Responses to the Northridge Earthquake,'' was held on January 
19, 1996.

20. OMB 2000 Reforms: Where Are They Heading?

    a. Summary.--In March 1994, the Office of Management and 
Budget (OMB) commenced a reorganization intended to make OMB 
more effective in serving the President and also how to achieve 
the proper balance between its responsibilities for management 
practices within the executive branch and its responsibilities 
for budget formulation. This reorganization, dubbed OMB 2000, 
fundamentally changed the organizational structure of OMB. 
Former budget areas were recreated as resource management 
offices (RMOs), and the Office of General Management was 
abolished. Since the three statutorily required offices--the 
Office of Federal Procurement Policy (OFPP), the Office of 
Federal Financial Management (OFFM), and the Office of 
Information and Regulatory Affairs (OIRA)--were unable to be 
abolished, OMB reduced the staffs of these offices and 
reallocated staff to the RMOs. In the case of the OFFM, over 
half of the authorized staff positions were transferred out.
    The subcommittee convened a hearing to review how a reform 
initiative, known as OMB 2000, has impacted upon management 
practices within the Office of Management and Budget and where 
OMB is headed as a result of this reform initiative. The 
subcommittee invited the following witnesses to testify at the 
February 7, 1996 hearing: Hon. Alice M. Rivlin, Director, and 
Hon. John A. Koskinen, Deputy Director for Management, Office 
of Management and Budget; Paul L. Posner, Director, Federal 
Budget Issues, General Accounting Office; L. Nye Stevens, 
Director, Federal Management Issues, General Accounting Office; 
Dwight A. Ink, president emeritus, Institute of Public 
Administration and former Assistant Director for Management, 
Bureau of the Budget and the Office of Management and Budget 
(Nixon administration); and Edwin Harper, former Deputy 
Director, Office of Management and Budget (Reagan 
administration).
    In his opening statement, subcommittee Chairman Horn stated 
that some experts say that a proper balance between budget and 
management has never been achieved at OMB. These experts 
question whether it is feasible to integrate the two functions 
in one organization, and suggest a solution is to set up a 
separate office within the Executive Office of the President, 
devoted entirely to management issues.
    Ms. Rivlin testified that the premise of OMB was based upon 
the notion that management is about using resources 
effectively. She asserted that there is not a way to separate 
resource management from other management. Prior to OMB 2000, 
OMB used a disjointed approach to dealing with both 
governmentwide and agency-specific management issues which was 
counterproductive.
    Dr. Ink testified that the potential for improvement in the 
management function within OMB was low because of: the inherent 
competition with the budget process; the budget not being 
focussed on crosscutting issues; lack of expertise in OMB to 
advise agencies on reorganization; lack of emphasis on long-
term investment; and financial management. Consolidation of 
management and budget functions limits the capacity of OMB to 
provide leadership for reform, and can hinder actions to 
prevent abuse. He supported the idea of establishing an Office 
of Federal Management within the Executive Office of the 
President, but outside OMB.
    Dr. Harper defined good management as the efficient use of 
resources in pursuit of specific policy objectives, and said 
that it would be impossible to deal with improving management 
until we can measure government program outputs related to 
policy objectives. He questioned whether the manpower resources 
assigned to OMB were adequate and whether the statutorily 
mandated offices were necessary. He would also approve of a 
separate Office of Management, whose head should have cabinet 
rank.
    b. Benefits.--The new direction chosen for OMB, under the 
OMB 2000 initiative, was to make all OMB activities part of a 
comprehensive, integrating budget analysis, management review 
and policy development. The resource management offices (RMOs) 
were set up to implement this. These RMOs are responsible for 
budget formulation, program analysis, implementation of 
governmentwide policy as formulated by the three statutory 
offices, and program effectiveness and efficiency.
    Agencies depend on OMB for guidance on implementing 
regulations required by new and existing legislation; it shares 
responsibility with the Office of Personnel Management for 
making sure that agency personnel are trained to perform new 
functions, such as those required under the Government 
Performance and Results Act. It should be a resource for the 
President in management of the executive branch agencies, 
drafting Executive orders as required or acting as a guide or 
goad, whichever is necessary, to ensure that agencies follow 
the administration's policies.
    The intent of OMB 2000 was to increase the attention OMB 
staff give to management issues. In the opinion of the 
committee, as a result of its oversight activities, this has 
not happened, and it seems that more drastic action is needed 
to ensure that OMB has the capability to advise the executive 
branch concerning the complex problems of management facing it.
    c. Hearings.--A hearing entitled, ``OMB 2000 Reforms: Where 
Are They Heading?'' was held on February 7, 1996.

21. Using the Best Practices of Information Technology in Government.

    a. Summary.--Leading corporations use information systems 
to remake their organizations and improve performance. Enhanced 
communications let these organizations operate with a greatly 
reduced hierarchical structure. Fewer middle managers are now 
needed between line workers and senior management as 
organizations become ``flatter'' and less bureaucratic. 
Corporations are using more direct communications links with 
customers, suppliers and transporters to shorten delivery 
schedules and reduce expensive inventories. Use of cutting edge 
information resources at these organizations is often central 
to their core business strategies.
    Despite the potential of information systems in 
strengthening organizations, the Federal Government has lagged 
behind in its successful application. Numerous reports have 
identified weaknesses with specific Federal Government 
information systems. The General Accounting Office has 
previously placed many of the Federal Government's largest 
information technology systems on its ``high risk series'' 
listing of specific programs most vulnerable to waste, fraud 
and abuse. These have included the Federal Aviation 
Administration's air traffic control modernization, the 
Internal Revenue Service's tax systems modernization and the 
Department of Defense's corporate information management 
initiative. Other similar reports, such as the Office of 
Management and Budget's high risk list, have identified 
additional troubled information systems developments.
    The subcommittee convened a hearing to address the problem 
of examining how leading private institutions are using 
information technology to improve their organizations and to 
capitalize on the opportunities available from information 
systems. Witnesses testifying were: Peter Huber, senior fellow, 
Manhattan Institute, columnist, and author; Chris Hoenig, 
Director, Information Management Policy and Issues, General 
Accounting Office; Dr. Renato A. DiPentima, vice president & 
chief information officer, SRA Corp.; C. Morgan Kinghorn, Jr., 
director, Coopers & Lybrand; John Kost, chief information 
officer, State of Michigan; and David R. Brooks, vice 
president, Health Care Technology Sector, Science Applications 
International Corp.
    b. Benefits.--Despite the expenditure of approximately $25 
billion per year and $200 billion over the past decade on 
information systems, the Federal Government lags behind the 
private sector in the effectiveness of its use of new 
technology. The Federal Government needs to draw upon the 
experience of other organizations that have successfully 
harnessed information technologies to be more efficient, 
effective organizations. The recommendations made at the 
hearing will improve the oversight activities conducted by the 
subcommittee.
    c. Hearings.--A hearing on ``Using the Best Practices of 
Information Technology in Government'' was held on February 26, 
1996.

22. Oversight of IRS Financial Management.

    a. Summary.--Pursuing oversight issues designated in Public 
Law 103-356, the Government Management Reform Act of 1994 and 
Public Law 101-576, the Chief Financial Officers Act of 1990, 
the subcommittee convened two oversight hearings regarding the 
Internal Revenue Service's financial management. The first 
hearing examined several aspects of financial management and 
addressed the IRS' ability to produce financial statements, to 
have these statements audited, and to obtain verification of 
accuracy. Testimony was received from: Gene L. Dodaro, 
Assistant Comptroller General, Accounting and Information 
Management Division, General Accounting Office; Hon. Margaret 
Milner Richardson, Commissioner, Internal Revenue Service; 
Donald C. Alexander, former Commissioner of the Internal 
Revenue Service from 1973 to 1977; Donald L. Korb, former 
Assistant to the Commissioner of the Internal Revenue Service 
from 1984 to 1986; and Shannon O'Toole, former Resolution Trust 
Corporation Department Head and Section Chief of Real Estate 
Disposition.
    Subcommittee Chairman Horn emphasized in his opening 
statement the importance of Congress receiving accurate 
information to properly oversee and evaluate the IRS' 
performance. In addition, he addressed concerns regarding the 
General Accounting Office's inability to give an opinion on 
audited IRS' financial statements, and weaknesses of internal 
controls and lack of audit documentation.
    When GAO auditors review the IRS statements and underlying 
records, they were unable to reconcile these records and, thus, 
were unable to give an opinion on the financial statements from 
fiscal years 1992 through 1995. The audits have identified five 
significant problems within the IRS' financial management, 
which if not corrected, will preclude future auditors from 
rendering an opinion on the IRS's financial statements. They 
include the: (1) inability to verify total revenue of $1.4 
trillion and the amount of tax returns; (2) unsubstantiation of 
the amount of collection from Social Security, income and 
excise tax; (3) reliability of reported estimate for FY 1995 of 
$113 billion for valid accounts receivable and of $46 billion 
for collectible receivable; (4) verficiation of the $3 billion 
for non-payroll expenses that the IRS reports; and (5) amounts 
the IRS reported as appropriations available for operating 
expenditures which cannot be reconciled with Department of the 
Treasury's records.
    Commissioner Richardson claimed that the IRS has strong 
systems and controls to ensure that the individual accounts are 
accurate and that they work. She explained that the IRS has two 
separate financial processes to track funds: the administrative 
system that handles our appropriated funds, and the revenue 
system that tracks tax collections. She stated that the current 
system the IRS uses, designed in 1994 (2 years after the IRS 
started doing service-wide audits as a pilot under the CFO 
Act), is not designed to provide the detailed information that 
is required by the CFO Act for financial statement 
presentation.
    Regarding accounts receivable, she described the 
improvement in management of the receivables inventory that has 
been undertaken by the IRS. They are also stepping up efforts 
to increase collection yields. She provided an update on the 
status of the private debt collection pilot project, in which 
the IRS is contracting out debt collection activities to a 
small number of debt collection agencies.
    A follow-up oversight hearing was held on September 19, 
1996, to further discuss the state of financial management in 
the Internal Revenue Service. The hearing addressed whether 
there had been any improvement since the first hearing 
regarding the IRS' inability to produce reliable financial 
statements and the internal controls or the accuracy of data 
input. Witnesses testifying included Gene L. Dodaro, Assistant 
Comptroller General, Accounting and Information Management 
Division, GAO; Steven App, Deputy Chief Financial Officer, 
Department of Treasury; and Anthony Musick, Chief Financial 
Officer, Internal Revenue Service.
    Gene Dodaro gave the subcommittee a status report about the 
progress the IRS is making in addressing its financial 
management problems. He explained that the IRS has two sets of 
financial statements to account for: statements on its revenue 
gathering function under its custodial responsibilities, 
running at about $1.3 to $1.4 trillion currently; and 
statements reporting on the administrative operations paid for 
out of appropriations, running at about $8 billion currently. 
The IRS has improved in this area, and the auditors were able 
to verify the validity of about $5 billion of their $8 billion 
in appropriations. However, two problems remain in the 
administrative area: Documentation of receipts and acceptance 
of goods and services is inadequate; and the cash accounts with 
the Department of the Treasury cannot be properly reconciled.
    b. Benefits.--IRS financial management impacts 
congressional decisionmaking on many levels. The reliability of 
revenue and other information gathered by the IRS is of concern 
to Congress since the revenues collected by the IRS represent 
more than 90 percent of all revenues available to the Federal 
Government. The confidence taxpayers have in the IRS to collect 
and account for the taxes they pay directly affects the degree 
to which they comply with the tax code which in turn impacts 
the taxes collected. The efficiency with which the IRS collects 
the taxes and other receivables owing to the Federal Government 
affects the cost of other Federal programs to the taxpayer. 
Subcommittee Chairman Horn introduced H.R. 2234, which is 
designed to improve debt collection efforts in the Federal 
Government, to include provisions related to the IRS use of 
private debt collection agencies.
    c. Hearings.--On March 6, 1996, the subcommittee held an 
oversight hearing entitled, ``Oversight of the Internal Revenue 
Service Financial Management.'' On September 19, 1996, a 
follow-up oversight hearing was held entitled, ``Internal 
Revenue Service Financial Management: Has There Been Any 
Improvement?''

23. Is January 1, 2000 the Date for Computer Disaster?

    a. Summary.--After midnight, December 31, 1999, computer 
systems throughout the world are at risk of failing. Computers 
may confuse the year 2000 with the year 1900 on January 1, 
2000, and go backward in time instead of forward when the new 
century begins. The severity of the problem was raised when 
Congress was told that if businesses and governments continue 
to ignore this issue, disruption of routine business operations 
and the inability of the Federal Government to deliver services 
to the American people could result. According to a 
Congressional Research Service Memorandum dated April 12, 1996, 
``Many people initially doubted the seriousness of this 
problem, assuming that a technical fix will be developed. 
Others suspect that the software services industry may be 
attempting to overstate the problem to sell their products and 
services. Most agencies and businesses, however, have come to 
believe that the problem is real, that it will cost billions of 
dollars to fix, and that it must be fixed by January 1, 2000, 
to avoid a flood of erroneous transactions.''
    On April 16, 1996, the subcommittee convened a hearing to 
collect the facts on the steps Federal agencies are taking to 
prevent a possible computer disaster. Subcommittee Chairman 
Horn raised the question whether agencies are taking the 
necessary actions to identify where the problem lies and 
whether they are providing the necessary human and capital 
resources to correct the problem. In her opening statement, 
Ranking Minority Member Maloney noted: ``The cost of failure is 
high--systems that deliver services to individuals will not 
work, and those services will not be delivered. Checks will not 
arrive on time. Planes will be grounded, and ports will be 
closed.''
    Testimony was received from: Kevin Schick, research 
director, the Gartner Group; Louis J. Marcoccia, director of 
data administration and logistics, New York City Transit 
Authority; Nicholas J. Magri, senior vice president, Securities 
Industry Automation Corp.; Michael B. Tiernan, the First Boston 
Corp. on behalf of the Securities Industry Association, Data 
Management Division; D. Dean Mesterharm, Deputy Commissioner 
for Systems, Social Security Administration; Hon. Emmett Paige, 
Jr., Assistant Secretary for Defense Command, Control, 
Communications and Intelligence, Department of Defense; and 
Hon. George Munoz, Assistant Secretary for Management and Chief 
Financial Officer, Department of the Treasury. The witnesses 
testified to a number of examples of incidences that could 
occur if industry and government continue to ignore this issue. 
In fact everything from unexpected expiration of drivers' 
licenses to erroneous dates for final mortgage payments could 
occur if two-digit date fields remain unable to recognize the 
year 2000.
    On September 10, 1996, the subcommittee convened a joint 
hearing with the Subcommittee on Technology of the Committee on 
Science to review the impact on personal computers, on State 
and local governments, and on Federal agencies. Testimony was 
received from: Sally Katzen, Administrator, Office of 
Information and Regulatory Affairs, Office of Management and 
Budget; Larry Olson, deputy secretary, information technology 
for the Commonwealth of Pennsylvania; Harris Miller, president, 
Information Technology Association of America; and Daniel 
Houlihan, first vice president and president elect, National 
Association of State Information Resource Executives.
    In her testimony, Sally Katzen provided an outline of the 
administration's current strategy for solving the problem: 1) 
raise the awareness of the most senior managers in Federal 
agencies to the dimensions of the problem; 2) promote the 
sharing of both management and technical expertise; and 3) 
remove barriers that may slow down or impede technicians fixing 
systems.
    Larry Olson presented Pennsylvania's plan of action. As 
noted by Olson, the key to success of the plan is senior level 
support. Mr. Olson pointed out that during his first year as 
Governor of Pennsylvania, Tom Ridge quickly recognized the 
dramatic implications of the Year 2000 date field problem. 
Subsequently the Governor took quick action to ensure that 
Pennsylvania businesses and governments will be prepared before 
January 1, 2000.
    Harris Miller presented an outline of how the Year 2000 
situation presents three problems for personal computer users 
in homes and businesses across the country: 1) the BIOs chip of 
individual machines; 2) the operating system that generally 
comes bundled with new computers; and 3) the commercial 
software purchased for those machines. Most equipment 
manufacturers in the past 18 months have modified their 
products. Operating systems in personal computers in most cases 
can have their operating systems ``fixed'' through a simple 
procedure using the computer's mouse. Commercial software 
products may or may not be Year 2000 compliant. An issue of 
great concern for personal computer users is the increasing 
access with other systems. In order to ensure that computer 
systems are operational in the year 2000, most systems will 
need modification. Miller also testified further that personal 
computer users as well as mainframe information technology 
managers need to be aware of this issue and take appropriate 
corrective steps.
    b. Benefits.--According to Mr. Schick, the crisis revolves 
around time, cost and risk. Businesses, Federal agencies, and 
State and local governments must understand that this 
information technology project cannot be allowed to slip: 
Saturday, January 1, 2000 cannot be postponed. Prevention of 
widespread disruption of services to citizens, breakdowns in 
information processing, and compromising of computer security 
controls must be kept to a minimum. The problem, although not 
technically complex, is managerially challenging and will be 
very time consuming for private and public sector 
organizations. It is the Government's responsibility to ensure 
that its constituents receive Federal services and that public 
safety is available to all citizens. (See section II.A.2.)
    c. Hearings.--Hearings entitled, ``Is January 1, 2000 the 
Date for Computer Disaster?'' and ``Solving the Year 2000 
Computer Problems'' were held on April 16, 1996 and September 
10, 1996.

24. Oversight of the General Accounting Office.

    a. Summary.--The primary mission of the General Accounting 
Office (GAO) is to investigate all matters relating to the 
receipt, disbursement, and application of public funds, which 
includes the audit requirements under the Chief Financial 
Officers Act of 1990. The scope of the GAO's authority has been 
extended to include conducting commercial audits of 
governmentwide operations; establishes principles and standards 
for accounting in executive agencies and audit evaluations of 
the adequacy of financial management and control; and to 
conduct a governmentwide audit of the executive branch's 
agencies in compliance with the Government Management and 
Reform Act of 1994.
    The subcommittee convened an oversight hearing on April 30, 
1996, to review the growing concerns regarding the GAO's 
operations and responsibilities; the efficiency of the GAO's 
processes; and the prioritization of the functions which the 
GAO performs. Testimony was received from Hon. Charles A. 
Bowsher, Comptroller General of the United States, U.S. General 
Accounting Office; Hon. John A. Koskinen, Deputy Director for 
Management, Office of Management and Budget; Dr. R. Scott 
Fosler, president, National Academy of Public Administration; 
Thomas V. Fritz, president and CEO, the Private Sector Council; 
and Dr. Cornelius (Neil) E. Tierney, accounting professor, 
George Washington University.
    Comptroller General Bowsher stated that since 1983, the GAO 
had doubled its productivity. Some of GAO's accomplishment have 
led to budget reductions, cost avoidance, appropriation 
deferrals, and revenue collections that have provided financial 
savings and other benefits in the billions of dollars. In 
fiscal year 1995, this amounted to a return of $35 for every $1 
appropriated for the GAO.
    Dr. Tierney stated that, with respect to the GAO's 
government auditing standards, two conditions exist that might 
warrant assistance from Congress: the need to actually audit 
and have auditors render an opinion on the adequacy of a 
government's system of internal controls; and giving increased 
emphasis within and possibly requiring the Inspectors General 
community to periodically conduct the program performance 
audits outlined and contemplated by the GAO in its government 
auditing standards.
    In addition, Tierney said that the concerns expressed about 
certain aspects of the GAO operations, its working 
relationships with individual Members of Congress and 
committees, and its independence, had been examined over the 
years. The GAO is continually concerned over the length of time 
taken to issue reports of its reviews and audits. At times, 
report preparation and delivery have exceeded a year or more. 
Also he stated that the GAO workload includes various studies, 
reports, audits, etc., that are legislatively mandated. Much of 
what appears to be self-initiated, is, in fact, the result of 
mandates in laws by earlier Congresses.
    b. Benefits.--In fiscal 1995, the GAO prepared 1,322 audit 
and evaluation reports, including 910 reports to Congress and 
agency officials, 166 congressional briefings, and 246 
congressional testimonies delivered by 72 GAO executives and 
serves a valuable asset to the Congress in its oversight of the 
executive branch.
    Mr. Bowsher also described steps the GAO has taken to 
improve its productivity and better serve Congress. It has 
streamlined its headquarters and field operations. It has 
improved its processes for conducting and reporting the results 
of its work. It plans to capitalize on advances in information 
resource technology and to enhance its methodological and 
technical skills. In addition, the GAO's financial audit 
division has successfully undergone an external peer review by 
KPMG Peat Marwick.
    c. Hearings.--On April 30, 1996, the subcommittee held an 
oversight hearing entitled ``Oversight of the United States 
General Accounting Office.''

25. Oversight of the General Services Administration.

    a. Summary.--The General Services Administration (GSA) was 
created to provide an economical and efficient system to supply 
goods and services to the Federal Government. It has not been 
reauthorized in the nearly 50 years of its existence.
    The subcommittee held a hearing on May 10, 1996, to examine 
GSA's authority over the Federal motor vehicle fleet, personal 
property disposal, and leasing of Federal buildings. The 
subcommittee heard testimony from: David Barram, Administrator 
of General Services, GSA; G. Martin Wagner, Associate 
Administrator, Office of Policy, Planning and Evaluation, GSA; 
Frank Pugliese, Commissioner, Federal Supply Service, GSA; 
David Bibb, Deputy Commissioner, Public Buildings Service, GSA; 
Andrew Jones, senior manager, Arthur Andersen; John Dues, 
partner and director, Arthur Andersen; Chris Butterworth, 
president, National Association of State Agencies for Surplus 
Property; and Bill Wilson, vice president, National Association 
of State Agencies for Surplus Property.
    Subcommittee Chairman Horn opened the hearing by noting 
that GSA had not been reauthorized since 1949, and asserted 
that this harmed GSA, since its programs do not have regular 
congressional input aside from the $257 million in appropriated 
funds. In addition to the lack of clear direction from 
Congress, GSA is split between policy and oversight and the 
provision of services. Chairman Clinger raised issues relating 
to the Federal motor vehicle fleet and if GSA could effectively 
operate a large fleet. Mr. Pugliese stated that the Federal 
Supply Service would be responsible for operating the GSA 
fleet, and the Office of Policy, Planning and Evaluation would 
handle the policy aspects. Pugliese noted that 90 percent of 
the dollars spent by the GSA fleet program are spent on private 
sector contractors--so much of the program is already 
privatized.
    Mr. Wagner described the purpose of the surplus property 
program, which is to put Federal property toward the highest 
possible use, in a Federal agency or a State or local 
government agency. Wagner agreed that GSA and other agencies 
should take a look at the property management function, since 
$30 billion in surplus personal property is declared excess 
each year by Federal agencies.
    Subcommittee Chairman Horn raised the issue of leases and 
public buildings, describing how GSA was charging his 
predecessor $80,000 for office space he obtained for $30,000, 
with an increase in service for constituents. Administrator 
Barram noted that GSA was required to locate, where possible, 
in downtown city centers, which inflates the cost.
    b. Benefits.--Administrator Barram noted that lease 
renegotiation and ensuring that tax reductions are passed 
through to the Federal Government will reduce office rate 
charges over the next few years. David Bibb noted that every 5 
years appraisers examine buildings to establish the market 
rate. Several private real estate firms have approached GSA 
offering to assist GSA in locating savings through 
restructuring existing leases, challenging tax assessments, and 
performing lease audits for free in exchange for some portion 
of the savings. Some private firms say that $1 billion could be 
saved annually, whereas Arthur Andersen notes show that GSA 
could save $565 million annually.
    c. Hearings.--On May 10, 1996, the subcommittee held a 
hearing on ``Oversight of the General Services Administration 
(GSA).''

26. Federal Information Policy Oversight.

    a. Summary.--As part of its oversight responsibility, the 
subcommittee has jurisdiction over the following aspects of the 
Government's information policy: the Freedom of Information Act 
(FOIA); the Privacy Act; Government in the Sunshine Act; and 
Federal Advisory Committee Act.
    The subcommittee conducted an oversight hearing on June 13, 
1996, to receive testimony from witnesses regarding the 
execution of these information policy laws. In his opening 
statement subcommittee Chairman Horn expressed his frustration 
upon learning that the Federal Bureau of Investigation (FBI) 
has a 4-year backlog for responding to FOIA requests. In noting 
the significance that the committee attaches to the Freedom of 
Information Act, he observed that the first report issued by 
the House Committee on Government Reform and Oversight was an 
updated version of ``A Citizen's Guide on Using the Freedom of 
Information and Privacy Act of 1974 to Request Government 
Records.''
    The subcommittee received testimony from Senator Patrick 
Leahy who noted the role that FOIA requests had in uncovering 
information about various Government actions. He stated that 
the law needed to be updated to reflect the advancing use of 
information technology in Government to maintain records, 
adding ``access should be the same whether they are on a piece 
of paper or a computer hard drive.'' The Senator also 
criticized the failure of agencies to comply with the statutory 
time limits for responding to requests.
    Few agencies actually respond to FOIA requests within the 
10-day limit required by law. Such routine failure to comply 
with the statutory time limits is bad for morale in the 
agencies and breeds contempt by citizens who expect Government 
officials to abide by, not routinely break, the law.
    Witnesses were Senator Patrick Leahy; J. Kevin O'Brien, 
Section Chief of the Freedom of Information/Privacy Acts 
Section, FBI; Roslyn Mazer, Deputy Assistant Attorney General, 
Office of Policy Development, Department of Justice; Anthony 
Passarella, Director, Directorate for Freedom of Information 
and Security Review, Office of the Assistant Secretary of 
Defense; Eileen Welsome, journalist; Larry Klayman, chairman 
and general counsel of Judicial Watch; Jane Kirtley, executive 
director, of the Reporter's Committee for Freedom of the Press; 
Byron York, reporter for the American Spectator; Marty Wagner, 
Associate Administrator, Office of Policy, Planning and 
Evaluation, GSA; James L. Dean, Director, Committee Management 
Secretariat Staff, GSA; Paul Kamenar, executive director, 
Washington Legal Foundation; Randolph May, attorney, 
Sutherland, Asbill & Brennan.
    b. Benefits.--Access to government information, government 
records about individuals, and the protection of personal 
records from unwarranted disclosure are each important 
protection in a democratic society. Technological developments 
have the potential of dramatically enlarging the potential for 
disclosure of this information. Legislative and oversight 
initiatives are necessary to assure that these new developments 
facilitate the release of information intended for disclosure 
in a timely manner, while also better shielding those personal 
records which the public expects to be kept private.
    c. Hearings.--Hearing entitled, ``Federal Information 
Policy Oversight,'' was held on June 13, 1996.

27. Oil Royalties.

    a. Summary.--The subcommittee has legislative and oversight 
jurisdiction with respect to the ``overall economy, efficiency 
and management of government operations and activities, 
including Federal procurement.'' In addition, the subcommittee 
has the oversight responsibility to review and study on a 
continuing basis, the operation of government activities at all 
levels with a view to determining their economy and efficiency. 
Pursuant to this authority, the subcommittee convened an 
oversight hearing to examine whether companies under agreements 
to extract oil from Federal lands in California undervalued the 
oil and as a result, underpaid royalties to the Federal 
Government.
    In 1975, the State of California and the city of Long Beach 
pursued litigation against seven major oil companies operating 
in California alleging that these companies conspired to keep 
posted oil prices low. The city and State claimed they had been 
damaged because their oil revenues depended on posted prices 
(posted prices are the announced prices at which crude oil 
purchasers, generally major refiners, will buy oil from 
producers at the wellhead) and the royalty thereon. If the 
posted price is below fair market value, the Federal Government 
loses tax and royalty revenue.
    In 1986, the Minerals Management Service (MMS) of the 
Department of the Interior contacted State officials to assess 
the appropriateness of posted prices as the royalty value 
basis. MMS concluded that the system of posted prices existing 
at the time fairly represented market value. Also weighing 
heavily in the MMS decision was the fact that the State and 
city had been unsuccessful in their antitrust claims in court. 
The Justice Department looked into the issue and chose not to 
pursue an investigation.
    In the mid-1980's, MMS, the General Accounting Office and 
the Internal Revenue Service independently analyzed the issue, 
but the information available to them was inconclusive in 
proving that Federal oil was undervalued at posted prices. In 
1991, six of the companies involved (ARCO, Shell, Chevron, 
Mobil, Texaco, and Unocal) reached settlements totaling $345 
million to end the court actions by the State and city alleging 
undervaluation. A seventh defendant, Exxon, went to trial and 
was exonerated. That decision was appealed, and Exxon won the 
appeal in January 1995. A separate appeal covering a different 
time period is still pending. Given the length and 
circumstances of the litigation, it is not certain whether the 
companies settled as a practical matter to cut off litigation, 
or whether they were concerned about potential legal liability.
    In light of the 1991 settlement, MMS performed a scoping 
exercise to estimate the size of any potential Federal royalty 
underpayment. In 1994, an interagency team consisting of MMS, 
the Department of the Interior's Solicitor's Office and the 
Departments of Energy, Commerce and Justice, investigated the 
allegations. The Justice Department resigned from the team, 
citing an inability to prove antitrust violations. The State of 
California assisted the Federal team in obtaining court records 
from the earlier litigation.
    b. Benefits.--The Minerals Management Service has delayed 
the collection of oil royalties which are owed. This hearing 
was the first congressional hearing on the issue of 
undervaluation of crude oil. As such, the hearing benefited the 
Federal Government by focusing attention on the problem and 
demonstrating that there was bipartisan congressional interest 
in pursuing underpayment. (See section II.A.3.)
    c. Hearings.--On June 17, 1996, the subcommittee held a 
hearing entitled, ``Can the U.S. Increase Oil Royalties.''

28. Field Hearing on the U.S. Border Patrol's Operation Gatekeeper.

    a. Summary.--The U.S. Border Patrol is a part of the 
Immigration and Naturalization Service, the primary agency in 
the Department of Justice responsible for enforcing the 
Nation's immigration laws. The Border Patrol is responsible for 
securing the international land and water borders between 
ports-of-entry with the goal of preventing illegal entry into 
the United States, interdicting drug smugglers, and compelling 
those persons seeking admission to the country to present 
themselves legally at ports-of-entry for inspection.
    On October 1, 1994, the Department of Justice initiated 
Operation Gatekeeper in an attempt to reduce illegal 
immigration across the United States-Mexico border in the San 
Diego region. Administered by the Border Patrol, Operation 
Gatekeeper has as one of its goals the shifting of illegal 
crossing routes to areas that are remote and difficult to 
cross--areas where the Border Patrol presumably has a tactical 
advantage. The operation has had the effect of moving the flow 
of illegal alien traffic eastward, away from San Diego, 
Imperial Beach and Chula Vista to Brown Field and beyond 
eastern San Diego County.
    A key objective of Operation Gatekeeper is providing a 
deterrent to illegal aliens crossing the United States-Mexico 
border. Accordingly, a measure of the operation's success is 
the number of individuals apprehended for illegally crossing 
the border. The fewer people caught, it is argued, the more 
successful the operation, since its aim is to reduce the number 
of illegal aliens arrested in the areas targeted by the 
initiative by deterring their crossings. Figures provided by 
the Immigration and Naturalization Service show reductions in 
the number of apprehensions in the southwest border region. 
Arrests in Imperial Beach have fallen to approximately 60,000 
for the first 9 months of the current fiscal year versus 84,000 
for the same period during the previous year. Arrests in Chula 
Vista have dropped from 105,159 to 91,987 during the same 
period. Arrests in Brown Field dropped from 109,141 to 94,206 
during that time.
    The subcommittee investigated allegations made by agents of 
the Border Patrol that the reported drop in arrests was due to 
falsification of the reports by officials within the Border 
Patrol. At a hearing before the California State Assembly 
Subcommittee on Border Crime, T.J. Bonner, president of the 
National Border Patrol Council testified that the Border Patrol 
has: ``[E]ngaged in a comprehensive campaign of deception 
regarding the effectiveness of Operation Gatekeeper. In its 
zeal to make good on its promise to replicate the reduction in 
arrests that occurred in El Paso, the Border Patrol encouraged 
and ordered agents to create the appearance that illegal 
entries had declined dramatically in the westernmost fourteen 
miles of the border.'' Mr. Bonner made a number of specific 
allegations about the effectiveness of the operation.
    In his opening statement, subcommittee Chairman Horn 
questioned the use of the apprehension rate as a gauge to 
assess the effectiveness of Operation Gatekeeper. He further 
noted the concerns of residents in areas where the traffic flow 
of illegal aliens has increased due to the operation. T.J. 
Bonner testified that: ``[T]he Border Patrol has engaged in a 
comprehensive campaign of deception regarding the effectiveness 
of Operation Gatekeeper . . . Encourag[ing] and order[ing] 
agents to create the appearance that illegal entries had 
declined dramatically . . .'' He stated that Border Patrol 
agents were ordered to remain in stationary positions and not 
to leave their locations even if illegal aliens crossed on 
either side of their stations. They were chastised and 
threatened with disciplinary action when they arrested illegal 
aliens. Illegal aliens were turned back without arresting them, 
and in other instances, the apprehensions were not recorded or 
reported. In addition, he testified that the Border Patrol 
altered the location for returning illegal aliens to Mexico by 
sending them hundreds of miles away from the San Diego area. 
This was done, Bonner noted, to ensure that if the illegal 
aliens attempted another crossing, the flow would not be felt 
in the area covered by Operation Gatekeeper. ``The result of 
all of these actions was an artificial decrease in the number 
of apprehensions'' stated Bonner.
    Mr. Bonner was joined by a Border Patrol agent whose 
identity was shielded by the subcommittee from disclosure. This 
was done at the agent's request for fear that if his identity 
was known to his supervisors at the Border Patrol, reprisals 
would occur against him for speaking publicly about allegations 
about the operation. His testimony supported the allegations 
raised in Mr. Bonner's statement. He added that quotas were set 
to limit the number of apprehensions, and noted that he 
witnessed the falsification of official reports on the number 
of illegal aliens stopped. In response to a question from 
subcommittee Chairman Horn, the agent noted that the order to 
manipulate data came from Johnny Williams, Chief of the Border 
Patrol's San Diego sector.
    b. Benefits.--The testimony received during this hearing 
enabled members of the subcommittee to hear firsthand the 
impact of Operation Gatekeeper. The testimony leads to the 
conclusion that Operation Gatekeeper is not a complete success; 
it has had limited success in slowing the entry of illegal 
aliens in a few miles of the border. The subcommittee will 
continue its oversight of this initiative due to the findings 
from the hearing.
    c. Hearings.--On August 9, 1996, the subcommittee held a 
field hearing on ``U.S. Border Patrol Implementation of 
Operation Gatekeeper.''

29. Oversight of the Smithsonian Institution.

    a. Summary.--The subcommittee convened an oversight hearing 
with the Committee on House Oversight to review security and 
procurement procedures of the Smithsonian. The subcommittees 
heard testimony from I. Michael Heyman, secretary of the 
Smithsonian Institution; Tom Blair, Inspector General of the 
Smithsonian Institution, and Bill Gadsby, Director of 
Governmental Business Operations, General Accounting Office.
    The Smithsonian entered into a contract with Hughes 
Aircraft Company to develop and build the Smithsonian 
Institution Proprietary Security System (SIPPS). It took 12 
years to complete from the initial award of the contract. The 
SIPPS was handled in two phases. In spite of the facts that 
there were significant problems with phase I of the project, 
the Smithsonian proceeded with phase II. The SIPPS was a 
complete failure, in that it was unable to protect the 
collections of the Smithsonian. The procurement and the 
performance of SIPPS was reviewed by Inspector General Blair 
who recommended changes in the procurement system.
    Secretary Heyman was in agreement with Mr. Blair regarding 
the procurement practices of the Smithsonian as they relate to 
the procurement of SIPPS. However, it was noted, many of the 
problems that existed during the initial SIPPS procurement have 
since been corrected. In addition, Secretary Heyman testified 
that during the 150th anniversary year of the Smithsonian, it 
has embarked on a program to enhance public exposure, 
accessibility and education. One of the ways in which the 
Smithsonian increased accessibility was to bring collections 
and collective experts on-line.
    b. Benefits.--This oversight hearing was the first in many 
years. This was an opportunity for the subcommittee to exercise 
its oversight authority over the Smithsonian.
    c. Hearings.--The subcommittee held an oversight hearing on 
September 25, 1996 on the Smithsonian Institution. The hearing 
was held jointly with the House Oversight Committee.

      HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE

1. Efforts To Reorganize and Improve Program Performance and Efficiency 
        at the U.S. Department of Housing and Urban Development (HUD).

    a. Summary.--The Human Resources and Intergovernmental 
Relations Subcommittee reviewed budget data, National 
Performance Review recommendations, Inspector General audits 
and reports, and General Accounting Office studies and 
recommendations to identify opportunities for cost savings, 
improved efficiency and consolidations in the programs and 
operations of the Department of Housing and Urban Development 
(HUD).
    The subcommittee convened two oversight hearings with 
respect to the agency. On February 13, 1995, the subcommittee 
invited the HUD Secretary Henry Cisneros to testify about the 
agency's core mission, management, plans, programs, and 
potential cost savings. The Secretary was also asked to discuss 
successes and challenges facing HUD in meeting its core 
mission. Secretary Cisneros spoke about HUD's Blueprint for 
Reinvention which focuses on the consolidation of several 
programs, the Department's efforts to transform the Federal 
Housing Administration (FHA) ``from a government bureau to a 
government corporation,'' and the agency's sweeping efforts to 
transform public housing throughout the country. Subcommittee 
Chairman Shays congratulated Secretary Cisneros on the agency's 
efforts to reorganize into a ``leaner and more efficient'' 
agency.
    On February 22, 1995, the subcommittee held a second 
hearing to receive information from HUD's Inspector General 
(IG); the Director of Housing and Community Development Issues 
of the U.S. General Accounting Office (GAO); a senior fellow 
from the Hudson Institute; a former chairman of the Chicago 
Housing Authority and president of American Community Housing 
Associates; a private organization; and the founder of the 
National Low Income Housing Coalition.
    b. Benefits.--American taxpayers and public housing 
residents, in particular, benefit from administrative savings, 
greater flexibility, and more effective concentration of 
limited HUD resources. The hearings demonstrated that there are 
opportunities at HUD for cost reduction, improved efficiency 
and reform and allowed HUD officials, former HUD officials, and 
other Federal and private officials the opportunity to come 
together to discuss what HUD is doing right as well as what the 
agency might be doing wrong.
    c. Hearings.--Hearings entitled ``Oversight Hearing on the 
Department of Housing and Urban Development'' were held on 
February 13 and 22, 1995.

2. Efforts To Improve Program Performance and Efficiency at the U.S. 
        Department of Health and Human Services (HHS).

    a. Summary.--The subcommittee reviewed budget data, 
National Performance Review recommendations, Inspector General 
audits and reports, and General Accounting Office studies and 
recommendations to identify opportunities for cost savings, 
improved efficiency and consolidations in the programs and 
operations of the Department of Health and Human Services 
(HHS).
    On March 1, 1995, the subcommittee convened an oversight 
hearing to receive testimony from HHS Secretary Donna E. 
Shalala. The Secretary was invited to discuss the agency's core 
mission, goals, programs, and plans for cost saving; to 
indicate what HHS does well and describe what HHS programs 
could possibly be better done by the States and localities; and 
to address agency efforts to move Medicare and Medicaid into 
managed care systems.
    Secretary Shalala testified about HHS efforts to reinvent 
the agency, and indicated that she continually asks the 
following questions with respect to the duties and 
responsibilities of HHS: Are the programs or functions critical 
to the agency's mission and based on customer input? Can the 
program or the function be done as well or better at the State 
or local level? Is there a way to cut cost or improve 
performance by introducing competition? Can the program be 
improved by putting customers first, cutting red tape, and 
empowering employees?
    On March 22, 1995, the subcommittee convened a second 
oversight hearing to receive testimony from public and private 
sector witnesses, as well as testimony from the U.S. General 
Accounting Office (GAO), HHS's Office of Inspector General 
(OIG), and representatives from the Heritage Foundation and 
Project HOPE.
    GAO and OIG officials focused on the critical area of 
losses due to waste, fraud and abuse in the Medicare and 
Medicaid programs. Losses in national health care spending are 
estimated by the GAO to be as high as 10 percent of total 
spending. If these estimates are correct, losses due to waste, 
fraud and abuse in Medicare and Medicaid in fiscal year 95 
could be in excess of $24 billion.
    b. Benefits.--Every American taxpayer benefits from a 
Federal health care and human services delivery system operated 
in the least costly manner with the needs of the customer given 
great weight in the decisionmaking processes. The subcommittee 
will continue to monitor waste, fraud and abuse in Medicare and 
Medicaid programs. Recommendations made by the GAO, OIG and 
others in the course of this hearing to reduce staggering and 
unacceptable losses will be carefully examined and monitored.
    c. Hearings.--Hearings entitled ``Oversight Hearing on 
Department of Health and Human Services'' were held on March 1 
and 22, 1995.

3. Efforts To Reorganize and Improve Program Performance and Efficiency 
        at the U.S. Department of Labor (DOL).

    a. Summary.--The subcommittee reviewed budget data, 
National Performance Review recommendations, Inspector General 
audits and reports, and General Accounting Office studies and 
recommendations to identify opportunities for cost savings, 
improved efficiency and consolidations in the programs and 
operations of the Department of Labor (DOL).
    On March 9, 1995, the subcommittee convened an oversight 
hearing, DOL Secretary Robert B. Reich was asked to address 
what DOL does well and to describe particular situations that 
the agency was finding challenging in the accomplishment of its 
core mission, goals, programs, and plans for cost saving. 
Secretary Reich was questioned about Representative Steven 
Gunderson's (IR-WI) proposal to combine the Departments of 
Education and Labor. The Secretary disagreed with the proposal, 
claiming that each agency has its own specialized and distinct 
function.
    Secretary Reich presented charts that showed the decline of 
real wages for middle and lower income workers. The Secretary 
advocated raising the minimum wage and increasing the level of 
job training, which he defined as ``any vocational course of 
instruction, directly related to gaining job skills, outside of 
a formal degree program.'' The Secretary also testified about 
efforts to consolidate job training programs and the agency's 
plans regarding downsizing.
    On April 4, 1995, the subcommittee convened a second 
oversight hearing to identify other opportunities for cost 
reduction, increased efficiency and reform in the $33.8 billion 
Labor Department budget. Testimony was received from the U.S. 
General Accounting Office (GAO), DOL's Office of Inspector 
General (OIG), and a representative from the Urban Institute. 
The GAO and OIG officials focused on consolidation and 
termination of overlapping job training programs. The GAO told 
the subcommittee that the Federal Government runs 163 job 
training programs administered by 15 agencies. Secretary Reich 
of DOL has proposed to consolidate 70 education and training 
programs. Urban Institute officials testified about potential 
administrative cost savings from Federal program consolidations 
and about administrative savings that might be expected from 
various program consolidation models.
    b. Benefits.--The hearings provided an overview of the 
policy issues presented by current DOL programs, particularly 
as the issues relate to opportunities for consolidations and 
terminations of ineffective and/or duplicative programs.
    c. Hearings.--Hearings entitled ``Oversight Hearing on 
Department of Labor'' were held on March 9 and April 4, 1995.

4. Efforts To Reorganize and Improve Program Performance and Efficiency 
        at the U.S. Department of Education (DOED).

    a. Summary.--The subcommittee reviewed budget data, 
National Performance Review recommendations, Inspector General 
audits and reports, and General Accounting Office studies and 
recommendations to identify opportunities for cost savings, 
improved efficiency and consolidations in the programs and 
operations of the Department of Education (DOED).
    On March 13, 1995, the subcommittee convened a hearing to 
allow DOED Secretary Richard Riley to discuss the agency's core 
mission, goals, programs, and plans for cost savings. 
Subcommittee Chairman Shays opened the hearing by mentioning 
the States' role in education and indicated his wish to 
understand the changes taking place in the Department of 
Education, especially in light of proposals to merge the 
Departments of Labor and Education.
    Secretary Richard Riley testified about the new and 
controversial direct student loan program, training program 
consolidations, and problems the agency had with block 
granting. Secretary Riley also indicated that he did not agree 
that combining the Departments of Labor and Education would 
help to save money since the DOED was already consolidating 
programs.
    Deputy Secretary of Education Madeleine Kunin testified 
that DOED had made significant managerial and attitudinal 
changes that she believed would break down agency bureaucracy 
and bring the DOED's philosophy in line with budget 
constraints.
    On April 6, 1995, the subcommittee convened a second 
oversight hearing to discuss whether significant cost savings 
could be achieved through a consolidation or elimination of 
duplicative programs and improved efficiencies in DOED program 
administration. Testimony was received from: the public and 
private sectors; DOED's Office of Inspector General (OIG); the 
U.S. General Accounting Office (GAO); and a former DOED 
Assistant Secretary for Management and Budget.
    GAO testified that according to Office of Management and 
Budget data, fiscal year 95 spending on education is estimated 
to be $70 billion. DOED spends less than half, $33.4 billion or 
47 percent of the total. The Department of Labor spends $5.5 
billion, or 7.9 percent of the total. Other Federal agencies 
also manage numerous education-related programs, including the 
Department of Health and Human Services with 129 programs, the 
National Endowment for the Arts and Humanities with 27, and the 
Department of Agriculture with 26. The OIG testified that, 
since 1965, the Federal Family Education Loan program has 
suffered $57 billion in defaults, with $4.7 billion in 1993 
alone.
    b. Benefits.--The hearings provided subcommittee oversight 
of DOED, its core missions, goals, and efforts to downsize and 
consolidate training and other programs. The hearings also 
produced information on the potential and the limitations of 
program consolidations in education and training.
    c. Hearings.--Hearings entitled ``Oversight Hearing on 
Department of Education'' were held on March 13 and April 6, 
1995.

5. Efforts To Reorganize and Improve Program Performance and Efficiency 
        at the U.S. Department of Veterans Affairs (VA).

    a. Summary.--The subcommittee reviewed budget data, 
National Performance Review recommendations, Inspector General 
audits and reports, and General Accounting Office studies and 
recommendations to identify opportunities for cost savings, 
improved efficiency and consolidations in the programs and 
operations of the Department of Veterans Affairs (VA).
    On March 13, 1995, the subcommittee convened a hearing to 
allow VA Secretary Jesse Brown to discuss the agency's core 
mission, goals, programs and plans for cost savings. Secretary 
Brown was asked to testify about successes and challenges at 
the VA and about agency efforts to reform the VA's vast health 
care system. The Secretary testified that the agency's biggest 
success so far had been evidenced in its ability to respond 
more quickly to the needs of veterans. Secretary Brown also 
discussed VA's continuing efforts to help veterans from the 
Persian Gulf War, addressed questions relating to VA hospital 
utilization rates and the accessibility of health services to 
veterans.
    On May 9, 1995, the subcommittee convened a second 
oversight hearing to identify opportunities for improved 
efficiency and management reforms in the $38.2 billion VA. 
Testimony was received from the U.S. General Accounting Office 
(GAO), the VA's Office of Inspector General (IG), and from 
representatives of veterans organizations.
    The subcommittee also probed the views of the witnesses on 
VA's plans for reorganizing hospital and medical facilities. 
Subcommittee Chairman Shays requested comments about plans to 
improve the efficiency and quality of the VA's health care 
service, and asked the witnesses for their views about how to 
raise the level of management coordination and accountability 
in VA programs and operations.
    b. Benefits.--The VA health system is the largest centrally 
managed health care delivery system in the Nation. Veterans and 
every American taxpayer will benefit from cost effective VA 
programs and services. If the VA health care system is to 
remain viable, it must fundamentally change its approach to 
providing care. The need for structural change is acute. By 
holding these hearings, the subcommittee has benefited the 
system by demonstrating congressional concern that the VA adapt 
its health care delivery system to meet the changing demands of 
the health care marketplace.
    c. Hearings.--Hearings entitled ``Oversight Hearing on 
Department of Veterans Affairs'' were held on March 13 and May 
9, 1995.

6. Examination of Programs and Operations of the Corporation for 
        National and Community Service.

    a. Summary.--On April 25, 1995, the subcommittee directed 
an inquiry to the Corporation for National and Community 
Service (Corporation) regarding the agency's AmeriCorps 
program. The inquiry requested information on the per-
participant costs of the program, the quality and performance 
standards applied to AmeriCorps grant applications and 
programs, the amount of training received by AmeriCorps 
participants and information on any AmeriCorps programs that 
did not involve AmeriCorps participants.
    On May 4, 1995, the Corporation responded to the 
subcommittee's inquiry. The Corporation reported per 
participant costs to be $17,600 for full time members. They 
noted this figure was subject to change if their original 
fiscal year 95 funding levels were rescinded. The Corporation 
also provided a breakdown of the per-participant costs 
indicating the percent of costs devoted to educational awards, 
stipends, travel, training and benefits. Part-time participants 
were reported to have a cost of $8,800. Again, this figure 
would also be subject to change if the fiscal year 95 
appropriations if rescissions were passed by Congress for that 
fiscal year.
    The Corporation also outlined the selection criteria 
applied in the agency's evaluation of AmeriCorps program 
applications. The criteria were set out under the headings of: 
quality, sustainability, innovation, replicability and special 
considerations (such as geographic diversity and start dates). 
The Corporation further outlined the quality standards used at 
both Federal and State levels in selecting grantees. These 
standards are printed in the AmeriCorps grant application and 
are reflected in the Corporation's ``Principles for High 
Quality National Service Programs'' which include: strong 
organization, excellent service projects, evaluation, 
participant experience, community partnerships and diversity.
    The Corporation also reported that the programs were made 
subject to several levels of performance reviews conducted by 
State commissions, national parent organizations, Corporation 
staff and impartial national evaluators. According to the 
Corporation, performance reviews include quarterly report 
forms, financial status reports, site visits, and independent 
evaluations. The Corporation stated that the performance 
results are taken into consideration during the grant renewal 
decisionmaking process.
    In the response, the Corporation also described the 
statutorily mandated ``planning grants'' that make up 1.5 
percent of their grant budgets. Planning grants, such as one 
awarded to the Northeastern University's Center for the Study 
of Sports in Society, must be used for activities such as: site 
selection, anticipating roadblocks, studying other AmeriCorps 
programs, creating partnerships with businesses, non-profits, 
police and school districts. The Corporation disputed 
allegations that planning grants are used to help organizations 
write grant applications.
    The Corporation response indicated that AmeriCorps 
participants must devote at least 80 percent of their hours to 
direct service, with no more than 20 percent going to 
education, training or community building activities during a 
full-time or reduced term of service. The education or training 
activities may include preparation for the GED.
    To address questions raised by the Corporation response, 
the subcommittee convened an oversight hearing to examine the 
programs and operations of the Corporation for National and 
Community Service. Testimony was received from Corporation 
Chief Executive Officer Eli Segal, along with representatives 
from AmeriCorps program sponsors, participants and critics of 
the Corporation.
    This was the first oversight hearing on the Corporation 
since its creation in 1993, with the passage of the National 
and Community Service Trust Act (Public Law 103-82). The act 
consolidated responsibility for a number of community service 
programs, including AmeriCorps, Volunteers in Service to 
America (VISTA), the National Civilian Community Corps, Serve-
America, and the Retired Senior Volunteer Program (RSVP).
    b. Benefits.--The subcommittee hearing provided a balanced 
discussion of the costs and benefits of the national service 
programs which became operational under the Corporation 
umbrella in 1993.
    c. Hearings.--A hearing entitled ``Oversight Hearing on the 
Corporation for National and Community Service'' was held on 
May 18, 1995.

7. Revelations of Medicaid Fraud and Scams.

    a. Summary.--In 1992, the House Government Operations 
Committee issued a report concluding that waste, fraud and 
abuse ``cost the government $300 billion in recent years.'' 
\20\ The report added, ``Government waste has not only bilked 
the taxpayer of billions of dollars, but it has created a 
public cynicism about government at a time when effective 
government is needed the most.'' After having received 
testimony from the Secretaries of five cabinet departments, the 
Human Resources and Intergovernmental Relations Subcommittee 
convened an oversight hearing in order to seek the perspectives 
and recommendations of commentators and investigators from 
outside the government on ways to identify and reduce waste, 
fraud and abuse in these departments. Testimony was received 
from: Thomas Schatz, president of Citizens Against Government 
Waste; Martin Gross, an author and commentator; James Bovard, 
journalist and author; and Dr. Ronald Walters, chairman of the 
political science department of Howard University.
---------------------------------------------------------------------------
    \20\ ``Managing the Federal Government: A Decade of Decline,'' 
December 1992, Majority Staff Report to the Committee on Government 
Operations.
---------------------------------------------------------------------------
    Mr. Schatz testified about the Departments of Education and 
Veterans Affairs. He discussed collection problems in Student 
Financial Aid Programs, which he believes should be 
unsubsidized and administered by the Treasury Department. He 
testified that he believes that the VA frequently overpays 
pension and compensation benefits and suggested forms of data 
collection that he believes would fix problems of overpayment.
    Mr. Gross testified about the Department of Health and 
Human Services. He believes that to prevent the insolvency of 
the Social Security system, the retirement age should be raised 
to 70 years. Mr. Gross also discussed his views regarding how 
Medicare and Medicaid could be run more efficiently.
    Mr. Bovard discussed problems in the Section 8 housing 
system. He cited several examples of incidences where he 
belived that the government was paying for expensive housing 
for the poor, and argued that Section 8 projects are linked to 
many inner city problems.
    Mr. Kennedy testified about his experience of going 
undercover for 2 months on the streets of New York City to 
expose scam artists--doctors, pharmacists and black 
marketeers--who he says rip off the Medicaid program in New 
York State for hundreds of millions of dollars. Mr. Kennedy 
said that he was able to ``easily rent Medicaid cards'' from 
unscrupulous people on the street and use the cards to obtain 
thousands of dollars ``in unneeded tests, exams and services--
all at taxpayer expense.'' Mr. Kennedy further testified that 
``after 30 years of existence, Medicaid has failed to require 
ID photos or any other descriptive information on its cards, 
allowing thousands of unscrupulous recipients to barter their 
cards for quick cash or drugs.''
    Dr. Walters lauded the efforts of the administration's 
Reinventing Government initiative, and voiced concern about the 
counterproductive outcomes of dismantling programs too quickly 
or ill-advisely. Dr. Walters contended that the reason many of 
the poverty programs do not work is because their operating 
costs are under funded. Dr. Walters testified about his fear 
that with further budget cuts to poverty programs and an 
increasing number of people entering poverty, that the 
situation would simply get worse.
    b. Benefits.--It is the view of subcommittee Chairman Shays 
that ``Even if it were possible to eliminate all losses to 
waste, fraud and abuse, the savings would still not balance the 
budget. However, Congressional action to produce a major 
reduction in losses would go a long was toward restoring public 
confidence in government.
    c. Hearings.--A hearing entitled ``Waste in Human Service 
Programs: Other Perspectives'' was held on May 23, 1995.

8. Fraud and Abuse in Medicare and Medicaid.

    a. Summary.--Pursuing oversight issues identified in 
previous general oversight hearings, the subcommittee requested 
information from the Health Care Finance Administration (HCFA), 
the HHS Inspector General and others concerning providers who 
defraud the programs but continue to bill Medicare and 
Medicaid. The effectiveness of legal and administrative 
sanctions against abusive providers, and management controls 
over provider access to Federal health care programs were 
examined. In particular, the subcommittee focused on whether 
more could be done to keep fraudulent providers out of those 
important government programs.
    Testimony was received from: the Administrator as well as 
the Senior Advisor for Program Integrity of the Health Care 
Financing Administration; the HHS Inspector General; the 
Special Counsel for Financial Institutional Fraud of the U.S. 
Department of Justice; the Assistant Director of the Agency for 
Health Care Administration for the State of Florida; and the 
executive director of the National Health Care Anti-Fraud 
Association.
    Federal health care programs will cost $262 billion this 
year. According to the GAO, up to 10 percent of health care 
spending is lost to fraud and abuse. That means Medicare and 
Medicaid losses are perhaps as much as $26 billion, or $71 
million each day!
    b. Benefits.--Losses of this magnitude pose a real threat 
to the solvency of Federal health care programs. The 
subcommittee learned of the limited impact of penalties--such 
as suspension or debarment--that can now be imposed on 
providers who are consistently abusive, or are indicted or 
convicted of defrauding the Government's health care systems.
    c. Hearings.--A hearing entitled ``Keeping Fraudulent 
Providers Out of Medicare and Medicaid'' was held on June 15, 
1995.

9. Lengthy FDA Delays in Reviewing Food Additive Petitions.

    a. Summary.--This hearing was the first oversight hearing 
on the FDA's management of this premarket review program since 
enactment of the food additive amendments of 1958. As 
subcommittee Chairman Shays noted, a serious look at how the 
FDA handles its responsibilities was long overdue. Thus, the 
subcommittee convened an oversight hearing on this subject to 
span a 2 day period, June 22 and 29, 1995, where testimony was 
received from representatives of the FDA; the Grocery 
Manufacturers of America; National Food Processors Association; 
the University of Texas Graduate School of Biomedical Sciences; 
the Institute of Food Technologists; the National Academy of 
Sciences' Food Forum; the Calorie Control Council, the center 
for Science in the Public Interest and the Federation of 
American Societies of Experimental Biology and from others.
    Under the Food Drug and Cosmetic Act, the FDA has up to 180 
days to review and act on food additive petitions. The FDA has 
a backlog of 295 food additive petitions under review. Among 
the backlog of pending food additive petitions, 66 percent have 
been pending since 1990, 27 percent since the 1980's, and 7 
percent since the 1970's. More than 100 new petitions are 
submitted each year to the FDA. Food additives affect the 
characteristics of food. They are commonly used to impart or 
maintain consistency, nutrition, texture, flavor, color or 
wholesomeness.
    b. Benefits.--The delays in the current food additive 
petition review process impede food technology research and 
delay benefits to the consumer. By convening these hearings, 
the subcommittee sought to identify the causes of and solutions 
to these lengthy FDA delays. According to subcommittee Chairman 
Shays, from a public health standpoint, the public wants 
minimum risk in food additives, but also wants the benefits of 
the same nutritional and dietary advances available to 
consumers in other nations. The current FDA review process 
appears to allow endless studies with no definite deadlines for 
action. The subcommittee will continue to explore the issue of 
whether the delays are caused by bad management, inadequate 
resources or a lack of confidence by the FDA in the agency's 
scientific personnel who review food additive petitions.
    Based on these subcommittee oversight hearings, the 
committee adopted its fourth report to the 104th Congress on 
December 14, 1995, entitled ``The FDA Food Additive Review 
Process: Backlog and Failure to Observe Statutory Deadline,'' 
House Report No. 104-436, December 21, 1995, Fourth Report by 
the Committee on Government Reform and Oversight, Together with 
Additional Views.
    c. Hearings.--Hearings entitled ``Delays in the FDA's Food 
Additive Petition Process and GRAS Affirmation Process'' were 
held on June 22 and 29, 1995.

10. Bringing Health and Support Services to Women, Minorities and 
        Adolescents--Growing Segments of the AIDS Population.

    a. Summary.--On July 17, 1995, the subcommittee convened a 
field hearing held in Brooklyn, NY, to examine how the U.S. 
Department of Health and Human Services (HHS) and local health 
care providers are preparing to bring health and support 
services to women, minorities and adolescents--growing segments 
of the AIDS population. Testimony was received from: 
representatives from Deputy Inspector General for Evaluations 
and Inspections, HHS; the Associate Director of Health Policy 
of the U.S. General Accounting Office; the Director of the 
Office of HIV/AIDS Policy, Assistant Secretary of Health, HHS; 
the acting commissioner of health, New York City department of 
health; the director of the AIDS Institute of the New York 
State Title II grantee; the AIDS program coordinator of the 
Stamford department of health of the Connecticut Title II 
grantee; the vice president of institutional advancement of the 
Brooklyn and Caledonian Hospitals; the executive director of 
Brooklyn Housing Works; the chairman of the Stewart B. McKinney 
Foundation; a board member of the LAMBDA Independent Democrats; 
Senator Velmanette Montgomery, New York State Senator, 18th 
Senate District in Brooklyn, NY; and the executive director of 
the Corporation for Supportive Housing.
    The subcommittee found that, in 1993 and 1994, over one-
half of the newly reported AIDS cases were in minority groups. 
The United States has also seen a 17 percent yearly increase in 
the number of women infected with AIDS. Fifty-four percent of 
those women are between the ages of 13-19. HHS provides funding 
to local service providers through the Ryan White CARE Act, 
administered by the Health Resources and Services 
Administration (HRSA). In fiscal year 95, HRSA will provide 
$633 million in Ryan White CARE Act funds.
    b. Benefits.--By holding the oversight hearing, the 
subcommittee acknowledged the importance of slowing the spread 
of AIDS and provided an opportunity for members to discuss how 
available Federal funding can be effectively utilized to meet 
the needs of the changing AIDS population.
    c. Hearings.--A hearing entitled ``AIDS in the 90's: 
Service Delivery to Emerging Populations (Field Hearing)'' was 
held on July 17, 1995.

11. Debating and Defining Federalism--the Sharing of Power Between the 
        Federal Government and the States.

    a. Summary.--The subcommittee is charged under the Rules of 
the House with the responsibility of studying the 
intergovernmental relationships between the United States and 
the States and municipalities. Pursuant to this authority, the 
subcommittee convened this oversight hearing in the form of a 
debate regarding what principles should guide Congress in 
balancing the relationship between the national government and 
the States, counties, cities and towns. This debate, 
essentially, a discussion of the meaning of federalism--the 
unique system of shared sovereignty that unites the States into 
one Nation--was actually launched by the ratification of the 
Constitution, waged fiercely in the Civil War, reshaped by the 
exigencies of the Depression and a World War.
    Testimony at the hearing was received from: the director of 
State-Federal relations of the National Governors Association; 
a former regional EPA Administrator; an author and director for 
the center for american political studies at Harvard 
University; the director of the Center on Budget and Budget 
Policy Priorities; a senior fellow from the Progressive Policy 
Institute; a commissioner from the Advisory Commission on 
Intergovernmental Affairs; the director for the center for 
constitutional studies from the CATO Institute; and the 
director for the Governors' forum for the Heritage Foundation.
    Today, it is hardly debatable that modern federalism is 
entirely out of balance. Federal powers and programs occupy, 
and in many cases, pre-empt, virtually every area of public 
concern. As subcommittee Chairman Shays explained, the legacy 
of the conflict between States' rights and civil rights 
continues to haunt efforts to empower State government. Any 
``new federalism'' will have to overcome that historical 
barrier and reassure all Americans that States can do what 
needs to be done more effectively, more efficiency and more 
fairly than a top-heavy, one-size-fits-all Federal bureaucracy.
    b. Benefits.--The great national debate over the proper 
distribution of the people's sovereign powers has raged since 
the Founders wrote the Constitution. Today, as Congress moves 
to implement a smaller Federal Government, it is beneficial to 
continue that discourse over the responsibility and capacity of 
each level of government to perform essential public functions.
    c. Hearings.--A hearing entitled ``Federalism Debate: Why 
Doesn't Washington Trust the States?'' was held on July 20, 
1995.

12. Joint Hearing on the FDA Regulation of Medical Devices, Including 
        Silicone Gel Breast Implants.

    a. Summary.--Continuing oversight conducted in previous 
Congresses, the Human Resources and Intergovernmental Relations 
Subcommittee and the National Economic Growth, Natural 
Resources, and Regulatory Affairs Subcommittee investigated 
FDA's approval process and enforcement standards for medical 
devices, including silicone gel breast implants.
    The subcommittees reviewed scientific and medical 
literature on so-called ``silicone diseases,'' requested 
extensive documents from the FDA on device review and 
enforcement policies and interviewed physicians, researchers 
and patients. These inquiries explored how the FDA, doctors and 
scientists assess the risks of silicone and other materials 
used in medical devices.
    The subcommittees inquired how the FDA establishes 
enforcement standards for medical device regulations, how 
consistently those standards are enforced, and the appearance 
of arbitrary or selective enforcement practices. In addition, 
the subcommittees also explored formal and informal procedures 
used by the FDA to promulgate enforcement standards.
    Pursuant to the results of these inquiries, both 
subcommittees became concerned that the FDA's evaluation 
standards and enforcement procedures for medical devices may 
create product shortages and inhibit innovation and technical 
advances. In order to explore these issues further, the 
subcommittees convened two oversight hearings.
    At the first hearing, testimony was received from: Hon. 
Marilyn Lloyd, a former Member of Congress; Hon. James A. 
Traficant, Jr. (D-OH), a Member of Congress; Hon. Greg Ganske, 
M.D. (R-IA), a Member of Congress; the Commissioner of the FDA; 
the Director for the Center for Devices and Radiological Health 
from the FDA; the chief medical officer from Vanderbilt 
University Medical Center; an official from the department of 
pathology from the University of Tennessee in Memphis; an 
associate professor of medicine and epidemiology at the Mayo 
Clinic; an official from the department of gynecology and 
obstetrics from Emory University; medical device patients; 
device industry representatives; clinicians; and scientists.
    At the second hearing, testimony was received from the FDA 
Deputy Commissioner, device industry representatives, and 
device manufacturers. The witnesses testified about the 
development and promulgation of FDA standards used in 
enforcement of statutes and regulations governing the 
manufacture and distribution of medical devices.
    b. Benefits.--The investigation updated the status of FDA 
review of silicone gel breast implants and the impact of that 
protracted review on the development and availability of other 
life-sustaining devices containing silicones. In addition, 
there is a great need for the American public to know that 
there is an open and predictable FDA process for promulgating 
enforcement guidance. As a result of these hearings, the FDA 
committed to more timely device review and a more open process 
for the development and issuance of guidance.
    c. Hearings.--A hearing entitled ``FDA Regulation of 
Medical Devices (Joint Hearing)'' was held on August 1, 1995. A 
hearing entitled ``FDA Enforcement Standards for Medical 
Devices (Joint Hearing)'' was held on September 14, 1995.

13. Federal Takeover of the Chicago Housing Authority.

    a. Summary.--The subcommittee convened an oversight 
investigation into the Federal takeover of the Chicago Housing 
Authority (CHA) after Congresswoman Cardiss Collins, ranking 
member of the Government Reform and Oversight Committee (D-IL), 
submitted a request to Committee Chairman William F. Clinger, 
Jr., (R-PA) on June 1, 1995, that hearings be conducted in 
Chicago on the role of U.S. Department of Housing and Urban 
Development (HUD) in the operation of the CHA.
    On May 30, 1995, HUD assumed control over the day to day 
operations of the ``troubled'' CHA. A declared breach of 
contract between CHA and HUD signed by HUD Secretary Henry 
Cisneros on June 2, 1995, made the takeover legally effective. 
Executed in the wake of the resignation of CHA's Board of 
Commissioners on May 26, 1995, the takeover was an 
unprecedented HUD action. Although HUD has authority to 
intervene in troubled housing agency operations at any time, 
HUD has never assumed responsibility for the day to day 
operations of a housing agency the size of CHA.
    CHA is the Nation's third largest public housing authority 
(PHA), surpassed in size only by those of Puerto Rico and New 
York city. CHA was created in 1937 by a resolution of the city 
of Chicago pursuant to the Housing Authorities Act of the State 
of Illinois, and administers over 55,000 public and assisted 
housing units serving over 150,000 residents.
    The socio-economic status of the resident population of CHA 
creates particular challenges for the housing authority. Eleven 
of the 15 poorest neighborhoods in the Nation are located in 
CHA communities.
    CHA is plagued by a poorly conceived and distressed housing 
stock, an acutely poor resident population and a historically 
mismanaged administrative bureaucracy. HUD's ability to carry 
out the CHA takeover effectively has immediate impact on the 
people of Chicago and broad implications for the 86 other 
housing agencies presently listed as ``troubled'' by HUD. The 
subcommittee's hearing focused on HUD's progress at CHA since 
the May 30 takeover, the department's short and long term 
strategies for reforming CHA and HUD's plans for installing new 
leadership and management at the housing authority. At the 
hearing, testimony was received from Hon. Henry Cisneros, 
Secretary of HUD and other HUD officials; the U.S. General 
Accounting Office; panels of tenants; public housing management 
experts and city and private sector representatives.
    b. Benefits.--Although HUD has not yet articulated a long 
term plan to reform CHA and to extricate itself from CHA 
management, if the takeover sets CHA on a course for recovery, 
HUD's assumption of control of CHA operations may be validated 
as an acceptable model of intervention at troubled housing 
agencies.
    In addition, based on this and the subcommittee's two other 
oversight hearings of HUD (on February 13 and 22, 1995), the 
committee adopted its fifth report to the 104th Congress on 
December 14, 1995 entitled ``The Federal Takeover of the 
Chicago Housing Authority--HUD Needs to Determine Long-Term 
Implications,'' House Report No. 104-437, December 21, 1995, 
Fifth Report by the Committee on Government Reform and 
Oversight, Together with Additional Views. (See II.A.2.)
    c. Hearings.--A hearing entitled ``HUD's Takeover of the 
Chicago Housing Authority (Field Hearing)'' was held on 
September 5, 1995.

14. Management of Threats to the Nation's Blood Supply.

    a. Summary.--After infection with the HIV virus, there is a 
period of time known as a ``window'' in which infection may be 
present but antibodies to the virus have not been produced in 
sufficient quantity for detection. This window can last up to 6 
months in some individuals, but is usually about 20 days. 
However, antigens appear and can be detected sooner than 
antibodies, reducing the window by 10 days or more.
    Subcommittee investigation discovered that on June 23, 
1995, the FDA's Blood Products Advisory Committee (BPAC) 
recommended against routine HIV-1 antigen screening of blood 
donor units. On July 12, subcommittee Chairman Shays wrote to 
FDA Commissioner David Kessler urging him not to accept the 
BPAC's decision and to approve the immediate licensing of HIV-1 
antigen tests for the screening of the Nation's blood supply. 
Subcommittee Chairman Shays pointed out that antigen testing 
would further close the window of potential infection in 
recipients of blood and blood products, a goal which was 
consistent with remarks made by Commissioner Kessler at a 
September 26, 1994 FDA Conference. Kessler said, ``[The FDA 
has] an obligation to foster the development of new 
technologies, especially if these technologies hold the promise 
of a blood supply that is even safer. This is especially true 
for detecting HIV--the AIDS virus. We need to close the 
window.''
    On August 10, 1995, the FDA announced its recommendation 
that, despite the BPAC recommendation, blood establishments 
should test donors with new HIV-1 antigen test kits after the 
tests become available. Under the new guidance, the FDA 
recommended that blood establishments begin screening all blood 
and plasma donors with newer test kits for HIV-1 antigen within 
3 months after FDA approves one of the kits.
    To examine this and other issues raised by the 
subcommittee's inquiries, the Human Resources and 
Intergovernmental Relations Subcommittee convened two oversight 
hearings to discuss efforts by the U.S. Department of Health 
and Human Services (HHS) and the blood products industry under 
HHS jurisdiction to protect the Nation's blood supply from 
emerging infectious agents.
    At the October 12, 1995 oversight hearing, HHS Secretary 
Donna Shalala provided the agency's response to a recent study 
that was critical of past HHS efforts to protect the blood 
supply from infectious agents. Secretary Shalala testified that 
HHS accepted recommendations of the report released by the 
Institute of Medicine (IOM)--HIV and the Blood Supply: An 
Analysis of Crisis Decisionmaking (July 13, 1995)--which had 
concluded that the medical and governmental response in the 
early 1980's to blood-borne HIV infection strongly suggests the 
need for greater coordination and more aggressive policies by 
HHS to meet the threat of future infectious agents.
    In addition, the Secretary named the Assistant Secretary 
for Health to the newly created post of Blood Safety Director 
and created a Blood Safety Committee which she indicated would 
include the FDA Commissioner, the Director of the National 
Institutes of Health (NIH), and the Director of the Centers for 
Disease Control and Prevention (CDC).
    Other hearing witnesses included representatives from the 
Committee of 10,000, the National Hemophilia Foundation, the 
Hemophilia Federation, the Oklahoma Blood Institute, and 
Michigan State University.
    A second oversight hearing on the subject was convened on 
November 2, 1995, so the subcommittee could consider the blood 
industry's response to the IOM report. In addition, the roles 
of the CDC and NIH in protecting blood safety were discussed. 
Witnesses included representatives from the CDC, NIH, the 
American Association of Blood Banks, the Council of Community 
Blood Centers, the American Red Cross, the American Blood 
Resources Association, the Bayer Corp., the Baxter Healthcare 
Corp. and the Armour Pharmaceutical Co.
    b. Benefits.--With 4 million patients in the country 
receiving transfusions of whole blood and blood components each 
year, raising the standards for blood collection and processing 
to meet new threats is a critical national priority. These 
hearings brought together all the major governmental and 
private sector players in the blood safety field and elicited a 
new commitment to diligence in protecting against infectious 
agents in the blood supply.
    c. Hearings.--Hearings entitled ``Protecting the Blood 
Supply from Infectious Agents: New Standards to Meet New 
Threats'' were held on October 12 and November 2, 1995.

15. The Occupational Safety and Health Administration's (OSHA) New 
        Strategy for Changing the Way it Does Business.

    a. Summary.--On October 17, 1995, the Human Resources and 
Intergovernmental Relations Subcommittee convened an oversight 
hearing to explore initiatives and programs claimed to have 
been adopted by the Occupational Safety and Health 
Administration (OSHA) as part of the agency's change in its 
strategy for doing business in a technology-based workplace. 
The agency had indicated in numerous publications and 
announcements that it was seeking to form new partnerships of 
employers, workers and OSHA to promote common sense 
regulations, focus on results, and reduce red tape.
    In the past the agency had earned a ``red tape 
reputation.'' The agency was widely perceived as an agency with 
a ``gotcha'' mentality, a preoccupation with small technical 
violations and governed by confusing, outmoded rules.
    OSHA's Assistant Secretary of Labor for Occupational Safety 
and Health Joseph A. Dear discussed the innovative programs the 
agency has developed to improve workplace protections for 
America's working men and women. Assistant Secretary Dear fully 
discussed what the agency refers to as the newly reinvented and 
responsive--``New OSHA''--and promised that the agency would 
continue to become more customer friendly and less driven by 
adherence to red tape and technical rules.
    In addition to Assistant Secretary Dear, testimony was also 
received from: the Associate Director for the U.S. General 
Accounting Office (GAO); the director of the Voluntary 
Protection Programs Participants' Association; and 
representatives from trade unions and the private industry.
    b. Benefits.--Through this hearing, the subcommittee was 
able to confirm that OSHA's efforts to re-engineer worker 
safety standards and enforcement to meet the new realities of 
the 21st century workplace are welcomed by business and 
workers. Given that no amount of enforcement resources would 
ever permit the agency to inspect all of America's workplaces, 
cooperation as opposed to confrontation will permit OSHA to 
better focus scarce budget resource and meet its core mission 
of correcting the most serious hazards in the most dangerous 
workplaces.
    c. Hearings.--A hearing entitled ``OSHA: New Mission for a 
New Workplace'' was held on October 17, 1995.

16. Management of U.S. Department of Housing and Urban Development 
        Funds in Public Housing Tenant Programs.

    a. Summary.--In September 1995, Representative William 
Martini (R-NJ), a member of the Human Resources and 
Intergovernmental Relations Subcommittee, forwarded to the 
subcommittee materials regarding a convention of public housing 
tenants sponsored by the National Tenants Organization (NTO). 
The subcommittee initiated inquiries to the Department of 
Housing and Urban Development (HUD) and several local public 
housing authorities regarding the use of HUD funds to attend 
the NTO convention which was described as a ``vacation'' in the 
promotional material.
    The subcommittee also learned that public housing tenants 
attended this and other training sessions using funds from 
HUD's Tenant Opportunity Program (TOP). At least two tenant 
groups obtained advances of anticipated TOP grant awards from 
their public housing agencies.
    As a result of these inquiries, the subcommittee also 
learned that 6 TOP grants had been awarded then rescinded by 
HUD in Delaware after questions were raised regarding the level 
of consultant fees and the planned use of the funds.
    On November 9, 1995, the subcommittee convened an oversight 
hearing on possible waste and mismanagement of HUD grant funds 
used in public housing tenant programs. Tenant programs support 
training and leadership activities in order to empower tenants 
for resident management purposes.
    The subcommittee investigated whether HUD has appropriately 
controlled or monitored TOP program results to ensure that 
program objectives are met. Testimony at the hearing was 
received from representatives from HUD, HUD's Inspector 
General, and from tenant and public housing organizations.
    b. Benefits.--Abuses of HUD's management of tenant training 
funds suggest fundamental weaknesses that raise concerns about 
the goals and effectiveness of certain TOP supported programs. 
The subcommittee will continue to monitor TOP and other public 
housing programs, as it does other Government programs within 
its jurisdiction, so as to ensure that the mission and 
integrity of HUD's tenant technical assistance grants and 
resident management programs will remain true to their 
principles and intended purposes.
    c. Hearings.--A hearing entitled ``HUD's Management of 
Tenant Empowerment Funds'' was held on November 9, 1995.

17. Status of Major Computer System Development.

    a. Summary.--Testimony at earlier oversight hearings on 
Medicare claims processing, and General Accounting Office (GAO) 
reports on Health Care Finance Administration (HCFA) 
acquisition and implementation of a centralized Medicare claims 
system, presented troubling questions regarding whether HCFA 
had the capacity to develop, procure and implement such a large 
computer application. Earlier testimony by HCFA also indicated 
the agency had foregone other claims management and program 
integrity efforts in favor of placing all their emphasis on the 
new Medicare Transaction System (MTS). Based on a GAO analysis, 
the subcommittees were concerned that the use of available 
claims screening software by HCFA contractors could yield 
significant savings to the Medicare program immediately, while 
the MTS system was being developed.
    To answer these questions, the Subcommittee on Human 
Resources and Intergovernmental Relations and the Subcommittee 
on Government Management, Information, and Technology convened 
a joint oversight hearing on HCFA's MTS project, a proposed 
$127 million data system to process Medicare claims and enable 
HCFA to detect and control fraud and abuse.
    Witnesses at the hearing discussed the status of the MTS 
computer programs which HCFA began planning in the early 1990's 
and which the agency claims will curb the loss of billions of 
dollars annually from fraud and abuse in Medicare claims. HCFA 
Administrator Bruce Vladek appeared before the Human Resources 
Subcommittee on June 15, and testified that the system would be 
fully implemented by late 1999. The subcommittee chairmen and 
other members wanted to know whether that schedule would be 
kept and whether the system, with potential for significant 
cost overruns, would be delivered on budget.
    b. Benefits.--The hearing provided necessary oversight of 
the MTS contract terms and milestones. The subcommittees 
learned that HCFA's schedule and cost estimates for MTS were 
neither reliable nor realistic, and that HCFA was using an 
inconsistent approach to define current and future system 
requirements. This information will be beneficial to those 
guiding health care management and anti-fraud policy pending 
the implementation of the MTS system.
    c. Hearings.--A joint hearing entitled ``Oversight and 
Review of Medicare's Transaction and Information Systems'' was 
held on November 16, 1995.

18. Radioactive Contamination of 27 People, Including Researcher Dr. 
        Maryann Ma, in June 1995 at the National Institutes of Health 
        (NIH).

    a. Summary.--A study by the Human Resources and 
Intergovernmental Relations Subcommittee, requested by 
Congresswoman Constance Morella (R-MD), was conducted over a 5-
month period to determine if the National Institutes of Health 
(NIH) was negligent in conforming to safety regulations in its 
handling of nuclear materials. On June 28, 1995, a 
contamination of 27 people occurred at the NIH Main Campus in 
Bethesda, MD, Building 37, Fifth Floor, Laboratory 5D18.
    The subcommittee also studied the 3-year safety record of 
NIH to see if there was a pattern of safety violations present 
at the facility. These studies were aided through 
documentation, meetings and conversations with the Nuclear 
Regulatory Commission (NRC) and with the NIH.
    b. Benefits.--The subcommittee study, in conjunction with 
an NRC investigation, established that NIH's current handling 
of nuclear materials at its Bethesda facilities are not a 
threat to the safety of NIH employees, the community, or the 
public at large.
    c. Hearings.--None.

19. Unfunded Mandates in Medicaid.

    a. Summary.--The subcommittee examined the cost of unfunded 
Medicaid mandates and the inflexibility of the joint Federal/
State Medicaid program, which adds burdensome costs to the 
States and prohibits them from taking full advantage of market 
efficiencies which exist in the private sector.
    Medicaid's enacting legislation and the subsequent 
regulations dictate that every State provide specific services 
to specific populations. Federal mandates in the Medicaid 
program expanded rapidly between 1983 and 1993 to include such 
requirements as catastrophic care provisions, mandated coverage 
for families leaving the AFDC program, coverage for women and 
children with incomes at 133 percent of the poverty line, and 
mandated coverage for children up to age 18 at 100 percent of 
the poverty line. Medicaid costs have more than tripled since 
this expansion and program enrollment has grown by more than 50 
percent. Viewed by States as the most burdensome mandate, the 
1980 Boren Amendment was interpreted (through substantial 
litigation) to require a cost-based payment standard, where all 
costs incurred by providers must be reimbursed. Without program 
modifications, CBO and GAO project Medicaid spending is likely 
to double in the next 5 to 7 years, having serious fiscal and 
human consequences in the States.
    In response to this rapid growth of unfunded Federal 
mandates, States have attempted Medicaid delivery reforms in 
order to reduce their budgets. Governors are in agreement on 
the need for more flexibility in the Medicaid program. Through 
the waiver process, States (approximately half) have requested 
greater flexibility to address issues related to financing and 
delivery of care, arguing that if States are receiving less 
money to meet the increased eligibility and services coverage 
requirements then they must have the flexibility to operate 
programs that can respond to cost efficiencies. In response to 
the increased cost burden to State budgets, State reform 
initiatives have resulted in 40 States now enrolling a portion 
of their Medicaid population in some form of managed care.
    To address the issue, the Clinton administration's FY 96 
budget for Medicaid proposed a per capita cap on Federal 
Medicaid spending to limit growth, control costs of per 
beneficiary expenditures (keeping in place the mandated 
eligibility and services), contribute savings to the Federal 
budget, and provide States with additional flexibility. The 
House Republicans proposed that Medicaid be turned into a block 
grant program, called ``Medigrant.''
    Those States testifying agreed they would like authority to 
design effective, innovative health care programs responsive to 
the special needs of their respective States, arguing that 
changes are imperative because the current rate of growth in 
State Medicaid spending will exceed the rate of total State 
spending ability, at which point the States will be forced 
either to increase taxes or to divert money from other 
important State programs to Medicaid.
    GAO reviewed for the panel those States that have been 
involved with innovation and reform in their Medicaid programs, 
elaborating on the States' experiences transitioning to new 
delivery systems.
    b. Benefits.--The hearing served as a forum to broaden the 
discussion of unfunded mandates and as such, helped Members of 
Congress and policymakers quantify and assess the cost of the 
unfunded Medicaid mandates to the States in their delivery of 
Medicaid services to beneficiaries. The Boren Amendment was 
cited as the most costly expansion mandate, which State 
officials feel should be repealed in order to help States 
reduce the escalating cost of Medicaid services.
    c. Hearings.--A hearing entitled, ``Unfunded Mandates in 
Medicaid'' was held on January 18, 1996.

20. HUD Management of Tenant Initiative Programs.

    a. Summary.--On November 9, 1995 the subcommittee held a 
hearing to hear testimony about the Department of Housing and 
Urban Development's (HUD) role in the National Tenants 
Organization (NTO) August 1995 conference in Puerto Rico. At 
that hearing the subcommittee received strong indications that 
more than $330,000 in Federal taxes were inappropriately spent 
on the conference and that there was little substantive 
training offered. As a result, the subcommittee asked the 
Inspector General to investigate HUD's active, visible and 
taxpayer-funded support for a convention advertised as a 
vacation.
    At the February 29, 1996 hearing the Inspector General 
testified among other things, that HUD officials played a key 
role in planning and conduction the conference, the NTO cleared 
an estimated $35,000 to $45,000 from the conference, little 
substantive resident training was provided, there was 
substantial lobbying and advocacy against Republican housing 
proposals, and HUD's participation in the convention violated 
department policies issued by HUD's Office of General Counsel 
regarding participation in conferences sponsored by non-Federal 
entities. The Inspector General also made a number of specific 
recommendations on steps HUD needed to take to remedy the 
problems and prevent future ones.
    Kevin Marchman, the Acting Secretary for Public and Indian 
Housing at HUD, told the subcommittee the steps HUD was taking 
to implement the Inspector General's recommendations and to 
strengthen HUD's internal controls and management. Also 
testifying at the hearing were Maxine Green, president of the 
NTO; Miguel Rodriguez, the executive director of the Puerto 
Rican Housing Authority; Ed Moses, deputy executive director of 
community relations and involvement for the Chicago Housing 
Authority; and Patricia Arnaudo, Deputy Director for Program 
Development at HUD.
    b. Benefits.--Tenant empowerment programs, such as TOP, are 
an important path out of isolation and dependence for those who 
use them. The investigation and hearing identified the 
weaknesses that led to the misuse of the TOP funds, ensured 
that steps were being taken to rectify the problems, and 
strengthened HUD's management and internal controls.
    c. Hearings.--A hearing entitled, ``HUD Management of 
Tenant Initiative Programs'' was held on February 29, 1996.

21. The Status of Efforts to Identify Persian Gulf War Syndrome.

    a. Summary.--The subcommittee investigated issues related 
to the Gulf War veterans' illnesses and convened four hearings 
during 1996 as a result of those investigations. These hearings 
began with a primary concern--how ongoing efforts to diagnose, 
treat and compensate Gulf War veterans can be more sharply 
focussed and urgently pursued.
    The first two hearings, in March 1996, dealt with veterans' 
symptoms and complaints about the handling of their health 
problems by the VA, especially about inappropriate medical 
treatment or denial of treatment, compensation issues, and lack 
of funded research by the VA into causes of their illnesses. 
The subcommittee also wanted to ensure that any research 
programs conducted by the Departments of Defense (DOD), Health 
& Human Services (HHS), and the Environmental Protection Agency 
(EPA), were focussed and coordinated. Witnesses in these 
hearings included sick veterans, veterans service 
organizations, the VA, and non-government medical research 
experts.
    The third hearing in June dealt with coordination of Gulf 
veterans issues between the DOD and VA, including medical 
recordkeeping and compensation procedures. Witnesses included 
DOD and VA health and compensation officials. The fourth 
hearing in September covered typical symptoms of sick Gulf 
veterans, studies of effects on humans and animals to low level 
chemical exposures, and probable exposures of large numbers of 
troops to chemical warfare agents and other toxins during the 
war. Witnesses were from the VA, EPA, Central Intelligence 
Agency (CIA), Gulf War Research Foundation, and non-government 
experts from the field of neurology and toxicology.
    The September hearing was critical and a turning point in 
the subcommittee's investigation. It was established that the 
typical complaints of Gulf veterans--chronic fatigue, flu-like 
symptoms, rashes, joint pain, headaches, gastrointestinal 
problems and other maladies--are similar to known effects on 
humans who have been exposed to organophosphates, such as 
pesticides and other chemical agents. Organophosphates are 
chemically related to sarin and other chemical warfare agents.
    Until recently, DOD had denied that chemical weapons were 
deployed or used in the Gulf. They also denied that troops were 
exposed to chemical agents, in spite of information to the 
contrary available to the Pentagon from reliable sources such 
as UN inspectors and Czech detection experts. Based on this DOD 
position, the VA appears to have given little priority to the 
possibility of low level chemical exposures in their diagnosis, 
treatment and compensation of sick Gulf War veterans.
    In the September hearing, Dr. Frances Murphy, Director of 
the VA Environmental Health Service, conceded in testimony that 
the VA research agenda through 1995 placed a low priority on 
low level chemical warfare agent exposure ``because military 
and intelligence sources had stated that U.S. troops had not 
been exposed to chemical agents.''
    In June, DOD finally admitted that 400 troops may have been 
exposed to chemical agents. In August, DOD raised the exposure 
estimate to 1,100 troops; in September to 5,000; and in October 
to more than 20,000. And recently the Associated Press quoted a 
high Pentagon official as conceding that ``big numbers'' of 
130,000 troops could have been exposed. These probable 
exposures came from fallout following the detonation of Iraqi 
munitions bunkers at Khamisiyah and the air bombardment of 
Iraqi chemical/biological weapons factories.
    The health problems of some veterans may have come also 
from other sources such as: the heavy use of pesticides and 
insect repellants during the war, leaded diesel fuel used in 
vehicles and for heating and dust mitigation, radioactivity 
from depleted uranium shells fired at Iraqi tanks, dense smoke 
from the oil well fires, parasites that cause a chronic 
infection called leishmaniasis, and perhaps the side effects of 
troop inoculations in combination with taking the experimental 
anti-nerve gas drug, pyridostigmine bromide.
    It is of major concern that many VA doctors have insisted 
since the war's end that the veterans' symptoms are physical 
manifestations of Post-Traumatic Stress Disorder (PTSD). While 
this may be true in some cases, this may also indicate an over-
reliance on theories of psychological causation to the 
exclusion of obvious physical toxins and stressors.
    With DOD's admission of troop exposures to low level 
chemical warfare agents, the next concern of the subcommittee 
was the extent to which DOD and the VA acknowledge the effects 
of those exposures.
    In testimony before the subcommittee, Dr. Stephen Joseph, 
DOD's Assistant Secretary for Health Affairs, stated that ``. . 
. chronic symptoms or physical manifestations do not later 
develop among persons exposed to low levels of chemical nerve 
agents who did not first exhibit acute symptoms of toxicity.'' 
This statement was challenged at the September 1996 hearing.
    A 1974 study of low level exposures (e.g. workers in 
chemical weapons plants) entitled ``Delayed Toxic Effects of 
Chemical Warfare Agents,'' by German scientist Dr. Karlheinz 
Lohs, tends to refute Dr. Joseph's testimony. The study 
concludes that ``. . . even in the case of exposure to very 
slight amounts [of low level mustard agents] which do not 
necessarily bring on acute symptoms, toxic reactions may later 
set in.''
    The question of whether delayed or chronic effects result 
from exposure to low level chemical agents without first having 
acute or immediate symptoms is critical to veterans. The answer 
determines whether or not Gulf veterans will be compensated 
appropriately for injuries suffered during the war. Many sick 
veterans did not report acute symptoms during the war but later 
developed chronic symptoms, thereby being denied higher 
compensation for war-related injuries. On the other hand, many 
veterans report that they may have had flu-like symptoms or 
rashes in-theater which they ignored as part of serving in a 
harsh, desert environment. These ``low-level'' symptoms could 
be considered acute, but mild, reactions to low level chemical 
agents.
    In December, the subcommittee held two additional hearings 
to discuss recent revelations about chemical detections and 
exposures in the Gulf War, and to determine the extent to which 
VA research and treatment protocols are being modified to take 
these disclosures into account. A panel of active-duty military 
officers testified regarding their experiences during Operation 
Desert Shield. Two of the witnesses operated sophisticated 
chemical detection equipment during the war. They testified 
that positive readings for mustard and other chemical warfare 
agents had been verified and recorded at locations other than 
Khamisayah. The third veteran testified that he heard chemical 
alarms and was told an Iraqi chemical mine had been detonated. 
He believes his subsequent medical problems, including 
Amyotrophic Lateral Sclerosis, or Lou Gherig's Disease, are the 
direct result of his exposure to residual chemicals after the 
``all clear'' was sounded and his unit proceeded through the 
contaminated area.
    A former Central Intelligence Agency analyst testified that 
standard intelligence sources were not relied upon to reach the 
conclusion that no chemical warfare agents were present in the 
Gulf War. Instead, the analyst believes the agency relied 
solely on representations made by the Department of Defense.
    At the second hearing, veterans of the Gulf War testified 
about the difficulty in getting the VA health system to 
recognize war-related illnesses. The VA's Chief Public Health 
and Environmental Hazards Officer testified that while the VA 
``has always remained open to the possibility'' of chemical 
exposures, no veteran had even been diagnosed as suffering from 
the after-effects of such an exposure. She testified that the 
VA health screening protocol for Gulf War veterans was modified 
in late 1995 to ask specific questions about toxic exposures. 
She also said epidemiological research into the effects of low-
dose chemical exposures was just beginning.
    Two VA doctors who treat Gulf War veterans also testified. 
They believe the various combinations of symptoms and illnesses 
presented by Gulf War veterans are the result of exposures to 
one or more environmental hazards present in the Gulf, 
including chemical warfare agents.
    b. Benefits.--The series of subcommittee hearings focused 
attention on the Persian Gulf War veterans' illnesses and 
helped produce admissions from the DOD that U.S. troops were 
exposed to chemical warfare agents. The investigation and 
hearings generated pressure on the VA to change their medical 
protocol and compensation policies toward sick Gulf veterans.
    The VA has also updated its research priorities and has 
begun studies into the long term health effects of low-dose 
exposures to chemical warfare agencts and other toxins. Also as 
the result of increased congressional scrutiny, the Department 
of Defense increased the size of its Gulf War Illnesses 
Investigation Team from 12 to more than 100 investigators and 
staff.
    c. Hearings.--Hearings entitled, ``The Status of Efforts to 
Identify Persian Gulf War Syndrome'' were held on March 11, 
March 28, June 25, and September 19, 1996. Hearings entitled, 
``Persian Gulf Veterans' Illnesses: Intelligence on Chemical/
Biological Exposures'' were held on December 10 and 11, 1996.

22. Unfunded Mandates Reform Act of 1995: A One Year Review.

    a. Summary.--On March 22, 1996, exactly 1 year after the 
bill was signed into law, the subcommittee convened a hearing 
that focused on implementation and the impact of the Unfunded 
Mandates Reform Act of 1995 (Public Law 104-4).
    The act requires the legislative and executive branches to 
identify and quantify implementation costs of statutory and 
regulatory mandates on State and local governments. The 
subcommittee has been monitoring Federal department compliance 
with the requirements of Title II of the act regarding analysis 
of mandates in proposed and final regulations.
    Title II also requires the executive branch to conduct an 
explicit analysis of proposed and final rules to quantify the 
costs and benefits of mandates and identify the most cost 
effective, least burdensome regulatory approach. Departments 
and agencies are required to consult with State and local 
governments, and the Office of Management and Budget (OMB) is 
directed to collect those regulatory statements and forward 
them ``periodically'' to the Congressional Budget Office (CBO). 
OMB is required to submit a written report detailing compliance 
by each agency during the preceding year.
    The subcommittee also been monitored the design and 
implementation of the study of existing mandates required under 
Title III of the act. Title III required the Advisory 
Commission on Intergovernmental Relations to (a) study issues 
involving the calculation of costs and benefits of mandates on 
State and local governments, (b) conduct a study and make 
recommendations to the President and Congress concerning the 
impact of existing mandates on intergovernmental (Federal-
State/local) relations, and (c) monitor and evaluate the 
implementation of the act. Testimony was received from 
representatives from Federal departments and agencies; State 
and local governments; community organizations, and Members of 
Congress.
    b. Benefits.--As a result of the investigation and hearing, 
the subcommittee found that OMB had concluded in the report 
required by Title II that only 16 out of more than 3,000 
proposed or final rules met the act's threshold for a detailed 
cost/benefit analysis and review. Moreover, the subcommittee 
found that OMB compliance with the requirement to share these 
analyses with Congress had been minimal since enacted of the 
act. Although reporting is required ``periodically,'' not one 
of the required statements had been forwarded to CBO prior to a 
day or two before the subcommittee's hearing convened. Then all 
16 arrived at once, just in time to be included in the report. 
The subcommittee was assured that future compliance would be 
more periodic and less episodic.
    Additionally, the subcommittee discovered that agencies had 
``begun considering, but had not yet developed'' pilot programs 
to reduce reporting and compliance requirements on small 
governments, as required by the act.
    c. Hearings.--A hearing entitled, ``Unfunded Mandates 
Reform Act of 1995: A One Year Review'' was held on March 22, 
1996.

23. Job Training That Works/Common factors in effective job training 
        programs.

    a. Summary.--At the subcommittee's request, the General 
Accounting Office (GAO) prepared a report on the common 
features shared by effective job training programs. The GAO 
studied six programs that successfully helped graduates attain 
self-sufficiency. It was learned that the programs employed 
four key features to ensure that participants were successful 
in obtaining and maintaining employment. First, there was a 
focus on ensuring that participants were committed to training 
and getting a job. Second, the programs removed barriers that 
could limit clients' ability to finish training and get and 
keep a job. The third feature was improving participants' 
employability skills as part of their training curriculum. This 
included skills such as dependability, promptness, ability to 
work effectively in groups, and the ability to resolve 
conflicts appropriately. The fourth feature was linking 
occupational skills training with the local labor market so 
that the project could monitor the local labor market and make 
adjustments in course offerings to meet employer demand.
    At the hearing the GAO testified about its work and 
findings. The subcommittee also heard from the directors and 
graduates of two of the programs reviewed by the GAO, and two 
additional successful job training programs.
    b. Benefits.--As the GAO noted, in fiscal year 1995, the 
Federal Government appropriated about $20 billion for about 163 
employment training programs yet large numbers of individuals 
remain unprepared for employment. The report and hearing form a 
basis from which to start in redesigning the structure and 
delivery of Federal job training so that it more successfully 
helps disadvantaged adults acquire and maintain permanent 
employment.
    c. Hearings.--A hearing entitled, ``Job Training That 
Works'' was held on April 18, 1996.

24. Preventing Teen Pregnancy: Coordinating Community Efforts.

    a. Summary.--The subcommittee examined strategies at the 
community level to prevent and reduce teen pregnancy in 
America. The subcommittee found that teen pregnancy is a near 
certain path to poverty, and that poverty is a major underlying 
cause of teenage childbearing. More than 1 million American 
teenagers become pregnant each year the rate of births per 
1,000 teenagers (age 15-19) in the United States is six times 
the rate of France and Italy, and twice the rate of Great 
Britain. About half the pregnant teens in the United States 
will go on to give birth, and of those, 72 percent will be 
unmarried. Childbearing teens make up less than one-third of 
out-of-wedlock births, but for a variety of reasons, they 
represent a disproportionate economic and social burden to 
society. Most teenage parents who drop out of school never 
return. Teenage mothers have half the lifetime earnings of 
women who postpone childbearing under age 20. Teen mothers are 
at greater risk of developing complications in pregnancy and of 
delivering low birth weight babies due to poor prenatal care. 
Low birth weights in turn are associated with increased infant 
mortality, illness and disabilities.
    The subcommittee also found that adult men father more than 
half the children born to 15 to 17 year old mothers. This 
shocking finding, combined with information on the extent to 
which initial sexual activity by teenage girls is involuntary, 
shattered some of the myths surrounding teen pregnancy.
    At on oversight hearing on Federal, State and private 
sector programs to reduce teen pregnancy, testimony was 
received from: Dr. Henry. W. Foster, Jr., senior advisor on 
teenage pregnancy to President Clinton, and White House liaison 
to the National Campaign to Prevent Teenage Pregnancy; the 
National Campaign to Prevent Teen Pregnancy; U.S. Congress; the 
U.S. Department of Health and Human Services; the Maryland 
Lieutenant Governor; Child Trends; Advocates for Youth; the 
Best Friends Foundation; and the Institute for Responsible 
Fatherhood and Family Revitalization.
    b. Benefits.--The subcommittee's investigation and hearing 
into teen pregnancy prevention programs brought needed public 
attention to the need for greater public/private collaboration 
in the design and implementation of effective intervention 
programs. This was the first examination of Federal, State and 
private teen pregnancy prevention programs since publication of 
new studies attributing the majority of under-age pregnancies 
to have been caused by men over the age of 20. This finding 
argues for a greater emphasis on enforcement of statutory rape 
laws, along with traditional program focus on abstinence and 
education about the results of early parenthood.
    c. Hearings.--A hearing entitled, ``Preventing Teen 
Pregnancy: Coordinating Community Efforts'' was held on April 
30, 1996.

25. Food Safety: Oversight of the Food and Drug Administration's Center 
        for Veterinary Medicine.

    a. Summary.--The subcommittee reviewed the performance of 
the FDA's Center for Veterinary Medicine (CVM), particularly 
regarding FDA's failure to issue a regulation prohibiting 
feeding of ruminant protein to other ruminant animals. This was 
a step recommended by the World Health Organization in 
preventing the spread of Bovine Spongiform Encephalopathy (BSE) 
or ``Mad Cow Disease'' in countries currently believed to be 
free of the disease, such as the United States.
    The subcommittee convened an oversight hearing into FDA's 
management of the programs of the Center for Veterinary 
Medicine on May 10, 1996. The hearing examined the lack of 
adequate funding and program priority for veterinary medicine 
issues overseen by FDA's Center for Veterinary Medicine as 
evidenced by the lengthy review process for new animal drugs. 
Testimony was provided by: FDA Deputy Commissioner Michael 
Friedman; Dr. Frederick Murphy, University of California School 
of Veterinary Medicine; Dr. Lester Crawford, Association of 
American Veterinary Medical Colleges; Dr. Gary Weber, National 
Cattlemen's Beef Association; Dr. Don Franco, National 
Renderers Association; Robert Hahn, Public Voice for Food and 
Health Policy; Dr. John Welser, Pharmacia and Upjohn; Dr. 
Sherbyn Ostrich, American Veterinary Medical Association and 
Dr. Cindy Wolf, American Sheep Industry Association.
    b. Benefits.--Delays in the review of new and supplemental 
animal drug applications were identified and corrective 
measures were examined. At the hearing and during subsequent 
meetings with the subcommittee, the FDA took further action on 
the issuance of the regulation banning the feeding of ruminant 
protein to other ruminant animals.
    c. Hearings.--A hearing entitled, ``Food Safety: Oversight 
of the Food and Drug Administration's Center for Veterinary 
Medicine'' was held on May 10, 1996.

26. Food Safety: Monitoring of Food Borne Illnesses by the Centers for 
        Disease Control, Food and Drug Administration and U.S. 
        Department of Agriculture.

    a. Summary.--Three of the four pathogens considered most 
important by the Centers for Disease Control were unrecognized 
as causes of food borne illnesses just 20 years ago. While the 
food supply becomes more vulnerable to pathogens, the food 
safety system on which we rely appears fragmented among three 
different Federal agencies.
    Therefore, subcommittee investigated issues affecting food 
safety and convened an oversight hearing on the monitoring of 
food borne illnesses by CDC, FDA and USDA. The oversight 
hearing evaluated the need for closer coordination, better 
surveillance and implementation of scientifically based hazard 
control systems. Testimony was taken from: Dr. David Satcher, 
Director, Centers for Disease Control; Dr. Fred Shank, Food and 
Drug Administration; Dr. Glen Morris, USDA; Mr. Robert 
Robinson, GAO; Dr. Ban Mishu Allos, Vanderbilt University 
School of Medicine; and Dr. John Kobayashi, Washington State 
Department of Health.
    b. Benefits.--The growing threat to the public health posed 
by food borne pathogens, such as Campylobacter jejuni which 
causes over 40 percent of the Nation's cases of the paralytic 
illness Guillaine-Barre Syndrome, was brought to the attention 
of the public. The inadequate monitoring of food borne 
illnesses by three different Federal agencies as well as State 
governments was identified and corrective actions suggested.
    c. Hearings.--A hearing entitled, ``Food Safety: Monitoring 
of Food Borne Illnesses by the Center for Disease Control, Food 
and Drug Administration and U.S. Department of Agriculture'' 
was held on May 23, 1996.

27. The Development of Successful Public Housing Resident Management 
        (Field Hearing).

    a. Summary.--This hearing was the third oversight hearing 
on resident management programs in public housing developments. 
The field hearing examined the elements of success at Cochran 
Gardens in St. Louis, MO. Cochran Gardens has operated one of 
the best tenant management programs in the country and the 
hearing examined the elements that make it, and other programs 
a success. Effective resident programs can provide superior and 
more cost effective site management than public housing 
authority management.
    At the hearing the subcommittee learned that the elements 
of successful resident management programs include strong 
tenant leadership, active housing authority support, and 
effective Department of Housing and Urban Development 
oversight.
    The subcommittee heard from non-resident public housing 
professionals as well as from residents engaged in resident 
management.
    b. Benefits.--The hearing demonstrated that resident 
management programs can be effective and can build strong 
communities and improve the lives of their residents. The 
hearing identified the key elements of successful resident 
management programs, challenges all programs to use those 
elements to meet the same standards of success.
    c. Hearings.--A hearing entitled, ``The Development of 
Successful Public Housing Resident Management'' (Field Hearing) 
was held on June 3, 1996.

28. Department of Education Oversight: Gatekeeping.

    a. Summary.--Gatekeeping is the process for screening 
higher education institutions for participation in Federal 
student financial aid (SFA) programs. Institutions must meet 
standards set by the triad of State licensing authority, 
accrediting agencies, and the U.S. Department of Education. 
Effective front-end controls are more efficient than back-end 
institutional monitoring and enforcement. Gatekeeping is 
particularly important in controlling non-degree-granting 
vocational trade schools, which pose the greatest risk to SFA 
programs in terms of fraud, waste, and abuse.
    b. Benefits.--The Department of Education discussed plans 
for a more focused oversight effort, including plans to realign 
staffing toward a case-management approach to enforcement. 
State government representatives made recommendations for a 
strong State role in improving institutional integrity 
following the elimination of State Postsecondary Review 
Entities. State governments can be effective due to their 
proximity to institutions within their borders, and because, 
unlike accrediting bodies, State governments are independent 
and accountable to the public. Also discussed were 
institutional concerns about over reliance on student loan 
default rates to determine institutional quality. High default 
rates supersede other regulatory reviews that institutions must 
pass to participate in Title IV.
    c. Hearings.--A hearing entitled, ``Department of Education 
Oversight: Gatekeeping'' was held on June 6, 1996.

29. Oversight of the Department of Labor's Efforts Against Labor 
        Racketeering.

    a. Summary.--As a result of an oversight review of 
Department of Labor Enforcement activities, the subcommittee 
found that racketeering is costly to the interests of union 
members in particular, and to society as a whole. Corrupt union 
officials betray the trust bestowed upon them as elected 
representatives of union workers and undermine the public 
confidence and trust in the collective bargaining agreement 
system. In some cases, millions of dollars of workers' dues and 
benefit moneys have been siphoned off by organized crime 
through outright embezzlement or more sophisticated devices, 
such as loans or excessive fees paid to corrupt union and trust 
fund service providers. Millions of consumers unknowingly pay 
organized crime what amounts to a surcharge on a wide range of 
goods and services due to organized crime's exercise of power 
in the marketplace.
    The subcommittee also examined the Department's current 
anti-racketeering strategy in view of the administrative and 
legislative recommendations made 10 years ago by the 
President's Commission on Organized Crime (Report to the 
President and Attorney General: ``The Edge: Organized Crime, 
Business and Labor Unions,'' 1985). The subcommittee found that 
despite the recommendations of the Presidential Report more 
than 10 years ago, despite the work of the Labor Secretary's 
1989 Task Force on Enforcement, despite a report in 1990 and 
subsequent reports by the DOL Inspector General of ``material 
weakness'' in DOL criminal enforcement efforts, and despite 
more than 5 years of in-depth oversight by the Inspector 
General, DOL enforcement activities ``remain inconsistent and 
uncoordinated with no integrated approach to common criminal 
enforcement issues.'' Moreover, the Report's call for ``New 
directions for the Department of Justice and fundamental 
changes in the structure and operation of the Department of 
Labor, the two principal agencies charged with responsibilities 
involving organized crime, labor organizations, and businesses' 
had not been implemented. The Department continues to resist 
repeated call to integrate and coordinate criminal and civil 
enforcement efforts to provide a sharper focus on labor 
racketeering. As a result, the Department appears to remain an 
inattentive, at times unwilling, partner in the fight against 
organized crime in labor unions.
    The subcommittee convened an oversight hearing to assess 
the Department of Labor's (DOL) strategies designed to detect, 
prosecute and eliminate labor union corruption. Testimony was 
received from representatives from the Office of Labor-
Management Standards, the Pension and Welfare Benefits 
Administration, the Office of the Solicitor and the Division of 
Labor Racketeering, a part of the Office of Inspector General--
all DOL operations responsible for the effectiveness and 
efficiency of the agency's efforts against criminal labor 
racketeering activity.
    b. Benefits.--The investigation and hearing were the first 
attempt in many years to resolve the issue of what it would 
take to overcome the legal, political and bureaucratic barriers 
that prevent the Department of Labor from playing a more 
effective role in the detection of labor racketeering and the 
protection of union members' rights and funds from exploitation 
by organized crime. Testimony at the hearing exposed 
bureaucratic resistance within DOL to a more unified, effective 
assault on labor racketeering. Calls for uniform case 
information, Department-wide outcome tracking, consistent 
information sharing and cross-agency training cooperation were 
pronounced too difficult, too complicated, too time-consuming, 
too costly, not feasible, unnecessary, impractical or secondary 
to the unique mission each enforcement entity within the DOL 
responsible for preventing labor racketeering.
    The Department of Labor and the Inspector General committed 
to a review of longstanding recommendations and a resolution of 
outstanding coordination issues.
    c. Hearings.--A hearing entitled, ``Oversight of the 
Department of Labor's Efforts Against Labor Racketeering'' was 
held on July 13, 1996.

30. Oversight of the Department of Education and the National Institute 
        of Mental Health: Current Approaches to Attention Deficit/
        Hyperactivity Disorders.

    a. Summary.--Attention Deficit/Hyperactivity Disorder 
(ADHD) has become the Nation's leading psychiatric disorder. 
The Department of Education estimates that 3 to 5 percent, or 
up to 2\1/2\ million school-aged children, have ADHD. As 
measured by growth in the use of methylphenidate, or Ritalin, 
the most commonly prescribed drug treatment for ADHD, the 
number of children diagnosed with the disorder has grown two 
and a half times since 1990. ADHD diagnoses in adults are also 
increasing dramatically. These trends have profound 
implications for health research and education policy.
    The subcommittee review and hearing examined what 
constitutes a proper diagnosis of the disorder, why there has 
been an increase in the diagnosis of individuals with the 
disorder, the appropriate treatment for the disorder, the role 
of medications such as methyphenidate (Ritalin) in treatment, 
the implications for Federal educational and health policies of 
current information and planned research, and the appropriate 
accommodations by schools to the diagnosis and treatment.
    b. Benefits.--The hearing helped address the uncertainty 
and controversy surrounding the proper definition, accurate 
diagnosis and appropriate treatment of ADHD. It also identified 
the significance of the problem and its implications on Federal 
education policy and research priorities.
    c. Hearings.--A hearing entitled, ``Oversight of the 
Department of Education and the National Institute of Mental 
Health: Current Approaches to Attention Deficit/Hyperactivity 
Disorders'' was held on July 15, 1996.

31. Consumers and Health Informatics.

    a. Summary.--With today's health care consumers demanding 
more and more information at ever increasing speed in receiving 
that information, the subcommittee explored the accessibility 
of health care information to consumers through the use of 
computers and other telecommunication tools. A report prepared 
by GAO at the request of subcommittee Chairman Christopher 
Shays, titled ``Consumer Health Informatics: Emerging Issues,'' 
was released at the hearing.
    The GAO report stated that health informatic systems are 
capable of providing many different types of health related 
information to consumers, giving them additional information 
resources to assist them in making more informed choices and 
decisions as it relates to their health care. The information 
benefits health care consumers in areas such as the pros and 
cons of elective surgery, self-care techniques when 
appropriate, preventative habits and life style choices, 
training and practice patterns of physicians, medically 
approved alternative types of treatments, et cetera. In 
addition, medical practitioners have the benefit of easily 
accessible patient records and updates on the latest medical 
practice techniques.
    HHS highlighted the growth in consumer interest in the data 
sources available through their information programs, noting 
that consumers are seeking more detailed health informatics, 
but are limited in gaining access. HHS reported their primary 
informatics efforts are coordinated in four main areas: (1) the 
direct provision of information through these technologies; (2) 
coordination to improve access to consumer health informatics; 
(3) partnerships with other pubic and private organizations to 
extend the reach and impact of consumer health informatics; and 
(4) research and development and evaluation.
    Witnesses from private sector organizations and medical 
facilities presented testimony about their specific health 
information projects which are providing health information 
products, infrastructure, data bases and information banks to 
help disseminate health care information more widely to health 
care consumers in a variety of settings.
    b. Benefits.--The hearing highlighted increased demand for 
health care related information, the potential cost savings in 
overall health care dollars spent and the benefit to consumers, 
at the same time calling attention to the problems associated 
with accessability, quality, privacy and availability of such 
information.
    c. Hearings.--A hearing entitled, ``Consumers and Health 
Informatics'' was held on July 26, 1996.

32. The Management of HUD's Section-8 Multi-Family Housing Portfolio.

    a. Summary.--The subcommittee examined this issue to begin 
to address a potential multi-billion dollar housing problem. 
The cost of rent subsidies on more than 700,000 units of low-
income, multi-family housing will soon be unsustainable. As a 
result, the Federal Housing Administration (FHA) will be forced 
to pay up to $18 billion on defaulted mortgages. Without 
definitive administrative and legislative action, this will 
mean that the place that 1 million Americans call home will be 
left to decay, or be torn down.
    At the hearing the subcommittee heard from the Department 
of Housing and Urban Development (HUD) about its plans to 
address this problem. The subcommittee also learned from the 
General Accounting Office (GAO) that there are three main 
factors that have caused this problem. These factors are high 
subsidy costs, high exposure to mortgage insurance loss, and 
the poor physical condition of many properties. These factors 
can be attributed to program design flaws that inflate 
subsidies above market rents and place all the risk of 
financial loss on HUD. The GAO also told the subcommittee that 
weakness in HUD's oversight and management of its multi-family 
portfolio has permitted the physical and financial problems 
facing these units to fester and grow.
    In addition to hearing from the GAO, the subcommittee 
learned what past efforts HUD took to address this problem and 
why they failed, and HUD's current plans and why HUD expects 
them to succeed.
    b. Benefits.--The hearing began to identify the causes and 
depth of a potentially multi-billion dollar problem. The 
hearing also examined the management and information challenges 
facing HUD so that any proposed solutions are made with a 
complete understanding of the capacity to structure and manage 
such an undertaking.
    c. Hearings.--A hearing entitled, ``The Management of HUD's 
Section-8 Multi-Family Housing Portfolio'' was held on July 30, 
1996.

33. Off-Label Drug Use and FDA Review of Supplemental Drug 
        Applications.

    a. Summary.--The subcommittee evaluated the extent of off-
label drug use in cancer, rare disease and pediatric 
indications and the rate at which supplemental indications are 
added by the FDA to the labeling of already marketed drugs. GAO 
testified that approximately 90 percent of cancer drug use, 80 
percent of pediatric use and 80-90 percent of drugs used to 
treat rare diseases are used off-label. For 50 million 
children, 40 million cancer patients and 20 million Americans 
suffering from rare, or orphan, diseases, most of their 
treatments are off-label. While perfectly legal, the widespread 
off-label use of medicines raises significant public policy and 
public health issues. Physicians need label information to 
treat patients effectively. Patients need the same information 
to make decisions about their own care. Both public and private 
health care payers need safety and efficacy data upon which to 
base reimbursement policies GAO and representatives of Tufts 
University Center for Drug Development testified that FDA's 
review of supplemental indications in the past was not timely.
    Testimony was heard from: Sarah Jagger, GAO; Dr. Joseph 
DiMasi, Tufts University Center for Drug Development; FDA 
Deputy Commissioner Michael Friedman; Dr. Carolyn Runowicz, 
American Society of Clinical Oncology; Dr. Ralph Kauffman, 
American Academy of Pediatrics; Abbey Meyers, National 
Organization for Rare Diseases and Dr. William Kennedy, Zeneca 
Pharmaceuticals (representing the Pharmaceutical and Research 
Manufacturers of America).
    b. Benefits.--This hearing examined the impact of the 
absence of up-to-date labeling for drugs used by nearly half of 
America's patients and the adverse impact this lack of 
information has on medical care. At the hearing, FDA, patient 
groups, physicians and the pharmaceutical industry pledged to 
address the problem of inadequate drug labeling and problems 
with FDA's review of supplemental indications for already 
marketed drugs.
    c. Hearings.--A hearing entitled, ``Off Label Drug Use and 
FDA Review of Supplemental Drug Applications'' was held on 
September 12, 1996.

34. Investigation into Possible Misuse of ``New Age'' Training Programs 
        by Federal Departments and Agencies.

    a. Summary.--On February 21, 1996, the subcommittee 
directed an inquiry to the Equal Employment Opportunity 
Commission (EEOC) regarding the number and type of objections 
or complaints regarding training programs, including diversity, 
management, motivation, ``new age,'' and other work training 
programs.
    On March 15, 1996, the EEOC reported a total of 22 charges 
made against private sector employers and no charges made 
against public sector employers. Of the 22 charges located, 8 
had Letters of Determination issued citing a violation of Title 
VII of the Civil Rights Act of 1964, as amended, on the basis 
of religious discrimination. In addition, in seven of the cases 
it is clear that the respondent conducted its own training.
    The EEOC analysis indicated that 17 of the 22 charges 
involved allegations that employees were inappropriately 
required to participate in Church of Scientology training 
sessions or religious practices and/or were told to utilize 
Church of Scientology philosophies in conducting their work. 
The other charges involved a diffuse set of ``new age'' 
practices that employees found objectionable.
    On May 29, 1996, the subcommittee directed inquiries to the 
Federal departments and agencies within its oversight 
jurisdiction regarding the impact of ``new age'' training 
programs, including the use of consultants for that purpose. 
The inquiries sought: a list of all requests for proposals for 
employee training issued; a list of all contracts for employee 
training entered into; copies of not less than five of the 
contracts; a tally of the number of objections or complaints 
from any source involving training programs; an analysis of the 
tally indicating the basis of each complaint; and an analysis 
of the objections or complaints tallied indicating common 
themes or trends.
    The departments and agencies all responded between June 5, 
1996 and August 2, 1996. Many of the agencies did not utilize 
or rarely utilized training programs. All responses, however, 
proved comprehensive. The responses were characterized by very 
few or no objections or complaints concerning the violation of 
individual civil rights.
    b. Benefits.--As questionable, and often dubious, practices 
falling under the category of ``new age'' training have gotten 
more attention, it has become important to protect against such 
explicit and implicit indoctrination and insure continued use 
of proven and effective training practices. The department and 
agency responses provided the subcommittee with a comprehensive 
listing of training programs. Based on these responses, it was 
concluded that Federal dollars were used responsibly in the 
choosing of appropriate and sound diversity, management, 
motivation, and other such employee training programs.
    c. Hearings.--None.

  NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND REGULATORY AFFAIRS 
                              SUBCOMMITTEE

1. Grantee Lobbying.

    a. Summary.--For decades, the Federal Government has 
awarded billions of dollars in grants to organizations that 
engage in lobbying and other forms of political advocacy. Much 
of this money is given to non-profit organizations. According 
to IRS figures, in 1992 alone, approximately 44,274 non-profit 
groups received $42.6 billion in grants from the Federal 
Government. Non-government sources put the figures even 
higher.\21\ The Independent Sector, a coalition of some of the 
largest non-profits in the country, reports that non-profits 
received nearly $160 billion from all government sources in 
1992; and OMB Watch's Gary Bass claims the Federal Government 
granted approximately $226 billion in fiscal year 1994 to non-
profits, for-profits, and to State, local and tribal 
governments.
---------------------------------------------------------------------------
    \21\ Letter from the U.S. General Accounting Office, Associate 
Director, Tax Policy and Administration Issues, Natwar M. Gandhi, to 
Ernest Istook, 11/08/95, found in subcommittee files.
---------------------------------------------------------------------------
    In many instances, government funding far exceeds donations 
received directly from private citizens. For example, in 1994 
Catholic Charities, one of the largest non-profit organization 
in the country, obtained $1.2 billion or 65 percent of its 
total annual revenue from government sources.
    While much of the money given away by the government is 
undoubtedly put to good use, too much of it is spent to 
subsidize political advocacy--whether it be lobbying on pending 
legislation, buying paid advertisements for political races, or 
simple grass-roots organizing. Federal grantees naturally 
develop a symbiotic relationship with their governmental 
funding sources. Even where Federal funds are not directly used 
for political advocacy, indirect support is inevitable--after 
all, money is fungible. Several votes have clearly demonstrated 
that Congress firmly believes the practice of giving grants to 
politically active organizations, termed ``Welfare for 
Lobbyists,'' must stop.
    The subcommittee explored the issue of Welfare for 
Lobbyists in great detail throughout the first session of the 
104th Congress. A total of four hearings were held by the 
subcommittee to investigate allegations that certain groups 
receiving Federal grants were engaging in political advocacy; 
to consider how Welfare for Lobbyists adversely affects both 
government and charity; and to explore possible solutions to 
the problem.
    The subcommittee also worked in coordination with the 
General Accounting Office to investigate the National Council 
of Senior Citizens (NCSC). NCSC is a non-profit organization 
that receives over 95 percent of its funding from the Federal 
Government (ostensibly to provide housing and jobs to senior 
citizens). Yet it is highly active in partisan politics. Half 
of NCSC's annual report for 1994 was devoted to a description 
of its political activities. As part of this investigation, 
electronic copies of NCSC's financial records for fiscal year 
1994 were requested. Those records are now being analyzed to 
determine whether current restrictions on the use of Federal 
funds were violated, and, if no violations took place, to 
identify the loopholes that permit an organization so heavily 
funded by the government to engage in significant political 
activity.
    In addition to investigatory hearings, the subcommittee and 
other Members also proposed legislation to address some of the 
problems associated with Welfare for Lobbyists. Ultimately, 
language was added to section 18 of the Lobbying Disclosure Act 
of 1995 to prohibit certain non-profit organizations (qualified 
as tax-exempt under IRC section 501(c)(4)) from receiving 
Federal funds in any form, if they engage in lobbying 
activities. That bill was signed into law by President Clinton 
on December 19, 1995, as Public Law No. 104-65. Those 
restrictions have no effect on grantees other than 501(c)(4)'s, 
nor do they prevent a 501(c)(4) grantee from creating shell 
corporations to separate, on paper, the grant receipts from the 
political activity.
    b. Benefits.--There is a need to protect the taxpayers by 
ensuring that Federal funds are not used to subsidize 
legislative or political advocacy. To that end, the 
subcommittee's hearings have exposed abuses of Federal grants. 
Many Members believe that further reforms are needed to 
increase accountability to the taxpayers and to prevent the 
abuse of tax dollars. With at least $42 billion in government 
grants each year, there is substantial room for waste, fraud, 
and abuse by unscrupulous grantees. The subcommittee's efforts 
will continue with an eye toward exposing existing abuses and 
demonstrating the case for reform to protect the American 
taxpayers.
    c. Hearings.--As part of its investigatory work, the 
subcommittee held four hearings on the question of Welfare for 
Lobbyists. Hearings were held to investigate allegations that 
certain groups receiving Federal grants were engaging in 
political advocacy; to consider how Welfare for Lobbyists 
adversely affects both government and charity; and to explore 
possible solutions to the problem. On June 29, 1995, the 
subcommittee heard from representatives from non-profits that 
refuse to engage in political activity or take Federal grants; 
General Accounting Office researchers and private scholars who 
have studied Welfare for Lobbyists; and Congressmen and 
Senators who are concerned about the problem as well. In 
addition, the subcommittee questioned representatives of the 
Nature Conservancy and the National Fish and Wildlife 
Foundation about allegations of improper political activity in 
connection with Federal grants they receive. Subsequent 
hearings were held on July 28, August 2, and September 28, 
1995.

2. Investigation of Improper EPA Lobbying on Pending Legislation.

    a. Summary.--The Anti-Lobbying Act is a criminal statute 
that prohibits executive branch agencies from using any 
appropriated money directly or indirectly to influence a Member 
of Congress on pending legislation, except through proper 
official channels. (18 U.S.C. sec. 1913.) The dual purpose of 
the act is to prevent agency officials from squandering public 
money in attempts to increase their budgets or protect their 
jobs, and to prevent executive branch agencies from using tax 
dollars to disseminate propaganda about pending legislation. 
Pursuant to this statute, and other Federal anti-publicity and 
propaganda statutes, the executive branch is free to propose 
such legislative measures as the President deems appropriate 
and communicate its comments directly to Members of Congress on 
any pending legislation. Executive branch officers and 
employees are prohibited, however, from engaging in any grass-
roots lobbying, even indirect grass-roots lobbying, that is 
intended to influence the legislative debate.
    In late February 1995, the committee learned the following 
facts regarding improper EPA lobbying: (1) EPA officials had 
used taxpayer funds to create non-public advocacy material 
strongly condemning pending regulatory reform legislation; (2) 
the EPA used taxpayer funds to fax these documents to more than 
150 grass-roots lobbying organizations and industry groups that 
are active in lobbying Members of Congress on these legislative 
proposals; (3) an objective reader would interpret these 
documents as a call to action, or in the words of one 
newspaper, ``a call to arms;'' (4) most of the documents, 
including the strongest advocacy pieces, were not solicited; 
(5) the mass-faxing of these documents was carefully timed to 
coincide with important votes in the House of Representatives; 
and (6) such action was consistent with a pattern of other EPA 
contacts with grass-roots lobbying organizations to defeat the 
reform legislation. These undisputed facts constituted strong 
evidence that some EPA officials had violated the criminal 
anti-lobbying laws. Indeed, the concerted EPA actions appeared 
to precisely fit the accepted definition of prohibited grass-
roots lobbying.
    On March 2, 1995, a written request for information was 
submitted to EPA Administrator Carol Browner. The Administrator 
initially responded that the EPA would cooperate with the 
oversight investigation and provide answers to the questions. 
However, EPA did not provide complete answers to any of the 
questions that were posed after an extension of time was 
granted. For example, EPA refused to say who approved the 
content of the lobbying material and who was involved in the 
decision to send it out. The EPA also refused to disclose 
whether EPA officials had meetings or conversations with 
outside lobbying groups to discuss lobbying Members of 
Congress. Instead, EPA's response to the legitimate oversight 
request was largely an argument why EPA need not provide 
Congress information regarding potential wrongdoing and waste 
of taxpayer resources.
    On March 21, 1995, subcommittee Chairman McIntosh and 
ranking subcommittee Member Peterson sent Administrator Browner 
a letter insisting on complete responses to all of its 
questions pursuant to its authority under Rules X and XI of the 
U.S. House of Representatives. The March 21 letter explained 
that the subcommittee knew of documents that EPA was refusing 
to produce, which raised concerns about possible violations of 
several Federal statutes besides the Anti-Lobbying Act, 
including other appropriation laws, the Hatch Act prohibitions 
against political activity by executive branch officials, the 
conspiracy statute, and the statute prohibiting misprision of 
felony. As the March 21 letter relayed:

          EPA simply cannot pick and choose which of the 
        subcommittee's requests for information it will honor 
        and which it will reject. We insist on complete 
        responses to all of our requests. . . . It is 
        impossible for the subcommittee to discharge its 
        oversight duty without uncovering all of the facts. 
        Your position that the Congress is not entitled to the 
        information because no one at EPA violated the Anti-
        Lobbying Act is troubling for two reasons. First, your 
        assertion that the act prohibits almost nothing is 
        unsupportable. The very opinions cited in the EPA 
        letter from the Department of Justice refute EPA's 
        interpretation of what the law allows and what it 
        prohibits.
          Second, even if we accepted EPA's . . . construction 
        of the law and blindly accepted EPA's conclusion (based 
        on EPA interviews not provided to us) that no laws were 
        violated, the information we seek still would be highly 
        relevant to our core legislative duty. If current law 
        is as empty as you assert, then our oversight 
        investigation is necessary to determine whether to 
        propose new legislation, similar to that which exists 
        for many agencies, which prohibits an even broader 
        category of publicity and propaganda activities.

The March 21 letter also contained a four-page appendix that 
refuted the agency's legal interpretation of the Anti-Lobbying 
Act.
    In the following months, EPA missed every agreed-upon 
deadline to provide the requested information. Although EPA 
eventually produced a significant number of documents, the 
agency continued to stonewall on producing answers to the most 
important questions and the most relevant documents and e-mail 
messages. At the same time, the Department of Justice's Office 
of Legal Counsel (OLC) issued new ``guidelines'' to executive 
branch agencies on interpreting the Anti-Lobbying Act. The OLC 
guidelines were substantially different from prior General 
Accounting Office (GAO) and OLC guidelines and directly 
contradicted the text of the Anti-Lobbying Act without 
justification.
    Despite the Department of Justice's refusal to investigate 
the facts, committee Chairman William F. Clinger, Jr., and 
subcommittee Chairman McIntosh reviewed the available evidence 
of improper lobbying by EPA and a host of other executive 
branch agencies. That evidence was more than sufficient to find 
a widespread pattern of lobbying by executive agencies within 
the Clinton administration, including the Departments of 
Commerce, Interior, Housing and Urban Development, Labor, the 
EPA, the Small Business Administration, and AmeriCorps.
    Chairman Clinger introduced an amendment to H.R. 2564, the 
``Lobbying Disclosure Act of 1995,'' which would clarify 
existing prohibitions and create a civil enforcement mechanism 
to prevent further improper lobbying activity. Although the 
amendment was narrowly defeated, there was widespread 
recognition that legislation of this type was needed to correct 
executive branch abuses.
    In early 1996, Chairman Clinger introduced H.R. 3078, ``The 
Federal Agency Anti-Lobbying Act,'' to create a civil law 
prohibiting agency grass-roots lobbying in support of or in 
opposition to pending legislation. Although H.R. 3078 did not 
move from committee, Chairman Clinger was able to have a 
similar prohibition enacted as section 631 of the Treasury 
Postal portion of the Omnibus Consolidated Appropriations Act 
of 1997.
    b. Benefits.--This investigation demonstrates the need for 
additional civil legislation, and greater enforcement of 
existing criminal laws regarding improper executive branch 
lobbying. The investigation also laid the groundwork for the 
consideration of civil legislation which was passed as part of 
the Omnibus Consolidated Appropriations Act that creates a 
civil enforcement mechanism to prevent further waste and abuse 
of taxpayer resources.
    c. Hearings.--The full committee conducted a hearing on 
H.R. 3078, on May 15, 1996, (see Part Two I.A.4.k.)

3. OSHA's Ergonomics Standards.

    a. Summary.--During the 104th Congress, the subcommittee 
conducted oversight into the Occupational Safety and Health 
Administration's (OSHA) rulemaking process for an ergonomics 
standard. The term ``ergonomics'' originated in industrial 
engineering to explain the idea that workplaces should be 
designed around the people who use them. The recent attention 
focused on ergonomics comes from its association with 
repetitive strain injuries (RSI's), also known as cumulative 
trauma disorders (CTD's). In spite of the lack of scientific 
evidence to support either of these theories, OSHA has 
proceeded aggressively with an ergonomics regulation.\22\
---------------------------------------------------------------------------
    \22\ Eugene Scalia, ``Ergonomics: OSHA's Strange Campaign to Run 
American Business,'' White Paper, National Legal Center for the Public 
Interest, Vol. 6, No. 3, August 1994, pp. 8-20.
---------------------------------------------------------------------------
    The regulatory moratorium bill (H.R. 450) would have 
prevented further work by OSHA on an ergonomics standard. When 
an OSHA official publicly indicated her intent to defy the 
moratorium, Congress passed a ``Stop Work Order'' on this 
rulemaking as part of H.R. 1158 and H.R. 1944, the 1995 
Rescissions Bill. Press accounts in June 1995 reported that 
OSHA had abandoned the ergonomics rulemaking. As Congress 
continued to review comprehensive regulatory reform proposals, 
the subcommittee held a hearing on July 12, 1995, with OSHA 
Assistant Secretary Joseph Dear as a witness, to finally 
establish the status of OSHA's regulatory activities on the 
ergonomics issue.
    The committee also examined whether a single, one-size-
fits-all rulemaking could ensure workplace safety and health, 
especially when serious questions still existed about the 
scientific basis of the regulation. The investigation brought 
into light the fact that the sweeping regulation would require 
that 96 million jobs across the Nation be formally reviewed for 
ergonomic ``risk factors.'' These risk factors are inherent in 
every job they include: repetitive motion; frequent or heavy 
lifting; contact stress; unsupported or awkward postures for 
long periods; and vibrating tools and equipment.\23\ Under this 
standard, workers would be prohibited from repeatedly pinching 
small binder clips or twisting their necks to cradle a 
telephone receiver. The investigation revealed that many jobs 
which include these risk factors would be abolished altogether 
in favor of automation.\24\ As a result of this investigation, 
the committee was able to establish that OSHA is continuing to 
work on the promulgation of an ergonomics rulemaking. Prior to 
the July 12, 1995 hearing, conflicting press reports were 
written on the subject. In addition to establishing the status 
of the ergonomics rulemaking, the hearing helped make a strong 
case that the rulemaking was overreaching and the House showed 
its agreement by passing a rider to deny funding DOL for 
promulgation of the ergonomics regulation.
---------------------------------------------------------------------------
    \23\ OSHA's Regulatory Process and Activities Regarding Ergonomics 
before the Subcommittee on National Economic Growth, Natural Resources, 
and Regulatory Affairs. Testimony of Joseph A. Dear, Assistant 
Secretary of Labor for Occupational Safety and Health. (Original 
transcript pp. 26-28, in subcommittee files.)
    \24\ Ibid., pp. 36-40.
---------------------------------------------------------------------------
    b. Benefits.--During the investigation, the committee 
learned from Assistant Secretary Dear that the agency is 
continuing to work on its proposed ergonomics regulation. 
Assistant Secretary Dear also confirmed that the agency is 
already enforcing the scientifically dubious ergonomics 
principles under the general duty clause, without a regulation. 
The airing of this information refuted press reports that the 
agency had stopped work on the massive regulation and renewed 
congressional scrutiny of the rulemaking process. A study 
released in January 1995, conducted by experts in occupational 
medicine, concludes that OSHA did not ground its proposed 
ergonomic regulation in sound medicial science. Rather OSHA 
selected research that supported its position and ignored or 
minimized findings that did not. In the Labor-HHS 
Appropriations bill to fund OSHA in 1996, Congress approved a 
prohibition on funds for further work on the ergonomics 
standard.
    c. Hearings.--The subcommittee held a hearing on July 12, 
1995, on ``OSHA's Regulatory Activities and Processes Regarding 
Ergonomics.'' Testimony was received from: Joseph A. Dear, 
Assistant Secretary of Labor for Occupational Safety and 
Health, U.S. Department of Labor; Joseph M. Woodward, Esquire, 
Associate Solicitor, Occupational Safety and Health Division, 
Office of the Solicitor, U.S. Department of Labor; David 
Sarvadi, attorney, Keller and Heckman; Howard M. Sandler, M.D., 
president, Sandler Occupational Medicine Associates, Inc.; C. 
Boyden Gray, Esquire, chairman, Citizens for A Sound Economy; 
Rick Treaster, president, Local 2400, Amalgamated Clothing and 
Textile Workers Union; Deborah Berkowitz, director, office of 
occupational health, United Food and Commercial Workers 
International Union.

4. Improper FDA Rulemaking.

    a. Summary.--The committee conducted an investigational 
hearing on the improper use of informal rulemaking by the Food 
and Drug Administration in cooperation with the Subcommittee on 
Human Resources and Intergovernmental Relations. This 
investigation resulted from a compelling Citizens' Petition 
filed with the FDA pursuant to section 553 of the 
Administrative Procedures Act by the Indiana Medical Device 
Manufacturers Council and the law firm of Baker & Daniels on 
May 2, 1995. That Citizens' Petition asked the FDA to add back 
certain language that the agency had deleted from its 
regulations in 1991 requiring notice and comment procedures for 
most rules. The 1991 language deletion permitted the FDA to 
issue guidance documents without subjecting them to notice and 
comment rulemaking. The Petition also asked the FDA to 
implement a consensus-based approach to the initiation, 
development and issuance of guidance documents that do not 
impose new rules, and to adopt greater internal controls over 
its communications with the public. In support, the Petition 
identified dozens of examples where informal guidance documents 
had been used by the FDA to justify enforcement actions or 
approval decisions that could not be otherwise justified by a 
formal rule or statute.
    Subcommittee Chairmen McIntosh and Shays submitted written 
questions to the FDA, which resulted in the production of 
hundreds of pages of documents and a number of instructive 
answers. For example, the FDA revealed that its decision in 
1991 to exempt guidance documents from notice and comment 
rulemaking procedures was made despite criticism from an 
independent government agency charged with improving government 
regulations. In a September 24, 1990 letter, Marshall Breger, 
chairman of the Administrative Conference of the United States, 
advised the Acting Commissioner of the FDA, James Benson, ``FDA 
should reconsider its seeming ``all-or-nothing'' approach with 
regard to using notice-and-comment procedure in the 
promulgation of interpretive rules.''
    In addition to focusing on the Citizens' Petition, the 
hearing also provided an opportunity for Members to consider a 
briefing paper published by David Murray of the Hudson 
Institute, entitled ``The Human Cost of Regulation: The Case of 
Medical Devices and the FDA.'' In that paper, the Hudson 
Institute concluded thousands of Americans had died as a result 
of FDA delay in approving just four medical devices. As one 
example from the paper indicates, nearly 1,100 Americans died 
as a result of a 24-month delay in the FDA's approval of 
endocardial leads.
    On October 30, 1995, the FDA provided a preliminary written 
response to the Citizen's Petition. Significantly, the FDA 
granted the petitioners' request that the FDA improve its 
guidance document procedures. In a letter signed by the Deputy 
Commissioner for Policy, the FDA concluded:

          ``FDA believes that there is merit to your concern 
        about the initiation, development, and issuance of 
        guidance documents. FDA agrees that public 
        participation benefits the guidance document 
        development process. Moreover, FDA believes that the 
        Agency can do a better of [sic] job of communicating to 
        its employees and to the public the non-binding nature 
        of guidance documents.''

    However, the FDA denied the petitioners' request for the 
FDA to add back certain language that the agency had deleted 
from its regulations in 1991 requiring notice and comment 
procedures for most rules. The FDA ruled ``notice-and-comment 
rulemaking would significantly delay the issuance of guidance 
documents, or more likely, make it impracticable to issue them 
at all. The Agency believes that the proper balance between the 
need for public input and the need for timely guidance can be 
struck if FDA modifies its guidance document procedures. This 
approach addresses your concerns regarding adequate public 
participation but does not make it impossible for FDA to 
continue making guidance available.''
    In that same letter, the FDA also announced plans to 
publish by January 31, 1996, a Federal Register notice setting 
forth its proposed ideas for revising guidance document 
procedures and its intention to solicit comment on the issues 
raised in the Citizens' Petition.
    b. Benefits.--The investigation helped focus both the 
public's and the FDA's attention on an issue that is of 
significant importance to the regulated community. The extent 
to which guidance documents and other informal statements 
issued by a regulatory body are used by that body is a core 
problem for any regulatory system. The Administrative 
Conference of the United States has recognized this concern, 
and has attempted to address solutions on a governmentwide 
basis. This investigation helps to highlight this concern with 
respect to the FDA. However, the FDA is not the only agency 
that could benefit from considering its treatment of informal 
rulemaking. The EPA, OSHA, and every other regulatory body 
needs to voluntarily examine their current rulemaking 
procedures. Failure to act voluntarily will inevitably lead 
more private citizens to use the Citizens' Petition process as 
a means of forcing the agencies to act responsibly. The 
subcommittee encouraged the filing of such petitions, and 
invites private citizens to bring them to its attention.
    c. Hearings.--A hearing on this matter was held on 
September 14, 1995. Witnesses included: William Schultz, Deputy 
Commissioner for Policy, FDA; Brad Thompson of the law firm of 
Baker & Daniels; Larry Pilot, counsel to the Medical Device 
Manufacturers Association; Ed Kimmelman, regulatory affairs 
director for Boehringer Mannheim Corp.; Thomas Lenard, Ph.D., 
director of regulatory studies at the Progress & Freedom 
Foundation; David Murray of the Hudson Institute's 
Competitiveness Center; and Jeff Brinker, M.D., director of 
interventional cardiology, Johns Hopkins Hospital.

5. Regulatory Reform.

    a. Summary.--The committee conducted an examination of the 
impact of Federal regulations on average Americans across the 
Nation. The subcommittee visited 17 cities and held hearings on 
the need for regulatory reform. Testimony from the hearings 
clearly showed that Government regulations place undue burdens 
on small business and the American people--burdens that are not 
outweighed by regulatory benefits.
    In Washington, DC, Federal agency officials and some 
Members of Congress make the case that more and more 
regulations are needed. However, outside Washington, DC, 
citizens plead for relief from the needless burden of 
regulations that already exist. In some cases the burden of 
regulations just makes it more difficult for these individuals 
to do their jobs. In other cases, regulations threaten to drive 
them out of business completely.
    The subcommittee found that America's hard-working farmers, 
who grow the food on which we all subsist, are heavily and 
unnecessarily burdened by regulations. One farmer in Oklahoma, 
Robert Ross, testified that Federal agencies issue so many 
convoluted regulations that it is nearly impossible for farmers 
not to break the law. Farmers are left with no other option but 
to follow the rules to the best of their ability, knowing that 
at any time, an agency inspector could fine them for a minor 
violation or, worse, take their land away. Another Oklahoma 
farmer, Ruby Henderson, testified that she can no longer farm 
her own land because it has been classified as a wetland--
although it remains dry most of the year.
    The subcommittee also found that regulations can be 
counterproductive, hurting the very people our society and our 
government should be trying to help. In Modesto, CA, a Laotian 
immigrant farmer leased 20 acres of land between two major 
roads which are good for only one thing--farming strawberries. 
Two agencies, the Fish and Wildlife Service and the Army Corps 
of Engineers, quickly stepped in to stop him from farming his 
own land. After much headache and paperwork, which involved the 
agencies first losing and then rejecting his forms because the 
drawings were not quite to scale, this farmer is still in 
limbo. He came to America because he thought it was the land of 
opportunity, and he wanted to escape governmental abuse. 
Unfortunately, he has not been able to do that here. His 
American dream has become a personal nightmare.
    Testimony from the field hearings also showed that 
regulations can have a counterproductive impact on large 
pockets of the American populace. For example, the small city 
of Manson, IA was forced to reduce the level of fluoride in the 
public drinking water--it was 4 to 5 milligrams per liter while 
Federal regulations required only 4 milligrams per liter. Even 
though the discrepancy between the actual level and the 
mandated level was very small, and fluoride is a good thing, 
the city was forced to install a reverse osmosis treatment 
plant to remove 1 milligram or less of fluoride per liter of 
water at a cost of more than $700,000. Water rates were 
increased by 45 percent to cover the operational costs of the 
plant. Property taxes were raised and now approximately 24 
percent of these taxes are allocated to paying off the bonds 
the city had to sell to build the plant. Some 50,000 gallons of 
water are rejected by the plant daily.
    In some cases, regulations aren't as much at fault as the 
methods Federal agencies use to enforce them. According to Dr. 
Jonathon Wright, on May 6, 1992, a group of flak-jacketed 
police and FDA agents kicked in the front door of the Tahoma 
Clinic, and with guns pointed at the staff demanded, among 
other things, their B vitamins. The raid came without any prior 
contact or inquiry from the FDA. In September 1995, the FDA's 
``criminal investigation'' was dropped without as little 
warning as it was started--and without any explanation, apology 
or reimbursement of costs.
    b. Benefits.--The field hearings have given private 
citizens across the Nation the opportunity to participate in 
the regulatory reform debate in Congress. By reaching outside 
Washington, DC, and listening to those people who must comply 
with Federal regulations on a daily basis, the subcommittee 
learned about many of the problems that the Federal regulatory 
system poses: use of excessive force by agencies, costly 
regulations that threaten to drive farmers and small business 
owners into bankruptcy, and counterproductive regulations that 
burden the American consumer without providing the benefits of 
protection for health and safety. The testimony of witnesses at 
the field hearings has helped build the record for regulatory 
reform, supporting the need for legislation to enact true, 
common-sense reform. Such significant legislation was enacted 
in the Small Business Regulatory Enforcement Fairness Act of 
1996, which gives Congress veto power over agency regulations.
    c. Hearings.--The subcommittee held the following field 
hearings: ``The Regulatory Transition Act of 1995 (H.R. 450) 
and Clean Air Act Regulations'' in Fairfax, VA, on February 2, 
1995. Testimony was received from: Robert W. McGillicuddy, 
AutoCare, Inc.; Dennis Dwyer, Potomac Mills Exxon; Ron Harrell, 
Capital Services, Inc.; Becky Norton Dunlop, secretary of 
natural resources, Commonwealth of Virginia; Robert E. 
Martinez, secretary of transportation, Commonwealth of 
Virginia; Robert B. Dix, Jr., Fairfax County board of 
supervisors; Lorraine Lavet, Fairfax County chamber of 
commerce; Stan Laskowski, Deputy Regional Administrator, Region 
3, Environmental Protection Agency; Ellen Bosman, vice 
chairman, Arlington County board; Sheryll Crosby, Shortness of 
Breath Club, American Lung Association. ``The Need for 
Regulatory Reform'' in Muncie and Indianapolis, IN, on April 
17, 1995. In Muncie, testimony was received from: Betty Devoe, 
executive director, Westminster Village; Joseph Russell, 
farmer; Wayne Townsend, farmer; Tom Miller, vice president, 
commercial lending, American National Bank; Lowell Williams, 
senior vice president, First Merchants Bank; Eugene Roach, 
M.D., medical director, Anderson Center of St. John's; James 
Currier, M.D., radiation oncologist; Robert Brodhead, 
president, Ball Hospital; George Brannum, M.D., Pathologists 
Associated; G.W. Bartlett, president, G.W. Bartlett Co.; 
Richard Brown, sales manager, Beckett Bronze; Robert Kersey, 
president, Rochester Metal Products; Robert Anderson, plant 
manager, Delphi Interior and Lighting Systems; Richard 
Sullivan, vice president and division manager, New Venture 
Gear; Mike Lunsford, realtor; Terri Quinter, supervisor, Rose 
View Transit; Katherine Kleber, Abate of Indiana PAC; Dan 
Conaway, Abate of Indiana PAC. In Indianapolis, testimony was 
received from: Alan Kemper, farmer; Warren Baird, farmer; Bart 
Dye, farmer; Jean Ann Harcourt, president, Harcourt Outlines; 
Malcolm Applegate, president and general manager, Indianapolis 
Newspapers; Jeff Bowe, president, Benham Press; John Keach, 
Jr., president, Home Federal Savings Bank; Jerry Baumgartner, 
president, Tri County Bank and Trust; Jeff Robinson, Indiana 
American Water Co.; Myles Brand, president, Indiana University. 
``Regulatory Problems Maine Citizens Face Under the Clean Air, 
Clean Water, and Safe Drinking Water Acts'' in Portland, ME, on 
May 26, 1995. Testimony was received from: Richard Verville, 
Citizens for Sensible Emissions; Monte Sloan, United Bikers of 
Maine; David Dixon, Earth Tech; Jinger Duryea, C.N. Brown Co.; 
Edward F. Miller, American Lung Association of Maine; Everett 
B. Carson, Natural Resources Council of Maine; Senator Jeffrey 
H. Butland, president of the senate, Maine State Senate; David 
Sweet, superintendent, Kennebunk, Kennebunkport and Wells Water 
District; Delores Lymburner, Maine Peoples Alliance; Judy W. 
Hayes, president, Consumers Maine Water Co.; Dale Glidden, 
superintendent, Augusta Sanitary District. ``Regulatory Reform 
and the FDA Drug Approval Process'' in Norristown, PA, on June 
9, 1995. Testimony was received from: Beverly Zakarian, 
president, Cancer Patients Action Alliance; David and Faith 
Samowitz; Mariah Gladis; Kiyoshi Kuromiya; Dr. David Bios, vice 
president, worldwide regulatory affairs, Merck & Co.; Dr. James 
Molt, vice president, worldwide regulatory affairs, Rhone-
Poulence Rorer; Dr. Robert Powell, vice president, regulatory 
affairs, SmithKline Beecham Co.; Bruce Carroll, manager, 
government relations division, Centocor, Inc.; Dr. Robert 
Larkin, director, registration & regulatory affairs, 
agricultural chemicals business, Rohm & Haas Co.; Mike Lumpkin, 
Deputy Director, Center for Drug Evaluation and Research, FDA. 
``The Need for Regulatory Reform'' in Tampa, FL, on July 17, 
1995. Testimony was received from: Juan Adriatico, farmer; Roy 
Davis, nurseryman and president, Hillsborough County Farm 
Bureau and president, Tampa Bay Chapter of the Florida 
Nurserymen and Growers Association; Tommy Brock, farmer and 
president, Hillsborough County Strawberry Growers Association; 
David Boozer, executive director, Florida Tropical Fish Farms 
Association; Charles E. Weeder, chairman and CEO, Homes of 
Merit, Inc.; Bruce Congleton, president and CEO, Florida Food 
Industry Association. ``Federal Regulatory Reform'' in St. 
Cloud, MN, on August 7, 1995. Testimony was received from: 
Harold Anderson, president, Anderson Trucking Service; Mike 
Helfeson, CEO, Gold'n Plump Poultry; Bruce Gohman, president, 
W. Gohman Construction Co.; Morrie Lanning, mayor, Moorhead, 
MN; Don Adams, director, Stearns County Environmental Services; 
David Volker, loss control manager, Berkley Administrators; 
Peter Larsen, M.D., F.A.C.S., St. Cloud Eye Clinic; John 
Solheim, CEO, St. Mary's regional health center, Detroit Lakes; 
Ed Zapp, president, chairman and CEO, Zappco Inc. ``Federal 
Regulatory Reform Pertaining to Federal Contracts'' in St. 
Paul, MN, on August 8, 1995. Testimony was received from: Ron 
Turner, president, Minnesota Federal Contractors Council, Joe 
Weis, chairman, Weis Builders; Todd Goderstad, legal counsel, 
Ames Construction Co.; Ted Arneson, president, Professional 
Instruments; Donnovan Eaker, owner, Steve's Meat Market; 
Charles McDuff, director of government and technical affairs, 
Ecolab Inc.; Lyle Clemenson, president, CEI, Inc.; William D. 
Smith, Jr., executive vice president, Brown & Bigelow. ``FDA 
Medical Product Approvals'' in Rochester, MN, on August 8, 
1995. Testimony was received from: Dr. Robert Schwartz, 
cardiologist, the Mayo Clinic; Dr. Richard Geier, president, 
Olmsted Medical Group; Dr. Mike Murray, president-elect, 
Minnesota Medical Association; Paul Citron, vice president of 
science and technology, Medtronic; Mike Gozola, president, 
Rochester Prosthetic Laboratories. ``The Federal Regulatory 
Climate in Maryland,'' in Towson, MD, on January 26, 1996. 
Testimony was received from: Paul Abenante, president, American 
Bakers Association; William Paterakis, H&S Bakery; John 
Morrison, vice president of Human Resources, Schmidt Baking 
Co.; Alvin Manger, president, Manger Packing Co.; Edward Lauer, 
owner, Lauer's Super Thrift; Joseph DeFrancis, president, 
chairman and CEO, Pimlico Race Course; Timothy Capps, Maryland 
Horse Breeders Association; William A. Good, executive vice 
president, National Roofing Contractors Association; Mark 
Gaulin, president, Magco, Inc., and president, Associated 
Roofing Contractors of Maryland; Calvin Coblentz, president, 
Wimpey Minerals U.S.A., Inc., and president, Maryland 
Associated General Contractors; William T. Popmaronis, 
president, EPIC MD Professional Pharmacies and owner, Edwards 
and Anthony Pharmacy; Hugh Brown, president, Safeguard 
Maintenance Corp.; Michael Stappler, president, Overlea 
Caterers, Inc.; Thomas Meighan, safety manager, Stromberg Metal 
Works, Inc.; Rabbi Moshe Heinemann, Star-K Kosher 
Certification; Joseph DiCara, GOW International, Inc. ``The 
Need for Regulatory Reform,'' in Sioux City, IA, on February 8, 
1996. Testimony was received from: Harold Higman, Higman Sand & 
Gravel; David Calhoun, Wells Blue Bunny Dairy; Corky Bailey, 
JEBRO; Ellen Prescott, Security National Bank; George 
Valentine, Terra Industries, Inc.; Craig Davis, Davey & Jim's 
Seed Store, Inc.; Ron Marr, Petroleum Marketers of Iowa; Bob 
Hamilton, chief, Sioux City Fire Department; Linda Madison, 
Sioux City Community School District; Stephen Brevig, Northwest 
Iowa Power Cooperative; Don Meisner, Siouxland Interstate Metro 
Planning Council. ``The Need for Regulatory Reform,'' on 
February 9, 1996 in Des Moines, IA. Testimony was received 
from: Wes Houston, human resources manager, Johnson Machine 
Works, Inc.; Loren Duchman, consultant, James B. Meehan, PE, 
PC; Don Beal, president, Beal Development Corp.; David Whiton, 
owner, Whiton Feed and Milling Co.; Bill Willis, Soil 
Conservation Consultant; Richard Seigel, farmer; Royal 
``Curly'' Holtz, II, farmer; Howard Alff, farmer; Harvey 
Johnson, farmer; Dean Torreson, city administrator, city of 
Atlantic; Robert Layton, city manager, city of Urbandale; 
Fletcher Reel, mayor, city of Missouri Valley; Tom Hanafan, 
mayor, city of Council Bluffs; Joe A. Gray, mayor, city of 
Manson; L.D. McMullen, CEO and general manager, Des Moines 
Water Works. ``The Impact of Regulations on California's 
Central Valley,'' in Modesto, CA, on April 1, 1996. Testimony 
was received from: Shel Thompson, president, Charter Mortgage; 
Robert Rucker, president, Rucker Construction; Ron West, Ron 
West Consulting; John Roberts, CEO, California Rice Industry 
Association; Norma Cordova, director, Sand Creek Flood Control 
District; Dan Nelson, executive director, San Luis Delta 
Mendota Water Authority; Allen Short, general manager, Modesto 
Irrigation District; Roger Wood, corporate vice president, J.R. 
Wood Co.; Manuel Cunha, president, NISEI Farmer's League; 
Carolyn Richardson, director, Department of Environmental 
Advocacy; Pat Paul, chair, Stanislaus County Board of 
Supervisors. ``Creating an Employer-Friendly Regulatory 
System,'' in Auburn, WA, on April 2, 1996. Testimony was 
received from: Dr. Jonathon Wright, Tahoma Clinic; Timothy S. 
Cooke, CEO, the Electrode Store; Ray Schow, State senator and 
owner, All-Night Printery and ANP Publishers; Ann Anderson, 
State senator; Suzette Cook, State representative; Pat Cattin, 
owner, Cattin's Restaurant; Don Guthrie, vice president, 
Wayne's Roofing; David Cornforth, co-owner, Cornforth-Campbell 
Pontiac, Buick, GMC; Keith Shay, former employee, Cornforth-
Campbell Pontiac, Buick, GMC. ``Taxing Times: The Case for IRS 
Reform,'' in Phoenix, AZ, on April 3, 1996. Testimony was 
received from: Sybille Koberstein; Alma Davis; Marlan Walker, 
Walker Ellsworth, P.L.C.; Yale Goldberg, Fraiser, Ryan, 
Goldberg & Hunter, L.L.P.; Mike Pietzsch, Polese, Pietzsch, 
Williams and Nolan; William Raby, the Raby Law Office; Natwar 
Ghandi, Associate Director of Tax Policy, General Accounting 
Office; Leigh Cheatham, deputy director, Arizona Department of 
Revenue; Judith C. Dunn, Associate General Counsel (domestic), 
Internal Revenue Service. ``The Impact of Regulations on the 
Oil Industry,'' in Norman, OK, on May 20, 1996. Testimony was 
received from: Frank McPherson, chairman of the Board, Kerr 
McGee; Richard Bilas, John A. & Donnie Brock Chair in Energy 
Economics & policy director, University of Oklahoma Energy 
Center; Christine Hansen, Interstate Oil and Gas Compact 
Commission; Terry Ross, executive vice president, Love's 
Country Stores; Susie King, senior staff engineer, Conoco; 
Barbara Price, vice president, Health, Environment and Safety, 
Phillips Petroleum; Mike Cantrell, president, Oklahoma 
Independent Petroleum Association; Troy Vickers, deputy 
director of Regulatory Services, Amoco Corp.; Commissioner Ed 
Apple, Oklahoma Corporation Commission. ``The Hidden Cost of 
Government Regulations,'' in Claremore, OK, on May 20, 1996. 
Testimony was received from: Wayne Francis, mayor of Henryetta; 
Sam Wade, deputy CEO, National Rural Water Association; Gene 
Whatley, executive director, Oklahoma Rural Water Association; 
Ron Meadows, superintendent, Prue Public Schools; Sue Ann 
Clayton, Cystic Fibrosis Patient; Joe Cox, president, 
Hydrohoist International; Ted McGuire, president & CEO, RCB 
Bank; Ruby Henderson, farmer; Robert Ross, farmer; Charles 
Sloan, farmer, Sequoyah County Farm Bureau; Don Turner, Turner 
Bros. Meats; Larry McFerron, McFerron's Quality Meats; James 
Zangger, Greenleaf Nursery.

6. Privatization of Sallie Mae and Connie Lee.

    a. Summary.--The Subcommittee on National Economic Growth, 
Natural Resources, and Regulatory Affairs and the Subcommittee 
on Postsecondary Education, Training and Life-Long Learning of 
the House Committee on Economic and Educational Opportunities 
held a joint hearing on the possible privatization of Sallie 
Mae and Connie Lee, both of which were chartered under the 
Higher Education Act. Sallie Mae was established in 1972 as a 
shareholder-owned, for-profit corporation to help ensure 
adequate private sector funding for federally guaranteed 
education loans. Sallie Mae supports financing for higher 
education loans primarily by making a secondary market in such 
loans and providing related financial and operational support 
to lending and educational institutions. Connie Lee was 
established in 1986 as a Triple-A rated, for-profit municipal 
bond insurance company which guarantees the repayment of bonds 
issued by colleges, universities, and teaching hospitals for 
the construction and renovation of facilities. Connie Lee helps 
educational institutions with lower investment grades obtain 
low cost, long-term capital.
    Members were interested in hearing testimony on whether it 
was in the public interest, and the interest of the 
stockholders of Sallie Mae and Connie Lee, that they be 
privatized because of changes in the secondary markets that 
these government-sponsored enterprises (GSE's) serve, and other 
changes in government policy.
    b. Benefits.--The information gained by the hearing 
provided valuable information on the following three questions: 
(1) whether the markets served by Sallie Mae and Connie Lee 
were mature enough to allow these GSE's to be privatized and 
pursue other socially productive business opportunities; (2) if 
the markets were mature enough, whether it was fundamentally 
unfair to prevent the stockholders of these companies from 
deciding for themselves the future of their companies; and (3) 
if privatization of Sallie Mae and Connie Lee was in the public 
and private interest, what general form the legislation should 
take to accomplish this objective.
    c. Hearings.--On May 3, 1995, the Subcommittee on National 
Economic Growth, Natural Resources, and Regulatory Affairs and 
the Subcommittee on Postsecondary Education, Training and Life-
Long Learning of the House Committee on Economic and 
Educational Opportunities held the joint hearing. The first 
panel of witnesses included Larry Hough, the president of 
Sallie Mae; Oliver Stockwell, the president of Connie Lee; 
along with representatives from the U.S. Department of 
Education and the U.S. Department of the Treasury. These 
witnesses testified about advantages of privatizing these GSE's 
and the possible terms of such privatization arrangement. The 
second panel of witnesses included experts on the financial 
markets served by Sallie Mae and Connie Lee. These witnesses 
discussed the typical life cycle of a GSE and explained that 
the secondary markets served by Sallie Mae and Connie Lee were 
sufficiently mature to make privatization appropriate.

7. Mismanagement of Grants by the Environmental Protection Agency.

    a. Summary.--The subcommittee initiated an investigation of 
the Environmental Protection Agency's grantmaking process. The 
subcommittee's investigation, spurred by a September 28, 1995 
report entitled ``Final Report of Audit on EPA's Controls Over 
Assistance Agreements'' by the EPA's Inspector General, found 
financial mismanagement that potentially places billions of tax 
dollars at risk. Grants generally compose more than half of the 
EPA's annual budget of approximately $6 billion.
    The agency's Inspector General found violations of EPA 
policies and procedures, destruction of critical grant 
documents, and blatant disregard for sound management 
practices.
    The Inspector General's report stated that ``audits have 
shown that the recipients of assistance agreements have at 
times misspent and wasted millions of dollars.'' The report 
attributes some of the abuse to the fact that EPA ``personnel 
did not comply with EPA policies and procedures when 
administering assistance agreements.''
    The Inspector General's audit revealed that an examination 
of agency grant records showed a ``disregard of basic 
management techniques.'' For example, in many documents, the 
grant agreement itself--the contract between the grantee and 
the government--could not be found. In some cases, EPA 
employees improperly destroyed grant documents, despite 
``numerous directives prohibiting the destruction of records.''
    The EPA has acknowledged the problems. In response to the 
Inspector General's report, the official EPA response stated 
flatly: ``The findings are consistent with the findings in 
previous reports. Basically, no new issues are identified.'' 
\25\ A later agency response indicated that ``many of the 
conditions which affect [EPA's] ability to administer and close 
out assistance agreements are a result of Agency priorities and 
lack of resources.''\26\
---------------------------------------------------------------------------
    \25\ A memorandum from Sallyanne Harper, Acting Assistant 
Administrator for Administration and Resource Management at EPA to 
Elissa Karpf, Deputy Assistant IG for Acquisition and Assistance Audits 
dated September 19, 1995.
    \26\ A memorandum from Al Pesachowitz, Acting Assistant 
Administrator for Administration and Resource Management at EPA to 
Elissa Karpf, Deputy Assistant IG for Acquisition and Assistance Audits 
dated March 25, 1996.
---------------------------------------------------------------------------
    The EPA has clearly indicated what its priorities are. 
Today, there are only 11 people in EPA headquarters in 
Washington watching out for the billions of dollars in 
taxpayer's money sent out each year in grants. To put that in 
perspective, more than 13 people work in EPA's public relations 
shop.
    On July 30, 1996, the subcommittee held a hearing to hear 
from Inspector General John Martin regarding the variety and 
volume of abuses of the grantmaking process uncovered. EPA 
Administrator Carol Browner was invited but refused to appear 
before the subcommittee to respond to the concerns raised by 
the Inspector General about half of the Agency's annual budget. 
Instead, the subcommittee heard from Deputy Administrator Fred 
Hansen.
    The subcommittee heard from Inspector General Martin that 
the Agency had not filed a formal response outlining proposed 
corrective action related to the September 28, 1996 report 
until just days before the subcommittee's hearing. Under the 
EPA's own guidelines, this report should have been provided 
months before the hearing.
    Further, the subcommittee heard from Deputy Administrator 
Hansen that it would take the EPA years in order to relieve the 
backlog of unmonitored grants and to establish the policy, 
procedures, and training necessary to adequately protect 
taxpayer funds from abuse.
    Mr. Hansen also testified that the EPA could not assure the 
Congress that taxpayer funds are not being used for lobbying or 
political purposes due to the EPA's lax management practices. 
Inspector General Martin agreed to work with the subcommittee's 
staff to initiate a review of potential abuse of taxpayer-
funded grants to subsidize lobbying and political activity.
    b. Benefits.--The EPA Inspector General found that more 
than $33 million in additional funds could have been spent 
cleaning up the environment if EPA had properly closed out 
completed grants. By failing to do so, grantees escaped a final 
audit and the American public was cheated out of a cleaner, 
safer environment.
    The subcommittee and the Inspector General of the EPA both 
intend to carefully monitor the Agency's ongoing corrective 
actions in order to ensure that the taxpayer's money is 
adequately protected while maintaining a cleaner, safer 
environment.
    c. Hearings.--``Mismanagement of Grants by the 
Environmental Protection Agency,'' July 30, 1996.

8. Investigation of the White House Database (WhoDB).

    a. Summary.--In response to press reports related to the 
committee's investigation of the improper acquisition of FBI 
files by the White House, the subcommittee undertook a review 
of the White House Database.
    The subcommittee has requested documents and information 
from the White House, various Federal agencies, and outside 
contractors with regard to their involvement with the WhoDB. 
The White House has not cooperated with the subcommittee's 
requests in a timely fashion.
    The subcommittee's initial review of the WhoDB shows that 
it is a computerized system of records that has information on 
more than 350,000 individuals and 80,000 organizations. The 
computer data base maintains sensitive personal and political 
information on these individuals and organizations.
    The subcommittee held an initial hearing on the WhoDB on 
September 10, 1996 and heard from witnesses from the General 
Accounting Office and legal experts on privacy and 
appropriations law.
    The General Accounting Office (GAO) testified that the 
White House cannot ``ensure that users are properly accessing 
and using'' the White House Database and that there is ``an 
opportunity for misuse'' of the system. In testimony by GAO's 
Director of Information Resources Management, Jack Brock, the 
independent auditing agency stated that the WhoDB system lacks 
basic security features, such as an access log and audit trail, 
that would track whether the ``sensitive information'' was 
being misused. He testified that the White House should assure 
``accountability'' in the WhoDB by operating under the 
``principles of [OMB Circular] A-130.''
    OMB Circular A-130, the official guidance document for 
computerized data bases, states that the government shall 
``limit the collection of information which identifies 
individuals to that which is legally authorized and necessary 
for the proper performance of agency functions.'' It does not 
appear that the White House's policy of keeping information on 
the fact that individuals attended DNC functions or received 
DNC or Re-election Committee Holiday Cards in 1995, as the 
WhoDB does, complies with this standard.
    b. Benefits.--The subcommittee's investigation of the WhoDB 
is ongoing, as is the General Accounting Office's review of the 
system. The investigation seeks to ensure that taxpayer funds 
are protected from abuse and that the White House has properly 
and legally spent appropriated funds.
    The investigation also will determine whether new 
safeguards or other restrictions need to be placed on the White 
House Database specifically or on government information 
systems generally.
    Internal White House estimates show that more than $1.7 
million of taxpayer money has been spent to design, develop and 
maintain the WhoDB.
    c. Hearings.--``Propriety of the White House Database,'' 
September 10, 1996.

9. The Effects of a Minimum Wage Increase.

    a. Summary.--The subcommittee examined the consequences of 
an increase in the minimum wage. The subcommittee held a 
hearing at which it heard from economic experts on the wage 
issue as well as employers and minimum wage employees. The 
testimony presented to the subcommittee clearly showed that an 
increase in the minimum wage would have a significant negative 
effect on employment.
    David Neumark, professor of economics at Michigan State 
University, testified that a hike in the minimum wage would 
have detrimental effects. Neumark has researched the minimum 
wage issue with William Wascher of the Federal Reserve Board 
for the past 6 years. In their first paper on the general 
employment effects of a minimum wage increase, Neumark and 
Wascher used data from the 50 States and Washington, DC between 
1973 and 1989 to estimate the effects of a change in the 
minimum wage on the employment of workers, aged 16 to 24. They 
concluded from the data that a 10 percent increase in the 
minimum wage results in a reduction of the employment rate of 
young workers by 1 or 2 percent. Applied to the proposed 
minimum wage increase of about 20 percent, their results 
predict a decline in employment of 2 to 4 percent among young 
workers. Neumark testified that, taking into account a rise in 
nominal wages, he now estimates the proposed minimum wage hike 
will result in a decline of 100,000 to 200,000 jobs among young 
workers.
    Given the fact that employment declines when the minimum 
wage goes up, Neumark examined the question of whether minimum 
wage increases are the best way to reduce poverty. He concluded 
that minimum wage increases are an ineffective means of 
reducing poverty because such increases do not target 
individuals in poor families and they result in some low-wage 
workers losing their jobs.
    Neumark and Wascher's research went beyond employment 
effects to examine the effects of minimum wage increases on 
school enrollment. Their findings were compatible with economic 
theory which suggests that minimum wage increases lead 
employers to decrease the number of lowest-skilled workers, who 
cost more to employ when the minimum wage goes up, and choose 
more skilled workers. This leads to two results for teenagers: 
those teenagers who have already left school and are employed 
full time lose their jobs at a high rate; and those teenagers 
who were enrolled in school and are more skilled have more 
attractive job opportunities and leave school for full-time 
work. Thus, increases in the minimum wage lead to increases in 
the high school drop out rate.
    Neumark and Wascher's most recent research has disproved 
the study done by David Card and Alan Krueger, which is most 
frequently cited in support of raising the minimum wage. The 
Card and Krueger study looked at fast-food restaurants in New 
Jersey before and after the minimum wage was increased from 
$4.25 to $5.05. They concluded from their data that relative 
employment rose in New Jersey as a result of the minimum wage 
increase. Neumark and Wascher, however, point out that Card and 
Krueger's data were obtained from a telephone survey and were 
very imprecise measures of changes in employment. Neumark and 
Wascher studied payroll data from the same restaurants and came 
to the exact opposite conclusion--that New Jersey's minimum 
wage increase led to a decline in employment in fast-food 
restaurants in the State.
    Several renowned economists also testified about the 
negative consequences of an increase in the minimum wage, 
particularly on employment. Finis Welch, Abell Professor of 
Liberal Arts and Distinguished Professor of Economics, Texas 
A&M University testified that his studies have shown that 
increases in the minimum wage will cause significant 
unemployment, particularly among teenagers. Kevin Murphy, 
George Pratt Shultz Professor of Business Economics and 
Industrial Relations, University of Chicago, testified that his 
studies have shown that increases in the minimum wage will 
cause significant unemployment among the least skilled workers. 
His studies have also shown that the minimum wage is one of the 
least effective means of helping poor wage earners. He 
explained how the cost of goods and services will increase for 
the poor under a hike in the minimum wage. William A. Niskanen, 
Ph.D. economist, former Economic Adviser to President Reagan, 
and chairman, Cato Institute, has studied what type of worker 
earns the minimum wage. He testified that current minimum-wage 
workers are not family breadwinners. He testified that other 
anti-poverty approaches, such as EITC and other tax cuts, are 
much more targeted to help family breadwinners.
    In contrast to the other witnesses, Edward Montgomery, 
Professor of Economics at the University of Maryland, testified 
that the evidence suggests that the employment losses 
associated with an increase in the minimum wage would be small. 
He also stated that since the evidence points to small 
employment losses, it would be short-sighted to ignore the 
financial gains a minimum wage increase would offer to minimum 
wage workers. All of the other expert and citizen witnesses 
disputed Montgomery's conclusions.
    b. Benefits.--The subcommittee learned that the unintended 
consequences of raising the minimum wage would be felt most by 
those least able to absorb them--seniors, the disabled and new 
employees in the work force--because it would create higher 
unemployment and higher prices for goods and services. 
Subcommittee Chairman David McIntosh introduced legislation 
proposing a minimum wage tax cut as an alternative to raising 
the minimum wage. McIntosh's legislation would cut Federal 
taxes for workers earning between $4.25 and $5.15 an hour, and 
it would raise workers' take home pay to $4.57 an hour, 
compared to the current $3.92 when Federal withholdings are 
deducted.
    c. Hearings.--The subcommittee held a hearing on May 14, 
1996, on ``The Effects of a Minimum Wage Increase.'' Testimony 
was received from: David Neumark, Ph.D., professor of 
economics, Michigan State University; Melody Rane, Burger King 
Franchisee; Don Baisch, manager, Burger King Franchise; Jim 
Militello, Jr., Attorney, Militello, Zanck & Coen, owner, 
Source Team, and Partner, Super Wash; Bernie Hellgeth, Source 
Team; Taalib-Din Abdul Uqdah, co-owner, Cornrows & Co., and 
president, Hairbraiders & Natural Haircare Association; Gail 
Robbins, Pizza Inn Franchisee; Finis Welch, Ph.D., professor of 
economics, Texas A&M University; Kevin Murphy, Ph.D., professor 
of economics, University of Chicago; William A. Niskanen, Ph.D. 
economist, chairman, Cato Institute; Edward Montgomery, 
professor of economics, University of Maryland.

10. The Impact of Regulations on Employment.

    a. Summary.--The subcommittee examined the impact of 
Federal regulations on employment. Witnesses at many of the 
subcommittee's field hearings testified that if they didn't 
have to absorb the huge cost of complying with government red 
tape, they would hire more workers, pay higher wages, or 
otherwise expand their businesses. Testimony presented before 
the subcommittee clearly showed that Federal regulations and 
big government in general depress job and economic growth.
    The subcommittee held a hearing on this issue at which 
expert economists and policy analysts, who have studied how the 
cost of big government depresses job, wage, and overall 
national economic growth presented testimony. One witness, 
Professor Lowell Gallaway from Ohio University, conducted a 
recent study for the Joint Economic Committee which showed that 
limiting big government spending is critical to raising the 
average American worker's wages. In fact, it showed that if 
Federal spending levels were held constant at their 1965 level 
and Federal taxes were adjusted accordingly, the typical worker 
would have taken home enough additional pay between 1973 and 
1994 to buy a home. His study used historical data on Federal 
regulatory costs from the Center for the Study of American 
Business to determine the relationship between productivity 
growth and regulation. One of the study's results showed that 
rising regulatory activity is to blame for almost half of the 
slowdown in long-run productivity growth from the last year of 
the Kennedy administration (1963) to the first year of the 
Clinton administration (1993). Therefore, if regulatory 
activity had remained at its 1963 level, annual productivity 
growth today would be nearly 1 percent higher. The cumulative 
effect of this 30-year drag on productivity caused by 
regulation has been to lower the Nation's output by 1993 by 
$1.3 trillion a year.
    Gallaway pointed to work by other economists supporting the 
idea that growth in regulatory activity lowers productivity 
growth. For example, Clark University Economist Wayne Gray has 
studied EPA and OSHA regulations in 450 manufacturing 
industries and found that increased regulatory activity 
explained more than 30 percent of the growth slowdown from the 
1960's to the 1973-78 period. In a National Bureau of Economic 
Research study, Gray and Ronald J. Shadbegian concluded that 
each dollar of regulatory compliance costs lowered total factor 
productivity by $3 to $4 dollars.
    Another witness, Professor Thomas D. Hopkins of the 
Rochester Institute of Technology, has studied the effects of 
regulations on the economy since he served in the Executive 
Office of the President from 1975-1984, conducting regulatory 
analysis. Hopkins has concluded that not only does Government 
regulation impose burdens on those who are regulated, but 
regulatory compliance costs are not distributed evenly and 
burden small businesses disproportionately. His work has shown 
that approximately $670 billion is spent each year to comply 
with all Federal regulations. If all regulatory compliance 
costs were shared evenly, every American household in 1995 
would have paid $7,000. Although it is the household that 
ultimately pays the price of regulation, initially business 
pays the compliance costs. Ninety percent of all U.S. firms are 
small businesses with fewer than 20 employees. In 1992, the 
average small firm with under 20 employees spent some $5,500 
per employee to comply with Federal regulations. The larger the 
firm, the smaller the compliance cost per employee, with firms 
of 500 or more spending about $3,000 per employee. Hopkins 
points out that compliance costs alone do not capture the 
decline in productivity that results from Government 
regulation. Regulation forces businesses to change their 
methods, giving up their most profitable and productive ways of 
doing business. Regulation also limits innovation and growth.
    Regulation makes it more expensive for businesses to hire 
workers--particularly small businesses which account for more 
than half the total employment in the United States. Mark 
Wilson, labor policy analyst at the Heritage Foundation, 
testified that the average cost of hiring an employee in 
private industry is $17.10 per hour, 43 percent of which is due 
to Government regulations, taxes and mandated benefits. For a 
minimum wage worker the cost is $4.76 per hour, 22 percent of 
which is due to Government regulations, taxes and mandated 
benefits.
    Several small business owners also presented testimony to 
the subcommittee. Gary Bartlett, President, G.W. Bartlett & Co. 
in Muncie, IN, testified that if it weren't for the huge 
regulatory burden, he would be able to build a new facility and 
create 100 new jobs in 18 months. Judi Moody, a small business 
owner in Washington State testified that she wants to open a 
small retail business. When she started investigating the 
matter seriously, she discovered that she would have to comply 
with myriad regulations and codes, hire a lawyer, and get 
industrial insurance before she could even open the doors. Due 
to this regulatory burden, she has decided not to open the 
business. Her spirit of entrepreneurship has been squashed and 
the jobs she would have created are lost.
    b. Benefits.--The subcommittee learned that reducing the 
cost of regulation, and big government in general, will promote 
greater productivity and economic growth, creating new jobs and 
enabling workers to take home more pay. Getting rid of 
unnecessary and counterproductive regulations will lift some of 
the disproportionate burden off small businesses, which 
comprise 90 percent U.S. firms. As a result, small businesses 
will have more money to expand, hire more workers and pay their 
workers higher wages.
    c. Hearings.--The subcommittee held a hearing on May 16, 
1996, on ``The Impact of Regulations on Employment.'' Testimony 
was received from: Gary Bartlett, president, G.W. Bartlett Co.; 
Judi Moody, owner, CEG Northwest; Dick Walton, owner, Maroney's 
Cleaners & Laundry; Lowell Gallaway, distinguished professor of 
economics, Ohio University; Thomas D. Hopkins, Arthur J. 
Gosnell professor of economics, Rochester Institute of 
Technology; Mark Wilson, Rebecca Lukens Fellow in Labor Policy, 
the Heritage Foundation.

11. Travel Practices of Department of Transportation Administrators.

    a. Summary.--The subcommittee investigated the travel 
practices of the Department of Transportation's administrators 
to determine the cost and nature of senior executive travel in 
the department. An initial letter was sent from subcommittee 
Chairman McIntosh on April 26, 1996, to Administrator Rodney 
Slater, Federal Highway Administration (FHWA); Administrator 
Jolene Molitoris, Federal Railroad Administration (FRA); 
Administrator David R. Hinson, Federal Aviation Administration 
(FAA); and Admiral Robert E. Kramek, U.S. Coast Guard (USCG). 
Subcommittee Chairman McIntosh sent an initial letter on May 
23, 1996 to Administrator Albert J. Herberger, Maritime 
Administration; Administrator Ricardo Martinez, National 
Highway Traffic Safety Administration (NHTSA); Administrator 
Gail McDonald, Saint Lawrence Seaway Development Corp. (SLSDC); 
and Administrator Gordon Linton, Federal Transit Administration 
(FTA). This letter requested information from each DOT 
Administration about their travel budget for fiscal years 1991 
through 1996 and about compliance with Federal travel 
practices. The letter also requested each administrator to 
disclose each time he or she traveled at government expense 
since becoming administrator, the purpose of the trips, and the 
cost to the Federal Government for the trips.
    Based on each administrator's response to the 
subcommittee's initial request for information, subcommittee 
Chairman McIntosh sent follow-up letters to Administrators 
Slater, Molitoris, Hinson, and Admiral Kramek.
    b. Benefits.--The subcommittee learned that certain DOT 
administrators traveled on frequent trips at great expense to 
the taxpayer. FHWA Administrator Rodney Slater took 134 trips 
totaling 328 travel days, between June 14, 1993 and January 17, 
1996. His travel included 9 trips to 11 foreign cities: Moscow, 
St. Petersburg, Berlin, Acapulco, Johannesburg, Calgary, 
Budapest, Paris, San Juan, Montreal, and Tokyo. His total 
travel (including accompanying staff) cost the taxpayer 
$168,719. Among his domestic trips, Slater traveled at least 14 
times to his home State of Arkansas at taxpayer expense. At 
least one of these trips included political activity. On 
October 29, 1994, Slater billed taxpayers for a trip to Austin, 
TX, while he also participated in political events for then-
Governor Richards' re-election campaign. From June 16 to 26, 
1996, Slater took a $20,000 cross-country trip to celebrate the 
Federal highway system. This costly trip included stops at 
several national landmarks and popular vacation spots, such as 
the Lone Tree Gold Mine in Nevada and the Olympic Sports Park 
in Utah.
    FRA Administrator Jolene Molitoris traveled almost as 
frequently as her colleague at the FHWA, taking 86 trips 
between August 10, 1993 and April 10, 1996. Her total travel 
(including accompanying staff) cost the taxpayer $116,567.79. 
On 32 of these trips she had free, unscheduled days, some of 
which she took as personal time. These trips included 12 visits 
to Columbus, OH, her home town where she keeps a residence. On 
most occasions her trips to Columbus did not coincide with any 
official business in the city. She attached stops in Columbus 
to other trips to Ohio. In one case, Molitoris attached a stop 
in Columbus to a trip to San Francisco, spending five personal 
days in Columbus when she had no official business in the city 
or even in the State. Molitoris also took six international 
trips to 21 foreign cities: Caracas, Vienna, Frankfurt, Calais, 
Paris, Geneva, Lille, London, Berlin, Warsaw, Yokota, Bangkok, 
Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Osaka, Tokyo, Manila, 
Vancouver, and Victoria.
    Coast Guard Commandant Robert Kramek, incurred especially 
high travel costs relative to the number of trips he took due 
to his frequent use of Government (USCG) aircraft. Between June 
1994 and June 1996, Admiral Kramek took 62 trips. Five of these 
trips were international, during which he visited England, 
France, Cuba, Norway, Russia, Iceland, Japan, Panama, 
Argentina, Bolivia, Peru, and Venezuela. His travel costs 
(including accompanying staff and his wife) were $304,471.30. 
Admiral Kramek's wife accompanied him on about half (30) of his 
official trips. The USCG covered her transportation costs. The 
USCG justifies Mrs. Kramek's travel because she ``plays a 
critical representational role'' as a service chief's wife.
    In response to the subcommittee's inquiry, the USCG noted 
that Admiral Kramek ``will reduce his overall travel by 15%'' 
in 1996 and that ``Admiral Kramek has also mandated that all 
other Coast Guard flag officers and SES's reduce their overall 
travel by 15%.'' Admiral Kramek's seemingly sudden decision to 
reduce travel in 1996 is curious because as of the second 
quarter of the year, he had already spent more than half of his 
total travel expenses for previous years. To achieve a 15 
percent reduction in travel, he would have to sharply curtail 
his travel for the remainder of the year.
    FAA Administrator David Hinson took 90 trips between August 
1993 and April 1996. His travels included eight international 
trips to 15 foreign locales: Paris, Toulouse, Zurich, 
Amsterdam, Brussels, Bejing, Tokyo, Geneva, Tel Aviv, 
Frankfurt, London, Madrid, Santiago, Montreal, and Saudi 
Arabia. His trips (including airfare for accompanying staff, 
but not their per diem and lodging expenses) cost $320,963.53. 
Like Admiral Kramek, Administrator Hinson incurred very high 
travel costs because of his frequent use of Government (FAA) 
aircraft. For many of the trips, the FAA did not report an 
estimated cost for the FAA aircraft, so the subcommittee's 
figure for Hinson's costs is an underestimate.
    [NOTE: All the above data on each DOT administrator was 
provided to the subcommittee by the respective DOT 
Administrations at the subcommittee's request.]
    c. Hearings.--None.

12. Travel Practices of SEC Chairman Arthur Levitt.

    a. Summary.--The subcommittee investigated the travel 
practices of the Securities and Exchange Commission's (SEC) 
Chairman Arthur Levitt. An initial letter was sent from 
subcommittee Chairman McIntosh to Chairman Levitt on March 8, 
1996, requesting information about the SEC's travel budget for 
fiscal years 1991 through 1996 and about compliance with 
Federal travel practices. The letter also requested that Levitt 
disclose each time he traveled at government expense since 
becoming chairman, the purpose of his trips, and the cost to 
the Federal Government for the trips. In subsequent letters 
sent on April 23, April 29, May 6, June 4, November 13, and 
December 6, 1996 as well as in meetings with Levitt's staff, 
the subcommittee requested further information, including 
copies of his schedule for all travel days, a complete list of 
all days he took as personal leave, copies of vouchers for all 
his trips, and a list of all the occasions on which Mrs. Levitt 
accompanied him on official travel.
    The period of Levitt's travel reviewed by the subcommittee 
is August 1993 through November 1996 (approximately 3 years). 
During that time, Levitt took numerous trips paid for or 
subsidized by the U.S. taxpayer. The approximate total cost of 
his international and domestic travel through October 1996 (not 
including accompanying staff) was $104,758.
    b. Benefits.--The subcommittee plans to continue its 
inquiry into the travel practices of Chairman Levitt. 
Particularly, the subcommittee will examine what internal 
controls are in place at the SEC to prevent abuse of taxpayer 
dollars and whether these controls are being properly 
implemented by the comptroller and others.
    [NOTE: All the above data on SEC Chairman Arthur Levitt's 
travel was provided to the subcommittee by the SEC at the 
subcommittee's request.]
    c. Hearings.--None.

13. Travel Practices of NTSB Chairman Jim Hall.

    a. Summary.--The subcommittee investigated the travel 
practices of the National Transportation Safety Board (NTSB) 
Chairman Jim Hall. An initial letter was sent from subcommittee 
Chairman McIntosh to Chairman Hall on March 8, 1996, requesting 
information about the NTSB's travel budget for fiscal years 
1991 through 1996 and about compliance with Federal travel 
practices. The letter also requested that Hall disclose each 
time he traveled at Government expense since becoming chairman, 
the purpose of his trips, and the cost to the Federal 
Government for the trips. In subsequent letters on April 17 and 
June 4 as well as in discussions with Hall's staff, the 
subcommittee requested further information, including copies of 
his schedule for all travel days, copies of vouchers for all 
his trips, copies of NTSB trip reports filed for each of his 
official trips, and information regarding the designation of 
Chattanooga as an alternate home base.
    b. Benefits.--The subcommittee learned that Chairman Hall 
has traveled extensively since taking the position as acting 
chairman in June 1994. (He was confirmed as chairman in October 
1994.) He took 51 official trips between July 1994 and February 
1996. His trips were largely domestic, but also included visits 
to foreign locales, including London, Paris, Moscow, Australia, 
Puerto Rico and Canada. The total cost to the taxpayer for his 
travels (including accompanying staff) was $141,251.14.
    In Hall's May 10 letter to the subcommittee, he wrote that, 
``During the process of compiling the requested documents, a 
few instances were discovered in which the complex and 
confusing rules governing alternate home base appear to have 
been unintentionally misinterpreted. For example, my 
understanding that establishing Chattanooga as my alternate 
home base allowed me to be reimbursed as if I were traveling 
out of Washington was incorrect.'' Therefore, as a result of 
the subcommittee's investigation into the matter, Hall was 
forced to reimburse the Government $1,887, a direct savings to 
the American taxpayer.
    [NOTE: All the above data on NTSB Chairman Hall's travel 
was provided to the subcommittee by the NTSB at the 
subcommittee's request.]
    c. Hearings.--None.

14. Cleaning Up the Superfund Program.

    a. Summary.--On May 8, 1996, the subcommittee held a 
hearing on the Federal Superfund program in order to continue 
the oversight performed by its predecessor subcommittee and to 
assist ongoing efforts to reauthorize this program. The 
subcommittee's review focused on: the current state of the 
Superfund program; how well the program is being managed under 
the reforms initiated by the Environmental Protection Agency 
(EPA); and on the limits to improving the cleanup process 
without new legislation.
    The Superfund program was created in 1980 when Congress 
enacted the Comprehensive Environmental Response, Compensation 
and Liability Act (CERCLA) to identify and cleanup the Nation's 
worst hazardous waste sites. Activity under the program 
includes emergency cleanups (removal actions) and the 
designation of sites on a National Priorities List (NPL) for 
longer-term remedial actions. Since 1980, approximately $16 
billion has been obligated by the EPA. For this investment, 
EPA's program has cleaned up only 128 sites as of November, 
1996, about 9 percent of the 1,387 sites on the NPL.\27\ 
Moreover, at least 40 percent of the deleted sites required no 
remedial action at all.
---------------------------------------------------------------------------
    \27\ 40 CFR Part 300, App. B, Table 1. Also, see the Federal 
Register generally for NPL deletions.
---------------------------------------------------------------------------
    On April 23, 1996, in testimony before the Senate Committee 
on Environment and Public Works, EPA Administrator Carol 
Browner claimed great strides in reforming Superfund. She 
stated that ``the current program is fundamentally different 
from the program as it existed just three years ago.'' Over the 
past 3 years, the Agency has implemented three rounds of 
Superfund reforms. Among other initiatives, the EPA has 
established a remedy review board to consider costly remedies, 
and drafted guidance to better control costs in remedy 
selection, to increase the number of protected small 
contributors, and to conduct national risk-based priority-
setting for funding cleanups. Administrator Browner maintained 
that these initiatives have produced ``measurable benefits'' to 
Superfund stakeholders and to public health and the environment 
by providing significant resource savings, accelerating 
cleanups, reducing transaction costs, and relieving small 
businesses of liability.
    About 11 million Americans live within one mile of the 
Nation's Superfund sites.\28\ Nonetheless, the current pace of 
cleanups has not accelerated at all. It still takes at least 12 
years on average to clean up a Superfund site.\29\ The fact 
that, within the last 3 years, sites are finally reaching the 
construction completion stage is simply a function of the 
Superfund pipeline and has nothing to do with the pace of 
cleanup. Indeed, testimony from a wide array of witnesses who 
appeared at the subcommittee's hearing indicated that EPA's 
initiatives have done little as yet to reduce the inordinate 
cleanup delays caused by interminable legal disputes over 
liability issues and the remedy selection process. Moreover, 
these disputes continue to generate enormous transaction costs. 
Over 30 percent of the $28 billion that has been spent on 
Superfund to date has gone to lawyers, consultants, and other 
non-cleanup expenses, instead of to cleaning up the most 
serious hazardous waste sites threatening the health and 
environment of the American public.\30\
---------------------------------------------------------------------------
    \28\ Agency for Toxic Substances and Disease Registry's ``Report to 
Congress: 1993, 1994, 1995'' at 5 (Oct. 1996).
    \29\ EPA, Office of Inspector General, ``Review of Barriers to 
Superfund Cleanups,'' at 2 (Nov. 29, 1995).
    \30\ See testimony of Jan Paul Acton, Assistant Director, 
Congressional Budget Office, Superfund Reauthorization Hearings, 
Committee on Transportation and Infrastructure, June 22, 1995, at 678.
---------------------------------------------------------------------------
    In his testimony at the hearing, EPA's own Inspector 
General identified negotiations over who pays for cleanup costs 
as a major barrier to cleaning up Superfund sites. Based on an 
audit of several highly toxic waste sites, the Inspector 
General concluded that liability negotiations clearly consume a 
lot of time and significantly delay completion of site 
cleanups. Moreover, several witnesses observed that such 
extended negotiations are inescapable due to the inherent 
unfairness of the current liability scheme. In theory, 
Superfund is supposed to enforce a ``polluter pays'' policy. 
That is, if culpable parties can be linked to a polluted site, 
these ``potentially responsible parties'' (PRPs) must pay for 
cleanup efforts. However, these witnesses testified that, in 
practice, Superfund's rule of ``retroactive, joint and several, 
and strict liability'' has been used to force numerous parties 
to pay for cleanup, even when they were not at fault. The 
Superfund statute established a sweeping liability system that 
declares that any person who contributed to contamination at a 
Superfund site at any time can be held liable for all costs of 
cleaning up that property, regardless of the degree of 
involvement of that person with the site, or even if the person 
fully complied with the laws at the time of disposal. As a 
result, EPA's Inspector General found that cleanups have been 
significantly delayed while PRPs and EPA negotiate the extent 
of the total liability and the allocation of liability among 
the PRP's.
    Several witnesses also pointed out the disproportionate 
impact that this unjust liability scheme has had on small 
businesses. Indeed, Mr. Leon Dixon testified that his family 
bronze foundry business, Beckett Bronze, is now facing a third 
party liability suit seeking a contribution of about $26,000 
for cleanup costs. The only evidence of Beckett Bronze's 
contribution to the contamination is a dump receipt for $16.l5, 
dated January 3, 1972. Furthermore, as Mr. James Nerger 
testified, persons are frequently named as PRP's even when they 
had no control over where their wastes were sent for disposal, 
and even though they were not required at the time to keep 
detailed records. His small family-owned solvent recycling 
business, Marisol, Inc., is potentially liable for $3-$10 
million. This is a business with $12 million in total annual 
sales that recently received its fifth consecutive E.I. 
Digest's Regulatory Compliance Award.
    Remedy selection, when based on unrealistic land-use 
assumptions, also can be viewed as a barrier to cleanups. By 
making cleanups unnecessarily expensive, such remedies reduce 
the cost-effectiveness of the Superfund program. As 
Representative Lincoln stated in written testimony, ``Sites 
that are located in industrial areas should not meet soil 
eating standards that are required for land used for day care 
centers.'' Stated differently by the representatives of the 
General Accounting Office (GAO), using realistic land-use 
assumptions will help to maximize Superfund resources for the 
protection of public health and the environment. GAO reviewed 
the sites contained in an EPA data base on health risks from 
Superfund sites to evaluate the significance of land-use 
assumptions. About half of the sites (119) in the data base did 
not pose health risks serious enough to justify their cleanup 
under current land-use assumptions. However, EPA nonetheless 
judged cleanup necessary because the agency assumed the sites' 
uses would change in a way that would increase human exposure 
to contaminants in the future. (The sites studied represent 
most of the sites where EPA made cleanup decisions between 1991 
and mid-1993.)
    Both GAO and Mr. Jeffrey Rosmarin, whose company is the 
current owner of the Liberty Industrial Finishing Superfund 
Site, testified that EPA has often assumed a site will be used 
for residential purposes and used residential exposure 
scenarios when calculating risks, even when the planned future 
use of a site was commercial or industrial redevelopment. Mr. 
Rosmarin testified that, although the Liberty Site has been 
zoned light industrial and used for that purpose for over 80 
years, EPA Region II did not even include light industrial use 
as a possible future use at this site in the Remedial 
Investigation report, issued in January 1994. According to one 
EPA estimate, the commercial level cleanup would be in the $6 
million range, while the residential level cleanup would be 
approximately $60 million. Moreover, Mr. Rosmarin noted that an 
EPA toxicologist has stated that the commercial industrial 
level cleanup would have the same health benefits for the 
surrounding community as the residential cleanup.
    In addition, GAO testified that EPA can reduce the risks at 
sites more quickly and economically by using its removal 
authority, where appropriate, instead of its more expensive and 
time-consuming traditional remedial techniques. If the 
accelerated cleanup techniques were used more consistently, GAO 
estimated that the Federal Government's and private sector's 
Superfund costs could be reduced by as much as $1.7 billion 
over the life of the program. However, GAO also noted that 
restrictions in CERCLA on the cost and time allowed for removal 
actions and inflexible funding arrangements have limited EPA's 
use of non-time-critical removals (where removal action in 
response to threats to human health or the environment can be 
delayed for at least 6 months in order to adequately plan for 
cleanup.)
    Finally, Representative Lincoln pointed out that ``one size 
does not fit all'' when it comes to cleanup remedies. Today, a 
large amount of cleanup spending is devoted to meeting cleanup 
criteria under other statutes and regulations that were not 
developed for remediation waste and/or complying with 
Superfund's current statutory preference for treatment--whether 
or not such standards are, in fact, necessary to protect human 
health and the environment at a specific site. The 
Congresswoman believes that, given the truly local impacts of 
the Superfund program, States should be given the flexibility 
to design site-specific, risk-based remedies that are tailored 
to their particular environmental make-ups.
    Witnesses also testified regarding significant management 
inefficiencies in the implementation of the Superfund program. 
GAO observed that the estimated cost of cleaning up the 
Nation's hazardous waste problem has grown to $75 billion for 
nonfederal Superfund sites. GAO maintains that, in this time of 
fiscal constraint, EPA could achieve more cost-effective 
cleanups by basing its priorities for funding cleanups on the 
principle of risk reduction. However, GAO has found that, to 
date, although one of the EPA's key policy objectives is to 
address the ``worst sites first,'' relative risk plays little 
role in the agency's determinations of priorities. EPA 
headquarters leaves the task of setting priorities to the 
regions, yet the regions do not rank sites by risk. As a 
result, the risks most dangerous to human health are not 
necessarily those that are addressed first.
    Commissioner Charles Williams of the Minnesota Pollution 
Control Agency stated that while the national average cost for 
cleaning up Federal Superfund sites is $31 million, the average 
cost to the State of Minnesota for cleaning up its sites is $3 
million.
    Finally, Mrs. Helena Tielmann testified that the 
``cleanup'' of her property by EPA contractors represents a 
prime example of gross mismanagement; a case where the property 
was left in far worse environmental condition than before 
remediation. Mrs. Tielmann lives with her husband and three 
children on a Superfund hazardous waste site, a 30-acre farm 
that had been the dumping ground for asbestos 25 years ago. 
After excavating the asbestos throughout their property and 
solidifying the flaky substance into a concrete monolith in 
their backyard, EPA's contractor backfilled the excavated soil 
with more than 100,000 tons of untested industrial fill from a 
contaminated industrial site. When later tested, the industrial 
fill, which, in fact, contained asbestos, exceeded New Jersey's 
residential use criteria. There is now more asbestos on the 
surface of the Tielmann's yard than there was before EPA 
implemented its remedy. Mrs. Tielmann maintains that this 
nightmare would never have occurred if there had been proper 
management, supervision, and controls; if EPA had used 
competent contractors; and if the Agency had been responsive to 
the property owner and the local community.
    b. Benefits.--This hearing has served to document further 
Superfund's fundamental flaws. Once again, testimony reflects a 
rigid statutory process that does not provide the flexibility 
to address effectively the wide variety of circumstances 
encountered at sites. It also is clear from the testimony that 
this program continues to wreak havoc on the lives of hard-
working and law-abiding citizens. Overall, the program 
continues to fall far short of protecting human health and the 
environment.
    Moreover, the record developed in the subcommittee's 
hearing stands in sharp contrast to Administrator Browner's 
recent assertion that the current program is fundamentally 
different from the one in years past. This subcommittee has 
heard testimony that shows that EPA's initiatives to improve 
the pace, cost, and fairness of the Superfund program within 
the constraints of the law are not really being implemented. 
Clearly, these reforms have not received sustained management 
attention and follow-through.
    Most importantly, the testimony given in this hearing 
reflects a dire need for legislative reform of this wasteful 
and expensive program. As J. Lawrence Wilson, chairman and 
chief executive of Rohm & Haas Co, stated before the Senate 
Environment and Public Works Committee on April 23, 1996: 
``Every month that continues to go by without reauthorization 
means more delays in cleanups, more litigation resulting from 
an inequitable liability scheme, more controversy between the 
public and EPA, and more wasteful spending by both the 
government and the private sector.''
    c. Hearings.--The subcommittee held a hearing entitled, 
``Cleaning up the Superfund Program,'' on May 8, 1996.

15. Havertown Superfund Site.

    a. Summary.--The subcommittee is examining the process that 
the Environmental Protection Agency has followed in developing 
a cleanup plan for the Havertown PCP Superfund site (NPL No. 
542; CERCLIS No. PAD 002338010). This investigation was 
prompted by complaints from township citizens. Residents of the 
local community expressed difficulty in obtaining information 
about EPA's technical and economic analyses and raised concerns 
about whether the Agency has properly evaluated all viable 
remediation options. In addition, the subcommittee undertook 
this inquiry because this case involves issues that are the 
focus of EPA's Superfund administrative reforms.
    The Havertown PCP site is a National Priorities List 
Superfund site in Havertown, PA. The site, which has been on 
the NPL since 1983, is surrounded by a mixture of commercial 
establishments, industries, parks, schools and residential 
homes. The site covers 12 to 15 acres, including a wood 
treatment facility. From 1947 to 1963, National Wood Preservers 
disposed of wood treatment waste materials into a 25 to 35 foot 
deep well that entered the groundwater under the plant. These 
wastes generally consisted of spent wood-treatment solutions 
containing pentachlorophenol (PCP) and diesel-type oil. The 
Agency also has found arsenic and dioxins on the site. The 
liquid wastes leached into a nearby small stream that flows 
through a residential area and eventually into the Delaware 
River.
    EPA has taken various steps, such as conducting an 
emergency removal action, fencing the site, and installing an 
oil/water separator, in order to stem the further spread of 
site contamination and, thus, to reduce the potential of 
exposure to contamination. Recently, to respond to soil and 
ground water contamination, EPA began the preparatory work for 
placing a protective cap over areas of the site. The cap is 
part of EPA's response action at the site and will be used to 
prevent contact with contaminated soil and prevent rain water 
from trickling down through the soil and moving additional 
contamination into the groundwater.
    On July 26, 1996, the subcommittee sent a letter of inquiry 
to EPA requesting information about its remedy decisions. The 
letter called upon EPA to provide the studies and analyses on 
which the Agency has relied for remedy selection at the 
Havertown site. On August 15, 1996, the subcommittee received 
from EPA Region III information and documentation in response 
to the inquiry. In reviewing these documents, the subcommittee 
has focused particularly on the following matters:
    1. Re-evaluation of the Remedy Decision. Whether material 
changes in site conditions and/or technological developments 
have occurred since the Havertown site was listed on the NPL 
that justify an alternative or modified remedy. Has EPA 
performed a coordinated current review of the site to determine 
the potential effectiveness of the selected remedy, including 
collecting and analyzing updated site information, re-
appraising the remedy's expected performance and costs, and 
evaluating currently available alternatives.
    2. Community Participation. Whether the community has had 
the opportunity to play a meaningful role in the selection of 
the cleanup remedy. Has EPA provided the local community with 
the material information needed for informed participation.
    3. Consideration of Future Land Use. To what extent has EPA 
conferred with local officials and other interested parties in 
developing a land use plan to guide decisionmaking on remedy 
selection.
    4. Economic Redevelopment of Contaminated Property. To what 
extent will the selected remedy inhibit productive use of the 
property. To what extent will this remedy keep the source areas 
under control so that the contamination will not continue to 
migrate.
    5. National Risk-Based Priority Setting. Whether the 
Havertown site is truly 1 of the 10 worst sites in this 
country, based on the criteria that EPA used to set national 
risk-based priorities for funding cleanups.
    Finally, the subcommittee's review of EPA's responses has 
raised additional questions that the subcommittee plans to 
probe further.
    b. Benefits.--In this Superfund case, the issues that are 
in dispute between the local community and EPA are the focus of 
the Agency's administrative reforms. The subcommittee is 
reviewing the Agency's implementation of such reforms at this 
site. Also, the Agency has listed this site as 1 of the 10 
worst sites in the country on its national risk-based 
priorities list for funding. After reviewing the Havertown 
Superfund documentation, this designation appears inappropriate 
based on the criteria that the Agency applied in developing the 
list.
    c. Hearings.--None were held.

    NATIONAL SECURITY, INTERNATIONAL AFFAIRS, AND CRIMINAL JUSTICE 
                              SUBCOMMITTEE

1. Office of National Drug Control Policy.

    a. Summary.--The National Narcotics Leadership Act of 1988 
(21 U.S.C. 1501 et seq.) established the Office of National 
Drug Control Policy (ONDCP). The act also provided for 
appointment of a Director of ONDCP, and required that the 
Director develop an overall strategy and budget for Federal 
anti-narcotics efforts, including both supply and reduction. 
Specifically, the statute provides that ONDCP: ``(A) include 
comprehensive, research based, long-range goals for reducing 
drug abuse in the United States; (B) include short-term 
measurable objectives which the Director determines may be 
realistically achieved in the 2 year period beginning on the 
date of the submission of the strategy; (C) describe the 
balance between resources devoted to supply reduction and 
demand reduction; and (D) review State and local drug control 
activities to ensure that the United States pursues well-
coordinated and effective drug control at all levels of 
government.'' Pursuant to the Government Reform and Oversight 
Committee's jurisdiction over ONDCP, the Subcommittee on 
National Security, International Affairs, and Criminal Justice 
convened five indepth oversight hearings during 1995 to assess 
the status and effectiveness of the Nation's Federal drug 
control strategy and the strategy's implementation. The 
subcommittee zeroed in on the interdiction program, source 
country, law enforcement, prevention and treatment components 
as prescribed by the Federal strategy.
    Before, during and after these hearings, expert advice and 
recommendations were sought from top administration officials 
and preeminent outside experts. The subcommittee's twin aims 
were to (a) identify strategic and implementation problems, and 
(b) identify sound recommendations for achieving measurable 
improvement in combating illegal drug importation and use.
    As a backdrop for this investigation, the committee 
recognized that the impact of illegal drugs on our society has 
been a growing concern since the early 1970's. For example, in 
June 1971, President Nixon told Congress that a national 
response to drug addiction was needed since ``the problem has 
assumed the dimensions of a national emergency.'' \31\
---------------------------------------------------------------------------
    \31\ Musto, David F. The American Disease: Origins of Narcotic 
Control, at 256 (1987).
---------------------------------------------------------------------------
    Moreover, by 1980, illegal drug use was so widespread that 
antidrug parent groups such as Pride and National Family 
Partnership began to take root in America's heartland; in fact, 
by 1979 more than half of all minors surveyed acknowledged 
illegal drug use.\32\
---------------------------------------------------------------------------
    \32\ In 1979, 54 percent of youth respondents to the Monitoring the 
Future Survey indicated drug use. See the 1995 Pride Report, Executive 
Summary, at 1.
---------------------------------------------------------------------------
    During the early 1980's, the Nation awakened to the 
enormity of the incursion being made by illegal drugs. Former 
First Lady Nancy Reagan became a leader in the anti-drug, or 
drug abuse prevention, movement. Mrs. Reagan effectively led 
the campaign to educate our Nation's youth and stem rising 
youth drug abuse. Her most famous statement, ``Just Say No,'' 
the answer to a child's question about how to respond if 
pressed to take drugs, became a guiding phrase in the 
prevention movement. Unrivaled in her energy and commitment, 
Nancy Reagan became the movement's chief spokesperson for much 
of the decade.
    Finally, as indicated earlier, during the mid-1980's, 
President Reagan showed unprecedented leadership in what soon 
became known as a war against illegal drug use and those who 
trafficked in illegal drugs.\33\
---------------------------------------------------------------------------
    \33\ See ``Testimony of Admiral Paul Yost,'' supra.
---------------------------------------------------------------------------
    In 1988, Congress passed the Anti-Drug Abuse Act of 1988 
(Public Law 100-690, Title I, Subtitle A), which established 
the Office of National Drug Control Policy (ONDCP) and created 
the new position of ``White House Drug Czar'' or ONDCP 
Director. In recognition of the threat posed to our society by 
the menace of illegal drug use, the act required the White 
House ONDCP Director to present an annual strategy with 
measurable goals and a Federal drug control budget to the 
President and Congress.\34\
---------------------------------------------------------------------------
    \34\ Public Law 100-690, Title I, Subtitle A.
---------------------------------------------------------------------------
    The 1988 act has been tinkered with in the years since. In 
1994, pursuant to the Violent Crime Control and Law Enforcement 
Act of 1994 (Public Law 103-322, Title X), the ``Drug Czar'' 
was authorized to make recommendations to agencies during 
budget formulation. The aim of this 1994 change was to improve 
resource targeting and policy consistency at Federal agencies 
involved in implementing the National Drug Control Strategy, as 
well as to heighten overall counternarcotics coordination 
throughout the Federal Government. In addition, the ``Drug 
Czar'' was authorized under the 1994 act to exercise discretion 
over 2 percent of the overall drug budget. While some have 
suggested that this provision achieved little, the ``Drug 
Czar'' could theoretically transfer up to 2 percent of the 
budget among National Drug Control Program accounts, upon 
approval by the appropriations committees.\35\
---------------------------------------------------------------------------
    \35\ In fact, this 2 percent measure has proved more theoretical 
than actual, as particular agency heads have resisted the transfers and 
prevailed in those efforts. For example, FBI Director Louis Freeh 
reportedly blocked resource allocations by ONDCP in 1994.
---------------------------------------------------------------------------
    Beyond these hallmark 1995 hearings, during recent prior 
sessions of Congress, legislative and oversight hearings have 
been held on various aspects of national drug policy. However, 
these hearings have focused on particular aspects of the ONDCP 
Strategy and have been conducted against the backdrop of 
falling drug use or general support by the minority-controlled 
Congress for the overall White House Strategy.
    This subcommittee's 1995 oversight hearings, proposed and 
supported by both minority and majority subcommittee members, 
were the result of recent developments, including the steep 
rise in juvenile and overall drug use (including both rising 
casual drug use, and increasing regularity of use); the growing 
awareness that increased juvenile drug use is linked to rising 
juvenile crime; \36\ the absence of a long-promised White House 
Heroin Strategy; \37\ an objective reduction in interdiction 
efforts; \38\ an apparent lack of progress in source countries 
toward goals set forth for so-called source country programs; 
\39\ reports of lagging accountability in certain drug 
prevention programs; \40\ deemphasis by the media on drug 
abuse; \41\ overall rise in drug related juvenile violence; 
\42\ and general concerns about interagency coordination of the 
Federal counternarcotics effort.\43\
---------------------------------------------------------------------------
    \36\ 1995 OJJDP Report, pp. 58-65.
    \37\ The President promised a Heroin Strategy within 120 days of 
taking office. Without any White House announcement, he signed a Heroin 
Strategy in late November 1995. The signed Strategy offers little 
detail, and was promulgated without Implementing Guidelines, which has 
so far made it a nullity.
    \38\ See ``Interdiction Policy Oversight'' section, below.
    \39\ See ``Source Country Program Oversight'' section, below.
    \40\ In particular, reports of waste and misapplication of funds 
have been associated with certain States' administration of Safe and 
Drug Free Schools moneys, and these allegations are under continuing 
investigation by the Department of Education Inspector General's Office 
and the General Accounting Office.
    \41\ See ``prevention Policy Oversight'' section, below.
    \42\ See ``Background'' section, below.
    \43\ See, e.g., Yost Testimony, below.
---------------------------------------------------------------------------
    The intent to examine National Drug Control Strategy was 
set forth in the February 6, 1995 subcommittee Strategic Plan 
in accord with both the majority and minority view that the 
area required oversight.\44\
---------------------------------------------------------------------------
    \44\ The topic was discussed at a meeting of the full subcommittee 
in early February, views were solicited by the subcommittee chairman, 
and both minority and majority members indicated a desire to conduct 
oversight in this area.
---------------------------------------------------------------------------
    In the course of investigating the status of the National 
Drug Control Strategy, the Strategy's implementation and the 
need for improvement, the subcommittee engaged in extensive 
correspondence with the administration, including direct 
correspondence with the President; the Vice President; Anthony 
Lake, the President's National Security Advisor; Dr. Lee P. 
Brown, Director of ONDCP; Admiral Robert E. Kramek, U.S. 
Interdiction Coordinator and Coast Guard Commandant; Thomas A. 
Constantine, Administrator of the Drug Enforcement 
Administration; George Weise, Commissioner of the U.S. Customs 
Service; Brian Sheridan, Department of Defense Deputy Assistant 
for Drug Enforcement Policy; Ambassador Jane E. Becker, 
Department of State Deputy Assistant Secretary for 
International Narcotics and Law Enforcement; and others at the 
Departments of Justice, Defense, State, ONDCP and elsewhere in 
the administration.
    The committee investigation included one fact finding trip. 
Subcommittee members, and members of the United States Coast 
Guard traveled to the Seventh Coast Guard District in the 
Caribbean transit zone. There, they attended briefings at 
Seventh District Headquarters in Miami, Coast Guard 
interdiction initiatives at sea, Drug Enforcement 
Administration (DEA) activities in the Greater Antilles, high 
level interagency briefings in Puerto Rico by the FBI, DEA, 
Customs, Border Patrol, and local authorities, and received 
indepth briefings by Admiral Granuzo and others at Joint Task 
Force Six in Key West, dedicated to Eastern Caribbean Drug 
Interdiction. This trip was arranged in coordination with the 
U.S. Coast Guard, and invitations were extended to majority and 
minority members. The trip occurred on June 16 through 19, 
1995. Additionally, in coordination with ONDCP, subcommittee 
Chairman Zeliff traveled with the White House Director of ONDCP 
to see prevention and treatment programs first-hand in 
Massachusetts.
    Throughout 1995, the subcommittee met extensively with the 
agencies involved in the counternarcotics effort, and 
endeavored to collect directly and indirectly both statistical 
and anecdotal evidence on the effectiveness and accountability 
of the current National Drug Control Strategy and programs. 
These efforts spanned the key areas of interdiction, law 
enforcement, prevention, treatment, and source country 
initiatives. The subcommittee sought further insight from GAO 
investigators, agents in the field, and departmental inspectors 
general.
    b. Benefits.--As a result of its investigation into the use 
of illegal drugs in America and the Nations fight against 
drugs, the committee uncovered the following basic facts:
          (1) Casual teenage drug use trends have suffered a 
        marked reversal over the past 3 years, and are 
        dramatically up in virtually every age group and for 
        every illicit drug, including heroin, crack, cocaine 
        hydrochloride, LSD, non-LSD hallucinogens, 
        methamphetamine, inhalants, stimulants, and marijuana.
          (2) Rising casual teenage drug use is closely 
        correlated with rising juvenile violent crime.
          (3) If rising teenage drug use and the close 
        correlation with violent juvenile crime continue to 
        rise on their current path, the Nation will experience 
        a doubling of violent crime by 2010.\45\
---------------------------------------------------------------------------
    \45\ See Juvenile Offenders and Victims: A National Report, OJJDP, 
Department of Justice, September 1995.
---------------------------------------------------------------------------
          (4) The nature of casual teenage drug use is 
        changing. Annual or infrequent teenage experimentation 
        with illegal drugs is being replaced by regular, 
        monthly or addictive teenage drug use.\46\
---------------------------------------------------------------------------
    \46\ See 1995 surveys conducted by PRIDE, The National Household 
Survey, and The University of Michigan's Monitoring the Future Survey.
---------------------------------------------------------------------------
          (5) The nationwide street price for most illicit 
        drugs is lower than at any time in recent years, and 
        the potency of those same drugs, particularly heroin 
        and crack, is higher.\47\
---------------------------------------------------------------------------
    \47\ See ``Interdiction Policy Oversight'' section, below.
---------------------------------------------------------------------------
          (6) Nationwide, drug related emergencies are at an 
        all time high.\48\
---------------------------------------------------------------------------
    \48\ See ``Background'' section, below.
---------------------------------------------------------------------------
          (7) The 1994 and 1995 White House ONDCP strategies 
        consciously shift resources away from priorities set in 
        the late 1980's, namely from prevention and 
        interdiction to treatment of ``hardcore addicts'' and 
        source country programs.
          (8) During 1993, 1994, and most of 1995, the 
        President put little emphasis on, and manifested little 
        interest in, either the demand side war against illegal 
        drug use or the supply side war against international 
        narcotics traffickers. An objective look at the 
        President's public addresses and his actions regarding 
        gutting the ONDCP when he became President, 
        interactions with Congress, and discussions with 
        foreign leaders reveals that attention to the rising 
        tide of illegal drug use is a low Presidential 
        priority.\49\
---------------------------------------------------------------------------
    \49\ See ``Background,'' ``Interdiction Policy Oversight'' and 
``Prevention Policy Oversight'' sections, below.
---------------------------------------------------------------------------
          (9) The President's actual attention to this problem, 
        measured by other than the paucity of speeches and 
        proposed budget cuts, has been uniformly low. In 
        addition to the absence of direct Presidential 
        involvement in the drug war, the President produced no 
        1993 Annual Strategy, despite a statutory duty to do so 
        under the 1988 Antidrug Abuse Act; delayed appointment 
        of a White House Drug Czar, or ONDCP Director, until 
        half way through 1993; and produced only a terse 
        ``interim'' 1993 Strategy.
          (10) The Drug War appears also to have been expressly 
        reduced to a low national security priority early in 
        the administration, and not to have been formally 
        elevated at any time since.\50\
---------------------------------------------------------------------------
    \50\ See ``Interdiction Policy Oversight'' section, below. 
Reportedly, the drug war's national security priority during the first 
3 years of the Clinton administration was number 29 out of 29.
---------------------------------------------------------------------------
          (11) While the position is contested by the 
        administration's ONDCP Director, a wide cross section 
        of drug policy experts inside and outside of the 
        administration concur that the absence of direct 
        Presidential involvement in foreign and domestic 
        counternarcotics efforts is one reason for the recent 
        reversal in youth drug use trends, reduced street 
        prices for most narcotics, and increased potency of 
        most illicit drugs.
          (12) Prevention programs that teach a right-wrong 
        distinction in drug use, or ``no use,'' such as 
        D.A.R.E., G.R.E.A.T., the Nancy Reagan After School 
        Program, community-based efforts run by groups such as 
        C.A.D.C.A., PRIDE, the National Parents Foundation, and 
        Texans War on Drugs, as well as other local school and 
        workplace programs, have proven both successful and 
        popular where they have been well-managed and 
        accountable--despite the 1995 White House ONDCP 
        Strategy statement that ``[a]ntidrug messages are 
        losing their potency among the Nation's youth;''.\51\
---------------------------------------------------------------------------
    \51\ See ``Prevention Oversight'' section, below.
---------------------------------------------------------------------------
          (13) Federal drug prevention programs, such as Safe 
        and Drug Free Schools, while supporting successful 
        prevention programs in many parts of the country, have 
        also been subject to misapplication, waste and abuse. 
        \52\
---------------------------------------------------------------------------
    \52\ See ``Prevention Oversight'' section, below.
---------------------------------------------------------------------------
          (14) The Nation's law enforcement community needs 
        greater flexibility and support from the Federal 
        Government in addressing the rise in juvenile and drug 
        related crime. While certain developments are 
        promising, such as the $25 million increase in Byrne 
        Grant funding in fiscal 1996, a law enforcement block 
        grant to supersede the COPS program, and increased 
        reliance on joint interagency task forces, valuable 
        time has been lost in addressing this need. Renewed 
        attention to strengthening Local, County, State and 
        Federal law enforcement's counternarcotics efforts is 
        required.
          (15) The Nation's interdiction effort has been 
        dramatically curtailed over the past 3 years, due to 
        lack of White House support for interdiction needs, 
        reduced funding, a tiny staff at the United States 
        Interdiction Coordinator's Office, the absence of an 
        ONDCP Deputy for Supply Reduction, reduced support for 
        National Guard container search days, the elimination 
        of certain cost effective assets in the Eastern 
        Caribbean, reassignment or absence of key intelligence 
        gathering assets, reluctance by the Department of State 
        to elevate counternarcotics to a top priority in 
        certain source and transit countries, unnecessary 
        interagency quarreling over asset management and 
        personnel issues, and the apparent inability or 
        unwillingness of the White House Drug Czar to bring 
        essential interdiction community concerns to the 
        attention of the President or to aid the President's 
        Interdiction Coordinator in doing so; and
          (16) Poor management and interagency coordination in 
        source countries.
    c. Hearings.--The subcommittee held five hearings in 
conjunction with its investigation of ONDCP. Those hearings 
include the following: (1) ``Effectiveness of the National Drug 
Control Strategy and the Status of the Drug War,'' March 9 and 
April 6, 1995. (2) ``Illicit Drug Availability: Are 
Interdiction Efforts Hampered by a Lack of Agency Resources?,'' 
June 27 and 28, 1995. (3) ``The Drug Problem in New Hampshire: 
A Microcosm of America,'' September 25, 1995.
    On March 9, 1995, the subcommittee investigation resulted 
in its first hearing. The purpose of this hearing was to 
examine President Clinton's 1995 National Drug Control 
Strategy, and to begin an assessment of how effectively the 
Nation is fighting illegal drug abuse, domestically and 
internationally. Acknowledged components of the Drug War under 
review include prevention, treatment, interdiction, law 
enforcement, and source country programs.
    At this hearing, testimony was received from four panels. 
The subcommittee heard first from former First Lady of the 
United States, Nancy Reagan.
    Testimony was received from William J. Bennett, former 
Director of the Office of National Drug Control Policy (ONDCP); 
Robert C. Bonner, former Administrator of the Drug Enforcement 
Administration; and John Walters, former Acting Director of 
ONDCP.
    The subcommittee also heard testimony from Dr. Lee Brown, 
Director of ONDCP. Finally, the subcommittee heard from Admiral 
Paul A. Yost, Jr., former Coast Guard Commandant; and several 
nationally recognized drug abuse prevention experts, including 
Thomas Hedrick, Jr., senior representative of the Partnership 
for a Drug-Free America; G. Bridget Ryan, executive director of 
California's BEST Foundation; James Copple, national director 
of the Community Antidrug Coalitions of America (CADCA); and 
Charles Robert Heard III, director of program services for 
Texans' War on Drugs.
    With varying degrees of emphasis, all panels acknowledged 
that current Federal efforts are under strain from reduced 
emphasis on certain components of the Drug War, budgetary 
pressure, and in some cases accountability.
    The panels also acknowledged that, over the past several 
years, there has been a marked reversal in several important 
national trends including most notably a rise in casual drug 
use by juveniles, but also reaching to perceived drug 
availability (up), perceived risk of use (down), average street 
price (down), drug related medical emergencies (up), drug 
related violent juvenile crime (up), total Federal drug 
prosecutions (down), and parental attention to the drug issue 
(down).\53\
---------------------------------------------------------------------------
    \53\ Press Release, the University of Michigan, ``Drug Use Rises 
Again in 1995 Among American Teens,'' December 15, 1995; Press Release, 
PRIDE, ``Teen Drug Use Rises for Fourth Straight Year,'' November 2, 
1995; Preliminary Estimates from the Drug Abuse Warning Network, U.S. 
Department of Health and Human Services, September 1995; James E. 
Burke, ``Presentation: An Overview of Illegal Drugs in America,'' 
Partnership for a Drug-Free America, Fall 1995.
---------------------------------------------------------------------------
    The subcommittee found that these reversals have continued 
through the period 1993 to 1995, although certain trend lines, 
including a shift from falling to rising casual use, typically 
among juveniles, began in 1992. In addition, a shift of certain 
interdiction resources, which were earlier a part of the 
counter narcotics force structure, began in late 1991 with the 
advent of the Persian Gulf War.
    All panels agreed, albeit with differing emphases, that 
renewed national leadership, including both Presidential and 
congressional leadership, will be necessary to combat these 
recent trend reversals, especially the rise in juvenile drug 
abuse and drug related violent juvenile crime.
    Subcommittee Chairman Zeliff initiated the hearing by 
noting that Mrs. Reagan ``woke the Nation up to this [juvenile 
drug abuse] problem and its pervasiveness in the early 
1980's.'' Subcommittee Chairman Zeliff observed that the former 
First Lady's ``Just Say No'' campaign effectively launched a 
``national crusade'' for drug abuse prevention.
    Subcommittee Chairman Zeliff also noted that, in April 
1985, Mrs. Reagan held the first International Drug Conference 
for the world's First Ladies. In 1988, she held the second such 
conference and became the first American First Lady to speak 
before the United Nations; and after leaving the White House, 
she founded the Nancy Reagan Foundation, which has since 
``awarded grants in excess of $5 million to drug prevention and 
education programs . . .''
    Appearing before the subcommittee, First Lady Nancy Reagan 
testified that America has forgotten the dangers of drug use, 
that America's children are at increased risk in 1995, that 
there is an absence of national leadership on the drug issue, 
and that a national strategy focused on treatment of so-called 
hardcore addicts misses the largest at-risk population, namely 
children participating in casual use. Specifically, Mrs. Reagan 
explained that she had ``decided to speak [before Congress on 
the drug issue] only after a lot of soul searching . . . 
because my husband and everything he stands for calls for me to 
be here.''
    She then explained that the Nation ``is forgetting how 
endangered our children are by drugs,'' that societal 
``tolerance for drugs'' is up, and that ``the psychological 
momentum we had against drug use [in the late 1980's and early 
1990's] has been lost.'' In short, she asked, ``How could we 
have forgotten so quickly?''
    Directing herself to national policy, Mrs. Reagan quoted 
from President Clinton's 1995 National Drug Control Strategy, 
which states that ``[a]nti-drug messages have lost their 
potency.'' Mrs. Reagan disagreed, testifying: ``That's not my 
experience. If there's a clear and forceful `no use' message 
coming from strong, outspoken leadership, it is potent . . . 
Half-hearted commitment doesn't work. This drift, this 
complacency, is what led me to accept your invitation to be in 
Washington today . . . [W]e have lost a sense of priority on 
this problem, we have lost all sense of national urgency and 
leadership.''
    John P. Walters, president of the New Citizenship Project 
and former Acting Director of ONDCP, testified that President 
Clinton has promoted policies that reversed or accelerated the 
reversal of nearly a decade of falling drug use. Mr. Walters 
tagged President Clinton as the source of major reversals in: 
the cultural aversion to drug use, falling drug availability, 
falling drug purities and rising drug prices. He sees these 
trends as significant and dangerous.
    Mr. Walters pointed to the President's 80 percent reduction 
of ONDCP staff,\54\ the Attorney General's stated goal of 
reducing mandatory minimum sentences for drug trafficking,\55\ 
and a Presidential directive reducing Department of Defense 
support to drug interdiction efforts as damaging to the drug 
control program. Further, Walters testified, the reduction in 
resources to transit and source countries by 33 percent (from 
$523.4 million in fiscal year 1993 to $351.4 million in fiscal 
year 1994),\56\ a reduction in Federal domestic marijuana 
eradication efforts, a call by the President's Surgeon General 
for study of drug legalization,\57\ and ``no moral leadership 
or encouragement'' from President Clinton himself as 
significant factors in the Nation's rising drug problems.
---------------------------------------------------------------------------
    \54\ On February 9, 1993, the White House announced that ONDCP 
would have its personnel cut from 146 to 25.
    \55\ See also Isikoff, the Washington Post (November 26, 1993), 
pps. A1, A10-A11.
    \56\ See also, ONDCP, National Drug Control Strategy: Budget 
Summary (February 1994), pp. 184.
    \57\ See also, Reuter, ``Elders Reiterates Her Support for Study of 
Drug Legalization,'' the Washington Post (January 15, 1994), pp. A8.
---------------------------------------------------------------------------
    In short, Mr. Walters testified, ``the drug problem is 
simply not a part of the foreign policy agenda of the United 
States under President Clinton--there is no carrot and no stick 
facing countries from which the poison destroying American 
lives every day comes.'' Finally, he noted that this de-
emphasis on international efforts ``fuels calls in other 
countries for abandoning antidrug cooperation.'' [See also the 
New York Times (February 20, 1994), pp. A6; the New York Times 
(February 27, 1994), Section 4, pp. 15.]
    In Mr. Walter's view, ``if these trends continue, by 1996, 
the Clinton administration will have presided over the greatest 
increase in drug use in modern American history.''
    William J. Bennett, current Co-Director of Empower America 
and former Director of ONDCP, testified that there has been a 
``sharp rise in drug use,'' citing many of the same studies 
cited by subcommittee Chairman Zeliff, Mrs. Reagan, Mr. Walters 
and others.
    According to Mr. Bennett, this rise should have ``mobilized 
the Federal Government to forcefully state the case against 
drug use, enforce the law and provide safety and security to 
its citizens.'' Instead, ``the Clinton administration has 
abdicated its responsibility'' and ``has been AWOL in the War 
on Drugs,'' said the former White House Drug Czar.
    Widely regarded as the most effective White House Drug Czar 
to date, Mr. Bennett denounced the 80 percent cut by President 
Clinton in the ONDCP staff, and the willingness of Clinton's 
Attorney General to endorse reductions in mandatory minimum 
sentences for drug traffickers.
    Mr. Bennett introduced new facts into the national dialog 
when he observed that, ``last year, the Clinton administration 
directed the U.S. Military to stop providing radar tracking of 
cocaine-trafficker aircraft to Colombia and Peru,'' a policy 
``Congress again had to reverse,'' and noted that ``last month, 
for the first time in history, the nation's drug control 
strategy was introduced without the participation of the 
President.'' He also believes that, if present trends continue, 
by 1996 the Clinton administration will have presided over the 
greatest increase in drug use ``in modern American history.''
    Expanding his analysis beyond the failure of public policy, 
Mr. Bennett testified that ``the Clinton administration suffers 
from moral torpor on the issue'' and that, as a general matter, 
``policy follows attitude.'' In support of this statement, Mr. 
Bennett quoted several statements by the President on his own 
prior use of drugs, in particular, President Clinton's 1991 
statement that he had never ``broken any drug law,'' followed 
by the 1992 statement that he had used marijuana in England but 
``didn't inhale it,'' followed in turn, when asked if he would 
inhale if he had it to do over, by: ``Sure, if I could, I tried 
before.''
    Mr. Bennett noted, on closing, that ``success in the drug 
war depends above all on the efforts of parents and schools and 
churches and police chiefs and judges and community leaders.'' 
Giving examples from more than 100 cities visited when 
President Bush's Drug Czar, Mr. Bennett urged renewed 
leadership.
    Robert C. Bonner, former Administrator of the Drug 
Enforcement Administration (DEA) under both Presidents Bush and 
Clinton, a former Federal judge, and currently a partner at 
Gibson, Dunn and Crutcher, testified forcefully for renewed 
leadership in the Drug War: ``The bottom line is unmistakable--
during the past two years, drug use among the youth of America 
has soared in nearly every category of illegal drug . . . When 
juxtaposed against the immediately preceding period and nearly 
a decade of declining drug use, there can be only one 
conclusion--the Clinton administration's National Drug Strategy 
has failed miserably, and indeed it is a tragedy.''
    Crediting Mrs. Reagan's ``Just Say No'' campaign and the 
Antidrug Abuse Act of 1988, Mr. Bonner noted that the onslaught 
of direct and indirect damage from illegal drugs was turned 
back in the mid-1980's and early 1990's. In Mr. Bonner's view, 
national will and a combination of ``strong law enforcement,'' 
a strong ``educational and moral message,'' and effective 
treatment programs for hardcore users made the difference. 
However, he warns that drug treatment programs should not be 
``oversold.''
    Bluntly, Mr. Bonner concluded, ``there has been a near 
total absence of presidential leadership by President Clinton 
in the fight to turn back illegal drug use . . .'' and his 
Surgeon General's remarks on legalization ``arguably encourages 
it'' by further reducing perceived risk; Mr. Bonner called 
Surgeon General Jocelyn Elders' statement on legalization 
``dead wrong and flagrantly irresponsible for a national public 
health official.''
    Dr. Lee P. Brown, Director of ONDCP, testified defending 
the 1995 National Drug Control Strategy. Dr. Brown testified 
that President Clinton's fiscal 1996 budget sought $14.6 
billion in funding across the Federal Government for drug 
related Federal programs.
    For context, the President's 1995 National Drug Control 
Strategy lists the total ``Drug Budget'' as $14,550.4 
(millions). This figure is somewhat misleading, however, since 
it contains funding for a variety of programs mixed purposes, 
such as the Federal Court System, Food and Drug Administration, 
Social Security Administration, Department of Agriculture's 
Agricultural Research Service and U.S. Forest Service, 
Department of Interior's Bureau of Indian Affairs, Bureau of 
Land Management, Fish and Wildlife Service, and National Park 
Service, Department of Justice's Community Policy, Immigration 
and Naturalization Service, U.S. Marshal's Service and Tax 
Division, an unidentified grant to the Department of Labor, 
ONDCP's ``gift fund'' (zeroed out in fiscal 1996), the Small 
Business Administration, the Agency for International 
Development (AID), the Department of Treasury's Internal 
Revenue Service, and United States Secret Service, the U.S. 
Information Agency (USIA), and a range of other disparate 
Federal initiatives.\58\
---------------------------------------------------------------------------
    \58\ See National Drug Control Strategy, February 1995, the White 
House, pp. 120-121.
---------------------------------------------------------------------------
    A dual concern raised by some members of the subcommittee 
was how these funds are actually spent and who coordinates the 
spending. The latter concern boiled down to accountability, 
avoiding duplication, and assuring interagency coordination.
    Seeking to justify the administration's acknowledged shift 
to treatment of hardcore drug users and the President's request 
for ``$2.8 billion for treatment'' in fiscal 1996, Dr. Brown 
noted that ``chronic hardcore drug users comprise 20 percent of 
the drug user population but consume two-thirds of the drugs . 
. .'' From this, he argued that ``past strategy [sic] ignore 
this inextricable part of the drug problem.''
    In fact, while the 1995 National Drug Control Strategy does 
increase the proportion of overall spending devoted to 
treatment, past strategies have included--and have steadily 
increased--funding for treatment. In fact, Federal treatment 
funding has increased every year from 1982 to 1995.\59\
---------------------------------------------------------------------------
    \59\ Fiscal year 1992, Federal treatment spending stood at $505.6 
million. Fiscal year 1995, Federal treatment spending stood at $2.65 
billion. National Drug Control Strategy: Budget Summary, Office of 
National Drug Control Policy, February 1995, pp. 238.
---------------------------------------------------------------------------
    Dr. Brown acknowledged that ``drug use among adolescents is 
rising,'' but attributed the trend to the final year of the 
Bush administration. Dr. Brown offered the view that Safe and 
Drug Free Schools moneys are ``the cornerstone of this nation's 
efforts to educate our children about drug use'' and are 
currently disbursed to ``94 percent of the school districts in 
this country.''
    Dr. Brown confirmed a shift in trafficking patterns toward 
greater use of container cargo and noted that ``over 70 percent 
of the cocaine entering our country crosses the border with 
Mexico,'' but was unable to explain reduced emphasis in the 
current strategy on National Guard Container Search Workdays 
along the United States-Mexican border. Specifically, Dr. Brown 
had no answer for the question why National Guard Container 
Search Workdays fell from 227,827 in 1994 to a 1996 projection 
of 209,000, as described in ONDCP's own 1995 Strategy at page 
41.
    Generally, Dr. Brown condemned ``Congress'' for having 
``failed to fulfill [the President's] budget request.'' 
However, Dr. Brown made no attempt to provide specific answers 
to Members' questions concerning (1) the President's own 
proposed deep cuts in interdiction and international program 
funding; (2) accountability; (3) shifting interdiction 
resources to source countries, (4) a reduction of Customs 
agents at the Southwest border; or (5) the shift in resources 
from prevention of casual use (80 percent of total users) by 
juveniles to treatment for older, chronic, hardcore users (20 
percent of total).
    Subcommittee Chairman Zeliff introduced an unclassified 
piece of correspondence dated December 1994 between the 
Interdiction Coordinator, Admiral Kramek, and the Director of 
ONDCP, Dr. Brown, which stated that a consensus of agency heads 
believed ``we need to restore assets to the interdiction force 
structure . . .'' and ``we must return to the 1992-1993 levels 
of effort.''
    The Kramek letter also indicated that the source country 
programs were not yet ``producing necessary results.'' 
Addressing drugs as a national security threat, the Kramek 
letter specifically asked for a meeting with the President. The 
letter read, ``I believe it appropriate that we meet with the 
President and National Security Advisor as soon as possible to 
brief them on the results of our conference and discuss the 
current state of implementation and national strategy . . . Of 
key importance to this meeting is the determination of priority 
of counting narcotics trafficking as a threat to national 
security of the United States as evaluated against other 
threats to our security that compete for resources.''
    Subcommittee Chairman Zeliff asked Dr. Brown if he had 
followed the Interdiction Coordinator's and agency heads' 
consensus that drug interdiction resources be returned to the 
``1992-1993 levels.'' Dr. Brown indicated that he held a view 
different from that of the Interdiction Coordinator and had, 
apparently, not followed that recommendation. Similarly, 
subcommittee Chairman Zeliff asked Dr. Brown if he had taken 
the Interdiction Coordinator's request to the President or 
National Security Advisor. Dr. Brown indicated that he had not, 
and apparently also had not set up the requested meetings 
between Kramek and the President, or between Kramek and the 
National Security Advisor to ``determin[e] [the] priority of 
counting narcotics trafficking as a threat to national security 
. . .''
    Admiral Paul Yost, former 18th Commandant of the U.S. Coast 
Guard and presently president of the non-partisan James Madison 
Fellowship Foundation, testified on the topics of interdiction 
and interagency coordination. He testified that the Nation 
witnessed a ``major build-up in drug interdiction in the at-sea 
war on drugs from 1984 through 1990,'' with the result that 
this interdiction effort ``successfully interrupted the flow of 
bulk marijuana by sea and cocaine by air over the water routes 
[of the Caribbean].''
    In Admiral Yost's view, ``strong interdiction and law 
enforcement were providing a climate [from 1984 through 1990] 
that made it clear to the [drug] trafficker that `this is 
wrong, and your chances of being intercepted are very high.' ''
    Since that time, he testified, there has been a ``tragic 
dismantling'' of the at-sea interdiction effort, so that today 
``there are several orders of magnitude less effort spent on 
drug interdiction.''
    Calling the resultant increase in drug availability and 
drug use predictable, Yost testified that the Nation ``will 
never stop drug use without a solid interdiction foundation for 
. . . education and treatment programs.''
    Accordingly, Admiral Yost favored a return to 
``emphasiz[ing] the interdiction prong of the drug strategy'' 
and increased budget authority for the Coast Guard.
    Finally, Admiral Yost discussed the need for better 
interagency coordination. He supports greater ``authority'' for 
the White House Drug Czar and President's Interdiction 
Coordinator. Without the ability, specifically, to ``direct 
cabinet-level officers regarding budget allocation, personnel 
allocation, or forced deployments'' on this issue, both 
positions are ``largely ceremonial,'' he said.
    Thomas Hedrick, Jr., vice chairman of the Partnership for a 
Drug-Free America, testified that prevention and interdiction 
advocates must begin to work together, and that ``preventing 
drug use by young people'' is essential ``if we are to have 
prayer of building safe and healthy families and communities.''
    As a prevention expert with 10 years of experience, Mr. 
Hedrick testified that, ``quite frankly, I am frightened 
because after nearly a decade of progress, drug use is rapidly 
increasing. The issue has `overarching importance.' `Crisis' is 
not an overly dramatic or inappropriate description, 
particularly when you consider that drug use among our youngest 
kids, 13 and 14, has more than doubled in the last three 
years,'' observed Mr. Hedrick.
    Mr. Hedrick favors increased parental involvement in 
setting a ``clear expectation of no use,'' better in-school 
education, and reduced exposure of children to ``pro-drug 
information,'' especially exposure to the ``recent re-
glamorization of drug use in some of the media.''
    Significantly, Mr. Hedrick reported that the Partnership 
has received--since inception--``over $2 billion in time and 
space'' from the media. In 1990 and 1991, this produced roughly 
one antidrug message per household per day.
    However, Mr. Hedrick testified that ``support for these 
messages has declined 20 percent in the past three years,'' 
apparently ``because the media is not as convinced that the 
drug issue is as important as it was.''
    Media coverage is also down, from 600 antidrug stories on 
the three major networks in 1989 to 65 last year, which Mr. 
Hedrick said is tantamount to ``zero'' from a communications 
point of view.
    Mr. Hedrick expressed the view that ``Federal support and 
Federal leadership in making drugs a critical national priority 
is essential, if we are to help convince the media that this is 
an important issue.'' National leaders must also tell those 
community leaders involved in this fight that what they are 
doing is important.
    Mr. Hedrick's 14-year-old son, Todd, testified briefly that 
his generation is surrounded by drugs. He said that ``parents 
need a serious wake-up call'' and that all kids now know where 
to get drugs in their schools. ``This entire country needs a 
huge turn-around in how it deals with drugs,'' since ``the fact 
that drugs aren't a prominent issue anymore tells kids that 
adults don't care about it.'' The younger Hedrick said, 
``that's suicide to my generation . . .'' He proposed starting 
prevention earlier, in elementary school, having parents talk 
more with their kids, increasing media attention to the 
problem, and stopping the legalization movement.
    Bridget Ryan, former program director for the Charles 
Stuart Mott Foundation and presently executive director of the 
BEST Foundation for a Drug-Free Tomorrow, testified that a 
recent RAND study advocated drug prevention as ``the first 
priority'' in curbing drug abuse. Ms. Ryan distinguished 
between ``validated'' and ``unvalidated'' drug prevention 
programs, and urged that the former be adequately funded.
    The best ``validated'' prevention programs build, Ms. Ryan 
testified, on three propositions: first, ``target[ing] 
substances used first and most widely by young people;'' 
second, ``helping students develop the motivation to resist 
using drugs;'' and third, teaching effectively.
    Ms. Ryan described a recent RAND study on the effectiveness 
of prevention as one ``conducted with methodological 
exactitude'' and ``one of the most rigorous ever undertaken.''
    Ms. Ryan testified that the RAND prevention study disproves 
three common criticisms of prevention--``first, that it works 
only for middle class, largely white, suburban situations; 
second, that the programs work only for kids who need them 
least; and finally, that prevention programs prevent only 
trivial levels of use.''
    RAND found that a properly designed prevention program, 
such as Project Alert, ``works well in urban, suburban, and 
rural areas, in middle- and low-income communities, and in 
schools with high and low minority populations.'' Project Alert 
is one of the prevention programs made available to ``schools 
across America'' by the BEST Foundation.
    James Copple, national director of the Community Anti-Drug 
Coalitions of America (CADCA), testified that CADCA is a non-
partisan group with approximately 2,500 community coalition 
members in every State and two U.S. territories. He noted that 
CADCA was founded in 1992 by the President's Drug Advisory 
Council, a creation of President Bush, and is privately funded.
    Expressing support for the Safe and Drug Free Schools 
Program, Mr. Copple retold a moving story of a young child that 
``made her stand'' against drugs, while forced to live in a 
crack house. During a law enforcement raid of the house, this 
child was found in her room, surrounded by antidrug posters and 
``a workbook on drug refusal skills;'' the posters and workbook 
were funded by Safe and Drug Free Schools moneys.
    In closing, Mr. Copple cited Peter Drucker's recommendation 
that budget cutting be conducted without imperiling the Federal 
Government's ability to conduct some ``national crusades.'' Mr. 
Copple noted that Drucker identified the war on drugs as one 
such crusade, and Mr. Copple urged the Congress to ``embrace a 
national strategy that is comprehensive, balanced and directs 
the majority of the resources to local communities to address 
local problems.''
    Charles Robert ``Bobby'' Heard III, director of program 
services at the Texans' War on Drugs, testified that ``parents, 
community leaders, and elected officials don't realize how easy 
it is for kids to get involved in drugs.'' He credited the 
precipitous drop in drug use ``between 1979 and 1992'' to 
substance abuse prevention, and noted that ``no other social 
issue can claim that kind of success.''
    Mr. Heard sees the primary solution to drug abuse in demand 
reduction. He testified that ``prisons alone will not break the 
cycle,'' and ``we can't treat our way out of this problem.'' He 
also noted that prevention is not a one-time mission, but an 
ongoing duty that must continue ``from generation to 
generation.''
    The subcommittee continued it's investigation into the 
Nation's drug control strategy with a hearing on April 6, 1995. 
Testimony at this hearing was received from Dr. Lee P. Brown, 
Director of ONDCP, who continued testimony he gave the 
subcommittee on March 9, 1995. Dr. Brown testified on a range 
of topics, including treatment, prevention, law enforcement, 
interdiction and source country programs.
    The purpose of this hearing was to continue an evaluation 
of President Clinton's 1995 National Drug Control Strategy, and 
assess the status of the Nation's fight against illegal drug 
trafficking and drug abuse.
    In his opening statement, subcommittee Chairman Zeliff 
noted that the subcommittee's March 9 hearing may have jump-
started media interest in the drug war, since a series of 
articles appeared after the hearing. Subcommittee Chairman 
Zeliff credited the Washington Post with ``an excellent series 
of articles describing the brutal infiltration by Colombia's 
Cali drug cartel in our own society.'' The series included the 
assessment that, ``[t]he Cali cartel is increasingly using 
violence to protect it's lucrative U.S. cocaine market . . . 
and they are trying to do things in this country similar to 
what they do in Colombia.'' Subcommittee Chairman Zeliff also 
noted that the newly powerful Mexican drug cartels present 
looming challenges to United States law enforcement, and 
credited the media with writing about this development.
    Subcommittee Chairman Zeliff returned to the December 1, 
1994 letter from Admiral Kramek, U.S. Coast Guard Commandant 
and Interdiction Coordinator, addressed to Dr. Brown containing 
Kramek's views that drugs constituted a national security 
priority, and that funding of drug interdiction must be 
returned to the 1992-1993 levels. Admiral Kramek's letter also 
requested a meeting with the President and National Security 
Advisor to discuss this issue.
    Subcommittee Chairman Zeliff and others were disturbed by 
Director Brown's failure to divulge the existence of the 
December 1, 1994 Kramek letter, despite clear oral and written 
requests for it. Subcommittee Chairman Zeliff noted that he had 
personally asked Dr. Brown on March 3, 1995--4 days before they 
met in subcommittee Chairman Zeliff's congressional office and 
6 days before the March 9, 1995 hearing--for ``any 
communications received by you from the administration's 
Interdiction Coordinator regarding the adequacy of interdiction 
resources.'' Dr. Brown had provided several letters, but the 
key December 1, 1994 letter was not included.
    Subcommittee Chairman Zeliff asked Dr. Brown, who 
subsequently acknowledged having received the subcommittee 
chairman's requests, why he had failed to include this 
unclassified and critical letter.
    Dr. Brown conceded that subcommittee chairman had been 
denied the document, but explained that this was because ``this 
letter was attached to a classified document.'' Dr. Brown's 
answer struck many as non-responsive, since the letter itself 
was unclassified. Indeed, it was secured by the subcommittee 
through other sources independent of attachments. Moreover, it 
was obvious to all present that there was no legitimate reason 
for a Federal agency to hide or refuse disclosure of such a 
material document to a Member of Congress, whether classified 
or not. The issue was thereafter dropped.
    On the substance of the Kramek letter, Brown stated that 
Admiral Kramek's recommendation for returning interdiction 
funding to ``1992-1993 levels'' did not ``provide [Brown] with 
the appropriate information upon which to make decisions.''
    Although he did not elaborate, Dr. Brown indicated he was 
``working with the Interdiction Coordinator,'' and ``once we 
come to a conclusion about what we need, then we can make some 
decisions'' Dr. Brown did not address the then-existing lapse 
of 6 months from October 1994 to April 1995, and why the 
relevant interdiction decisions had not been made during that 
period.
    Referring again to the Kramek letter, subcommittee chairman 
Zeliff asked Dr. Brown if he had presented to the President the 
October 1994 interdiction conference findings, along with 
Admiral Kramek's specific request to meet with the President 
and National Security Advisor. Brown conceded that ``the 
specific request was never given to the President. . . .''
    The subcommittee chairman closed the discussion by 
observing that the Admiral Kramek's letter represented not only 
the Interdiction Coordinator's views, but an ``agency head 
consensus.'' Dr. Brown responded that he was a co-sponsor of 
the conference, and was ``working with the Interdiction 
Coordinator,'' which struck many as non-responsive.
    Dr. Brown testified that the Bush administration's ``linear 
kingpin strategy'' was still being pursued, contradicting 
testimony on March 9, 1995, by former Clinton DEA Administrator 
Bonner, but stressed that the Clinton administration had 
shifted resources to source country programs and away from the 
``less than effective interdiction efforts.'' Dr. Brown offered 
no statistical support for his view that interdiction was 
``less than effective.''
    Questioned about the President's fiscal 1993, 1994, and 
1995 requests for reduced interdiction spending--collectively, 
a 12.3 percent cut, Brown responded that it was Congress which 
had cut the Defense and State Department budgets in 1993, and 
further that the President's interdiction cuts were part of the 
administration's ``controlled shift'' to the source countries.
    During the hearings, there was much debate about the 
success of safe and drug free schools programs and their 
accountability. On balance, the difference of opinion between 
those who favored deep 1995 cuts in programs which appear 
subject to abuse, such as Safe and Drug Free Schools, and those 
who did not favor such cuts was relatively straight forward: 
whether to fund programs that are highly successful in some 
locations, but have been subject to waste and abuse in others, 
and do not yet have adequate accountability mechanisms.
    The aim shared by all subcommittee members and Dr. Brown 
appeared to be strong encouragement for effective and 
accountable drug prevention programs, as well as adequate 
funding for such programs, once accountability and the no-use 
message could be assured.
    Subcommittee Chairman Zeliff closed the hearing by 
applauding Dr. Brown's participation, noting that the drug war 
and drug abuse is ``probably the number one issue facing our 
country,'' and pledging to work with the administration if the 
administration will re-focus on this issue. The subcommittee 
chairman also asked Dr. Brown to seek a meeting between key 
congressional leaders concerned about this issue and the 
President.
    The subcommittee's investigation into the Nation's war on 
drugs turned to efforts to fight the influx of drugs from 
outside America's borders. In the first of two back-to-back 
interdiction hearings held on June 27, 1995, and June 28, 1995, 
entitled ``Illicit Drug Availability: Are Interdiction Efforts 
Hampered by a Lack of Agency Resources?,'' the subcommittee 
received testimony from a variety of witnesses, beginning with 
a technology and K-9 demonstration,\60\ and proceeding through 
testimony from student witnesses. The hearing continued with 
testimony from the Administrator of the Drug Enforcement 
Administration and three investigators from the General 
Accounting Office (GAO), who evaluated the effectiveness of the 
Clinton administration's source country programs.
---------------------------------------------------------------------------
    \60\ The U.S. Customs Service Canine Training Center provided a 
demonstration on the utilization of drug sniffing dogs in illicit 
narcotic interdiction. Also, a representative from the U.S. Coast 
Guard's Miami Law Enforcement Division demonstrated how an Ionscan and 
the Compact Integrated Narcotic Detection Instrument (CINDI) operate to 
detect and locate illicit narcotics.
---------------------------------------------------------------------------
    The subcommittee first heard from four students affected by 
drugs in their schools, including Michael Taylor of Browne 
Junior High School, Natasha Surles of Roper Junior High School, 
Willie Brown of McFarland Middle School, and Lan Bui of Bell 
Multicultural School.
    Subsequently, the subcommittee heard testimony by Thomas A. 
Constantine, Administrator of the Drug Enforcement 
Administration, and expert witnesses Joseph Kelley, Allan 
Fleener and Ron Noyes of the General Accounting Office. Mr. 
Kelley is Director-In-Charge of the International Affairs 
Section and Mr. Fleener and Mr. Noyes are investigators who 
principally assisted in producing the June 1995 GAO report on 
Source Country Programs.
    Finally, the subcommittee heard testimony from Jane E. 
Becker, Acting Assistant Secretary of State for International 
Narcotics and Law Enforcement Affairs, U.S. Department of 
State; and Brian Sheridan, Deputy Assistant Secretary for Drug 
Enforcement Policy and Support at the Department of Defense.
    During this hearing, the subcommittee examined the current 
drug interdiction efforts of the major Federal agencies engaged 
in the National Drug Control Strategy, namely DEA, the U.S. 
Coast Guard, U.S. Customs, and the Departments of Defense and 
State.
    Collectively, the expert witnesses confirmed that on 
November 3, 1993, President Clinton signed a Presidential 
Decision Directive for counter narcotics (PDD-14), which 
instructed Federal agencies to shift the emphasis in United 
States international antidrug programs from the transit zones 
such as Mexico, Central America and the Caribbean to the source 
countries such as Colombia, Peru, and Bolivia. PDD-14 provided 
that the Director of the Office of National Drug Control Policy 
(ONDCP) should appoint a Coordinator for Drug Interdiction ``to 
ensure that assets dedicated by the Federal drug program 
agencies for interdiction are sufficient and that their use is 
properly integrated and optimized.'' [PDD-14, November 3, 
1993.]
    The aim of this hearing was to offer the administration's 
principals on interdiction, those whose mission was affected by 
PDD-14, an opportunity to assess their own efforts and explain 
the impact on their agencies of PDD-14 and its concomitant 
``controlled shift'' of resources.
    The opening panel consisted of local students: Michael 
Taylor of Browne Junior High School, Natasha Surles of Roper 
Junior High School, Willie Brown of McFarland Middle School, 
and Lan Bui of Bell Multicultural School. The students offered 
testimony on the availability of illegal drugs in their 
schools. Summing up their collective testimony, Lan Bui stated 
that ``[drugs] are really cheap to buy . . . I have seen them 
everywhere, from the streets which we use to get to school 
every day to right in front of my building.'' The students 
focused on the importance of role models, antidrug programs in 
their schools, student drug testing, and the need for national 
leadership.
    Thomas A. Constantine, Administrator of the Drug 
Enforcement Administration (DEA), testified on the role that 
the DEA, as the lead Federal agency in enforcing narcotics and 
controlled substances laws and regulations, plays in the 
interdiction of illicit narcotics. He noted that DEA has 
offices throughout the United States and in more than 50 
countries.
    Emphasizing the importance of interdiction Constantine 
stated, ``[w]hat happens in the source country often affects 
what happens on the streets of Boston or Schenectady or Tulsa 
or Savannah, GA,'' adding that those in charge of interdiction 
efforts must ``strike a balance between our domestic and our 
international role.''
    Mr. Constantine addressed the ``controlled shift'' to 
source countries by stressing that it is imperative that we 
``destroy some of these organizations [drug trafficking 
cartels] rather than merely disrupt them.'' He also testified 
that he was ``concerned that if we relent on any of our efforts 
to control the drug problem in this country [the United States] 
. . . we're going to be facing immense problems in the future . 
. . [so] we have to address this problem effectively and 
dramatically in the present.''
    Joseph Kelley, Director-In-Charge of International Affairs 
Issues at the General Accounting Office (GAO), testified on the 
GAO's review of the source country programs, including sub-
strategies and Federal efforts to stop production and 
trafficking of cocaine and heroin.
    As part of GAO's review, investigators traveled to 
Colombia, Mexico, and other nations to observe counter 
narcotics programs in those countries. GAO discussed these 
programs with U.S. officials at in-country headquarters and 
field locations. Mr. Kelley offered five general observations, 
each corroborated by the investigators themselves.
    First, in response to the shift in strategy from the 
transit zone to the source countries, the executive branch has 
had difficulty implementing key elements of their strategy. In 
fact, ``resources applied to the transit zone [have] been 
significantly reduced,'' said Kelly. ``At the same time, we 
have not seen a shift in resources to the source countries.'' 
This observation troubled GAO, and Kelly confirmed that counter 
narcotics assistance to each of the three primary source 
countries (Colombia, Bolivia, and Peru) was less in 1995 than 
it was in 1991 and 1992. Mr. Kelley also emphasized that ``a 
plan for a country as well as a region [is necessary].''
    Second, GAO found that there is high intensity competition 
for attention and resources with other foreign policy 
objectives which are deemed important by the Department of 
State. As Mr. Kelley noted, ``. . . these decisions may result 
in counter narcotics objectives receiving less U.S. attention 
than other objectives.'' For example, ``In Mexico . . . 
countering the drug trade is the fourth highest priority in 
what the [U.S. Department of State] call[s] the U.S. Mission 
Program Plan.'' Incredibly, the United States Ambassador to 
Mexico told the GAO that he had focused his attention during 
the last year and a half on other issues.
    Third, GAO found that more coordination and leadership are 
needed in this effort. Mr. Kelley, in his testimony, stated 
they found U.S. officials generally agreed that ``no single 
organization was in charge of antidrug activities in the 
cocaine source countries of the transit zone.''
    Fourth, GAO reports that U.S. funds are ``not always well 
managed.'' While end-use monitoring requirements have been 
established in the source countries, oversight is limited. Mr. 
Kelley testified that, ``In Colombia, the Narcotics Affairs 
Section of the Embassy conducts reviews of how the national 
police uses counter narcotics assistance,'' but ``they lacked 
reports from the Colombian Air Force on how U.S. provided 
equipment is being used--and this is some of the big ticket 
items . . . C-130s and things like that.''
    Finally, GAO found that our dependence on the willingness 
and ability of the foreign governments to combat the drug trade 
leaves us vulnerable in our counter narcotics efforts. This is 
especially apparent in countries such as Colombia and Mexico, 
where extensive corruption is prevalent, according to GAO. As 
the Ambassador in Mexico emphasized to the GAO review team, in 
Mexico, the key lies with the Mexicans, who must be committed 
and involved if counter narcotics efforts are to take hold.
    Jane E. Becker, Acting Assistant Secretary of State for 
International Narcotics and Law Enforcement Affairs, testified 
on what she sees as her two missions. Ms. Becker said that the 
office of International Narcotics and Law Enforcement Affairs 
(INL) ``provide[s] counter narcotics support to those countries 
that demonstrate a commitment to narcotics control,'' adding 
the observation that ``the goal is for those countries to use 
this assistance to reduce the supply of illicit drugs destined 
for the United States.'' She noted that ``INL leads bilateral 
and multilateral diplomatic efforts to advance our 
international narcotics control policies.''
    Ms. Becker noted, somewhat surprisingly and contrary to 
other testimony on this topic, that cooperation with Mexico and 
Colombia has been good. She highlighted the source country 
focus of the administration when she stated that ``transit 
interdiction is important to our overall counterdrug effort, 
[but] it is not the sole solution.'' For the record, no member 
of the subcommittee had suggested that interdiction alone could 
serve as a ``sole solution.'' Ms. Becker drove the point home 
when she stated that ``the heart [of the administration's 
counterdrug] policy lies in the source countries.''
    Ms. Becker had no response to the GAO study, and seemed 
unfamiliar with essential facts surrounding the source 
countries, for example, she seemed unable to identify major 
cities in Colombia.
    Brian Sheridan, Deputy Assistant Secretary for Drug 
Enforcement Policy and Support at the Department of Defense 
(DOD), focused on DOD's five-point counterdrug program. DOD 
offers support to the following efforts: source nations, 
transit zone, domestic law enforcement, demand reduction, and 
dismantling drug cartels.
    Mr. Sheridan emphasized DOD's objectives in the source 
nations, testifying that these efforts were threefold: They 
were: (1) to support the host nation interdiction efforts and 
help them disrupt the flow of semi-finished cocaine from Peru 
and Bolivia up to Colombia; (2) support for our law enforcement 
and for host nation C14 programs, communications, equipment, 
and intelligence support; and (3) to provide a significant 
amount of training for host nation police and for some military 
units that are engaged in counter narcotics work.
    Assessing programs in Colombia, Peru, and Bolivia, Sheridan 
testified that Colombia gets a ``C'' for their counterdrug 
performance, but their efforts of late have been much better. 
One area he highlighted is the Colombian military occupation of 
San Adreas Island and denial of the island to the drug 
traffickers as a transshipment point.
    Mr. Sheridan noted that, in the transit zone, the use of 
general aviation aircraft by drug traffickers continues to 
decrease. He offered no clear support for this apparent 
development, although he observed that smuggling of drugs is 
now more common via maritime and ground transport.
    On DOD program for reduction of demand, Mr. Sheridan again 
rolled out three points: (1) DOD employs rigorous military drug 
testing; (2) prevention and education are part of DOD's plan; 
(3) community outreach is conducted. Details of these programs 
and who they reach were not discussed.
    On June 28, 1995, the subcommittee received testimony on 
interdiction policy from additional administration witnesses, 
including Admiral Robert E. Kramek, Commandant of U.S. Coast 
Guard and U.S. Interdiction Coordinator, as well as George 
Weise, Commissioner of U.S. Customs. This hearing, was a 
continuation of the June 27 hearing, ``Illicit Drug 
Availability: Are Interdiction Efforts Hampered by a Lack of 
Agency Resources?''
    Admiral Robert E. Kramek, U.S. Interdiction Coordinator and 
Commandant of the U.S. Coast Guard, serves a dual role in the 
Nation's interdiction efforts. He testified before the 
subcommittee in both capacities. Initially, he explained that 
the U.S. Coast Guard serves as the lead agency for maritime 
interdiction and as co-lead with Customs for air interdiction, 
adding that drug interdiction takes only 9 percent of the Coast 
Guard budget and emphasizing the important role intelligence 
plays in drug interdiction. On this topic, he testified that 
``70 percent of our operations are based on intelligence.''
    Admiral Kramek, in his role as Interdiction Coordinator, 
does not have command or control of the affected agencies, nor 
does he have any authority over their budgets. Rather, he works 
with the agencies ``in a collegial atmosphere'' and coordinates 
their activities. According to Kramek's testimony, the 
Interdiction Coordinator holds quarterly conferences that bring 
agency heads together.
    Admiral Kramek took particular note of the importance of 
national leadership on this issue. Offering implicit criticism 
of a reduced interdiction effort in the Clinton administration, 
he testified that, when the smugglers see our foreign policy 
priorities change and make drug interdiction much lower on the 
priority list than other things, they're quick to take 
advantage of that.
    More pointedly still, he said ``. . . when they see it 
doesn't rate number one on our national security priority list, 
they're quick to take advantage of that.'' He stressed that, in 
his view, the issue stands ``number one'' with the American 
people.
    George Weise, Commissioner, U.S. Customs, testified on 
Customs' interdiction of drugs at the Nation's borders. Mr. 
Weise reiterated the importance of knocking out smuggling by 
private plane into this country, and attributes the increased 
shift to ground smuggling along the Southwest border to the 
efforts against air transport. He believes that the 2,000 miles 
of the Nation's Southwest border has now emerged as the primary 
entry point for cocaine, although he did not contradict Admiral 
Kramek's assessment that Puerto Rico has recently taken on new 
significance as a port of entry into the United States.
    Said Weise, ``Our big load strategy is causing traffickers 
to . . . reduce the load size,'' although support for this 
assertion was thin. Reckless and aggressive driving along the 
border, or ``port running,'' has increased in the last few 
years, Weise stated.
    The subcommittee's investigation led to an examination of 
the fight against drugs on the streets of America's cities. At 
the subcommittee's September 25, 1995, hearing on the drug 
problem in New Hampshire, entitled ``The Drug Problem in New 
Hampshire: A Microcosm of America,'' members received testimony 
from an array of highly qualified witnesses.
    The purpose of the hearing was to continue an examination 
of national drug control policy, focusing on the successful 
drug fighting efforts of Manchester, NH, which had recently 
participated in a joint interagency task force called Operation 
Streetsweeper.
    Collectively, the expert testimony confirmed the following 
facts. Early in 1995, statistics showed that the overall crime 
rate in Manchester, which is New Hampshire's largest city, had 
declined. However, these statistics also showed that arrests 
for drug offenses had increased dramatically, as they had for 
other drug related crimes. After a number of murders were 
linked to drug distribution and usage, the community ``came 
together to rid their city of this scourge.''
    Manchester Police Chief Peter Favreau received a $100,000 
grant to help pay for State police officers to patrol city 
streets with city police, and a short time later Manchester 
Police were joined by the Sheriff's Department, the State 
Attorney General's Drug Task Force, the State Police Special 
Investigations Unit, the Drug Enforcement Administration, the 
Bureau of Alcohol, Tobacco and Firearms (ATF), and the 
Immigration and Naturalization Service (INS). This Federal-
State-local interagency task force put jurisdictional issues 
aside and singularly pursued the aim of getting drug dealers 
off the streets of Manchester.
    As various panelists and community representatives 
testified, the change on the streets of Manchester could be 
felt immediately. As Chief Favreau testified, ``With as much 
coverage as we have out there, I honestly feel [the criminals] 
are going elsewhere. It's almost impossible not to have that 
happen.''
    In an effort to understand how the interagency task force 
worked and what made it so effective, the principals in this 
successful antidrug effort testified before the subcommittee. 
Since illegal drugs and associated violent crime plague 
virtually every city in America, the accounts these witnesses 
told offer valuable insights into how best to tackle drugs and 
violent crime in other cities around this country.
    First, Jeff Howard, attorney general for the State of New 
Hampshire, offered testimony regarding the value of effective 
coordination between local, State, and Federal law enforcement 
in the fight against drugs. The Attorney General specifically 
credited the creation of the New Hampshire Drug Task Force with 
``keep[ing] pressure on all areas of the problem, going from 
what we have identified as kingpins to mid-level dealers to 
street dealers, and putting as much of the resources as we can 
into treatment programs to include treatment of State 
prisoners, and prevention particularly through educational 
efforts.''
    The Attorney General also singled out the Byrne grant 
programs as an effective means of funding law enforcement, 
since it offers needed flexibility in how valuable law 
enforcement funds may be utilized. In New Hampshire's case, 
Howard noted that the State has committed less than one-quarter 
of the grant funds to State agencies. The rest of it has all 
gone back to the communities.
    The subcommittee then heard from Geraldine Sylvester, the 
director of New Hampshire's Office of Alcohol and Drug Abuse 
Prevention. Ms. Sylvester, in her testimony, emphasized the 
importance of giving ``equal attention to the battle fronts of 
treatment and prevention.'' She also noted the important role 
that student assistance programs, parental training and peer 
leadership groups play in preventing or abating drug usage 
among young people.
    Paul Brodeur, commissioner of New Hampshire Department of 
Corrections, offered testimony on the Byrne grant funded 
correctional options program called ``Pathways'' utilized by 
the New Hampshire Department of Corrections. Mr. Brodeur noted 
that Pathways emphasizes education, substance abuse treatment 
and employment counseling. He further illustrated the 
importance of programs like Pathways by pointing out that in 
New Hampshire 20 percent of the State's inmates are 
incarcerated for drug related offenses, and 80 percent or more 
of the inmates have substance abuse problems.
    Neal Scott, assistant unit commander of the narcotics 
investigation unit with the New Hampshire State Police, offered 
testimony regarding the status of current drug usage in New 
Hampshire. Statewide, he testified, the No. 1 problem is 
marijuana; cocaine in powder form is No. 2; crack, LSD and 
heroin run third. Mr. Scott quantified drug usage according to 
regions of New Hampshire, further emphasizing the importance of 
localities being able to set their own priorities according to 
local need.
    Billy Yout, Special Agent in Charge of Drug Enforcement 
Administration, concurred with Commander Scott, stating that 
``marijuana . . . is by far the biggest problem [because it is] 
easily accessible to children.'' Mr. Yout also testified on how 
traffickers are moving their bases of operation into New 
Hampshire from Massachusetts and other New England States, 
although he noted that New Hampshire remains predominantly a 
consumer State.
    Ray Wieczorek, the mayor of Manchester, in his testimony, 
focused on the important role that a public sector-private 
sector relationship plays in the war against illegal drugs. 
Wieczorek encouraged other communities to follow Manchester's 
model of how to establish a public-private partnership. Mayor 
Wieczorek explained how the city has effectively tapped all 
available resources, including cooperation from financial 
institutions, citizens and the business community, in uniting 
to fight this battle.
    Peter Favreau, chief of the Manchester Police Department 
(MPD), reviewed the creation of Operation Streetsweeper and its 
importance as a model for future multi-agency efforts. Early in 
1995, Favreau and U.S. Attorney Paul Gagnon, planned a round-up 
of crack dealers. Favreau testified that MPD's undercover 
people, along with the State drug task force arranged to make a 
lot of buys from crack dealers, and make the round-up all at 
one time. This round-up occurred in June 1995. As a result, 
most of the 55 dealers picked up by more than 150 law 
enforcement officers are now behind bars. This was Phase I of 
Operation Streetsweeper.
    Favreau testified that Phase II included cooperation 
between the MPD and the New Hampshire State Police in 
dismantling street gangs and getting them off Manchester's 
streets. Phase III was a continuation of the anti-gang 
component of the Operation, Phase II, but included Federal law 
enforcement agencies.
    Paul Gagnon, U.S. attorney for New Hampshire, focused on 
interagency cooperation, indicating that the success of 
Operation Streetsweeper was as dependant upon cooperation as 
upon the institutional framework that made it possible. Mr. 
Gagnon also noted the importance of Federal funding in the 
success of Operation Streetsweeper, and urged continued 
funding. Finally, Mr. Gagnon recommended a similar marshaling 
of law enforcement resources and key agencies in the future.
    Alice Sutphen, a representative from the citizen's group 
Take Back Our Neighborhoods, delivered testimony to the 
subcommittee on the importance of citizens working with law 
enforcement and local authorities, as well as mobilizing on 
their own, to take back their neighborhoods. She described how 
a coordinated and dedicated citizenry can make a difference, 
and can genuinely assist law enforcement. Chief Favreau and 
Mayor Wieczorek credited Sutphen and the local citizenry with 
making Operation Streetsweeper a success and echoed her 
sentiments about citizen participation.
    Dana Mitchell, captain, Dover Police, offered testimony on 
the success and overall utilization of Dover's Drug Free 
program. He testified that this program includes an expansive 
D.A.R.E. program beginning in elementary school, and continuing 
through junior high and high school. Ms. Mitchell also stressed 
the importance of law enforcement's role in prevention, 
focusing on Dover's Youth Outreach Program. Ms. Mitchell noted 
that this program represented a successful initiative to bring 
the community's young people into the prevention effort in the 
form of organized student groups.
    Ms. Mitchell also urged congressional leaders to allow 
greater creativity and flexibility as they authorize Federal 
drug prevention programs. For example, Mitchell noted that the 
Dover Police Department recently approached the director of a 
180-unit low-income Dover Housing Authority, which is a 
Department of Housing and Urban Development facility, about 
mandating that all parents receiving the housing subsidy 
receive a D.A.R.E. seminar. The Housing Authority's director 
stated that Federal regulations bar that kind of condition on a 
housing subsidy. Greater flexibility in the hands of local 
authorities would allow them to cooperate more fully and adapt 
Federal programs to community needs.
    Michael Plourde, executive director of the Nashua Youth 
Council, offered testimony on how community coalitions assist 
in assessing the priorities that are needed for a locality. Mr. 
Plourde recommended that any Federal money that comes down to 
localities should require that those coalitions exist prior to 
the money being received, and that those coalitions assess the 
community needs prior to the money being distributed to those 
communities.
    John Ahman, regional program director for Marathon House, 
testified that there is a definite link between crime and drug 
use, and emphasized the importance of effective drug treatment 
in breaking this link. Effective treatment, Ahman said, means 
that ``after treatment, recovering addicts are less likely to 
be involved in crime and more likely to be employed.'' Ahman 
also stated that, in the case of drugs, treatment is often more 
appropriate and less expensive than incarceration.
    Dick Tracy, sergeant, crime prevention division, Manchester 
Police Department, offered testimony on the effectiveness of 
the 17-week D.A.R.E. program for Manchester students. Tracy 
went on to testify that having a police officer in the school 
to teach the kids about the dangers of drugs is more effective 
because the officer can relate firsthand experience of cases he 
has dealt with. Tracy's testimony concluded the expert witness 
portion of the hearing.
    As indicated above, the subcommittee's 1995 investigation 
included one fact finding trip to the Drug War's front line. 
Subcommittee members, the U.S. Coast Guard and staff, traveled 
to the Seventh Coast Guard District in the Caribbean transit 
zone between June 16 and June 19, 1995.
    In the transit zone, subcommittee members and staff 
attended briefings at Seventh District Headquarters in Miami, 
Coast Guard interdiction initiatives at sea, DEA activities in 
the Greater Antilles, high level interagency briefings in 
Puerto Rico by the FBI, DEA, Customs, Border Patrol, and local 
authorities, and received indepth briefings by Admiral Granuzo 
and others at Joint Interagency Task Force East (JIATF East) in 
Key West, dedicated to drug interdiction in the transit zone.
    This interdiction trip was arranged in coordination with 
the U.S. Coast Guard, and invitations were extended to minority 
and majority members. Additionally, in coordination with ONDCP, 
subcommittee Chairman Zeliff traveled with the White House 
Director of ONDCP to prevention and treatment programs in 
Massachusetts.
    In the transit zone, the subcommittee learned a number of 
important facts. In addition to traveling on HU-25 interdiction 
aircraft as they demonstrated interceptions, witnessing FLIR or 
forward-looking infrared radar tracking during interceptions, 
and traveling to the United States Coast Guard Cutter MELLOIN 
on the heels of that cutter's successful interdiction of 5,000 
pounds of marijuana, the subcommittee received demonstrations 
of the ion scanner and CINDI technologies, received briefings 
by agents participating in Operation OPBAT on the remote island 
of Great Inagua, and toured OPBAT assets by HH-60 helicopter. 
Before receiving briefings at JIATF East, the subcommittee also 
visited the interdiction cutters Ocracoke and Spenser.
    In briefings, a number of interdiction facts became more 
clear. Agents participating in OBAT (Operation Bahamas, Turks 
and Caicos), a multi-agency, international operation based in 
Nassua, Bahamas, made clear that they have lost major assets 
over the past 2 years.
    At the Greater Antilles Section Coast Guard Base (GANTSAC) 
in Puerto Rico, which covers 1.3 million square miles, multi-
agency briefers expressed the view that, if 70 percent of the 
cocaine coming into the United States comes over the Southwest 
border, the rest comes through Puerto Rico, which has seen as 
much as $40 million in money laundering in recent years.
    In attendance at the briefing were representatives of the 
FBI, DEA, Border Patrol, Coast Guard, INS, Customs, Department 
of Defense and Puerto Rico.
    Summarizing the candid counsel received at this briefing, 
the assets most needed are: more radars (including a suggested 
radar in Belize); more Jayhawk helicopters; more 378-foot Coast 
Guard Cutters; ion scanners and CINDI's; air rights agreements 
with more Caribbean nations (perhaps 1 day Cuba); and more top 
people. The Coast Guard also indicated that they have recently 
lost 4 of 10 HU-25 intercepter aircraft by re-deployment or 
demobilization.
    At JIATF East, briefers included Rear Admiral Andrew A. 
Granuzo, who bluntly admitted that the central obstacle to 
waging a more effective drug war, particularly in interdiction, 
is that ``there is no one in charge.'' This assessment mirrored 
the views of Admiral Yost, Bill Bennett, John Walters, Robert 
Bonner, and a host of others inside and outside the 
administration.
    JIATF East was created by Presidential Decision Directive 
14 (PDD 14), which ordered a review of the Nation's 
counternarcotics command and control intelligence centers. 
Creation of three joint interagency task forces and a domestic 
air interdiction center was authorized by the White House Drug 
Czar in April 1994. Accordingly, JIATF East is joined in its 
interdiction mission by JIATF West in Almeda, CA; JIATF South 
in Panama; the DAICC at March Air Force Base, CA; and JTF-6 in 
El Paso, TX.
    JIATF East is dedicated to deconfliction of all non-
detection and monitoring counter drug activities in the transit 
zone. The command integrates intelligence with operations, and 
coordinates the employment of the United States Navy and United 
States Coast Guard ships and aircraft, United States Air Force 
aircraft, and aircraft and ships from allied nations, such as 
Great Britain and the Netherlands. The command's mission boils 
down to maximizing the disruption of drug transhipment, 
collecting, integrating and disseminating intelligence, and 
guiding detection and monitoring forces for tactical action.
    Just as importantly, JIATF East integrates law enforcement 
personnel, primarily from Customs, into the international 
interdiction effort. For that reason, the command includes FBI, 
DEA, DIA and State Department, in addition to the Department of 
Defense.

2. Federal Law Enforcement Actions in Relation to the Branch Davidian 
        Compound in Waco, TX.

    a. Summary.--The conduct of three executive branch 
Departments, and subsidiary agencies, came under intense 
scrutiny following the defective raid and burning of the so-
called Branch Davidian compound in West Texas in 1993. 
Accordingly, the committee conducted a 5-month prehearing 
investigation into executive branch conduct of these 
departments and agencies, presented testimony by 97 witnesses 
in 10 days of hearings, and concluded 1995 with a 4-month post-
hearing investigation.
    The essential facts, while well known and extensively 
covered in the media, nevertheless bear reporting. On February 
28, 1993, the Bureau of Alcohol, Tobacco and Firearms (ATF) 
attempted to serve an arrest warrant on Vernon Howell (a.k.a. 
David Koresh) at the Branch Davidian Compound in Waco, TX. The 
initial raid brought about the death of four ATF agents and 
numerous Branch Davidians, thereby commencing the longest 
stand-off in the history of the Federal Bureau of 
Investigation. The siege ended tragically. The Branch Davidian 
compound burned to the ground, resulting in the death of 22 
children and more than 60 adults. The initial raid apparently 
consisted of participants from the Department of Treasury 
(DOT), ATF, and local law enforcement officials. U.S. Special 
Forces personnel may have been involved in training some of the 
foregoing agents in specific raid techniques. The standoff 
progressed, the effort intensified and brought about the 
involvement of the Federal Bureau of Investigation (FBI) and 
others at the Department of Justice (DOJ), the White House, the 
Department of Defense (DOD) and the Texas National Guard.
    Pursuant to its oversight jurisdiction over the Federal law 
enforcement community, the committee's National Security, 
International Affairs, and Criminal Justice Subcommittee, 
jointly with the Crime Subcommittee of the House Committee on 
the Judiciary, conducted an investigation into the initial 
raid, ensuing standoff, and eventual fire at the Branch 
Davidian Compound near Waco, TX.
    b. Benefits.--As has been widely reported, throughout the 
investigation and the hearings, the committee had difficulty 
obtaining information from certain agencies and offices under 
investigation. Unfortunately, correspondence files that will 
likely be released with the committee's final report attest to 
a constant battle for documents and evidence relating to the 
tragedy at Waco. This battle was largely institutional with the 
legislative and executive branches both seeking to assert and 
protect their respective procedural and institutional rights. 
Nonetheless, the investigation and the hearings brought to 
light a great deal of new information, educated the public on a 
matter that had continued to be unsettling, and put to rest 
many errant theories about the incident. The committee 
meticulously organized and indexed hundreds of thousands of 
documents in its possession, some of which were law enforcement 
sensitive and classified. After months of investigating the 
facts about Waco, the subcommittee heard from 97 witnesses 
during 10 days of televised hearings. To the committee's 
knowledge, there exists no more exhaustive compilation of 
testimony or comprehensive set of documentation than that which 
was gathered during these hearings into executive branch 
conduct at the Branch Davidian Compound near Waco, TX.
    This investigation opened up to the public more information 
about this tragedy than ever before and also unearthed many of 
the institutional strengths and weaknesses inherent in our 
current Federal executive branch.
    Unlike prior reports and investigations undertaken by the 
agencies involved in the tragedy, the subcommittee presented a 
divergence of highly detailed views to be presented, and seen 
together, in an attempt to find out exactly what went wrong at 
Waco. The central purpose of this investigation, as indicated 
earlier, was to initiate internal reforms that would prevent 
any such tragedy from occurring again. As a result of this 
investigation, agencies have changed their policies in an 
attempt to approach future investigations and operations with 
less likelihood of tragedy, and greater opportunity for 
success.
    Specifically, ATF has experienced an entire change of 
leadership. Moreover, the FBI now has 30 Senior Agents 
specially trained as ``crisis managers,'' who can be called on 
at any time to assist in any similar crisis. The FBI's Hostage 
Rescue Team (HRT) has increased personnel and equipment, as 
well as the size and training of its negotiating team. Today, 
there are 9 FBI SWAT teams around the country to assist the HRT 
in any similar emergency. The FBI has also established a 
working relationship with the crisis resolution centers at 
Michigan State University and George Mason University, and now 
keeps a resource list of experts on marginal eclectic or 
unusual religious groups. In addition, FBI Director Louis Freeh 
has implemented a new policy regarding the use of force in 
crisis situations that reinforces the FBI's standing policy in 
favor of a negotiated solution, and has finally disposed of the 
prior FBI policy permitting a barrage of unseemly noise-making 
in hostage or barricade situation.
    Perhaps the most beneficial aspect of the investigation of 
Waco was refutation of various errant theories of conspiracy 
and generally circulating accusations of malfeasance on the 
part of particular government agencies.
    c. Hearings.--Oversight Hearings on Federal Law Enforcement 
Actions in Relation to the Branch Davidian Compound in Waco, 
TX, July 19, 20, 21, 24, 25, 26, 27, 28, 31, and August 1, 
1995. Witnesses testified regarding the involvement of 
different agencies on pre-assigned ``agency days.'' This 
testimony grouped witnesses together by agency, but also 
allowed the presentation of raid and post-raid evidence in 
rough chronological order. The particular days, witnesses and 
testimony are described below. Since several agencies were 
investigated, the evidence collected at these hearings is 
grouped under agency headings, e.g. ATF, FBI, etc.
    (i) The Bureau of Alcohol, Tobacco and Firearms.--The 
initial investigation of Vernon Howell was conducted by ATF. 
ATF's investigation began in late May 1992. With the results of 
that investigation, the ATF obtained an arrest warrant for 
Vernon Howell. The attempt to serve that warrant on February 
28, 1993, went badly awry resulting in an armed confrontation 
which cost the lives of four Federal agents and several Branch 
Davidians. Following a 51 day stand-off, the siege ended 
tragically, on April 19, 1993, when the compound was totally 
destroyed by fire costing the lives of 22 children and more 
that 60 adults. Based on those facts, the subcommittee 
initiated an investigation into ATF's actions leading to the 
raid. The committee submitted document requests to the 
Department of the Treasury for all documents in its possession 
pertaining to the initial investigation of Vernon Howell. The 
committee carefully analyzed the documents relating to the 
investigation and interviewed numerous individuals involved in 
the investigation and the raid. ATF agents, supervisors and 
legislative affairs personnel briefed subcommittee staff on 
events surrounding the investigation of Vernon Howell and 
preparations for the initial raid on the Mt. Carmel complex. 
Surviving Branch Davidians instructed the subcommittee about 
conditions at Mt. Carmel and events surrounding the initial 
raid. In addition to the defense attorneys for certain Branch 
Davidians, representatives of the National Association of 
Criminal Defense Lawyers gave their interpretation of the 
sufficiency of the warrant that the ATF attempted to serve on 
Vernon Howell. These briefings and interviews were in addition 
to the many telephone conversations and informal briefings that 
were conducted.
    An integral part of the inquiry into ATF's investigation of 
Vernon Howell was a schedule of hearings lasting 10 days and 
comprising 97 witnesses. As indicated earlier, the subcommittee 
held these hearings jointly with the Subcommittee on Crime of 
the House Committee on the Judiciary. Following the chronology 
of the actual events, the early days of the hearings focused on 
ATF's investigation and plan to serve Vernon Howell (a.k.a. 
David Koresh) with an arrest warrant.
    July 19 marked the first day of hearings. On that day, the 
subcommittee heard testimony from Dick Reavis, author of Ashes 
of Waco; Stuart Wright, contributor and editor of Armageddon in 
Waco; Ray Jahn, assistant U.S. attorney; Gerald Goldstein, 
president of the National Association of Criminal Defense 
Lawyers; Robert L. Descamps, president of the National District 
Attorneys' Association; Henry McMahon, firearms dealer; David 
Thibodeau, resident at Mt. Carmel; Kiri Jewell, resident at Mt. 
Carmel; David Jewell, father of Kiri Jewell; Lewis Gene Barber, 
former lieutenant with the McLennan County Sheriff's Office; 
Bill Johnson, assistant U.S. attorney; Davey Aguilera, ATF 
Special Agent; Chuck Sarabyn, former ATF ASAC in Houston; Earl 
Dunagan, former ATF acting SAC in Austin; Dan Hartnett, former 
ATF Deputy Director for Enforcement; Ed Owens, ATF Firearms 
Expert; H. Geoffrey Moulton, Jr., Project Director of Treasury 
Department Review Team; and Dr. Bruce Perry, associate 
professor of psychiatry and behavioral sciences at Baylor 
College of Medicine.
    Noteworthy among those testifying on the first day of 
hearings was Kiri Jewell. Jewell, a former resident of Mt. 
Carmel, testified about the conditions as she understood them 
at Mt. Carmel, her view of the beliefs of the Davidians, and 
her treatment by Vernon Howell. In particular, she strengthened 
the existing view that Howell was a nefarious individual.
    Another engrossing witness on the first day of hearings was 
former ATF Special Agent Davey Aguilera. Aguilera went 
undercover among the Branch Davidians posing as a philosophy 
student. A fact discussed publicly for the first time in detail 
through the testimony of Aguilera was that ATF agents knew the 
Branch Davidians were expecting the raid on Mt. Carmel. 
Aguilera testified to his desperate attempts to inform ATF 
Supervisory Special Agents not to go ahead with the raid, and 
tearfully recalled the results of not being able to turn back 
the raid.
    Chuck Sarabyn, former ATF Assistant Special-Agent-in-Charge 
in Austin, testified before the subcommittee about his decision 
to allow the raid to proceed in light of the fact that the 
Branch Davidians knew the ATF was planning to raid Mt. Carmel. 
Sarabyn defended his decision to go ahead with the raid, and to 
do so forcefully. Sarabyn maintained the view that the ATF was 
afraid of mass suicide among the Branch Davidians.
    The subcommittee heard additional testimony on day two, 
July 20, 1995. Those testifying before the subcommittee 
regarding the role of ATF included Robert Sanders, Former ATF 
Deputy Director for Enforcement; Wade Ishimoto, Sandia National 
Laboratories; George Morrison, Los Angeles Police Department; 
William Buford, ATF Resident-Agent-in-Charge, Little Rock, AR, 
Office; Lewis Merletti, Deputy Director of Treasury Department 
Review Team.
    This second day of testimony concentrated on the 
investigation of Howell's collection of weapons and the alleged 
or initially asserted existence of a methamphetamine laboratory 
on the premises of Mt. Carmel. Mr. Morrisson, of the Los 
Angeles Police Department, testified that ATF should have 
employed better investigative techniques and more organized 
methods for case management. He told the subcommittee that 
newspaper articles surfacing soon before the raid on Mt. Carmel 
could have assisted ATF in gathering information. Mr. Ishomoto, 
of Sandia National Laboratories, told the subcommittee that the 
team assembled in Waco to serve the arrest warrant on Howell 
was inexperienced and that the raid plan lacked the 
sophisticated procedures necessary for such an operation. 
Several witnesses testified to the danger of explosive devices 
in the presence of chemicals necessary for the production of 
methamphetamines.
    The third day of hearings on Waco was July 22, 1995. On 
this day, the subcommittee obtained the statements of Steve 
Higgins, former Director of the ATF; John Simpson, former 
acting Assistant Secretary of Treasury; Christopher Cuyler, ATF 
Liaison for Acting Deputy Assistant Secretary Michael Langan; 
Michael Langan, former acting Deputy Assistant Secretary of 
Treasury; Lloyd Bentsen, former Secretary of Treasury; Joyce 
Sparks, Texas Department of Child Protective Services; George 
Morrison, Los Angeles Police Department; Tim Evans, attorney; 
John Kolman, formerly with the Los Angeles County Sheriff's 
Department; Victor Oboyski, Law Enforcement Officers 
Association; Lewis C. Merletti, Deputy Director of the Treasury 
Department Review Team; Robert Rodriguez, ATF Special Agent; 
Chuck Sarabyn, former ATF Special Agent-in-Charge in Houston; 
Phillip Chojnacki, former ATF Special Agent-in-Charge; Sharon 
Wheeler, ATF Special Agent; Dan Hartnett, former ATF Deputy 
Director for Enforcement; Daniel Black, ATF Personnel Office; 
James Cadigan, FBI Firearms expert; William Buford, ATF 
Resident Agent-in-Charge; Roland Ballesteros, ATF Agent; and 
John Henry Williams, ATF Agent.
    On this final day of testimony regarding the actions of ATF 
at Waco, the subcommittee heard the testimony of former 
Secretary of Treasury Lloyd Bentsen. Secretary Bentsen 
testified about the actions he took in response to ATF actions 
at Waco. He told the subcommittee that, upon hearing of the 
failure of the raid, he established an in-house review 
commission that investigated the incident for 5 months and 
compiled a report based on more than 500 interviews. Secretary 
Bentsen testified that he believed the review team had the 
total cooperation of ATF. Bentsen listed for the subcommittee 
those agencies involved in the Treasury investigation: Secret 
Service, Customs Service, the IRS, and the Financial Crimes 
Enforcement Network. Notably, Bentsen was unable to explain why 
a warning from Mr. Altman, his aide at the time, was not viewed 
with seriousness or passed on to the FBI; the Altman warning 
indicated the possibility of ``tragedy'' if the Davidian 
Compound was, as occurred on April 19, 1993, confronted with 
what Davidians might perceive as an assault.
    Secretary Bentsen also mentioned corrective actions taken 
by ATF and Treasury in the wake of the incident at Waco. 
According to Bentsen, ATF leadership was replaced, the 
intelligence chief was demoted, and the two raid commanders 
were relieved of their law enforcement duties. In addition, 
Bentsen told the subcommittee that Treasury has enhanced the 
formal and informal communication between the Office of 
Enforcement and the bureaus within the department.
    (ii) The Federal Bureau of Investigation.--Almost 
immediately after the raid on Mt. Carmel, the FBI was called in 
to take over the operation of the standoff. The FBI Hostage 
Rescue team was in place and FBI negotiators were on the phone 
with Davidians almost continuously for the succeeding 51 days. 
Jeffrey Jamar, FBI Special Agent-in-Charge in San Antonio, 
commanded the FBI team and was charged with deciding which 
tactics to employ. The subcommittee investigation produced 
audiotapes and transcripts of these negotiations, as well as 
contemporaneous memoranda from both inside and outside experts 
attempting to explain the actions of Vernon Howell and the 
Branch Davidians. After 51 days of standoff, the siege ended 
tragically. The Branch Davidian compound burned to the ground 
and resulted in the death of 22 children and more than 60 
adults.
    The investigation into the role of the Department of 
Justice and the Federal Bureau of Investigation continued into 
a second day, constituting day four, of the subcommittees' 
hearings. On this day, the subcommittee heard from John Coonce 
of the Drug Enforcement Administration and Donald A. Bassett, 
Former FBI Crisis Management Specialist.
    John Coonce testified before the subcommittee on the 
dangers of the use of explosives in the presence of those 
chemicals used to produce methamphetamine. The Branch Davidians 
had been accused of operating a methamphetamine laboratory at 
Mt. Carmel. Coonce testified that in order to ``take down'' a 
methamphetamine laboratory, an agent must first be certified by 
the Occupational Safety and Health Administration (OSHA), and 
must be very knowledgeable about the process involved. Coonce 
enumerated the hazards involved with drug enforcement of 
laboratories producing methamphetamines. In particular, he 
discussed the effect of firing a gun, the possibility of 
explosion or leakage of chemicals, and the safety of 
individuals inside or entering any such laboratory.
    The investigation into the Department of Justice and FBI 
participation at Waco continued on the fifth day of hearings. 
On July 25, 1995, the subcommittee heard the testimony of Jack 
Zimmerman, attorney for Steve Schneider; Dick DeGuerin, 
attorney for Vernon Howell; Philip Arnold, Ph.D, Reunion 
Institute, Houston, TX; James Tabor, Ph.D., associate professor 
of religious studies, University of North Carolina at 
Charlotte, author of Why Waco?; Captain Maurice Cook, senior 
Texas Ranger; Captain David Byrnes, Texas Ranger; Glen Hilburn, 
Baylor University; Captain Frank McClure, deputy sheriff, 
Douglas County, GA.
    Jack Zimmerman and Dick DeGuerin, attorneys for Steve 
Schneider and Vernon Howell, testified before the subcommittee 
about their dealings with the Branch Davidians and explained in 
detail their attempts to assist in negotiating a surrender. 
DeGuerin testified about difficulties he personally encountered 
in brokering a potential surrender. DeGuerin told the 
subcommittee about his trips into Mt. Carmel and the 
breakthrough he believed he had achieved upon receiving 
Howell's final promise to surrender. DeGuerin obtained a letter 
from Howell in which Howell promised to complete his 
interpretation of the ``Seven Seals,'' contained in the Bible, 
and then surrender with all the Branch Davidians. DeGuerin 
testified that he believed Howell was sane. Although others 
later disagreed, DeGuerin perceived Howell as a person deeply 
committed to and sincere in his religious beliefs.
    Also testifying on July 25 were several of the local Texas 
Rangers. The Texas Rangers were charged with investigating the 
deaths of the four ATF agents killed on the day of the initial 
raid. Captain Byrnes testified that the Texas Rangers had many 
disagreements with FBI's Jamar, and generally felt excluded. 
Byrnes testified that, in addition to problems with destruction 
of the crime scene by FBI tactical personnel, the Rangers were 
disappointed about a lack of communication between FBI 
personnel and local officials.
    On its sixth day of hearings, the subcommittee heard, in 
greater detail, the facts surrounding the Department of Justice 
and FBI involvement in Waco. On July 26, 1995, the subcommittee 
received testimony from Peter Smerick, former Criminal 
Investigative Analyst, Investigative Support Unit, National 
Center for the Analysis of Violent Crime, FBI Academy, 
Quantico, VA; Jim Cavanaugh, ATF Special Agent; Byron Sage, FBI 
Supervisory Special Agent, San Antonio, TX; Ronald McCarthy, 
former officer, Los Angeles Police Department; George F. Uhlig, 
professor of chemistry, College of Eastern Utah; David Upshall, 
Ph.D, British biochemist; Paul Rice, Ph.D., toxicologist, 
Environmental Protection Agency; Dr. Alan A. Stone, professor 
of psychiatry and law, Harvard Law School; Larry Potts, former 
FBI Assistant Director, Criminal Investigations; Anthony Betz, 
FBI CS Gas Expert; Dick Rogers, former Head of the Hostage 
Rescue Team; Jeffrey Jamar, former FBI Special Agent-in-Charge 
in San Antonio; Byron Sage, FBI Supervisory Special Resident 
Agent in Austin; and Harry Salem, Defense Department 
Toxicologist.
    James Cavanaugh, although an ATF Special Agent, testified 
before the subcommittee regarding negotiations with the Branch 
Davidians and the transition from ATF control of the operation 
to FBI control. Cavanaugh was the first person to engage in 
serious negotiations with the Branch Davidians. He recounted 
the planning of the initial raid, the ensuing negotiations for 
a cease-fire, the first surrender offer of the Branch Davidians 
and the lengthy negotiations for a surrender. Cavanaugh 
described the tension between negotiators and tactical 
personnel: in general, he expressed the view that negotiators 
prefer to wait for a peaceful solution to a crisis and tactical 
personnel generally prefer to intercede with tactical measures.
    Peter Smerick was the Criminal Investigative Analyst the 
FBI used to profile Howell for the FBI negotiators and the 
FBI's Hostage Rescue Team. Smerick testified that his first 
four memoranda urged the FBI to ``wait Koresh out'' and advised 
against increasing the pressure from outside. Smerick told the 
subcommittee that he changed his final memorandum based, 
essentially, on his knowledge that the FBI was not pleased with 
the tone of his memoranda. Smerick told the subcommittee that, 
although he felt no overt pressure to change the approach of 
his memoranda, he knew that FBI agents on the ground in Waco 
wanted a view that supported a more clearly tactical approach.
    Jeffrey Jamar, the FBI Special Agent-in-Charge in San 
Antonio at the time, was the onsite commander of all forces in 
Waco. Jamar testified before the committee that he was hopeful 
of a surrender based on Koresh's promise to come out of Mt. 
Carmel when he completed his interpretation of the Seven Seals. 
In response to questions regarding the possibility of the 
withdrawal of the FBI from Mt. Carmel, Jamar explained that the 
danger of gun fire from the building, the risk to children 
inside, and the sanitary conditions in Mt. Carmel made 
withdrawal untenable. Jamar testified before the subcommittee 
regarding the decision to implement the CS gas plan. Jamar 
said, ``I would have waited a year if we had something to work 
with, if there was just something there we could attach 
something to. We did it from February 28 until a decision was 
made in late March that we thought we were going nowhere.'' 
Jamar told the subcommittee he was certain that Koresh would 
end the standoff ``his way.'' Jamar also testified that he knew 
with ``99 percent'' certainty that the Davidians would open 
fire on the FBI's Bradley vehicles inserting CS gas, an 
eventuality that he also knew would mean acceleration of the CS 
gas, under the FBI's CS gas insertion plan.
    On July 28, 1995, the subcommittee heard compelling 
testimony from many decisionmakers regarding the events at 
Waco. The subcommittee took the testimony of Webster Hubbell, 
former Associate U.S. Attorney General; Mark Richard, Deputy 
Assistant Attorney General; William Sessions, former Director 
of the FBI; Floyd Clarke, former Deputy Director of the FBI; 
Larry Potts, former Assistant Director of the FBI, Criminal 
Investigations; Harry Salem, Ph.D., Defense Department 
Toxicologist; Rick Sherrow, fire expert; Paul Gray, Houston 
Fire Department and leader of the fire review team; James 
Quintere, arson expert, University of Maryland; and Clive 
Doyle, former Branch Davidian.
    Webster Hubbell, the former Associate U.S. Attorney General 
and close associate of President and Mrs. Clinton, testified 
before the subcommittee on the decisionmaking process that led 
to the implementation of the CS gas insertion plan. According 
to Hubbell, the decision to implement the CS gas insertion plan 
was based essentially on two facts: (1) a lack of progress in 
negotiations, and (2) military personnel assuring him that the 
inhabitants would exit the building upon insertion of CS gas. 
Hubbell testified that the President wanted to be advised of 
any change in strategy from one of negotiation to one of 
tactical maneuvers. Hubbell testified before the subcommittee 
that he was told that Howell was manipulating the attorneys. 
Howell's statement that he would come out upon having 
interpreted the ``Seven Seals,'' according to Hubbell, was a 
ruse. Hubbell told the members of the subcommittee that Howell 
was responsible for the deaths of those inside Mt. Carmel.
    The Assistant Director of the FBI at the time of the Waco 
standoff was Larry Potts. Potts testified before the 
subcommittee regarding the FBI's strategy for resolving the 
standoff. Potts stated that the strategy was: ``(1) to verbally 
negotiate a peaceful surrender of Koresh and his followers; and 
(2) to gradually increase the pressure on those inside the 
compound by tightening the perimeter around the compound and 
denying the Davidians certain comforts.'' Potts recounted how 
this strategy was perceived as a failure, and he outlined the 
roles that the FBI and the Department of Justice played in the 
development of the CS Gas insertion plan.
    Potts testified that the FBI, in response to questions 
about its conduct of the standoff at Waco, had improved three 
aspects of FBI crisis management. ``Jurisdictional issues are 
being clarified, crisis response operations have been 
reorganized and expanded, including the availability and use of 
outside experts; and research efforts have been enhanced,'' he 
stated. Potts displayed a diagram of the crisis management 
changes implemented as a result of the standoff at Waco.
    The subcommittee followed up on the investigation into the 
actions of the Department of Justice and the FBI at Waco with 
the testimony of Jeffrey Jamar, former FBI Special Agent-in-
Charge; Dick Rogers, former Head of Hostage Rescue Team; Edward 
S.G. Dennis, Jr., former Assistant Attorney General, Criminal 
Division; R.J. Craig, FBI Special Agent; James McGee, FBI 
Special Agent; John Morrison, FBI Special Agent; and Byron Sage 
FBI Special Supervisory Resident Agent in Austin.
    The most compelling testimony was given on July 31, hearing 
day nine, by Resident Agent, Byron Sage. Sage testified 
regarding his last pre-fire conversation with Attorney General 
Reno. In Sage's view, Reno was attempting to gauge negotiators' 
opinions regarding the potential for a negotiated surrender to 
the standoff. Sage testified that he told Reno the negotiations 
were at a standstill and that there was no evidence that 
negotiations were meeting with renewed success. Apparently, in 
this conversation, Sage stated or implied to Reno that he 
favored the tactical option.
    On the final day of hearings into the events at Waco, the 
subcommittee heard from the Nation's top law enforcement 
officer, the Attorney General, Janet Reno. On August 1, 1995, 
Attorney General Reno gave her reasons for what she termed her 
decision to implement the plan to insert CS gas into Mt. 
Carmel. The Attorney General described the 51-day standoff, the 
efforts to negotiate a surrender, and the reasons that Howell 
was not trusted by FBI negotiators. Reno stressed changes the 
FBI had implemented since Waco. According to her testimony, the 
FBI now has 30 Senior Agents specially trained as ``crisis 
managers'' to be called on at any time to assist in a crisis 
the magnitude of Waco. These managers form an element of the 
Critical Incident Response Group, a group formed to deal with 
crisis situations. Reno told the subcommittee that the Hostage 
Rescue Team will increase its personnel, equipment, and the 
size and training of the negotiating team. Today, there are 9 
FBI SWAT teams around the country to assist the Hostage Rescue 
Team in an emergency. To assist the FBI in dealing with 
complex, psychological hostage takers in the future, Reno 
testified that the FBI will establish a working relationship 
with the crisis resolution centers at Michigan State University 
and George Mason University, and will keep a resource list of 
experts on marginal religious groups.
    Much of Reno's testimony involved her decision to implement 
the CS Gas Insertion Plan. The Attorney General told the 
subcommittee she thought she had all the information she needed 
to make her decision. She indicated however, that someone 
informed her of ongoing abuse in the compound; at no time could 
she recall who that individual was. She believed that briefings 
on CS gas were proper and complete. She did confirm that she 
had not read all pre-fire briefing material and was not in the 
command center when the tragedy occurred. In her statement to 
the subcommittee, Reno assured the members that the FBI was 
continuing its research into non-lethal technologies as 
alternatives to deadly force.
    (iii) The Department of Defense.--The subcommittee 
investigation into the participation of Department of Defense 
personnel in the events at Waco continued with the subcommittee 
hearings on the events at Waco. On July 20, 1995, the first day 
of hearings that delved into the participation of military 
personnel, the subcommittee heard the testimony of Ambassador 
H. Allen Holmes, Assistant Secretary of Defense for SOLIC; 
Major General John M. Pickler, U.S. Army, Commander Joint Task 
Force 6; Brigadier General Walter B. Huffman, U.S. Army, 
Assistant Judge Advocate General for Civil Law; Chris Crain, 
Special Forces Group; Lieutenant Colonel Philip Lindley, U.S. 
Army, former Deputy Staff Judge Advocate for U.S. Army, Special 
Forces Command; Major Mark Petree, U.S. Army, formerly of 3/3D 
Special Forces Group; Staff Sergeant Steve Fitts, U.S. Army, 
formerly of 3/3D Special Forces Group; Staff Sergeant Robert W. 
Moreland, U.S. Army, formerly of 3/3D Special Forces Group; and 
Sergeant Chris Dunn, U.S. Army, formerly of 3/3D Special Forces 
Group.
    Ambassador Holmes testified before the subcommittee 
regarding the role of the military in domestic law enforcement 
actions and about military participation before Waco. Holmes 
told the committee that, in his opinion, the process developed 
to monitor military involvement in domestic law enforcement was 
a sound process. The Ambassador testified that, in his view, 
there were no violations of the law regarding military 
assistance at Waco and that the process regarding requests for 
military assistance had worked effectively.
    Staff Sergeant Steve Fitts, U.S. Army, formerly of 3/3D 
Special Forces Group, testified before the subcommittee 
regarding the military preparations for involvement in 
methamphetamine laboratories. Staff Sergeant Fitts told the 
subcommittee that he conducted extensive research on the 
dangers and precautions required to ``take-down'' 
methamphetamine laboratories. According to Staff Sergeant 
Fitts, he wrote the paper at the instruction of Major Mark 
Petree, U.S. Army, formerly of 3/3D Special Forces Group. 
Sergeant Fitts testified that Major Petree then presented the 
paper to ATF agents in Houston. According to Staff Sergeant 
Fitts, it was clear to him from the reaction of the ATF agents 
that these agents anticipated no actual methamphetamine 
laboratory at Mt. Carmel. Indeed, based on the lack of interest 
shown by ATF agents in the procedures necessary to dismantle a 
methamphetamine laboratory, it was Fitt's belief that ATF 
agents knew that no methamphetamine laboratory existed at Mt. 
Carmel.

3. The Bureau of Census and Its Planning for the 2000 Census.

    a. Summary.--Article I, Section 2, of the U.S. Constitution 
calls for an ``actual enumeration'' of the citizens of the 
country ``within every subsequent term of ten years, in such 
manner as they shall by Law direct.'' The Nation's first census 
was taken in 1790. Title XIII, enacted into law on August 13, 
1954, established the parameters for taking the national census 
and created the Bureau of the Census. This law requires the 
compilation of statistics and information far in excess of that 
intended by the Constitution. That element of the Census which 
evokes the greatest controversy, however, remains the counting 
of citizens of the United States.
    Until recently, the percentage of people not being counted 
has declined each census since that particular statistic was 
first measured in 1940. However, in 1990 the undercount rose to 
1.8 percent, from 1.2 percent in 1980. Furthermore, official 
reports suggest that the 1990 Census may have missed 
substantially more persons, particularly blacks and other 
minorities, than suggested by the official net undercount 
estimate. The decline in the accuracy of the census cannot be 
attributed to spending less than was spent in 1980. The 1980 
Census cost $1.1 billion over 10 years, while the 1990 Census 
cost about $2.6 billion. If the current approach to taking the 
census is retained in the year 2000, the costs could rise to 
about $4.8 billion in current dollars. In 1994 an expert panel 
at the National Academy of Sciences concluded that to contain 
costs and increase accuracy, the Bureau should use statistical 
sampling as an integral part of the design for Census 2000.
    Pursuant to its oversight jurisdiction of the Bureau of the 
Census, the committee conducted an investigation into the 
preparations for the next census which resulted in the hearing, 
``Oversight of the Census Bureau: Preparations for the 2000 
Census.'' With the focus on the status of preparations, the 
committee wanted to learn the Bureau's plans for changes to the 
2000 Census that will alleviate problems encountered in the 
1990 Census. The committee had additional concerns about the 
Bureau's success in obtaining consensus among major 
stakeholders for these planned changes.
    b. Benefits.--The investigation and subsequent hearing was 
the first real effort to study the complexities surrounding the 
taking of the Census. The investigation showed unresolved 
questions and problems at the Bureau of the Census. In 
addition, the investigation confronted the controversy 
surrounding the adjustment issue, and potential solutions to 
the problem of undercounting. With the analysis of the issues 
surrounding the development of Census 2000, the committee is 
now prepared to offer substantive contributions to those who 
will administer the Census 2000.
    c. Hearings.--``Oversight of the Census Bureau: 
Preparations for the 2000 Census,'' October 25, 1995. The 
subcommittee heard from three witnesses regarding Census 2000. 
The first panel consisted of Inspector General Francis D. 
DeGeorge of the U.S. Department of Commerce and L. Nye Stevens, 
Director of Planning and Reporting of the General Government 
Division of the U.S. General Accounting Office. The first panel 
concentrated on management problems at the Bureau of the Census 
and controversy surrounding the preparations for Census 2000. 
Martha Farnsworth Riche, Director of the Bureau of the Census, 
responded to those questions in the second panel.
    Francis D. DeGeorge told the subcommittee that he believes 
the recommended statistical sampling does not go far enough to 
address the problems of the 1990 census. He recommended that 
the Bureau increase the amount of sampling over the amount 
currently planned. DeGeorge also expressed concern with the 
Bureau's selected design. He testified that the value of the 
design changes is unsubstantiated and vulnerable to cost growth 
beyond the design's estimated $3.9 billion price tag. He 
suggested the bureau use a design that is simpler, 
operationally less risky, and less vulnerable to cost growth.
    The Inspector General blamed the Bureau's choice on a 
fragmented organizational and decisionmaking structure that is 
not conducive, in his opinion, to completing, substantiating, 
and implementing a design.
    L. Nye Stevens testified that he is encouraged by the 
bureau's design for the 2000 Census. Stevens said the new 
design should both save money and improve quality. He said he 
was particularly encouraged by the decision to adopt sampling 
among the nonresponse population as a basic foundation of the 
count. But he said the Bureau's decisions should be carefully 
reviewed by the subcommittee and by Congress. He also warned 
that managing a radically different census process presents a 
formidable challenge to the Bureau. Without very tight 
management over the next few years, there is a risk not only of 
failing to achieve the savings that are projected, but also a 
risk of a ``failed Census.''
    Martha Farnsworth Riche, Director of the Bureau of the 
Census, told the subcommittee that the Bureau is designing a 
census that will be simpler to answer, cheaper to conduct, and 
more accurate. Riche outlined, in her testimony, four 
strategies to meet her objectives. She testified that one 
strategy is to build partnerships at every stage of the 
process. Riche stated that the taking of the Census is so far 
reaching that it requires the cooperation of a broad range of 
State and Federal agencies and people of diverse expertise. 
Riche explained that her second strategy is to keep it simple. 
The simpler the taking of the Census, according to Riche, the 
better response rate we can expect. Strategy three is to use 
technology intelligently. The Bureau of the Census is 
experimenting with a number of innovations to help take a 
better count of the people. And strategy four is to increase 
the use of statistical methods in an attempt to offset the 
undercount.

4. Counterterrorism Activities in the United States.

    a. Summary.--On April 19, 1995, Timothy McVeigh and Terry 
Lynn Nichols allegedly parked a truck bomb adjacent the Alfred 
R. Murrah Federal Building in Oklahoma City, OK. The result was 
the explosion of the Murrah building. Hundreds of people, 
including several children, were killed and the building was 
destroyed. The bombing stirred the fears of citizens throughout 
the country regarding terrorist attacks on American soil. As a 
result of this act of domestic terrorism, the committee 
initiated an investigation into the intelligence apparatus of 
the Nation's law enforcement and national security agencies. 
The aim was to better understand preparations being taken to 
confront the possibility of further terrorism and to prepare 
for recurrence.
    Pursuant to its oversight of the Department of State, the 
Federal Bureau of Investigation, the Central Intelligence 
Agency, the National Security Agency, and the Defense 
Intelligence Agency, the committee conducted an investigation 
of counterterrorism activities in the United States. The 
investigation resulted in a briefing of Members of Congress and 
an oversight hearing.
    The subcommittee held one briefing and one hearing on the 
issues of terrorism and counterterrorism. The purpose of the 
closed briefing was to obtain general information about 
terrorism, interagency coordination of counterterrorism 
initiatives, and performance of agencies of the U.S. Government 
assigned to collect intelligence on terrorist organizations, 
prevent terrorism and investigate terrorist incidents.
    Knowledgeable counterterrorism representatives from FBI, 
DOD, State, DOE, DEA, FEMA, and ATF attended the briefing. At 
the briefing, agency officials educated the members of the 
subcommittee about ongoing anti and counterterrorism efforts, 
and gave Members an overview of the scope and threat of 
terrorism both from the preventative and the responsive points 
of view. The Federal response to the Oklahoma City tragedy was 
also reviewed from an operational point of view. Since the 
briefing was closed the dialog may not be summarized.
    The purpose of the closed hearing on terrorism and the 
correlative intelligence gathering was to gain a better 
understanding of, and to review the quality of, sharing and 
cooperation among intelligence gatherers related to anti and 
counterterrorism. At the hearing, members learned how terrorism 
is defined, and were briefed on types of worldwide terrorist 
groups, how such groups are organized, and the tools they may 
employ. Further discussion is foreclosed by the nature of the 
closed briefing.
    b. Benefits.--In general, the investigation shed light on 
the threat of domestic and international terrorism to the 
citizens of the United States. It also informed the committee 
members about the intelligence and law enforcement communities 
fighting terrorism. The results may be improved by intelligence 
sharing, improved training, resource sharing, and exploration 
of preventive measures, that do not violate Constitutional 
guarantees, which can be taken to stop terrorists before they 
act. The briefing and the hearing began a constructive dialog 
between the committee and the respective agencies.
    c. Hearings.--``The Effectiveness of Coordination of the 
Nation's Anti and Counterterrorism Intelligence,'' held on May 
23, 1995. The subcommittee heard testimony from the Federal 
Bureau of Investigation; the National Security Agency; the 
Department of State; the Defense Intelligence Agency; and the 
Central Intelligence Agency.
    Each witness presented a 10 minute overview of their 
agency's approach to gathering, processing, analyzing, and 
sharing anti and counterterrorism intelligence. In addition, 
each witness offered examples of intelligence sharing in 
response to specific terrorist activities, and cited recent 
instances in which intelligence sharing facilitated 
apprehension of terrorists or prevention of terrorist acts.
    Since the hearing was closed, the actual testimony may not 
be summarized here.

5. Army Ranger Training Deaths of February 15, 1995.

    a. Summary.--In the worst incident in the 44-year history 
of this elite program, four U.S. Army Rangers died from 
hypothermia during training at Elgin Air Force Base, near 
Pensacola, FL, on Wednesday, February 15, 1995. The training 
provides instruction in advanced combat skills in a punishing 
2-month course in wooded, desert, mountainous and swampy 
conditions. The soldiers spent up to 6 hours in chest-deep 
water that ranged from 52 degrees to 59 degrees. The Army's 
standard limit is 3 hours in waist deep, 50 degree water. These 
casualties were part of a 34 man patrol in the final phase of 
the Army's 8 week Ranger training. The soldiers had been in the 
field since Saturday, February 11. At approximately 5:30 p.m., 
one of the students showed signs of hypothermia (numbness). The 
students had been training in 52 degree water; the air 
temperature was 65 degrees. An instructor called in a medical 
evacuation helicopter which arrived 15 minutes later. When the 
helicopter arrived, the original casualty and two more students 
showing signs of cold were flown out. The students were treated 
and released.
    At approximately 9:50 p.m., two more cases of hypothermia 
were reported. After being flown to the military hospital at 
Elgin, these two soldiers died. At approximately 11:45 p.m., 
two more hypothermia cases were reported. Heavy fog prevented 
helicopter evacuation. Carried to the nearest road in 
approximately 40 minutes, the soldiers were taken by ambulance 
to a civilian hospital, where one died. At midnight, one 
soldier had not been found. At 7:35 a.m., Thursday morning, a 
search party discovered his body in waist-deep water. Four 
instructors were assigned to the 34-man patrol. In 1977, 
hypothermia caused the death of two Ranger students at Elgin. 
Since then, one Ranger student died at Elgin from drowning in 
1985.
    The committee conducted an investigation of this incident, 
by examined internal DOD investigation results, explored the 
Army's interpretations of those results, as well as reviewing 
both post incident disciplinary and corrective actions taken by 
the Army. The committee was concerned with the overall process 
of the DOD investigation. The committee also made efforts to 
review precisely what went wrong in this incident, and how it 
can be fixed while maintaining the quality of Ranger training.
    The AR 15-6 collateral investigation found that ``lack of 
experienced personnel and reduction in the number of officers 
available to prepare for, oversee, and conduct this training 
had a detrimental effect on command and control.'' The AR 15-6 
collateral investigation also found that the lack of MEDEVAC 
fuel may have been a contributing factor in the deaths.
    The committee, as part of its investigation, held numerous 
meetings with the office of Army Legislative Liaison. In 
addition, the subcommittee participated in three briefings. The 
first briefing, held on April 6 in conjunction with the 
Subcommittee on Military Personnel, heard from Major General 
Hendrix, Commanding General of the Infantry Center at Fort 
Benning, GA. The second briefing, held on May 11, heard from 
Togo D. West, Jr., Secretary of the Army. The final briefing, 
held on May 17, was held with the Secretary of the Army, a 
representative of the Department of the Army Inspector 
General's office and a representative from the Department of 
the Army Safety Command. In this briefing, the subcommittee 
fully reviewed the military investigation of the incident and 
the AR 15-6 investigations. The subcommittee, prior to the May 
17 briefing, considered holding a hearing in late May. 
Following the May 17 briefing the chairman, with the agreement 
of the ranking minority member, decided to postpone the 
proposed hearing.
    b. Benefits.--The committee investigation focused on the 
actions undertaken in response to this incident. The 
committee's concern regarding the Army Ranger deaths turned on 
the Army's investigative process, and in particular on the 
process that surrounds review of tragic incidents of this 
nature. After monitoring this investigation and indepth 
inquiries of the Secretary of the Army, Army Inspector General 
and Commanding General of the Army Infantry Training Center, 
and upon careful review of the findings, conclusions, and 
recommendations of both the AR 15-6 collateral investigation 
and the safety investigation, the committee was reassured that 
the Army investigative process had advanced properly, and that 
necessary changes were in progress.
    c. Hearings.--None were held.

6. The Ballistic Missile Defense Program.

    a. Summary.--The committee conducted an investigation into 
the status of the Nation's Ballistic Missile Defense Program. 
The end of the cold war lessened the threat of a Ballistic 
Missile attack from the former Soviet Union. However, as a 
result of proliferating weapons of mass destruction and missile 
delivery system technology, the need remains to research and 
explore implementation of theater and strategic missile 
defenses. On May 18, 1995, Lieutenant General Malcolm R. 
O'Neill, U.S. Army, Director of the Ballistic Missile Defense 
Organization briefed the chairman and the staff on the status 
of the Nation's Ballistic Missile Defense Program.
    Lieutenant General O'Neil told subcommittee Chairman 
William Zeliff that the current program is designed to address 
the post cold war environment. The program continues within the 
financial constraints set by Congress. O'Neil detailed the 
existing strategy for the Ballistic Missile Defense Program. 
The first priority is Theater Missile Defense. The existing 
budget devotes approximately $2.3 billion to Theater Missile 
Defense. General O'Neil said that the program builds on 
existing systems to provide new defense capabilities as soon as 
possible to meet existing threats. New systems and enhancements 
are to be added to ensure robust protection.
    The second priority is national strategic missile defense. 
This program maintains the technological base and continues its 
maturation. General O'Neil told the committee that the program 
provides for evolutionary contingency deployment options if a 
threat suddenly emerges. The General also stated that the 
program is concentrating on technologies that will increase the 
capabilities and allow the system to be deployed more rapidly 
and efficiently.
    During the fall of 1995 and early 1996, several 
developments occurred regarding the Ballistic Missile Defense 
issue. In November 1995, a National Intelligence Estimate (NIE 
95-19) was produced which dealt with missile threats to the 
Continental United States in the next 15 years. This National 
Intelligence Estimate subsequently received much criticism from 
Congress and intelligence experts including, R. James Woolsey, 
former Director of Central Intelligence.
    In December 1995, President Clinton vetoed the original 
fiscal year 1996 Defense Authorization Act stating that its 
provisions calling for deployment of a national missile defense 
system by 2003 would be ``costly'' and that such a deployment 
was ``unwarranted.''
    In March 1996, the Clinton administration released its 
fiscal year 1997 Defense Budget request which called for $2.8 
billion for Theater Missile Defense, National Missile Defense, 
and the associated support technologies that comprise the 
Department of Defense's Missile Defense Program. The 
administration's budget request reflected a reduction of more 
than 25 percent from the amount authorized for ballistic 
missile defense in the fiscal year 1996 National Defense 
Authorization Act.
    In March 1996, Congressman Bob Livingston (LA) introduced 
the Defend America Act of 1996, H.R. 3144, which calls for a 
national missile defense system by 2003 to defend against a 
rogue missile attack or an accidental launch. Currently, the 
Deployment Readiness Program (formerly called the Technology 
Readiness Program) would not result in the deployment of an 
actual missile defense system because the Program is designed 
to support development, within 3 years of core elements of a 
nationwide Ballistic Missile Defense. The actual process of 
deploying such a missile defense system would take an 
additional 3 years, if and when a decision to deploy is made.
    In May 1996, the President repeated his assertions that a 
national missile defense system by 2003 would be costly and 
unwarranted. Among the administration's reasons for reluctance 
to support Congressional attempts to mandate a national missile 
defense were these: Deployment of an effective national missile 
defense system could raise concerns over compliance with the 
ABM treaty, and no immediate urgency to the long range missile 
attack threat.
    As a result of the foregoing events, this subcommittee the 
first in what is expected to be a series of hearings on May 30, 
1996. In that hearing, the subcommittee explored the rapidly 
evolving threat to national security posed by existing or 
potential rogue ballistic missile forces, and options for 
confronting this risk. The hearing also addressed the costs and 
benefits associated with competing near-term BMD options.
    b. Benefits.--The investigation into the Ballistic Missile 
Defense Program gave the committee timely insights into an 
important element of America's national security protection. 
Ensuring that this program continues to progress is crucial to 
our preparedness against the growing threat of ballistic 
missile terrorism. The committee learned a great deal about the 
budgetary constraints under which the program is operating, as 
well as it's potential for cost effective protection over the 
near-, medium-, and long-term.
    c. Hearings.--On May 30, 1996, the subcommittee held a 
hearing on the Nation's Ballistic Missile Defense System. The 
following witnesses offered testimony: Hon. Curt Weldon (PA); 
Hon. R. James Woolsey, former Director of Central Intelligence; 
Frank J. Gaffney, Jr., president of the Center for Security 
Policy; Dr. Keith B. Payne, president of the National Institute 
for Public Policy; and Michael Krepon, president of the Henry 
L. Stimson Center.

7. National Drug Control Strategy.

    a. Summary.--The threats posed by illegal drug use, 
especially among the Nation's youth, have continued to grow 
since the subcommittee's investigation began in January 1995. 
All national studies show a rise in drug use among teenagers. 
Both minority and majority members of the subcommittee have 
demonstrated a commitment to enhancing the drug control 
strategy.
    Pursuant to the National Narcotics Leadership Act of 1988 
(21 U.S.C. 1501 et seq.), the Director of the Office of 
National Drug Control Policy (ONDCP) develops a strategy and 
budget for anti-narcotics efforts, including both supply and 
demand reduction. In order to evaluate the strategy and find 
ways to both improve and supplement in the public and private 
sector, the Subcommittee on National Security, International 
Affairs, and Criminal Justice held 19 hearings supplemented 
with a fact-finding trip to the Caribbean drug transit zone and 
a full committee congressional delegation (CODEL) to the 
transit and source countries of Mexico, Panama, Colombia, 
Bolivia, and Peru. The first five subcommittee hearings and 
trip to the transit zone resulted in the March 19, 1996 
subcommittee report entitled ``National Drug Policy: A Review 
of the Status of the Drug War,'' and are described in an 
earlier section of this report. The following is a description 
of the other 14 hearings and congressional delegation trip to 
Central and South America.
    The National Narcotics Leadership Acts requires that the 
strategy: ``(A) include comprehensive, research based, long-
range goals for reducing drug abuse in the United States; (B) 
include short-term measurable objectives which the Director 
determines may be realistically achieved in the 2 year period 
beginning on the date of the submission of the strategy; (C) 
describe the balance between resources devoted to supply 
reduction and demand reduction; and (D) review state and local 
drug control activities to ensure the United States pursues 
well-coordinated and effective drug control at all levels of 
government.'' The oversight and investigation of drug policies 
and programs enabled the subcommittee to determine whether the 
current strategy and its execution continues to meet these 
statutory obligations.
    b. Benefits.--In addition to special orders by Members on 
the House floor, the creation of counterdrug working groups and 
an overall increase of awareness to the Nation's drug problem, 
the subcommittee's work also elevated interagency coordination, 
and contributed greatly to the advancement of the 
appropriations process. The subcommittee Members and staff met 
repeatedly with appropriators from each of the major 
appropriations subcommittees, as well as the full 
appropriations committee. The result was a careful targeting of 
additional counternarcotics funds in areas of paramount need. 
The hope is that sustained effort in these newly-revitalized 
areas will generate results over the short and long-run.
    c. Hearings.--(i) General Oversight.--On May 8, 1996, the 
subcommittee held a hearing entitled ``Oversight of the 1996 
National Drug Control Strategy,'' to hear from then newly-
confirmed Director of the Office of National Drug Control 
Policy, General Barry McCaffrey. This hearing was an 
opportunity for General McCaffrey to discuss and elaborate on 
the President's 1996 National Drug Control Strategy. The 1996 
National Drug Control Strategy states certain emphasis, goals, 
and budget priorities that are subject to congressional 
oversight.
    On October 1, 1996, the subcommittee held a second 
oversight hearing as a result of whistle-blower information 
regarding a secret, Pentagon-commissioned report on the 
effectiveness of interdiction in combating drugs and the 
ineffectiveness of Clinton's drug treatment strategy. The 
hearing, entitled ``Review of Internal Administration Study 
Critical of Clinton Drug Policy and White House Suppression of 
Study,'' was held to determine why the secret study's results 
had not previously been shared with Congress or even other 
government drug-fighting agencies. The subcommittee also sought 
to find out why analysis did not lead to changes in President 
Clinton's National Drug Control Strategy.
    The subcommittee reached three basic conclusions from 
examining the secret report: (1) Interdiction is a highly 
effective method of reducing the drug-using population leading 
to the inference that Clinton's deep interdiction cuts have 
been devastating to drug availability, potency, price and use; 
(2) the administration's heavy emphasis on drug treatment, at 
the expense of drug prevention and drug interdiction, has been 
a failure notably marked by reliance on a flawed RAND study; 
and (3) the Drug Czar's office actively suppressed this report 
and ignored its thorough analysis in forming policy.
    The study, conducted by the Institute for Defense Analysis 
(IDA), a well-respected and independent Pentagon think tank, 
refuted the conclusions of the flawed ``Controlling Cocaine'' 
study released by the RAND Corporation on which the President's 
strategy relies. The IDA study tracks close correlations 
between major interdiction operations and increases in the 
street price of cocaine, as well as availability and use. Based 
on this data, IDA revised the RAND estimates of cost-
effectiveness for interdiction compared to treatment and 
interdiction was shown to be much more cost-effective than the 
RAND study indicated.
    The subcommittee heard testimony from the authors of the 
study including Messrs. Rex Rivolo, Gary Comfort, and Barry 
Crane, and independent experts on research design, including 
Tom Snitch. Based on their testimony, the subcommittee 
determined that the report was extremely credible and confirmed 
their prior findings that interdiction is a cost effective 
counter-narcotics approach and Clinton's heavy-treatment 
approach has failed. The IDA study confirmed the importance of 
the efforts of subcommittee members to increase appropriations 
for interdiction activities in the FY 97 spending bills.
    In an attempt to uncover the source of suppression, the 
subcommittee also called General McCaffrey, the Drug Czar, and 
Admiral Robert E. Kramek, U.S. Interdiction Coordinator, who 
were involved in the events surrounding the suppression of the 
report. While testimony from several witnesses were not 
consistent, the subcommittee believes that Admiral Kramek took 
the preliminary findings of the report to General McCaffrey in 
March 1996. General McCaffrey declined to discuss the findings 
with the authors of the report who waited in the hall while 
Kramek and McCaffrey discussed the report. According to the 
authors, they felt that McCaffrey had dismissed their work out 
of hand and treated Kramek dismissively. Testimony received led 
the subcommittee to the same belief. At that point, in May 
1996, the report entered a seemingly endless process of 
revision and redrafting designed to prevent its release.
    In the subcommittee's preliminary investigation, it 
obtained several memos that passed between the authors of the 
studies and various administration officials suggesting 
inexplicable alterations in the findings of the document, like 
removing the cost-effectiveness comparison and the critique of 
the RAND study. The subcommittee believes that these were two 
of the most valuable sections of the report and clearly should 
have had great impact on forming a viable drug control 
strategy; failure to consider this evidence was deemed intent 
to support the misguided priorities of the current strategy for 
non-policy reasons.
    Based on the hearing, the subcommittee requested that 
agencies involved in the Drug War keep it apprised of all 
emerging research findings that should influence policymaking. 
Members of the subcommittee also renewed their commitment to 
enhancing interdiction as a vital component of the War on 
Drugs.
    (ii). Transit Zone Interdiction.--On May 23, 1996, the 
subcommittee held a hearing titled, ``National Drug Control 
Strategy: The Decline in Interdiction Efforts in the 
Caribbean.'' This hearing focused on the Nation's interdiction 
strategy in the international narcotics transit zone. According 
to U.S. Law enforcement officials, up to 30 percent of the 
cocaine entering the United States comes through the Caribbean 
section of the transit zone. U.S. officials believe that the 
level of maritime activity is increasing. In April 1994, the 
executive branch issued the National Interdiction Command and 
Control Plan to strengthen interagency coordination. The plan 
called for creating several joint interagency task forces made 
up of representatives from Federal agencies, including the 
Department of Defense (DOD), the Drug Enforcement Agency (DEA), 
the U.S. Customs Service (USCS) and the U.S. Coast Guard 
(USCG). The various U.S. activities are expected to be 
coordinated through the Joint Interagency Task Force East 
(JIATF-East) in Key West, FL. JIATF-East was to be supported by 
personnel from various agencies.
    Witnesses at this hearing included Jess Ford, Associate 
Director of International Affairs and Trade Issues, U.S. 
General Accounting Office; Admiral Robert Kramek, Commandant, 
U.S. Coast Guard; and a hands-on panel of Coast Guard officials 
directly involved in drug interdiction. This panel included 
Commander Arthur Brooks, Commanding Officer, U.S. Coast Guard 
Cutter SENECA; Lieutenant Kristine Horvath, Aircraft Commander, 
U.S. Coast Guard Air Station Miami; Lieutenant Glenn Gebele, 
Aircraft Commander, U.S. Coast Guard Air Station Clearwater; 
Lieutenant Greg Sanial, Commanding Officer, U.S. Coast Guard 
Cutter ATTU.
    As a follow-up to the May 23d hearing, the subcommittee 
conducted another transit zone hearing titled, ``Puerto Rico: 
The Rising Drug Threat and Some Recent Successes,'' held on 
June 10, 1996. This hearing was held aboard the U.S. Coast 
Guard Cutter COURAGEOUS in San Juan Harbor, Puerto Rico, and 
focused on the rising drug threat to the United States and 
Puerto Rico.
    It specifically explored the island's status as a major 
thoroughfare into the United States for narcotics, as well as 
Governor Rossello's achievements in the current war on drug 
trafficking organizations, and the requirements of Operation 
``GATEWAY'' and Operation ``LASER STRIKE.''
    Curbing the flow of illicit drugs through Puerto Rico would 
have a profound effect on the availability of drugs in the 
United States. Due to its proximity to both narcotics source 
countries and the United States mainland, the island has become 
a haven for those trying to escape more heavily funded 
interdiction efforts in the Bahamas and at the United States-
Mexican border.
    According to the DEA, Puerto Rico, along with the U.S. 
Virgin Islands corridor, is the target site of over 26 percent 
of all drug ventures. Once narcotics shipments reach the 
island, there is no further Customs inspection before the 
shipment reaches the United States mainland. The San Juan 
Airport has become the largest United States point of entry for 
illegal drugs by air.
    This hearing also addressed the problems facing the whole 
Caribbean region as a drug transit zone. The Puerto Rican State 
Government has implemented several initiatives which are 
committed to taking quick action against the many drug 
trafficking rings that have established themselves on the 
island. Included among these programs are the Safe Streets Task 
Force, the Most Wanted Task Force, the Money Laundering Task 
Force, and the Drug Enforcement Administration Task Force. Each 
of these programs works in concert with Federal agencies to 
combat the many criminal activities brought to the island by 
narcotics trade.
    The hearing also addressed Operation ``GATEWAY.'' Launched 
on April 15, 1996, Operation ``GATEWAY'' is a Customs 
interdiction program aimed at reducing the chances for 
successful smuggling in the air and on the seas. ``GATEWAY'' 
employs an array of sophisticated technology such as cargo 
container x-ray systems which Customs officials expect will 
greatly reduce the opportunities for undetected drug smuggling 
in Puerto Rico and the Caribbean.
    Witnesses at this hearing included Pedro Rossello, 
Governor, Puerto Rico; Pedro Toledo, superintendent of police 
and commissioner of public safety, Puerto Rico; Carlos Vivoni, 
secretary of housing, Puerto Rico; Manuel Diaz Saldana, 
secretary of the treasury, Puerto Rico; Vice Admiral James Loy, 
commander, U.S. Coast Guard Atlantic Area; Harv Pothier; 
Director, Air Interdiction Division, U.S. Customs Service; 
Felix Jimenez; Special Agent in Charge, Drug Enforcement 
Administration.
    The subcommittee then conducted a third interdiction 
hearing titled, ``Oversight of Federal Drug Interdiction 
Efforts in Mexico,'' on June 12, 1996, focusing on the growing 
threat posed by increased drug trafficking across the United 
States-Mexico border. It also explored the initiatives 
currently being enacted to foster enhanced joint efforts 
between the two nations.
    This hearing revealed findings of a 6 month GAO 
investigation into Mexican-United States counternarcotics 
efforts. This hearing also examined counternarcotics issues 
between the United States and Mexico as well as the extent to 
which four Mexican drug trafficking cartels dominate cocaine 
transshipment to the United States, and are major suppliers of 
heroin, marijuana and methamphetamine.
    Today, 400 tons of cocaine enter the United States 
annually, 70 percent across the Mexico-United States border; 
and 150 tons of methamphetamine are now produced in Mexico. 
These facts will be amplified at the hearing. Cross border 
shipments of these drugs have increased markedly in the past 
several years, while at the same time incidences of drug-
related arrests and confiscations have decreased. In 1995, 
Mexican authorities seized half as much cocaine as they did in 
1992 and made only a third as many drug-related arrests. This 
discrepancy persists despite what appears to be a renewed 
commitment by the Zedillo government to address this growing 
national security threat to both the United States and Mexico.
    Over the past 3 years, the United States played only a 
peripheral role in stemming the movement of drugs within 
Mexico. Following the 1993 kidnaping of a Mexican national for 
trial in the United States, the Mexican Government refused 
nearly all United States counternarcotics assistance, and has 
restricted the presence of the DEA within its borders. 
Consequently, U.S. efforts in the region have been all but 
paralyzed. Although the Zedillo government has recently made a 
show of force against major trafficking organizations, there 
are widespread reports of corruption among the ranks of the 
Federal and State police forces, as well as within the National 
Institute for Combating Drugs.
    The growing influx of narcotics along the U.S. Southwestern 
border poses a rising national security threat. The inability 
of the Mexican Government to contain the problem underscores 
the need for renewed cooperation with United States officials. 
Prior to its 1993 decision to assume all costs of the 
counternarcotics effort within its borders, Mexico was the 
largest recipient of anti-narcotics aid from the United States, 
which also provided much-needed equipment and personnel 
training support.
    The shortage of United States anti-narcotic support 
contributed to the deterioration of the situation in Mexico. 
With this realization, steps were finally initiated this year 
to forge new ties between drug enforcement authorities in the 
two governments. In March 1996, The Clinton administration 
joined with Zedillo's government to establish a high level 
contact group to address the narcotics threat faced by both 
nations. Drug control issues have also been assigned elevated 
importance at the United States embassy in Mexico City. A key 
challenge is the need to strike a balance between restoring 
stronger interdiction measures and continuing the free trade 
practices introduced through NAFTA.
    Witnesses at this hearing included Ben Nelson, Director of 
International Relations and Trade Issues, U.S. General 
Accounting Office; George Weise, Commissioner, U.S. Customs 
Service; Doug Wankel, Chief of Operations, Drug Enforcement 
Administration.
    (iii). Drug Testing in Corporate America.--The subcommittee 
also conducted a hearing on Corporate America's role in the 
counterdrug effort and the importance of drug testing on June 
27, 1996. This issue is of paramount importance because there 
is a serious drug abuse problem in America's present and future 
work place. Department of Labor studies have estimated that 
drug abuse in the workplace costs American businesses in excess 
of $100 billion annually. This affects the employer and 
consumer through decreased worker productivity, increased 
accidents, poor quality products, and higher medical and 
insurance costs. In addition, co-workers of abusers are 
unnecessarily burdened by higher medical and insurance 
premiums, greater risk of injury on the job (drug-using 
employees are 3.6 times more likely to have accidents according 
to Strategic Planning for Workplace Drug Abuse Programs, 
National Institute on Drug Abuse), and the general disruption 
that intoxicated and compromised employees bring to the 
workplace.
    Witnesses included Mark A. de Bernardo, executive director, 
Institute for a Drug-Free Workplace; C.R. Cummings, manager of 
labor relations & employment, Chevron; William L. Bedman, 
Esquire, assistant general counsel, Brown & Root; and Kevin 
Connors, director for Safety and Department of Transportation 
Compliance, Waste Management, Inc.
    Drug testing offers companies, employers and employees an 
excellent means to combat drug abuse. The subcommittee well 
understands that drug testing must be done properly and with 
full respect for individuals' civil rights. To be effective, 
there are several criteria which must be met as a threshold 
matter: (1) all testing should be done in accordance with a 
written policy which may be reviewed by employees; (2) test 
samples should be properly handled and documented; (3) only 
certified laboratories that employ scientifically accepted 
methods should test; (4) multiple tests and multiple techniques 
should be used to assure a positive result; and (5) 
confidentiality should be maintained whenever reasonable, 
feasible or necessary.
    The subcommittee, after extensive review, concluded that 
when done professionally and fairly, drug testing is 
unintrusive and highly effective, both case-by-case and as a 
deterrent to future use. However, drug testing itself is 
clearly just one element in drug prevention. It is an important 
first step to help businesses move beyond detection, and into 
treatment and future prevention through education.
    Based on the subcommittee's investigation, subcommittee 
Chairman Zeliff introduced H.R. 4017, the ``Drug-Free Workplace 
and Public Safety Assurance Act of 1996,'' on August 2, 1996. 
This bill would amend the Americans with Disabilities Act of 
1990 and the Rehabilitation Act of 1973 to exclude individuals 
with records of engaging in the abuse of drugs or alcohol from 
protection under the Americans with Disabilities Act regarding 
``safety-sensitive'' employment functions (any job in which an 
employee could significantly contribute to an accident 
resulting in loss of human life, serious bodily injury, or 
significant property or environmental damage). Currently, 
former drug addicts and alcoholics are considered ``disabled,'' 
and therefore receive protection from discrimination even if 
they pose a risk to the general public. Subcommittee Chairman 
Zeliff's bill would properly narrow the definition of 
``disabled'' and remove former drug abusers from this 
classification. This would (1) prevent suits against employers 
who, in good faith, transfer or remove individuals from 
``safety-sensitive'' positions that have a provable medical 
history of extensive illegal drug abuse or alcoholism, and (2) 
allow employers to consider former drug use as a condition for 
denial of employment for ``safety-sensitive'' positions, such 
as airline or oil tanker pilots.
    (iv) Field Hearings.--Members of the subcommittee also 
traveled to several regions of the country to examine the 
counter-narcotics efforts by communities, State, and local law 
enforcement agencies, as well as cooperation of those groups 
with local offices of Federal counter-drug agencies.
    Taken as a whole, these field hearings generated two basic 
conclusions. First, the most successful way to combat drugs is 
for whole communities to become engaged in tackling the issue 
and to work in partnership or collegially. This includes 
families, schools, law enforcement, business, church, 
synagogue, and other community leaders. Second, controlling 
drugs at the border and at their origins is essential to 
combating their abuse, and to limiting the violence associated 
with their use and distribution, especially in the southwest 
border States.
    The subcommittee held three field hearings in the Midwest: 
one in Fort Wayne, IN on June 24, 1996, entitled ``Report from 
the Front Line: Fort Wayne's Battle Against Drugs''; the second 
in Elgin, IL on June 24, 1996, entitled ``Report from the Front 
Line: Chicago's Land Area's Battle Against Drugs''; and the 
third in Lansing, MI on September 3, 1996, entitle ``Report 
from the Front Line: Michigan's Battle Against Drugs.'' In 
these Midwestern States, testimony made clear that border 
activity has a dramatic effect on drug-related efforts in the 
schools, communities, and homes of America's ``heartland.'' 
According to Harold Wankel, of the Drug Enforcement Agency, 
drug traffickers move their illegal cargo over the border in 
Texas and Arizona, bring it through Fort Wayne and on to 
Chicago and Detroit. This trafficking pattern has had serious 
adverse impacts in cities like Fort Wayne where the drug 
problem was fairly mild only a few years ago and has become a 
crisis in the last 2 years with soaring levels of drug-related 
gang violence. Controlling drugs at the border is one key 
component of reducing their insidious effects in the Midwest.
    In the West and Southwest, the subcommittee held field 
hearings in Los Angeles and San Lusi Obispo entitled ``Report 
from the Front Line: The Drug War in Hollywood'' and ``Report 
from the Front Line: The Drug Battle in California'' on 
September 21 and 23, 1996, respectively, and in Phoenix, AZ on 
October 10, 1996, entitled ``Report from the Front Line: Losing 
America's Drug War, `Just Say No' to `Just Say Nothing.' '' The 
first hearing in this area covered a topic of growing 
significance and concern, namely Hollywood's ``glorification,'' 
promotion, and general influence on youth drug use. The 
subcommittee heard testimony from several actors and producers 
who have been fighting what they describe as a ``losing 
battle'' to reduce the portrayal and promotion of drug use and 
violence in contemporary American films. According to these 
witnesses, including Dee Wallace Stone, the film business elite 
are convinced that drugs and violence ``sell.'' Until they are 
brought face-to-face with the violence and tragedy this 
approach creates, Hollywood will remain aligned against 
producing more positive, family-oriented entertainment.
    The hearings in San Luis Obispo and Phoenix focused on law 
enforcement, education, and treatment. Based on testimony from 
leading local officials in the FBI, DEA, Customs Service, 
Immigration and Naturalization Service, National Guard and 
State and local police, the subcommittee identified weaknesses 
in the sharing of intelligence and cooperation between these 
groups. The subcommittee was encouraged with the success of the 
High-Intensity Drug Trafficking Area (HIDTA) initiative which 
has enhanced cooperation and intelligence sharing, especially 
in Arizona. The subcommittee also learned that the most 
effective treatment programs are ``faith-based'' and receive no 
government funds. As witnesses testified, part of the success 
of these programs appears to be their reliance on the 
community, rather than government, for support. This community 
self-reliance allows programs to grow responsively and thus 
benefit the community rather than becoming untargeted, 
bureaucratic, or a nuisance to it. Awareness of the programs 
and substantial success rates have resulted.
    The subcommittee conducted its final field hearing in Lake 
Mary, FL, a suburb of Orlando on October 14, 1996. The hearing 
was entitled ``Report From the Front Line: The Drug Crisis in 
Central Florida.'' Several years ago, Orlando was only a 
transshipment point for drug traffickers; in the past year, 
however, it has become a major distribution point. Heroin-
related deaths of several area teenagers have motivated the 
community to address this problem conscientiously and together. 
Again, the subcommittee found that ``faith-based,'' non-
government treatment programs had the greatest impact. The 
subcommittee also received persuasive testimony on the 
importance and challenges of fighting drugs in the schools. In 
a nutshell, school officials are extremely limited by current 
regulations and laws in the actions they can take to uncover 
youth drug use and drug distribution in the schools.
    (v). Current Availability and Drug Use Trends.--The 
subcommittee held two hearings on the magnitude and growth of 
the drug problem: ``Heroin: A Re-Emerging Threat'' on September 
19, 1996; and ``The Epidemic in Teen Drug Use'' on September 
26, 1996. Both hearings were held after the release of 
significant 1996 studies on the magnitude of drug use. These 
studies included the National Household Survey, the Drug Abuse 
Warning Network (DAWN) report, the 1996 PRIDE Survey, and a 
study by the Center on Addiction and Substance Abuse at 
Columbia University gauging attitudes of parents and youth 
toward drug use. All of the studies point to an alarming 
increase in drug use by youth in the last 4 years, and 
correlate disturbingly with rising violent, drug-related youth 
crime.
    At the heroin hearing, the subcommittee learned that heroin 
has roared back as a major threat to America's youth. The new 
heroin is both more potent and cheaper than in the 1960's and 
1970's, when heroin made a major appearance on the national 
scene. New international heroin trafficking routes have also 
appeared. Today, heroin comes not only from Southeast Asia, but 
from Latin America as well. Indeed, 62 percent of the heroin 
entering the United States now originates in, or passes 
through, Colombia. The Colombian cartels have begun to use 
their increasingly secure cocaine distribution network to 
market heroin, in part accounting from the dramatic upsurge in 
use.
    Throughout 1996, the subcommittee investigated the 
administration's lack-luster response to the new usage patterns 
for heroin. The administration released their heroin strategy 
more than a year after it was promised by President Clinton; 
while it was promised in 1993, the Clinton anti-heroin plan 
only appeared at the start of the Presidential primary season 
on November 29, 1995. That strategy has yet to be implemented, 
or to have any implementing guidelines issued to support it. 
Accordingly, little progress had been made on any of the 
ambitious goals articulated therein. Finally, a GAO report 
commissioned by the subcommittee identified many emerging 
problems associated with enforcement in Southeast Asia, and the 
general failure of the administration to respond to them.
    At the subcommittee's hearing on teen drug use, testimony 
was heard from organizations that conducted leading surveys on 
teen drug abuse, as well as from individuals involved in 
preventing drug abuse among America's youth. Expert witness 
testimony clarified the already alarming picture presented by 
the studies, and expounded the difficulties in delivering a no-
use anti-drug message against the backdrop of a President, 
media, and parents, who seem ambivalent. The subcommittee also 
discussed H.R. 4016, the Drug Free Schools Reform Act of 1996, 
introduced by subcommittee Chairman Zeliff which was designed 
to help correct this problem by eliminating fraud and abuse in 
the Drug Free Schools program, while insuring that all moneys 
spent under the program support a clear, no-use message.
    (vi). Congressional Delegation to Transit and Source 
Countries.--A delegation of committee and subcommittee members 
participated in a counternarcotics trip to the major transit 
and source countries of Mexico, Panama, Colombia, Bolivia and 
Peru from April 8-15, 1996. Members met with top 
counternarcotics officials in each country, including the 
Presidents of Mexico and Peru, the chief of the Colombian 
Police (who has lost more than 3,000 officers), Colombia's top 
counternarcotics prosecutor (who has indicted the top Cali drug 
kingpins, seven cabinet officers and over 100 members of the 
Colombian Congress), top Bolivian officials and DEA agents in 
the field, Bolivian military counternarcotics leaders, and 
Peru's air force and marine personnel, including generals and 
pilots responsible for Peru's highly successful force-down/
shoot-down policy (a policy that has virtually arrested air 
traffic in cocaine from Peru to Colombia, reduced coca prices 
ten-fold, and resulted in 20 percent to 40 percent of the coca 
fields being abandoned in Peru).
    Despite cables indicating 22 deaths from terrorist bombings 
on April 10, 1996 in Colombia, and discovery of dynamite at 
Colombia's Supreme Court also on April 10, CODEL Members stood 
by their commitment to meet with the Colombian Chief of Police, 
General Serrano, and top counternarcotics and anti-corruption 
prosecutor, Prosecutor General Valdivieso on April 11.
    In Bolivia, Members traveled by C-130 military transport to 
a deep jungle military base camp in the Chapare region, where 
most of the coca leaf is grown. After classified briefings on 
the status of counternarcotics efforts in this major region of 
cocaine base production, Members boarded UH-1H Huey helicopters 
and flew to the location of a remote drug lab and coca fields, 
where they observed first-hand the destruction of the drug lab 
by UMOPAR (elite Bolivian counternarcotics troops) and observed 
destruction of clandestine coca fields, and seed beds.
    The CODEL's mission was essentially two-fold: Members 
sought to observe how effective the source and transit country 
programs were, including what resources in-country teams needed 
to better implement U.S. counternarcotics strategy; and the 
CODEL sought to deliver strong messages to each of the 
respective governments on the U.S. commitment to 
counternarcotics and the commitment expected of these countries 
by the United States, as well as our appreciation for their 
efforts where that was appropriate. Both missions were 
accomplished, as reflected not only in subsequent subcommittee 
work, but in the total 1996 anti-drug appropriations package, 
and such subsequent events as Peruvian President Fujimori's 
first visit to the United States in 1996.
    On April 8, CODEL Members flew to Mexico City, where they 
were briefed by Ambassador Jones on counternarcotics efforts 
underway in Mexico. Members delivered the strong message to 
Mexican President Zedillo and Members of the Mexican Congress 
that counternarcotics efforts must become a top priority with 
the Mexican Government, and close cooperation with United 
States is vital for both nations. Joined by Senator Paul 
Coverdell, Members spent 2 hours meeting with the Mexican 
Congress; the American delegation expressed frustration at that 
nearly 70 percent of the cocaine entering the United States 
comes across the United States-Mexican border, along with 
significant quantities of methamphetamine, heroin, and 
marijuana.
    The CODEL confirmed that counternarcotics is now a top 
objective of the United States Embassy in Mexico, which it had 
not been until very recently, and further confirmed that U.S. 
policy us directed at four subsidiary priorities: (1) 
apprehending heads of the highly violent Mexican drug cartels; 
(2) encouraging Mexico to enact money laundering, Anti-
Organized Crime, conspiracy, criminal forfeiture, confidential 
informant and wiretap legislation similar to United States 
laws; (3) institution building to stem the corrupting influence 
of narcotrafficking; and (4) continued narcotics crop 
eradication and operational counternarcotics law enforcement.
    The CODEL was pleased to hear President Zedillo and his 
Foreign Minister, Jose Angel Gurria, state that 
narcotrafficking is ``Mexico's number one national security 
threat.'' Both the President and his Foreign Minister expressed 
a personal commitment to fighting the narcotraffickers with 
U.S. cooperation.
    On April 9, Members flew to Panama and the United States 
Southern Command (SOUTHCOM), which plans and coordinates U.S. 
counternarcotics strategy for the source countries. Members 
discussed potential vulnerabilities in the War on Drugs with 
the U.S. Ambassador and U.S. Officials at SOUTHCOM. Meetings 
with Panama's Vice President and National Security Advisor 
reinforced the vulnerability of Panama as a major money 
laundering and drug transit route, especially at its border 
with Colombia, which remains essentially uncontrolled. A 
briefing was conducted on the 1995 operation called GREEN 
CLOVER, which featured a highly successful regional 
coordination counternarcotics effort run by SOUTHCOM.
    In Bogota, Colombia, the Members met with U.S. Ambassador 
Frechette, Prosecutor General Valdivieso, National Police Chief 
Serrano, Defense Minister Esguerra and Commander of the 
Colombian Armed Forces Admiral Delgado.
    Members expressed clear appreciation for Colombia's recent 
anti-Cali efforts, particularly those of General Serrano and 
Prosecutor General Valdivieso, and discussed the status of 
current and future counternarcotics cooperation and efforts. 
Members focused on ways to improve United States and Colombian 
cooperation and coordination in destroying the Colombian drug 
trafficking organization, particularly the Cali cartel, which 
ships cocaine and heroin to Mexico and the United States. 
Members also inquired about, and expressed concern about, a 
longstanding (October 1995) request for replacement helicopters 
needed by the Colombian National Police (replacing two shot 
down or destroyed in crashes).
    On April 12, the congressional delegation arrived in Santa 
Cruz, Bolivia. Bolivia is the second largest producer of coca 
and cocaine base, which is then generally processed in Colombia 
(into cocaine HCL, cocaine) for transshipment (through Mexico 
and the Caribbean) to the United States. Colombian cocaine has 
been found in quantity in every city in the United States. This 
cocaine originates with the coca and cocaine base created in 
Bolivia's Chapare region and in the Peruvian Andes mountains, 
largely the Upper Huallaga Valley.
    The delegation traveled to a key jungle base camp manned by 
DEA and Bolivian elite counternarcotics troops (UMOPAR) in 
Chapare region of Bolivia. Field commanders briefed the Members 
on the strategy being employed to find and destroy clandestine 
coca labs, eradicate illegal coca fields, and spur alternative 
crop development.
    Members were able to see where major coca fields had been 
eradicated and where others were growing. At the same time, 
Members could see evidence of successful alternative 
development, in particular the increased production of bananas. 
Members then traveled with the UMOPAR, DEA representatives and 
the U.S. Ambassador to the site of a jungle cocaine drug lab 
and maceration pit discovered the day before. In this remote 
location, Members saw firsthand the coca leaves, chemicals and 
other implements used by the cocaine base producers. With the 
Members present, the military destroyed the cocaine lab and 
maceration pits, and then destroyed adjacent coca fields and 
coca seed beds.
    On April 13, the Members left Santa Cruz, Bolivia for Lima, 
Peru. Peru is the single largest coca-producing country in the 
world, responsible for two-thirds of all coca production 
worldwide and 80 percent of the cocaine that reaches the United 
States. In Lima, the delegation met with President Alberto 
Fujimori, becoming one of the most recent congressional 
delegations to meet with Peru's President in many years. The 
delegation expressed appreciation for Fujimori's successful 
efforts to cut off the so-called ``Peru-to-Colombia air 
bridge,'' the route by which narcotraffickers were--until very 
recently--flying the cocaine base to Colombia. The Peruvian 
President's conviction that this link had to be broken, and his 
implementation of a force-down/shoot-down policy (with 
carefully identified warnings, chances to come to ground, 
signals and radio contacts prior to shoot down), has been 
highly successful.
    This U.S. counternarcotics CODEL generated enormous insight 
into our counternarcotics strategy's strengths and weaknesses, 
operational strengths and weaknesses, coordination problems and 
gaps, specific in-country resource needs, various national 
convictions and attitudes toward fighting and winning this war, 
and the extreme circumstances and dangers under which all those 
(including American government personnel) pursing our joint 
strategy function on a day-to-day basis.
    Specific facts and recommendations resulting from the CODEL 
include:
    1) A higher degree of cooperation and coordination in 
counternarcotics efforts is badly needed with Mexico. However, 
recent and foreseeable events have the potential for making a 
marked difference in addressing what has now become Mexico's--
and our--No. 1 national security threat;
    2) Mexico is now acknowledging that drugs present the 
``number one national security threat'' to that nation;
    3) Mexico's President and Foreign Minister appear ready to 
work more closely with the United States in a number of 
specific areas which will assist in combating the rise of the 
four main drug cartels in Mexico;
    4) The CODEL confirmed that counternarcotics is now a 
priority of the United States Embassy in Mexico, focusing on 
four main objectives: a) apprehending heads of four highly 
violent Mexican drug cartels; b) encouraging Mexico to enact 
money laundering, anti-organized crime, conspiracy, criminal 
forfeiture, confidential informant and wiretap legislation 
similar to United States laws; c) institution building to stem 
the corrupting influence of narcotrafficking; and d) continued 
narcotics crop eradication and operational counternarcotics law 
enforcement;
    5) Mexico objects to the certification process, despite 
having been fully certified this year. This objection is deeply 
rooted in apprehensions about their northern neighbor;
    6) Mexico's Congress and Administration want closer direct 
ties with the U.S. Congress, to facilitate both communication 
and policy coordination and understanding;
    7) Panama's current position of transition, particularly 
with respect to U.S. base hand-overs, is presenting the country 
with a serious dilemma. Against the backdrop of rising money 
laundering by Colombian drug traffickers in Panama 
(particularly in projects such as high-rise construction) and 
nearby border incursions from criminal elements in Colombia, 
there is a view that Colombia's narcotraffickers could increase 
their presence in Panama if coordinated regional action is not 
more forthcoming and vigorous. It is a critical thing for the 
United States to stay engaged and to provide needed 
counternarcotics and other assistance to Panama;
    8) Colombia's National Police, Prosecutor General and 
Defense Chief all displayed their clear and convincing 
commitment to the drug war, and creative new thinking in ways 
to increase the pressure on the Cali Cartel and others. Clear 
U.S. appreciation for the commitment of the Police and 
Prosecutor is deserved, although the Nation's constitutional 
crisis at the very top was also evident. Narcoterrorism remains 
a clear problem, and there is concern that the U.S. commitment 
in-country to this mission must remain strong to fight these 
two closely allied elements of terrorism and narcotrafficking. 
Particular resource needs in-country were discussed. Particular 
funding priorities were also discussed, and will be explored 
further. The need, for example, for replacement helicopters--
still inexplicably delayed by the Department of State--was a 
matter of shared and serious concern;
    9) Bolivia's UMOPAR and in-country team, especially DEA and 
others on the front lines, was in considerable need of support 
and seemed a victim of the phenomenon that ``Washington often 
punishes those who effectively do more with less.'' This 
impression was compounded by basic observation in the Chapare 
of the obstacles facing lab identification, crop eradication, 
narcoproducer apprehension, UMOPAR training and support, 
attitude change with respect to coca and alternative crop 
production. Specific resource needs were discussed--as they 
were with each in-country team--and were openly weighed against 
the results being shown. Regional coordination--and the need 
for more of it--was voiced by those in every country; and
    10) Peru's air interdiction and riverine efforts in the 
Central Huallaga Valley, and the United States presence that 
has assisted in these efforts, need greater support. As with 
Bolivia and Colombia, near heroic efforts are being shown by 
those on the ground and in the local and United States 
counternarcotics teams. These efforts should receive needed 
resources, particularly now, with President Fujimori's current 
political will and support. These include clear needs for 
consistent, adequately funded counternarcotics and alternative 
crop development programs.
    Perhaps more than any other recommendations out of this 
trip three elements stand out: First, our source and transit 
country interdiction, overall counternarcotics and alternative 
crop development efforts must be consistent over the long-term. 
There can be no more, for example, halting and reprogramming of 
key alternative development assistance (as has occurred in the 
past 3 years); no more failure to provide key support 
assistance to facilitate programs known to be successful when 
properly and consistently funded.
    Second, these programs, while perhaps subject to earlier 
coordination or management problems, are now clearly making a 
difference and are positioned to establish significant, 
increasingly permanent gains--in population attitudes, 
apprehensions and prosecutions, narco-organizational 
destruction, crop eradication, air interdiction, riverine 
interdiction and obtainment of overall counternarcotics aims.
    Third, for a small amount of moneys for police training, 
air wing operations and other counter-narcotics initiatives, we 
can and must end the massive flow of drugs to our Nation.

8. Department Of Defense Bulk Fuel: Appropriations vs. Usage.

    a. Summary.--The Department of Defense (DOD) has 
consistently requested and received excessive funding for fuel 
products. For a number of years, DOD's funding requests have 
been significantly in excess of both anticipated and actual 
needs. For example, for fiscal year 1996, DOD requested $4.01 
billion to buy fuel from the Defense Fuel Supply Center (DFSC), 
which is the central DOD component that supplies fuel to all 
the services. However, the DFSC estimated that the services 
would need to purchase only $3.57 billion worth of fuel in FY 
1996, leaving the additional $440 million as ``extra'' money 
which DOD could divert to other expenditures, such as 
administrative costs, property management and contingency 
operations. Similarly, the General Accounting Office (GAO) has 
estimated that for fiscal year 1997, DOD's $3.796 billion 
request for fuel is excessive by $183 million. While it may be 
a positive sign that the predicted overage is smaller for FY 
1997 than it was for FY 1996, the amount of extra funding is 
still substantial.
    DOD has attempted to justify its large bulk fuel funding 
requests by explaining that the services are often faced with 
new missions and other unanticipated contingencies, which 
require significant expenditures by DOD. However, these new 
missions and contingencies are supposed to be funded by 
supplementary appropriations--and not by ``extra'' money in 
certain DOD accounts--so that Congress has firm control over 
the appropriations process. Still, DOD contends that sometimes 
supplementary appropriations do not occur in a timely and 
sufficient manner.
    The larger point, however, is that when DOD develops the 
habit of requesting money for one purpose and then diverting it 
to another, it is usurping the power of Congress to appropriate 
funds. DOD may request additional funds to cover the cost of 
unanticipated contingencies, or for expenses which it knows 
Congress will approve of in order to spend the money on 
something that Congress might not approve; however, in either 
case, Congressional oversight and control over the public purse 
is being thwarted. This lack of oversight and accountability 
can easily lead to significant waste of taxpayer dollars.
    The example of bulk fuel spending is repeated in many other 
areas within the $81 billion fiscal year 1996 Operations and 
Maintenance (O&M) budget (almost a third of the entire defense 
budget). It covers everything from the training of tank 
battalions to the running of day care centers, and is a 
particularly ``flexible'' source of funding within DOD.
    b. Benefits.--If it is just a matter of DOD using faulty 
accounting methods to put together its budget request, then 
those methods must be revised. If, on the other hand, this over 
budgeting is intentional, then we must reform the DOD budgeting 
process to insure greater honesty and accountability. More 
generally, responding to heightened congressional scrutiny, the 
GAO has found that within the O&M accounts, the Army and the 
Air Force consistently request excess funding for combat-
readiness-related purposes, yet actually spend the money on 
administrative costs and infrastructure expenses. The GAO was 
unwilling to speculate as to whether or not such 
miscalculations were intentional or merely accidental.
    For example, the Navy was consistently miscalculating 
future fuel requirements because it based those requirements on 
average fuel consumption over 4 years. Because the Navy 
downsized from over 500 ships to about 350 in the last 6 years, 
the estimate was overstated. To correct this, the Navy will now 
calculate future requirements based on the previous 3 years' 
usage. Furthermore, DOD contends that the lengthy request and 
appropriations process makes accurate estimations extremely 
difficult. DOD witnesses maintain that budget adjustments 
during the course of a fiscal year are understandable, due to 
unpredictable military operations, a desire to provide budget 
flexibility to field and base commanders, and uncertainty 
surrounding supplemental appropriations.
    It is clear and indisputable that, with DOD budgets 
shrinking in recent years and the number and variety of DOD 
missions continuing to increase, every dollar should be 
appropriated and spent efficiently in accordance with the 
direction of Congress. There is no room for padding of accounts 
within the O&M budget. Improvements can only enhance the 
security of our Nation.
    c. Hearings.--``Department Of Defense Bulk Fuel: 
Appropriations vs. Usage,'' July 30, 1996. Sharon A. Cekala, 
Associate Director, Military Operations and Capabilities 
Issues, National Security and International Affairs Division, 
and Michael J. Curro, Assistant Director, Budget Issues Area, 
testified for the General Accounting Office. These witnesses 
testified that extra money is consistently requested for 
Purpose A, and then diverted to Purpose B. They referred to 
specific examples, such as the bulk fuel account, the operating 
tempo (optempo) account, from which the Army diverted one-third 
of its $3.6 billion combat training budget to other purposes, 
(e.g., base operations and real property maintenance), during 
fiscal years 1993 and 1994, and the depot maintenance account. 
In the later area, the Army and Navy requested $418 million 
more--and received $838 million more--than they executed for 
depot-level maintenance in fiscal year 1993 and 1994.

9. Oversight of the National Aeronautics and Space Administration.

    a. Summary.--The subcommittee conducted an investigation of 
the National Aeronautics and Space Administration's 
infrastructure ``downsizing'' efforts. In the early 1990's, 
NASA infrastructure supported an agency with a projected annual 
budget of more than $20 billion by fiscal year 2000. Yet, over 
the last few years, the agency has been repeatedly directed to 
reduce its future years' budget levels: In the fiscal year 1994 
budget request, NASA's funding for fiscal year 1994 though 
fiscal year 2000 was decreased by 18 percent, or $22 billion. 
In the fiscal year 1995 budget request, total funding for NASA 
was reduced again by almost 13 percent, or another $13 billion. 
And in fiscal year 1996, NASA's projected budget through fiscal 
year 2000 was lowered an additional 5 percent, or $4.6 billion.
    In response to these early budget reductions, NASA 
initially focused on adjusting programs (stretching out, 
reducing the scope, or terminating existing efforts and/or 
postponing new initiatives). However, after the fiscal year 
1996 budget request, NASA Administrator Dan Goldin announced 
that the agency would compensate the budget shortfall by 
reducing infrastructure, including consolidating and closing 
facilities. In addition, NASA planned to reduce its use of 
support contractors and decrease its workforce to about 17,500 
by the year 2000, calling for its smallest workforce since the 
1960's. NASA also set a goal of decreasing the current 
replacement value \61\ of its facilities by $4 billion (25 
percent) by the end of fiscal year 2000. By all indications, 
current facilities reduction plans will not meet NASA's 
reduction goal or even yield substantial cost reductions. In 
addition, many of NASA's closure and consolidation efforts have 
lacked objective, well-supported decisions and not included 
sufficient consideration of reasonable alternatives.
---------------------------------------------------------------------------
    \61\ Current Replacement Value is the acquisition cost of 
facilities, excluding land, plus the cost of collateral equipment and 
incremental book value changes escalated to the current year using a 
20-city average cost index for building.
---------------------------------------------------------------------------
    The General Accounting Office (GAO) has found that NASA 
personnel in identifying, assessing, or implementing some cost-
reduction opportunities have (1) overlooked larger potential 
cost-reduction options; (2) limited the scope of consideration 
for consolidation; (3) performed poor initial cost-reduction 
studies; (4) made inappropriate closure recommendations; and 
(5) substantially overstated cost-reduction estimates. GAO has 
also identified NASA's failure to decrease its current value 
replacement and lack of progress in DOD and NASA cooperative 
efforts. The subcommittee and GAO acknowledge that 
environmental clean-up costs could affect facility disposition 
efforts.
    In GAO's report,\62\ it has recommended that NASA conduct 
an objective review of network consolidation. NASA agreed that 
an independent group would conduct the review and decided that 
its telecommunications experts would not participate in the 
review because they have a ``biased'' perspective.
---------------------------------------------------------------------------
    \62\ Telecommunications Network: NASA Could Better Manage Its 
Planned Consolidation (GAO/AIMD-96-33, Apr. 9, 1996).
---------------------------------------------------------------------------
    In June 1995, NASA teamed up with DOD to begin studying how 
the two agencies could reduce their operations costs and 
increase mission effectiveness and efficiency. These study 
teams began work in September 1995 in seven areas. GAO 
monitored the groups progress in three areas--major facilities, 
space launch activities, and base/center support and services.
    Both the major facilities and space launch activities teams 
were to assess facilities' utilization and recommend potential 
consolidation and closures. Neither team made such 
recommendations nor identified cost reductions in their April 
1996 briefings to the Aeronautics and Astronautics Coordinating 
Board. However, they did identify barriers to increased 
cooperation and coordination which include conflicting goals 
and differences in cost accounting systems, practices and 
standards. Another significant barrier they identified is that 
each NASA and DOD program was protecting its ability to 
maintain technical expertise and competence, i.e. the ``old 
paradigm.''
    The base/center support and services team did examine eight 
NASA centers and one test facility geographically near DOD 
installations and reported finding over 500 existing support 
arrangements and identified additional cooperative 
opportunities. However, barriers to the joint support 
arrangement were cited, including different negotiated wage 
rates and possible complications in existing procurement in 
small and disadvantaged business set-aside programs. Additional 
work will continue and a joint DOD-NASA report is expected to 
be released in the near future.
    If NASA is to remain within its budget constraints and 
downsizing goals, NASA must institute major changes in how it 
conducts consolidation studies and implements its downsizing 
plans. To maximize its infrastructure cost-reduction 
opportunities, NASA needs to ensure that its consolidation and 
closure decisions are well supported, with an adequate balance 
of expertise and interests on study teams and a fair and 
thorough consideration of reasonable alternatives.
    b. Benefits.--The subcommittee's review of major management 
issues at NASA focused attention on significant weaknesses in 
the agency's infrastructure downsizing efforts, which will 
require a long-term commitment and a sustained effort to 
correct. Throughout its year-and-a-half-long investigation, the 
subcommittee has exposed a number of problems in the National 
Aeronautics and Space Administration's downsizing efforts. 
Three GAO reports \63\ resulting from the subcommittee's 
review, found a number of deficiencies in NASA's efforts.
---------------------------------------------------------------------------
    \63\ Telecommunications Network: NASA Could Better Manage Its 
Planned Consolidation (GAO/AIMD-96-33, April 1996); NASA Chief 
Information Officer: Opportunities to Strengthen Information Resources 
Management (GAO/AIMD-96-78, Aug 1996); NASA Infrastructure: Challenges 
to Achieving Reductions and Efficiencies (GAO/NSIAD-96-187, Sept 1996).
---------------------------------------------------------------------------
    In this time of shrinking budgets, it is important to 
ensure that NASA's programs are well-managed and that each tax 
dollar is spent wisely. The subcommittee's oversight has 
strongly encouraged NASA management to review the process by 
which it was downsizing infrastructure and led to a candid 
recognition of these problems by Administrator Goldin and he 
promised to take corrective action.
    c. Hearings.--On September 11, 1996, the subcommittee held 
a hearing entitled, ``Oversight of NASA's Infrastructure 
Downsizing Efforts.'' Testimony was received from NASA 
Administrator Daniel S. Goldin, NASA Inspector General Roberta 
Gross and General Accounting Office personnel. This hearing 
examined those deficiencies in NASA decisionmaking process 
found in our investigation and attempted to address other 
problems that NASA management is encountering.

10. INS.

            INS Citizenship USA Program.
    a. Summary.--An investigation of the Immigration and 
Naturalization Service's (``INS'') Citizenship USA (CUSA) 
program has uncovered a pervasive and alarming pattern of 
election-year fraud and abuses within the INS' naturalization 
process.
    CUSA was designed to enlarge and accelerate the INS' 
naturalization process from August 31, 1995 through September 
30, 1996. INS statistics suggest that during that period INS 
almost reached its stated goal of naturalizing approximately 
1.3 million new citizens. This represents roughly four times 
the annual average of naturalization from 1990 through 1994, 
and triple 1995's total of 450,000. INS efforts focused on five 
major cities--Los Angeles, San Francisco, New York City, 
Chicago and Miami--while affecting the naturalization process 
in smaller cities throughout the United States.
    Beginning in May 1996, media reports began alleging that 
the CUSA program was politically motivated and rife with fraud 
and abuse, a vehicle used by the Clinton administration to 
naturalize 1.3 million people who, given their geographic 
location and ethnicity, were considered likely Democratic 
voters in 1996. Various reports argued that CUSA focused on the 
five cities chosen because they were located in the swing 
States of California, New York, Florida and Illinois, whose 
electoral college tallies would be critical to victory in the 
1996 Presidential campaign. Further, they alleged that this 
enormous and precipitous influx of applicants for 
naturalization was made possible only by easing dramatically 
the legal and procedural requirements long in place to 
safeguard the process.
    In a July 9, 1996, letter to INS Commissioner Meissner, 
subcommittee Chairman Zeliff requested certain information and 
documents regarding CUSA be provided to the subcommittee by 
July 18, 1996. On July 17, 1996, INS informed Representative 
Zeliff that it would be unable to respond to his request until 
after Labor Day but declined to provide any justification for 
non-production. Representative Zeliff reiterated his request 
and INS grudgingly responded to his inquiries and produced some 
30,000 pages of documents from INS headquarters and field 
offices throughout the country beginning in August 1996. No 
confidentiality provisions were attached to any of this 
material.
    While INS headquarters was providing an official response 
to subcommittee Chairman Zeliff, numerous INS employees nation-
wide began contacting the subcommittee on a confidential basis. 
These ``whistle blowers,'' working in INS offices in Los 
Angeles, San Francisco, San Jose, Las Vegas, Denver, Dallas, 
Oklahoma City, Chicago, Miami, New York City, Arlington, VA, 
and Washington, DC, offered disturbing information and 
corroborative documents regarding CUSA program abuses. One and 
all were outraged by politically-motivated fraud and abuse. 
They provided the subcommittee with a detailed picture of 
CUSA's operations across the country.
    INS and the Clinton administration consistently have 
maintained that CUSA was nothing more than a timely and 
efficient response to a growing backlog of citizenship 
applications which only coincidentally ended on September 30, 
1996, near the close of voter registration in many States. The 
administration attributed the increase in applications 
primarily to the fact that: (1) a large number of formerly 
illegal aliens, granted amnesty and permanent resident status 
under the Immigration Reform and Control Act of 1986 recently 
had become eligible to apply for citizenship; and (2) many 
long-term resident aliens perceived California's Proposition 
187 and other proposed reforms as ``anti-immigrant'' and 
decided to become citizens to preserve their rights.
    In fact, INS documents and information indicated that INS 
was doing much more than reducing its backlog of applications. 
Beginning in FY 1995, and on an even greater scale in FY 1996, 
INS actively solicited applications in certain communities and 
geographic areas. The majority of solicitations was conducted 
through ``community-based organizations'' (CBOs), most of which 
were Democratic Party affiliated (or leaning) advocacy groups. 
The CBOs generated massive numbers of citizenship applications 
within their respective communities: 60 percent of citizenship 
applications handled by the INS in Chicago and some 700,000 of 
the 1.3 million citizenship applications received by the agency 
during FY 1996. Some solicitations were done through the mail.
    INS also changed its method of calculating the application 
backlog. While applications previously were counted as part of 
the backlog only after they were logged into the agency's data 
files, they were counted as soon as they were received in the 
mail under CUSA. This single accounting change increased the 
INS' backlog by 100,000 to 200,000 applications.
    The Vice President's Office (which began playing an active 
role in CUSA by early 1996) and INS and CUSA articulated speed 
and numbers as paramount goals. In an effort to achieve these 
goals, many longstanding legal and procedural safeguards of the 
naturalization process were deliberately discarded or ignored. 
While a comprehensive listing of CUSA's fraudulent practices is 
beyond the scope of this report, examples include:
         Every applicant for citizenship is required by 
        law to undergo a criminal record check to establish the 
        good moral character required for citizenship. The FBI 
        conducts these checks after receiving applicant 
        fingerprint cards from INS. Under CUSA, however, INS 
        refused to allow sufficient time for routine FBI 
        background checks; thus INS had no opportunity to 
        review ``positive'' identifications of applicants with 
        criminal histories which automatically or otherwise 
        might disqualify them for citizenship. Subcommittee 
        examination of more than 20,000 criminal histories 
        (from among more than 60,000 such histories) suggest 
        that tens of thousands of people granted citizenship 
        under CUSA were not legally entitled to it and many 
        should have been deported.
         Tests on the English language and American 
        history and government, which applicants must pass to 
        win citizenship, were ``dumbed down'' until they were 
        virtually fail-safe. Even so, rampant cheating was 
        allowed, even encouraged, by INS-licensed test 
        administrators. Convincing evidence indicate that tens 
        of thousands of people who could not speak or 
        understand a word of English paid hundreds of dollars 
        to ``pass'' the English and civics test, and were then 
        granted citizenship. Documents establish that INS was 
        aware of this fraud for more than a year, but allowed 
        it to continue in order to ``keep the numbers up.''
         INS citizenship examiners, also called 
        District Adjudication Officers (DAOs) were pressured to 
        ignore evidence of welfare fraud, tax delinquency, 
        failure to register for Selective Service, non-payment 
        of alimony or child support, extensive travel abroad, 
        and other illegalities and irregularities which legally 
        preclude the granting of U.S. citizenship.
         Even after the INS hired a thousand new DAOs 
        nationwide, experienced and new DAOs were forced to 
        work mandatory overtime, including evenings and 
        weekends, for many months, rewarded for ``high 
        production,'' and punished, harassed or removed for 
        opposing or delaying applications, or voicing concerns 
        about expedited procedures.
         Most of the new DAOs were unqualified 
        temporary employees, hired so quickly they did not go 
        through required background investigations or receive 
        proper job training.
         Personnel and resources were stripped from 
        other INS divisions to accommodate the politically-
        driven acceleration. Legalization, Investigation, 
        Asylum, Deportation, and Border Patrol officers were 
        diverted from essential duties to assist in CUSA 
        processing before September 30, 1996. This severely 
        hindered INS' enforcement functions.
         Naturalization swearing-in ceremonies became 
        so large and frequent that in some cases, control over 
        tens of thousands of green cards and naturalization 
        certificates was lost, creating a lucrative black 
        market for those documents.
         Finally, naturalization was linked closely to 
        voter registration. New citizens immediately were 
        registered to vote. Democratic Party-affiliated CBOs 
        provided volunteer clerical services for the 
        naturalization and voter registration processes in 
        direct violation of the Federal Anti-Deficiency Act. 
        Overall, advocacy groups with close Democratic Party 
        ties blatantly were favored over other CBOs.
            Naturalization Testing Fraud.
    The subcommittee has focused on naturalization testing 
fraud among other areas of inquiry. To become a citizen, an 
immigrant is required by law to speak and understand English, 
acquire a basic knowledge of U.S. history and government. Each 
applicant must pass written tests in English and civics.
    The subcommittee uncovered a pattern of testing fraud, most 
of which involved the largest INS licensee, Naturalization 
Assistance Services, Inc. (NAS), a private company with 400 
branches nationwide. The subcommittee discovered that INS 
continued to rely on NAS even after learning of its fraudulent 
activities, preferring to maximize naturalization granted by 
the September 30, 1996, deadline.
    The subcommittee believes NAS should not have been approved 
by INS in the first place. INS requirements for licensee 
approval clearly state that each organization must demonstrate 
expertise in administering English and civics tests but NAS was 
a Florida-based driver education school when it filed its 
application with INS in July 1994. Incredibly, while it taught 
neither English nor civics, and possessed no testing expertise 
in either, it was approved a month later in August 1994. INS 
employee William R. ``Skip'' Tollifson approved the 
application--then left INS to work for NAS in April 1996. This 
legal and ethical conflict of interest has yet to be explored, 
let alone resolved.
    NAS was by far the largest of INS' six private testing 
organizations, administering 200,000 tests annually, or roughly 
as many tests as the other five firms combined. As early as 
June 1995, NAS was plagued by revelations of fraudulent and 
abusive testing practices at many sites. Tens of thousands of 
applicants who could not speak English or conceivably pass 
written English or civics tests, received ``pass'' certificates 
from NAS. Multiple reports confirm that test administrators 
orchestrated blatant cheating, making tests as simple as 
possible, giving applicants the correct answers, and sometimes 
filling in answers themselves for aliens who knew no English. 
In return for this ``service,'' applicants paid as much as $850 
apiece for same-day ``training courses'' which in reality 
translated into sure passes.
    Though well-aware of widespread irregularities, NAS not 
refused to crack down on fraud, its officials routinely 
pressured local INS officers to accept ``pass'' certificates 
when applicants could not speak or understand English. Worse, 
NAS appears to have allowed, and even encouraged, testing fraud 
among its 400 affiliates. NAS went so far as to refuse to allow 
Dallas-based INS officials suspecting NAS fraud to inspect 
local NAS testing sites.
    INS headquarters in Washington, DC, appears to have 
abandoned its statutory duty to insure the integrity of its 
citizenship testing program. Although high-ranking INS 
officials were aware of the scope of NAS' fraudulent activities 
for at least 16 months--abundant and compelling evidence of NAS 
fraud was presented to the INS both privately and publicly in 
the media and in a subcommittee hearing--INS allowed NAS to 
administer citizenship tests in ever-increasing numbers. INS 
headquarters also pressured local INS officers continually to 
accept NAS ``pass'' certificates held by applicants unable to 
speak or understand English.
    Pressured by the Clinton White House, INS appears to have 
focused on maximizing politically valuable naturalization by 
knowingly permitting, and even assisting, NAS' fraudulent 
testing for perceived political gain. Only after CUSA's 
political goals were achieved did INS bow to mounting public 
pressure and terminate NAS' testing authority. That long-
overdue termination did nothing to address the harm inflicted 
by widespread fraudulent citizenship testing and 
naturalization.
            Naturalization of Criminals.
    Perhaps the most disturbing pattern of abuses discovered by 
the subcommittee involves the widespread granting of American 
citizenship to unqualified and violent criminals. This appears 
to have been the consequence of recklessness by top 
administration officials, including INS officials, the Deputy 
Attorney General, and those in the Vice President's Office. The 
INS is required by law to send the fingerprints of each 
applicant for naturalization to the FBI and await return of the 
applicant's criminal record before deciding whether to grant 
U.S. citizenship. Beginning in August 1995, this was not done 
in a consistent or reliable manner in the CUSA program.
    Under CUSA, when INS dramatically increased the number of 
fingerprint cards submitted to the FBI, the average processing 
time also increased. However INS, determined to accelerate 
naturalization, intentionally decreased the amount of time 
allowed for the return of a criminal record, before granting 
citizenship. Predictably, this led to the granting of 
citizenship to numerous unqualified and dangerous criminals 
before their criminal records arrived at local INS offices, and 
were placed in individual files. Indeed, there is evidence that 
in Los Angeles, where the largest number of CUSA applications 
were processed, INS management intentionally disabled 
safeguards its own computer programs, thus increasing the 
number of applicants being naturalized before their criminal 
record checks had been completed.
    INS also is required by law to deny citizenship to any one 
who fails to report his criminal history in full--i.e. any past 
arrests, charges or convictions--during the mandatory INS 
application and sworn interview process, even if the 
applicant's criminal history is minor (i.e. administrative 
action, misdemeanor conviction, or a dismissed or unresolved 
charge). Since INS refused to await the return of FBI criminal 
records, it is likely that many applicants who misrepresented 
their criminal history were nonetheless naturalized.
    Worse still, the subcommittee learned that thousands, 
perhaps tens of thousands, of fingerprint cards may not have 
been submitted to the FBI at all, but were lost, misplaced, or 
destroyed in the rush to meet INS' 1996 ``production goals.'' 
Recently, the INS provided the FBI with a supposedly 
comprehensive computer tape identifying people naturalized 
under the CUSA program whose fingerprint cards were submitted 
to the FBI. That list contained only 864,000 individual entries 
(an additional 60,000 entries were duplicates). Since INS 
itself conservatively estimated that it granted citizenship to 
at least 1.1 million people under CUSA, it is likely that tens 
of thousands of fingerprint cards were never submitted to the 
FBI. The subcommittee has learned that in Los Angeles, and 
other CUSA, INS management was surreptitiously destroying or 
concealing thousands of unsubmitted fingerprint cards to cover 
up the scope of this problem. INS' only response to these 
serious criminal actions was to intimidate employees courageous 
enough to expose the situation.
    Furthermore, criminal background information already in 
INS' possession routinely was ignored because numerous 
individual naturalization files (``A-files'') were misplaced or 
delayed in transit, and INS refused to allow sufficient time 
for them to be located before naturalizing the applicants. The 
FBI provided the subcommittee 60,000 raw rap sheets which fully 
confirmed that a large number of violent criminals improperly 
were granted U.S. citizenship under CUSA. This group includes 
individuals charged with or convicted of murder, rape, drug 
trafficking, spouse abuse, child molestation, and virtually 
every serious crime imaginable. The FBI expects to deliver 
thousands of additional rap sheets to the subcommittee in the 
future. While INS continues to deceive the public by minimizing 
the extent of this problem, the evidence of it is both 
irrefutable and highly disturbing.
    In short the administration and the INS, in pursuit of 
partisan political advantage, created a grave national security 
and criminal justice problem, the full proportions of which are 
not yet fully known. While INS spokesmen repeatedly have 
promised to track down and denaturalize those criminals on whom 
it bestowed citizenship, the sheer number of criminals 
naturalized makes that all but impossible. In fact, INS has 
demonstrated no willingness to do so. For example, the 
subcommittee requested, under two subpoenas, detailed 
information regarding all felons naturalized under CUSA. As of 
this writing, INS steadfastly has delayed and obstructed the 
subcommittee's inquiry for months, providing no information in 
response to these requests. Sadly, the Department of Justice 
has aided and abetted INS in its obstruction by incorrectly 
challenging the validity of subcommittee subpoenas, spending 
endless time ``clearing'' letters from the FBI, and falsely 
suggesting that the subcommittee has deemed all ``FBI hits'' to 
be ``convictions'' or has knowingly revealed any names or 
addresses of naturalized citizens.
            Political Motivation.
    All of these abuses appear to have resulted from the 
Clinton administration's political agenda. Substantial evidence 
indicates that the CUSA was initiated by the Clinton 
administration and ``hijacked'' by the Office of the Vice 
President for political gain. Beginning in February 1996, Vice-
Presidential staffers Douglas Farbrother, Elaine Kamarck, and 
Laurie Lyons among others began directing substantial changes 
in INS' naturalization policies and procedures. Operating with 
the apparent consent of the Vice President, they dictated a 
rapid and substantial increase in CUSA resources a 40 percent 
increase its ``production goals''; and, in effect, the 
disabling of legal and procedural safeguards associated with 
the naturalization process. Documents state this was done ``to 
produce a million new citizens before election day,'' an 
objective that resulted in a pervasive pattern of fraud, abuse 
and recklessness.
    Indeed, Vice President Gore apparently sent President 
Clinton a memo detailing methods to ``Lower the Standards for 
Citizenship,'' and the INS proceeded to implement them. Worse 
yet, the Vice President's own Mr. Farbrother and Ms. Kamarck 
achieved some of their ends by pressuring Deputy Attorney 
General Jamie Gorelick, who in turn pressured INS to ``waive'' 
key rules, regulations, and standards. In the White House 
itself, senior Presidential aides Leon Panetta, Harold Ickes, 
Rahm Emanuel and Carol Rasco were involved in the process, 
though the extent of their involvement is not yet clear.
    Based on the criminal wrongdoing and high-level political 
involvement associated with CUSA, subcommittee Chairman Zeliff 
wrote Attorney General Janet Reno on October 31, 1996, to 
request that she appoint an Independent Counsel to investigate 
it. Subcommittee Members Souder, Mica, Ehrlich, and Shadegg 
joined in this request. That request was denied on December 4, 
1996. In a letter to subcommittee Chairman Zeliff, the 
Department stated, ``The Criminal Division is conducting a 
careful review of the issues identified in your letter, and the 
Division and the Office of Inspector General have agreed to 
pursue any matters that might warrant further investigation.''
    b. Benefits.--The subcommittee's investigation has begun to 
expose the full scope and nature of CUSA fraud, abuse and 
recklessness and media reports have chronicled some of the 
criminal activities and abuses of power wrought by this 
politically-motivated program. INS, given mounting public 
pressure, has begun to make incremental and long-overdue 
reforms.
    INS finally terminated NAS' license to conduct citizenship 
testing in late October 1996. In addition, it promulgated new 
anti-testing-fraud policies which, if actually enforced, may 
begin to address the problem of fraudulent testing by the 
remaining licensees.
    In addition, the INS belatedly has enacted new regulations 
allowing it to conduct administrative denaturalization 
proceedings, against people erroneously naturalized. INS has 
had statutory authority to do so since 1990, but heretofore 
neglected to promulgate the necessary regulations. In response 
to our investigation, these administrative proceedings will be 
substantially less time-consuming and burdensome than judicial 
denaturalization, previously the agency's only method of 
denaturalization: a small step in the right direction. 
Unfortunately, for legal and logistical reasons, these new 
procedures are unlikely to be applied retroactively to those 
illegally and improperly naturalized under CUSA. This raises 
legal and national security concerns beyond the scope of this 
report.
    Finally, there are indications INS' Chicago office has 
begun to remedy some CUSA-related problems. In Los Angeles, the 
Department of Justice Inspector General's office apparently has 
begun to investigate abuses occurring there.
    In the wake of intense pressure from Congress, the public, 
and the media, INS has begun to take incremental steps to 
reform the naturalization process. However, remains to be done 
by INS, DOJ, FBI, Congress, and possibly an Independent 
Counsel. The subcommittee intends to pursue its investigation 
as long as necessary to expose and correct the fraud, abuses 
and recklessness CUSA.
    c. Hearings.--On September 10, 1996, the subcommittee held 
a hearing on naturalization testing fraud, focusing on the 
operations of NAS. Ms. Jewell Elghazali, a former employee, 
testified at length regarding NAS testing fraud which she 
testified was permitted and even encouraged to increase NAS 
corporate revenue.
    Also testifying were NAS's CEO Paul W. Roberts, and William 
R. (Skip) Tollifson, a former INS employee who also worked for 
NAS. Both men denied any intentional wrongdoing by NAS. Mr. 
Alexander Aleinikoff, INS' Executive Associate Commissioner for 
Programs, and Louis D. Crocetti, INS' Associate Commissioner 
for Examinations also were present Aleinikoff acknowledged the 
testing fraud by NAS affiliates, but denied that INS knowingly 
tolerated fraud. Mr. Crocetti said nothing.
    On September 24, 1996, the subcommittee held a hearing on 
CUSA. The following INS employees testified as whistle blowers, 
exhibiting exceptional courage and integrity in so doing: Tom 
Conklin, Chicago INS; Diane Dobberfuhl, Chicago INS; Ethel 
Ware, Chicago INS; Joyce Woods, Chicago INS; James Humble-
Sanchez, Los Angeles INS; Neil Jacobs, Dallas INS; Cora Miller, 
Las Vegas INS; and Robin Lewis, Oklahoma City INS. They 
addressed fraud, abuses and recklessness with special emphasis 
on testing fraud and the naturalization of dangerous criminals. 
They also testified that after participating in CUSA, they and 
their colleagues reluctantly had concluded that it was 
politically motivated, and was intended to favorably influence 
the November 1996 elections on behalf of the Clinton 
administration and the Democratic Party.
    Mr. David Rosenberg, Director of the Citizenship USA 
Program, and Louis D. Crocetti, INS Associate Commissioner for 
Examinations testified on behalf of the INS. Both minimized 
problems associated with CUSA, and denied any politically 
motivation.

                      POSTAL SERVICE SUBCOMMITTEE

1. General Oversight of the U.S. Postal Service: The Postmaster General 
        and the General Accounting Office.

    a. Summary.--Congress established the Postal Service as an 
independent establishment of the executive branch of the 
Federal Government pursuant to the Postal Reorganization Act of 
1970 (Public Law 91-375). The act provides that the Postal 
Service must establish ``reasonable and equitable classes of 
mail and reasonable and equitable rates of postage and fees for 
postal services.'' Further, the act mandates that the Postal 
Service ``break even'' as nearly as practicable. Postmaster 
General Marvin Runyon testified that though the Postal 
Reorganization Act has worked well for 25 years, the act did 
not anticipate the highly competitive communications industry 
that exists today. Mr. Runyon urged Congress to reexamine the 
act in order to allow the Postal Service to become more 
businesslike and more responsive to the American people. 
Suggested solutions include: freeing postal employees from 
bureaucracy and burdensome rules; simplifying and speeding up 
the price-setting process to respond to market needs; and 
making postal products more customer oriented and modern 
through pricing and product flexibility. The Postmaster General 
testified that the collective bargaining process is outmoded 
and that employee dispute resolution mechanisms are faulty. In 
addition, he urged Congress to reexamine the ratemaking process 
and review proposals which would allow the Postal Service to 
price its products and services to better reflect its 
competitive environment.
    The General Accounting Office (GAO) testified that poor 
labor-management relations continue at the Postal Service. 
Delivery service problems remain and customer satisfaction 
indicators have not improved. GAO further reported that postage 
meter revenues were declining due to fraud and deficiencies in 
program controls. Automation has fallen behind schedule and 
anticipated savings have not been realized.
    b. Benefits.--The information received by the subcommittee 
during this oversight hearing was instrumental in documenting 
the progress and deficiencies of the Postal Service. This 
information would be used to craft legislative language to 
shape appropriate corrective measures.
    c. Hearings.--Hearing entitled ``Oversight of Postal 
Service'' was held on February 23, 1995.

2. General Oversight of the U.S. Postal Service: The Postal Rate 
        Commission.

    a. Summary.--The Postal Reorganization Act of 1970 
established the Postal Rate Commission (Commission) as an 
independent agency of the executive branch with authority to 
recommend postal rates and classes. Prior to its creation, 
Congress was responsible for setting postal rates and classes.
    Postal Rate Commission Chairman Edward Gleiman testified to 
the role played by the Commission in postal affairs because of 
its mandate to ensure that postal rates and fees are reasonable 
and equitable. In addition, the Commission hears mail 
classification proceedings to determine the groupings, classes 
and subclasses of mail, and the more than 100 work-sharing 
discounts affecting the postage rates paid by various mailers. 
The Commission is permitted to take up to 10 months for 
consideration of an omnibus rate case. Chairman Gleiman 
stressed that the Commission is interested in streamlining and 
expediting these proceedings. The Commission reissued rules 
(which went unused for 5 years) giving the Postal Service the 
authority to accelerate changes in Express Mail rates to meet 
market pressures.
    b. Benefits.--Improvements in the ratemaking process will 
better enable the Postal Service to implement rate changes and 
respond to competitive pressures in the communications 
marketplace. Presently, competitors are able to react quickly 
to changing markets, whereas the Postal Service must adhere to 
a complex, mandated process before changing its rate structure 
or offering new products. For the Postal Service to be 
competitive, its pricing and product mechanisms must be 
flexible to react to changing market forces. By having an 
improved and more flexible ratemaking structure, the Postal 
Service should prove competitive with its products and prices 
thereby reducing losses in market share and keeping postal 
rates stable. These flexibilities would help the Postal Service 
fulfill its statutory mandate to break even. Americans benefit 
from a fiscally sound Postal Service which operates 
independently of taxpayer financed appropriated funds.
    c. Hearings.--Hearings entitled ``General Oversight of the 
U.S. Postal Service'' were held on March 2, March 8, June 7, 
June 14, and June 28; on July 25, 1995, a hearing entitled 
``Oversight of the U.S. Postal Inspection Service and Postal 
Operations'' was held.

3. General Oversight of the U.S. Postal Service: The Board of 
        Governors.

    a. Summary.--Chairman Sam Winters testified on behalf of 
the Presidentially appointed Postal Service Board of Governors. 
He said that the Postal Service is one of the most complex 
enterprises in our country. However, both the Postal Service 
and its employees could be doing better. The 1970 act empowered 
the Board of Governors to authorize postal rates and 
classifications following the Governors' review of the Rate 
Commission's recommended decision. The board directs the 
overall policy of the Postal Service and acts as the customer 
representative in managing the Postal Service in a businesslike 
manner. The chairman believes that cumbersome restraints levied 
on the Postal Service by the Postal Reorganization Act place a 
burden on the Postal Service which impedes its ability to 
operate in a businesslike manner. He emphasized that the Postal 
Service's competitive efforts are hampered because of the 
collective bargaining process. Chairman Winters said almost 80 
cents of each dollar goes toward salaries and benefits. Cost 
restraints and a need to pay for performance are necessary to 
achieve effective operation of the Postal Service. He echoed 
Postmaster General Runyon's concern for redesigning the current 
ratemaking process to make it more sensitive to market rates.
    b. Benefits.--Testimony from the Board of Governors 
stressed the need for further study of the Postal 
Reorganization Act in order to give the Postal Service the 
tools to make it more businesslike and more competitive. It is 
apparent that the present act places undue restrictions on the 
Postal Service which, ultimately, costs the postal customer in 
money, service and reliability.
    c. Hearings.--The Board of Governors appeared before the 
Subcommittee of the Postal Service on March 8, 1995.

4. General Oversight of the U.S. Postal Service: Major Mailing 
        Customers.

    a. Summary.--Eleven witnesses representing major mailing 
groups (commercial mailers, publishers, and nonprofit mailers) 
testified at this hearing. The witnesses included: the Mailers 
Council; Advertising Mail Marketing Association; Direct 
Marketing Association; Mail Order Association of America; 
Parcel Shippers Association; National Newspaper Association; 
Newspaper Association of America; Magazine Publishers of 
America; Association of American Publishers; Alliance of 
Nonprofit Mailers; and the National Federation of Nonprofits. 
All had distinct opinions on privatization, the usefulness of 
the Postal Rate Commission, the reform of the Postal Service 
and the effect of labor-management relations on the mission of 
the Postal Service. However, all but one witness testified 
against privatization of the Postal Service. The witnesses also 
presented their views on the Postal Service's filing in Docket 
No. MC95-1 regarding mail reclassification.
    b. Benefits.--This hearing provided important information 
regarding the concerns of the major stakeholders in the U.S. 
Postal Service. In order to meet competitive pressures, the 
Postal Service must evolve into a service-oriented organization 
attuned to its customers' needs. Further, the witness testimony 
will facilitate the subcommittee's efforts in the conduct of 
its oversight responsibilities of the Postal Service.
    c. Hearings.--Hearing entitled ``Oversight of the U.S. 
Postal Service: Commercial Mailing and Non-Profit Mailing 
Organizations'' was held on May 23, 1995.

5. General Oversight on the U.S. Postal Service: Postal Employee Unions 
        and Organizations.

    a. Summary.--The employees represented by the unions and 
organizations who testified are responsible for moving 5 
million pieces of mail each day. These organizations serve as a 
sounding board for employee suggestions and complaints dealing 
with labor and management problems. The organizations must 
address issues pertaining to restructuring, technology, 
privatization, employee schedules, delivery standards, along 
with prompt, reliable and efficient customer service. At the 
time of the hearing, three of the unions engaged in contract 
talks with postal management were critical of management 
particularly at postal headquarters. The president of the Rural 
Letter Carriers Union reported that his members had job 
satisfaction, motivation, and pride in their jobs. They have an 
evaluated pay system that measures various criteria which 
cannot be directly transferred to urban carriers. The unions 
spoke, with one voice, supporting universal delivery and 
uniform postal cost. They were of the opinion that the Postal 
Reorganization Act served them well. They testified that though 
the Postal Service can be improved, the Postal Reorganization 
Act should not, and need not, be revised in the area of labor 
relations. However, the unions expressed support for more 
flexibility on ratesetting and the introduction of new 
products. The unions testified that management should be 
streamlined as there are too many intermediate steps confusing 
lines of communication. The three management groups focused on 
labor-management issues, adverse actions and compensation.
    b. Benefits.--The subcommittee's continuing examination of 
labor-management problems and collective bargaining obstacles 
will serve to inform the Postal Service and the unions that 
these issues are serious impediments to the good health of the 
Postal Service and to employee job stability. This information 
will help the subcommittee to tailor solutions when considering 
legislative reforms to the Postal Service.
    c. Hearings.--The subcommittee held a hearing on June 7, 
1995, entitled ``Oversight of Postal Employees and Management 
Group.''

6. General Oversight of the U.S. Postal Service: Postal Reliant 
        Businesses and Competitors.

    a. Summary.--Twelve witnesses representing postal reliant 
businesses and competitors participated in this hearing. These 
diverse entities expressed varied opinions regarding the letter 
mail monopoly, the international mail market, the inequity 
created because the Postal Service is exempt from rules and 
regulations applicable to private sector businesses (for 
example, taxes, parking fines), and the commercial and research 
value in the sale of postage meters in lieu of renting them. 
Some of the witnesses testified regarding their valued 
partnership with the Postal Service while others viewed the 
Postal Service as an unfair competitor. The hearing explored 
the extent to which the Postal Service affects contracting, 
manufacturing, transportation, both inter- and intrastate 
commerce, international law and business opportunities for 
large and small firms.
    b. Benefits.--The hearing provided useful information from 
diverse witnesses regarding their evaluations of the Postal 
Service. The subcommittee will continue to investigate how 
better partnerships can be forged between the Postal Service 
and other entities for the benefit of the customers.
    c. Hearings.--On June 14, the subcommittee held a hearing 
entitled ``Oversight of Postal Reliant Businesses and 
Competitors.''

7. General Oversight Hearing on the Postal Service: Return of the 
        Postmaster General.

    a. Summary.--The Postmaster General, at his second 
appearance before the subcommittee, expressed his interest in 
remaining on the job for several more years. He appealed to the 
Congress to revise the laws governing collective bargaining. 
Mr. Runyon testified regarding postal workers' right to strike, 
he cautioned that in granting such rights Congress would need 
to allow the Service the ability to hire replacements for 
striking employees. He suggested allowing postal unions the 
same bargaining rules as railroad workers under which the 
President may impose a cooling off period before a strike and 
can use the power of his office to persuade the parties to 
reach a settlement. The Postmaster General defended his agency, 
declaring it had ``come a long way'' since delivery debacles in 
1994. Congress was urged to approve legislative initiatives 
which would authorize the sale of postal assets in incremental 
parts. The Postmaster General again asked Congress to reduce 
red tape and regulations in an effort to streamline the Postal 
Service making it more efficient and competitive.
    b. Benefits.--This forum enabled the Postmaster General to 
respond to concerns and issues raised subsequent to his 
previous appearance before the subcommittee.
    c. Hearings.--The Postmaster General appeared for the 
second time before the subcommittee on June 28, 1995, at the 
hearing entitled, ``General Oversight: Postal Service.''

8. General Oversight of the U.S. Postal Service: Postal Service 
        Inspector General.

    a. Summary.--The Inspector General of the Postal Service 
serves as the watchdog of Postal Service operations. The 
hearing focused on the operational, financial and security 
challenges facing the agency. The Inspector General echoed many 
of the statutory restrictions on pricing, new products, and 
managing the workforce that the Postmaster General had shared 
with the subcommittee. The Inspector General noted that the 
immediate abolition of the postal monopoly would be devastating 
to the Postal Service and the concept of universal service. 
However, he stated that if everything the Postmaster General 
wants in the area of postal reform is granted, the monopoly 
will be eliminated.
    b. Benefits.--Testimony from the Inspector General 
underscored many of the same problems with which the 
subcommittee had been concerned. The Office of the Inspector 
General and the Inspection Service are responsible for keeping 
the U.S. mail safe and preventing waste, fraud and abuse in the 
Postal Service.
    c. Hearings.--The Inspector General appeared before the 
subcommittee on July 25, 1995, at a hearing entitled 
``Oversight of the Postal Service Inspector General.''

9. Review of International Mail Market.

    a. Summary.--The U.S. Postal Service seeks to expand its 
role in the international mail markets. However, because it has 
less control over pricing than its competitors, and its 
delivery systems appear unable to provide sufficiently reliable 
service, the Postal Service may have neither the authority nor 
the ability to compete effectively in the growing international 
market competition.
    The subcommittee examined the Service's statutory, current, 
and planned role in the delivery of international mail. Areas 
under examination include the existing relationships between 
the Postal Service, foreign postal administrations and the 
Universal Postal Union; and whether current postal laws and 
international agreements may limit the Service's ability to 
participate internationally.
    The subcommittee received a final report on this issue 
early in 1996. ``U.S. Postal Service: Unresolved Issues in the 
International Mail Market,'' March 11, 1996, GAO/GGD 96-51 
found that through multilateral and bilateral agreements, the 
Postal Service, together with other foreign postal 
administrations provides a worldwide delivery network that 
covers even the most remote localities for the rate of $1 for a 
1-ounce letter to any overseas location in the world. Private 
carriers often provide some mail services that are more 
dependable, faster, and cheaper than those provided by the 
Postal Service. As a result, the Postal Service is concerned 
that it has lost and continues to lose market share in a 
growing $4.6 billion international mail market. Despite lost 
market share, the Postal Service has embarked on an aggressive 
marketing strategy to regain market share which includes new 
service offerings, service improvements, and market-based 
prices.
    This aggressive strategy has drawn criticism from some 
Service competitors. They say the Postal Service benefits 
unfairly from its status as a Federal entity and its exclusive 
access to foreign postal administrations as the sole U.S. 
representative to the Universal Postal Union. In addition, some 
charge that Service rates do not cover costs in contravention 
of the Postal Reorganization Act directive that each class of 
mail recover its direct and indirect costs. These competitors 
urge Congress to give the Postal Rate Commission authority to 
recommend the Service's international postage rate.
    b. Benefits.--This continuing review will provide essential 
information required by Congress in order to make sound 
determinations regarding the role of the Postal Service in the 
international mail markets.
    c. Hearings.--The subcommittee and the Senate Subcommittee 
on Post Office and Civil Service conducted a joint oversight 
hearing on international postal administration reform on 
January 25, 1996.

10. General Oversight of the U.S. Postal Service: The Board of 
        Governors, the Postmaster General, the Postal Rate Commission, 
        the Chief Postal Inspector and the General Accounting Office.

    a. Summary.--The joint oversight hearing was intended to 
provide a general overview of the operation of the Postal 
service. A series of major events had occurred since the 
oversight hearings during the first session. The Postal Service 
had achieved a positive financial performance and service 
record in fiscal year 1995; and the Postal Rate Commission had 
recently provided a recommended decision on the 
reclassification case which greatly affects the Postal Service 
and was in the process of addressing a series of rulemaking 
proposals.
    Tirso del Junco, Chairman of the Postal Service's Board of 
Governors testified that the Board had focused on audit, 
compensation, strategic planning and capital projects. The 
Postal Service is committed to keep the postal rates stable 
through 1997. A quality management program, Customer Perfect!, 
based on the Malcolm Baldridge criteria for an effectively 
managed private-sector business, had been instituted and was 
proving to be effective.
    The Postmaster General, Marvin Runyon, testified that 
fiscal 1995 was a year of achievement--volume increased to 181 
billion pieces (an increase of 3 billion pieces), overnight 
service was at an all-time high of 87 percent for local, 
overnight delivery and record net income was $1.8 billion, more 
than twice the previous high. However, he projected a dim 
future due to anticipated and recorded decreasing mail volume 
during the first and second quarters in 1996. The Postal 
Service is growing in only one of its six product lines whereas 
the overall communication market is growing in double digits. 
First-Class Mail is greatly eroded with much of today's 
financial transactions being made electronically. The 
Postmaster General informed that 3,600 additional pieces of 
automation would be available, bringing the total to more than 
10,000 machines at an investment of $4.6 billion. He reported 
that the Board of Governors approved the first revision in the 
mail classification rules since 1970; the changes will benefit 
mailers who participate in worksharing. Further reform measures 
for non-profit mail, special services, parcels and expedited 
services were being prepared for forwarding to the Postal Rate 
Commission. Several new products are being introduced and a 
separate Priority Mail network and Global Priority Mail are 
being implemented. The Postal Service is trying to improve 
productivity by at least 2 percent yearly, saving $1 billion 
annually. Labor costs have climbed 54 percent this decade and 
need to be reduced. He said that the Postal Service must have 
the ability to compete and have the freedom to run like a 
business--``to respond to market at market speed,'' and to have 
the flexibility to test products.
    Postal Rate Commission Chairman, reported that the 
Commission issued the omnibus rate case and had completed a 
major mail classification reform case. He expressed concern 
that the Board of Governors rejected the Commission 
recommendation regarding the ``bulk parcel'' issue and the 
Courtesy Envelope Mail. The Commission was deliberating the 
USPS' request for expedited consideration of an experimental 
case regarding First Class and Priority small parcels. Progress 
has been made in receiving quality data from the Postal Service 
as a result of testimony for an improved process in the 
previous oversight hearing; however, untimely responses are 
still a problem. Reversing his position from previous testimony 
because of difficulties in obtaining Postal Service 
information, Mr. Gleiman requested subcommittee Chairman McHugh 
to include statutory authority to subpoena Postal Service 
records and documents in postal reform legislation. (This 
provision was included in postal reform legislation.)
    Kenneth J. Hunter, Chief Postal Inspector and Inspector 
General, testified that audits regarding Delivery Point Program 
(DSP) showed that additional savings could have been gained if 
there had been increased conformance with national policies and 
procedures. The Inspection Service conducted developmental, 
financial, financial opinion, financial installation, capital 
investment, contract, and six performance audits. It conducted 
investigations: protecting Postal Service revenue and assets; 
procurement, expenditure and false claims; employee and 
contract post office embezzlements; and workers' compensation 
fraud.
    Michael E. Motley, Associate Director, Government Business 
Operations, General Government Division, General Accounting 
Office, commented on areas related to improving labor-
management relations, setting and providing competitive rates 
and services and controlling operating costs. Labor-management 
problems still persists; the Postal Service and employee 
organization had not met to address GAO's recommendations to 
develop and sign a framework of agreement. The number of 
employee grievances referred to higher levels has increased 31 
percent since 1993. The Postal Service is not as competitive as 
it could be and has lost market share of products, including 
Express Mail, because of limited flexibility in rate setting, 
cost and growth of labor, less reliable service and the 
inability to control internal operating costs.
    b. Benefits.--The forum enabled a thorough review of all 
postal operation and the status of rulemaking proposals set 
forth by the Postal Service. The subcommittee had an 
opportunity to explore the issues raised and recommendations 
proposed by the GAO in testimony the previous session. Close 
oversight by the subcommittee has focused the Postal Service's 
attention to on-time nationwide delivery performance.
    c. Hearings.--A consolidated hearing entitled, ``General 
Oversight of the U.S. Postal Service: The Board of Governors, 
The Postmaster General, the Postal Rate Commission, the Office 
of the Postal Service Inspector General and the General 
Accounting Office'' was held on March 13, 1996.

11. Joint Hearing with the Senate Subcommittee on Post Office and Civil 
        Service, of the Committee on Governmental Affairs on 
        International Postal Reform.

    a. Summary.--During the past decade, a number of countries, 
including Argentina, Australia, Canada, Denmark, France, 
Germany, Netherlands, New Zealand, Sweden, and the United 
Kingdom, have moved toward postal deregulation and 
corporatization. Some of the countries were forced to change 
their system because of crises such as workplace unrest and 
union and management conflict, resulting in lack of trust and 
respect between employee and employer. Some countries initiated 
postal reforms as a part of greater government privatization 
initiatives. While each country labored under its own set of 
circumstances, a consensus among international postal observers 
was that the most successful reform efforts were made when the 
targeted postal system was not operating in a state of crisis.
    In general, most of the countries that have restructured 
their postal system conduct their business like a private 
sector concern with great latitude in rate setting. However, 
rate increases for monopoly services must still be approved by 
some branch or department of government or are subject to a 
rate cap, though non-monopoly services enjoy greater freedom in 
price setting. These postal administrations have greater 
managerial freedom and many are mandated to make a profit. 
Though not all of the administrations are mandated to maintain 
uniform rates for letter mail, all of them do; they also have 
explicit social obligations to the citizens of the country and 
the government. There appears to be an international view to 
require universal service.
    The U.S. Postal Service is unique in terms of the volume, 
size and purposes for which it is used. No other postal system 
compares in size to the USPS which boasts of annual revenues in 
excess of $55 billion. Additionally, no other postal system is 
utilized as an advertising medium to the extent of the U.S. 
Postal Service.
    During the first session of the 104th Congress, the 
subcommittee on the Postal Service initiated a series of 
hearings on postal reform. A dialog was initiated in querying 
whether, and in what manner, the quarter-century old Postal 
Reorganization Act should be changed. When the act was adopted, 
the Postal Service faced little competition in terms of its 
product structure and the act was widely heralded as 
progressive legislation designed to ensure the future viability 
of the Postal Service. However, advances in electronic 
communication and aggressive business practices on the part of 
competitors during the past 25 years has necessitated the re-
evaluation of the role of the Postal Service in today's 
marketplace.
    b. Benefits.--Given the studies which have been 
commissioned by the USPS and requested by the Senate 
Subcommittee on Post Office and Civil Service regarding 
progressive postal administrations and Private Express 
Statutes, respectively, the oversight committees are in a 
position to analyze the applicability to the U.S. postal system 
the changes which have taken place in foreign postal 
administrations. Since the changes in foreign postal 
administrations have included evolving from a traditional 
government-owned monopoly operation into variations of 
profitmaking entities with significant commercial freedom, the 
suitability to the American scenario in establishing a paradigm 
would be beneficial.
    c. Hearings.--The U.S. Senate, Subcommittee on Post Office 
and Civil Service, of the Committee on Governmental Affairs, 
and the U.S. House Subcommittee on the Postal Service, of the 
Committee on Government Reform and Oversight held a joint 
hearing on January 25, 1996. The witnesses included, Graeme T. 
John, managing director Australia Post, Georges C. Clermont, 
president and director general, Canada Post Corp.; Elmar Toime, 
chief executive officer, New Zealand Post Limited; Ulf 
Dahlsten, president and chief executive officer, Posten AB, 
Limited, Sweden, accompanied by Tommy Perrson, senior vice 
president, Posten AB, Limited, Sweden; Michael E. Motley, 
Associate Director, Government Business Operations Issues, U.S. 
General Accounting Office, accompanied by James T. Campbell, 
Assistant Director, Government Business Operation Issues, GAO; 
James Waddell, partner, Price Waterhouse, accompanied by David 
E. Treworgy, principal consultant, Price Waterhouse.

12. Postal Reform: H.R. 210, a Bill To Provide for the Privatization of 
        the United States Postal Service; H.R. 3717, the Postal Reform 
        Act of 1996; H.R. 3690, the Postal Service Core Business Act of 
        1996.

    a. Summary.--The U.S. Postal Service was created by statute 
to operate efficiently and economically without benefit of 
taxpayer funds but with mandates to provide universal service 
at uniform rates and to break even. Whereas competitors can 
tailor their capital and labor resources to narrow markets, the 
Postal Service must support a broad infrastructure in order to 
meet its obligation of providing universal postal service. 
These statutory structures impose conflicting mandates on the 
Postal Service. Today, the Postal Service operates without 
benefit of taxpayer financing but service and delivery 
questions burden the agency along with increasing competition 
from new and emerging communication technologies as consumers 
and businesses move away from communicating via hard copy 
delivery. Various modules have been proposed to restructure the 
Postal Service, including the experiences international postal 
services.
    Representative Crane's bill, H.R. 210, transforms the 
current Federal Government-owned Postal Service to a private 
corporation with ownership divested from the U.S. Government to 
the employees of the Service. The entity would operate under 
some of the same restrictions as the current Postal Service. 
During the first 5 years, the company would operate with 
benefit of the current monopoly and rates would be established 
upon consultation with the Postal Rate Commission. Following 
the initial 5 years, the President would have the discretion of 
continuing or nullifying the Postal Rate Commission.
    Subcommittee Chairman McHugh's comprehensive reform 
measure, H.R. 3717, retains the Postal Service as a government-
owned enterprise, mandated to maintain universal service and 
uniform rates for noncompetitive products but with considerable 
flexibility in the rate-setting of competitive products and the 
launching of new products, though under the fullest extent of 
antitrust provisions and under the oversight of Congress.
    H.R. 3717 is the first comprehensive reform effort of the 
Postal Service since the Postal Reorganization Act of 1970. The 
legislation is the result of testimony presented by more than 
60 witnesses over 18 months of hearings. Issues were brought to 
the subcommittee's attention by postal customers, postal 
employees, and business leaders, among others, whose voices 
were heard and incorporated within the legislation. The 
legislation guarantees the continuation of universal postal 
service at uniform, affordable rates. However, during the past 
decades, methods of communications have changed drastically 
resulting in shifting mail volumes and stagnant postal revenue 
growth. There has been a steady erosion of standard 
correspondence which formerly moved through the Postal Service 
but is now being sent by electronic alternatives, facsimile 
machines or by private mail carriers. The General Accounting 
Office (GAO) reported that within the past 25 years the Postal 
Service lost approximately 13 percent of its express mail 
market and is moving fewer parcels. For instance, in 1971 the 
Postal Service handled 536 million parcels and in 1990 the 
volume dropped to 122 million pieces, or a market share of only 
6 percent. The shift of revenues negatively impacts the ability 
of the Postal Service to serve the Nation.
    The Postal Reorganization Act served the Nation well for a 
quarter century. However, rapid changes force Congress to 
examine adjustments which permit the Postal Service more 
flexibility in areas where it faces competition while 
guaranteeing that postal customers will receive universal 
service. The legislation accomplishes this mission. The bill 
allows the U.S. Postal Service the opportunity to make a profit 
and removes the break-even mandate required by 1970 law.
    H.R. 3690, the Postal Service Core Business Act of 1996, 
was considered with postal reform legislation because it would 
restrict the ability of the Postal Service to provide services 
while limiting its nonpostal services.
    b. Benefits.--Because of the many challenges confronting 
the Postal Service in an era of ever changing technology and 
competition, it is important to explore postal reform before a 
major crisis befalls the Service and reform is made in haste. 
The subcommittee has made consideration of substantive postal 
reform its major focus. Testimony from all quarters was heard, 
solicited and accepted to address each concern, including 
ratemaking, the statutory monopoly, new technologies, and 
organizational structure.
    c. Hearings.--A joint hearing with the Senate Subcommittee 
on Post Office and Civil Service was held on January 25, 1996. 
Witnesses were the heads of several international postal 
corporations, as listed above. Four hearings entitled ``Postal 
Reform Act of 1996'' were held on July 10, July 18, September 
17, and September 26, 1996. The following witnesses presented 
testimony:
    July 10--Postmaster General Marvin Runyon and Chairman 
Edward J. Gleiman of the Postal Rate Commission.
    July 18--(Postal Employee Unions and Management 
Organizations) Moe Biller, president, American Postal Workers 
Union; Vincent Sombrotto, president National Association of 
Letter Carriers; Scottie Hicks, president, National Rural 
Letter Carriers Association; William Quinn, president, National 
Postal Mail Handlers Union; John Pesa, president, National 
Labor Council, Fraternal Order of Police; Hugh Bates, 
president, National Association of Postmasters of the United 
States; Bill Brennan, president, National League of 
Postmasters; Vince Palladino, president, National Association 
of Postal Supervisors.
    September 17--(Major Mailers) Jerry Cerasale, senior vice 
president, Direct Marketing Association; Ian D. Volner, general 
counsel, Advertising Mail Marketing Association; Timothy May, 
general counsel, Parcel Shippers Association; David Todd, 
counsel, Mail Order Association of America; Mark Silbergeld, 
president, Alliance of Nonprofit Mailers; Lee Cassidy, 
executive director, National Federation of Nonprofits; 
Christopher M. Little, chairman Government Affairs Council, 
Magazine Publishers of America; Steven B. Waters, vice 
president & publisher, Rome Sentinel Co., National Newspaper 
Association; John Sturm, president & CEO, Newspaper Association 
of America; Steve Bair, senior vice president, Law and Business 
Affairs for Time Life, Inc., Association of American 
Publishers.
    September 26--(Postal Service Reliant Business and 
Competitors) Honorable Duncan Hunter; Maynard H. Benjamin, 
president, Envelope Manufacturers Association of America; Dan 
Goodkind, chairman of the board, Mail Advertising Service 
Association; Charmaine Fennie, chairperson, Coalition Against 
Unfair USPS Competition; John T. Estes, executive director, 
Main Street Coalition for Postal Fairness; Robert Williamson, 
executive director, National Association of Presort Mailers; 
Frederic W. Smith, chairman & CEO, Federal Express; Kent (Oz) 
C. Nelson, CEO, United Parcel Service; Philip A. Belyew, 
president, Air Courier Conference of America.

13. Field Hearing on Chicago Mail Service and Postal Operations.

    a. Summary.--The Chicago Division of the Postal Service has 
been the subject of concern over a period of years. The various 
issues include problems arising from delivery standards and the 
construction of a new general mail facility in downtown Chicago 
which faced cost overruns.
    A Postal subcommittee hearing in Chicago during the 101st 
Congress reviewed similar issues. After a visit to the Chicago 
area in 1994, the Postmaster General formed the Chicago Task 
Force and appointed a new Postmaster in an attempt to improve 
service problems. However, the need for this oversight was 
necessitated because improvement of on-time delivery in the 
area has not been evident. On-time delivery scores in the 
Chicago area are the lowest in the country. Quarterly 
statistics issued by the Postal Service show that Chicago has, 
for many quarters, consistently performed below the national 
average.
    The Chicago Post Office had an impact on modern postal 
history. In October 1966, operations in the Chicago Post Office 
came to a halt for 3 weeks under a deluge of more than 10 
million pieces of mail. The results were devastating for 
Chicago and for the entire Midwest. Reportedly, this was a 
result of inadequate infrastructure and improper focus of 
attention to postal operations nationwide. Postal observers 
recognized that there were accumulated stresses and concerns 
which could lead to crisis. The Chicago incident precipitated 
congressional hearings which made a case for postal reform and 
the formation of the Kappel Commission which lead to the Postal 
Reorganization Act of 1970.
    b. Benefits.--The hearing explored the reasons for the last 
place showing of the Chicago postal service. It reminded the 
Postal Service of its mission of service to its business and 
residential customers and that a delivery problem exists at the 
hub of the Nation's commerce and airline activities. As a 
result of the hearing, Postal Service witnesses pledged to 
improve the delivery standards in the Chicago Division by the 
end of the next quarter.
    c. Hearings.--A field hearing was held at the DePaul 
University campus in Chicago on October 11, 1996. Members of 
Congress from the Chicago area were invited to attend and 
testify on the first panel. The second panel consisted of J.T. 
Weeker, vice president, Area Operation, Great Lakes Area; 
Postmaster Rufus Porter, district manager, Chicago accompanied 
by David C. Fields, plant manager, Chicago Processing and 
Distribution Center. The third panel was made up of witnesses 
from local users and postal customer councils (composed of 
volunteers from the local communities): Allan Bennett, Postal 
Advisory Council; Donald Gutowski, village trustee, Village of 
Norridge; Caroline Hill, Customer Advisory Council and Diane 
Winter, Chicago Postal Customer Council. Witnesses on the third 
panel were pleased with the amount of progress that has been 
made during the past few years because of the new management 
and their commitment, even though continued improvements are 
necessary.

14. Qui Tam Provisions within the False Claims Act.

    a. Summary.--The False Claim Act (FCA) Amendments was 
signed into law by President Reagan in 1986. This law enables 
private citizens, who have evidence, to play a role in 
antifraud endeavors. Qui tam provisions, revitalized in this 
legislation permit individuals to sue, on behalf of the 
Government, against the entity which has fraudulently obtained 
profits from the Government. The individual is permitted to 
keep a portion of the compensation if awarded. Qui tam 
provisions originated in the Middle Ages, encouraging police 
action by private citizens because there were no organized 
methods of policing. President Lincoln incorporated the 
principle in the False Claims Act in 1863 but, until 1986, the 
provision became greatly eroded both by statute and by 
inconsistent case law. Because of clarification made by the 
1986 amendments, qui tam litigation has enabled the Federal 
Government to recover more than $1.13 billion in damages with 
individuals (relators) receiving about 18 percent of the total 
amount.
    b. Benefits.--Potential for fraud against the Postal 
Service, which initiates contracts worth billions of dollars, 
is great. The subcommittee has initiated a study of the qui tam 
provisions and the possibility of including the Postal Service 
under the rubric of its application.
    c. Hearings.--None.

15. USPS contract for 8,879 Cargo Minivans.

    a. Summary.--The subcommittee was informed that the U.S. 
Postal Service recently awarded a contract to Ford Motor Co. of 
Detroit, MI for 8,879 minivans with front wheel drives. The 
informant stated that though the contract award went to the 
lowest bidder, there was no real competitor as there is only 
one vehicle on the market which fits the Postal Service' 
specification; had the Postal Service permitted more 
flexibility, there would have been more competition. 
Furthermore, the specification for a front wheel drive vehicle 
would be costly to maintain. The Postal Service averred that 
its decision to specify front wheel drive configuration took 
into account the potential costs for maintenance; the 
conclusion was that the benefits outweigh the drawbacks. The 
solicitations were issued on July 8, 1996. Some bidders 
requested that the return date for subject solicitation be 
extended from 8/5/96 to 9/12/96 because of the specified amount 
of equipment and training materials required. The Postal 
Service responded that because the Postal Service's fiscal year 
ends on September 13 the solicitation is committed to be spent 
by that date and the extension was denied. The Postal Service 
set specifications for training. One of the bidders suggested 
that training for ``off the shelf'' minivans that were 
specified was unnecessary as all maintenance requirements are 
specified in the owners and service manuals. The Postal Service 
responded that it requires specified training therefore the 
specification would remain unchanged. It was alleged that this 
was essentially a sole-source contract.
    The cost of the 8,879 Cargo Minivans totaled $161.6 
million. The subcommittee was informed that the Postal Service 
may not have received the standard customer discount per 
vehicle. Generally, a $1,500 discount is given per single 
vehicle bought; the claim was that the successful bidder did 
not feel the need to give bid assistance as there was no real 
competition due to the specifications. The charge was that had 
there been a larger competitive field with greater flexibility 
in the specifications the Postal Service may have been able to 
save at least $30 million in this contract. The Postal Service 
indicated that the price they contracted for per vehicle 
included the discount.
    The subcommittee is also interested in answers from the 
Postal Service regarding the justification for 7,954 front 
wheel drive vehicles, whether rear wheel drive vehicles would 
have been adequate in some areas, could rear wheel drive 
vehicles been bought at a lesser cost, how much would the 
General Services Administration have paid per vehicle for the 
same or similar vehicle, whether a market study was done, was a 
study done on the life cycle cost of the product, and what 
procurement manual and procedures were used.
    Initial dialog was initiated between the Postal Service and 
the subcommittee staff. Consequently, the chairman of the 
subcommittee requested the Postal Inspection Service to provide 
a report on the matter.
    b. Benefits.--The investigation by the Postal Inspection 
Service may find that the contract is in order; however, the 
likelihood is that there could have been additional savings on 
a contract of this size. Revenue protection helps the Postal 
Service from seeking earlier rate increases, which in turn 
benefits the users of postal services. Efficient and careful 
contracting will help the Postal Service meet its mandate to 
act more like a business.
    c. Hearings.--No hearings were held on this issue.

16. Review of Postal Service Bulk Business Mail Acceptance Practices; 
        Assessment of the Adequacy of the Postal Service's Systems for 
        Assessing, Collecting, and Otherwise Protecting Revenue and/or 
        Accountable Paper.

    a. Summary.--Postage discounts are allowed for presorted 
and prebarcoded bulk business mailings because processing costs 
for the Postal Service are reduced. Discounts allowed in fiscal 
year 1994 totaled $8 billion. The subcommittee is concerned 
that the Postal Service may allow discounts on mail that is not 
properly prepared and does not reduce processing costs. With 
the assistance of the GAO, the subcommittee is evaluating 
whether the Postal Service's acceptance procedures provide 
reasonable assurance that all revenues due from bulk business 
mailings are being received, and what actions the Postal 
Service is taking to minimize its vulnerability to bulk 
business mail losses.
    The subcommittee received a report from the GAO on June 25, 
1996, ``U.S. Postal Service: Stronger Mail Acceptance Controls 
Could Help Prevent Revenue Losses,'' GAO/GGD-96-126. GAO 
reported that the Service's system of revenue controls were 
insufficient to provide it with reasonable assurances that all 
significant amounts of revenue due from bulk business mailings 
were correctly identified and received because of systemic 
weaknesses. While the Postal Inspection Service has long 
considered bulk business mail acceptance to be a high-risk 
activity, postal management has not devoted sufficient 
attention to the adequacy of acceptance controls.
    b. Benefits.--This review will provide essential 
information on the extent of revenue losses to the Postal 
Service and review improvements to the Service's revenue 
protection efforts. For fiscal year 1994, bulk business mail 
accounted for $23.1 billion or 48.4 percent of the Services 
total mail revenue. Identifiable losses totaled $168 million 
with more than $8 billion of postage discounts at risk. This 
continuing review will benefit the Nation and postal ratepayers 
by helping the Service identify revenue shortfalls and areas 
subject to waste, fraud and abuse.
    c. Hearings.--None.

17. Review of Selected Major Postal Service Procurements.

    a. Summary.--One of the major areas of subcommittee concern 
is the Postal Service procurement program. In the past, the 
program which is exempt from most Federal procurement laws, has 
exhibited major deficiencies which have created procurement 
problems. The GAO, at subcommittee Chairman McHugh's request, 
reviewed the Postal Service procurement program to determine 
what the underlying problems are and what might be done to 
alleviate them.
    The GAO found in its report, ``Postal Service: Conditions 
Leading to Problems in Some Major Purchases,'' January 18, 
1996, GGD-96-59, problems encountered during the seven 
purchases it reviewed were due to Postal officials' poor 
judgment, circumventions of existing internal controls, and 
failure to resolved conflicts of interest. It also found that 
many contracting officers could not exercise independent 
judgment, since they reported directly to those officials who 
required the products or services. Further, the GAO maintained 
that the Service has taken action to increase oversight and 
accountability over its purchasing process and to safeguard 
against such future occurrences. In response to recommendations 
by the Office of Government Ethics, the Service has outlined 
actions it is taking to improve its ethics program which should 
help prevent the recurrence of such purchasing problems. The 
Service has also instituted a formal ethics education and 
training program for contracting officers and personnel. 
Further, the Service has established one purchasing executive 
with management authority over the three separate Postal 
purchasing groups; and the Service plans to adopt a requirement 
for more explicit documentation of and rationale for 
contracting officers' business and policy actions. The 
subcommittee will explore the findings in subsequent oversight 
hearings.
    b. Benefits.--This report provided program information and 
indicated possible solutions to ensure that the Postal Service 
maintains appropriate internal controls and ethics rules in its 
procurement program.
    c. Hearings.--This issue, and others, were raised during 
the conduct of the subcommittee's General Oversight hearing, 
entitled ``General Oversight of the U.S. Postal Service: The 
Board of Governors, the Postmaster General, the Postal Rate 
Commission the Office of the Postal Service Inspector General 
and the General Accounting Office'' on March 13, 1996.

18. Evaluation of USPS Oversight of National Change of Address Program 
        Licensees.

    a. Summary.--The Postal Service National Change of Address 
(NCOA) program provides postal customer address change 
information to licensees who, in turn, use the data to update 
proprietary address lists which are sold nationwide. In order 
to protect the privacy of its customers, the USPS imposes 
restrictions on licensees' use of NCOA information and monitors 
compliance with those restrictions. The subcommittee, with the 
assistance of GAO, is examining what restrictions the NCOA 
license agreement imposes regarding the use and release of 
address information; whether those restrictions are consistent 
with ``privacy'' requirements of Federal law; how USPS monitors 
the licensees' compliance with NCOA license agreements and 
oversees corrective actions for identified violations.
    The subcommittee received a report from GAO entitled ``U.S. 
Postal Service: Improved Oversight Needed to Protect Privacy of 
Address Changes,'' August 13, 1996, GAO/GGD-96-119. The report 
concluded that the Postal Service has been unable to prevent, 
detect, or correct potential breaches in agreements with the 24 
licensees who collect and disseminate address-correction 
information. These licensees provide address service to other 
private firms and organizations in accordance with the standard 
licensing agreement. GAO reported that the Service has not 
expressed a clear and consistent position regarding the use of 
change of address data by licensees to crease new-movers list 
in violation of Federal privacy guarantees. In addition, the 
Service was not enforcing its contract limitations with 
licensees to ensure that the use of change-of-address data is 
limited to the purpose for which it was intended.
    b. Benefits.--This report provided the subcommittee with 
critical information regarding privacy issues for postal 
patrons. It analyzed the Postal Service's ability to quickly 
and accurately correct customers' addresses which is key to 
effective and cost-efficient mail delivery. However, the report 
also provided the subcommittee with information identifying 
concerns regarding potential misuse of change-of-address data. 
The findings contained in this report further provide the 
subcommittee with informational resources necessary for the 
effective conduct of its oversight responsibilities. Further, 
the recommendations will serve as a basis for additional 
legislative inquiry regarding needed postal reforms.
    c. Hearings.--None.

19. Final-Offer Arbitration as an Alternative Means of Resolving 
        Contract Disputes Between Postal Management and Labor Unions.

    a. Summary.--In September 1994, GAO reported that 
adversarial postal labor-management relations have resulted in 
reliance on arbitration to settle contract disputes. Both 
management and unions have expressed dissatisfaction with such 
a procedure. The subcommittee asked that GAO obtain more 
information on final-offer arbitration as an alternative to the 
current procedure. Specifically: What is final-offer 
arbitration? How and where has final-offer arbitration been 
used? What do management and labor officials believe has been 
the impact of final-offer arbitration on their relations?
    The subcommittee received one briefing by the GAO regarding 
final offer arbitration. GAO reported that final offer is a 
specific approach to interest arbitration in which an 
arbitrator's decision is restricted to the selection of either 
management's offer or the union's offer. In contrast, the 
approach used by the Postal Service and its four major postal 
unions has been conventional interest arbitration, an approach 
that allows an arbitrator to develop an award decision that may 
be different from the offers submitted by the Service and the 
unions.
    Final offer has been suggested as an alternative approach 
to contract dispute resolution that can encourage Postal 
Service management and the unions to settle their disputes 
instead of relying on an arbitrator to do it for them.
    b. Benefits.--The report will indicate ways that Congress 
can encourage and assist postal management and unions to 
resolve longstanding labor relations problems. In addition, the 
subcommittee will continue its review in determining whether 
final offer interest arbitration should be included as part of 
any future postal legislative reform efforts.
    c. Hearings.--None.

20. Review of the Quality and Quantity of Data Produced by the Postal 
        Service for the Rate Setting Process.

    a. Summary.--One of the areas of the subcommittee's 
continuing concern is the quality and quantity of data 
collected and provided by the Postal Service in the ratesetting 
process.
    Given the general public concern, the subcommittee, GAO, 
the Postal Rate Commission, and the Postal Service are working 
together to assess the setting of postal rates. The GAO study 
will determine the extent to which existing systems produce 
complete, current, and accurate data necessary for ratemaking. 
The report should demonstrate whether the systems produce data 
that are reliable enough to set and adjust rates in accordance 
with relevant provisions of the Postal Reorganization Act of 
1970. It should also assess the cost and quality of reports and 
other results generated from existing Postal Service rate data 
systems compared to alternative approaches, systems, and 
techniques for gathering and reporting such data. The 
subcommittee anticipates the final results by the end of 1996. 
These findings will assist the subcommittee in evaluating 
reform of the Postal Service's ratemaking process.
    b. Benefits.--For an entity like the Postal Service that 
accounts for $54 billion in annual revenue and touches the 
lives of all Americans, the data provided to the Commission is 
essential to establishing fair and equitable rates. In many 
instances, it is the same data that the Postal Service needs to 
effectively manage an organization of 855,000 people in a 
businesslike manner. The results of this study will be 
critically important to the Congress' deliberations on whether 
to modify the ratesetting process.
    c. Hearings.--None.

21. Evaluation of the Management Practices, Working Conditions, and 
        Security at Postal Facilities in Southern California.

    a. Summary.--On July 9, 1995, at the City of Industry 
Processing Center in California, a postal worker shot and 
killed one of his supervisors. About the same time, workers at 
the La Puente California Post Office staged street protests 
over what they perceived to be a ``hostile'' work environment. 
Because of these and similar incidents and complaints, the 
Postal Service Inspector General was requested to evaluate the 
working conditions, management practices, and security at 
postal facilities in the Santa Ana District of California. The 
evaluation should clarify the state of labor-management 
relations in the Santa Ana District, and help indicate how 
Congress and the executive branch can encourage and assist 
postal management and unions to address the longstanding and 
severe labor-management problems in the Postal Service. The 
subcommittee coordinated a briefing with the U.S. Postal 
Service, the Inspection Service and the Southern California 
House delegation.
    b. Benefits.--This restricted report, which the 
subcommittee received from the Inspector General/Chief Postal 
Inspector in February 1996 provided critical information to the 
subcommittee on the status of labor-management relations at the 
southern California facilities in question. It also highlighted 
several problems which the subcommittee hopes is unique to 
these facilities, involving favoritism in employment and 
promotions; allegations of sexual harassment and a working 
environment that was less than conducive to effective 
performance of its many duties. The subcommittee is continuing 
to examine ways in which it can encourage and assist postal 
management and unions to resolve longstanding labor relations 
problems not only in southern California, but, nationwide.
    c. Hearings.--None.

22. Miscellaneous Investigative Issues.

    a. Summary.--The subcommittee has conducted a variety of 
investigations into other specific issues that are the subject 
of continued monitoring through oversight hearing questions and 
informal inquiries. In addition to an extensive number of 
matters examined as part of the oversight hearing record, the 
subcommittee reviewed the following six specific issues: (1) 
the quality of the Postal Service's performance management 
systems which were found to be inadequate by the GAO in 
previous reviews; (2) the decision by the Postmaster General to 
restructure the Service in 1992 and the extent to which, if at 
all, he was aware that this decision would be viewed as a 
reduction in force; (3) the feasibility of implementing the 
requirements of the Postmark Prompt Payment Act (H.R. 1963); 
(4) the extent to which the whistle blower protection laws 
apply to Postal Service employee; (5) the extent to which the 
applicable criminal statutes regarding mail fraud and theft 
apply to the Postal Service's efforts in the electronic mail 
environment; and (6) the effectiveness of these criminal 
statutes as a deterrent to criminals utilizing the U.S. mail.
    b. Benefits.--These investigations help to facilitate the 
effective conduct of oversight responsibilities by the 
subcommittee of the operations of the U.S. Postal Service. 
Ensuring efficient postal operations meets the mandate of the 
Postal Reorganization Act that the Postal Service operate in a 
businesslike manner so as to break even over the long term. The 
inability to prove financially viable places at risk the 
obligation for the Postal Service to provide universal service 
since an insolvent postal administration would require an 
infusions of taxpayer funds to conduct its operations. The 
conduct of these investigations furthers the public interest 
that the Postal Service is operated in an efficient and 
effective manner and furthers the ability of the institution to 
meet its public service obligations.
    c. Hearings.--None.

23. Review of the Postal Service Board of Governors.

    a. Summary.--As the governing body of the U.S. Postal 
Service, the Board of Governors is comparable to a board of 
directors of a private corporation. The Board is comprised of 
nine Governors who are appointed by the President with the 
advice and consent of the Senate. The nine governors select a 
Postmaster General, who becomes a member of the Board, and 
those 10 select a Deputy Postmaster General who also serves on 
the Board.
    The Postmaster General and the Deputy Postmaster General 
participate with the Governors on all matters except that they 
may not vote on rate or classification adjustments, adjustments 
to the budget of the Postal Rate Commission, or election of the 
chairman of the Board. While the entire Board approves requests 
to the independent Postal Rate Commission for changes in rates 
and classes of mail, the Governors alone, upon receiving a 
recommendation from the Commission, may approve, allow under 
protest, reject or modify that recommendations. The entire 
Board is responsible for determining the dates on which new 
rates and classification adjustments become effective.
    The Board directs the exercise of the powers of the Postal 
Service, directs and controls its expenditures, reviews its 
practices, conducts long-range planning, and sets policies on 
all postal matters. The Board takes up matters such as service 
standards, capital investments and facilities projects 
exceeding $10 million. It also approves officer compensation.
    As part of the subcommittee's continuing review of postal 
operations, it found that the Board of Governors had not been 
reviewed since the 1970's. The subcommittee is concerned that 
the board's legal status, e.g., its authority and 
responsibilities, and the compensation and qualifications of 
its members may be outdated when compared to similar boards. 
Key issues to be addressed include the similarities and 
differences between the Postal Service Board of Governors and 
other selected boards. In addition, this review solicits the 
input from current and former Governors regarding the strengths 
and weaknesses of the present Board structure.
    b. Benefits.--The subcommittee believes that this review 
will provide a long overdue review of the operations of the 
governing body of the USPS. The Board is ultimately responsible 
for the efficient operation of the Postal Service, a public 
entity with estimated revenues of $59 billion for fiscal year 
1997. Consequently, the Board, and ultimately the American 
public and all postal ratepayers, will benefit by this thorough 
review in order to determine what reforms may be needed of this 
important governing body.
    This review will be conducted in reference to the recent 
enactment of Public Law 104-208 which granted the Governors an 
increase in compensation from $10,000 per year to $30,000, the 
first increase since enactment of the Postal Reorganization Act 
25 years ago.
    c. Hearings.--The subcommittee addressed the subject of 
governance of the Postal Service in the conduct of two of its 
general oversight hearings: (1) a hearing entitled ``General 
Oversight of the U.S. Postal Service--the Board of Governors'' 
held on March 8, 1995; and (2) a hearing entitled ``General 
Oversight of the U.S. Postal Service--the Board of Governors, 
the Postmaster General, the Postal Rate Commission the Office 
of the Postal Service Inspector General and the General 
Accounting Office'' was held on March 13, 1996.

24. Review of the Status of USPS Initiatives to Improve Employee 
        Working Conditions and Organizational Performance.

    a. Summary.--In its September 1994 report on Labor-
Management issues within the USPS (U.S. Postal Service: Labor-
Management Problems Persist on the Workroom Floor, GAO/GGD-94-
201A & B), the GAO made several substantive recommendations to 
address the myriad of difficulties it encountered in its 
analysis. That report was prompted by the November 1991 
shooting of postal employees in the Royal Oak Mail Service 
Center in Royal Oak, MI, and other incidents of workplace 
violence at Postal facilities. The report evaluated (1) the 
status of labor-management relations in the Postal Service, (2) 
past efforts to improve relations, and (3) opportunities to 
improve relations.
    The report found that labor-management relations problems 
persist on the factory floor of postal facilities. These 
problems have not been adequately dealt with over many years 
because labor and management leadership at the national and 
local levels have been unable to work together to find 
solutions to employee problems. GAO found that labor-management 
problems are long-standing and have multiple causes that are 
related to an autocratic management style, adversarial employee 
and union attitudes, and inappropriate and inadequate 
performance management systems. Further, changing working 
relations on the workroom floor will require increased 
flexibility, necessitating changes in union contracts and 
personnel systems to allow experimentation with and evaluation 
of new approaches in relations between supervisors and 
employees.
    Specifically, GAO recommended that the Postal Service, the 
unions, and management associations develop a long-term 
agreement of at least 10 years for changing the workroom 
climate of both processing and delivery functions. This 
agreement should provide incentives that encourage teamwork and 
give employees greater responsibility and accountability for 
work results.
    The subcommittee has endorsed this GAO recommendation and 
has urged the parties to agree to participation in this labor-
management ``summit.'' Further, the subcommittee has asked the 
GAO to revisit those recommendations to determine if any have 
been implemented to improve working conditions.
    b. Benefits.--The subcommittee is concerned that poor 
postal labor-management relations continue to plague the 
operations of the U.S. Postal Service. In addition, the nature 
and extent of poor labor-management relations may differ 
substantially from one facility to another; this may reflect 
the impact of individual management or labor representation 
styles. The subcommittee believes it is incumbent upon labor 
and management to review the recommendations made by the GAO in 
its 1994 report and to seek to implement those initiatives to 
provide a better working environment for all postal employees 
and improved service for postal customers. History has shown 
what hostile management-labor relations can foster. 
Consequently, a mutual climate of respect between labor and 
management ensures both a safe working environment and more 
efficient postal operations.
    c. Hearings.--The subcommittee conducted a hearing on June 
7, 1995, as part of its general oversight hearing agenda, 
entitled ``Oversight of Postal Employees and Management 
Groups'' which explored the recommendations presented by the 
GAO in its labor-management report.

25. Continued oversight of Internal Audits of the existing Inspector 
        General.

    a. Summary.--The subcommittee receives a quarterly summary 
of significant internal Audits/Investigations conducted by the 
Postal Inspection Service (PIS) as part of its Inspector 
General function and prepared for the Board of Governors of the 
Postal Service. The format for these summaries allows the 
Governors and the subcommittee to quickly monitor the amount of 
the total costs of the audited subject, the total amount 
avoided or recovered as result of the audit and the total 
amount not recovered or avoided. For example, in Fiscal Year 
1996, the Inspection Service conducted a series of Contract 
Audits which relate to the purchasing or contracting for 
equipment, facilities, supplies, services and transportation. 
These audits questions a significant portion of postal 
operating expenses and 94 percent of the costs ($1.3 billion) 
questioned by the PIS in their Contract Audits was subsequently 
recovered by postal management.
    The Inspection Service further conducts Capital Investment 
Audits which review after-cost studies of facility projects and 
are used to evaluate the effectiveness of the projections 
contained in the original Decision Analysis Reports (DARs). 
These audits allowed the Inspection Service to make 
recommendations to postal management for savings which amounted 
to $33.3 million in fiscal year 1996. Financial Installation 
and District Accounting Office Audits identified revenue 
deficiencies of $2.4 million within postal operations for FY 
1996. These audits point out deficiencies in accounting and 
operational controls and practices. As an example, in a single 
facility, the Inspection Service found that Post Office box and 
caller service fees totaling $41,023 were not collected. In 
addition, the Inspection Service found that a general lack of 
management oversight regarding second-class mailings led to a 
revenue deficiency of $94,334 while an additional $100,000 was 
not refunded to postal customers or reported in an appropriate 
postal account as required. These facility financial audits 
allow the Inspection Service to focus local management's 
attention on the weak spots in their internal management and 
accounting practices that result in the overall loss of 
revenues. With 40,000 individual facilities, it is critical the 
accounting and management operations function as efficiently as 
possible. In another facility, the Inspection Service found 
that approximately 2.5 million pieces of first-class and 
priority mail had been delayed from 24 to 48 hours due to 
inadequate staffing, misunderstandings regarding reporting 
requirements and certain internal practices.
    b. Benefits.--These audits and investigations have has 
proved invaluable for the subcommittee in the conduct of its 
oversight responsibilities. In addition, this information is 
critical to the subcommittee in monitoring the progress of the 
Postal Service in cost-avoidance and revenue protection via 
audits of its various procurement. Such audits aid the 
subcommittee in evaluating the seriousness with which the 
Postal Service views its internal reporting organization. These 
internal controls are mandatory for organizations such as the 
Postal Service. As an example, the Postal Service utilizes the 
world's largest cash transaction system through which it 
processes postal receipts totaling from $300 to $500 million at 
more than 5,000 banks daily through more than nearly 40,000 
facilities. The Service owns and maintains 6,962 buildings with 
174 million square feet and leases an additional 27,626 
buildings with 92 million square feet. The cost of gasoline for 
the Postal Service increases by more than $1 million when the 
price per gallon goes up by a penny. The protection and 
recovery of postal revenues should be of prime importance not 
only to postal management but to every person who buys a postal 
stamp or product.
    Wasteful spending by the Postal Service results in higher 
postage rates or reduced service for all postal customers. The 
subcommittee is committed to working to ensure that the Postal 
Service operates as efficiently as possible and will work with 
the General Accounting Office, the Inspector General, the 
Postal Inspection Service and postal management to accomplish 
this important goal.
    c. Hearings.--These internal audits and the performance of 
the Inspection Service, were the subject of oversight hearings 
conducted during both sessions of the 104th Congress.

26. Oversight of the implementation of the new Office of Inspector 
        General for the Postal Service as provided in Public Law 104-
        208.

    a. Summary.--The 1988 amendments to the Inspector General 
Act of 1978 provided that the Chief Postal Inspector of the 
Postal Service perform the dual role as the designated agency 
Inspector General. The subcommittee, as well as prior oversight 
committees, perceived this dual role as an inherent conflict of 
interest and expressed concern regarding the credibility of 
this organizational structure. The subcommittee requested the 
GAO to investigate whether this dual role compromised the 
ability of the Inspector General to perform audits and 
investigations pursuant to its statutory mandates. The GAO 
reported in ``Inspectors General: A Comparison of Certain 
Activities of the Postal IG with other IGs,'' September 20, 
1996, AIMD-96-150, that the current structure organizationally 
impaired the Inspector General in performing independent audits 
of the Inspection Service.
    This issue was addressed by the subcommittee in H.R. 3717, 
the Postal Reform Act of 1996. Title I of this measure provided 
for a Presidentially appointed Inspector General independent of 
Postal Service management. Subsequent hearings and discussions 
led to subcommittee Chairman McHugh obtaining authorizing 
legislation in the Omnibus Appropriations Act of 1996 which 
established an Independent Office of Inspector General; one who 
is appointed by the Governors of the Postal Service for a term 
of 7 years (see section 662 of Public Law 104-208).
    b. Benefits.--An independent Office of Inspector General 
benefits the Postal Service, postal ratepayers and the American 
people by providing for an independent watchdog over postal 
operations, free of control and organizationally independent of 
postal management. It is expected this new office will provide 
significant oversight of an agency which accounts for more than 
$54 billion in revenue in fiscal year 1995. This arrangement 
will also allow the Chief Postal Inspector to focus his 
energies on his duties of ensuring the security of postal 
facilities and employees, protecting the public from mail fraud 
schemes and other criminal usage of the mail, and enforcing the 
laws regarding revenue protection. The subcommittee will 
continue to monitor the implementation of this amendment and 
looks forward to working with the Governors and the new 
Inspector General.
    c. Hearings.--None.

27. Continued oversight of labor-management relations within the Postal 
        Service.

    a. Summary.--The subcommittee continues to receive reports 
from labor and management representatives that problems exist 
in the working environments of certain postal facilities as 
well as between the national representatives of labor and 
management. As part of its in-depth review of this topic in 
1994 the GAO recommended that the Postmaster General conduct a 
``labor summit'' of the heads of all the employee groups and 
labor unions and himself. This summit should be used to discuss 
issues that are outside of the normal collective bargaining 
discussions and that reflect the larger problems of poor 
communication, numbers of grievances and treatment of managers 
and employees.
    b. Benefits.--Early in the first session the chairman of 
the subcommittee called upon the Postmaster General to hold 
such a summit. While the Postmaster General did issue 
invitations for a summit, it was during the time of labor 
negotiations and the invitations were generally declined until 
the negotiations were completed. By the end of the second 
session those negotiations were completed. The subcommittee 
chairman has again called upon the Postmaster General and the 
presidents of the employee associations and labor unions to 
conduct a summit to explore in detail the basic problems that 
exist in the framework of the existing labor-management 
relationships. To ensure that such a summit takes place the 
subcommittee chairman included in H.R. 3717, the Postal Reform 
Act of 1996, provisions establishing a Presidentially 
appointed, non-postal, Labor-Management Commission to address 
these issues and make recommendations to the Congress and the 
Postal Service on improvements. The subcommittee believes that 
a serious dialog and a complete understanding of individual 
views would serve to greatly improve the working environment 
for each employee, improve service to postal customers and 
allow the Postal Service to achieve increased productivity, 
performance and better revenue utilization.
    c. Hearings.--None.

28. Continuing Review of the Competitive Role of the U.S. Postal 
        Service.

    a. Summary.--The subcommittee is continuing to follow-up on 
an earlier report of the General Accounting Office entitled, 
``U.S. Postal Service: Pricing Products in a Competitive 
Environment,'' GAO/GGD 92-49, which outlined the competition 
the U.S. Postal Service faces in the marketplace and its 
response to that competition. The report also examined the 
constraints and obstacles that hinder Postal Service efforts to 
compete effectively and evaluated the major issues of pricing 
postal services in a competitive environment. Specifically, GAO 
recommended Congress examine the nine ratemaking criteria set 
forth in the Postal Reorganization Act and consider amending 
them to give demand factors--including elasticities of demand--
a greater weight in order to assure the long-term viability of 
the Postal Service as a nationwide full-service provider of 
postal services. GAO found that such use of demand factors 
would not be inconsistent with the rate criterion requiring the 
establishment of a fair and equitable rate schedule. Further, 
GAO suggested that Congress consider allowing the Postal 
Service to offer volume discounting to the extent it would not 
result in ``undue or unreasonable discrimination'' among 
mailers or result in an ``undue or unreasonable preference'' to 
a mailer.
    This report served as the foundation for the subcommittee's 
efforts in reviewing the ratemaking criteria and in 
establishing guidelines for the Postal Service to offer volume 
discounts in H.R. 3717. The subcommittee will continue to 
review ratemaking efforts in order to prepare the Postal 
Service with the capability of providing efficient, cost-
effective service to universal audience of postal customers.
    b. Benefits.--The subcommittee recognizes that a 
financially viable Postal Service is critical toward meeting 
the mandate of universal mail service as provided by the Postal 
Reorganization Act of 1970. The subcommittee questions whether 
the private sector is capable or desirous of offering such a 
guarantee of universal mail delivery. However, the impact of 
competition from private couriers, private mail box retail 
facilities and the emerging electronic alternatives is being 
felt by the Postal Service. Lost mail volumes and revenues can 
contribute to a spiral of low mail volume and increased postage 
rates further decreasing volume. The GAO has recognized the 
competitive nature of the Postal Service, but, queries whether 
it can compete fairly. The subcommittee has asked the GAO to 
continue to gather data on this rapidly changing environment. 
This information will be taken into consideration as it 
continues to prepare postal reform legislation.
    c. Hearings.--None.

29. Continuing Review of Universal Mail Service and Ratemaking in 
        Canada.

    a. Summary.--The Canadian Government enacted the Canada 
Post Corporation Act in 1981, which created Canada Post, a 
Crown Corporation with commercial freedoms to operate similar 
to a private business. On July 31, 1996, the Ministry 
Responsible for Canada Post Corporation received the report of 
the Canada Post Mandate Review. The review was critical of 
Canada Post's excursions into the private sector competitive 
markets.
    b. Benefits.--Of all foreign postal administrations, Canada 
Post most resembles the U.S. Postal Service. However, mail 
volume in Canada lags considerably behind the United States. 
The benefits and problems experienced by Canada in its postal 
reform will prove valuable to the subcommittee as we consider 
reforms for the U.S. Postal Service.
    c. Hearings.--None.

30. Continuing Review of Mailing Costs for the Federal Government.

    a. Summary.--The U.S. Government incurs an estimated $1.2 
billion annually in mailing costs. According to the General 
Accounting Office, the General Services Administration (GSA), 
the central mail manager for the government, lacks data on the 
extent to which Federal agencies take advantage of centralized 
mail preparation and postal discounts. The subcommittee has 
requested the GAO report to it concerning government mailing 
costs and the extent to which agencies have taken advantage of 
available postage discounts.
    b. Benefits.--The subcommittee believes that opportunities 
exist for the Federal Government to take advantage of the 
myriad postage discounts offered to postal customers to a 
greater degree than is occurring presently. Better coordination 
of governmental mailing needs to take place in order to make 
these opportunities a reality. By taking advantage of readily 
available postage discounts, agencies--and taxpayers--can 
benefit through more efficient mail service and cheaper mailing 
rates.
    c. Hearings.--None.

31. Continuing Review of Growth in Postal Service Employment.

    a. Summary.--The subcommittee is very interested in the 
apparent connection between the number of postal employees and 
the impact such employment numbers have on the quality of 
postal services. The Postal Service has invested billions on 
automation equipment to reduce human handling of mail. Yet, the 
Postal Service remains a very manually intensive operation with 
more than 80 percent of its costs reflective of employee pay 
and benefits.
    b. Benefits.--According to the GAO, in 1989 the Postal 
Service reached record employment of career and noncareer 
employees at 845,141. Throughout 1992 and 1993 the Postal 
Service went through an aggressive downsizing effort that 
brought its numbers of employees to 781,591. Unfortunately, 
service was noticeably degraded and the Postal Service 
immediately launched an effort to hire additional workers to 
improve service. This effort has allowed the numbers of full 
and part-time employees to reach 855,471 in November 1995. 
While this number exceeds 1989 employment figures, it is 
important to recognize that the current number of career 
employees--739,804--is less than the 1989 career employment 
count of 773,699. Arguably, this indicates a conscious effort 
on the part of the Postal Service to hold down its labor costs. 
The numbers of employees, the need for quality postal services 
and the elasticities of demand for those services require the 
subcommittee to continue its oversight efforts.
    c. Hearings.--None.

32. Continuing Review of the Statutory Mail Box Restriction.

    a. Summary.--The United States is one of few nations to 
have restricted access to the individual's mail box. Current 
law provides that only that individual and the U.S. Postal 
Service may have access to the mailbox. During the joint 
hearing with the Senate Subcommittee on Post Office and Civil 
Service, representatives of foreign postal administrations 
testified that lack of restrictions on mailbox access had 
little effect on exacerbating mail theft. Other witnesses 
expressed envy regarding protections this offered postal 
customers and law enforcement.
    b. Benefits.--This restriction is an emotional issue for 
postal employees and officials, customers and private sector 
competitors. However, no data exists to substantiate the views 
of either those who want to continue to restrict access or 
those who wish to open the mail box up to non-Postal Service 
delivery. The subcommittee intends to work with the GAO to 
secure some insight into postal customer views on this issue 
and provide the necessary data upon which future decisions can 
be based.
    c. Hearings.--None.

33. Express Mail Accounts and Insufficient Controls for Revenue 
        Protection.

    a. Summary.--Express Mail Corporate Accounts allow 
customers to deposit money with the Postal Service for using as 
needed to pay for Express Mail delivery services. The 
subcommittee is concerned that the Service's protection of 
postage revenue in this area may prove inadequate and be 
subject to abuse. The subcommittee requested the GAO to help it 
in its investigation and requested the GAO to investigate what 
steps the Service is taking to prevent fraud in this area and 
what steps the Service can take to help avoid or minimize 
revenue losses in this area.
    GAO reported to the subcommittee in ``U.S. Postal Service: 
Revenue Losses from Express Mail Accounts Have Grown,'' October 
24, 1996, GAO/GGD-97-3, that some mailers obtained Express Mail 
services using invalid corporate accounts and that the Service 
did not collect the postage due. In fiscal year 1995, the 
Service lost revenue of about $800,000--a 91 percent increase 
from fiscal year 1993--largely because the Service had not 
verified corporate accounts, which it later determined were 
invalid.
    The subcommittee is concerned that this investigation, and 
others conducted by the subcommittee regarding revenue 
protection, present a troubling pattern of lack of adequate 
control and protection of Service revenues. The subcommittee is 
continuing to maintain a focus on the problems identified and 
will work with the Postal Service to assure it takes seriously 
the weaknesses in its systems.
    b. Benefits.--Tight controls over revenue protections 
benefit both the Service and ratepayer by helping forestall 
future rate increases. While some revenue losses due to lax 
controls may not seem significant in comparison with an overall 
Service income of $59 billion for fiscal year 1997, an 
established pattern of lax revenue protection invites future 
fraud and abuse in this area while requiring ratepayers to fund 
the services for mailers who intentionally defraud the system.

34. Continuing Review of the role of the U.S. Postal Service in the 
        Electronic Information Age.

    a. Summary.--The subcommittee has been monitoring the 
discussions at the Postal Service regarding its tentative 
efforts to develop and offer certain electronic services such 
as: telephone cards, kiosks, so-called ``smart cards'' and the 
``electronic'' postmark.
    b. Benefits.--These topics go to the root of what type of 
products the Postal Service may offer in the future and impact 
greatly on similar evaluations being done in the private sector 
and the need, or lack of need, for a centralized authority, 
such as the Postal Service with 40,000 retail outlets, to be a 
part of these emerging industries.
    c. Hearings.--None.

35. Review of Postal Inspection Service investigations of the public 
        threat to the U.S. mails in the Unabomber case.

    a. Summary.--The so-called ``Unabomber'' waged an 
unprecedented, two-decade campaign of terror, setting off as 
many as 15 bombs in a period of 17 years.
    The apprehension of the Unabomber represented the combined 
efforts of Federal, State and local law enforcement. Due to his 
frequent utilization of the U.S. mail as a vehicle for the 
delivery of his bombs, the Unabomber's actions fell within the 
jurisdiction of the Postal Inspection Service. Following the 
capture of the Unabomber, the subcommittee arranged a briefing 
by the Chief Postal Inspector, Kenneth J. Hunter, for 
interested congressional staff.
    b. Benefits.--This briefing and review, which included 
examples of how the Unabomber's packages were wrapped and 
addressed, provided additional information that individuals 
could use to protect themselves against suspicious packages. 
While a suspect has now been arrested in the Unabomber case, 
the subcommittee intends to continue to monitor use of the U.S. 
mail to illegally transmit explosives and other nonmailable 
matter to consider appropriate legislative changes.
    c. Hearings.--None.
                            III. Legislation

                            A. NEW MEASURES

                       Civil Service Subcommittee

1. H.R. 3586, Veterans' Employment Opportunities Act of 1996.
    a. Report Number and Date.--House Report No. 104-675, July 
12, 1996.
    b. Summary of Measure.--To amend title 5, United States 
Code, to strengthen veterans' preference, to increase 
employment opportunities for veterans, and for other purposes. 
It permits preference eligibles and certain other veterans to 
overcome artificial restrictions on the scope of competition 
for announced vacancies, provides preference eligibles with 
increased protections during reductions in force, establishes 
an effective redress system for veterans who believe their 
rights have been violated, extends veterans' preference to 
certain positions at the White House and in the legislative and 
judicial branches of government, and requires the Federal 
Aviation Authority to apply veterans' preference in reductions 
in force.
    c. Legislative History/Status.--H.R. 3586 was introduced on 
June 5, 1996, and referred to the Committee on Government 
Reform and Oversight. On June 12, 1996, the Subcommittee on 
Civil Service reported H.R. 3586 to the full committee. The 
bill was approved and order reported, as amended, by the 
Committee on Government Reform and Oversight on June 20, 1996. 
H.R. 3586 passed the House by voice vote under suspension of 
the rules on July 30, 1996, and was received in the Senate on 
July 31, 1996.
    d. Hearings.--No hearings were held on this legislation. 
However, the subcommittee held a hearing, entitled ``Veterans 
Preference: A New Endangered Species,'' on April 30, 1996.
2. H.R. 3841, Omnibus Civil Service Reform Act of 1996.
    a. Report Number and Date.--House Report No. 104-831, 
September 23, 1996.
    b. Summary of Measure.--H.R. 3841, the Omnibus Civil 
Service Reform Act of 1996, revises the executive branch's 
ability to conduct demonstration projects under Chapter 47 of 
Title 5, U.S.C., and enhances the role of performance 
management in several employee evaluation activities. The bill 
expands the array of benefits available under the Thrift 
Savings Plan, including enabling new employees to begin 
contributing to their retirement accounts when they enter the 
workforce, allowing entering employees to roll their individual 
401(k) retirement accounts into their Thrift Savings Plan 
accounts, and liberalizing the terms under which employees can 
borrow or withdraw their contributions.
    The bill also authorizes agencies to exercise additional 
flexibility in reducing their workforces by allowing employees 
to volunteer for RIFs and by authorizing employees to enter 
into nonreimbursable details as a means of demonstrating their 
skills for potential new employers. The bill creates a variety 
of ``soft-landing'' options to ease the transition between 
Federal and private sector employment. These include allowing 
employees to continue their Federal Employees Group Life 
Insurance coverage by paying the premiums after leaving Federal 
service, extending for up to 18 months the period during which 
agencies may continue to pay the employer share of premium in 
the Federal Employees Health Benefits Program, and creating a 
combination of within-agency priority placement programs, 
education, retraining, and relocation assistance programs that 
will ease post-Federal employment transitions.
    The bill enables agencies to reimburse Federal employees 
for the costs of certain forms of liability insurance, 
authorizes disbarment of health care providers who have 
committed fraud against the Federal Employees Health Benefits 
Program, and will ensure that FBI personnel have access to the 
same Merit System Protection Board personnel appeals system as 
other Federal employees.
    c. Legislative History/Status.--H.R. 3841 was introduced by 
subcommittee Chairman Mica on July 17, 1996. It was referred to 
the Committee on Government Reform and Oversight and 
subsequently to the Subcommittee on Civil Service on July 17, 
1996. The subcommittee forward H.R. 3841 to the full committee. 
On July 25, 1996, the Committee on Government Reform and 
Oversight approved and ordered reported to the House, as 
amended, H.R. 3841. It was called up under suspension of rules 
and passed the House on September 27, 1996, by voice vote. The 
Senate received H.R. 3841 on September 28, 1996.
    d. Hearings.--The Subcommittee on Civil Service conducted a 
hearing on the bill on July 16, 1996. In addition, the 
subcommittee held a number of hearings in 1995 addressing 
concerns related to the civil service reform proposals on 
October 12, 13, 26, and November 29. In 1996, the subcommittee 
also held related hearings on May 8 and 23.
3. S. 868, Federal Employees Emergency Leave Transfer Act.
    a. Report Number and Date.--None.
    b. Summary of Measure.--S. 868, the ``Federal Employees 
Emergency Leave Transfer Act of 1995,'' provides the authority 
for the President to direct the Office of Personnel Management 
to establish an emergency leave transfer program when a 
substantial number of Federal employees are adversely affected 
by a disaster or emergency, including natural disasters and 
emergency situations such as that created by the Oklahoma City 
bombing.
    c. Legislative History/Status.--This bill was introduced in 
the Senate on May 25, 1995, and referred to the House Committee 
on Government Reform and Oversight on October 24, 1995, and 
referred to the Subcommittee on Civil Service on October 25, 
1995. The Committee on Government Reform and Oversight approved 
S. 868 on September 18, 1996, and ordered it reported. The 
House passed an amended version on September 25, 1996, 
incorporating revised language from H.R. 3586 to strengthen 
veterans' preference and provisions from H.R. 3841 and S. 1080 
to improve the Thrift Savings Plan for Federal employees by 
adding two new investment funds, eliminating restrictions on 
borrowing, establishing authority for a one-time permanent 
withdrawal, and authorizing new employees to deposit funds from 
their private 401(k) plans in the Thrift Savings Plan. There 
was no further action in the Senate.
    d. Hearings.--No hearings were held on this measure.

                   District of Columbia Subcommittee

1. H.R. 1345, District of Columbia Financial Responsibility and 
        Management Assistance Act of 1995.
    a. Report Number and Date.--House Report No. 104-96, March 
30, 1995.
    b. Summary of Measure.--The purpose of H.R. 1345 is to 
assist the District of Columbia in addressing its financial 
problems and would (1) establish a new entity, the District of 
Columbia Financial Responsibility and Management Assistance 
Authority (Authority), to advise the District, oversee and 
improve its financial and managerial activities, and (2) 
provide the District with additional access to short- and long-
term debt financing.
    The Authority would consist of five members appointed by 
the President in consultation with Congress. The Authority 
would review and approve annual financial plans and budgets 
submitted by the District. These financial plans would require 
the District to move its budget into balance by 1999. In order 
to ensure that the actions of the District are consistent with 
the approved plan, the bill would require the Authority to (1) 
review District-passed legislation before it is submitted to 
Congress; (2) approve or disapprove leases or contracts that 
the Mayor proposes to execute; (3) comment on budget 
reprogramming requests; (4) review the District's performance 
quarterly and report any variances between budgeted and actual 
transactions; and (5) approve all borrowing by the District, 
whether from the U.S. Treasury or in the private market. Also, 
the Authority would control access to the annual Federal 
payment to the District as well as any funds advanced to the 
District by the U.S. Treasury.
    The legislation also calls for creating the position of a 
Chief Financial Officer (CFO) of the District of Columbia. The 
CFO is appointed by the Mayor with the advice of the City 
Council. The Authority must confirm the Mayor's candidate. Only 
the Authority may fire the Chief Financial Officer during a 
control period. Public Law 104-8 also significantly enhanced 
the Inspector General position and provided the same Mayoral 
appointment, Authority confirmation and firing procedure as for 
the CFO.
    In addition, H.R. 1345, would create an extensive and 
detailed 4 year financial plan for the District.
    c. Legislative History/Status.--H.R. 1345 was introduced on 
March 29, 1995. On March 29, 1995, the Subcommittee on the 
District of Columbia reported H.R. 1345, to the full committee. 
The bill was approved and ordered reported to the House by the 
Committee on Government Reform and Oversight on March 30, 1995. 
On April 3, 1995, H.R. 1345 passed the House amended by voice 
vote and was received in the Senate on April 4, 1995. H.R. 1345 
passed the Senate with amendments on April 6, 1995, and the 
House agreed to the Senate amendments on April 7, 1995, and was 
signed by the President on April 17, 1995, Public Law 104-8.
    d. Hearings and Subcommittee Actions.--The Subcommittee on 
the District of Columbia held hearings on February 22, March 2, 
and March 8, 1995, on the financial status of the District of 
Columbia and on the experience of other cities which have 
operated under financial control boards. The following 
witnesses testified: Johnny C. Finch, Assistant Comptroller 
General, General Government Division, General Accounting 
Office, on February 22; Rudolph W. Giuliani, mayor of the city 
of New York; George V. Voinovich, Governor of Ohio; Hugh L. 
Carey, former Governor of New York; Edward V. Regan, former 
comptroller of New York State; David Cohen, chief of staff to 
the mayor of Philadelphia, on March 2nd; Dr. Bernard E. 
Anderson, Assistant Secretary for Employment Standards, U.S. 
Department of Labor and former chairman of the Pennsylvania 
Intergovernmental Cooperation Authority (PICA); and Ronald G. 
Henry, former executive director of PICA, on March 8th.
    On March 29, 1995, the subcommittee held a Mark-up session, 
and forwarded the measure to the full committee. On March 30, 
1995, the full committee held a mark-up session and ordered 
H.R. 1345 to be reported by voice vote.
2. H.R. 2108, District of Columbia Convention Center and Sports Arena 
        Authorization Act of 1995.
    a. Report Number and Date.--House Report No. 104-227, 
August 2, 1995.
    b. Summary of Measure.--The purpose of H.R. 2108 is to 
amend the District of Columbia Home Rule Act to allow a 
governmental entity selected by the Mayor to develop a new 
sports arena to: (1) pledge tax revenues dedicated by local law 
as security for revenue bonds to finance the cost of a sports 
arena preconstruction activities; and (2) spend these dedicated 
revenues without appropriations from the District Government 
for both preconstruction activities and debt service. The 
legislation further provides that bonds issued for arena 
development are not backed by full faith and credit of the 
District of Columbia and that revenues dedicated to sports 
arena development are not to be included in the calculation of 
the accumulative debt limit of the District.
    In addition, H.R. 2108 would eliminate the current 
requirement that the Washington Convention Center Authority 
receive appropriations from the District Government to use tax 
revenues currently dedicated to the Convention Center 
Authority. These revenues may be used to pay for operating 
expenses of the existing convention center and preconstruction 
activities of the new convention center.
    c. Legislative History/Status.--H.R. 2108 was introduced on 
July 25, 1995. On July 26, 1995, the Subcommittee on the 
District of Columbia reported H.R. 2108 to full committee. The 
bill was approved and ordered Reported to the House by the 
Committee on Government Reform and Oversight on August 2, 1995, 
and placed on Union Calendar No. 119. H.R. 2108 passed House by 
Voice Vote on August 4, 1995, and was received in the Senate on 
August 7, 1995, and referred to the Senate Committee on 
Governmental Affairs.
    On August 9, 1995, the Subcommittee on Oversight of 
Government Management held a hearing. On August 10, 1995, it 
was ordered to be Reported to the Senate by the Senate 
Committee on Governmental Affairs and placed on Senate 
Legislative Calendar under General Orders, Calendar No. 180. 
The Senate on August 11, 1995, passed the legislation by Voice 
Vote. On September 6, 1995, it was signed by the President, 
Public Law 104-28. Several amendments to Public Law 104-8 have 
been enacted as part of the District of Columbia Appropriations 
bills for FY 1996 and FY 1997.
    d. Hearings and Subcommittee Actions.--On July 12, 1995, 
the Subcommittee on the District of Columbia held a hearing on 
H.R. 1862, District of Columbia Convention Center 
Preconstruction Act of 1995, and H.R. 1843, District of 
Columbia Sports Arena Financing Act of 1995. At the hearing the 
following witnesses testified: Barry Campbell, DC chief of 
staff, Office of the Mayor; David A. Clarke, chairman, DC City 
Council; Charlene Drew Jarvis, council member, DC City Council; 
Michelle Bernard, chairwoman, Redevelopment Land Agency; Abe 
Pollin, chairman, Centre Group USAIR Arena; Eugene Godbold, 
senior vice president, Nationsbank; and Jeffrey C. Steinhoff, 
Director of Planning and Reporting, General Accounting Office.
3. H.R. 2661, District of Columbia Fiscal Protection Act of 1995.
    a. Report Number and Date.--House Report No. 104-408, 
December 14, 1995.
    b. Summary of Measure.--H.R. 2661 would allow the Mayor of 
the District, with prior written notification to the District 
Council, the District Control Board, the Congress, and the 
President, to obligate and spend District funds in the event 
that a new fiscal year begins and the District's regular 
appropriations bill has not been enacted. As amended, H.R. 
2661, would provide that the District of Columbia could 
continue its normal municipal operations using only its own 
locally raised revenues in a fiscal year while awaiting final 
action on its appropriation even if there is no Continuing 
Resolution in effect. This measure specifically mandates that 
the city must spend at the lowest spending level approved by 
Congress.
    c. Legislative History/Status.--H.R. 2661 was introduced on 
November 17, 1995, and was referred to the Committee on 
Government Reform and Oversight. On November 21, 1995, the bill 
was referred to the Subcommittee on the District of Columbia. 
The bill was approved and ordered reported, as amended, to the 
House by the Committee on Government Reform and Oversight on 
December 14, 1995, and placed on Union Calender 205.
    d. Hearings and Subcommittee Actions.--The Subcommittee on 
the District of Columbia held a hearing on December 6, 1995, 
and the following witnesses testified: Representative George W. 
Gekas, (R-PA); Edward DeSeve, Controller, Office of Management 
and Budget; Dr. Andrew Brimmer, chairman, District of Columbia 
Financial Responsibility and Management Assistance Authority; 
Marion Barry, Mayor, District of Columbia; Anthony Williams, 
chief financial officer, District of Columbia; Michael Rogers, 
city administrator, District of Columbia; Charles Hicks, 
president, American Federation of State, County, and Municipal 
Workers; David Schlein, American Federation of Government 
Employees; Diane Duff, director of Federal affairs, Greater 
Washington Board of Trade; and Dr. Marlene Kelley, deputy 
commissioner for public health, District of Columbia.
4. H.R. 461, Closing of Lorton Correctional Complex.
    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 461, to close the Lorton 
Correctional Complex, and to prohibit the incarceration of 
individuals convicted of felonies under the laws of the 
District of Columbia in facilities of the District of Columbia 
Department of Corrections. The legislation would also create a 
Commission to determine the future use of the 3,000 reservation 
which is owned by the Federal Government.
    For several years, Virginia local and State elected 
officials, Members of Congress, and criminologists have 
recommended closing this complex, which is obsolete and 
potentially dangerous facility. In response to a congressional 
mandate in the FY 1995 Commerce, State and Justice 
Appropriations bill, the National Institute of Corrections 
commissioned a study of the D.C. Department of Corrections. The 
National Council on Crime and Delinquency (NCCD) was 
commissioned to conduct that investigation. The subcommittee 
convened an informational hearing on May 22, 1996, to review 
the preliminary findings of that study. Subcommittee Chairman 
Davis directed attention of the hearing to living and working 
conditions at the prison, which the NCCD report showed to be 
universally substandard. Other issues discussed were problems 
in personnel and procurement, underfunding and the physical 
condition of the facility, which was described as unhealthy and 
life threatening.
    c. Legislative History/Status.--H.R. 461, was introduced on 
January 9, 1995, and referred to the Committee on Government 
Reform and Oversight. On January 24, 1995, it was referred to 
the Subcommittee on the District of Columbia.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held three hearings on this matter and the following witnesses 
testified: Senator John Warner (R-VA); Representative Frank 
Wolf (R-VA); Representative James Moran (D-VA); James Gilmore, 
attorney general, Commonwealth of Virginia; Michael Rogers, 
city administrator, District of Columbia; David E. Clarke, 
chairman, District of Columbia City Council; William Lightfoot, 
District of Columbia council member; Kate Hanley, chairman, 
Fairfax County board of supervisors, VA; Gerald Highland, 
Fairfax County board of supervisors, VA; Maureen Caddigan, vice 
chairwoman, Prince William County board of supervisors, VA; and 
Michelle McQuigg, Prince William County board of supervisors, 
VA, on March 17, 1995. The June 7, 1995, hearing allowed 
testimony from a diverse group of citizens and organizations.
    The third hearing was held on May 22, 1996, to review the 
findings of the NCCD study. The subcommittee received testimony 
from the following witnesses: Margaret Moore, director, 
District of Columbia Department of Corrections; Dr. James 
Austin, executive vice president, National Council on Crime and 
Delinquency; and Steve Harlan, vice chairman, District of 
Columbia Financial Responsibility and Management Assistance 
Authority (Control Board).
5. H.R. 1855, To Amend Title 11, District of Columbia Code, To Restrict 
        the Authority of the Superior Court of the District of Columbia 
        Over Certain Pending Cases Involving Child Custody and 
        Visitation Rights.
    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 1855, is intended to enable a 
child to return to her native land free of fear of continued 
court battles and judicial rulings on her custody and 
supervision.
    c. Legislative History/Status.--H.R. 1855, was introduced 
on June 15, 1995, and referred to the Committee on Government 
Reform and Oversight. On June 19, 1995, H.R. 1855 was referred 
to the Subcommittee on the District of Columbia.
    The language of H.R. 1855 was incorporated as Section 350 
of H.R. 3675, Transportation Approporiations for FY 1997 and 
signed by the President on September 30, 1996 as Public Law 
104-205.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held a hearing on August 4, 1995, and the following witnesses 
testified on the bill: Dr. Eric Foretich; Jonathan Turley, 
professor of law, George Washington University; Hollida 
Wakefield, Institute of Psychological Therapies; Antonia 
Morgan; Robert Morgan; Charles D. Gill, Superior Court Judge, 
State of Connecticut; David Harmer, Esquire; Susan Hall, vice 
president, Alliance for the Rights of Children; and Nieltje 
Gedney, Committee for Mother and Child Rights.
6. H.R. 3663, District of Columbia Water and Sewer Authority Act of 
        1996.
    a. Report Number and Date.--House Report No. 104-635, June 
25, 1996.
    b. Summary of Measure.--To amend the District of Columbia 
Self-Government and Governmental Reorganization Act to permit 
the Council of the District of Columbia to authorize the 
issuance of revenue bonds with respect to water and sewer 
facilities, and for other purposes. H.R. 3663 is needed to 
implement legislation already passed by the District of 
Columbia Council, as signed by the mayor, and approved by the 
Control Board under Public Law 104-8, creating the District of 
Columbia Water and Sewer Authority (Act 11-201, amended by 
Emergency Act on June 5, 1996). H.R. 3663 accomplishes the 
intent of Congress to allow the issuance of revenue bonds for 
water and sewer purposes by the District of Columbia and to 
permit the District Government to delegate the power being 
vested to the new Water and Sewer Authority. Other related 
provisions prevent the District Government from altering the 
Authority's budget and exempts bond proceeds and repayments 
from being part of the District's appropriations process. The 
legislation also removes both the revenues of the Water and 
Sewer Authority and outstanding General Obligation bonds issues 
for water and sewer purposes from the calculation of the 
District debt ceiling.
    c. Legislative History/Status.--H.R. 3663 was introduced on 
June 18, 1996 and was referred to the Committee on Government 
Reform and Oversight. The subcommittee considered and approved 
H.R. 3663, by voice vote and forwarded it the full committee on 
June 18, 1996. The Government Reform and Oversight Committee 
met on June 20, 1996, approved and ordered reported H.R. 3663 
to the House unanimously by voice vote. On June 27, 1996, the 
House considered the measure by unanimous consent and passed 
H.R. 3663, as amended by voice vote. It was received in the 
Senate on June 28, 1996 and passed the Senate by unanimous 
consent on July 30, 1996. It was signed by the President on 
August 6, 1996, and became Public Law 104-184.
    d. Hearings and Subcommittee Actions.--The Subcommittee on 
the District of Columbia held two hearings on February 23, 1996 
and June 12, 1996. The first hearing was devoted to oversight 
issues associated with the District's waste and water systems. 
It also examined the overall operation and performance of the 
Blue Plains Waste Water Treatment Facility and its compliance 
with Environmental Protection Agency (EPA) permits and orders. 
The following witnesses testified: Michael McCabe, Director of 
Region III, EPA; Larry King, director of the District of 
Columbia Department of Public Works, Tom Jacobus, Chief of 
Washington Aqueduct, U.S. Army Corps of Engineers; Erik Olson, 
senior attorney of the Natural Resources Defense Council, and 
Dr. Peter Hawley, medical director of the Whitman-Walker 
Clinic. The second hearing was intended to evaluate what had 
taken place at the Blue Plains Facility since the February 23 
hearing. The following witnesses testified: Hon. Steny H. 
Hoyer; Michael Rogers, city administrator of the District of 
Columbia; Larry King, director of the DC Department of Public 
Works; Katherine Hanley, chairman of the Fairfax County Board 
of Supervisors; Bruce Romer, chief administrative officer of 
Montgomery County, MD; Howard Stone, chief administrative 
officer of Prince Georges County, MD: Michael McCabe, Region 
III Administrator of EPA; and Henri Gourd, vice president/
manager of MBIA Insurance Corp. Written testimony was received 
from John Hill, executive director of the District of Columbia 
Financial Responsibility and Management Assistance Authority 
(Control Board).
7. H.R. 3336, Bill granting the District of Columbia Temporary 
        authority to waive reduction for early retirement under the 
        Civil Service Retirement System.
    a. Report Number and Date.--None.
    b. Summary of Measure.--A bill to provide for temporary 
authority to waive the reduction for early retirement under the 
Civil Service Retirement System to assist the District of 
Columbia government in its workforce downsizing efforts, and 
for other purposes. H.R. 3336 authorizes the Office of 
Personnel Management to establish a temporary program under 
which mandatory reductions in annuities for certain employees 
of the District of Columbia who voluntarily separate from 
service would be waived in connection with the District of 
Columbia's plans for downsizing its workforce. This legislation 
is intended to assist the District of Columbia in its ongoing 
efforts to reduce the size of its workforce in an orderly and 
effective fashion.
    c. Legislative History/Status.--H.R. 3336 was introduced by 
Delegate Norton on April 25, 1996 and was referred to the 
Committee on Government Reform and Oversight and subsequently 
referred to the Subcommittee on District of Columbia on May 1, 
1996.
    d. Hearings and Subcommittee Actions.--None.
8. H.R. 3389, District of Columbia Pension Liability Funding Reform Act 
        of 1996.
    a. Report Number and Date.--None.
    b. Summary of Measure.--A bill to reduce the unfunded 
liability of the teachers', firefighters', police officers', 
and judges' pension funds of the District of Columbia by 
increasing and extending the contributions of the Federal 
Government to such funds, increasing employee contributions to 
such funds, and establishing a single annual cost-of-living 
adjustment for annuities paid from such funds, and for other 
purposes.
    c. Legislative History/Status.--H.R. 3389 was introduced on 
May 2, 1996, by Delegate Norton and was referred to the 
Committee on Government Reform and Oversight. On May 8, 1996, 
it was referred to the Subcommittee on the District of Columbia 
and it currently has one co-sponsor.
    d. Hearings and Subcommittee Actions.--None.
9. H.R. 3664, District of Columbia Government Improvement and 
        Efficiency Act of 1996.
    a. Report Number and Date.--None.
    b. Summary of Measure.--This bill would make several 
technical corrections and enhance the operations aspects of the 
District's government.
    c. Legislative History/Status.--H.R. 3664 was introduced on 
June 18, 1996, and was referred to the Committee on Government 
Reform and Oversight and subsequently referred to the 
Subcommittee on the District of Columbia. The subcommittee 
considered and approved H.R. 3664 and forwarded to the full 
committee by voice vote on June 18, 1996. The Committee on 
Government Reform and Oversight considered, approved and 
ordered reported by voice vote to the House on June 20, 1996.
    d. Hearings and Subcommittee Actions.--None.

    Government Management, Information, and Technology Subcommittee

1. H.R. 1271, Family Privacy Protection Act of 1995.
    a. Report Number and Date.--House Report No. 104-94, March 
29, 1995.
    b. Summary of Measure.--Legislation protecting the privacy 
of minors from federally sponsored questioning traces its 
origins to the General Education Provisions Act (GEPA) (Public 
Law 90-247, January 2, 1968, as amended).
    The GEPA, originally enacted as Title IV of the Elementary 
and Secondary Education Amendments of 1967 (Public Law 90-247), 
brought together in one document statutory provisions enacted 
during the previous 100 years that applied to Federal education 
programs. Since 1970, most major acts extending Federal 
education programs' authorization for appropriations, have 
amended GEPA in some significant way. Three of those changes 
have greatly affected the section of GEPA on ``Protection of 
Pupils'': (1) the ``Kemp amendment'' of 1974; (2) the ``Hatch 
amendment'' of 1978; and (3) the ``Grassley amendment'' of 
1994.
    1. The Kemp amendment (Public Law 93-380, August 21, 1974) 
required that parents of pupils participating in federally 
assisted educational ``research or experimentation program[s] 
or project[s]'' be provided access to the instructional 
materials used therein. A ``research or experimentation program 
or project'' was defined as an instructional activity using 
``new or unproven teaching methods or techniques.''
    2. The Hatch amendment (Public Law 95-561, November 1, 
1978) enhanced pupil protection by inserting several provisions 
of the Privacy Act of 1974 to apply specifically in cases 
covered by the Kemp amendment. The provision prohibited 
requiring pupils to participate in certain forms of testing as 
part of a federally assisted education program, without the 
prior consent of the pupil (if an adult or emancipated minor) 
or the pupil's parent/guardian. The requirement was specific in 
referring to ``psychiatric'' or ``psychological'' tests or 
treatments that gather information on: political affiliations; 
``potentially embarrassing'' mental or psychological problems; 
sexual behavior or attitudes; illegal, antisocial, or 
``demeaning'' behavior; ``critical appraisals'' of family 
members; privileged relationships, such as those with lawyers, 
physicians, or ministers; or income (except where necessary to 
determine eligibility for financial aid).
    3. The Grassley amendment (Public Law 103-227, General 
Education Provisions Act, March 31, 1994) sought to restore 
parents/guardians' rights and powers in obtaining the redress 
of family privacy violations resulting from intrusive questions 
or improper procedures. The provision was no longer limited to 
only research or experimentation programs or projects and 
psychiatric or psychological tests. It expanded consent 
requirements to ``any survey, analysis, or evaluation'' that 
was federally assisted. The Grassley amendment also contained a 
lower threshold for triggering the consent requirement. 
Questions that happen to reveal private information trigger the 
prior-consent requirement, not just questions with a primary 
purpose of revealing private information. According to a 
Congressional Research Service memorandum, the Department of 
Education had yet to modify its regulations in order to reflect 
any of the Grassley amendment provisions as of March 1995.
    Because the Grassley amendment impacts only the Department 
of Education, not all intrusions on family privacy by federally 
sponsored questionnaires or surveys are being addressed. New 
legislation is necessary to expand the scope of parental 
consent requirements to cover surveys or questionnaires funded 
by agencies other than the Department of Education. Some of the 
Federal nationwide surveys, not now covered by the Grassley 
amendment, that might be affected by the Family Privacy 
Protection Act include: Head Start and other child development 
programs, as well as potentially health or welfare related 
surveys of the Department of Health and Human Services; child 
nutrition programs of the Department of Agriculture; education 
and related programs of the National Science Foundation and 
National Endowments for the Arts and the Humanities; and 
national surveys done by the Department of Commerce's Bureau of 
the Census, either as part of its own decennial population 
updates or as contract work for other Federal Departments and 
agencies.
    The Department of Health and Human Services and the Bureau 
of the Census regularly conduct and update a number of large-
scale nationwide surveys that include minors among the 
respondents. None of these surveys, as currently conducted 
(except where noted otherwise), require all parents/guardians 
of participating minors to provide verbal or written consent. 
To the extent that any of H.R. 1271's seven categories of 
private information might be revealed in the course of 
surveying, the proposed legislation would significantly affect 
the conduct of these surveys: National Crime Victimization 
Survey; National Health Interview Survey; and Youth Risk 
Behavior Survey.
    H.R. 1271, the Family Privacy Protection Act, establishes a 
consent requirement for those conducting a survey or 
questionnaire funded in whole or part by the Federal 
Government. Those seeking responses of minors on surveys or 
questionnaires must obtain parental/guardian consent before 
asking seven types of sensitive questions. The bill also 
provides five types of common sense exceptions from this 
requirement.
    Areas of concern for which parental consent is required for 
minors are questions related to: parental political affiliation 
or beliefs; mental or psychological problems; sexual behavior 
or attitudes; illegal, antisocial, or self-incriminating 
behavior; appraisals of other individuals with whom the minor 
has a familial relationship; relationships that are legally 
recognized as privileged, including those with lawyers, 
physicians, and members of the clergy; and religious 
affiliations and beliefs.
    The areas of exception are: the seeking of information for 
the purpose of a criminal investigation or adjudication; any 
inquiry made pursuant to a good faith concern for the health, 
safety, or welfare of an individual minor; administration of 
the immigration, internal revenue or customs laws of the United 
States; the seeking of any information required by law to 
determine eligibility for participation in a program or for 
receiving financial assistance; and the seeking of information 
to conduct tests intended to measure academic performance.
    The legislation requires that Federal agencies provide 
implementation procedures and ensure full compliance with the 
legislation. The procedures shall provide for advance 
availability of each survey or questionnaire for which a 
response from a minor is sought. The Family Privacy Protection 
Act does not apply to the Department of Education, because a 
similar provision is already contained in the General Education 
Provisions Act pertaining to that subcommittee. The act would 
become effective 90 days after enactment.
    The Contract With America includes a commitment to protect 
and strengthen the rights of families. As part of this 
commitment, H.R. 1271, the ``Family Privacy Protection Act of 
1995,'' provides for parents/guardians' rights to supervise and 
choose their children's participation in any federally funded 
survey or questionnaire that involves intrusive questioning on 
sensitive issues. H.R. 1271 is an outgrowth of the original 
legislation provided for in Title IV of H.R. 11, the Family 
Reinforcement Act, which is included as part of the Contract 
With America.
    The requirements of H.R. 1271 take effect 90 days after 
enactment and would apply to current grantees of departments 
and agencies, not just future recipients of funds. Therefore, 
time will be of the essence in providing those conducting 
surveys and questionnaires with necessary guidance through 
implementing rules and regulations. By incorporating the 
requirements of the Family Privacy Protection Act into these 
existing administrative processes, OMB can assure expeditious 
implementation.
    The reported bill provides the parents or guardians the 
opportunity to decide whether to consent to the participation 
of their minor children in federally funded surveys or 
questionnaires.
    c. Legislative History/Status.--H.R. 11, Title IV was 
referred to the Committee on Government Reform and Oversight, 
and a hearing was convened by the Subcommittee on Government 
Management, Information, and Technology on March 16, 1995. The 
bill was marked-up in the subcommittee on March 22, 1995, where 
subcommittee Chairman Horn presented an amendment in the nature 
of a substitute to H.R. 11, Title IV. This amendment was 
introduced as H.R. 1271 on March 21, 1995. Two amendments were 
considered and adopted without objection. The first, offered by 
Representative Maloney, ranking minority member of the 
Subcommittee on Government Management, Information, and 
Technology, required that agency rules and regulations 
promulgated pursuant to the legislation provide for protection 
of the confidentiality of survey data. The other amendment, 
offered by Representative Tate, provided for advance public 
availability of proposed surveys and questionnaires. The 
legislation passed the subcommittee unanimously by voice vote. 
On April 4, 1995, the legislation passed the House by a vote of 
418 to 7, and was received in the Senate on April 5, 1995.
    d. Hearings and Subcommittee Actions.--On March 16, 1995, 
the Subcommittee on Government Management, Information, and 
Technology, held a hearing to solicit comments from interested 
parties on Title IV of H.R. 11, the Family Reinforcement Act. 
Witnesses included Senator Charles E. Grassley (R-IA), Dr. 
Lloyd Johnston, program director, Survey Research Center, 
University of Michigan, Dr. Matthew Hilton, member of the Utah 
Bar and an authority on family privacy issues, Ms. Sally 
Katzen, Administrator of the Office of Information and 
Regulatory Affairs, Office of Management and Budget, and Dr. 
William T. Butz, Associate Director, Demographic Programs, 
Bureau of the Census. Written statements were provided from the 
American Association of School Administrators, the American 
Civil Liberties Union, the American School Counselor 
Association, the American School Health Association, the 
National Association of School Nurses, Inc., the National 
Association of School Psychologists, and the National School 
Boards Association.
    The Government Reform and Oversight Committee met on March 
23, 1995, to consider H.R. 1271. Chairman Clinger presented an 
amendment in the nature of a substitute to H.R. 1271 reflecting 
the two subcommittee amendments. The bill, as amended, was 
favorably reported to the House unanimously by voice vote and 
without further amendment by the full committee.
2. H.R. 1756, The Department of Commerce Dismantling Act.
    a. Report Number and Date.--None.
    b. Summary of Measure.--The Commerce Department contains a 
diverse group of programs, including the Bureau of Economic 
Analysis, the Census Bureau, Economic Development 
Administration, Export Administration, Patent and Trademarks 
Office, National Institute of Standards and Technology, 
Technology Administration, U.S. Travel and Tourism 
Administration and the National Weather Service. About 60 
percent of its budget is used for the National Oceanic and 
Atmospheric Administration (NOAA), which includes the National 
Weather Service. The Department has an annual budget of $4 
billion and has 35,000 employees.
    Title I of H.R. 1756 would redesignate the Commerce 
Department as the ``Commerce Programs Resolution Agency'' 
(CPRA) effective 6 months after enactment, an independent 
executive branch agency headed by an administrator appointed by 
the President and confirmed by the Senate. CPRA would be 
charged with ``winding down'' or the elimination of those 
activities not intended for continuation. While most of the 
continuing functions of the Commerce Department would be 
transferred out of Commerce to their receiving agency 6 months 
after the date of enactment of the Chrysler bill, the specific 
disposition of Commerce programs are contained in Title II of 
the Chrysler bill.
    c. Legislative History/Status.--The bill was introduced by 
Representative Chrysler on June 7, 1995, and was referred to 
the Committee on Government Reform and Oversight in addition to 
Committees on Commerce, Transportation and Infrastructure, 
Banking and Financial Services, International Relations, 
National Security, Agriculture, Ways and Means, the Judiciary, 
Science, and Resources. On June 16, 1995, it was referred to 
the Subcommittee on Government Management, Information, and 
Technology. It was reported amended from Ways and Means on 
September 21, 1995, Report No. 104-206, Pt. I.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held a legislative hearing on September 6th to enable the 
members, among other things, to examine the CPRA model as a 
possible prototype for future program resolution agency models. 
Subcommittee Chairman Horn, in his opening statement, noted 
that the hearing would attempt to determine if the Commerce 
Program Resolution Agency, as proposed, could effectively 
dispose of the Department's functions. He also noted that 
several other bills for eliminating agencies contained the 
``Program Resolution Model,'' consequently CPRA could provide 
the model for the process for eliminating a number of agencies.
    Committee Chairman Clinger observed that ``Our goal is to 
improve government activity where it is necessary, refocus 
government efforts where it is misdirected, and get government 
out of activities in which it does not belong.''
    Congressman Chrysler provided testimony on his bill, citing 
a Congressional Budget Office (CBO) savings estimate of $8 
billion over 5 years. He emphasized what he regarded as the 
inappropriateness of many of the activities in which the 
Department is engaged.
    In her opening statement, Mrs. Collins stressed the 
effectiveness of the current Commerce Secretary in advancing 
American trade interests abroad and in supporting the 
development of the Nation's technological capacity.
    The subcommittee received testimony from Secretary of 
Commerce Brown who questioned the CBO savings estimate, 
contending the new law would cost $1.542 billion more in the 
next 5 years. He proposed elimination of duplicated functions 
around the Federal Government by consolidating them in the 
present Department.
    In his questioning of the Secretary, Mr. Mica challenged 
the use of Department resources to engage in a grass roots 
lobbying effort to oppose legislation which would change the 
organization of the Federal Government's trade functions.
    Dr. Rodgers, the CEO of Cypress Semiconductor provided 
testimony describing several examples of what he termed 
``corporate welfare,'' which are some of the programs that 
could be terminated by dismantling the Department of Commerce.
    Mr. Black, president, Computer and Communications Industry 
Association, provided testimony advising deliberation in 
examining alternatives to the status quo, including possibly 
keeping a trimmed Department of Commerce.
    Mr. Cobb, Heritage Foundation, offered testimony in support 
of dismantling the Department and recommending staffing the 
Commerce Programs Resolution Agency with members of the Office 
of the Inspector General to ensure a successful phaseout. He 
noted that CPRA would not be a new agency, only the mechanism 
through which an existing agency would be phased-out.
    Nye Stevens, Director of Federal Management and Workforce 
Issues, General Accounting Office, testified on the purpose, 
structuring, and projected continuing need for a capacity like 
that of the Commerce Programs Resolution Agency.
    Dr. Dwight Ink, president emeritus, Institute of Public 
Administration, and senior fellow, National Academy of Public 
Administration cited his personal experience presiding over the 
elimination of a Government agency in warning of possible legal 
and personnel problems with creating the temporary resolution 
agency, questioning across-the-board funding cuts, suggesting 
the dismantling could be done in less than 3 years, and 
reaffirming longstanding support for phasing out the Department 
of Commerce.
    Mr. Raymond J. Keating, the chief economist of the Small 
Business Survival Committee, expressed full support for 
dismantling the Department of Commerce, advocating that it be 
pursued rapidly and boldly, in the spirit of small-business 
entrepreneurship, in order to serve as a model for more 
difficult and even bolder Federal agency reductions in the 
future.
    Mr. Robert McNeill, executive vice chairman, Emergency 
Committee on American Trade, supported the general dismantling 
thrust but expressed the need for a continued strong Government 
presence in the area of international commerce.
    Mr. Jeffrey Smith, executive director, Commercial Weather 
Services Association, urged the committee to provide greater 
opportunities to entrepreneurs through privatization to furnish 
weather forecasting services on a competitive basis.
    Professor Charles Bingman, another veteran of Government 
agency abolition, reorganization, and creation, suggested in 
written testimony that abolishing an agency is not only a 
political responsibility but a management process, and is best 
done as quickly as possible, with concern and sensitivity to 
human consequences.
3. H.R. 2234, Debt Collection Improvement Act of 1995.
    a. Report Number and Date.--None.
    b. Summary of Measure.--Federal agencies are currently 
authorized to use a number of debt collection tools under Title 
31 of the U.S.C. H.R. 2234 strengthens the debt collection 
tools available to agencies. In addition to strengthening these 
tools, H.R. 2234 envisions several other changes to improve 
agency performance in collecting debts. The Department of the 
Treasury will be given lead responsibility for collecting debts 
owed to the government and establishing consistent treatment of 
similarly situated debtors. Agencies will be eligible to retain 
some portion of increased debt collections, establishing an 
incentive for agencies to collect debts.
    Since the 1930's, Federal agencies have been occupying an 
ever larger role in the Nation's credit markets. According to 
the ``Analytical Perspectives'' of the fiscal year 96 Budget of 
the U.S. Government, the Federal Government is responsible for 
a portfolio of $155 billion in direct loans; $699 billion in 
guaranteed loans; $4,986 billion in insurance; and $1,502 
billion in obligations of government-sponsored enterprises. 
This increased credit role has led to increased delinquencies. 
The Federal Government currently has $49.9 billion in 
delinquent nontax debts and $70 billion in tax debts. These 
amounts have increased each of the last 5 years, despite 
writeoffs averaging $10 billion each and every year. It is the 
upward trend in delinquencies that H.R. 2234 is designed to 
remedy.
    The first modern statutory authority to collect Government 
claims dates from the Federal Claims Collection Act in 1966 
(the ``1966 act''). Prior to 1966, the Federal Government 
collected debts under common law authority. The Debt Collection 
Act of 1982 (the ``1982 act'') built upon the 1966 act and 
created a number of tools available to agencies to assist in 
collecting debts. The 1982 act allowed agencies the ability to 
use private debt collectors, credit reporting bureaus, and 
other debt collection tools.
    c. Legislative History/Status.--H.R. 2234 was introduced on 
August 4th with 10 original coauthors, including Mr. Horn, Mrs. 
Maloney, Mrs. Morella and Ms. Norton of the Government Reform 
and Oversight Committee. The major provisions include: 
offsetting payments; agency coordination; disbursements/
facilitating offset; additional collection tools; and improving 
financial management. The Debt Collection Improvement Act 
passed the House of Representatives as part of Title V of H.R. 
2491 by a vote of 227-203 on October 26, 1995. The provisions 
in H.R. 2234, as amended by the Committee on Government Reform 
and Oversight on September 19, 1995, were adopted by the House 
on April 25, 1996, as part of H.R. 3019 by a recorded vote of 
399-25, and was signed into law on April 26, 1996; Public Law 
104-134.
    d. Hearings and Subcommittee Actions.--The Subcommittee on 
Government Management, Information, and Technology held a 
legislative hearing on H.R. 2234 on September 8, 1995. In 
addition, the subcommittee has examined the issue of debt 
collection in related hearings on financial management issues.
    Representative Jim Lightfoot testified that by moving 
toward electronic disbursements, the Federal Government could 
streamline its operations, send payments and benefits to 
recipients faster, reduce crime and fraud, and save $66 million 
over 5 years. Representative Lightfoot testified that if we 
moved to electronic disbursements, the problem of lost checks 
would diminish.
    In the second panel, John Koskinen, Deputy Director, Office 
of Management and Budget testified that the administration 
supports H.R. 2234 because it will lower the deficit and 
improve financial management. Mr. Koskinen mentioned the 
deteriorating Federal credit picture, and that delinquencies 
for nontax debts increased by nearly 25 percent from 1993 to 
1994. He also referred to a report on debt collection prepared 
by the President's Council on Integrity and Efficiency, which 
endorsed many of the tools included in H.R. 2234.
    George Munoz, Chief Financial Officer/Assistant Secretary 
for Management of the Department of the Treasury also 
testified, highlighting the anticipated benefits of adopting 
H.R. 2234. Mr. Munoz cited the increased collections from 
improved litigation tracking and systems integration. Mr. Munoz 
also testified on the benefits of electronic disbursements.
    Anthony Williams, then-Chief Financial Officer, U.S. 
Department of Agriculture, detailed the collections achieved by 
USDA using various collection tools, including administrative 
offset, tax refund offset, and litigation. Upon questioning, 
Mr. Williams discussed the agency's policies regarding 
compromising debts.
    Michael Smokovich, Deputy Commissioner, Financial 
Management Service, Department of the Treasury, testified on 
the advantages of moving toward electronic funds transfer. He 
cited statistics demonstrating savings of $66 million per year, 
a reduction in the 800,000 lost checks per year, and other 
reductions in fraud, theft, crime, and forgery. Upon 
questioning, Mr. Smokovich cited the security record of 
electronic disbursements, noting that nobody has ever broken 
through the security procedures established by Treasury and the 
Federal Reserve.
    Jeff Steinhoff, Director of Policy and Planning, U.S. 
General Accounting Office, endorsed the additional tools 
included in H.R. 2234. Mr. Steinhoff noted that agencies 
assumed greater credit risk than lenders in the private sector, 
and that the Government should expect higher default rates as a 
result. In addition, he supported the idea to use private tax 
collectors to supplement other tax collection personnel.
    Bob Tobias, president of the National Treasury Employees 
Union, mentioned his concern that the use of private collection 
agencies would undermine voluntary taxpayer compliance and 
damage operations at the Internal Revenue Service. Mr. Tobias 
advocated increasing appropriations for civil servant tax 
collectors and raised concerns over taxpayer privacy.
    On the final panel, Thomas Gillespie testified on behalf of 
the American Collectors Association, a group of private debt 
collection firms. Also on the panel were Stephen Sale of Sale, 
Quinn, Deese and Weiss, James Tracey of Diversified Collection 
Services, and Robert Bernstein of the Commercial Law League. 
Mr. Bernstein endorsed centralization of debts within the 
Treasury Department. Mr. Tracey recounted his firm's successful 
experience with wage garnishment in collecting student loans.
4. H.R. 1162, Lockbox Deficit Reduction Proposals.
    a. Report Number and Date.--None.
    b. Summary of Measure.--This hearing examined a number of 
proposals designed to create a deficit reduction Lockbox, or 
guarantee, that a spending cut passed during debate on an 
appropriations bill is not reallocated during the House/Senate 
Conference Committee to another project or program. The 
multiplicity of these proposals, the varied approaches they 
take, and their complicated effects on the budget process, were 
important topics that Members examined in detail.
    H.R. 1162 would establish a Deficit Reduction Trust Fund 
and provide for downward adjustment of discretionary spending 
limits in appropriations bills. This legislation stems from 
perceived problems experienced when the House of 
Representatives voted for a spending cut and the funds were 
redirected to another project or account either in the 
conference committee or when another appropriations bill was 
considered. Members were interested in making permanent any 
reduction in spending which was passed on the floor of the 
House.
    c. Legislative History/Status.--H.R. 1162 was introduced on 
March 8, 1995 and was referred to the Subcommittee on 
Government Management, Information, and Techonology on March 
10, 1995. It was reported amended by the Committee on Rules, H. 
Rept. 104-205, Part I. On September 13, 1995, the House passed 
H. Res. 218, and was received in the Senate on September 14, 
1995.
    d. Hearings and Subcommittee Actions.--Subcommittee 
Chairman Horn and subcommittee Chairman Goss of the 
Subcommittee on Legislation Budget Process of the Committee on 
Rules, held a joint hearing to examine proposals related to 
Lockbox deficit reduction efforts. Interested Members of 
Congress were invited to testify before the subcommittees.
    Hon. Michael Crapo noted his frustration at passing cuts to 
appropriations bills, only to see the funding shifted to 
another program rather than being reduced. Representative Crapo 
described his past efforts at passing Lockbox type bills.
    Hon. Mark Foley described the frustrations experienced by 
the freshman class in reducing Government spending. 
Representative Foley presented a letter signed by virtually 
every freshman advocating adoption of a Lockbox-type approach.
    Mr. James Blum, Deputy Director, Congressional Budget 
Office, noted the success that Congress has had in controlling 
the type of discretionary spending targeted by the Lockbox 
proposal, and the heavy contribution of mandatory programs 
(uncontrolled by the Lockbox bill) to the problem of the 
deficit.
    Dr. Alice Rivlin, Director, OMB explained the Clinton 
administration's views on the Lockbox proposal, and possible 
unintended consequences of a Lockbox law. Dr. Rivlin also 
testified that the Lockbox issue was a technical accounting 
device, and that far more important was making real choices to 
balance the Federal budget.
5. H.R. 1698, Mandatory Electronic Funds Transfer Expansion Act of 
        1995.
    a. Report Number and Date.--None.
    b. Summary of Measure.--The purpose of H.R. 1698 is to 
amend title 31, U.S.C., to require electronic funds transfer 
for all Federal payments by 2001 to promote efficiency and 
economy in the disbursement of Federal funds and to eliminate 
crime incident to the issuance of Treasury checks.
    c. Legislative History/Status.--H.R. 1698 was introduced on 
May 24, 1995, and currently has four co-sponsors. On May 26, 
1995, H.R. 1698 wa referred to the subcommittee.
    d. Hearings and Subcommittee Actions.--None.
6. H.R. 1907, the Federal-aid Facility Privatization Act of 1995.
    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 1907 would relax the 
requirement that State or local governments wishing to 
privatize infrastructure facilities, but constructed partially 
or wholly with a Federal grant, repay the grant prior to 
privatizing or selling the asset. This change is contingent 
upon several conditions, such as the asset continuing in use 
for the purpose it was originally constructed, and adherence to 
all applicable grant assurances.
    c. Legislative History/Status.--The bill H.R. 1907 was 
introduced by Representatives McIntosh and Horn on June 21, 
1995. It was referred to the Committee on Government Reform and 
Oversight, and in addition the Committee on Transportation and 
Infrastructure.
    d. Hearings and Subcommittee Actions.--Subcommittee 
Chairman Horn called the hearing on November 15, 1995. The 
purpose of the hearing was to focus on the use of corporate 
forms of organization to examine H.R. 1907, the Federal-aid 
Facility Privatization Act of 1995. H.R. 1907 would ease the 
requirement that Federal grants associated with State or 
locally owned infrastructure projects are repaid prior to 
privatization.
    Representative David McIntosh (R-IN), the author of the 
bill, testified on the origins of the bill in Executive Order 
12803. Representative McIntosh stressed the importance of 
reducing the burden on local governments.
    Mr. Robert Poole, president, Reason Foundation, testified 
in support of H.R. 1907. Mr. Poole argued that H.R. 1907 could 
increase the flow of funds to improve infrastructure assets and 
that if Federal grants were to be repaid, they should be 
considered loans.
    Mr. Allen Roth, executive director, New York State Research 
Council on Privatization, testified in support of H.R. 1907, 
and suggested that it could be improved. Mr. Roth offered his 
experience reviewing New York State infrastructure assets, 
especially the New York airports.
    Mr. Michael B. Cook, Director, Office of Wastewater 
Enforcement and Compliance, Environmental Protection Agency 
testified on the U.S. Environmental Protection Agency's water 
programs, and the crucial need for increased investment in 
infrastructure assets required to comply with the Clean Water 
Act and the Safe Drinking Water Act. Mr. Cook noted that the 
official administration position would be available soon after 
the hearing.
    Mr. John Dowd, senior vice president, Wheelabrator Clean 
Water Systems, Inc., testified about Wheelabrator's experience 
privatizing a wastewater treatment plant in Ohio based on 
Executive Order 12803, and provided extensive comments on H.R. 
1907, offering suggestions for improvements.
    Mr. James Barr, chairman of the board, National Association 
of Water Companies testified in support of H.R. 1907 on behalf 
of private water companies. Barr noted the large capital 
investment requirements necessitated by current law.
    Mr. Raymond Holdsworth, president, Daniel, Mann, Johnson 
and Mendenhall testified in support of H.R. 1907, and noted the 
importance of bringing private sector expertise to bear on 
solving America's infrastructure needs. Mr. Holdsworth also 
surveyed some of the larger projects on which his company was 
working, including the Alameda Corridor project.
    Mr. Ralph L. Stanley, senior vice president, United 
Infrastructure Corp. testified in support of H.R. 1907. While 
supportive of the bill, Mr. Stanley believed that other 
barriers to privatization should be reduced. Mr. Stanley also 
advocated the increased use of toll roads.
    Mr. John Collins, senior vice president, American Trucking 
Association testified in support of H.R. 1907, so long as 
several amendments were made protecting highway users from fee 
increases unless road improvements were made.
    Mr. Viggo Butler, vice president, Airport Group 
International testified in support of H.R. 1907, and described 
his company's experience with operating privatized airports 
throughout the world, and his interest in providing capital and 
expertise to solve airport management problems in the United 
States.
    Mr. John Yodice, general counsel, Aircraft Owners and 
Pilots Association testified that the inclusion of airports in 
H.R. 1907 was premature, since the Federal Aviation 
Administration would be considering airport rates and the bill 
should await that study before action.
    Mr. Rod Grimm, president, Thicksten, Grimm, Burgum, Inc., 
testified that some of the practical difficulties of 
privatizing an asset, and offered suggestions tightening the 
bill's language to increase clarity.
    Ms. Peggy Kelly, policy analyst, Service Employee's 
International Union testified in opposition to H.R. 1907. Ms. 
Kelly disagreed that privatization was the answer for providing 
new capital for public infrastructure projects and that 
privatization would endanger safety and threatens public 
employment.
7. H.R. 2521, The Statistical Consolidation Act of 1995.
    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 2521 is designed to establish 
a Federal Statistical Service. The bill would improve 
coordination and planning among the statistical programs of the 
government and to reduce duplication and waste in information 
collected for statistical purposes.
    c. Legislative History/Status.--H.R. 2521 was introduced by 
subcommittee Chairman Horn on October 24, 1995, and currently 
has 18 co-sponsors. It was jointly referred to the Subcommittee 
on National Security, International Affairs, and Criminal 
Justice, and to the Subcommittee on Government Management, 
Information, and Technology on October 31, 1995.
    d. Hearings and Subcommittee Actions.--On March 22, 1996, 
the subcommittee held a legislative hearing on H.R. 2521. 
Testimony was received from: Hon. Everett Ehrlich, Under 
Secretary for Economic Affairs, Department of Commerce; Hon. 
Katherine Abraham, Commissioner, Bureau of Labor Statistics, 
Department of Labor; Hon. Martha Riche, Director, Bureau of the 
Census, Department of Commerce; Hon. Sally Katzen, 
Administrator, OIRA, Office of Management and Budget; Nye 
Stevens, Director, Federal Management and Workforce Issues, 
General Accounting Office; Janet Norwood, senior fellow, the 
Urban Institute; Dr. James T. Bonnen, professor of agricultural 
economics, Michigan State University; Dr. Maurine Haver, 
president, National Association of Business Economists (NABE); 
Dr. John Knapp, president, Council on Professional Associations 
on Federal Statistics; and Dr. Lynn Billard, president, 
American Statistical Association.
    Subcommittee Chairman Horn opened the hearing emphasizing 
the importance of Federal statistics and that the integrity of 
the data not be compromised. He pointed out that most Federal 
statistical programs were established to serve the information 
needs of the particular agency in which they were based. 
However, government is increasingly more interconnected, and 
most economical and social issues far exceed the bounds of any 
one agency.
    Dr. Norwood made several points noting that the United 
States has the most decentralized statistical system, and that 
American citizens must have access to accurate and objective 
statistical data. Norwood further emphasized this data must be 
collected and interpreted by competent professionals, free from 
political pressure. Finally, an effective statistical system 
must be grounded in an institutional and legal framework which 
is credible, set appropriate priorities and have the 
flexibility to conduct the appropriate and needed research.
    Mr. Ehrlich, Dr. Riche, Dr. Abraham and Ms. Katzen echoed 
the Clinton administration's position that agencies should not 
be consolidated. They further stated that allowing for the 
sharing of data is enough to address any of the concerns that 
consolidation may give rise to.
    Dr. Haver testified that the data produced by the Census 
Bureau, the Bureau of Labor Statistics and the Bureau of 
Economic Analysis, are as vital to the private sector as to the 
public. These statistics provide the basis for many operational 
and planning decisions and have real dollar consequences. While 
the economy of the United States has changed rapidly, the 
resources to measure the growing service and hi-tech sectors 
have not been available.
    Dr. Billard focused on five points in her testimony. First, 
the need for good statistics is fundamental to the functioning 
of the government; second, it is important to build an 
institutional framework which enables statistical agencies to 
meet basic statistical practices prerequisites such as 
integrity, quality and the confidentiality of data; third, the 
new agency will have to have staff expertise in many 
disciplines; fourth, the commitment to quality and professional 
standards and independence are best assured by a strong, 
independent Chief Statistician; and finally, H.R. 2521 has the 
opportunity to clarify the relationship between the 
administrator of the new agency and the coordination system 
established by the Paperwork Reduction Act.
8. H.R. 3184, The Single Audit Act Amendments of 1996.
    a. Report Number and Date.--House Report No. 104-607, June 
6, 1996.
    b. Summary of Measure.--H.R. 3184 is designed to promote 
sound financial management, including effective internal 
controls, with respect to Federal awards administered by non-
Federal entities; establish uniform requirements for audits of 
Federal awards administered by non-Federal entities; promote 
the efficient and effective use of audit resources; reduce 
burdens on State and local governments, Indian tribes and 
nonprofit organizations; and ensure that Federal departments 
and agencies rely upon and use audit work done pursuant to 
chapter 75 of title 31 United States Code, to the maximum 
extent practicable.
    Prior to the passage of the Single Audit Act, multiple 
grant-by-grant audits had produced inefficiency and duplication 
of audit efforts. There was a myriad of overlapping, 
inconsistent, and duplicative Federal requirements for audits 
of individual programs. The Single Audit Act eliminated this 
disparate approach, replacing it with a comprehensive, 
organization-wide approach to the audit.
    The threshold of $100,000 for requiring a single audit was 
based on the premise that 95 percent of direct Federal 
assistance to local governments would be subject to audit, but 
resulted in approximately 98 percent of Federal assistance 
being audited. Program managers were concerned because the 
single audit did not appear to provide much detailed coverage 
of their particular programs, especially if the dollar amount 
was such that the program was not considered to be a major 
program.
    In 1990, the General Accounting Office conducted a study to 
illustrate the influence of the act on the financial management 
practices of State and local governmental entities receiving 
Federal funds; identify issues that burden the current single 
audit process and limit the usefulness of the single audit 
reports; and develop workable solutions to improve the single 
audit process.
    The standards subcommittee of the President's Council on 
Integrity and Efficiency (PCIE) released a report noting 
concerns about some aspects of single audit implementation.
    The National State Auditors Association (NSAA) also 
conducted a survey of its members in 1991, and found that the 
members thought the act was an effective piece of legislation 
that improves overall accountability and internal controls over 
Federal funds, and provides an effective mechanism to determine 
compliance with applicable Federal program laws and 
regulations. NSAA believed the act provided information to 
Federal program managers in a cost-effective manner and 
strengthened general fiscal accountability through all levels 
and units of government.
    The results of these studies indicated that the Single 
Audit Act is working, and has caused improvements in financial 
management practices. However, the studies also indicated that 
a number of issues burden the single audit process, hinder the 
usefulness of the reports, and limit its impact. They all 
agreed that changes could improve the functioning of the act.
    c. Legislative History/Status.--Senator Glenn introduced S. 
1579, the Single Audit Act Amendments of 1996 on February 27, 
1996; subcommittee Chairman Horn introduced the same bill as 
H.R. 3184 on March 28, 1996. The subcommittee held a hearing on 
March 29, 1996; and considered H.R. 3184 on April 18, 1996, and 
forwarded it to the full committee. The Government Reform and 
Oversight Committee considered and ordered reported H.R. 3184 
favorably to the House on April 24, 1996. S. 1579 passed the 
Senate by unanimous consent on June 14, 1996; the House passed 
the provisions of H.R. 3184 as S. 1579 by voice vote on June 
18, 1996; and S. 1579 was signed into law on July 5, 1996, 
Public Law 104-156.
    d. Hearings and Subcommittee Actions.--On March 29, 1996, 
the subcommittee held a hearing to address the need for changes 
to the original act and examined what the changes will 
accomplish. Testimony was received from: Edward DeServe, 
Controller, Office of Federal Management, Office of Management 
and Budget; Gene Dodaro, Assistant Comptroller General, General 
Accounting Office; Randy Main, representing the Association of 
Independent Research Institutes; Anthony Verdecchia, 
legislative auditor of Maryland; and Kurt Sjoberg, California 
State Auditor.
9. H.R. 3869, The Electronic Reporting Streamlining Act of 1996.
    a. Report Number and Date.--None.
    b. Summary of Measure.--The bill is designed to amend the 
Federal Advisory Committee Act to direct the Director of the 
Office of Management and Budget (OMB) to conduct a negotiated 
rulemaking for the purpose of establishing electronic data 
reporting standards for the electronic interchange of certain 
data that is required to be reported under existing Federal 
law.
    The act will also streamline government-wide use of 
electronic data transmissions in place of paperwork submissions 
to included a number of reforms designed to reduce the burden 
of government-imposed paperwork on businesses and households. 
The proposed bill was intended to encourage a reduction in the 
burden of regulatory reporting for business through the more 
rapid development of data interchange standards for reporting 
regulatory information in electronic formats through an 
advisory committee process.
    Greater use of electronic filing will improve the 
efficiency of Federal Government operations by allowing 
electronic submission of required information. Increased use of 
electronic data interchange could ease the burden on private 
firms required to report regulatory information, reduce Federal 
Government administrative costs associated with processing 
data, and increase the public accessibility of submitted 
information.
    c. Legislative History/Status.--Subcommittee Chairman Horn 
introduced H.R. 3869, the ``Electronic Reporting Streamlining 
Act of 1996,'' on July 23, 1996, and has 9 co-sponsors. The 
subcommittee considered H.R. 3869 and reported it favorably to 
the full committee on July 23, 1996. The Committee on 
Government Reform and Oversight considered and approved H.R. 
3869, as amended, on July 25, 1996, and ordered it reported to 
the House.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held two hearings on October 10, 1995 and on May 22, 1996 on 
the Electronic Reporting Streamlining Act. Witnesses at the 
October hearing were: Thomas E. Kelly, Director, Regulatory 
Management and Information, Office of Policy, Planning and 
Evaluation, Environmental Protection Agency; Stephen D. Hanna, 
assistant for information technology, California Environmental 
Protection Agency; Brad W. Lamont, vice president, Romic 
Environmental Technologies Corp.; David Roe, senior attorney, 
Environmental Defense Fund; and Richard A. Ferguson, board 
member and executive director, Environment & Safety Data 
Exchange (ESDX). Witnesses at the May hearing were: Hon. Sally 
Katzen, Administrator, Office of Information and Regulatory 
Affairs, Office of Management and Budget; Richard A. Ferguson, 
board member and executive director, Environment & Safety Data 
Exchange (ESDX); David Roe, senior attorney, Environmental 
Defense Fund; and Jeffrey Snow, Electronic Data Interchange 
Project, International Association of Industrial Accident 
Boards and Commissions.
10. H.R. 3189, To Delay Privatization of the Office of Federal 
        Investigations of the Office of Personnel Management.
    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 3189 is formulated to delay 
the privatization of the Office of Federal Investigations of 
the Office of Personnel Management in order to allow sufficient 
time for a thorough review to be conducted as to the 
feasibility and desirability of any such privatization.
    The Office of Federal Investigations (OFI) performs 
background checks on Federal employees and potential Federal 
employees. Agencies granting security clearances must comply 
with the same security standards for background investigations, 
which are overseen by the Information Security Oversight Office 
(ISOO), within the Executive Office of the President. The 
background checks to comply with these requirements are subject 
to OPM's authority. Agencies may either use OPM investigators, 
or can employ a private contractor after obtaining a delegation 
of OPM's authority.
    The Office of Personnel Management intends to privatize 
this function through an Employee Stock Ownership Program. The 
new entity will be called the U.S. Investigations Service 
(USIS). OPM will grant USIS a sole-source contract for the 
first 5 years of its existence. In addition, OPM will partially 
prepay USIS, in effect capitalizing USIS for its initial 
operations.
    Questions have been raised regarding the costs of 
outsourcing this function. OPM has contracted with a private 
consultant to determine the costs and benefits of privatizing 
USIS, and determined that $73.8 million would be saved by the 
ESOP, on a net present value basis. The General Accounting 
Office is working on a report related to the costs and benefits 
of privatizing the Office of Federal Investigations, and will 
review the OPM methodology and findings.
    Others are concerned about the security and privacy of 
background checks for Federal employees and the advisability of 
private contractors having access to sensitive information. 
Reportedly, some agencies have expressed this concern, and will 
seek to establish an in-house staff of investigators to perform 
checks in the future.
    In addition, H.R. 3189 would delay the privatization of the 
Office of Federal Investigations for 2 years, and would require 
a report submitted to Congress on the feasibility of 
terminating the Office of Federal Investigations and 
privatizing its functions.
    c. Legislative History/Status.--H.R. 3189 was introduced by 
Representative Davis on March 28, 1996 with six co-sponsors. It 
was referred to the Committee on Government Reform and 
Oversight on March 28, 1996, and was referred to the 
subcommittee on April 2, 1996.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held a hearing on May 22, 1996. Testimony was received from: 
Hon. James B. King, Director, Office of Personnel Management; 
Richard A. Ferris, Associate Director, Investigations Service, 
Office of Personnel Management; Lorraine Lewis, General 
Counsel, Office of Personnel Management; Deborah Apperson, 
Investigator, Office of Personnel Management; and Herb 
Saunders, chairman, Varicon International.
11. H.R. 1281, War Crimes Disclosure Act.
    a. Report Number and Date.--House Report No. 104-819 (Part 
1), September 24, 1996.
    b. Summary of Measure.--This bill is to amend title 5, 
United States Code, and the National Security Act of 1947 to 
require disclosure under the Freedom of Information Act of 
information regarding certain individuals who participated in 
Nazi war crimes during the period in which the United States 
was involved in World War II.
    Identification of Nazi War Criminals.--Current law 
restricts access to information concerning individuals who are 
suspected of engaging in Nazi war crimes due to privacy or 
national security exemptions. Under H.R. 1281, the War Crimes 
Disclosure Act, information about these individuals in Federal 
Government files could be released through the Freedom of 
Information Act.
    The bill allows justice to be better served by allowing 
information to be released to interested parties concerning 
persons who may be guilty of committing such crimes.
    c. Legislative History/Status.--H.R. 1281 was introduced by 
Ranking Minority Member Maloney on March 21, 1995 with 29 co-
sponsors, and referred to the subcommittee. The subcommittee 
held a hearing on June 14, 1996, and marked up the bill on July 
16. The committee marked up the bill on July 25. On September 
24, 1996, H.R. 1281 passed the House by unanimous consent. On 
October 3, 1996, it passed the Senate by unanimous consent, and 
was signed into law by the President on October 19, 1996 as 
Public Law 104-309.
    d. Hearings and Subcommittee Actions.--A legislative 
hearing was held on June 14, 1996. Testimony was received from: 
Representative Tom Lantos (D-CA.); Professor Robert Herzstein, 
a member of the Department of History at the University of 
South Carolina in Columbia, SC; and Hon. Elizabeth Holtzman, a 
former Member of Congress.
12. H.R. 3802, Electronic Freedom of Information Amendments of 1996.
    a. Report Number and Date.--House Report No. 104-795, 
September 17, 1996.
    b. Summary of Measure.--H.R. 3802 is designed to amend 
section 552 of title 5, United States Code, known as the 
Freedom of Information Act, to provide for public access to 
information in an electronic format.
    The Freedom of Information Act was written more than 30 
years ago, well before the advent of the Internet and changing 
technologies. H.R. 3802 clarifies that under the Freedom of 
Information Act, records maintained in an electronic format are 
subject to disclosure to the public. The bill also simplifies 
the administration of information requests and makes more 
information about the Freedom of Information Act available to 
the public via the Internet.
    These are important changes which will allow citizens 
greater access to information.
    c. Legislative History/Status.--H.R. 3802 was introduced on 
July 12, 1996 by Representative Tate and was referred to the 
Committee on Government Reform and Oversight. The subcommittee 
held a hearing on June 14, 1996, on S. 1090, the ``Electronic 
Freedom of Information Improvement Act of 1995.'' The 
subcommittee considered and approved H.R. 3802 on July 16, 1996 
and forwarded it to the full committee. The Committee on 
Government Reform and Oversight considered, approved and 
ordered reported, as amended, by voice vote to the House on 
July 25, 1996. H.R. 3802 passed the House on September 17, 1996 
by 402-0, and was received and passed in the Senate on 
September 18, 1996. It was signed into law by President Clinton 
on October 2, 1996 as Public Law No. 104-231.
    d. Hearings and Subcommittee Actions.--On June 14, 1996, 
the subcommittee held a legislative hearing on S. 1090, the 
``Electronic Freedom of Information Improvement Act of 1995,'' 
and received testimony from Senator Patrick Leahy, (D-VT), 
Robert Gellman, attorney and a privacy and information policy 
consultant and Alan Adler, attorney.
    Mr. Gellman praised the principle in S. 1090 requiring 
agencies to respond to requestor format requests for electronic 
records, but suggested that S. 1090 might go too far in 
allowing the requestor to unreasonably require disclosure in 
seldom used formats. He further suggested that a requirement 
that agencies identify redacted material on electronic records 
should be subject to a standard of technical feasibility. He 
criticized the Department of Justice for its handling of FOIA 
litigation for agencies, stating that: ``the Department of 
Justice defends unreasonable agency denials in court and will 
make an argument, without regard to the purpose of FOIA or the 
policies of the President, department litigators bear 
substantial responsibility for much of the bad FOIA case law in 
recent years.''
    Mr. Adler recounted the barriers that journalists face when 
they request production of records in an electronic format. In 
recounting the evolution of Senator Leahy's initiatives toward 
an electronic Freedom of Information bill, Adler stressed that 
the legislation was intended to help agencies to reduce request 
backlogs and to more effectively use scarce resources. He noted 
that the legislation had evolved in response to agency 
concerns.
    Also testifying was James Lucier, director of economic 
research at Americans for Tax Reform, in support of S. 1090. He 
observed that the public was now more eager to obtain 
government information than it was when the FOIA was first 
enacted in 1966. He suggested that increasing public access to 
government information through electronic means was essential 
if the government were to approach the pace of private sector 
developments. He argued that government needed to keep pace in 
its use of communication technologies that made information 
about private institutions more accessible. Lucier testified 
that the government needs to meet the expectations for 
responsiveness that consumers insist upon from private 
institutions.
13. H.R. 3452, The Presidential and Executive Office Accountability 
        Act.
    a. Report Number and Date.--House Report No. 104-820 (Part 
1), September 24, 1996.
    b. Summary of Measure.--The Presidential and Executive 
Office Accountability Act extends certain rights and 
protections to employees of the Executive Office of the 
President. The bill amends title three of the United States 
Code, by applying 11 civil rights, labor and employment laws to 
the Executive Office of the President; extending rights and 
protections under these laws to covered employees, and 
permitting administrative and judicial dispute-resolution 
procedures, including punitive damages if applicable. H.R. 3452 
as originally drafted, established a Chief Financial Officer in 
the White House, amended the definition of ``special Government 
employee,'' made future employment laws applicable, amended the 
Congressional Accountability Act to permit awards of punitive 
damages, and repealed section 320 of the Government Employee 
Rights Act of 1991. The Senate made amendments to H.R. 3452, 
which resulted in the above provisions being eliminated.
    The Executive Office of the President will be required to 
abide by the same laws that Congress and private industry must 
comply with.
    c. Legislative History/Status.--Representative Mica 
introduced H.R. 3452 on May 14, 1996 and was referred to the 
Committee on Government Reform and Oversight. Section 3 of H.R. 
3452 was referred to the subcommittee and a hearing was held on 
June 25, 1996. The subcommittee considered and forwarded as 
amended to the full committee on July 16, 1996. The Committee 
on Government Reform and Oversight considered, approved and 
ordered reported as amended H.R. 3452 on July 25, 1996. On 
September 24, 1996, H.R. 3452 was considered under suspension 
of the rules and passed the House by a recorded vote of 410-5, 
and passed the Senate, with amendments, by unanimous consent, 
on October 3, 1996. The House agreed to the Senate amendments, 
by unanimous consent, on October 4, 1996. The bill was signed 
by the President and became law on October 26, 1996; Public Law 
104-331.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held a legislative hearing on June 25, 1996 on H.R. 3452. 
Testimony was received from: Hon. John L. Mica, (R-FL); Hon. 
Christopher Shays, (R-CT); Gregory S. Walden, counsel, Mayer 
Brown & Platt; Sandra J. Boyd, assistant general counsel, Labor 
Policy Association; Deanna R. Gelak, chair, Congressional 
Coverage Coalition, and director of Congressional Affairs, 
Society for Human Resource Management; and Hon. Franklin S. 
Reeder, Director, Office of Administration, Executive Office of 
the President. All witnesses confirmed the need for the 
provisions of H.R. 3452 to apply to the White House and those 
other divisions of the Executive Office of the President that 
are not widely covered by employment laws.
    At the committee markup on July 25, written testimony on 
constitutional issues related to establishing an Inspector 
General in the Executive Office of the President from CRS/ALD 
and from the Office of Legislative Affairs, Department of 
Justice, were put into the record.\64\ The CRS/ALD memo 
concluded that encroachment on the President's authority must 
be balanced by the need of Congress to be able to conduct 
effective oversight over the executive branch, and, on balance, 
the bill did not impermissibly encroach on the President's 
constitutional authority. The letter from the Office of Legal 
Counsel at the Justice Department claimed that to establish an 
IG in the Executive Office of the President violated the 
separation of powers between the executive and legislative 
branches and was not balanced by the Congress's need for 
effective oversight.
---------------------------------------------------------------------------
    \64\ Memorandum dated October 22, 1993, Congressional Research 
Service/American Law Division Letter undated but received July 24, 
1996, U.S. Department of Justice Office of Legislative Affairs.
---------------------------------------------------------------------------
    Written testimony \65\ was also received from the 
Department of Justice's Office of Legislative Affairs 
reiterating their support of the removal of the injunctive 
relief provisions from the bill.
---------------------------------------------------------------------------
    \65\ Letter undated but received July 24, 1996, U.S. Department of 
Justice Office of Legislative Affairs.
---------------------------------------------------------------------------
14. H.R. 3872, The White House Inspector General Act of 1996.
    a. Report Number and Date.--None.
    b. Summary of Measure.--Establishing an Office of Inspector 
General in the Executive Office of the President would provide 
the President with a tool to prevent waste, fraud, and abuse, 
and serve as an early warning system of potential problems. 
H.R. 3872 amends the Inspector General Act of 1978 and would 
set up an Inspector General in the Executive Office.
    The White House Inspector General would serve as a watchdog 
of Presidential and Executive Office financial management and 
fiscal resources. It would have complemented H.R. 3452's 
original provision applying the Chief Financial Officer Act to 
the White House. The IG would have brought to the President's 
attention situations which could cause problems before such 
problems arise, and ensure that controls are in place to 
prevent waste, fraud, or abuse.
    c. Legislative History/Status.--H.R. 3872 was introduced by 
Representative Charles Bass on July 23, 1996 and referred to 
the Committee on Government Reform and Oversight. H.R. 3872 was 
added as an amendment to H.R. 3452 on July 25, 1996, and 
approved by voice vote. However, this amendment was deleted 
from H.R. 3452 by the Senate prior to Senate passage of H.R. 
3452 on October 3, 1996.
    d. Hearings and Subcommittee Actions.--None were held.
15. H.R. 3637, The Travel Reform and Savings Act of 1996.
    a. Report Number and Date.--None.
    b. Summary of Measure.--To amend chapter 57 of title 5, 
United States Code, and title 31, United States Code, to 
provide employees who transfer in the interest of the 
government more effective and efficient delivery of relocation 
allowances by reducing administrative costs and improving 
services.
    Prior to 1921, Federal agencies established their own 
individual travel and relocation policies. In 1921, the 
legislation which created the Bureau of the Budget (BoB) 
included a small section called the Federal Coordinating 
Service, which enabled the President to coordinate executive 
branch activities to ensure economical and efficient 
operations. In 1926, President Coolidge issued Executive Order 
4493 to implement uniform regulations, known as Standard 
Government Travel Regulations (SGTR), recommended by the 
Federal Coordinating Service. The SGTR incorporated the first 
set of standardized maximum subsistence expense rates which had 
just been enacted in the Subsistence Expenses Act of 1926. The 
SGTR was issued by Executive order until 1931, when BoB was 
given the authority to issue regulations with the President's 
approval. In 1949, the Travel Expense Act of 1949 conferred 
authority on the Director of the BoB to promulgate the SGTR 
without the President's approval. BoB, and then OMB, continued 
to issue the regulations until 1971, when the function was 
transferred to the General Services Administration (GSA).
    The Federal Government spends $7.6 billion per year on 
Federal travel, according to the General Accounting Office. An 
additional $2 or $3 billion per year is spent processing the 
paperwork that this generates.
    c. Legislative History/Status.--Subcommittee Chairman Horn 
introduced H.R. 3637 on June 13, 1996. It was referred to the 
subcommittee on June 18, 1996. The subcommittee held two 
hearings and considered and reported favorably to the full 
committee H.R. 3637 on July 16, 1996. The Government Reform and 
Oversight Committee considered, approved and ordered reported 
to the House on July 25, 1996. H.R. 3637 was incorporated into 
H.R. 3230, the National Defense Authorization Act, as Title 
XVII: Federal Employee Travel Reform and passed the House on 
August 1, 1996. It was signed into law on September 23, 1996 as 
Public Law 104-201.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held a hearing on May 10, 1996 and another hearing on July 9, 
1996 to examine H.R. 3637, the Travel Reform and Savings Act of 
1996. Testimony was received from: Jack Brock, Jr., Director, 
Information Resources Management/General Government Issues, 
Accounting and Information Management, General Accounting 
Office; Edith Pyles, Assistant Director, Information Resources 
Management/General Government Issues, Accounting and 
Information Management, General Accounting Office; Virginia 
Robinson, executive director, Joint Financial Management 
Improvement Project; G. Martin Wagner, Associate Administrator, 
Office of Policy, Planning and Evaluation, General Services 
Administration; Hon.John J. Hamre, Comptroller, Department of 
Defense; and Hon. Donald K. Charney, Chief Financial Officer, 
Agency for International Development.
16. S. 1130, Federal Financial Management Improvement Act of 1996.
    a. Report Number and Date.--None.
    b. Summary of Measure.--The Federal Financial Management 
Improvement Act of 1996 is intended to strengthen Federal 
financial management. It requires Federal financial agencies to 
implement and maintain financial management systems that comply 
substantially with Federal financial management system 
requirements; applicable Federal accounting standards; and the 
U.S. Standard General Ledger at the transaction level. Agencies 
not in compliance must develop a remediation plan which will 
bring them into compliance within 3 years. It builds upon the 
Chief Financial Officers Act of 1990 (Public Law 101-576), the 
Government Performance and Results Act of 1993 (Public Law 103-
62), and the Government Management Reform Act of 1994 (Public 
Law 103-356).
    Compliance with this legislation by executive branch 
agencies will enable them to have better control over errors 
and irregularities in financial management systems processing, 
and will reduce the risk of fraud, waste, and abuse.
    c. Legislative History/Status.--Senator Hank Brown 
introduced S. 1130, the ``Federal Financial Management 
Improvement Act of 1996,'' which was referred to the committee 
on September 4, 1996, and subsequently referred to the 
subcommittee on September 6, 1996. The subcommittee held two 
hearings in April, 1996. S. 1130 passed the Senate on August 2, 
1996; and was inserted into the Treasury, Postal Service, and 
General Government Appropriations Act, 1997 which was included 
in H.R. 3610, the ``Omnibus Consolidated Appropriations for 
Fiscal Year 1997,'' and signed into law on September 30, 1996 
as Public Law 104-208. On September 11, 1996, Representative 
Talent (R-MO) introduced a similar bill, H.R. 4061, which was 
referred to the subcommittee. No action was taken on H.R. 4061. 
Conference Report No. 104-863 was filed on September 28, 1996, 
which includes S. 1130 as Title VIII of SEC. 101(f).
    d. Hearings and Subcommittee Actions.--The subcommittee 
held two hearings on April 23 and 25, 1996, on Federal 
Financial Management at which time an early draft of the 
proposed legislation was discussed. Testimony was received 
from: Hon. Charles A. Bowsher, U.S. Comptroller General, 
General Accounting Office; Hon. G. Edward DeSeve, Controller, 
Office of Federal Financial Management, Office of Management 
and Budget; George Munoz, Assistant Secretary for Management 
and Chief Financial Officer, the Department of the Treasury; 
Donald R. Wurtz, Chief Financial Officer, U.S. Department of 
Education; and Ted Sheridan, president, Financial Executives 
Institute.
    Comptroller Bowsher testified that, ``when the Congress 
passed the Budget and Accounting Act of 1950, they expected the 
systems and our Government to be modernized over the years and 
to provide good information, information that the Members of 
Congress and the public and taxpayers could understand; and the 
truth of the matter is that this did not happen, until the last 
four or five years. Now, with the CFO Act of 1990, the GMRA of 
1994, there is in place a legislative basis for modernizing the 
accounting and the financial reporting and the auditing of the 
Federal Government.''
    With the memorandum of understanding (MOU) that the GAO 
worked out with Treasury and the OMB in 1990 to update the 
standards for the Federal Government, real progress has been 
made. All the basic accounting standards have been issued by 
the Federal Accounting Standards Advisory Board (FASAB) which 
was established under the MOU.
    Mr. DeSeve provided an overview of how the administration 
is continuing to improve the way the Federal Government manages 
its finances and programs. The administration believes that the 
FASAB process for establishing accounting standards, as 
envisioned by the agreement between GAO, OMB, and Treasury, is 
working. The MOU signed by Treasury, the related financial 
statement preparation and auditing requirements of the CFO Act 
and the GMRA achieve the same management ends without further 
legislation. The administration does not believe any 
legislation in this area is needed at this time.
    Assistant Secretary Munoz said that the CFO Act is working, 
and because of it, the Federal Government is better off than 5 
years ago when it comes to financial management reform. He 
stated that the development of cost accounting systems has been 
identified as a priority for the Department of the Treasury, 
because they will augment Treasury's ability to develop 
performance measures. Treasury has also developed a framework 
for financial statements, which will be helpful in preparation 
for the governmentwide audited financial statements required by 
the GMRA.
    Mr. Wurtz said that the CFO Act of 1990, the Government 
Performance and Results Act of 1993, and the Government 
Management Reform Act of 1994, have each strengthened the 
statutory underpinning of Federal financial management.
    Witnesses at the second hearing included representatives 
from the accounting industry.
17. Federal Budget Process Reform.
    a. Report Number and Date.--None
    b. Summary of Measure.--The subcommittee took various 
legislative proposals from this and prior Congresses and 
incorporated them into a proposed omnibus budget reform bill.
    Three hearings were held to assess the adequacy of current 
Federal budget law and review recent proposals for reform. The 
budget process currently in use by the Federal Government is 
the result of 75 years of legislative action which have 
resulted in 15 major acts and dozens of supplementary 
legislative provisions.
    Starting with the Budget and Accounting Act of 1921, the 
Federal Government began to establish rules and procedures for 
budget formulation. In the three decades since the Second World 
War and the Legislative Reorganization Act of 1946, Congress 
passed the Accounting and Audit Act of 1950, the Budget and 
Accounting Procedures Act of 1950, the Federal Claims 
Collection Act of 1966, the Congressional Budget and 
Impoundment Control Act of 1974, and the Inspector General Act 
of 1978.
    Major budget initiatives were enacted into law during the 
1980's with the purpose of putting the Federal Government's 
fiscal house in order and making deficit reduction part of the 
law. The Balanced Budget and Emergency Deficit Control Act of 
1985, otherwise known as Gramm-Rudman-Hollings and the Balanced 
Budget and Emergency Deficit Control Reaffirmation Act of 1987 
both promised to bring Federal spending under control and 
reduce the size of government. This promise was not realized.
    During the first half of the 1990's, a number of 
comprehensive budget reform bills were crafted. One of them, 
the Budget Enforcement Act of 1990, added new budget 
enforcement mechanisms for discretionary spending, entitlement 
and receipts. These were intended to ensure deficit reduction 
over the 1991-1996 timeframe.
    The subcommittee believes that a comprehensive bipartisan 
effort to reform the Federal budget process and law is 
warranted, and that this would provide better control of 
spending by the Federal Government, reduction of the deficit, 
and minimize the burden of debt passed on to future 
generations.
    c. Legislative History/Status.--No legislative action 
taken.
    d. Hearings and Subcommittee Actions.--During March and 
April 1996, the subcommittee held a series of hearings on 
Budget Process reform. The hearings were held on March 27, 
April 23, and April 25. Congressional witnesses were 
Representatives Joe Barton (R-TX); Nick Smith (R-MI); Chris Cox 
(R-CA); Mike Crapo (R-ID); Lamar Smith (R-TX); Ray Thornton (D-
AK); Steve Stenholm (R-TX); and Mike Castle (R-DE). They 
discussed various legislative proposals they had introduced. 
They were followed by a panel of expert witnesses including 
Roger Zion, honorary chairman of the 60 Plus Association, 
accompanied by its president, James L. Martin; Michael 
Monroney, former chairman, Coalition for Fiscal Restraint; 
Thomas A. Schatz, president, Council for Citizens Against 
Government Waste; Stephen Moore, director of fiscal policy 
studies, the Cato Institute; Joseph White, senior fellow, 
government affairs, the Brookings Institution; Richard Kogan, 
budget director, Center on Budget and Policy Priorities; and 
Dave M. Mason, vice president, government relations, the 
Heritage Foundation.
    Mr. Zion indicated that the biggest contribution to budget 
simplification would be to tackle the problem of entitlements. 
His organization has advocated privatizing entitlement 
programs, following the Chilean model that has been successful 
for 14 years.
    Mr. Monroney advocated discontinuing current services 
budgeting, extending some form of enhanced rescission authority 
to the President, ensuring that funds cut from appropriations 
bills are not spent without proper subsequent authorization, 
that the Federal budget should be in the form of a binding 
joint resolution, and ensuring that entitlement programs are 
brought within budget control; stricter budgetary controls for 
costs relating to emergencies, and an end to the abuse of 
waivers which permit the Congress to ignore the budget. He 
thought that the Transportation Trust fund and the Superfund 
cleanup fund should not be taken off budget.
    Mr. Schatz favored biennial budgeting and appropriations, a 
two-thirds requirement for spending over the budget ceiling, 
fixed dollar amounts for entitlements, and deficit reduction 
through a lockbox mechanism.
    Mr. Moore supported a balanced budget amendment and a 
supermajority for raising taxes. He also thought that the 
Congressional Budget Office should use dynamic rather than 
static revenue analysis.
    Mr. White questioned some of the legislative proposals, 
because, if taken together, they are inherently contradictory. 
He noted that two-thirds majority requirements may not meet 
with the public's approval, and questioned the meaning of 
generational accounting for programs that are all annually 
appropriated where there are no commitments beyond 1 year. He 
reminded the subcommittee that balancing the budget, though 
helpful, does not provide markedly positive returns, that most 
entitlements are entitlements for good reason, and that they 
are designed to be automatic stabilizers of the economy.
    Mr. Kogan pointed out difficulties with some of the 
proposals. He stated that supermajorities are basically 
undemocratic, unfair, and have no place in Congress. He noted 
that the framers of the Constitution specifically rejected 
supermajorities as a way of deciding public policy. Kogan 
further testified that fixed deficit targets are wrong because 
the size of the deficit or surplus in any given year depends or 
should depend on what the net national savings rate is, and 
that spending caps are unwise policy. He concluded that there 
is a real reason to reform Medicare and Medicaid, but attaching 
entitlement caps is not the right way to do it.
    Mr. Mason thought that it is critical to get a mechanism 
for regular review of entitlement programs, although 
entitlement caps are the wrong way to do it. He supported 
looking at fundamental reforms in the programs and favored a 
binding budget resolution.
    Witnesses at the second hearing on April 23, 1996 
testifying on Federal budget process reform included 
Representatives Robert Wise, (D-WV) and Jim Saxton (R-NJ); 
James L. Blum, Deputy Director, Congressional Budget Office; 
and Herbert N. Jasper, fellow of the National Academy of Public 
Administration (NAPA), representing David Chu, also a fellow of 
NAPA.
    Representative Wise spoke about an amendment he had 
sponsored to balance the Federal budget using a capital budget. 
He supported higher real growth, and the recognition of 
infrastructure needs, and stated that the present budget system 
is a disincentive to investing in infrastructure improvements.
    Mr. Blum expressed the view that the Congressional Budget 
office was cautious about reforming the Federal budget process. 
He thought that the budget process is working reasonably well 
and does not need major reform at this time. The budget process 
is not and cannot, in his opinion, be designed to force 
particular outcomes in the absence of broad political agreement 
or to obstruct those outcomes when agreement has been reached. 
Blum stated that budget decisions tend to be incremental in 
nature, and the budget process has evolved in a similar manner 
over a period of time.
    Blum further testified that the major proposals now on the 
table, such as converting the budget resolution into a joint 
resolution in order to get early agreement between the 
President and the Congress on a overall budget plan, converting 
the annual budget cycle into a biannual cycle so as to free up 
legislative time for other matters, and imposing caps on 
mandatory spending so as to control the annual growth rate, 
have been on the table for a number of years and have potential 
drawbacks that could present serious problems. He opined that 
joint budget resolutions could be the cause of further delays 
in making budget decisions; biennial budgets could raise the 
stakes and also lead to delays; and mandatory spending caps, by 
themselves, are not likely to be effective without political 
consensus. Further, in evaluating reform proposals, especially 
omnibus proposals, Blum thought it was important to be 
cognizant of the implementation costs in terms of time and 
resources needed to carry out the reforms.
    Dr. Jasper, who had played an active role in fashioning the 
Congressional Budget and Impoundment Control Act of 1974, 
discussed the draft omnibus budget legislation. He stated that, 
in his opinion, the current budget process is basically sound. 
Its principal structure and provisions have lasted more than 20 
years. The budget is primarily a reflection and accommodation 
of many conflicting objectives and contending interest. The 
current process provides a workable way of channeling 
inevitable differences toward negotiations and agreements in 
order to produce a budget.
    At the final hearing on Federal budget process reform, 
witnesses testifying included Representative Tom Campbell (R-
CA) and Ron Moe, Senior Specialist, Congressional Research 
Service.
    Representative Campbell asked support for a resolution 
which expresses the sense of the Congress to use dynamic 
economic modeling for Congressional Budget Office and Joint 
Committee on Taxation projections on revenue. Presently 
Congress is using something in between a completely static 
model and a truly dynamic model.
    Mr. Moe discussed a proposal in the omnibus budget 
legislation that he supported. The proposal is to provide for 
the reorganization of the present Office of Management and 
Budget into two equal separate offices, an Office of Budget and 
an Office of Management. This was recommended in the 
subcommittee's report, ``Making Government Work,'' (see Sec. 
II.A.1.) Mr. Moe emphasized that governmental management is 
different than private sector management, in that the actions 
of governmental officials must have their basis in public law, 
not in the pecuniary interests of private entrepreneurs or 
owners or in the fiduciary concerns of private managers. Moe 
rejected the draft Omnibus Budget Act as an example of 
extensive congressional involvement in the detailed direction 
of executive management, reflecting the frustration felt by 
many in Congress with what they see as the lack of management 
capability in the executive branch. He suggested the 
establishment of an Office of Federal Management to provide the 
President and the Congress with the institutional authority and 
capacity to maintain quality general management laws while 
permitting flexible exceptions to these laws and encouraging 
innovative experiments with an accountable system overseen by 
this committee.
18. Health Information Privacy Protection Act.
    a. Report Number and Date.--None.
    b. Summary of Measure.--This legislation would have 
established ``protected health information.'' Under this 
legislation, medical records which are created or used during 
the process of medical treatment would become protected health 
information.
    The bill would require doctors and hospitals to maintain 
appropriate administrative, technical, and physical safeguards 
to protect the integrity and privacy of health information. It 
would require that the information be used for a purpose 
related to the reason it was originally collected. Generally, 
the bill would limit the use or disclosure of medical records 
to the minimum number of necessary users.
    The legislation also would have allowed for a review of 
protected health information by subjects of the information, 
and established rules for the inspection and copying of 
protected health information. The act also would have 
established procedures for an individual to correct information 
contained in their medical records. General rules for the use 
and disclosure would have been established to govern 
disclosures for treatment, payment, next of kin notification, 
emergency circumstances, and the creation of non-identifiable 
health information for health research.
    Civil penalties would be established for persons who fail 
to comply with the provisions of the act. Further, anyone who 
knowingly violates provisions of this act would have been 
subject to a criminal penalty.
    Restrictions on the disclosure of electronic payment 
information to third parties for purposes other than collection 
of debts would be established. An Office of Information Privacy 
would have been established to serve as the principal advisor 
to the Secretary of Health and Human Services on the provisions 
of the act.
    No provision of the act would have preempted individual 
State laws, and the act would not affect the rights of a 
witness or person in a non-Federal court proceeding. Further, 
States could have established and enforced criminal penalties 
for failing to comply with provisions of the act.
    Most Americans are under the impression that their medical 
records are confidential--they are not. The Health Information 
Privacy Protection Act would have provided for the 
confidentiality of medical records.
    c. Legislative History/Status.--No legislative action was 
taken.
    d. Hearings and Subcommittee Actions.--The subcommittee 
held a hearing on June 14, 1996 to examine the Health Care 
Privacy Protection Act. Witnesses at the hearing were Janlori 
Goldman, deputy director of the Center for Democracy and 
Technology (CDT); Kathleen Frawley, director of the Washington, 
DC, office of the American Health Information Management 
Association (AHIMA); Gerry Bay, vice president of Pharmacy 
Operations, East Division, American Drug Stores, National 
Association of Chain Drugstores, and Dr. Steven K. Hoge of the 
American Psychiatric Association.
    Ms. Goldman stated that the major change affecting the 
protection of personal health information has been in the 
health care industry, and noted that the goal of this type of 
legislation is to protect patients' privacy. She further 
expressed concerns about the administrative simplification 
provisions in the health portability bill since it gives total 
rulemaking authority to the Secretary of Health and Human 
Services.
    Ms. Frawley testified that a greater professionalism is 
needed when handling and reviewing patient medical records. 
Frawley pointed out that AHIMA, in the absence of Federal 
legislation, has taken on the responsibility for protecting the 
confidentiality of health information, educating consumers of 
their rights, and further noted that the Health Information 
Privacy Protection Act appropriately addresses patient 
concerns.
    Mr. Bay testified that implementation of this legislation 
would create an administrative burden for an industry which 
does a great deal of its work through paperless transactions. 
The legislation would ``tie the hands of the day-to-day 
operations of the pharmacy.'' Bay further testified that this 
legislation could hamper a person's ability to pick up a 
prescription for another.
    Dr. Hoge noted in testimony that the legislation 
incorporated many of the suggestions which APA has made over 
the years. He noted that in the past it was much easier to 
protect an individual's privacy by relying on the ethical 
standards of the medical profession. However, there are now a 
great number of non-physicians involved in the maintenance of 
medical records.

      Human Resources and Intergovernmental Relations Subcommittee

1. H.R. 2086, the Local Empowerment and Flexibility Act of 1995.
    a. Report Number and Date.--House Report No. 104-847, 
September 26, 1996.
    b. Summary of Measure.--The Local Empowerment and 
Flexibility Act allows for the more efficient use of Federal, 
State, local and tribal resources through program flexibility 
and coordination. The legislation enables State, local and 
tribal governments, and non-profit organizations to adapt 
Federal grant programs to the particular circumstances of their 
communities by: (1) Integrating Federal programs into 
``flexibility plans'' that increase the effectiveness of the 
programs; (2) eliminating wasteful duplication across Federal 
programs; and (3) authorizing Federal officials to waive 
statutory and regulatory program requirements to enhance the 
delivery of services.
    The purpose of the bill is to make each program included in 
a ``flexibility plan'' more effective so that it better serves 
individuals and the community. To get approval of a 
``flexibility plan'' an applicant must be able to demonstrate 
that each program included will be at least as effective as it 
would have been if it had not been included in the plan.
    The legislation has a bipartisan history. In the 103d 
Congress, the Local Flexibility Act of 1993, legislation to 
provide greater flexibility and allow the waiver of regulatory 
and statutory requirements, was introduced by Congressman John 
Conyers (D-MI), then-Chairman of the House Government 
Operations Committee, and then-Ranking Member William Clinger.
    The Local Empowerment and Flexibility Act retained and 
clarified the same statutory and regulatory waiver authority 
that was included in the Local Flexibility Act of 1993. The 
Local Empowerment and Flexibility Act adds additional language 
to prohibit the waiver of constitutional rights and non-
discrimination provisions. Language to prohibit waiver that 
would diminish national standards in certain sensitive areas 
such as labor and environmental protections was also added.
    c. Legislative History/Status.--H.R. 2086 was introduced in 
the House on July 20, 1995, by Congressman Christopher Shays 
(R-CT), chairman of the Human Resources and Intergovernmental 
Relations Subcommittee and by Congressman William F. Clinger, 
Jr., (R-PA), chairman of the Committee on Government Reform and 
Oversight. On April 24, 1996, H.R. 2086, was approved and 
ordered reported, as amended, by the Committee on Government 
Reform and Oversight.
    d. Hearings and Subcommittee Actions.--The Human Resources 
and Intergovernmental Relations Subcommittee held three 
hearings on the Local Empowerment and Flexibility Act. On 
August 3, 1995, the subcommittee held its first hearing on H.R. 
2086. Testimony was received from: Hon. Mark O. Hatfield (R-
OR), U.S. Senator and former Governor of Oregon; the Director 
of Housing and Community Development Issues of the U.S. General 
Accounting Office; the Director of Intergovernmental Liaison of 
the Advisory Commission on Intergovernmental Relations; and the 
Director for the Center for Public Service of the University of 
Virginia representing the National Academy of Public 
Administration.
    On September 20, 1995, the subcommittee held a second 
hearing on H.R. 2086. Testimony was received from: the Deputy 
Assistant for Operations of the Office of Community Planning 
and Development from the U.S. Department of Housing and Urban 
Development; the Deputy Director for Management for the Office 
of Management and Budget; the superintendent of public 
instruction for the State of Oregon; the chairman of the 
Governor's Task Force on Human Services Reform for the State of 
Illinois; a senior attorney for the Natural Resources Defense 
Council (NRDC) and the director of public division for the 
Services Employees International Union.
    The subcommittee's third hearing on the Local Empowerment 
and Flexibility Act was held on February 22, 1996. Testimony 
was received from Congressman Steny Hoyer (D-MD); Andrew 
Norton, Connecticut State Representative; Angela Park, 
coordinator, Sustainable Communities for the President's 
Council on Sustainable Development; Lloyd Smith, president and 
chief executive officer of the Marshall Heights Community 
Development Organization; Dick Cowden, executive director of 
the American Association of Enterprise Zones; and Eddy R. 
Battle, of Eddy Battle Associates.

2. H.R. 2326, The Health Care Fraud and Abuse Prevention Act of 1995 
        and H.R. 1850, The Health Care Fraud and Abuse Act of 1995.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 2326 and H.R. 1850 are 
designed to combat waste, fraud and abuse in the Medicare and 
Medicaid programs through increased cooperation and 
coordination between regulators and law enforcement agencies.
    c. Legislative History/Status.--H.R. 2326 was introduced in 
the House on September 13, 1995, by subcommittee Chairman 
Christopher Shays (R-CT), and Congressman Steven Schiff (R-NM). 
Joining Representatives Schiff and Shays as original co-
sponsors were chairman of the Committee on Government Reform 
and Oversight, William F. Clinger, Jr. (R-PA) and Congressmen 
Edolphus Towns (D-NY), Jon Fox (R-PA) and Charles Schumer (D-
NY). Currently, the bill has 33 co-sponsors.
    d. Hearings and Subcommittee Actions.--On September 28, 
1995, the Human Resources and Intergovernmental Relations 
Subcommittee held a hearing on H.R. 2326. Testimony was 
received from: the Special Counsel for Health Care Fraud from 
the U.S. Department of Justice; the Deputy Administrator from 
the Health Care Financing Administration; a past president from 
the American Association of Retired Persons; the executive 
director of the National Health Care Anti-fraud Association; 
and the president of Citizens Against Government Waste.
    Testimony focused on the need for stronger and more 
specific criminal sanctions against health care fraud. 
Witnesses supported ``all payer'' provisions defining various 
Federal health care crimes against any health care plan. 
Currently, Federal enforcement agencies must proceed against 
interstate scams using only the mail fraud or wire fraud 
statutes. Strengthened provisions to exclude convicted and 
sanctioned providers were also supported.
    Witnesses who submitted statements for the record included: 
the Inspector General of the Department of Health and Human 
Services; president of the National Association of Medicaid 
Fraud Control Units; and president of Citizens Against 
Government Waste.
    At the May 2 hearing, the HHS Inspector General testified 
on the vulnerability of Medicare to waste and abuse due to 
inflexible pricing regulations used to establish the 
reimbursement amount for certain medical supplies and services.

  National Economic Growth, Natural Resources, and Regulatory Affairs 
                              Subcommittee

1. H.R. 450, the Regulatory Transition Act of 1995.

    a. Report Number and Date.--House Report No. 104-39, Part 
I, February 16, 1995, together with minority views.
    b. Summary of Measure.--Prior to the start of the 104th 
Congress, Republican leaders of the House of Representatives 
and the Senate wrote the President of the United States to ask 
that he voluntarily impose a moratorium on all Federal 
rulemaking for the first 100 days of the 104th Congress. (See 
letter from House and Senate Leaders to President William 
Clinton dated December 12, 1994, reprinted in House Rept. 104-
39, Part 1, pp. 37-38.) This request was based on the fact that 
Federal regulations are estimated to drain the American economy 
of approximately $600 billion every year, and that current law 
does not adequately ensure that such regulations are justified 
in terms of their overall impact. Congressional leaders 
proposed to the President that, during the moratorium, all 
Federal agencies be directed to: (1) identify regulations in 
which the costs exceed the benefits; (2) recommend actions to 
eliminate unnecessary regulatory burdens; (3) recommend ways to 
give State, local and tribal governments more flexibility to 
meet Federal mandates; and (4) share their information and 
analysis with Congress.
    The President refused to issue such a moratorium in a 
December 14, 1994 letter signed by Sally Katzen, of OMB's 
Office of Information and Regulatory Affairs. (See House Rept. 
104-39, Part 1, pp. 38-39).
    As a result, Congressmen Tom Delay (R-TX) and David 
McIntosh (R-IN), along with 32 other House co-sponsors, 
introduced the Regulatory Transition Act of 1995 on January 9, 
1995. That bill sought to ensure economy and efficiency of 
Federal Government operations by establishing, through statute, 
a moratorium on regulatory rulemaking actions.
    That bill, as amended, was eventually passed by the House 
of Representatives. The Senate has failed to act on H.R. 450, 
but is actively pursuing other bills that enact regulatory 
reform.
    c. Legislative History/Status.--Following its introduction 
on January 9, 1995, H.R. 450 was referred to the Committee on 
Government Reform and Oversight. Within that committee, the 
bill was referred to the Subcommittee on National Economic 
Growth, Natural Resources, and Regulatory Affairs for 
consideration.
    The subcommittee held two hearings into the merits of the 
bill--on January 19, 1995, in Washington, DC, and on February 
2, 1995, in Fairfax, VA. At these hearings, 28 witnesses 
testified about the state of regulatory affairs, the need for a 
moratorium, and the merits of the particulars contained in H.R. 
450. Following those hearings, the subcommittee held a mark-up 
on the bill on February 8, 1995, at the conclusion of which, 
the subcommittee voted 10 to 4 to report the bill, as amended, 
favorably to the full committee.
    On February 10 and 13, 1995, the committee marked up the 
bill. On February 13, 1995, the committee voted 28 to 13 to 
report the bill, as amended, favorably to the House (Report No. 
104-39, Part I).
    The bill was debated in the House of Representatives on 
February 23 and 24, 1995. Following debate, it was passed, as 
amended, by electronic vote, 276 to 146.
    On February 27, 1995, the bill was received in the Senate, 
and referred to the Senate Committee on Governmental Affairs. 
No action was taken on H.R. 450 by the Senate in the first 
session of the 104th Congress. However, the Senate did take 
action on S. 219, a companion piece of legislation to H.R. 450. 
That bill was passed by the Senate on March 29, 1995, by a 
unanimous vote of 100 to 0. On May 17, 1995, the House of 
Representatives amended S. 219 by replacing its text with the 
text of H.R. 450 (as passed by the House). The Senate, in turn, 
disagreed to the House's amendment and requested a conference 
on June 16, 1995. The House did not respond to the Senate's 
request for a conference in the first session of the 104th 
Congress.
    d. Hearings and Subcommittee Actions.--January 19, 1995, 
the Regulatory Transition Act of 1995. February 2, 1995, in 
Fairfax, VA, the Regulatory Transition Act of 1995 and Clean 
Air Regulations.

2. H.R. 994, the Regulatory Sunset and Review Act of 1995.

    a. Report Number and Date.--House Report No. 104-284, Part 
1, October 19, 1995, together with additional views; Report No. 
104-248, Part 2, November 7, 1995, together with additional 
views (Committee on the Judiciary).
    b. Summary of Measure.--H.R. 994, the Regulatory Sunset and 
Review Act of 1995, provides a framework for the systematic 
review of current and future Federal rules. The bill requires 
Federal agencies to periodically review their significant rules 
to determine whether the rules should be continued without 
change, modified, consolidated with other rules, or allowed to 
terminate. The legislation also creates a petition process that 
would permit the public and appropriate committees of Congress 
to request that agencies review less significant rules in the 
same manner.
    A rule designated for review will not expire if the issuing 
agency reviews and reissues it in accordance with the 
procedures established by the bill and the rule meets all the 
legal requirements that apply to the issuance of new rules. 
This legislation will help ensure that obsolete, unnecessary, 
duplicative, or conflicting rules are reviewed and either 
modified or terminated.
    c. Legislative History/Status.--H.R. 994 was introduced by 
Representatives Jim Chapman, John Mica, Tom DeLay, Nathan Deal, 
and Gene Green on February 21, 1995, and referred to the 
Committee on Government Reform and Oversight and the Committee 
on the Judiciary. On May 18, 1995, the subcommittee reported 
H.R. 994 to the full committee, with a bipartisan amendment in 
the nature of a substitute cosponsored by over two-thirds of 
the subcommittee members. On July 18, 1995, the committee 
approved H.R. 994 on a recorded vote of 39-7 and ordered it to 
be reported, with an amendment in the nature of a substitute 
offered by Chairman Clinger. On October 19, 1995, the committee 
reported the bill to the House. On November 7, 1995, the 
Committee on Judiciary reported H.R. 994 favorably with an 
amendment in the nature of a substitute.
    d. Hearings and Subcommittee Actions.--On March 28, 1995, 
subcommittee Chairman McIntosh convened the Subcommittee on 
National Economic Growth, Natural Resources, and Regulatory 
Affairs for the first day of hearings on H.R. 994. The 
witnesses at the hearing included Representatives Jim Chapman 
and John Mica, OIRA Administrator Sally Katzen, former 
Associate Counsel to the President and regulatory expert, Gene 
Schaerr, and private citizens and business people concerned 
about Federal regulations, including Charles Bechtel, Kaye 
Whitehead, Steven Dean, Joe Bob Burgin, Paul Mashburn, and 
David Vladeck.
    At the request of four minority members of the 
subcommittee, subcommittee Chairman McIntosh scheduled a second 
day of hearings with additional testimony heard from 
administration witnesses. On May 2, 1995, the subcommittee 
reconvened and heard testimony from Richard Roberts, 
Commissioner of the Securities Exchange Commission, Judith 
Feder, Principal Deputy Assistant Secretary for Planning and 
Evaluation in the Department of Health and Human Services, 
James Gililand, General Counsel for the Department of 
Agriculture, Edward Knight, General Counsel for the Department 
of the Treasury, Stephen Kaplan, General Counsel for the 
Department of Transportation, and Mr. William Kennard, General 
Counsel for the Federal Communications Commission. In addition 
to the testimony of the hearing witnesses, the subcommittee 
received written testimony from a variety of sources, including 
the President of the American National Standards Institute 
(ANSI), Sergio Mazza.

3. Grantee Lobbying Legislation.

    For a description of legislative proposals to stop Welfare 
for Lobbyists, see II. Investigations, section B, ``Grantee 
Lobbying.''

4. Corrections Day.

    a. Summary.--The purpose of Corrections Day is to correct 
rules, regulations, statutory laws, and court decisions which 
impose a severe financial burden, or are ambiguous, arbitrary, 
or ludicrous, through an expedited process in the U.S. House of 
Representatives. Five months after passage of H. Res. 168 
designating the Corrections Calendar, the House has held six 
Corrections Days and passed 11 bills. Three of these bills have 
become law. Seven bills remain to be considered by the Senate.
    b. Benefits.--Through the Corrections Day process, the U.S. 
House of Representatives has routinely corrected dumb laws and 
regulations in an expeditious manner, answering the call of 
American citizens for responsive public officials.
    c. Hearings.--On May 2, 1995, the subcommittee and the 
Subcommittee on Rules and Organization of the House held a 
joint hearing on Speaker Newt Gingrich's proposal to create a 
``Corrections Day'' in the House of Representatives 
specifically for correcting legislative and regulatory 
mistakes.

                      Postal Service Subcommittee

1. H.R. 1026, To Designate the United States Post Office Building 
        Located at 201 East Pikes Peak Avenue in Colorado Springs, 
        Colorado, as the ``Winfield Scott Stratton Post Office''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The bill designates the U.S. Post 
Office building located at 201 East Pikes Peak Avenue in 
Colorado Springs, CO as the ``Winfield Scott Stratton Post 
Office''. The late Mr. Stratton was a Colorado Springs 
philanthropist and benefactor. Following a successful mining 
career Mr. Stratton dedicated his life to helping others less 
fortunate and to advancing the development of Colorado Springs 
and the State of Colorado.
    c. Legislative History/Status.--The legislation was 
introduced on February 23, 1995, by Representative Hefley of 
Colorado and cosponsored by the entire Colorado House 
delegation, as required by the Committee on Government Reform 
and Oversight. The Subcommittee on Postal Service considered 
and marked-up the bill on June 20, 1995, and was forwarded to 
the full committee. On June 21, H.R. 1026 was ordered to be 
reported by voice vote by the Committee on Government Reform 
and Oversight. H.R. 1026 was called up by the House under 
suspension of rules on October 17 where it passed by voice 
vote. It passed the Senate by voice vote on October 24 and was 
signed by the President on November 3, 1995, and became Public 
Law 104-44.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on the measure.

2. H.R. 2077, To Designate the United States Post Office Building 
        Located at 33 College Avenue in Waterville, Maine, as the 
        ``George J. Mitchell Post Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 2077 designates that the U.S. 
Post Office located at 33 College Avenue in Waterville, ME, as 
the ``George J. Mitchell Post Office Building''. The 
legislation honors Senator Mitchell who served in the U.S. 
Senate from 1980 to 1995. He served as Senate Majority Leader 
for 5 years and has a long career in public service.
    c. Legislative History/Status.--H.R. 2077 was introduced by 
Representative Longley on July 18, 1995, and co-sponsored by 
the House delegation of the State of Maine. It was referred to 
the House Committee on Government Reform and Oversight on 
August 4, 1995, and the committee discharged the bill. The 
House called up H.R. 2077 by unanimous consent and the measure 
was passed by voice vote on August 4. The Senate approved the 
bill by voice vote on August 9, 1995. The President signed H.R. 
2077 on September 6, 1995, and it became Public Law 104-27.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on this legislation.

3. H.R. 1826, To Repeal the Authorization of Transitional 
        Appropriations for the United States Postal Service, and for 
        Other Purposes.

    a. Report Number and Date.--House Report No. 104-174, July 
10, 1995.
    b. Summary of Measure.--H.R. 1826 repeals the authorization 
for transitional appropriations to the Postal Service. The 
transitional appropriations provided funds to the Postal 
Service to cover workers compensation liabilities incurred by 
the former Post Office Department. The bill provides that 
liabilities of the former Post Office Department to the 
Employees' Compensation Fund shall be liabilities of the Postal 
Service payable out of the Postal Service Fund.
    c. Legislative History/Status.--The bill was introduced by 
subcommittee Chairman McHugh on June 13, 1995, and referred to 
the Subcommittee on Postal Service. The subcommittee considered 
and marked up the legislation on June 20, 1995. It was 
forwarded to full committee which marked up the bill on June 
21, 1995, and ordered it to be reported. H.R. 1826 was reported 
to the House by the Committee on Government Reform and 
Oversight, House Report No. 104-174. H.R. 1826 was subsequently 
included in the Balanced Budget Act of 1995, H.R. 2491, House 
Report No. 104-350.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on this measure.

4. H.R. 210, a Bill To Provide for the Privatization of the United 
        States Postal Service.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 210 establishes the current 
Postal Service as a private corporation with ownership divested 
among its employees. The measure provides for incorporation by 
up to nine individuals who are qualified to establish and 
operate an effective mail service. Ownership of securities 
would be limited to postal employees during the first year and 
then sold to the general public. The new structure would 
operate under some of the same restrictions under which the 
current Postal Service operates. Small or rural post offices 
could not be closed solely for operating at a deficit. Rates 
would have to meet the ``fair and equitable'' criterion. During 
the first 5 years of the corporation's existence, rates would 
be established in consultation with the Postal Rate Commission. 
Retirement benefits would be comparable to the benefits of 
current postal employees.
    c. Legislative History/Status.--H.R. 210 was introduced on 
January 4, 1995, by Representative Philip M. Crane. It has two 
co-sponsors.
    d. Hearings and Subcommittee Actions.--On November 15, 
1995, the Subcommittee on the Postal Service held a hearing on 
H.R. 210. Representatives Philip Crane and Dana Rohrabacher 
testified in support of the measure.

5. H.R. 1963, ``The Postmark Prompt Payment Act of 1995.''

    a. Report Number and Date.--None.
    b. Summary of Measure.--The Postmark Prompt Payment Act, 
H.R. 1963, introduced by subcommittee Chairman John McHugh, 
provides that the date postmarked on the envelope containing a 
payment, bill, invoice or statement of account due stands as 
prima facie evidence of timely payment if the date of the 
postmark is on or before the bill's due date. The use of the 
postmark is premised on the common law of contracts which 
provides that an offer to a contract is deemed accepted at the 
time such acceptance is mailed. In addition, the Internal 
Revenue Service uses the postmark on envelopes as proof that 
taxpayers mailed income tax returns on or before the April 15 
deadline, regardless of when the IRS receives actual payment. 
The legislation specifies that the envelope must be correctly 
addressed with adequate postage affixed to it. Metered mail is 
excluded.
    The provisions of the bill would not apply to any other 
type of payment other than a bill, invoice or statement of 
account due. Currently, covered creditors are required to post 
payment on the date received. The legislation would require 
that the payment received by a creditor be posted as of the 
date of the postmark. The legislation is intended to remedy the 
inequity of conscientious bill payers who pay their bill on 
time but, who through no fault of their own, are assessed late 
fees and interest charges because the delays of others result 
in the actual delivery of their payment in an untimely manner. 
In addition to these charges, many bill payers see their credit 
ratings adversely affected through no fault of their own. 
Furthermore, the legislation would ultimately place the burden 
of late delivery on the Postal Service. Unsatisfactory delivery 
and service will not be tolerated by the Postal Service's 
largest customers. Ultimately, the provisions of the bill 
should lead to better postal service for all customers.
    c. Legislative History/Status.--H.R. 1963 was introduced on 
June 29, 1995, by subcommittee Chairman McHugh. The measure has 
34 co-sponsors.
    d. Hearings and Subcommittee Actions.--Two hearings 
entitled ``Postmark Prompt Payment Act'' were held on October 
19, 1995, and February 28, 1996.
    On October 19, 1995, testimony was received from 
Representatives Sherwood L. Boehlert, Andy Jacobs, Steve 
Stockman, Thomas M. Barrett, Peter Blute, Carlos Romero-
Barcelo, Peter T. King, Thomas M. Davis, and James T. Walsh. 
Also testifying were Mark Silbergeld, Consumers Union and Bruce 
Williams, a syndicated radio talk show host who broadcasts on 
approximately 400 stations in all 50 States, Guam, the U.S. 
Virgin Islands and Puerto Rico, who suggested the legislation. 
All the witnesses were in favor of the legislation.
    On February 28, 1996, the subcommittee received testimony 
from Casey Sewruk, Credit Union National Association; Leland 
Stenehjen, Independent Bankers Association of America; Mallory 
Duncan, National Retail Federation; Paul S. Reid, Mortgage 
Bankers Association; and Vice Admiral Thomas J. Hughes (Ret.), 
National Association of Federal Credit Unions; Al Stevens, Opex 
Corp., accompanied by Mark Stevens and Bob Dewitt; Ben Brude, 
ElectroCom Automation L.P.; and Tod Mongan, BancTec Inc., 
accompanied by Nolan Klier. These witnesses generally voiced 
concerns about the cost of implementing the provisions of the 
legislation in terms of actual monetary loss due to the costs 
of retroactively crediting interest charges and technical and 
operational problems. The current payment systems cannot read 
the postmark or retain envelopes as evidence of timely payment. 
Therefore, new systems would have to be redesigned or developed 
and the costs would necessarily be passed on to the consumers. 
However, the cost is yet unknown.

6. H.R. 1398, To Designate the United States Post Office Located at 
        1203 Lemay Ferry Road, St. Louis, Missouri as the ``Charles J. 
        Coyle Post Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The bill was introduced by 
Representative Clay of Missouri on April 5, 1995, and was 
cosponsored by the entire House delegation of the State of 
Missouri as required by the Committee on Government Reform and 
Oversight. The bill designates the U.S. Post Office building 
located at 1203 Lemay Ferry Road, St. Louis, MO as the 
``Charles J. Coyle Post Office Building''. Mr. Coyle was a U.S. 
Army veteran and career postal worker. Mr. Coyle died on 
February 18, 1995.
    c. Legislative History/Status.--The bill was referred to 
the Subcommittee on Postal Service on April 7, 1995. The 
Committee on Government Reform and Oversight considered and 
approved the bill on December 14, 1995, and ordered it to be 
reported. On December 19, H.R. 1398 was called up by the House 
under suspension of rules and the measure passed by voice vote. 
The Senate received it the same day and referred it to the 
Senate Committee on Governmental Affairs.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on the measure.

7. H.R. 1606, To Designate the United States Post Office Building 
        Located at 24 Corliss Street, Providence, Rhode Island, as the 
        ``Harry Kizirian Post Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 1606 designates the U.S. Post 
Office Building located at 24 Corliss Street, Providence, RI as 
the ``Harry Kizirian Post Office Building''. It honors Mr. 
Kizirian, a World War II Marine veteran and former Providence 
Postmaster.
    c. Legislative History/Status.--The bill was introduced by 
Representative Reed on May 10, 1995, and referred to the 
Subcommittee on Postal Service. H.R. 1606 was cosponsored by 
the House members of the Rhode Island delegation. The 
subcommittee approved the legislation on June 20, 1995, and 
forwarded it to full committee which marked up the bill and 
ordered it to be reported by voice vote. H.R. 1606 was called 
up by the House under suspension of the rules where it passed 
by voice vote on October 17, 1995. The measure was amended and 
approved by the Senate on October 24, 1995. The House disagreed 
to Senate amendments, Jan. 5, 1996, and the Senate receded from 
its amendments the same day. (Legislative day of Jan. 3, 1996) 
by voice vote. The bill was cleared for the White House and was 
presented to the President on January 23, 1996; and became 
Public Law 104-100, on February 1, 1996.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on the legislation.

8. H.R. 1880, To Designate the United States Post Office Located at 102 
        South McLean, Lincoln, Illinois as the ``Edward Madigan Post 
        Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 1880 honors the late Edward 
Madigan by naming the U.S. Post Office located at 102 South 
McLean, Lincoln, IL after him. Mr. Madigan, a native of 
Lincoln, IL, served 10 terms in the House of Representatives 
and was the 24th Secretary of Agriculture.
    c. Legislative History/Status.--Representative LaHood 
introduced the measure on June 16, 1995, and the measure was 
referred to the Subcommittee on Postal Service on June 19. The 
bill was cosponsored by the entire House delegation of the 
State of Illinois. The committee considered and marked up the 
legislation on December 14, 1995, and it was ordered to be 
reported. H.R. 1880 was called up by the House under suspension 
of rules on December 19, 1995, and passed by voice vote. The 
measure was received in the Senate that day and referred to the 
Senate Committee on Governmental Affairs. On April 18, 1996, 
H.R. 1880 was ordered to be reported in lieu of S. 1443. H.R. 
1880 was reported to the Senate by the Senate Committee on 
Governmental Affairs on May 23, 1996, and it was placed on the 
Senate legislative calendar under general orders Calendar No. 
423. On June 27, 1996, the bill passed the Senate by unanimous 
consent and it was cleared for the White House. On July 2, 
1996, the bill was presented to the President and signed on 
July 9, 1996, becoming Public Law 104-157.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on this bill.

9. H.R. 2262, To Designate the United States Post Office Located at 218 
        North Alston Street in Foley, Alabama as the ``Holk Post Office 
        Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 2262 designates that the U.S. 
Post Office Building located at 218 North Alston Street in 
Foley, AL, as the ``Holk Post Office Building''. It honors 
Arthur A. Holk and his father, George Holk, both of whom served 
as mayor of the city of Foley. Both father and son participated 
actively in various city organizations and on the city and 
county school boards.
    c. Legislative History/Status.--H.R. 2262 was introduced on 
September 6, 1995, by Representative Callahan. The bill was 
cosponsored by all the House members of the Alabama delegation. 
The committee considered and marked up the bill on December 14, 
1995, when it was ordered to be reported. On December 19, 1995, 
H.R. 2262 was called up by the House under suspension of the 
rules and passed the House by voice vote. It was received in 
the Senate the same day and referred to the Senate Committee on 
Governmental Affairs.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on this legislation.

10. H.R. 2704, a Bill To Provide That the United States Post Office 
        building Located on the 2600 block of East 75th Street in 
        Chicago, Illinois Shall Be Known as the ``Charles A. Hayes Post 
        Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 2704 provides that the U.S. 
Post Office building that is to be located on the 2600 block of 
East 75th Street in Chicago, IL, shall be known and designated 
as the ``Charles A. Hayes Post Office Building''. The 
legislation honors former Representative Charles Hayes who was 
elected to Congress in 1983. Prior to his departure from 
Congress, Mr. Hayes served as chairman of the Subcommittee on 
Postal Personnel and Modernization of the former Committee on 
Post Office and Civil Service.
    c. Legislative History/Status.--H.R. 2704 was introduced by 
Representative Collins of Illinois on December 5, 1995. The 
committee considered and marked up the measure on December 14, 
1995, and ordered it to be reported as amended. The amendment 
reflected the correct address of the facility. H.R. 2704 was 
called up by the House under suspension of the rules on 
December 19, 1995, and the measure passed by voice vote in the 
same form as passed in committee. The amended bill was received 
in the Senate the same day and referred to the Senate Committee 
on Governmental Affairs. On April 18 the bill was ordered to be 
reported and on May 23, 1996, it was reported to the Senate by 
the Committee on Governmental Affairs and placed on the 
legislative calendar under general orders (Calendar No. 425). 
The Senate passed the measure by unanimous consent on June 27 
and it was cleared for the White House the same day. On July 2, 
the bill was presented to the President and was signed into law 
July 9, 1996, becoming Public Law 104-159.
    d. Hearings and Subcommittee Actions.--No hearings were 
conducted on this legislation.

11. H.R. 885, To Designate the United States Post Office Building 
        Located at 153 East 110th Street, New York, New York, as the 
        ``Oscar Garcia Rivera Post Office Building.''

    a. Report Number and Date.--None.
    b. Summary of Measure.--The bill designates the U.S. Post 
Office building located at 153 110th Street, New York, New 
York, as the ``Oscar Garcia Rivera Post Office Building''. The 
legislation honors the first Puerto Rican to be elected to 
public office in the continental United States. He was 
instrumental in organizing and establishing the Association of 
Puerto Rican and Hispanic Employees within the Post Office 
Department when he was assigned to the post office in City 
Hall. In 1937, Mr. Oscar Garcia Rivera was elected assemblyman 
in the State of New York by the 14th District.
    c. Legislative History/Status.--The legislation was 
introduced on February 9, 1995, by Representative Serrano of 
New York and cosponsored by the entire New York House 
delegation, as required by the Committee on Government Reform 
and Oversight. The committee considered and ordered H.R. 885 to 
be reported on June 20, 1996. H.R. 885 was called up by the 
House under suspension of rules on July 30, and passed by voice 
vote. The bill was received in the Senate on July 31, 1996 and 
referred to the Senate Committee on Government Affairs the same 
day.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on the measure.

12. H.R. 2700, a Bill to Designate the United States Post Office 
        Building located at 7980 FM 327, Elmendorf, Texas, as the 
        ``Amos F. Longoria Post Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The legislation provides that the 
U.S. Post Office building located on the Farm to Market Road in 
Elmendorf, Texas be named after Amos F. Longoria, born in 
Elmendorf, drafted into the U.S. Army during World War II and 
who died in service to the country.
    c. Legislative History/Status.--The bill was introduced by 
Representative Tejeda of Texas on November 30, 1995 and 
cosponsored by the full Texas House Delegation, pursuant to 
committee policy. The legislation was referred to the House 
Committee on Government Reform and Oversight and subsequently 
referred to the Subcommittee on Postal Service. On April 24, 
1996, the committee considered and approved the bill, as 
amended to correct the address, and was ordered to be reported. 
On July 30, 1996, the legislation was called up by the House 
under suspension of the rules and the amended bill was passed 
by voice vote. It was received in the Senate the following day 
and referred to the Senate Committee on Government Affairs. The 
Senate Committee on Governmental Affairs discharged the measure 
by unanimous consent on September 28, 1996, and it was laid 
before the Senate. At that time, the Senate attached an 
amendment and passed the amended bill by unanimous consent. The 
new provision amended section 3626(b)(3) of title 39, United 
States Code to include in the definition of an ``institute of 
higher education,'' a nonprofit organization that coordinates a 
new network of college-level courses that are sponsored 
primarily by nonprofit, educational institutions for older 
adults. This provision is contained in H.R. 3717, the Postal 
Reform Act of 1996 which has been the subject of four 
legislative hearings, and was the subject of a free standing 
bill, H.R. 2578. The House agreed to the Senate amendment by 
unanimous consent the same day and it was cleared for the White 
House. The bill was presented to the President on September 30, 
1996 and it was signed on October 9, 1996, when it became 
Public Law 104-255.
    d. Hearings and Subcommittee Actions.--No hearings were 
held on the legislation.

13. H.R. 3139, a Bill To Redesignate the United States Post Office 
        building Located at 245 Centereach Mall on Middle Country Road 
        in Centereach, New York, as the ``Rose Y. Caracappa United 
        States Post Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The bill redesignates the U.S. Post 
Office building located at 245 Centereach Mall in Centereach, 
New York as the ``Rose Y. Caracappa United States Post Office 
Building''. The legislation honors Rose Caracappa who served in 
the Suffolk County legislature for 14 years and was chairperson 
of various committees. At the time of her death she was working 
on building a World War II monument to honor all who served.
    c. Legislative History/Status.--The bill was introduced by 
Representative Forbes of New York on March 21, 1996. H.R. 3139 
was cosponsored by the full New York House Delegation as 
required by committee policy. The committee considered and 
ordered it to be reported on June 20, 1996. On July 30, 1996, 
the bill was called up by the House under suspension of the 
rules and passed by voice vote. The Senate passed H.R. 3139 by 
unanimous consent on August 2, 1996, and it was cleared for the 
White House. The legislation was presented to the President on 
August 9, 1996, and signed by the President as Public Law 104-
187 on August 20, 1996.
    d. Hearings and Subcommittee Actions.--No hearings were 
conducted on this legislation.

14. H.R. 3768, a Bill to Designate a United States Post Office to be 
        located in Groton, Massachusetts, as the ``Augusta `Gusty' 
        Hornblower United States Post Office''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 3768 provides that the United 
States Post Office to be located at 80 Boston Road in Groton, 
Massachusetts, shall be designated and known as the ``Augusta 
`Gusty' Hornblower United States Post Office'' in honor of 
Augusta Hornblower who served as State Representative to the 
Massachusetts General Court from 1985 to 1994, representing the 
towns of Groton, Ayer, Dunstable, Lunenberg, Pepperell, 
Townsend and Tyngsborough. She served as Assistant Minority 
Whip for 2 years prior to her death from breast cancer in 1994.
    c. Legislative History/Status.--H.R. 3768 was introduced on 
July 10, 1996, by Representative Blute of Massachusetts and 
cosponsored by all the members of the House Delegation from 
Massachusetts. The committee considered, and approved H.R. 3768 
on July 25, 1996; and ordered it reported. On July 30, 1996, 
the House called up the bill under suspension of the rules and 
passed it by voice vote. The bill was received in the Senate 
the following day and referred to the Senate Committee on 
Governmental Affairs.
    d. Hearings and Subcommittee Actions.--No hearings were 
conducted on this legislation.

15. H.R. 3834, a Bill to Redesignate the Dunning Post Office in 
        Chicago, Illinois, as the ``Roger P. McAuliffe Post Office''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The legislation would redesignate 
the ``Dunning Post Office'' located at 6441 West Irving Park 
Road, Chicago, Illinois as the ``Roger P. McAuliffe Post 
Office''. The naming of this Post Office honors the late Roger 
McAuliffe who was elected to the Illinois House for 24 years. 
He served the 14th District of Chicago's Northwest Side and the 
suburbs of Park Ridge, Rosemont, Norridge and Schiller Park. He 
had also previously represented the 16th District. He served in 
the U.S. Army and graduated from the Chicago Police Academy and 
remained on active duty with the Chicago Police Department even 
as he served in the legislature. Roger McAuliffe was assistant 
majority leader of the Illinois House when he died unexpected 
in a boating accident.
    c. Legislative History/Status.--H.R. 3834 was introduced by 
Representative Flanagan of Illinois on July 17, 1996, and 
referred to the Committee on Government Reform and Oversight. 
On July 25, 1996, the committee considered approved and the 
bill was ordered to be reported. On July 30, 1996, the House 
called up the bill under suspension of the rules and it passed 
by voice vote. H.R. 3834 passed the Senate by unanimous consent 
on August 2, 1996, and was cleared for the White House. On 
August 9, 1996, the bill was presented to the President and the 
measure was signed on August 20, 1996, becoming Public Law 104-
189.
    d. Hearings and Subcommittee Actions.--No hearings were 
conducted on this legislation.

16. H.R. 3877, a Bill to designate the United States Post Office 
        Building in Camden, Arkansas, as the ``Honorable David H. Pryor 
        Post Office Building''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The legislation states that the 
United States Post Office building located at 351 Washington 
Street in Camden, Arkansas is designated as the ``Honorable 
David H. Pryor Post Office Building'' in honor of Senator David 
H. Pryor who served as former chair of the Senate Subcommittee 
on Post Office and Civil Service and currently serves as that 
panel's ranking minority member. He was elected to serve 
Ouachita County in the State legislature and he then served in 
the U.S. House of Representatives from 1967 through 1972. He 
was elected Governor of Arkansas in 1974 and in 1976. In 1978, 
David Pryor won the U.S. Senate seat and has retained it for 
three terms until his retirement at the end of the 104th 
Congress.
    c. Legislative History/Status.--H.R. 3877 was introduced by 
Representative Dickey of Arkansas on July 23, 1996, and 
cosponsored by the full Arkansas House Delegation as required 
by committee policy. The committee considered the bill on 
September 18, 1996, and the measure was ordered to be reported 
as amended by voice vote. The amendment corrected technical 
changes of the bill. On September 24, 1996, the bill was called 
up by the House under suspension of the rules and the bill, as 
it was amended by the committee, passed the House by voice 
vote. The Senate received the legislation the same day and 
passed the bill by unanimous consent on September 27, 1996. It 
was cleared for the White House and on September 30, 1996, the 
bill was presented to the President. H.R. 3877 was signed by 
the President on October 9, 1996, and became Public Law 104-
268.
    d. Hearings and Subcommittee Actions.--No hearings were 
conducted on this legislation.

17. H.R. 3610, The Omnibus Appropriations Act of 1996.

    a. Report Number and Date.--Conference Report H. Rept. 104-
863.
    b. Summary of Measure.--Sections 103 and 104 in H.R. 3717 
relating to the salary of the Directors and to establishment of 
the Office of the Inspector General of the Postal Service and 
the appointment and removal of the Inspector General by the 
Board of Governors were amended to the above-reference 
legislation and required to be effective as if included in the 
provision of the Treasury Postal Service and General 
Appropriation Act, 1996.
    c. Legislative History/Status.--H.R. 3610 was introduced by 
Representative Young of Florida on June 11, 1996. The 
legislation passed the House as amended on June 13, and 
received in the Senate on June 14. The Senate struck the bill 
after the enacting clause and substituted the language of S. 
1894 and passed the measure on July 18, in lieu of S. 1894. The 
Senate insisted on the amendment and requested a conference. 
The House disagreed to the Senate amendment. A Conference was 
held on September 10, and September 28. A Conference Report, H. 
Rept. 104-863 was filed on September 28. A motion to recommit 
failed in the House by voice vote but the House agreed to 
Conference Report by a yea-nay vote. The Senate agreed to the 
conference report by voice vote on September 30, 1996, and it 
was cleared for the White House, presented to the President and 
signed by the President on the same day. The legislation became 
Public Law 104-208.
    d. Hearings and Subcommittee Actions.--The issues of 
increasing the salaries of Postal Service Directors and 
establishing the Office of the Inspector General were heard 
during the course of hearings on postal reform on July 10, July 
18, September 17 and September 26.

18. H.R. 3690, the ``Postal Service Core Business Act of 1996''.

    a. Report Number and Date.--None.
    b. Summary of Measure.--The legislation was introduced to 
address claims regarding unfair competition by the United 
States Postal Service (USPS). Many new industries have emerged 
over the last 15 years including the Commercial Mail Receiving 
Agent (CMRA) which provides value added and ancillary services 
to postal customers. Many home-based businesses use CMRAs as 
mini offices. They also help their customers in packing and 
sending packages in the most cost effective manner. CMRAs 
provide services which the USPS does not. Within the past two 
decades, one franchise has grown into an entity of nearly 
10,000 small business persons. The CMRA industry fears that it 
is at a disadvantage because of the vast resources of the 
Postal Service.
    Among those concerns are that the USPS: does not charge tax 
on its retail items; is self-insured as an agency of the U.S. 
Government; does not have to make a profit; can borrow money 
from the Federal Reserve System at the most favorable rates; 
and has a statutory monopoly on the delivery of first class 
mail which the CMRAs think can subsidize other services.
    The legislation prohibits the USPS from competing with 
private industries unless the Postal Service was offering the 
service nationwide as of January 1, 1994. H.R. 3690 limits the 
types of commercial nonpostal service which may be offered by 
the Postal Service.
    c. Legislative History/Status.--The legislation was 
introduced on June 20, 1996, by Representative Duncan Hunter 
(R-CA) and it was referred to the Committee on Government 
Reform and Oversight. Within the committee, it was then 
referred to the Subcommittee on the Postal Service. Though the 
merits of the bill, per se, were not the subject of a hearing, 
it was heard in the context of postal reform under the rubric 
of H.R. 3717 when on September 26, 1996, Mr. Hunter testified 
on the impact of postal reform on small related business, 
specifically CMRAs.
    d. Hearings and Subcommittee Actions.--H.R. 3690 was heard 
in context with H.R. 3717, the Postal Reform Act of 1995, on 
September 26, 1996. No further action was taken on the 
legislation.

19. H.R. 3717, the ``Postal Reform Act of 1996.''

    a. Report Number and Date.--None.
    b. Summary of Measure.--H.R. 3717 introduced by 
subcommittee Chairman McHugh, amends Title 39, United States 
Code regarding the United States Postal Service. Title I 
redesignate the name of the Board of Governors to the Board of 
Directors and makes additional name changes of the Postmaster 
General and Deputy Postmaster General to convey the business 
responsibilities of the Postal Service anticipated by the 
reform bill and to communicate the experience, professionalism 
and business acumen expected of the people who hold these 
positions. The bill creates a Presidentially-appointed 
Inspector General for the Postal Service and establishes both 
an Office of the Inspector General and a separate Office of the 
Chief Postal Inspector General. The bill mandates that the 
Office of Inspector General will be a separate item in the 
annual budget. The Inspector General is authorized to hire and 
manage the office in a manner independent from Postal Service 
functions and control. Compensation for the employees of the 
Inspector General's Office and the Chief Postal Inspector's 
Office will be compensated similarly to offices of other 
Inspectors General and Federal law enforcement entities. Both 
offices are mandated to develop strategic plans outlining their 
goals, missions, and resources needs. Clarifying and technical 
changes are included.
    Title II of the legislation permanently authorizes the 
employment of Postal Police Officers. This corrects an 
oversight in the 1970 law which has required Congress to enact 
temporary authority each fiscal year by the appropriations 
process. Current law states that an appeal of a post office 
closing by anyone served by that post office may be considered 
if the appeal is received by the Postal Rate Commission within 
30 days of notification. H.R. 3717 changes the provision by 
considering the appeal timely if the date stamped on the 
envelope is postmarked within 30 days of the notification.
    Title III of the legislation repeals the inactive Postal 
Service Advisory Council and establishes a temporary 
Presidentially-appointed Postal Employee-Management Commission 
which would sunset after a 3 year tenure. The Commission would 
evaluate and recommend solutions to employee-management 
problems which have permeated the Postal Service. This issue 
was reported on by the General Accounting Office at great 
length in report, U.S. Postal Service: Labor-Management 
Problems Persist on the Workroom Floor (GAO/GGD-94-201A and 
201B (Vols. 1 & 2), Sept. 29, 1994. Testimony received from GAO 
in March 1996 stated that the problems still exist. The make up 
of the Commission is specified and the first report will be 
submitted within 18 months of the Commission's origination and 
annually thereafter until the third report is submitted.
    Title IV of the bill relates to finance issues. The measure 
grants the Postal Service sole discretion to deposit its 
revenues in the Postal Service Fund within the U.S. Treasury, 
as it already must do, or to any Federal Reserve banks or 
depositories for public funds. The Postal Service must, 
however, submit a master plan detailing how it will exercise 
its authority, measures to safeguard against losses, procedures 
for regular accounting of its authority, to the President, the 
Secretary of the Treasury, and both Houses of Congress 30 days 
prior to the funds being deposited elsewhere. This section also 
removes Treasury control from Postal Service investments, 
allowing it to invest any excess funds only in obligations of, 
or guaranteed by, the U.S. Government. This will give the 
Postal Service the opportunity to take advantage of favorable 
market conditions and make equity investments which fit its 
business strategies. The bill severs the access of the Postal 
Service to the Federal Financing Bank which would result in the 
Postal Service taking advantage of the speed, flexibility, 
innovation and requirements of the open market to serve its 
financial needs. Though these provisions remove the control of 
the Secretary of the Treasury from Postal Service financial 
borrowing decisions, the Postal Service must consult with the 
Secretary on the terms and conditions of sale of any 
obligations issued by the Postal Service. This provision would 
allow the Postal Service to minimize interest expenses by 
obtaining the most cost efficient services. The bill would also 
remove the requirement that the Secretary of the Treasury 
purchase up to $2 billion in obligations of the Postal Service, 
though it would still permit the Secretary to purchase Postal 
Service obligations, but only upon mutual agreement of both 
parties. Removal of the Treasury requirement is consistent with 
the purpose of directing the Postal Service to borrow in the 
private sector where it will be able to take advantage of 
broader markets, though with some restriction. This provision 
places the Postal Service in conformity with some other 
government-sponsored enterprises.
    Title V refers to the budget and appropriations process. It 
carries out the function of H.R. 1826 which subcommittee 
Chairman McHugh introduced last session, repealing the 
authority for the transitional appropriations (funding for 
worker's compensation liabilities of pre-1971, former Post 
Office Department employees) and making those liabilities those 
of the United States Postal Service, to be handled in the same 
manner as all Postal Service employee worker compensation 
claims. Technical and clarifying amendments are included 
regarding the status of the employees affected by the change. 
This section also ends the authorization for all appropriations 
and funding of any postal services by the American taxpayer but 
maintains a phased-in schedule of rates for certain nonprofit 
organizations, free mail for the blind and disabled, free 
mailing of balloting material under the Uniformed and Overseas 
Citizens Absentee Voting Act and reduced rates for voter 
registration purposes. The Postal Service will ultimately bear 
the responsibility for social obligations as part of its 
mission and charge to provide universal service. Though there 
would not be an appropriation for the Postal Service, this 
provision would still retain Congressional oversight of the 
Postal Service.
    Title VI provides for miscellaneous provisions relating to 
postal rates, classes and services. It authorized the Postal 
Service to forward mail in the same manner as other postal 
customers, for addressees receiving their mail in Commercial 
Mail Receiving Agencies (CMRAs) accepting mail on behalf of 
their customers. At present, CMRAs must add postage to mail 
that requires forwarding. Another provision includes in the 
definition of an ``institute of higher education,'' a nonprofit 
organization that coordinates college-level courses for older 
adults by nonprofit, educational institutions, such as ``elder 
hostels.'' This provision passed as an amendment to H.R. 2700 
and was enacted into law. This section would also authorize the 
Postal Service to request from the Postal Rate Commission a 
rate category for periodical requester publications. The powers 
of the Postal Rate Commission are expanded in this title. The 
Commissioners, law judges appointed by the Commission and any 
designated employee are permitted to administer oath, examine 
witnesses, take deposition and receive evidence. Additionally, 
the chairman or any Commissioner designated by the chairman, 
and any Commission appointed law judge may issue subpoenas to 
require attendance, presentation of testimony, production of 
documents and order depositions and responses to written 
interrogatories. Any subpena requires the written concurrence 
of a majority of the Commissioners then holding office. Failure 
to obey a subpena may be referred to the United States district 
court and failure to obey is punishable as a contempt of court. 
If any information requested by the Commission is considered 
proprietary, the Postal Service must inform the Commission in 
writing. In cases where proprietary information is received, 
the Commission may use the information only for the purpose 
supplied and restrict access to the information to Commission 
officials.
    A section within Title VI permits the Postal Service to 
offer volume discounts in which all customers would be eligible 
for the same volume discount as long as the discounted rate is 
set in accordance with statutory provisions. This provision is 
intended to insure greater pricing flexibility in markets 
exposed to growing competition. The Postal Service is permitted 
to offer volume discounts on a negotiated basis as along as the 
agreements are restricted to postal services in the Competitive 
Mail category, enumerated in Title X. The rates would be 
attractive to the mailer and beneficial to the Postal Service. 
This authority would be tested for 3 years; after notice and 
comment the Comptroller General of the General Accounting 
Office will report the evaluation to Congress.
    Title VII deletes obsolete provisions referring to the 
Interstate Commerce Commission and other matters such as 
contracting for surface transportation of mail, the duration of 
postal transportation contracts. One section expands the 
flexibility of the Postal Service to contract for international 
air transportation of mail at competitive market rates. Current 
restrictions stifle the Postal Service' competitiveness in 
international markets. This provision would contribute to 
improvements in cost and service performance. An important 
provision in this title provides that a letter may be carried 
outside the Postal Service under existing law or when the 
amount paid for private carriage is at least $2. Further, this 
title provides for a 3 year demonstration project which would 
test the feasibility of allowing non-Postal Service access to 
private mailboxes. This project directs the Postal Service to 
include at least one urban, suburban, and rural area in the 
pilot project. Importantly, the section allows individuals in 
affected areas to opt-out of the test.
    Title VIII of the bill amends title 5 of the United States 
Code. It permits the Chief Executive Officer (CEO) of the 
Postal Service to obtain a review of any final order or 
decision of the Merit Systems Protection Board (MSPB) regarding 
any employee or applicant for employment with the Postal 
Service by petitioning for judicial review in the United States 
Court of Appeals for the Federal Circuit. The CEO could proceed 
with the request if it is determined that the MSPB has erred in 
interpreting civil service provisions affecting personnel 
management and that the ruling would have significant impact on 
civil service policies. If the CEO had not intervened in the 
matter earlier, then the CEO must first petition the Board for 
reconsideration. This provision gives the MSPB an opportunity 
to correct any errors which may have been made at this level. 
If reconsideration is denied, the CEO has the right to appear 
before the Court of Appeals; judicial review would be at the 
discretion of the Court.
    Title IX is applicable to law enforcement. It specifically 
includes contract employees within the protection of law 
afforded to Federal and postal employees against the threat of 
assault. The amendment broadens the deterrent to the continued 
receipt of unsolicited sexually oriented advertising by 
authorizing a civil monetary penalty of $500 to $1,500 for each 
sexually oriented advertising mail piece in violation of 
specific sections of law. The new provision allows the deposit 
of asset forfeitures in which the Postal Service had primary 
responsibility for investigation to be deposited directly in 
the Postal Service Fund. This title also provides that the 
Postal Service may bring civil action for penalties against 
mailers who violate postal statutes and regulations in regard 
to mailing and packaging hazardous matter. Civil penalties were 
included for improper transportation of hazardous material in 
the Hazardous Materials Transportation Act, but the mailing of 
such items were not. This title creates criminal penalties for 
stalking of Federal and postal employees; updates existing law 
to prohibit the mailing of controlled substances, as defined by 
the Controlled Substances Act and makes the violation a felony 
punishable by fines or imprisonment or both; directs the U.S. 
Sentencing Commission to appropriately enhance its sentencing 
guidelines for volume mail thefts and the use of the credit 
line of credit cards to compute the dollar loss in the 
unauthorized use of a credit card; clarifies the Postal 
burglary statute to specifically include the robbery of the 
large number of post office boxes and vending machines that are 
not in postal facilities and includes penalties for the receipt 
or possession of stolen property through a violation of this 
statute; enhances the penalties for postal robberies, including 
those that result in the death of any person, to be equivalent 
to the enhanced penalties for bank robber as included in the 
Violent Crime Control and Law Enforcement Act of 1994.
    Title X of H.R. 3717 establishes a new system for 
establishing postal rates, classes, and services. It replaces 
the postal rate setting process by creating a new ratemaking 
framework. It is designed to reflect the regulatory approach 
for monopolies or market dominant entities currently in use by 
regulatory commissions in nearly all States, the Federal 
Communication Commission, and several other nations. The new 
system recognizes the marketplace realities and competition 
faced by the Postal Service this year and into the 21st 
century. This title establishes a price cap regulatory regime 
for those postal products that are protected by the Private 
Express Statutes and those products that have few if any 
alternatives outside the Postal Service. The noncompetitive 
products will be divided among four groupings of similar 
classes of mail. The Postal Service will have the flexibility 
to price postal products that have a sufficient number of non-
Postal Service alternatives, according to economic decisions 
required in the marketplace.
    The Postal Service is also given the authority to introduce 
and test experimental postal services, encouraging the 
investment into new services for the benefit of postal 
customers. The Postal Service will then have the flexibility of 
a privately owned entity to react to market conditions, to 
introduce and test new products and to earn a profit.
    The Postal Service is required to initiate an omnibus rate 
case before the Postal Rate Commission ensuring that the most 
current rates and fees are in effect before the application of 
the new formula for rate setting. The baseline rates and fees 
must take effect no later than 18 months after enactment. The 
factors which the Postal Rate Commission must consider in 
establishing baseline rates and fees include cost, demand, and 
quality of service. These elements would determine the 
competitiveness of the Postal Service with other delivery 
services and methods of communication.
    Prices in the noncompetitive mail category will be indexed 
to the Gross Domestic Product Chain-Type Price Index (GDPPI) 
which is published quarterly by the Bureau of Economic Analysis 
of the Department of Commerce. Thus, the statistic is 
straightforward and easily verifiable; it cannot be manipulated 
by the regulated entity. As the GDPPI is an economy-wide 
measure of prices that reflect the cost of business, it is an 
appropriate link to the Postal Service as a business. 
Furthermore, numerous State utility commissions and the Federal 
Communication Commission base their price cap policies on 
GDPPI.

           B. REVIEW OF LAWS WITHIN COMMITTEE'S JURISDICTION

1. Federal Property and Administrative Services Act of 1949, as Amended 
        June 30, 1949, 63 Stat. 377 (the act) (40 U.S.C. Section 471 et 
        seq.; Public Law 152, 81st Congress).

    This law provides the Federal Government with a system for 
procurement of personal property and nonpersonal services, for 
storage and issues of such property, for transportation and 
traffic management; for further utilization and disposal of 
surplus property, and for management authority was modified in 
1985. GSA's original responsibilities were enacted as part of 
title 44, U.S.C. The committee has amended certain sections of 
the 1949 act.
    With respect to Title III (Procurement Procedure), H.R. 
1670, reported by the committee on August 1, 1995, as House 
Report 104-222, Pt. I, would amend contract solicitation 
provisions, provide for preaward debriefings, amend preaward 
qualification requirements and replace these provisions with a 
contractor performance system; amend all commercial items from 
the Truth in Negotiations Act; and apply simplified acquisition 
procedures to all commercial items regardless of their dollar 
value.
    Division D of Public Law 104-106, the Federal Acquisition 
Reform Act of 1996, retains the provisions regarding commercial 
item purchasing in modified form. The law also maintains the 
original language authorizing preaward debriefings for excluded 
offerors where appropriate.
    Division E of Public Law 104-106, the Information 
Technology and Reform Act of 1996, includes a Senate provision 
that would require agencies to inventory all agency computer 
equipment and to identify excess or surplus property in 
accordance with title II of the act. The statement of the 
committee of conference on S. 1124, which became Public Law 
104-106, contains a direction of the conferees that GSA, 
exercising current authority under title II of the act, should 
issue regulations that would provide for donation of such 
equipment under title II on the basis of this priority: (1) 
elementary and secondary schools and schools funded by the 
Bureau of Indian Affairs; (2) public libraries; (3) public 
colleges and universities; and (4) other entities eligible for 
donation under the act.

2. Brooks Automatic Data Processing Act (40 U.S.C. 759).

    This provision of law is found at section 111 of the 
Federal Property and Administrative Services Act (the act). It 
provides the authority to coordinate and provide for the 
purchase, lease, and maintenance of automatic data processing 
equipment for all Federal agencies through the Administrator of 
General Services. It also provides authority for the General 
Services Board of Contract Appeals to review any decision by a 
contracting officer that is alleged to violate a statute, a 
regulation, or the conditions of a delegation of procurement 
authority.
    Division E of Public Law 104-106 repeals section 111 of the 
act. It provides authority for the acquisition of information 
technology within each of the Federal agencies and gives the 
Office of Management and Budget the responsibility for 
coordinating governmentwide information technology management 
and purchasing. It also establishes the General Accounting 
Office as the sole independent administrative forum for bid 
protests.

3. Office of Federal Procurement Policy Act (41 U.S.C. Section 401 et 
        seq., 88 Stat. 796, Public Law 93-400).

    The Office of Federal Procurement Policy (OFPP) Act 
established OFPP within the Office of Management and Budget to 
promote economy, efficiency, and effectiveness in the 
procurement of property and services by and for the executive 
branch of the Federal Government and to provide governmentwide 
procurement policies, regulations, procedures, and forms.
    H.R. 1760, reported by the committee on August 1, 1995, as 
House Report 104-222, Pt. I, would revise the current OFPP Act 
to provide for improved definitions of competition 
requirements; to establish an alternative quality-based pre-
qualification system for meeting the government's recurring 
needs; to exempt commercial items from the Truth in 
Negotiations Act and the Cost Accounting Standards; to add a 
new section to encourage the government's reliance on the 
private sector sources for goods and services; to revise and 
simplify Procurement Integrity provisions; to remove certain 
certification requirements currently in statute and other 
regulatory certifications (unless justified); to add a new 
section providing that each executive agency establish and 
maintain effective value engineering processes and procedures; 
and to establish a series of policies and procedures for the 
management of the acquisition workforce in civilian agencies.
    Division D of Public Law 104-106 contains many of the 
provisions of House Report 104-222 in addition to other changes 
to the OFPP Act. The provisions of Public Law 104-106 include: 
exempting commercial item purchases from the Truth in 
Negotiations Act and Cost Accounting Standards; removing 
certain unnecessary certification requirements; providing for 
the inapplicability of certain procurement laws to commercially 
available off-the-shelf items; extending authority for 
executive agencies to establish and maintain cost-effective, 
value engineering procedures and processes; establishing a 
series of policies and procedures for the management of the 
acquisition workforce in the civilian agencies. It also repeals 
the current procurement integrity provisions and their 
certification requirements. New language provides for the 
protection of confidential procurement information by 
prohibiting both the disclosure and receipt of such information 
and imposing criminal and civil penalties for violations. There 
also is a limited ban on contacts between government officials 
and industry contractors, as well as governmentwide ``revolving 
door'' restrictions.

4. The Competition in Contracting Act of 1984 (41 U.S.C. 253, 98 Stat. 
        1175, Public Law 98-369, July 18, 1984).

    The Competition in Contracting Act of 1984 amended title 
III of the Federal Property and Administrative Services Act of 
1949 to establish a statutory preference for the use of 
competitive procedures in awarding Federal contracts for 
property or services; to require the use of competitive 
procedures by Federal agencies when purchasing goods or 
services--sealed or competitive bids; and to direct the head of 
each agency to appoint an advocate for competition who will 
challenge barriers to competition in the procurement of 
property and services by the agency and who will review the 
procurement activities of the agency.
    Division D of Public Law 104-106 contains language which 
retains the current statutory competition standard, but adds a 
requirement that the standard is to be implemented in a manner 
which is consistent with the government's need to 
``efficiently'' fulfill its requirements. Further provisions 
are added to allow contracting officials more discretion in 
determining the number of proposals in the ``competitive 
range,'' to provide for preaward debriefings of unsuccessful 
offerors, and to authorize the use of special two-phase 
procedures for design and construction of public buildings.

5. The Federal Acquisition Streamlining Act of 1994 (Public Law 103-
        355, October 13, 1994).

    The Federal Acquisition Streamlining Act (FASA) of 1994 was 
developed to provide the foundation for establishing 
``commercial-like'' procedures within the Federal procurement 
system. FASA established a preference for commercial items and 
simplified procedures for contracts under $100,000 as well as 
addressing a wide spectrum of issues regarding the 
administrative burden--on all sides--associated with the 
government's specialized requirements.
    H.R. 1670, reported by the committee on August 1, 1995, as 
House Report 104-222, Pt. I, would amend section 5061 of FASA 
(41 U.S.C. 413 note) to permit the OFPP Administrator to 
exercise the authority granted in FASA to test ``innovative'' 
procurement procedures without having to wait for the 
implementation of other FASA provisions.
    Public Law 104-106 authorizes OFPP to test alternative 
procurement procedures and removes a requirement that the 
testing of these procedures be contingent upon the full 
implementation of the Federal Acquisition Computer Network 
Electronic Commerce (FACNET) procedures. It also would limit 
the linkage between the use of the simplified acquisition 
procedures and the full implementation of FACNET.

                       Civil Service Subcommittee

1. The Veterans' Preference Act of 1944 (58 Stat. 387).

    This law provides preferences for veterans in obtaining and 
retaining Federal employment. The subcommittee reviewed this 
law in connection with its examination of the current status of 
veterans in the Federal workforce. (See section II.B.18. 
above.) Based upon this examination, the subcommittee concluded 
that veterans' rights in reductions in force are often 
circumvented and, most importantly, that veterans do not have 
access to an effective redress system when their rights have 
been violated. In addition, the subcommittee also concluded 
that veterans entitled to preference and others who have served 
honorably in the armed forces are frequently shut out of 
competition for Federal jobs by artificial restrictions on 
competition. In order to remedy these deficiencies, Chairman 
Mica introduced H.R. 3586. (See section III.A.1. above.)

2. Statutes reviewed in connection with civil service reform.

    The subcommittee reviewed the following laws affecting the 
civil service in connection with its examination of civil 
service reform legislation, H.R. 3841. (See section III.A.2. 
above.):
          a. Demonstration projects--5 U.S.C. Chapter 47.
          These laws govern the procedures under which OPM and 
        individual agencies may establish demonstration 
        projects to experiment with innovative personnel 
        practices. The subcommittee proposed a number of 
        changes to these statutes to simplify and expedite the 
        establishment of demonstration projects and to remove 
        current limits that prevent increased experimentation 
        with such programs.
          b. Chapters 33, 87 & 89--The subcommittee reviewed 
        these laws and proposed revisions to soften the impact 
        of layoffs and restructuring on Federal employees.
          c. Chapters 35, 43, 45, 53 (5335), 71--The 
        subcommittee reviewed these laws and proposed revisions 
        to improve performance management.
          d. Chapters 71, 75, & 77--The subcommittee reviewed 
        these laws and proposed revisions to streamline Federal 
        employee appeals procedures and encourage the use of 
        alternative dispute resolution techniques to resolve 
        disputes in the Federal workplace.
          e. Chapters 84 & 83--The subcommittee reviewed these 
        laws and proposed revisions to improve the Thrift 
        Savings Plan (TSP) by: (1) adding two new investment 
        plans, (2) liberalizing borrowing authority, (3) 
        authorizing a one-time permanent withdrawal of 
        contributions, (4) permitting immediate participation 
        in the TSP, and (4) allowing employees to contribute up 
        to the IRS limit. Items (1)-(3) were enacted into law 
        in Public Law 104-208.

3. Statutes reviewed in connection with Treasury, Postal 
        appropriations.

    The subcommittee reviewed a number of laws affecting the 
civil service in connection with the appropriations for the 
Office of Personnel Management (OPM) and other agencies.
    In the first session, the following laws were reviewed in 
connection with the Treasury, Postal Appropriations Act for 
fiscal year 1996 (Public Law 104-52):
          a. 5 U.S.C. Sec. 1104.--This statute, which deals 
        with delegations of authority for personnel management, 
        was amended to allow OPM to delegate competitive 
        examinations for all positions other than the position 
        of administrative law judge (ALJ) and to provide that 
        agencies using ALJs reimburse OPM for the cost of the 
        ALJ examination. It was also amended to allow OPM to 
        assist agencies conducting competitive examinations on 
        a reimbursable basis. Reimbursements to OPM are to be 
        made through the revolving fund established by 5 U.S.C. 
        Sec. 1304.
          b. 5 U.S.C. Sec. 3329 (the second section so 
        designated).--The second section in title 5 designated 
        as section 3329, which requires OPM to establish and 
        maintain a government wide list of certain vacant 
        positions, is redesignated as 3330 and is amended to 
        permit OPM to charge agencies for maintaining this 
        list.
          c. 5 U.S.C. Sec. 5378.--This statute, which deals 
        with pay rates for positions within the police force of 
        the Bureau of Engraving and Printing and the U.S. Mint, 
        was amended by adding a provision permitting the 
        Secretary of the Treasury to establish pay for the 
        position of chief at a rate not to exceed the maximum 
        rate for a GS-14.
          d. 5 U.S.C. Sec. 5542.--This section, which governs 
        the computation of overtime, was amended by adding a 
        new subsection (e) to cover computation of certain 
        overtime work performed by Secret Service agents.
          e. Section 4(a) of the Federal Workforce 
        Restructuring Act of 1994 (Public Law 103-226) was 
        amended to require additional agency contributions of 9 
        percent for each employee who receives a buyout and 
        retires under 5 U.S.C. Sec. 8336(d)(2).
          f. 5 U.S.C. Sec. 8348.--Subsection (a)(1) of this 
        section was amended to authorize the Office of 
        Personnel Management to withhold State income taxes 
        from civil service retirement annuities.

4. Statutes reviewed in connection with the Federal Reports Elimination 
        and Sunset Act of 1995 (Public Law 104-66).

          a. 5 U.S.C. Sec. 1304.--This statute was amended to 
        eliminate the requirement that the Comptroller General 
        report to Congress on OPM's revolving fund once every 3 
        years.
          b. 5 U.S.C. Sec. 2304.--This statute was amended to 
        eliminate the requirement that GAO submit annual 
        reports to Congress on the activities of the Merit 
        Systems Protection Board and the Office of Personnel 
        Management.
          c. 5 U.S.C. Sec. 3135.--This statute, which required 
        the Office of Personnel Management to submit biennial 
        reports to Congress on the Senior Executive Service, 
        was repealed.
          d. 5 U.S.C. Sec. 4314(d).--This statute, which 
        required the Office of Personnel Management to include 
        certain information in the reports required under 
        section 3135, was repealed.
          e. 5 U.S.C. Sec. 4113.--This statute, which required 
        agencies to report to the Office of Personnel 
        Management every 3 years on training programs and 
        plans, was repealed.
          f. 5 U.S.C. Sec. 5347(e).--This statute, which 
        required the Federal Prevailing Rate Advisory Committee 
        to submit annual reports to the Office of Personnel 
        Management, was repealed.
          g. 5 U.S.C. Sec. 3407.--This statute, which required 
        agencies and the Office of Personnel Management to 
        submit periodic reports on part-time career employment, 
        was repealed.

5. Repeal of the Ramspeck Act.

    The subcommittee reviewed the Ramspeck Act, 5 U.S.C. 
Sec. 3304(c), in connection with House consideration of the 
Lobbying Disclosure Act of 1995. Section 16 of the Lobbying 
Disclosure Act repealed the Ramspeck Act, which permitted the 
noncompetitive appointment of certain legislative and judicial 
branch employees to positions in the competitive service. The 
Office of Personnel Management was directed to develop 
regulations for evaluating experience gained in the legislative 
or judicial branches and non-profit enterprises.

6. Statutes reviewed in connection with the ICC Termination Act of 1995 
        (Public Law 104-88).

    In connection with the ICC Termination Act of 1995, the 
subcommittee reviewed amendments to 5 U.S.C. Sec. Sec. 5314 and 
5315 to reflect changes resulting from the abolition of the 
Interstate Commerce Commission.

7. Statutes reviewed in connection with Public Law 104-19.

    In connection with this act, the subcommittee reviewed 
amendments to 5 U.S.C. Sec. 5545a, which governs availability 
pay for criminal investigators. These amendments allowed 
Inspectors General who employ fewer than 5 criminal 
investigators to exempt those criminal investigators from the 
section's coverage and applied this section to pilots employed 
by the U.S. Customs Service who are law enforcement officers. 
Such pilots are also to be considered law enforcement officers 
for purposes of 5 U.S.C. Sec. 5542(d) and section 13(a)(16) and 
(b)(30) of the Fair Labor Standards Act of 1938.

8. Statutes reviewed in connection with the Intelligence Authorization 
        Act for Fiscal Year 1996 (104-93).

    In accordance with House consideration of this act, the 
subcommittee reviewed the following statutes:
          a. 5 U.S.C. Sec. 8318.--This statute was amended to 
        authorize the restoration of spousal benefits to the 
        spouse of an employee whose pension was forfeited under 
        5 U.S.C. Sec. Sec. 8312 or 8313 if the Attorney General 
        determines the spouse fully cooperated with Federal 
        authorities in the criminal investigation and 
        prosecution leading to the forfeiture.
          b. 5 U.S.C. Sec. 8432(g).--This statute was amended 
        to provide for the forfeiture of government 
        contributions to the Thrift Savings Plan and all 
        earnings attributable to such contributions if the 
        individual's annuity is forfeited under subchapter II 
        of chapter 83.
          c. 5 U.S.C. Sec. 7325.--This statute was amended to 
        allow employees of the agencies enumerated in 
        subsection (b)(2)(B) of section 7323 to engage in 
        fundraising or run for office in connection with 
        elections in certain municipalities or political 
        subdivisions.

9. Statutes reviewed in connection with the Legislative Branch 
        Appropriations Acts.

    In connection with House consideration of the Legislative 
Branch Appropriations Act, 1996 (Public Law 104-53), the 
subcommittee reviewed an amendment to section 5 U.S.C. 
Sec. 8402(c) to authorize the Director of the Congressional 
Budget Office to exclude temporary or intermittent CBO 
employees from the Federal Employees Retirement System.
    In connection with House consideration of the Legislative 
Branch Appropriations Act, 1997 (Public Law 104-197), the 
subcommittee reviewed the following statutes:
          a. 5 U.S.C. Sec. 3303.--This statute was amended to 
        prohibit anyone examining or appointing an individual 
        to a position in the competitive service from receiving 
        or considering a recommendation of the applicant by a 
        Senator or Representative, except as to the character 
        or residence of the applicant.
          b. 5 U.S.C. Sec. 2302.--This statute was amended to 
        make it a prohibited personnel practice for anyone with 
        the authority to take, direct others to take, 
        recommend, or approve any personnel action to solicit 
        or consider any recommendation or statement with 
        respect to any individual who requests or is under 
        consideration for any personnel action unless such 
        recommendation or statement is based on the personal 
        knowledge or records of the person furnishing it and 
        evaluates the work performance, ability, aptitude, 
        general qualifications, character, loyalty, or 
        suitability of such individual.

10. Statutes reviewed in connection with Defense Authorization Acts.

    In both sessions of the 104th Congress reviewed a number of 
statutes in connection with House consideration of Defense 
Authorization Acts.
    The following statutes were reviewed in connection with the 
National Defense Authorization Act for Fiscal Year 1996 (Public 
Law 104-106):
          a. 5 U.S.C. Sec. 3341.--This statute was amended to 
        eliminate the 120-day limit on details with respect to 
        Defense Department employees detailed to jobs that are 
        expected to terminate in connection with base closures 
        and realignments or downsizing.
          b. 5 U.S.C. Sec. 3502.--This statute was amended to 
        permit the Secretary of Defense or the Secretary of a 
        military department to allow employees to volunteer to 
        substitute for another employee in a reduction-in-
        force. The Secretary involved may refuse to allow an 
        employee with critical skills and knowledge to 
        volunteer. This authority terminated on September 30, 
        1996.
          c. 5 U.S.C. Sec. 5595.--This statute was amended to 
        permit the Secretary of Defense or the Secretary of a 
        military department to make a lump sum payment of 
        severance pay to an employee of the Department of 
        Defense.
          d. 5 U.S.C. Sec. 8905.--This statute was amended to 
        allow Department of Defense employees who voluntarily 
        separate from a surplus position to continue their 
        health insurance plan under the Federal Employees 
        Health Benefits Program.
          e. 5 U.S.C. Sec. 3329.--This statute was amended to 
        eliminate the requirement that certain military reserve 
        technicians who are involuntarily separated from 
        technician service be offered another position. 
        Instead, such individuals are to be given placement 
        consideration through a Department of Defense priority 
        placement program for positions in either the excepted 
        or competitive services within the Department for which 
        he is qualified and that, to the extent practicable, is 
        at the same pay grade or level.
          f. 5 U.S.C. Sec. 6323.--This statute was amended to 
        provide military reserve technicians, at their request, 
        with military leave of up to 44 workdays per calendar 
        year for participation in noncombat operations outside 
        the United States, its territories and possessions. 
        This statute was also amended to provide that Federal 
        employees who are members of the Reserves or National 
        Guard may, at their request, have the time they spend 
        performing public safety service charged to annual 
        leave or compensatory time rather than to military 
        leave provided under section 6323(b).
          g. 5 U.S.C. Sec. 6121.--This statute was amended to 
        permit employees of nonappropriated fund 
        instrumentalities to use flexible and compressed work 
        schedules.
          h. 5 U.S.C. Sec. Sec. 8347 and 8461.--These statutes 
        were amended to improve the portability of retirement 
        benefits for employees who move between positions with 
        nonappropriated fund instrumentalities of the 
        Department of Defense or Coast Guard and civil service 
        positions.
          i. 5 U.S.C. Sec. 3502.--This statute was amended to 
        provide that certain employees of the Department of 
        Defense or Coast Guard are entitled to credit for 
        service in a nonappropriated fund instrumentality of 
        the Department of Defense or Coast Guard after January 
        1, 1966.
          j. 5 U.S.C. Sec. 5519.--This statute was amended to 
        provide that pay for Reserve or National Guard service 
        for the period during which an employee has been 
        granted military leave shall be credited against his 
        civilian pay for that period.
          k. 5 U.S.C. Sec. 5520a.--This statute was amended to 
        provide that an agency's cost of garnishing the pay of 
        an employee or member of a uniformed service shall be 
        deducted from the amount withheld from the employee's 
        or member's pay.
    The following statutes were reviewed in connection with the 
National Defense Authorization Act for Fiscal Year 1997 (Public 
Law 104-201):
          a. 5 U.S.C. Sec. 2105.--This statute was amended to 
        restrict the definition of ``employee'' to employees of 
        certain activities at the U.S. Naval Academy who were 
        employed in such positions before October 1, 1996 and 
        whose employment has been uninterrupted in such a 
        position since that date.
          b. 5 U.S.C. Sec. Sec. 2302, 3132, 4301, 4701, 5102, 
        5342, 6339, 7323, and 6339.--These statutes were 
        amended to reflect the abolition of the Central Imagery 
        Office and establishment of the National Imagery and 
        Mapping Agency.
          c. 5 U.S.C. Sec. 2302.--This statute was amended to 
        apply title 5 procedures and sanctions for prohibited 
        personnel practices to violations of veterans' 
        preference within the Department of Defense.
          d. Chapter 57 of title 5.--Several statutes within 
        this chapter were revised and three new ones were added 
        to improve the efficiency of the Federal Government's 
        travel practices. Sections revised were: 5722, 5723, 
        5724a, 5724c, and 5727. Sections added were: 5737, 
        5738, and 5756. In addition conforming amendments were 
        made to the following additional sections of title 5: 
        3375, 5724, 5726, and 5731.
          e. 5 U.S.C. Sec. 3502.--This statute was amended to 
        allow the Secretary of Defense or the Secretary of a 
        military department to accept volunteers for reductions 
        in force even though the volunteer would not have been 
        otherwise subject to separation by the reduction. The 
        authority to accept volunteers was also extended to 
        September 30, 2001.
          f. 5 U.S.C. Sec. Sec. 5543 and 5544.--These statutes 
        were amended to allow wage-grade employees to receive 
        compensatory time off in lieu of overtime payments.
          g. 5 U.S.C. Sec. 5551.--This statute was amended to 
        allow agencies to liquidate restored annual leave that 
        remains unused upon transfer of a Department of Defense 
        employee from an installation being closed or 
        realigned.
          h. 5 U.S.C. Sec. 5597.--This statute was amended to 
        allow agency heads to waive the requirement of repaying 
        voluntary separation incentives received by former 
        department of defense employees who are reemployed by 
        the government without pay.
          i. 5 U.S.C. Sec. 6103.--This statute was amended to 
        simplify rules relating to the observance of certain 
        holidays by employees on compressed work schedules. The 
        amendment gives agencies authority to depart from 
        statutorily prescribed rules governing when such 
        employees observe a holiday that falls on their 
        regularly scheduled non-workday in order to avoid an 
        adverse impact on the agency.
          j. 5 U.S.C. Sec. Sec. 7103 and 7511.--These statutes 
        were amended to reflect changes related to the 
        establishment of the National Imagery Office and the 
        abolition of the Central Imagery Office.
          k. 5 U.S.C. Sec. Sec. 8332 and 8411.--These statutes 
        were amended to prevent Members or employees entitled 
        to military retired pay from circumventing court orders 
        by waiving retired pay to enhance their civil service 
        retirement annuity.
    Conforming amendments were made to the following title 5 
provisions to reflect other revisions to statutes made by the 
National Defense Authorization Act of 1997: 3401, 5102, 5342, 
5343, 5348, 5373, 5337, 5541, 5924, 6322, and 7901.

11. Statutes reviewed in connection with the Omnibus Consolidated 
        Rescissions and Appropriations Act of 1996 (Public Law 104-
        134).

          5 U.S.C. Sec. 5514.--This statute was amended to 
        improve the Federal Government's ability to collect 
        debts Federal employees owe it by requiring agencies to 
        participate in certain computer matching programs.

12. Statutes reviewed in connection with the Intelligence Authorization 
        Act for Fiscal Year 1997 (Public Law 104-293).

    The following laws were reviewed in connection with the 
House's consideration of the Intelligence Authorization Act for 
Fiscal Year 1997.
          a. 5 U.S.C. Sec. Sec. 5314 and 5315.--These statutes 
        were amended to place various CIA positions in Levels 
        III and IV of the Executive Schedule.
          b. Central Intelligence Agency Voluntary Separation 
        Pay Act and the Federal Workforce Restructuring Act of 
        1994.--These statutes were reviewed, and the former 
        amended, to eliminate a double surcharge on the CIA 
        relating to employees who retire or resign in fiscal 
        years 1998 or 1999 and who receive voluntary separation 
        incentive payments.

13. Transfer of Functions--5 U.S.C. 3503.

    This law provides the basic authority for a competing 
Federal employee to be eligible for employment in a position 
for which he is qualified before the receiving agency may make 
an appointment from another source to that position when a 
function is transferred from one agency to another.
    The subcommittee reviewed this law for the purposes of H.R. 
1561, a bill to consolidate State, AID, and USIA. The 
subcommittee was concerned that the language in H.R. 1561 would 
terminate competing employees who perform transferred work 
because the receiving agency has employees already performing 
such work. The subcommittee maintained that the acquiring 
agency should give the transferred employees who are currently 
performing identical work, the opportunity to compete with 
employees for positions remaining after the consolidation 
associated with that work.

14. Laws Relating to Volunteering, Details, and Part-time Employees in 
        5 U.S.C.

    The subcommittee reviewed provisions in the Senate Defense 
Authorization bill relating to civilian employees, with the 
following comments.
    Details are designed to allow agencies to adjust to 
temporary fluctuations in work flow by making temporary 
adjustments to the workforce. Where more permanent needs exist, 
agencies, already have the flexibility to reassign workers to 
meet those needs. An exemption from 5 U.S.C. 3341 for the 
Department of Defense was not supported by subcommittee staff.
    5 U.S.C. section 3407 requires each agency to prepare and 
transmit a report to the Office of Personnel Management on its 
part-time and detail employees. Relieving an agency from 
reporting on part-time employment policies undercuts the Office 
of Personnel Management's ability to function effectively as 
the central personnel authority for the executive branch. To 
the extent that responsibility for developing sound personnel 
systems becomes more diffuse, it becomes that much more 
difficult for Congress to effectively oversee executive branch 
personnel matters.
    A section within the authorization bill would allow 
employees to volunteer to substitute for other employees who 
are scheduled for reductions in force. Although this authority 
is limited in scope to DOD employees and limited in time, the 
subcommittee staff raised concerns about without sufficient 
safeguards, this program could become counterproductive. The 
unintended consequence of such a program could result in more 
highly skilled--and therefore more marketable--employees to be 
the likely volunteers. The government does not want to 
unnecessarily encourage its best employees to leave. Unless 
tightly controlled, a volunteer program could seriously hinder 
an agency's ability to achieve its mission.

15. Reductions in Force--5 U.S.C. Chapter 35.

    Federal agencies must follow specific procedures found in 
Chapter 35 of 5 U.S.C. when an agency is faced with separations 
or downgrades due to circumstances such as reorganization, lack 
of work, shortage of funds, or insufficient personnel ceilings.
    The law requires that four retention factors must be 
implemented through the Office of Personnel Management's 
reduction in force regulations before employees are released. 
Although the law does not assign a specific weight to any 
individual factor, the relative importance of the four factors 
in determining employee's retention standing is in the 
following order: (1) tenure; (2) veteran's preference; (3) 
length of service; and (4) performance ratings.
    The subcommittee learned of irregular reduction in force 
procedures in effect at the U.S. Geological Survey, resulting 
in ongoing analysis of the situation.

                   District of Columbia Subcommittee

1. District of Columbia Financial Responsibility and Management 
        Assistance Act of 1995 as amended. (Public Law 104-8, April 17, 
        1995).

    This law was established to eliminate the financial crisis 
caused by budget deficits and management inefficiencies in the 
government of the District of Columbia through the 
establishment of the District of Columbia Financial 
Responsibility and Management Assistance Authority.

2. District of Columbia Emergency Highway Relief Act. (Public Law 104-
        21, August 4, 1995).

    This law authorizes a delay in the District of Columbia's 
payment of its share of the costs of certain transportation 
projects in the District of Columbia for fiscal years 1995 and 
1996. It was referred to the Transportation and Infrastructure 
and in addition to Government Reform and Oversight on July 12, 
1995.

3. District of Columbia Convention Center and Sports Arena 
        Authorization Act (Public Law 104-28, September 6, 1995).

    This law permits the Washington Convention Center Authority 
to expend revenues for the operations and maintenance of the 
existing Washington Convention Center and for preconstruction 
activities relating to a new convention center in the District 
of Columbia; and to permit a designated authority of the 
District of Columbia, to borrow funds for the preconstruction 
activities relating to a sports arena in the District of 
Columbia and to permit certain revenues to be pledged as 
security for the borrowing of such funds.

4. District of Columbia Acts.

    Currently 133 acts have been transmitted to the 
Subcommittee on the District of Columbia for review during the 
2d session of the 104th Congress. Of that total, 84 acts are 
now law, and the remaining 49 did not complete the 
congressional review due to the adjournment of the 104th 
Congress. One council act which amended the D.C. Criminal Code, 
required a 60-day layover. H.R. 3845 waived the congressional 
review of three acts and H.R. 3610 waived one act.

    Government Management, Information, and Technology Subcommittee

1. Government Corporation Control Act, Public Law 248, 79th Congress, 
        December 6, 1945, 59 Stat. 597.

    This law provides basic accountability requirements for 
many government corporations. This subcommittee has a 
continuing interest in the scope and implementation of this act 
and consequently monitors it closely. The subcommittee reviewed 
the standards to which government corporations are held 
accountable, during a June 6 hearing entitled ``Corporate 
Structures for Government Functions,'' see Section II.B.7. In a 
subsequent report entitled ``Making Government Work: Fulfilling 
the Mandate for Change'' (House Report 104-435, December 21, 
1995), the committee recommended that the Government 
Corporation Control Act be updated to reflect the increasing 
variety of government corporations and changes over the past 50 
years since the enactment of the act.

2. The Administrative Expenses Act of 1946, Public Law 600, 79th 
        Congress, August 2, 1946, 60 Stat. 806.

    The subcommittee continues its oversight of this act.

3. The Prompt Payment Act, Public Law 97-177, 96 Stat. 85 (31 U.S.C. 
        Sec. 3901, et seq.).

    The Prompt Payment Act requires every Federal agency to pay 
an interest penalty on amounts owed to business concerns for 
the acquisition of property or services when the agency does 
not pay on time. The subcommittee continues its oversight over 
problems with the implementation of this act.

4. Federal Managers' Financial Integrity Act, Public Law 97-255, 
        September 8, 1992, 96 Stat. 814 (31 U.S.C. Sec. 3512).

    The Federal Managers' Financial Integrity Act requires 
agency heads to conduct ongoing evaluations and to report on 
the adequacy of their respective agency's systems of internal 
accounting and administrative controls. Further, it requires 
the Comptroller General to prescribe the standards for such 
controls, as well as standards to ensure the prompt resolution 
of all audit findings; it requires the Director of the Office 
of Management and Budget (OMB) to establish guidelines for 
agency use in evaluating whether the systems comply with the 
standards. Agency heads are required to prepare for the 
President and the Congress an annual statement on the status of 
the agency's compliance.
    The subcommittee has been monitoring implementation of this 
act, which became effective September 8, 1982, including 
administration proposals for pilot studies to streamline the 
reporting under this and other acts.

5. Inspector General Act of 1978 (5 U.S.C. App.).

    The subcommittee continued its oversight of the Inspector 
General Act of 1978 and the amendments of 1988. These acts 
created the Inspectors General [IG's] in 61 Federal entities, 
including Cabinet departments and major agencies, as well as at 
smaller commissions, corporations, boards, and foundations. The 
IG's are charged with: (1) conducting audits and investigations 
related to the programs and operations, and to prevent and 
detect waste, fraud, and abuse; and (2) keeping the department, 
agency or entity head, and the Congress fully informed about 
problems and deficiencies.
    The subcommittee has worked closely with the IG's on audits 
and investigations during this session. The subcommittee paid 
particular attention to NPR recommendations to reorient the 
IG's to lessen what it considers ``adversarial'' relations that 
often develop between managers and IG's. The subcommittee 
oversight of this proposal concentrates on whether such changes 
might impede the aggressive oversight that is necessary for an 
effective agency Inspector General.

6. The Single Audit Act of 1984, Public Law 98-502, October 19, 1984, 
        98 Stat. 2327 (31 U.S.C. 7501 et seq.).

    The Single Audit Act of 1984 requires each State and local 
government receiving $100,000 or more per year in Federal 
financial assistance to obtain an independent, organization-
wide audit of its operations--usually on an annual basis. The 
audit must include a thorough review of the recipient's 
internal controls over its Federal funds, and an examination of 
its compliance with Federal program requirements. The 
subcommittee continues to closely monitor implementation of 
this act, and is reviewing current proposals to amend the act 
by incorporating the provisions of OMB Circular No. A-133, 
Audits of Institutions of Higher Education and Other Non-Profit 
Institutions, into the act, raising the thresholds for 
requiring organization-wide audits, and allowing a risk-based 
approach to selection of major programs. These changes have 
been proposed as a result of recent studies by the General 
Accounting Office, the President's Council on Integrity and 
Efficiency, and the National State Auditors Association.

7. Budget and Accounting Act of 1921, Public Law 13, 67th Congress, 
        June 10, 1921, 42 Stat. 20-27; Congressional Budget and 
        Impoundment Control Act of 1974, Public law 344, 93d Congress, 
        July 12, 1974, 88 Stat. 297-339; Balanced Budget and Emergency 
        Deficit Control Act of 1985, Title II of Public Law 177, 99th 
        Congress, December 12, 1985, 99 Stat. 1038-1101; Balanced 
        Budget and Emergency Deficit Control Reaffirmation Act of 1987, 
        Title I of Public Law 119, 100th Congress, September 29, 1987, 
        101 Stat. 754-784; Budget Enforcement Act of 1990, 104 Stat. 
        1388-573 Through 630; Omnibus Budget Reconciliation Act of 
        1993, Title XIV of Public Law 66, 103d Congress, 107 Stat. 683-
        685, August 10, 1993.

    These laws establish the current framework for the 
presentation of the President's budget request to Congress, the 
consideration of the congressional budget resolution and the 
imposition of fiscal discipline through the possible 
application of end-of-year sequesters and other deficit 
reduction mechanisms. The subcommittee is examining whether 
there is a need for comprehensive budget process reform.

8. Debt Collection Act of 1982, 96 Stat. 1749, Public Law 97-365.

    The Debt Collection Act of 1982 is intended to facilitate 
improved debt collection procedures in the Federal Government. 
It includes: (1) referring delinquent debtors to credit bureaus 
while providing those debtors the same protection now afforded 
the private sector under the Fair Credit Reporting Act; (2) 
requiring individuals to supply their Social Security number 
when applying for credit or financial assistance that would 
result in indebtedness to the Government; (3) offsetting a 
Federal employee's salary and certain benefits to satisfy 
general debts owed the Government; (4) making it a Federal 
penalty to assault Federal employees collecting debts owed the 
Government; (5) determining delinquent tax liability and 
seeking its resolution before extending Federal credit; (6) 
disclosing mailing addresses obtained from the IRS on 
delinquent debtors to private contractors for debt collection 
purposes; (7) clarifying that administrative set off of 
delinquent debts owed the Government exists beyond the 6 year 
statute of limitations; (8) assessing interest on debts owed 
the Government and penalties on those debts that are 
delinquent; (9) easing the requirements for serving summonses 
in order to litigate delinquent debt cases; (10) reporting to 
Congress on debt collection activities; and (11) allowing 
Federal departments and agencies to contract with private 
collection agencies for collection services. The subcommittee 
continued closely monitoring implementation of this act.
    The subcommittee is concerned over rising levels of 
delinquent debts. Despite write-offs averaging $10 billion per 
year, delinquent non-tax debts equal $49.9 billion, while 
delinquent tax debts total $70 billion. The subcommittee held a 
hearing on September 8, 1995, to study the problem of 
delinquent debts, which built upon earlier hearings related to 
financial management and debt collection. In response to the 
difficulties agencies have had collecting debts, the 
subcommittee considered legislation to improve debt collection 
by allowing agencies the following authorities:
     Require that agencies refer debts to Treasury for 
administrative offset;
     Allow payments currently exempt from offset to be 
administratively offset (includes Social Security, Railroad 
Retirement, Pt. B of Black Lung, and Veterans' benefits);
     Allow administrative offset to be conducted for 
child support;
     Allow States and the Federal Government to offset 
each other's payments to collect each other's debts;
     Require Electronic Funds Transfers (Direct 
Deposit) by 1999 to facilitate offset, improve audit 
information and reduce fraud;
     Bar delinquent debtors from obtaining Federal 
benefits, loans, insurance, and routine services;
     Allow agencies to garnish the wages of delinquent 
debtors;
     Allow agencies to give public notice of 
indebtedness in the case of individuals or corporations who 
refuse to repay Federal loans, and who have assets or income to 
repay the debt;
     Require agencies to report current and delinquent 
debt to credit reporting agencies (including corporate and 
other commercial debts);
     Allow agencies to retain some portion of increased 
collections to fund improved debt collection efforts (agency 
gain sharing); and
     Authorize agencies to sell debt prior to 
terminating collection action.
    This proposal is pending before Congress.

9. Buy American Act, 41 U.S.C. Sec. 10.

    This act requires Federal agencies to purchase materials or 
articles mined, produced, or manufactured in the United States 
and to let contracts for public works on the same basis unless 
such purchases are inconsistent with the public interests or 
are unreasonably costly. The subcommittee continues its 
oversight of the act.

10. Chief Financial Officers Act of 1990 (Public Law 101-576, November 
        15, 1990; 31 U.S.C. 502(b-f)-504).

    The CFO Act had two primary purposes: (1) to strengthen the 
general management activities of the OMB by creating a Deputy 
Director for Management position and clarifying OMB's general 
management statutory authority; and (2) to establish 
accountability and a business-like discipline in Federal 
financial management. The CFO Act created a new Office of 
Federal Financial Management at OMB, headed by a Controller 
with extensive experience in financial management and 
accounting. The act further requires CFO's to be installed at 
23 departments and major agencies. The act requires that 
financial statements be prepared for business-like activities 
of the Federal Government in order to provide accurate 
information about the financial condition of key programs and 
to identify fraud, waste, and abuse. The act also places 
requirements on Federal agencies for improving financial 
information and internal controls, and for upgrading specific 
financial management activities such as debt collection and 
budget execution.
    The CFO Act requirements have been strengthened, made 
permanent, and expanded by the Government Management Reform 
Act. In October 1994, the Government Management Reform Act 
became law. It requires agencies to prepare agency-wide 
financial statements and have them audited beginning in fiscal 
year 1996, with the report due to Congress by March 1997. By 
fiscal year 1997, the General Accounting Office is required to 
audit the financial statements of the executive branch, with 
the report due to Congress by March 1998.
    The subcommittee held a hearing on the status of agency 
implementation of the CFO Act and the preparedness for 
implementation of the GMRA on July 25, 1995, (see Section 
II.B.15.) A subsequent hearing, on Financial Management 
Problems in the Department of Defense was held on November 14, 
1995, to examine the likelihood that Defense will not be able 
to comply with the GMRA by the statutory deadline, see Section 
II.B.16.
    The subcommittee continues its monitoring of the act, 
conducts ongoing investigations into OMB's leadership of the 
agencies in financial management through the Office of Federal 
Financial Management, set up in OMB as a result of the act, and 
will continue to evaluate agencies' ability to comply with the 
requirements of both acts, and their progress in obtaining 
clean opinions on their audited financial statements.

11. Government Performance and Results Act of 1993, Public Law 103-62.

    On August 3, 1993, the Government Performance and Results 
Act of 1993 was signed into law by the President. The act 
provides for the establishment, testing, and evaluation of 
strategic planning and performance measurement in the Federal 
Government, and for other purposes. It will improve the 
efficiency and effectiveness of Federal programs by 
establishing a system to set goals for program performance and 
to measure results. After a series of pilot projects 
implementing a strategic planning and performance system in 
volunteer agencies, the requirements are to be applied 
governmentwide eventually leading to a performance-based 
budgeting system.
    Beginning in 1994, this act requires the OMB to select 10 
agencies to perform pilot projects for 3 years on developing 
strategic plans. OMB has designated some 71 individual pilot 
programs which include all Cabinet departments and most of the 
major agencies. They also represent nearly every significant 
type of government function or activity, from the very large, 
to the very small. The 5-year strategic plans must outline an 
agency's mission, general goals, and objectives, and include a 
description of how the goals and objectives are to be achieved.
    OMB will also select five agencies to perform pilot 
projects for 2 years on managerial flexibility. The pilots will 
assess the benefits, costs, and usefulness of increasing 
managerial flexibility and organizational flexibility, 
discretion, and authority. The OMB was required to designate 
pilots for 1995 and 1996, and has not yet done so.
    Strategic plans and annual performance plans are to be 
submitted to Congress and OMB not later than September 30, 
1997. At the same time, five agencies will be selected to begin 
pilot projects on performance-based budgeting. By the year 
2000, all agencies will submit annual performance reports with 
the budget.
    OMB is seeking to increase the use and value of performance 
information in the preparation and submission of the 
President's budget. OMB expects to increase substantially the 
use of performance information in fiscal years 1997 and 1998 
budgets, and to work with all the agencies on defining 
performance goals that agencies will include in their annual 
performance plans for fiscal year 1999.

12. Government Management Reform Act of 1994; Public Law 103-356.

    On June 9, 1994, the Senate Governmental Affairs Committee 
incorporated provisions of related measures of H.R. 3400, the 
Government Reform and Savings Act, into S. 2170, as introduced. 
S. 2170 was signed by the President on October 13, 1994. The 
legislation incorporated portions of H.R. 3400, specifically 
the sections on streamlining management controls and improving 
financial management. It contained the first round of the 
administration's recommendations from the Vice President's 
initiative to reform Government operations, the National 
Performance Review (NPR). The subcommittee held a hearing on 
the NPR.
    This legislation strengthens the ability of Federal 
agencies to expand conversion to electronic delivery of 
payments to Federal employees and retirees. Each recipient of a 
Federal wage, salary, or retirement payment, who begins to 
receive payments on or after January 1, 1995, will be required 
to receive payments by direct deposit. This provision does 
allow agency heads to waive the requirements through a written 
request by recipients.
    Second, an authorization of six pilot franchise funds to 
help lower costs and share common administrative services is 
provided by this legislation. An offshoot of the Vice 
President's National Performance Review, it would increase 
funds available to executive branch agencies for shared 
administrative services for different departments within an 
agency or among different agencies of the Federal Government.
    OMB would create six franchise funds within the executive 
branch, in consultation with the Appropriations and Government 
Reform and Oversight Committees. The funds can be used to 
support ``common administrative support services.'' The fund 
may receive an initial appropriation, but must charge fees for 
the services it provides. Fees can be used only to carry out 
the purposes of the fund. The fund ``sunsets'' after fiscal 
year 1999. OMB must report by March 1998 to the Government 
Reform and Oversight and Appropriations Committees on the 
operation of the fund.
    The fund seeks to improve efficiency in the agencies in 
delivering administrative support services by centralizing 
activities and creating competition to deliver the services. An 
agency in which the franchise fund was created would be free to 
solicit business for these services from other Federal 
departments and agencies, streamlining Federal management by 
increasing efficiency through the elimination of duplicative, 
inefficient service providers. As different agencies develop 
strengths in different areas, they can contract out for those 
areas where an agency is weak and sell services to other 
agencies where an agency is strong. The U.S. Department of 
Agriculture does this with its National Finance Center which 
provides financial services to other agencies.
    Third, this legislation directs the OMB to work with the 
House Government Reform and Oversight and the Senate 
Governmental Affairs Committees to streamline and consolidate 
financial management reports from the agencies to OMB and from 
OMB to Congress.
    Last, beginning in 1997, all 24 agencies covered under the 
Chief Financial Officers Act are required to produce audited 
financial statements for all activities. Starting in 1998, the 
Government will produce audited consolidated financial 
statements of all 24 CFO Act agencies. See Section II.B.15. for 
descriptions of hearings on the status of agency preparations 
to comply with the GMRA.

13. Laws Relating to Official Travel, Transportation, and Subsistence 
        of Federal Employees.

    The subcommittee has oversight responsibility with respect 
to chapter 57 of title 5, U.S.C., which relates to travel, 
transportation, and subsistence allowances and payments to 
Federal employees performing official travel or relocating 
pursuant to transfer. The President has delegated most 
administrative function under chapter 57 to the Administrator 
of General Services. (See Executive Order 11609.) The Office of 
Management and Budget has developed new protocols for senior 
Federal travel and new reporting requirements in OMB Circular 
No. A-126, Improving the Management and Use of Government 
Aircraft, and OMB Bulletin 93-11, Fiscal Responsibility and 
Reducing Perquisites. The subcommittee held a hearing on 
December 29, 1995, to examine the Senior Executive Federal 
Travel Reports. These requirements have been supplemented by a 
White House Memorandum, dated February 10, 1993.

14. Freedom of Information Act (Public Law 89-487, as Amended by Public 
        Laws 90-23, 93-502, 94-409, and 99-570; 5 U.S.C. 552).

    The passage of the Freedom of Information Act of 1966 
remains as the most important recent development in public 
access to government documents. The subcommittee continued its 
oversight of the implementation of amendments to the act. The 
subcommittee also continued its longstanding practice of 
reviewing legislation from other committees that affects the 
availability of Government information. The subcommittee also 
continued to provide assistance to Members of Congress and to 
other committees on matters concerning the availability of 
information. The Government Reform and Oversight Committee has 
reissued ``A Citizen's Guide on Using the Freedom of 
Information Act and the Privacy Act of 1974 to request 
Government Records'' (First Report by the Committee on 
Government Reform and Oversight, 104th Congress, 1st Session, 
originally issued June 22, 1995). The subcommittee is currently 
reviewing proposed amendments to the act.

15. Privacy Act of 1974 (Public Law 93-579, as Amended by Public Laws 
        100-503 and 101-56; 5 U.S.C. 552a).

    The passage of the Computer Matching and Privacy Protection 
Act of 1988 (Public Law 100-56) marked the biggest change to 
the Privacy Act since its passage in 1974. Review of the 
effectiveness of the matching law was undertaken by the GAO and 
is discussed elsewhere in this report.
    The subcommittee is also continuing its routine oversight 
of the Privacy Act by reviewing agency proposals to create new 
systems of records and proposals to modify existing systems of 
records. The Privacy Act requires each agency to file a report 
with the Congress whenever a system is changed or established. 
About 100 such reports are filed annually.
    The subcommittee raised questions about system notices 
filed by Department of Commerce, Department of State, GSA, and 
OPM. In addition, general Privacy Act matters have been 
discussed with the OMB.

16. Federal Advisory Committee Act (Public Law 93-463, as amended by 
        Public Law 94-409; 5 U.S.C. App. 1).

    The Federal Advisory Committee Act (a) requires each 
standing congressional committee to make continuing reviews of 
advisory committees under its jurisdiction; (b) gives the 
Director of the OMB responsibility for reviewing advisory 
committees and prescribing administrative guidelines and 
management controls; (c) sets forth reporting requirements by 
the President; (d) provides for phasing out advisory committees 
every 2 years unless positive actions are taken to retain them; 
(e) prescribes open meetings, balanced representation, and 
other procedural requirements for advisory committees; and 
requires GSA to provide guidance and assistance to advisory 
committees as well as to review annually their activities and 
responsibilities. The subcommittee continues to monitor 
implementation of the act.

17. Government in the Sunshine Act (Public Law 94-409, 5 U.S.C. 552b).

    The Government in the Sunshine Act provides that meetings 
of Federal agencies must be open to the public if a majority of 
the members were appointed by the President with the consent of 
the Senate. The act includes 10 permissive exemptions to the 
open meeting requirement. The subcommittee is monitoring the 
implementation of the act.

18. The Cash Management Improvement Act of 1990, as amended (Public Law 
        101-453, 31 U.S.C. 3335, 6501, 6503).

    This act focuses on promoting equity in the exchange of 
funds between the Federal Government and the States. It 
requires the Secretary of the Treasury, along with the States, 
to establish equitable funds transfer procedures, and provided 
that States would pay interest to the Federal Government if 
they draw funds in advance of need and that the Federal 
Government would pay interest to the States if the Federal 
program agency does not reimburse the States in a timely manner 
when States use their own funds. The first year of 
implementation of the act was 1994. During fiscal year 1994 
(which for the majority of the States included 9 months of the 
first fiscal year under the act), the Federal Government 
obligated over a reported $150 billion in Federal funds to the 
States for programs covered under the act. The first year of 
implementation resulted in a cumulative net State interest 
liability due to the Federal Government of approximately $34 
million--over $41 million owed by the States offset by $4.7 
million and $2.5 million owed the States by the Federal 
Government for interest and reimbursable costs, respectively.
    Prior to the CMIA, the timing of Federal funds transfers to 
the States was governed by the Intergovernmental Cooperation 
Act, Public Law 90-577. That law allowed a State to retain for 
its own purposes any interest earned on Federal funds 
transferred to it ``pending its disbursement for program 
purposes. The subcommittee, when considering the CMIA 
legislation in 1990, noted that the Intergovernmental 
Cooperation Act had been a source of continuing friction 
between the States and the Federal Government.'' CMIA requires 
the Federal Government to schedule transfers of funds to States 
``so as to minimize the time elapsing between transfer of funds 
from the United States Treasury and the issuance or redemption 
of checks, warrants, or payments by other means by a State,'' 
and expects States to ``minimize the time elapsing between 
transfer of funds from the United States Treasury and the 
issuance or redemption of checks, warrants, or payments by 
other means for program purposes.'' The subcommittee continues 
to monitor the implementation of the CMIA.

      Human Resources and Intergovernmental Relations Subcommittee

1. Unfunded Mandates Reform Act of 1995, Public Law 104-4, 104th 
        Congress, March 22, 1995, 109 Stat. 67.

    The Unfunded Mandates Reform Act of 1995 requires the 
legislative and executive branches to identify and quantify 
implementation costs of Federal statutory and regulatory 
mandates on State and local governments. The Human Resources 
and Intergovernmental Relations Subcommittee has been 
monitoring Federal agencies' compliance with the requirements 
of Title II of the act regarding analysis of mandates in 
proposed and final regulations. Specifically, Title II requires 
Federal agencies to review such regulations for mandate impacts 
and consider less onerous alternatives.
    The subcommittee has also been monitoring the design and 
implementation of the study of existing mandates required under 
Title III of the act. Title III required the Advisory 
Commission on Intergovernmental Relations (ACIR) to (a) study 
issues involving the calculation of costs and benefits of 
mandates on State and local governments, (b) conduct a study 
and make recommendations to the President and Congress 
concerning the impact of existing mandates on intergovernmental 
(Federal-State/local) relations, and (c) monitor and evaluate 
the implementation of the act.
    On March 22, 1996, exactly 1 year after the bill was signed 
into law, Representative Christopher Shays, chairman of the 
subcommittee, convened a hearing that focused on the 
implementation and impact of the act. Testimony was received 
from representatives from Federal departments and agencies, 
State and local governments, community organizations, and 
Members of Congress.
    In January 1996, the ACIR released a preliminary report 
entitled, ``The Role of Federal Mandates in Intergovernmental 
Relations--A Preliminary ACIR Report for Public Review and 
Comment,'' U.S. Advisory Commission on Intergovernmental 
Relations, January 1996. In response to public comments and 
those received at an ACIR hearing, the preliminary report was 
revised and a draft final report was considered by the 
Commission in July 1996. The Commission voted to reject the 
draft final report, and no subsequent version of the report was 
considered.
    On September 30, 1996, appropriations for ACIR expired and 
the Commission closed down operations, no longer remaining as 
the independent, bipartisan commission created by Congress in 
1959 to monitor the operation of the American Federal system 
and to recommend improvements in intergovernmental relations.

  National Economic Growth, Natural Resources and Regulatory Affairs 
                              Subcommittee

    The Subcommittee on National Economic Growth, Natural 
Resources, and Regulatory Affairs concentrated on the review of 
three broad areas of law. The subcommittee reviewed 
effectiveness of various administrative procedure laws and 
related regulatory reform Executive orders and the need to 
amend or enact new regulatory reform laws. The subcommittee 
reviewed the adequacy and effectiveness of various grant 
statutes, anti-lobbying statutes, and tax laws and the need to 
amend or enact new laws in this area. The subcommittee also 
reviewed the adequacy of various laws relating to official 
travel, transportation, and subsistence of Federal employees. 
The subcommittee devoted particular attention to the following 
laws:

1. The Paperwork Reduction Act of 1980, as amended October 18, 1986, 
        100 Stat. 1783-307 (the act) (44 U.S.C.A. and 3501 et seq.; 
        Public Laws 500 and 591, 99th Congress).

    The Paperwork Reduction Act is intended to: (1) reauthorize 
appropriations for the Office of Management and Budget's (OMB) 
Office of Information and Regulatory Affairs (OIRA) to carry 
out the provisions of the Paperwork Reduction Act of 1980 as 
amended by Public Laws 500 and 591 of the 99th Congress; (2) 
strengthen OIRA and agency responsibilities for the reduction 
of paperwork burdens on the public, particularly through the 
inclusion of all Federally sponsored collections of information 
in a clearance process involving public notice and comment, 
public protection, and OIRA review; (3) establish policies to 
promote the dissemination of public information on a timely and 
equitable basis, and in useful forms and formats; (4) 
strengthen agency accountability for managing information 
resources in support of efficient and effective accomplishment 
of agency missions and programs; and (5) improve OIRA and other 
central management agency oversight of agency information 
resources management (IRM) policies and practices.
    All of the legislation's amendments to the 1980 act, as 
amended in 1986, are intended to further its original 
purposes--to strengthen OMB and agency paperwork reduction 
efforts, to improve OMB and agency information resources 
management, including in specific functional areas such as 
information dissemination, and to encourage and provide for 
more meaningful public participation in paperwork reduction and 
broader information resources management decisions.

2. The Congressional Review Act (Public Law No. 104-121, title II, 
        subtitle E, March 19, 1996, 5 U.S.C. chapter 8).

    The Congressional Review Act (CRA) was passed as part of 
the ``Small Business Regulatory Enforcement Fairness Act of 
1996.'' Among the important provisions, the CRA requires 
executive branch agencies to submit their new rules to Congress 
before they go into effect. The CRA allows Congress to review 
each new rule and consider a joint resolution of disapproval 
under expedited House and Senate procedures to overrule it. The 
term ``rule'' is defined very broadly to include all general 
agency statements that affect the public, including 
``interpretive'' rules, agency ``policy statements,'' 
``guidelines,'' and ``staff manuals.'' Although the CRA applies 
to almost all rules, ``major rules'' are delayed in their 
effectiveness for 60 calender days to provide Congress with a 
chance to reject problematic rules before they have an adverse 
impact. In addition to submitting the rules themselves, 
agencies must submit a report to Congress on each rule stating 
whether they have complied with the Unfunded Mandates Reform 
Act, the Regulatory Flexibility Act, and whether they have 
conducted a valid cost-benefit analysis, takings analysis, and 
federalism assessment as set forth in the Reagan, Bush, and 
Clinton Executive orders. If a resolution of disapproval is 
introduced to overturn a problematic regulation, Congress may 
reject the rule using expedited procedures that eliminate the 
Senate filibuster and require only a simple majority in each 
House for passage. If Congress does reject a rule, the rule may 
not be reissued in substantially the same form without 
congressional authorization.
    The subcommittee monitored compliance with the new law, 
including whether the regulatory agencies submitted the 
required rules, reports, and analyses, whether the agencies 
were providing the appropriate guidance regarding compliance 
with the CRA, and whether the OMB Office of Information and 
Regulatory Affairs was adequately overseeing implementation of 
the act. The subcommittee will continue to conduct careful 
oversight over implementation of the act in the 105th Congress 
to determine whether amendments are necessary to ensure full 
compliance with its provisions.

3. The Energy Policy Act of 1992 (Public Law 102-486).

    The Energy Policy Act of 1992 comprises a wide variety of 
mandates that are intended to enhance U.S. energy security, 
reduce energy-related environmental effects, and encourage 
long-term economic growth. Major provisions establish energy 
efficiency standards, allow greater competition in electricity 
generation, establish new licensing procedures for nuclear 
plants and waste repositories, and provide tax incentives for 
domestic production and conservation. To increase U.S. energy 
efficiency, the act establishes new statutory standards for 
electric motors and lighting, requirements for State and 
Federal action, and incentives for voluntary efficiency 
improvements. Greater competition in the electricity industry 
is encouraged by exempting certain suppliers of wholesale 
electricity from regulation under the Public Utilities Holding 
Company Act of 1935. The act also provides incentives for the 
development of alternative fueled vehicles and commuting by 
mass transit.
    The principal agencies involved in implementing the act are 
the Federal Energy Regulatory Commission and the Department of 
Energy. The subcommittee monitored agency and industry actions 
authorized or encouraged by the act. In particular, the 
Subcommittee monitored the agency regulatory actions and policy 
initiatives undertaken pursuant to the act, and sought the 
views of industry and consumer groups regarding these 
regulatory actions and the need for additional legislation.

    National Security, International Affairs, and Criminal Justice 
                              Subcommittee

1. National Aeronautics and Space Act of 1958, as Amended (42 U.S.C. 
        2451 et seq).

    This law governs NASA and its operation. The subcommittee 
has a keen interest in the operation and efficiency of the 
Nation's space program and monitors the legislation closely.

2. Executive Order 12127 of March 31, 1979.

    This Executive order consolidated the Nation's emergency 
related programs into the Federal Emergency Management Agency. 
The fast response to national disasters is a crucial function 
of the Federal Government. As a result, this legislation 
garners the keen interest of the subcommittee.

3. National Narcotics Leadership Act of 1988 (21 U.S.C. 1501 et seq.).

    This law established the Office of National Drug Control 
Policy in 1988. Because drug policy is a primary focus of this 
subcommittee, the subcommittee gives a great deal of attention 
to this legislation. To fulfill its oversight responsibility of 
the Office of National Drug Control Policy, the subcommittee 
held an extensive investigation into the effectiveness of the 
Nation's drug control strategy. Those investigations brought 
about three major hearings: (1) The Effectiveness of the 
National Drug Control Strategy and the Status of the Drug War, 
on March 9 and April 6, 1995. (2) Illicit Drug Availability: 
Are Interdiction Efforts Hampered by a Lack of Agency 
Resources?, on June 27 & 28, 1995. (3) The Drug Problem in New 
Hampshire: A Microcosm of America--on September 25, 1995, the 
subcommittee held an oversight hearing.

4. The Sentencing Reform Act of 1984 (28 U.S.C. et seq. and 18 U.S.C. 
        3551 et seq.).

    This law established the U.S. Sentencing Commission as an 
independent commission in the judicial branch of the Federal 
Government. As the commission determines the effectiveness of 
Federal sentencing policy, the subcommittee takes an active 
role in studying and guiding this legislation.

5. Treasury Department Order No. 221.

    This Treasury order established the Bureau of Alcohol, 
Tobacco and Firearms. In connection with the subcommittee's 
oversight of the executive branch activities at Waco, TX, the 
subcommittee has monitored the bureau and its organization to 
develop ways to maximize the Bureau's efficiency in enforcing 
the laws over which it has jurisdiction.

6. Title 13 of the U.S.C.

    This law governs the Bureau of the Census and taking of the 
Census 2000. As Census 2000 draws near, and preparations are 
underway, the subcommittee makes a routine study of this 
legislation and how it governs the taking of the Census.

7. Defense Base Closure and Realignment Act of 1990, Public Law 101-
        510.

    This law created the Defense Base Closure and Realignment 
Commission, the commission which recommends, on a bipartisan 
basis, the most efficient and least intrusive way to eliminate 
Department of Defense facilities throughout the country. The 
subcommittee has followed this legislation with interest.

                      Postal Service Subcommittee

1. The Postal Reorganization Act of 1970, Public Law 91-375, August 12, 
        1970, 84 Stat. 719.

    The Subcommittee on the Postal Service has legislative 
jurisdiction and oversight over the U.S. Postal Service, U.S. 
Postal Rate Commission and the U.S. Postal Inspection Service. 
These entities operate under the authority granted pursuant to 
the Postal Reorganization Act of 1970 (PRA) which traces 
congressional authority for postal services to Article I, 
Section 8 of the U.S. Constitution, which direct Congress 
``(t)o establish Post Offices and Post Roads.''
    The U.S. Postal Service is governed by an 11 member Board 
of Governors; 9 of whom are appointed by the President and 
confirmed by the Senate who in turn employ a Postmaster General 
and Deputy Postmaster General who also become members of the 
Board. The U.S. Postal Service handles 40 percent of the 
world's mail volume; it had total revenues in 1995 of $54.3 
billion; it employs 1 out of every 170 Americans; and processed 
181 billion pieces of mail or about 580 million pieces per day 
and delivered to 128 million addresses in 1995.
    The U.S. Postal Rate Commission, independent of the U.S. 
Postal Service, is governed by five, full-time, Presidentially-
appointed and Senate-confirmed Commissioners. It is responsible 
by hearing a request of the U.S. Postal Service for an increase 
in postage rates, reclassification of its postage schedule and 
for making a recommended decision upon such a request. The 
Commission also hears complaints from outside parties regarding 
postal rates or services.
    The Postal Inspection Service is the law enforcement branch 
of the U.S. Postal Service and is responsible for enforcing the 
Mail Fraud Act, Mail Order Consumer Protection Amendments of 
1983, Drug and Household Substance Mailing Act of 1990, and for 
enforcing the Private Express Statutes which give the Postal 
Service its letter-mail monopoly. It is also entrusted with 
insuring the security and safety of postal facilities and 
employees and for serving in the dual role of Inspector General 
for the agency.
    The subcommittee continued its in-depth oversight of the 
operations of these entities. During the first session, the 
subcommittee conducted a series of in-depth oversight hearings 
which highlighted the need for reform of postal operations. 
These hearings laid the foundation for the reforms contained in 
H.R. 3717, the Postal Reform Act of 1996, the first 
comprehensive postal reform legislation in a quarter century. 
H.R. 3717 focused constructive debate in the postal community 
on the future of the Postal Service in meeting its statutory 
mandate of provision of universal mail service. The 
subcommittee believes that shifting mail volumes and stagnant 
postal revenue growth requires an examination of the statutory 
structure under which our current postal system now operates if 
the Service is to maintain this important public service 
mission.
    The oversight hearings identified several weaknesses in the 
current statutory structure of the Postal Service. One weakness 
highlighted is the Postal Service's inability to compete under 
the procedures required by the current, 25 year old ratemaking 
structure. According to the General Accounting Office, the U.S. 
Postal Service controlled virtually all of the Express Mail 
market in the early 1970's; by 1995 its share had dropped to 
approximately 13 percent. Similarly, the Postal Service is 
moving considerably fewer parcels today than 25 years ago. In 
1971 the Postal Service handled 536 million parcel pieces and 
enjoyed a 65 percent share of the ground surface delivery 
market. This is in comparison to 1990 when the Postal Service 
parcel volume had dropped to 122 million pieces with a 
resulting market share of about 6 percent.
    Even first-class financial transactions and personal 
correspondence mail--monopoly protected areas under the Private 
Express statutes--are showing the effect of electronic 
communications competition. Financial institutions are 
promoting computer software to consumers as a method of 
conducting their bill-paying and general banking, while 
Internet service providers and online subscription services are 
offering consumers the ability to send electronic messages to 
anyone in the world or around the corner. Similarly, many 
postal users have become accustomed to the immediacy of the 
facsimile machine. These new communication technologies all 
carry correspondence that formerly flowed through the Postal 
Service. These former sources of revenues supported a postal 
infrastructure dedicated to the mission of universal service.
    This shift in postal revenues will have a negative long-
term effect on the financial well being of the Postal Service. 
The subcommittee believes that should the Service continue to 
labor under the restrictions established by the 1970 act, its 
inability to compete, develop new products and respond to 
changing market conditions jeopardizes its ability to continue 
to provide universal service to the diverse geographic areas of 
our Nation. Congress must review reforms to the current postal 
statutory structure which will provide the Postal Service more 
competitive flexibility while assuring all postal customers of 
a continued universal mail service at reasonable and affordable 
rates. H.R. 3717 meets this goal by replacing the zero-sum game 
of the current ratemaking structure with a system that insures 
reasonable postal rates while allowing the Postal Service the 
flexibility it needs to compete in today's changing 
communication markets.
    As evidenced in our review of data quality, the act has 
fostered an entrenched distrust between the Postal Service and 
the Postal Rate Commission and allowed the two agencies to 
develop an inter-agency antagonism which fosters a sense of 
favoritism between postal customers. This problem is 
exacerbated by the existing cost-based ratemaking process.
    The subcommittee will continue to study, monitor and report 
on the effectiveness of the Postal Reorganization Act and will 
continue to seek needed reforms to improve the overall 
performance of the Postal Service and provide better service to 
all postal customers.
                      IV. Other Current Activities

                  A. GENERAL ACCOUNTING OFFICE REPORTS

                       Civil Service Subcommittee

1. ``Public-Private Mix: Extent of Contracting Out for Real Property 
        Management Services in GSA,'' May 16, 1994, GAO/GGD-94-126BR.
    a. Summary.--At the request of Representative Jim Inhofe, 
then-ranking minority member of the Committee on Public Works 
and Transportation's Subcommittee on Investigations and 
Oversight, GAO reviewed the General Service Administration's 
(GSA) experience with contracting for real property management 
services (for example, cleaning and general maintenance of 
Federal facilities) between 1982 and 1992.
    During these years, GSA's Public Buildings Service (PBS) 
reviewed 731 functions for contracting. GSA contracted for 
services at 73 percent of the facilities, retained 24 percent 
in-house, and closed the remaining 3 percent of the functions. 
PBS estimated the savings from these reviews at $45.7 million 
(about 60 percent of GSA's $75.8 million savings from 
contracting). These reviews resulted in the reduction of 3,227 
full-time equivalent employees (FTE), with about 10 percent of 
these savings achieved by reorganizing functions retained in-
house. Low contractor bids averaged 39 percent less than the 
government's bid where functions were contracted out. Where 
functions were retained, the government's bid averaged 33 
percent less than competing contractors' bids. On custodial 
services, contractors' bids averaged over 50 percent less than 
government bids. Government proved more competitive in 
maintenance services, where contractors averaged only 2 percent 
lower than government bids. Contractors were most competitive 
when functions involved more than 10 FTE.
    At the end of the period, 3,525 of the 8,086 commercial 
positions included in the PBS inventory of commercial 
activities remained unstudied. The ``Edgar Amendment'' to GSA's 
appropriations laws had, since 1982, restricted GSA from 
contracting for guard, elevator operator, messenger, and 
custodial activities unless such contracts are awarded to 
``sheltered workshops employing the severely handicapped.'' The 
amendment obstructed GSA's ability to compete 1,181 positions. 
Despite the savings reported from analysis of current 
contracts, and GSA's efforts to repeal this arbitrary 
restriction, GAO made no recommendation.
    GAO reported that 78 percent of these contracts had 
occurred before 1987. Data in figure I.17 of the report 
indicate that, in the first 2 years of the study period, 
savings for all contracted activities averaged well above 50 
percent. Government agencies became more effective competitors 
in studies conducted during 1985 and 1986. Most contracting 
done, even during this period, was through direct conversions 
rather than the competitive procedures described in Circular A-
76. Indeed, 71 percent of contracted activities and 74 percent 
of contracted FTE's were attributable to direct conversions, 
and 586 of the activities reviewed by PBS were functions 
involving fewer than 10 FTE, where direct conversion does not 
require competitive bids.
    b. Benefits.--This report is cited by both GAO and the 
Office of Management and Budget as the most comprehensive 
effort to assess contracting by Federal agencies. It takes a 
longer-term perspective than most GAO reports, and reviews 
similar functions involving a range of facilities. This report 
assesses the extent of such contracting, and a subsequent 
report was slated to address the effectiveness of GAO's 
contracting. The report reveals deficiencies in procurement 
data collection systems. It also implies that the benefits of 
contracting can be identified by managers who have the 
discretion to move directly to contract. At the same time, the 
report prompts the inference that managers are reluctant to 
utilize competitive procedures required by Circular A-76, 
raising the possibility that those procedures constitute an 
obstacle to contracting when comparisons might be close.
2. ``Workforce Reductions: Downsizing Strategies Used in Selected 
        Organizations,'' March 13, 1995, GAO/GGD-95-54.
    a. Summary.--In response to the Workforce Restructuring Act 
of 1994, GAO provided the chairs and ranking minority members 
of committees and subcommittees having jurisdiction over 
Federal employment issues information about downsizing 
strategies used by 17 private companies, 5 States, and 3 
foreign governments. The act mandated a reduction of 272,900 
positions (roughly 12 percent of the Federal workforce) between 
1994 and 1999. Other organizations have reduced workforces by 
as much as 40 to 50 percent over comparable periods, but this 
long-term commitment to reduction was unique in Federal 
experience. Congress authorized payment of separation 
incentives of up to $25,000 to Federal employees who agreed to 
resign or retire, and the administration adopted other 
downsizing strategies.
    Private organizations reported that their downsizing 
decisions resulted from corporate restructurings or decisions 
to eliminate unprofitable product lines. That is, downsizing 
was the consequence of business objectives rather than 
independent objectives. Corporate officials stressed the 
importance of identifying desirable structural changes and 
revising methods of operation. Two-thirds of the private sector 
organizations emphasized planning to retain a viable workforce, 
and those that did not plan effectively conceded that 
downsizing resulted in skills imbalances that resulted in 
rehiring separated employees or costly retraining programs for 
new employees. Attrition and hiring freezes were not 
consistently effective measures for achieving short-term 
reductions. Most organizations used incentives to encourage 
``at risk'' employees to resign or retire, including buyouts 
much larger than authorized by Congress, credit of additional 
years of service for retirement purposes, allowance for 
retirement with no reduction in pensions, and lump-sum 
severance payments of as much as 1 year's salary. Involuntary 
terminations were a last resort, and were coordinated with 
decisions to terminate product lines. Where firms needed more 
than one round of incentive payments to achieve staff 
reductions, subsequent incentives tended to be smaller than 
payments to the first round of terminated personnel.
    Management of effective downsizing required attention to 
morale issues, including strong communication programs 
addressed to remaining employees. These programs were 
supplemented by career counseling, outplacement assistance, and 
retraining for all employees. These programs would convey the 
revised mission of the organization and help employees to 
understand why they were retained and their expected 
contributions to the new organization.
    Rather than a result of strategic planning processes, 
government reductions tend to be a response to budget 
constraints. Where organizations reduced staff without reducing 
workload or revising work procedures, incremental staff 
increases tended to follow the downsizing, within the limits of 
available funds.
    Foreign nations included in the study reduced government 
operations because of declining economic conditions and changed 
public attitudes toward government services. Corporate 
decisions tended to be responses to market forces, either 
competition in current product lines or decisions to change 
product offerings. Objectives ranged from decisions to enter 
new markets, redesign work systems, or ``flatten the 
organization.'' Tactics used included the identification and 
elimination of unnecessary work, automation or comparable 
technology innovations, and plant closings where product lines 
were terminated. The Wyatt Co. reported, however, that only 17 
percent of private sector organizations were able to reduce 
staff without replacing at least 10 percent of the workforce.
    Private organizations identified statutory constraints as 
they designed workforce reduction programs. One company 
considered it excessively costly to provide both separation 
incentives and retirement benefits to the same employees, but 
terminated a program that limited buyouts to people younger 
than retirement age because of the Older Workers Benefit 
Protection Act of 1990. Another company wanted to offer single 
mothers more generous separation packages than other employees, 
but concluded that the Employee Retirement Income Security Act 
of 1974 required that all ``at-risk'' employees be offered the 
same incentives. States reported that their options for 
structuring separations were constrained by ``bumping'' rights 
of public employees. These ``bumping'' rights prolonged staff 
uncertainty related to the separation process approximately 2-
months longer than planned. The State, however, admitted the 
``bumping'' ensured that remaining workers had experience 
beyond those who wound up separated. States also were 
constrained by collective bargaining agreements that required 
separation of covered employees on seniority, rather than 
performance, skills, or knowledge, criteria.
    b. Benefits.--This report highlights the importance of 
linking workforce reduction plans to larger strategic 
objectives, and demonstrates that separation incentives can be 
of limited effectiveness, depending upon the objectives of 
workforce restructuring. Buyouts can rarely be targeted to 
specific positions, are frequently preceded by a reduction of 
normal attrition rates, and thus seldom result in the 
elimination of one position for each buyout. It provides a 
useful information resource for agencies and for Congress 
assessing options for the elimination of functions to 
facilitate further workforce reductions.
3. ``Managing for Results: Experiences Abroad Suggest Insights for 
        Federal Management Reforms,'' May 2, 1995, GAO/GGD-95-120.
    a. Summary.--At the request of the chairmen and ranking 
minority members of House and Senate oversight committees, GAO 
reviewed government management reforms in Canada, Australia, 
New Zealand, and the United Kingdom to anticipate methods of 
implementing the conversion to an ``inputs'' focus of policy 
analysis to the results orientation mandated by the Government 
Performance and Results Act of 1993 (GPRA). GPRA directs 
Federal agencies to establish strategic planning processes and 
objectives, to measure annually progress toward those 
objectives, and to report publicly on the effectiveness of 
programs.
    In each of the countries, managers learned that greater 
flexibility of administrative rules and budgeting restrictions 
were necessary to shift agencies' focus toward strategic goals. 
Much of the flexibility was achieved by adopting performance 
contracts and oversight based upon process factors, generally 
providing executives more room to operate within budget 
ceilings. Despite the intention to focus on results, GAO 
reported that most measures used in each country focused on 
outputs rather than results, although Canada and Australia 
realized more progress toward ``outcomes'' measures. Officials 
also recognized that external factors, such as economic 
conditions, could influence the results in spite of 
government's program activities.
    Experiences with performance measures indicate that they 
should flow from a program's objectives and reflect managers' 
ability to influence the intended results. Program staff should 
have a role in developing performance measures, which should 
focus on a few key elements and assess different dimensions of 
performance, including quantity, quality, efficiency, and cost. 
Effective performance measures should enable qualitative 
assessment of program results, and provide aggregated 
information to upper management while giving detailed data to 
program managers. Although these nations reported providing 
program objective measurement data to Members of Parliament, it 
is used in a limited, but increasing, manner in evaluating 
programs.
    The four governments reported that investments in 
information systems and training were critical to program 
success. Managers need advanced systems to collect, analyze, 
and report program information, manage resources, and implement 
commercial reforms. Staff typically requires additional 
training to develop, collect, and analyze results-oriented 
information, exercise spending flexibility, and improve human 
resources management.
    b. Benefits.--GAO's presentation of the reports asserts 
that caution should be used in attempts to apply the results to 
the United States, but the reasons cited for caution in 
application seem irrelevant to the conclusion. GAO has 
previously argued that ``maintaining a clear and continuing 
commitment to performance improvement can be extremely 
difficult in the U.S. Government due to turnover in political 
appointees.'' This formulation of the issue evades the 
question: ``Who has authority to establish program goals and 
objectives?'' An implicit answer serves as GAO's premise for 
the conclusion: objectives should be established by Congress 
and should remain constant through political transitions. The 
establishment of performance objectives, however, is a 
political function. In a parliamentary system, that function is 
purely legislative and one should expect consistency unless 
there is a change of parliament. In a Presidential system, 
appointed leadership should and must be involved in evaluating 
and changing program objectives. The related accountability, 
after all, rests with the appointed leadership, not the career 
civil service. Among other factors, Presidents appoint agency 
heads to achieve program changes. Congress, of course, has 
responsibility to oversee those measures, and to impose 
accountability when changes in priorities are inconsistent with 
duly enacted laws. GAO's working premise that there should be 
continuity in measures and evaluation criteria is itself a 
political decision. That decision, however, is unsupported by 
the electorate when made by career civil servants. The call for 
``flexibility'' for line managers might serve the interests of 
career civil servants, but would impede accountability in the 
executive if elected leadership favored substantial reform or 
abolition. The report indicates, albeit inadvertently, that 
Federal managers are adept at linking their agencies' inability 
to achieve performance objectives to factors beyond their 
programs' control.
    The report provides some examples of output measures, but 
demonstrates that few nations have achieved genuine 
``outcomes'' measures for program evaluations. The report 
provides little evidence to demonstrate that measures developed 
to reflect ``customer'' satisfaction that is, the desires of 
citizen beneficiaries of programs will coincide with the 
evaluation criteria that authorizing committees might apply 
which is usually interpreted to be the public interest. It 
indicates that market mechanisms (e.g., user fees, asset sales, 
and contracting for support services) improve the efficiency of 
agencies, but reaches no assessment of effectiveness.
    Similarly, performance-focussed evaluations provide 
incentives for human resources managers to focus on the 
recruitment, training, and development requirements of line 
management. Again, the result appears to be improved 
efficiency, because GAO cites no measures of the organization's 
effectiveness.
4. ``Federal Hiring: Reconciling Flexibility With Veterans' 
        Preference,'' June 16, 1995, GAO/GGD-95-102.
    a. Summary.--At the request of the former chairman of the 
Subcommittee on Civil Service of the Committee on Post Office 
and Civil Service, GAO initiated a review of Federal hiring 
procedures to identify those that are working, those that are 
not, and to assess whether proposals to reform hiring 
procedures address the needs of agencies and applicants. 
Previous GAO studies alleged that the Federal hiring process 
has impeded managers from hiring quality people when they were 
needed at the same time that it has frustrated applicants.
    Federal hiring procedures include recruitment, application, 
referral, and selection phases, and provide managers twelve 
different authorities under which they can hire personnel. In 
making selections, managers are required to comply with legal 
principles including merit principles, veterans' preference, 
and equal opportunity laws. Managers must select from among the 
three highest ranking candidates, but are prohibited from 
selecting a nonveteran over a higher ranking veteran. In 
response to National Performance Review recommendations, the 
Office of Personnel Management (OPM) granted agencies 
additional flexibility in recruitment and selection by 
abandoning centralized hiring registers. OPM has also automated 
application, rating, ranking, referral, and employment 
information processes.
    Nonetheless, Federal managers informed GAO that although 
managers have greater flexibility, they believe that the legal 
requirement to give veterans preference in hiring can conflict 
with their desire to hire the people whom they feel are best 
qualified for open positions. Veterans' preference appears to 
be an obstacle to hiring the highest qualified candidates in a 
demonstration project currently being run by the Department of 
Agriculture. GAO's subsequent interviews with veterans' groups 
revealed that the hiring procedures were not serving veterans 
well, either. Veterans' organizations report that agencies 
appear to favor using noncompetitive hiring procedures when 
available because these are not restricted by veterans' 
preference and the rule of three. GAO confirmed that agencies 
are less likely to hire from a selection certificate when a 
veteran is rated highest.
    Applicants for Federal employment who also applied for 
private sector positions tended to find private sector 
procedures faster. Median times between submitting an 
application and receiving a job offer varied between 8 and 14 
weeks. One-third of the new hires responding to GAO interviews 
claimed that waiting time became excessive after 6 weeks. GAO, 
it should be noted, interviewed only those who accepted Federal 
positions, and did not sample applicants who accepted private 
employment during the interval between application and 
selection. Personnel officials agreed that OPM's automation and 
procedural flexibility might alleviate some of their timeliness 
concerns, but would not resolve the difficulties in Federal 
hiring that they identified with veterans' preference and the 
rule of three.
    GAO recommended that OPM use its authority for 
demonstration projects to recruit agencies that would attempt 
alternative methods of implementing veterans' preference. These 
demonstrations would be conducted in conjunction with labor 
unions, veterans' organizations, and other interested parties.
    b. Benefits.--This report continues GAO's monitoring of the 
personnel system, and raises important questions about 
potential conflicts between merit principles and veterans' 
preference. The report has serious conceptual flaws. It's 
concept of ``quality'' seems to center on whom managers would 
like to hire, rather than relative ranking scores. The 
potential conflict between veterans' preference and ``merit'' 
identified in this report, in the absence of objective 
measures, could be nothing more than a preference for hiring 
within the current system. Similarly, the absence of analysis 
of the applicant pool undoubtedly skews the sample used to 
evaluate the acceptance of employment offers. Thus, although 
the report opens questions, the limits of survey data restrict 
its usefulness in providing guidance for answering them.
5. ``Federal Personnel Management: Views on Selected NPR Human Resource 
        Recommendations,'' September 18, 1995, GAO/GGD-95-221BR.
    a. Summary.--At the request of the ranking minority member 
of the Civil Service Subcommittee, GAO reviewed recommendations 
made by the National Performance Review (NPR) in the area of 
human resource management. The Workforce Restructuring Act of 
1994 requires the reduction of 272,900 positions from the 
Federal workforce by 1999, and the administration has targeted 
administrative positions, such as human resource management 
functions, for many of the necessary reductions. NPR has also 
recommended a decentralized hiring system, where agencies would 
have more authority to hire persons based upon the needs of 
program managers. This report surveyed human resource managers 
to ascertain their level of agreement with the NPR 
recommendations, to gain their impression about the adequacy of 
their resources to meet their new responsibilities, and to 
report on OPM's plans for oversight to ensure accountability 
for merit system principles.
    Human resource managers generally favored increased 
delegation of authority in their areas of responsibility, but 
they were reluctant to embrace the abolition of the standard 
Federal job application, the SF-171. They believed that the NPR 
recommendations leading to a decentralized system would 
increase their workload, although some of the associated 
automation and simplification of procedures might save some 
time. They expressed reservations about their ability to 
accomplish the increased workload with the planned workforce 
reductions.
    Although NPR recommended adoption of new oversight systems 
to ensure that greater delegation did not result in violations 
of merit principles, OPM had not completed its plans for 
greater oversight when this report was written. Most human 
resource managers agreed that they did not have performance 
measures to evaluate their systems. Implementation of such 
systems will be necessary to comply with requirements of the 
Government Performance and Results Act.
    GAO used a sample of personnel officers selected to provide 
geographic diversity among agencies with substantial personnel 
workloads, so the results might not be generalizable to all 
agencies. The surveys were conducted during a period of change, 
both in terms of implementing NPR recommendations for new 
procedures and reducing the workforces at several of the 
agencies involved in the survey.
    NPR recommendations in the human resources management area 
include 14 recommendations and 46 action items, and the GAO 
focussed upon the areas of recruitment and examinations, the 
classification system, performance management, alternative 
dispute resolution, the standard application form, and the 
Federal Personnel Manual (FPM). Managers favored 
recommendations related to the abolition of centralized 
registers and increased hiring authority within agencies. Most 
recruitment and examination is already handled by agencies, 
rather than OPM, although there is a statutory requirement that 
OPM conduct examinations for common positions.
    Agency officials favor simplification of the classification 
system, especially implementation of ``paybanding.'' Officials 
in 33 of 37 offices in the survey favored opportunities to 
develop their own performance management programs, including 
such concepts as ``pass/fail'' and ``group/team'' performance 
evaluations. Alternative dispute resolution and informal 
grievance procedures also enjoy wide support among human 
resource managers.
    Agency officials believe that abolition of the SF-171 will 
add to their workloads because obtaining all of the information 
needed to evaluate applications will require more time. They 
also were reluctant to accept information in nonstandard 
resumes, and feared that different agencies might adopt 
distinct application forms. Those supporting abolition of the 
SF-171 recognized that it was cumbersome for applicants and 
required irrelevant job experience information. Although 
officials conceded that the FPM was too detailed and 
inflexible, only 17 of 37 offices supported abolishing it. Many 
reported that, although the FPM lacked official status, nothing 
had changed and it remained in use, and personnel officials 
would continue to rely upon it until adequate substitutes are 
published.
    Agencies generally supported OPM's efforts to automate 
human resource management procedures, and agreed that many of 
these technological changes and procedural simplifications 
would reduce workloads. Over time, many human resource 
management responsibilities would be shouldered by line 
managers, if the NPR recommendations are implemented.
    Under the Civil Service Reform Act of 1978, OPM had 
responsibility to oversee human resource management in Federal 
agencies to ensure compliance with merit principles and other 
statutory requirements. If NPR recommendations are implemented, 
agencies will have more flexibility in the design of human 
resource programs. Although most agency officials believed that 
they could manage their own human resource programs, only 16 of 
the 37 offices surveyed had performance measurement systems in 
place. OPM is assisting agencies to develop performance 
management measures for their system in order to facilitate 
compliance with GPRA. Agencies will remain responsible for 
ensuring that their human resource management programs are 
linked effectively to overall agency objectives.
    b. Benefits.--This update sustains GAO's role in monitoring 
and reporting on the administration's efforts to implement the 
NPR recommendations. It highlights areas where agencies are 
uncomfortable with recommendations, and points out the need for 
strengthened oversight where operational responsibility is 
decentralized.
6. ``Worker Protection: Federal Contractors and Violations of Labor 
        Law,'' October 24, 1995, GAO/HEHS-96-8.
    a. Summary.--Senator Paul Simon has proposed legislation 
that would debar firms exhibiting a clear ``pattern and 
practice'' of violating the National Labor Relations Act (NLRA) 
from Federal contracts. Senator Simon asked GAO to review 
Federal contractors' violations of the NLRA and to identify 
ways to improve Federal contractors' compliance with NLRA. GAO 
found that 80 firms with Federal contracts worth $23 billion 
had violated the act. Six of the violators had received almost 
90 percent of the contracts, which comprise approximately 13 
percent of total Federal contracts for the years reviewed 
(1993-94). None of these 6 firms were included among the 15 
worst violators, as classified by GAO. Remedies imposed by the 
National Labor Relations Board in the 88 cases reviewed 
affected nearly 1000 employees in twelve bargaining units. The 
Department of Labor's Office of Federal Contract Compliance 
Programs estimates that 22 percent of the Nation's workforce, 
or about 26 million employees, are hired by Federal contractors 
or subcontractors.
    Federal laws and an Executive order place greater 
responsibilities on Federal contractors than other employers. 
Executive Order 11246 requires Federal contractors to develop 
and maintain an affirmative action program. The Davis-Bacon Act 
and the Service Contract Act require contractors to pay 
prevailing area wages and benefits. GAO found that most of the 
violations involved interference with workers' rights to 
organize, to bargain collectively, and discriminating against 
union members in hiring or conditions of employment. These 
offenses are violations of Section 8(a) of the act.
    GAO noted that enforcement could be enhanced by collecting 
violators' penalties from Federal contract awards, but did not 
make a recommendation to do so. This measure would require 
coordinating contract awards reported to GSA with NLRB actions. 
The report did not discuss methods of implementing Federal 
contract debarment.
    b. Benefits.--This report documents, with summary reports 
of violations in all 88 cases reviewed, that labor law 
violations are not widespread among Federal contractors, and 
that serious violators have only a minuscule portion of Federal 
contracts. The NLRB already has extensive enforcement authority 
in these areas. The lack of recommendation indicates that the 
remedy proposed by Senator Simon would have limited utility in 
enforcing Federal labor laws against Federal contractors.
7. ``Government Contractors: Selected Agencies' Efforts To Identify 
        Organizational Conflicts of Interest,'' October 25, 1995, GAO/
        GGD-96-15.
    a. Summary.--In response to a legislative requirement, GAO 
reviewed agency implementation of OMB Policy Letter 89-1, 
(Public Law 89-1), ``Conflict of Interest Policies Dealing with 
Consultants,'' GAO attempted to determine whether agencies have 
complied with requirements to identify and evaluate potential 
organizational conflicts of interest (OCI) and to identify ways 
that agencies might improve their screening for OCI's. GAO 
reviewed contractors at the Environmental Protection Agency, 
the Department of Energy, and the Department of the Navy, three 
agencies that use especially large amounts of consultant and 
advisory service contracts.
    Under the Policy Letter, agencies are required to obtain 
certifications that no conflict exists. If a conflict is found, 
agencies are required to evaluate the conflict before awarding 
contracts. EPA and DOE were found to have obtained 
certifications from contractors in nearly all cases, but a DOD 
Inspector General reported that the Navy was obtaining 
certifications in so few cases that the IG concluded that the 
Navy was not requesting the submissions. The Navy is 
implementing new procedures.
    An April 1993 study by the President's Council on Integrity 
and Efficiency (PCIE) reported that certifications were being 
requested in only 9 of 19 civilian agencies. The PCIE contended 
that self-certifications would do little to deter dishonest 
contractors. GAO agreed, and cited the evaluations conducted by 
EPA and DOE as important elements of the Public Law 89-1 
implementation process. Fully one-third of the 66 contracting 
officials contacted by GAO, however, had received no training 
on identifying conflicts of interest covered by the letter.
    GAO observed that proper training might enhance supervision 
of potential conflicts of interest in contractor organizations. 
GAO also determined that, if agencies are receiving 
certifications from contractors, duplicative information should 
not be required in other formats.
    b. Benefits.--This report responds to continuing 
congressional concerns about integrity in government 
contracting. It demonstrates the need for agencies to implement 
regulations that are in place, and confirms that additional 
safeguards might not be necessary if existing ones are 
adequately implemented.
8. ``Federal Quality Management: Strategies for Involving Employees,'' 
        April 19, 1995, GAO/GGD-95-79.
    a. Summary.--The General Accounting Office initiated a 
study in June 1992 to examine Quality Management (QM)--a 
management approach that emphasizes improving product quality 
while decreasing production costs by increasing the efficiency 
of work processes.
    This report describes the human resource management 
approaches used to implement QM by 10 Federal organizations 
that have won governmental awards for the advanced level of 
their quality initiatives. Although no two of the QM programs 
GAO looked at were the same, all 10 of the award-winning 
organizations embraced the same four Human Resource Management 
strategies: (1) a comprehensive training program; (2) an 
increase in organizational communication; (3) promoting and 
rewarding teamwork; and (4) involving employees in the 
management of work processes.
    GAO concluded that the process of changing to a quality 
culture was driven by the synergism that resulted from the four 
HRM strategies concurrently. In doing so, these organizations 
increased the levels of employee involvement in quality 
improvement activities.
    b. Benefits.--This study may be of use to the Office of 
Personnel Management in its role assisting Federal agencies 
with QM through the Federal Quality Institute.
9. ``Personnel Practices: Career Appointments of Legislative, White 
        House, and Political Appointees,'' October 10, 1995, GAO/GGD-
        96-2.
    a. Summary.--At the request of Representative Schroeder, 
GAO reviewed the pattern of political appointees at Federal 
departments and agencies and employees of the White House and 
Congress receiving career appointments in the competitive Civil 
Service or the Senior Executive Service. GAO examined such 
appointments made between October 1, 1984, and June 30, 1994.
    During this period, GAO found a total of 1,090 former 
political and congressional/judicial branch employees received 
career appointments. Of these, 552 individuals received 
noncompetitive appointments under the Ramspeck authority, and 
502 individuals converted from Schedule C and noncareer SES 
positions to competitive appointments. Another 36 received 
White House service appointments. The median grade received for 
Ramspeck and White House appointments was at the GS-12 level. 
The median grade received for conversions was at the GS-13 
level.
    GAO found that Ramspeck appointments have followed a 
cyclical trend over the 10-year period, increasing 
significantly during those years immediately following Federal 
elections, GAO analysis indicates that this cycle can generally 
be associated with turnover in congressional membership and the 
consequent involuntary separation of congressional employees. 
The pattern of Schedule C and noncareer SES conversions and 
White House service appointments is less distinctive.
    b. Benefits.--This report provided useful information to 
the subcommittee in its oversight of Federal career 
appointments and the merit system selection process. 
Additionally, the clarification of the White House employee 
conversion process was very useful.
10. ``Employment Discrimination: Most Private Sector Employers Use 
        Alternative Dispute Resolution,'' July 1995, GAO/HEHS-95-150.
    a. Summary.--At the request of Congressman William L. Clay 
(D-MO) and Major Owens (D-NY), GAO reviewed the extent to which 
private-sector employers use alternative dispute resolution 
(ADR) approaches, especially arbitration, to resolve 
discrimination complaints of employees not covered by 
collective bargaining agreements and the fairness of employers' 
arbitration policies. The study examined whether employers use 
one or more of the following alternative dispute resolution 
techniques: negotiation, fact finding, peer review, internal 
mediation, external mediation, and arbitration.
    GAO found that almost all employers with 100 or more 
employees use one or more ADR approaches. Arbitration is one of 
the least common approaches reported, but some employers using 
arbitration make it mandatory for all workers. According to 
GAO, some of the arbitration techniques used by employers would 
not meet fairness standards proposed by the Commission of the 
Future of Worker-Management Relations, established by Labor 
Secretary Robert Reich.
    b. Benefits.--This study will be useful in examining 
whether to encourage the use of alternative dispute resolution 
mechanisms to resolve Federal employment disputes.
11. ``Congressional Retirement Costs,'' October 12, 1995, GAO/GGD-96-
        24R.
    a. Summary.--At the request of Congressman Dan Miller (R-
FL) the GAO gathered information relating to the retirement 
system available to Members of Congress and congressional 
staff. Specifically, the GAO reviewed the following: (1) the 
cost of retirement benefits afforded to Members; (2) the cost 
of retirement benefits afforded to congressional staff; (3) the 
potential savings available from H.R. 804, introduced by 
Representative Miller; (4) how retirement systems in the 
private sector compare with the congressional retirement 
program; and (5) the extent to which nonFederal employers may 
be replacing their defined benefit pension plans with defined 
contribution pension plans.
    The GAO found that the total cost to the government of 
providing the future retirement benefits earned by House 
Members during calendar year 1994 was about $14.3 million. At 
this annual amount, the 5-year total for House Members would be 
about $71.5 million. The GAO also found that the total cost to 
the government of providing future retirement benefits earned 
by House staff during 1994 was about $116.5 million. The Senate 
Disbursing Office refused to provide the GAO with information 
on staff payroll and retirement program coverage that is 
essential for accurate estimates. The GAO did not attempt to 
estimate the potential savings of H.R. 804 but stated that the 
bill, if enacted, would significantly reduce the cost of Member 
retirement programs. The GAO is currently working on a report 
that examines nonFederal retirement programs. The GAO expects 
the comparison to show that general Federal employees under 
CSRS receive greater benefit amounts at the same salary levels 
and years of service than nonFederal employees when they retire 
before age 62 but smaller amounts at age 62 and older when 
Social Security benefits are available to nonFederal employees. 
The disparity between nonFederal retirement programs and 
retirement for Members of Congress will be much greater. The 
GAO also found in the private sector there does not appear to 
be a discernable trend toward replacing defined-benefit plans 
with defined contribution plans.
    b. Benefits.--This information will assist the subcommittee 
as it continues its oversight and legislative activities 
regarding the Federal retirement programs. It has been the goal 
of the subcommittee to examine the full magnitude and cost of 
the taxpayer financed retirement systems for all Federal 
employees, including Members of Congress and congressional 
staff. The Balanced Budget Act of 1995, also known as 
``Reconciliation,'' dramatically cut the accrual rates for 
Members and congressional staff and equalized the contribution 
rates with those of executive branch employees.
12. ``Federal Retirement Benefits for Members of Congress, 
        Congressional Staff, and Other Employees,'' May 1995, GAO/GGD-
        95-78.
    a. Summary.--At the request of the chairman of the House 
Subcommittee on Civil Service, Representative John Mica (R-FL), 
and the chairman of the Senate Subcommittee on Post Office and 
Civil Service, Senator Ted Stevens (R-AL), the GAO reviewed the 
retirement benefits available to Members of Congress and 
congressional staff with those available to other groups of 
employees under the Civil Service Retirement System (CSRS) and 
the Federal Employees Retirement System (FERS). The GAO found 
that the CSRS provisions for Members of Congress are generally 
more beneficial than the provisions for other employee groups, 
particularly general employees. The major differences are found 
in the eligibility requirements for retirement and the formulas 
used to calculate benefit amounts. The Member benefit formula 
applies to congressional staff; however, congressional staffs 
are covered by the general employees' retirement eligibility 
requirements. Law enforcement officers and firefighters may 
retire earlier and are covered by a more generous benefit 
formula than general employees. Under CSRS, the provisions for 
air traffic controllers fall between those for law enforcement 
officers and firefighters and general employees.
    The GAO also found that many of the relative advantages 
afforded to Members of Congress and congressional staff over 
general employees in CSRS were continued under the FERS pension 
plan. However, provisions for law enforcement officers, 
firefighters, and air traffic controllers are very similar to 
the Member provisions under FERS.
    b. Benefits.--This information will assist the subcommittee 
as it continues its oversight and legislative activities 
regarding the Federal retirement programs. It has been the goal 
of the subcommittee to examine the full magnitude and cost of 
the taxpayer financed retirement systems for all Federal 
employees, including Members of Congress and congressional 
staff. The report was a useful resource in drafting the section 
of the Balanced Budget Act of 1995, also known as 
``Reconciliation,'' which dramatically cut the accrual rates 
for Members and congressional staff and equalized the 
contribution rates with those of executive branch employees.
13. ``Private Pension Plans, Efforts To Encourage Infrastructure 
        Investment,'' September 1995, GAO/HEHS-95-173.
    a. Summary.--At the request of Representatives Bud Shuster 
(R-PA), chairman, and Norman Mineta (D-CA), ranking minority 
member, of the Committee on Transportation and Infrastructure, 
GAO gathered information on the role that pension plans might 
play in expanding public investment in infrastructure projects, 
in particular, by implementing the proposals addressed in the 
1993 report of the Commission to Promote Investment in 
America's Infrastructure.
    In its 1993 report, the Infrastructure Commission proposed 
creating two new entities to provide credit assistance to 
States and localities that would make infrastructure projects 
more attractive to private investors. One entity--the National 
Infrastructure Corp. (NIC)--would support projects by 
purchasing debt securities of selected projects. NIC could 
expand investment by creating securities backed by projects it 
had supported. Another entity--the Infrastructure Insurance 
Corp. (IIC)--would ensure projects that could not obtain bond 
insurance from the private sector. The Infrastructure 
Commission also proposed expanding tax incentives, including 
the creation of a public benefit bond that would distribute 
earnings tax free to participants in certain pension plans.
    Establishing NIC and IIC would demand additional Federal 
subsidies (the Commission proposed that the NIC and IIC be 
capitalized through a Federal grant of $1 billion over 5 
years). Under current budget rules, these new costs would have 
to be offset with spending cuts or additional revenues.
    The Infrastructure Commission identified three ways that 
pension plans could participate in infrastructure projects 
generally through NIC and IIC: (1) Pension plans could invest 
in the equity of the proposed bond insurer, IIC; (2) Pension 
plans could buy taxable project debt insured by IIC or purchase 
securities directly issued by NIC; and (3) Pension plans could 
act as lenders directly funding project debt through purchasing 
public benefit bonds.
    GAO reviewed the economic analysis and held discussions 
with market participants in evaluating the Infrastructure 
Commission's proposals. While discussions with some market 
participants indicated some of the Infrastructure Commission's 
proposals might attract pension plan investment, many 
economists and participants were skeptical. They raised 
questions about the goal of reallocating pension capital as 
well as the need for Federal entities and incentives that the 
Infrastructure Commission proposed.
    Experts and market participants noted that alternative 
mechanisms, not specifically targeted to pension plans, may 
increase infrastructure investment. One proposed approach is to 
amend the ISTEA to allow States to create transportation 
revolving funds similar to those established under the Clean 
Water Act. While this approach has limitations that require 
study, it may be an alternative way of attracting new sources 
of capital to infrastructure projects.
    b. Benefits.--This information will assist the subcommittee 
as it continues its oversight and legislative activities 
regarding Federal retirement programs. While the Infrastructure 
Commission's proposals concerned private pensions, this study 
highlights concerns which are relevant to any future 
consideration of investing Federal pension funds in instruments 
other than those currently used. Unfortunately, this report 
limited its criticism of the Infrastructure Commission's 
proposals to those concerns of market experts who noted that 
the rates paid by bonds issued by infrastructure projects 
usually were not competitive with other instruments which 
pension managers have available to them. The report failed to 
note the primary objection to the Commission's proposals, or 
any other proposals which would argue for so-called 
economically targeted investments: they threaten to undermine 
the integrity of pension programs and conflict with ERISA. 
Under ERISA a pension fund manager is required to ``discharge 
his duties with respect to a plan solely in the interest of the 
participants and the beneficiaries for the exclusive purpose of 
(i) providing benefits to participants and their beneficiaries; 
and (ii) defraying reasonable expenses of administering the 
plan.''
14. ``Federal Employees Compensation Act, Redefining Continuation of 
        Pay Could Result in Additional Refunds to the Government,'' 
        June 1995, GAO/GGD-95-135.
    a. Summary.--At the request of Senators Joseph Leiberman 
(D-CT) and Thad Cochran (R-MS), GAO gathered information 
relating to Continuation of Pay under Federal Employees 
Compensation Act (FECA) and how it is administered by the 
Department of Labor (DOL) Office of Worker's Compensation 
Programs (OWCP). FECA authorizes Federal agencies to continue 
paying employees their regular salaries for up to 45 days 
(called the Continuation of Pay or COP period) when they are 
absent from work due to work-related traumatic injuries.
    Because of current interpretations of FECA by the 
Employees' Compensation Appeals Board (ECAB) and a Federal 
appeals court, the Federal Government has no legal basis to 
obtain refunds of COP paid to injured employees when those 
employees recover damages from third parties who are liable for 
their on-the-job injuries. A basis could be provided, however, 
by amending FECA. As a result of current interpretations, 
employees can receive regular salary payment from their 
agencies and reimbursement from third parties--in effect, a 
double recovery of income for their first 45 days of absence 
from work due to injury. In contrast, employees may not receive 
double recoveries for compensation benefits, such as medical 
expenses whenever they are incurred or compensation in lieu of 
pay after 45 days, because FECA provides that the government 
can recoup funds for these expenditures from employees 
receiving third-party recoveries.
    GAO determined that the government could recover up to an 
estimated $2 million per year if it were to obtain funds of 
continuation of pay (COP) in third-party cases. The Postal 
Service would realize about 70 percent of these recoveries. 
This could be accomplished if Congress were to amend FECA to 
require that COP payments in third-party cases be treated like 
compensation benefits for the purpose of refunds to the 
government from third-party recoveries. Thus, injured employees 
could not receive double recoveries for COP periods because the 
government could also recoup funds for COP expenditures from 
employees receiving third-party recoveries. According to Labor 
and Postal Service officials, the amount of COP that could be 
refunded to the government would greatly exceed the 
administrative costs to recover it.
    b. Benefits.--This information will assist the subcommittee 
as it continues its oversight and legislative activities 
regarding Federal employee compensation and benefit programs 
despite the fact that the study limited itself to a discussion 
of recovering damages from third-parties held liable in injury 
cases. Not considered by the report was the elimination of COP. 
FECA is far more generous than any of the State workers' 
compensation programs. Only FECA offers a 45-day COP which, 
some observers claim, may act as an incentive to file 
disability claims. One proposed solution to this problem is to 
eliminate COP and immediately place claimants on disability 
pay, as do most States.
15. ``Veteran's Benefits, Effective Interaction Needed Within VA To 
        Address Appeals Backlog,'' September 1995, GAO/HEHS-95-190.
    a. Summary.--At the request of Senators John D. Rockefeller 
(D-WV) and Ben Nighthorse Campbell (R-CO), GAO gathered 
information on the untimely processing of veteran's 
compensation and pension claims by the Veterans Administration 
(VA).
    Veterans often wait many months for the VA to process 
claims and for the 40,000 vets who annually appeal the VA's 
decisions, the wait may be extended to as much as 2 years. 
Since 1990 different groups have studied the problems of the 
untimely processing, including the GAO, VA's Inspector General, 
and VA special task forces. A frequently cited recommendation 
is the need for the autonomous organizations within the VA to 
work together to resolve problems.
    GAO found that the VA's appeals process is increasingly 
bogged-down. The 1988 Veteran's Judicial Review Act and Court 
of Veteran's Appeals rulings expanded veteran's rights, but 
also expanded the VA's adjudication responsibilities. VA is 
having difficulty integrating these responsibilities into its 
already complex and unwieldy adjudication process. Since 1991 
the number of appeals awaiting action by the Board of Veteran's 
Appeals has increased by 175 percent and average processing 
time has increased by 50 percent.
    The current legal and organizational framework--which 
involves several autonomous VA organizations in claims 
adjudication--makes effective interaction among those 
organizations essential to fair and efficient claims 
processing. Many study recommendations underscore the need for 
VA organizations to work together. VA officials have not 
implemented many study recommendations believing that other 
formal and informal mechanisms are effective.
    GAO found that many problems are going undetected and 
unresolved despite the VA preferred mechanisms. Unless VA 
clearly defines its adjudication responsibilities it will not 
be able to determine whether it has the resources to meet those 
responsibilities and whether some new solutions may be needed, 
including amending laws defining VA's responsibilities, or 
reconfiguring the agency.
    b. Benefits.--This information will assist the subcommittee 
as it continues its oversight and legislative activities 
regarding Federal compensation and benefit programs as it 
highlights problems shared by other agencies which may be 
analyzed in the future.
16. ``Sunday Premium Pay, Millions of Dollars in Sunday Premium Pay Are 
        Paid to Employees on Leave,'' May 1995, GAO/GGD-95-144.
    a. Summary.--This report responds to the direction in the 
Conference Report accompanying the Treasury, Postal Service, 
and General Government Appropriations Act of 1995. The report 
was directed to the conferees: Senators Richard Shelby (R-AL), 
chairman, and J. Robert Kerry (D-NE), ranking minority member, 
Senate Appropriations Committee, Treasury and Postal 
Subcommittee, and Representative Jim Lightfoot (R-IA), 
chairman, and Steny Hoyer (D-MD), ranking minority member of 
the corresponding House subcommittee. The objectives of the 
report were to determine: (1) the agencies that pay the most 
Sunday premium pay and the amounts paid; (2) to the extent 
possible, the amounts of Sunday premium pay paid to employees 
on leave at selected agencies; and (3) whether employees' 
Sunday leave usage at these agencies increased after issuance 
of the OPM letter stating that agencies must pay Sunday premium 
pay to full-time employees who are regularly scheduled to work 
on a Sunday, but who take paid leave during the tour of duty.
    This report provides the Sunday pay information for fiscal 
1994 and, where possible, compares Sunday leave usage for 
comparable pay periods both before and after issuance of the 
OPM letter.
    A 1993 court decision interpreting the leave provisions in 
Title 5 U.S.C. held that Federal employees who took leave on a 
Sunday for which they were scheduled to work were entitled to 
Sunday premium pay even though they did not work. Accordingly, 
Federal agencies began paying Sunday premium pay to employees 
who were on leave. Subsequently, Congress, in the 1995 DOT 
appropriation, nullified the court's decision with respect to 
FAA employees. Extending a similar prohibition on paying Sunday 
pay to employees on leave would reduce Federal payroll costs by 
millions of dollars.
    b. Benefits.--This information will assist the subcommittee 
as it continues its oversight and legislative activities 
regarding Federal compensation and benefit programs. Premium 
pay is pay for work performed on a weekend, hours in excess of 
a defined period per day, or hours in excess of a defined 
standard work week. These definitions of a standard work day or 
week (the 8-hour day or the 40-hour week for example) grew from 
``definitions'' of the work week negotiated between labor 
organizations and industry, child labor and protective laws 
developed around the turn of the century, and, in the case of 
work performed on Sunday, special recognition of labor 
performed on a day which prevailing cultural norms regarded as 
``a day of rest.''
    In all cases, the idea of premium pay is predicated upon 
the notion that the individual works a longer than normal work-
day or work-week. In the particular case of Sunday premium pay, 
the individual is being remunerated above standard rates 
because he or she is sacrificing a day normally reserved by 
societal practice as a day for personal use rather than work.
    The policy of paying Sunday premium pay to an employee on 
leave posits the notion that premium pay is an ``entitlement'' 
rather than something received for services rendered. 
Compensation policy must reflect the underlying notion that Pay 
is tied to work performed or services rendered. The practice of 
Sunday premium pay for individuals on leave should be 
eliminated.
17. ``Review of Compensation Comparability Report,'' October 30, 1995, 
        GAO/GGD-96-34R.
    a. Summary.--At the request of Congressman James P. Moran 
(D-VA) the GAO reviewed a report published by the American 
Legislative Exchange Council (ALEC) entitled ``America's 
Protected Class: The Excess Value of Public Employment'' (June 
1994). The authors of this report, Messrs. Wendell Cox and 
Samuel A. Brunelli, conclude that Federal civilian employees 
receive about 51 percent more in total compensation (salaries, 
wages, and benefits) over their careers than employees in the 
private sector. The methodology used by the authors of the ALEC 
report estimate the ``excess value'' by measuring the extent to 
which average Federal compensation exceeds average private 
sector compensation. (``Excess value'' is defined as the extent 
to which Federal employees' compensation exceeds the market 
rate for comparable employees.) The methodology quantifies five 
factors, which represent areas of possible advantages for 
Federal compensation. The GAO states that ``the methodological 
assumptions which drive the conclusions are not well 
supported.'' The GAO also suggests that the authors' approach 
seemed questionable on conceptual and factual grounds.
    Prior to the publication of the GAO report Wendell Cox was 
given the opportunity to respond in writing to the GAO 
findings. Following publication Mr. Cox stated that ``GAO 
dismissed our response out of hand, despite the fact that we 
directly refuted the most important points in their analysis. 
The GAO analysis includes constructive criticisms. But, in sum, 
incorporation of the recommendations would produce little 
difference from our original estimate that Federal non-military 
employment has an inherent excess value of 50.8 percent. As 
indicated in our GAO published response, a downward adjustment 
of 2.6 percent would be required. GAO's analysis is not 
balanced. . . .''
    b. Benefits.--The conclusions of the GAO do not suggest a 
fair and objective analysis of the ALEC report. Although the 
GAO admits that their ``review is not exhaustive,'' the 
language used to characterize the methodology used by ALEC 
suggest an institutional bias. The report has serious 
conceptual flaws. The subcommittee staff communicated these 
concerns to the GAO when the letter to the ranking member was 
published, and GAO has not resolved the concerns.
18. ``Transforming the Civil Service: Building the Workforce of the 
        Future. Results of a GAO-Sponsored Symposium,'' December 26, 
        1995, GAO/GGD-96-35.
    a. Summary.--At the request of the Senate Committee on 
Government Affairs, GAO convened a symposium to address options 
for civil service reform. The 2-day session, conducted in April 
1995, reflected the experiences of selected Federal agencies, 
respected practices of State and local governments, governments 
of other nations, including Canada, Australia, and New Zealand. 
Participants included public administrators and scholars as 
well as management officials who could discuss innovations in 
progress in some of the Nation's leading corporations. From 
these presentations, GAO discerned eight principles that 
described current management thinking, essentially adopting a 
Total Quality Management perspective based on an expectation of 
continuous efforts to provide services ``cheaper, faster, and 
better.'' Privatizing or outsourcing of numerous functions 
would play a prominent role in future revision of Federal human 
resource management. The public is interested in greater 
accountability from public employees, and current thinking 
indicates that managers require additional flexibility, rather 
than extensive regulations, to achieve that accountability. 
Flexibility would have to be included in the design of 
organizations, rather than rely primarily on large 
organizations as governments have traditionally done. Despite 
the call for flexibility, participants seemed to agree on more 
integrated systems of information management, and more 
extensive ``investment'' perspectives with regard to the 
resources allocated to government institutions.
    b. Benefits.--Although the conference provided a broad 
exchange related to currently-favored practices, the summary 
reflects the difficulties of initiating a course of reform 
where participants are uncertain about, or disagree about, 
future directions. Many of the concerns expressed by 
participants reflect continued commitment to existing 
government services (the symposium made no reference to 
eliminating or abolishing functions) while acknowledging that 
many of government's operational problems derive from internal 
regulations rather than laws imposed by Congress. These 
discussions proved of limited utility as the Civil Service 
Subcommittee considered the Omnibus Civil Service Reform Act.
19. ``Retention Allowances: Usage and Compliance Vary Among Federal 
        Agencies,'' December 11, 1995, GAO/GGD-96-32.
    a. Summary.--Senator David Pryor requested GAO to review 
agencies' use of retention bonuses as a means of keeping the 
services of valued employees. GAO found that only 354 of 2.1 
million Federal civilian employees were receiving retention 
bonuses as of September 30, 1994, with 334 of them awarded at 
five agencies: the Departments of Defense, Energy, and 
Agriculture, the Securities and Exchange Commission, and the 
Export-Import Bank. The Export-Import Bank stood out because 
21.7 percent of its employees were receiving retention 
allowances. GAO's review confirmed that the Export-Import Bank 
was not complying with relevant statutes in the administration 
of these awards.
    b. Benefits.--This report enabled the Office of Personnel 
Management to intervene and require the Export-Import Bank to 
take corrective measures, in part by temporarily withdrawing 
its delegation of authority to award retention allowances. The 
Civil Service Subcommittee linked this research with its own 
oversight of buyout programs, and subsequently documented that 
the Export-Import Bank had paid buyouts to several employees 
who were also receiving retention bonuses. This oversight 
resulted in modification of buyout authority subsequently 
provided to other Federal agencies.

20. ``Veterans' Preference: Data on Employment of Veterans.'' February 
        1, 1996, GAO/GGD-96-13.

    a. Summary.--At the request of Representative Bob Stump, 
chairman of the House Committee on Veterans' Affairs, GAO 
reviewed the veterans' preference practices of executive branch 
agencies. GAO specifically examined whether statistics 
indicated that the Office of Personnel Management (OPM) and 
other Federal agencies have given veteran hiring preference; 
whether the Merit Systems Protection Board's (MSPB) authority 
over veterans' preference was weakened by the Civil Service 
Reform Act of 1978; and how reductions-in-force (RIFs) have 
affected women and minorities.
    GAO found that in recent years, veterans' preference 
represented an increasing share of the new hires in executive 
branch agencies. The percentage of new hires with veterans' 
preference increased form 12 percent in Fiscal Year 1990 to 
14.8 percent in Fiscal Year 1994, among all agencies. Prior GAO 
work found that veterans' preference procedures were being 
properly applied in virtually all of the hiring instances that 
were examined. However, GAO did not examine whether agencies 
were correctly applying veterans' preference during reductions-
in-force and could report no findings on whether agencies have 
properly, or improperly, administered veterans' preference 
rules during reductions-in-force.
    With regard to the Merit Systems Protection Board's 
authority over veterans' preference appeals, GAO believes the 
current framework to protect veterans' rights was not weakened 
by the Civil Service Reform Act of 1978. In prior work on how 
women and minorities were affected during RIFs, GAO found that 
women and minorities were disproportionately separated in RIFs 
at three Department of Defense installations because they 
ranked lower than white males in one of three retention 
factors, including veterans' preference.
    b. Benefits.--This report provided some useful background 
information on the issue of veterans' preference and suggested 
areas for closer examination in connection with the 
subcommittee's examination of veterans' preference in the 
executive branch.

21. ``Public Pensions: Summary of Federal Pension Plan Data,'' February 
        16, 1996, GAO/AIMD-96-6.

    a. Summary.--At the request of Representative Nancy L. 
Johnson (R-CN), chairman of the Ways and Means Subcommittee on 
Oversight, and Representative Sam M. Gibbons (D-FL), GAO 
reviewed the status of public pension funding.
    The GAO found that more than 10 million individuals were 
enrolled in 34 defined benefit plans, and 2.2 million 
individuals were enrolled in 17 defined contribution plans. 
Participants in the defined benefit plans had accumulated more 
than $1.2 million in total retirement benefits.
    Differences exist in the funding of Federal Government 
defined benefit plans. Most agency plans have trust funds to 
account for government and employee contributions, investments, 
and benefits paid. Most agency plans are underfunded, that is, 
the estimated obligation for benefits exceeds plan assets. The 
agency trust funds, with one exception, invest in special issue 
Treasury securities, which are nonmarketable. The Treasury must 
obtain the necessary money through tax receipts or borrowing to 
pay plan benefits to annuitants when those benefits are due. 
This financing approach enables the Federal Government to defer 
obtaining the money until it is needed to pay the benefits. 
Because the plan assets are invested in this way, GAO concludes 
that whether this obligation is funded or unfunded has no 
effect on current budget outlays.
    The GAO found the 17 defined contribution plans had 
investment balances totaling more than $28 billion, of which 
$26 billion was held by the Thrift Savings Plan (TSP). Employee 
designated contributions to the government securities fund (G-
Fund) of the TSP are invested in special-issue Treasury 
securities under the same financing approach used for agency 
defined benefit plans. Therefore, to pay the benefits of G-Fund 
investments when they come due the Treasury must obtain the 
necessary money through tax receipts or by borrowing.
    b. Benefits.--This report serves as an invaluable resource 
in tracking, the benefit design and funding characteristics, of 
the multitude of Federal retirement systems. However, the 
discussion of retirement system financing, including investing, 
does not clearly present the real obligations these systems 
place on the taxpayer.
    Current Federal retirement systems are simply accounting 
devices and not repositories of funds available to pay future 
obligations. Without benefit of retirement funds invested in 
instruments that generate a market rate of return, the U.S. 
taxpayer bears the full burden of the annual shortfalls between 
employee retirement contributions and annuity payments.

22. ``Intelligence Agencies: Personnel Practices at CIA, NSA, and DIA 
        Compared With Those of Other Agencies,'' March 11, 1996, GAO/
        NSIAD-96-6.

    a. Summary.--While chairing the Civil Service Subcommittee 
of the Post Office and Civil Service Committee of the 103d 
Congress, Representative Schroeder observed that employees of 
the Central Intelligence Agency, the Defense Intelligence 
Agency, and the National Security Agency (and a few selected 
smaller organizations) are not within the jurisdiction of the 
Merit Systems Protection Board or the Equal Employment 
Opportunity Commission if they wish to appeal adverse 
employment actions. This exemption was granted for national 
security reasons. She requested that GAO compare personnel 
practices in these three major intelligence agencies with 
appeal rights available to other Federal employees. GAO 
concluded that, although the Directors of all these agencies 
retain summary removal authority in cases of national security 
concern, the agencies all provide procedures that protect 
employees' basic rights. These procedures are not necessarily 
identical to those provided by MSPB or EEOC, but GAO noted that 
it has reported difficulties with both appeals agencies. GAO 
observed that, when compared with other Federal agencies, these 
agencies have fewer discrimination or prohibited personnel 
practice complaints, but their rates are increasing more 
rapidly. The report concluded that, with the exception of a 
limited number of sensitive national security cases, GAO sees 
no justification for treating employees at these intelligence 
agencies differently from employees at other Federal agencies.
    b. Benefits.--This report provides one of the few avenues 
in Federal service for comparing agencies that are subject to 
EEOC and MSPB procedures to those that are not. GAO's 
conclusions that basic rights of employees can be protected 
through methods other than EEOC and MSPB procedures reinforced 
testimony at the Civil Service Subcommittee's November 29, 1995 
hearing. That hearing identified several administrative 
shortcomings in current appeals procedures and provided a 
foundation for reforms of the appeals processes drafted for 
inclusion in the Omnibus Civil Service Reform Act of 1996.

23. ``Public Pensions: State and Local Government Contributions to 
        Underfunded Plans,'' March 14, 1996, GAO/HEHS-96-56.

    a. Summary.--At the request of Representative Nancy L. 
Johnson (R-CN), chairman of the Ways and Means Subcommittee on 
Oversight, and Representative Sam M. Gibbons (D-FL), GAO 
reviewed the status of public pension funding of State and 
local governments. Although Federal pension laws impose funding 
requirements on private pension plans, they impose no such 
requirements on State and local plans.
    GAO found that 75 percent of State and local government 
pensions surveyed were underfunded; 38 percent were less than 
80 percent funded. State and local governments with underfunded 
pensions plans may face difficult budget choices in the future 
if they do not work toward full funding. Their future taxpayers 
will face a liability for benefits earned by current and former 
government workers, leaving these governments to choose between 
reducing future pension benefits or raising revenues.
    b. Benefits.--This report begins to identify the danger of 
unfunded pensions for State and local governments. 
Unfortunately, the GAO does not definitively refute the myth 
that government entities (be they Federal, State, or local) 
need not fully fund their pension systems since they will not 
become insolvent or cease to operate. GAO also erroneously 
attempts to differentiate the implications of Federal 
retirement underfunding from that of State and local government 
underfunding. The consequences of underfunding Federal, State 
and local government employee pensions are the same. The 
practice simply shifts the full cost of government payrolls 
from one generation of taxpayers to another. The GAO report 
therefore fails to provide an objective analysis of the true 
problem of underfunding of governmental pension plans.

24. ``U.S. Geological Survey and Office of Personnel Management RIFs,'' 
        March 21, 1996, GAO/GGD-96-83R.

    a. Summary.--The U.S. Geological Survey (USGS) conducted an 
extensive reduction in force (RIF) in its Geologic Division in 
October 1995. This RIF was the culmination of an extensive 
planning period during which the Geologic Division had reviewed 
and revised the competitive levels of potentially-affected 
organizations, revised position descriptions of employees, 
assigned 97.2 percent of the scientific positions within the 
Division to single-person competitive levels, ostensibly based 
upon the unique skills and qualifications of these employees. 
The Office of Personnel Management (OPM) had also conducted a 
RIF which was preceded by a reorganization of its Headquarters' 
components. This reorganization was related to a decision to 
``privatize'' OPM's Workforce Training Services as part of the 
``Reinventing Government'' proposals in the President's 1996 
budget. Chairman Mica asked GAO to review both of these RIFs 
and to ascertain their consistency with civil service 
procedures.
    USGS officials informed GAO that their need for workforce 
reductions was related to funding shortages rather than 
workforce reduction initiatives. OPM regulations permit single-
person competitive levels, and the Merit Systems Protection 
Board has upheld their use in previous cases. USGS officials 
began to anticipate RIF requirements in 1994, and they 
contended that their previous classifications were no longer 
consistent with OPM regulations. Even the old system had 
resulted in 66 percent of the Division's employees being placed 
in single-person competitive levels. USGS had consulted with 
OPM on the extensive use of single-person competitive levels, 
and reported to GAO that OPM had voiced no concerns about the 
procedures.
    OPM informed GAO that its reorganization responded to 
administrative and operational concerns expressed by Director 
James King prior to the President's budget decisions. The 
administrative reorganization became effective in February 
1995, and the transfer of the training function to the U.S. 
Department of Agriculture Graduate School was not completed 
until June 1995. The loss of revenues that would be associated 
with the separation of the training function was claimed to be 
the primary reason for this RIF.
    b. Benefits.--This review of RIF procedures enabled the 
Civil Service Subcommittee to identify a range of concerns 
related to workforce reductions, and officials from the 
agencies were subsequently invited to testify at a May 23, 
1996, hearing on downsizing strategies involved in the 
Administration's efforts to ``reinvent'' government.

25. ``Civilian Downsizing: Unit Readiness Not Adversely Affected, But 
        Future Reductions a Concern,'' April 22, 1996, GAO/NSIAD-96-
        143BR.

    a. Summary.--At the request of Representative Herbert H. 
Bateman, chairman of the Committee on National Security's 
Subcommittee on Military Readiness, GAO reviewed civilian 
workforce reductions in the Department of Defense to ascertain 
their impact on the Nation's military readiness. GAO reported 
that between fiscal years 1987 and 1995, the Department of 
Defense (DOD) reduced its civilian workforce by approximately 
284,000 personnel, or about 25 percent. During the same period, 
its active and reserve military components were reduced by 
about 26 percent, or 861,000 military personnel. After visiting 
installations, reviewing unit readiness reports, and 
interviewing civilian and military officials, GAO concluded 
that civilian downsizing had little impact on military 
readiness, but some unit leaders expressed concerns about the 
impact of future downsizing on operational readiness. GAO noted 
that downsizing decisions were not guided by comprehensive, 
service-wide strategies, and observed that service commands do 
not have a long-term road map to guide future civilian 
workforce requirements.
    b. Benefits.--This report demonstrates, albeit 
inadvertently, the limited impact of the National Performance 
Review (NPR) on DOD downsizing. Although GAO can trace the 
downsizing to its 1987 start, the report notes that the NPR 
``bottoms up'' review was not initiated until 1993. Most of the 
reduction plans originated with the Base Realignment and 
Closure Commission. The NPR recommendations include adding 
``reinventing government'' initiatives (such as doubling the 
supervisor/worker ratio from 1:7 to 1:14) are among the future 
recommendations that, GAO observes, cause some concern among 
base commanders. The report, however, is merely a compilation 
of views of DOD officials, civilian and military, and has no 
independent assessment of future operational (hence, staffing 
and other support) requirements.

26. ``Public Pensions: Section 457 Plans Pose Greater Risk Than Other 
        Supplemental Plans,'' April 30, 1996, GAO/HEHS-96-38.

    a. Summary.--At the request of Representative Nancy L. 
Johnson (R-CN), chairman of the Ways and Means Subcommittee on 
Oversight, and Representative Sam M. Gibbons (D-FL), GAO 
reviewed the financial security of amounts deferred by 
participants into State and local government supplemental 
pension plans.
    Many State and local government employees are taking steps 
to increase their future retirement benefits by deferring some 
of their wages to supplemental pension plans, known as salary 
reduction arrangements or plans. The amounts deferred or 
contributed to some of these plans, however, may be at risk. 
Due to limitations on 401(k) plans and 403(b) plans, most State 
and local government employees have only Section 457 plans 
available to augment their regular government pension.
    Section 457 plans are unfunded deferred compensation plans. 
In order to avoid salary deferrals from being taxed under these 
rules the amounts deferred must remain the property of the 
sponsoring employer and be available to the general creditors 
of the employer. Although 457 plans are considered unfunded 
because salary deferrals are not held specifically for 
individual employees, most employers invest the salary 
deferrals to ensure that funds will be available when the time 
comes to pay benefits.
    The report's principal conclusion is that a Section 457 
plan's assets could be subject to a risk of loss in the event 
the government entity sponsoring the plan becomes insolvent or 
bankrupt. The report notes that Section 401(k) plan assets, in 
contrast, must be placed in trust for the exclusive benefit of 
employee participants, and therefore are not subject to this 
type of risk. The report suggests that public sector employees 
should be afforded the same protections as Section 401(k) plan 
participants and, thus, recommends that Congress consider 
amending Section 401(k) of the Internal Revenue Code to permit 
State and local governments to establish 401(k) plans.
    b. Benefits.--The report will, among other things, serve as 
an ongoing and important reference tool for the subcommittee in 
considering issues regarding Section 457 plans and other 
deferred compensation devices. Particularly useful is the 
comparison detailed in the report between Section 457 plans, 
which are supplemental retirement plans offered to public 
employees, and Section 401(k) plans, which serve a similar 
purpose for employees in the private sector.

27. ``Federal Personnel: Issues on the Need for the Public Health 
        Service's Commissioned Corps,'' May 7, 1996, GAO/GGD-96-55.

    a. Summary.--Representatives Lamar Smith and John Kasich 
requested GAO to assess whether the Public Health Service 
required an officer corps, including characteristics similar to 
a military-like array of compensation and benefits. GAO 
reported that the PHS Corps was established in the late 1800's 
with a primary mission to provide medical care to merchant 
seamen. Over the years, however, these responsibilities have 
expanded, and now include functions such as providing care to 
Native American tribes, services in Federal prisons, and health 
sciences research. GAO noted that the Corps has not been 
incorporated into the military since 1952, and that the 
Department of Defense has no specific plans about how the Corps 
would be used in the event of future mobilizations. GAO 
reviewed differences between comparable civilian employees and 
the military-like pay and benefit structure of the PHS Corps 
and calculated that the government could save as much as $130 
million annually if Corps members were paid as civilian 
employees. These savings would accrue primarily from special 
pay, allowances, bonuses, Corps officers' advantage of paying 
no taxes on their housing and subsistence allowances, and their 
differential retirement advantages. The Department of Health 
and Human Services contested this report, claiming that 
converting to a civilian pay and benefits structure would incur 
transition costs of as much as $575 million. GAO countered that 
these costs would be incurred as a result of continuing 
operations, regardless of the Corps status of PHS officials.
    b. Benefits.--The report documents opportunities for 
reducing the Federal Government's human resources costs and 
demonstrates the willingness of the affected agencies to 
protect differential benefits for its employees.

28. ``Federal Downsizing: The Costs and Savings of Buyouts Versus 
        Reductions-In-Force,'' GAO/GGD-96-63, May 14, 1996.

    a. Summary.--As part of the Civil Service Subcommittee's 
continuing efforts to monitor workforce reductions affecting 
Federal employees, Chairman Mica requested the GAO to compare 
the costs and savings of alternative methods of cutting 
employment at Federal agencies. This report distinguished the 
multitude of cost factors involved in different downsizing 
strategies, and estimated the 5-year savings associated with 
the different options. GAO argued that buyouts usually result 
in greater savings, because retirement-eligible employees who 
accepted the buyouts averaged salaries of $48,000, where RIF'd 
employees averaged salaries of only $29,495. The accuracy of 
this estimate, therefore, would depend upon the agency 
eliminating the position that it bought out. GAO concluded 
that, where ``bumping and retreating'' occur (the situation 
most commonly associated with RIFs), buyouts could generate as 
much as $60,000 in additional savings for agencies over a 5 
year period. RIFs, however, generate more savings than buyouts 
if either the amount of ``bumping and retreating'' is 
controlled or the RIFs eliminate positions of retirement-
eligible employees. RIFing retirement-eligible employees helps 
to reduce costs because retirement-eligible employees are not 
eligible for severance pay.
    Although GAO's text emphasized the potential for greater 
savings using buyouts rather than RIFs, for each of the 
separation techniques compared, buyouts generate lower savings 
than RIFs when ``bumping and retreating'' does not take place. 
For instances where retirement eligible employees are RIFd, the 
absence of ``bump and retreat'' results in almost $22,000 more 
savings than the costs of buyouts. For early retirement 
eligible employees, a RIF without ``bumps and retreats'' yields 
nearly $30,000 additional savings over a 5 year period when 
compared to the savings that could be realized through buyouts.
    b. Benefits.--This review has spurred several additional 
inquiries from the subcommittee in its efforts to evaluate 
alternative methods of workforce reduction. The subcommittee 
documented, through follow-up research with agencies that had 
conducted RIFs, that when RIFs are used to eliminate regional 
offices or terminate programs (as occurred at the General 
Accounting Office and the Office of Personnel Management), 
``bump and retreat'' costs are eliminated from considerations, 
and buyouts are unlikely to produce the most effective results. 
This study also used the salary of the incumbent accepting the 
buyout as the basis for calculating estimated savings. Other 
research conducted by the subcommittee, and data and testimony 
provided by the Office of Management and Budget and the Office 
of Personnel Management have demonstrated that buyouts 
implemented under the Federal Workforce Restructuring Act of 
1994 were not directly linked to the elimination of positions. 
Thus, if senior officials accepted buyouts but positions 
eliminated were of lower-graded or lower-salaried employees, 
the buyouts could not achieve the savings forecast using GAO's 
model. This finding supported efforts to strengthen the 
planning requirements that would be involved in any future 
buyout authority.

29. ``Commodity Programs: Freedom-to-Farm Approach Will Reduce USDA's 
        Personnel Costs,'' GAO/RCED-96-116, May 22, 1996.

    a. Summary.--The Federal Agricultural Improvement and 
Reform Act of 1996 included provisions that would reduce 
Federal controls on farmers receiving government support for 
their crops. House Budget Committee Chairman John Kasich asked 
GAO to review the level of personnel reductions and to estimate 
the cost savings associated with this reform legislation. GAO 
concluded that this farm bill will result in personnel 
reductions at the Department of Agriculture, but probably less 
than would have occurred if the original provisions of the bill 
had remained in place. Under provisions of H.R. 2195 as 
enacted, the Farm Services Agency will reduce staff years by 
1,823 and save approximately $332 million between 1997 and 
2002. This would represent a 9 percent reduction in staff 
years. As introduced, this authorizing legislation would have 
resulted in a 13 percent reduction in staff years, most of 
which would have resulted from transferring certain functions--
such as enrolling farmers for crop insurance--to the private 
sector. GAO estimated that 1,495 of these work years would be 
eliminated among county employees performing functions such as 
maintenance of farm records, compliance activities, and 
payments under commodity programs, while 328 work years would 
be reduced from Washington headquarters.
    b. Benefits.--This report outlines the personnel reductions 
associated with program changes at a single agency, and 
identifies personnel consequences of legislative options. The 
Agency's comments, however, indicate that it might re-evaluate 
the impact of the provisions as it reviews the law after 
enactment.

30. ``Federal Downsizing: Delayed Buyout Policy at DOE is 
        Unauthorized,'' GAO/T-GGD/OGC-96-132, June 11, 1996.

    a. Summary.--The Federal Workforce Restructuring Act of 
1994 had authorized agencies to pay employees buyouts. Agencies 
were allowed to offer such payments through March 31, 1995, 
although separation of employees taking the buyouts could be 
deferred for as long as 2 years if the head of the agency 
certified the need for employees to remain on the payroll. At 
the Civil Service Subcommittee's May 23, 1996, hearing on the 
administration's implementation of the Federal Workforce 
Restructuring Act of 1994, the Office of Management and Budget 
admitted that it had relied upon a legal opinion developed by 
the Department of Energy to ``reauthorize unused buyouts.'' At 
the subcommittee's request, the General Accounting Office 
analyzed the Department of Energy's legal opinion and concluded 
that the administration's use of it to enable agencies to offer 
``delayed buyouts'' was inconsistent with the authority granted 
in the law.
    b. Benefits.--This testimony supported the Civil Service 
Subcommittee's efforts to end the administration's illegal 
extension of buyouts and ensured a congressional role in any 
further buyout activities.

31. ``Reemployment of Buyout Recipients,'' GAO/GGD-96-102R, June 14, 
        1996.

    a. Summary.--Representative Frank Wolf requested GAO to 
investigate allegations that employees at several agencies had 
accepted buyouts then returned to work for Federal agencies, 
either as direct employees or as contractors. For this study, 
GAO reviewed buyouts at the Department of Transportation and 
the National Aeronautics and Space Administration. These 
agencies awarded nearly 20 percent of buyouts used by 
nondefense agencies. The Federal Aviation Administration, which 
was already investigating reemployment violations as a result 
of a DOT Inspector General's report, was excluded from the 
study. Legislation authorizing the Department of Defense buyout 
program did not contain the 5-year bar on Federal reemployment 
included in the Federal Workforce Restructuring Act of 1994. 
GAO's review of the OPM Central Personnel Data File (CPDF) 
system revealed 394 buyout recipients who had gained new 
employment with a Federal agency, but only 68 of them were 
subject to the Restructuring Act's reemployment restrictions. 
GAO found that most of the reemployed buyout recipients were 
hired under limited term appointments. GAO further found that 
only eight agencies had inquired about the waivers of repayment 
requirements, and only two waivers had actually been requested 
of OPM. Most of the agencies involved had instituted management 
controls to implement the reemployment restrictions, and GAO 
found little evidence of Federal employees returning to the 
payroll after accepting buyouts.
    b. Benefits.--This report continued GAO's role monitoring 
the implementation of buyouts with sufficient publicity that 
both appropriators and authorizing committees of the Congress 
become aware of any abuses taking place in the program. This 
report indicates that some obvious abuses have been averted in 
implementing the law.

32. ``Cost Analysis: Privatizing OPM Investigations,'' GAO/GGD-96-121R, 
        July 5, 1996.

    a. Summary.--The Office of Personnel Management implemented 
a recommendation developed by the National Performance Review 
to convert its Federal background investigations from a 
reimbursable function performed within the agency into a 
function performed under contract with a private corporation. 
The private corporation would be an employee stock ownership 
program formed with former OPM employees. The Civil Service 
Subcommittee conducted hearings on this transition on June 14 
and 15, 1995, and during the course of those hearings the 
Office of Management and Budget conceded that no serious cost 
analysis had been done before pursuing this conversion. After 
that hearing, OPM's trustee contracted for a professional 
estimate of projected savings. At the request of both 
authorizing and appropriations subcommittees, GAO reviewed the 
consultant's projected costs and savings, and recommended 
revision of the allocation of retirement savings associated 
with this transition.
    b. Benefits.--This analysis provided for an additional 
review of the savings projected by the Office of Personnel 
Management and the Office of Management and Budget in promoting 
this National Performance Review initiative. This report can 
serve as a baseline for comparing eventual savings from the 
contract.

33. ``USGS Reduction in Force,'' GAO/GGD-96-155R, August 1, 1996.

    a. Summary.--Chairman Mica requested GAO to review 
reductions in force at the U.S. Geological Survey's Geologic 
Division to ascertain the extent to which veterans' preference 
was consistent with legal requirements, to review the effect of 
changing position descriptions on the definition of single-
person competitive levels and eventual impact on the RIF, 
including the number and types of positions that were revised. 
GAO's analysis revealed that veterans fared better than 
nonveterans in terms of retention or placement into alternative 
positions. USGS apparently educated veterans about the 
importance of their status in a RIF and provided ample 
opportunity for documenting that status. GAO found that the 
USGS's development of retention registers appeared to have 
complied with statutory requirements. GAO's efforts to review 
revisions of official personnel files centered on 
administrative changes (correction of pay, grade, 
classification series information) rather than modifications of 
substantive professional qualifications. GAO's review indicated 
that the USGS procedures appeared to be generally consistent 
with legal requirements.
    b. Benefits.--This review provided the subcommittee with 
some insight into the RIF procedures used by the Geological 
Survey and the surrounding work influenced provisions of the 
Veterans Employment Opportunities Act of 1996 that provide 
additional protections for veterans in the event of reductions 
in force.

34. ``401(k) Pension Plans: Many Take Advantage of Opportunity to 
        Ensure Adequate Retirement Income,'' August, 2, 1996, GAO/HEHS-
        96-176.

    a. Summary.--At the request of Representative Jim Bunning 
(R-KY), chairman of the Ways and Means Subcommittee on Social 
Security, the GAO reviewed the growth in 401(k) pension plans. 
GAO was asked to answer the following questions: (1) What 
proportion of workers are covered by pension plans and, in 
particular, 401(k) pension plans? (2) How much do workers 
covered by 401(k) plans contribute to their pension accounts? 
(3) How do workers covered by 401(k) plans allocate their 
pension account balances among various investment options?
    GAO found that almost half of all workers and nearly two-
thirds of workers nearing retirement age are covered by a 
pension plan. One in four workers who have pension coverage 
participates in a 401(k) pension plan. On average, workers 
covered by a 401(k) plan contribute about 7 percent of their 
salary to their account; 80 percent also receive a matching 
contribution from their employer, averaging about 5 percent of 
their salary.
    Many workers are responsible for directing the investment 
of their 401(k) pension plan account balances. About 25 percent 
of 401(k) participants invest their 401(k) funds in 
conservative investments, such as bonds; another 25 percent 
invest primarily in stocks; and the rest split their 
investments between stocks and bonds.
    b. Benefits.--This report demonstrates the importance of 
planning for retirement and the role of 401(k) pension plans in 
providing adequate post-employment income. Unfortunately, the 
report does not address the distinct advantages defined-
contribution plans have over the more traditional defined-
benefit retirement plans. The current era of corporate 
downsizing and restructuring enhances the importance of pension 
portability and flexibility.

35. ``Federal Employees' Compensation Act: Issues Associated With 
        Changing Benefits for Older Beneficiaries,'' August 14, 1996, 
        GAO/GGD-96-138BR.

    a. Summary.--At the request of Senator Mark O. Hatfield (R-
OR) and Senator Robert C. Byrd (D-WV), the chairman and ranking 
member of the Senate Appropriations Committee, and 
Representative Bob Livingston (R-LA) and Representative David 
Obey (D-WI), the chairman and ranking member of the House 
Appropriations Committee, the GAO reviewed possible changes to 
the Federal Employees' Compensation Act (FECA).
    Currently, FECA allows the receipt of workers' compensation 
benefits by beneficiaries who are at or beyond retirement age; 
possible changes could reduce benefits they receive. The GAO 
found that older FECA beneficiaries make up a high percentage 
of cases on the long-term rolls and account for a substantial 
portion of the FECA benefits paid for long-term compensation. 
Sixty percent of the approximately 44,000 long-term 
beneficiaries receiving compensation benefits in June 1995 were 
55 years of age or older; 37 percent were age 65 or older. Of 
the $1.28 billion in compensation benefits paid in 1995, $947 
million went to long-term beneficiaries who would most likely 
be affected by a change in benefits for older beneficiaries. 
About $611 million (64 percent) of the compensation benefits 
paid to these beneficiaries went to those age 55 and over.
    b. Benefits.--The report helps identify the widely 
divergent views held by proponents and opponents of changing 
benefits for older FECA beneficiaries. The report will serve as 
a useful resource to subcommittee staff as we pursue 
comprehensive reform to FECA. The FECA program provides a level 
of benefit to injured Federal employees that is much more 
generous than is available at the in the private sector. The 
government's FECA costs are too high, thus putting an added 
burden on the taxpayer and agencies' program budgets.

36. ``Private and Public Prisons: Studies Comparing Operational Costs 
        and/or Quality of Service,'' August 16, 1996, GAO/GGD-96-158.

    a. Summary.--The Department of Justice had announced plans 
to add two private prisons to the facilities used as part of 
the Bureau of Prisons' system, but these plans were deferred 
while the Department studied potential cost savings and 
operational issues in greater detail. GAO initiated this review 
to ascertain changes in the academic and professional studies 
of private prisons since 1991, when it had last reported on the 
topic. GAO found five major studies that compared private and 
public prisons in different States. Three studies showed no 
significant difference in costs, where the other two studies 
differed about the advantages of private and public prisons. 
Although GAO found some benefit from the other studies, it 
identified methodological flaws that limited their use for 
developing lessons for other jurisdictions. In most cases, 
because decisions to privatize prisons are often related to 
other policy concerns (for example, low-risk, rather than 
maximum security, facilities are most likely to be privatized), 
comparisons between similar institutions are difficult, and the 
studies usually cannot be generalized. The findings from these 
studies were not sufficiently consistent to permit reliable 
generalizations from them. Quality measures were very difficult 
to develop, and comparison could not be done from the available 
materials.
    b. Benefits.--GAO's outside reviewers considered the study 
to be a valuable contribution to criminology studies, and 
suggested that the questions asked should be linked to several 
other questions that GAO described as ``philosophical,'' and 
beyond the scope of their review. The study did describe 
systematic approaches that could make future studies more 
comparable for analytical purposes, and thus provide a better 
foundation for policy decisions.

37. ``Privatization of OPM's Investigations Service,'' GAO/GGD-96-97R, 
        August 22, 1996.

    a. Summary.--The Civil Service Subcommittee initiated 
oversight of the Office of Personnel Management's decision to 
privatize its Office of Federal Investigations by creating an 
employee stock ownership program. GAO had testified at hearings 
on June 14 and 15, 1995, and this report follows up on 
deficiencies in OPM's planning process identified during those 
oversight hearings. OPM awarded a sole source contract for the 
conduct of background investigations to US Investigations 
Services, Inc., on April 8, 1996. Although OPM had assured the 
Civil Service Subcommittee that full protection would be 
provided for files covered by the Privacy Act, to the extent of 
pledging to create a ``firewall,'' OPM could not describe 
provisions to ensure the privacy of records in July 1996. After 
the ESOP was established, the Department of Energy withdrew 
security clearances of background investigators because they 
were no longer Federal employees. USIS employees were not 
guaranteed access to State files on the National Crime 
Information Center (NCIC) maintained by the Federal Bureau of 
Investigation, and officials in major States had not been 
informed about OPM's plans for privatization of this function. 
Although OPM had assured the Civil Service Subcommittee that 
information gathered to perform work for Federal agencies would 
not be used for USIS'' non-federal work, OPM appears to have 
allowed this mixture of effort in contract provisions.
    b. Benefits.--This report demonstrates continuing 
inadequacies in OPM's plans for conversion of this segment of 
its workforce. Deficiencies in the planning process have 
carried into the initial phases of operations, jeopardizing the 
level of service required by Federal agencies that need 
background investigations to ensure the suitability, security, 
and public trust qualifications of Federal employees.

38. ``Employment and Buyout Incentives,'' GAO/GGD-96-168R, August 22, 
        1996.

    a. Summary.--The Civil Service Subcommittee requested GAO 
to review instances where agencies had paid the same employee 
both a separation incentive (``buyout'') and an incentive to 
remain within government employment, either a retention bonus 
or a relocation bonus. Through a review of records in OPM's 
Central Personnel Data File, GAO determined that 52 persons at 
the Department of Defense and seven other Federal agencies had 
received both types of payments. The Department of Justice 
reported to GAO that the one person who had received both a 
relocation bonus and a buyout had repaid the relocation bonus.
    b. Benefits.--Although there would appear to be conflicts 
in statutory purposes for an agency to pay the same employee 
both a retention bonus and a separation incentive, the Federal 
Workforce Restructuring Act of 1994 contained no prohibition on 
these contrasting payments. The subcommittee subsequently 
learned that the Export-Import Bank had awarded three retention 
bonuses after it had approved buyouts for these employees. As a 
result of information provided in this report, the subcommittee 
chairman was able to write to the Secretary of Defense and 
secure modification of management practices to prevent such 
payments in the future. The subcommittee has also developed 
standard buyout language for future legislative use that 
includes prohibition of buyout payments to persons who received 
retention incentives.

39. ``Federal Downsizing: Better Workforce and Strategic Planning Could 
        Have Made Buyouts More Effective,'' GAO/GGD-96-62, August 26, 
        1996.

    a. Summary.--Civil Service Subcommittee Chairman Mica 
requested that GAO conduct a comprehensive review of Federal 
workforce reductions under the Federal Workforce Restructuring 
Act of 1994. This review examined whether the act's objectives 
were being achieved, whether the workforce reductions as 
implemented were consistent with the administrative and 
supervisory targets established by the National Performance 
Review, to assess the demographic impact of the buyouts, to 
review agencies' perspectives on buyouts as a downsizing tool, 
and whether the workforce reductions were having any effects on 
agencies' performance. This report documented that most buyouts 
came from the Department of Defense, a pattern consistent with 
the overall Federal workforce reductions. The administration, 
however, did not achieve the targeting of selected 
administrative and supervisory occupations recommended by the 
NPR. Instead, agencies had reduced the NPR objectives in their 
plans, then failed to achieve the level of reductions in these 
categories included in their plans. As a result, some of these 
administrative and supervisory positions had actually increased 
as a portion of the Federal workforce. Although GAO reported 
that the portions of the Federal workforce made up of women and 
minorities had increased slightly since the enactment of the 
law, GAO did not provide details about the impact of the 
reductions on the portion of college graduates, the geographic 
distribution, or other demographic descriptions of the Federal 
workforce that might enable assessment of the effects of these 
reductions on the quality of the Federal workforce. GAO 
concluded that many of the unintended consequences of 
downsizing could have been mitigated had agencies done adequate 
strategic and workforce planning.
    b. Benefits.--This report provides an extensive review of 
Federal agencies' downsizing efforts. It demonstrates that 
agencies have failed to achieve NPR workforce reduction targets 
in many of the administrative and supervisory areas, and 
provides a baseline for further oversight of the Federal 
workforce reduction efforts.

40. ``Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,'' 
        (GAO/AIMD-96-130) August 30, 1996.

    a. Summary.--This report reviewed actions taken by the 
Department of the Treasury to manage national accounts during 
the period from November 1995, through March 1996, when major 
Federal accounts were manipulated to evade the restrictions 
imposed by the Federal debt ceiling. Among the accounts used by 
the Department of the Treasury to facilitate Federal borrowing 
that would not be restricted by the legal debt ceiling were the 
Civil Service Retirement and Disability Fund (CSRDF) and the 
Federal Retirement Thrift Investment Fund's holdings of Federal 
nonmarketable securities, commonly known as the ``G Fund.'' 
After declaring a ``debt suspension period'' on November 15, 
1996, Secretary of the Treasury Robert Rubin directed three 
measures to enable the Government to continue borrowing money 
in ways that would not be subject to the debt ceiling. These 
included redeeming nonmarketable securities held by the CSRDF, 
suspending further investments in those accounts as receipts 
continued to come into the Treasury from employees' payroll 
deductions, and suspending further investments in the G Fund. 
GAO concluded that the Treasury's actions resulted in the 
Government incurring $138.9 billion in obligations that would 
normally have been subject to the debt ceiling. GAO reported 
that the Treasury had fully restored the CSRDF's $995 million 
and the G Fund's $255 million interest losses, but observed 
that additional statutory action would be needed to restore 
$1.2 million taken from the Exchange Stabilization Fund. GAO 
concluded that these actions were consistent with provisions of 
Chapters 83 and 84 of Title 5 that were enacted in 1986 to 
enable more flexible management of Federal debt.
    b. Benefits.--This report demonstrates that the Secretary 
of the Treasury has been provided legislative authority that 
enables the vitiation of legal restrictions on the national 
debt. The Treasury's actions during the debt ceiling 
demonstrated ambiguities in the term ``debt suspension period'' 
that enabled the Secretary of the Treasury to borrow billions 
of dollars beyond the legal ceiling. The Secretary's actions 
focused public attention on deficiencies in the law, but the 
GAO review concentrated on the financial manipulations to the 
omission of some of the key legal issues related to enforcing 
limitations on the national debt.

41. ``Federal Contracting: Comments on S. 1724, The Freedom From 
        Government Competition Act,'' September 24, 1996, GAO/T-GGD-96-
        169.

    a. Summary.--GAO observed that OMB Circular A-76 has been 
the policy guidance governing competition related to Federal 
contracting since 1967. Primarily because Departments and 
agencies created in the past 30 years have consistently relied 
upon the private sector for commercially-available goods and 
services, Federal agencies now spend about $65 billion to 
purchase goods and $116 billion on services, as compared to 
personnel costs of approximately $115 billion for the 2 million 
person Federal workforce. S. 1724 would have expanded 
significantly government's role in purchasing, rather than 
providing, any goods and services that were not defined as 
``inherently governmental,'' related to national security, or 
related to ``unique'' agency needs. GAO testified that S. 1724 
would require contractual procurement even when the government 
might be able to provide the service cheaper internally, and 
opined that in some cases the bill might result in private 
procurement in the absence of effective competition. GAO also 
expressed concerns about the 6-year transition period during 
which agencies would be required to convert to contract, 
contending that the deadlines might be unrealistic. GAO remains 
concerned that conversion to contract requires more extensive 
contract management capabilities than most agencies currently 
possess. These contract management positions were targeted in 
the National Performance Review's workforce reduction strategy, 
and conversion to contract might be more difficult if these 
employees no longer serve in agencies.
    b. Benefits.--This study reiterates GAO's long concerns 
about contracting. It draws from extensive prior testimony on 
the topic, and served to remind the committee of these 
concerns.

42. ``Social Security: Union Activity at the Social Security 
        Administration.'' October 2, 1996, GAO/HEHA-97-3.

    a. Summary.--Representative Jim Bunning, chairman of the 
House Ways and Means Subcommittee on Social Security, asked GAO 
to examine union involvement and activity within the Federal 
Government. Given the budget constraints facing Federal 
agencies, Chairman Bunning expressed concern about the amount 
of time and expense devoted to union activities--which is paid 
for by the Federal Government, and ultimately, the taxpayer.
    Since the early 1960's, Federal agencies have allowed 
unions to conduct union-related activities during official duty 
hours. Such activities generally include representing employees 
in complaints against management; bargaining over changes in 
working conditions; and negotiating union contracts with 
management. The use of ``official time,'' generally defined as 
authorized paid time off from assigned duties for union 
activities, has become a routine method of union operation in 
the Federal Government.
    GAO has determined that the time spent on union activities 
at the Social Security Administration (SSA) has grown from 
254,000 hours annually, to at least 413,000 hours annually at a 
cost of $12.6 million in 1995 alone, largely from SSA's trust 
funds. Additionally, SSA has reported to Congress that the 
number of full-time union representatives--those devoting 75 
percent or more of their work time to union activities--grew 
from 80 to 145 between fiscal years 1993 and 1995.
    Under the terms of the current SSA union contract, which 
will expire in 1999, the selection of union representatives and 
the amount of time they spend on union activities is determined 
by the union, without the consent of local managers. GAO 
determined that over 1,800 designated union representatives in 
SSA are authorized to spend time on union activities--although 
most of that time is spent by SSA's 145 full-time 
representatives. Some SSA field managers told GAO that problems 
in managing the day-to-day operations activities are caused by 
their having no involvement in deciding how much time is spent 
by individuals, or who the individuals are.
    The fact that agencies are not required to track official 
time government wide is a major impediment in compiling 
statistics on the use of official time in the Federal 
Government. Hence, the amount of time spent on such activities 
cannot be reported accurately, because agencies are not 
obligated to capture, or report, ``official time,'' or union 
activity charges. SSA reported that the agency paid for 404,000 
union-activity hours in fiscal year 1995. GAO found this figure 
to be lower than the actual hours spent on ``official time.''
    GAO also found that in the private sector, some employers 
pay employees for time spent on union activities, while others 
do not.
    b. Benefits.--The information contained in this report 
provides documentation of the significant increase in the use 
of official time during recent years. It also demonstrated 
serious deficiencies in recordkeeping by some of the agencies 
studied, including SSA and VA. Because of these deficiencies, 
including the failure to routinely track the use of such time, 
the amount of the burden official time imposes upon taxpayers 
is generally unknown. This report documents how the Federal 
Government pays employees' salaries and expenses for the 
considerable amount of time they spend on union activities, as 
well as the cost of additional support: space, supplies, 
equipment, and some travel expenses.
    In the current fiscal climate, the subcommittee believes 
this information documenting vast expenses being incurred by 
executive branch agencies is of great interest to all Members 
of Congress. GAO's findings in this report were also helpful to 
the subcommittee in framing issues for its own hearing on 
taxpayer subsidies of Federal unions. The report also 
reinforced the subcommittee's prior determination to examine 
the question of official time more widely by requesting a more 
extensive GAO study.

43. ``Hiring of Former IRS Employees By PBGC.'' October 2, 1996, GAO/
        GGD-97-9R.

    a. Summary.--After receiving several complaints of alleged 
improper personnel activities at the Pension Benefit Guaranty 
Corporation (PBGC), Representative John L. Mica, chairman of 
the House Committee on Government Reform and Oversight 
Subcommittee on Civil Service, requested that GAO investigate 
whether any instances of improper hiring had occurred. 
Specifically, the subcommittee was told that the current 
Director of the PBGC improperly hired a number of colleagues 
from his former agency, the Internal Revenue Service.
    All but one of the former IRS employees had been hired by 
the PBGC at the GS-13 level or above. GAO examined the official 
personnel folders (OPFs) of 16 of the 17 former IRS employees 
hired between March 1993 and July 1996. (The OPF of the 17th 
employee, who had retired, was at the Federal Records Center 
and its retrieval would have seriously delayed GAO's work.) 
Based upon this review, GAO determined that 15 of these 16 
employees had been hired noncompetitively. Only one competed 
for her new position. In this instance, while serving as a 
Visiting Actuary on a term appointment at PBGC, the employee 
submitted an application for a newly created position for an 
actuary within PBGC's Corporate Finance and Negotiations 
Department. GAO examined the procedures followed in making 
these appointments and found them in compliance with applicable 
civil service rules and regulations.
    During fiscal years 1992 through 1996, the number of full-
time equivalent PBGC positions was increased by a total of 25 
percent.
    b. Benefits.--This GAO investigation assisted the 
subcommittee in discharging its oversight function by resolving 
concerns that the PBGC Director improperly brought former IRS 
employees with him to serve in the PBGC.

44. ``Buyout Recipients Compliance With Reemployment Provisions,'' 
        (GAO/GGD-97-7R) October 3, 1996.

    a. Summary.--In response to a request from Representative 
Frank Wolf, GAO reviewed the Central Personnel Data File system 
to ascertain the numbers of people who had received buyouts and 
returned to Federal employment in ways that might conflict with 
legislation authorizing the buyouts. GAO found a total of 68 
individuals who had regained Federal employment after accepting 
a buyout payment. Only 11 of those incidents appeared to 
conflict with legal restrictions on post-buyout Federal 
employment. In 20 instances, individuals had repaid the buyout 
or were doing so through installment payments. More than 25 of 
the reports indicated potential data difficulties in the CPDF. 
OPM had waived the repayment requirement in only one case.
    b. Benefits.--This report reflects personnel records of 
more than 87,000 buyouts, indicating that the legal 
restrictions upon re-employment after accepting a buyout have 
had their intended effect. Very few individuals are returning 
to Federal employment after taking the buyouts, and those who 
do either enter into repayment programs or secure the waivers 
necessary to comply with the law.

45. ``Private Pensions: Most Employers that Offer Pensions Use Defined 
        Contribution Plans,'' October 3, 1996, GAO/GGD-97-1.

    a. Summary.--At the request of Representative John L. Mica 
(R-FL), chairman of the Subcommittee on Civil Service, the GAO 
reviewed the approaches private employers are using to provide 
retirement benefits to their employees and the extent to which 
these approaches may be changing.
    Employer-sponsored pension plans, in combination with 
Social Security and personal savings, provide millions of 
retirees and their families with retirement income. Employers 
can provide these benefits using two basic types of plans--
defined benefit (DB) or defined contribution (DC) pension 
plans.
    For a DB plan, the employer determines retirement benefit 
amounts for individual employees using specific formulas that 
consider certain factors, such as age, years of service, and 
salary levels. Employers bear the full responsibility and risk 
of providing sufficient funding to guarantee that the benefits 
promised by the formulas will be paid. The amount an employer 
must contribute to a DB plan can vary from year-to-year 
depending on changes in areas such as workforce demographics or 
investment earnings.
    For a DC plan, the employer establishes an individual 
account for each eligible employee and generally promises to 
make a specified contribution to that account each year. 
Additional employee contributions are also allowed and 
sometimes required. The employee's retirement benefits depend 
on the total of employer and employee contributions to the 
account as well as the investment gains and losses that have 
accumulated at the time of retirement. Therefore, the employee 
bears the risk of whether the funds available at retirement 
will provide a sufficient level of retirement income.
    Private employers are not required to provide their 
employees with pension benefits; however, those employers that 
do so must meet certain minimum legal standards. The Employee 
Retirement Income Security Act of 1974 (ERISA) requires that 
private employers manage pension plan funds prudently and in 
the best interests of participants and their beneficiaries, 
that participants be informed of their rights and obligations, 
and that there be adequate disclosure of the plan's terms and 
activities. For DB plans only, ERISA created a Federal 
insurance program financed primarily by employer-paid premiums 
to guarantee the payment of pension benefits when an 
underfunded DB plan is terminated.
    The GAO found that in 1993, 88 percent of private employers 
with single-employer pension plans sponsored only DC plans. 
This represents a sizable increase over 1984 when 68 percent of 
private employers reported they had only DC plans. From 1984 to 
1993, the percentage of employers that offered only DB plans 
decreased from 24 to 9 percent, and those employers offering 
both DC and DB plans decreased from 8 to 3 percent. The growth 
in DC plans occurred across all employer sizes and industries.
    The GAO reported a variety of possible explanations for why 
employers might prefer DC over DB plans. These factors included 
increasingly complex and burdensome government regulations for 
DB plans, a surge in the number of employers terminating DB 
plans to acquire capital assets, and employees' growing 
preference for pension benefits that they can retain, when they 
change jobs.
    b. Benefits.--This report highlights the clear trend 
throughout the private sector toward DC retirement plans. The 
advantages of the DC plans over the traditional DB retirement 
plans are substantial for both employers and employees. The GAO 
study will be useful as the committee considers changes to the 
structure of Federal employee retirement plans.
    The current Federal retirement system suffers from a 
history of fiscal practices that relied on the deferral of the 
cost of annuities to generations of future taxpayers. In 1997, 
the Federal Government will pay $41.3 billion in pension 
benefits to Federal annuitants. The government will receive 
approximately $10 billion from employee payroll deductions and 
from cash contributions from the U.S. Postal Service. The 
General Treasury will make up the difference between receipts 
and payouts--over $30 billion.
    Because of the way Federal pensions are funded, the 
Treasury will pay a growing share of annuity costs in the 
future. The projections in the Annual Report of the U.S. Office 
of Personnel Management indicate that by the year 2000, the 
Treasury share of annuities will grow from $40 billion per year 
to $60 billion in 2010 and over $150 billion per year by the 
year 2030. According to the Budget for fiscal year 1997 
submitted by the Clinton administration: ``From 1960 through 
1995, CSRDF [Civil Service Retirement and Disability Fund] 
payments to the public have exceeded its income from the public 
by $408 billion.''
    Given the annual funding shortfalls in the retirement 
system, it may be necessary to close the current Federal 
retirement system to new employees. A new retirement system for 
future employees can be created relying on defined 
contributions and consistent with private sector practices. By 
investing the funds in commercial investments the Federal 
Government can provide its employees with an adequate 
retirement benefit, while exercising fiscal constraint.

                   District of Columbia Subcommittee

1. ``District's Workforce, Annual Report Required by the District of 
        Columbia Retirement Reform Act,'' March 1996, GAO/GGD-96-95.

    a. Summary.--This report provides comments on the actuary's 
report on the disability retirement rate of District of 
Columbia police officers and fire fighters. The act provides 
for annual Federal payments to the District of Columbia Police 
Officers and Fire Fighters' Retirement Fund. These payments 
however, are reduced when the disability retirement rate 
exceeds an established limit. This is done to encourage the 
District government to control retirement costs.
    b. Benefits.--The actuary was engaged by the District of 
Columbia Retirement Board (1) to determine the 1995 disability 
retirement rate for District police officers and fire fighters 
hired before February 15, 1980; (2) to examine if the rate 
exceeds eight-tenths of 1 percentage point; and (3) to prepare 
the annual report required by the act. Reviews of the actuary 
report and other relevant data conclude that no reduction is 
required in the fiscal year 1997 Federal payment to the 
District's Police Officers and Fire Fighters' Retirement Fund.

2. ``District of Columbia Information on Health Care Costs,'' April 
        1996, GAO/AIMD-96-42.

    a. Summary.--This report provides baseline information on 
the District of Columbia's health care system to aid in 
evaluation of the various restructuring proposals the District 
is considering in light of rising health care costs, limited 
resources, and pending legislative changes. Recent studies on 
the District's health care system have concluded that the 
District's health care peoblems are aggrevated by social 
factors, such as high rates of poverty, crime, substance abuse, 
and unemployment in the city. The report looks at these factors 
in order to analyze the District's health care budget.
    b. Benefits.--The report conducts a cost-benefit analysis 
of the District's health care system and concludes the 
following: (1) the District does not collect much of the 
specific cost information, which is considered vital for 
managing and measuring Medicaid; (2) many of the District's 
hospitals are in disrepair and costs to repair were estimated 
at $119 million in 1985; (3) in the fiscal year, 1994, D.C. 
General reported nearly $78 million in uncompensated care. As a 
result of these factors, the costs of D.C. health care is 
increasing. These findings help facilitate the various 
reconstructuring propasals of the District's health care 
system.

3. Testimony--``District Government Information on its Fiscal 
        Condition,'' July 19, 1996, GAO/T-AIMD-96-133.

    a. Summary.--This testimony reviewed the District of 
Columbia's financial condition. The report focuses on the 
District's cash position at the end of fiscal year 1995, as 
adjusted through March 31, 1996. The report discusses financial 
and budget trends in the District's revenue flows and expense 
patterns, comparing and contrasting the District's historical 
experience through fiscal year 1995 with its enacted and 
proposed budgets for fiscal years 1996 and 1997.
    Where unusual trends were identified, such as discrepancies 
in the amounts of the District's operations, GAO met with 
District officials to determine the reasons for these 
differences. In addition, GAO conducted reviews detailing 
underlying supporting information and documentation to verify 
that the explanation provided was supported. GAO also reviewed 
expenses reported during the 1996 fiscal year, to ensure that 
the trends identified in GAO's analysis through the fiscal year 
ended 1995 were still accurate.
    b. Benefits.--GAO performed an analysis of the District of 
Columbia's cash and overall financial condition. In order to 
understand the District's financial predicament, GAO 
interviewed several key members of the city's control board and 
current and former government officials. In addition, GAO 
reviewed what actions New York City and Philadelphia and their 
respective boards took to respond to their respective cash 
shortages. This information aided the District of Columbia 
Financial Responsibility and Management Assistance Authority's 
efforts to resolve financial and management problems facing the 
District.

    Government Management, Information, and Technology Subcommittee

1. ``Status of Open Recommendations: Improving Operations of Federal 
        Departments and Agencies,'' January 1995, GAO/OP-95-1.

    a. Summary.--In fiscal year 1994, the General Accounting 
Office (GAO) made 1,450 recommendations. More importantly, 
about 4,400 GAO recommendations made during the past 5 years 
have been implemented. This report summarizes the status of all 
GAO recommendations that have not been fully implemented and 
highlights some of the key ones.
    b. Benefits.--The report is used for oversight, both of GAO 
and other agencies and programs. It provides information about 
previous GAO recommendations and a basis for future requests.

2. ``Federal Office Space: More Businesslike Leasing Approach Could 
        Reduce Costs and Improve Performance,'' GAO/GGD-95-48.

    a. Summary.--The GSA has a virtual monopoly over the 
provision of Federal office space. GSA now spends $2 billion 
annually for leased space and projects. These costs will rise 
to $3 billion by 2002 unless the ratio of federally owned to 
leased space is increased. Also, Federal agencies have been 
dissatisfied with GSA's monopoly and the amount of time GSA 
takes to deliver requested space. GAO concludes that a more 
businesslike approach to leasing could reduce costs and improve 
performance. GAO makes several recommendations to streamline 
GSA's leasing process, making it less costly and time 
consuming, more responsive to the needs of Federal agencies, 
and a better value for taxpayers.
    b. Benefits.--The subcommittee has jurisdiction over the 
GSA and has a responsibility to monitor its activities. 
Implementation of the recommendation could result in savings to 
the Government.

3. ``The Chief Financial Officers Act: A Mandate for Federal Financial 
        Management Reform,'' GAO/AFMD-12.19.4.

    a. Summary.--Overall, executive branch agencies are making 
progress in implementing the Chief Financial Officers Act 
(CFO). This landmark legislation seeks to (1) provide Congress 
and agency managers much more reliable financial, cost, and 
performance information; (2) dramatically improve financial 
management systems and controls to eliminate waste, fraud, 
abuse, and mismanagement and to better protect the Government's 
assets; and (3) establish effective financial organizational 
structures to provide strong leadership into the 21st century. 
The remaining problems are difficult, however, and much remains 
to successfully implement the act--especially in regard to 
improving the quality of financial information and the 
underlying financial systems and controls, which are in serious 
disrepair today. The Comptroller General's statement outlines 
key areas in which progress is being made and discusses 
critical implementation issues that need to be fully 
confronted.
    b. Benefits.--The subcommittee has oversight over the CFO 
Act and the GAO report highlights areas that need to be 
monitored more closely.

4. ``Information Technology: A Statistical Study of Acquisition Time,'' 
        GAO/AIMD-95-65.

    a. Summary.--The Federal Government spends upwards of $25 
billion each year on information technology. Too often, 
however, this investment falls short in improving service, 
increasing efficiency, or lowering costs. This lack of success 
can be traced to several factors, including: (1) ineffective 
management practices for proposing, selecting, and controlling 
technology investments; (2) not defining outcomes in terms of 
quality, delivery and cost; and (3) poorly managing the 
acquisition process. This report focuses on the third problem 
area. GAO discusses how various factors, such as procurement 
amount, size, contract type, bid protests, and the acquisition 
method, affect the length of time to award a contract.
    b. Benefits.--The report will assist the subcommittee in 
its oversight responsibilities. The subcommittee is planning a 
series of hearings on information technology and the report is 
helpful in giving background information for the hearings.

5. ``Comptroller General's 1994 Annual Report,'' Received April 7, 
        1995.

    a. Summary.--In fiscal year 1994, GAO prepared 1,252 audit 
and evaluation products, including 901 reports to Congress and 
agency officials, 129 congressional briefings, and 222 
congressional testimonies delivered by 77 GAO executives. GAO 
also issued over 3,000 legal decisions.
    The selected reports and testimonies summarized reflect the 
broad range of issues GAO addressed during the year. A list of 
GAO witnesses is also included in the report.
    b. Benefits.--This is very helpful to the subcommittee in 
preparing for investigations, selection of witnesses, and the 
planning of hearings.

6. ``Comptroller General's 1992 Annual Report''.

    a. Summary.--The report provides information similar to the 
1994 report described above.
    b. Benefits.--This is very helpful to the subcommittee in 
preparing for investigations, selection of witnesses, and the 
planning of hearings.

7. ``Tax-Exempt Organizations: Information on Selected Types of 
        Organizations,'' February 1995, GAO/GGD-95-84BR.

    a. Summary.--Since the mid-1970's, the number and the size 
of organizations that are tax exempt have increased 
substantially; more than 1 million of these organizations 
existed as of 1992. Press reports and congressional hearings 
have recently focused on the activities of charitable groups, 
but other kinds of tax-exempt organizations have not received 
this level of scrutiny. This briefing report: (1) discusses the 
growth in the number, the assets, the revenues, and the 
expenses of social welfare organizations, labor and 
agricultural groups, and business leagues; (2) documents the 
compensation that some of the largest of these tax-exempt 
organizations paid their executives in 1992; (3) identifies the 
extent to which these organizations are involved in lobbying 
and political activities; and (4) identifies IRS efforts to 
monitor their activities. Information on charitable 
organizations is presented for comparison purposes.
    b. Benefits.--The findings of the report were brought to 
the subcommittee's attention.

8. ``Federal Management Issue Plan--Fiscal Years 1995-1996,'' March 
        1995, GAO/IAP-95-9.

    a. Summary.--This report is prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office. It describes the key issues that GAO 
plans to cover in the area of Federal management.
    b. Benefits.--The report is helpful in preparing for 
hearings and conducting investigations in the areas of the 
subcommittee's jurisdiction.

9. IRM/General Government Division Issue Area Plan--Fiscal Years 1994-
        1996, March 1995, GAO/IAP-95-8, Date Received: April 20, 1995.

    a. Summary.--This report is prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office. It describes the key issues that GAO 
has planned to cover in the area of Federal management.
    b. Benefits.--The report is helpful in preparing for 
hearings and conducting investigations in the areas of the 
subcommittee's jurisdiction.

10. ``Budget Function Classification: Relating Agency Spending and 
        Personnel Levels to Budget Functions,'' January 1995, GAO/AIMD/
        GGD-95-69FS.

    a. Summary.--This fact sheet examines the functions 
performed by agencies in the Federal Government, identifying 
those that are uniquely associated with each agency and those 
done by two or more agencies. It also provides financial 
information and civilian personnel levels associated with each 
function. GAO provides tabular and graphical presentations 
showing (1) a matrix of Federal departments and agencies 
according to budget function and subfunction classifications 
developed by the Office of Management and Budget; (2) separate 
presentations for departments and agencies depicting obligation 
and employment levels by budget function; (3) separate 
presentations for each budget function showing obligation and 
employment levels for departments and agencies, and (4) end-of-
year employment ``head counts'' for each department and agency.
    b. Benefits.--This fact sheet is helpful to the 
subcommittee in developing proposals to reform the budget and 
accounting structure of the Federal Government.

11. ``Following the Federal Dollar--The Strategic Plan of the General 
        Accounting Office,'' March 1995, GAO/OCG-95-3, March 1995, Date 
        Received: May 31, 1995.

    a. Summary.--This document describes the long-term 
strategic plan for GAO, including how the GAO plans to meet its 
responsibilities to Congress given its reduced staff and 
budget.
    b. Benefits.--This report assists the subcommittee in 
fulfilling its oversight responsibilities over the U.S. General 
Accounting Office.

12. ``Government Corporations: Profiles on Recent Proposals,'' March 
        1995, GAO/GGD-95-57FS.

    a. Summary.--This report profiled seven proposed Government 
corporations: (1) Bonneville Power Corp.; (2) National 
Petroleum Reserves Corp.; (3) U.S. Air Traffic Services Corp.; 
(4) Federal Housing Administration; (5) Presidio Trust; (6) 
National Infrastructure Development Corp.; and (7) National 
Infrastructure Insurance Corp. It noted that some of the 
proposed Government corporations currently exist in 
noncorporate form within Federal departments: (1) Bonneville 
Power Administration; (2) Naval Petroleum and Oil Shale 
Reserves; (3) Federal Housing Administration; and (4) Federal 
Aviation Administration. The proposed Presidio Trust, National 
Infrastructure Development Corp., and National Infrastructure 
Insurance Corp. do not currently exist. To date, no legislation 
has been enacted to establish any of the seven proposed 
corporations. Any legislation would need to be evaluated to 
determine whether offsetting spending or tax increases would be 
required to comply with the Budget Enforcement Act.
    b. Benefits.--This report is helpful to the subcommittee in 
its ongoing investigation into how Government corporations 
should be structured.

13. ``Budget Function Classification: Agency Spending and Personnel 
        Levels for Fiscal Years 1994 and 1995,'' April 1995, GAO/AIMD-
        95-115FS.

    a. Summary.--This fact sheet examines the functions 
performed by Federal agencies. GAO identifies those functions 
that are uniquely associated with each agency and those 
performed by two or more agencies. This fact sheet also 
provides financial information and civilian personnel levels 
associated with each function. GAO presents actual fiscal year 
1994 and estimated fiscal year 1995 information from the 
President's 1996 budget. This fact sheet contains (1) a matrix 
of Federal agencies according to budget function 
classifications developed by the Office of Management and 
Budget; (2) a separate presentation for each agency depicting 
obligation and employment levels by budget function; and (3) a 
separate presentation for each budget function showing 
obligation and employment levels by agency.
    b. Benefits.--The subcommittee is conducting an 
investigation into whether the budget function classification 
and account structure should be reformed. This report is 
helpful to the subcommittee in that effort.

14. ``Budget Function Classification: Agency Spending by Subfunction 
        and Object Category, Fiscal Year 1994,'' May 1995, GAO/AIMD-95-
        116FS.

    a. Summary.--This fact sheet is the third in a series of 
GAO reports examining the functions performed by Federal 
agencies. GAO identifies those functions that are uniquely 
associated with each agency and those performed by two or more 
agencies. In particular, this fact sheet provides an 
``accounting of expenditures'' so that both administrative and 
mission-oriented operations are identified. GAO describes 
fiscal year 1994 obligations by subdepartment and subfunction 
and by focusing on objects of expenditure within each 
subfunction. This enables GAO to more precisely describe 
Federal activities by characterizing obligations according to 
the nature of the service or the article procured.
    b. Benefits.--This fact sheet is helpful to the 
subcommittee in developing proposals to reform the budget 
account structure.

15. ``Welfare Benefits: Potential To Recover Hundreds of Millions More 
        in Overpayments,'' June 1995, GAO/HEHS-95-111.

    a. Summary.--Under welfare reform legislation being 
considered by Congress, resources for helping poor families may 
become increasingly limited, making it critical that only those 
who are eligible for benefits receive them. In 1992, benefit 
overpayments in three welfare programs, Aid to Families With 
Dependent Children, Food Stamps, and Medicaid, totaled $4.7 
billion, or about 4 percent of the total benefits paid. 
Nationwide recovery of these benefits was relatively low. This 
report discusses: (1) what States are doing to recover benefit 
overpayments; (2) what the more effective practices are; (3) 
what States could do better; and (4) what the Federal 
Government could do to help States recover more overpayments.
    b. Benefits.--This report is helpful to the subcommittee in 
its oversight over management practices and the prevention of 
fraud, waste, and abuse in Federal programs.

16. ``Federal Reorganization: Congressional Proposal To Merge 
        Education, Labor and EEOC,'' June 1995, GAO/HEHS-95-140.

    a. Summary.--A congressional proposal to consolidate the 
Departments of Labor and Education along with the Equal 
Employment Opportunity Commission envisions saving billions of 
dollars and creating more efficient services, but savings might 
be elusive if downsizing proceeds too quickly or proceeds 
without careful planning. The proposal to create a new 
Department of Education (DOED) and Employment could yield 
savings of about $1.65 billion in administrative costs through 
the year 2000. The proposal's cost-saving goal, in addition to 
its organizational requirements, would significantly change 
DOED's existing structure, program offerings, and processes. 
The proposal would also raise program consolidation, workforce, 
accountability, implementation, and oversight issues that 
Congress, DOED, and other agencies would need to address to 
ensure that Federal education and training programs meet the 
Nation's needs.
    b. Benefits.--This report is helpful to the subcommittee in 
its investigation into how to make government work better by 
reorganizing departments and agencies.

17. ``Inspector General Act: Activities of the Federal Entities,'' June 
        1995, GAO/AIMD-95-152FS.

    a. Summary.--The Inspectors General (IG) Act of 1978 
requires OMB, in consultation with GAO, to identify Federal 
entities, including Government corporations and independent 
regulatory agencies, without Offices of Inspectors General and 
to publish a list of such entities annually in the Federal 
Register. The act also requires these entities to report 
annually to Congress and to OMB on the audit and investigative 
activities of their organizations. This fact sheet provides 
information on: (1) whether Federal entities identified by OMB 
in fiscal year 1994 reported their audit and investigative 
activity as required by law; (2) what audit and investigative 
activities these entities reported during the past 3 years; (3) 
the status of audit recommendations for seven entities under 
the jurisdiction of the Senate Appropriations Subcommittee on 
Labor, Health and Human Services, and Education; (4) how these 
seven entities process allegations of fraud and mismanagement; 
and (5) how these entities obtain administrative services.
    b. Benefits.--This report is helpful to the subcommittee in 
its continuing oversight over the Inspector General Act.

18. ``Managing for Results: The Department of Justice's Initial Efforts 
        To Implement GPRA,'' June 1995, GAO/GGD-95-167FS.

    a. Summary.--The Government Performance and Results Act of 
1993 was intended to improve the effectiveness and efficiency 
of Federal programs by establishing a system to set performance 
goals and measure results. This fact sheet reviews the Justice 
Department's implementation of the act. As GAO was 
systematically collecting information from each Justice 
component about its implementation of the act, the Department 
asked GAO to describe what it had found because this 
information had not been consolidated. This fact sheet provides 
information that addresses questions from the Department's 
components to help them develop performance measures and 
discusses the processes used to develop the fiscal year 1996 
exhibits, implementation questions and concerns, and 
performance measures used in the exhibits.
    b. Benefits.--This report is helpful to the subcommittee in 
its continuing oversight over the Government Performance and 
Results Act.

19. ``National Fine Center: Progress Made But Challenges Remain for 
        Criminal Debt System,'' May 1995, GAO/AIMD-95-76.

    a. Summary.--This report reviews the efforts of the 
Administrative Office of U.S. Courts (AOUSC) to centralize 
criminal debt accounting and reporting within the National Fine 
Center. AOUSC was required to replace the existing fragmented 
approach to receiving criminal fine payments with a 
centralized, automated criminal-debt processing system for all 
94 judicial districts. The new system was intended to alleviate 
long-standing weaknesses in accounting for, collecting, and 
reporting on monetary penalties imposed on criminals. GAO (1) 
provides information on AOUSC's latest efforts to establish the 
National Fine Center and centralize criminal debt accounting 
and reporting and (2) discusses additional steps AOUSC needs to 
take to complete implementation of the National Fine Center.
    b. Benefits.--The report's findings were brought to the 
subcommittee's attention.

20. ``Performance Measurement: Efforts To Evaluate the Advanced 
        Technology Program,'' May 1995, GAO/RCED-95-68.

    a. Summary.--The Advanced Technology Program seeks to 
provide support on a cost-sharing basis to research and 
development projects in industry. These projects are intended 
to stimulate economic growth and improve the competitiveness of 
U.S. industry. Funding for the program has risen from $68 
million in fiscal year 1993 to $431 million in fiscal year 
1995, more than doubling each year. The President has set a 
goal of $750 million in funding for the program by 1997. The 
agency has reported short-term results that it claims show the 
program is making an impact. This report (1) analyzes these 
short-term results and plans for evaluating the program in the 
future.
    b. Benefits.--This report is helpful to the subcommittee in 
its continuing oversight over the Government Performance and 
Results Act.

21. ``General Government Information Systems Issue Area,'' Active 
        Assignments, July 1995, GAO/AA-95-33 (3).

    a. Summary.--This report was prepared to inform Members of 
Congress and key staff of ongoing assignments in the General 
Accounting Office's General Government Information Systems 
issue area. This report contains assignments that were ongoing 
as of July 6, 1995, and presents a brief background statement 
and a list of key questions to be answered on each assignment.
    b. Benefits.--This report is helpful to the subcommittee in 
preparing for hearings and oversight investigations.

22. ``Federal Management Issues Area,'' Active Assignments, July 1995, 
        GAO/AA-95-11(3).

    a. Summary.--This report was prepared to inform Members of 
Congress and key staff of ongoing assignments in the General 
Accounting Office, Federal Management issue area. This report 
contains assignments that were ongoing as of July 6, 1995, and 
presents a brief background statement and a list of key 
questions to be answered on each assignment.
    b. Benefits.--This report is helpful to the subcommittee in 
its oversight of Federal management issues.

23. ``Information Technology Investment: A Governmentwide Overview,'' 
        July 1995, GAO/AIMD-95-208.

    a. Summary.--Increasingly, Federal agencies' ability to 
improve performance and cut costs depends on automated data 
processing systems that give managers critical financial and 
programmatic information needed to make good decisions, hold 
down costs, and improve service to the public. Major Federal 
investments in information technology, however, have often 
yielded poor results--costing more than expected, falling 
behind schedule, and failing to meet mission needs. To shed 
light on where information technology dollars are being spent, 
what costs and benefits are anticipated, and what risks must be 
managed, this report provides information on overall Federal 
information technology obligations, as well as on programs by 
GAO, OMB, and GSA to identify information technology 
investments that are at risk and in need of corrective action.
    b. Benefits.--This report is helpful to the subcommittee in 
its continuing oversight of information technology issues.

24. ``Inspectors General: Mandated Studies To Review Costly Bank and 
        Thrift Failures,'' July 1995, GAO/GGD-95-126.

    a. Summary.--GAO reviewed the compliance of the Inspectors 
General (IG's) at the Federal Reserve, the Federal Deposit 
Insurance Corporation (FDIC), and the Department of the 
Treasury with the requirement that they issue reports on banks 
or thrifts whose failures result in ``material losses''--those 
that exceed $25 million--to the deposit insurance funds. IG's 
are required to determine why the problems of a bank or a 
thrift result in a material loss to a deposit insurance fund 
and to make recommendations for preventing such losses in the 
future. This report (1) assesses the adequacy of the 
preparation, the procedures, and the audit guidelines that IG's 
have established for performing material loss reviews to ensure 
compliance with their responsibilities under the FDIC; (2) 
verifies the information in the material loss review reports 
upon which the IG's based their conclusions; (3) recommends 
improvements in bank supervision on the basis of a review of 
material loss review reports issued between July 1993 and June 
1994; and (4) assesses the economy and the efficiency of the 
current material loss review process.
    b. Benefits.--This report is helpful to the subcommittee in 
its continued oversight over the Inspector General Act.

25. ``Human Resources Information Systems Issue Area,'' Active 
        Assignments, July 1995, GAO/AA-95-34(3).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Human Resources Information Systems 
issue area. This report contains short summaries of assignments 
that were ongoing as of July 1995.
    b. Benefits.--These summaries are helpful in giving the 
subcommittee information to use in preparation for hearings or 
in conducting investigations in the systems area.

26. ``Program Evaluation and Methodology Issue Area Plan, Fiscal Years 
        1995-1997,'' June 1995, GAO/IAP-95-12.

    a. Summary.--This report contains a strategic plan that 
describes the significance of the issues it addresses, its 
objectives, and the focus of its work. The Program Evaluation 
and Methodology issue area is a technical area of work 
implemented within GAO to use innovative research methodologies 
for evaluating Federal and related programs and activities. The 
evaluations are conducted across a number of substantive areas. 
They include defense, education, agriculture, aging, 
environment, health, public management, transportation, and 
welfare.
    b. Benefits.--The description of the key issues addressed 
in the plan aid the subcommittee in its oversight of management 
issues and of acts such as the Government Performance and 
Results Act.

27. ``Program Evaluation and Methodology Issue Area,'' Active 
        Assignments, July 1995, GAO/AA-95-25(3).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Program Evaluation and Methodology 
Information Systems issue area. This report contains short 
summaries of assignments that were ongoing as of July 1995.
    b. Benefits.--These summaries are helpful in giving the 
subcommittee information to use in preparation for hearings or 
in conducting investigations.

28. ``Information Resources Management Policy and Issues Issue Area,'' 
        Active Assignments, July 1995, GAO/AA-95-31(3).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Information Resources Management 
Policy and Issues issue area. This report contains short 
summaries of assignments that were ongoing as of July 1995.
    b. Benefits.--These summaries are helpful in giving the 
subcommittee information to use in preparation for hearings or 
in conducting investigations.

29. ``Government Business Operations Issue Area,'' Active Assignments, 
        July 1995, GAO/AA-95-13(3).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Government Business Operations 
issue area. This report contains assignments that were ongoing 
as of July 1995, and presents a brief background statement and 
a list of key questions to be answered on each assignment.
    b. Benefits.--This report is helpful to the subcommittee in 
its continuing oversight activities.

30. ``Federal Reorganization: Proposed Merger's Impact on Existing 
        Department of Education Activities,'' June 29, 1995, GAO/T-
        HEHS-95-188.

    a. Summary.--This report provides testimony which addresses 
a congressional proposal to consolidate the Departments of 
Labor and Education along with the Equal Employment Opportunity 
Commission. The proposal envisions saving billions of dollars 
and creating more efficient services; however, GAO testified 
that savings might be elusive if downsizing proceeds too 
quickly or proceeds without careful planning.
    b. Benefits.--This testimony is helpful to the subcommittee 
in its investigation into how to make government work better by 
reorganizing departments and agencies.

31. ``Government Reorganization: Issues Relating to International Trade 
        Responsibilities,'' July 25, 1995, GAO/T-GGD-95-218.

    a. Summary.--This report provides testimony which discusses 
the potential impact that abolishment of the Commerce 
Department would have on managing Federal trade 
responsibilities. GAO examines (1) the basis of the Federal 
role in international trade; (2) the roles played by Commerce 
and other Federal agencies involved in international trade; and 
(3) the means by which interagency mechanisms help integrate 
Federal trade activities. GAO also examines (1) the 
implications of legislation to dismantle the Commerce 
Department for Federal implementation of the trade function; 
(2) opportunities for cost savings in the international trade 
area; and (3) a conceptual framework to help decisionmakers 
identify the ramifications and ensure the success of any 
restructuring effort.
    b. Benefits.--This testimony is helpful to the subcommittee 
in its investigation into how to make government work better by 
reorganizing departments and agencies.

32. ``National Service Programs: AmeriCorps' USA--Early Program 
        Resource and Benefit Information,'' August 1995, GAO/HEHS-95-
        222.

    a. Summary.--In 1993, Congress created AmeriCorps, the 
largest national and community service program since the 
Civilian Conservation Corps of the 1930's. The program is 
administered by the new Federal Corporation for National and 
Community Service. In testimony before Congress, Corporation 
officials estimated that program costs per participant are 
$18,800. That estimate did not include contributions that 
AmeriCorps grantees receive from other Federal agencies, State 
and local governments, and private sources. For program year 
1994-95, GAO estimates that Corporation resources available per 
participant averaged $17,600, slightly less than the 
Corporation's estimate. More than one-third of the money 
available for grantees came from sources outside the 
Corporation, mostly from other Federal agencies and State and 
local governments. Total resources per program participant 
averaged $26,654, of which about $17,600 came from the 
Corporation, $3,200 from other Federal sources, and $4,000 from 
State and local governments. The remaining amount, roughly 
$1,800, came from the private sector. At the seven program 
sites it visited, GAO found that projects had been designed to 
strengthen communities, develop civic responsibility, and 
expand educational opportunities for program participants and 
others.
    b. Benefits.--The report's findings were brought to the 
attention of the subcommittee.

33. ``Public-Private Mix: Effectiveness and Performance of GSA's In-
        House and Contracted Services,'' September 1995, GAO/GGD-95-
        204.

    a. Summary.--GAO reviewed the cost-effectiveness and 
performance of the GSA's real property management services, 
such as building maintenance and custodial services. The cost 
comparison, performance evaluation, and historical tracking 
data GAO reviewed for 54 activities indicated that GSA's 
decisions to retain activities in-house or contract them out 
were sound. Post-decision analyses and evaluations by GSA 
showed that the agency generally obtained services at a 
reasonable cost and at an acceptable level of performance and 
that it made relatively few reversals from its original 
decisions. GAO found no evidence of performance problems in the 
case files for a majority of the 54 sample activities. For 11 
activities, however, GAO found serious problems, such as 
defaults or terminations for unsatisfactory performance. All 
but one of these activities involved maintenance services. In 
general, the files provided evidence of GSA's efforts to 
oversee the activities and take appropriate corrective action, 
including deductions from payments to contractors, when 
necessary. Information on private sector practices that GAO 
reviewed and that GSA gathered to support its reinvention 
efforts indicated that real estate organizations commonly used 
such approaches as performance measurement and benchmarking to 
manage and evaluate their operations and activities and to 
decide whether to contract them out. The approaches offer an 
opportunity for GSA to improve the oversight and evaluation of 
its services. Although GSA has begun to implement some 
performance measures, such as customer satisfaction surveys, 
the specific performance measures that it will use after its 
reorganization is completed are still being developed.
    b. Benefits.--This report is helpful to the subcommittee in 
its oversight responsibilities of the General Services 
Administration.

34. ``Health, Education, Employment, Social Security, Welfare, 
        Veterans,'' September 1995, GAO/HEHS-95-261W.

    a. Summary.--This booklet lists GAO documents on Government 
programs related to health, education, employment, Social 
Security, welfare, and veterans issues, which are administered 
by the Departments of Health and Human Services, Labor, 
Education, and Veterans Affairs. The report identifies other 
reports and testimony issued during the past months and 
summarizes key products. It also lists all documents published 
during the past year, organized chronologically by subject.
    b. Benefits.--This survey document makes available GAO 
resources.

35. ``Financial Institutions and Market Issue Area,'' Active 
        Assignments, October 1995, GAO/AA-95-7(4).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Financial Institutions and Market 
issue area. This report contains short summaries of assignments 
that were ongoing as of July 1995.
    b. Benefits.--These summaries are helpful in giving the 
subcommittee information to use in preparation for hearings or 
in conducting investigations.

36. ``Program Evaluation and Methodology Issue Area,'' Active 
        Assignments, October 1995, GAO/AA-95-25(4).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Program Evaluation and Methodology 
Information Systems issue area. This report contains short 
summaries of assignments that were ongoing as of October 1995.
    b. Benefits.--These summaries are helpful in giving the 
subcommittee information to use in preparation for hearings or 
in conducting investigations.

37. ``Federal Management Issue Area: Active Assignments,'' October 
        1995, GAO/AA-95-11(4).

    a. Summary.--This report was prepared to inform Members of 
Congress and key staff of ongoing assignments in the General 
Accounting Office's Federal Management issue area. This report 
contains assignments that were ongoing as of October 2, 1995, 
and presents a brief background statement and a list of key 
questions to be answered on each assignment.
    This report was compiled from information available in 
GAO's internal management information system. The information 
was downloaded from computerized data bases intended for 
internal use.
    b. Benefits.--This report is helpful to the subcommittee in 
preparing for hearings and oversight investigations.

38. ``Corporate Financial Audits Issue Area: Active Assignments,'' 
        October 1995, GAO/AA-95-27(4).

    a. Summary.--This report was prepared to inform Members of 
Congress and key staff of ongoing assignments in the General 
Accounting Office's Corporate Financial Audits issue area. This 
report contains assignments that were ongoing as of October 2, 
1995, and presents a brief background statement and a list of 
key questions to be answered on each assignment.
    This report was compiled from information available in 
GAO's internal management information system. It was downloaded 
from computerized data bases intended for internal use.
    b. Benefits.--This report is helpful to the subcommittee in 
preparing for hearings and oversight investigations.

39. ``Information Resources Management Policy and Issues Area,'' Active 
        Assignments, October 1995, GAO/AA-95 31(4).

    a. Summary.--This report was prepared primarily to inform 
Members of Congress and key staff of ongoing assignments in the 
General Accounting Office's Information Resources Management 
Policy and Issues issue area. This report contains short 
summaries of assignments that were ongoing as of October 1995.
    b. Benefits.--These summaries are helpful in giving the 
subcommittee information to use in preparation for hearings or 
in conducting investigations.

40. ``Los Angeles Earthquake: Opinions of Officials on Federal 
        Impediments to Rebuilding,'' June 1994, GAO/RCED-94-193.

    a. Summary.--This report summarizes the views of State and 
local officials regarding the Federal role in the recovery from 
the Northridge earthquake in 1994. Many State and local 
officials were pleased with the emergency response immediately 
following the earthquake, but were concerned about the long-
term recovery phase, given the problems associated with Federal 
laws and regulations that occurred after the 1989 Loma Prieta 
earthquake in northern California. They felt encouraged by 
recent policy and regulatory changes made by the Federal 
Emergency Management Agency (FEMA) and believed that changes 
could improve the agency's assistance efforts. At the same 
time, some of these officials cited other barriers to recovery.
    b. Benefits.--The subcommittee held a field hearing on the 
Northridge Earthquake on January 19, 1996. This report was 
useful in the preparation for the hearing.

41. ``Government Business Operations Issue Area--Active Assignments,'' 
        October 1995, GAO/AA-95-13 (4).

    a. Summary.--This report was prepared to inform Members of 
Congress and key staff of ongoing assignments in the General 
Accounting Office's Government Business Operations issue area. 
This report contains assignments that were ongoing as of 
October 2, 1995, and presents a brief background statement and 
a list of key questions to be answered on each assignment.
    b. Benefits.--This report is helpful to the subcommittee in 
its ongoing oversight activities.

42. ``Electronic Benefits Transfer: Use of Biometrics To Deter Fraud in 
        the Nationwide EBT Program,'' September 1995, GAO/OSI-95-20.

    a. Summary.--The National Performance Review recommended in 
1993 that the Federal Government consider paying individuals by 
using electronic rather than paper means. In 1994, a task force 
composed of representatives from various Federal agencies 
estimated that more than $110 billion in annual cash benefits 
and food assistance could be delivered with EBT, including food 
stamps, Social Security payments, and Federal pensions. EBT 
systems are already providing the U.S. Department of 
Agriculture investigators and program managers with data that 
has been used to target retailers illegally trafficking in food 
stamps benefits. However, EBT alone has not effectively 
deterred fraud in this program. An EBT program without the 
enhanced security of biometric verification--an automated 
method to measure a physical characteristic or personal trait--
raises a genuine concern about the potential for higher program 
costs and losses. GAO believes that fingerprint verification is 
the biometric option that offers potential for reducing fraud 
in EBT systems. Although development of an EBT system with 
biometric safeguards would be more expensive, largely because 
of the need to purchase hardware and software, and would take 
longer to implement nationwide, such system enhancement is 
needed to ensure that the future system is practical and not 
beset by fraud.
    b. Benefits.--The report is useful to the subcommittee in 
its ongoing investigations into the merits of mandatory 
electronic benefits transfers.

43. ``Financial Audit: Expenditures by Six Independent Counsels for the 
        Six Months Ended March 31, 1995,'' September 1995, GAO/AIMD-95-
        233.

    a. Summary.--This report presents the results of GAO's 
audit of expenditures reported by six independent counsels for 
the 6 months ended March 31, 1995. GAO found that the 
statements of expenditures for independent counsels Arlin M. 
Adams, Joseph E. DiGenova, Robert B. Fiske, Jr., Donald C. 
Smaltz, Kenneth W. Starr, and Lawrence E. Walsh were reliable 
in all material respects. GAO also did limited tests of 
internal controls and discovered a material weakness in 
internal controls over reporting of expenditures. GAO found no 
reportable noncompliance with laws and regulations that it 
tested.
    b. Benefits.--This report is helpful to the subcommittee in 
its oversight of financial management issues.

44. ``Schools and Workplaces: An Overview of Successful and 
        Unsuccessful Practices,'' August 1995, GAO/PEMD-95-28.

    a. Summary.--The Nation's well-being depends on its ability 
to create and sustain well-paying jobs and to improve the 
performance of U.S. business in an increasingly complex world 
economy. For more than a decade, Americans have been concerned 
that the Nation is not doing all that is needed to meet these 
challenges. In particular, they have raised concerns about the 
quality of education provided by elementary and secondary 
schools, especially those attended by disadvantaged students, 
and about the productivity and performance of workers and their 
employers. This report summarizes research findings on what has 
and has not been successful in schools and workplaces.
    b. Benefits.--The report aids the subcommittee in its 
evaluation of training and capacity in the Federal Government.

45. ``Land Management Systems: Progress and Risks in Developing BLM's 
        Land and Mineral Record System,'' August 1995, GAO/AIMD-95-180.

    a. Summary.--The Bureau of Land Management's (BLM) 
Automated Land and Mineral Record System/Modernization, which 
is estimated to cost $428 million, is intended to improve BLM's 
ability to record, maintain, and retrieve land description, 
ownership, and use information. To date, the Bureau has 
compiled most of the project's tasks according to the schedule 
milestones set in 1993. In coming months, the work will become 
more difficult as BLM and the primary contractor try to 
complete, integrate, and test the new software system and meet 
the current schedule. Slippages may yet occur because little 
time was allocated to deal with unanticipated problems. BLM 
recently sought to obtain independent verification and 
validation to ensure that the new system software meets the 
Bureau's requirements. A key risk remains, however. BLM's plans 
include stress testing only a portion of the Automated Land and 
Mineral Record System/Modernization, rather than the entire 
project, to ensure that all systems and technology can 
successfully process workloads expected during peak operating 
periods. By limiting the stress test, BLM cannot be certain 
that the system's information technology will perform as 
intended during peak workloads.
    b. Benefits.--This report is helpful to the subcommittee in 
its oversight of the Government's use of information 
technology.

46. ``Highway Funding: Alternatives for Distributing Federal Funds,'' 
        November 1995, GAO/RCED-96-6.

    a. Summary.--Under the Federal-aid highway program, 
billions of dollars are distributed to the States each year for 
the construction and repair of highways and related activities. 
The Intermodal Surface Transportation Efficiency Act of 1991 
authorized about $120 billion for this program for fiscal years 
1992 through 1997. This report discusses (1) the way the 
formula works and the relevancy of the data used for the 
formula and (2) the major funding objectives implicit in the 
formula and the implications of alternative formula factors for 
achieving them.
    b. Benefits.--The report's findings were brought to the 
subcommittee's attention.

47. ``Government Contractors: Selected Agencies' Efforts To Identify 
        Organizational Conflicts of Interest,'' October 1995, GAO/GGD-
        96-15.

    a. Summary.--This report reviews Federal agencies' 
implementation of the Office of Management and Budget's 1989 
policy letter entitled ``Conflict of Interest Policies 
Applicable to Consultants.'' It also reviews organizational 
conflict of interest requirements applicable to advisory and 
assistance service contractors, including consultants. GAO (1) 
determines whether selected agencies have complied with 
requirements to identify and evaluate potential organizational 
conflicts of interest and (2) identifies ways that agencies 
might improve their screening for such conflicts. GAO focuses 
on the Energy Department, the EPA, and the Navy because they 
are among the largest users of contracted advisory and 
assistance services.
    b. Benefits.--This report is helpful to the subcommittee's 
oversight and investigations into contracting issues.

48. ``Office of Management and Budget--Changes Resulting From the OMB 
        2000 Reorganization,'' December 1995, GAO/GGD/AIMD-96-50.

    a. Summary.--This report describes the changes that have 
occurred as a result of OMB 2000--a major reorganization and 
process change at the Office of Management that took place in 
1994. The report was requested by the Government Reform and 
Oversight Committee and the Senate Governmental Affairs 
Committee.
    b. Benefits.--The report was helpful to the subcommittee in 
preparing for its hearing on OMB reforms.

49. ``Federal Research: Information on Fees for Selected Federally 
        Funded Research and Development Centers,'' December 1995, GAO/
        RCED-96-31FS.

    a. Summary.--This report addresses variations in the fees 
paid by sponsoring Federal agencies for the management of the 
federally Funded Research and Development Centers, the formulas 
used to calculate the fees, and the justifications for paying 
the fees provided by the sponsoring Federal agencies. It 
provides information on Federal policies and practices 
concerning the fees paid by the Department of Energy, the 
Department of Defense, and the National Aeronautics and Space 
Administration (NASA) for managing the Centers. It identifies 
the extent to which the three agencies have regulations 
governing these fees: the annual amounts and purposes of the 
fees provided by Energy, Defense, and NASA during fiscal year 
1994; the uses made by Energy's contractors of their total 
funds during fiscal year 1994; and the effect of Energy's 
February 1994 contract reforms on the fees for the Department's 
Centers.
    b. Benefits.--This answers congressional questions as to 
whether there are Governmentwide guidelines for setting the 
fees, and on the reasonableness of the fees. Defense has 
specific regulations for its Centers' fees, Energy uses its 
regulations covering the development of fees for the 
contractors that manage and operate its facilities, and NASA 
uses the general Federal and NASA regulations that apply to its 
other contracts.

50. ``Federal Research: Preliminary Information on the Small Business 
        Technology Transfer Program,'' January 1996, GAO/RCED-96-19.

    a. Summary.--This report was required by the Small Business 
Research and Development Enhancement Act of 1992 and focuses on 
the implementation of the Small Business Technology Transfer 
Pilot Program which was established by the act. It discusses 
the quality and commercial potential of the program's research 
as shown by technical evaluations of the winning proposals in 
the first year of the program. It also discusses how agencies 
addressed potential conflicts of interest resulting from the 
involvement of federally funded research and development 
centers in the program and agencies' views on the effects of 
and need for the program in view of its close similarity to the 
Small Business Innovation Research Program.
    b. Benefits.--In order to be eligible for a STTR award, a 
small business must interact with a nonprofit research entity 
such as a university or a Government funded R&D center. This 
requirement is unique to STTR, and was established in hopes of 
providing a more effective means for transferring new knowledge 
from institution to industry. If this requirement does what is 
intended, it will increase private-sector commercialization of 
new ideas and methods derived from Government R&D, and 
stimulate entrepreneurial and technological innovations which 
aid slumping markets as well as create new ones.

51. ``Financial Management--Implementation of the Cash Management 
        Improvement Act,'' January 1996, GAO/AIMD-96-4.

    a. Summary.--GAO conducted its review as required by the 
Cash Management Improvement Act of 1990 (P.L. 101-453). The act 
focuses on promoting equity in the exchange of funds between 
the Federal Government and the States. It provides that States 
pay interest to the Federal Government if they draw funds in 
advance of need and the Federal Government pays interest to the 
States if the Federal Government agency does not reimburse the 
States in a timely manner when States use their own funds. The 
first year of implementation of the act resulted in a 
cumulative net State interest liability due to the Federal 
Government of approximately $34 million, over $41 million owed 
by the States offset by $4.7 million and $2.5 million owed the 
States by the Federal Government for interest and reimbursable 
costs, respectively.
    b. Benefits.--The Cash Management Improvement Act is one of 
the laws in the subcommittee's jurisdiction and this report 
aided the subcommittee in its oversight of agency and State 
compliance with the act. This act has brought cash management 
awareness back to the forefront at both State and Federal 
levels. Also under this act, the transfer of funds from the 
States to Washington and vice-versa would be interest neutral, 
with neither entity incurring any interest liability. Finally, 
by implementing its plans to begin streamlining the act's 
regulations and using the results of single audits as a means 
of overseeing State activities as well as enforcing the act's 
requirements, the Financial Management Service should be able 
to further improve CMIA's effectiveness and ease any concerns 
about administrative burden.

52. ``Budget Issues Compliance Report Required by the Budget 
        Enforcement Act of 1990,'' February 1996, GAO/AIMD-96-41.

    a. Summary.--This compliance report was required by the 
Budget Enforcement Act of 1990. It covers reports issued by the 
Office of Management and Budget (OMB) and the Congressional 
Budget Office (CBO) during the session of the Congress ending 
January 3, 1996. GAO is required to issue this compliance 
report 45 days after the end of a session of the Congress. The 
report noted that OMB and CBO differed in making (1) 
adjustments to the discretionary spending limits or caps, (2) 
estimates of discretionary appropriations, and (3) estimates of 
PAYGO legislation.
    b. Benefits.--The subcommittee's jurisdiction includes the 
Executive Office of the President of which the Office of 
Management and Budget is a component part. It also has 
jurisdiction over budget and accounting measures generally. 
This report was useful to the subcommittee in reviewing 
compliance with the Budget Enforcement Act.

53. ``Embedded Computers: B-1B Computers Must be Upgraded to Support 
        Conventional Requirements,'' February 1996, GAO/AIMD-96-28.

    a. Summary.--This report reviews the Air Force's efforts to 
upgrade the computers and software for the B-1B Bomber 
Conventional Mission Upgrade Program. It discusses recent 
decisions the Air Force has made in upgrading the B-1B's 
embedded computer systems ranging from a simple memory upgrade, 
to installing all new computer processors and Ada Software--a 
more modern computer language which offers advantages in 
design, coding, and documentation, along with cost-effective 
software maintenance and support. However, the only affordable 
option was a simple memory upgrade.
    b. Benefits.--Initial planned computer improvements did not 
go far enough, in the GAO's opinion. The Air Force subsequently 
increased funding and plans to convert its outdated software to 
Ada Software, an option the GAO agrees with.

54. ``Financial Audit: Federal Family Education Loan Program's 
        Financial Statements for Fiscal Years 1994 and 1993,'' GAO/
        AIMD-96-22.

    a. Summary.--This gives the results of the GAO's review of 
the Department of Education's Office of Inspector General (OIG) 
financial audit of the Federal Family Education Loan Program's 
Principal Financial Statements and its internal controls and 
compliance with laws and regulations for the fiscal year ended 
September 30, 1994. The OIG was unable to express an opinion on 
the financial statements taken as a whole because student loan 
data on which Education based its costs to be incurred on 
outstanding guaranteed loans was not reliable.
    b. Benefits.--The subcommittee continues to monitor agency 
compliance with the Chief Financial Officers Act of 1990 and 
the Government Management Reform Act of 1994. These laws 
require the executive branch agencies to prepare and submit to 
Congress audited financial statements describing their 
financial status. This is one of the required reports and aids 
the subcommittee in performing its oversight function.

55. ``Budget Issues Selected GAO Work on Federal Financial Support of 
        Business,'' March 1996, GAO/AIMD/GGD-96-87.

    a. Summary.--This summarizes previously issued GAO work on 
spending programs and tax benefits available to businesses. The 
Federal Government provides financial benefits to businesses as 
a means of fulfilling a wide range of public policy objectives. 
Programs involved include areas such as programs in 
international affairs, research, energy, natural resources and 
environment, agriculture, and transportation. More 
specifically, the research and experimentation tax credit is 
intended to stimulate additional research spending. It allows 
taxpayers to reduce their tax liabilities by 20 percent of 
qualified R&D expenditures that go over a base amount. Another 
example of a benefit provided by the Government is a 15-percent 
tax credit which is available for expenditures related to 
enhanced oil recovery techniques. Petroleum production tax 
incentives include increasing energy security, rewarding risk 
taking, or advocating investments in new technologies.
    b. Benefits.--This report is helpful to the subcommittee in 
that it reinforces our belief that the Federal policy of giving 
incentives to encourage businesses to further Federal 
Government policy objectives is working.

56. ``CFO Act Financial Audits--Increased Attention Must be Given to 
        Preparing Navy's Financial Reports,'' March 1996, GAO/AIMD-96-
        7.

    a. Summary.--This report was sent to the Secretary and 
Under Secretary of Defense and the Secretary and Assistant 
Secretary for Financial Management and Comptroller to report on 
the reliability of the Navy's fiscal year 1994 consolidated 
financial reports so that the Navy and the Defense Finance and 
Accounting Service (DFAS) can:
         Improve the credibility of the Navy's 
        financial reports, starting with those prepared for 
        fiscal year 1995, and
         Enhance their ability to prepare required 
        reliable financial statements for the Navy, beginning 
        with those for fiscal year 1996.
    The Navy accounts for about one-third of the gross budget 
authority of the Department of Defense (DOD), controls almost 
half of DOD's assets, and employs one-third of all DOD 
personnel. The Navy's fiscal year 1994 consolidated financial 
reports, which were submitted to the Department of the Treasury 
and used to prepare Governmentwide financial reports, showed 
$506 billion in assets, $7 billion in liabilities, and $87 
billion in operating expenses. Each of these amounts was 
substantially misstated. The errors included:
         $66 billion of material omissions, including 
        $31 billion of ammunition, $14 billion of inventories, 
        and $7 billion of unfunded liabilities for projected 
        environmental cleanup costs that were omitted 
        altogether, and
         $43 billion of items not recorded such as $24 
        billion of structures and facilities and $8 billion of 
        Government-furnished and contractor-acquired material 
        that were counted twice and $9 billion of understated 
        revenues due to an erroneous calculation.
    The Navy's financial reports also excluded billions of 
dollars invested in building aircraft and missiles and 
modernizing of weapons systems. However, because of the poor 
state of Navy and DFAS financial records, we could not 
determine the amounts of these costs and we cannot be sure that 
we identified all significant mistakes in the Navy's financial 
reports. The GAO stated in the report that the root cause of 
the Navy's financial reporting deficiencies is the longstanding 
failure to use basic internal controls and to instill 
discipline in financial operations.
    b. Benefits.--The GAO reports on Department of Defense 
financial management and related information management issues 
which are extremely helpful to the subcommittee. They have been 
used in oversight hearings, and serve as a resource for 
continued oversight. The subcommittee plans to continue its 
oversight over agency compliance with the requirements for 
Governmentwide audited financial statements.

57. ``Financial Audit--Panama Canal Commission's 1995 and 1994 
        Financial Statements,'' March 1996, GAO/AIMD-96-61.

    a. Summary.--The auditors' opinion given was that the 
Panama Canal Commission's financial statements present fairly, 
in all material respects, its financial position as of 
September 30, 1995 and 1994, and the results of its operations, 
changes in capital, and cash flows for the years then ended, in 
conformity with generally accepted accounting principles.
    On February 10, 1996, the Panama Canal Act of 1979 was 
amended by Public Law No. 104-106, sections 3521 and 3529, to 
make the Panama Canal Commission a wholly owned Government 
corporation. The Commission can now hire independent auditors 
to conduct the audit in lieu of the Comptroller General. In 
addition to conducting the audit of the Commission's financial 
statements, the auditor is to examine the Commission's forecast 
that it will be in a position to meet its financial liabilities 
on December 31, 1999, when the Panama Canal Treaty terminates 
and the Republic of Panama will assume full responsibility for 
the Canal.
    b. Benefits.--This report provided the subcommittee with 
ongoing accountability information on the activities of the 
Panama Canal Commission, now a wholly owned Government 
corporation. The subcommittee also has jurisdiction over the 
Government Corporation Control Act.

58. ``Tax Policy and Administration 1995 Annual Report on GAO's Tax-
        Related Work,'' March 1996, GAO/GGD-96-61.

    a. Summary.--This report is submitted in compliance with 31 
U.S.C. 719(d) and summarizes GAO's work on tax policy and 
administration in fiscal year 1995. Appendices describe: (1) 
agency actions taken on GAO's recommendations, as of December 
31, 1995; (2) GAO recommendations made to Congress before and 
during fiscal year 1995 that have not been acted upon; and (3) 
assignments for which GAO was authorized access to tax 
information under 26 U.S.C. 6103(i)(7)(A). At a time when the 
Federal Government faces hard choices in spending in order to 
continue to reduce the deficit and use resources wisely, all 
Federal expenditures need to be carefully reviewed. This report 
focused on strengthening and extending expenditure control 
techniques now used by congressional tax-writing committees, 
integrating tax expenditures further into the budget process, 
and reviewing tax expenditures jointly with related Federal 
outlay programs.
    b. Benefits.--During 1996 the subcommittee held hearings on 
management practices at the Internal Revenue Service, in which 
IRS management of records was discussed. This report was 
helpful in preparing for the hearing. This report also shed 
light on the importance for tax-writing committees to explore 
opportunities to exercise more scrutiny over indirect spending 
through tax expenditures.

59. ``Telecommunication: Initiatives Taken by Three States to Promote 
        Increased Access and Investment,'' March 1996, GAO/RCED-96-68.

    a. Summary.--This report describes how selected States have 
encouraged private investment in advanced telecommunications, 
how these States have encouraged widespread access, and what 
lessons their experiences could provide for others. Three 
States, Iowa, Nebraska, and North Carolina, are considered 
leaders in the development of statewide advanced 
telecommunications.
    b. Benefits.--The report provides guidance for Congress in 
ensuring that advanced telecommunication programs will be 
successful. In the report, GAO stressed the importance of 
building and maintaining consensus among telecommunications 
companies, anticipated users, State legislators, and State 
executive branch officials.

60. ``Management Reform: Status of Agency Reinvention Lab Efforts,'' 
        March 1996, GAO/GGD-96-69.

    a. Summary.--Part of the administration's National 
Performance Review initiative was the establishment of 
reinvention labs in a number of departments and agencies. The 
GAO found that the labs addressed a variety of topics. Although 
customer service was stated as a goal, the actual customers 
were often other Federal agencies, not the general public. The 
report stated that the labs' results suggest a number of 
promising approaches to improving agency work processes. The 
real value will be realized only when the operational 
improvements initiated, tested, and validated by the labs 
achieve wider adoption. The GAO recommends that the Director of 
OMB ensure that a clearinghouse of information about the labs 
be established. It should contain information about the 
location of each lab, the issues being addressed, points of 
contact for further information about the lab, and any 
performance information demonstrating the lab's results.
    b. Benefits.--The subcommittee has been monitoring the 
claims of the National Performance Review (NPR) since its 
inception. This report was helpful to the subcommittee and is 
used in its evaluation of executive branch claims for NPR 
achievements.

61. ``DOE Management--DOE Needs to Improve Its Analysis of Carryover 
        Balances,'' April 1996, GAO/RCED-96-57.

    a. Summary.--This report examines the effectiveness of the 
Department of Energy's approach for identifying the funding 
balances remaining from prior years' budgets that exceed the 
requirements of the Department's programs and thus may be 
available to reduce the budget request for the new fiscal year. 
The report also examines whether the process for analyzing 
these balances, known as carryover balances, could be improved. 
It includes a recommendation that the Secretary of Energy 
develop a more effective approach to analyzing carryover 
balances. It would involve developing standard goals for all 
programs' carryover balances that represent the minimum needed 
to meet the programs' requirements, projecting what the 
carryover balances will be for all programs at the beginning of 
the fiscal year for which new obligational authority is being 
requested, and comparing the programs' goals and projected 
balances to identify the balances that exceed requirements. 
Under 31 U.S.C. 720 the Secretary must submit a written 
statement of the actions taken on the recommendation to the 
Senate Governmental Affairs Committee and the House Committee 
on Government Reform and Oversight not later than 60 days after 
the date of the letter accompanying the report, April 12, 1996.
    b. Benefits.--This report is of help to the subcommittee in 
its examination of management practices in the agencies. The 
subcommittee now knows that the DOE does not use a standard 
approach for identifying surplus carryover balances. Because of 
this DOE cannot be positive that it has reduced its balances to 
the proper level to operate its programs. The current DOE 
approach of making broad estimates has caused some programs to 
receive too much, and others too little. This report has got 
the DOE to start to formulate a more structured system to abide 
by which in return will yield more accurate estimates.

62. ``Financial Audit: U.S. Government Printing Office's Financial 
        Statements for Fiscal Year 1995,'' GAO/AIMD-96-52.

    a. Summary.--This report presents the results of the audit 
of the U.S. Government Printing Office's (GPO) financial 
statements for the fiscal year ended September 30, 1995. The 
firm of Arthur Andersen LLP was hired to do the audit. Arthur 
Andersen found that GPO does operate an effective internal 
control structure to oversee financial reporting. In addition, 
Arthur Andersen found that GPO should tighten up security over 
computer access by programmers and systems application 
personnel to the financial management and electronic data 
processing systems (EDP), strengthen backup planning for the 
financial management and EDP systems, and begin to reconcile 
ledgers for accounts payable and receivable on a more regular 
basis.
    b. Benefits.--This helps the subcommittee in its continued 
oversight of financial management in the executive branch. This 
report disclosed that GPO's consolidated financial statements 
are prepared in accordance with generally accepted accounting 
principles (GAAP). GPO's accounting system includes internal 
controls designed to provide reasonable assurance that assets 
are safeguarded against loss from unauthorized use, and that 
transactions are properly recorded. This report enabled the 
subcommittee to examine a very solid accounting system in which 
it could pass on information about to other agencies with 
accounting problems.

63. ``Overseas Real Estate: Millions of Dollars Could be Generated by 
        Selling Unneeded Real Estate,'' GAO/NSIAD-96-36.

    a. Summary.--The Department of State owns more than $10 
billion in real estate at 200 locations overseas. The report 
reviewed the Department's efforts to identify and sell excess 
or underutilized real estate and to use the proceeds for other 
high-priority real property needs. In 1995, GAO reported on the 
potential budget savings that selling high-value properties in 
Tokyo could have and on the problems in State's management of 
overseas real property. This report: (1) identifies real estate 
at other locations that could possibly be sold to provide funds 
for other real estate needs, (2) sets forth the problems State 
has in deciding what properties to dispose of, and (3) 
discusses how State uses the proceeds from properties it does 
sell.
    b. Benefits.--The report will assist the subcommittee with 
its oversight responsibilities and its jurisdiction relating to 
excess and surplus real property under the Federal Property and 
Administrative Services Act of 1949.

64. ``Telecommunications Network: NASA Could Better Manage Its Planned 
        Consolidation,'' April 1996, GAO/AIMD-96-33.

    a. Summary.--This is an assessment of the National 
Aeronautics and Space Administration's plans to consolidate the 
management and operations of its wide area telecommunications 
networks. The report assessed whether consolidation would 
result in savings and whether NASA considered a full range of 
approaches to consolidation so as to ensure maximum savings. 
The GAO reviewed reports prepared by NASA teams who are 
responsible for evaluating the agencies activities and 
recommending ways to save money in addition to interviewing 
selected members of the teams, officials from NASA 
headquarters, and officials from NASA's five networks at three 
centers.
    b. Benefits.--The report assessed whether savings would 
result from the consolidation, and whether NASA planned to 
maximize such savings. This aids the subcommittee in its 
oversight of telecommunications issues.

65. ``USDA Telecommunications: More Effort Needed to Address Telephone 
        Abuse and Fraud,'' April 1996, GAO/AIMD-96-59.

    a. Summary.--This report stated that the Department of 
Agriculture does not cost-effectively manage and plan its 
telecommunications resources. In addition the report discusses 
problems identified involving fraud and abuse of the 
Department's telephone resources and provides an update on 
USDA's efforts to address recommendations from our past report.
    b. Benefits.--USDA does not have adequate controls for 
ensuring that its telephones are used properly. Telephone bills 
are generally not reviewed. USDA is, accordingly, at risk to 
telephone abuse and fraud. Since the issuance of the report, 
USDA has begun to correct some of the telecommunications 
management weaknesses.

66. ``Customs Service Modernization: Strategic Information Management 
        Must Be Improved for National Automation Program to Succeed,'' 
        May 1996, GAO/AIMD-96-57.

    a. Summary.--This report was completed for Hon. Philip M. 
Carne, chair, Subcommittee on Trade, Committee on Ways and 
Means, House of Representatives and assesses the U.S. Customs 
Service's efforts to modernize its automated systems. GAO in 
the report recommends that, prior to additional Customs 
Distributed Computing for the Year 2000 (CDC-2000) equipment 
purchases (except for those for office automation needs) and 
before beginning to develop any applications software that will 
run on this equipment, the Commissioner of Customs should:
         Assign accountability and responsibility for 
        implementing National Customs Automation Program 
        (NCAP).
         Ensure that the export and passenger business 
        processes are completed and the requirements generated 
        from these two tasks, along with those of the import 
        process requirements, are used to determine how Customs 
        should accomplish its mission in the future, including 
        who will perform operations and where they will be 
        performed; what functions must be performed as part of 
        these operations, what information is needed to perform 
        these functions, and where data should be created and 
        processed to produce such information; what alternative 
        processing approaches could be used to satisfy Customs' 
        requirements, and what are the costs, benefits, and 
        risks of each approach; and what processing approach is 
        optimal, and not resume CDC-2000 purchases unless CDC-
        2000 is determined to be the optimal approach.
         Complete the agency's effort to redefine the 
        role of the systems steering committee to include 
        managing systems as investments as required by the 
        Office of Management and Budget's Circular A-130 and 
        information technology investment guide. This effort 
        should include developing and using explicit criteria 
        to guide system development decision and using the 
        criteria to revisit whether Custom's planned 
        investments, including Automated Commercial Environment 
        (ACE) and Automated Commercial System enhancements, are 
        appropriate.
         Direct the steering committee to ensure that 
        systems strictly adhere to Customs' system development 
        steps. As part of this oversight, we recommend that 
        before applications are developed for ACE, the steering 
        committee ensure that Customs resolves how to 
        incorporate NCAP-mandated functions into ACE and 
        prepares a security plan.
    b. Benefits.--The subcommittee will monitor whether the 
recommendations are acted upon. This is part of the 
subcommittee's effort to encourage improvement in management 
practices, including information technology management, in the 
executive branch.

67. ``Defense Procurement: E-Systems' Reporting of Alleged Wrongdoing 
        to Army's Fraud Division,'' May 1996, GAO/OSI-96-6.

    a. Summary.--The Memcor Agreement between the Department of 
the Army and E-Systems, Inc., requires E-Systems to report all 
hotline allegations to the Army's Procurement Fraud Division. 
This report discusses whether E-Systems violated the agreement, 
and whether the Government experienced any loss as a result of 
E-Systems' actions.
    b. Benefits.--A potential loss to the Government occurred 
in one hotline case that the GAO examined. E-Systems actions 
may have cost the Government about $228,000, resulting from 
mischarged labor hours. As of April 1996, the resolution of 
this issue was still in process.

68. ``Financial Management: BIA's Tribal Trust Fund Account 
        Reconciliation Results,'' GAO/AIMD-96-63.

    a. Summary.--This report was produced at the request of 
Hon. John McCain, chair, and Hon. Daniel K. Inouye, vice chair, 
Committee on Indian Affairs, U.S. Senate. It reviews the Bureau 
of Indian Affairs' efforts to reconcile and certify tribal 
trust fund accounts. GAO provides its evaluation if the results 
of the reconciliation effort, including (1) whether the 
reconciliation report clearly communicated the results of the 
reconciliation and fully disclosed known limitations, (2) 
whether the certification contract addressed the extent to 
which the reconciliation provided as complete an accounting as 
possible, and (3) the tribes' responses to BIA's reconciliation 
report.
    Tribal accounts could not be fully reconciled or audited 
due to missing records and the lack of an audit trail in BIA's 
systems. Tribes have expressed concerns about the scope and 
results of the reconciliation process. BIA may be unable to 
resolve those concerns. Tribes have claimed that BIA has not 
consistently provided them with statements on their account 
balances, that their trust fund accounts have never been 
reconciled, and that BIA planned to contact with a third party 
for management of trust fund accounts. Accordingly, Congress 
required BIA to reconcile trust fund accounts before they can 
be transferred to any third party.
    b. Benefits.--This report shows the BIA's effort to 
reconciliate Tribal Trust Fund Accounts. The report addresses 
several areas of reconciliation limitations and inadequacies of 
the BIA including: lack of a known universe of transactions and 
leases and the use of issue papers to approve changes in 
reconciliation scope due to unforseen circumstances that could 
not be completed or performed. The report acknowledges these 
tribal accounts could be included in a settlement process, for 
any attempt to reconcile these accounts would be costly and 
limited.

69. ``Weather Forecasting--Recommendations to Address New Weather 
        Processing System Development Risks,'' May 1996, GAO/AIMD-96-
        74.

    a. Summary.--The report describes recommendations made by 
GAO in testimony provided on February 29, 1996 to the 
Subcommittee on Energy and Environment, House Committee on 
Science. The testimony dealt with the National Weather 
Service's (NWS) Advanced Weather Interactive Processing System 
(AWIPS). The recommendations, if implemented, will strengthen 
NWS's ability to achieve a fair return on its AWIPS investment.
    b. Benefits.--This aids the subcommittee in its oversight 
of technology issues.

70. ``The Federal Judiciary: Reviews of Court Operations Should Adhere 
        to Oversight Standards,'' June 1996, GAO/GGD-96-114.

    a. Summary.--The report examines how the Administrative 
Court of the U.S. Courts assessed the efficiency of local court 
operations and promoted the use of efficient administrative 
practices within the judiciary. Since November 1995, the AOUSC 
Office of Audit has chosen to follow generally accepted 
Government auditing standards although not required by statute 
to do so.
    b. Benefits.--This report aided the subcommittee in its 
oversight of Federal financial management issues. Legislation 
was proposed by Senator Hank Brown that would have required the 
Judiciary to conduct studies of whether the CFO Act should 
apply to it. The information in this report helped the 
subcommittee arrange for that requirement to be dropped from 
the final legislation.

71. ``Financial Management--DOD Needs to Lower the Disbursement 
        Prevalidation Threshold,'' June 1996, GAO/AIMD-96-82.

    a. Summary.--This report was requested by the chairman of 
the Subcommittee on National Security, Committee on 
Appropriations, the chairman of the Subcommittee on Government 
Management, Information, and Technology, Committee on 
Government Reform and Oversight, (both House committees) the 
ranking minority member, Senate Committee on Governmental 
Affairs and three members of the Senate, Barbara Boxer, Charles 
Grassley and William Roth.
    The report assessed the Department of Defense's efforts to 
reduce problem disbursements and its implementation of section 
8137 of Public Law 103-335, Department of Defense 
Appropriations Act, 1995, which required that each disbursement 
exceeding $5 million be matched to the appropriate obligations 
in DOD's official accounting records before the disbursement is 
made.
    The Congress thinks it important that DOD prematch, or 
prevalidate, disbursements with recorded obligations, which is 
an important control for ensuring that agency funds are used as 
authorized by the Congress and the DOD. Without such matching, 
there is a substantial risk that fraudulent or erroneous 
payments may be made without being detected and that cumulative 
amounts of disbursements may exceed appropriated amounts and 
other legal limits. In reducing these risks, the provisions of 
the act are intended to strengthen accountability over DOD's 
disbursement process, which has been plagued by longstanding 
problems.
    The DOD IG participated in the review and has issued a 
separate report, ``Implementation of the DOD Plan to Match 
Disbursements to Obligations Prior to Payment,'' DOD IG Project 
No. 5FI-2031, draft report.
    The GAO recommended in the report that the Secretary of 
Defense direct the DOD Comptroller to develop a plan to 
prevalidate all disbursements. As a first step, the DOD 
Comptroller should reduce the threshold at the DFAS Columbus 
Center to $4 million and continuously lower the threshold in 
accordance with the plan to prevalidate all disbursements. 
Similar plans should be developed to prevalidate all 
disbursements at all the other DOD disbursing activities. These 
plans should incorporate the DOD IG's recommendations. Further, 
the GAO recommended that the Secretary of Defense should direct 
the Comptroller to ensure that existing accounting policies and 
procedures are followed in recording obligations, detecting and 
correcting errors, and posting complete and accurate accounting 
information in systems supporting the disbursement process.
    b. Benefits.--The subcommittee held a hearing on DOD 
financial management at which the problem of disbursements was 
discussed. This report is of value to the subcommittee as part 
of its continued monitoring of the problem, and the manner in 
which the DOD is attempting to resolve it.

72. ``Management Reform--Completion Status of Agency Actions Under the 
        National Performance Review,'' June 1996, GAO/GGD-96-94.

    a. Summary.--This report is addressed to Hon. Ted Stevens 
and John Glenn, chairman and ranking minority member of the 
Committee on Governmental Affairs, U.S. Senate; Hon. William F. 
Clinger, Jr., and Cardiss Collins, chairman and ranking 
minority member of the Committee on Government Reform and 
Oversight respectively; and Hon. John R. Kasich, chairman, 
Committee on the Budget, House of Representatives.
    The report reviews the completion status of the 380 NPR 
action items that NPR says are completed. NPR had identified a 
series of 1,203 action items necessary to implement the NPR 
Phase I recommendations. So NPR claimed that 380 out of 1,203 
items had been completed, or 32 percent. The GAO found that out 
of the 380,294 were actually completed, that is 294 out of 
1,203 or 24 percent. So 76 percent of the initial NPR 
recommendations have not been implemented as of the date of 
this report, June 12, 1996.
    The NPR reported 20 out of 33 items in the intelligence 
area as completed but the CIA refused to provide the GAO with 
information to independently verify the status of the 20 items. 
The CIA claimed that they had given the NPR staff the 
information.
    b. Benefits.--It is of the upmost importance for Congress 
to be kept aware of fraud, abuse, and mismanagement in the 
executive branch. A ``National Performance Review'' is a step 
in the right direction, but because it is an internal 
investigation by the executive branch, it still needs oversight 
from an outside source. This report helped the subcommittee in 
its continuing monitoring of the National Performance Review's 
actual and claimed achievements.

73. ``National Park Service--Information on Special Account Funds at 
        Selected Park Units,'' May 1996, GAO/RCED-96-90.

    a. Summary.--GAO was requested to determine the sources and 
amounts of special account funds available to the Park Service 
and the amount of special account funds that were available to 
each of them and whether the expenditure of funds in special 
accounts were consistent with the purposes for which those 
accounts were established. The Park Service has eight special 
accounts with a total value of $45 million in fiscal year 1994. 
Of the eight accounts, five are authorized to recover costs of 
particular in-park activities. The other three accounts are not 
designed to recover costs, but to provide the parks with cash 
and noncash benefits.
    b. Benefits.--This aids the subcommittee in its oversight 
responsibilities by identifying eight special accounts and 
providing financial data for these accounts and reviewing the 
available documentation for expenditures from special accounts 
at six park units, showing that the expenditures were for 
authorized purposes.

74. ``Public Timber: Federal and State Programs Differ Significantly in 
        Pacific Northwest,'' May 1996, GAO/RCED-96-108.

    a. Summary.--This is a report to the chairman of the House 
Committee on Resources. Recent studies and testimony before 
congressional committees have suggested that some States 
operate their timber sales programs at less cost than the 
Federal agencies. This compares timber sales programs of two 
Federal agencies with those of the States. It identifies (1) 
the major differences among the timber programs of the Forest 
Service's Pacific Northwest Region, the Bureau of Land 
Management, and the States of Washington and Oregon and (2) the 
effect of these differences on the agencies' planning 
processes.
    The States' legislative guidance emphasizes timber 
production and maximizing revenues over the long-term. The 
States fund their timber sales programs with a percentage of 
timber sales receipts, which provides built-in incentives to 
promote cost efficiency.
    b. Benefits.--This report aids the subcommittee in 
oversight of Federal timber sale programs and why when volumes 
of timber sold and harvested from Federal timberlands have 
decreased in recent years, the costs of Federal timber sales 
programs have not decreased proportionately. The report 
identifies reasons for the States timber sale programs to be 
less costly compared to Federal timber sale programs in the 
Pacific Northwest.

75. ``Rural Development--Steps Towards Realizing the Potential of 
        Telecommunications Technologies,'' June 1996, GAO/RCED-96-155.

    a. Summary.--GAO was asked by the chairman and ranking 
minority member of the Senate Committee on Agriculture, 
Nutrition, and Forestry to identify Federal programs that rural 
areas can use to fund telecommunications projects; identify 
lessons learned by rural areas that have used these programs to 
establish such projects; and obtain the views of experts, 
public and private officials, and program users on whether 
changes to these programs are needed.
    b. Benefits.--This report suggests ideas for overcoming the 
remoteness from urban centers for many rural farmers. While 
improved roads was previously seen as the solution to such 
dilemmas, the GAO uncovers the suggestion that the advancement 
of, or the better accessability of telecommunications 
technology including the Internet, video conferencing, and 
high-speed data transmission to name a few are the key to 
bringing the farmers closer to the city.
    Aspects of the Federal Agriculture Improvement and Reform 
Act of 1996, as well as changes to guidelines proposed by the 
Economic Development Administration should help address these 
problems.

76. ``Software Capability Evaluation: VA's Software Development Process 
        is Immature,'' GAO/AIMD-96-90.

    a. Summary.--The GAO report reviewed software development 
processes at the Veterans Benefits Administration (VBA) and 
VA's Office of Information Resources Management's Austin 
Automation Center. The sites and projects were selected by VBA 
and VA, respectively, as those that represent their best 
software development processes and practices. VA has reportedly 
spent an estimated $294 million on these activities between 
October 1, 1986 and February 29, 1996. The modernization 
program can have a major impact on the efficiency and accuracy 
with which over $20 billion in benefits and other services is 
paid to veterans and their dependents. Software development is 
a critical component of this major modernization initiative. 
VBA, with the assistance of contractors, will be developing 
software for the veterans Services Network (VETSNET) 
initiative, a replacement for the existing Benefit Delivery 
Network. For effort like VETSNET to succeed, it is crucial that 
VBA have in place a disciplined set of software development 
processes to produce high-quality software within budget and on 
schedule. In fiscal year 1995, VBA had 314 full-time 
equivalents, with payroll expenses of $20.8 million, devoted to 
developing and maintaining software throughout the 
organization. It also spent $17.7 million in contract services 
in these areas.
    The GAO found that VBA is extremely weak in the 
requirements management, software project planning, and 
software subcontract management criteria. It cannot reliably 
develop and maintain high-quality software on any major project 
within existing cost and schedule constraints, placing the VBA 
modernization program at risk.
    b. Benefits.--This report is part of a series of reports 
the GAO has completed on software development and management of 
the development process in the agencies. It is helpful to the 
subcommittee in its oversight of the technology area and of 
management capability in the agencies.

77. ``Tax Systems Modernization: Actions Underway But IRS Has Not Yet 
        Corrected Management and Technical Weaknesses,'' June 1996, 
        GAO/AIMD-96-106.

    a. Summary.--Reflecting continuing concern with TSM, the 
Treasury, Postal Service, and General Government Appropriations 
Act of 1996 required that the Department of the Treasury 
provide a report to the House and Senate Committees on 
Appropriations identifying, evaluating, and prioritizing all 
IRS systems investments planned for fiscal year 1996, using 
explicit decision criteria; providing a schedule for 
successfully correcting weaknesses that were identified in 
April 1995; presenting a milestone schedule for developing and 
implementing all projects included in the tax systems 
modernization program; and presenting a plan to expand the 
utilization of external expertise for systems development and 
total program integration. The GAO report states that the IRS 
has not made adequate progress in correcting its management and 
technical weaknesses, and none of GAO's recommendations have 
been fully implemented. Additionally, the GAO report stated 
that the IRS does not now have the capability to manage all of 
its current contractors successfully. The report recommends 
that Congress limit IRS TSM spending to only cost-effective 
modernization efforts that meet specified criteria.
    b. Benefits.--The subcommittee held two hearings on the 
Internal Revenue Service during 1996, at both of which the 
problem of tax system modernization costs and lack of results 
was discussed. The GAO reports formed the basis for much of the 
subcommittee preparation for the hearings.

78. ``Budget Issues: Inventory of Accounts With Spending Authority and 
        Permanent Appropriations, 1996,'' May 1996, GAO/AIMD-96-79.

    a. Summary.--This report updates the GAO's 1987 inventory 
of accounts with spending authority and permanent 
appropriations (commonly referred to as ``backdoor 
authority''). It provides specific information on such accounts 
and analyzes the changes in the number and dollar amounts of 
accounts with backdoor authority. Spending authority is 
authority provided in laws other than appropriation acts to 
obligate the U.S. Government to make payments. It includes 
contract authority, authority to borrow, authority to forgo the 
collection of proprietary offsetting receipts (the use of 
monetary credits or bartering), and authority to make other 
payments for which the budget authority is not provided in 
advance by appropriation acts. A permanent appropriation is an 
appropriation that is available as the result of previously 
enacted legislation, remains so until repealed, and does not 
require current appropriations action by Congress.
    b. Benefits.--This report helps the subcommittee in 
oversight of Federal management practice by updating the 1987 
report discovering some accounts no longer have backdoor 
authority and discovering that new ones exist. We analyzed 
material by comparing the old inventory data with the new in 
terms of number of accounts and dollar amounts. The oversight 
conducted was over a broad spectrum of over 80 departments and 
agencies. The report uncovers that the use of backdoor 
authority continues to be widespread and both it and the number 
of accounts has increased since 1987.

79. ``CFO Act Financial Audits--Navy Plant Property Accounting and 
        Reporting is Unreliable,'' July 1996, GAO/AIMD-96-65.

    a. Summary.--This report describes in detail the areas 
contributing to inaccurate financial reporting of the Navy's 
plant property account balance. It recommends additional 
actions needed to ensure that the Navy has reliable information 
to effectively manage and adequately control the billions of 
dollars the Government has invested in the Navy's plant 
property.
    The report cites four primary weaknesses:
         In preparing the Navy fiscal year 1994 
        financial reports on general fund operations, $24.6 
        billion of real property was counted twice;
         the Navy had no assurance that all plant 
        property from only general fund activities was included 
        in its fiscal year 1994 financial reports on general 
        fund operations;
         the $291 million reported as Navy plant 
        property work-in-progress was highly questionable, and
         the Navy's logistics, custodial, and 
        accounting records of real property were often not 
        reconciled on a timely basis, or in some cases were 
        never reconciled. For example, for over 20 years the 
        Navy's financial reports overstated the real property 
        account balance by millions of dollars because plant 
        property at a shipyard closed in the 1970's had not 
        been removed from the Navy's accounting records. 
        Because this property was no longer carried in the 
        Navy's logistics records, a reconciliation between 
        these records and the Navy's accounting records would 
        have identified this error.
    The GAO recommended that:
         By September 30, 1996, the Navy Comptroller 
        Manual provision that lists the Navy's activities 
        engaged in general fund operations and DBOF operations 
        should be updated and accurately maintained;
         the Navy and DFAS, Cleveland Center should use 
        this listing as part of their analytical procedure 
        testing to help ensure that the plant property account 
        balances reported in the Navy's financial reports are 
        complete and include information from only general fund 
        activities;
         Navy activities and DFAS should routinely 
        monitor plant property work-in-progress accounts and 
        promptly review and resolve large balances;
         Navy activities should promptly request, and 
        DFAS expeditiously provide, information to assist in 
        transferring plant property work-in-progress items to 
        on-hand accounts and in correcting errors; and
         Navy activities and DFAS personnel should be 
        trained to identify and resolve work-in-progress and 
        other plant property problems.
    b. Benefits.--This report was of great help to the 
subcommittee in its oversight of DOD financial management 
issues. DOD agreed with the findings of the report and groups 
have been established to fix problems involving the consistency 
of report information and establish and monitor a plan of 
action and milestones for improving property reporting and 
accounting. DOD has said that corrective actions will be 
accomplished within the next year; this shows that the 
committee's oversight is paying off by getting cabinet 
departments thinking in terms of downsizing and cutting down on 
fraud and waste.

80. ``Financial Audit: Examination of IRS' Fiscal Year 1995 Financial 
        Statements,'' July 1996, GAO/AIMD-96-101.

    a. Summary.--As in prior years, no opinion could be 
provided on the financial statements. The reasons given were:
         Amounts of total revenue ($1.4 trillion) and 
        tax refunds ($122 billion) cannot be verified or 
        reconciled to accounting records maintained for 
        individual taxpayers in the aggregate;
         the amounts reported for various types of 
        taxes collected (social security, income, and excise 
        taxes, for example, cannot be substantiated;
         the reliability of reported estimates of $113 
        billion for valid accounts receivable and $46 billion 
        of collectible accounts receivable cannot be 
        determined;
         a significant portion of IRS' reported $3 
        billion in nonpayroll operating expenses cannot be 
        verified; and
         the amounts the IRS reported as appropriations 
        available for expenditure for operations cannot be 
        reconciled fully with Treasury's central accounting 
        records showing these amounts, and hundreds of millions 
        of dollars in differences have been identified.
    The overriding problem in providing an opinion on the IRS' 
financial statements, reporting on its internal controls, and 
reporting on its compliance with laws and regulations is that 
the IRS has not yet been able to provide support for major 
portions of the information presented in its financial 
statements, and in some cases where it was able to do so, the 
information was found to be in error.
    The core financial management control weaknesses that 
contribute greatly to these problems are that the IRS does not 
have comprehensive documentation on how its financial 
management system works nor has it put in place procedures to 
routinely reconcile activity in summary accounts records with 
that maintained in its detailed masterfile records of 
taxpayers' accounts. Another weakness was that the IRS did not 
provide support as to whether and when it received goods and 
services for significant portions of its nonpayroll operating 
expenses.
    b. Benefits.--This is one of the reports that the 
subcommittee reviews as part of its oversight responsibility 
for CFO Act implementation by the agencies. It was used 
extensively in the two hearings the subcommittee held on the 
Internal Revenue Service.

81. ``Financial Audit: Resolution Trust Corporation's 1995 and 1994 
        Financial Statements,'' July 1996, GAO/AIMD-96-123.

    a. Summary.--The Resolution Trust Corporation (RTC) opinion 
was analyzed by the GAO in this report for the years ended 
December 31, 1995 and 1994. The report presents GAO's opinion 
on RTC management's assertions of the quality of its system of 
internal controls. The report also discusses (1) internal 
control weakness, (2) the savings and loan crisis and creation 
of RTC, (3) the completion of RTC's mission, (4) RTC's cost and 
allocations, (5) RTC's contracting, (6) how much resolving the 
savings and loan crisis costed, and (7) fiscal implications 
which still exist.
    b. Benefits.--This report reviews as part of its oversight 
responsibility for the CFO Act implementation by the agencies. 
The report was a benefit for the finding of internal control 
weaknesses over RTC's computerized information systems and the 
status of RTC and FDIC actions to correct them. This report in 
turn will lead to the evaluation of the adequacy and 
effectiveness of those corrective actions as part of the GAO 
audit of FDIC's 1996 financial statements.

82. ``Fire-Safe Accommodations: Information on Federal Agencies' 
        Compliance with Public Law 101-391 Lodging Requirements,'' July 
        1996, GAO/GGD-96-135.

    a. Summary.--After the death of 400 Americans over 5 years 
from multistory hotel fires, Congress passed the Hotel and 
Motel Fire Safety Act of 1990 to save lives and property by 
promoting fire safety. The act requires that GAO review 
annually Federal agency compliance with the provisions which 
require that a certain percentage of Federal travelers stay in 
hotels or motels meeting fire safety requirements. This report 
fulfills that requirement.
    b. Benefits.--The report will assist the subcommittee with 
its oversight of the Hotel and Motel Fire Safety Act of 1990 
and also with its oversight over GSA, which arranges contracts 
on behalf of Federal travelers for hotels.

83. ``Information Management: Energy Lacks Data to Support Its 
        Information System Streamlining Effort,'' GAO/AIMD-96-70(3).

    a. Summary.--The Department of Energy developed a standard 
inventory of data on specific systems used by the Department 
and its management and operating contractors. It planned to use 
this inventory in streamlining its information systems. 
However, the inventory is substantially incomplete and lacks 
sufficient information describing systems' functional 
capabilities. As a result, the inventory will not be adequate 
to help eliminate duplicate information systems as part of the 
streamlining effort.
    b. Benefits.--This aids the subcommittee in its oversight 
of information management. In order to begin to streamline 
information, it is essential that the DOE and its contractors 
are able to assess the capabilities of existing systems before 
implementing new systems. This report has illustrated the fact 
that the DOE does not have adequate reporting methods for 
software inventory. Much money can be saved by having an 
accurate procedure for information systems because it will 
greatly cut down on duplication and waste when purchasing new 
systems.

84. ``Statistical Agencies: Statutory Requirements Affecting Government 
        Policies and Programs,'' July 1996, GAO/GGD-96-106.

    a. Summary.--The Federal Government is the largest single 
producer, consumer, custodian and disseminator of statistical 
information in the United States. This report provides a list 
of the legislatively mandated reports that statistical agencies 
are to produce for Congress on a regular basis, the statutory 
authority for the reports and the authorizing statutes for the 
agencies.
    b. Benefits.--This report is one of three examining aspects 
of the U.S. statistical system. This project was undertaken to 
gather background information for a potential consolidation of 
parts, if not all, of the U.S. statistical system.

85. ``Telecommunications Costs Reported by Federal Organizations for 
        Fiscal Year 1995,'' GAO/AIMD-96-105.

    a. Summary.--This report provides information on 
Governmentwide telecommunications costs. Forty-two executive 
branch departments and Government agencies were surveyed to 
identify total fiscal year 1995 telecommunications costs, 
divided into five categories: (1) FTS 2000 services, (2) non-
FTS 2000 long-distance services, (3) local telecommunications 
services, (4) wireless services, and (5) telecommunications 
support contract services. Also provided in this report is 
information on reported local access costs associated with FTS 
2000 telephone calls and the Government's reported fiscal year 
1995 costs for the Purchase of Telecommunications and Services 
(POTS).
    b. Benefits.--This report aids the subcommittee in 
oversight by an extension of the analysis of the costs of 
certain Federal agency telecommunications services which is 
required under Section 629(c) of Public Law 104-52, the Fiscal 
Year 1996 Treasury, Postal Service, and General Government 
Appropriations Act. Though this report analyzed detailed 
information dealing with the Federal telecommunications world, 
due to time constraints, GAO did not independently verify the 
accuracy of the cost information provided by Federal 
organizations during the review.

86. ``Acquisition Reform: Purchase Card Use Cuts Procurement Costs, 
        Improves Efficiency,'' August 1996, GAO/NSIAD-96-138.

    a. Summary.--The Federal Acquisition Streamlining Act of 
1994 (FASA) eliminated some requirements for purchases of 
$2,500 or less, called micropurchases. Previously, the National 
Performance Review had recommended that agencies increase their 
use of Government commercial credit cards, called purchase 
cards, for small purchases to cut the red tape normally 
associated with the procurement process. As of fiscal year 
1995, cards were used at most Federal agencies for over 4 
million purchases worth more than $1.6 billion. This GAO report 
was a legislatively mandated review of FASA implementation. It 
reviewed the nature and extent of progress in using the 
purchase card, whether card use had led to savings, potential 
increase in card use, and controls in place at the program 
level.
    b. Benefits.--The GAO report shows that use of purchase 
cards increases agency efficiency. Purchase card use reduces 
labor and payment processing costs, sometimes by more than 
half. Reviews of controls in place to monitor card use indicate 
no significant patterns of misuse of the cards. The report 
suggests that there is a need for greater interagency 
communication to share improvements in card programs to sustain 
growth in card use.

87. ``Aviation Acquisition: A Comprehensive Strategy is Needed for 
        Cultural Change at FAA,'' August 1996, GAO/RCED-96-159.

    a. Summary.--This claims that the persistent acquisition 
problems at the Federal Aviation Administration (FAA) are a 
result of its organizational culture. It includes suggestions 
as to how the culture can be changed. Over the past 15 years, 
the FAA's modernization program has experienced substantial 
cost overruns, lengthy schedule delays, and shortfalls in 
performance. Concerned about these recurring problems, the 
chairman, Subcommittee on Transportation and Related Agencies, 
House Committee on Appropriations, asked GAO to review the 
agency's management of the acquisition process to determine 
whether organizational culture was contributing to the FAA's 
acquisition problems.
    The GAO found that FAA's organizational culture has been an 
underlying cause of the agency's acquisition problems. Its 
acquisitions were impaired because employees acted in ways that 
did not reflect a strong commitment to mission focus, 
accountability, coordination, and adaptability. The GAO reports 
that research has shown that organizations with more 
constructive cultures perform better and are more effective. In 
organizations with a more constructive culture, employees 
exhibit a stronger commitment to mission focus, accountability, 
coordination, and adaptability. At the FAA, insufficient 
mission focus; weak accountability; poor internal coordination; 
and inadequate adaptability have all hampered acquisitions.
    The GAO recommends that the Secretary of Transportation 
direct the FAA administrator to develop a comprehensive 
strategy for cultural change.
    b. Benefits.--This report aids the subcommittee in its 
oversight of management practices by Federal agencies. 
Discovered in this report are the widespread inadequacies and 
inefficiencies displayed by the FAA ranging in areas of mission 
focus, accountability, coordination, and adaptability. The GAO 
displays the need for the organization to adapt more 
constructive cultures. The GAO recommends that the Secretary of 
Transportation direct the FAA administrator to develop a 
comprehensive strategy for cultural change.

88. ``Defense Management: Information on Selected Aspects of DOD's Jet 
        Fuel Programs,'' July 1996, GAO/NSIAD-96-188.

    a. Summary.--This was done as a result of House Report 104-
208. The GAO reviewed the DOD's reimbursement pricing policies 
for the Defense Logistics Agency's bulk and into-plane jet fuel 
programs. The bulk fuel program refers to jet fuel that the 
agency's Defense Fuel Supply Center (DFSC) purchases from major 
commercial suppliers and transports directly (via trucks, 
pipelines, barges, and railroads) to military installations for 
use by military and other authorized aircraft. The into-plane 
program consists of individual contracts between DFSC and 
fixed-base operators who provide jet fuel to authorized 
aircraft at contractually established prices. The policies and 
procedures of the Defense Business Operations Fund (DBOF) 
govern the setting of standard prices for jet fuel.
    The report discusses:
         Pricing policies, rules, and regulations used 
        to establish standard prices for both fuel programs and 
        whether the cost factors used for each are consistent 
        with applicable policies;
         whether bulk fuel usage and into-plane sales 
        have changed in recent years and our assessment of the 
        reasons for any changes; and
         the significance and validity of questions and 
        complaints raised by into-plane contractors and the 
        National Air Transportation Association about the 
        effect on their businesses of DOD changes in the 
        pricing of into-plane jet fuel.
    b. Benefits.--This report aids the committee in oversight 
of the DOD's Jet Fuel Programs, ranging from the pricing of the 
bulk fuel program, the pricing of the into-plane program, and 
general analysis of the comparisons between rises in prices of 
the two fuels. The report displays that the standard jet fuel 
prices are consistent with current DBOF policies and procedures 
and that individual contractor's concerns of the disparity of 
rising prices of jet fuel between bulk fuel and into-plane fuel 
are unwarranted and not widespread.

89. ``NASA Chief Information Officer: Opportunities to Strengthen 
        Information Resources Management,'' GAO/AIMD-96-78(2).

    a. Summary.--The GAO was asked to assess the effectiveness 
of the National Aeronautics and Space Administration's (NASA) 
initiative to implement a chief information officer (CIO) 
position. NASA appointed its CIO in February 1995 as a senior 
manager within the Office of the Administrator to strengthen 
IRM leadership.
    The GAO concluded that NASA has gained some initial IRM 
improvements through its appointment of a CIO. By establishing 
a CIO Council to help select, control, and evaluate its system 
investments, NASA is beginning to conform to the Paperwork 
Reduction Act and the Information Technology Management Reform 
Act and should be in a position to better manage its 
information resources in the future. Additional improvements, 
such as instituting effective mechanisms for information 
technology inventorying and accounting, will also be critical.
    b. Benefits.--This report aids the subcommittee in its 
oversight of information resource management issues. The report 
assessed NASA's: effectiveness of implementing a Chief 
Information Officer position, while evaluating CIO initiatives, 
and identifying opportunities for NASA to strengthen its CIO 
position and improve its IRM program. GAO also felt additional 
improvements, such as instituting effective mechanisms for it 
inventory and accounting, will also be critical.

90. ``Navy Financial Management--Improved Management of Operating 
        Materials and Supplies Could Yield Significant Savings,'' 
        August 1996, GAO/AIMD-96-94.

    a. Summary.--This report provides the results of GAO's 
detailed assessment of the Navy's financial reporting on and 
management of operating materials and supplies that are not 
part of DBOF inventories. Specifically, it provides the results 
of our assessment of: (1) the adequacy of the Navy's 
accountability and visibility over its approximately $5.7 
billion in operating materials and supplies on board vessels 
and at the redistribution sites; (2) the Navy's management of 
excess items of this type; and (3) the accuracy of operating 
unit records for operating materials and supplies that we 
tested. This report also contains recommendations that are 
directed at improving financial reporting and inventory 
management.
    b. Benefits.--A report beneficial to the subcommittee in 
its oversight of financial management. The report reviews 
various aspects of the Department of Navy's financial 
management operations and its ability to meet the management 
and reporting requirements of the Chief Financial Officers Act 
of 1990, as amended by the Government Management Reform Act of 
1994, examining the Navy reporting on and management of 
operation materials and supplies.

91. ``The Accounting Profession: Major Issues Progress and Concerns,'' 
        GAO/AIMD-96-98 and ``The Accounting Profession: Appendices to 
        Major Issues: Progress and Concerns,'' GAO/AIMD-96-98A.

    a. Summary.--This two-volume report identifies 
recommendations made from 1972 through 1995 to improve 
accounting and auditing standards and the performance of 
independent audits under the Federal securities laws and the 
actions taken on these recommendations. It further examined 
unresolved issues and made recommendations for further 
congressional review.
    b. Benefits.--Helpful to the subcommittee in its oversight 
of accounting measures, the Inspector General Act and the Chief 
Financial Officers Act. Analysis of accounting profession's 
responsiveness in making changes to improve financial reporting 
and auditing of public companies and analysis of statistical 
data on the results of peer reviews of accounting firms showing 
that most firms have effective quality control programs to 
ensure adherence with professional standards. However, the 
report also shed light of shortcomings within certain major 
issues: (1) auditor independence, (2) auditor responsibility 
for detecting fraud and reporting on internal controls, and (3) 
maintaining the independence of FASB.

92. ``Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,'' 
        August 1996, GAO/AIMD-96-130.

    a. Summary.--This report was requested by the chairmen of 
the Senate Committee on Finance and the House Committee on Ways 
and Means. It addresses the actions taken by the Department of 
the Treasury when Treasury reached the statutory debt limit 
ceiling of $4.9 trillion established in 1993. It analyses 
Treasury's actions relating to investments and redemptions in 
Federal trust funds and the restoration of losses incurred.
    The public debt is composed of Treasury securities, which 
include bills, notes, and bonds that Treasury issues to raise 
cash to finance Government operations and invest trust fund 
receipts. On October 31, 1995, about 75 percent of the $4.9 
trillion public debt was Treasury securities held by the 
public. The remainder, about $1.3 trillion, was held by Federal 
trust funds. The GAO concluded that, during the 1995-96 debt 
ceiling crisis, Treasury acted in accordance with statutory 
authorities when it suspended some investments of the G-fund, 
exercised its discretion in not reinvesting some of the 
Exchange Stabilization Fund's maturing Treasury securities, and 
issued certain securities to Government trust funds without 
counting them toward the debt ceiling.
    b. Benefits.--During the 1995-96 debt ceiling crisis, the 
Federal Government's debt increased from $4.9 trillion to $5.5 
trillion. Treasury took several actions during this period to 
raise funds to meet Federal obligations without exceeding the 
debt ceiling. The subcommittee learned the chronology of these 
actions along with a financial and legal analyses of them.

93. ``Military Family Housing--Opportunities Exist to Reduce Costs and 
        Mitigate Inequities,'' September 13, 1996, GAO/NSIAD-96-203.

    a. Summary.--The Defense Department's policy of relying 
primarily on private-sector housing to meet military family 
housing needs is cost-effective. Studies by the Congressional 
Budget Office and DOD have shown that compared to the cost of 
providing military housing, the Government's cost is 
significantly less when military families are paid housing 
allowances and live in private housing. These studies and GAO's 
analysis estimate that the cost difference to the Government 
for each family that lives in private housing ranges from about 
$3,200 to $5,500 annually. The Government's cost is less 
primarily because families living in private housing pay a 
portion of their housing costs and the Government pays 
significantly less Federal school impact aid for military 
dependents that live in private housing, which is subject to 
local property taxes.
    Although the DOD housing policy is cost-effective, DOD and 
the services have not taken full advantage of this policy. Data 
reported by the services and GAO's analysis show that the 
communities surrounding many military installations could meet 
thousands of additional family housing needs. Yet, the services 
continue to operate old housing that does not meet suitability 
standards and, in some cases, improve or replace Government 
housing at such installations. As a result, opportunities for 
reducing housing costs have been lost because DOD has not taken 
advantage of the significant savings available from use of 
private housing.
    b. Benefits.--This report helped the subcommittee conclude 
that the DOD's policy of relying on private-sector housing to 
meet military family housing needs is saving the Government 
money. In the post cold war age of shrinking defense budgets, 
the short-term flexibility yielded by housing allowances seems 
preferable to the long-term, costly commitments that come with 
military construction. In the current environment of the 104th 
Congress working to make the Government a smarter shopper, this 
is a prime example.

94. ``NASA Infrastructure--Challenges to Achieving Reductions and 
        Efficiencies,'' September 1996, GAO/NSIAD-96-187.

    a. Summary.--This reviews the status of NASA's efforts to 
achieve reductions and efficiencies in key areas of its 
infrastructure, principally facilities, and the challenges it 
faces. NASA's current facility closure and consolidation plans 
will not fully achieve the agency's goal of decreasing the 
current replacement value of its facilities by about 25 percent 
(about $4 billion in 1994 dollars) by the end of fiscal year 
2000. More importantly, these plans will not result in 
substantial cost reductions by that date. NASA has had problems 
in evaluating some cost-reduction opportunities; environmental 
cleanup costs could affect future facility disposition efforts; 
and its efforts to share facilities with DOD have progressed 
slowly.
    GAO suggested that, ultimately, a process that uses an 
external independent group similar to the Defense Base Closure 
and Realignment Commission may be needed. To help determine the 
need for an independent group to facilitate closures and 
consolidations of NASA facilities, Congress may wish to 
consider requiring NASA to submit a plan outlining how it 
intends to meet its reduction goals.
    b. Benefits.--This aids the subcommittee in conducting 
oversight of agency downsizing, infrastructure, and facilities 
management. The report compelled NASA to a response that it was 
committed to streamlining its work force and supporting 
infrastructure and is in the process of making further changes 
in the way it operates. NASA has heard the mandate from the 
104th Congress for less waste through better management and is 
taking the proper steps in addressing its problems.

95. ``Surface Transportation: Research Funding, Federal Role, and 
        Emerging Issues,'' September 1996, GAO/RCED-96-233.

    a. Summary.--This report provides information on the public 
and private funding for surface transportation research, the 
transportation community's views on the Federal role for such 
research, the Department of Transportation's ability to fulfill 
that role, and the issues that the transportation community 
believes the Congress and the Department should consider during 
the reauthorization of the Intermodal Surface Transportation 
Efficiency Act of 1991.
    b. Benefits.--The report looked in detail at Surface 
Transportation to analyze research for the knowledge, products, 
and technologies needed to make transportation more efficient, 
effective, and safe. GAO felt that the department funds 
insufficient basic, long-term, high-risk research.

96. ``Tax Systems Modernization: Cyberfile Project Was Poorly Planned 
        and Managed,'' GAO/AIMD-96-140.

    a. Summary.--Cyberfile is an electronic filing system being 
developed for the Internal Revenue Service (IRS) by the 
Department of Commerce's National Technical Information Service 
(NTIS). The GAO concluded that the IRS's selection of NTIS to 
develop Cyberfile was not based on sound analysis.
    The IRS did not adequately analyze requirements, consider 
alternatives, or assess NTIS's capabilities to develop and 
operate an electronic filing system, even though the need for 
these critical prerequisites was brought to management's 
attention as early as July 1995. Instead, the IRS selected NTIS 
because it was expedient, and because NTIS promised the IRS, 
without any objective support, that it could develop Cyberfile 
in less than 6 months and have it operating by February 1996.
    Development and acquisition were undisciplined, and 
Cyberfile was poorly managed and overseen. As a result it was 
not delivered on time, and after advancing $17.1 million to 
NTIS, the IRS has suspended Cyberfile's development and is 
reevaluating the project.
    b. Benefits.--This report is part of the GAO's ongoing 
review of management practices at the IRS, and as such, it is 
very helpful to the subcommittee in the oversight of the IRS's 
management functions, including financial management and 
procurement.

97. ``USIA Options for Addressing Possible Budget Reductions,'' GAO/
        NSIAD-96-179.

    a. Summary.--This report discusses streamlining efforts at 
the U.S. Information Agency and identifies options that could 
enable USIA to include additional budget reductions. To respond 
to the potential that USIA might have to withstand cuts of the 
magnitude suggested by the OMB or congressional budget 
projections, GAO analyzed each of the major components within 
USIA for potential areas of reduction. Though USIA officials 
believe that further significant reductions could greatly 
hamper USIA's mission, new fiscal realities may force the 
agency to make additional choices about resource priorities for 
the number and size of its locations and its wide range of 
programs and activities.
    b. Benefits.--This report aids the subcommittee on 
oversight of budget reductions and possibility of more budget 
reductions by the U.S. Information Agency. GAO is not making 
recommendations in this report rather it is shedding light in 
areas in which budget reductions could be made to deal with 
potential cuts in appropriations. The USIA in reaction to the 
report has complied that changes will occur and that 
alterations will be instituted to cut costs while preserving 
the essential missions. USIA also acknowledges that it 
understands that the intrinsic value of many traditional 
programs is no longer enough to justify their continuation; 
there must be direct benefit to U.S. policy interests.

      Human Resources and Intergovernmental Relations Subcommittee

1. ``Multiple Employment Training Programs: Information Crosswalks on 
        163 Employment Training Programs,'' February 14, 1995, GAO/
        HEHS-95-85FS.

    a. Summary.--The General Accounting Office compiled a list 
of 163 programs and funding streams that provide about $20 
billion in employment training assistance. During recent 
testimony before Congress, GAO indicated that the number of 
employment training programs had risen to 193 since 1991 and 
that this fragmented ``system'' wasted resources, and confused 
and frustrated clients, employers, and administrators. To help 
Congress make choices about overhauling and consolidating 
employment training programs, this fact sheet provides 
information for each program, including (1) fiscal year 1995 
appropriation; (2) summary of the program's purpose as it 
relates to employment training activities; (3) authorizing 
legislation and the U.S. citation; (4) Catalog of Federal 
Domestic Assistance program number; (5) budget account number; 
(6) target group; and (7) type of employment training 
assistance provided.
    b. Benefits.--By continuing to document the growing number 
of employment training programs, GAO provides important 
information to help Congress and the executive branch evaluate 
and consolidate these programs.

2. ``Community Development: Comprehensive Approaches Address Multiple 
        Needs but Are Challenging To Implement,'' February 8, 1995, 
        GAO/RCED/HEHS-95-69.

    a. Summary.--The aspirations of people in distressed 
neighborhoods are familiar--to have a home and a job, to live 
in a safe area, and to have hope for their children's future. 
Isolated by poverty, residents of distressed neighborhoods may 
never realize their dreams. Some community-based nonprofit 
groups are using a multifaceted, or comprehensive, approach to 
community development that relies on residents' participation 
to address housing, economic, and social service needs in 
distressed neighborhoods. This report examines (1) why 
community development experts and practitioners advocate this 
approach; (2) what challenges they see to its implementation; 
and (3) how the Federal Government might support comprehensive 
approaches. GAO reviewed four groups, located in Boston, 
Detroit, Pasadena, and Washington, DC, that have used 
comprehensive approaches in their communities.
    b. Benefits.--By approaching the subject of multiple needs 
in community development, GAO has demonstrated that different 
communities have both different needs and different approaches 
to these needs. Furthermore, the report also suggest that 
comprehensive approaches are more effective but are difficult 
to implement.

3. ``School Facilities: Condition of America's Schools,'' February 1, 
        1995, GAO/HEHS-95-61.

    a. Summary.--The General Accounting Office surveyed school 
officials across the country on the physical condition of their 
facilities. The survey projects that the Nation's elementary 
and secondary schools need about $112 billion in repairs and 
upgrades to restore them to good condition. About 14 million 
students attend schools needing extensive repair or 
replacement. Also, problems with major building features, such 
as plumbing, are widespread even among schools said to be in 
adequate shape. Nearly 60 percent of America's schools reported 
at least one major building element in disrepair; most of these 
schools had multiple problems. In addition, about half the 
school officials reported at least one environmental problem in 
their schools, such as inadequate ventilation or poor heating 
and lighting; most of these schools had multiple environmental 
problems. Some school officials attributed the physical decline 
of the Nation's schools to decisions by school districts to 
defer vital maintenance and repair expenditures from year to 
year due to lack of money.
    b. Benefits.--This survey describes some of the problems 
facing the basic infrastructure of our Nation's schools. The 
information in the report documents these concerns to both the 
American people and the Congress.

4. ``Welfare Reform: Implications of Proposals on Legal Immigrants' 
        Benefits,'' February 2, 1995, GAO/HEHS-95-58.

    a. Summary.--The General Accounting Office found that the 
percentage of immigrants receiving public assistance--
specifically Supplemental Security Income (SSI) or Aid to 
Families With Dependent Children (AFDC)--is higher than the 
percentage of citizens receiving these benefits. Six percent of 
all immigrants receive benefits compared with 3.4 percent of 
all citizens. Most immigrant recipients live four States: 
California, New York, Florida, and Texas; more than one-half of 
all immigrant recipients live in California. Between 1983 and 
1993, the number of immigrants receiving SSI more than 
quadrupled, increasing from 151,000 to 683,000. During this 
period, immigrants grew from about 4 percent of all SSI 
recipients to more than 11 percent. As a percentage of all 
adult AFDC recipients, immigrants grew from about 5 percent to 
8 percent. In all, immigrants received an estimated $3.3 
billion in SSI benefits and $1.2 billion in AFDC benefits in 
1993. Most immigrant recipients are lawful permanent residents 
or refugees, but other characteristics of immigrants receiving 
SSI and AFDC vary. For example, the number of immigrants 
receiving SSI aged benefits--available to those 65 years and 
older--has increased dramatically. According to the 
Congressional Budget Office, a welfare reform proposal now 
before Congress (H.R. 4) would save $9.2 billion from the SSI 
program and $1 billion from the AFDC program over 4 years. GAO 
estimates that 522,000 SSI recipients and 492,000 AFDC 
recipients would become ineligible for benefits under H.R. 4.
    b. Benefits.--This report gives the Congress valuable 
information as it debates H.R. 4 and other welfare reform 
proposals, as well as many immigration reform proposals.

5. ``Block Grants: Characteristics, Experience, and Lessons Learned,'' 
        February 9, 1995, GAO/HEHS-95-74.

    a. Summary.--The 15 block grant programs in effect today, 
with funding of $32 billion, constitute a small portion of the 
overall Federal aid to States, which totaled $206 billion for 
593 programs in fiscal year 1993. In 1981, as part of the 
Omnibus Reconciliation Act, nine block grants were created from 
about 50 of the 534 categorical programs in effect at the time. 
In general, the transition from categorical programs to block 
grants was smooth. Experience with the 1981 block grants 
teaches three lessons. First, accountability for results is 
clearly needed, and the Government Performance and Results Act 
may provide the appropriate framework. Second, funding 
allocation based on distributions under prior categorical 
programs may be inequitable because they do not reflect need, 
ability to pay, and variations in the cost of providing 
services. Finally, the transition to block grants may be more 
challenging today than in 1981 because the programs being 
considered for inclusion in block grants are much larger and, 
in some cases, fundamentally different from programs included 
in the 1981 block grants.
    b. Benefits.--As the Congress considers placing more 
programs into block grants, this report provides an important 
historical perspective on past efforts to transform categorical 
grants into block grants.

6. ``Social Security Administration: Leadership Challenges Accompany 
        Transition to an Independent Agency,'' February 15, 1995, GAO/
        HEHS-95-59.

    a. Summary.--In 1994 Congress passed legislation making the 
Social Security Administration (SSA) an independent agency. As 
part of the transition, GAO was required to evaluate the 
interagency agreement for transferring personnel and resources 
from the Department of Health and Human Service (HHS) to SSA. 
GAO concludes that the two agencies have developed an 
acceptable methodology for identifying the functions, 
personnel, and other resources, such as furniture and computer 
equipment, to be transferred to an independent SSA. They have 
also made good progress toward completing the initiatives 
necessary for SSA to be a fully functional independent agency 
by March 31, 1995. However, SSA will continue to face serious 
policy and management challenges, including long-range 
shortfall in funds to pay future Social Security benefits. 
Also, questions have been raised by GAO and others about the 
future growth of the Disability Insurance program and recent 
increases in Supplemental Security Income benefits.
    b. Benefits.--GAO's report has helped give the Congress 
some direction in the oversight of the SSA. In addition, the 
questions raised about the growth of entitlement programs are 
important for both the American people and the Congress.

7. ``Public Housing: Funding and Other Constraints Limit Housing 
        Authorities' Ability To Comply With One-for-One Rule,'' March 
        3, 1995, GAO/RCED-95-78.

    a. Summary.--The overall vacancy rate in public housing is 
about 8 percent. This average, however, masks the conditions at 
many large housing authorities where uninhabitable buildings 
cause the rate to be close to 22 percent. At some authorities, 
whole projects are vacant and hundreds of run-down buildings 
stand idle. If housing authorities tear down or sell any of 
these buildings, they are required to replace the housing units 
on a one-for-one basis with new or other inhabitable housing or 
provide equivalent rental assistance to the tenants. Because 
some authorities believe that they lack enough money or 
appropriate sites to replace demolished housing, they leave the 
deteriorated buildings in place. This report provides 
information on (1) housing authorities with the highest number 
of vacant units; (2) the impact of the one-for-one requirements 
on housing authorities' ability to deal with their 
uninhabitable housing units; and (3) housing officials' views 
on the proposed waiver of the one-for-one replacement law.
    b. Benefits.--The GAO report provides the Congress with 
evidence to support repeal of the one-for-one rule.

8. ``Social Security: New Functional Assessments for Children Raise 
        Eligibility Questions,'' March 1, 1995, GAO/HEHS-95-66.

    a. Summary.--More than 200,000 children have been awarded 
Federal disability benefits for mental or behavioral problems 
using new subjective criteria that allow benefits in cases that 
previously would have been rejected. GAO found fundamental 
flaws in the new process for assessing children's impairments. 
Specifically, each step of the process relies heavily on 
adjudicators' judgments, rather than on objective criteria from 
the Social Security Administration (SSA), to assess children's 
behavior. This calls into question SSA's ability to guarantee 
consistency in administering the program. At the same time, GAO 
discovered little evidence that parents are coaching their 
children to fake mental problems by misbehaving or faring 
poorly in school so that they can qualify for cash benefits.
    b. Benefits.--This study has called into question SSA's 
ability to successfully monitor behavioral problems in children 
when assessing disability benefits. In the current environment, 
acknowledging the need for entitlement reform, this information 
demonstrates some of the limitations of a large Federal 
entitlement program.

9. ``Poverty Measurement: Adjusting for Geographic Cost-of-Living 
        Difference,'' March 9, 1995, GAO/GGD-95-64.

    a. Summary.--This report provides information on the 
statistical data requirements that would be needed to construct 
a cost of living index that could be used, at the Federal 
level, to adjust for geographic differences in living costs. 
Concerns had been raised in Congress that current measures do 
not recognize that residents of high-cost areas may need higher 
incomes to meet their basic needs. The report (1) describes the 
function of market baskets in determining a cost-of-living 
index, including both a uniform national market basket and 
market baskets that reflect regional differences in 
consumption; (2) identifies methodologies that might be used to 
calculate a cost-of-living adjustment, including, methodologies 
that researchers and private industry use for comparing costs 
by geographic areas; and (3) presents expert opinions on the 
ability of these methodologies to adjust the poverty 
measurements for geographic differences in cost of living.
    b. Benefits.--As the Congress works through welfare reform 
proposals, especially through discussions of how to equitably 
distribute funds to the States, this report will help establish 
benefit formulas that account for regional differences.

10. ``Higher Education: Restructuring Student Aid Could Reduce Low-
        Income Student Dropout Rate,'' March 23, 1995, GAO/HEHS-95-48.

    a. Summary.--Loans and grants do not have equivalent 
effects on low-income students' staying in college. Grant aid 
lowers the probability of low-income students' dropping out, 
while loans have no statistically significant impact on their 
dropping out. Furthermore, the timing of grant aid influences a 
student's probability of dropping out. For example, grant aid 
is more effective for low-income students during the first 
school year than in subsequent years. Given that the dropout 
rate is higher in students' first 2 years, front loading grants 
would appear to provide low-income students with the most 
effective means of financial support when they are most likely 
to benefit from it. Restructuring Federal grant programs to 
feature front loading could improve low-income students' 
dropout rates with little or no changes to students' overall 4-
year allocation of grants and loans. GAO supports the creation 
of a pilot program to evaluate the effects and costs of front 
loading.
    b. Benefits.--This report suggests the student aid system 
can be changed to lower the probability of low-income students 
dropping out of school.

11. ``Veterans' Benefits: Basing Survivors' Compensation on Veterans' 
        Disability Is a Viable Option,'' March 6, 1995, GAO/HEHS-95-30.

    a. Summary.--In 1993, the Department of Veterans Affairs' 
Dependency and Indemnity Compensation (DIC) program paid 
benefits totaling $2.7 billion to about 276,000 surviving 
spouses of service members who had died on active duty and 
surviving spouses of some disabled veterans. These benefits 
were paid under the Veterans' Benefits Act of 1992, which 
changed the basis for DIC benefits from the military rank of 
the deceased service member or veteran to a flat rate for all 
surviving spouses. This report (1) estimates DIC recipients' 
total income and determines the kind and the amount of benefits 
received from other programs; (2) determines the financial 
impact on surviving spouses of the deaths of totally disabled 
veterans and of veterans who were receiving supplemental 
payments because they had multiple severe disabilities and 
could not care for themselves; and (3) assesses alternative 
ways to set DIC benefits.
    b. Benefits.--With the acknowledgment that entitlements 
must be reformed, this report lays out a plan for a more 
equitable formula to fund compensation rates for spouses of 
deceased veterans.

12. ``Early Childhood Centers: Services To Prepare Children for School 
        Often Limited,'' March 21, 1995, GAO/HEHS-95-21.

    a. Summary.--More than a third--2.8 million--of the 
Nation's children aged 3 and 4 were from poor families in 1990, 
a growth of 17 percent since 1980. This trend continues. These 
disadvantaged youngsters often live in homes that provide 
little intellectual stimulation, as well as inadequate health 
care and nutrition. Lagging behind their middle- and upper-
income peers when they enter school, many disadvantaged 
children never catch up. Early childhood centers funded by 
Federal and State governments prepare children for school and 
help them to overcome their disadvantages. This report answers 
the following questions: What services do disadvantaged 
children need to be prepared for school? To what extent do 
these children receive these services from early childhood 
centers? If disadvantaged children do not receive these 
services from early childhood centers, why not?
    b. Benefits.--This report gives real information on the 
problems and needs of disadvantaged children. The report 
provides Congress with critical information for education and 
welfare reforms.

13. ``Medicare: Tighter Rules Needed To Curtail Overcharges for Therapy 
        in Nursing Homes,'' March 30, 1995, GAO/HEHS-95-23.

    a. Summary.--Nursing homes and rehabilitation centers are 
taking advantage of ambiguous payment rules and lack of 
guidelines to bill Medicare at inflated rates for therapy 
services. State averages for physical, occupational, and speech 
therapists' salaries range from about $12 to $25 per hour, but 
Medicare has been charged upwards of $600 per hour. The extent 
of overcharging and its precise impact on Medicare outlays are 
unclear; however, billing schemes uncovered in recent years 
suggest that the problem is nationwide and is growing in 
magnitude. Extraordinary markups on therapy can result from 
providers exploiting regulatory ambiguity and weaknesses in 
Medicare payment rules. Payment rules and procedures developed 
when the therapy industry was much smaller and less 
sophisticated have proved no match for increasingly complex 
business practices designed to generate increased Medicare 
revenue and skirt program controls. Although the over billing 
problem has been known since 1990, no action has been taken to 
close loopholes that allow payment for these overcharges.
    b. Benefits.--The need to achieve savings in Medicare is 
paramount to any efforts to balance the budget. This report 
informs Congress about another type of waste, fraud, and abuse 
within the system, and thus, arms Congress with the knowledge 
to prevent it.

14. ``Multifamily Housing: Better Direction and Oversight by HUD Needed 
        for Properties Sold With Rent Restrictions,'' March 22, 1995, 
        GAO/RCED-95-72.

    a. Summary.--Between 1990 and 1993, the Department of 
Housing and Urban Development (HUD) began foreclosure on many 
insured mortgages on multifamily properties with financial, 
physical, or operating problems. However, HUD was unable to 
sell many of the properties promptly because of long-term rent 
subsidies the agency had attached to some properties. 
Purchasers of 62 properties agreed to restrict rents charged to 
low-income households to the same rent that they would have 
paid under the HUD rent subsidy program--usually 30 percent of 
the household income. GAO found that HUD had not (1) provided 
its field offices or purchasers of HUD multifamily properties 
with clear instructions on the procedures owners must follow in 
managing properties subject to rent restrictions or (2) 
established long-term requirements specifying how field offices 
should oversee owners' compliance with agreed upon use 
restrictions. As a result, HUD has placed inconsistent 
requirements on property owners and, until recently, did not 
require field offices to oversee owner compliance.
    b. Benefits.--The report documents HUD's failure to 
properly oversee multifamily properties sold with rent 
restrictions.

15. ``School Facilities: America's Schools Not Designed or Equipped for 
        21st Century,'' April 4, 1995, GAO/HEHS-95-95.

    a. Summary.--To educate America's children for an 
increasingly technological world, schools must have the 
equipment and the infrastructure, such as computers, in place 
before technology can be fully integrated into the curriculum. 
GAO surveyed about 10,000 schools across the country and 
visited 10 school districts. GAO found that overall the 
Nation's schools were not even close to meeting their basic 
technology needs. Most schools do not use modern technology, 
and not all students--even those attending schools in the same 
district--have equal access to facilities that can support 
education into the 21st century. Schools with 50 percent or 
more minority students were found to be more likely to have 
unsatisfactory environmental conditions such as poor lighting 
and little physical security, and were found less likely to 
have technology elements.
    b. Benefits.--The report documents the failure of schools 
to integrate technology into the curriculum and prepare 
students for the future.

16. ``Medicaid: Spending Pressures Drive States Toward Program 
        Reinvention,'' April 4, 1995, GAO/HEHS-95-122.

    a. Summary.--The $131 billion Medicaid program is at a 
crossroads. Between 1985 and 1993, Medicaid costs tripled and 
the number of beneficiaries rose by more than 50 percent. 
Medicaid costs are projected to rise to $260 billion, according 
to the Congressional Budget Office. Despite Federal and State 
budgetary constraints, several States are seeking to expand the 
program and enroll hundreds of thousands of new beneficiaries. 
The cost of expanded coverage, they believe, will be offset by 
the reallocation of Medicaid funds and the wholesale movement 
of beneficiaries into some type of managed care arrangement. 
This report examines (1) Federal and State Medicaid spending; 
(2) some States' efforts to contain Medicaid costs and expand 
coverage through waiver of Federal requirements; and (3) the 
potential impact of these waivers on Federal spending and on 
Medicaid's program structure overall.
    b. Benefits.--With rapidly increasing costs, the report 
shows the need for reform of the Medicaid program.

17. ``Medicaid: Restructuring Approaches Leave Many Questions,'' April 
        4, 1995, GAO/HEHS-95-103.

    a. Summary.--Over the years, various proposals have been 
made to restructure the Medicaid program. One approach calls 
for providing Federal block grants to the States and giving 
them increased responsibility for running the program. Under 
another proposal, Medicaid would be entirely funded and 
administered by the Federal Government. Yet another would split 
Medicaid into two programs, one encompassing acute and primary 
care and the other long-term care. This report compares the 
different restructuring approaches and discusses their 
implications for Federal-State financing and program 
administration. GAO also provides information on the need to 
establish a Federal ``rainy day'' fund if restrictions, such as 
block grants, were placed on Federal revenues paid to States. 
GAO also provides the most recent data on the amount of Federal 
Medicaid funds provided to each State.
    b. Benefits.--Both major political parties agree on the 
need for Medicaid reform. This report examines the advantages 
and disadvantages of each of the proposals. It is an invaluable 
tool in analyzing the best way to save Medicaid.

18. ``Veterans Compensation: Offset of DOD Separation Pay and VA 
        Disability Compensation,'' April 3, 1995.

    a. Summary.--The Defense Department (DOD) uses separation 
pay to induce people to serve in the military despite the risk 
of involuntary separation. Congress authorized special 
separation pay to minimize the use of involuntary separations 
in the ongoing force drawdown. Pay offsets prevent service 
members from receiving dual compensation for a single period of 
service. Repealing offsets for separation and disability pay 
would cost the Federal Government an estimated $435 million for 
those service members who separated during fiscal years 1995-
1999. A repeal would cost about $799 million if it was made 
retroactive to fiscal year 1992, when the special separation 
pay program began. Separation and disability pay offsets have 
not significantly undermined the voluntary separation 
incentive. According to DOD, the bulk of the drawdown since 
fiscal year 1992 has been accomplished through voluntary 
separations. DOD requires the services to inform separating 
service members about the offset.
    b. Benefits.--As Congress considers repealing offsets for 
separation, it must consider the cost to the U.S. taxpayer and 
the impact on prospect of balancing the budget. This report 
gives the Congress the data it needs to discuss whether or not 
to repeal the offsets and to form payment formulas if offsets 
are repealed.

19. ``VA Health Care: Retargeting Needed To Better Meet Veterans' 
        Changing Needs,'' April 21, 1995, GAO/HEHS-95-39.

    a. Summary.--Many veterans have health care needs that are 
not adequately met through current health care programs, 
including the health care system run by the Department of 
Veterans Affairs (VA). About one-third of the Nation's homeless 
are veterans, nearly one-half of whom have serious mental 
problems, suffer from substance abuse, or both. The homeless 
have limited access to health care services and may not seek 
medical treatment. About 38 percent of male and 25 percent of 
female Vietnam veterans with Post Traumatic Stress Disorder 
have not sought treatment. About 91,000 low-income, uninsured 
veterans with no apparent health care options indicated in a 
1987 VA survey that they had never used VA health facilities 
because they were unaware that they were eligible or they had 
concerns about the quality or the accessibility of VA health 
care. VA cannot adequately address many of these health care 
needs because (1) it relies primarily on direct delivery of 
health services in VA facilities; (2) its complex eligibility 
and entitlement provisions limit the services that veterans may 
obtain from VA facilities; and (3) space and resource 
limitations prevent eligible veterans from obtaining covered 
services. This report presents several options for 
restructuring VA's health care system to enable it to better 
meet the health care needs of veterans.
    b. Benefits.--The number of veterans in the country has 
decreased and VA hospitals are underutilized, and yet, the VA 
wants to spend its resources on building more hospitals and 
medical centers. This report makes it clear that the VA could 
better spend its resources on outreach to the homeless, 
mentally ill, and substance abusing populations and on making 
access to non-VA medical centers easier.

20. ``Veterans' Benefits: VA Can Prevent Millions in Compensation and 
        Pension Overpayments,'' April 28, 1995, GAO/HEHS-95-88.

    a. Summary.--Despite its responsibility to ensure accurate 
benefit payments, the Department of Veterans Affairs (VA) 
continues to overpay veterans and their survivors hundreds of 
millions of dollars in compensation and pension benefits each 
year. VA has the ability to prevent millions of dollars in 
overpayments but has not done so because it has not focused on 
prevention. For example, VA does not use available data, such 
as information on when beneficiaries will become eligible for 
social security benefits, to prevent the overpayments. 
Furthermore, VA does not systematically collect, analyze, and 
use information on the specific causes of overpayments that 
will help it target preventive efforts.
    b. Benefits.--At a time when the VA is seeking more 
resources, this report highlights an example of gross 
mismanagement at the Department. The report points out simple 
and easy methods for preventing waste and mismanagement of 
millions of dollars, which could be redirected elsewhere.

21. ``School Safety: Promising Initiatives for Addressing School 
        Violence,'' April 25, 1995, GAO/HEHS-95-106.

    a. Summary.--Many schools throughout the United States are 
struggling with rising levels of youth violence. Schools have 
adopted a broad range of solutions to curb violence. The four 
programs GAO visited--in California, Ohio, and New York--are 
examples of some of the promising approaches schools have 
initiated to address violence. Research suggests that the most 
promising school-based violence prevention programs involve at 
least some of seven key characteristics, including a 
comprehensive approach, starting early, and involving parents. 
Although few prevention programs have been evaluated, some 
Federal agencies are now funding evaluations to examine various 
violence prevention program approaches. The results, which 
should be available in 3 to 5 years, will help determine which 
programs work best at cubing violence.
    b. Benefits.--This report helps Congress craft more 
effective legislation to address the growing problem of 
violence in our schools.

22. ``Long-Term Care: Current Issues and Future Directions,'' April 13, 
        1995, GAO/HEHS-95-109.

    a. Summary.--Today, an increasing number of Americans need 
long-term care. Unprecedented growth in the elderly population 
is projected for the 21st century, and the population age 85 
and older--those most in need of long-term care--is expected to 
outpace the rate of growth for the entire elderly population. 
In addition to the dramatic rise in the elderly population, a 
large portion of the long-term care population consists of 
younger people with disabilities. The importance of long-term 
care was underscored by the 1994 congressional debate over 
health care reform and, more recently, by the ``Contract with 
America,'' which proposed assistance such as tax deductions for 
long-term care insurance and tax credits for family care 
giving. This report (1) defines what is meant by ``long-term 
care'' and discusses the conditions that give rise to long-term 
care need, how such need is measured, and which groups require 
long-term care; (2) examines the long-term care costs that are 
born by Federal and State governments as well as by families; 
(3) addresses strategies that States and foreign countries are 
pursuing to contain public long-term-care costs; and (4) 
discusses predictions by experts on the future demand for long-
term care.
    b. Benefits.--Long-term care is proving to be one of the 
fastest growing areas of health care. A thorough understanding 
of who receives the care and who pays for the care are 
invaluable as strategies are initiated to slow the increase of 
medical costs, especially in entitlement programs like Medicaid 
and Medicare.

23. ``Prescription Drug Prices: Official Index Overstates Producer 
        Price Inflation,'' April 28, 1995, GAO/HEHS-95-90.

    a. Summary.--During the 1980's and 1990's, the prices of 
prescription drugs rose on average at triple the rate of 
inflation, according to U.S. Government statistics. As Congress 
debated whether to curb drug price increases, research 
questioning the accuracy of the price statistics--especially 
the producer price index for prescription drugs published by 
the Bureau of Labor Statistics--was in its early stages. Today, 
a body of research urges the reexamination of the accuracy of 
the producer price index for prescription drugs. This report 
(1) reviews the accuracy of the producer price index as a 
measure of drug price inflation; (2) describes whether the 
index could be changed to more accurately measure changes in 
the cost of buying drugs; and (3) provides guidance on 
appropriate uses and common misuses of price indexes.
    b. Benefits.--One of the fastest growing costs in health 
care is the price of drugs. It is important to have a clear 
understanding of the price movements in the drug industry to 
have a credible plan to control the costs of drugs.

24. ``Medicaid Managed Care: More Competition and Oversight Would 
        Improve California's Expansion Plan,'' April 28, 1995, GAO/
        HEHS-95-87.

    a. Summary.--The Medicaid program was established to make 
health care more accessible to the poor. In many communities, 
however, beneficiaries' access to quality care is far from 
guaranteed. Too few doctors and other health care providers 
choose to participate in Medicaid because of low payment rates 
and administrative burdens. To address the access problem, as 
well as rising costs and enrollment in its $15 billion Medi-Cal 
program (which serves about 5.4 million beneficiaries), 
California intends to increase its reliance on managed-care 
delivery systems. This report (1) describes California's 
current Medicaid managed-care program; (2) reviews the State's 
oversight of managed-care contractors with a focus on financial 
incentive arrangements and the provision of preventive care for 
children; (3) describes the State's plans for expansion; and 
(4) identifies key issues the State will face as it implements 
the expanded program.
    b. Benefits.--Both Republican and Democrat health care 
reform plans rely heavily on managed care to better control 
costs. As the largest State in the country, California offers 
the most similar example of how managed care issues can be 
addressed in any reform proposals.

25. ``Community Health Centers: Challenges in Transitioning to Prepaid 
        Managed Care,'' May 4, 1995, GAO/HEHS-95-138.

    a. Summary.--As States move to prepaid managed care to 
control costs and improve access for their Medicaid clients, 
the number of participating community health centers continues 
to grow. Medicaid prepaid managed care is not incompatible with 
health centers' mission of delivering health care to the 
medically underserved population. However, health centers face 
substantial risks and challenges as they move into these 
arrangements. Such challenges require new knowledge, skills, 
and information systems. Centers lacking expertise and systems 
face an uncertain future, and those in a vulnerable financial 
position are at even greater risk. Today's debate over possible 
changes in Federal and State health programs heightens the 
concern over the financial vulnerability of centers 
participating in prepaid managed care. If this funding source 
continues to grow as a percentage of total health center 
revenues, centers must face building larger cash reserves while 
not compromising services to vulnerable populations.
    b. Benefits.--Both Republican and Democrat health care 
reform plans rely heavily on managed care to better control 
costs. This report gives the Congress the information to help 
it avert many of the difficulties the health care industry 
faces as it transitions to managed care.

26. ``Medicare Claims: Commercial Technology Could Save Billions Lost 
        to Billing Abuse,'' May 5, 1995, GAO/AIMD-95-135.

    a. Summary.--With an investment of only $20 million in off-
the-shelf commercial software, Medicare could save nearly $4 
billion over 5 years by detecting fraudulent claims by 
physicians--primarily manipulation of billing codes. On the 
basis of a test in which four commercial firms reprocessed a 
sample of more than 20,000 paid Medicare claims, GAO estimates 
that the software could have saved $603 million in 1993 and 
$640 million in 1994. In addition, GAO estimates that because 
beneficiaries are responsible for about 22 percent of the 
payment amounts--mainly in the form of deductibles and 
copayments--Medicare could have saved an additional $134 
million in 1993 and $142 million in 1994. The test results 
indicate that only a small proportion of providers are 
responsible for most of the abuses: less than 10 percent of 
providers in the sample had miscoded claims.
    b. Benefits.--This report begins to quantify the savings 
available from the application of computer technology to 
Medicare claims processing. The Health Care Financing 
Administration has been developing a computer system, the 
Medicare Transaction System (MTS), to unify and standardize 
claims review. It is estimated that hundreds of millions of 
dollars in improper or ineligible Medicare claims are paid each 
year. This report indicates that significant savings could be 
accomplished if Medicare contractors used off-the-shelf 
commercial software while the MTS system is being deployed.

27. ``Welfare Dependency: Coordinated Community Efforts Can Better 
        Serve At-Risk Teen Girls,'' May 10, 1995, GAO/HEHS/RCED-95-108.

    a. Summary.--Although poverty and the erosion of families 
and neighborhoods have put many teenage girls at risk of 
pregnancy, school failure, and substance abuse, programs aimed 
at helping them are often too little, too late. However, GAO 
found that some communities are organizing coalitions with 
private and public agencies to integrate services and reach 
more young women at risk. This report (1) describes the health 
and the well-being of young at-risk teen girls and their 
families and the condition of the urban neighborhoods where 
they live; (2) presents local service providers' views on what 
the needs of these girls are, how they are addressing those 
needs, and what obstacles service providers may face in working 
with the girls, their families, and their communities; and (3) 
describes how the communities where these girls live are 
responding to the service needs of this group.
    b. Benefits.--The problems of at-risk teen girls are 
increasingly becoming an issue of national importance. 
Unfortunately, credible solutions are often ``too little, too 
late.'' This report provides information on some successful 
alternatives to assist at-risk teen girls.

28. ``Welfare to Work: Participants' Characteristics and Services 
        Provided in JOBS,'' May 2, 1995, GAO/HEHS-95-93.

    a. Summary.--The General Accounting Office found that most 
adult welfare recipients do not participate in the Job 
Opportunities and Basic Skills (JOBS) training program because 
of allowable exemptions and minimum participation standards. 
JOBS still reached only about 13 percent of single-female-
headed households receiving welfare each month in 1992; about 
60 percent were exempt from participation. Most of the 1.95 
million exempt adult welfare recipients were excused from 
participation because they were caring for children under 3 
years old. The low level of participation raises questions as 
to whether a program serving relatively few participants can 
bring about a widespread transformation of the welfare culture. 
In addition to discussing who is and is not being served under 
the JOBS training program, this report discusses (1) the range 
of services that JOBS participants are receiving and the extent 
to which participant needs are being met and (2) the 
implication of servicing participants in a system of time-
limited benefits.
    b. Benefits.--According to this report the JOBS program 
does not help most welfare recipients and a different approach 
is needed if the Congress wants to reform the welfare system.

29. ``Welfare to Work: Most AFDC Training Programs Not Emphasizing Job 
        Placement,'' May 19, 1995, GAO/HEHS-95-113.

    a. Summary.--In 1988, Congress strengthened the work 
requirements for welfare recipients by creating the Job 
Opportunities and Basic Skills Training (JOBS) program. 
Although, the JOBS program is designed to move welfare 
recipients from dependence to work, GAO found that a majority 
of JOBS programs lacked a strong employment focus. However, 
five welfare-to-work programs visited by GAO show promise 
because they focus on the importance of employment and forge 
links with employers. This report (1) provides examples of 
county or local JOBS or JOBS-like programs that emphasize job 
placement, subsidized employment, or work-experience positions 
for welfare recipients; (2) discusses the extent to which 
county JOBS programs nationwide use these employment-focused 
activities; and (3) examines factors that hinder program 
administrators' efforts to move welfare recipients into jobs.
    b. Benefits.--A previous GAO report indicated that the JOBS 
program is not reaching a significant portion of its target 
audience. This report will help the Congress change the current 
system to make it more effective.

30. ``Welfare Programs: Opportunities To Consolidate and Increase 
        Program Efficiencies,'' May 31, 1995, GAO/HEHS-95-139.

    a. Summary.--The Federal Government provides billions of 
dollars in public assistance each year through an inefficient 
welfare system that is increasingly cumbersome for program 
administrators to manage and difficult for eligible clients to 
access. Program consolidation may be one strategy to reduce 
inefficiency of the current system of overlapping and 
fragmented programs. This report (1) describes low-income 
families' participation in multiple welfare program; (2) 
examines program inefficiencies such as program overlap and 
fragmentation, and (3) identifies issues to consider in 
deciding whether, and to what extent, to consolidate welfare 
issues. Regardless of how the welfare system is restructured, 
ensuring that Federal funds are used efficiently and that 
programs focus on outcomes remains important. Without a focus 
on outcome, concerns and the effectiveness of welfare programs 
will not be adequately addressed.
    b. Benefits.--Both the administration and the Congress have 
suggested major reforms to the current welfare system involving 
consolidations. This report provides Congress with an indepth 
examination of how services are delivered and where likely 
inefficiencies and duplications can be found. This in turn, 
points to many areas where consolidation may be effective.

31. ``Federal Reorganization: Congressional Proposal To Merge 
        Education, Labor, and EEOC,'' June 7, 1995, GAO/HEHS-95-140.

    a. Summary.--A congressional proposal to consolidate the 
Departments of Labor and Education along with the Equal 
Employment Opportunity Commission (EEOC) envisions saving 
billions of dollars and creating more efficient services, but 
savings might be elusive if downsizing proceeds too quickly or 
proceeds without careful planning. The proposal to create a new 
Department of Education and Employment could yield savings of 
about $1.65 billion in administrative costs through the year 
2000. The proposal significantly changes Education's existing 
structure, program offerings, and processes. The proposal would 
also raise program consolidation, workforce, accountability, 
implementation, and oversight issues that Congress, Education, 
and other agencies would need to address to ensure that Federal 
education and training programs meet the Nation's needs.
    b. Benefits.--Currently, the Departments of Labor and 
Education offer many programs which duplicate or overlap. 
Furthermore, education and labor issues are becoming 
increasingly intertwined. This report concludes that the 
proposal to combine these two departments and the Equal 
Employment Opportunity Commission could result in significant 
savings.

32. ``Nutrition Monitoring: Data Serve Many Purposes; Users Recommend 
        Improvements,'' June 20, 1995, GAO/PEMD-95-15.

    a. Summary.--The National Nutrition Monitoring and Related 
Research Program consists of a network of surveys, surveillance 
systems, and research activities that serve various purposes. 
It provides researchers and decisionmakers with data for 
assessing the safety of the Nation's food supply, targeting 
food assistance to low-income families, and studying the 
relationship between diet and disease. The program has been 
criticized, however, for the lack of coordination among the 
various activities and its poor coverage of populations at risk 
of nutritional problems. GAO surveyed users of nutrition-
monitoring data. This report (1) describes the users and the 
major uses of nutrition-monitoring data and (2) summarizes user 
satisfaction with nutrition-monitoring activities and the 
changes that users believe are likely to increase their use of, 
or confidence in, the data.
    b. Benefits.--Increasingly, scientists are discovering more 
connections between diet and the incidence of disease or 
illness. In order to reduce both the human and dollar costs of 
illness, nutritional standards must be considered by 
decisionmakers. This report will help improve the collection 
and coordination of this data.

33. ``HUD Management: FHA's Multifamily Loan Loss Reserves and Default 
        Prevention Efforts,'' June 5, 1995, GAO/RCED/AIMD-95-100.

    a. Summary.--In recent years, the number of defaults on 
Federal Housing Administration (FHA) insured loans for 
multifamily housing has soared. In 1994, FHA established loan 
loss reserves of $103 billion for its multifamily portfolio. 
This represents the amount that HUD expects to lose from future 
defaults on FHA-insured loans. This report evaluates (1) the 
methodology that FHA used to set loan loss reserves for its 
fiscal year 1993 multifamily portfolio; (2) the relative 
benefit of creating a new, actuarially sound insurance fund for 
all new multifamily housing insurance commitments; and (3) 
HUD's current initiatives for preventing future defaults on 
FHA's multifamily housing loans.
    b. Benefits.--The report documents the FHA's handling of 
defaults within its multifamily portfolio and the FHA's 
establishment of loan loss reserves. The report will assist the 
Congress in any efforts to restructure either FHA or the 
agency's multifamily portfolio.

34. ``Housing Finance: Improving the Federal Home Loan Bank System's 
        Affordable Housing Program,'' June 9, 1995, GAO/RCED-95-82.

    a. Summary.--Decent and affordable housing for every 
American family has been a goal of national housing policy 
since 1949. A shortage of affordable housing has prompted 
Congress to expand the capital available to finance such 
housing. The Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 required that the Federal Home Loan 
Bank System establish an Affordable Housing Program to help 
finance housing for households with very low, low, and moderate 
incomes and directed GAO to evaluate this program. This report 
examines (1) how program funds have been used to support 
affordable housing initiatives; (2) how the program has been 
run; and (3) whether opportunities exist to improve the program 
as a source of housing finance.
    b. Benefits.--The report provides a generally positive 
evaluation of the Federal Home Loan Bank System's Affordable 
Housing Program and highlights the program's role in promoting 
affordable housing. GAO's report indicates that the program is 
continuing to institute improvements. The report also suggests 
that the Congress should continue funding upon adoption of some 
small changes.

35. ``Public Housing: Converting to Housing Certificates Raises Major 
        Questions About Cost,'' June 20, 1995, GAO/RCED-95-195.

    a. Summary.--Proposed legislation submitted to Congress by 
the Department of Housing and Urban Development (HUD) would 
change how the United States has traditionally funded public 
housing. Federal aid would no longer flow to public housing 
authorities but instead would go to households in the form of 
housing certificates, giving these families the choice of 
remaining in public housing or moving to rental apartments. HUD 
believes that this shift in policy would save money and solve 
several basic problems with public housing, including 
residents' lack of choice in housing, the concentration of very 
poor people in very poor neighborhoods, and a lack of 
discipline in management of public housing because of its 
insulation from the marketplace. This report analyzes the 
proposed legislation and (1) describes the cost implications 
and issues raised by switching from the current public housing 
program to one using housing certificates and (2) identifies 
key factors that may affect HUD's plan to provide greater 
housing choice for public housing residents.
    b. Benefits.--Both the administration and the Congress have 
called for major changes in national housing policy. This 
report provides an indepth analysis of the voucher conversion 
proposal offered by the administration.

36. ``Federal Family Education Loan Information System: Weak Computer 
        Controls Increase Risk of Unauthorized Access to Sensitive 
        Data,'' June 12, 1995, GAO/AIMD-95-117.

    a. Summary.--Controls over the Federal Education Loan 
Program information system, which is operated by a contractor 
for the Education Department, are critical to safeguarding 
assets, maintaining sensitive loan data, and ensuring the 
reliability of financial management information. GAO found that 
Education's general controls over the system failed to 
adequately protect sensitive files, applications programs, and 
systems software from unauthorized access, changes, or 
disclosure.
    b. Benefits.--This report makes it clear that the 
Department of Education could significantly improve their 
information systems thereby, improving the efficiency of data 
collection and preventing loan defaults.

37. ``Foreign Housing Guaranty Program: Financial Condition Is Poor and 
        Goals Are Not Achieved,'' June 2, 1995, GAO/NSIAD-95-108.

    a. Summary.--Since 1961, the Agency for International 
Development's (USAID) housing Guaranty Program has guarantied 
more than $2.7 billion in loans in 44 countries for home 
construction, mortgages, home improvements, urban 
infrastructure, and other shelter projects. A fundamental 
program goal is to increase housing for low-income families in 
developing countries by motivating local institutions to 
provide investment capital and other resources. However, 
Congress should consider terminating the program because it has 
failed to spur private-sector investment in low-income housing 
in developing countries, its benefits often go to higher-income 
persons, and its loan defaults may ultimately cost the U.S. 
Government as much as $1 billion. Moreover, program assistance 
has gone increasingly to creditworthy developing nations that 
have ready access to international financing.
    b. Benefits.--This report suggests the failure of a program 
which does not fulfill its mission and is proving financially 
unsound. The report presents information that questions the 
continued need for the Foreign Housing Guaranty Program.

38. ``Food Aid: Competing Goals and Requirements Hinder Title I Program 
        Results,'' June 26, 1995, GAO/GGD-95-68.

    a. Summary.--During the past 40 years, the United States 
has allocated more than $88 billion in food assistance to 
developing countries under Title I of the 1954 Agriculture 
Trade Development and Assistance Act. Under the Title I 
program, run by the Agriculture Department, U.S. agricultural 
commodities are sold on long-term credit terms at below-market-
rate interest. Although the United States remains a world 
leader in providing food aid, Title I's share of both U.S. food 
aid and overall U.S. agricultural exports has declined 
dramatically since the program's inception. This report 
evaluates the impact of Title I assistance on (1) broad-based, 
sustainable economic development in recipient countries and (2) 
long-term market development for U.S. agricultural goods in 
those countries. GAO also reviews the effect of 1990 
legislation on restructuring title I program management and the 
program's ability to sustain economic and market development.
    b. Benefits.--Congress must continually evaluate the 
effectiveness of programs. This report gives Congress the tools 
needed to candidly evaluate the effectiveness of the Title I 
food assistance program and the effects of the 1990 
restructuring.

39. ``Child Welfare: Opportunities to Further Enhance Family 
        Preservation and Support Activities,'' June 15, 1995, GAO/HEHS-
        95-112.

    a. Summary.--During the past 20 years, social, cultural, 
and economic changes--such as increases in drug abuse, 
community violence, and poverty--have increased the severity of 
problems plaguing American families and the number of families 
that have come to the attention of child welfare agencies. From 
1976 to 1992, the rates of child abuse and neglect increased 
fourfold. And from 1988 to 1993, the number of foster children 
increased nearly one-third, to 450,000. States have struggled 
to keep up with the increased demand for child welfare 
services, but worsening State fiscal difficulties have further 
strained the child welfare system's ability to serve vulnerable 
children and their families. As part of the Omnibus Budget 
Reconciliation Act of 1993, Congress authorized new funding for 
family preservation and family support services. More recently, 
Congress has considered proposals to incorporate these funds, 
along with other child welfare programs, into a block grant 
program for States. This report (1) describes the condition of 
child welfare in America that precipitated the 1993 act; (2) 
assesses Federal and State efforts to implement its provisions; 
and (3) highlights areas in which these efforts could be 
enhanced.
    b. Benefits.--This report highlights the deteriorating 
state of many American families and the effects on children and 
provides information useful in the evaluation of Federal 
assistance efforts.

40. ``Community Development: Reuse of Urban Industrial Sites,'' June 
        30, 1995, GAO/RCED-95-172.

    a. Summary.--Thousands of former industrial sites, known as 
``brownfields,'' are abandoned and possibly contaminated. Many 
offer potential for redevelopment, but developers have been 
reluctant to get involved because of far-reaching and uncertain 
liability imposed by Federal and State liability laws. This 
report (1) determines what is known about the extent and the 
nature of abandoned industrial sites in distressed urban areas 
and the barriers that brownfields present to redevelopment and 
(2) provides information on Federal initiatives aimed at 
helping communities overcome obstacles to reusing brownfield 
sites.
    b. Benefits.--Former industrial sites often have great 
potential for redevelopment possibilities, but as the report 
shows, these possibilities are frustrated by potential 
liabilities from Federal and State liability laws. The report 
indicates a need for further investigation into how the 
redevelopment of ``brownfields'' can be encouraged.

41. ``Welfare Benefits: Potential To Recover Hundreds of Millions More 
        in Overpayments,'' June 20, 1995, GAO/HEHS-95-111.

    a. Summary.--Under welfare reform legislation being 
considered by Congress, resources for helping poor families may 
become increasingly limited--making it critical that only those 
who are eligible for benefits receive them. In 1992, benefit 
overpayments in three welfare programs--Aid to Families With 
Dependent Children, Food Stamps, and Medicaid--totaled $4.7 
billion, or about 4 percent of the total benefits paid. 
Nationwide recovery of these benefits was relatively low. This 
report discusses (1) what States are doing to recover benefit 
overpayments; (2) what the more effective practices are; (3) 
what States could do better; and (4) what the Federal 
Government could do to help States recover more overpayments.
    b. Benefits.--Overpayments in welfare programs are a large 
drain on resources that could be better used to help other 
people, expand benefits, or be put to different uses. The 
report reinforces the need for welfare reform and stronger 
oversight of welfare programs to reduce overpayments and other 
wasteful practices.

42. ``Employment Discrimination: Most Private-Sector Employers Use 
        Alternative Dispute Resolution,'' July 5, 1995, GAO/HEHS-95-
        150.

    a. Summary.--The number of discrimination lawsuits filed in 
Federal courts has increased dramatically in recent years. 
Employers have become more and more concerned about the costs 
involved in resolving these complaints--in time, money, and 
good employee relationships. Some employers have turned to 
internal alternative dispute resolution approaches, including 
arbitration, which requires submitting disputes to a neutral 
third person for resolution. Some require their employees to 
agree to binding arbitration of discrimination complaints as a 
condition of their employment, forcing employees to waive the 
right to sue. GAO estimates, on the basis of a survey of 2,000 
businesses, that almost all employers with 100 or more 
employees use one or more alternative dispute resolution 
approaches. Arbitration is one of the least common approaches 
reported. Employer policies on arbitrating discrimination 
complaints vary considerably. Some of these policies, such as 
those for employees obtaining information and empowering the 
arbitrator to use remedies equal to those under law, would not 
meet standards of fairness proposed recently by a commission 
established by the Secretary of Labor and the Secretary of 
Commerce.
    b. Benefits.--The use of alternative dispute resolution 
reduces costs for businesses resolving discrimination 
complaints. Some of the methods might be used by the Federal 
Government.

43. ``Supplemental Security Income: Growth and Changes in Recipient 
        Population Call for Reexamining Program,'' July 7, 1995, GAO/
        HEHS-95-137.

    a. Summary.--The Supplemental Security Income (SSI) program 
is the largest cash assistance program for the poor and one of 
the fastest-growing entitlement programs. Program costs have 
risen 20 percent annually during the last 4 years. SSI provides 
means-tested income support payment to aged, blind, or disabled 
persons. Last year, more than 6 million persons received about 
$25 billion in Federal and State benefits. In response to SSI's 
rapid growth, Congress passed legislation limiting drug 
addicts' benefits, and this year it is considering further 
restrictions for these recipients, as well as for children and 
noncitizens. This report provides an overview of the SSI 
program and its recent history. Specifically, it examines 
factors contributing to caseload growth and changes in the 
characteristics of SSI recipients.
    b. Benefits.--This report gives Congress and the American 
people background and reasons for the rapid growth in SSI. This 
report provides important information in the debate over 
welfare and entitlement reform.

44. ``Health Insurance for Children: Many Remain Uninsured Despite 
        Medicaid Expansion,'' July 19, 1995, GAO/HEHS-95-175.

    a. Summary.--Expanding children's Medicaid eligibility has 
significantly increased the number of children who rely on 
Medicaid for health coverage. It has also cushioned the effect 
of declining employment-based health insurance coverage for 
children. Because of expanded eligibility, the proportion of 
children on Medicaid in working and in two-parent families has 
grown. Congress is considering welfare reform proposals that 
would encourage low-income mothers to work. Yet many low-income 
jobs do not offer health insurance as a benefit. Even children 
who have full-time working parents and are part of two-parent 
households may lack health insurance. Although Medicaid has 
begun to help close that gap for some families, many more 
uninsured children are eligible for Medicaid than have been 
enrolled. Changes to Medicaid that remove guaranteed 
eligibility and change the financing and responsibilities of 
Federal and State government may strongly affect health 
insurance coverage for children in the future. Children account 
for only a small portion of Medicaid costs. Because they 
represent almost half the participants, however, any changes to 
Medicaid disproportionately affect children. Changes to 
Medicaid that reduce the number of children covered, without 
any corresponding changes to encourage employers to provide 
dependent health insurance coverage or to provide other 
coverage options for children, could significantly increase the 
number of uninsured children in the future.
    b. Benefits.--This report demonstrates the need to be 
careful in deciding how reforms are implemented so that 
children are not unfairly affected.

45. ``Property Disposition: Information on HUD's Acquisition and 
        Disposition of Single-Family Properties,'' July 24, 1995, GAO/
        RCED-95-144FS.

    a. Summary.--Each year, lenders foreclose on thousands of 
defaulted mortgages on single-family properties insured by the 
Department of Housing and Urban Development's (HUD) Federal 
Housing Administration (FHA). With few exceptions, HUD then 
takes ownership of, and later resells, these properties. FHA 
almost always loses money on the sale of foreclosed properties. 
In response to congressional concerns about the costs that HUD 
incurs in acquiring, managing, and selling the foreclosed 
properties, this fact sheet provides information on (1) the 
losses on such properties sold during the 3 fiscal years ending 
September 20, 1994, and the breakdown of the costs associated 
with these losses; (2) the number of properties that HUD 
acquired and sold during the 3-year period; and (3) the length 
of time that the properties remained in HUD's inventory before 
being sold.
    b. Benefits.--At the request of the Congress, GAO has 
compiled comprehensive data on HUD's acquisition and 
disposition of single-family properties. This report provides 
the Congress with necessary information for reform efforts 
aimed at improving single-family acquisition and disposition 
policy.

46. ``College Savings: Information on State Tuition Prepayment 
        Programs,'' August 3, 1995, GAO/HEHS-95-131.

    a. Summary.--A handful of States have adopted tuition 
prepayment programs, which allow parents to pay in advance for 
tuition at participating colleges on behalf of a designated 
child, thereby ensuring full coverage of the child's future 
tuition bill at one of these colleges regardless of how much 
costs rise. By allowing purchasers to ``lock in'' today's 
prices, these programs are intended to ease families' concerns 
about whether they will have enough money in the future to pay 
for their children's' college expenses. This report (1) 
describes how these programs operate and the participation 
rates they have achieved; (2) assesses participants' income 
levels and options for increasing the participation of lower-
income families; and (3) discusses the key issues surrounding 
these programs.
    b. Benefits.--States are using innovative means to address 
the cost of college. This report will help the Federal 
Government decide if it can learn from those experiences and 
improve Federal loan programs.

47. ``Medicare: Increased HMO Oversight Could Improve Quality and 
        Access to Care,'' August 3, 1995, GAO/HEHS-95-155.

    a. Summary.--This report discusses problems that the Health 
Care Financing Administration (HCFA) has had in (1) monitoring 
health maintenance organizations (HMO) it contracts with to 
provide services to Medicare beneficiaries and (2) ensuring 
that they comply with Medicare's performance standards. GAO 
found weaknesses in HCFA's quality assurance monitoring, 
enforcement measures, and appeal processes. Although HCFA 
routinely reviews HMO operations for quality, these reviews are 
generally perfunctory and do not consider the financial risks 
that HMO's transfer to providers. Moreover, HCFA collects 
virtually no data on services received through HMO's that would 
enable HCFA to identify providers who may be under serving 
beneficiaries. In addition, HCFA's HMO oversight has two other 
major limitations: enforcement actions are weak, and the 
beneficiary appeal process is slow. HCFA's current regulatory 
approach to ensuring good HMO performance appears to GAO to lag 
behind the private sector.
    b. Benefits.--As both the administration and Congress 
promote HMO's, it is critical that HCFA have the systems in 
place to deal with the increased use of HMO's. This report 
makes it clear that HCFA must place more emphasis on handling 
this emerging form of health care.

48. ``Medigap Insurance: Insurers' Compliance With Federal Minimum Loss 
        Ratio Standards, 1988-1993,'' August 23, 1995, GAO/HEHS-95-151.

    a. Summary.--The Medigap market grew steadily from 1988 to 
1993, from $7.3 billion to $12.1 billion. Medigap insurers' 
aggregate loss ratios were relatively stable during the first 4 
years of that period. During the next 2 years, however, these 
ratios fell about 10 percentage points, to an aggregate 75 
percent for individual policies and 85 percent for group 
policies. In 1991, 19 percent of Medigap policies failed to 
meet loss ration standards; this rose to 38 percent by 1993. 
The premium dollars spent on such policies increased from $320 
million in 1991 to $1.2 billion in 1993. If insurers had been 
required to give refunds or credits on substandard policies, as 
they will in the future, policyholders would have been due 
about $124 million during 1992 and 1993.
    b. Benefits.--This report shows that despite some minor 
concerns the Medigap program is one reform that is working to 
standardize coverages, improve underwriting standards and 
prevent abuses.

49. ``Nonprescription Drugs: Value of a Pharmacist-Controlled Class Has 
        Yet To Be Demonstrated,'' August 24, 1995, GAO/PEMD-95-12.

    a. Summary.--The drug classification system in the United 
States, under which drugs are classified as either prescription 
or nonprescription, is unique. Other countries have a class of 
drugs that is available without a prescription but can be 
obtained only at a pharmacy and sometimes can be dispensed only 
by a pharmacist. This report reviews the drug distribution 
systems in 10 countries and the European Union. GAO also 
reviews the practice of pharmacists' counseling patients on the 
use of nonprescription drugs. GAO found that little evidence 
exits to support the establishment of a pharmacy or a 
pharmacist class of drugs in the United States at this time, 
either as a fixed or a transition class. Available evidence 
tends to undermine the argument that countries with such a 
class obtain major benefits. This report discusses in detail 
the facts supporting this conclusion.
    b. Benefits.--This report demonstrates the need to assess 
the way other nations determine pharmaceutical classifications. 
In reviewing the classification systems of other nations, the 
GAO has shown no appreciable gains to be made by changing the 
U.S. classification system.

50. ``Medicare: Antifraud Technology Offers Significant Opportunity To 
        Reduce Health Care Fraud,'' August 11, 1995, GAO/AIMD-95-77.

    a. Summary.--Medicare continues to suffer large losses each 
year due to fraud. Existing risks are sharply increased by the 
continual growth in Medicare claims--both in number and 
percentage processes electronically. Existing Medicare payment 
safeguards can be bypassed and apparently do not deter 
fraudulent activities. The Health Care Financing Administration 
should be able to benefit by taking full advantage of emerging 
antifraud technology to better identify and prevent Medicare 
fraud. The number and types of Medicare fraud schemes 
perpetrated in South Florida may make that area the best place 
to test antifraud systems before nationwide use.
    b. Benefits.--Previous GAO reports have shown that HCFA 
lacks comprehensive and sometimes common sense ways to combat 
waste, fraud, and abuse in Medicare and Medicaid, resulting in 
the loss of billions of dollars each year. This report 
reinforces that view and cautions Congress once again that it 
must take steps to ensure better accounting and accountability 
at the agency.

51. ``VA Health Care: Need for Brevard Hospital Not Justified,'' August 
        29, 1995, GAO/HEHS-95-192.

    a. Summary.--The Department of Veterans Affairs (VA) 
assumed control of a former naval hospital in Orlando, FL, in 
June 1995. VA plans to convert the hospital into a nursing home 
while continuing to operate an existing outpatient clinic. VA 
also plans to build a new hospital and nursing home in Brevard 
County, 50 miles from Orlando. GAO concludes that VA's 
conversion of the former Orlando Naval Hospital into a nursing 
home and construction of a new hospital and nursing home in 
Brevard County is not the most prudent and economical use of 
its resources. These construction projects are based on 
questionable planning assumptions that may result in an 
unneeded expenditure of Federal dollars. Specifically, VA did 
not adequately consider hundreds of nursing home beds available 
in nearby communities, unused VA hospital beds, and the 
potential for decreasing demand for VA hospital beds. VA could 
achieve its goals in central Florida by using existing 
capacity.
    b. Benefits.--The report provides useful information 
regarding flaws in the VA criteria and process used to allocate 
construction funds.

52. ``Medicare: Excessive Payments for Medical Supplies Continue 
        Despite Improvements,'' August 8, 1995, GAO/HEHS-95-171.

    a. Summary.--In fiscal year 1994 alone, Medicare was billed 
more than $6.8 billion for medical supplies. Congressional 
hearings and government studies have shown that Medicare has 
been extremely vulnerable to fraud and abuse in its payments 
for medical supplies, especially surgical dressings. In one 
case, Medicare paid more than $15,000 in claims for a month's 
supply of surgical dressings for a single patient, apparently 
without reviewing the reasonableness of the claims before 
payment. Until recently, medical suppliers had considerable 
freedom in choosing the Medicare contractors that would process 
and pay their claims. Some exploited this freedom by 
``shopping'' for contractors with the weakest controls and 
highest payment rates. This report discusses (1) the 
circumstances allowing payment for unusually high claims for 
surgical dressing and (2) the adequacy of Medicare's internal 
controls to prevent payments for excessive claims.
    b. Benefits.--As previous GAO reports have concluded, HCFA 
lacks proper controls within Medicare and Medicaid to prevent 
large scale waste, fraud, and abuse. This report points to the 
need for significant reforms to assure program integrity.

53. ``Block Grants: Issues in Designing Accountability Provisions,'' 
        September 1, 1995, GAO/AIMD-95-226.

    a. Summary.--Congress has shown strong interest in 
consolidating narrowly defined categorical grant programs into 
broader purpose block grants. A total of 15 block grant 
programs with funding of $35 billion were in effect in fiscal 
year 1994, constituting a small portion of the total Federal 
aid to States. If Medicare and Aid to Families With Dependent 
Children are added, however, block grant spending could rise 
substantially--to as much as $138 billion or about 58 percent 
of the total Federal aid to States. This report summarized 
information on how accountability for program financial 
management can be designed to fit a block grant approach and 
the potential consequences of such provisions. To provide an 
overview and summary of GAO's evaluations of past block grant 
programs, GAO reviewed nearly two decades of reports, 
testimony, and other documents on accountability issues related 
to intergovernmental programs. GAO also consulted with experts 
on block grants, performance budgeting, and financial 
accountability.
    b. Benefits.--In order to give States more flexibility, the 
Congress has supported converting categorical grant programs 
into block grants. The GAO report will help the Congress 
establish effective management and accountability systems in 
block grants.

54. ``Adult Education: Measuring Program Results Has Been 
        Challenging,'' September 8, 1995, GAO/HEHS-95-153.

    a. Summary.--According to a recent national survey, nearly 
90 million adults in the United States have difficulty writing 
a letter explaining an error on a credit card bill, using a bus 
schedule, or calculating the difference between the regular and 
sale price of an item. To address these deficient skills, 
Congress passed the Adult Education Act, which funds State 
programs to help adults acquire the basic skills needed for 
literacy, benefit from job training, and continue their 
education at least through high school. The most common types 
of instruction funded under the act's largest program--the 
State Grant Program--are basic education (for adults 
functioning below the eighth grade level), secondary education, 
and English as a second language. Because many clients of 
Federal employment training programs need instruction provided 
by the State Grant Program, coordination among these programs 
is essential. Although the State Grant Program funds programs 
that address the educational needs of millions of adults, it 
has had difficulty ensuring accountability for results because 
of a lack of clearly defined program objectives, questionable 
validity of adult student assessments, and poor student data.
    b. Benefits.--The GAO report demonstrates that there is a 
great need for literacy training. However, the report also 
suggests that the current system used to evaluate the 
illiteracy rate cannot ascertain the success of the program. 
The report will aid Congress in considering legislation to 
target literacy programs to achieve measurable goals.

55. ``School Finance: Trends in U.S. Education Spending,'' September 
        15, 1995, GAO/HEHS-95-235.

    a. Summary.--Recent trends in financing U.S. education show 
a leveling off of per pupil spending for education combined 
with increasing enrollment in public elementary and secondary 
schools. Meanwhile, the schools face an increasing number of 
poor children and others at high risk of school failure--
students whose education costs are generally greater than 
average. Moreover, education's share of State budgets has 
declined, and Federal funding for education faces tight fiscal 
constraints. If these trends continue, America may be less able 
to provide adequate educational services for many school-age 
children or make needed improvements in the educational system.
    b. Benefits.--This report examines trends in per pupil 
funding for education. The information provides a thorough and 
useful overview of the issues Congress and the American people 
must consider in order to ensure adequate education funding in 
the future.

56. ``Medicare Spending: Modern Management Strategies Needed To Curb 
        Billions in Unnecessary Payments,'' September 19, 1995, GAO/
        HEHS-95-210.

    a. Summary.--Medicare's vulnerability to billions of 
dollars in unnecessary payments stems from a combination of 
factors. First, Medicare pays higher than market rates for some 
services and supplies. For example, Medicare pays more than the 
lowest suggested retail price for more than 40 types of 
surgical dressings. Second, Medicare's anti-fraud-and-abuse 
controls do not prevent the unquestioned payment of claims for 
improbably high charges or manipulated billing codes. Third, 
Medicare's checks on the legitimacy of providers are too 
superficial to detect the potential for scams. Various health 
care management strategies help private payers avoid these 
problems, but Medicare generally does not use these strategies. 
The program's pricing methods and controls over utilization, 
consistent with health care financing and delivery 30 years 
ago, have not kept pace with major financing and delivery 
changes. GAO believes that a viable strategy to remedy the 
program's weaknesses would involve adapting the health care 
management approach of private payers to Medicare's public 
payer role. This strategy would include (1) more competitively 
developed payment rates; (2) enhanced fraud and abuse detection 
efforts through modernized information systems; and (3) more 
rigorous criteria for granting authorization to bill the 
program.
    b. Benefits.--Previous GAO reports have shown that HCFA 
lacks comprehensive and common sense ways to combat waste, 
fraud, and abuse in Medicare and Medicaid, resulting in the 
loss of billions of dollars each year. This report reinforces 
that view and points out successful practices from the private 
sector that can help prevent fraud and abuse in Medicare.

57. ``Medicaid: Tennessee's Program Broadens Coverage but Faces 
        Uncertain Future,'' September 1, 1995, GAO/HEHS-95-186.

    a. Summary.--In early 1993, Tennessee predicted that 
increases in State Medicaid expenditures and the loss of tax 
revenues used to finance Medicaid would produce a financial 
crisis. To control Medicaid expenditures, and extend health 
insurance coverage to most State residents, Tennessee converted 
its Medicaid program into a managed-care health program--
TennCare--to serve both Medicaid recipients and uninsured 
persons. GAO found that although TennCare met its objective of 
providing health coverage to many uninsured persons while 
controlling costs, concerns remain with respect to access to 
quality care and managed care performance. In addition, the 
soundness of the methodology for determining and the resulting 
adequacy of the program's capitation rates have been 
questioned. This report discusses (1) TennCare's basic design 
and objectives; (2) the degree to which the program is meeting 
these objectives; and (3) the experiences of TennCare's 
insurers and medical providers and their implications for 
TennCare's future.
    b. Benefits.--While the report highlights some concerns 
with TennCare, GAO makes clear that flexibility is paying off, 
giving the State more control over costs and expanding health 
coverage. The report makes the case to Congress that while 
giving States more flexibility in Medicaid eligibility and 
service delivery is not without its difficulties, it can be 
successful.

58. ``Health Care Shortage Areas: Designations Not a Useful Tool for 
        Directing Resources to the Underserved,'' September 8, 1995, 
        GAO/HEHS-95-200.

    a. Summary.--Many Americans live in places where barriers 
exist to obtaining basic health care. These areas range from 
isolated rural locations to inner-city neighborhoods. In fiscal 
year 1994, the Federal Government spent about $1 billion on 
programs to overcome access problems in such locales. To be 
effective, these programs need a sound method of identifying 
the type of access problems that exist and focusing services on 
the people who need them. The Department of Health and Human 
Services uses two main systems to identify such sites. One 
designates Health Professional Shortage Areas (HPSA), the other 
Medically Underserved Areas (MUA). More than half of all U.S. 
counties fall into these two categories. GAO reviewed the two 
systems to determine (1) how well they identify areas with 
primary care shortages; (2) how well they help target Federal 
funding to benefit those who are underserved; and (3) whether 
they are likely to be improved under proposals to combine them.
    b. Benefits.--The GAO report indicates that the HPSA and 
MUA systems do not effectively identify areas with primary care 
shortages or help target Federal resources to benefit those who 
are underserved. Furthermore, the GAO offers alternative reform 
initiatives for Congress and HHS to consider.

59. ``Cancer Drug Research: Contrary to Allegation, NIH Hydrazine 
        Sulfate Studies Were Not Flawed,'' September 13, 1995, GAO/
        HEHS-95-141.

    a. Summary.--Despite advances in treating cancer, some 
forms of the disease remain resistant to all therapies and are 
often fatal. Because of findings suggesting that hydrazine 
sulfate may improve survival for some patients with advanced 
cancers, the National Cancer Institute sponsored three studies 
of the drug. All three studies failed to show any benefit from 
it. The developer of hydrazine therapy alleged that the 
National Cancer Institute compromised its studies by allowing 
study patients to take tranquilizers, barbiturates, and 
alcohol, which they contend are incompatible with hydrazine 
sulfate. GAO confirmed that all three trials allowed the use of 
tranquilizers to varying degrees and one trial allowed the use 
of barbiturates and alcohol. Retrospective analyses, however, 
found no evidence that the use of these allegedly incompatible 
agents adversely affected the results of the clinical trials. 
Although GAO's work did not support the allegation that the 
studies were flawed, the National Cancer Institute should have 
ensured that complete and accurate records were kept on 
concurrent medications and possible alcohol use. Furthermore, 
the National Cancer Institute's investigators did not analyze 
this issue until recently, and the published results did not 
accurately describe the use of tranquilizers during one of 
these clinical trials.
    b. Benefits.--The GAO report demonstrates that the National 
Cancer Institute studies concerning hydrazine sulfate for 
cancer patients were not compromised by the use of 
tranquilizers, barbiturates, and alcohol. The report cautions 
the Institute about the accuracy of some recordkeeping and 
provides valuable insights to Congress on health care research 
procedures.

60. ``Health Insurance Portability: Reform Could Ensure Continued 
        Coverage for up to 25 Million Americans,'' September 19, 1995, 
        GAO/HEHS-95-257.

    a. Summary.--Although Federal and State laws have improved 
the portability of health insurance, an individual's health 
care coverage could still be reduced when changing jobs. 
Between 1990 and 1994, 40 States enacted small group insurance 
regulations that include portability standards, but the Federal 
Employee Retirement Income Security Act of 1974 prevents States 
from applying these standards to the health plans of employers 
who self-fund. As a result, Members of Congress have proposed 
broader national portability standards. GAO estimates that as 
many as 21 million Americans each year would benefit from 
Federal legislation to ensure that workers who change jobs 
would not be subject to new health insurance plans that impose 
waiting periods or exclude ``preexisting conditions.'' In 
addition, as many as 4 million Americans who at some point have 
been unwilling to leave their jobs because they feared losing 
their health care coverage would benefit from national 
portability standards. Such a change, however, could possibly 
boost premiums, according to insurers.
    b. Benefits.--With both the administration and the Congress 
agreeing on the need for greater health insurance portability, 
it is important that any legislation achieve that goal while 
avoiding unintended or market-distorting consequences in this 
complex area. This report provides Congress with important 
information on insurance portability issues.

61. ``Durable Medical Equipment: Regional Carrier's Coverage Criteria 
        Are Consistent With Medicare Law,'' September 19, 1995, GAO/
        HEHS-95-185.

    a. Summary.--In November 1993, the Health Care Financing 
Administration began consolidating the work of processing and 
paying claims for durable medical equipment, prostheses, 
orthoses, and supplies at four regional carriers. Claims for 
such items had previously been processed and paid by local 
Medicare carriers. As part of the transition to regional 
processing, the four regional carriers developed coverage 
criteria for the items. GAO found that the final criteria 
adopted by the regional carriers are consistent with Medicare's 
policies on national coverage and the law. GAO does not believe 
that the criteria have impeded access by disabled beneficiaries 
to needed durable medical equipment and other items. Also, the 
regional carriers approved a similar percentage of service for 
durable medical equipment and other items for disabled and aged 
Medicare beneficiaries in 1994, so there was no significant 
difference in access to durable medical equipment and other 
items between the two groups of beneficiaries.
    b. Benefits.--This report assists Congress in the discharge 
of its oversight responsibilities and provides useful analysis 
of a successful HCFA initiative.

62. ``Medical Liability: Impact on Hospital and Physician Costs Extend 
        Beyond Insurance,'' September 29, 1995, GAO/AIMD-95-169.

    a. Summary.--As Congress considers proposals to reduce the 
tort liability in the health care industry, little consensus 
exists on the extent to which medical liability-related 
spending boosts hospital and physician expenditures, a central 
issue in the debate over health care reform. GAO found that 
hospitals and physicians incur a variety of medical liability 
costs. Studies attempting to measure such costs have focused on 
the cost of purchased malpractice insurance, which is readily 
quantifiable because of State reporting requirements. Other 
hospitals and physician liability costs, however, are 
impractical and methodologically difficult to measure with any 
precision. Such costs include defensive medicine, liability-
related administrative expenses, and medical device and drug 
company liability expenses that are passed on to hospitals and 
doctors in the price of products. However, a broader 
understanding of such costs and their implications is useful to 
the ongoing medical liability reform debate.
    b. Benefits.--This report gives the Congress a greater 
understanding of liability related expenses in health care.

63. ``Health Care: Employers and Individual Consumers Want Additional 
        Information on Quality,'' September 29, 1995, GAO/HEHS-95-201.

    a. Summary.--Both employers who purchase health care and 
individual consumers have demanded more information on quality. 
In response to these demands, some States, large employers, and 
health plans have been publishing performance reports 
describing the quality of health care providers. These ``report 
cards'' provide such information as the frequency with which 
preventive services are provided and the degree of success in 
treating certain diseases. Data comparing health care plans and 
providers helped the consumers GAO surveyed make their health 
care purchasing decisions. However, performance reports have 
yet to achieve their fullest potential. Consumers said that 
they needed more reliable and valid data, more readily 
available and standardized information, and more emphasis on 
outcome measures. Meeting the information needs of individual 
consumers continues to lag behind meeting employer needs. 
Attention must be paid to ensuring that individual consumers 
have access to health care data. Although employers themselves 
have begun to cooperate with one another, few of those GAO 
interviewed are making complete health care data available to 
help individual consumers make purchasing decisions. Relevant 
stakeholders have not yet addressed the issues of disseminating 
performance data to individual consumers so that they can make 
responsive, informed decisions about their health care 
coverage.
    b. Benefits.--The movement toward managed health care has 
created a stronger need for quality of care information. This 
report provides information on performance measures and quality 
surveys used by States and private purchasers of health 
coverage.

64. ``Welfare to Work: Child Care Assistance Limited; Welfare Reform 
        May Expand Needs,'' September 21, 1995, GAO/HEHS-95-220.

    a. Summary.--From 1991 through 1993, Federal and State 
spending on child care subsidies to help welfare recipients 
work or go to school grew from about $460 million to more than 
$1 billion. As Congress and the States consider various 
approaches to restricting the length of time that mothers stay 
on welfare, questions have arisen about the child care needs 
that will arise as more and more welfare mothers participate in 
training activities or return to work. In particular, concerns 
have been raised about the capacity of State child care 
resources to handle the rise in the number of children needing 
care under such proposals. This report examines (1) the extent 
to which child care needs of welfare recipients in an education 
program--the Job Opportunities and Basic Skills Training 
program--are being met; (2) whether any barriers exist to 
meeting the child care needs of program participants; (3) the 
effects of child care subsidies on former welfare recipients' 
progress toward self-sufficiency; and (4) the potential 
implications of welfare reform for child care availability and 
continuity.
    b. Benefits.--This report provides Congress with useful 
information on the relationships between likely demand for 
welfare, health care and training programs.

65. ``Child Welfare: Complex Needs Strain Capacity To Provide 
        Services,'' September 26, 1995, GAO/HEHS-95-208.

    a. Summary.--Between 1983 and 1993, sharp increases in the 
number of foster children combined with unprecedented service 
needs led to a crisis in foster care. Reports of child abuse 
and neglect nearly doubled, and foster care caseloads grew by 
two-thirds. Demands for child welfare services grew not only 
because the number of foster children increased but also 
because families and children were more troubled and had more 
complex needs than in the past. Large numbers of preschool-age 
foster children, for example, are at risk for health problems 
due to prenatal drug exposure. Meanwhile, resources for child 
welfare services failed to keep pace with the needs of troubled 
children and their parents. Although foster care funding has 
increased dramatically at all levels of government, Federal 
funding for child welfare services has lagged. State and 
localities have found it hard to meet the demand, despite the 
fact that they have more than tripled expenditures in some 
cases. As a result, States have adopted various measures to 
meet the needs of troubled children and their families while 
maintaining child safety. Many States now offer family 
preservation services or place children with relatives to 
maintain family ties and save money. States are also 
increasingly considering the use of specialized foster homes 
for children with unique problems, including emotionally 
disturbed and medically fragile youngsters, to provide more 
family like care at lower costs than institutions.
    b. Benefits.--This report provides useful information on 
the complex and dynamic relationships between public assistance 
programs, particularly programs directed to children.

66. ``FDA Import Automation: Serious Management and Systems Development 
        Problems Persist,'' September 28, 1995, GAO/AIMD-95-188.

    a. Summary.--The Food and Drug Administration (FDA) 
oversees imports of food, drugs, cosmetics, medical devices, 
and other products to ensure that the public is protected from 
goods of questionable quality or that make misleading claims. 
In 1987, FDA began developing an automated system to improve 
its import entry clearance process, which required extensive 
paperwork. Despite an investment of 8 years and $13.8 million 
to automate its process for inspecting imported goods, the new 
system contains major deficiencies. This is due mainly to 
inadequate top management oversight and a management team that 
lacked expertise and skill in system development. FDA has 
implemented a portion of the system--the Operational and 
Administrative System for Import Support (OASIS)--to enhance 
its ability to regulate imports and to relieve importers and 
FDA personnel of some of the paperwork burdens associated with 
import processing. In developing OASIS, FDA did not follow 
generally accepted systems development practices for validating 
software; conducting user acceptance testing; developing a 
security plan to safeguard its computer facilities, equipment, 
and data; and conducting a cost-benefit analysis. The resulting 
shortcomings mean that OASIS may not perform as needed and that 
unsafe products could enter the country.
    b. Benefits.--This GAO report indicates that the FDA's 
OASIS system has been poorly managed and coordinated. The 
report gives the Congress information needed to conduct 
thorough oversight and to evaluate FDA reform proposals.

67. ``Welfare to Work: Approaches That Help Teenage Mothers Complete 
        High School,'' September 29, 1995, GAO/HEHS/PEMD-95-202.

    a. Summary.--A variety of local programs seek to help 
teenage mothers complete their secondary education and thereby 
avoid welfare dependency. GAO found that close monitoring of 
teenage mothers' educational activities coupled with follow-up 
when their attendance drops increases the likelihood that they 
will complete their education. Leveraging the welfare benefit 
as a sanction or reward for attendance has contributed to the 
completion of high school by teenage mothers. Providing support 
services to overcome barriers to continued attendance, with or 
without financial incentives, also seems to work, especially 
for dropouts. Assistance in meeting child care or 
transportation needs may be particularly helpful but did not 
appear to be enough, in the absence of attendance monitoring, 
to motivate these young mothers to complete their secondary 
education. Although current Federal Aid to Families With 
Dependent Children policy stresses the importance of teenage 
mothers' participation in the JOBS program, it does not require 
States to serve all teenage mothers in JOBS, nor does it 
require States to monitor the school attendance of all teenage 
mothers on welfare. Congress is now deliberating several 
reforms to the welfare system, including whether to provide 
benefits to teenage mothers. Although GAO found that several 
approaches can succeed in helping teenage mothers complete high 
school, the final form of any reform legislation will likely 
influence each State's use of these approaches.
    b. Benefits.--As Congress addresses welfare reform, aid to 
teenage mothers is one of the most contentious areas of 
concern. This report points to several ways which have proven 
effective in assisting teenage mothers.

68. ``VA Student Financial Aid: Opportunity To Reduce Overlap in 
        Approving Education and Training Programs,'' October 30, 1995, 
        GAO/HEHS-96-22.

    a. Summary.--Since the 1940's, the Department of Veterans 
Affairs (VA) and its predecessor agencies have contracted with 
State approving agencies to assess whether schools and training 
programs offer classes of sufficient quality to merit VA 
education assistance benefits. GAO estimates that $10.5 million 
of the $12 million paid to these agencies in 1994 was spent on 
assessments that overlapped those of the Department of 
Education. These assessments involved reviews of academic and 
vocational schools that were already accredited by Education-
approved agencies. State approving agency efforts costing 
another $400,000 in 1994 may have overlapped assessments of 
apprenticeship programs done by the Department of Labor. The 
continued use of State approving agencies to do assessments 
that overlap other assessments does not appear to be a good use 
of scarce Federal dollars. GAO suggests restricting State 
approving agency activity solely to those schools and programs 
not subject to ``gatekeeping'' by the Department of Education.
    b. Benefits.--This report provides additional evidence that 
Departments of Education, Labor and the VA operate duplicative 
education, training and school assessment programs.

69. ``Worker Protection: Federal Contractors and Violations of Labor 
        Law,'' October 24, 1995, GAO/HEHS-96-8.

    a. Summary.--Private sector firms receive billions of 
dollars each year in Federal Government contracts for goods and 
services. Although these firms generally profit from their 
business with the Federal Government, some also violate Federal 
laws that protect the rights of employees to bargain 
collectively. Legislation is pending before Congress that would 
debar firms showing ``a clear pattern and practice'' of 
violating the National Labor Relations Act from being awarded 
Federal contracts. This report identifies the extent to which 
violators of the act include employers that have contracts with 
the government. More specifically, GAO identifies 
characteristics associated with these Federal contractors and 
their violations of the act and identifies ways to improve 
compliance of Federal contractors with the act.
    b. Benefits.--This report gives Congress information needed 
in oversight and legislative deliberations regarding better 
enforcement and compliance with labor laws by Federal 
contractors.

70. ``Arizona Medicaid: Competition Among Managed Care Plans Lowers 
        Program Costs,'' October 4, 1995, GAO/HEHS-96-2.

    a. Summary.--Many States are converting their traditional 
fee-for-service Medicaid programs to managed care delivery 
systems. Arizona's Medicaid program offers valuable insights--
especially in fostering competition and monitoring plan 
performance. Since 1982, Arizona has operated a statewide 
Medicaid program that mandates enrollment in managed care and 
pays health plans a capitated fee for each beneficiary served. 
Although the program had problems in its early years, such as 
the dismissal of the program administrator and the State's 
takeover of the administration, it has successfully contained 
health care costs while maintaining beneficiaries' access to 
mainstream medical care. Arizona's recent cost containment 
record is noteworthy. According to one estimate, Arizona's 
Medicaid program saved the Federal Government $37 million and 
the State $15 million in acute care costs during fiscal year 
1991 alone. Arizona succeeded in containing costs by developing 
a competitive Medicaid health care market. Health plans that 
submit capitation rates higher than their competitors' bids 
risk not winning Medicaid contracts. Other States considering 
managed care programs can benefit from Arizona's experience. 
GAO concludes that key conditions for holding down Medicaid 
costs without compromising beneficiaries' access to appropriate 
medical care include freedom from some Federal managed care 
regulations, development and use of market forces, controls to 
protect beneficiaries from inadequate care, and investment in 
data collection and analysis capabilities.
    b. Benefits.--The report makes it clear that the 
flexibility afforded Arizona is paying off under Section III 
Medicaid waivers. Furthermore, it makes the case to Congress 
that while giving States more flexibility in Medicaid 
eligibility and service delivery is not without difficulties, 
it can prove successful and should be pursued.

71. ``Mammography Services: Initial Impact of New Federal Law Has Been 
        Positive,'' October 27, 1995, GAO/HEHS-96-17.

    a. Summary.--The Mammography Quality Standards Act of 1992 
imposed uniform standards for mammography in all States, 
requiring certification and annual inspection of mammography 
facilities. GAO found that the act has resulted in higher 
quality equipment, personnel, and practices. Although 
mammography quality standards are now in place in all States, 
they do not appear to have hampered access to services. To 
avoid large-scale closure of facilities, however, the Food and 
Drug Administration settled on an approach that allowed some 
delay in meeting certification requirements. For this and other 
reasons, such as the availability of outcome data, more time 
will be needed before the act's full impact can be determined. 
GAO is required to assess the effects of the act again in 2 
years and to issue a report in 1997.
    b. Benefits.--This report provides valuable oversight 
feedback about the Mammography Quality Standards Act to the 
Congress.

72. ``Homeownership: Mixed Results and High Costs Raise Concerns About 
        HUD's Mortgage Assignment Program,'' October 18, 1995, GAO/
        RCED-96-2.

    a. Summary.--During the 19-year period that ended in 
September 1993, the Department of Housing and Urban Development 
(HUD) incurred losses totaling $12.8 billion as a result of 
foreclosures on homes that the Federal Housing Administration 
(FHA) had insured. As an alternative to foreclosure on such 
properties, HUD operates a mortgage assignment program. For 
borrowers accepted into the program, FHA pays the mortgage 
debt, takes assignment of the mortgage from the lenders, and 
develops a new repayment plan for the borrower under which 
monthly mortgage payments can be reduced or suspended for up to 
36 months. HUD collects mortgage payments from the borrowers 
while allowing them to live in their homes. The number of FHA 
borrowers participating in the program has tripled during the 
past 6 years, reaching 71,500 at the end of fiscal year 1994. 
Their unpaid principle balances total $3.7 billion. GAO found 
that program has helped borrowers avoid immediate foreclosure, 
but it has not been fully successful in helping borrowers avoid 
foreclosure and retain their homes on a long-term basis. GAO 
estimates that 52 percent of the nearly 69,000 borrowers who 
have entered the program since fiscal year 1989 will eventually 
lose their homes through foreclosure. Moreover, program losses 
have exceeded those that would have been incurred had loans 
gone immediately to foreclosure without assignment. Options to 
reduce program losses include reducing the 3-year relief period 
provided to borrowers, setting a time limit on eliminating 
delinquencies, and accepting only those borrowers into the 
program who can afford to pay at least half of their mortgage 
payments.
    b. Benefits.--This report gives the Congress suggestions on 
how to reform HUD's Mortgage Assignment Program.

73. ``FDA Drug Approval: Review Time Has Decreased in Recent Years,'' 
        October 20, 1995, GAO/PEMD-96-1.

    a. Summary.--New drugs marketed in the United States must 
be approved first by the Food and Drug Administration (FDA). 
FDA grants its approval after it has determined from data 
submitted by a drug's sponsor that the drug is safe and 
effective and that the manufacturer can guarantee its quality. 
GAO found a considerable reduction in approval time for new 
drug applications between 1987 and 1992. It took an average of 
33 months for new drug applications submitted in 1987 to be 
approved but only 19 months on average to approve new drug 
applications submitted in 1992. The priority that FDA assigns 
to new drug application and the experience of its sponsors 
significantly affect the likelihood of a quick decision. FDA 
assigns priority status to drugs that are expected to provide 
therapeutic benefit to consumers beyond that of drugs already 
marketed. Priority status and sponsor experience are also the 
two factors that predict the likelihood of drug approval. 
Finally, the limited data available on review time for FDA and 
its counterpart in the United Kingdom paint a more ambiguous 
picture than presented in many recent reports. In fact, the 
latest data published by the regulatory agency in the United 
Kingdom show that it does not have faster approval times than 
FDA.
    b. Benefits.--This report documents better FDA performance 
in drug reviews and approvals, but also demonstrates that 
statutory deadlines are still missed. This information should 
be useful in congressional oversight and legislative 
considerations of FDA reform.

74. ``Medical Devices: FDA Review Time,'' October 30, 1995, GAO/PEMD-
        96-2.

    a. Summary.--The Food and Drug Administration (FDA) 
regulates the manufacture and marketing of medical devices in 
the United States. Some critics have argued that FDA's review 
of medical devices is excessively lengthy and can impose 
inordinate delays in the introduction of new devices into the 
marketplace. GAO found that FDA review times and trends for 
medical device applications varied widely between October 1988 
through May 1995. For 510(k) applications submitted, the review 
time remained stable from 1989 to 1991, then rose sharply in 
1992 and 1993, before dropping in 1994. For 1994, the median 
was 152 days. The mean time to a decision was higher--166 
days--and this mean will continue to grow as the remaining open 
cases (13 percent) are completed. The review time trend for 
original premarket approvals was less clear, in part because a 
large proportion of applications had yet to be completed. Not 
all the time that elapsed between an application's submission 
and its final determination was spent under FDA's review 
process. In many cases, FDA had to wait for additional 
information.
    b. Benefits.--This report documents that medical device 
reviews and approvals at the FDA are slow, inconsistent and 
often miss statutory deadlines. This information should be 
useful in congressional oversight and legislative 
considerations of FDA reform.

75. ``Higher Education: Selected Information on Student Financial Aid 
        Received by Legal Immigrants,'' November 24, 1995, GAO/HEHS-96-
        7.

    a. Summary.--According to records at the Department of 
Education of about 390,000 legal immigrant students received 
Pell grant aid in academic year 1992-93. This was about 10 
percent of all students receiving Pell grants. In total, 
immigrants received $662 million, or about 11 percent, of Pell 
grant aid in that year. GAO was unable to determine the total 
number of legal immigrants who received Stafford loans because 
citizenship data are not maintained in the Education 
Department's loan files. Some immigrants who received Pell 
grants, however, also received Stafford loans totaling $257 
million. About 82 percent of the immigrants who received 
student aid lived in seven States, led by California and New 
York. Sixty-one percent attended public colleges, 19 percent 
attended private colleges, and 21 percent attended for-profit 
vocational schools. The 100 schools with the most immigrant 
Pell grant recipients accounted for about half of all such 
students, and 91 percent of these schools were located in the 
seven States with the highest concentration of immigrant 
students.
    b. Benefits.--As the Congress considers welfare, education 
and immigration reforms, this report offers useful information 
on the extent to which ineligible non-citizens obtain 
assistance.

76. ``Ryan White Care Act of 1990: Opportunities To Enhance Funding 
        Equity,'' November 13, 1995, GAO/HEHS-96-26.

    a. Summary.--GAO's analysis of existing funding formulas 
demonstrates that Federal funding under the Ryan White Care Act 
can be made more equitable. An important goal of the act was to 
target emergency funding to areas of greatest need. At the time 
the law was enacted, high rates of human immunodeficiency virus 
(HIV) infection were found in fewer areas of the country, 
service delivery networks were just beginning to form, and 
these service delivery systems had to rely primarily on private 
and volunteer resources. During the past 5 years, however, the 
HIV epidemic has become more widespread and less localized. 
Hence, areas where the AIDS caseload had burgeoned recently 
need per-case funding levels comparable to those in areas where 
AIDS was initially concentrated.
    b. Benefits.--This report should prove useful in 
consideration of legislation to reauthorize the Ryan White Care 
Act.

77. ``Medicare: Enrollment Growth and Payment Practices for Kidney 
        Dialysis Services,'' November 22, 1995, GAO/HEHS-96-33.

    a. Summary.--Medicare is the predominant health care payer 
for people with end-stage renal disease--permanent and 
irreversible loss of kidney function. Medicare's costs for this 
program have increased, mainly because of the substantial 
increase in new beneficiaries being enrolled in the program. 
The average annual rate of increase averaged 11.6 percent 
between 1978 and 1991. In addition to the rise in enrollment, 
the mortality rate for new patients decreased. For example, 
deaths among beneficiaries during their first year in the 
program fell from 28 percent to 24 percent between 1982 and 
1991. Since the program began in 1973, technological advances 
and greater availability of kidney dialysis machines have meant 
that persons who were not considered good candidates for kidney 
dialysis in 1973--those 65 years old or older and those whose 
kidney failure was caused by diabetes and hypertension--are now 
routinely placed on dialysis. GAO's review of medical services 
and supplies provided to all Medicare end-stage renal disease 
patients in 1991 shows that no separately billable service or 
supply was provided often enough to make it a good candidate to 
be considered part of the standard dialysis treatment and thus 
included in a future composite rate.
    b. Benefits.--This report will assist congressional 
oversight and authorizing committees in reviewing appropriate 
Medicare payment rates and reimbursement policies.

78. ``National Health Service Corps: Opportunities To Stretch Scarce 
        Dollars and Improve Provider Placement,'' November 24, 1995, 
        GAO/HEHS-96-28.

    a. Summary.--The National Health Service Corps (NHSC) is 
the Federal Government's main program for placing physicians 
and other health care providers in locations with identified 
shortages of health professionals. For many years, NHSC 
recruited health care providers primarily by awarding 
scholarships to students who agreed to serve in shortage areas 
after their health professions training was completed--
generally several years later. In the late 1980's, the Congress 
authorized an additional approach--a loan repayment program for 
health care providers who had completed their training and 
could begin serving in a shortage area immediately. Under this 
second approach, the government repaid a set amount of 
educational loan debt for each year of service in a shortage 
area. In recent years, funding for NHSC scholarships and loan 
repayments has increased nearly ten-fold, from about $8 million 
in fiscal year 1989 to nearly $80 million in fiscal year 1994. 
This report (1) compares the costs and benefits of the NHSC 
scholarships and loan repayment programs and (2) determines 
whether NHSC has distributed available providers to as many 
eligible areas as possible.
    b. Benefits.--This report will assist Congress in better 
targeting and matching health professional training funds to 
areas of need.

79. ``School Facilities: States' Financial and Technical Support 
        Varies,'' November 28, 1995, GAO/HEHS-96-27.

    a. Summary.--This report is one in a series addressing the 
condition of America's school facilities. While the 
construction of school buildings has traditionally been a local 
responsibility, nearly all States now have some role in school 
facilities construction, renovation, and major maintenance, and 
13 States have established comprehensive facilities programs. 
As a group, States reported providing about $3.5 billion for 
school facilities construction during fiscal year 1994. 
However, State involvement in facilities matters varied 
greatly. For example, State financial assistance for school 
facilities in the 40 States with ongoing assistance programs 
ranged from $6 per student to more than $2,000 per student. 
States' technical assistance and compliance review activities 
also varied greatly, as did the amount and type of data that 
States collected and maintained on school facilities. Forty 
States collected some type of building inventories or building 
condition data. Overall, the data on State involvement suggest 
that while most States are providing facilities support to 
school districts, many States do not currently play a major 
role in addressing school facilities issues.
    b. Benefits.--As the Congress considers major education 
reforms, this report will help better focus the Federal role in 
the Nation's school systems.

80. ``Head Start: Information on Federal Funds Unspent by Program 
        Grantees,'' December 29, 1995, GAO/HEHS-96-64.

    a. Summary.--In fiscal year 1995, Head Start was 
appropriated $3.5 billion to provide a range of service to 
eligible, preschool-aged children from low-income families. 
Currently, about 1,400 local agencies, known as grantees, 
sponsor these programs and serve 752,000 children. Local 
programs provide education, nutrition, health, and social 
services to low-income children and opportunities for parental 
involvement and enrichment. Since 1990, the Congress has 
increased funding for Head Start 135 percent to allow more 
children the opportunity to participate and to improve the 
quality of Head Start services. During this period of growth, 
virtually all program funds were awarded to grantees. However, 
some Head Start grantees did not spend all of the program funds 
awarded them each year to conduct local program activities and 
carried these unspent funds forward for use in subsequent 
years. This report determines (1) the amount of Head Start 
funding unspent by program grantees at the end of grantee 
budget years 1992, 1993, and 1994 and the reasons for these 
unspent funds; (2) the proportion of carryover funds that were 
added to grantee awards or that offset grantee awards in 
subsequent years; (3) the proportion of carryover funds that 
are one or more grantee budget years old; and (4) the grantees' 
intended use of carryover funds.
    b. Benefits.--This report provides Congress and the public 
with one measure to evaluate the efficiency and effectiveness 
of Head Start programs.

81. ``Department of Education: Efforts by the Office for Civil Rights 
        To Resolve Asian-American Complaints,'' December 11, 1995, GAO/
        HEHS-96-23.

    a. Summary.--As with many other Federal agencies and 
departments responsible for enforcing civil rights and equal 
employment opportunity laws, over the last several years the 
discrimination complaint workload of the U.S. Department of 
Education's Office for Civil Rights (OCR) has increased, but 
its staffing has remained level. In the early 1990's, compared 
with the 1980's, generally, the number of compliance reviews 
decreased and the average time to resolve complaint 
investigations and complete compliance reviews increased. 
Because of this, concerns have been raised about how 
effectively OCR carries out its responsibilities. The GAO has 
examined OCR's complaint investigations and compliance reviews 
of discrimination cases involving Asian-Americans who applied 
for or were enrolled in postsecondary schools, such as colleges 
and universities. This report determines: (1) for 13 specific 
cases, did Education's OCR follow established policies and 
procedures, particularly with respect to timeliness and 
recordkeeping, in conducting complaint investigations and 
compliance reviews involving Asian-Americans; (2) for fiscal 
years 1988-1995, how did the timeliness and outcomes of 
complaint investigations and compliance reviews involving 
Asian-Americans compare with the timeliness and outcomes of 
those involving other minority groups; and (3) have recent 
administrative changes implemented by OCR improved its 
operations in conducting and resolving complaint investigations 
and completing compliance reviews?
    b. Benefits.--This oversight report of the Department of 
Education's OCR provides the Congress with important 
information necessary to evaluate the office.

82. ``Medicare: Millions Can Be Saved by Screening Claims for Overused 
        Services,'' January 30, 1996, GAO/HEHS-96-49.

    a. Summary.--Medicare contractors routinely pay hundreds of 
millions of dollars in Medicare claims without first 
determining if the services provided are necessary. GAO 
reviewed payments to doctors for six groups of high-volume 
medical procedures--ranging from eye examinations to chest x-
rays--that accounted for nearly $3 billion in Medicare payments 
in 1994. GAO also surveyed 17 contractors to determine if they 
had used medical necessity criteria in their claims processing 
to screen for these six groups of procedures. For each of the 
six groups, more than half of the 17 contractors failed to use 
automated screens to flag claims for unnecessary, 
inappropriate, or overused treatments. These prepayment screens 
could have saved millions of taxpayer dollars now wasted on 
questionable services. Problems with controlling payments for 
widely overused procedures continue because the Health Care 
Financing Administration (HCFA) lacks a national strategy to 
control these payments. HCFA now relies on contractors to focus 
on procedures where local use exceeds the national average. 
Although this approach helps reduce local overuse of some 
procedures, it is not designed to control overuse of a 
procedure nationwide.
    b. Benefits.--The GAO report suggests that the 
implementation of compulsory national screening criteria for 
Medicaid could save millions of tax dollars from being wasted 
on unnecessary medical procedures.

83. ``Health Insurance for Children: State and Private Programs Create 
        New Strategies to Insure Children,'' January 18, 1996, GAO/
        HEHS-96-35.

    a. Summary.--In the mid-1980's, State and private groups 
began developing health insurance programs to increase health 
care coverage for children. By 1995, 14 States and upward of 24 
private-sector organizations offered such programs. The number 
of children enrolled in the six programs GAO visited ranged 
from 5,000 to more than 10,000. Unlike State Medicaid programs, 
which operate as open-ended entitlements funded partly by the 
Federal Government, these programs operated within fixed and 
often limited budgets and were funded by various sources, such 
as dedicated State taxes and private donations. Limited budgets 
forced five of the six programs to cap enrollment at times and 
to place eligible children on waiting lists. The programs used 
several strategies to control costs. Some limited the services 
covered, while others resorted to patient cost-sharing through 
premiums and copayments or enrolled children in managed care. 
Most of the programs operated through nonprofit or private 
insurers, which allowed the programs to use existing provider 
payment systems and physician networks and to offer near-market 
reimbursement rates--features that appealed to insurers and 
providers. For patients, the programs guaranteed access to a 
provider network, had simple enrollment procedures, and tried 
to avoid the appearance of a welfare program. Moreover, 
children in these programs appeared to gain greater access to 
health care.
    b. Benefits.--The report highlights successful State and 
private sector initiatives to provide health insurance to 
uninsured children. These initiatives can serve as a model to 
Congress and other States interested in creating similar 
programs.

84. ``Fraud and Abuse: Providers Target Medicare Patients in Nursing 
        Facilities,'' January 24, 1996, GAO/HEHS-96-18.

    a. Summary.--Nursing home patients are an attractive target 
for fraudulent and abusive health care providers that bill 
Medicare for undelivered or unnecessary services. A wide 
variety of providers, including medical equipment suppliers, 
laboratories, optometrists and doctors, have been involved in 
fraudulent and abusive Medicare billing schemes. Several 
features make nursing home patients attractive targets. First, 
because a nursing facility houses many Medicare beneficiaries 
under one roof, unscrupulous billers of services can operate 
their schemes in volume. Second, nursing homes sometimes make 
patient records available to outsiders, contrary to Federal 
regulations. Third, providers are permitted to bill Medicare 
directly, without certification from the nursing home or the 
attending physician that the items are necessary or have been 
provided as claimed. In addition, Medicare's automated systems 
do not collect data to flag improbably high charges or levels 
of services. Finally, even when Medicare spots abusive billings 
and seeks recovery of unwarranted payments, it often collects 
little money from wrongdoers, which either go out of business 
or deplete their resources so that they cannot repay the funds.
    b. Benefits.--This report highlights the seriousness of the 
problem of fraud and abuse in nursing homes and calls attention 
to the fact that nursing homes are failing to monitor providers 
they contract with to provide services to nursing residents. It 
makes clear Medicare's automated anti-fraud systems are lacking 
and that Congress and the Health Care Financing Administration 
need to address the problem.

85. ``Medicare HMO's: Rapid Enrollment Growth Concentrated in Selected 
        States,'' January 18, GAO/HEHS-96-63.

    a. Summary.--Private-sector insurers cite extensive use of 
health maintenance organizations (HMO) and other managed care 
approaches as a key factor in slowing the growth of their 
insurance premiums. As a result, part of the current interest 
in controlling Medicare costs has centered on ways to increase 
HMO use among Medicare beneficiaries. This report provides 
information on trends in the number of (1) Medicare 
beneficiaries enrolling in HMO's and (2) HMO's enrolling 
beneficiaries. GAO analyzes this data for factors that might be 
influencing decisions by HMO's to enroll Medicare beneficiaries 
and decisions by beneficiaries to enroll in HMO's. GAO found 
approximately 2.8 million Medicare beneficiaries--about 7 
percent of the total--were enrolled in risk-contract HMO's as 
of August 1995. This was double the percentage enrolled in 
1987. The growth has been particularly rapid during the past 4 
years and has centered on certain States. California and 
Florida, for example, have more than half of all enrollees.
    b. Benefits.--The report serves as a focal point for 
Congress to look further at the growth of HMO's and the 
marketing tools they are using in States with large percentages 
of Medicare beneficiaries.

86. ``Job Training Partnership Act: Long-Term Earnings and Employment 
        Outcomes,'' March 4, 1996, GAO/HEHS-96-40.

    a. Summary.--The Federal Government spends billions of 
dollars annually to support employment training programs, but 
little is known about their long-term effect on participants' 
earnings and employment rates. GAO's analysis found some 
positive effects of the Job Training Partnership Act--the 
cornerstone of the Federal employment training effort--in the 
years immediately following training. However, neither 
employment rates nor earnings were significantly higher for 
participants than for nonparticipants 5 years after training. 
In some earlier years, adults (but not youth) who received 
training had earnings or employment rates significantly higher 
than those of the control group. Because none of the fifth-year 
differences were statistically significant, however, GAO could 
not attribute the higher earnings to training provided under 
the act rather than to chance alone.
    b. Benefits.--The information found in this report can be 
used to either improve the long-term effectiveness of the JTPA 
program or redirect funds to more effective programs. The 
report will lead to greater financial accountability with 
Federal job training funds.

87. ``Food Safety: New Initiatives Would Fundamentally Alter the 
        Existing System,'' March 27, 1996, GAO/RCED-96-81.

    a. Summary.--In response to continuing outbreaks of food 
poisoning, Congress and Federal agencies are considering new 
approaches to ensuring food safety. This report discusses the 
Federal food safety system, particularly the current 
responsibilities, budgets, staffing, and workloads of the 
Federal agencies involved and the changes in these areas since 
1989, when GAO issued a two-volume report on this subject (GAO/
RCED-91-19a and 19b). The Food and Drug Administration (FDA) 
and the Food Safety Inspection Service (FSIS), the lead 
agencies responsible for food safety, rely heavily on physical 
inspections to prevent unsafe food from leaving processing 
plants. Current proposals, however, would shift the 
Government's oversight role. Private industry would become 
responsible for identifying and controlling potential hazards 
before they affected food products, while the Government would 
assess the effectiveness of each plant's safety system. Such 
systems, known as Hazard Analysis and Critical Control Point 
(HACCP) systems, are intended to identify the critical points 
in food processing and establish controls to prevent 
adulteration caused by microbes, chemicals, or physical 
hazards. Under the FDA and FSIS initiatives, such systems are 
to be up and running by 1997. Because of FDA's resources 
constraints and FSIS' regulatory restrictions, however, the 
agencies are unlikely to inspect plants on the basis of the 
risk they pose--even though this was recommended by the 
National Academy of Sciences.
    b. Benefits.--A fundamental change in food safety 
inspection programs is required due to changes in food 
processing and the increasing virulence of food borne 
pathogens. This report addresses the importance of HACCP 
inspection programs in reforming the food safety inspection 
system to reflect current industry and pathogen containment 
requirements.

88. ``FDA Laboratories: Magnitude of Benefits Associated With 
        Consolidation Is Questionable,'' March 19, 1996, GAO/HEHS-96-
        30.

    a. Summary.--Many of the Food and Drug Administration's 
(FDA) 18 testing laboratories across the country are old and 
need repair, the agency plans to replace the old labs with five 
``megalabs'' and four special-purpose facilities. GAO found, 
however, that projected cost savings of about $91 million may 
be based on assumptions that inflate the cost of replacing 
medium-sized labs--those having about 50 analysts per lab--are 
more efficient and effective than existing larger labs. In 
selecting sites for its megalabs, FDA did little analysis of 
the relative efficiency of alternative sites. FDA placed little 
emphasis on such factors as proximity to ports of entry and 
quantity of nearby food and other relevant businesses. Instead, 
the agency's site selections were based mainly on where FDA 
thought it would receive congressional funding approval.
    b. Benefits.--This information can be used to assess FDA's 
current and future laboratory needs. In view of the current 
budget climate and limited resources, FDA's lab consolidation 
plans should reflect accurate administrative planning to ensure 
safe food and drug inspections for the Nation.

89. ``Public Pensions: State and Local Government Contributions to 
        Underfunded Plans,'' March 14, 1996, GAO/HEHS-96-56.

    a. Summary.--State and local governments with underfunded 
pension plans risk tough budget choices in the future if they 
do not make progress toward full funding. Their taxpayers will 
face a liability for benefits earned by current and former 
Government workers, forcing these governments to choose between 
reducing future pensions or raising taxes. Funding of State and 
local pension plans has improved significantly since the 
1970's. After adjusting for inflation, the amount of the 
unfunded liability has been cut in half. Still, in 1992, 75 
percent of State and local government pension plans in the 
Public Pension Coordinating Council survey were underfunded; 38 
percent were less than 80 percent funded. Sponsors of slightly 
more than half of the plans in the survey made contributions on 
schedule to pay off any unfunded liability. One-third of the 
pension plans, however, were underfunded in 1992, and were not 
receiving the actuarially required sponsor contributions. Of 
all plans with complete data, one-fifth were underfunded and 
were not receiving full contributions in both 1990 and 1992.
    b. Benefits.--This report provided detailed data on the 
extent of public pension under funding. It gives a look at the 
progress that State and local governments are making toward 
full funding of their pension plans.

90. ``Medicare: Home Health Utilization Expands While Program Controls 
        Deteriorate,'' March 27, 1996, GAO/HEHS-96-16.

    a. Summary.--Use of the Medicare home health benefit has 
increased dramatically, with spending rising from $2.7 billion 
in 1989 to $12.7 billion in 1994. Costs are projected to reach 
$21 billion by the year 2000. In earlier reports (GAO/HRD-81-
155 and GAO/HRD-87-9), GAO cited lax controls over the use of 
the home health benefit and recommended measures to improve 
Medicare's ability to detect claims that were not medically 
necessary or did not meet the coverage criteria. Medicare's 
escalating home health outlays continue to raise concerns about 
the extent of benefit abuse. This report examines the factors 
underlying the growth in the use of the home health benefit. 
GAO discusses: (1) changes in the composition of the home 
health industry; (2) changes in the composition of Medicare 
home health users; (3) differences in utilization patterns 
across geographic areas; (4) incentives to overuse services; 
and (5) the effectiveness of payment controls in preventing 
payments for services not covered by Medicare.
    b. Benefits.--The report serves as the basis for Congress 
to require the Health Care Financing Administration (HCFA) to 
better implement existing anti-fraud controls in the home 
health program. This will allow HCFA to better detect billing 
improprieties and remove fraudulent providers from the Medicare 
program.

91. ``At-Risk and Delinquent Youth: Multiple Federal Programs Raise 
        Efficiency Questions,'' March 6, 1996, GAO/HEHS-96-34.

    a. Summary.--The Federal Government now runs 131 programs 
in 16 agencies to benefit delinquent youth. Many of the 
programs GAO has examined provide a range of services--from 
counseling to job training to research and evaluation. The 
services most commonly authorized are substance abuse 
intervention and training and technical assistance. Many 
programs also have multiple target groups, ranging from poor 
and neglected youth to abused and neglected youth to school 
dropouts. The current system of Federal programs for at-risk or 
delinquent youth creates the potential for overlap of services. 
GAO identifies many instances of two or more programs' offering 
similar services to the same target groups, raising questions 
about the overall efficiency of Federal efforts to help these 
youngsters.
    b. Benefits.--The information provided by GAO can be used 
as a starting point for an evaluation and determination by 
Congress of which services are most helpful to the target 
groups. Inefficient and duplicative programs could be 
eliminated and the funds from such programs used to strengthen 
the remaining programs or for other purposes.

92. ``Veterans' Health Care: VA's Approaches to Meeting Veterans' Home 
        Health Care Needs,'' March 15, 1996, GAO/HEHS-96-68.

    a. Summary.--In fiscal year 1994, the Department of 
Veterans Affairs (VA) provided home health care to more than 
40,000 veterans at a cost of $64 million to VA and millions 
more to Medicare. By providing them with home health care for 
various reasons. Some veterans may have chronic health 
problems, such as heart disease, and require periodic visits, 
while others may be discharged from VA medical centers 
following surgery and need dressings changed or medications 
administered. The number of veterans needing home health care 
is expected to grow as the veteran population ages and as VA 
discharges patients from its hospitals to reduce the costs of 
hospitalization. This report provides information on: (1) the 
characteristics and the services of the home health care 
programs that VA uses; (2) the available data on program costs; 
and (3) the way in which VA ensures that veterans receive 
quality service.
    b. Benefits.--The report will help Congress determine if 
the growing home health care service for veterans is cost 
effective and provide quality medical care.

93. ``Mortgage Financing: FHA Has Achieved Its Home Mortgage Capital 
        Reserve Target,'' April 12, 1996, GAO/RCED-96-50.

    a. Summary.--Borrowers with mortgage loans insured by the 
Federal Housing Administration (FHA) pay insurance premiums, 
which are deposited into the Department of Housing and Urban 
Development's Mutual Mortgage Insurance Fund. FHA-insured Fund 
mortgages were valued $305 billion as of September 1994. 
Although the Fund has traditionally been self-sufficient, it 
began to suffer substantial losses during the 1980's, mainly 
because foreclosures on single-family homes supported by the 
Fund were high in areas experiencing difficult times 
economically. To help place the Fund on a financially sound 
basis, legislative reforms, such as requiring FHA borrowers to 
pay more in premiums, were made in November 1990. This report: 
(1) estimates, under different economic scenarios, the Fund's 
economic net worth as of the end of fiscal year 1994; (2) 
assesses the Fund's progress in achieving the legislatively 
mandated capital reserve ratio that expresses economic net 
worth as a percentage of insurance-in-force; and (3) compares 
GAO's estimate of the Fund's economic net worth with the 
estimate prepared for FHA by Price Waterhouse.
    b. Benefits.--HUD's Mutual Mortgage Insurance Fund had 
begun to suffer substantial losses during the 1980's. This 
report tells Congress whether the reforms were effective and 
the program is sound, giving Congress the ability to assess 
whether or not further reforms are necessary.

94. ``Workers' Compensation: Selected Comparisons of Federal and State 
        Laws,'' April 3, 1996, GAO/GGD-96-76.

    a. Summary.--Concerns have been raised that workers' 
compensation benefits authorized under the Federal Employees' 
Compensation Act may provide Federal workers having job-related 
injuries with more generous benefits than other Federal or 
State workers' compensation programs. This report compares: (1) 
monetary benefits authorized by the act with those authorized 
by other workers' compensation laws, and (2) other significant 
benefit provisions of Federal and State workers' compensation 
laws, such as those involving waiting periods, physician 
choice, and coverage of occupational diseases.
    b. Benefits.--This report answers the questions about the 
extent of Federal employee benefits. In addition, the reports 
gives Congress the ability to determine fair compensation 
benefits should Congress decide to reform the benefits of 
Federal employees.

95. ``Medicare: Federal Efforts to Enhance Patient Quality of Care,'' 
        April 10, 1996, GAO/HEHS-96-20.

    a. Summary.--In the past decade, Medicare costs have risen 
on average more than 10 percent per year. Expanding managed 
care options for Medicare patients has been proposed as a way 
to contain costs. Concerns have been raised, however, that such 
changes may undermine the quality of care provided to Medicare 
beneficiaries. Currently, Medicare reimburses only for care 
provided in health maintenance organizations and by the fee-
for-service sector. This report (1) discusses the present and 
future strategies of the Health Care Financing Administration 
(HCFA), which administers the Medicare program, to ensure that 
Medicare providers furnish quality health care, in both fee-
for-service and health maintenance organization arrangements, 
and (2) provides the views of experts on attributes a quality 
assurance program should have if more managed care options are 
made available to Medicare beneficiaries.
    b. Benefits.--With the ongoing shift of some Medicare 
beneficiaries into health maintenance organizations (HMO), HCFA 
needs to carefully monitor and ensure Medicare dollars are 
being spent wisely on HMO services and that the beneficiaries 
enrolled are receiving needed and quality care. The report 
makes it clear that Congress should continue to assess HCFA's 
progress on this issue.

96. ``Medicaid Long-Term Care: State Use of Assessment Instruments in 
        Care Planning,'' April 2, 1996, GAO/PEMD-96-4.

    a. Summary.--GAO examined how publicly funded programs 
assess the need for home and community based long-term care for 
the elderly with disabilities. This care is provided to persons 
living at home who, because of a chronic condition or illness, 
cannot care for themselves. Services range from skilled nursing 
to assistance with day-to-day activities, such as bathing and 
housekeeping. Under the Medicaid program, 49 States have 
obtained waivers to provide home and community-based services 
to low-income elderly persons who could otherwise need 
institutional care paid for by Medicaid. These States are 
responsible for developing a care plan tailored to a client's 
specific needs. A well-designed assessment instrument helps 
identify all appropriate needs--increasing the likelihood that 
important aspects of the client's situation will not be 
overlooked in care planning. Standardized administration of the 
assessment instrument increases the likelihood that the needs 
of all clients will be determined in the same way. This report 
provides information on the following: (1) comprehensiveness of 
assessment instruments; (2) uniformity of their administration; 
and (3) training for staff who do the assessments.
    b. Benefits.--This report serves as a basis for Congress to 
ensure that Federal Medicaid programs take additional steps to 
develop patient plans for each beneficiary receiving services.

97. ``Job Training: Small Business Participation in Selected Training 
        Programs,'' April 29, 1996, GAO/HEHS-96-106.

    a. Summary.--Both Government and the private sector spend 
considerable sums to train the Nation's work force. In 1995, 
the Federal Government alone spent about $20 billion on 163 
programs that included some aspect of worker training. GAO 
found that large employers were about twice as likely to take 
advantage of several types of training programs as were small 
employers. Training programs that require employers to comply 
with detailed administrative or other paperwork requirements 
present economic barriers. Small employers may find it too 
costly to devote the time needed to focus on workers' general 
needs rather than on employers' specific skill needs present 
institutional barriers. Finally, informational barriers may 
also exist because small employers often know less about the 
training programs available to them than do larger employers. 
In GAO's case studies, those programs that focused mainly on 
employer needs used or actively encouraged consortia which are 
organizations of employers, unions, or other interested 
parties. These consortia provide employment training to 
employers and, in these particular programs, overcame many of 
the barriers cited above.
    b. Benefits.--The information in this report will aid in 
the creation of a new Federal job training system that avoids 
costly economic barriers which reduce the appeal and 
effectiveness of job training programs to States, localities, 
and trainees.

98. ``Supplemental Security Income: Some Recipients Transfer Valuable 
        Resources to Qualify for Benefits,'' April 30, 1996, GAO/HEHS-
        96-79.

    a. Summary.--Existing law does not prohibit people from 
transferring resources to qualify for benefits under the 
Supplemental Security Income program--the largest cash 
assistance program for the poor and one of the fastest growing 
entitlement programs. Between 1990 and 1994, 3,500 Supplemental 
Security Income recipients transferred assets, including cash, 
houses, land, and other items, valued at $74 million. Transfer 
values ranged as high as $800,000; most transfers fell between 
$10,000 and $25,000. The total amount of resources transferred, 
however, is likely to be larger than GAO's estimate because the 
Social Security Administration (SSA) is not required to verify 
the accuracy of resource transfer information, which is self-
reported by individuals. Moreover, because the information is 
self-reported, SSA is unlikely to detect unreported transfers. 
Without a transfer-of-resource restriction, Supplemental 
Security Income recipients who transferred assets to qualify 
for benefits would receive nearly $8 million in benefits in the 
24 months after they transferred resources. Many of these 
recipients could also have received Medicaid acute-care 
benefits at an annual value of between $2,800 and $5,300 per 
recipient. GAO estimates that from 1990 through 1995, SSA could 
have saved $14.6 million with a transfer-of-income restriction 
similar to that used for Medicaid. Such a restriction could 
also boost the public's confidence in the program's integrity.
    b. Benefits.--The statistics provided by the GAO report, in 
terms of cost to the Social Security Program, indicated SSA 
should be required by Congress to implement the transfer-of-
income restriction that is presently used in the Medicaid 
program so as to reduce losses to the SSA program.

99. ``Employment and Training: Successful Projects Share Common 
        Strategy,'' April 18, 1996, GAO/T-HEHS-96-127.

    a. Summary.--Strong foreign competition has underscored the 
need for a skilled U.S. labor force. It has also focused 
attention on the many Americans who are unprepared for 
employment. The Federal Government earmarked about $20 billion 
in fiscal year 1995 for 163 different training programs. GAO 
visited six projects that had outstanding results, as indicated 
by project completion rates, job placement and retention rates, 
and wages. The projects GAO visited differed in many ways, but 
they shared a common strategy that has four key elements: (1) 
ensuring that clients were committed to training and getting 
jobs; (2) removing barriers, such as a lack of child care, that 
might hinder clients' ability to finish training and get and 
keep jobs; (3) improving clients' employability skills, such as 
getting to jobs regularly and on time, working well with 
others, and dressing and behaving appropriately; and (4) 
linking occupational skills training with the local labor 
market. The upshot is that clients are ready, willing, and able 
to benefit from training and employment programs and move 
toward self-sufficiency.
    b. Benefits.--The identification of the key elements of 
successful job training programs provides a framework for 
Congress and the Department of Labor to redesign the current 
system of Federal job training programs. The information is 
especially important to redesign job training to reach the 
hardest to serve populations.

100. ``Property Disposition: HUD's Illinois State Office Incurred 
        Unnecessary Management Expenses,'' April 22, 1996, GAO/RCED-96-
        52.

    a. Summary.--Although the Department of Housing and Urban 
Development (HUD) cannot control all the costs associated with 
buying and selling foreclosed single-family properties, it can 
avoid or minimize some of the costs of managing them. GAO 
reviewed HUD's Single-Family Property Disposition Program in 
the Illinois State Office and found that the Illinois State 
Office had spent thousands of dollars unnecessarily on water 
and sewer services, as well as for tax penalties, lost 
properties, and increased costs to recover properties from the 
new owners. Nationwide, HUD could be wasting large amounts of 
money. GAO supports efforts by the Illinois State Office to 
better track unpaid taxes, which would help avoid future tax 
liens and lost properties.
    b. Benefits.--The work identifies weaknesses in the 
management of a HUD program by a State field office. With this 
information and efforts to correct the problems, further waste 
and unnecessary expenditures can be prevented.

101. ``SSA Disability: Program Redesign Necessary to Encourage Return 
        to Work,'' April 24, 1996, GAO/HEHS-96-62.

    a. Summary.--During the past decade, the number of persons 
receiving benefits from Social Security's Disability and 
Supplemental Security income programs increased 70 percent 
because of program changes and economic and demographic 
factors. These programs, which provide assistance to persons 
with disabilities until they return to work, if that is 
possible, provided $53 million in cash benefits to 7.2 million 
people in 1994. Advances in technology, such as standing 
wheelchairs and synthetic voice systems, and the medical 
management of some physical and mental disabilities have 
allowed some persons to work. Moreover, there has been a 
greater trend toward inclusion of and participation by people 
with disabilities in the mainstream of society. Yet both 
programs have done little to identify recipients who might 
benefit from rehabilitation and employment assistance and 
ultimately return to work.
    b. Benefits.--GAO identifies the waste and failure of the 
SSA disability program and suggests further review and reform 
are needed to better identify beneficiaries who could return to 
work with some training and assistance.

102. ``Public Housing: HUD Takes Over the Housing Authority of New 
        Orleans,'' May 3, 1996, GAO/RCED-96-67.

    a. Summary.--Operating more than 13,000 housing units and 
providing homes to nearly 25,000 people, the Housing Authority 
of New Orleans is one of the largest public housing authorities 
in the country. For nearly two decades, however, New Orleans 
has been one of the Nation's poorest performing housing 
authorities. Moreover, its performance has improved only 
marginally in recent years, despite Federal grants, hands-on 
management assistance from professional property managers, and 
the personal involvement of the Secretary of the Department of 
Housing and Urban Development (HUD). This report discusses the 
following: (1) major operational problems at the Housing 
Authority of New Orleans; (2) underlying causes of these 
problems; and (3) steps HUD has taken to improve the 
performance of the Housing Authority of New Orleans and what 
success these measures have had.
    b. Benefits.--The report helps explain the persistent 
problems facing one of the poorest performing public housing 
authorities, and is a case study on what actions are affective 
in dealing with this type of problem. The report will help HUD 
avoid making similar mistakes with other public housing 
authorities.

103. ``Health Care Fraud: Information-Sharing Proposals to Improve 
        Enforcement Efforts,'' May 1, 1996, GAO/GGD-96-101.

    a. Summary.--Estimates of health care fraud range from 
between 3 and 10 percent of all health care expenditures--as 
much as $100 billion based on estimated 1995 expenditures. In 
late 1993, the Attorney General designated health care fraud as 
an enforcement priority second only to violent crime 
initiatives. This report discusses: (1) the extent of Federal 
and State immunity laws protecting persons who report 
information on health care fraud; and (2) the advantages and 
disadvantages of establishing a centralized health care fraud 
data base to strengthen information-sharing and support 
enforcement efforts.
    b. Benefits.--Given the seriousness of health care fraud as 
further highlighted by the GAO report, more must be done by 
everyone involved to prevent fraud, including greater 
coordination and cooperation among law enforcement and the 
Federal health care programs. In addition, as this report 
suggests, Congress must continue to monitor waste, fraud, and 
abuse in Federal health care programs.

104. ``Food Safety: Information on Foodborne Illnesses,'' May 8, 1996, 
        GAO/RCED-96-96.

    a. Summary.--Since most cases of foodborne illness go 
unreported, existing data may understate the extent of the 
problem. However, the best estimates indicate that millions of 
Americans become sick and thousands die each year because of 
contaminated food. Moreover, public health officials believe 
that the risk of foodborne illnesses has been on the rise 
during the past 20 years. The precise cost of foodborne 
illnesses is unknown, but recent estimates place the cost as 
high as $22 billion annually. According to Department of 
Agriculture estimates, the cost of medical treatment and lost 
productivity related to foodborne illnesses from seven of the 
most harmful bacteria approached $10 billion in 1993. Public 
health and safety officials believe that current data on 
foodborne illnesses do not provide a complete picture of the 
risk level and do not sufficiently describe the sources of 
contamination and the populations at greatest risk. In 1995, 
Federal and State agencies began to collect more uniform and 
comprehensive data across the country. Due to budget 
constraints, Federal officials are concerned that they may not 
be able to continue this effort long enough to collect 
meaningful trend data. GAO summarized this report in testimony 
before Congress.
    b. Benefits.--This report identifies the lack of reliable 
foodborne illness data as a major impediment to accurate 
determination of the extent of foodborne illness in this 
country. Accurate information is essential to addressing the 
growing problem of foodborne illnesses.

105. ``Federal Personnel: Issues on the Need for the Public Health 
        Service's Commissioned Corps,'' May 7, 1996, GAO/GGD-96-55.

    a. Summary.--This report reviews the operations of the 
Public Health Service's (PHS) Commissioned Corps, whose 
officers carry out various public health functions. GAO 
addresses why the corps exists; Corps officers' duties; the 
rationale for their receiving military-like pay, allowances, 
and benefits; and any savings that might accrue from not using 
uniformed personnel to carry out the Corps' duties.
    b. Benefits.--This comprehensive report documents 
substantial cost savings if the Government eliminates the PHS 
Commissioned Corps, an uniformed service whose mission to 
protect merchant seamen long ago expired.

106. ``Veterans' Compensation: Evidence Considered in Persian Gulf War 
        Undiagnosed Illness Claims,'' May 28, 1996, GAO/HEHS-96-112.

    a. Summary.--More than 700,000 men and women served in the 
Middle East during the Persian Gulf War. Some of these veterans 
began experiencing symptoms, such as fatigue, weight loss, and 
skin conditions, that could not be diagnosed or associated with 
a specific illness. Congress passed legislation in 1994 
allowing the Department of Veterans Affairs (VA) to pay 
compensation to veterans for undiagnosed illnesses connected to 
their service during the Persian Gulf War. As of July 1995, VA 
had denied nearly 95 percent of the 4,144 claims that it had 
processed for Persian Gulf veterans claiming such disabilities. 
In response to congressional concerns about the high denial 
rate, GAO reviewed the procedures VA used to process Persian 
Gulf War undiagnosed illness claims. This report discusses: (1) 
the evidence standards that VA has established to process 
Persian Gulf claims; (2) the evidence in the claim files that 
VA considered in reaching its decisions; and (3) VA's reporting 
of the reasons for denial.
    b. Benefits.--This report will help Congress ascertain the 
accuracy and fairness of VA's compensation system for Gulf 
veterans; however, since the issuance of this report, the 
Department of Defense admissions that thousands of troops were 
exposed to chemical agents should directly impact the VA's past 
compensation decisions.

107. ``Cholesterol Treatment: A Review of the Clinical Trials 
        Evidence,'' May 14, 1996, GAO/PEMD-96-7.

    a. Summary.--Clinical trials and other scientific studies 
have consistently shown that cholesterol-lowering treatment 
benefits middle-aged white men with high cholesterol levels and 
a history of heart disease. Medical research also shows that 
men with moderate-to-high cholesterol levels and no history of 
heart disease have lower rates of nonfatal heart attacks but no 
statistically significant reductions in death rates as a result 
of cholesterol-lowering treatment. Clinical trials generally 
have not evaluated the value of cholesterol-lowering treatment 
for several important groups, including women, the elderly, and 
minorities. Thus, they provide little or no evidence of 
benefits or possible risks for these groups. Two recent trials 
using a new drug class--the statins--show greater reductions in 
heart problems with their greater reductions in cholesterol and 
no increase in fatalities from coronary heart disease. One 
trial studied men and women with coronary heart disease and 
found a significant reduction in total fatalities; the other, 
which studied only men who did not have coronary heart disease, 
showed encouraging but not statistically significant reductions 
in fatalities from coronary heart disease.
    b. Benefits.--Heart disease is the leading cause of death 
in America. This report assesses the benefits of cholesterol-
lowering treatment regimens to reduce morbidity and mortality.

108. ``Cocaine Treatment: Early Results From Various Approaches,'' June 
        7, 1996, GAO/HEHS-96-80.

    a. Summary.--Three cognitive/behavioral approaches--relapse 
prevention, community reinforcement/contingency management, and 
neurobehavioral therapy--have shown positive results in the 
treatment of cocaine addiction. Preliminary findings show that 
clients treated with these therapies remained abstinent and in 
treatment for long periods. These findings are particularly 
encouraging because initial treatments used during the early 
1980's were not very successful. Although too few studies have 
been done to draw definite conclusions about the utility or the 
generalizability of any of these treatments, more research 
should be completed within the next several years. Research 
experts agree that continued research and study are needed to 
enhance and confirm--or deny--these early results.
    b. Benefits.--The information provided by GAO can help 
researchers and Congress eliminate unsuccessful drug programs 
and allow them to focus on, and narrow their studies to, 
programs that seem the most effective and the most promising.

109. ``School Facilities: America's Changing Schools Report Differing 
        Conditions,'' June 14, 1996, GAO/HEHS-96-103.

    a. Summary.--Schools in unsatisfactory condition can be 
found in every part of the country. However, a GAO survey of 
schools nationwide found that schools needing relatively 
greater repairs were those in inner cities, schools in the 
West, schools with 50.5 percent or more minority students, and 
schools with 70 percent or more poor students. More than 14 
million children are being taught in school buildings needing 
significant repairs to restore them to good overall condition. 
At the same time, GAO found that new a school in excellent 
shape, conforming to all Federal, State, and local mandates, 
might be located only a few blocks from an operating but 
deteriorated school building. GAO found the greatest variations 
at the State level. For example, 62 percent of schools in 
Georgia compared with 97 percent of schools in Delaware needed 
repairs to restore them to good overall condition. Virtually 
all communities, even some of the wealthiest, are wondering how 
to balance school infrastructure needs with other community 
priorities.
    b. Benefits.--Communities at socioeconomic levels are 
struggling to meet their school infrastructure needs. This 
report discusses State variations, provides regional 
comparisons, and discusses facility condition relative to 
community income levels and minority representation.

110. ``Health Insurance for Children: Private Insurance for Children: 
        Private Insurance Coverage Continues to Deteriorate,'' June 17, 
        1996, GAO/HEHS-96-129.

    a. Summary.--Despite larger numbers of parents who work 
full-time, private health insurance coverage for children is 
declining. The number of children without health insurance 
coverage reached 10 million in 1994--the largest number since 
1987. In comparison, the number of adults who have lost their 
health insurance coverage appears to have stabilized during the 
past 2 years. Meanwhile, although Medicaid provided health 
coverage for 16 million children in 1994, more than 60 percent 
of those children had a working parent. This trend is straining 
public resources: Taxpayers end up paying either for Medicaid 
coverage or for hospital subsidies to provide acute care for 
uninsured. In response to rising Medicaid costs, State and 
local governments are considering various program changes, some 
of which have profound implications for health care coverage 
for children, such as proposals to remove guaranteed 
eligibility. Other changes that strengthen the private 
insurance market may also significantly affect children's 
future coverage.
    b. Benefits.--The report serves as a basis for States 
arguing that the guaranteed eligibility of certain child 
populations must be changed in order for States to meet the 
cost of such a demand. Congress should continue to look into 
this issue and allow States to work with private insurers to 
become part of a nongovernmental solution.

111. ``VA Health Care: Opportunities for Service Delivery Efficiencies 
        Within Existing Resources,'' July 25, 1996, GAO/HEHS-96-121.

    a. Summary.--The Department of Veteran Affairs (VA), which 
operates one of the Nation's largest health care systems, faces 
increasing pressure to contain or reduce spending as part of 
governmentwide efforts to balance the budget. This report 
discusses ways VA could operate more efficiently and reduce the 
resources needed to meet the needs of veterans in what is 
commonly referred to as the mandatory care category. GAO 
addresses: (1) VA's forecasts of future resource needs; (2) 
opportunities to run VA's system more efficiently; (3) 
differences between VA and the private sector in efficiency 
incentives; and (4) recent VA efforts to reorganize its health 
care system and create efficiency incentives. GAO concludes 
that successful implementation of a range of reforms, coupled 
with reduced demand for services, could save the VA health care 
system billions of dollars during the next 7 years. The success 
of these efforts, however, depends on introducing efficiency 
incentives at VA that have long existed in the private sector.
    b. Benefits.--The report identifies ways to operate VA's 
hospital and out-patient system more efficiently and save 
billions of dollars. While recent changes by VA management are 
starting to provide incentives for greater efficiency, this 
report demonstrates that much more needs to be done.

112. ``Medicaid Managed Care: Serving the Disabled Challenges State 
        Programs,'' July 31, 1996, GAO/HEHS-96-136.

    a. Summary.--With its emphasis on primary care, restricted 
access to specialists, and control of services, managed care is 
seen as a way to control spiraling Medicaid costs, which 
totaled $159 billion in fiscal year 1995. So far, States have 
extended prepaid care largely to low-income families--about 30 
million persons--but to few of the additional 6 million 
Medicaid beneficiaries who are mentally or physically disabled. 
Managed care's emphasis on primary care and control of services 
is seemingly at odds with the care requirements of disabled 
beneficiaries, many of whom need extensive services and access 
to highly specialized providers. However, because more than 
one-third of all Medicaid payments go for the care of the 
disabled, policymakers have been exploring the possibility of 
enrolling disabled persons in managed care plans. These efforts 
affect three key groups: disabled beneficiaries, who include a 
small number of very vulnerable persons who may be less able to 
effectively advocate on their own behalf for access to needed 
services; prepaid care plans, which are concerned about the 
degree of financial risk in treating persons with extensive 
medical needs; and the State and Federal Governments, which run 
Medicaid. This report examines: (1) the extent to which States 
are implementing Medicaid prepaid managed care programs for 
disabled beneficiaries; and (2) the steps that have been taken 
to safeguard the interests of all three groups. GAO's review of 
safeguards focuses on two areas: efforts to ensure quality of 
care and strategies for setting rates and sharing financial 
risk.
    b. Benefits.--A large portion of Medicaid dollars go to a 
small portion of the Medicaid population. This in turn requires 
States to look for innovative ways to provide care in managed 
care environments. The report suggest there are workable 
alternatives if safeguards are in place to protect quality for 
those in managed care programs.

113. ``School Lunch Program: Cafeteria Managers' View on Food Wasted by 
        Students,'' July 18, 1996, GAO/RCED-96-191.

    a. Summary.--Under the National School Lunch Program, about 
26 million students nationwide were served lunches daily during 
fiscal year 1995. Federal costs for the program totaled more 
than $5 billion that year--about $4.5 billion in cash 
reimbursements and more than $600 million in commodity foods, 
such as beef patties, flour, and canned vegetables. Although 
most cafeteria managers GAO surveyed reported that plate waste 
in the public schools was not a concern, about one-quarter of 
the managers characterized plate waste as at least a ``moderate 
problem''--particularly at the elementary school level. 
Cafeteria managers strongly agreed on some of the reasons for 
and ways to reduce plate waste. For example, 78 percent cited 
students' attention on recess, free time, or socializing rather 
than eating as a reason for waste. Almost 80 percent believed 
that allowing students to select only what they want to eat 
would reduce plate waste. Most cafeteria managers were 
satisfied with the Federal commodities they received for use in 
the school lunch program.
    b. Benefits.--The Federal Government devotes significant 
cash and commodity resources to the National School Lunch 
Program. This report states that most cafeteria managers are 
satisfied with the commodities provided them and feel that 
greater student choice would reduce plate waste.

114. ``Welfare Waivers Implementation: States Work to Change Welfare 
        Culture, Community Involvement, and Service Delivery,'' July 2, 
        1996, GAO/HEHS-96-105.

    a. Summary.--In the wake of growing dissatisfaction with 
the welfare system, Congress and the President have been 
considering welfare reform on a national level. Meanwhile, many 
States have undertaken far-reaching reforms through waivers of 
Federal provisions governing the program most Americans think 
of as welfare--Aid to Families With Dependent Children. For 
example, States have required welfare recipients to work; set 
limits on lifetime benefits; and denied cash benefits for 
additional children born to families already receiving welfare. 
Believing that the findings would be useful to States dealing 
with the challenge of welfare reform, Congress asked GAO to 
review some States' early experiences with implementing 
reforms. This report examines efforts by Florida, Indiana, New 
Jersey, Virginia and Wisconsin to implement three key reforms: 
time-limited benefits, work requirements, and family caps.
    b. Benefits.--In order to keep abreast of additional 
welfare reform measures and to evaluate current reform 
mechanisms, this report clearly suggests, Congress must 
continue to study and examine early experiences with current 
reform measures.

115. ``NIH Extramural Research: Internal Controls Are Key to 
        Safeguarding Phase III Trials Against Misconduct,'' July 11, 
        1996, GAO/HEHS-96-117.

    a. Summary.--In fiscal year 1995, the National Institutes 
of Health (NIH) sponsored about $9 billion in extramural 
research--research done by groups outside of NIH. About $1.2 
billion was spent on phase III clinical trials, which usually 
involve hundreds of human participants to evaluate experimental 
treatments. In the early 1990's, disclosure that falsified data 
had been used in a large phase III trial looking at alternative 
treatments for breast cancer raised concern that the results of 
this multimillion dollar trial had been compromised. This 
report discusses NIH's oversight responsibilities and internal 
controls used to prevent and detect misconduct in phase III 
clinical trial research. GAO also reviews NIH's approach to 
monitoring performance of its institutes that sponsor clinical 
trials and efforts to implement agencywide policy on misconduct 
in research.
    b. Benefits.--NIH clinical research involves billions of 
taxpayer dollars and affects tens of thousands of Americans. 
The integrity of clinical trial processes at NIH are crucial to 
the health of the American people. This report identifies 
important improvements needed in NIH oversight of clinical 
research.

116. ``Medicaid: Waiver Program for Developmentally Disabled Is 
        Promising But Poses Some Risks,'' July 22, 1996, GAO/HEHS-96-
        120.

    a. Summary.--More than 300,000 adults with developmental 
disabilities--typically mental retardation--receive long-term 
care paid for by Medicaid or, to a lesser extent, State and 
local programs. Such long-term care often involves supervision 
and assistance with everyday activities, such as dressing or 
managing money. Persons with developmental disabilities receive 
more than $13 billion annually in public funding for long-term 
care, second only to the elderly. Recently, States have begun 
to significantly expand the use of the Medicaid waiver program, 
which seeks to provide alternatives to institutional care for 
persons with developmental disabilities. The waiver program has 
two advantages. First, it helps States to control costs by 
allowing them to limit the number of recipients being served. 
In contrast, States must serve all eligible persons in the 
regular Medicaid program. Second, it permits States to meet the 
needs of many persons with developmental disabilities by 
offering them a broader range of services in less restrictive 
settings, such as group or family homes, rather than in an 
institutional setting. This report examines: (1) expanded State 
use of the waiver program; (2) the growth in long-term care 
costs for individuals with developmental disabilities; (3) how 
costs are controlled; and (4) strengths and limitations in 
States' approaches to ensuring quality in community settings.
    b. Benefits.--GAO highlights the success of waiver programs 
and suggest they can be a cost effective alternative if quality 
controls are in place to protect the developmentally disabled 
served. The report will give Congress the tools it needs to 
assess how to adapt the GAO findings to future programs.

117. ``Job Corps: Where Participants are Recruited, Trained, and Placed 
        in Jobs,'' July 17, 1996, GAO/HEHS-96-140.

    a. Summary.--The Job Corps, a national employment training 
program run by the Labor Department, serves about 66,000 
participants at 112 centers in 46 States, the District of 
Columbia, and Puerto Rico. GAO found that the Job Corps has the 
capacity to serve 81 percent of program participants in their 
home States--52,000 of 64,000 participants from States with Job 
Corps centers could have been assigned to a center in their 
State of residence. About 59 percent of participants were 
assigned to centers in their home State; the remaining 
participants were sent to centers outside their home State and 
traveled an average of more than four times as far as they 
would have had they been assigned to the closest center in 
their State of residence. Regardless of where they were 
trained, however, about 83 percent of those participants who 
got jobs were employed in their home State.
    b. Benefits.--The report helped address the feasibility of 
making the Job Corps program a State run program, rather than a 
federally run program. The information also identifies a 
potential area for cost savings if participants can be served 
equally well in their home State as they can in another.

118. ``Consumer Health Informatics: Emerging Issues,'' July 26, 1996, 
        GAO/AIMD-96-86.

    a. Summary.--Technology has increased the amount of health 
information available to the public, allowing consumers to 
become better educated and more involved in their own health 
care. Government and private health care organizations rely on 
a variety of technologies to disseminate health information on 
preventive care, illness and injury management, treatment 
options, post-treatment care, and other topics. This report 
discusses consumer health informatics--the use of computers and 
telecommunications to help consumers obtain information, 
analyze their health needs, and make decisions about their own 
health. GAO provides information on: (1) the demand for health 
information and the expanding capabilities of technology; (2) 
users' and developers' views on potential systems advantages 
and issues surrounding systems development and use; (3) 
government involvement--Federal, State, and local--in 
developing these technologies; and (4) the status of related 
efforts by the Department of Health and Human Services. As part 
of this review, GAO surveyed consumer health informatics 
experts and presents their views on issues that need to be 
addressed when developing consumer health information systems.
    b. Benefits.--The report provides information on the risks 
and potential cost savings of health informatics, and will 
allow Congress and the executive branch to make more informed 
decisions as they consider what actions are appropriate with 
regard to this growing aspect of health care.

119. ``SSA Disability: Return-to-Work Strategies From Other Systems May 
        Improve Federal Programs,'' July 11, 1996, GAO/HEHS-96-133.

    a. Summary.--Between 1985 and 1994, the number of working-
age people in the Social Security Administration's (SSA) 
disability insurance and supplemental security income programs 
rose 59 percent, from 4 million to 6.3 million. Concern about 
such growth has been compounded by the fact that less than half 
of 1 percent of disability insurance beneficiaries ever leave 
the disability rolls and return to work. A recent GAO report 
(GAO/HEHS-96-62) urged SSA to place more emphasis on return-to-
work efforts. If an additional 1 percent of the 6.3 million 
beneficiaries were to leave SSA's disability rolls and return 
to work, lifetime cash benefits would be reduced by nearly $3 
billion. The magnitude of disability costs in the workplace has 
spurred companies to develop strategies to return disabled 
employees to the workplace--an effort that can help businesses 
reduce costs, such as disability benefit payments and 
disability insurance premiums. This report discusses: (1) key 
practices used in the U.S. private sector to return disabled 
employees to the workplace; and (2) examples of how other 
countries implement return-to-work strategies for disabled 
persons.
    b. Benefits.--The report highlights the seriousness of the 
huge increase in the growth of the SSA disability and SSI 
programs. In discussing the low numbers of people who leave the 
rolls to return to work, the report calls attention to the 
failure of SSA's efforts to return people to work and the need 
for Congress to involve itself in reforming the program.

120. ``Readjustment Counseling Service: Vet Centers Address Multiple 
        Client Problems, but Improvement Is Needed,'' July 17, 1996, 
        GAO/HEHS-96-113.

    a. Summary.--The Department of Veterans Affairs (VA) 
operates 205 community-based facilities known as Vet Centers to 
help veterans make a successful transition from military to 
civilian life. Vet Center counselors reported visiting with 
about 138,000 veterans during fiscal year 1995, 84,000 of whom 
were new to Vet Centers. Most veterans do not establish long-
term relationships with Vet Center counselors; however, those 
who do, represent a core group who use services over extended 
periods for serious psychological problems, such as post-
traumatic stress disorder. Other veterans usually visit Vet 
Center counselors only once or twice for social concerns, such 
as employment or benefit needs.
    b. Benefits.--The report cites problems in documenting 
client records and the need to develop a systematic approach 
for measuring the effectiveness of Vet Center services. Such 
improvements would increase service results and offer 
opportunities for cost savings.

121. ``Social Security Disability: Backlog Reduction Efforts Under Way; 
        Significant Challenges Remain,'' July 11, 1996, GAO/HEHS-96-87.

    a. Summary.--The Social Security Administration (SSA) runs 
the Nation's largest programs providing cash benefits to people 
with severe long-term disabilities. The number of persons 
receiving either disability insurance or supplemental security 
income benefits has soared during the past decade. At the same 
time, SSA has struggled to deal with unprecedented growth in 
appeals of its disability decisions and the resulting backlog 
of cases awaiting hearing decisions. Processing delays stemming 
from a backlog of more than half a million appealed cases have 
created hardships for disability claimants, who often wait more 
than a year for final disability decisions. This report 
discusses: (1) factors contributing to the growth in appealed 
cases; (2) SSA initiatives to reduce the backlog; and (3) steps 
that need to be taken in the long-term to make the disability 
appeals process more timely and efficient.
    b. Benefits.--For those denied program benefits the current 
appeals process has overloaded the system, causing a 12-month 
wait for decisions. The report adds to the view that the 
appeals process needs to be reviewed and modified by Congress.

122. ``Homeownership: FHA's Role in Helping People Obtain Home 
        Mortgages,'' August 13, 1996, GAO/RCED-96-123.

    a. Summary.--Many changes have occurred in the single-
family housing finance system since the Federal Housing 
Administration (FHA) was established in the 1930's to insure 
housing loans made by private lenders. These changes include 
the advent of modern private mortgage insurance, the emergence 
of a secondary mortgage market, and various public- and 
private-sector initiatives to expand affordable housing for 
home buyers. Critics of FHA argue that other housing finance 
entities, such as private mortgage insurers, are filling the 
role FHA once filled exclusively. Supporters of FHA contend 
that its single-family program, which has insured about 24 
million home mortgages since its inception, remains the only 
way for some families to become homeowners and should be 
expanded. This report discusses: (1) the terms of the mortgage 
insurance offered by FHA, private mortgage insurers, and the 
U.S. Department of Veteran's Affairs; (2) the characteristics 
of borrowers of insured mortgages and the overlap between FHA-
insured mortgages and privately insured mortgages; and (3) 
other methods used by the Federal Government to promote 
affordable homeownership.
    b. Benefits.--The report provides information necessary for 
Congress to consider what role, if any, the FHA should continue 
to have given the growth of private mortgage insurance.

123. ``Higher Education: Tuition Increasing Faster Than Household 
        Income and Public Colleges' Costs,'' August 15, 1996, GAO/HEHS-
        96-154.

    a. Summary.--During the past 15 years, tuition at 4-year 
public colleges and universities rose 234 percent. In contrast, 
median household income rose only 82 percent. This increase in 
tuition also substantially exceeded the 74-percent increase in 
the cost of consumer goods--as measured by the Consumer Price 
Index. The two factors most responsible for the rise in tuition 
were increases in schools' expenditures and schools' greater 
dependency on tuition as a source of revenue. Increases in 
instruction, administration, and research expenditures 
accounted for much of the increase. The increased spending for 
instruction was driven largely by increases in faculty 
salaries, which rose 97 percent during the period. At the same 
time, the share of schools' revenue provided by tuition rose 
from 16 percent to 23 percent, as the share of revenue derived 
from State appropriations fell by 14 percentage points. GAO 
found wide variation in tuition charges among States in school 
year 1995-96. These variations are explained partly by States' 
levels of support. Colleges have tried to deal with students' 
increasing financial burden in several ways, including holding 
down tuition increases, making paying for college easier, and 
streamlining students' progress to graduation to keep their 
total charges lower. Because some of the efforts are in the 
early stages of implementation, little has been done to 
evaluate their effectiveness.
    b. Benefits.--The report details State variations in 
college tuition charges for school year 1995-96 and relates 
them to the level of State support. It notes that evaluation of 
tuition cost control measures will be needed when data becomes 
available.

124. ``Supplemental Security Income: Administrative and Program Savings 
        by Directly Accessing State Data,'' August 29, 1996, GAO-HEHS-
        96-163.

    a. Summary.--The Supplemental Security Income program, 
which provides cash benefits to the aged, the blind, and the 
disabled, could be run more efficiently. More importantly, 
millions of dollars in overpayments could be prevented or 
detected quickly if information were available on-line during 
eligibility assessments. GAO estimates that direct on-line 
access to State computerized income information could have 
prevented or quickly detected more than $131 million in 
overpayments caused by unreported or underreported income 
nationwide in one 12-month period. However, in Social Security 
Administration (SSA) field offices where direct access to 
computerized State information has been implemented, SSA claims 
representatives did not use it to detect overpayments. The 
claims representatives did use it to process claims more 
efficiently, and SSA's preliminary results have shown that its 
use has reduced administrative expenses. Establishing on-line 
access between SSA field offices and State agency databases 
would require only minimal computer programming in most States; 
some States would need additional hardware, such as computer 
lines.
    b. Benefits.--Management of the SSI program is lacking and 
as a result, millions of dollars are lost annually in 
overpayment. The study highlights the effectiveness of 
coordination efforts and calls attention to the fact SSA should 
and must do more to stop overpayments. The report provides 
Congress with tools to help fight waste, fraud, and abuse in 
SSI.

125. ``School Lunch Program: Role and Impacts of Food Service 
        Companies,'' August 26, 1996, GAO/RCED-96-217.

    a. Summary.--Under the National School Lunch Program, local 
school districts receive Federal funds for lunches that meet 
the programs' requirements for nutritious, well-balanced meals. 
Although these school districts have traditionally run their 
own school meals programs, several have contracted with private 
food service management companies to plan, prepare, and serve 
school meals. Also, some school districts have purchased brand-
name fast foods to serve as part of their school meals or as a 
la carte items. This report: (1) discusses the extent to which 
food authorities use food service companies to operate their 
school lunch program and the impact that the use of food 
service companies has had on the National School Lunch Program; 
(2) describes the terms and the conditions in the contracts 
between food authorities and food service companies; (3) 
discusses the extent to which fast foods and snack foods in 
vending machines are available in participating schools; and 
(4) describes the types, the brands, and the nutritional 
content of the fast foods most commonly offered.
    b. Benefits.--This Congress conducted an extensive debate 
over the future of the National School Lunch Program. The 
information in this report will provide Congress with the 
ability to more accurately debate the program and convert its 
ideas for reform into a reality.

126. ``Supplemental Security Income: SSA Efforts Fall Short in 
        Correcting Erroneous Payments to Prisoners,'' August 30, 1996, 
        GAO/HEHS-96-152.

    a. Summary.--Despite Social Security Administration (SSA) 
procedures to detect supplemental security income recipients in 
county and local jails, GAO found that $5 million had been 
erroneously paid to prisoners in the jail systems it reviewed. 
SSA had been unaware of many of these payments and, therefore, 
had made no attempt to recover them. Various factors 
contributed to these payments. First, SSA field offices have 
not been compiling information regularly on prisoners in 
country and local jails. Second, the supplemental security 
recipient--or the person or organization designated to receive 
payments on the recipients' behalf--has not been reporting the 
incarceration, as required. Third, SSA sometimes falls short in 
periodically reviewing--either by mail or interview--a 
recipient's continues financial eligibility for supplemental 
security income. Under a new SSA initiative, field offices will 
be required to obtain prisoner information from country and 
local jails, and SSA plans to monitor field office compliance 
with this requirement. It is too early to tell, however, 
whether this initiative will be successful.
    b. Benefits.--GAO highlights the serious oversight and 
failure on the part of SSA. A further review of the problem, 
possibly by Congress, will likely be required to curtail this 
area of Government waste.

127. ``School Finance: Options for Improving Measures of Effort and 
        Equity in Title I,'' August 30, 1996, GAO/HEHS-96-142.

    a. Summary.--Disparities in per pupil funding for 
elementary and secondary education within each State have long 
been a concern of parents, teachers, State officials, and 
Federal officials. Since the early 1970's, these disparities 
have prompted poor districts in more than 40 States to 
challenge the constitutionality of their States' school finance 
systems. Under Title I's Education Finance Incentive Program, 
States with high levels of ``fiscal effort'' for education--
that is, high State spending relative to the State's ability to 
pay--and equity in per pupil spending would receive additional 
funds. In June 1994, GAO cited weaknesses in the proposed 
measures of effort and equity used in the title I program. 
Members of Congress have also called for these measures to be 
improved. This report: (1) examines the measures now included 
in Title I's Education Finance Incentive Program to reflect 
State fiscal effort for education and equity in per pupil 
spending; (2) proposes several options for improving these 
measures; (3) describes the characteristics of States with 
higher levels of effort and equity under both the current 
definitions and the options GAO developed; and (4) suggests 
alternative ways the options GAO developed could be used in 
allocating funds under the Education Finance and Incentive 
Program.
    b. Benefits.--Long-term background of the issue is provided 
in this report on per pupil funding for disadvantaged school 
districts. It provides suggestions for improving measures of 
Title I Equity and Effort.

  National Economic Growth, Natural Resources, and Regulatory Affairs 
                              Subcommittee

1. ``Nuclear Regulation: Weaknesses in NRC's Inspection Program at a 
        South Texas Nuclear Power Plant,'' October 3, 1995, GAO/RCED-
        96-10.

    a. Summary.--At the request of Congressman John Dingell, 
ranking minority member of the Committee on Commerce, the 
General Accounting Office (GAO) conducted a study of the 
circumstances surrounding the shutdown of the South Texas 
Project Electric Generating Station, a nuclear plant located in 
Matagorda County, TX, and the effectiveness of the Nuclear 
Regulatory Commission's (NRC) inspection program at the plant. 
This report attempts to: (1) identify the circumstances 
surrounding the shutdown of the plant and the seriousness of 
the event; (2) determine whether the NRC was aware of problems 
at the plant before the shutdown; and (3) identify any factors 
that may have prevented NRC from having complete and timely 
information about the licensee's performance.
    The NRC found several safety violations but considered an 
accident unlikely. The licensee shut down both reactors because 
of continuing problems with their emergency pumps. NRC requires 
the reactor to be shut down if its pump is inoperable for more 
than 3 days. NRC later found that one reactor's pump had been 
inoperable for about 40 days. Two of the reactor's three 
generators had also been inoperable during portions of this 
period. The risk of damaging the reactor's core increased from 
about 1 chance in 5 million to about 1 chance in 83,000 during 
the period when two or more of the reactor's emergency systems 
were not working.
    The NRC was aware of long-standing malfunctions with the 
reactor's pumps, including problems with one reactor's pump in 
the 3-day period preceding the shutdown. However, it was not 
until after the shutdown that NRC found, among other things, 
that the licensee had not conducted a valid test of the 
reactor's pump since December 26, 1992. NRC also knew that the 
licensee was performing maintenance on the reactor's 
generators. However, the agency did not know that, in addition 
to the problems with the pump, (1) painting had immobilized one 
generator for 24 days, and (2) the licensee had removed another 
generator from service for 61 hours--conditions that 
substantially increased the likelihood of a core-damaging event 
at the plant.
    Although one purpose of NRC's inspection program is to 
prevent significant events at plants, in practice, NRC rarely 
detects such events before its licensees do. All 16 significant 
events that NRC reported for 1993, including the event in South 
Texas, were initially identified by the licensees rather than 
by NRC.
    According to the NRC, a major purpose of its reactor 
inspection program is to identify and resolve underlying 
problems at nuclear plants and, by so doing, anticipate and 
prevent significant safety events--events with the potential to 
both damage a reactor's core and release radioactive material. 
In the case of the South Texas plant, this goal was not 
achieved.
    Furthermore, the GAO concluded that the NRC did not 
identify the underlying safety problems that contributed to the 
event at the South Texas plant--another stated purpose of the 
inspection program--until after the plant's shutdown. 
Specifically, while NRC's inspection program identified long-
standing problems at the plant, NRC did not adequately use its 
inspection to determine if the problems were indicative of 
systemic, or underlying problems in the licensee's operation of 
the plant. As a result, it was not until after the plant's 
shutdown that the agency identified the areas as underlying 
safety concerns at the plant. By then, the problems had become 
so acute that it took the licensee more than a year to address 
the concerns.
    b. Benefits.--NRC's March 1995 report on the effectiveness 
of its inspection effort at the South Texas plant presents a 
candid overview of weakness in the agency's inspection program, 
including NRC's failure to (1) assess the significance of 
identified problems and (2) ensure that long-standing problems 
at the plant had been corrected. NRC has taken several actions, 
and planned others, to address the program's weaknesses. The 
effectiveness of NRC's corrective actions will depend, to a 
great extent, on NRC's ongoing initiatives to rely more heavily 
on licensees to identify problems at nuclear facilities. 
Overall, this report will help to identify the ways in which 
the NRC can improve its inspection program and can alert 
nuclear plants to potential problems concerning the safety of 
their facility.

2. ``Tax Administration: Information on IRS' Taxpayer Compliance 
        Measurement Program,'' October 6, 1995, GAO/GGD-96-21.

    a. Summary.--At the request of Congressman Joseph 
Knollenberg, the General Accounting Office (GAO) prepared a 
report on the Internal Revenue Service's Taxpayer Compliance 
Measurement Program (TCMP) for tax year 1994. The report 
focuses on how the IRS addressed the problems discussed in 
GAO's December 1994 report on the status of the program and, if 
the problems persist, how they would affect final TCMP results; 
(2) informational sources other than TCMP that IRS could use to 
target its audits more effectively; and (3) the relevancy of 
TCMP data for alternative tax system proposals.
    The GAO found that the IRS has generally taken appropriate 
action in the concerns raised in GAO's 1994 report that dealt 
with meeting milestones for starting TCMP audits, testing TCMP 
data base components, developing data collection systems, and 
collecting and analyzing data. The IRS plans to collect data on 
partners, shareholders, and misclassified workers as suggested 
in GAO's 1994 report. This additional data should allow IRS to 
better measure compliance levels, which could increase the 
value of TCMP audit results. Also, IRS plans to have auditors 
computerize some of their comments on audit findings, which 
should make it easier for researchers to analyze TCMP results.
    GAO's overall conclusion is that TCMP could be very useful 
not only for improving compliance in the existing tax system, 
but also as a tool for designing and administering a new 
system. While types of income and deductions included in each 
new proposed tax system vary, TCMP could still provide data on 
compliance issues that would have to be addressed in any of the 
new system proposals that GAO reviewed. To the extent that new 
tax systems are proposed and adopted, TCMP data could alert tax 
system designers and administrators to potential areas of 
noncompliance and provide data on which to base rules and 
regulations. The longer it takes to implement a new tax system, 
the more useful TCMP data could be for helping design and 
administer the new system.
    b. Benefits.--This report provides an update on the 
progress being made with respect to reforming the Internal 
Revenue Service's Taxpayer Compliance Measurement Program.

3. ``Tax Administration: IRS Faces Challenges in Reorganizing for 
        Customer Service,'' October 10, 1995, GAO/GGD-96-3.

    a. Summary.--At the request of Sens. Orrin Hatch, Bill 
Bradley, Richard Shelby, Robert Kerrey, Representatives Nancy 
Johnson, Robert Matsui, Jim Lightfoot, and Steny Hoyer, the 
General Accounting Office (GAO) prepared a report on the 
Internal Revenue Service's effort to modernize its information 
systems and restructure its organization. The report discusses: 
(1) IRS' goal for customer service and its plans to achieve 
them; (2) the gap between current performance and these goals; 
(3) its progress to date; (4) current management concerns; and 
(5) several important challenges IRS faces. The IRS has as its 
goals for its customer service to: (1) provide better service 
to taxpayers; (2) use its staff and facilities more 
efficiently; and (3) raise the level of compliance with the tax 
laws. IRS plans to better serve taxpayers by improving their 
accessibility to telephone service and resolving most problems 
with a single contact.
    The GAO has concluded that the gap between IRS' current 
operations and its customer service vision is very great. As an 
example, the GAO points to IRS plans to improve telephone 
accessibility by greatly reducing busy signals on its new 
customer service telephone system. In fiscal year 1994, 
taxpayers who called the IRS Taxpayer Services toll-free sites 
got busy signals 73 percent of the time.
    The IRS has made some progress toward its customer service 
vision, including selecting sites for the new centers, 
experimenting with two prototype sites, and beginning 
operations at five more customer service centers. However, 
implementation still has far to go. For example, as of June 30, 
1995, only 925 of an eventual 22,240 staff had been reassigned 
to customer service centers. The new computer and telephone 
systems planned to support customer service were still in an 
early stage of development and testing. IRS officials recently 
acknowledged that the transition would last longer than the 
original goal of full operation in 2001.
    The GAO recommends that the IRS: (1) clarify the criteria 
for assigning process owners responsibility for TSM projects 
when they involve more than one core business system; (2) 
define process owners' roles and responsibilities for TSM 
projects involving more than one core business system; and (3) 
emphasize to those designated as process owners the need for 
them to provide the business requirements necessary to develop, 
test, and implement new customer service products and services.
    b. Benefits.--This report helps to highlight the problems 
the IRS is facing in its attempt to improve customer service. 
The GAO has made several suggestions in this report to the IRS 
on how the agency might proceed with improving its operations.

4. ``Bank Regulatory Structure--Canada,'' September 28, 1995, GAO/GGD-
        95-223 ``Tax Administration: IRS Faces Challenges in 
        Reorganizing for Customer Service,'' October 10, 1995, GAO/GGD-
        96-3.

    a. Summary.--At the request of Representative Charles 
Schumer, the General Accounting Office (GAO) conducted a study 
of the structure and operations of regulatory activities in 
several countries. This particular study focuses on the 
regulatory structure of Canada.
    GAO's objectives were to describe: (1) the Canadian bank 
Federal regulatory and supervisory structure, and its key 
participants; (2) how that structure functions, particularly 
with respect to bank authorization or chartering, regulation, 
and supervision; (3) how banks are examined; and (4) how 
participants handle other financial system responsibilities.
    The Office of the Superintendent of Financial Institutions 
(OSFI) has primary responsibility for overseeing the safety and 
soundness of financial institutions in Canada. OSFI administers 
the appliciation process for incorporating financial 
institutions, issues financial institution regulations and 
guidelines: taking both formal and informal enforcement actions 
relying mostly on informal actions, such as recommendations; 
and taking the lead in resolving problem institutions.
    OSFI conducts full-scope, onsite examinations of financial 
institutions with a staff of full-time examiners. OSFI relies 
on a financial institution's external auditors for an 
assessment of the fairness of an institution's annual financial 
statement. External auditors also have a responsibility to 
report to OSFI anything that they discover during the course of 
their work that might affect the well-being of an institution, 
and OSFI advises external auditors about anything material that 
has come to its attention concerning a financial institution.
    b. Benefits.--This report will provide interested parties 
with a comprehensive overview of the Canadian financial 
regulatory system. The information contained within this report 
will assist in the formulation of proposals to consolidate U.S. 
bank regulatory agencies.

5. ``Tax Administration--IRS' Partnership Compliance Activities Could 
        Be Improved,'' June 16, 1995, GAO/GGD-95-151.

    a. Summary.--At the request of Chairman Bill Archer and 
Vice-Chairman Robert Packwood, the General Accounting Office 
produced a report to determine: (1) the extent of partnership 
compliance with Federal tax laws; (2) any steps IRS is taking 
to improve partnership compliance; and (3) any additional 
efforts that IRS could take to improve partnership compliance.
    The extent of partnership tax compliance is unknown. IRS' 
most current partnership compliance data were collected under 
its tax year 1982 partnership Taxpayer Compliance Measurement 
Program (TCMP). This data showed that partnerships under 
reported their net income by $13 billion in 1982 which the GAO 
estimates resulted in an underpayment of taxes by partners 
approaching $3.6 billion. Even when partnerships reported all 
of their income, partners sometimes failed to include it in 
their own tax returns. Thus, IRS estimated that individual 
partners owed an additional $2.4 billion in taxes in 1982. But 
significant tax law changes in the intervening years make these 
data unreliable indicators of the present situation. IRS will 
not have more current partnership compliance data until October 
1998 when its TCMP audits of tax year 1994 partnership returns 
are scheduled to be completed.
    GAO has concluded that the IRS is taking some steps to 
address partnership compliance issues. For example, it is 
planning to conduct partnership TCMP audits to determine the 
level of partnership compliance and to develop audit selection 
formulas. However, the results of these audits will not be 
available until late 1998. IRS is also in the process of 
modernizing the tax system with plans such as developing an 
integrated case-processing system that would allow IRS to more 
effectively and efficiently identify noncompliant taxpayers. 
This system is scheduled to be in place by 2001.
    b. Benefits.--This report examines IRS' attempts to 
increase partnerships' compliance with tax laws. It suggests 
several steps that could be taken by the IRS to improve 
compliance rates in this area.

6. ``Financial Audit: Examination of IRS' Fiscal Year 1994 Financial 
        Statements,'' August 4, 1995, GAO/AIMD-95-141.

    a. Summary.--In accordance with the Chief Financial 
Officers Act of 1990, this report presents the results of the 
General Accounting Office's (GAO) efforts to audit the 
Principal Financial Statements of the Internal Revenue Service 
for fiscal years 1994 and 1993 and an assessment of its 
internal controls and compliance with laws and regulations. IRS 
continues to face major challenges in developing meaningful and 
reliable financial management information and in providing 
adequate internal controls that are essential to effectively 
manage and report on its operations. Overcoming these 
challenges is difficult because of the long-standing nature and 
depth of IRS financial management problems and the antiquated 
state of its systems. IRS has expressed its commitment to 
resolving the problems GAO reported.
    This report discusses the scope and severity of IRS 
financial management and control problems, the adverse impact 
of these problems on IRS ability to effectively carry out its 
mission, and IRS' actions to remedy the problems. The report 
also contains recommendations to help IRS continue its efforts 
to resolve these long-standing problems and strengthen its 
financial management operations.
    b. Benefits.--This report will provide interested parties 
with an assessment of changes that need to be made within the 
IRS to improve the agency's financial operations.

7. ``Government Corporations: Profiles of Existing Government 
        Corporations,'' December 13, 1995, GAO/GGD-96-14.

    a. Summary.--At the request of Senator David Pryor, ranking 
minority member of the Senate Subcommittee on Post Office and 
Civil Service, the General Accounting Office (GAO) conducted a 
review of government corporations (GC's) to determine the 
number of these corporations presently in operation and their 
adherence to 15 Federal statutes.
    The GAO surveyed 58 entities that were potential government 
corporations to identify their legal status and adherence to 15 
Federal statutes. The GAO identified these 58 entities by 
including: (1) all government corporations listed in the 
Government Corporation Control Act; (2) entities that were 
listed in at least three of five major government corporation 
studies done in the last 15 years; and (3) additional entities 
the GAO identified during the course of our work.
    No comprehensive descriptive definition of criteria for 
creating GC's exist, and counts of the number of government 
corporations have varied widely. Using self-reported responses, 
the GAO identified 22 GC's. In addition to the 22 government 
corporations, the GAO also profiles five other entities that 
reported that they were not GC's. The GAO decided to profile 
these other five entities for two reasons. First, although 
these entities reported that they were not government 
corporations, they are frequently considered to be GC's by 
others and were previously identified in several major GC 
studies done over the last 15 years. Second, each of these 
entities receives at least some of its operating funds from 
yearly Federal appropriations.
    Congress sometimes exempts GC's from several key management 
laws to provide them with greater flexibility than Federal 
Government departments and agencies typically have in hiring 
employees, paying these employees competitive salaries/
benefits, disclosing information publicly, and procuring goods 
and services. Because of these exemptions, the government 
corporations did not report uniform compliance with the 15 
selected Federal statutes. For example, one GC--the Federal 
Housing Administration--reported full adherence to 14 of the 15 
statutes, while another--Amtrak--reported full adherence to 
only 2 statutes.
    b. Benefits.--This report helps to create a greater 
understanding of what constitutes a government corporation and 
how they are similar to, or differ from, government agencies, 
government sponsored enterprises, and private corporations.

8. ``Forest Service: Distribution of Timber Sales Receipts Fiscal Years 
        1992-94,'' September 8, 1995, GAO/RCED-95-237FS.

    a. Summary.--At the request of Congressman Sidney R. Yates, 
ranking minority member of the Subcommittee on Interior and 
Related Agencies of the Committee on Appropriations, the 
General Accounting Office (GAO) conducted a study to provide 
information on the receipts collected for the timber sales 
program in fiscal years 1992-94. This study includes the amount 
of the receipts the Forest Service distributed for specific 
purposes and the receipts deposited in the General Fund of the 
Treasury compared with the Forest Service's outlays for the 
preparation and administration of timber sales for that same 
period. During fiscal years 1992-94, the Forest Service 
collected nearly $3 billion in timber sales receipts and 
distributed about $2.7 billion, or 90 percent, to various 
Forest Service funds or accounts for specific purposes. The 
Forest Service deposited the remaining receipts--about $300 
million--in the General Fund of the Treasury. Outlays for 
preparing and administering timber sales totaled about $1.3 
billion for the same period. Overall, for fiscal years 1992-94, 
the Forest Service collected more timber sales receipts than it 
distributed.
    b. Benefits.--The GAO's report details timber sales 
receipts and outlays by region for fiscal years 1992-94.

9. ``Community Reinvestment Act: Challenges Remain To Successfully 
        Implement CRA,'' November 28, 1995, GAO/GGD-96-23.

    a. Summary.--At the request of Chairman Leach, Congressman 
Henry Gonzalez, Chairwoman Roukema, Congressmen Bruce Vento and 
Joseph Kennedy, the General Accounting Office (GAO) prepared a 
report on the effectiveness of the Community Reinvestment Act. 
It discusses the major problems with the implementation of the 
act identified by the affected parties, the extent to which 
recent regulatory reform efforts have addressed those problems, 
and the challenges that regulators need to address as they 
implement new CRA regulations. It also discusses initiatives 
that banks have taken independently or in partnership with 
others to enhance community lending.
    GAO identified four major problems with the regulators' 
compliance examinations and enforcement of CRA that all the 
affected parties agreed were problems: (1) too little reliance 
on lending results and too much reliance on documentation of 
efforts and processes, leading to an excessive paperwork 
burden; (2) inconsistent CRA examinations by regulators 
resulting in uncertainty about how CRA performance is to be 
rated; (3) examinations based on insufficient information that 
may not reflect a complete and accurate measure of an 
institutions' performance; and (4) dissatisfaction with 
regulatory enforcement of the act, which largely relies on 
protests of expansion plans to ensure institutions are 
responsive to community credit needs. However, the reasons they 
gave for why they believed the problems adversely affected 
their interests--which form the basis for their concerns--and 
often contradictory solutions they offered to address the 
problems, showed that the affected parties differed 
considerably on how best to revise CRA.
    b. Benefits.--The results of this study should be of great 
assistance to lawmakers in their efforts to revisit and revise 
the CRA statute in order to clarify its intent and scope. In 
particular, this study will assist with the development of 
alternative strategies for meeting the goals of the CRA.

10. ``Bank Mutual Funds--Sales Practices and Regulatory Issues,'' 
        September 27, 1995, GAO/GGD-95-210.

    a. Summary.--At the request of Congressman John Dingell, 
ranking minority member of the Committee on Commerce, and 
Congressman Henry Gonzalez, ranking minority member of the 
Committee on Banking and Financial Services, the General 
Accounting Office (GAO) prepared a report on the extent to 
which banks and thrifts have expanded into mutual fund 
activities. The GAO found that in the last few years, many 
banks and thrifts have entered the mutual fund business to 
retain customers, increase fee income, and diversify their 
operations. The rapid growth of bank mutual fund sales over the 
last 5 years has raised concerns that bank customers may not 
fully understand the risks of investing in mutual funds 
compared to insured bank products. In February 1994, the four 
banking regulators responded to these concerns by issuing 
guidelines to banks and thrifts on the policies and procedures 
that these institutions are to follow in selling nondeposit 
investment products, such as mutual funds. During visits to a 
sample of banks and thrifts in 12 metropolitan areas in March 
and April 1994, GAO found that many institutions were not 
following the guidelines. About one-third of the institutions 
visited made all the risk disclosures called for by the 
guidelines, and about one-third did not clearly distinguish 
their mutual fund sales area from the deposit-taking area of 
the bank as required by the guidelines. The banking regulators 
have stated that they are including steps in their examinations 
to determine how well institutions are following guidelines.
    b. Benefits.--The results of this study will assist in the 
development of a sensible approach to conducting examinations 
of banks' mutual fund activities to provide effective investor 
protection, while ensuring bank safety and soundness.

11. ``National Parks--Difficult Choices Need To Be Made About the 
        Future of the Parks,'' August 30, 1995, GAO/RCED-95-238.

    a. Summary.--At the request of Senators Murkowski, 
Campbell, Thomas, and Congressman James Hansen, the General 
Accounting Office (GAO) conducted a study on the current 
condition of national parks. The report specifically discusses: 
(1) what, if any, deterioration in visitor services or park 
resources is occurring at the 12 park units that GAO visited; 
(2) what factors contribute to any degradation of visitor 
services, natural and cultural resources at the 12 park units 
that GAO visited; and (3) what choices are available to help 
deal with identified problems. The GAO concluded that the 
overall level of visitor services was deteriorating at most of 
the park units that GAO reviewed. Services were being cut back, 
and the condition of many trails, campgrounds, and other 
facilities was declining. Trends in resource management were 
less clear because most park managers lacked sufficient data to 
determine the overall condition of their parks' natural and 
cultural resources. In some cases, parks lacked an inventory of 
the resources under their protection.
    Two factors particularly affected the level of visitor 
services and the management of park resources. These were (1) 
additional operating requirements placed on parks by laws and 
administrative requirements and (2) increased visitation, which 
drives up the parks' operating costs. These two factors 
seriously eroded funding increases since the mid-1980's.
    The GAO has concluded that the national park system is at a 
crossroads. While the system continues to grow, conditions at 
the parks have been declining, and the dollar amount of the 
maintenance backlog has jumped from $1.9 billion in 1988 to 
over $4 billion today. Dealing with this situation involves 
making difficult choices about how parks are funded and 
managed. These choices call for efforts on the part of the Park 
Service, the administration, and the Congress centering on one 
or more of the following: (1) increasing the amount of 
financial resources going to the parks; (2) limiting or 
reducing the number of units in the park system; and (3) 
reducing the level of visitor resources. Additionally, the Park 
Service should be able to stretch available resources by 
operating more efficiently and continuing to improve its 
financial management and performance measurement systems.
    b. Benefits.--This GAO study provides interested parties 
with an honest assessment of the current status of much of our 
national park system. The results of this study will assist in 
determining what priorities need to be set for the national 
park system, including potential solutions to many of the 
problems these parks currently face.

12. ``Nuclear Safety: Concerns With Nuclear Facilities and Other 
        Sources of Radiation in the Former Soviet Union,'' November 7, 
        1995, GAO/RCED-96-4.

    a. Summary.--At the request Senator Bob Graham, the General 
Accounting Office (GAO) conducted a study on (1) nuclear 
facilities (other than civil nuclear power reactors), nuclear-
powered vessels, and other sources of radiation in the former 
Soviet Union; (2) the views of United States and international 
experts on the safety of these facilities and other sources of 
radiation; and (3) United States and international efforts to 
address nuclear safety and environmental problems associated 
with these facilities and other sources of radiation. According 
to available information, the countries of the former Soviet 
Union have at least 221 operating nuclear facilities, not 
including civil nuclear power reactors. Ninety-nine of these 
facilities are located in Russia and include facilities 
involved in plutonium production and processing as well as 
weapons design and production. Russia also has a fleet of 
nuclear powered vessels, including 228 submarines. In addition, 
according to the Department of Defense, as many as 10,000 to 
20,000 organizations throughout the former Soviet Union may be 
using different types of radiation sources for medicine, 
industry, and research.
    The GAO also found that nuclear safety experts, including 
Russian officials, are concerned about the safety of certain 
nuclear facilities and the potential for accidents, 
particularly at facilities producing or reprocessing plutonium 
and at some sites for decommissioning nuclear submarines. The 
following five major factors contribute to unsafe conditions in 
the former Soviet Union: (1) aging facilities and equipment and 
inadequate technology; (2) the lack of awareness of and 
commitment to the importance of safety; (3) the long-standing 
emphasis on production over safety; (4) the absence of 
independent and effective nuclear regulatory bodies; and (5) 
the lack of funds for safety improvements.
    Nuclear safety experts cited the radiological contamination 
generated by past and continued operation of nuclear weapons 
operations in the former Soviet Union as current safety and 
environmental concerns. For example, over many years, nuclear 
waste from three large sites in Russia producing plutonium had 
been discharged directly into surrounding lakes and rivers. 
Currently, radioactive waste is being injected into the ground 
and continues to be stored improperly. In addition, Russia's 
history of dumping liquid and solid radioactive waste from 
nuclear-powered submarines and icebreakers into the Arctic seas 
and the Sea of Japan has raised concerns about the long-term 
environmental effects of this practice.
    b. Benefits.--This report highlights some of the nuclear 
safety issues concerning nuclear facilities and other sources 
of radiation in the former Soviet Union and will help foster an 
informed debate over the need for United States assistance in 
ensuring the safety of these facilities.

13. ``Army Depot Maintenance: Privatization Without Further Downsizing 
        Increases Costly Excess Capacity,'' GAO/NSIAD-96-201, September 
        1996.

    a. Summary.--Several Army depots have been recommended for 
closure under the 1995 Defense Base Closure and Realignment 
Commission (BRAC). The Department of Defense (DOD) is planning 
to consolidate some functions to remaining Army Depots while 
privatizing others. The problem of excess capacity is driving 
up the maintenance cost of depots, and privatization does not 
deal with this situation.
    The plans to transfer certain workloads from realigned 
depots to remaining depots while improving capacity usage and 
lower operating costs to some extent, but will not resolve the 
extensive excess depot capacity problems. Current privatization 
initiatives as outlined by the Army will increase excess 
capacity from 42 percent to 46 percent which will increase the 
cost of depot maintenance. Privatizing-in-place will also 
aggravate excess capacity conditions in the private sector. 
There is also a lack of details as to how the Army will comply 
with certain statutory requirements of privatizing depot 
maintenance.
    While the Army's plans for depot reallocation are still 
evolving, the Army has not yet demonstrated that privatization 
initiatives are cost effective. The General Accounting Office 
(GAO) has found that opportunities do exist to significantly 
reduce maintenance costs through workload transfers from 
closing and downsizing depots as opposed to in place 
privatization. The GAO found that while there would be benefits 
from transferring workloads it is unlikely that the Army's 
current plans will achieve the BRAC Commission's projected 20-
year net present value savings of $953 million from the 
realignment of the Letterkenny depot or the $274 million from 
downsizing the Red River depot.
    b. Benefits.--An expedited transfer of equipment from the 
Sacramento Air Logistics Center to the Tobyhanna Army Depot 
could result in an annual savings of up to $24 million and 
further savings for the Air Force by earlier termination of the 
work than currently scheduled. Also consolidating the tactical 
missile workload at the Tobyhanna depot could decrease costs by 
as much as $27 million annually.

14. ``Nuclear Weapons: Improvements Needed to DOE's Nuclear Weapons 
        Stockpile Surveillance Program,'' GAO/RCED-96-216, July 1996.

    a. Summary.--The Department of Energy (DOE) is responsible 
for the management and surveillance of weapons in the Nation's 
nuclear stockpile to identify reliability and safety problems. 
DOE conducts three different types of surveillance tests on 
nine different types of nuclear warheads. The three types of 
tests conducted are flight tests, nonnuclear systems laboratory 
tests, and nuclear and nonnuclear component tests. Based on 
these tests the DOE assesses the reliability level of the 
weapon. While reliability level of a particular weapon can only 
be changed as the result of a test, DOE loses confidence in 
reliability ratings of untested weapons.
    While this loss of faith is unquantifiable, it is 
significant. There are several reasons why various testing 
programs are behind schedule including transfer of functions, 
lack of a safety study, and concerns about safety procedures. 
There is also concern that limited equipment and changes to 
number of test packages that may be sent on a single flight 
test have been limited by the SALT treaties. The DOE does not 
yet have written plans on how it will get the backlogged 
programs back on schedule, and they estimate that it may take 
years to return some of these programs to schedule.
    The DOE is also being forced to improvise flight test 
packages on certain weapons systems made from a package 
designed for a similar system. Due to the random selection of 
the tested weapons and the type of data gathered the DOE also 
feels that it can eliminate certain flight tests from the 
backlog without effecting their confidence in the reliability 
level of those systems. The DOE is also looking at ways in 
which it can transfer testing functions and maintain safety at 
its facilities without sacrificing time and creating delays in 
the surveillance process.
    b. Benefits.--The importance of knowing the safety and 
reliability of our nuclear stockpile cannot be understated. The 
sooner the problems in this program are addressed the less it 
will cost to clear the backlog of tests and prevent similar 
situations from occurring in the future.

15. ``Tax Research IRS Has Made Progress But Major Challenges Remain,'' 
        GAO/GGD-96-109, June 1996.

    a. Summary.--The Internal Revenue Service (IRS) is 
responsible for enforcing compliance with the Federal tax 
system. The tax system is supposed to be voluntary and the IRS 
seeks to reduce noncompliance not only through enforcement 
methods such as audits but also through a variety of 
nonenforcement methods designed to raise voluntary compliance 
through nonenforcement means such as education and assistance 
through their Compliance 2000 program.
    Compliance 2000 seeks to keep current enforcement methods 
in place to deal with intentional noncompliance while lowering 
the level unintentional noncompliance. Compliance levels have 
remained static at 87 percent for about 20 years, 83 percent 
from voluntary compliance and 4 percent from IRS enforcement 
methods. The IRS seeks to raise this level to 90 percent by the 
year 2000 mostly by increasing the level of voluntary 
compliance. At the same time the IRS has undertaken a rigorous 
program of reviewing procedures and developing plans to further 
increase compliance by studying local and national 
noncompliance problems and tailoring solutions to noncompliant 
market segments.
    b. Benefits.--Compliance 2000 is designed to decrease the 
$1,000 billion income tax gap. These efforts will help increase 
tax revenues without increasing the IRS image problem by 
focusing on increasing voluntary compliance and focusing 
enforcement methods to intentional noncompliance.

16. ``Tax Administration: IRS Is Improving Its Controls for Ensuring 
        That Taxpayers Are Treated Properly,'' GAO/GGD-96-176, August 
        1996.

    a. Summary.--In 1994 the Internal Revenue Service (IRS) 
processed over 200 million tax returns, issued 86 million tax 
refunds, handled 39 million calls for assistance, conducted 1.4 
million audits, and issued 19 million collection notices for 
delinquent taxes. These activities result in millions of 
contacts with taxpayers, and these contacts have the potential 
to make taxpayers feel as though they have been abused or 
mistreated by individual IRS employees. Due to the nature of 
our tax system, taxpayers must be willing to comply voluntarily 
for the efficient collection of taxes. A feeling that one has 
been abused by part of the system, or that the system itself is 
abusive has a negative impact on compliance.
    In order to avoid situations in which taxpayers are abused 
or feel mistreated by IRS employees, a number of controls have 
been implemented. The IRS is responsible for administering 
these controls and shares the responsibility for investigating 
allegations of abuse. Depending on the type of abuse alleged 
and the position of the alleged abuser the IRS, the Department 
of the Treasury Office of the Inspector General (OIG), or the 
Department of Justice (DOJ) are responsible for carrying out 
the investigation. OIG is involved in complaints against senior 
officials of the IRS, while DOJ may prosecute IRS employees who 
are accused of taxpayer abuses that are criminal misconduct. 
The DOJ can also defend IRS employees against civil suits that 
arise out of actions taken as part of their official duties.
    While at this time the IRS has not yet defined taxpayer 
abuse, the GAO has had definitions since their 1994 report on 
IRS controls. The tracking systems in place at IRS, DOJ, and 
OIG are not currently prepared to follow progress of these 
controls in cutting down taxpayer abuse. Without the IRS 
creating a definition of taxpayer abuse and tracking the number 
and disposition of complaints it is impossible to gather clear 
data on the effectiveness of their implemented controls. The 
IRS has not yet agreed to take such actions, but is following 
other GAO recommendations to improve the general system of 
controls to eliminate taxpayer abuse by IRS employees.
    b. Benefits.--The perception that IRS employees or the tax 
system itself is abusive can decrease voluntary compliance in 
taxation by taxpayers. Eliminating these abuses would help to 
increase voluntary compliance, reducing the $100 billion income 
tax gap while decreasing IRS workload in the field of 
intentional noncompliance cases. This would also facilitate 
taxpayers confidence in the IRS and the tax system in general.

17. ``Tax Administration: Tax Compliance of Nonwage Earners,'' GAO/GGD-
        96-165, August 1996.

    a. Summary.--Nonwage income accounts for $859 billion of 
the $3,665 billion of total income for individuals in 1992. 
This is a significant increase in the percentage of total 
income for individuals since 1970, and all indications are that 
this percentage will continue to grow as more people earn money 
from nonwage sources of income such as pensions and self 
employment. It has been found that nonwage earners have more 
difficulty in paying their taxes than wage earners. While it is 
impossible to determine all the factors that cause nonwage 
earners to be more frequently delinquent, it appears that a 
large portion of the problem is the confusion generated by the 
estimated tax system and lack of withholding.
    The estimated tax system requires nonwage earners to file 
taxes several times a year, estimating what their income will 
be by projecting expected payments and dividends. The system by 
which the Internal Revenue System (IRS) carries out the 
estimated tax procedures has not changed in years and relies on 
stringent payment schedules and old payment channels. The GAO 
has made several recommendations for increasing compliance and 
modernizing the IRS procedures in this area. They also suggest 
that mandatory withholding extend to cover certain types of 
nonwage income in order to simplify compliance, as is done in 
several other countries. Many tax experts agree that this helps 
to increase compliance.
    The IRS and private sector both agree that improving 
taxpayer awareness of their responsibilities increases 
compliance. The IRS seeks ways to improve taxpayer compliance 
through education and by targeting periods of transition from 
wage to nonwage income to eliminate confusion. Also better 
monitoring of estimated tax payments will aid the IRS in 
determining how to improve compliance.
    b. Benefits.--As nonwage income becomes an increasingly 
large percentage of taxable income, the importance of 
compliance rises proportionally. The Social Security 
Administration prepares, pending authorizing legislation, to 
start mandatory withholding on Social Security payments to help 
ease compliance burdens. The IRS along with the private sector 
studies ways in which it can increase compliance in other areas 
of nonwage income, and has received several GAO suggestions in 
addition to its own research and reports.

18. ``NASD Telephone Hotline: Enhancement Could Help Investors Be 
        Better Informed About Brokers Disciplinary Records,'' GAO/GGD-
        96-171, August 1996.

    a. Summary.--The National Association of Securities 
Dealer's (NASD) creates a toll-free hotline in October 1991. 
The hotline receives hundreds of thousands of calls from 
investors seeking information on their brokers disciplinary 
records. These callers represent less than 1 percent of those 
who directly own shares in a publicly traded company or mutual 
fund. While surveys showed that most callers were very 
satisfied with the information and services provided by the 
NASD hotline, many wanted more information than NASD was 
providing.
    NASD was not providing information that they are allowed to 
disclose such as whether their broker had been subject to a 
settled civil case, had a pending or settled arbitration, or a 
pending customer complaint. However, all of this information is 
available by calling ones State board of regulators, causing a 
discrepancy in the type of information available to investors. 
NASD agrees to make changes in this policy.
    Also, findings indicate that in some cases NASD gave out 
either too little of the information they were allowed to or in 
rare instances exceeded the scope of allowed information. This 
causes investors to make decisions without information they 
should have, which consequently harms certain brokers.
    b. Benefits.--The NASD agrees to provide in addition to the 
services already available on their hotline the same 
information on brokers that one could receive by calling ones 
State board of regulators. This allows investors to make 
informed decisions, thus decreasing unnecessary risk.

19. ``Environmental Cleanup: Cash Management Practices at Rocky 
        Mountain Arsenal,'' GAO/NSIAD-96-145, September 1996.

    a. Summary.--The Army and Shell Oil Co. (Shell) reaches an 
agreement under which they would cofund the environmental 
cleanup costs at the Rocky Mountain Arsenal. The percentage of 
the cleanup for which Shell is responsible expects to exceed 
$500 million. Since the 1989 settlement agreement, the Army's 
cash management procedures in collecting from Shell cost the 
Government in excess of $1 million.
    The three factors that contribute to the weakness in cash 
management procedures are as follows: (1) the Army bills on a 
quarterly instead of monthly basis as is the usual practice; 
(2) the Army has allowed an additional 30 days in the payment 
cycle agreed on; (3) the Army and Shell send payments to each 
other by mail instead of by electronic transfer, causing delays 
in receipt of funds. The Army has the capability to implement 
changes that would eliminate all three of these problems, the 
first two having each caused losses in excess of half a million 
dollars apiece and the third having caused untold opportunity 
costs.
    b. Benefits.--The Army saves the Federal Government 
millions of dollars by implementing changes to a monthly 
billing cycle and holding Shell to a 60-day cycle to calculate 
costs as outlined in the settlement, as opposed to the 90-day 
cycle now used. In addition, switching to electronic transfer 
saves the Government in opportunity cost by allowing them to 
invest in a timely manner.

20. ``Tax Administration: Income Tax Treatment of Married and Single 
        Individuals,'' GAO/GGD-96-175, September 1996.

    a. Summary.--The Internal Revenue Code (IRC) has 59 
separate provisions where tax liability depends, at least in 
part, on ones marital status. There is discussion over whether 
the IRC creates either a marriage bonus or a marriage penalty. 
Of the 59 provisions that are marriage sensitive, three of them 
are frequently discussed in connection with marriage penalties 
or bonuses: sections on the tax rate; the standard deduction; 
and the earned income credit.
    The different ways married and single people are treated 
under the income tax code leads to situations where the tax 
liability of married taxpayers is different than that of two 
similarly situated single taxpayers. Of the 59 provisions that 
GAO identifies as marriage sensitive, 56 results in marriage 
bonuses or marriage penalties, depending upon the taxpayers 
individual circumstances. The single most important factor in 
these situations is how income is divided between spouses. 
Disparate income between spouses tends to lead to marriage 
bonuses while equivalent income could lead to marriage 
penalties. There are other factors that lead to marriage 
bonuses or penalties including property ownership and 
qualification for tax credits or deductions. Examples include 
capital losses and capital gains. A married couple gets the 
same capital loss deduction as a single person, so if both 
spouses have capital losses that when combined exceed this 
deduction there is a penalty, but if one spouse has a capital 
loss while the other has a larger or equal capital gain the 
loss can be used to offset the gain, resulting in a marriage 
bonus.
    b. Benefits.--At this time there is not enough data to 
quantify the number of taxpayers who may suffer a marriage 
penalty or benefit from a marriage bonus. However, both of 
these conditions exist under current tax law and what 
circumstances can lead to benefit or penalization for married 
couples.

21. ``Tax Policy: Analysis of Certain Potential Effects of Extending 
        Federal Income Taxation to Puerto Rico,'' GAO/GGD-96-127, 
        August 1996.

    a. Summary.--Based on 1992 figures the net aggregate 
Federal tax liability that could be collected from Puerto Rico 
would have been about $49 million under the United States tax 
rules as adopted by the end of 1995. Over half of all Puerto 
Rican taxpayers would have received net transfers from the 
Federal Government under the Earned Income Tax Credit (EITC) 
while some 41 percent of taxpayers would have had positive 
Federal income tax liabilities including EITC. If additional 
EITC could have been claimed by legal nonfiler residents this 
would result in an additional $64 million in EITC payments, 
eliminating the aggregate of Federal income tax liability and 
creating $15 million in EITC payments over the aggregate of tax 
liability.
    The Government of Puerto Rico would have had to reduce its 
income tax level by about 5 percent if the Government wanted to 
keep level the rate of combined taxes on its residents if the 
$49 million in aggregate tax had been collected by the Federal 
Government. If the aggregate Federal tax liability were wiped 
out by additional EITC payments the Government of Puerto Rico 
would not have to alter its tax rate.
    While the per-capita amount of Puerto Rico's individual 
income tax was lower than the State and local taxes in most 
States and the District of Columbia the income tax as a 
percentage of total personal income was higher than any State 
or the District of Columbia. However because residents of 
Puerto Rico pay considerably less in Federal taxes the combined 
Federal and Puerto Rican income tax were lower both in dollars 
per-capita and as a percentage of personal income than the 
combined Federal, State and local taxes for a resident of any 
State or the District of Columbia.
    The elimination of the possessions tax credit saves 
billions in tax expenditures. According to the Joint Committee 
on Taxation we save $4.4 billion annually by the year 2000. The 
U.S. Department of the Treasury is more conservative, placing 
those savings at $3.4 billion within the same time period.
    b. Benefits.--While the benefits of extending full Federal 
taxation to Puerto Rico are unresolved, costing either $15 
million a year or else netting $49 million, there are benefits 
to reconsidering the possessions tax credit.

22. ``Fair Lending: Federal Oversight and Enforcement Improved but Some 
        Challenges Remain,'' GAO/GGD-96-145, August 1996.

    a. Summary.--Recently the banking regulators, the 
Department of Justice (DOJ), and the Department of Housing and 
Urban Development (HUD) devote additional efforts to the 
enforcement of fair lending laws, along with other responsible 
Federal agencies. The banking regulatory agencies attempt to 
detect discrimination through improved examination procedures. 
In addition they, and other agencies, recommend a number of 
compliance procedures and activities to help lenders ensure 
that all loan applicants are treated fairly if implemented.
    Problems remain and agencies can still take advantage of 
opportunities to improve the consistency of Oversight and 
Enforcement. The areas that still need work are adequate means 
by which to detect discrimination in the process before the 
submission of the formal loan application. Compliance examiners 
at several agencies find that poor quality Home Mortgage 
Disclosure Act data, examiner inexperience, and insufficient 
time allowances make detecting discrimination more difficult 
during fair lending examinations. Uncertainty also persists 
among officials at some Federal agencies as to what constitutes 
a referable pattern or practice violation under the Equal 
Credit Opportunity Act and the Fair Housing Act.
    There are a number of other interpretation and application 
issues of the fair lending laws that remain unresolved. These 
and other legal issues create uncertainty among both lenders 
and regulators which impeded current attempts by Federal 
banking regulatory agencies to provide clearer more concise 
guidance regarding fair lending policies. Banks and other 
lending institutions are in turn left confused about what is 
needed to ensure that they are in compliance.
    Unresolved legal issues also pose other potential barriers 
to wider adoption of some programs and activities recommended 
by Federal agencies to ensure compliance. Chief amongst these 
is the resolution of the disparate impact theory of lending 
discrimination and the use by regulators and third parties of 
data acquired or generated by lenders through self-testing 
programs. The disparate impact theory states that a lender 
discriminates when they apply a policy or practice that while 
seemingly innocuous has a disproportionate adverse impact on 
applicants from a protected group, even when applied to all 
groups equally. The policy or practice must also be of a nature 
that is not justifiable as a business necessity.
    Compounding these problems is the fact that many of these 
issues may require judicial or administrative resolutions in 
addition to the legislative actions being taken. This could 
take some time during which the fair lending laws remain 
unclear to lending institutions, thus leading to hesitation in 
the implementation of additional compliance programs.
    b. Benefits.--The goal of making capital and credit 
available to all is aided by the efforts to cut discrimination 
out of lending programs. Ongoing efforts by the banking 
regulatory agencies clarify the fair lending laws, new policies 
and programs which make recommendations should toward 
eliminating discrimination in the industry.

23. ``National Park Service: Activities Within Park Borders Have Caused 
        Damage to Resources,'' GAO/RCED-96-202, August 1996.

    a. Summary.--Park managers identify 127 direct internal 
threats to park resources at eight parks as reviewed by the 
General Accounting Office (GAO). Park managers feel that the 
most serious threats to the park come from shortages in 
staffing, funding, and resource knowledge which they say 
contribute, or are responsible for many of the other conditions 
that pose threats. The threats are divided into six categories 
of threat which include: private inholdings/commercial 
activities; nonnative wildlife/plants; illegal activities; 
effects of visitation; agency/park management actions; and 
other. While the Park Service has developed systems focusing on 
tracking particular classes of resources, it has no system-wide 
or national data base. It also lacks a system to categorize, 
prioritize, and track internal problems. It is the Park 
Services feeling that despite the General Accounting Office 
recommendation, such a system is not appropriate at this time.
    Private inholdings and commercial development present the 
largest number of specific threats, threatening resources and 
natural resources as well as affecting visitor enjoyment. 
Encroachment by nonnative flora and fauna accounted for the 
second largest number of direct threats destroying native 
plants and animals. Illegal activities constitute the third 
highest category and mainly consist of animal and resource 
poaching. About 30 percent of threats are divided into two 
other categories the adverse effects of people's visits to the 
parks, and the Park Services own management actions. These 
problems are mainly erosion and fire safety concerns. The other 
direct threats are largely posed by nature itself.
    The cultural resources of our national parks have more 
permanent damage than natural resources. Most of this damage 
can be traced to vandalism, poor upkeep, and the venturing off 
of established trails or illegal vehicle usage. Historic 
artifacts, buildings, and cemeteries have all been looted. So 
far, mitigation efforts have been primarily limited to studies.
    b. Benefits.--Park managers believe that they have taken 
some action in response to 82 percent of the direct threats 
identified. By adding rails and ropes and replacing easily 
damaged items with more durable ones the park managers are 
hoping to reduce erosion and lessen the effects of vandalism. 
Also, access to certain delicate areas is being restricted to 
limit looting and poaching while in addition to slowing other 
forms of damage.

24. ``Earned Income Credit: IRS' 1995 Controls Stopped Some 
        Noncompliance, But Not Without Problems,'' GAO/GGD-96-172, 
        September 1996.

    a. Summary.--The Internal Revenue Service (IRS) took steps 
to detect and prevent noncompliance with the earned income 
credit (EIC). The EIC is a refundable tax credit available to 
low-income working taxpayers. There have been high numbers of 
EIC claims filed with errors in calculating the amount of EIC 
or by people who did not qualify for the EIC.
    The IRS uses a series of filters in its Electronic Filing 
System to identify problems in electronic submissions. The 
filters serve as controls in finding EIC problems mainly by 
identifying problems related to the submitted Social Security 
numbers (SSN). Filters added by IRS in 1995 as well as the 
existing filters identified about 1.3 million SSN problems. 
This is a great increase over about 600,000 such problems found 
in the previous year. There is no way of determining which 
instances of noncompliance were intentional and which were 
honest mistakes by use of these filtering mechanisms. The IRS 
also had several electronic submissions that were rejected and 
later filed on paper, nearly a third of which than received 
their refunds.
    The IRS must transcribe and validate SSN's for paper 
returns. If the IRS identifies an invalid or missing SSN it 
must determine whether or not they will examine those requests 
for refunds. Last year the IRS only had the resources to 
investigate roughly a third of the over 3 million requests for 
EIC refunds with problems. Information on the results of the 
roughly 1 million examinations the IRS carried out is 
unavailable. For those problems that were identified but not 
examined the IRS delayed, but ultimately sent, the EIC refunds. 
The IRS also delayed about 4 million EIC refunds on which no 
problems were identified while checking if other returns had 
been filed using the same SSN's.
    According to the IRS Internal Audit Division, procedures 
used in determining which cases warranted followup were lacking 
in several areas. The IRS procedures did not ensure the 
selection of the most productive cases and resulted in an 
inefficient use of IRS resources. There was also the long delay 
of EIC returns in which problems had not been detected. The IRS 
has since revised its procedures for selecting cases to review 
in order to address these problems and the efficacy of such 
reforms remains to be seen.
    b. Benefits.--The IRS has not provided enough data to allow 
for an overall assessment of the results of EIC noncompliance 
actions in 1995. There were over 2 million less EIC claims 
filed in 1995 than the IRS expected, and as of June 30, 1996 
the 1 million investigations into paper returns EIC claims had 
resulted in $800 million in reduced refunds and additional 
assessments. The IRS continues to work to refine their 
procedures in order to more efficiently use their resources and 
followup on those returns most likely to produce results.
    In addition the IRS is optimistic that their efforts and 
the publicity surrounding them resulted in fewer EIC claims 
being filed. The benefit of increased tax revenue and increased 
speed in processing that will result from these reforms will be 
more easily tacked with the adoption of the General Accounting 
Office recommendations.

25. ``Social Security Disability: Backlog Reduction Efforts Under Way; 
        Significant Challenges Remain,'' GAO/HEHS-96-87, July 1996.

    a. Summary.--The Social Security Administration (SSA) with 
State agencies called disability determination services (DDS) 
make the initial determination of disability eligibility. The 
petitioner has the right to appeal the SSA/DDS decision, first 
to another DDS staff, and failing that they have a second 
appeal to the SSA's Office of Hearings and Appeals (OHA). The 
OHA appeals go before an administrative law judge (ALJ).
    From 1985 to 1995 the OHA's pending case backlog grew from 
107,000 to 548,000, and processing time increased from 167 days 
to 350 days for a filed claim. While there has been a surge in 
initial applications and appeals to OHA, the increases in case-
processing time and the backlog of pending cases cannot be 
blamed on these problems alone. SSA has failed to pay attention 
to several longstanding problems until recently, compounding 
the problems created by the increased demands on the system. 
These longstanding problems include: (1) multiple levels of 
claims development and decisionmaking; (2) fragmented program 
accountability; (3) decisional disparities between DDS and OHA 
adjudicators; and (4) SSA's failure to consistently define and 
communicate its management authority over the ALJ's.
    Since 1994, SSA has initiated a new line of programs to 
address these problems including both short- and long-term 
efforts. These efforts replace previous initiatives that were 
outpaced by the increasing workload placed on OHA. SSA's Short-
Term Disability Plan (STDP) represents its near term efforts to 
reduce OHA's backlog of pending cases to a manageable level by 
the end of the year. The STDP reallocates agency resources and 
institutes process changes to reduce the flow of appeals 
requiring ALJ hearings and allow for reduction of the current 
backlog. Startup delays, limited impact of key initiatives, and 
concern over claims being allowed incorrectly due to time 
pressure have limited SSA's ability to reduce the backlog of 
cases. SSA is closely monitoring STDP and tracking allowances 
to ensure decisional accuracy.
    The long-term plan by SSA is called the Plan for a New 
Disability Claim Process, also called a redesign plan. The 
redesign plan is aimed at the first three longstanding problems 
noted above. The SSA is still in the early testing stages of 
the redesign plan so its effectiveness is not yet known. Its 
goal is to implement initiatives which streamline the claims 
process, improve organizational and process accountability, and 
provide more consistent decisional policies to OHA and DDS. It 
is believed that this project will decrease processing time 
from over a year currently to about 225 days by the turn of the 
century.
    The only problem that the redesign plan does not address is 
that of SSA's management authority over the ALJ's. The 
Administrative Procedure Act protects ALJ decisional 
independence, and the ALJ's have successfully argued that these 
provisions protect them from management attempts to control 
their workload. The success of the redesign plan hinges on the 
level of cooperation that the ALJ's are willing to extend.
    b. Benefits.--The Government stands to garner significant 
savings from the streamlined claims process and decreased 
workload on OHA.

26. ``U.S. Mint: Commemorative Coins Could Be More Profitable,'' GAO/
        GGD-96-113, August 1996.

    a. Summary.--The U.S. Mint is running an increasingly large 
number of commemorative coin programs over recent years. While 
the commemorative coin program has been profitable overall, 
some recent programs have lost money. This presents a problem 
for the Mint and the Government as the legislative 
authorization for the commemorative coin programs states that 
the mint shall take all steps necessary to ensure that the 
issuance of these coins result in no net cost to the 
Government. It is also one of the main problems that have 
resulted in losses to the mint have been the increasing number 
of coin series released, the unpopularity of chosen themes, and 
the payment of surcharges to sponsors on coins that lose money 
for the mint.
    The increasing number of commemorative coin programs has 
lead to decreased interest in individual programs by coin 
collectors as well as decreasing satisfaction. This hurts the 
larger market for commemorative coins, and profits for single 
programs have been dropping The Citizens' Commemorative Coin 
Advisory Committee (CCCAC) was established in 1992 to help 
reduce the proliferation of commemorative coins. By reducing 
the number of programs, it is hoped that the existing coin 
programs will be more attractive to collectors and the general 
public.
    CCCAC is also responsible for recommending themes to 
Congress for series of commemorative coins to be produced by 
the mint. It is hoped that by eliminating unpopular themes and 
themes of only limited or local appeal the Mint can appeal to a 
larger cross section of the American public. These efforts are 
also designed to maintain the interest of coin collectors in 
the Commemorative Coin program, some collectors having recently 
called for a boycott of the Mints commemorative coins which 
they feel are flooding the market.
    The Mint has also lost millions of dollars on coin programs 
while still paying the sponsors their surcharges. Despite the 
goal of reducing the deficit through the Commemorative Coin 
programs, the current agreements between the Mint and program 
sponsors are structured in such a way as to allow sponsors to 
profit even when their coin series is a commercial failure. In 
those cases the Mint must assume the loss, which translates to 
the taxpayers ultimately assuming the loss. CCCAC has made a 
recommendation is that future agreements between the Mint and 
program sponsors be structured in such a way so that they are 
profit-sharing arrangements instead of surcharges. This type of 
arrangement would have reduced or eliminated the loss on all 
programs to the Mint, and in some cases may have resulted in a 
profit to the Mint instead of a loss.
    CCCAC has also recommended that Congress authorize 
circulating commemorative coins. These are coins which are sold 
at face value and operate as legal tender, while having a 
special collective appeal from their distinctive designs and 
limited issue. This program would be similar to the Postal 
Service's commemorative stamp programs. A circulating coin 
would give the Government all costs but it would also receive 
all the benefits. The circulating coins would provide millions 
in seigniorage (the difference between the face value of the 
coins and their cost of production, which reduces Government 
borrowing requirements) and lead to a substantial savings on 
interest on the national debt.
    b. Benefits.--Reducing the number of noncirculating 
commemorative will reduce the risk of loss to the Mint while 
increasing their appeal to collectors. Following the CCCAC 
recommendations would also allow the Government to reduce the 
national debt and provide a means of fundraising for sponsors 
while meeting the requirement without Government net cost to 
the Government.
    A circulating commemorative coin program of the type 
suggested by CCCAC could provide about $225 million in 
seignorage for the Government. In addition such a program has 
the potential to save $16 million in annual interest on the 
national debt.

27. ``Amtrak's Strategic Business Plan: Progress to Date,'' GAO/RCED-
        96-187, July 1996.

    a. Summary.--Since 1971, Amtrak took over the 
responsibility for operating the Nation's intercity passenger 
trains. The corporation was provided more than $18 billion from 
the Federal Government to cover annual operating losses and to 
make capital investments. By 1994 the long-term survivability 
of Amtrak was seriously threatened. Their financial and 
operating conditions had taken a serious decline. In order to 
boost revenues and cut expenses, Amtrak has taken on a 
Strategic Business Plan. This Plan was to increase revenues and 
cut expenses with a goal of operating self-sufficiency by the 
year 2002. In 1975, the development of the Strategic Business 
Plan by Amtrak underwent a major corporate restructuring. The 
restructuring involved dividing Amtrak's intercity passenger 
service operations into three distinct operating units.
    Although progress has been made in the past 18 months, it 
is still too early for the corporation to judge whether their 
long-term goal of operating self-sufficiency will work. Amtrak 
plans to increase revenues and State support and control costs 
to eliminate the need for Federal operating subsidy. Marketing 
efforts and fare increases are the bases for increasing 
passenger revenues. The increase in State contributions will 
occur shortly. Amtrak is hoping for 100 percent of these costs 
from the States by the fiscal year 1999. As of now, the States 
pay only a portion of the costs, but Amtrak is increasing the 
portion annually to reach their goals.
    b. Benefits.--Amtrak's success in implementing the plan 
will go a long way toward deciding the future of intercity 
passenger rail service in the United States. With Amtrak's 
success to date with the Strategic Business Plan, it provides 
the Congress with a framework for determining the level capital 
and operating funds Amtrak will receive. This Plan could be 
critical in determining the continued availability of intercity 
passenger rail service in the United States and the level of 
Federal support necessary to maintain this service.

28. ``Futures Markets: Heightened Audit Trail Standards Not Met But 
        Progress Continues,'' GAO/GGD-96-177, September 1996.

    a. Summary.--In August 1989, the Department of Justice, in 
cooperation with the Commodity Futures Trading Commission 
(CFTC), conducted an undercover investigation at the Chicago 
Board of Trade (CBT) and the Chicago Mercantile Exchange (CME). 
The investigation disclosed illegal trading practices designed 
to enrich participants. GAO in a report to Congress in 
September 1989 concluded that most of the types of illegal 
practices disclosed could have been detected with improved 
audit trails--the physical records of the price and time of 
each trade. A recommendation from GAO was made for CFTC to 
heighten audit trail standards by requiring a more accurate and 
comprehensive record of trades.
    Exchanges having a minimum average daily trading volume of 
less than 8,000 contracts in each of its contract markets 
qualify for an exemption from the heightened standards if they 
could demonstrate substantial compliance with the act's audit 
trail standards and trade monitoring requirements. In November 
1994, five exchanges were covered by the heightened standards 
because of their trading volume: (1) CBT; (2) CME; (3) the 
Coffee, Sugar & Cocoa Exchange (CSCE); (4) the Commodity 
Exchange, Inc. (COMEX); and (5) the New York Mercantile 
Exchange (NYMEX).
    Future exchanges use one of four types of systems to meet 
audit trail standards--manual, imputed timing, pit card time 
stamping, and computer trade matching. In addition to meeting 
the requirements of the existing 1-minute trade timing and 
sequencing standards, including capturing the essential data on 
the participants, terms, times, and sequencing of all trades, 
the heightened standards require that this information be 
continually provided to the exchange in an unalterable manner 
and that it be precise, complete, and independent. CFTC has 
taken actions to enforce exchange compliance with the FTPA 
audit trail standards. In June 1996, the exchanges testified 
that the FTPA requirement to capture broker receipt time was 
not currently practicable. Some exchanges were concerned that 
due to differences in trading volume and in the way customer 
orders are routed, trades recorded, and execution times 
derived, audit trail features that are practicable at one 
exchange may be impracticable at another exchange without 
significantly disrupting trading.
    The exchanges that were reviewed have continued to make 
progress toward compliance with them. GAO is concerned that the 
momentum toward achieving compliance could be lost now that the 
legislatively mandated deadline has passed without any covered 
exchange being found in full compliance.
    The recommendation that the chairperson inform Congress 
periodically on exchange progress toward compliance with the 
FTPA heightened audit trail standards and on implementation of 
the dual trading ban--including mitigating factors delaying 
compliance or implementation and the steps CFTC is taking to 
encourage continued progress. This information could be 
provided on the anniversary of the statutory deadline, in an 
annual report, for compliance with the heightened standards, or 
through periodic testimonies before congressional committees.
    b. Benefits.--Exact trade sequencing would help detect 
trading abuses, such as trading ahead of customer orders. More 
complete times could also improve an exchange's ability to 
accurately sequence trades. Independent or automatic trade 
recording could increase the reliability of the data collected 
by preventing the broker or trader from falsifying the record. 
Continually providing data to an exchange could reduce the 
opportunity for floor brokers and traders to illegally alter 
the trading record. The requirement that the data be 
unalterable is to prevent floor brokers or traders from 
changing a trading record without detection. Automated order 
routing systems could enhance audit trails by meeting the FTPA 
requirements for recording the time an order reaches the 
exchange floor, the time the broker receives an order, and the 
time the order fill is recorded. According to CFTC officials, 
these systems should result in better timing data for orders by 
augmenting existing sequencing information.

29. ``Debt Ceiling: Analysis of Actions During the 1995-1996 Crisis,'' 
        GAO/AIMD-96-130, August 1996.

    a. Summary.--Congress has traditionally imposed a limit on 
the size of the Federal Government's public debt by 
establishing ceilings (debt ceiling) on the amount of Treasury 
securities that can be outstanding. In 1993, Congress raised 
the debt ceiling to $4.9 trillion. This debt ceiling was 
reached in the fall of 1995, but was raised until March 1996, 
when it was set at $5.5 trillion.
    The public debt consists primarily of Treasury securities, 
which include bills, notes, and bonds that Treasury issues to 
raise cash to finance Government operations and invest trust 
fund receipts.
    When a debt ceiling is reached, Treasury is unable to issue 
additional Treasury securities without adding to the public 
debt and exceeding the debt ceiling. Treasury is also unable to 
discharge its normal trust fund investment and redemption 
responsibilities. Treasury can avoid exceeding the debt ceiling 
by not issuing Treasury securities for trust fund receipts or 
reinvesting maturing Treasury securities. Also, when Government 
trust funds redeem Treasury securities to pay for benefits and 
expenses, the debt subject to the debt ceiling is lowered, and 
therefore, Treasury can sell additional securities to the 
public to raise cash.
    The intervening period, beginning on November 15, 1995, 
when the Secretary of the Treasury declared a debt issuance 
suspension period, became known as the 1995-96 debt ceiling 
crisis. Congress provided the Secretary of the Treasury 
authority to issue securities that did not count toward debt 
ceiling. On February 8, 1996, Public Law 104-103 provided 
Treasury with the authority to issue securities in an amount 
equal to the March 1996 Social Security payments. This statute 
provided that the securities issued under its provisions were 
not to be counted against the debt ceiling until March 15, 
1996, which was later extended to March 30, 1996. On March 12, 
1996, the Congress enacted Public Law 104-115, which exempted 
Government trust fund investments and reinvestment from the 
debt ceiling until March 30, 1996.
    During the 1995-96 debt ceiling crisis, Treasury used its 
normal investment procedures for 12 of the 15 major Government 
trust funds. The remaining three major trust funds (Civil 
Service fund, G-Fund, and Exchange Stabilization Fund), had 
other actions taken to stay within the $4.9 trillion debt 
ceiling.
    Although actions taken during the debt ceiling crisis to 
issue and redeem Treasury securities allowed the Government to 
pay the Government's obligations while staying under the $4.9 
trillion debt ceiling, the Government's debt which normally 
would be considered part of this ceiling, increased by $138.9 
billion--the amount necessary to finance those obligations 
during this period.
    When Treasury departed from its normal investment and 
redemption policies and procedures during the 1995-96 debt 
ceiling crisis, the Civil Service fund, the G-Fund, and the 
Exchange Stabilization Fund incurred interest losses. Treasury 
restored the interest losses to the Civil Service fund and G-
Fund, once the Congress raised the debt ceiling. The Exchange 
Stabilization Fund lost $1.2 million in interest that cannot be 
restored without special legislation.
    b. Benefits.--During the 1995-96 debt ceiling crisis, the 
Federal Government's debt increased substantially. Under normal 
procedures, this debt would have been considered in calculating 
whether the Government was within the debt ceiling.

30. ``Internal Revenue Service: Business Operations Need Continued 
        Improvement,'' GAO/AIMD/GGD-96-152, September 1996.

    a. Summary.--Since 1992, IRS has made some progress in 
modernizing its operations, but the differences between IRS' 
current operations and those proposed in its vision are great.
    The Government Performance and Results Act (GPRA) provides 
an excellent vehicle for IRS to reach agreement with the 
Congress on a business strategy and for the Congress to assess 
IRS' performance in implementing an agreed upon strategy. Under 
GPRA, each agency is to develop strategic plans for its program 
activities, laying out the organization's fundamental mission 
and long-term goals and objectives for accomplishing that 
mission. These plans are to be submitted to OMB and the 
Congress by September 30, 1997, as required by GPRA.
    In May 1996, a status report of Tax Systems Modernization 
(TSM) was given to the Senate and House Appropriations 
Committees, the Department of the Treasury assessed TSM 
progress and future redirection. Despite some qualified 
success, IRS has not made progress on TSM as planned. Systems 
development efforts have cost more than anticipated, it's 
taking longer than planned, less functionality than originally 
envisioned has been delivered. TSM would need expanded us of 
external expertise in order to have the capability to develop 
and integrate.
    IRS expects to improve the accountability for probability 
of TSM success by increasing its reliance on contractors. They 
still need to address the risk inherent in shifting hundreds of 
millions of dollars to additional contractual efforts before it 
has the disciplined processes in place to manage all of its 
current contractual efforts effectively.
    GAO believes that the Congress should consider limiting TSM 
spending to only cost-effective modernization efforts that: (1) 
support ongoing operations and maintenance; (2) correct IRS' 
pervasive management and technical weaknesses; (3) are small, 
represent low technical risk, and can be delivered in a 
relatively short timeframe; and (5) involve deploying already 
developed systems that have been fully tested, are not 
premature given the lack of a completed architecture, and 
produce a proven, verifiable business value.
    As the Congress gains confidence in IRS' ability to 
successfully develop these smaller, cheaper, quicker projects, 
it could consider approving larger, more complex, more 
expensive projects in future years.
    b. Benefits.--IRS has begun to analyze how it might use new 
technology to change its business operations. They have 
developed a vision for 2001 that called for organizational, 
technological, and operational changes affecting the way it 
processes tax returns, provides customer service, and ensures 
compliance.
    The Government Performance and Results Act (GPRA) provides 
an excellent vehicle for IRS to reach agreement with the 
Congress on a business strategy. GPRA requires that these plans 
be submitted to OMB and the Congress by September 1997. 
Recognizing the value of such plans, OMB has accelerated the 
legislative schedule and is currently working with agencies in 
developing key elements of their strategic plans.
    As of September 1996, for TSM, IRS said it (1) has made 
substantial progress in updating the business cases for TSM 
projects and was continuing to refine its investment review 
process, (2) had initiated the tax settlement reengineering 
project to further reduce the volume of paper transactions, (3) 
would continue work on the systems life cycle and was 
developing a schedule for completing the TSM architecture, (4) 
was establishing the GPMO which will be responsible for 
directing and monitoring the activities of all modernization 
contractors, and (5) would deliver a revised strategic plan to 
Congress and OMB by September 1997.

31. ``Farm Credit System: Analysis and Comment on Possible New 
        Insurance Corporation Powers,'' GAO/GGD-96-144, August 1996.

    a. Summary.--The Farm Credit System (the System) is a 
government-sponsored enterprise that was chartered by Congress 
to ensure a stable supply of credit to agriculture. The Farm 
Credit System Insurance Corp. (FCSIC) maintains the Insurance 
Fund, which insures the prompt payment of most of the debt 
obligations of the System's eight banks. In 1991, the Farm 
Credit Administration (FCA) recommended to Congress three 
expansions of the FCSIC's powers. These changes would authorize 
the FCSIC to: (1) assess the capital of the 228 System 
associations that have ownership interest in the banks that 
fund them; (2) charge supplemental insurance premiums to the 
banks; and (3) base the premiums it charges banks on the 
relative riskiness of each bank.
    In the short run, authorizing the FCSIC to assess the 
capital of associations, as FCA recommended, would provide 
additional protections to the Insurance Fund, investors in the 
System debt, and ultimately the taxpayers. However, the 
concerns that gave rise to this recommendation--the limited 
size of the fund and the adequacy of capital in System banks--
have diminished over time. Moreover, if the FCSIC had this 
authority and used it in a time of financial stress, there is a 
risk that a significant number of individual member/borrowers 
would withdraw from their associations as a result. Such an 
occurrence could destabilize the System and the Insurance Fund 
instead of protecting them.
    FCA's recommendation that FCSIC be authorized to charge 
supplemental premiums to banks in case the Insurance Fund seems 
unable to meet projected needs might appear justified if the 
Insurance Fund experienced major losses. But, at such a time, 
the size of these supplemental premiums would likely be limited 
by adverse industry conditions and competitive considerations.
    FCA's third recommendation--that FCSIC be authorized to 
incorporate additional risk factors into its premium structure 
to require higher risk banks to pay higher premium rates--could 
be a useful complement to the FCA's risk-based capital 
requirements. Currently, FCSIC's premiums are based in part on 
credit risk, but not on other forms of risk. Giving FCSIC the 
authority to charge premiums that are more fully based on all 
risks could create additional incentives for banks to manage 
risk prudently, because banks that were judged to be riskier 
would be expected to pay higher premiums.
    b. Benefits.--The FCA's first two recommendations for the 
FCSIC are not currently needed, but their third recommendation 
could be useful. Authorizing the FCSIC to charge premiums that 
are more fully based on risk would encourage banks to be wise 
risk managers and would work well with the FCA's current risk-
based capital requirements.

32. ``Northwest Power Planning Council: Greater Public Oversight of 
        Business Operations Would Enhance Accountability,'' GAO/RCED-
        96-226.

    a. Summary.--The Pacific Northwest Electric Power and 
Conservation Planning Council (Council) is a four-State body 
consisting of eight members appointed by the Governors of 
Idaho, Montana, Oregon, and Washington. The Council was 
mandated by the Pacific Northwest Electric Power Planning and 
Conservation Act (act). Established as an interstate agency on 
April 28, 1981, the Council oversees regional energy and fish 
and wildlife policies. It's main purpose is to act as a 
regional planning and policymaking agency to ensure that the 
Northwest has an adequate, economical, and reliable power 
system, while simultaneously rebuilding the fish and wildlife 
populations damaged by the operations of Federal dams on the 
Columbia River and its tributaries.
    The Council's energy planning and fish and wildlife efforts 
have been consistent with congressional direction, but changing 
conditions now cloud the Council's future. The act directed the 
Council to prepare long-range plans for the region's 
conservation and electricity needs, and the Council has 
prepared four such plans in its nearly 20-year history. In 
connection with fish and wildlife policy, the Council has 
prepared a program directing the efforts of various Federal and 
State agencies and Indian tribes. However, changing conditions 
in the utility industry and fish and wildlife mitigation have 
implications for the Council's future. Due to these changing 
conditions--such as the transition from a regulated monopoly to 
a competitive market for electricity--the Governors of the four 
Northwest States have convened a comprehensive review of the 
Northwest energy system and the Council's role in it. 
Evaluations of the role and content of the Council's fish and 
wildlife program are also underway.
    Although the Council's internal controls over day-to-day 
operations were generally sound, the Council's oversight of 
these operations has not been consistent. The Council has since 
taken steps to improve their oversight of business practices, 
and these steps appear sufficient to correct the immediate 
problems at hand. However, the risk still exists that Council 
members' attention may be diverted from administrative matters 
in the future, because of the unstable nature of the Council's 
main areas of focus--power, fish and wildlife. The Council 
could improve its credibility as a manager of public resources 
by taking steps to make its policies and decisions on business 
operations more a matter of public record.
    b. Benefits.--As a publicly funded regional planning body, 
the Council derives its effectiveness in part from its 
continued credibility. This credibility depends not only on the 
quality of its work in power and fish and wildlife planning, 
but also on business practices that demonstrate sound use of 
public funds. Greater public oversight of the Council's 
business operations could help protect this credibility.

33. ``Power Marketing Administrations: Cost Recovery, Financing, and 
        Comparison to Nonfederal Utilities,'' GAO/AIMD-96-145, 
        September 1996.

    a. Summary.--The Federal Power Marketing Administrations 
(PMAS) transmit and sell electric power generated mainly at 
Federal hydropower facilities. Most of these facilities were 
originally designed for other purposes in addition to producing 
electricity. Three PMAS in particular--the Southeastern Power 
Administration, the Southwestern Power Administration, and the 
Western Area Power Administration--have been reviewed to 
determine if they have been recovering their costs, to what 
extent they are subsidized by the Federal Government, and how 
they differ from nonFederal utilities.
    The three PMAS, which are part of the Department of Energy, 
market primarily wholesale power in 30 States produced at 
large, multiple-purpose water projects. In fiscal year 1995, 
their collective revenues totaled $1 billion. Most of the power 
they sell is produced at 102 hydroelectric dams built and run 
primarily by two operating agencies--the U.S. Army Corps of 
Engineers and the Department of the Interior's Bureau of 
Reclamation. The three PMAS receive annual appropriations to 
cover operating and maintenance (O&M) expenses and, in some 
cases, capital investment in transmission assets. Under Federal 
law, the PMAS must repay these appropriations as well as the 
power-related O&M and capital appropriations expended by the 
operating agencies generating the power. At the end of fiscal 
year 1995, the three PMAS had about $5.4 billion of 
appropriated debt outstanding.
    Five main power-related costs have not been fully recovered 
by one or more of the PMAS through rates: (1) pensions and 
post-retirement health benefits for current employees, (2) 
construction costs for some power-generating and transmission 
projects, (3) construction and O&M costs that have been 
allocated to irrigation facilities at the Pick-Sloan Program 
that are incomplete and infeasible, (4) costs of mitigating the 
environmental impact of certain water projects, and (5) certain 
O&M and interest expense payments due from Western. These 
unrecovered costs amount to approximately $83 million for 
fiscal year 1995 and cumulatively could be as much as $1.8 
billion by September 30, 1995.
    Financing of power-related capital projects is subsidized 
by the Federal Government. Financing subsidies were about $200 
million in fiscal year 1995. Cumulative financing subsidy over 
the last 30 years has been several billion dollars.
    The types of unrecovered costs experienced by the PMAS are 
typically included in the power production costs and 
electricity rates established by nonfederal utilities. 
Nonfederal utilities generally pay higher interest rates on 
debt than do PMAS. The unrecovered costs, financing subsidies, 
and inherent cost advantages have resulted in the PMAS' being a 
low-cost marketer of wholesale electric power. In 1994, PMAS' 
average revenue per kilowatt-hour for wholesale sales was about 
40 percent less than the average for nonfederal utilities. 
Increased competition in wholesale electricity markets is 
projected to lower rates, which will magnify the importance of 
PMAS' marketing low-cost power because customers are able to 
buy electricity from suppliers that have the most advantageous 
rates.
    b. Benefits.--In recent years, Congress has focused 
increasing attention on the pros and cons of privatizing the 
Federal PMAS. It is important to consider that, in aggregate, 
the unrecovered power-related costs and financing subsidy for 
Federal PMAS totaled about $300 million for fiscal year 1995 
and billions of dollars over the last 30 years.

34. ``Federal Research: Changes in Electricity-Related R&D Funding,'' 
        GAO/RCED-96-203, August 1996.

    a. Summary.--In fiscal year 1996, the Congress appropriated 
to the Department of Energy (DOE) about $1 billion for 
electrically related research and development (R&D). 
Manufacturers, States, the Federal Government, and electric 
utilities have traditionally played a major role in this R&D. 
Electricity R&D includes such technologies as solar energy, 
fossil-fueled generating systems, and electric automobiles.
    The electric utility industry is being deregulated and 
moving toward a more competitive market. Reductions have 
occurred in funding from the major sources of electricity-
related R&D.
    The electric power industry is moving toward deregulation 
and increased competition, which means utilities face 
significant changes. Many utilities operated as monopolies in 
protected geographic areas. Many were regulated by State public 
utility commissions that approved the inclusion of electricity 
R&D expenditures in the rate base. Utilities have been allowed 
to earn a fixed rate of return on these expenditures. Being 
driven by a combination of factors, the move toward 
deregulation gained impetus with the Energy Policy Act of 1992, 
which promotes increased competition in the wholesale power 
market. Other factors in spurring the move toward competition 
include large differences in electricity rates among utilities; 
new low-cost electricity generation technologies; and recent 
experiences in reduced regulation in other industries, such as 
natural gas and telecommunications.
    In April 1996, the Federal Energy Regulatory Commission now 
requires, as a final rule, electric utilities to make their 
transmission lines accessible to other utilities or power 
producers for the transmission of wholesale power. This was as 
a result of the Energy Policy Act of 1992. This open access is 
to be made available at the same cost that public utilities 
incur to transmit their own power. As of June 30, 1996, 
regulatory commissions in 44 States and the District of 
Columbia had adopted/evaluating deregulation alternatives.
    Electricity-related R&D funding was reduced in 1996 by the 
Federal Government, most States that were reviewed, and the 
electric utility industry. Primary reasons for funding declines 
are overall reductions in Federal and State funding and the 
increased competition expected from the deregulation of the 
utilities.
    R&D spending by the Nation's investor-owned utilities has 
declined by nearly one-third in 3 years (from 1993-96). 
Utilities will be forced to price electricity to compete with 
other utilities and independent power producers. As a result, 
R&D managers evaluate potential R&D projects on the basis of 
their likelihood of providing a near-term return to the utility 
that will allow them to reduce electricity rates.
    b. Benefits.--A suggestion from some utility R&D managers 
and State and EPRI officials was that a nonbypassable national 
wire charge could provide an alternative funding mechanism for 
EPRI and longer-term collaborative R&D. It would ensure that 
those who do not fund R&D do not achieve a competitive 
advantage over those who do. Under this proposal, a small 
charge would be assessed on all electricity entering the 
transmission grid, whether it be interstate or intrastate. If 
there were wire charges, the utility R&D managers would like to 
have considerable say over how the money was spent.

35. ``World Bank: U.S. Interests Supported, but Oversight Needed to 
        Help Ensure Improved Performance,'' GAO/NSIAD-96-212, September 
        1996.

    a. Summary.--The purpose of the World Bank is to promote 
economic growth and the development of market economies by 
providing finance on reasonable terms to countries that have 
difficulty obtaining capital. Implicit Bank actions during most 
of its history was the need to ensure the availability of 
capital for countries that might otherwise turn to communism.
    To achieve its goals, the Bank developed four major 
institutions; the International Bank for Reconstruction and 
Development (IBRD), the International Development Association 
(IDA), the International Finance Corporation (IFC), and the 
Multilateral Investment Guarantee Association (MIGA).
    Banking operations support U.S. economic and foreign policy 
goals and leverage other donors' funds to do so. The 
effectiveness of the Bank's projects have been limited due to 
performance weaknesses. The Bank has recognized the problems 
and has developed a reform program that holds promise for 
improving projects' effectiveness.
    Systematically assessing country performance and direct 
lending to countries that have demonstrated progress in project 
implementation and in market and policy reform is a key 
component of the reform effort.
    Another major focus of reform is the improvement of project 
design, or quality at entry.
    During project implementation, the Bank is also working to 
improve project management by being more proactive in 
identifying and attempting to resolve problems.
    Other reform efforts appear promising. They include greater 
emphasis on policy and market reform objectives in projects, 
increased use of nonlending services, and more focused Bank 
management attention to reforms. With the Bank's greater 
emphasis on policy and market reforms, in particular, may 
increase the potential for Bank projects to positively impact 
development in borrowing countries.
    b. Benefits.--The benefits of U.S. participation in the 
Bank are limited by problems with the effectiveness of Bank 
projects. Through its leadership, the United States is 
positioned to ensure that the Bank reforms continue to progress 
and have a positive impact on development effectiveness.

36. ``Chemical Weapons Stockpile: Emergency Preparedness in Alabama Is 
        Hampered by Management Weaknesses,'' GAO/NSIAD-96-150, July 
        1996.

    a. Summary.--Eight years after CSEPP's (Chemical Stockpile 
Emergency Preparedness Program) inception, Alabama communities 
near Anniston Army Depot are not fully prepared to respond to a 
chemical stockpile emergency because they lack critical items. 
Allocated to Alabama and six counties was $46 million to 
enhance emergency preparedness. The following four projects for 
which Federal, State, and local officials have not agreed on 
specific requirements: (1) a CSEPP 800-megahertz (MHz) 
emergency communications system; (2) equipment and supplies to 
protect people in public buildings (including schools and 
hospitals); (3) indoor alert and notification devices for 
public buildings and homes; and (4) personal protective 
equipment for emergency workers. Until a written commitment 
from the Army to support the county's emergency preparedness 
requirements or provide acceptable alternative is met, Calhoun 
County Emergency Management Agency (EMA) opposes the granting 
of a State environmental permit for the construction of 
Anniston's disposal facility.
    The lack of progress in Alabama's CSEPP is the result of 
management weaknesses at the Federal level and inadequate 
action by State and local agencies. Management weaknesses at 
the Federal level are fragmented and unclear roles as well as 
responsibilities, imprecise and incomplete planning guidance, 
extensive involvement in the implementation of certain local 
projects, lack of team work in the budget process, and 
ineffective financial controls. At the State level, Alabama EMA 
spent more than 2 years trying to contract for a demographic 
survey. This would serve as the basis for determining the 
requirements for the tone alert radios and developing critical 
planning documents. Once Federal officials agree to the 
county's requirements, then perhaps Calhoun County EMA may not 
be so reluctant to initiate CSEPP projects.
    Although some progress has been made, local communities 
near the eight chemical weapons storage sites in the United 
States are not fully prepared to respond to a chemical 
emergency, financial management is weak, and costs are growing.
    The Army considers the likelihood of a chemical release at 
one of its eight storage sites to be extremely small, the 
health effects of an accident can be severe. Some munitions 
contain nerve agents, which can disrupt the nervous system and 
lead to loss of muscular control and death. Other contain a 
series of blister agents commonly, but incorrectly, referred to 
as mustard agents, which blister the skin and can be lethal in 
large amounts. Threats to the stockpile include external events 
such as earthquakes, airplane crashes, and tornadoes and 
internal events such as spontaneous leakage of chemical agent, 
accidents during handling and maintenance activities, and self-
ignition of propellant.
    Calhoun County has identified 12 major deficiencies in its 
program: (1) no demographics survey; (2) no evacuation time 
estimate study; (3) no indoor tone alert radio system; (4) no 
personal protective equipment; (5) lack of reception and mass 
care locations; (6) no collective protection system; (7) no 
integrated communications system; (8) lack of 24-hour staffing 
of emergency operations center; (9) lack of funding for local 
public information awareness; (10) lack of complete siren 
system; (11) lack of a complete, automated information system; 
and (12) lack of complete planning guidance.
    The Department of the Army is responsible for managing and 
funding CSEPP. Program funds flow from the Army to FEMA 
headquarters, through FEMA regional offices, and to the States.
    b. Benefits.--To develop an effective approach for reaching 
timely agreements on specific requirements in order to be able 
to adequately respond to a chemical stockpile emergency.

37. ``Tax Administration: Alternative Filing System,'' GAO/GGD-97-6, 
        October 1996.

    a. Summary.--The Internal Revenue Service (IRS) currently 
offers taxpayers several choices for filing tax returns that 
are less burdensome than preparing paper tax returns, such as 
filing returns electronically, over the telephone, or through 
use of personal computers. In at least 36 other countries they 
have tax withholding systems as well as an alternative filing 
system. The alternative filing system is not available in the 
United States.
    There are two types of such alternative filing systems 
found in other countries: (1) The first type can be referred to 
as the tax agency reconciliation system, whereas the taxing 
authority prepares the return for the taxpayer; and (2) the 
second type can be referred to as a final withholding filing 
system, whereas the taxpayers' income tax is withheld at the 
source and remitted to the tax agency by employers and other 
payers who are responsible for withholding taxes that equal but 
do not exceed each taxpayer's tax liability. By using a tax 
agency reconciliation type system, tax law changes would not be 
required, but with a final withholding type system, tax law 
changes would be required.
    If IRS were able to establish a voluntary tax agency 
reconciliation filing system, it would consist of taxpayers who 
claimed the standard deduction and had income from only wages, 
interest, dividends, pensions, and unemployment compensation. 
IRS would then be able to supply a simpler tax form. IRS would 
then mail the returns and refunds or tax bills to taxpayers, 
who would need to review their returns and notify IRS whether 
they agreed with the return information. Taxpayers would have 
to continue to keep records to be able to accurately review the 
IRS-proposed tax return and tax assessment. It is unclear as to 
what extent taxpayers would continue to rely on tax preparers 
to assist them in reviewing their returns. Tax preparers would 
likely lose some business under such a system.
    Before a final withholding system could be instituted in 
the United States, the law would have to be changed to require 
employers to calculate employees' tax liability and adjust 
employees' last paychecks so that total yearly withholdings 
would equal employees' tax liability. The U.S. tax system does 
not exempt or limit taxes on interest and dividend income, nor 
does it require married couples to file separately.
    IRS concluded that a tax agency reconciliation filing 
system it studied was not feasible primarily because it would 
be very difficult to receive, verify, and post over 900 million 
wage and information documents in time to generate tax returns.
    b. Benefits.--While both individual taxpayers and IRS could 
benefit, there would still be significant obstacles to 
overcome. Taxpayers could reduce the amount of time it takes to 
prepare their tax returns. This would also save millions of 
dollars that are paid to tax return preparers. The tax agency 
reconciliation system would also be likely to further reduce 
the volume of paper documents IRS would have to process. This 
would lower IRS' returns processing and compliance costs by as 
much as $37 million annually.

38. ``Tax Systems Modernization: Cyberfile Project Was Poorly Planned 
        and Managed,'' GAO/AIMD-96-140, August 1996.

    a. Summary.--In August 1995, IRS signed a $22 million 
interagency agreement with NTIS. To date, $17.1 million has 
been advanced to NTIS. NTIS was to develop and operate 
Cyberfile, a tax systems modernization (TSM) project that would 
allow taxpayers to prepare and electronically submit their tax 
returns using their personal computers. By using the public 
switch telephone network or the Internet, electronic returns 
would be submitted, then accepted at a new NTIS data center, 
and then forwarded to designated IRS Service Center. A filing 
fee would not be charged to taxpayers on their returns if using 
Cyberfile.
    IRS selected NTIS because it was expedient and because NTIS 
promised IRS, without any objective support, that it could 
develop Cyberfile in less than 6 months and have it operating 
by February 1996. NTIS offered no convincing analytical support 
for its claim that it could deliver Cyberfile by February 1996. 
It provided no detailed task definitions, work breakdown 
structures, or interim schedules.
    In December 1995, GAO briefed the IRS Commissioner on the 
risks associated with proceeding with Cyberfile as planned. GAO 
explained that Cyberfile was not being developed using 
disciplined systems development processes and that adequate 
steps were not being taken to protect taxpayer data on the 
Internet.
    IRS and NTIS did not follow all applicable procurement laws 
and regulations in developing Cyberfile. Cyberfile obligations 
and costs were not accounted for properly. Specifically, 
significant financial transactions were not properly documented 
and obligations and costs were not recorded promptly and 
accurately.
    Adequate financial and program management controls were not 
implemented to ensure that Cyberfile was acquired cost-
effectively. Excess costs were incurred as a result. Cyberfile 
costs continued to be incurred after the project was suspended 
due to the agreement between IRS and NTIS not being structured 
to minimize costs.
    GAO noted that Cyberfile development reflected many of the 
same management and technical weaknesses that were found in TSM 
systems and delineated in their July 1995 report.
    IRS' Chief Inspector reviewed the Cyberfile acquisition and 
in a briefing to management concluded that IRS did not follow 
internal procurement procedures, failed to sufficiently oversee 
the project, and was vulnerable to outside criticism. Inspector 
General officials told GAO that they have serious concerns 
about how NTIS and the department contracted for Cyberfile as 
well as other projects.
    In March 1996, IRS decided to delay Cyberfile operations 
until after April 15, 1996. IRS is awaiting the completion of 
its Electronic Commerce Strategic Plan before deciding on the 
future course of Cyberfile. IRS has not yet established a 
completion date for the plan.

39. ``Bureau of Reclamation: Information on Allocation and Repayment of 
        Costs of Constructing Water Projects,'' GAO/RCED-96-109, July 
        1996.

    a. Summary.--Since 1902, the Federal Government has been 
involved in financing and construction of water projects in the 
western United States. These water projects were primarily to 
reclaim arid and semiarid land in the West. The projects first 
started out to be generally small and built almost solely in 
providing irrigation. Over the years, the projects have grown 
in size and purpose, providing municipal and industrial water 
supply, recreation, flood control, hydroelectric power 
generation, and other benefits in addition to irrigation. Most 
Federal water projects are built by the Bureau and the U.S. 
Army Corps of Engineers. The Bureau's activities are limited to 
17 western States, while the Corps operates nationwide. The 
beneficiaries of these projects are generally required to repay 
to the Federal Government their allocated share of the costs of 
constructing these projects. The Federal Government provides 
various forms of financial assistance, whereas some of the 
beneficiaries repay considerably less than their full share of 
the costs. Irrigators generally receive the largest amount of 
such financial assistance.
    The Federal statutes that are applicable to all reclamation 
water projects and the statutes authorizing individual projects 
are known as reclamation law. Reclamation law determines how 
the costs of constructing reclamation projects are allocated 
and how the repayment responsibilities are assigned among the 
projects' various beneficiaries. Under this law, the costs are 
designated as either reimbursable--to be repaid by the 
projects' beneficiaries--or nonreimbursable--to be borne by the 
Federal Government. Municipal and industrial water supply, 
irrigation, and power are allocated costs that are 
reimbursable. The costs allocated to purposes such as 
navigation and flood control are nonreimbursable because these 
purposes are viewed as national in scope.
    There are three types of financial assistance that 
irrigators that participate in a Federal water project can 
receive under reclamation law: (1) is federally subsidized 
financing of the project's construction cost, where no interest 
is charged; (2) a shifting to the project's other beneficiaries 
of the repayment of part or all of the costs allocated to 
irrigators but determined to be over their ability to pay; and 
(3) relief of part or all of their repayment obligation through 
specific legislation in special circumstances, such as drought 
or depressed economic conditions. For example, the Omnibus 
Adjustment Act of 1926 (44 Stat. 636) provided repayment relief 
to irrigators at 21 projects.
    b. Benefits.--As a result of this financial assistance, 
irrigators have either paid, or are scheduled to pay, their 
entire allocated share of the construction costs for only 14 of 
the 133 water projects. According to Bureau officials, 
irrigators are generally current in repaying their obligations, 
having repaid $945 million as of September 30, 1994.

40. ``Global Warming: Difficulties Assessing Countries' Progress 
        Stabilizing Emissions of Greenhouse Gases,'' GAO/RCED-96-188, 
        September 1996.

    a. Summary.--Industry, transportation, agriculture, and 
other human activities are emitting increasing amounts of 
carbon dioxide and other heat-trapping greenhouse gases into 
the earth's atmosphere. The IPCC (International Panel on 
Climate Change) is the group established to assess the 
scientific and technical information on climate change. Climate 
changes could have such important consequences as changes in 
weather patterns, including shifts in precipitation patterns 
that could lead to droughts, flooding; changes in crop yields; 
and changes in ecosystems.
    Annex I of the United Nations Framework Convention on 
Climate Change have several countries: the United States, other 
developed countries, the former Soviet Union, and other Eastern 
European States. They have agreed to aim to return their 
emissions of greenhouse gases to 1990 levels by 2000. Carbon 
dioxide is the greenhouse gas considered to be the largest 
single contributor to human-induced climate change.
    GAO found that factors such as economic growth, population 
growth, fuel prices, and energy efficiency affect trends in 
energy use, thereby influencing trends in greenhouse gas 
emissions. This will probably prevent the United States and 
Canada from reaching the Convention's goal.
    The Annex I countries' progress in meeting the Convention's 
goal to reduce greenhouse gas emissions cannot be fully 
assessed because the emissions data are incomplete, unreliable, 
and inconsistent.
    As of June 1996, 159 countries had ratified the Convention. 
The Convention's ultimate objective is to stabilize the 
concentrations of human-induced greenhouse gasses in the 
atmosphere at a level that would prevent dangerous interference 
with the climate system.

41. ``Nuclear Waste: Uncertainties About Opening Waste Isolation Pilot 
        Plant,'' GAO/RCED-96-146, July 1996.

    a. Summary.--The Department of Energy (DOE) plans to begin, 
in April 1998, a $19 billion program to permanently dispose of 
about 176,000 cubic meters of transuranic waste primarily 
generated and currently stored at six facilities. Transuranic 
waste consists of equipment, tools, scrap materials, and other 
trash that is contaminated with radioactive elements, such as 
plutonium, having atomic numbers higher than uranium. This type 
of waste is called contact-handled waste because it can be 
handled with limited precautions to protect workers from 
radiation. The remaining volume of waste is called remote-
handled waste because it emits higher levels of penetrating 
radiation that requires special shielding, handling and 
disposal procedures. This waste is to be permanently stored in 
the Waste Isolation Pilot Plant (WIPP), a planned geologic 
repository near Carlsbad, NM. The Department of Energy must 
first obtain from the Environmental Protection Agency (EPA) a 
certificate of compliance with its disposal regulations for 
radioactive waste and meet the requirements of the Resource 
Conservation and Recovery Act of 1976, as amended (RCRA), for 
handling and disposing of hazardous waste.
    GAO was requested to assess the prospects for opening WIPP 
in 1998 and determine how well the Department of Energy is 
positioned to begin filling the repository in its first few 
years of operation as well as over the longer term.
    The prospects for opening WIPP by April 1998 are uncertain 
for two reasons. First, a wide disparity exists between DOE's 
mid-1995 draft application for a certificate of compliance and 
EPA's criteria for reviewing a compliance application. The 
application lacked details on the repository site, on the 
inventory of anticipated waste, and on future human activities 
that could compromise the capability of the repository to 
contain the waste; also, the application did not address many 
of EPA's compliance criteria. Second, as of May 1996, DOE was 
still working to complete all of the scientific and technical 
activities that are essential to the preparation of a complete 
compliance application.
    To open WIPP on schedule, the Department of Energy needs to 
submit the application in October 1996; receive a certificate 
of compliance from EPA in October 1997; and, also by October 
1997, obtain favorable RCRA-related decisions from EPA and the 
State of New Mexico.
    The Department of Energy is optimistic that it will obtain 
all of the required regulatory approvals as planned because, it 
says, all remaining work is known, planned, and on schedule.

42. ``Resource Conservation and Recovery Act: Inspections of Facilities 
        Treating and Using Hazardous Waste Fuels Show Some 
        Noncompliance,'' GAO/RCED-96-211, August 1996.

    a. Summary.--Fuel blending facilities process many types of 
hazardous waste--such as paints, solvents, and used oil--into 
fuels that can be burned in cement kilns, which are regulated 
as a type of industrial furnace. The facilities that blend 
hazardous waste into fuels and the cement production facilities 
that burn these fuels are both governed by regulations 
established under the Resource Conservation and Recovery Act of 
1976 (RCRA), which is administered by the Environmental 
Protection Agency (EPA) and certain States.
    Concerns were expressed from the Senate and the House about 
whether the facilities that blend hazardous waste fuels and the 
cement production facilities that burn these fuels are 
operating in a manner that protects human health and the 
environment.
    GAO provided information on the results of recent 
inspections of the facilities in five States. Compliance with 
RCRA's (1) treatment, storage, and disposal regulations for the 
processing of hazardous waste fuels by fuel blenders and (2) 
boiler and industrial furnace regulations for the burning of 
these fuels by cement producers. Both of these sets of 
regulations must ensure the protection of human health and the 
environment.
    The most recent Resource Conservation and Recovery Act 
inspections of fuel blending facilities identified many minor 
but few serious violations of waste treatment, storage, and 
disposal regulations. Some of the minor violations found were 
inadequately labeling hazardous waste storage containers and 
having an inaccurate emergency coordination list. Significant 
violations found were having storage containers in poor 
condition and storing waste in excess of approved capacity. 
State officials are working with these fuel blenders to ensure 
that the violations are corrected.

    National Security, International Affairs, and Criminal Justice 
                              Subcommittee

1. ``Export Controls: Some Controls Over Missile Related Technology to 
        China Are Weak,'' April 1995, GAO/NSIAD-95-82.

    a. Summary.--This report presents information regarding the 
Missile Technology Control Regime (MTCR) and United States 
missile technology related exports to the People's Republic of 
China. For fiscal years 1990 though 1993, the Commerce and 
State Departments approved a total of 67 export licenses worth 
about $530 million for missile-related technology commodities 
for China. While United States Government officials believe 
that the United States generally performs adequate monitoring 
of China's compliance with the terms of its MTCR commitments, 
this review indicates that because the Commerce Department's 
pre-license check/post-shipment verification program is 
inadequate, and hampered by Chinese government reluctance to 
cooperate, the United States end-use check program to monitor 
license conditions has only marginal effectiveness for exports 
to China.
    b. Benefits.--Given the weaknesses in monitoring 
commodities after their export to China, GAO believes it is all 
the more important that dual-use license applications be 
scrutinized in accordance with clear procedures before their 
approval. The effectiveness of United States sanctions on China 
is unknown, due in part to the fact that United States 
Government officials share no consensus on a definition of, or 
criteria for, measuring the effectiveness of proliferation 
sanctions imposed on China.

2. ``Export Controls: Concerns Over Stealth-Related Exports,'' May 
        1995, GAO/NSIAD-95-140.

    a. Summary.--This report is a review examining export 
controls over low-observable, radar signature reduction 
technology, or ``stealth'' technology. Materials used for 
stealth have civil and military applications and are controlled 
on the Commerce Control List (CCL) and the U.S. Munitions List 
(USML). However, the unclear lines of jurisdiction over 
stealth-related items may lead to the inappropriate export of 
militarily sensitive stealth materials and technology. 
Exporters may unknowingly seek and obtain export licenses from 
Commerce for militarily sensitive items controlled on the USML. 
The less restrictive export controls under the Export 
Administration Act (EAA) provide an incentive for exporters to 
go to Commerce rather than State. Moreover, Commerce has 
limited authority to prevent such exports. Licenses to export 
stealth-related commodities and technology controlled on the 
CCL can only be denied under limited circumstances and when the 
exports are going to certain destinations.
    b. Benefits.--Under current referral practices, the 
majority of applications for the export categories related to 
stealth are not sent to DOD or State for review. Without such 
referrals, DOD, State, and Commerce cannot ensure that export 
licenses for militarily significant stealth technology are 
properly reviewed and controlled.

3. ``Weapons of Mass Destruction: Reducing the Threat From the Former 
        Soviet Union: An Update,'' June 1995, GAO/NSIAD-95-165.

    a. Summary.--Congress has had an ongoing interest in the 
effectiveness to reduce the threat posed by weapons of mass 
destruction in the former Soviet Union (FSU). In 1991, Congress 
authorized the Department of Defense (DOD) to help FSU States 
destroy weapons of mass destruction, store and transport those 
weapons in connection with their destruction, and reduce the 
risk of proliferation. This report assesses the Cooperative 
Threat Reduction (CTR) program's planning and funding status, 
and recent progress in addressing CTR objectives in the FSU. In 
some areas, the CTR program has made progress over the past 
year and its long-term prognosis for achieving its objectives 
may be promising. The program has played an important role in 
facilitating Ukraine's weapons dismantlement effort and the 
executive branch believes that the promise of CTR aid has been 
a significant factor in the political decisions of the 
recipient states to begin dismantling weapons of mass 
destruction. Nevertheless, the overall specific material impact 
of CTR assistance provided to date has been limited and the 
program must overcome numerous challenges and problems to 
realize its long term objectives. The program's long-term 
prospect may be more promising, but problems and challenges 
remain.
    b. Benefits.--Congress may wish to consider reducing the 
CTR program's fiscal year 1996 request for $104 million for 
support to Russian chemical weapons destruction efforts by 
about $34 million because of uncertainties regarding the 
expenditure. Congress may also wish to consider withholding 
approval to obligate any remaining funds designated for the 
design or construction of elements of a chemical weapons 
destruction facility until the United States and Russia have 
agreed on the results of the joint evaluation study concerning 
applicability of a destruction technology.

4. ``B-2 Bomber: Status of Cost, Development, and Production,'' August 
        1995, GAO/NSIAD-95-164.

    a. Summary.--The conference report on the National Defense 
Authorization Act for fiscal year 1994 called for the GAO to 
report to the congressional defense committees at regular 
intervals on the total acquisition costs of the B-2 Bomber 
program throughout he completion of the production program. 
This report discusses the Air Force's progress in acquiring 20 
operational B-2 aircraft within cost limitations set by the 
Congress and the extent of the progress achieved in flight 
testing, production, and modification efforts. It finds that 
although ground and flight tests have demonstrated the 
structural integrity, flying qualities, and aerodynamic 
performance of the B-2's flying wing design, GAO's review of 
the program's progress indicates that there are many important 
events yet to be completed, and many risks can impact the 
ultimate cost and completion of the 20 operational B-2 
aircraft. For example, the flight test program is only about 
half complete, and modification efforts required to deliver 20 
operational B-2's did not begin until July 1995.
    b. Benefits.--After 14 years of development and evolving 
mission requirements, including 6 years of fight testing, the 
Air Force has yet to demonstrate that the B-2 design will meet 
some of its most important mission requirements. As of May 31, 
1995, the B-2 had completed about 44 percent of the flight test 
hours planned for meeting test objectives. Test progress has 
been slower than planned. The test program is planned for 
completion in July 1997, but GAO's analysis of the tests to be 
completed and the time that may be needed to complete them 
indicates that completion by July 1997 is optimistic. The 
flight test program depends on timely delivery of effective 
integration software to bring together the functions of the 
various B-2 subsystems so that the aircraft and crew can 
perform the planned military functions. In the past, B-2 
integration software was delivered late, without all the 
planned capabilities, and with deficiencies that significantly 
affected the Air Force's ability to complete flight testing on 
schedule. In addition, the change in emphasis on the B-2 
mission from nuclear to conventional increased the need to 
integrate precision conventional weapons into the B-2 aircraft, 
while after 9 years of producing and assembling aircraft, 
Northrop Grumman, the prime contractor, continues to experience 
difficulties in delivering B-2's that can meet Air Force 
operational requirements. For the most part, aircraft have been 
delivered late and with significant deviations and waivers. All 
corrections are scheduled to be incorporated into B-2 aircraft 
during planned modification programs scheduled for completion 
on July 2000.

5. ``Foreign Assistance: Assessment of Selected USAID Projects in 
        Russia,'' August 1995, GAO/NSIAD-95-156.

    a. Summary.--This report responds to the Committee on 
International Relations' request that we evaluate assistance 
projects in Russia managed by the United States Agency for 
International Development (USAID). Specifically, the GAO 
investigated whether individual USAID projects were meeting 
their objectives and contributing to systemic reforms, whether 
the projects had uncommon characteristics that contributed to 
their successful or unsuccessful outcomes, and whether USAID 
was adequately managing its projects in Russia. In conducting 
it's study, GAO reviewed 10 judge mentally selected projects 
with obligations of $64.6 million as case studies and used 
audits and evaluations performed by the USAID Inspector 
General.
    b. Benefits.--Projects have had mixed results in meeting 
their objectives. While some of the USAID projects the GAO 
reviewed fully met most or all of their objectives, were 
contributing to systemic reform, and were sustainable, others 
did not have all or some of these attributes of success. USAID 
did not adequately manage some projects it funded. The 
devolution of management and monitoring responsibility from 
USAID's Washington office to its Moscow office delayed 
decisionmaking and created confusion among contractors. USAID's 
management information systems were inadequate, and it did not 
adequately monitor or coordinate some projects. USAID has taken 
steps to overcome these problems, including terminating some 
unsuccessful projects, refining its assistance strategy, and 
undertaking efforts to improve project monitoring and 
evaluation. In commenting on this report, USAID said that the 
difficult operating environment in which it worked during the 
first 2 years of the program in Russia cannot be overstated. 
GAO agrees that USAID faced numerous operating obstacles in 
getting this program underway, and these observations on how 
well the projects performed should be seen in that context.

6. ``Peacekeeping: Assessment of U.S. Participation in the 
        Multinational Force and Observers,'' August 1995, GAO/NSIAD-95-
        113.

    a. Summary.--This report responds to the Committee on 
International Relations' request that the GAO review U.S. 
participation in the Multinational Force and Observers (MFO). 
The recent signing of peace accords between Israel and the 
Palestinian Liberation Organization, Israel and Jordan, and the 
possibility of similar agreements between Israel and Syria and 
Lebanon have heightened interest in the MFO, which has 
monitored the current treaty of peace between Egypt and Israel 
since 1982. The MFO operational responsibilities include 
manning observation posts in the Sinai, conducting both ground 
and air surveillance, and conducting naval patrols in the 
Strait of Tiran to monitor implementation of the security 
arrangements established in the treaty. This report provides 
information on U.S. contributions to and the total cost of the 
MFO, including measures taken to reduce costs; the level of 
U.S. participation and its operational impacts; State 
Department oversight of U.S. participation; and State 
Department and other relevant parties' views of MFO performance 
and lessons learned.
    Despite the MFO operational success and its ability to 
reduce certain costs, GAO finds that greater State oversight 
over U.S. participation may be needed because of the MFO 
operating environment and the absence of assurance regarding 
the adequacy of internal controls. Unlike other international 
organizations, the MFO does not have a formal board of 
directors or an independent audit committee to oversee its 
operations. Moreover, GAO observed that some MFO policies have 
been changed to accommodate the personal needs of MFO officials 
and that financial transactions involving the MFO and an MFO 
retail store it established may not have received the necessary 
review. State was not aware of the specifics surrounding these 
matters, both of which had an impact on the cost of MFO 
operations and amount of the U.S. contribution. State can also 
improve the quality of its reporting to Congress, as some 
annual reports to Congress have not contained full or accurate 
information on the cost of U.S. participation.
    b. Benefits.--GAO recommends that the Secretary of State 
ensure adequate oversight of the MFO by examining the annual 
MFO-style published financial statements for items that may 
impact U.S. contributions, requesting the MFO have its external 
auditor include an evaluation of the MFO management and 
internal accounting controls beyond what is required to 
complete the annual financial statement audit and provide a 
copy of the resulting report to State. GAO also recommends that 
the Secretary of State include the U.S. annual assessment cost 
contribution of one-third of the MFO operating costs in its 
annual report to Congress on MFO. GAO believes that the review 
of external auditor's report, published financial reports, and 
annual budget submissions does not provide adequate oversight 
of U.S. contributions to the MFO.

7. ``Unmanned Aerial Vehicles: Maneuver System Schedule Includes 
        Unnecessary Risk,'' September 1995, GAO/NSIAD-95-161.

    a. Summary.--This report consists of a review of the Joint 
Tactical Unmanned Aerial Vehicle (UAV) program, including the 
Hunter UAV system, a variant of the Hunter referred to as the 
Maneuver system, and another Hunter variant for shipboard use; 
and brings to attention certain aspects of the program status 
and the Joint Tactical UAV project for the Maneuver system that 
GAO believes will unnecessarily increase the Department of 
Defense's (DOD) risk on the program.
    Past UAV acquisition programs have been marked by premature 
entry into production that resulted in extensive and costly 
system redesigns in attempting to achieve acceptable system 
performance. Nevertheless, the Joint Tactical UAV Project 
Office plans to begin production of the Maneuver system without 
adequate assurance that it can meet operational performance 
requirements. As a result, DOD will again risk becoming 
committed to acquiring an unsatisfactory system.
    b. Benefits.--GAO recommends that the Secretary of Defense 
change the Maneuver system's acquisition strategy to require 
that sufficient operational testing be conducted before the 
start of low-rate production. The purpose of this change is to 
demonstrate that without any major or costly design changes, 
the system can achieve its primary mission and meet 
requirements for performance and suitability.

8. ``Ballistic Missile Defense: Current Status of Strategic Target 
        System,'' March 1995, GAO/NSIAD-95-78.

    a. Summary.--This report concerns the status of the 
Strategic Target System (STARS) program, the program's current 
and future costs and its plans for the future. STARS began in 
1985 as a result of concerns that the supply of Minuteman I 
boosters, which were used to launch targets on intercontinental 
ballistic missile flight trajectories, would be depleted by the 
year 1988. As a result, both STARS I and STARS II were 
developed as alternate launch vehicles. The first STARS I 
flight was successfully launched in February 1993 and in August 
1993 a STARS I reentry vehicle experiment was also successfully 
launched. STARS I can deploy single or multiple payloads, but 
it cannot simulate the operation of the post-boost vehicle 
(PBV), which is necessary to carry multiple warheads and 
independently target each warhead on a specific target. As a 
result, the Ballistic Missile Defense Organization (BMDO) 
created an Operations and Deployment Experiments Simulator 
(ODES), which functions as a (PBV). With the addition of ODES 
to STARS I, the configuration is named STARS II. STARS II was 
successfully launched in July 1994.
    b. Benefits.--In 1993 the Secretary of Defense compiled a 
detailed ``Bottom-Up Review'' of the Nation's defense strategy. 
As a result the future of the STARS program is in limbo as to 
whether it will be continued, placed in a dormant status, or 
terminated. The Secretary of Defense was uncertain if STARS was 
necessary due to the dramatic changes in the world resulting 
from the end of the cold war and the dissolution of the Soviet 
Union.
    STARS officials cite many reasons for continuing the 
program. The Strategic Arms Reduction Treaty I (START) limits 
other strategic ballistic missiles' use of telemetry 
encryption, but STARS is exempt from this restriction. STARS 
will also be exempt from the STARS II Treaty upon its 
ratification, which means that it will be the only land-based 
multiple warhead booster that the United States can use as a 
target or for research and development. Other benefits of STARS 
is that it is the only U.S. target missile system that operates 
in the 1,500 to 3,500 km range and it can deliver a variety of 
experiments and scientific payloads at various speeds and 
trajectories. The final decision on the future of the STARS 
program most likely will not be made for up to 6-9 months.

9. Military Training: ``Potential To Use Lessons Learned To Avoid Past 
        Mistakes Is Largely Untapped,'' August 1995, GAO/NSIAD-95-152.

    a. Summary.--This report focuses on whether the military 
and the Joint Staff have learned from past problems and 
experiences and used that learned information to avoid 
repeating past mistakes. Specifically, the report investigates 
the military and Joint Staff's effectiveness in collecting all 
significant lessons, identifying recurring weaknesses, and 
implementing corrective actions. Training methods are examined 
at the various combat training centers, in addition to, 
examination of operations such as the Persian Gulf War and 
Operation Restore Hope in Somalia.
    b. Benefits.--The results of these examinations is not a 
favorable one for the military and Joint Staff. The findings 
conclude that despite the implementation of lessons learned 
programs, mistakes are often repeated. These negative findings 
are not to be taken lightly for the problems found could result 
in serious consequences. Some of the specific problems are that 
the Marine Corps, Air Force, and the Navy do not include all 
significant information from training exercises and operations 
in their lessons learned programs. Thus, important information 
is missed that could be useful to others. The Joint Staff and 
all the services, except the army, do not routinely analyze 
lessons learned information to identify trends or potential 
problems. The Air Force does not ensure that lessons learned 
information receives the widest possible distribution. The lack 
of training on how to access the data bases is the primary 
reason for the limited distribution of information. Finally, 
the Air Force, Navy, and the Marine Corps do not use lessons 
learned information to its full potential. These parts of the 
military are insufficient in following-up to ensure that 
problems have been properly corrected.

10. ``National Security: Impact of China's Military Modernization in 
        the Pacific Region,'' June 1995, GAO/NSIAD-95-84.

    a. Summary.--This purpose of this report is to review and 
examine China's recent military modernization. The report 
assesses the nature and purpose of China's improvement in their 
military, while comparing China's military to other Asian 
nations. China, with the end of the cold war, is now viewed as 
aspiring to take over role of the leading regional power. 
China's military is the world's largest military force, 
although its weaponry is far outdated and its troops are not 
trained in modern warfare. Since 1989, China has devoted more 
of its resources toward the national goal of military 
modernization. More specifically, China is attempting to 
upgrade its air and naval power, while realigning its force 
structure. Throughout this modernization China has maintained a 
lack of openness concerning its military which leads to 
suspicion and questions about its intentions.
    b. Benefits.--China had initiated its military 
modernization by acquiring new weapon systems, restructuring 
its forces, and improving its training. China has also reduced 
its forces, increased its defense budget, and changed its 
military doctrine in the hope of improving its military. These 
actions seemed to be fueled by a number of reasons. These 
include the desire to be the leading regional power in Asia, 
lessons learned about modern warfare from the Gulf War, the 
need to protect its economic interests, and a need to maintain 
internal stability. The improvement in China's military has 
neighboring countries concerned about China challenging them in 
contested areas.

11. ``Drug Courts: Information on a New Approach To Address Drug-
        Related Crime,'' May 1995, GAO/NSIAD-95-159BR.

    a. Summary.--This briefing report examines the usefulness 
and effectiveness of the recently developed drug courts. These 
courts are the result of Title V of the Violent Crime Control 
and Law Enforcement Act of 1994, which authorizes the award of 
Federal grants for drug courts. These courts became necessary 
when State and local courts were inundated with drug cases 
during the late 1980's. The drug courts are designed to monitor 
the treatment and behavior of drug-using defendants. The 
objective of the drug courts is to use the authority of the 
court to reduce crime by changing defendants' drug-using 
behavior. Incentives such as the possibility of dismissed 
charges or reduced sentences are used to divert defendants to 
drug courts. The judges who preside over these courts monitor 
the progress of defendants through frequent status hearings, 
and prescribe sanctions and rewards as appropriate. The drug 
courts represent a new movement in dealing with drug-related 
crime and drug-using defendants.
    b. Benefits.--The conclusions resulting from the study are 
mixed. There are some visible benefits to the drug court 
program, but there are also limitations in its design and 
methodology. The relative newness of drug courts limits the 
ability to make firm conclusions on effectiveness and impact. 
The program, as of March 1995, has expanded to 37 drug courts 
operating nationwide. These courts have accepted over 20,000 
defendants, with a third of them completing their programs. 
Among the defendants, there are none currently charged with a 
violent offense and most do not have prior violent convictions. 
The results from the evaluations were contrasting surrounding 
the amount of recidivism among the program's participants. 
Thus, it's difficult to determine how many defendants the drug 
courts benefited. The Department of Justice expects to assess 
the impact and effectiveness of the drug courts in about 2 
years to clarify the program's effectiveness. For the fiscal 
year 1995, $29 million was appropriated for the drug courts. 
However, Congress has proposed cutting this budget and the 
House has passed legislation repealing the drug court grant 
program authorized in the 1994 Crime Act.

12. ``Tactical Aircraft: Concurrency in Development and Production of 
        F-22 Aircraft Should Be Reduced,'' April 1995, GAO/NSIAD-95-59.

    a. Summary.--This report examines the concurrency, which is 
defined as the overlap between development and production of a 
system, of the Air Force's F-22 fighter program. This 
assessment looks at whether the fighter program was introduced 
in a timely manner or fulfilled an urgent need, avoided 
technological obsolescence, and maintained an efficient 
industrial development/production work force. Initial 
operational tests, which are field tests intended to 
demonstrate a system's effectiveness and suitability for 
military use, were the major way used to determine the 
program's concurrency.
    b. Benefits.--After tests and evaluations were concluded, 
the F-22 Fighter program exhibited a high degree of 
concurrency. This concurrency will allow the production of a 
significant number of F-22s before many of the technological 
advances are flight tested and before the completion of initial 
operational testing and evaluation (IOT&E). Although there is a 
certain amount of risk in the F-22's production because the 
program embodies many of these important technological advances 
that are critical to its operational success. The Air Force 
plans to procure 80 F-22s under low-rate initial production 
(LRIP), at a cost of about $12.4 billion, before completing 
(IOT&E). The program's production rates are projected to 
accelerate to 75 percent of the full-production rate under the 
LRIP phase of the program.

13. ``Financial Management: Control Weaknesses Increase Risk of 
        Improper Navy Civilian Payroll Payments,'' May 1995, GAO/AIMD-
        95-73.

    a. Summary.--GAO's tests of 225,000 Navy payroll and 
personnel records for one pay period found overpayments to 134 
Navy civilians, which represented less than one-tenth of 1 
percent of the accounts tested. Although GAO tallied $62,500 in 
overpayments to these persons, the total amount overpaid is 
likely to be far greater because some of these erroneous 
payments continued for nearly 1 year. The causes of these 
overpayments included the following: (1) The Defense Finance 
and Accounting Service did not check to see whether civilian 
employees were paid from multiple data bases for the same time 
period and (2) reconciliations between civilian payroll and 
personnel systems were infrequent and did not provide for 
systematic follow-ups to investigate and correct discrepancies. 
Navy payroll operations are susceptible to additional improper 
payments because (1) a large number of payroll personnel are 
granted virtually unrestricted access to both pay and personnel 
data; (2) ineffective audit trails do not always identify who 
made data changes; and (3) inactive payroll accounts are 
maintained on the active payroll data base.
    b. Benefits.--GAO examination of the Navy's payroll records 
show that many of the overpayments were discovered by the 
Defense Finance and Accounting Service (DFAS) within 6 months 
of their occurrence. The (DFAS) then processed retroactive 
transactions to change the pay records and to initiate the 
resolution process. These adjustments were made on 45 out of 
the 134 overpaid Navy civilians that GAO identified. GAO 
provided Navy personnel officials with a comprehensive list of 
all the remaining overpayments and requested that these 
officials recover the cited amounts.

14. ``DOD Household Goods: Increased Carrier Liability for Loss and 
        Damage Warranted,'' May 1995, GAO/NSIAD-95-48.

    a. Summary.--The Department of Defense (DOD) spends more 
than $700 million each year to move the household goods of 
military service members and DOD civilian employees. DOD shares 
liability with carriers for loss and damage to these shipments. 
During mid-1987, DOD increased carrier liability for domestic 
household goods shipments, a change that the carrier industry 
opposed. In March 1993, DOD proposed that carrier liability be 
similarly increased for international household goods 
shipments, a change that carriers objected to as well. This 
report evaluates DOD household goods shipment programs to 
determine (1) the impact of the 1987 increase in carrier 
liability on domestic shipments and (2) the level and the type 
of carrier liability that DOD should adopt for international 
shipments.
    b. Benefits.--Since DOD has increased carrier liability on 
domestic household goods shipments the household goods claims 
costs have declined and carrier performance has improved. Claim 
costs have declined an estimated $18.9 million during the 
fiscal years 1987-1991. However, the carrier liability for DOD 
international household goods of $0.60 per pound per article 
severely restricts DOD's ability to recover the cost of loss 
and damage inflicted during shipment, it also increases 
government costs, and limits carrier incentive to improve 
performance. Thus, the carrier liability needs to be increased. 
The GAO report concurs with DOD's proposal to change carrier 
liability on international shipments from a per pound, per 
article basis to one based on shipment valuation. Although, GAO 
recommends that with this change, carriers should receive 
compensatory payments in exchange for the increased liability. 
Finally, the household goods program also has some management 
and administrative problems that need to be addressed with any 
increase in carrier liability.

15. ``Military Exports: A Comparison of Government Support in the 
        United States and Three Major Competitors,'' May 1995, GAO/
        NSIAD-95-86.

    a. Summary.--Declining U.S. defense spending has placed 
defense-related jobs and some domestic industrial capabilities 
at risk. U.S. defense companies are using various strategies to 
adjust to the decline. One strategy is to boost defense export 
sales. Export proponents point out that such sales maintain 
industrial base capabilities and lower the cost of weapons to 
the U.S. Government. They also argue that more government 
support for exports is needed to level the playing field 
against foreign competitors. Opponents of such support argue 
that it could delay restructuring of the defense industry and 
increase global weapons proliferation. This report reviews (1) 
conditions in the international defense export market and (2) 
the tools used by France, Germany, the United Kingdom, and the 
United States to enhance the competitiveness of their defense 
exports. GAO compares the U.S. position in the global defense 
market with those of its major competitors and analyzes the 
factors that can contribute to a sale.
    b. Benefits.--The United States has moved forward to become 
the world's leading defense exporter, increasing its market 
share to 49 percent by 1993. This is a result of the United 
States recognizing the positive impact that defense exports can 
have on the defense industrial base. The United States is 
projected to remain strong in the world market, but further 
growth will be limited. This is due to many factors including 
U.S. national security and export control policies to reduce 
dangerous or destabilizing arms transfers to certain countries 
and certain major foreign country buyers' practices of 
diversifying weapons purchases among multiple suppliers. This 
government involvement in the defense industry's sales will, in 
turn, affect the position of defense manufacturers in overseas 
markets. As global defense markets decrease, government support 
will become more significant, and companies will fight to 
maintain their market share. Other nations such as France, 
Germany, and the United Kingdom provide similar types of 
support. These include (1) government backed or provided export 
financing; (2) advocacy on behalf of defense companies by high-
level government officials; and (3) organizational entities 
that promote defense exports. The nations differ in that 
central organizations support defense exports in France and the 
United Kingdom, while in the United States several government 
agencies share in supporting defense exports. They also differ 
because United States financing is provided through the Foreign 
Military Financing (FMF) in the form of grants and loans, while 
the three European countries provided government-backed 
guarantees for commercial bank loans.

16. ``Comanche Helicopter: Testing Needs To Be Completed Prior to 
        Production Decisions,'' May 1995, GAO/NSIAD-95-112.

    a. Summary.--Under the restructured program to produce the 
Comanche helicopter, production decisions will be made before 
operational testing of the Comanche starts, thereby continuing 
the risky practice of concurrent development and production. 
Because of the Comanche's high costs and technical risks, GAO 
believes that the Army should undertake operational testing 
before making decisions on long-lead and low-rate initial 
production. The Comanche will be a much more expensive 
helicopter than the one originally justified to Congress. The 
Comanche's acquisition unit cost has almost tripled in 10 
years--from $12.1 million in 1985 to $34.4 million in 1995. The 
cost and program schedule will again be affected because of the 
program restructuring. After a decade of developing the 
Comanche, the Army continues to experience technical 
difficulties, including software problems, and key aircraft 
maintainability requirements for the Comanche may not be 
achievable--calling into question the Comanche's ability to 
meet its wartime availability requirements and its objective of 
lower operating and support cost. On the positive side, the 
program is meeting its goals of reducing maintenance levels and 
keeping within acceptable limits of overall weight growth for 
the Comanche.
    b. Benefits.--The Army's restructuring of the Comanche 
program continues risks associated with making production 
decisions before knowing whether the aircraft will be able to 
perform as required and of higher program costs. Although there 
are high risks involved with making production decisions before 
operational testing, the time provided by extending the 
development phase and the acquisition of the six additional 
aircraft under the restructured program provides the Army with 
the opportunity to conduct operational testing before 
committing funds to any production decisions. Additionally, the 
risks associated with concurrency can be limited by reducing 
production aircraft to the minimum necessary to perform initial 
operational testing. GAO predicts that the restructuring of the 
program provides additional time which will provide the chance 
to resolve the technical risks before the decision to enter 
production is made. Long-lead production decisions are 
scheduled for November 2003, and low-rate initial production is 
planned to start in November 2004, about 9 months before 
operational testing begins. Finally, GAO recommends that the 
Secretary of Defense require the Army to complete operational 
testing to validate the Comanche's operational effectiveness 
and suitability before committing any funds to acquire long-
lead production items or enter low-rate initial production.

17. ``Defense Downsizing: Selected Contractors Business Unit 
        Reactions,'' May 1995, GAO/NSIAD-95-114.

    a. Summary.--This report examines how the recent decline in 
defense spending has affected individual business units of 
major defense contractors. GAO selected business units from 6 
of the top 10 defense contractors in 1993--General Dynamics, 
General Motors, Lockheed, Martin Marietta, McDonnell Douglas, 
and United Technologies. These units were engaged primarily in 
defense work, an important part of their corporations' total 
government sales. GAO compares defense expenditures over 
several years and changes in business units' (1) sales and 
employment levels and (2) spending on independent research and 
development, bid and proposal preparation, capital 
improvements, and facilities.
    b. Benefits.--Measured from their peak years, GAO 
determined that the six business units have experienced sales 
decreases ranging from 21 percent to 54 percent through 1993 
and estimated declines ranging from 50 percent to 73 percent 
through the latest year projected. While employment reductions 
ranged from 30 percent to 76 percent through 1993 and planned 
reductions ranging from 44 percent to 79 percent through the 
latest year are projected. As a result these business units 
have significantly reduced their spending with reductions 
ranging from 31 percent to 71 percent through 1993 and 
projected reductions ranging from 41 percent to 84 percent 
expected through the latest year. Additionally, the six units 
have reduced expenditures for capital improvements by an 
average of 80 percent through 1993 and, through the latest year 
projected, estimate an average reduction of 76 percent in these 
expenditures. Defense contractors view the current decline as 
permanent and have developed a variety of strategies to deal 
with reduced defense spending.

18. ``Overhead Costs: Defense Industry Initiatives To Control Overhead 
        Rates,'' May 1995, GAO/NSIAD-95-115.

    a. Summary.--Senior Pentagon officials have expressed 
concern that contractor overhead rates may drive up procurement 
costs as a result of declines in Defense Department spending. 
Declining defense spending since the late 1980's has reduced 
sales by defense contractors and has reduced the business bases 
against which they charge overhead. This report reviews (1) 
initiatives taken by six individual business units of large 
defense contractors--General Dynamics, General Motors, 
Lockheed, Martin Marietta, McDonnell Douglas, and United 
Technologies--to reduce overhead costs and (2) the issue of 
whether the units' actions would avoid increases in overhead 
rates.
    b. Benefits.--In response to their declining business 
bases, the six business units examined have taken action to 
reduce their overhead costs. These measures include reducing 
the number of indirect employees, cutting employee health 
benefits, consolidating facilities, and reducing independent 
research and development and bid and proposal expenditures. 
These measures have been successful, shown by a reduction in 
overhead costs by an average of 35 percent between their peak 
years and 1993 and an anticipated total reduction of about 53 
percent between their peak years and the latest projected 
years. However, overhead costs at four of the six business 
units were not declining as rapidly as their sales, and as a 
result these units were forecasting increases in their overhead 
rates. Unless these businesses can further reduce costs or 
increase their sales, their overhead rates will continue to 
rise, which could result in increased procurement costs.

19. ``Peace Operations: Estimated Fiscal Year 1995 Costs to the United 
        States,'' May 1995, GAO/NSIAD-95-138BR.

    a. Summary.--Several United States agencies have 
participated in peace operations during fiscal year 1995, such 
as those in Haiti, Bosnia, and Southwest Asia. The Defense 
(DOD) and State Departments are the two lead agencies involved 
in U.S. peace operations. The U.S. Agency for International 
Development is the lead agency that provides humanitarian 
assistance and coordinates U.S. donations of food with the 
Agriculture Department. This briefing report provides 
information on (1) potential fiscal year 1995 costs of peace 
operations; (2) the potential United States share of United 
Nation assessments for peace operations; and (3) the manner in 
which the annual defense budget enables DOD to participate in 
peace operations.
    b. Benefits.--The Federal agencies' and departments' 
participation in peace operations is estimated to have cost 
$3.7 billion during the fiscal year 1995; $672 million of this 
estimated cost has not been funded. About $1.8 billion, or 49 
percent, of the estimated cost is DOD's estimated incremental 
costs, costs which would not have been incurred except for the 
operations, for its involvement in peace operations. These 
incremental costs include (1) special payments, including 
imminent danger pay, family separation allowance, and foreign 
duty pay for troops deployed to certain peace operations; (2) 
operation and maintenance expenses in support of deployed 
forces; (3) procurement of items such as forklifts and fire 
support vehicles; and (4) limited military construction at 
Guantanamo Bay, Cuba. The estimated U.S. share of special U.N. 
peacekeeping assessments ($992.1 million) is also included in 
this figure. The remaining cost of $1.9 billion will be paid by 
several non-defense agencies and departments. These estimated 
costs could increase if the need for new operations arises or 
current operations are expanded.

20. ``Cassini Mission: Estimated Launch Costs for NASA's Mission to 
        Saturn,'' May 1995, GAO/NSIAD-95-141BR.

    a. Summary.--In April 1994, NASA estimated that it would 
cost about $475 million for a Titan IV-Centaur launch of its 
Cassini spacecraft. NASA plans to launch its Cassini spacecraft 
to Saturn in October 1997. Following a voyage of more than 6 
years, the spacecraft will orbit Saturn for 4 years, observing 
the planet's atmosphere, rings, and moons. In response to 
congressional concerns about cost, this briefing report 
provides information on the current estimated cost for the 
Cassini launch and determines the extent of cost-saving 
opportunities.
    b. Benefits.--NASA's most recent estimate for the Titan IV-
Centaur launch of its Cassini spacecraft is about $452 million, 
which is $23 million less than its previous estimate in April 
1994. This decrease was the direct result of NASA reducing its 
earlier estimate of mission integration costs. The $452 million 
estimate includes $253 million to the Air Force for a Titan IV-
Centaur launch vehicle and launch services, mission 
integration, prior-year studies, support by two NASA field 
centers, NASA funding for potential future cost increase, and 
miscellaneous costs. Other than the reduction in the mission 
integration costs, cost savings in other areas of the Cassini 
launch are unlikely, and some of NASA's cost could increase. 
Additionally, the Air Force is not required to refund NASA 
payments in excess of cost. Consequently, the Air Force is not 
required to refund to NASA fees that the Air Force does not pay 
to the Titan IV contractor. Among these fees are a $9 million 
incentive fee and $2 million in award fees. Finally, NASA's 
mission integration does not fully comply with the revised 
policy for cost-plus-award-fee contracts, which was implemented 
to encourage contractors to deliver quality products at 
reasonable costs.

21. ``Peace Operations: Update on the Situation in the Former 
        Yugoslavia,'' May 1995, GAO/NSIAD-95-148BR.

    a. Summary.--This briefing report provides an update on the 
situation in the former Yugoslavia. GAO assesses (1) progress 
in resolving the conflict in Croatia and Bosnia-Herzegovina and 
(2) the effectiveness of the United Nations in carrying out 
Security Council mandates in these countries.
    b. Benefits.--Little progress has been made toward the 
resolution of the major issues of conflict in Croatia and 
Bosnia. In Croatia, there are still fundamental differences 
between the Croatian Serbs, who demand an independent state 
within Croatia, and the Croatian government, which demands 
control of its occupied territory. The Croatian Serbs still 
maintains an army with heavy weapons and fighter planes, while 
they continue to face the Croatian government along 
confrontation lines. In Bosnia, the Bosnian Serbs control 70 
percent of the territory and no territory has been returned to 
the Bosnian government, as proposed in the international peace 
plan. As of May 1995 fighting continues and since the beginning 
of the conflict many thousands of Bosnians have been killed, 
widespread human rights violations have been committed, and the 
guilty parties have not answered for their crimes.
    The United Nations Protection Force (UNPROFOR) has been 
ineffective in carrying out mandates leading to lasting peace 
in the former Yugoslavia. In Croatia, UNPROFOR was unable to 
demilitarize the territory controlled by the Croatian Serbs, 
return displaced persons to their homes, or prevent the use of 
Croatian territory for attacks on Bosnia. In Bosnia, UNPROFOR 
made an assertive stand with the North Atlantic Treaty 
Organization (NATO) to protect Sarajevo in February 1994. As a 
result of UNPROFOR's overall ineffectiveness, Croatia announced 
in January 1995 that it would not agree to a renewal of 
UNPROFOR's mandate. This ineffectiveness in deterring attacks 
and providing protection stems from an approach to peacekeeping 
that is dependent on the consent and cooperation of the warring 
parties. Another factor that has contributed to UNPROFOR's lack 
of credibility is their lack of consistent assertive response 
to aggression. For example, UNPROFOR has the authority to use 
force, but tries to negotiate when attacked and has called 
sparingly for NATO air support. However, UNPROFOR has been 
successful in many other areas. They have helped provide food 
for thousands living in the region over the past several 
winters, monitored the situation on the ground, maintained 
roads, escorted convoys to the safe areas, operated the 
Sarajevo airport, and undertaken confidence-building measures, 
such as joint patrols and monitoring of cease-fires.

22. ``NASA Budgets: Gap Between Funding Requirements and Projected 
        Budgets Has Been Reopened,'' May 1995, GAO/NSIAD-95-155BR.

    a. Summary.--Recent events have reopened a gap between 
NASA's program plans and its likely budgets. NASA has not yet 
developed plans for closing this $5.3 billion gap projected for 
fiscal years 1996-2000. NASA closed the gap that GAO reported 
in 1992 primarily by changing and deleting some of its major 
programs. As a result of these changes, NASA increased the 
risks in several of its largest programs.
    b. Benefits.--In 1992, GAO reported that NASA's funding 
estimates for fiscal years 1993-1997 exceeded its likely 
budgets for those years. GAO estimated that NASA would have to 
reduce its program plans by $13-$21 billion to match the 
available budgets. As a result, NASA has reduced its 5-year 
program plans by about $20 billion, or almost 22 percent. NASA 
accomplished this by eliminating some programs, scaling down 
program scopes, identifying program efficiencies, stretching 
some programs beyond the 5-year planning period, and reducing 
the number of civil service personnel. In some cases, NASA has 
accepted higher program risk to achieve the budget reductions. 
For example, reductions in the space shuttle program have 
increased the risk of delays in meeting projected launch 
schedules. Another problem that NASA is encountering with their 
reduced budget is that their future budgets are not expected to 
cover anticipated inflation. In fact, GAO estimates that NASA 
will lose $3.8 billion in purchasing power in fiscal years 
1996-2000 because of inflation. Despite their efforts, NASA 
still has a $5.3 billion gap between estimated funding 
requirements and projected budgets. This gap resulted when NASA 
was directed, in January 1995--just before the President's 
budget was submitted to the Congress--to freeze its budget at 
$14.3 billion and make increasingly larger reductions from that 
level for each year from 1997-2000. Under this plan, the 
agency's budget would be reduced from $14.3 billion in 1996 to 
$13.2 billion in 2000. NASA has yet to figure out how it will 
accomplish the $5.3 billion in unresolved reductions, although 
studies are underway on how to make the reductions.

23. ``Juvenile Justice: Representation Rates Varied as Did Counsel's 
        Impact on Court Outcomes,'' June 1995, GAO/GGD-95-139.

    a. Summary.--Some legal organizations and scholars have 
raised concerns about the access to counsel afforded to young 
people in juvenile court proceedings. For example, the American 
Bar Association and individual law professors testified before 
Congress in 1992 that half of all juveniles in the United 
States waive their constitutionally guaranteed right to counsel 
without speaking to attorneys. This report (1) reviews laws in 
15 States to determine juveniles' right to counsel; (2) 
determines how often juveniles obtain counsel in juvenile 
courts in three States; (3) determines the likely impact of 
counsel on juvenile justice outcomes; (4) determines whether 
juveniles who are in adult court have counsel; and (5) provides 
insights on the quality of counsel.
    b. Benefits.--In all 15 States reviewed by GAO, juveniles 
were guaranteed the right to counsel in delinquency 
proceedings. In cases where the juveniles could not provide 
counsel on their own, the States have provisions to provide and 
compensate counsel for them. Of the 15 States, 11 had laws 
allowing the waiver of counsel under certain circumstances but 
generally had rules to ensure that waivers were made only when 
juveniles were aware of their right and voluntarily gave up 
that right. In three other States juveniles can waive counsel 
even though the State statutes do not specifically address the 
waiver issue. In the remaining State, juveniles could not waive 
counsel. After analyzing three States, California, 
Pennsylvania, and Nebraska, GAO determined that overall 
representation varied from 97 and 91 percent in California and 
Pennsylvania, to 65 percent in Nebraska. The overall impact of 
representation on case outcomes varied according to the State 
and the offense category. In most cases, juveniles without 
representation were less likely to receive out-of-home 
placements (e.g., training school). Additionally, unrepresented 
juveniles were generally about as likely to have their cases 
adjudicated (i.e., judged to be a delinquent) than represented 
juveniles, but characteristics other than representation (e.g., 
detention prior to adjudication and prior offense History) were 
more strongly associated with placement decisions. GAO could 
not locate any data bases to determine if juveniles in adult 
court had counsel or to compare access to counsel for juveniles 
in adult and juvenile court. However, GAO's survey of 
prosecutors indicated that juveniles in adult and juvenile 
court were given the same opportunity as adults to be 
represented. Finally, the report gives a favorable assessment 
of the quality of counsel provided to juveniles.

24. ``U.S. Attorneys: More Accountability for Implementing Priority 
        Programs Is Desirable,'' June 1995, GAO/GGD-95-150.

    a. Summary.--U.S. attorneys litigate for the government in 
criminal and civil proceedings. They prosecute persons charged 
with violating Federal criminal law, represent the government 
in civil cases, and collect money and property owed to the 
government. In view of the independence and the discretion 
exercised by U.S. attorneys in determining which cases to 
prosecute and recent growth in the size and the cost of their 
operations, this report determines (1) how the Justice 
Department communicates national priorities to the U.S. 
attorneys; (2) how selected U.S. attorneys establish their 
priorities and coordinate them with law enforcement agencies in 
their districts; and (3) what, if any, measures Justice uses to 
assess U.S. attorneys' effectiveness in meeting national 
priorities.
    b. Benefits.--Justice did not have a specific process for 
communicating national law enforcement priorities over the past 
10 years. National priorities, on the other hand, were 
communicated through a variety of processes, such as Attorney 
General speeches, press conferences, budget memorandums, 
discussions at seminars and conferences, and testimony before 
Congress. Justice has moved toward setting more focused law 
enforcement policies and making a commitment to principles of 
strategic management and clear articulation of priorities, 
goals, and missions for U.S. attorneys. Seven out of eight U.S. 
attorneys GAO visited did not have formal processes to 
establish priorities and communicate them to law enforcement 
components in their districts. Instead, their priorities were 
set informally on the basis of the Attorney General's 
priorities, as well as on the crime problems and socioeconomic 
characteristics of their districts. The report concluded that 
the U.S. attorneys interviewed were satisfied with their input 
into the development of national priorities. Justice had no 
requirements for these U.S. attorneys to measure their own 
effectiveness. Instead, Justice's evaluation program was the 
primary means of assessing the activities of individual U.S. 
attorneys' offices. Finally, at the end of 1994, Justice was 
developing plans to implement the Government Performance and 
Results Act of 1993's requirements to measure performance.

25. ``INS: Information on Aliens Applying for Permanent Residence 
        Status,'' June 1995, GAO/GGD-95-162FS.

    a. Summary.--This fact sheet provides information on aliens 
applying to the Immigration and Naturalization Service (INS) to 
adjust their status to lawful permanent residents. Recent 
legislation allows aliens who entered without inspection, 
worked illegally, or overstayed their visas to apply for 
permanent resident status without leaving the country. GAO 
provides data on (1) the number of aliens applying for 
permanent resident status under the legislation; (2) revenue 
that has been received as a result of these aliens' 
applications; (3) denial rates for these applications; and (4) 
the impact of these applications on INS' workload.
    b. Benefits.--GAO concluded that from October 1, 1994, to 
February 24, 1995, 175,940 aliens applied for permanent 
resident status. During this same time period INS denied 8 
percent, or 6,983, of the applicants. The revenue generated 
from these applications totaled $61.7 million for the same time 
period. These applications resulted in an increased estimated 
processing time per application in many areas. To meet the 
increased workload, in April 1995, the Department of Justice 
notified Congress of a proposed reprogramming action that would 
provide INS additional resources to enhance its application 
processing capability.

26. ``Managing For Results: The Department of Justice's Initial Efforts 
        To Implement GPRA,'' June 1995, GAO/GGD-95-167FS.

    a. Summary.--The Government Performance and Results Act of 
1993 was intended to improve the effectiveness and the 
efficiency of Federal programs by establishing a system to set 
performance goals and measure results. This fact sheet reviews 
the Justice Department's implementation of the act. As GAO was 
systematically collecting information from each Justice 
component about its implementation of the act, the Department 
asked GAO to describe what it had found because this 
information had not been consolidated at Justice. This fact 
sheet provides information that addresses questions from the 
Departments's components to help them develop performance 
measures and discusses the processes used to develop the fiscal 
year 1996 exhibits, implementation questions and concerns, and 
performance measures used in the exhibits.
    b. Benefits.--GAO's review of the development of the 
Department's first performance measurement exhibits revealed 
that the components (1) used five general processes to develop 
the exhibits, four of these processes involved getting input 
from program staff; (2) had a variety of questions and concerns 
about implementing a performance measurement system regarding 
how the Office of Management and Budget (OMB) would analyze and 
use the performance data; and (3) developed a number of output 
and outcome measures for a variety of activities.

27. ``Foreign Assistance: African Development Foundation's Overhead 
        Costs Can Be Reduced,'' June 1995, GAO/NSIAD-95-79.

    a. Summary.--The African Development Foundation was created 
by Congress in 1980 as an independent public corporation to 
support local self-help initiatives of the poor in Africa. In 
response to congressional concerns about whether the Foundation 
has used its resources efficiently, GAO reviewed the 
Foundation's administrative and financial management practices. 
This report discusses whether the Foundation (1) used program 
funds for administrative expenses; (2) presented reliable data 
in its budget submissions to Congress; and (3) complied with 
financial reporting requirements.
    b. Benefits.--During the fiscal year 1994, the African 
Development Foundation (ADF) spent more of its budget for 
headquarters administrative expenses (about 28 percent) than 
other similar agencies spent for such costs. ADF's higher 
administrative expenses are a result of higher salaries and 
greater use of consultants and contractors than were budgeted 
to carry out headquarters functions. ADF's funds are 
appropriated as a lump sum and not earmarked for program or 
administrative use and as a result ADF is not bound by statute 
as to the amount it can spend for administrative overhead. The 
budgetary and cost data that ADF presented to Congress was not 
reliable. The data was based on unaudited financial statements 
and an accounting system that was not viable for audit. ADF has 
recently acknowledged the problem and taken steps to improve 
the quality of budget reporting. Finally, ADF did not meet the 
financial reporting, internal controls assessment, and budget 
report reconciliation requirements of the Government 
Corporation Control Act; however, it began steps in 1994 to do 
so.

28. ``Army National Guard: Combat Brigades' Ability To Be Ready for War 
        in 90 Days Is Uncertain,'' June 1995, GAO/NSIAD-95-91.

    a. Summary.--The end of the cold war and budgetary 
constraints have increased the military's reliance on Army 
National Guard combat brigades. Shortcomings revealed during 
the combat brigades' mobilization for the Persian Gulf War 
raised questions about the training strategies used and the 
time required to be ready to deploy. GAO found that recruitment 
and training problems make it unlikely that these units could 
meet a goal of combat readiness within 90 days of mobilization. 
This report discusses whether (1) the Bold Shift training 
strategy has enabled combat brigades to meet peacetime training 
goals; (2) the advisers assigned to the brigades are working 
effectively to improve training readiness; and (3) prospects of 
having the brigades ready for war within 90 days are likely.
    b. Benefits.--None of the seven brigades came close to 
achieving the training proficiency sought by the Bold Shift 
strategy during 1992 through 1994. The brigades were unable to 
recruit, retrain, and meet staffing goals, and many personnel 
were not sufficiently trained in their individual job and 
leadership skills. In addition, collective training was also 
problematic. For example, in 1993, combat platoons had mastered 
an average of just one-seventh of their mission-essential tasks 
and less than one-third of the battalions met gunnery goals. 
The new adviser program's efforts to improve training readiness 
have been limited by factors such as (1) an ambiguous 
definition of the advisers' role; (2) poor communication 
between the active Army, advisers, brigades, and other National 
Guard officials, causing confusion and disagreement over 
training goals; and (3) difficult working relationships. The 
poor relationship between the active Army and the State-run 
Guard, if not improved, could undermine prospects for 
significant improvement in the brigades' ability to conduct 
successful combat operations. Finally, GAO concluded that it is 
highly uncertain whether the Guard's mechanized infantry and 
armor brigades can be ready to deploy 90 days after 
mobilization. It is estimated that brigades would need between 
68 and 110 days before being ready to deploy.

29. ``Military Personnel: High Aggregate Personnel Levels Maintained 
        Throughout Drawdown,'' June 1995, GAO/NSIAD-95-97.

    a. Summary.--The largest military drawdown since the end of 
the Vietnam War is now about 80 percent complete. By the end of 
fiscal year 1999, the Defense Department will have reduced its 
military and civilian personnel by almost a third. GAO found 
that despite these substantial cuts, the military services 
generally kept more than 95 percent of their authorized 
positions filled throughout the drawdown. They also maintained 
high fill rates for most ranks and kept more than 90 percent of 
authorized positions filled in most military categories. The 
major area of concern was a continuing shortage of field grade 
officers, especially in the Army, where fill rates generally 
hovered between 80 and 85 percent. In addition to discussing 
the extent to which the services were able to fill authorized 
positions, this report discusses the factors contributing to 
the personnel shortage at selected U.S. installations and units 
and the factors that could lead to personnel shortages in the 
future.
    b. Benefits.--GAO reported that many factors contributing 
to personnel shortages at units and installations were directly 
related to the drawdown and could dissipate as the drawdown 
concludes. For example, not all personnel in units being 
withdrawn from Europe and not all those in units affected by 
United States base closure and realignment decisions were 
required to transfer with their units. This policy, as well as 
others, created shortages in some units and led to multiple 
personnel transfers. Other factors contributing to shortages 
were less directly related to the drawdown. For example, (1) 
personnel had to be transferred between units to meet the 
requirements of operations other than war; (2) military 
personnel had to be temporarily assigned to duties formerly 
handled by civilians whose positions were eliminated; and (3) 
scarce field grade officers had to be assigned to joint duty 
and reserve units before other operational positions could be 
filled.

30. ``Navy Torpedo Programs: MK-48 ADCAP Upgrades Not Adequately 
        Justified,'' June 1995, GAO/NSIAD-95-104.

    a. Summary.--As part of its ongoing work on Navy torpedo 
programs, GAO reviewed the Navy's plans to upgrade both the 
propulsion and the guidance and control systems of the MK-48 
Advanced Capability (ADCAP) torpedo. Because the program 
manager is seeking approval to begin low-rate initial 
production, this report discusses (1) the need for the 
propulsion system upgrade and (2) the appropriateness of 
approving low-rate initial production of the guidance and 
control system.
    b. Benefits.--GAO concluded that the $249 million upgrade 
to the ADCAP propulsion system is not needed. The technological 
improvement to be contributed by the propulsion upgrade, which 
is torpedo quieting, will neither improve the performance of 
the ADCAP nor reduce the vulnerability of the launching 
submarine to enemy attack. Moreover, the Operational Test and 
Evaluation Force (OPTEVFOR) already considers the current ADCAP 
operationally suitable and effective in shallow water, and the 
Navy did not establish a requirement to improve the ADCAP's 
propulsion system for use in open ocean deep water in its 
operational requirements document for the upgrade. GAO 
recommended that approval for the low-rate initial production 
for the guidance and control upgrade would be ill-advised at 
this time. Installing the new guidance and control unit will do 
nothing more to counter the existing threat than the current 
units until the new software is developed and installed. The 
software necessary to take advantage of the upgraded guidance 
and control hardware will not be ready until mid-1998. 
Therefore, upgrade acquisition would be better scheduled to 
coincide with the software development schedule. As currently 
planned, the Navy could buy as many as 529 units at a cost of 
$177 million before the new software will be available.

31. ``Space Station: Estimated Total U.S. Funding Requirements,'' June 
        1995, GAO/NSIAD-95-163.

    a. Summary.--The space station program was approved in the 
mid-1980's and has since been redesigned several times to meet 
decreasing budgets. NASA estimates that the International Space 
Station can be built and completely assembled in orbit by June 
2002. The International Space Station would provide more 
research capacity, support more crew, and cost less than prior 
space station configurations. NASA is currently planning a 10-
year operational life for the space station following 
completion of assembly.
    b. Benefits.--GAO estimates that it will cost about $94 
billion to design and launch the space station through 2012. 
Although the program has made great progress since last year in 
defining its requirements, meeting its schedule milestones, and 
remaining within its annual operating budgets, the program 
still faces formidable challenges in meeting all its goals on 
time and within budget. Moreover, low financial reserves 
through fiscal year 1997 could lead to cost overruns and force 
postponement of some activities. In addition, the space 
station's current launch and assembly schedule is ambitious, 
and the shuttle program may have difficulty supporting it. If 
the contractor is unable to negotiate subcontractor agreements 
for the expected price, the target cost for the prime contract 
could increase. NASA plans to complete an independent internal 
assessment of space station costs later this fiscal year.

32. ``Defense Management: Selection of Depot Maintenance Standard 
        System Not Based on Sufficient Analyses,'' July 1995, GAO/AIMD-
        95-110.

    a. Summary.--This report evaluates the Defense Department's 
(DOD) justification for developing and deploying the Depot 
Maintenance Standard System. DOD is developing the system to 
help streamline depot maintenance operations and manage 
resources more effectively at its repair depots. DOD spends 
about $13 billion annually to manufacture, overhaul, and repair 
equipment, such as airplanes, ships, and tanks, and repairable 
parts of this equipment, such as radios and engines. Congress 
has raised concerns that although DOD has spent billions of 
dollars for information technology during the past several 
years, DOD has not produced significant quality improvement, 
cost savings, and productivity gains in service operations. 
Congress required DOD to conduct a study to determine the best 
prototype depot maintenance system and directed GAO to assess 
the soundness of the study's conclusions. DOD, however, has not 
completed such a study. As a result, this report determines 
whether DOD had (1) based its selection of the system on 
convincing analyses of costs and benefits, as well as economic 
and technical risks, and (2) selected a strategy that would 
dramatically improve depot maintenance operations.
    b. Benefits.--GAO concluded that DOD did not base its 
decision to develop and implement the Depot Maintenance 
Standard System (DMSS) on sufficient analyses of costs and 
benefits or on detailed assessments of economic and technical 
risks. Also, DOD did not obtain project milestone reviews by 
the Major Automated Information System Review Council (MAISRC) 
and approvals from the Milestone Decision Authority (MDA). 
These reviews and approvals are designed to ensure that system 
development and implementation decisions are consistent with 
sound business practices and to better manage risks inherent in 
large information system projects. DOD is making a major 
investment, totaling more than $1 billion, to develop and 
deploy DMS, intended to incrementally improve depot maintenance 
processes and move toward a DOD-wide integrated corporate 
system. These improvements are intended to reduce depot 
maintenance operational costs by $2.6 billion or less than 2.3 
percent over a 10-year period. However, by focusing first on 
developing and deploying a standard depot maintenance 
information system designed to incrementally improve depot 
maintenance processes, DOD will not achieve any immediate 
dramatic cost reductions and may make future re-engineering 
efforts more difficult by entrenching inefficient and 
ineffective work processes.

33. ``Defense Communications: Management Problems Jeopardize DISN 
        Implementation,'' July 1995, GAO/AIMD-95-136.

    a. Summary.--The Department of Defense (DOD) initiated the 
Defense Information System Network (DISN) program in 1991 as a 
two-phase effort to improve its long-distance 
telecommunications services and reduce costs. DOD envisioned 
that in the near term, DISN would achieve these goals by 
consolidating and integrating about 100 existing communications 
networks into one network. For the long term, DISN would 
replace older telecommunications systems and use new technology 
and improved acquisition strategies to provide a more cost-
effective system. In addition to the DISN initiative, the 
General Services Administration (GSA) and the Interagency 
Management Council (IMC) in 1993 began planning a replacement 
for the Federal Telecommunications System (FTS) 2000 program, 
which provides the Federal Government's long-distance service. 
GAO in this report (1) assesses DISN's objectives, 
requirements, management plans, and implementation status, and 
(2) determines whether Defense has positioned itself to 
participate effectively in the government wide Post-FTS 2000 
program.
    b. Benefits.--Asked to review implementation of DISN, GAO 
found that DOD had not effectively planned and managed its DISN 
program. DOD spent more than $100 million during the past 3\1/
2\ years on DISN's planning, implementation, operation, and 
management. Despite this expenditure, DISN still lacks 
validated operational requirements, approved plans for network 
implementation, and guidelines needed to ensure efficient and 
effective end-to-end management of this important 
communications network. As a result, DOD's near-term DISN 
implementation more than 2 years behind schedule and DISN's 
objectives of improving DOD communications services and 
reducing costs are at risk. Rather than buy services from 
commercial providers through initiatives such as the Post-FTS 
2000 program, Defense currently intends to use the program 
primarily to obtain the communications bandwidth it needs to 
build its own private DISN network. GAO determined that by 
limiting its use of Post-FTS 2000 services, Defense risks 
spending hundreds of millions of dollars to establish, operate, 
and maintain redundant communications facilities and services 
that do not efficiently or effectively respond to its 
requirements.

34. ``Illegal Aliens: National Net Cost Estimates Vary Widely,'' July 
        1995, GAO/HEHS-95-133.

    a. Summary.--In recent years, public concern has grown 
about illegal aliens' use of public benefits and their overall 
cost to society. The three national studies that GAO reviewed 
represent the initial efforts of researchers to estimate the 
total public fiscal impact of illegal aliens. The limited data 
available makes it hard to develop reasonable estimates on such 
a broad subject. Moreover, the national studies varied 
considerably in the range of items they included and their 
treatment of some items, making their estimates difficult to 
compare. As a result, a great deal of uncertainty remains about 
the national fiscal impact of illegal aliens. Obtaining better 
data on the illegal alien population would help improve the 
national net cost estimates. Such data should focus on 
characteristics of illegal aliens, such as geographic 
distribution, age distribution, income distribution, labor 
force participation rate, tax compliance rate, and school 
participation, that are helpful in estimating the largest net 
cost items. Clearer explanations of which costs and revenues 
are appropriate to include would also help improve the 
usefulness of the estimates. The expert panel convened by the 
U.S. Commission on Immigration Reform could serve as a forum 
for discussing some of these data and conceptual issues.
    b. Benefits.--All three national studies concluded that 
illegal aliens in the United States generate more in costs than 
revenues to Federal, State, and local governments combined. 
However, the studies varied considerably in the range of costs 
and revenues they included and their treatment of certain 
items, making them difficult to compare. Thus, a great deal of 
uncertainty remains about the actual national fiscal impact of 
illegal aliens.

35. ``Federal Criminal Justice: Cost of Providing Court-Appointed 
        Attorneys Is Rising, but Causes Are Unclear,'' July 1995, GAO/
        GGD-95-182.

    a. Summary.--The Criminal Justice Act of 1964 required the 
Federal judiciary to provide for the legal representation of 
eligible Federal criminal defendants who were financially 
unable to afford their own attorneys. In response, the Federal 
judiciary created the Federal Defender Services program. This 
program provides legal services for eligible defendants through 
a mixed system, which includes 45 Federal Public Defender 
Organizations (FPF's), 10 Community Defender Organizations 
(CDO's), private ``panel'' attorneys chosen from a list or 
maintained by the district courts. As of August 1993, 85 
percent of all criminal cases prosecuted in Federal courts 
required court-appointed legal counsel. This report (1) reviews 
several issues related to cost growth and the workload at the 
Federal Defender Services program, which provides legal counsel 
for those who cannot afford attorneys, and (2) determines 
whether Death Penalty Resource Centers (DPRC) have reduced 
Federal costs for representing indigent defendants in death 
penalty cases.
    b. Benefits.--The Administrative Office of the U.S. Courts 
maintains that the overall Defender Services workload has grown 
and costs have increased because criminal cases, especially 
drug cases, involve more defendants; more persons are defended 
by court-appointed attorneys; more defendants are being tried 
in Federal courts; and the costs are more complex, principally 
because of changes in Federal sentencing guidelines and 
mandatory minimum-sentencing statutes. Although each of these 
factors may have had some effect, inadequate data prevented GAO 
from determining to what extent these factors individually or 
collectively accounted for the doubling of program costs or the 
tripling of DPRC costs from fiscal years 1990 through 1993. 
Death Penalty Resource Centers (DPRC) have reduced Federal 
costs for representing indigent defendants in death penalty 
cases. This is exemplified with the average DPRC cost per 
representation at $17,200, while the average panel attorney 
cost per representation is $37,000. However, DPRC costs have 
increased because more DPRC's have been created, more death 
penalty cases are in the courts, and the cases are becoming 
more complex.

36. ``Depot Maintenance: Some Funds Intended for Maintenance Are Used 
        for Other Purposes,'' July 1995, GAO/NSIAD-95-124.

    a. Summary.--During the past several years, Congress and 
military officials have expressed concern about the adequacy of 
the depot maintenance funding levels and the adverse effect on 
readiness resulting from growing maintenance backlogs. This 
report (1) determines the services' processes for deciding 
which end items of equipment will be overhauled; (2) compares 
the depot maintenance funding received by the military services 
from Congress with the amounts requested by the service; and 
(3) assesses the services' management of maintenance backlogs 
and the impact of depot maintenance backlogs on readiness.
    b. Benefits.--GAO determined that the services use such 
measurements as hours of usage/operations, mileage, engineered 
standards, historical data, and inspection results to identify 
end items of equipment that qualify for depot maintenance. The 
services then assess the candidates in terms of the depots' 
ability to perform the maintenance and the anticipated 
availability of funds. A comparison of the amount of depot 
maintenance work executed to the amount of funds requested and 
received shows that for fiscal years 1993 and 1994, the amount 
of depot maintenance accomplished by the services was about 
$485 million less than the amount requested and about $832 
million less than the amount received. The depot maintenance 
funds not used for depot maintenance were used for military 
contingencies and other O&M expenditures such as real property 
maintenance base operations. The depot maintenance backlogs at 
the time the services submit their budget requests to the 
Congress tend to decrease during the year of budget execution. 
These decreases are a result of the services' reducing the 
requirements for items requiring depot maintenance. According 
to service officials, the depot maintenance backlogs are 
manageable, represent an acceptable minimal level of risk, and 
have not yet adversely affected equipment operational readiness 
rates. The service officials attribute the lack of adverse 
effects to funding levels; the levels of depot maintenance 
execution; and the reductions to the force levels, which have 
made more equipment available to the remaining forces.

37. ``Defense Contracting: Contractor Claims for Legal Costs Associated 
        With Stockholder Lawsuits,'' July 1995, GAO/NSIAD-95-166.

    a. Summary.--In response to a congressional request, GAO 
asked the Defense Contract Audit Agency (DCAA) for its views on 
allowing the reimbursement of legal costs resulting from 
stockholder derivative lawsuits associated with defense 
contractor wrongdoing. The Major Fraud Act of 1988 and the 
Federal Acquisition Regulation (FAR) addresses the 
allowableness of defense contractors' legal fees and other 
proceeding costs related to litigation with the Federal 
Government. However, neither the act nor the FAR expressly 
addresses the allowableness of legal costs associated with 
stockholder derivative lawsuits based on prior corporate 
wrongdoing. DCAA performs contract audit functions for the 
Department of Defense (DOD) and provides accounting and 
financial advisory services to DOD components responsible for 
procurement and contract administration. In addition, DCAA 
audits costs and makes recommendations regarding the 
allowableness of cost claimed or proposed by contractors. This 
report includes information on (1) defense procurement fraud 
cases; (2) Defense Contract Audit Agency's (DCAA) policy on the 
allowableness of legal fees associated with stockholder 
derivative lawsuits; and (3) the number of stockholder lawsuits 
associated with defense contractor wrongdoing.
    b. Benefits.--DCAA responded that the Federal Acquisition 
Regulation (FAR) contained no cost principle dealing 
specifically with the allowableness of legal fees associated 
with defending against stockholder derivative lawsuits. DCAA 
concluded, however, that such costs were unallowable under the 
FAR cost principle on reasonableness of costs when the lawsuit 
was based on contractor wrongdoing. As a result, DCAA issued 
audit guidance in April 1995 that specifically dealt with these 
costs. From October 1988 through December 1994, 72 cases arose 
involving procurement fraud associated with firms on the 
Defense Department's Top 100 Contractors list. It is not 
apparent, however, that claiming reimbursement for stockholder 
derivative legal costs is a common practice.

38. ``Space Shuttle: Declining Budget and Tight Schedule Could 
        Jeopardize Space Station Support,'' July 1995, GAO/NSIAD-95-
        171.

    a. Summary.--NASA plans to use the space shuttle on 21 
flights during a 5-year period to transport station components 
into orbit for assembling the space station. The shuttle is 
necessary because it is the only U.S. launch vehicle capable of 
carrying humans into space. As a result, the shuttle will have 
to be substantially redesigned to gain additional lift 
capability. At times, only two of the four shuttles will be 
available for station assembly. One shuttle, Columbia, cannot 
provide adequate lift and one of the remaining shuttles will be 
undergoing scheduled maintenance during some portions of the 
assembly schedule. The space station has been redesigned in 
March 1993, and is now called the International Space Station 
because it combines the efforts of Europe, Japan, Canada, 
Russia, and the United States.
    b. Benefits.--NASA's plans for increasing the shuttle's 
lift capability are complex and challenging, involving about 30 
separate steps, including hardware redesigns, improved 
navigational or flight design techniques, and new operational 
procedures. Further difficulties are possible. NASA's schedule 
for meeting the space station's launch requirements appear 
questionable--particularly during a period of shrinking 
budgets. Delays in the launch schedule could substantially 
boost the space station's cost. Under the shuttle's 
modification and launch enhancement program, NASA will defer 
some recertification activities and will forgo full integration 
testing of the propulsion system. NASA plans to assess the 
implications of the design changes through a combination of 
tanking and component tests and systems analysis. Because of 
the magnitude and the complexity of the shuttle enhancement 
program, GAO urges additional measures to ensure that (1) the 
implications of integrating many individual design changes are 
fully understood and (2) safety is not compromised.

39. ``Law Enforcement Support Center: Name-Based Systems Limit Ability 
        To Identify Arrested Aliens,'' August 1995, GAO/AIMD-95-147.

    a. Summary.--Identifying persons arrested for aggravated 
felonies as aliens is critical to joint efforts by the 
Immigration and Naturalization Service (INS) and local law 
enforcement agencies to prevent the release of these persons 
before INS can take action. To meet this requirement, INS 
established the Law Enforcement Support Center (LESC), whose 
pilot operations began in July 1994. When individuals arrested 
for aggravated felonies identify themselves as being foreign-
born, the local law enforcement agency (LEA) sends a request to 
LESC to determine whether these individuals are aliens and, 
thus, possibly subject to deportation. This report discusses 
whether (1) LESC, using the INS name-based data bases, can 
identify individuals arrested for aggravated felonies as 
aliens; (2) other INS initiatives will allow identification of 
aliens arrested for aggravated felonies; and (3) criminal alien 
information in two of INS' data bases is complete and accurate.
    b. Benefits.--GAO determined that INS dependance on LESC 
for providing identification of aliens who were arrested for 
aggravated felonies is inherently limited by the name-based 
systems that it depends upon. Until INS successfully implements 
a system that identifies persons on the basis of biometric 
information, such as fingerprints, the INS planned move to an 
automated fingerprint data base is intended to address the need 
for better ways to identify persons who will be processed for 
either enforcement or benefit purposes. Further, accurate and 
complete criminal alien data in INS' Deportable Alien Control 
System and the Central Index System are essential. Unless INS 
data reliability problems are resolved, INS risks making 
decisions on the basis of inaccurate and incomplete 
information.

40. ``Juvenile Justice: Juveniles Processed in Criminal Court and Case 
        Depositions,'' August 1995, GAO/GGD-95-170.

    a. Summary.--According to the Justice Department, juveniles 
are committing increasing numbers of serious crimes, such as 
murder and aggravated assaults. The number of juvenile court 
cases involving these offenses rose 68 percent from 1988 to 
1992. Each State has at least one of three methods--judicial 
waiver, prosecutor direct filing, and statutory exclusion 
(State laws requiring the transfer of juveniles for some 
crimes)--available for transferring juveniles to criminal 
court. In recent years, many States have changed their laws to 
expand the criteria under which juveniles may be sent to 
criminal court. This report discusses (1) the frequency with 
which juveniles have been sent to criminal court; (2) the 
juvenile conviction rates and sentences in criminal court; (3) 
the dispositions of juvenile cases in juvenile court; and (4) 
the conditions of confinement for juveniles held in adult 
prisons.
    b. Benefits.--GAO's analysis of nationwide estimates from 
the National Center for Juvenile Justice (NCJJ) showed that 
juvenile court judges transferred to criminal court less than 2 
percent of juvenile delinquency cases that were filed in 
juvenile court from 1988 to 1992. According to the Bureau of 
Justice Statistics' 1989 and 1990 Offender Based Transaction 
Statistics (OBTS) data from seven States, conviction rates of 
juveniles prosecuted in criminal court for serious violent, 
serious property, and drug offenses varied within and among 
States. The incarceration rates varied dramatically from 3 
percent in California to 50 percent in Vermont. Additionally, 
many juveniles were placed on probation in juvenile court. For 
example, in 1992, juveniles in 43 percent of approximately 
744,000 formal delinquency cases were placed on probation. Of 
the remaining 57 percent of juvenile cases, 27 percent were 
dismissed, and 17 percent of the juveniles were placed in a 
residential treatment program, and 12 percent of them received 
some other disposition such as restitution, fines, or community 
service. About 1 percent were transferred to criminal court. In 
the four States that GAO visited, juveniles sentenced to adult 
prisons generally were to be subject to the same policies and 
procedures as adults; however, in three of the four States 
visited, younger inmates were housed in separated prisons. At 
all facilities, juveniles generally were to be provided with 
the same health services; afforded the same educational, 
vocational, and work opportunities and provided access to the 
same recreational facilities as older inmates.

41. ``Defense Restructuring Costs: Payment Regulations Are Inconsistent 
        With Legislation,'' August 1995, GAO/NSIAD-95-106.

    a. Summary.--Section 818 of the National Defense 
Authorization Act for Fiscal Year 1995 governs payments made by 
the Defense Department (DOD) to contractors for costs 
associated with business combinations, including mergers and 
acquisitions. Normally, after a business combination, a new 
company will undertake restructuring activities, such as 
closing plants, eliminating jobs, and relocating workers. 
Section 818 prohibits payment of restructuring costs until DOD 
officials certify that projected savings from the business 
combination are based on audited cost data and should reduce 
costs to DOD. Section 818 also requires the Secretary of 
Defense to report annually on DOD experience with business 
combinations, including whether savings associated with each 
restructuring actually exceed costs. In response to section 818 
requirements, DOD issued interim regulations on restructuring 
costs effective December 29, 1994. This report reviews the 
regulations to determine whether they (1) are consistent with 
section 818, applicable procurement laws, and the Federal 
Acquisition Regulation (FAR) and (2) ensure that restructuring 
costs are paid only when in the best interests of the United 
States.
    b. Benefits.--DOD regulations do not comply with section 
818 requirements because all restructuring costs associated 
with defense contractor business combinations, for which 
contractors may be reimbursed, will not be subject to the 
section's certification requirements. By excluding some 
restructuring costs that should be subject to section 818 
certification requirements, DOD cannot ensure that payment of 
these costs are made only when in the best interests of the 
United States. Further, the regulations cannot ensure that DOD 
will be able to meet the section's annual reporting 
requirements to Congress. Moreover, DOD plans to pay 
restructuring costs up to the amount of savings projected to 
result from a business combination, which would result in the 
payment of those costs without significant projected savings to 
DOD.

42. ``Military Bases: Case Studies on Selected Bases Closed in 1988 and 
        1991,'' August 1995, GAO/NSIAD-95-139.

    a. Summary.--As part of an earlier review of 37 bases 
closed by the first two base realignment and closure rounds, 
GAO reported in late 1994 on expected revenues from land sales, 
resources requested from the Federal Government, and issues 
delaying reuse planning. GAO collected more information on 
reuse planning and implementation at the 37 bases. This report 
provides updated summaries on the planned disposal and reuse of 
properties, successful conversions, problems that delayed 
planning and implementation, and assistance provided to 
communities. GAO also profiles each of the 37 installations.
    b. Benefits.--Under current plans, over half of the land 
will be retained by the Federal Government because it (1) is 
contaminated with unexploded ordinance; (2) has been retained 
by decisions made by the base realignment and closure 
commissions or by legislation; or (3) is needed by Federal 
agencies. Most of the remaining land will be requested by local 
reuse authorities under various public benefit transfer 
authorities or the new economic development conveyance 
authority. Further, reuse efforts by numerous communities are 
yielding successful results. Military airfields are being 
converted to civilian airports, educational institutions are 
being established in former military facilities, and wildlife 
habitats are being created that meet wildlife preservation 
goals while reducing the Department of Defense's environmental 
cleanup costs. However, some communities are experiencing 
delays in reuse planning and implementation. This is due to 
failure within the local communities to agree on reuse issues, 
developments of reuse plans with unrealistic expectations, and 
environmental cleanup requirements. In order to help alleviate 
some of these problems the Federal Government has made 
available over $350 million in direct financial assistance to 
communities. In addition, DOD's Office of Economic Adjustment 
has provided reuse planning grants, the Department of Labor has 
provided job training grants, and the Federal Aviation 
Administration has awarded airport planning and implementation 
grants.

43. ``Inventory Management: DOD Can Build on Progress in Using Best 
        Practices To Achieve Substantial Savings,'' August 1995, GAO/
        NSIAD-95-142.

    a. Summary.--In a series of five recent reports, GAO 
discussed the Defense Department's (DOD) efforts to adopt 
modern logistics practices to better manage its $22 billion in 
inventory of consumable items, such as food, clothing, and 
industrial supplies. As of September 1994, consumable items 
accounted for only 29 percent of DOD's $74 billion in secondary 
inventory value, but for 88 percent of the total items. This 
report discusses (1) the extent to which DOD has adopted the 
specific practices that GAO recommended for consumable items; 
(2) the savings and benefits being achieved through the use of 
these practices; and (3) DOD's overall progress in improving 
consumable item management.
    b. Benefits.--While DOD has taken steps to improve its 
logistics practices and reduce consumable inventories, it could 
do more to achieve substantial savings. DOD can make the most 
improvements with hardware items because it continues to store 
large amounts of items (such as bolts, valves, and fuses) that 
cost millions of dollars to manage and store. DOD's inventories 
of hardware items existing in 1992 are expected to decrease 
only 20 percent by 1997. In contrast, private sector companies, 
have reduced similar inventories by as much as 80 percent and 
saved millions in associated costs by using ``supplier parks'' 
and other techniques that give established commercial 
distribution networks the responsibility to manage, store, and 
distribute inventory on a frequent and regular basis directly 
to end-users. If DOD were to adopt these innovative commercial 
practices, hardware inventories and related management costs 
could be significantly reduced. However, DOD has taken steps 
that use prime vendors to supply personnel items directly to 
military facilities. By 1997, with the expanded use of prime 
vendors and by eliminating obsolete and unnecessary items, DOD 
expects to reduce personnel (medical, food, and clothing) item 
inventories 53 percent from 1992 levels. DOD's most successful 
program to date uses prime vendors at approximately 150 
military medical facilities, which has reduced overall 
wholesale pharmaceutical inventories by $48.6 million and has 
achieved inventory reductions and cost savings at medical 
facilities. Finally, if DOD took similar steps with its prime 
vendor program and consistently applied it within each service, 
the current savings could be significantly increased.

44. ``U.S.-Japan Cooperative Development: Progress on the FS-X Program 
        Enhances Japanese Aerospace Capabilities,'' August 1995, GAO/
        NSIAD-95-145.

    a. Summary.--In 1988, the United States and Japan agreed to 
cooperatively develop the FS-X fighter plane, which is a 
significantly modified derivative of the United States Air 
Force's F-16 Block 40 fighter aircraft. Congress has been 
concerned about the transfer of United States technology to 
Japan through the FS-X program and whether the program will 
provide the United States with useful technology. As a result, 
Congress requested that GAO monitor and periodically report on 
the implementation of the FS-X program. This report examines 
(1) the program's status; (2) United States Government and 
contractor controls over technical data and hardware provided 
to Japan for the program; (3) the transfer of program 
technology from Japan to the United States; and (4) the 
benefits that the program has provided to the Japanese and 
United States aerospace industries.
    b. Benefits.--The FS-X development program entered the 
prototype production phase in April 1993. The first prototype 
flight is currently scheduled for late summer 1995, a delay of 
about 2 years from earlier estimates. The adequacy of United 
States Controls of the transfer of technology and hardware to 
Japan has varied. Japan is obtaining F-16 technical data from 
the United States Air Force, as well as, technologies and FS-X 
subsystem items from United States companies under export 
licenses. However, there is inadequate sharing of licensing 
information among U.S. Government entities on these and related 
exports to ensure (1) compliance with DOD releasability 
guidelines or (2) that FS-X items are properly categorized as 
derived or non-derived. On the other hand, the United States 
has gained more access to Japanese FS-X technologies since 
GAO's June 1992 FS-X review, although some issues remain 
unresolved. Further, Japan has been reluctant to transfer data 
for certain systems to the United States and is seeking to 
limit technology transfer to the United States for those 
systems by reclassifying them as non-derived. Finally, no one 
currently knows what benefits, if any, Japanese technologies 
will provide to the United States. United States officials 
believe that better coordination between United States defense 
contractors is necessary to effectively evaluate and apply 
Japanese FS-X technologies.

45. ``Poland: Economic Restructuring and Donor Assistance,'' August 
        1995, GAO/NSIAD-95-150.

    a. Summary.--Since the reform process began in central and 
eastern Europe in 1989, Poland has undertaken some of the most 
dramatic economic reforms in the region. Although the United 
States now has assistance programs in several central and east 
European countries, Poland has received the largest share of 
that assistance. This report (1) assesses the status and the 
progress of the country's economic restructuring in the key 
areas of macroeconomic stabilization, foreign trade and 
investment, privatization, and banking; (2) discusses the role 
that donors have played in the transformation process; and (3) 
identifies lessons learned that could be useful to other 
transition countries.
    b. Benefits.--Poland has made substantial progress in 
stabilizing and restructuring its economy. The International 
Monetary Fund and other major donors played an important role 
in the early stages of the reform process by requiring Poland 
to adopt tough macroeconomic reforms in return for receiving 
substantial donor assistance. Although Poland's own efforts to 
implement tough reform measures and apply consistent 
macroeconomic policy over several years have been the critical 
factors in the country's economic recovery. Further, Poland has 
achieved significant increases in its exports to the West and a 
number of foreign companies have recently made significant 
investments in Poland. However, trade barriers hamper Poland's 
exports of certain products to the European Union, and a number 
of internal obstacles continue to impede foreign investment. 
Donor assistance has had only a marginal impact in facilitating 
trade and investment. In moving toward privatizing its economy, 
Poland's progress has been mixed. The country's economic 
reforms have resulted in a rapidly growing private sector, but 
significant portions of the Polish economy remain in the hands 
of the government. Continuing, Poland has fundamentally 
reformed its banking sector, but several major problems remain, 
including delays in bank privatization, unclear policies 
regarding the licensing of foreign banks, inadequate banking 
expertise and bank supervision skills. Donors have provided key 
financial support for recapitalizing Poland's state-owned banks 
and restructuring their problem loan portfolios. However, 
despite the progress that has been made, Poland is still 
struggling to overcome relatively high rates of inflation and 
unemployment. Poland's transition experience offers a number of 
lessons that merit consideration by countries such as Russia, 
Ukraine, and others not as far along the reform path as Poland. 
These lessons suggest that while donor assistance can be 
important in supporting economic restructuring efforts in 
certain key areas, the ultimate success or failure of such 
efforts is far more dependent upon the actions of the 
transition country than it is upon those of outside 
participants.

46. ``Financial Audit: Expenditures by Six Independent Counsels for the 
        Six Months Ended March 31, 1995,'' September 1995, GAO/AIMD-95-
        223.

    a. Summary.--This report presents the results of GAO's 
audit of expenditures reported by six independent counsels for 
the 6 months ended March 31, 1995, as well as, the 
consideration of the internal control structure for this audit 
period. The internal controls of the independent counsels were 
tested with regard to safeguarding assets against loss from 
unauthorized use or disposition, assuring the execution of 
transactions in accordance with management authority, laws, and 
regulations; and properly recording, processing, and 
summarizing transactions to permit the preparation of 
expenditure statements in accordance with the applicable basis 
of accounting. GAO also discusses the evaluation of the 
counsels' compliance with laws and regulations for the 6 months 
ending on March 31, 1995.
    b. Benefits.--GAO found that the statements of expenditures 
for independent counsels Arlin M. Adams, Joseph E. DiGenova, 
Robert B. Fiske, Jr., Donald C. Smaltz, Kenneth W. Starr, and 
Lawrence E. Walsh were reliable in all material respects. 
However, GAO also did limited tests of internal controls and 
discovered a material weakness in internal controls over 
reporting of expenditures. A material weakness is a condition 
in which the design or operation of one or more of the internal 
control structure elements does not reduce to a relatively low 
risk that errors or irregularities in amounts that would be 
material to the expenditure statements and may not be detected 
promptly by employees in the normal course of their duties. 
GAO's audit tests for compliance with selected provisions of 
laws and regulations disclosed no instances of noncompliance 
that would be reportable under generally accepted government 
auditing standards.

47. ``Foreign Direct Investment: Review of Commerce Department Reports 
        and Data-Sharing Activities,'' September 1995, GAO/GGD-95-242.

    a. Summary.--This is GAO's final report on the Secretary of 
Commerce's first three annual reports on foreign direct 
investment in the United States. GAO: (1) assesses the extent 
to which Commerce's second and third reports--issued in 1993 
and 1995--fulfilled their requirements under the law and 
responded to recommendations made in a 1992 GAO report; (2) 
reviews the process by which Federal agencies collect data on 
foreign direct investment; (3) reviews the status and processes 
of the data exchanges, or links, initiated by the Financial 
Data Improvements Act of 1990 between the Commerce Department's 
Bureau of Economic Analysis and the Labor Department's Bureau 
of Labor Statistics; and (4) evaluates the extent to which 
implementation of the act has improved public information on 
foreign direct investment in the United States.
    b. Benefits.--The 1993 and 1995 reports included discussion 
of all the data requirements of the 1990 act for which data 
exists, and responded to the recommendations in our 1992 
report. In addition, GAO found that the two reports adequately 
presented the Commerce Department's analysis and findings. 
Overall, the Commerce reports' analyses and conclusions 
relating to the effects of foreign direct investment in the 
United States (FDIUS) on the U.S. economy were thorough and 
reasonable. The U.S. Government collects data on foreign 
investment principally through the Commerce Department. The 
Commerce Department's Bureau of Economic Analysis (BEA) obtains 
information on (FDIUS) through four survey questionnaires that 
require U.S. affiliates of foreign firms to report on a wide 
range of financial and operating data. The BEA-census and the 
BEA-Bureau of Labor Statistics (BLS) data-sharing efforts, 
initiated by the 1990 act, have generated data on U.S. 
affiliates of foreign firms at a greater level of industry 
specificity than was previously available. This data has 
enabled Commerce to provide a richer description of U.S. 
affiliates' activities and to draw more meaningful comparisons 
between their operations and those of other U.S. firms without 
imposing their burdens on survey respondents. The Commerce 
Department's FDIUS reports and the data-sharing activities 
between BEA, Census, and BLS have largely fulfilled the purpose 
of the 1990 act by improving the quality and quantity of 
Federal Government data on FDIUS.

48. ``Combat Identification Systems: Changes Needed in Management Plans 
        and Structure,'' September 1995, GAO/NSIAD-95-153.

    a. Summary.--The military services are pursuing a number of 
solutions that should help reduce the occurrence of friendly 
fire incidents. One class of systems being pursued under Army 
and Navy led efforts are cooperative identification of friend 
or foe (IFF) question and answer (Q&A) systems. Because the 
services are approaching major decision points in the 
acquisition process for these systems, GAO reviewed their 
management plans and structures for cooperative IFF Q&A systems 
development and integration.
    b. Benefits.--The Army and the Navy have failed to fully 
consider how to integrate their independently developed systems 
to identify friend from foe on the battlefield and thus reduce 
fratricide incidents. Moreover, these systems, which could cost 
more than $4 billion, are limited to identifying ``friends'' 
equipped with compatible identification systems. GAO recently 
learned that the Army plans to acquire more near-term 
millimeter wave cooperative identification systems without 
analyzing whether the system can be integrated into the mid- 
and long-term solutions--as GAO recommended in an October 1993 
report. The Army plans to acquire another 115 near-term systems 
at a cost of nearly $24 million. The Defense Department and the 
Army are concerned about the affordability and cost-
effectiveness of the near-term system, and it may never be 
fully fielded for these reasons. The Army's plan risks wasting 
millions of dollars on a system that may never be procured.

49. ``Aircraft Requirements: Air Force and Navy Need To Establish 
        Realistic Criteria for Backup Aircraft,'' September 1995, GAO/
        NSIAD-95-180.

    a. Summary.--Since 1977, many audits by the Defense 
Department (DOD) and GAO have pointed out that the military 
services overstate the number of backup fighter and attack 
aircraft needed for training, test, and evaluation, and to 
replace combat aircraft that are lost through attrition or are 
being repaired. At the end of fiscal year 1993, the Air Force 
and the Navy/Marine Corps maintained nearly 3,000 fighter and 
attack aircraft and about 1,600 similar, equally capable backup 
planes. In response to congressional concerns that backup 
forces are not efficiently managed and that this had adversely 
affected funds available for combat forces, this report 
identifies (1) trends in the number of backup aircraft 
maintained by the services; (2) steps that the military has 
taken in response to recommendations made by GAO and others to 
validate backup aircraft requirements; and (3) opportunities to 
remove unneeded backup aircraft from the force to minimize the 
cost of operating and maintaining combat aircraft.
    b. Benefits.--The Air Force and the Navy/Marine Corps 
operate and maintain about one backup aircraft for every two 
combat-designated fighter/attack aircraft. The Air Force's and 
the Navy/Marine Corps' plans to reduce the size of the combat-
designated aircraft forces will, if implemented, essentially 
achieve the bottom-up review's force level goals by the end of 
the fiscal year 1996. Backup forces will also be reduced but 
will still make up about one-third of all fighter/attack 
aircraft operated and maintained by the services. The Air Force 
has not developed supportable criteria for structuring and 
managing the backup forces and justifying the procurement of 
backup aircraft. The Navy/Marine Corps have begun to revise 
their criteria. Realistic criteria is essential because both 
the Air Force and the Navy plan to buy expensive new aircraft 
systems in the near future--the F-22 and the F/A-18E/F, 
respectively. If realistic criteria for backup aircraft are not 
established soon, the Air Force and the Navy could buy more 
aircraft than needed. Finally, if attrition aircraft in excess 
of short-term needs were stored until needed, the Air Force 
could reduce operation and maintenance costs.

50. ``Weapons of Mass Destruction: DOD Reporting on Cooperative Threat 
        Reduction Assistance Can Be Improved,'' September 1995, GAO/
        NSIAD-95-191.

    a. Summary.--In 1991, Congress authorized the Defense 
Department to help the former Soviet Union (1) destroy nuclear, 
chemical, and other weapons of mass destruction; (2) transport, 
store, and safeguard such weapons in connection with their 
destruction; and (3) prevent the proliferation of such weapons. 
Under the Cooperative Threat Reduction program, DOD manages 
various projects to help Balarus, Kazakhstan, Russia, and 
Ukraine--the four republics that inherited the former Soviet 
Union's weapons of mass destruction. This report examines 
whether DOD had (1) made progress in auditing and examining 
program aid; (2) listed its planned audit and examination 
efforts to be carried out during fiscal year 1995; (3) compiled 
a list describing the current location and condition of program 
assistance; and (4) provided a basis for determining whether 
the assistance was being used for the purposes intended.
    b. Benefits.--DOD made some progress in the Cooperative 
Threat Reduction (CTR) program's first year of audit and 
examination activities. DOD has worked to resolve recipient 
nations' concerns over audit and examination implementing 
procedures; conducted five audits at sites in three countries 
as of July 1995, and planned an audit every month of other CTR-
provided assistance through the end of the fiscal year 1995.
    However, in reviewing DOD's report to Congress, GAO found 
the following shortcomings:
    (1) The report does not fully represent all of DOD's audit 
and examination activities for the fiscal year 1995, as 
required, and does not describe how DOD plans such activities.
    (2) The report does not describe the condition of the 
assistance, as required, and contains outdated and inaccurate 
listings of CTR assistance deliveries. While the report is 
dated January 5, 1995, it was not issued until May 31, 1995. 
Moreover, the list of CTR deliveries that the report includes 
is dated February 2, 1995. After that date and through May 
1995, DOD delivered CTR aid worth over $38 million.
    (3) The limited number of projects DOD reviewed raises 
questions about the basis for DOD's programwide determination 
that CTR assistance--with one classified exception--has been 
accounted for and used for its intended purpose. According to 
DOD's report, this determination was based on information on 9 
of the 23 projects for which CTR-provided assistance was being 
used. Of these nine projects, only three had actually been 
audited. Other sources of information for the projects included 
random observations by U.S. technical teams, recipient-provided 
data, and national technical means.

51. ``Unexploded Ordinance: A Coordinated Approach To Detection and 
        Clearance Is Needed,'' September 1995, GAO/NSIAD-95-197.

    a. Summary.--Inexpensive improvements in mine design; the 
unique challenges posed by clearing large areas, such as 
farmland, in Third World countries; and the difficulty of 
controlling the proliferation of antipersonnel landmines have 
thwarted U.S. technological efforts to detect and clear 
unexploded ordinance, which kills an estimated 30,000 people 
around the world each year. Many of the victims are civilians, 
including children, who are killed years after hostilities have 
ceased. This report reviews the extent of ordinance problems. 
GAO (1) reviews the extent to which the Defense Department's 
and other agency's requirements and associated research and 
development could be applied to clearance problems elsewhere in 
the world; (2) assesses the ability of existing or foreseeable 
technologies to detect and clear landmines and other unexploded 
ordnance (UXO); and (3) identifies barriers that could impede 
the progress or output of this technology.
    b. Benefits.--U.S. research and development for UXO 
detection and clearance technology are broader today than they 
were during the cold war years and thus have more in common 
with the worldwide problem. With the dissolution of the Soviet 
Union, United States requirements have evolved that have more 
in common with area clearance than ``breaching'' or making 
paths through minefields during combat. These new requirements 
include clearing (1) U.S. military sites of UXO and other 
hazards, and (2) areas and roads needed for conducting 
operations other than war, such as peacekeeping. Such broader 
requirements make it likely that research and development 
sponsored by DOD will have more direct application to the 
clearance problems faced by Third World countries. The 
technologies available today to clear wide areas are inadequate 
and cannot keep pace with the number of landmines being 
emplaced annually. For example, the United Nations estimated 
that in 1993, 2.5 million mines were emplaced, while only 
80,000 were removed. The most effective techniques, such as 
hand-held probes and metal detectors, are time-consuming, 
expensive, and labor-intensive. While heavy mine clearing 
equipment, such as plows, are suited to breaching paths, it is 
not practical for clearing large areas. Several factors limit 
the potential output from U.S. investment in technologies 
related to the detection and clearance of landmines and other 
forms of UXO. For one, there is no overarching, government wide 
strategy or organization that exists to ensure that the most is 
gained from these various efforts. Moreover, it is difficult to 
estimate if the level of funding for applicable technologies is 
sufficient. Other barriers to technical solutions include the 
relative ease with which inexpensive improvements in mine 
designs have outstripped detection and clearance methods, the 
unique area clearance challenges Third World countries pose, 
and the difficulty of controlling the proliferation of 
antipersonnel landmines.

52. ``1996 DOD Budget: Potential Reductions to Operation and 
        Maintenance Programs,'' September 1995, GAO/NSIAD-95-200BR.

    a. Summary.--This report evaluates the military services' 
and Department of Defense's (DOD) fiscal year 1996 operation 
and maintenance (O&M) budget requests totaling $70.3 billion. 
GAO reviewed selected O&M accounts for U.S. Army, Europe 
(USAREUR); U.S. Forces Command (FORSCOM); U.S. Air Forces, 
Europe; Air Combat Command; Air Material Command; and the 
Atlantic and Pacific Fleets. They also reviewed selected 
activities managed at the headquarters of the Army, Navy, and 
the Air Force, as well as some DOD-managed activities. Specific 
programs were included because (1) O&M funding levels are 
increasing; (2) GAO's ongoing or issued reports identified O&M 
implications; or (3) congressional committees have expressed a 
specific interest in the program.
    b. Benefits.--GAO identified potential reductions of $4.9 
billion to the fiscal year 1996 operation and maintenance 
budget requests, which totaled $70.3 billion, from the military 
services and the Defense Department (DOD). In addition, GAO 
notes that funding for the Partnership for Peace program, which 
is designed to encourage joint training and military exercises 
with NATO forces and to promote greater partner 
interoperability, is divided between the DOD and State 
Department budgets. As a result, no one congressional committee 
has complete oversight to ensure that the program's efforts are 
effective and not duplicative. The fiscal year 1996 operation 
and maintenance budget request from DOD earmarks $40 million 
for program expenses, including an information management 
system, regional airspace initiative, defense resource 
management program, and unit exchanges. Meanwhile, the State 
Department is requesting $60 million for this same program.

53. ``Future Years Defense Program: 1996 Program Is Considerably 
        Different From the 1995 Program,'' September 1995, GAO/NSIAD-
        95-213.

    a. Summary.--This report compares the Defense Department's 
(DOD) fiscal year 1996 Future Years Defense Program (FYDP) with 
the program for fiscal year 1995. Specifically, GAO discusses 
(1) what major program changes were made from 1995 to 1996; (2) 
what the implications of these changes are for the future; and 
(3) whether the 1996 program complies with statutory 
requirements.
    b. Benefits.--The fiscal year 1996 FYDP, which covers 
fiscal years 1996-2001, is considerably different from the 1995 
FYDP, which covers fiscal years 1995-1999. First the total 
program increased by about $12.6 billion in the 4 common years 
of both plans. Second, approximately $27 billion in planned 
weapon system modernization programs for these 4 years have 
been eliminated, reduced, or deferred to the year 2000 and 
beyond. Third, the military personnel, operation and 
maintenance, and family housing accounts increased by over $21 
billion during the common period. The net affect is a more 
costly defense program, despite substantial reductions in DOD's 
weapon modernization programs between 1996 and 1999. As a 
result of these changes, Defense plans to compensate for the 
decline in procurement during the early years of the 1996 FYDP 
by substantially increasing procurement funding in 2000 and 
2001. The Secretary of Defense plans to pay for this increase 
with a combination of savings achieved from infrastructure 
reductions, acquisition reforms, and from real budget growth. 
The additional budget amounts are expected, in part, to lessen 
the need for Defense to reduce or defer weapon modernization 
programs to meet other near-term readiness requirements. 
Congress will specify how Defense is to spend some of the added 
funds; however, DOD may have an opportunity to restore some 
programs that were reduced to the year 2000 and beyond. 
Moreover, the additional funding could mitigate the need for 
DOD to increase out-year budgets. The fiscal year 1996 FYDP was 
submitted in compliance with applicable legislative 
requirements.

54. ``Discrimination Complaints: Monetary Awards in Federal EEO 
        Cases,'' January 1995, GAO/GGD-95-28FS.

    a. Summary.--Federal employment discrimination complaints 
are resolved in various ways. For example, an agency may 
provide a complainant with appropriate training if training is 
at issue. Another way to resolve a complaint, which is very 
common, is to provide the complainant with monetary relief 
through back pay, which gives the victim of discrimination the 
salary he or she would have received had the alleged 
discrimination not occurred. Further, Federal employment 
discrimination complaints are handled through administrative 
procedures and the courts. When a lawsuit is filed, any 
resulting monetary relief is generally paid from the Judgement 
Fund. However, in some cases the monetary relief is paid by the 
discriminating agency. Additionally, a prevailing party in a 
discrimination case at the administrative or judicial level can 
receive reasonable attorney fees and costs.
    b. Benefits.--Although exact payment figures are not 
readily available, GAO found that Federal agencies and the 
Judgement Fund paid at least $87.4 million to Federal workers 
and their attorneys since fiscal year 1989 as a result of 
Federal equal employment opportunity cases. Of that amount, 
$30.6 million was paid in fiscal years 1993 and 1994. Much of 
the $87.4 million was back pay to Federal employees. However, 
at least $30.5 million was for attorney fees and costs. Of that 
amount, $8.7 million was paid in fiscal years 1993 and 1994.

55. ``Missile Development: Status and Issues at the Time of the TSSAM 
        Termination Decision,'' January 1995, GAO/NSIAD-95-46.

    a. Summary.--The Tri-Service Standoff Attack Missile 
(TSSAM) program--a $13.7 billion effort to develop and acquire 
a stealthy, conventional, medium-range cruise missile--has been 
plagued by significant technical problems, cost growth, and 
schedule delays. In May 1994, the Defense Department began 
restructuring the program after a series of flight test 
failures and unresolved technical problems. On December 9, 
1994, the Secretary of Defense announced plans to cancel the 
program because of significant development difficulties and 
growth in the expected unit cost for each missile. This report 
provides pertinent information on the History and status of the 
TSSAM program at the time of the Secretary's announcement for 
use by Congress as it reviews the termination decision.
    b. Benefits.--Unsuccessful flight test results, 
particularly over the last 2 years, made attainment of TSSAM's 
very high reliability requirement questionable. A reliable 
improvement program has been initiated to address this problem, 
but demonstration of whether problems would have been resolved 
would have taken several years. The acquisition of more test 
missiles would have added nearly $300 million to the program's 
estimated development cost but provide little, if any, 
assurance of TSSAM performance and reliability before the 
critical early production decisions. Moreover, the total TSSAM 
program cost increased from an estimated $8.9 billion in 1986 
to $13.7 billion in 1994, and the total number of missiles to 
be produced decreased by over 50 percent. During the same 
period, estimated procurement unit costs increased from 
$728,000 to over $2 million. Additionally, declining budgets 
and changes in threat had prompted the services to consider 
alternative systems. DOD's March 1994 Cost and Operational 
Effectiveness Analysis (COEA) concluded that TSSAM was the most 
cost-effective weapon among several alternatives, principally 
because of its success in high-threat situations. However, the 
analysis showed some alternative weapon systems performed well 
in less demanding situations and might be adequate to meet 
existing national security requirements.

56. ``Department of Energy: National Laboratories Need Clearer Missions 
        and Better Management,'' January 1995, GAO/RCED-95-10.

    a. Summary.--The Energy Department's (DOE) national 
laboratories have made vital contributions to the Nation's 
defense and to civilian science and technology efforts. 
However, the national laboratories today lack clearly defined 
missions and suffer from poor coordination to solve national 
problems. As a result, DOE has underutilized the laboratories' 
talents to tackle complex issues and these institutions may be 
unprepared to meet future expectations. GAO raises questions 
about the laboratories' ability to help the United States meet 
its changing defense needs at the end of the cold war and 
compete against growing foreign competition in technology.
    b. Benefits.--DOE's laboratories do not have clearly 
defined missions that focus their considerable resources on 
accomplishing the Department's changing objectives and national 
priorities. DOE has not coordinated these laboratories' efforts 
to solve national problems but has managed each laboratory on a 
program-by-program basis. As a result, DOE has underutilized 
the laboratories' special talents to tackle complex, cross-
cutting issues. Additionally, DOE has not acted on 
recommendations by government advisory groups that they 
redefine the laboratories' missions to meet changes in 
conditions and national priorities. Moreover, DOE's day-to-day 
management of the laboratories--perceived as costly and 
inefficient by laboratory managers--inhibits the achievement of 
a productive working relationship between the laboratories and 
DOE that is necessary if the laboratories are to move 
successfully into new mission areas. Both laboratory and DOE 
managers believe that more realistic and consistent priorities 
are needed to comply with the growing oversight and 
administrative requirements placed on the laboratories in 
recent years.

57. ``Naval Petroleum Reserve: Opportunities Exist To Enhance Its 
        Profitability,'' January 1995, GAO/RCED-95-65.

    a. Summary.--The Naval Petroleum Reserve in Elk Hills, CA, 
is jointly owned by the U.S. Government and Chevron U.S.A., 
Inc. It is now operated by Bechtel Petroleum Operations, Inc., 
under a contract that expires in July 1995. Chevron believes 
that it can run the reserve more profitably than the Government 
can, and in May 1995 it proposed taking over reserve 
operations. Later, the Energy Department (DOE) suspended 
negotiations with Chevron on this proposal and recently began 
to solicit interest from other parties to operate the reserve. 
This report explores actions that DOE and Congress can now take 
to improve the reserve's profitability.
    b. Benefits.--Three actions could enhance the profitability 
of the Naval Petroleum Reserve (NPR-1). First, DOE could be 
allowed to set the rate of production in a way that maximizes 
profits, which is standard industry practice. In contrast, the 
production rate of oil and gas at the reserve is currently set 
by statutory requirement at the rate that can be achieved 
``without detriment to the ultimate recovery'' of the 
resource--called the maximum efficient rate (MER). Second, 
making a final decision on how ownership shares in the NPR-1 
are distributed between DOE and Chevron could enhance the 
reserve's profitability by allowing the owners to focus on 
investments that enhance the venture as a whole. Currently, an 
open-ended arrangement between Chevron and DOE governs their 
equity and ownership shares of projection. This open-ended 
situation has undermined trust and cooperation between the two 
owners, and both spend a significant amount of resources 
examining the likely impact of proposed investments on their 
equity shares before committing to new projects. As a result, 
these expenditures and the slowed decisionmaking result in 
reduced profits. By contrast, standard industry practice calls 
for operating a mature commercial oil and gas field with the 
equity shares finalized among the partners so the unit can be 
developed and production managed in the most profitable manner 
possible. Finally, adding a clause to the contract between DOE 
and Chevron to promote risk sharing could help encourage 
investments that enhance profits. In standard industry 
practice, sharing such risks is encouraged by a contract's 
``nonconsent clause,'' which governs how a partner that does 
not share the initial risks or costs of a project will be 
treated. Without such a cause, one partner may decide not to 
participate in drilling a well but later decide that it wants a 
share of any resulting profits.

58. ``Juvenile Justice: Minimal Gender Bias Occurred in Processing 
        Noncriminal Juveniles,'' January 1995, GAO/GGD-95-56.

    a. Summary.--This report studies gender bias in State 
juvenile justice systems' handling of status offenders, who are 
youths and have committed an offense, such as truancy or 
ungovernable behavior, that would not be a crime if committed 
by an adult. GAO defines ``gender bias'' as intentional or 
unintentional differences in the juvenile justice system's 
outcomes of female and male status offenders who have similar 
characteristics, such as age, status offense, and prior offense 
History. GAO (1) compares the outcome of the intake decisions 
and the frequency and outcomes of detentions, adjudications, 
and out-of-home placements of female and male status offenders, 
and (2) compares the availability of facilities and services 
for female and male status offenders in selected jurisdictions.
    b. Benefits.--GAO concluded that there was minimal gender 
bias, as they defined it, in processing noncriminal juveniles. 
According to the National Center for Juvenile Justice's 
national data, 500,620 status-offender cases were petitioned to 
juvenile courts in the United States during the 6-year period 
from 1986 to 1991. Five of the six intake regression models 
that GAO studied indicated no evidence of gender bias. 
Similarly, for 14 of the 19 regression models for the 
detention, adjudication, and placement decisions, results 
indicated no evidence of gender bias in the juvenile courts' 
handling of status offenders. However, for the one intake model 
that exhibited a difference for a specific State, females were 
more likely to be petitioned to juvenile court than males. For 
the other five State-specific models--three detention, one 
adjudication, and one placement--females were less likely to be 
detained, adjudicated, or placed than males. GAO determined 
that factors, such as prior offense, history, and source of 
referral, affected the offenders' outcomes. At the 15 
facilities that GAO visited, they found minimal gender-based 
differences in the availability of counseling, educational, and 
medical services for females and males, although the extent of 
such services varied by type of facility. The only gender-based 
difference we noted involved admission physicals. At two of the 
female-only group homes, health examinations included testing 
for sexually transmitted diseases, whereas, at similar male-
only facilities operated by the same organizations, such 
testing was not done unless requested by the males.

59. ``Former Soviet Union: Creditworthiness of Successor States and 
        U.S. Export Credit Guarantees,'' February 1995, GAO/GGD-95-60.

    a. Summary.--Under the 1990 Farm Bill, the Office of 
General Sales Manager (GSM)-102 program is intended to develop, 
expand, or maintain U.S. agricultural markets overseas by 
facilitating commercial export sales of U.S. agricultural 
products. Under the program, the U.S. Department of 
Agriculture's (USDA) Commodity Credit Corporation (CCC) may 
guarantee loans to buy U.S. agricultural exports. Through this 
program the Soviet Union received $3.74 billion in credit 
guarantees. After its dissolution, and through September 30, 
1993, Russia and Ukraine received credit guarantees equal to 
$1.06 billion and $199 million, respectively. In this report, 
GAO (1) considered the general economic and political 
environment in the former Soviet Union (FSU) and its successor 
states; (2) reviewed how the Soviet debt crisis developed and 
the relationship between debt problems, on the one hand, and 
economic reform and creditworthiness on the other; (3) examined 
how USDA decisions on providing the FSU/successor states with 
credit guarantees; and (4) considered the exposure of the 
(GSM)-102 portfolio to default by the FSU and its successor 
states.
    b. Benefits.--Burdened with debt and plagued by economic 
and political uncertainties, the successor states of the former 
Soviet Union are not creditworthy and are at high risk for 
default on billions of dollars in United States agricultural 
export credit guarantees. Arrears on the debt of the former 
Soviet Union have continued to mount since 1989--
notwithstanding debt deferral, debt rescheduling, and other 
foreign assistance provided by creditor nations. Although 
Western nations have indicated a willingness to provide more 
debt relief and other assistance, much of this aid depends on 
Russia's implementing difficult macroeconomic and structural 
reforms. Whether, and when, Russia can or will implement such 
reforms is questionable. During the period when the Agriculture 
Department (USDA) provided more than $5 billion in export 
credit guarantees to the former Soviet Union, Russia, and 
Ukraine, USDA's own evaluations found that these states were 
very risky in terms of their ability to repay such debt. As a 
result of the large amount of credit guarantees made to the 
former Soviet Union and its successors and their poor 
creditworthiness, the export credit guarantee program is 
heavily exposed to default.

60. ``Former Soviet Union: U.S. Bilateral Program Lacks Effective 
        Coordination,'' February 1995, GAO/NSIAD-95-10.

    a. Summary.--Since the Soviet Union was dissolved late in 
1991, the newly independent successor states have been trying 
to develop more efficient, market-based economies and establish 
democratic governments. The United States has strongly 
supported this transition, both diplomatically and financially. 
The structure that the executive branch established to 
coordinate, manage, and implement U.S. programs to help with 
this enormous undertaking is both unique and complex. This 
report (1) identifies the size, scope, and status of the 
various United States bilateral programs for the Soviet Union; 
(2) describes the structures established for coordinating and 
managing these programs; and (3) describes some of the 
coordination and structural problems the executive branch has 
faced.
    b. Benefits.--For the fiscal years 1990 through 1993, 19 
United States Government agencies committed a total of $10.1 
billion for bilateral grants, donation, and credit programs to 
the former Soviet Union (FSU). During the period, Federal 
agencies obligated $1 billion and spent $434 million of the 
$1.8 billion authorized by Congress for grant programs, 
obligated $1.6 billion, and spent $1.22 billion for the 
donation program, and made $6.7 billion available for direct 
loans, guarantees, and insurance agreements. The structure for 
coordinating and managing U.S. bilateral programs for the FSU 
starts with the National Security Council's Policy Steering 
Group chaired by the Deputy Secretary of State. This group is 
the only place where all U.S. Government policies and programs 
involving the FSU come together and where all agencies report. 
Pursuant to the Freedom Support Act, in May 1993, the President 
designated a Coordinator within the Department of State and 
charged him with broad responsibility for U.S. bilateral 
programs with the FSU that included management and 
implementation of assistant programs, resolving policy and 
assistance program disputes among U.S. agencies participating 
in the assistance program, designing overall assistance and 
economic cooperation strategy for the FSU, and ensuring program 
and policy coordination amongst agencies. Despite this, GAO 
found that the State Department Coordinator's role is much more 
limited. Other groups within the executive branch have equal or 
greater influence and authority over assistance to the FSU or 
function autonomously outside the Coordinator's purview. In 
fact, the only bilateral program wholly within the 
Coordinator's purview is the program funded by the Freedom 
Support Act. Additionally, other participants involved with 
U.S. assistance to the FSU have at times resisted, hindered, or 
overruled the Coordinator's efforts to develop a coherent and 
comprehensive assistance program for the FSU. These include 
Cabinet and other agencies, the Gore-Chernomyrdin Commission 
and Congress through congressional earmarks. Further, the 
Coordinator's role has been complicated by the existence of 
serious disagreement between agencies over various aspects of 
the program. For example, USAID, a primary implementing agency 
for Freedom Support Act programs, has been involved in numerous 
disputes with other government agencies over money and policy.

61. ``Federally Funded R&D Centers: Executive Compensation at the 
        Aerospace Corporation,'' February 1995, GAO/NSIAD-95-75.

    a. Summary.--The Aerospace Corporation is a nonprofit 
mutual benefit corporation that provides scientific and 
technical support, principally general systems engineering and 
integration services, for the Air Force and other government 
agencies. Aerospace runs a federally funded research and 
development center (FFRDC) sponsored by the Air Force. 
Aerospace's FFRDC's are funded solely or substantially by 
Federal agencies to meet special long-term research or 
development needs that cannot be met as effectively by existing 
in-house or contracting resources. While compensation to 
Aerospace employees is primarily paid from government 
contracts, which represent over 99 percent of the company's 
total business revenue. Aerospace compensation is reviewed by 
the Air Force for reasonableness during its annual contract 
negotiations. This report discusses the salary and other 
benefits provided to Aerospace's corporate officers and other 
senior management personnel and includes information on Defense 
Contract Audit Agency (DCAA) audits on Aerospace compensation 
costs and congressional actions regarding FFRDC compensation.
    b. Benefits.--As of September 1994, Aerospace employed 32 
executives, 12 of whom were corporate officers. The officers' 
total compensation averaged about $240,000, and their annual 
salary averaged about $176,000. From September 1991 to 
September 1994, total salary cost for all Aerospace executives 
rose 78 percent, primarily due to raises of up to 29 percent 
for individual executives in 1992 and a 45-percent increase in 
the number of executives from 1991 to 1994. In addition, 
Aerospace paid executives hiring bonuses of $30,000 each in 
1993. In an audit started in response to Aerospace's June 1992 
salary increases, the Defense Contract Audit Agency (DCAA) 
initially questioned the reasonableness of the salaries and 
fringe benefits. In its final report, however, DCAA no longer 
questioned the reasonableness of corporate officers' salaries 
but recommended that Aerospace provide further support for 
corporate officers' fringe benefits.

62. ``DOD Budget: Selected Categories of Planned Funding for Fiscal 
        Years 1995-99,'' February 1995, GAO/NSIAD-95.

    a. Summary.--GAO identified programs in the Defense 
Department's (DOD) future funding plans for fiscal years 1995-
99 for the following 13 categories: environmental cleanup and 
restoration, defense conversion, DOD dependents schools and 
Junior ROTC, basic research, counter-drug efforts, humanitarian 
and foreign assistance programs, civilians separation pay and 
military temporary early retirement authority, grants to 
colleges and universities, operation of the 89th Military 
Airlift Wing at Andrews Air Force Base, medical education and 
noncombat-related medical research, support for foreign 
military sales, antiterrorism activities, and pay and 
allowances to jailed military personnel.
    b. Benefits.--GAO notes that DOD planned to fund about 13 
categories when the President submitted his fiscal year 1995 
budget in February 1994. More than half of the funds are in the 
operations and maintenance account, which traditionally has 
funded combat training and other readiness-related items. The 
largest part of the remaining funds are in the research, 
development, test, and evaluation account.

63. ``Peace Operations: Information on U.S. and U.N. Activities,'' 
        February 1995, GAO/NSIAD-95-102BR.

    a. Summary.--Peace operations use military forces to help 
maintain or restore international peace. Peace operations fall 
into three categories: those seeking to prevent conflict from 
breaking out, those that seek to compel countries to comply 
with international sanctions designed to maintain or restore 
peace and order, and those designed to relieve human misery and 
suffering. This briefing report covers (1) the cost and funding 
of peace operations; (2) the effectiveness of U.N. operations; 
(3) U.S. policy and efforts to strengthen U.N. capabilities; 
and (4) the impact of peace operations on the U.S. military.
    b. Benefits.--GAO noted that when considering the cost of 
operations it should be recognized that DOD's financial systems 
cannot reliably determine costs. For the fiscal year 1994, DOD 
reported incremental costs for peace operations of $1.9 billion 
and they estimate a cost of $2.6 billion for 1995. In addition 
to DOD's costs, the Department of State paid $1.1 billion 
toward U.S. peacekeeping, the Agency for International 
Development paid $100 million, and various other agencies paid 
amounts ranging from several hundred thousand to several 
million dollars. The United Nations has had limited 
effectiveness carrying out complex missions such as the U.N. 
Transitional Authority in Cambodia (UNTAC) and operations that 
entail the use of force, such as the U.N. Protection Force 
(UNPROFOR) in Bosnia and U.N. Operations in Somalia (UNOSOM). 
Although, these operations took place in quite hostile 
environments. However, several weaknesses of the United Nations 
limit its ability to effectively undertake such large and 
ambitious operations. These include weaknesses in leadership, 
command and control, and logistics. Moreover, the United 
Nations is ill-equipped to plan, logistically support, and 
deploy personnel for large missions. The United States is 
making an effort to remedy these problems by recommending steps 
to improve the capabilities of the U.N. Department of 
Peacekeeping Operations and thus provide for effective and 
efficient peace operations. For example, DOD has detailed 
military officers, sealift and airlift planners, and budget 
experts to U.N. headquarters to improve planning and 
preparation for new and ongoing operations. Peace operations 
have stressed certain key military capabilities, few of which 
are in the active component. These include certain Army support 
services, Air Force specialized aircraft, and the F-4G Wild 
Weasel, which is used for lethal suppression of enemy radars. 
However, peace operations have also provided the military 
forces with valuable experience in joint and coalition 
operations.

64. ``Foreign Assistance: Selected Donors' Approaches for Managing Aid 
        Programs,'' February 1995, GAO/NSIAD-95-37.

    a. Summary.--Congress and the executive branch have been 
deliberating on how to reform the U.S. foreign assistance 
program given the rapidly changing global environment and 
recurring management problems. This report provides information 
on how six other bilateral donors--Canada, Germany, Japan, 
Sweden, the Netherlands, and the United Kingdom--and the 
European Union, a multilateral donor, manage their foreign aid 
programs. GAO discusses (1) the difficulty of planning in an 
uncertain environment; (2) common structural dilemmas in 
foreign aid programs; and (3) common management weaknesses.
    b. Benefits.--Careful planning is becoming increasingly 
important as the worldwide recession, growing deficits, and the 
resulting budget cuts force most donors to make choices among 
aid programs and recipients. Aid agencies must balance their 
governments' development assistance goals with newer foreign 
aid goals associated with the environment, U.N. peacekeeping, 
and democracy. Moreover, the balancing of these goals is then 
weighed against their governments' self-interests and domestic 
needs, placing additional pressure on declining aid budgets. In 
addition to an uncertain environment, there are several common 
structural dilemmas in foreign aid programs the donors have to 
overcome. These include (1) ensuring coordination and relieving 
organizational tension among government agencies, particularly 
aid agencies and foreign ministries, caused by overlapping 
jurisdictions and conflicts over aid priorities; (2) increasing 
institutional specialization as new development problems or 
functions are turned over to newly created aid agencies; (3) 
determining the most efficient and effective approaches for in-
country representation; and (4) determining how much 
implementation of development activities should be carried out 
by nongovernment personnel. Finally, donors have reported long-
standing problems with inadequate administrative capacity among 
aid agencies. Addressing management problems takes on a new 
urgency now that politicians and the general public are looking 
for greater evidence of development results. The lack of 
criteria for measuring project and program results, 
preoccupation with formulating new projects, and inadequate 
monitoring of program and project implementation were 
consistently cited as problems among the donors.

65. ``Defense Operations Fund: Management Issues Challenge Fund 
        Implementation,'' March 1995, GAO/AIMD-95-79.

    a. Summary.--The National Defense Authorization Act for 
Fiscal Year 1995 directed the Secretary of Defense to submit to 
the congressional defense committees a report on the progress 
made in implementing the September 1993 Defense Business 
Operations Fund Improvement Plan by February 1, 1995. GAO has 
monitored and evaluated the Fund's implementation in February 
1991 and its operation since. It was previously reported that 
the Department of Defense (DOD) had not achieved the Fund's 
objectives. It was also concluded that the Fund's problems are 
symptomatic of the weaknesses in DOD's overall financial 
management environment. This report provides GAO's (1) 
assessment of DOD's progress in correcting the ongoing problems 
that have hindered the Fund's operations, and (2) 
recommendations to the Congress and DOD to address GAO's 
concerns.
    b. Benefits.--The Pentagon faces formidable challenges in 
overcoming problems plaguing the Defense Business Operations 
Fund. Many of these shortcomings, such as inadequate financial 
and accounting systems, are the result of years of neglect and 
date from the old industrial and stock funds. The Fund's 
financial systems cannot produce accurate and reliable 
information on Fund operations. Until these antiquated systems 
are eliminated, (1) the infrastructure costs of maintaining 
multiple systems for the same purpose will persist, and (2) the 
Defense Department (DOD) and Congress will continue to receive 
inaccurate and unreliable information and Fund operations. 
Also, the recent decision to devolve cash management abandons 
one of the Fund's goals. DOD can cut costs only if it is more 
conscious of operating expenses and makes fundamental 
improvements in the way it conducts business. Although the Fund 
is supposed to operate on a break-even basis, it had not been 
able to meet this goal. Fiscal year 1994 marked the third 
consecutive year of reported losses. If top management does not 
reverse this trend, potential savings from the Fund will not be 
realized.

66. ``Travel Process Reengineering: DOD Faces Challenges in Using 
        Industry Practices To Reduce Costs,'' March 1995, GAO/AIMD/
        NSIAD-95-90.

    a. Summary.--DOD reported that it spent about $3.5 billion 
in direct costs and processed about 8.2 million vouchers for 
temporary duty travel in fiscal year 1993. DOD estimated that 
it spent 30 percent of direct costs to process temporary duty 
travel. Defense employees perform various types of travel to 
carry out mission and business functions. This report focuses 
on temporary duty travel, which includes travel for business, 
deployment, and training purposes. DOD's travel processing is 
done on a decentralized basis. The processing generally 
includes (1) authorizing the funding and appropriate means of 
travel and issuing travel orders; (2) arranging transportation, 
accommodations, and developing itineraries; (3) making travel 
expenditures, purchasing tickets, and collecting receipts; (4) 
preparing and processing vouchers based on receipts; and (5) 
reconciling accounts, auditing vouchers, making payments, and 
generating management reports. The report includes information 
on DOD's temporary duty travel processes, estimates of travel 
costs, and an assessment of DOD's ongoing initiatives to 
improve its travel processes.
    b. Benefits.--With processing costs accounting for at least 
30 percent of the $3.5 billion that the Pentagon spent on 
travel in fiscal year 1993, adopting private industry's ``best 
practices'' for travel management could save millions of 
dollars. DOD's needs to streamline its complex processing 
system, which involves 700 voucher-processing centers, multiple 
travel agencies, and more than 1,300 regulations. ``Best 
practices'' in the private sector include empowering employees 
to make travel decisions, reducing the number of travel agents 
to as few as one, consolidating multiple travel-processing 
centers into a single facility, and simplifying travel policies 
to less than 20 pages.

67. ``Managing Customs: Efforts Under Way To Address Management 
        Weaknesses,'' March 1995, GAO/GGD-95-73.

    a. Summary.--The U.S. Customs Service enforces trade laws 
and policies designed to prevent importation of foreign goods 
that threaten our health and safety. Customs also collects 
duties, fees, and taxes that have totaled about $20 billion 
annually in recent years, and Customs is the initial source of 
trade statistics used in formulating and monitoring our 
Nation's foreign trade policies. GAO had previously identified, 
in a December 1992 report, a number of problems that could 
hinder Customs' ability to meet the challenges of the changing 
world trade environment. The major problem areas were in (1) 
mission planning; (2) financial, information, and human 
resource management; and (3) its organizational structure. 
Since then Customs has made efforts to improve on these noted 
problems areas. This report discusses the U.S. Customs 
Service's efforts to address weaknesses GAO identified in the 
1992 report and during subsequent reviews.
    b. Benefits.--Customs has taken action in each of the 
problem areas. Some of the more significant efforts include the 
following:
    (1) Customs has revised its 1993 5-Year Plan to clarify and 
set priorities for its trade enforcement objectives, including 
fully automating its transaction processing and establishing 
performance accountability measurements for achieving its trade 
enforcement goal.
    (2) It has improved controls over the identification and 
collection of duties, taxes, fees, and penalties.
    (3) It has reorganized its debt collection unit, formalized 
its collection procedures, and aggressively pursued collection 
of delinquent receivables.
    (4) It has embarked on a reorganization plan to correct 
institutional problems related to cooperation and coordination 
among its programmatic units and to ensure consistency in 
policy implementation.
    Although, additional efforts will be needed in Customs' 
financial and information systems modernization programs, GAO's 
recent audits of Customs' financial statements disclosed that 
Customs has improvement efforts under way but had not yet fully 
resolved many of the financial management problems reported in 
1992. Also, these audits identified two areas not identified in 
the 1992 report. One concerns Customs' inability to detect and 
prevent duplicate or excessive claims for refunds of duties and 
taxes paid on imported goods that are subsequently exported or 
destroyed. The other relates to Customs' inability to prevent 
or detect unauthorized access and modifications to critical and 
sensitive data and computer programs.

68. ``Defense Health Care: Issues and Challenges Confronting Military 
        Medicine,'' March 1995, GAO/HEHS-95-104.

    a. Summary.--The Defense Department's (DOD) military health 
care system provides medical services and support both in 
peacetime and in war to members of the armed forces and their 
families, as well as to retirees and survivors. Post-cold war 
planning scenarios, efforts to reduce the overall size of the 
military, Federal budget cuts, and base closures and 
realignments have focused attention on how large DOD's health 
care system is, what its makeup is, how it operates, whom it 
serves, and whether its missions can be carried out in a more 
cost-effective way. This report describes the Military Health 
Services System (MHSS), past problems faced by DOD as it ran 
the system and efforts to solve those problems, and the 
management challenges now confronting DOD.
    b. Benefits.--The MHSS is one of the Nation's largest 
health care systems, offering health benefits to about 8.3 
million people and costing over $15 billion annually. Its 
primary mission is to maintain the health of 1.7 million 
active-duty service personnel and to be prepared to deliver 
health care during times of war. Past reports about DOD's 
ability to meet its wartime mission described problems such as 
inadequate training, missing equipment, and large numbers of 
nondeployable personnel as serious threats to the Department's 
ability to provide adequate medical support to deployed forces. 
Other problems that have faced DOD in the past decade are 
increasing costs, uneven access to health care services, and 
disparate benefit and cost-sharing packages for similarly 
situated categories of beneficiaries. In response to these 
challenges, DOD initiated, with congressional authority, a 
series of demonstration programs around the country designed to 
explore various means by which it could more cost effectively 
manage the care it provides and funds. The experiences of these 
demonstration programs provided many valuable lessons and has 
enabled DOD to become one of the Nation's leaders in the 
managed care arena. Additionally, DOD, in 1993, began a 
nationwide managed care program, called TRICARE, to improve 
beneficiary access to high-quality care while containing the 
growth of the system's costs. The program calls for 
coordinating and managing beneficiary care on a regional basis 
using all available military hospitals and clinics supplemented 
by contracted civilian services. As DOD implements the TRICARE 
program, several operational challenges have emerged. These 
range from deciding the appropriate authorities of regional 
health administrators to constructing networks adequate to 
serve all beneficiaries in each region. Finally, as the 
Congress and the Department plan for the future, decisions 
about the appropriate size of the military health care system 
will be of paramount importance.

69. ``Security Clearances: Consideration of Sexual Orientation in the 
        Clearance Process,'' March 1995, GAO/NSIAD-95-21.

    a. Summary.--The requirement for Federal employees who 
handle classified information to be loyal and trustworthy was 
an outgrowth of a 1947 Federal loyalty program, established by 
President Truman during a time of heightened feelings of 
national security over growing concerns about the communist 
threat. Executive Order 10450 modified the loyalty program in 
1953, requiring that any individual's employment be ``clearly 
consistent with the interests of the national security,'' and 
for the first time included sexual perversion as a basis for 
removal from the Federal service. Federal agencies used the 
sexual perversion criteria in the early 1950's to categorize 
homosexuals as security risks and separate them from government 
service. Agencies could deny homosexual men and women 
employment because of their sexual orientation until 1975, when 
the Civil Service Commission issued guidelines prohibiting the 
government from denying employment on the basis of sexual 
orientation.
    b. Benefits.--GAO found during a review of eight Federal 
agencies that, in a break with government policy dating to the 
1950's, sexual orientation was no longer a factor in issuing 
security clearances to Federal workers and contractors. Some 
persons GAO spoke with, however, believed that they had been 
asked inappropriate questions during the clearance processes. 
All eight agencies indicated that concealment of any personal 
behavior that could result in exploitation, blackmail, or 
coercion was a security concern. However, the treatment of 
concealment as it relates to sexual orientation varies. Most 
agencies have eliminated specific questions about sexual 
orientation, but Defense Department and FBI guidelines treat 
concealment as a security concern.

70. ``Peace Operations: Heavy Use of Key Capabilities May Affect 
        Response to Regional Conflicts,'' March 1995, GAO/NSIAD-95-51.

    a. Summary.--As the number, size, and scope of peace 
operations have increased in the past several years, the nature 
and extent of U.S. military participation has changed markedly. 
Recently, the United States has used more military forces, of 
an increasingly varied nature, in peace operations in places 
such as Somalia, Bosnia, Haiti, and Northern and Southern Iraq. 
These operations often take place for an extended duration, 
usually occurring in austere environments with little or no 
infrastructure from which to base and sustain an operation. 
This report discusses the impact that peace operations have on 
U.S. military forces, force structure limitations that may 
affect the military's ability to respond to other national 
security requirements while engaged in peace operations, and 
options for increasing force flexibility and response 
capability.
    b. Benefits.--Increasing U.S. involvement in peace 
operations heavily stresses some U.S. military capabilities, 
including such support functions as quartermaster and 
transportation forces and the use of specialized aircraft. 
Extended participation in multiple or large-scale peace 
operations could tax the military's ability to carry out the 
Defense Department's strategy for fighting two nearly 
simultaneous regional conflicts. Several options exist that 
could allow DOD to meet the demands of peace operations while 
responding to its two-conflict strategy. These options include 
changing the mix of active and reserve forces and making 
greater use of the reserves and contractors.

71. ``Unmanned Aerial Vehicles: No More Hunter Systems Should Be Bought 
        Until Problems Are Fixed,'' March 1995, GAO/NSIAD-95-52.

    a. Summary.--The Hunter is a pilotless aircraft resembling 
a small airplane that is controlled from a ground station. It 
is intended to perform reconnaissance, target acquisition, and 
other military missions by flying over enemy territory and 
transmitting video imagery back to ground stations for use by 
military commanders. The Hunter program began in 1989, at an 
estimated cost of $4 billion, as a joint-service effort in 
response to congressional concern over the proliferation of 
Unmanned Aerial Vehicles (UAV) by different services and the 
need to acquire UAV's that could meet the requirements of more 
than one service. GAO reviewed the Hunter program to determine 
(1) whether it has been demonstrated to be logistically 
supportable; (2) whether its performance deficiencies found in 
prior testing have been resolved; and (3) whether it represents 
a valid joint-service effort as mandated by Congress.
    b. Benefits.--Although the Defense Department (DOD) has 
spent more than $4 billion to acquire the Hunter Short-Range 
Unmanned Aerial Vehicle. The aircraft suffers from serious 
performance problems and has crashed repeatedly during flight 
tests. The plane's engines, originally designed for a 
motorcycle, have proven especially unreliable. GAO believes 
that the plane may prove unsuitable for use by military forces 
and could require costly contractor maintenance to stay in the 
air. DOD's recent restructuring of the program would further 
delay and curtail critical testing while allowing for 
additional procurement of systems whose performance is so far 
unproven and possibly defective.

72. ``Foreign Aid: Actions Taken To Improve Food Aid Management,'' 
        March 1995, GAO/NSIAD-95-74.

    a. Summary.--For over 4 decades the United States has 
provided agricultural commodity assistance, or food aid, to 
foreign countries to combat hunger and malnutrition, encourage 
development, and promote U.S. foreign policy goals. The 1990 
Agricultural Development and Trade Act made several major 
changes in the U.S. food aid program. One of the changes 
involved providing agricultural commodities to developing 
countries to enhance their ``food security'', that is, access 
by all people at all times to sufficient food and nutrition for 
a healthy and productive life. Moreover, Title II of the act 
authorizes food donations in response to famines and other 
emergencies and food aid grants to private voluntary 
organizations (PVO) and cooperatives, intergovernmental 
organizations, and multilateral institutions for nonemergency 
uses. Another important part of the act is Title III, which 
gives the Administrator of the U.S. Agency for International 
Development (USAID) considerable flexibility in designing food 
aid programs that complement its overall country development 
activities.
    b. Benefits.--A July 1993 GAO report identified several 
problems with the U.S. Agency for International Development's 
(USAID) management of its food aid programs. These problems 
included USAID's lack of criteria and guidance for implementing 
the programs, USAID's inability to show the impact of food aid 
on food security, and USAID's failure to account for food aid 
resources. Among the recommendations GAO made: USAID to 
establish criteria and guidance on how food aid should be 
programmed, managed, and accounted for; assess the efficiency 
of food aid in achieving food security; and evaluate the impact 
of food aid on food security. USAID has fully or partially 
implemented 11 of 13 recommendations made in GAO's 1993 report. 
USAID has yet to (1) establish criteria as to when U.S. 
procurement and shipping regulations may be waived and (2) 
report to Congress on the efficiency of food aid in achieving 
food security.

73. ``Army Reserve Components: Cost, Readiness, and Personnel 
        Implications of Restructuring Agreement,'' March 1995, GAO/
        NSIAD-95-76.

    a. Summary.--The Defense Department's bottom-up review 
concluded that the Army's reserve components should be reduced 
to 575,00 positions by 1999--a 201,000 decrease since fiscal 
year 1989. In December 1993, the Defense Department announced a 
major restructuring of the Army National Guard and the Army 
Reserve. The Offsite Agreement spelled out how personnel 
reductions would be distributed among the reserve components. 
This report evaluates (1) the cost of implementing the 
agreement; (2) the agreement's impact on reserve components' 
readiness; and (3) reserve components' efforts to absorb 
displaced personnel.
    b. Benefits.--Implementation of the Offsite Agreement could 
cost over $180 million. The Army's latest cost estimate is 
about $85 million. As of now, it is too early to tell how the 
agreement will affect readiness for most units. Although GAO 
estimated the readiness impact for some of the units and 
determined that 13 units will be replaced by units with lower 
readiness ratings, 18 units will be replaced by units having 
the same or higher readiness ratings. Finally, in the three 
areas affected by the agreement--the 157th Separate Infantry 
Brigade, aviation units, and special operation units--some of 
the commands' and units' initiatives, to help affected persons 
find new units, appear to be working well. Others, however, 
appear to discourage the transfer of personnel, even if a 
transfer would result in a more effective use of their skills.

74. ``Force Structure: Army National Guard Divisions Could Augment 
        Wartime Support Capability,'' March 1995, GAO/NSIAD-95-80.

    a. Summary.--The Department of Defense (DOD), in its 
bottom-up review of the Nation's defense needs in the post-cold 
war era, judged that it is prudent to maintain the capability 
to fight and win two nearly simultaneous major regional 
conflicts. In responding to a single conflict during Operation 
Desert Storm, the Army had difficulty providing support units, 
even though it deployed only a portion of its total combat 
force. Because of this experience, GAO examined whether (1) the 
Army might face similar challenges in supporting the two-
conflict strategy; and (2) support capability in certain Army 
National Guard units could be used to alleviate any potential 
shortfalls.
    b. Benefits.--The Army would be hard-pressed to provide 
enough nondivisional support units for two nearly simultaneous 
major regional conflicts. The Army had difficulty providing 
such units during the Persian Gulf War--a single regional 
conflict. One option for augmenting the Army's nondivisional 
support capability is to use existing support capability--
units, personnel, and equipment--in the eight National Guard 
divisions that DOD did not include in the combat force for 
executing the two-conflict strategy. These divisions contain 
several support units that are similar or identical to 
nondivisional support units that were not allocated resources 
during the 1993 Total Army Analysis. These divisions have many 
of the same types of skilled personnel and equipment that the 
nondivisional support units have.

75. ``Chemical Weapons: Army's Emergency Preparedness Program Has 
        Financial Management Weaknesses,'' March 1995, GAO/NSIAD-95-94.

    a. Summary.--GAO reviewed how the Army's Chemical Stockpile 
Emergency Preparedness Program funds (CSEPP)--about $281 
million appropriated in fiscal years 1988-94--were spent. GAO 
has previously reported on problems that the Army experienced 
in improving the emergency preparedness capabilities of local 
communities and the ineffectiveness of its management approach. 
GAO (1) identifies the purposes for which the funds were 
allocated; (2) determines how funds were spent by States and 
communities associated with four chemical weapons storage 
sites; and (3) examines elements of the program's financial 
reporting and internal control systems.
    b. Benefits.--Army and Federal Emergency Management Agency 
(FEMA) officials lack accurate financial information to 
identify how funds are spent or to ensure program goals are 
achieved. However, GAO, by analyzing why funds were allocated 
and by visiting four States participating in the program, 
developed a general picture of expenditures. More than $145 
million (52 percent) was allocated to States and counties, $127 
million (45 percent) was allocated to the Army and FEMA, and 
almost $8.9 million (3 percent) is unallocated. The State 
allocations for major program categories were (1) $35.1 million 
for communications; (2) $28.4 million for alert and 
notification; (3) $18.3 million for salaries and benefits; (4) 
$15.8 million for automation; and (5) $12.7 million for 
emergency operations centers. In general, funds were used for 
priority items and other critical CSEPP objectives, but not all 
items are operational or have been purchased. Finally, adequate 
internal controls to ensure assets are safeguarded and program 
goals are efficiently and effectively achieved do not exist, 
leaving the program susceptible to fraud, waste, and abuse.

76. ``Background Investigations: Impediments to Consolidating 
        Investigations and Adjudicative Functions,'' March 1995, GAO/
        NSIAD-95-101.

    a. Summary.--Executive Orders 10450 and 12356, as amended, 
establish uniform requirements for personnel security programs 
in the Federal Government. They require agency heads to (1) 
classify Federal positions for sensitivity in relation to 
national security and (2) investigate each person as 
appropriate based on the position's level of access to national 
security information. These background investigations are used 
to determine whether an individual meets established criteria 
for access to classified information. Moreover, Executive Order 
10450, as amended, directs the Office of Personnel Management 
to provide investigative services to Federal agencies except 
those authorized to conduct their own investigations such as 
the Departments of Defense and State, the FBI, and the CIA. In 
this report, GAO collected and analyzed information on (1) the 
feasibility of one central agency conducting all background 
investigations or adjudicative functions; (2) Federal agencies' 
compliance with National Security Directive on single scope 
background investigations for top secret clearances; and (3) 
costs of background investigations and number of security 
clearances.
    b. Benefits.--GAO concludes that it may be feasible to have 
one central agency conduct all background investigations and 
adjudicative functions. However, most of the nine key Federal 
agencies that account for 95 percent of the security clearances 
oppose consolidation. Moreover, several other impediments would 
have to be resolved. Potential benefits of consolidation 
include cost savings, fewer oversight agencies, standardized 
operating procedures and information systems, and more 
consistency in applying standards. However, consolidation could 
also result in less agency control over the process, 
potentially reducing the extent to which an individual agency's 
requirements and priorities were met. GAO found that Federal 
agencies were complying with National Security Directive 63 on 
single-scope background investigations for top secret 
clearances. The purpose of the directive was to eliminate 
redundant investigative practices for granting persons access 
to top secret and sensitive information. Consistent with the 
directive, some agencies now require even more background 
information to meet their missions. For example, the United 
States Secret Service conducts polygraph tests for its agents 
and employees. In the fiscal year 1993, executive branch 
agencies spent $326 million on background investigations, $20 
million of which went to private sector investigators.

77. ``Military Readiness: Improved Assessment Measures Are Evolving,'' 
        March 1995, GAO/T-NSIAD-95-117.

    a. Summary.--In recent years, military leaders have 
expressed concern about the effect on military readiness of (1) 
the level of current military operations; (2) contingency 
operations; (3) the shifting of funds to support these 
operations; and (4) personnel truculence. Questions have also 
been raised about the ability of the Defense Department's (DOD) 
readiness-reporting system to provide a comprehensive 
assessment of overall readiness. In an October 1994 report, GAO 
examined whether current indicators of readiness adequately 
reflected the many complex components that contributed to 
overall military readiness and whether readiness indicators 
existed that could predict positive or negative changes in 
readiness.
    b. Benefits.--This testimony highlights key findings from 
that report and discusses some major DOD initiatives to achieve 
a more comprehensive readiness assessment.

78. ``Navy Shipbuilding Programs: Nuclear Attack Submarine 
        Requirements,'' March 1995, GAO/T-NSIAD-95-120.

    a. Summary.--There are less costly alternatives than the 
Navy's approach to maintain the required fleet of nuclear 
attack submarines. These alternatives would save billions of 
dollars and meet the Navy's force structure and threat 
requirements. In addition, the SSN-23 is not needed to satisfy 
force structure requirements or to counter a treat. Instead, 
the Defense Department's (DOD) justification for building the 
submarine is to preserve competition and to meet industrial 
base and national security needs.
    b. Benefits.--GAO believes that this is an inadequate 
justification for building the SSN-23 because currently no 
competition exists to build nuclear attack submarines and DOD 
has not made clear what it means by long-term industrial base 
and national security needs.

79. ``Wartime Medical Care: Aligning Sound Requirements With New Combat 
        Care Approaches Is Key to Restructuring Force,'' March 1995, 
        GAO/T-NSIAD-95-129.

    a. Summary.--The Defense Department's (DOD) medical system 
costs about $15 billion annually and employs about 227,000 
active duty and reserve personnel. Recent legislation required 
DOD to determine (1) the size and the composition of the 
military medical system needed to support U.S. forces during a 
war, and (2) any adjustments needed for cost-effective delivery 
of medical care to covered beneficiaries during peacetime.
    b. Benefits.--The resulting DOD study challenged the cold 
war assumption that all medical personnel employed during 
peacetime are needed for wartime and questioned whether U.S. 
military medical forces should be reduced to only those needed 
for wartime.

80. ``Department of Justice: Office of Professional Responsibility's 
        Case-Handling Procedures,'' March 1995, GAO/OSI-95-8.

    a. Summary.--A February 1992 GAO report recommended that 
the Justice Department's Office of Professional Responsibility 
(OPR), which investigates allegations of criminal or ethical 
misconduct involving Justice employees, (1) establish basic 
standards for conducting investigations; (2) set standards for 
case documentation; (3) review case files to identify needed 
changes to Justice procedures and operations; and (4) follow up 
more consistently on the results of misconduct investigations 
conducted by other Justice components and maintain the follow-
up information in the case files. This report discusses whether 
the recommendations have been implemented and provides 
information on the Offices's handling of referrals.
    b. Benefits.--OPR's procedural standards for investigating 
and documenting cases addressed only those cases that OPR staff 
actually investigated--72 of the 106 cases. In three of the 
seven OPR investigations, the application of OPR's 
investigative and documentation standards was questionable. 
However, OPR's new procedures addressed GAO's recommendation 
regarding case file reviews to identify systemic problems in 
Justice procedures and operations. Continuing, the OPR 
standards did not cover cases that OPR monitored or supervised 
or cases that involved other matters, such as preliminary 
reviews of complaints. These cases were not subject to any 
formalized case file documentation requirements. In addition, 
GAO found inconsistencies in how OPR monitored and supervised 
investigations by other Justice components and questioned OPR's 
handling of some cases in the ``other'' category. Finally, 
except for the Office of Inspector General (OIG), OPR had no 
formal referral procedures with any Justice component.

81. ``Chemical Weapons Disposal: Issues Related to DOD's Management,'' 
        July 1995, GAO/T-NSIAD-95-185.

    a. Summary.--Defense Department (DOD) efforts to destroy 
its chemical weapons stockpile have been plagued by soaring 
costs and schedule delays. Cost estimates to dispose of this 
deadly material have risen from $1.7 billion to $11.9 billion, 
and the planned completion date has slipped from 1994 to 2004. 
DOD has taken some encouraging steps to improve its management 
and oversight of the disposal program, but a number of areas 
are still of concern. To date, only two of nine planned 
incinerators have been built and only one of the two, at 
Johnston Atoll, is operational. About $2 billion has been spent 
on the program, but only 2 percent of the stockpile has been 
destroyed. The Army continues to experience added program 
requirements, public opposition, and technical and programmatic 
problems. Although the storage of the M55 rocket poses the 
largest safety risk, the Army lacks information to predict the 
safe storage life of the rocket. Communities near the storage 
sites are still not yet fully prepared to respond to a chemical 
emergency. Finally, although the Army is researching technology 
to dispose of the chemical weapons stockpile, this technology 
will not be ready in time to meet the current disposal deadline 
of December 31, 2004.

82. ``Military Base Closures: Analysis of DOD's Process and 
        Recommendations for 1995,'' April 1995, GAO/T-NSIAD-95-132.

    a. Summary.--The Defense Base Closure and Realignment Act 
of 1990 established the current process for DOD base closure 
and realignment actions within the United States. This report 
responds to the act's requirement that GAO provide to the 
Congress and the Defense Base Closure and Realignment 
Commission an analysis of the Secretary of Defense's 
recommendations for bases for closure and realignment and the 
selection process used. On February 28, 1995, the Secretary of 
Defense recommended closures, realignments, and other actions 
affecting 146 domestic military installations. Of that number, 
33 were described as closures of major installations, and 26 as 
major realignments. An additional 27 were changes to prior base 
closing round decisions. The Secretary projects that the 
recommendations, when fully implemented, will yield $1.8 
billion in annual recurring savings.
    b. Benefits.--Although DOD has undergone substantial 
downsizing in funding, personnel, and force structure, it is 
generally recognized that much excess capacity likely will 
remain after the 1995 Base Realignment and Closure Commission 
(BRAC) round. Currently, DOD projects that its fiscal year 1996 
budget represents a 39-percent reduction below its fiscal year 
1985 peak. By way of comparison, 1995 BRAC recommendations 
combined with previous major domestic base closures since 1988 
would total a reduction of 21-percent. However, DOD's 1995 BRAC 
process was generally sound and well documented and should 
result in substantial savings. Although, the recommendations 
and selection process were not without problems, and in some 
cases, there are questions about the reasonableness of specific 
recommendations. At the same time, we also noted that 
improvements were made to the process from prior rounds, 
including more precise categorization of bases and activities. 
This resulted in more accurate comparisons between like 
facilities and functions and better analytical capabilities. 
GAO raised a number of issues that they believe warrant the 
Commission's attention in considering DOD's recommendations. 
These issues include: (1) DOD's attempt at reducing excess 
capacity in common support functions facilitated some important 
results. However, agreements for consolidating similar work 
done by two or more of the services were limited, and 
opportunities to achieve additional reductions in excess 
capacity and infrastructure were missed. (2) Although the 
services have improved their processes with each succeeding 
BRAC round, some process problems continued to be identified. 
In particular, the Air Force's process remained largely 
subjective and not well documented; also, it was influenced by 
preliminary estimates of base closure costs that changed when 
more focused analyses were made.

83. ``U.S.-China Trade: Implementation of the 1992 Prison Labor 
        Memorandum,'' April 1995, GAO/GGD-95-106.

    a. Summary.--Following the crackdown on protestors in 
Tiananmen Square, United States Government officials began 
debating whether to link renewal of China's most-favored-nation 
status to improving human rights in China. Among the issues 
raised was Chinese exports made with prison labor. In early 
August 1992, the United States and China signed the prison 
labor memorandum of understanding (MOU) providing for the 
exchange of information between both countries regarding their 
respective prison facilities. Not only does United States law 
prohibit imports of prison labor products, but China itself 
prohibits such exports. Then, in May 1993, President Clinton 
signed an Executive order requiring the review of Chinese 
compliance with the 1992 MOU as part of the annual assessment 
of China's most-favored-nation status. This report is a review 
of recent issues regarding the United States-China MOU on 
prison labor. Specifically, GAO's describes (1) the United 
States Customs Service's assessment of China's compliance with 
the prison labor MOU, and (2) the experience of the United 
States Government in obtaining information sufficient to 
enforce the prohibition against goods made with Chinese prison 
labor since the MOU was signed.
    b. Benefits.--Although the United States Customs Service 
was concerned in 1993 that China had not shown a willingness to 
fulfill its responsibilities under the memorandum, Customs said 
that Chinese officials had been more cooperative of late. 
Customs officials said that they had obtained information from 
the Chinese that allowed them to pinpoint imported goods made 
with prison labor. This was upheld in December 1994, when the 
United States Court on International Trade upheld an 
affirmative Customs finding that imported goods from China had 
been made with prison labor. However, Justice Department 
officials are concerned whether any memorandum or agreement 
could provide Justice attorneys with the information necessary 
to defend Customs' decisions in an efficient and inexpensive 
manner because of the evidence that might be required under 
U.S. law. In addition, the evidence obtained from Chinese 
government documents may not be present in future cases 
primarily because the information used as evidence is no longer 
published in China.

84. ``U.S.-Vietnam Relations: Issues and Implications,'' April 1995, 
        GAO/NSIAD-95-42.

    a. Summary.--Although the United States has lifted its 
trade embargo against Vietnam and allowed United States 
businesses to invest there, the United States has yet to 
establish full diplomatic relations with Vietnam. Additional 
steps toward normalization of relations depend on political and 
economic change in Vietnam and continued progress on the POW/
MIA issue. This report discusses (1) ongoing changes in 
Vietnam's foreign and domestic policies and the reaction of the 
international community; (2) changes in United States policy 
toward Vietnam and the substance of bilateral relations between 
the two countries; (3) the interests that the United States and 
Vietnam are pursuing; (4) political development; and (5) key 
factors affecting the pace of movement toward normalized 
relations.
    b. Benefits.--Changes in Vietnam's foreign and domestic 
policies have led to broader acceptance of Vietnam by the 
international community. Vietnam's withdrawal from Cambodia and 
subsequent cooperation in the U.N.-coordinated search for a 
peaceful settlement in that country, and Vietnam's ongoing 
program of market-oriented domestic reforms have largely 
removed the basis for the international community's 1980's 
consensus that Vietnam should be isolated as an outcast. 
Further, the United States has, among other things, ended its 
opposition to international financial institution (IFI) lending 
to Vietnam and lifted its embargo against trade with Vietnam. 
As a result, United States private sector interests, including 
businesses, nongovernmental organizations, and Vietnamese-
Americans, have established growing ties with Vietnam. 
Government agencies, including the Departments of State and 
Defense, have established limited ties. The United States has 
also altered its policy interests with Vietnam; they now 
include the promotion of human rights and democracy in Vietnam, 
as well as United States commercial and security interests. For 
its part, Vietnam has important commercial and security 
interests to pursue with the United States. Vietnam still faces 
an uncertain future, despite ongoing reforms and positive 
economic trends. While Vietnam has potential for growth and 
change, analysts still can point out serious constraints that 
remain. Vietnam remains one of the world's poorest countries, 
and the Communist party continues to exercise a monopoly on 
political power. Finally, executive branch officials and other 
analysts stated that the pace at which the administration moves 
toward full bilateral ties will depend on United States 
conclusions regarding developments within Vietnam, particularly 
with regard to progress on the POW/MIA issue.

85. ``Army Training: One-Third of 1993 and 1994 Budgeted Funds Were 
        Used for Other Purposes,'' April 1995, GAO/NSIAD-95-71.

    a. Summary.--The Army uses the Training Resource Model to 
identify the amount of operating tempo funds that its military 
units require to meet readiness objectives. Once the Army 
determines direct (fuel, maintenance, and spare parts) and 
indirect (civilian pay and maintenance contracts) costs for 
each reporting unit, it aggregates operating tempo costs, or 
military training funds, by major command. Finally, the Army 
establishes a total operating tempo cost for inclusion in the 
President's budget submission for annual congressional 
appropriation. Congress has consistently supported Army 
requests for tempo costs to keep Army forces at a high level of 
combat readiness. However, as a result of reports that 
scheduled training exercises have been canceled, GAO in this 
report determines whether (1) operating tempo funds were spent 
for purposes other than training, and (2) the operating tempo 
funds requested in the Army's congressional budget submissions 
were consistent with the amounts needed for training exercises 
necessary to meet its readiness objectives.
    b. Benefits.--Of the $3.6 million allocated in fiscal years 
1993 and 1994 for military training to keep United States 
forces in the United States and Europe and a high level of 
combat readiness, the Army diverted nearly one-third for other 
purposes, including base operations, property maintenance, and 
other peacekeeping operations. At the same time, outdated 
assumptions and the failure to consider unit ability to train 
at their home stations resulted in Army budget submissions to 
Congress that overestimated the funding needed to conduct 
training exercises.

86. ``DOD Service Academies: Comparison of Honor and Conduct 
        Adjudicatory Processes,'' April 1995, GAO/NSIAD-95-49.

    a. Summary.--Over the years, several highly publicized 
incidents have occurred at the Nation's military academies 
involving honor or conduct charges against students. GAO 
reviewed the adjudicatory systems used at the academies to make 
decisions on student conduct and performance. This report (1) 
compares the honor and conduct systems at each academy and 
describes how the various systems provide common due process 
protection, and (2) describes the attitudes and the perceptions 
of students regarding these systems.
    b. Benefits.--The three service academies have established 
review processes to evaluate cases of academically deficient 
students and prescribe dispositions for each case. The 
processes in place at each academy are generally similar. 
Dispositions range from requiring an individual to repeat a 
failed course to disenrollment from the academy. Before a 
student is academically disenrolled, at least one academic 
review group evaluates the case. Students may present 
statements on their behalf during the review process.

87. ``Nuclear Safety: U.S. Assistance to Upgrade Soviet-Designed 
        Nuclear Reactors in the Czech Republic,'' June 1995, GAO/RCED-
        95-157.

    a. Summary.--In March 1994, the Export-Import Bank 
guaranteed a loan of $317 million for work done by the 
Westinghouse Electric Corp. on a nuclear power plant in the 
Czech Republic. The project entailed integrating Western 
technology into a Soviet-designed pressurized water reactor. 
Although United States officials saw an opportunity to gain 
more than $330 million in United States exports and to make the 
reactors safer, the Austrian Government and some Members of 
Congress have expressed concern about the safety of the Soviet-
designed reactors and the extent of potential United States 
liability in the event of a nuclear accident. This report 
discusses (1) the reasons for the Export-Import Bank's loan 
guarantee for the nuclear power plant; (2) the steps that the 
Export-Import Bank took to ensure the project's soundness; and 
(3) the U.S. Government's potential liability as a result of 
the Export-Import Bank's loan guarantee.
    b. Benefits.--United States Government officials believe 
that Western technology can make the Soviet-designed Temelin 
reactors safer and provide more than $330 million in United 
States export earning. As a result, United States officials 
strongly supported United States industry's participation in 
the Temelin project and worked with Westinghouse and the Czech 
Government to help bring about the acceptance of a United 
States firm for the project. To determine whether the project 
complied with the administration's policies--particularly 
United States environmental policy--and to draw on the 
administration's expertise, the Bank chairman requested 
guidance from the National Security Council, which conducted an 
interagency review of the safety of the reactor's design and of 
the technical capabilities of the Czech regulatory authorities. 
The results of the National Security Council's review and the 
engineering and environmental evaluation by the Bank's nuclear 
engineer satisfied the Bank's Board of Directors, and the loan 
guarantee was approved. In addition, the Bank's Office of the 
General Counsel examined the question of whether the Bank, 
since it is guaranteeing a loan for equipment and nuclear fuel 
to complete the reactors, could be held liable for damages in 
the event of a nuclear incident at the Temelin plant. The 
Bank's General Counsel concluded that the chances are small 
that the Bank would be held liable in any court for damages.

88. ``DOD Infrastructure: DOD's Planned Finance and Accounting 
        Structure Is Not Well Justified,'' September 1995, GAO/NSIAD-
        95-127.

    a. Summary.--The Defense Department's (DOD) consolidation 
of more than 300 defense accounting offices did not adequately 
consider the functions and proper staffing levels of the new 
offices and gave undue weight to the reuse of closed military 
bases. GAO concludes that DOD's plan, which is expected to cut 
23,000 finance and accounting jobs, stressed short-term cost 
savings at the expense of customer service and improved 
business practices. This report assesses (1) the process that 
DOD used to identify the appropriate size and location for its 
finance and accounting centers and operating locations; (2) the 
consolidation's potential impact on customer service; and (3) 
the extent to which DOD's consolidation plan reflects cutting-
edge business practices.
    b. Benefits.--GAO stated that DOD's plan to consolidate and 
reduce personnel as a necessary step toward a more efficient 
finance and accounting service. In such an undertaking it is 
important to strike a balance between cost considerations and 
other factors important to maintaining customer service and 
improving business operations. GAO concluded that DOD, based on 
their analysis of the process DOD used to select the proper 
number of new operating locations and where they should be 
located, did not achieve that balance. Specifically, GAO found:
          (1) DOD decided to open 20 new operating locations 
        without first determining what finance and accounting 
        functions they would perform or if 20 was the right 
        number to support its operations.
          (2) DOD, in selecting the 20 specific operating 
        locations, used criteria that resulted in placing undue 
        weight on using excess DOD facilities, primarily those 
        on military bases closed or realigned during the base 
        realignment and closure process.
          (3) DOD, for the most part, has not re-engineered the 
        finance and accounting functions that will be performed 
        at the 20 new operating locations. Accordingly, the 
        consolidation may reduce the number of people 
        performing the finance and accounting functions, but 
        operations at the new locations will not reflect 
        leading-edge business practices.
    DOD needs to develop a new estimate of number of locations 
and personnel needed to meet current and future operating 
requirements. This estimate should factor in the impact on 
operating requirements of new processes that cure present 
deficiencies and take full advantage of modern technology.

89. ``Peace Operations: Effect of Training, Equipment, and Other 
        Factors on Unit Capability,'' October 1995, GAO/NSIAD-96-14.

    a. Summary.--Since the end of the cold war, the U.S. 
military has become increasingly involved in peace operations, 
ranging from military observer duties to humanitarian and 
disaster relief work. This report examines (1) how the military 
services incorporate peace operations into their training 
programs; (2) what effect peace operations have on maintaining 
combat readiness; and (3) whether the services have the weapon 
systems and equipment they need for these operations.
    b. Benefits.--Commanders of ground combat units differ on 
when special peace operations training should be provided. Some 
commanders include aspects of peace operations in standard unit 
training. Other commanders prefer to maintain an exclusive 
combat focus until their units are formally assigned to a peace 
operation. Participation in peace operations can provide 
excellent experience for combat operations, but such 
participation can also degrade a unit's war-fighting 
capability. For example, it can take up to 6 months for a 
ground combat unit to recover from a peace operation and become 
combat ready. Additionally, peace operations may interrupt 
naval training schedules, but there is little difference in the 
naval skills required for peace operations and for other 
operations. Finally, to determine whether the services have the 
appropriate weapon systems and equipment for peace operations 
is an ongoing process taking place primarily at the service 
level. The services have identified specific requirements in 
three areas: (1) force protection; (2) equipment for military 
operations in built-up areas; and (3) nonlethal weapons. Except 
for the recent withdrawal operation from Somalia, few nonlethal 
weapons have been used to date in peace operations.

90. ``Cuba: U.S. Response to the 1994 Cuban Migration Crisis,'' 
        September 1995, GAO/NSIAD-95-211.

    a. Summary.--This report reviews the United States 
Government's efforts to cope with the mass exodus of people 
from Cuba during the summer of 1994. GAO (1) describes how 
United States policy toward those seeking to leave Cuba has 
changed since then; (2) identifies the agencies and the costs 
to the United States Government associated with the exodus of 
Cubans; (3) assesses the capabilities of the United States 
Interests Section in Havana to process applicants seeking legal 
entry into the United States; and (4) evaluates the adequacy of 
living conditions in the United States, and at the United 
States Naval Station, Guantanamo Bay.
    b. Benefits.--For over 30 years, fleeing Cubans had been 
welcomed to the United States. However, the United States 
Government reversed this policy on August 19, 1994, when 
President Clinton announced that Cuban rafters interdicted at 
sea would no longer be brought to the United States. Instead, 
they would be taken to safe haven camps at the United States 
Naval Station, Guantanamo Bay, Cuba, with no opportunity for 
eventual entry into the United States other than by returning 
to Havana to apply for entry through legal channels at the 
United States Interests Section. On September 9, 1994, the 
United States and Cuban Governments agreed that the United 
States would allow at least 20,000 Cubans to enter annually in 
exchange for Cuba's pledge to prevent further unlawful 
departures by rafters. On May 2, 1995, a White House 
announcement was released stating that Cubans interdicted at 
sea would not be taken to a safe haven but would be returned to 
Cuba where they could apply for entry into the United States at 
the Interests Section in Havana. Several United States agencies 
have been involved in implementing the United States policy 
regarding Cubans wishing to leave their country. The 
predominant agencies are: (1) the Department of Defense, which 
will spend about $434 million from August 1994 through 
September 1995 operating the safe haven camps; (2) the United 
States Coast Guard, which spent about $7.8 million interdicting 
Cubans at sea from August 1994 to the present; (3) the 
Department of Justice's Immigration and Naturalization Service 
(INS) and Community Relations Service (CRS), which together 
will spend about $48.3 million for the Cuban migration crisis 
from August 1994 through September 1995; and (4) the Department 
of State, which will spend an estimated $7.1 million during 
this same period. Further, the United States Interests Section 
in Havana has been able to meet the workload of processing 
applicants seeking legal entry into the United States. As of 
June 9, 1995, it had approved 16,305 Cubans for United States 
entry. Finally, the Cubans' living conditions at the Guantanamo 
Bay safe haven camps are difficult, but adequate based on our 
observations at the camps. GAO found no internationally 
accepted standards of what the living conditions should be at 
refugee camps, but GAO noted that conditions in all camps 
generally exceeded U.N. inspection guidelines for minimal 
shelter, food, and water.

91. ``Inventory Management: Purchasing Parts From Contractor-Operated 
        Parts Stores and Commercial Sources,'' September 1995, GAO/
        NSIAD-95-176.

    a. Summary.--Air Force bases use a variety of vehicles to 
support base operations. Common commercial vehicles used 
include Plymouth and Dodge sedans and Ford and Chevrolet pickup 
trucks. When making small purchases for vehicle repair parts 
the bases are directed to use the small purchase procedure that 
is most suitable, efficient, and economical for each 
acquisition. Small purchase procedures include blanket purchase 
agreements, purchase orders, and the International Merchant 
Purchase Authorization Card. Bases may also meet their vehicle 
repair needs by establishing Air Force Contractor Operated 
Parts Stores (COPARS). These stores were authorized in the 
early 1960's because the Air Force believed they would usually 
be more responsive and less costly than the traditional Air 
Force base supply system. Currently, the Air Force contracts 
with COPARS at 46 of its bases, and the value of these 
contracts totals $79.6 million. This report includes a cost 
comparison study of vehicle repair parts purchased from COPARS 
with those purchased directly from commercial suppliers. Also, 
included is whether the provisions of Office of Management and 
Budget (OMB) Circular A-76 are to be applied before terminating 
a COPARS contract.
    b. Benefits.--In comparing costs for vehicle parts 
purchased from COPARS with those purchased directly from 
commercial suppliers, GAO found that the most cost-effective 
way to buy parts to repair vehicles can vary from base to base. 
Factors, such as the types of vehicles in a fleet, the volume 
of business being done, vendor availability, and vendor payment 
preferences, differ among bases and can affect the price of 
parts. Also, mission-related factors, such as deployments, can 
affect the availability of personnel needed to manage a 
commercial-source parts procurement operation. Given these 
differences, installation commanders are in the best position 
to decide which approach for acquiring parts will best meet 
their needs. GAO also found that controlling personnel costs is 
key to determining whether savings can be achieved in a 
commercial-source procurement system. Office of Management and 
Budget Circular A-76 does not apply to the Air Force's vehicle 
repair parts support decision. The establishment of a 
commercial-source procurement system is simply an alternative 
way of doing business. The Air Force is not replacing the 
stores with an identical in-house service. As a result, no 
study is required.

92. ``Nuclear Facility Cleanup: Centralized Contracting of Laboratory 
        Analysis Would Produce Budgetary Savings,'' May 1995.

    a. Summary.--The Department of Energy (DOE) is undertaking 
the cleanup of contaminants that were dumped or leaked into the 
soil and water at its facilities during more than 50 years of 
nuclear weapons production. The Environmental Protection Agency 
(EPA) is also engaged in an expensive cleanup of some of the 
same contaminants at the Nation's worst nonFederal sites. DOE 
estimates that this cleanup will cost at least $300 billion and 
take more than 30 years to complete. In this report, GAO (1) 
compares the average prices that DOE and EPA pay to commercial 
laboratories for the same types of analysis and determine 
whether the two agencies' different contracting approaches 
affect these prices; (2) identifies whether DOE's decentralized 
approach has resulted in any administrative inefficiencies; and 
(3) discusses any key changes DOE is making in its contracting 
for laboratory analysis.
    b. Benefits.--Under DOE's decentralized approach, 
contractors independently obtain laboratory analyses of soil 
and water through either commercial laboratories or contractor-
run laboratories. In contrast, the EPA, which oversees cleanup 
of Superfund sites, contracts for these analyses on a 
centralized basis. DOE pays substantially higher prices than 
EPA does for the same types of analyses at commercial 
laboratories. For example, DOE's price for inorganic chemical 
analysis $358, about 223 percent more than EPA's price of $111. 
GAO concluded that if DOE had used a centralized approach, like 
the EPA, they would have saved $247 per analysis, on average. 
They also determined that DOE dilutes its massive buying power 
by procuring commonly used analyses on a piecemeal basis 
through its contractors. The results of DOE's contracting 
approach are higher prices and unnecessary costs arising from 
duplication of efforts. Without centralizing its laboratory 
analysis procurements, DOE will not reap the cost benefits 
resulting from its enormous buying power.

93. ``Federally Funded R&D Centers: Use of Contract Fee by the 
        Aerospace Corporation,'' September 1995, GAO/GGD-96-4.

    a. Summary.--The Air Force provided a $15.5 million 
contract fee to the Aerospace Corp. to operate a federally 
funded research and development center. Such fees are common 
for federally funded, private sector organizations who perform 
research and development that cannot be done in-house or by 
contract. Such fees are awarded according to weighted 
guidelines. The Air Force does submit a plan expressing its 
needs, but there is discretion as to how the fee is used. 
Included in the fee are ``unreimbursable expenses'' which are 
incurred only if such expenses are ``ordinary or necessary.''
    b. Benefits.--There should be better coordination between 
the research and development centers and the agency providing 
the fee so that the agency obtains from the fee the research 
and development that best suits its immediate needs. In 
addition, there should be a better definition of ``ordinary or 
necessary'' expenses.

94. ``Community Policing: Information on the ``COPS on the Beat'' Grant 
        Programs,'' October 1995, GAO/GGD-96-4.

    a. Summary.--This is a description of the grant 
application, selection processes for the COPS, Phase I, COPS 
Funding Accelerated for Smaller Towns (FAST), and COPS 
Accelerated Hiring, Education, and Deployment (AHEAD) programs. 
This report also includes a comparison of COPS FAST and COPS 
AHEAD programs by looking at the crime rates in applicant and 
nonapplicant jurisdictions, the reasons some jurisdictions 
chose not to apply for COPS program grants, and the public 
safety issues identified by a sample of jurisdictions applying 
for COPS FAST grants.
    b. Benefits.--The Department of Justice created a COPS 
office to award Community Policing Act grants in a non-
competitive, two-step application and a selection process to 
allow officers to be hired more quickly. Basically, the higher 
the crime rate, the more likely a jurisdiction was to apply. 
The primary reasons jurisdictions chose not to apply for COPS 
grants were cost related. Specifically, these jurisdictions 
expressed uncertainty about being able to continue officer 
funding after the grant expired and about their ability to 
provide the required 25-percent match. Property crimes and 
domestic violence were the most frequently included crimes in 
the top five public safety issues among approved COPS FAST 
applicants.

95. ``Coast Guard: Enforcement Under MARPOL V Convention on Pollution 
        Expanded, Although Problems Remain,'' May 1995, GAO/RCED.

    a. Summary.--As much as 1 million metric tons of garbage 
and plastics are dumped into the ocean each year, killing 
seabirds and marine mammals, creating safety hazards for 
shippers and boaters, and polluting shorelines and beaches. To 
mitigate this uncontrolled ocean dumping, the United States 
became a party to Annex V of the International Convention for 
the Prevention of Pollution From Ships--known as MARPOL V--
which restricts the discharge of garbage and plastics from 
ships of signatory countries. However, Congress has repeatedly 
expressed concerns about the Coast Guard's enforcement of 
MARPOL V provisions. This report discusses the Coast Guard's 
progress in enforcing MARPOL V and determines whether funds 
that Congress earmarked for 100 enforcement positions are being 
used for educational and outreach efforts, which are intended 
to improve compliance with MARPOL V.
    b. Benefits.--Although the provisions of MARPOL V became 
effective on December 31, 1988, the Coast Guard did not begin 
substantial enforcement efforts until the early 1990's. 
Following congressional criticism in 1990 and 1992, and aided 
by additional personnel, the Coast Guard stepped up its 
enforcement efforts. As a result, the number of reported cases 
involving violations of the MARPOL V regulations has increased 
steadily from 16 in 1989 to 311 in 1994. At present, no 
accurate means exists to determine whether the Coast Guard is 
fully utilizing the additional resources that the Congress 
provided for enforcing MARPOL. Moreover, the amount of time the 
Coast Guard, in aggregate, spends on MARPOL-related activities 
is uncertain because the Coast Guard does not consistently 
record time spent on this function. In addition, education and 
outreach has become an important part of the Coast Guard's 
strategy to achieve compliance with MARPOL. In 1994, the Coast 
Guard's education and outreach efforts for MARPOL V expanded 
from targeting commercial shippers to include other groups, 
such as recreational boaters and fishing vessel operators.

96. ``Defense Inventory: Opportunities to Reduce Warehouse Space,'' May 
        1995, GAO/NSIAD-95-64.

    a. Summary.--The Defense Department's (DOD) 600 million 
cubic feet of warehouse space make DOD the world's largest 
inventory manager. Although DOD has substantially cut the 
number of its storage depots and the inventory stored there--
ranging from medical supplies to clothing to spare parts--it 
could reduce inventory levels still further, particularly among 
deteriorated or obsolete items. DOD should focus on getting rid 
of unneeded items that take up a lot of space and involve more 
than 20 years supply on hand. This report determines (1) the 
size of DOD's secondary inventory; (2) the amount of space 
occupied by secondary inventory that DOD does not need to 
satisfy current war reserve and operating requirements; (3) the 
cost of storing this inventory; and (4) the time it will take 
to use it.
    b. Benefits.--Over the past several years, DOD has made 
sizable reductions to the number of storage depots and to the 
amount of inventory stored in them. DOD has initiatives to make 
further reductions and we believe opportunities exist to build 
on these initiatives. Additionally, GAO analyzed DOD secondary 
inventory, an estimated volume of 218.8 million cubic feet. 
They found that 60 percent of this volume, or 130.4 million 
cubic feet, is not needed to satisfy current war reserve and 
operating requirements. About 84,000 of these items, occupying 
41.7 million cubic feet, has more than a 20-year supply. DOD 
has begun programs to reduce the secondary inventory level; 
however, its efforts have been partially offset by decreasing 
inventory demands and increasing returns of material by forces 
being deactivated. During the last 3 fiscal years, DOD disposed 
of secondary inventory costing about $43 billion.

97. ``Military Exports: Recovery of Nonrecurring Research and 
        Development Costs,'' May 1995, GAO/NSIAD-95-147.

    a. Summary.--Since 1967, the Defense Department (DOD) has 
been recovering nonrecurring research and development and one-
time production costs on sales of weapon systems to foreign 
governments. The intent of this effort was to control U.S. 
costs and the extent of weapons sales to foreign governments. 
In 1992, DOD canceled its policy of recovering nonrecurring 
costs on direct commercial sales in an effort to boost the 
competitiveness of U.S. firms in the world market. In 1995, 
several bills were introduced that could affect the recovery of 
nonrecurring costs on military sales. This report discusses (1) 
the government's recovery of nonrecurring research and 
development costs on sales of major defense equipment; (2) the 
effect of charging a flat or standard fee rather than the 
current pro rata fee; and (3) views from supporters and 
opponents of the recovery of these costs.
    b. Benefits.--DOD recovered $181 million in nonrecurring 
costs on foreign military sales in fiscal year 1994 and 
estimated, based on historical trends, that collections could 
amount to $845 million between fiscal years 1995 and 1999. It 
has been considered to change from the current pro rata fee to 
a flat or standard fee. A flat rate would be easy to calculate 
and would not need to be periodically updated, as is the case 
of a pro rata charge. However, the effect of using a flat rate 
varies, depending on the way it is applied. Supporters and 
opponents of the recovery of nonrecurring costs differ on its 
benefits and drawbacks. Supporters believe that the charges 
serve national security interests by keeping weapon systems out 
of unstable regions of the world and the weapons industry 
should not be subsidized at taxpayers' expense. Opponents, on 
the other hand, believe the charges adversely affect U.S. 
industry's competitiveness in the world market and could affect 
the U.S. economy in the long run.

98. ``Military Capabilities: Stronger Joint Staff Role Needed To 
        Enhance Joint Military Training,'' July 1995, GAO/NSIAD-95-109.

    a. Summary.--U.S. military strategy today stresses the need 
for air, land, sea, and special operations forces to work 
together in large-scale combat and noncombat operations. 
Operation Desert Storm, humanitarian relief efforts in Rwanda 
and Somalia, and the effort to restore democracy in Haiti 
illustrate the diverse missions that United States forces can 
expect to carry out. This report examines (1) the scope of the 
Defense Department's joint training activities; (2) the 
effectiveness of the management of these activities; and (3) 
the actions that have been taken and any additional steps 
needed to improve joint training.
    b. Benefits.--Although the chairman of the Joint Chiefs of 
Staff (CJCS) Exercise Program is the primary method DOD uses to 
train its for joint operations, inadequate Joint Staff 
oversight has led to perpetuating a program that provides U.S. 
forces with little joint training. The vast majority of the 
exercises were conducted to maintain U.S. access or presence in 
a region or to foster relations with foreign military forces. 
The J-7 has not provided the strong leadership needed to ensure 
that the full range of program management tasks required for an 
effective joint training program are carried out and 
coordinated. It has not (1) critically reviewed planned 
exercises to ensure that the program provides joint training 
benefits to the fullest extent possible; (2) ensured that 
problems surfacing in the exercises are identified and 
addressed; or (3) monitored enough exercises to gain first-hand 
knowledge of the problems. Finally, the Secretary of Defense 
and the Joint Staff have recently taken steps aimed at 
improving joint training. Notably, they have strengthened the 
roles of the U.S. Atlantic Command and the Joint Warfighting 
Center.

99. ``Defense Inventory: Shortages Are Recurring, but Not a Problem,'' 
        August 1995, GAO/NSIAD-95-137.

    a. Summary.--As part of its ongoing evaluation of the 
Defense Department's (DOD) secondary inventory, GAO reviewed 
issues relating to inventory shortages. This report analyzes 
inventory shortages to determine the (1) size of the shortage; 
(2) steps that inventory managers were taking in response to 
the shortage and if funding problems caused managers not to buy 
needed items; and (3) need to revise DOD's inventory reporting.
    b. Benefits.--DOD's September 1991 secondary inventory 
shortage was $16.4 billion rather than the $26 billion that DOD 
cited. Between September 1991 and September 1993, the $16.4 
billion shortage decreased to about $8.1 billion. The decrease 
was attributable to (1) removal of Operation Desert Storm 
requirements; (2) downsizing the military forces; (3) 
elimination of some war reserve requirements; and (4) decreases 
in requirements due to reduced levels of operations. GAO found 
that in only a relatively small number of instances was funding 
an issue in deciding whether or not to purchase needed items. 
GAO found that managers made purchases for about $578 million 
of $1.1 billion in shortages that they analyzed. For the 
remaining $559 million, inventory was ordered because (1) 
requirements on which the shortages were based were no longer 
paid; (2) inventory managers decided that purchases were not 
necessary for reasons such as the availability of substitute 
items in the supply system; and (3) responsibility for items 
had been transferred to other organizations or the items had 
been removed from the inventory. In general, the decisions not 
to buy were valid and may have precluded DOD's acquisition of 
millions of dollars of inventory that probably would not have 
been used. Finally, DOD's inventory reporting needs revising 
because it does not focus on the amount of inventory that is 
needed to be on hand. For example, only $28.8 billion of DOD's 
reported $58.8 billion September 1993 wholesale inventory had 
to be on hand.

100. ``1996 Defense Budget: Potential Reductions, Rescissions, and 
        Restrictions in RDT&E,'' September 1995, GAO/NSIAD-95-218BR.

    a. Summary.--GAO examined the Department of Defense's 
fiscal year 1996 budget request and prior years appropriations 
for selected research, development, test, and evaluation and 
procurement programs. GAO's objectives were to identify 
potential reductions in the fiscal year 1996 budget request and 
potential rescissions to prior years appropriations. This 
report summarizes information and briefings provided to 
congressional committees from April through July 1995.
    b. Benefits.--Due to schedule delays, changes in the 
program requirements, and issues that emerged after the budget 
request was developed, GAO identified opportunities to reduce 
the funding levels for fiscal year 1996 by about $956 million 
and rescind about $265 million from prior years' 
appropriations. GAO also found $934 million that Congress can 
restrict from obligation until specified criteria are met to 
minimize risks in acquisition programs. Of these totals, GAO 
identified potential budget cuts of nearly $103 million to the 
fiscal year 1996 research, development, test, and evaluation 
budget request and potential rescissions of about $15 million 
to prior year appropriations. GAO also identified about $27 
million in obligational authority that can be restricted. GAO 
identified potential budget reductions of about $854 million to 
the fiscal year 1996 procurement budget request, potential 
rescissions of about $250 million to prior year appropriations, 
and about $907 million in potential restrictions. GAO also 
found nearly $98 million in obligational authority expiring on 
September 30, 1995, including about $77 million in fiscal year 
1994 research, development, test, and evaluation funds and 
about $19 million in fiscal year 1993 procurement funds.

101. ``Export Controls: Some Controls Over Missile-Related Technology 
        Exports to China Are Weak,'' April 1995, GAO/NSIAD-95-82.

    a. Summary.--Because of inadequate export controls over 
shipments of United States missile technology to China--
ostensibly for use in satellite projects--and weaknesses in 
monitoring such shipments after export to China, the United 
States has no guarantee that such sensitive equipment will not 
be used for military purposes. This report discusses (1) the 
nature and the extent of United States dual-use and missile 
technology exports to the Peoples Republic of China and the 
extent to which the items are exported to sensitive end users; 
(2) the ability of the United States to monitor Chinese 
compliance with conditions attached to United States missile 
technology exports and with the terms of United States-China 
understanding on missile technology exports and with the terms 
of United States-China understanding on the regime; and (3) the 
effectiveness of United States sanctions imposed on China.
    b. Benefits.--For fiscal years 1990 through 1993, the 
commerce and State Departments approved a total of 67 export 
licenses worth about $530 million for missile-related 
technology commodities for China. Most of this amount was for 
licenses in support of satellite projects, to be owned or 
operated by other countries or by multinational 
telecommunications corporations for or within China, for which 
the President waived applicable sanctions. In general, export 
licensing process and monitoring controls for missile 
technology and dual-use export license applications cannot 
ensure that such United States exports to the Peoples Republic 
of China are kept from sensitive end users. Further, United 
States Government officials believe that the United States 
generally performs adequate monitoring of China's compliance 
with the terms of its Missile Technology Control Regime (MTCR) 
commitments. However, GAO's review indicates that the United 
States end-use check program to monitor license conditions has 
only marginal effectiveness for exports to China. The terms of 
the 1992 United States-China bilateral understanding on China's 
adherence to MTCR, commit China, as a nonmember, to less 
restrictive requirements than currently apply to full members 
of the regime. China agreed to commit to only the MRCR 
Guidelines and Annex of 1987, in force at the time of its MTCR 
pledge, but not to the guidelines and annex as subsequently 
advised. Finally, GAO determined that the effectiveness of 
United States sanctions on China is unknown. United States 
Government officials share no consensus on a definition of, or 
criteria for, measuring effectiveness of proliferation 
sanctions imposed on China.

102. ``Peace Operations: DOD's Incremental Costs and Funding for Fiscal 
        Year 1994,'' April 1995, GAO/NSIAD-95-119BR.

    a. Summary.--The Defense Department (DOD) participated in 
peace operations in several locales, including Somalia, Bosnia, 
Haiti, and Southwest Asia, during fiscal year 1994. To help 
cover the incremental costs of these operations, Congress 
provided DOD with two supplemental appropriations. DOD also 
received reimbursements from the United Nations for incremental 
costs incurred in Somalia. This report provides information on 
(1) whether the supplemental appropriations fully covered DOD's 
incremental costs; (2) what the impacts on the services were 
from funding shortages and overages; and (3) how DOD spent the 
reimbursements received from the United Nations.
    b. Benefits.--During the fiscal year 1994, DOD reported 
$1,907.8 million in incremental costs for peace operations. 
Congress provided supplemental appropriations that covered 
almost two-thirds of these incremental costs, leaving DOD with 
a funding shortfall of $709.5 million. Then on September 30, 
1994, the fiscal year 1995 defense appropriations act provided 
additional supplemental appropriations of $299.3 million 
through the Defense Emergency Response Fund (DERF) to further 
reimburse DOD for certain operations that occurred in fiscal 
year 1994. Despite this second supplement, and funds from the 
Feed and Forage Act and the operation and maintenance accounts, 
DOD still sustained a funding shortfall of $176.9 million. 
Units participating in peace operations were fully funded for 
their incremental costs. To pay these units' costs, DOD used 
funds from other service programs or units that did not 
participate. Although the funding shortages adversely affected 
military readiness in several units in the Air Force. The $98.1 
million that DOD received in reimbursements from the United 
Nations for 1993 was deposited to fiscal year 1994 
appropriation accounts and, according to DOD, cannot be traced 
to specific expenditures.

103. ``Defense Sector: Trends in Employment and Spending,'' April 1995, 
        GAO/NSIAD-95-105BR.

    a. Summary.--This report includes data on (1) the extent of 
the Department of Defense (DOD) and defense industry 
downsizing, and (2) defense reinvestment and conversion 
expenditures.
    b. Benefits.--The defense sector, as measured by Pentagon 
spending and military and defense industry employment, has been 
shrinking, both in absolute terms and relative to the U.S. 
economy, since the mid-1980's. Declines in Defense Department 
(DOD) spending and decreases in defense-related employment have 
occurred during a period of strong increase in the gross 
domestic product and in nondefense employment. The defense 
reinvestment and conversion initiative was established in 1993 
to help ease the displacement caused by defense downsizing. Not 
all programs were tied directly to DOD cuts, however. Some 
individual programs in the initiatives have other purposes and 
will likely continue after the initiative ends in fiscal year 
1997.

104. ``National Airspace System: Comprehensive FAA Plan for Global 
        Positioning System Is Needed,'' May 1995, GAO/RCED-95-26.

    a. Summary.--The FAA has been meeting its milestones for 
implementation of the Department of Defense Global Positioning 
System thus far. The Global Positioning System will consist of 
24 satellites in six orbits at approximately 11,000 miles above 
the earth. The satellites transmit radio signals that permit 
adequately equipped users to calculate the time as well as 
their speed and tridimensional position anywhere on or above 
the earth's surface and in any weather condition. This report 
analyzes the status of the implementation of the Global 
Positioning System.
    b. Benefits.--FAA will have more complex and difficult 
tasks in achieving future milestones. The revised schedule may 
not give the agency enough time to develop and implement its 
wide area system for augmenting the Global Positioning System 
resulting in having to rely on other navigation aids for 
backup. The current FAA plan omits (1) milestones for 
implementing the local area system to augment the Global 
Positioning System; (2) cost estimates for this system and the 
wide area system; and (3) information on the probabilities of 
meeting schedule and cost estimates, given known potential 
problems that may affect the development of these systems.

105. ``Military Bases, Analysis of DOD's 1995 Process and 
        Recommendations for Closure and Realignment,'' April 1995, GAO/
        NSIAD-95-133.

    a. Summary.--The 1990 Defense Base Closure and Realignment 
Act (Title XXIX, Public Law 101-510), authorized the base 
closure rounds in 1991, 1993, and 1995. The purpose was to 
provide a bipartisan approach to the Department of Defense 
downsizing in funding, personnel, force structure and 
infrastructure. This report analyzes the improvement of the 
1995 round over previous years.
    b. Benefits.--While some progress occurred regarding the 
reduction in excess infrastructure, much excess capacity will 
remain after the 1995 BRAC round. The Department of Defense 
1995 BRAC process was generally sound and well documented and 
should result in substantial savings. However, the 
recommendations and selection process were not without problems 
and, in some cases, raise questions about the reasonableness of 
specific recommendations. GAO suggests the following areas that 
need attention: (1) agreements for consolidating similar work 
done by two or more of the services were limited, and 
opportunities to achieve additional reductions in excess 
capacity and infrastructure were missed; (2) The Air Force BRAC 
process was largely subjective and not well documented and the 
Navy did not consistently apply DOD's criteria when excluded 
certain facilities from closure for economic impact reasons.

106. ``Space Shuttle, NASA Must Reduce Costs Further To Operate Within 
        Future Projected Funds,'' June 1995, GAO/NSIAD-95-118.

    a. Summary.--The purpose of this investigation was to 
determine (1) how successful NASA has been in reducing funding 
for shuttle operations and what changes enabled the reductions; 
(2) if the potential exists for further reductions; and (3) 
whether NASA adequately considered the impact, if any, of the 
reductions on shuttle safety. NASA will spend about $3.2 
billion of its $14.3 billion budget for shuttle production and 
operations. Since the space shuttle is the Nation's only launch 
system capable of transporting people, it's viability is 
critical to other space programs such as the international 
space system.
    b. Benefits.--Significant additional funding reductions are 
needed to achieve NASA's future budget projections for shuttle 
operations. If NASA cannot reduce shuttle operating costs to 
match available funds in fiscal years 1996 through 2000, either 
NASA's budget must be increased or funding for other programs 
will have to be cut. On May 19, 1995, the Administrator 
announced plans for significantly reducing NASA's 
infrastructure.

107. ``DOD Service Academies: Comparison of Honor and Conduct 
        Adjudicatory Processes'' April 1995, GAO/NSIAD-95-49.

    a. Summary.--This report examines the adjudicatory systems 
at the service academies to make decisions regarding student 
conduct and performance by (1) comparing the honor and conduct 
systems at each academy and describing how the various systems 
provide common due process protections, and (2) describing the 
attitudes and perceptions of the students toward these systems. 
Each academy establishes a conduct system that establishes 
rules and regulations and provides for dealing with those 
accused of violations. Each academy also has a largely student-
run honor system that prohibits lying, cheating, and stealing.
    b. Benefits.--GAO found that although there are many 
similarities in each academy's honor system, there are some 
prominent differences. The honor system at the Military and Air 
Force academies include non-toleration clauses that make it an 
honor offense to know about an honor offense and not report it, 
while at the Naval Academy failure to act on a suspected honor 
violation is a conduct offense. The standard of proof also 
differs. The Air Force Academy utilizes the ``beyond a 
reasonable doubt,'' while the other academies utilize ``a 
preponderance of the evidence''. Students at the academies 
receive protections typically associated with procedural due 
process, with a few notable exceptions. The most prominent 
exception is the right to representation by counsel and the 
right to remain silent, however, the right to remain silent is 
granted once an individual is charged with an offense. GAO 
administered a questionnaire which indicated that academy 
students generally saw their honor systems as fair, however, it 
was found that there is a considerable reluctance among 
students to report fellow students for honor violations.

108. ``International Broadcasting: Downsizing and Relocating Radio Free 
        Europe/Radio Liberty,'' April 1995, GAO/NSIAD-95-53.

    a. Summary.--In the 1950's, the United States Government 
established Radio Free Europe/Radio Liberty (RFE/RL) as a 
private nonprofit company to provide radio programming to 
Eastern Europe and the former Soviet Union. With the end of the 
cold war, the executive branch began questioning the role and 
the management of international broadcasting. Executive branch 
officials concluded that management consolidation would reduce 
costs by promoting more rational programming decisions and 
sharing of engineering and other resources. In July 1994, the 
President directed that the operations of RFE/RL be moved from 
Munich to Prague. This report discusses (1) RFE/RL's ability to 
meet its congressionally mandated funding ceiling and 
successfully operate in Prague; (2) the most pressing 
management problems RFE/RL faces in Prague; and (3) RFE/RL's 
view of its role and mission in the 21st century.
    b. Benefits.--Current and planned sources of revenue are 
insufficient to cover RFE/RL downsizing and relocation costs 
and to meet mission requirements through 1999. The Board for 
International Broadcasting estimates that the overall funding 
shortfall could reach as high as $28 million. Also, the move 
and operations in Prague may not occur as easily as RFE/RL has 
anticipated. The move is behind schedule and some RFE/RL 
managers are concerned about their ability to recruit the most 
qualified staff from within and outside the company. In looking 
to the future, RFE/RL officials see an enduring, although 
changing mission. They believe their broadcasts will continue 
to be needed to provide accurate, objective news in support of 
democratic institutions and to present journalistic standards 
that in-country media can emulate. RFE/RL is also crafting a 
role for itself to directly assist in the democratic 
development of the former Eastern bloc countries.

109. ``Illegal Immigration: INS Overstay Estimation Methods Need 
        Improvement,'' September 1995, GAO/PEMD-95-20.

    a. Summary.--Reliable and valid estimates of the number of 
``overstays''--persons who enter the United States legally as 
visitors but do not leave under the terms of their admissions--
are important to public policymaking. Higher numbers of 
overstays might suggest, for example, the need for stricter 
policies or laws for issuing temporary U.S. visas to citizens 
of those countries whose travelers tend to overstay their visas 
in significant numbers. Overstay data are also needed to 
monitor travel from countries whose citizens are not required 
to obtain a U.S. tourist visa. This report examines the basis 
for the Immigration and Naturalization Service (INS) estimates 
of overstays and suggests ways in which INS can improve these 
estimates.
    b. Benefits.--INS devised a creative approach for 
estimating overstays through estimating the number of uncounted 
departures (that is, ``system error''). Specifically, INS 
determined that system error could be estimated by using data 
from countries for which it seems safe to assume there are few 
or no overstays (that is, ``index countries''). GAO devised an 
alternative method for estimating overstays among foreign 
visitors who arrive by air. Their method is based on INS' index 
country strategy but uses more detailed INS data and avoids the 
global assumption. GAO method also corrects an error in INS' 
computation formula and uses appropriately weighted data. GAO's 
overstay estimates are between 16 percent and 47 percent lower 
than INS'. INS' global approach provided a good starting point 
for estimating overstays, but makes too many assumptions, which 
increases the uncertainty of their estimates.

110. ``Nuclear Nonproliferation: Information on Nuclear Exports 
        Controlled by U.S.-EURATOM Agreement,'' June 1995, GAO/RCED-95-
        168.

    a. Summary.--The United States-EURATOM Agreement, which 
expires on December 31, 1995, controls the export of nuclear 
materials--specifically enriched uranium, natural and depleted 
uranium with nuclear uses, plutonium, thorium, and nuclear 
reactors and their major components--from the United States to 
15 western European countries. If a new agreement is not 
concluded before the expiration date, exports of United States 
nuclear materials and components to EURATOM would be banned. In 
addition, the expiration of the agreement would also prohibit 
Japan from transferring United States-origin nuclear materials 
to EURATOM because United States-origin nuclear materials are 
not permitted to be transferred to countries that do not have 
in place agreements for cooperation with the United States. 
This report provides information on (1) the amount of United 
States nuclear exports to EURATOM and Japan and United States-
origin nuclear materials transferred from Japan to EURATOM; (2) 
the value of United States nuclear exports to EURATOM and 
Japan; and (3) the nuclear industry's views on the potential 
impact on nuclear commerce with EURATOM and Japan if the 
agreement is not renewed.
    b. Benefits.--From 1980 through 1994, the United States 
exported about 32.6 million kilograms (kgs) total. About 11 
million kgs of nuclear materials went to EURATOM and Japan, 
respectively, and Japan transferred about 4.7 million kgs of 
United States-origin nuclear materials to EURATOM. The United 
States Department of Commerce has valued United States nuclear 
materials exported from 1989 through August 1994 at about $1.1 
billion for EURATOM countries and about $4 billion for Japan. 
According to United States Enrichment Corporation officials, if 
the United States-EURATOM agreement expires, the future of the 
Corporation's uranium enrichment services could be seriously 
affected. Corporation officials estimated that contracts with 
EURATOM worth about $470 million would be in jeopardy if the 
agreement expires. Furthermore, another $1.8 billion in 
potential new contracts with EURATOM and Japan could be lost.

111. ``Foreign Investments: Foreign Laws and Policies Addressing 
        National Security Concerns,'' April 1996, GAO/NSIAD-96-61.

    a. Summary.--Japan, France, Germany, and the United Kingdom 
have the authority to block investments for national security 
reasons, as does the United States. In recent years, however, 
these five countries have rarely invoked this authority. Some 
of these countries have established processes for reviewing 
foreign investment for national security concerns. United 
States defense industry officials have said that they had not 
pursued defense-related direct investment in Japan, France, 
Germany, or the United Kingdom because of economic factors, 
such as the size of the defense markets in these nations, as 
well as informal barriers, such as domestic company ownership 
structures. Most countries offer investment incentives, but the 
U.S. defense industry officials did not cite them as a major 
inducement to invest. U.S. defense industry officials said that 
they were pursuing access to overseas defense markets through 
strategies other than foreign direct investment. For example, 
United States defense firms either licensed technology to 
Japanese companies or made direct sales to Japan. In the three 
European countries, United States companies formed partnerships 
to compete for projects.
    b. Benefits.--According to the Organization for Economic 
Cooperation and Development (OECD), total foreign direct 
investment inflows and outflows among member countries have 
increased in recent years. Cross-border mergers in Europe in 
1994 were almost double the level of 1993 in value terms. 
United States firms were the most active buyers in Europe. 
Similarly in the United States, foreign companies significantly 
increased their investment activity.

112. ``Marine Safety: Coast Guard Should Address Alternatives as It 
        Proceeds With VTS 2000,'' April 1996, GAO/RCED-96-83.

    a. Summary.--Currently, the U.S. Coast Guard and private 
entities operate radar-based vessel traffic services (VTS) in 
several U.S. ports. A VTS system employs remote surveillance 
sensors, such as radar or closed-circuit television, that relay 
information on maritime traffic conditions to VTS personnel, 
who pass it on to mariners and the maritime industry by radio. 
The purpose of these systems is to improve the safe and 
efficient movement of ships around ports and to protect the 
environment. The Coast Guard is considering installing VTS 
systems in as many as 17 ports. The Federal Government will 
spend as much as $310 million to build the proposed expansion, 
known as VTS 2000, and about $42 million annually to operate 
it. The report answers the following four questions: What is 
the status of the Coast Guard's development of VTS 2000? At 
ports being considered for VTS 2000, to what extent do major 
stakeholders support acquiring and funding it? If major 
stakeholders do not support VTS 2000, to what extent are they 
interested in acquiring and funding other VTS systems? What 
other issues could affect the establishment of VTS systems that 
are privately funded?
    b. Benefits.--GAO did not find widespread support for VTS 
2000 among the interviewed stakeholders at the eight ports 
where site visits were conducted. Many who opposed VTS 2000 
said that the proposed system would likely be more expensive 
than necessary for their port. Many opposed the user fees and 
other funding approaches that would pass the cost of VTS 2000 
from the Federal Government to those using the system.

113. ``Promoting Democracy: Progress Reported on U.S. Democratic 
        Development Assistance to Russia,'' February 1996, GAO/NSIAD-
        96-40.

    a. Summary.--United States-funded democracy projects have 
demonstrated support for, and contributed to, Russia's 
democracy movement. Those assisted include prodemocracy 
political activities and political parties, proreform trade 
unions, court systems, legal academies, Government officials, 
and the media. The democracy projects that GAO reviewed, 
however, had mixed results in meeting their stated objectives. 
Russian reformers and others generally viewed United States 
democracy assistance as valuable, but in only three of the six 
areas GAO reviewed had projects contributed significantly to 
political, legal, or social changes. Media projects generally 
succeeded in increasing the quality and the self-sufficiency of 
nongovernment media organization, but the weak economy 
continues to threaten the press's ability to remain 
independent. United States' efforts to develop a democratic 
trade union movement and improve Russia's electoral system also 
contributed to systemic changes, although more needs to be 
done. Projects relating to political party development, rule of 
law, and civil-military relations had limited impact. Russian 
economic and political conditions were the most important 
factors determining project impact. Implementation problems 
accounted for the limited results derived from the rule-of-law 
project.
    b. Benefits.--The United States-funded independent media 
program in Russia has helped raise the quality of print and 
broadcast journalism and contributed to Russia's movement 
toward an independent, self-sustaining local television 
network. The USAID-funded election administration project, 
implemented by the International Foundation for Electoral 
Systems has made important contributions to addressing the 
legal, institutional, and procedural shortcomings evident 
during Russia's December 1993 national elections. Trade union 
development assistance in Russia has helped increase the size 
and effectiveness of democratic trade unions. But United 
States-funded political party development programs, United 
States-funded projects intended to strengthen civilian control 
of the Russian military, and United States-funded rule of law 
activities have made only incremental improvements in reforming 
Russia's legal, military, and judicial institutions, largely 
due to a lack of interest by the Russian Government in these 
areas.

114. ``United Nations: U.S. Participation in the Fourth World 
        Conference on Women,'' February 1996, GAO/NSIAD-96-79BR.

    a. Summary.--This briefing report focuses on the Fourth 
World Conference on Women, sponsored by the United Nations 
(UN). GAO discusses (1) the cost of United States participation 
in the conference and the parallel, independently convened 
nongovernmental organizations' forum, (2) the UN process for 
accrediting nongovernmental organizations, and (3) the handling 
of conference travel visas by the Chinese. A summary of GAO's 
discussions with 28 U.S. nongovernmental organizations about 
their views on the accreditation process, the adequacy of 
accommodations, and physical access to conference and forum 
facilities is included.
    b. Benefits.--The total cost to the United States for the 
Conference and Forum was approximately $5.9 million. The UN 
invited nongovernmental organizations (NGO's) to apply for 
accreditation to participate in Conference activities. Of the 
2,450 NGO's worldwide that applied for accreditation, 277 were 
not accredited. Of the 588 U.S. NGO's that applied, 69 were not 
accredited. And although the Chinese were late in processing 
visas, an official of the United States Mission to the UN 
stated that most applicants did receive one. Possible causes of 
problems include the overwhelming number of visa requests 
received by the Chinese and the requirement to have a confirmed 
hotel reservation before applying for a visa.

115. ``Military Aircraft Safety: Significant Improvements Since 1975,'' 
        February 1996, GAO/NSIAD-96-69BR.

    a. Summary.--Despite a series of recent crashes, the safety 
record of military aircraft has improved significantly during 
the past 20 years. Accidents dropped from 309 in 1975 to 76 
last year, while fatalities declined from 285 to 85 during the 
same period. Human error was reported as a contributing factor 
in 73 percent of these flight mishaps. This report discusses 
(1) historical trends in aircraft accidents involving deaths or 
extensive aircraft damage, (2) investigations performed to 
determine the causes, and (3) examples of actions taken to 
reduce the number of aviation accidents.
    b. Benefits.--Each of the services have taken steps to 
reduce aviation mishaps, such as tracking mishap investigation 
recommendations and disseminating safety information in 
manuals, newsletters, videos, and messages. Recent safety 
initiatives include risk management and human factor studies.

116. ``DOD Procurement: Use and Administration of DOD's Voluntary 
        Disclosure Program,'' February 1996, GAO/NSIAD-96-21.

    a. Summary.--Forty-eight of the top 100 military 
contractors have disclosed procurement fraud as part of a 
Defense Department (DOD) program encouraging voluntary 
reporting of such incidents. But the total number of 
disclosures has been small and the dollar amounts recovered 
have been modest--less than $100,000 in 63 percent of the 
cases. Moreover, under DOD's Voluntary Disclosure Program, 
cases took an average of 2.8 years to close, with about 25 
percent taking more than 4 years. Less-than-full cooperation 
from contractors and low priority given by DOD and other 
investigative agencies to managing cases expeditiously may be 
problems in some cases.
    b. Benefits.--From its inception in 1986 through September 
1994, DOD reported the 138 defense contractors made 325 
voluntary disclosures of potential procurement fraud, of which 
129 have been closed. According to DOD, 48 of the top 100 
defense contractors made 222 disclosures. The remaining 103 
disclosures were made by 90 contractors from among the more 
than 32,000 contractors doing business with DOD. Through 
September 1994, DOD reported recoveries from the program of 
about $290 million, of which about 38 percent is associated 
with cases that are still open.

117. ``Military Readiness: A Clear Policy is Needed to Guide Management 
        of Frequently Deployed Units,'' April 1996, GAO/NSIAD-96-105.

    a. Summary.--This report addresses concerns raised by 
Congress that the length of time that military personnel are 
spending away from home on deployments--commonly called 
personnel tempo--has increased and is stressing portions of the 
military community and harming readiness. GAO discusses (1) 
U.S. forces' frequency of deployments in recent years; (2) the 
effect of increased personnel tempo on the readiness of U.S. 
forces; and (3) Defense Department efforts to mitigate the 
impact of high personnel tempo, including measures to create 
systems for measuring personnel tempo.
    b. Benefits.--GAO's analysis of a group of high-deploying 
units over a 4-year period showed the most had elements that 
were deployed for more than one-half of each year. Peace 
operations were the driving force behind the increases, 
accompanied by smaller increases in joint activities. DOD 
officials believe that deployments could be reduced by 
eliminating redundant military training and combining or 
canceling some exercises.

118. ``Acquisition Reform: Efforts to Reduce the Cost to Manage and 
        Oversee DOD Contracts,'' April 1996, GAO/NSIAD-96-106.

    a. Summary.--The Defense Department (DOD) contracted with 
the management consulting firm of Coopers and Lybrand to study 
the impact of the military's acquisition regulations and 
oversight requirements on its contracts. Coopers and Lybrand's 
1994 report cited more than 120 regulatory and statutory ``cost 
drivers'' that increased the prices that DOD paid for goods and 
services by 18 percent. In response, DOD established a working 
group to address the issue of cost drivers. The working group 
is tracking many reforms initiated by DOD to reduce the cost of 
managing and overseeing DOD contracts. Although DOD expects 
substantial savings from these reforms, the actual savings may 
be significantly less than the 18-percent cost premium noted by 
Coopers and Lybrand. In December 1995, contractors 
participating in DOD's Reducing Oversight Costs Reinvention 
Laboratory noted that current measures would yield savings of 
only 1 percent. DOD said that the 1-percent cost savings was 
based on ``work in progress'' and that it would be 
inappropriate to use these results to draw conclusions about 
DOD's ability to reduce the cost premiums. DOD fully expects 
the savings from laboratory activities to exceed the level 
reported in December 1995.
    b. Benefits.--In response to the Coopers and Lybrand study, 
DOD established the Regulatory Cost Premium Working Group in 
1994 to identify and coordinate efforts to address to cost 
drivers. The working group is addressing the top 24 cost 
drivers and intends to expand its work to include the top 59 
cost drivers identified in the study. Although substantial 
savings are expected from DOD's acquisition reform efforts, the 
savings from on-going initiatives to address the cost drivers 
may be significantly less than the 18-percent cost premium 
identified by Coopers and Lybrand.

119. ``Defense Transportation: Streamlining of the U.S. Transportation 
        Command Is Needed,'' February 1996, GAO/NSIAD-96-60.

    a. Summary.--The military often pays as much as three times 
the amount commercial carriers would normally charge to ship 
cargo because of a fragmented and inefficient organizational 
structure and outdated management practices at the U.S. 
Transportation Command. This situation has led to confusing 
billing practices and expensive staff overhead. For example, a 
military customer might pay the United States Transportation 
Command $3,800 to ship a load of cargo from California to 
Korea, while a commercial carrier would have charged only 
$1,250 for the shipment. Much of today's military cargo moves 
by air, land, and sea transport. Under the U.S. Transportation 
Command's unwieldy organizational structure, customers receive 
bills from each command for each mode of transportation, rather 
than a single bill covering the entire shipment. In addition to 
confusing customers, separate billing systems increase 
personnel and costs. Salaries and wages alone for the command 
in fiscal year 1994 topped $1 billion.
    b. Benefits.--Customers using defense transportation 
services pay substantially more than the component commands do 
for basic commercial transportation. Higher defense 
transportation costs are driven by process fragmentation, 
duplication, and overlap within component commands and the need 
to maintain mobilization capability. GAO recommends (1) 
separate traffic management component command headquarters 
staff, (2) the consolidation of separate field-subordinate 
command traffic management staff, and (3) the elimination of 
all remaining duplicative field-based subordinate command 
support staff.

120. ``Closing Maintenance Depots: Savings, Workload, and 
        Redistribution Issues,'' March 1996, GAO/NSIAD-96-29.

    a. Summary.--The Department of Defense (DOD) spends $15 
billion annually to maintain aircraft, ships, tracked and 
wheeled vehicles, and other equipment. However, it believes 
that it can reduce maintenance costs by better matching its 
depots' workload capacity with current maintenance 
requirements. Accordingly, as part of the ongoing base closures 
and realignments, DOD is closing 15 of its major maintenance 
depots and is transferring their workloads to other depots or 
the private sector. This report: (1) assesses the reliability 
of DOD's depot closure cost and savings estimates, (2) provides 
information on the policies and the programs used to provide 
employment and training to employees at depots being closed, 
(3) determines if the military can increase savings by using 
competition between DOD depots or between depots and the 
private sector when redistributing the workloads of closed 
depots, and (4) determines if the military services adequately 
consider other services' depots when they use methods other 
than competition to redistribute the workloads.
    b. Benefits.--GAO found the (1) public-public and public-
private competition programs were discontinued in May 1994; (2) 
the Air Force is implementing a privatization-in-place plan 
that will likely increase maintenance costs; (3) the military 
services rarely consider interservicing alternatives (one 
service relying on another service for depot maintenance 
support) when they redistribute workloads; and (4) neither DOD 
nor the services require depots to reengineer workloads they 
receive from closing depots.

121. ``Intelligence Agencies: Personnel Practices at CIA, NSA, and DID 
        Compared with Those of Other Agencies,'' March 1996, GAO/NSIAD-
        96-6.

    a. Summary.--Intelligence agencies employ thousands of 
people who, for reasons of national security, are not covered 
by Federal personnel statutory protections. Members of Congress 
have raised concerns that intelligence agency employees lack 
the same protections afforded other Federal workers. GAO found 
that the Central Intelligence Agency, the National Security 
Agency, and the Defense Intelligence Agency have equal 
employment opportunity practices similar to those of other 
Federal agencies. In contrast, adverse action practices at the 
intelligence agencies vary by agency and by type of employee. 
The external appeals procedures at the intelligence agencies 
differ from the procedures at other Federal agencies in that 
most employees may not appeal adverse actions to the Merit 
Systems Protection Board.
    b. Benefits.--GAO's review indicated that with the 
retention of summary removal authorities, these intelligence 
agencies could follow standard Federal practices, including the 
right to appeal adverse actions to the Merit Systems Protection 
Board, without undue risk to national security. GAO sees no 
justification for treating employees at these intelligence 
agencies differently from employees at other Federal agencies 
except in rare national security cases.

122. ``Defense Logistics: Requirement Determinations for Aviation Spare 
        Parts Need to be Improved,'' March 1996, GAO/NSIAD-96-70.

    a. Summary.--The Air Force and the Navy budgeted $132 
million more than needed for aviation spare parts because of 
questionable policies governing the determination of 
requirements and the accountability for depot maintenance 
assets. The Air Force, in preparing its fiscal year 1996 budget 
for aviation parts, did not consider $72 million worth of on-
hand assets. In computing its fiscal year 1997 requirements for 
aviation parts, the Navy counted $60 million in depot 
maintenance requirements twice. GAO found that the Air Force 
and the Navy had made other errors in computing their 
requirements because of poor management oversight and internal 
controls. Both the Air Force and the Navy used unsupported or 
incorrect maintenance replacement rates, demand rates, planned 
program requirements, repair costs, lead times, due-out 
quantities, and asset quantities on hand and on order. These 
inaccuracies totaled $35 million for the items in GAO's sample 
alone and resulted in some requirements being overstated by $25 
million and others being understated by $10 million.
    b. Benefits.--Although Air Force and Navy policies and 
procedures related to reserving on-hand assets for depot 
maintenance requirements differ, both agencies' policies and 
procedures result in overstated requirements. GAO's review of 
overall budget inventory data related to these assets and their 
sampling tests of F-100 and F-404 engine parts showed that the 
Air Force and the Navy overstated budget buys and repairs by 
about $132 million. This overstatement occurred because of 
questionable Air Force and Navy policies concerning the 
determination of requirements and the accountability for assets 
held in reserve to satisfy depot maintenance needs.

123. ``Defense Budget: Trends in Active Military Personnel Compensation 
        Accounts for 1990-1997,'' July 1996, GAO/NSIAD-96-183.

    a. Summary.--The Defense Department's (DOD) budget request 
for fiscal year 1997 includes nearly $70 billion for pay and 
allowances for military personnel. This amount represents about 
30 percent of DOD's total budget request. DOD projects that 
during the next 5 years, pay and allowances will remain about 
30 percent of its total budget. This report (1) identifies the 
various pay categories included in the accounts, (2) describes 
the trends of those pay categories, and (3) determines how 
changes in the budget compared with changes in service force 
levels. GAO also discusses the reasons for some of the service 
trends and differences among the services.
    b. Benefits.--GAO found the military personnel budget for 
active forces is projected to decline by 30 percent from about 
$85 billion to $60 billion through fiscal year 1997, while 
military personnel levels are projected to decline by the same 
rate from over 2 million to about 1.4 million. Discounting for 
inflation by using constant 1996 dollars, the cost of each 
person in FY97 is projected to be about the same as it was in 
FY90. Specifically, the cost per military person has decreased 
by roughly $80 between 1990 and 1997 to about $40,600. A 
decrease of about $2,000 per person in retired pay accrual 
mostly offset increases in basic pay ($700), the basic 
allowances for quarters ($200), and six other categories.

124. ``Physically Demanding Jobs: Services Have Little Data on 
        Availability of Personnel to Perform,'' July 1996, GAO/NSIAD-
        96-169.

    a. Summary.--This report reviews the use and development of 
gender-neutral occupational performance standards in the 
military. GAO (1) discusses the military services' approaches 
to implementing gender-neutral performance standards and 
screening service members to ensure that they can meet the 
physical demands of their jobs, (2) discusses how the military 
services identified the extent to which service members had 
problems in accomplishing the physical demands of their jobs, 
and (3) evaluates the Air Force's implementation of its 
strength aptitude testing program.
    b. Benefits.--Except for the Army, the services have not 
collected data on service members' ability to do physically 
demanding jobs and have little basis on which to conclude that 
service members are not having problems. GAO is concerned that 
some service members may have difficulty doing some physically 
demanding tasks based on the results of a limited survey 
conducted by the Army Research Institute and anecdotal 
information obtained in interviews with service members.

125. ``Military Bases: Potential Reductions to the Fiscal Year 1997 
        Base Closure Budget,'' July 1996, GAO/NSIAD-96-158.

    a. Summary.--A review of the Defense Department's (DOD) 
Base Realignment and Closure (BRAC) accounts indicates that 
Congress has little assurance that appropriated BRAC funds will 
be used as requested in DOD budget submissions. In past 
submissions, environmental costs have been understated while 
costs for other BRAC subaccounts, such as military construction 
and operation and maintenance, have been overstated. The DOD 
fiscal year 1997 budget request can be reduced by about $148 
million (about 6 percent) because funds from prior year 
appropriations will be available to fund future expenditures. 
Additional reductions are possible because mandated annual DOD 
Inspector General (IG) audits of BRAC construction projects 
identify those activities that can be eliminated or reduced in 
scope. If the fiscal year 1997 IG audit identifies reductions 
in the projects proportionate to the reductions identified in 
1996 and 1995, the amount would be about $60 million.
    b. Benefits.--DOD did not concur with this draft report, 
nor did it agree with the report's conclusion that the fiscal 
year 1997 BRAC budget request could be reduced by $300 million. 
GAO believes that by reducing the BRAC 1997 budget would better 
align available funds with closure actions and reduce 
unobligated balances in the BRAC account.

126. ``Defense Depot Maintenance: Commission on Roles and Mission's 
        Privatization Assumptions Are Questionable,'' July 1996, GAO/
        NSIAD-96-161.

    a. Summary.--GAO questions the assumption made by the 
Commission on Roles and Missions (CORM's) that privatizing all 
Defense Department (DOD) depot maintenance activities would 
save 20 percent and not harm readiness or sustainability. The 
Commission's assumptions are based on conditions that do not 
now exist for many depot workloads. The extent to which DOD's 
long-term privatization plans and market forces will 
effectively create more favorable conditions for outsourcing is 
uncertain. The Commission assumed that a highly competitive and 
capable market exists or would develop for most depot 
workloads. However, most of the depot workloads contracted to 
the private sector are awarded noncompetitively--mostly to the 
original equipment manufacturer. Moreover, several factors 
would likely limit private sector competition and capable 
private sector markets, the cost and readiness risks of 
privatizing depot maintenance workloads may prove unacceptable. 
Furthermore, the Commission's privatization savings do not 
reflect the cost impact of excess capacity in the public 
depots.
    b. Benefits.--The CORM assumed the public-private 
competitions would only be used in the absence of private 
sector competition and would be limited to only a few cases. 
GAO found the public-private depot maintenance competitions 
have resulted in savings and benefits and can provide a cost-
effective way of making depot workload allocation decisions for 
certain workloads.

127. ``Inventory Management: Adopting Best Practices Could Enhance Navy 
        Efforts to Achieve Efficiencies and Savings,'' July 1996, GAO/
        NSIAD-96-156.

    a. Summary.--This report is part of a series comparing the 
Defense Department's (DOD) logistics practices with those of 
the private sector. Although DOD has introduced some innovative 
practices, many opportunities exist for improving the logistics 
system. This report focuses on the Navy's logistics system for 
aircraft parts. GAO (1) examines the current performance of the 
Navy's logistics system, (2) reviews the Navy's efforts to 
improve its logistics system and reduce costs, and (3) examines 
leading best practices used by the airline industry that could 
potentially help the Navy bolster the efficiency and 
effectiveness of its logistics operations.
    b. Benefits.--GAO believes that these practices can be 
integrated into the Navy's logistics system and that they are 
compatible with many aspects of Navy's operations. DOD agreed 
with the findings of this report and will issue a memorandum to 
the Secretary of the Navy requesting that a demonstration 
project be initiated. This project should be underway by the 
beginning of FY97. The Navy will conduct a business care 
analysis and access the leading-edge practices highlighted in 
this report for their applicability in a Navy setting and, 
where appropriate, will tailor and adopt a version of these 
practices for use in its repair process.

128. ``Bosnia: Costs are Uncertain but Seem Likely to Exceed DOD's 
        Estimate,'' March 1996, GAO/NSIAD-96-120BR.

    a. Summary.--The Defense Department's (DOD) cost to send 
almost 27,000 troops to Bosnia as part of peacekeeping 
operations could well exceed DOD's original estimate. Army 
costs, which are estimated at two-thirds of total operation 
costs, are likely to exceed DOD projections, while Air Force 
costs are likely to be less than estimated. DOD estimated 
deployment transportation costs at nearly $73 million, but 
through the end of January 1996, DOD had spent about $157 
million on deployment transportation. DOD estimated the cost of 
contractor support at $192 million; through February 1996, 
however, the Army had spent more than $247 million on 
contractor services, and Army officials said that contractor 
costs could go as high as $500 million. Several major cost 
areas remain uncertain. They involve the operating tempo of the 
forces in Bosnia, the cost of redeploying the implementation 
force, and the expense of reconstituting equipment used in the 
operation.
    b. Benefits.--Because of the uncertainty in the cost 
estimate, GAO suggested that in determining funding Congress 
consider (1) expenses incurred in support of contingency 
operations involving the former Yugoslavia, and (2) the 
reimbursement of accounts initially utilized to fund those 
operations. In fiscal year 1995, some of the military services 
ended the year with contingency costs that were below the 
amounts provided in supplemental appropriations and used the 
remaining funds for other needs that otherwise would have gone 
unfunded. A related guideline is that if initial funding proves 
to be inadequate, but some services have costs that are below 
their funded level while other have costs that are above it, 
the excess contingency funds should be redistributed before 
providing additional funds.

129. ``Contingency Operations: Defense Cost and Funding Issues,'' March 
        1996, GAO/NSIAD-96-121BR.

    a. Summary.--The Defense Department (DOD) participated in 
contingency operations in several places during fiscal year 
1995, including Haiti, Southwest Asia, and the former 
Yugoslavia. To help cover the incremental costs of these 
operations, Congress provided DOD with a supplemental 
appropriation. This report provides information on (1) the 
extent to which the supplemental appropriation fully covered 
DOD's incremental costs and the impact that funding shortages 
or overages may have had on the services and (2) the accuracy 
of the methods used to estimate incremental costs compared with 
actual costs and ways to improve the method of estimating 
costs.
    b. Benefits.--DOD reported fiscal year 1995 contingency 
operations-related incremental costs of $2.2 billion. The Air 
Force, Marine Corps, the Defense Intelligence Agency, and the 
U.S. Special Operations Command collectively received fiscal 
year 1995 supplemental funding of $133 million in excess of 
their reported incremental costs for contingency operations. 
Based on these figures, GAO found it necessary to improve the 
methods of estimating costs in order to avoid such over-
expenditure of funding.

130. ``Peace Operations: U.S. Costs in Support of Haiti, Former 
        Yugoslavia, Somalia, and Rwanda,'' March 1996, GAO/NSIAD-96-38.

    a. Summary.--The United States paid more than $6.6 billion 
to support United Nations peacekeeping operations in Haiti, the 
former Yugoslavia, Rwanda, and Somalia between fiscal years 
1992 and 1995. Slightly more than half of these costs were 
incurred by the Defense Department, which sent troops and 
equipment to support the missions in these countries. The State 
Department's costs were about $1.8 billion, while costs for the 
U.S. Agency for International Development--the lead agency 
responsible for providing humanitarian assistance, including 
food donated by the Agriculture Department--were about $1.3 
billion. The Departments of Justice, Commerce, the Treasury, 
Transportation, and Health and Human Services reported costs 
totaling about $91 million to support peace operations.
    b. Benefits.--The United Nations has reimbursed the United 
States $79.4 million for some of these costs. The subcommittee 
learned from this report how officials from the Departments of 
Defense and State budgeted and accounted for peace operations' 
costs. Also, GAO reviewed previous reports on peace operations 
costs. In some cases, the cost data obtained from participating 
agencies changed from amounts previously reported because 
agencies update their costs as more information becomes 
available. Therefore, the numerical data in this report may be 
inaccurate, depending on how much information was not accounted 
for at the time of the reports release.

131. ``Military Readiness: Data and Trends for January 1990 and March 
        1995,'' March 1996, GAO/NSIAD-96-111BR.

    a. Summary.--This is an unclassified version of an earlier 
classified GAO report on military readiness. GAO analyzed 
military readiness data found in the Defense Department's 
Status of Resources and Training System to determine if the 
information showed significant changes in readiness since 
1990--a year of peak readiness. This report provides readiness 
information for all four military services. Specifically, GAO 
(1) summarizes the reported overall readiness status of all 
military units from January 1990 to March 1995, (2) assesses 
the readiness trends of selected units from each service for 
the same period and discusses any readiness problems 
experienced, and (3) explains significant changes in reported 
readiness of selected units.
    b. Benefits.--Of the 94 units GAO reviewed, readiness 
remained at levels consistent with service goals in 75 (80 
percent) of the units. However, readiness declined below the 
goals in 19 (20 percent) of the units. In five of these units, 
the readiness reduction were for fairly short periods of time 
due to the units' participation in contingency operations. In 
the remaining units, readiness reductions were caused primally 
by personnel shortages, equipment shortages, and difficulty in 
obtaining training for personnel in certain military 
occupations.

132. ``Army National Guard: Validate Requirements for Combat Forces and 
        Size Those Forces Accordingly,'' March 1996, GAO/NSIAD-96-63.

    a. Summary.--Although the Army National Guard has come down 
in size since the end of the cold war, the Guard's combat 
strength still exceeds what the Defense Department needs to 
fight two major regional wars--the basic goal of U.S. military 
strategy today. GAO recommends that the Army validate the size 
and the structure of all the Guard's combat forces and develop 
a plan to bring the size and the structure of these forces in 
line with validated requirements. Depending on the study's 
conclusions, the Army should consider converting some Guard 
combat forces to support roles. To the extent that Guard forces 
exceed validated requirements, the Army should consider 
eliminating them.
    b. Benefits.--According to DOD documents and Army 
officials, the excess forces are a strategic reserve that could 
be assigned missions such as occupational forces once an enemy 
has been deterred and as rotational forces. However, GAO could 
find no analytical basis for this level of strategic reserve.

133. ``Military Airlift: Observations on the Civil Reserve Air Fleet 
        Program,'' March 1996, GAO/NSIAD-96-125.

    a. Summary.--This report provides information on the Civil 
Reserve Air Fleet Program, which augments military airlift 
during emergencies. According to Air Mobility Command 
documents, fleet aircraft played a vital role in Operations 
Desert Storm and Desert Shield by providing 62 percent of the 
Air Force's passenger airlift capability and 27 percent of its 
cargo airlift capability. GAO discusses the (1) extent to which 
participation by commercial carriers in the program meets 
wartime requirements, (2) Defense Department's efforts to 
ensure future carrier participation, and (3) recent review of 
the program that was directed by the C-17 Defense Acquisition 
Board.
    b. Benefits.--GAO found that (1) commercial carriers have 
committed only 19 of the 44 aircraft required for aeromedical 
evacuation, (2) carriers have committed 114 of the 120 wide-
body equivalent aircraft required for cargo airlift, and (3) 
participation in passenger airlift exceeds requirements--a 
commitment of 161 wide-body equivalent aircraft to meet a 
requirement of 136.

134. ``Air Force Maintenance: Two Level Maintenance Program 
        Assessment,'' March 1996, GAO/NSIAD-96-86.

    a. Summary.--The Air Force's Two Level Maintenance program, 
which seeks to save money by reducing maintenance staffing, 
equipment, and base-level support without sacrificing force 
readiness, is not fully achieving its intended benefits. The 
estimated costs to implement the program have increased, and 
the expected net savings have decreased--from $385 million to 
$258 million. In addition, not all program costs have been 
included in the cost-savings analyses. Under the program, the 
turnaround time to repair avionics items generally have met Air 
Force standards. For engines, however, the turnaround times 
have exceeded the standard by as many as 87 days. The use of 
the program to support troops during wartime will add to the 
airlift burden. Because the deployed forces will not have in-
country intermediate maintenance capability, the forces will 
have to depend on airlift for spare and repair parts. However, 
the theater commander, not the Air Force, controls airlift 
priorities. As a result, the early stages of a conflict 
outweighed the return of unserviceable items to depot repair 
facilities and the movement of items from the depots to the 
battlefront.
    b. Benefits.--DOD agreed that there should be a continuing 
reassessment of TLM candidates to gaurantee that the right ones 
are in the program and that further assessments are made 
through the TLM end-to-end analysis and engine supply 
reassessment. Officials further stated that the Air Force will 
continue to work with the Joint Staff and Supported Commanders-
in-Chief to determine executive use of airlift allocation to 
meet service requirements. The need for early sustainment 
airlift to support Two Level Maintenance is an issue that has 
not been fully resolved and is one that could affect 
sustainment of the deployed forces.

135. ``DOD Research: Acquiring Research by Nontraditional Means,'' 
        March 1996, GAO/NSIAD-96-11.

    a. Summary.--With considerable support from Congress, the 
Defense Department (DOD) has made acquisition reform one of its 
top priorities as it tries to reduce the cost of maintaining 
technological superiority in an era of tighter military 
budgets. Acquisition reform has generally focused on measures 
affecting DOD procurement. However, DOD is also investigating 
new approaches in its science and technology efforts, including 
using cooperative agreements and other transaction instruments 
to enter into research projects with commercial firms and 
consortia. DOD has cited the use of cooperative agreements and 
other transaction instruments as a way to (1) reduce barriers 
to integrating the defense and civilian sectors of the 
industrial base, (2) promote new relationships and practices 
within the defense industry, and (3) allow the Government to 
leverage for defense purposes the private sectors' financial 
investments in research and development of commercial products 
and processes. This report discusses DOD's use of the 
instruments to further these three objectives. GAO also 
discusses issues concerning the selection and structure of the 
instruments.
    b. Benefits.--GAO found that the use of cooperative 
agreements and other transactions appears to provide some 
opportunities to remove barriers between the defense and 
civilian industrial bases, in particular by attracting firms 
that traditionally did not perform research for DOD.

136. ``Depot Maintenance: Opportunities to Privatize Repair of Military 
        Engines,'' March 1996, GAO/NSIAD-96-33.

    a. Summary.--In recent years, Congress has expressed 
continuing interest in the Pentagon's management of its $15 
billion depot maintenance program. One area of particular 
interest has been the allocation of depot maintenance workload 
between the public and private sectors, including various 
privatization initiatives. This report addresses the depot 
maintenance workload for an essential military commodity--gas 
turbine engines. GAO discusses (1) the rationale supporting the 
continued need for DOD to be able to repair engines at its own 
maintenance depots, (2) opportunities to privatize additional 
engine workloads, and (3) the impact that excess capacity 
within DOD's depot system has on the cost-effectiveness of 
decisions to privatize additional workloads.
    b. Benefits.--GAO surveyed private sector companies to 
determine their interest in repairing military engines with 
commercial counterparts that are currently repaired in DOD 
depots and their capability to do the job. The survey 
identified interest in the maintenance workload for all 10 
military commercial counterpart engines the DOD has or is 
considering developing depot maintenance capability to support.

137. ``DOD Bulk Fuel: Services' Fuel Requirements Could Be Reduced and 
        Funds Used for Other Purposes,'' March 1996, GAO/NSIAD-96-96.

    a. Summary.--For fiscal year 1996, bulk fuel requests by 
the Army, the Navy, and the Air Force totaled $4.12 billion. 
The three services planned to spend $107 million on this 
amount, or 2.6 percent, on fuel from commercial sources. The 
rest was used to buy fuel from the Defense Fuel Supply Center, 
which buys fuel from commercial sources and sells it to the 
military services. On the basis of historical usage data, the 
Center estimates that the services' fuel purchases in fiscal 
year 1996 would total $3.57 billion, or about $440 million less 
than the amount the services had requested in their budgets. 
This estimate is lower than the estimate made when the services 
submitted their budget requests in January 1995. At the time, 
the Center projected that the services would buy 3.68 billion 
dollars' worth of fuel in fiscal year 1996, or about $330 
million less than the amount requested. Because the services' 
bulk fuel budgets are still overstated by about $440 million--
$440 million less than the $100 million congressional 
reduction--GAO suggests that Congress rescind the $340 million 
and apply it to other unfunded needs.
    b. Benefits.--GAO believes that budget requests should 
reflect the best estimate of what is needed for the purpose for 
which funds are being requested. DOD justified their budget 
request by pointing out that the fuel account has over executed 
its budget in 2 of the last 4 years. But GAO thinks that in 
those cases in which the request is excessive to meet known 
needs, Congress should redirect the funds to other purposes 
rather than allowing DOD to decide where to use the funds.

138. ``Military Bases: Update on the Status of Bases Closed in 1988, 
        1991, and 1993,'' August 1996, GAO/NSIAD-96-149.

    a. Summary.--Land sales for the first three rounds of 
military base closure totaled nearly $180 million as of March 
1996. There were only two sales in the 1993 round, for a total 
of $1.5 million. Although private parties are not precluded 
from buying surplus properties at the closed military bases, 
they rarely have a chance to bid on the properties because 
communities are requesting the properties under public benefit 
transfers, economic development conveyances, and noncompetitive 
negotiated sale authorities. Communities are planning 
industrial and office complexes, parks and recreational 
facilities, residential housing, and prisons on this land. 
Developing and implementing reuse and disposal plans, however, 
can be a lengthy process. Readily marketable properties may 
decline in value as they sit idle and may require resources 
from the services' budgets for protection and maintenance. GAO 
recommends that the Defense Department (DOD), to preserve the 
facilities' value while reducing protection and maintenance 
costs, (1) set time limits on negotiations before offering 
properties for public sale and (2) when practical, rent 
unoccupied surplus housing and other facilities as a way to 
preserve properties pending final disposal.
    b. Benefits.--DOD now reports that for the 60 bases GAO 
reviewed, about 21 percent of the 88,000 DOD civilian jobs have 
been replaced. To help communities successfully transform 
closed bases into new opportunities, Federal agencies have 
provided more that $780 million in direct assistance to areas 
affected by 1988, 1991, and 1993 realignment and closure 
rounds. GAO believes property can be effectively used to create 
jobs and reduce the military services' protection and 
maintenance costs even before community plans are finished or 
military missions have ceased. The DOD Base Reuse 
Implementation Manual describes leasing for reuse as one of the 
most important tools for initiating rapid economic recovery and 
job creation while reducing the military's protection and 
maintenance costs.

139. ``Environmental Protection: Status of Defense Initiatives for 
        Cleanup, Compliance, and Technology,'' August 1996, GAO/NASD-
        96-155.

    a. Summary.--The Defense Department (DOD) manages thousands 
of military installations throughout the United States and 
overseas. Its operations are subject to the same environmental, 
safety, and health laws as is private industry, as well as 
additional regulations governing Federal facilities. The day-
to-day operations of a typical military installation mirror 
those of a small city. As a result, these installations face 
many of the same environmental problems confronting the 
industrial and commercial sectors. DOD has organized its $5 
billion environmental program into five areas: cleanup, 
compliance, conservation, pollution prevention, and technology. 
This report discusses three of these areas: (1) cleanup 
(remediation), which involves investigating and cleaning up 
contamination from hazardous substances and waste on land used 
by DOD; (2) compliance with Federal, State, and local 
environmental laws and regulations; and (3) technology research 
and development.
    b. Benefits.--GAO found that (1) recent DOD initiatives 
affecting environmental cleanup include efforts to focus 
funding on actual cleanup versus study and oversight, better 
target the funds through the use of risk determination in 
priority setting, and devolve the budget process to the 
military services; (2) DOD lacks the data it needs to manage 
its environmental compliance program, and (3) DOD plans to 
implement an on-line strategic environmental technology plan 
that will show specific service requirements and match ongoing 
and planned initiatives.

140. ``Mine Detection: Army's Detector's Ability to Find Low-Metal 
        Mines Not Clearly Demonstrated,'' August 1996, GAO/NSIAD-96-
        198.

    a. Summary.--Land mines, especially those with little metal 
content, have been used extensively by the warring factions in 
the former Yugoslavia, and up to 7 million mines are believed 
to be in the region. Before the deployment of United States 
troops in the area, U.N. forces were involved in 174 land mine 
incidents in Bosnia, which included 204 casualties and 20 
deaths. The ability of the Army's AN/PSS-12 portable mine 
detector to locate low-metal mines has not been clearly 
demonstrated. The AN/PSS-12 performed poorly against low metal 
targets in operational tests. The AN-PSS-12's testing history 
suggests that the detector may have only limited application in 
Bosnia, where most of the buried mines are of the low-metal 
variety. Although the Army claims that the AN-PSS-12 has 
performed well in Bosnia, other sources raise questions about 
the detector's abilities there. The Air Force recently 
cautioned its explosive ordinance technicians in Bosnia that 
the AN/PSS-12 is not sensitive enough to detect the low-metal 
mines that they may encounter. In addition, an Army report on 
United States operations in Somalia says that the detector 
could not find low-metal mines. In Bosnia, United States troops 
have been able to pick routes that avoid minefields or they use 
heavy equipment, such as vehicles equipped with rollers, to 
clear paths.
    b. Benefits.--GAO believes that the more important factor 
in explaining the AN/PSS-12's performance in Bosnia to date has 
been the prudent steps taken by the Army to minimize the threat 
posed by the land mines there. The resulting infrequent 
reliance on the AN/PSS-12 helps explain why its shortcomings in 
testing may not have been borne out in Bosnia.

141. ``Navy Aviation: F/A-18E/F Will Provide Marginal Operational 
        Improvement at High Cost,'' June 1996, GAO/NSIAD-96-98.

    a. Summary.--With a projected total cost of $63 billion, 
the Navy's program to modernize its fleet of F-18 tactical 
aircraft ranks among the most costly of military aviation 
projects. Yet the planned F/A-18E/F will deliver only marginal 
operational improvements over the current F/A-18C/D model. The 
operational deficiencies in the F/A-18C/Ds that the Navy cited 
as a justification for developing the F/A-18E/F either have 
failed to materialize or can be corrected with nonstructural 
changes to the C/D. Furthermore, E/F operational capabilities 
will be only slightly better than those of the C/D model. Given 
the expense and the marginal improvements in operational 
capabilities that F/A-18E/F would provide, GAO recommends that 
the Pentagon reconsider the decision to produce the F/A-18E/F 
aircraft and, instead, consider procuring additional F/A-18C/
Ds. The number of F/A-18C/Ds that the Navy would ultimately 
need to buy will depend on when the next generation strike 
fighter becomes operational and the number of those planes the 
Navy decides to purchase.
    b. Benefits.--GAO recommends that DOD reconsider the 
decision to produce the F/A-18E/F aircraft and, instead, 
consider procuring additional F/A-18C/Ds. The number of F/A-
18C/Ds that the Navy would ultimately need to procure would 
depend upon when the next generation strike fighter achieves 
operational capability and the number of those aircraft the 
Navy decides to buy.

142. ``Canada, Australia, and New Zealand: Potential Ability of 
        Agricultural State Trading Enterprises to Distort Trade,'' June 
        1996, GAO/NSIAD-96-94.

    a. Summary.--The agricultural agreements of the Uruguay 
Round of the General Agreements on Tariffs and Trade (GATT) 
seek to establish a fair and market-oriented agricultural 
trading system. Through progressive reductions in governmental 
support and export subsidies, conversion of quotas to tariffs, 
lowering of barriers to import access, and other reforms, 
member nations hope to reduce distortions in world agricultural 
markets. Some member states are using state trading enterprises 
(STE) to regulate imports and exports. STEs are authorized to 
engage in trade and are owned, sanctioned, or otherwise 
supported by the Government. Although STEs are legitimate 
trading entities and are subject to GATT regulations, some U.S. 
agricultural producers are concerned that STEs, through their 
monopoly powers and Government support, may be able to distort 
worldwide trade in their respective commodities. This report 
reviews state trading enterprises in Canada, Australia, and New 
Zealand. GAO focuses on the activities of the Canadian Wheat 
Board, the Australian Wheat Board, and the New Zealand Dairy 
Board. GAO discusses whether the boards are capable of 
distorting world markets in their respective commodities.
    b. Benefits.--GAO's framework for analyzing export STEs 
highlight three STE relationships--with domestic producers, 
Government, and foreign buyers. STEs can have monopoly buying 
authority over all domestic production of a particular 
commodity, or the production of that commodity for export. This 
authority provides STEs with the ability to potentially distort 
trade through such practices as cross-subsidization. GAO found 
that the establishment of an STE can also lead to a reduction 
in the number of exporters and an increase in the market power 
of the remaining participants.

143. ``Operation and Maintenance Funding: Trends in Army and Air Force 
        Use of Funds for Combat Forces and Infrastructure,'' June 1996, 
        GAO/NSIAD-96-141.

    a. Summary.--The Secretary of Defense contends that the 
Defense Department (DOD) must increase its procurement funding 
if it is to have a modern future force. The Secretary wants to 
reform the acquisition process and streamline infrastructure to 
pay, in part, for force modernization. DOD now expects 
decreases in its operation and maintenance account and 
increases in its procurement account beginning in fiscal year 
1998. This report reviews how the Army and the Air Force 
obligated their annual operation and maintenance account funds 
and compares their obligations to what was requested in the 
President's budgets. GAO determines what part of total 
obligations was used for infrastructure activities as opposed 
to combat force. The Navy is not included in this review 
because, at the headquarters level, it does not maintain the 
level of budget request and obligation data that GAO needed for 
its analysis.
    b. Benefits.--GAO's comparison of the amounts obligated and 
budgeted by the Air Force for the same functions showed that 
the Air Force obligated slightly more than it requested for 
combat forces. With regard to training and recruiting, the Air 
Force obligated less than the amounts requested. It obligated 
more than it requested for base support and slightly less than 
it requested for management activities.

144. ``Basic Training: Services are Using a Variety of Approaches to 
        Gender Integration,'' June 1996, GAO/NSIAD-96-153.

    a. Summary.--The military services are using various 
approaches to integrate men and women during basic training. 
These approaches range from using the same program to instruct 
both sexes and integrating some training units to using 
different programs of instruction and providing separate 
training. The costs associated with gender integration have 
been low. In fact, the Army is the only service that has 
incurred expenses to accommodate gender-integrated basic 
training. Studies of the impact of gender-integrated units have 
been done for the Navy and the Army. A 1993 study done for the 
Navy reported no impact on objective performance measures and 
improvement in teamwork measures for both men and women 
training in gender-integrated units. A recent study found that 
the performance of men was not degraded. Although the Army 
introduced limited gender-integrated basic training in the late 
1970's and early 1980's, the Army has no records from that 
period to compare with its current program.
    b. Benefits.--As women comprise an increasingly large 
portion of the military, each of the services are striving to 
adjust their philosophy of basic training in order to achieve a 
more gender-neutral military.

145. ``Navy Ship Propulsion: Viability of New Engine Program in 
        Question,'' June 1996, GAO/NSIAD-96-107.

    a. Summary.--Although the Navy has spent more than 4 years 
and nearly $225 million in a joint venture with the British and 
French to develop a new gas turbine ship propulsion system, the 
effort has encountered serious problems in development. Navy 
officials have raised many questions about the new engine, 
including the practicality of using it in the DDG-51 destroyer. 
They also have concerns about whether the new engine will 
provide a viable and timely return on the large investment to 
develop it. GAO urges the Pentagon to reassess the need for 
this program. As the Navy restructures the engine development 
program, it must decide how and if it will use the $5.4 million 
test facility that it built in Philadelphia. The Navy now plans 
to conduct almost all of its engine testing at a test site in 
the United Kingdom. The Navy must also decide whether to test 
the engine at sea in a pilot ship. The cost to do so is 
estimated as high as $12.5 million.
    b. Benefits.--Given the (1) small number of new U.S. 
destroyers involved, (2) adequacy of the current destroyer 
engine, (3) high cost and difficulty of incorporating the 
engine into the destroyer, (4) uncertain status of DDG-51 
integration plans, and (5) current state of intercooled 
recuperated gas turbine engine (ICR) development, GAO believes 
that the Navy should at least wait for a more appropriate new 
ship for the ICR engine.

146. ``Bottom-Up Review: Analysis of DOD War Game to Test Key 
        Assumptions,'' June 1996, GAO/NSIAD-96-170.

    a. Summary.--This report, an unclassified version of an 
earlier classified GAO report, reviews the objectives, 
methodology, and results of the Pentagon's war game Nimble 
Dancer, which assessed the ability of the U.S. armed forces to 
fight and win two nearly simultaneously major regional 
conflicts. GAO also discusses the assumptions and data used in 
Nimble Dancer relating to several areas, such as readiness, 
threat, and force availability. GAO provides its observations 
on the objectives, methodology, and results of the exercise. It 
also provides details on specific areas of interest.
    b. Benefits.--GAO recognized that Nimble Dancer involved 
analyses of key assumptions, enabling game participants to gain 
insight into various aspects of the two major regional conflict 
requirement. GAO believes that certain game assumptions were 
favorable because they set conditions that were mostly 
advantageous to U.S. forces, thereby minimizing risk.

147. ``Combat Air Power: Assessment of Joint Close Support Requirements 
        and Capabilities is Needed,'' June 1996, GAO/NSIAD-96-45.

    a. Summary.--During the next 6 years, the military plans to 
spend more than $10 billion on aircraft and other weapons to 
bolster its already formidable close support capabilities. This 
effort, however, comes at a time of shrinking defense budgets, 
defense downsizing, and increasing questions about the 
affordability of defense modernization. This report (1) 
discusses the overall capabilities of the military services to 
provide close support and the extent to which those 
capabilities continue to be modernized and enhanced and (2) 
evaluates the processes that the Defense Department uses to 
assess missions needs, capabilities, and modernization 
proposals for the close support mission.
    b. Benefits.--GAO recommends that comprehensive cross-
service of overall joint close support missions needs existing 
close support systems, and planned enhancements to be made on a 
routine basis. DOD's current assessment processes do not enable 
the chairman of the Joint Chiefs of Staff to provide effective 
military advice to the Secretary of Defense on the services 
acquisition and modernization proposals for close support.

148. ``Contingency Operations: Update on DOD's Fiscal Year 1995 Cost 
        and Funding,'' June 1996, GAO/NSIAD-96-184BR.

    a. Summary.--During fiscal year 1995, the Defense 
Department (DOD) participated in contingency operations around 
the globe, including Haiti, Southwest Asia, and the former 
Yugoslavia. To help cover the incremental costs of these 
operations, Congress provided DOD with supplemental 
appropriation. In an earlier report (GAO/NSIAD-96-121BR), GAO 
found that although DOD ended fiscal year 1995 with 
supplemental funding of $12 million above its reported 
incremental costs, some of the military services and defense 
agencies had reported costs that exceeded their supplemental 
appropriations. GAO also indicated that costs surged in 
September 1995. This briefing report provides information on 
(1) how the services that reported costs in excess of 
supplemental funding covered their shortfalls and (2) why the 
surge occurred.
    b. Benefits.--The Army and Navy reported incremental costs 
in excess of their O&M supplemental appropriations. They 
covered their shortfall completely, and both Army and Navy 
officials believe that unit readiness was not affected 
significantly. GAO found that the surge in September costs were 
primarily related to (1) accounting adjustments; (2) end-of-
year payments; and (3) other spending, including spending 
associated with higher operating tempo in Bosnia and Southwest 
Asia.

149. ``Counterfeit U.S. Currency Abroad: Issues and U.S. Deterrence 
        Efforts,'' February 1996, GAO/GGD-96-11.

    a. Summary.--U.S. currency, reportedly the most widely held 
in the world, is susceptible to counterfeiting. The Federal 
Reserve estimates that of the $380 billion of U.S. currency in 
circulation, more than 60 percent may be held outside the 
United States. The widespread use of U.S. currency abroad, 
together with the outdated security of the currency, make it 
particularly vulnerable to international counterfeiters. 
Widespread counterfeiting of U.S. currency could undermine 
confidence in the dollar and, if done on a large enough scale, 
could harm the U.S. economy. This report discusses (1) the 
nature of counterfeiting of U.S. currency abroad, (2) the 
extent of that counterfeiting and of concerns about this issue, 
and (3) the status of U.S. efforts to deter such 
counterfeiting.
    b. Benefits.--GAO found that the U.S. Government, primarily 
through the Treasury and the Federal Reserve, has increased its 
efforts to put an end to counterfeiting activities. These 
anticounterfeiting efforts included (1) redesigning U.S. 
currency to incorporate additional security features, and then 
publicizing and distributing the new currency; (2) using joint 
Federal agency team visits abroad to obtain more information on 
counterfeiting and provide counterfeit-detection training; (3) 
increasing Secret Service staffing abroad; and (4) using 
additional task forces and increasing diplomatic efforts to 
combat counterfeiting abroad, particularly efforts to eradicate 
the highest quality counterfeit note known to the Secret 
Service, commonly referred to as the ``Superdollar.''

150. ``Reserve Officers' Training Corps: Questions Related to 
        Organizational Restructuring,'' February 1996, GAO/NSIAD-96-56.

    a. Summary.--Because of questions about readiness, housing, 
and costs, the Army has not approved the proposal to close the 
Reserve Officers' Training Corps (ROTC) regional head quarters 
at Fort Knox, KY. As a result, the regional headquarters at 
Fort Knox remains open and the summer camp run at Fort Knox is 
expected to remain in place through fiscal year 1996 and 
possibly 1997. Still unresolved are questions about the (1) 
impact of the ROTC program on training and readiness of combat 
units stationed at some bases that house and support ROTC 
summer camp programs; (2) adequacy and condition of housing at 
bases being considered for consolidation of the ROTC program, 
on both a short- and long-term basis; and (3) costs to address 
the housing program.
    b. Benefits.--Before a decision can be made, GAO recommends 
a broad-based assessment of ROTC restructuring which should 
include readiness, housing, and cost issues to accommodate the 
long-term needs of ROTC within the context of the Army's total 
base structure.

151. ``Defense Industrial Security: Weaknesses in U.S. Security 
        Arrangements with Foreign-Owned Defense Contractors,'' February 
        1996, GAO/NSIAD-96-64.

    a. Summary.--This unclassified version of a 1995 GAO report 
discusses security arrangements--known as voting trusts, proxy 
arrangements, and special security agreements--used to protect 
sensitive information when foreign-owned defense contractors 
work on classified Defense Department projects. GAO concludes 
that the Pentagon needs to strengthen controls to prevent the 
export of military secrets when foreign-owned defense 
contractors work on such highly sensitive weapons programs as 
the B-2 bomber and the F-22 fighter. Agreements at most of the 
14 companies GAO reviewed permitted some risk of foreign 
control, influence, and unauthorized access to classified data 
and technology.
    b. Benefits.--GAO observed the following: (1) 36 percent of 
special security agreement companies were graced exceptions to 
restrictions on their access of the most highly classified 
information; (2) visitation agreements permitted numerous 
visits, many occurring under contracts and export licences for 
military and dual-use products between the foreign owners and 
the U.S. defense contractors; and (3) most trustees performed 
little oversight and, at four companies, some trustees appeared 
to have conflicts of interest.

152. ``Foreign Banks: Assessing Their Role in the U.S. Banking 
        System,'' February 1996, GAO/GGD-96-26.

    a. Summary.--During the past 20 years, the share of U.S. 
banking assets held by foreign banks has increased 
significantly. This report examines the role of foreign banks 
in the United States and reviews U.S. laws and regulations 
governing their operations. Specifically, GAO evaluates whether 
these laws and regulations give foreign banks operating in the 
United States a significant competitive advantage over U.S. 
banks. GAO also identifies areas in which U.S. laws and 
regulations have been adapted to meet the circumstances of 
foreign banks and examines the competitive impact of these 
adaptations on U.S. banks.
    b. Benefits.--At the end of 1994, foreign branches and 
agencies held 17 percent of domestic U.S. banning assets. The 
addition of assets held in foreign-owned U.S. subsidiary banks 
increased the foreign bank market by about 4 percentage points. 
Foreign banks have been cited as an important source of capital 
to the U.S. economy because they are believed to supply more 
funds to the United States than they raise from it. In 
addition, GAO's review of current laws and regulations 
indicated the foreign branches and agencies operating in the 
United States are subject to substantially the same laws and 
regulations as those governing U.S. banks.

153. ``Military Personnel Reassignments: Services are Exploring 
        Opportunities to Reduce Relocation Costs,'' February 1996, GAO/
        NSIAD-96-84.

    a. Summary.--In fiscal year 1995, the military spent nearly 
$3 billion to move 850,000 service members and their families. 
GAO has found that few opportunities exist to reduce the costs 
of permanent change-of-station moves. Overseas commitments and 
other laws also require the miliary to move many service 
members each year. Despite these constraints, the military is 
trying to cut annual costs by reducing the number of permanent 
change-of-station moves. To further reduce costs, the services 
are encouraging consecutive assignments in some geographic 
areas and increasing tour lengths where possible. Finally, the 
Defense Department can further decrease its overseas military 
requirements by hiring overseas contractors. The number of 
relocations, but not their costs, decreased in proportion to 
the defense downsizing from fiscal year 1987 through fiscal 
year 1995. The main reasons that permanent change-of-station 
moves did not decrease were inflation, changes in some 
entitlement, and an increase in the number of service members 
with dependents. According to military officials, the frequency 
of permanent change-of-station moves is only a minor 
contributor to readiness problems in military units. Other 
factors, especially the increase in deployments for operations 
other than war, have a greater impact on readiness.
    b. Benefits.--GAO found several areas in which the services 
could reduce personnel change-of-station costs: (1) the 
services could cut personnel costs by using civilians for 
certain positions; (2) the services maintain more recruiting 
stations throughout the United States than they need; and (3) 
the services could work toward reducing the attrition rate for 
first-term enlistees.

154. ``Best Management Practices: Reengineering the Air Force's 
        Logistics System Can Yield Substantial Savings,'' February 
        1996, GAO/NSIAD-96-5.

    a. Summary.--Redesign of the Air Force's $33 billion 
reparable parts inventory could benefit from adopting leading-
edge practices used by the commercial airline industry to 
reduce costs and improve services. However, success hinges on 
the Air Force's ability to overcome major barriers, such as 
organizational resistance to change and poor inventory data. 
Some commercial manufacturers are providing aircraft parts to 
the customers on a just-in-time basis, and suppliers are 
assuming inventory management responsibilities for airlines and 
manufacturers. One airline has reengineered its entire 
logistics system in an integrated fashion by examining all 
aspects of its logistics operation to pinpoint and remove 
inefficient processes and functions. The Air Force is beginning 
to test private-sector management practices, such as removing 
unnecessary inventory layers, repairing parts as they break, 
and rapidly transporting parts between the end user and the 
repair facility.
    b. Benefits.--GAO recommends establishing a top-level 
Defense Department position to champion change, using third 
party logistics services more often, building closer 
partnerships with suppliers, encouraging suppliers to use local 
distribution centers, centralizing repair functions, and 
modifying repair facilities to accommodate these new practices.

155. ``Space Shuttle: Need to Sustain Launch Risk Assessment Process 
        Improvements,'' March 1996, GAO/NSIAD-96-73.

    a. Summary.--The 1986 explosion aboard the space shuttle 
Challenger underscored the risks inherent in human space 
flight. The Presidential Commission investigating the accident 
found that it had been caused by poor rocket motor design, but 
the Commission also cited as a contributing factor shortcomings 
in NASA's processes for identifying, assessing, and managing 
risk. This report reviews the steps that NASA has taken to 
improve the free flow of information in launch decisions and 
the progress NASA has made in adopting quantitative methods for 
assessing risks.
    b. Benefits.--GAO recommends that NASA (1) identify guiding 
principles of good risk management; (2) take steps to ensure 
that flight readiness review participants understand and agree 
on the minimum issues that should always be discussed at the 
review and the level of detail that should be provided; (3) 
establish a strategy for deciding whether and how quantitative 
methods might be used as a supplemental tool to assess shuttle 
risk; and (4) assess the shuttle program's centralized data 
base to insure that data required to conduct risk assessments 
and inform decisionmakers is accessible, timely, accurate, and 
complete.

156. ``Drug Control: Counternarcotics Efforts in Mexico,'' June 1996, 
        GAO/NSIAD-96-163.

    a. Summary.--Hampered by declining United States funding, 
staff cutbacks, and corruption among key Mexican institutions, 
drug interdiction efforts in Mexico have failed to stem the 
flow of illegal drugs reaching the United States. Mexico 
remains the primary transit route for cocaine, heroin, 
marijuana, and methamphetamine smuggled into this country. 
United States narcotics activities in Mexico and the transit 
zone have declined since 1992. United States funding for 
counternarcotics efforts in the transit zone and Mexico fell 
from $1 billion in fiscal year 1992 to $570 million in fiscal 
year 1995. Moreover, since 1992, direct U.S. assistance to 
Mexico has been negligible because of Mexico's 1993 policy of 
refusing most United States counternarcotics assistance. 
Staffing reductions in the State Department's Narcotics Affairs 
Section at the United States Embassy in Mexico City have 
limited monitoring of earlier United States assistance, mainly 
helicopters and spare parts. Since GAO's June 1995 testimony 
before Congress (GAO/T-NSIAD-95-182), the United States Embassy 
has elevated drug control issues in importance and has 
developed a drug control operating plan with measurable goals; 
the Mexican Government has indicated a willingness to develop a 
mutual counternarcotics assistance program and has taken action 
on important law enforcement and money laundering legislation; 
and the United States and Mexico have created a framework for 
greater cooperation and are expected to develop a joint 
counternarcotics strategy by the end of the year. Following 
through on these efforts is critical to combating drug 
trafficking in Mexico.
    b. Benefits.--This report highlights problems in such areas 
as changes in the U.S. drug interdictions strategy; competing 
foreign policy objectives at some U.S. Embassies; coordination 
of U.S. activities; management and oversight of U.S. assets; 
and willingness and ability of foreign governments to combat 
the drug trade.

157. ``Acquisition Reform: Military-Commercial Pilot Program Offers 
        Benefits but Faces Challenges,'' June 1996, GAO/NSIAD-96-53.

    a. Summary.--Faced with substantial finding cuts for 
defense procurement, the Pentagon has made acquisition reform a 
top priority. The challenge for the Defense Department (DOD) is 
to maintain technological superiority and ensure a strong 
national industrial base while reducing acquisition costs. The 
need to reform the miliary's acquisition system is well known; 
however, acquisition reform has been an elusive goal. DOD has 
on several occasions tried to introduce a commercial-style 
procurement system that would take advantage of commercial 
products and processes and, whenever possible, eliminate 
contracting, technical, and accounting requirements that are 
unique to the military. According to DOD, acquisition reform 
could cut costs by as much as 30 percent. This report discusses 
a pilot program, known as ``Military Products From Commercial 
Lines,'' set up by the Air Force with one of its contractors. 
GAO evaluates the pilot program to determine (1) its potential 
for producing the benefits sought through reform and (2) any 
barriers to achieving these benefits.
    b. Benefits.--This pilot represents a low-risk effort to 
demonstrate the potential benefits of designing and producing a 
military component on a commercial line. GAO recommends that 
the Air Force and TRW identify the Government-unique 
requirements that prevent the pilot from demonstrating that 
military items can be produced at better quality on commercial 
production lines at lower prices, and then seek requirement 
waivers from Congress and the Secretary of Defense.

158. ``Overseas Real Estate: Millions of Dollars Could Be Generated by 
        Selling Unneeded Real Estate,'' April 1996, GAO/NSIAD-96-36.

    a. Summary.--The State Departments own more than $10 
billion in real estate at 200 locations overseas. GAO reviewed 
State's efforts to identify and sell excess or under used real 
estate and to use the proceeds for other high-priority real 
property needs. GAO reported in 1995 (GAO/NSIAD-95-73) on the 
potential budget savings from selling expensive property in 
Tokyo and on the problems in State's management of properties 
abroad. This report (1) identifies real estate at other 
locations that could possibly be sold to provide money to meet 
other real estate needs, (2) describes problems that State has 
had in deciding which properties to dispose of, and (3) 
explains how State uses the proceeds from the properties it 
does sell.
    b. Benefits.--GAO recommends the Secretary of State appoint 
an independent panel to decide which properties should be sold. 
The reasons for retaining any property should be weighed 
against the financial interests of the State Department and the 
U.S. Government.

159. ``Best Practices: Commercial Quality Assurance Practices Offer 
        Improvements for DOD,'' August 1996, GAO/NSIAD-96-162.

    a. Summary.--The Defense Department (DOD) spends about $1.5 
billion extra per year on military-unique quality assurance 
requirements for major acquisitions. It spends billions more on 
cost and schedule overruns to correct problems caused by poor 
quality practices. To hep improve DOD's quality assurance 
program, GAO reviewed world-class commercial organizations to 
determine what practices they had adopted to more efficiently 
produce quality products. This report describes (1) the 
problems DOD has had historically in improving quality 
assurance practices, (2) some private sector practices that 
could benefit DOD, and (3) a current plan for improving quality 
assurance activities.
    b. Benefits.--GAO believes that achieving the same results 
as world class companies would require DOD to consider quality 
assurance as an integral part of the entire acquisition process 
and diffuse responsibilities accordingly. DOD must encourage 
the defense industry to use more advanced commercial 
techniques, such as design manufacturing, statistical process 
control, and supplier quality programs.

160. ``Contingency Operations: Defense Department's Reported Costs 
        Contain Significant Inaccuracies,'' May 1996, GAO/NSIAD-96-115.

    a. Summary.--Since fiscal year 1992, the Pentagon has 
reported more than $7 billion in incremental costs for its 
participation in contingency operations, ranging from 
peacekeeping missions in Haiti and the former Yugoslavia to 
deployments to the Middle East during the Persian Gulf War. 
Accurate reporting of these costs is crucial to effective 
congressional oversight of appropriated funds. GAO found 
inaccuracies in the Defense Department's (DOD) costs for 
contingency operations, representing about 7 percent of the 
$4.1 billion in costs reported in fiscal years 1994 and 1995. 
In GAO's judgement, this variance in reported costs is 
indicative of a material weakness in the accounting systems. 
DOD guidance on reporting incremental costs is vague and 
incomplete, and weaknesses plague DOD's accounting system.
    b. Benefits.--In February 1995, DOD added a chapter on 
contingency operations to its financial management regulations 
to include guidance for developing and reporting incremental 
costs. Neither DOD nor the resulting service guidance provides 
instruction on which costs to include, how to calculate them, 
or how to apply generally accepted internal control standards 
to test the accuracy and reliability of the reported costs. The 
incremental cost data is developed using financial management 
systems that DOD has reported as a high-risk area within its 
Federal Managers' Financial Integrity Act Statement of 
Assurance. DOD is taking steps to improve its incremental cost 
reporting, but problems remain.

161. ``Ammunition Industrial Base: Information on the Defense 
        Department's Assessment of Requirements,'' May 1996, GAO/NSIAD-
        96-133.

    a. Summary.--This report reviews the production facilities 
available to support the military's ammunition requirements and 
the status of the ammunition stockpile. GAO focuses on the 
Defense Department's assessment of the industrial base's 
ability to supply ammunition to meet requirements for peacetime 
and two major regional conflicts and to replenish ammunition 
stockpile following those conflicts.
    b. Benefits.--According to DOD, the ammunition stockpile, 
which is to meet peacetime needs and support two major regional 
conflicts, has no major shortages due to the industrial base. 
However, there is no longer a requirement to surge the 
industrial base during conflicts. In addition, the most lethal, 
up-to-date, ``preferred'' munitions will be at a premium; some 
requisitions will be filled with older ``substitute'' 
ammunition items, but these items are considered adequate by 
DOD to defeat the threat that U.S. forces are expected to 
encounter.

162. ``Defense Department Dependents Schools: Cost Issues Associated 
        with the Special Education Program,'' May 1996, GAO/HEHS-96-77.

    a. Summary.--Congress created the Department of Defense 
(DOD) Dependents Schools in 1978 to provide a free public 
education for dependents of military personnel serving abroad. 
DOD Dependents School are required to provide special education 
to all eligible students as required by the Individuals With 
Disabilities Education Act. Members of Congress have raised 
concern that DOD Dependents Schools are spending excessive 
amounts to educate special education students who live in areas 
overseas that lack a school that can meet their needs. This 
report discusses (1) the amount of money the schools spend on 
their special education programs, (2) the number of special 
education students who live in areas lacking a DOD Dependents 
School with the resources to meet the students' needs and the 
cost to meet their needs another way, and (3) the number of 
special education students who are sent to schools outside the 
DOD Dependents School system because no DOD Dependents School 
is nearby to meet their needs and the cost to do so.
    b. Benefits.--DOD Dependents Schools do not track and 
report information on the additional costs it incurs to (1) 
acquire services for special education students whose needs 
cannot be met by DODDS schools in locations where their 
sponsors have been placed or (2) send special education 
students to non-DODDS schools to meet their needs. District 
office special education staff estimated that DODDS had 
incurred additional annual per student costs that ranged from 
several hundred dollars for evaluation and monitoring to 
$60,000 when teachers had to be flown in to one DODDS school 
thought the school year to provide services. DOD's lack of 
adherence to its policies for screening and placing dependents 
with special education needs, as well as its management of the 
special education program are two factors in which 
effectiveness should be greatly improved to reduce program 
costs.

163. ``Defense Depot Maintenance: More Comprehensive and Consistent 
        Workload Data Needed for Decisionmakers,'' May 1996, GAO/NSIAD-
        96-166.

    a. Summary.--The National Defense Authorization Act for 
Fiscal Year 1996 requires GAO to analyze the Defense 
Department's (DOD) report entitled ``Depot Maintenance and 
Repair Workload,'' which was submitted to Congress in April 
1996. GAO focuses on DOD's analysis of (1) the need for and 
effect of the 60/40 legislative requirement concerning the 
allocation of depot maintenance workloads between the public 
and private sectors, (2) historical public and private sector 
depot maintenance workload allocations, and (3) projected 
public and private depot maintenance workload allocations.
    b. Benefits.--This report found that DOD generally complied 
with the section 311 requirements regarding workload data, 
except that it did not provide direct labor hour data as 
required by Congress. GAO's analysis of DOD's workload report 
shows that the use of more comprehensive and consistent data 
would provide Congress and DOD decisionmakers a more accurate 
picture of historical and future projections of depot 
maintenance workload allocations between the public and private 
sectors.

164. ``Defense Depot Maintenance: DOD's Policy Report Leaves Future 
        Role of Depot System Uncertain,'' May 1996, GAO/NSIAD-96-165.

    a. Summary.--The National Defense Authorization Act for 
Fiscal Year 1996 requires GAO to analyze the Defense 
Department's (DOD) report entitled ``Policy Regarding 
Performance of Depot-Level Maintenance and Repair,'' which was 
submitted to Congress in April 1996. GAO focuses on (1) the 
likely future role of the defense depots, (2) the adequacy of 
the depot maintenance policy's content, and (3) the 
inconsistency of DOD's policy with current statutes and 
congressional direction on the use of public-private 
competitions.
    b. Benefits.--GAO found that the DOD depot maintenance 
policy report calls for a clear shift to a greater reliance on 
private sector maintenance capabilities than exists today. But, 
the policy is vague or provides wide implementation latitude in 
a number of key areas, leading to questions as to what the 
practical effects it could have once implemented. In addition, 
the policy is inconsistent with congressional direction calling 
for competition between private-public entities for noncore 
work.

165. ``NATO Enlargement: NATO and U.S. Actions Taken to Facilitate 
        Enlargement,'' May 1996, GAO/NSIAD-96-92.

    a. Summary.--In January 1994, the North American Treaty 
Organization (NATO) committed itself to expanding its 
membership to include the newly democratic states of the former 
Communist bloc. According to the State Department, the United 
States has been the driving force behind NATO's enlargement. 
This report discusses (1) actions taken or planned to enlarge 
NATO, (2) the extent of current and planned U.S. bilateral 
assistance programs to enhance the military operations and 
capabilities of aspiring NATO members, and (3) the potential 
costs of enlargement to NATO and the new members.
    b. Benefits.--The United States has five bilateral 
assistance programs that help to improve the operational 
capabilities of potential NATO members an other countries of 
Central and Eastern Europe and the Newly Independent States. In 
fiscal year 1995, the United States provided about $54 million 
in bilateral assistance to Partnership for Peace (PFP) member 
states through these five programs; and in 1996, the United 
States will provide about $125 million. Although the total cost 
of NATO enlargement is unknown, increased membership will place 
new financial burdens on NATO's commonly funded infrastructure 
programs and on the new members themselves.

166. ``Air Force Aircraft: Consolidating Fighter Squadrons Could Reduce 
        Costs,'' May 1996, GAO/NSIAD-96-82.

    a. Summary.--The Air Force decided in 1992 to reconfigure 
its fighter force into smaller squadrons. This decision was 
made at a time when the Defense Department was seeking to 
reduce military operating and infrastructure costs. GAO found 
that the organizational structure of the Air Force's fighter 
force is not cost-effective. By operating F-15's and F-16's in 
smaller squadrons, the Air Force boosts the number of squadrons 
above the number that would have been used in the traditional 
24-aircraft configuration. This reconfiguration has increased 
operating costs and slowed reductions in infrastructure costs. 
Although the Air Force considers smaller fighter squadrons to 
be beneficial, it has not undertaken any studies to support its 
decision. The Air Force's arguments for using smaller squadrons 
do not justify the additional expense. GAO evaluated a range of 
options for consolidating squadrons that could cut operating 
costs by as much as $745 million during fiscal years 1997-2002. 
In addition, consolidating squadrons could result in base 
closures, reducing infrastructure costs by about $50 million 
per base closure per year.
    b. Benefits.--The Air Force cited increased deployment 
flexibility and reduced span of control as the primary benefits 
for having smaller fighter squadrons. However, the Air Force 
has not demonstrated that these benefits are compelling. 
Moreover, the Air Force has neither documented instances of 
problems with deployment flexibility and span of control nor 
conducted studies that support its decision to use smaller 
squadrons.

167. ``Tactical Intelligence: Accelerated Joint STARS Ground Station 
        Acquisition Strategy is Risky,'' May 1996, GAO/NSIAD-96-71.

    a. Summary.--The Army and the Air Force are jointly 
developing the Joint Surveillance Target Attack Radar System 
(Joint STARS), which is designed to locate and track wheeled 
and track vehicles beyond the ground line of sight during 
either day or night and under most weather conditions. The Army 
is responsible for the development, test, production, and 
fielding of Joint STARS ground station modules. GAO found that 
the Army's strategy to accelerate production of the Common 
Ground Station--the next version of the ground station 
modules--unnecessarily risks millions of dollars on an unproved 
system. GAO believes that buying more systems than are needed 
for operational testing and evaluation significantly raises the 
risks of procuring a costly and ineffective system. The Army 
has accelerated the program and moved the first fielding date 
for the Common Ground Station from fiscal year 2002 to fiscal 
year 1998. However, the Army lacks analyses showing an urgent 
need to field the added capabilities of the Common Ground 
Station 4 years earlier than planned or showing that the 
expected benefits of accelerated procurement, prior to 
successful completion of operational testing and evaluation, 
outweigh the risks.
    b. Benefits.--DOD believes that the Army's acquisition 
strategy espouses prudent risks. The risks of systems starting 
production before operational tests include reliability that is 
significantly less than expectations, systems that cannot meet 
current specifications, systems that are never fielded and/or 
retired after fielding because of poor performance, and systems 
that require significant and expensive post-fielding repairs 
for faults identified during operational test and evaluation.

168. ``Passports and Visas: Status of Efforts to Reduce Fraud,'' May 
        1996, GAO/NSIAD-96-99.

    a. Summary.--Technical problems and the failure of overseas 
consular staff to comply with internal management controls have 
hampered State Department effort to modernize its visa and 
passport operations and make them less vulnerable to fraud. 
After initial delays, State has made steady progress in 
installing its machine-readable system--the primary initiative 
for eliminating visa fraud--and provided all visa-issuing posts 
with automated access to its global data base containing the 
names of persons ineligible for visas. State's modernization 
program to reduce passport fraud is behind schedule. State 
originally planned to install a new wide-area network, develop 
a system to print a digitalized passport photograph, and 
install a system to verify the multiply issuance of passport by 
December 1995. However, only the installation of the wide-area 
network, upon which the other two projects depend, has been 
completed. Full implementation also depends on modernizing the 
passport production system, which according to State depends on 
funding availability.
    b. Benefits.--Operational problems have diminished the 
effectiveness of efforts to overcome the material weaknesses in 
visa and passport processing. These problems include (1) 
technical problems that have limited the availability and 
usefulness of the visa improvements, (2) limited usefulness of 
embassy lookout committees because of the reluctance of some 
agencies to share information and the lack of representation of 
key agencies, and (3) lack of compliance with management 
control procedures designed to decrease the vulnerability of 
consular operations to fraud.

169. ``U.S. Combat Air Power: Reassessing Plans to Modernize 
        Interdiction Capabilities Could Save Billions,'' May 1996, GAO/
        NSIAD-96-72.

    a. Summary.--In view of continuing concerns over future 
defense spending and the military's services' ample ability to 
intercept enemy missiles and aircraft, GAO questions the 
Pentagon's decision to upgrade warplanes and other weapons 
systems at a cost of more than $200 billion during the next 20 
years. GAO recommends that the Defense Department routinely 
review modernization proposals according to how they will 
enhance the overall ability of the U.S. military to intercept 
enemy targets. Proposals that add redundancy, such as the B-1B 
and Apache modifications and the purchase of F/A-18E/F's, 
attack helicopters, and precision-guided missiles, should be 
examined in the context of the additional interdiction 
capability they offer. This analysis could serve as the basis 
for deciding funding priorities, the sufficiency of investment, 
and the future force structure.
    b. Benefits.--GAO finds that the services have proposed 
upgrades or new weapons that offer little additional 
interdiction capability. DOD has not assessed interdiction 
modernization proposals in terms of adequacy of aggregate 
capability, therefore little assurance has been provided that 
indicate that its interdiction capabilities are properly sized 
to meet mission needs, or whether more cost-effective 
alternatives exist.

170. ``Satellite Control Capabilities: National Policy Could Help 
        Consolidation and Cost Savings,'' May 1996, GAO/NSIAD-96-77.

    a. Summary.--Satellite control relies on ground antennas to 
track satellites and collect satellite health and status data 
by telemetry as well as to command satellites to perform 
various functions. GAO has been reviewing space programs and 
activities within the Defense Department and intelligence 
community. This report discusses the potential for 
consolidating satellite control functions within the 
Government.
    b. Benefits.--GAO believes that a national satellite 
control policy that addresses the objective of interoperability 
and standardization through integration, consolidation, and 
sharing of the defense, intelligence, and civil space sector's 
satellite control capabilities is needed. And for these 
requirements, GAO recommends that the National Science and 
Technology Council develop an inter-sector space policy, to be 
included with its revisions of other space policies, that would 
direct the Nation's satellite control networks.

171. ``Defense Management: Information on Selected Aspects of DOD's Jet 
        Fuel Programs,'' July 1996, GAO/NSIAD-96-188.

    a. Summary.--Under its bulk fuel program, the Defense 
Logistics Agency buys jet fuel from commercial suppliers and 
transports it via trucks, pipelines, barges, and railroads to 
military installations for use by military aircraft. The into-
plane program involves individual contracts between the Defense 
Fuel Supply Center and fixed-base operators who provide jet 
fuel at contractually set prices. These prices are generally 
less than commercial prices charged at civilian airports. This 
report discusses (1) the pricing policies, rules, and 
regulations used for both fuel programs and whether the cost 
factors used for each are consistent with applicable policies; 
(2) whether bulk fuel usage and into-plane sales have changed 
in recent years and GAO's assessment of the reasons for any 
changes; and (3) the significance and validity of questions and 
complaints raised by into-plane contractors and the National 
Air Transportation Association about the effect on their 
businesses of Defense Department changes in the pricing of 
into-plane jet fuel.
    b. Benefits.--Defense Business Operations Fund policies 
governed standard pricing for both the bulk and into-plane jet 
fuel programs. The standard prices used in each program were 
based on appropriate cost factors and complied with current 
DBOF policies. However, while the current policies as applied 
to the into-plane program meet DBOF's original objective that 
standard prices recover the total costs of goods and services 
provided to customers, they do not in the bulk fuel program in 
which the current standard price is based only on the direct 
costs incurred by the Defense Fuel Supply Center.

172. ``C-17 Aircraft: RM&A Evaluation Less Demanding Than Initially 
        Planned,'' July 1996, GAO/NSIAD-96-126.

    a. Summary.--The Air Force reported that the C-17 transport 
aircraft met or exceeded 10 of the 11 contract specification 
requirements during its reliability, maintainability, and 
availability (RM&A) evaluation. However, the evaluation was 
less demanding than the one called for in a draft 1992 plan. 
The reduced rigor stemmed primarily from changes in the number 
of aircraft sorties, average sortie length, and total flying 
hours. The evaluation was also less demanding because it had 
fewer airdrops and landings at small, austere airfields than 
originally planned and flew cargo loads that were significantly 
lighter than projected in the contract specifications. In 
awarding the incentive fee, the Air Force credited the C-17 
aircraft with meeting the full mission capable rate goal. 
During the RM&A evaluation, however, the aircraft was 
restricted from performing formation personnel airdrop under 
realistic conditions and was rated not functionally effective 
for aeromedical evacuation. As a result, the $5.91 million 
incentive fee was $750,000 higher than justified.
    b. Benefits.--The RM&A evaluation was not a statistically 
valid test for determining C-17 wartime utilization rates and 
did not prove what a mature C-17 fleet would do during 45 days 
of wartime surge operations. It simply demonstrated that a high 
utilization rate could be achieved during a 48-hour period.

173. ``Ballistic Missile Defense: Issues Concerning Acquisition of 
        THAAD Prototype System,'' July 1996, GAO/NSIAD-96-136.

    a. Summary.--The Ballistic Missile Defense Organization and 
the Army plan to acquire a Theater High Altitude Area Defense 
(THAAD) User Operational Evaluation System--an early prototype 
version of the final THAAD system. The Army now plans to buy 40 
interceptors well before testing ensures the User Operational 
Evaluation System's capabilities, even though the THAAD program 
has already experienced significant cost, schedule, and 
technical performance problems. As a result, the Defense 
Department risks acquiring system that might not be worth 
deploying in an emergency.
    b. Benefits.--GAO found that (1) the contractor's cost 
estimate for the interceptors has more than doubled since 1992 
and is likely to increase further and (2) test schedule 
slippage, increase delivery lead times, and funding limitations 
have delayed the availability of the interceptors by about 2 
years. Furthermore, airborne deployment of the Use Operational 
Evaluation System may be difficult because it must compete with 
other military hardware for scarce airlift resources.

174. ``Space Station: Cost Control Difficulties Continue,'' July 1996, 
        GAO/NSIAD-96-135.

    a. Summary.--The international space station, a joint 
venture involving NASA, Japan, Canada, the European Space 
Agency, and Russia, will be a permanently orbiting laboratory 
used to conduct scientific research under weightless 
conditions. NASA estimates its share of the costs to build the 
space station at $17.4 billion. The space station is now 
scheduled to be completed by 2002. As of April 1996, the prime 
contract for the space station was nearly $90 million over cost 
and about $88 million behind schedule. Overall, the prime 
contract is 45-percent complete and these variances are within 
planned funding levels. NASA has tried to ensure that the prime 
development contractors and its major subcontractors implement 
effective performance measurement systems for managing their 
contractors, but a complete performance measurement system is 
still not in place. Also, NASA has made slower progress 
implementing effective performance measurement systems on its 
contractors for developing ground-based and on-orbit 
capabilities for using and operating the space station.
    b. Benefits.--Many cost threats remain, and financial 
reserves needed for unexpected contingencies remain limited 
during the next several years. If available resources prove 
inadequate, program managers either will be forced to exceed 
the annual funding limitation, or will have to defer or 
rephrase other activities, potentially delaying the space 
station's schedule and increasing its overall cost.

175. ``Defense Research and Development: Federal Centers' 1993 
        Compensation in Relation to Federal Levels,'' July 1996, GAO/
        NSIAD-96-140.

    a. Summary.--This report provides information on the 
professional staff, managers, and executives of the Defense 
Department's federally funded research and development centers. 
GAO reviews fiscal year 1993 costs for salaries, other cash 
compensation, and benefits to determine total compensation for 
the centers and identifies the Federal levels that contained 
the average compensation paid by the centers to their 
personnel.
    b. Benefits.--GAO determined that the average compensation 
for all fiscal year 1993 federally funded research and 
development centers employees, including average base salaries, 
benefits, and total compensation, was $89,000. The average base 
salary for all study employees was $73,000 with individual 
averages ranging from $67,000 for the Center of Naval Analyses 
to $81,000 for the RAND Corp.

176. ``Chemical Weapons Stockpile: Emergency Preparedness in Alabama is 
        Hampered by Management Weaknesses,'' July 1996, GAO/NSIAD-96-
        150.

    a. Summary.--Eight years after the inception of the Army's 
Chemical Stockpile Emergency Preparedness Program, communities 
near the Anniston Army Depot in Alabama are not prepared to 
respond to a chemical stockpile emergency because they lack 
critical items, including communication warning systems and 
protective equipment for emergency workers. Alabama and six 
counties have yet to spend $30.5 million--about two-thirds of 
the $46 million earmarked for improvements in emergency 
preparedness. This lack of progress is the result of management 
weaknesses at the Federal level and inadequate action by State 
and local agencies.
    b. Benefits.--GAO has found that local communities near the 
eight chemical weapons storage sites in the United States are 
not fully prepared to respond to a chemical emergency, 
financial management is weak, and costs are mounting.

177. ``Haiti: U.S. Assistance for the Electoral Process,'' July 1996, 
        GAO/NSIAD-86-147.

    a. Summary.--This report reviews United States efforts to 
foster democratic elections and greater respect for human 
rights in Haiti. GAO discusses (1) how the elections in Haiti 
were conducted, (2) the nature and extent of United States 
support for these elections, and (3) whether election 
assistance funds for Haiti were properly controlled and spent. 
GAO also assesses Haiti's progress in investigating allegations 
of politically motivated killings.
    b. Benefits.--GAO observed that the elections were 
generally peaceful, citizens were free to vote, organized fraud 
was not evident, and technical irregularities did not affect 
the outcome of the election, although several incidents of 
violence and intimidation, and uncertainty did arise over 
President Aristide's intentions to step aside to his successor, 
Rene Preval. In support of the Haitian elections, the United 
States spent about $18.8 million used for financial and 
diplomatic support, without which the elections would not have 
been possible.

178. ``NASA Budget: Carryover Balances in Selected Programs,'' July 
        1996, GAO/NSIAD-96-206.

    a. Summary.--In response to concerns raised in an oversight 
hearing, GAO reviewed the extent of carryover balances for the 
Mission to Planet Earth and other NASA programs. Carryover 
balances consist of unobligated funds and uncosted obligations. 
Unobligated balances represent the portion of its budget 
authority that NASA has not obligated. Uncosted obligations 
represent the portion of its authority that NASA has obligated 
for goods and services but for which it has not yet incurred 
costs. Carryover balances in NASA's Human Space Flight and 
Science, Aeronautics, and Technology programs totaled $3.6 
billion by the end of fiscal year 1995--an amount equal to 
almost one-third of the budget authority provided for these 
programs in fiscal year 1995 that will be used to cover costs 
that will accrue in fiscal year 1996 or beyond. Individual 
programs carried over varying amounts, ranging from the 
equivalent of 1 month to 16 months of fiscal year 1995's new 
budget authority. The Mission to Planet Earth carried $695 
million, or more than 6 months, of budget authority into fiscal 
year 1996.
    b. Benefits.--Under NASA's current budget and cost plans, 
these balances will be reduced in fiscal years 1996 and 1997, 
but the actual reductions depend on (1) the extent NASA's 
projected costs match the actual costs incurred and (2) the 
amount of new budget authority received for fiscal year 1997.

179. ``Federally Funded R&D Centers: Issues Relating to the Management 
        of DOD-Sponsored Centers,'' August 1996, GAO/NSIAD-96-112.

    a. Summary.--Federally funded research and development 
centers (FFRDC) were first established during World War II to 
meet the military's specialized research needs that could not 
be met by Government workers because of limits placed on 
salaries and hiring. Today, eight agencies, including the 
Defense Department (DOD), fund 39 centers that are run by 
universities, nonprofit groups, and industrial firms under 
long-term contracts. GAO believes that the following four 
issues merit attention as Congress and DOD work to resolve 
concerns regarding the centers: (1) whether DOD limits its 
centers to performing appropriate work, (2) whether DOD 
adequately safeguards the objectivity of its centers, (3) 
whether DOD effectively oversees its centers, and (4) whether 
DOD adequately considers cost-effective alternatives to using 
the centers. GAO also discusses recent steps DOD has taken to 
improve management of the centers.
    b. Benefits.--The DOD has recently provided an update on 
initiatives it was taking to (1) define FFRDC core work 
appropriate for FFRDSs, (2) establish stringent criteria for 
the noncore work FFRDC's parent corporations accept, (3) 
develop guidelines to ensure that management fees are based on 
need and detailed justification, and (4) establish an 
independent advisory panel as the Defense Science Board Task 
Force recommended.

180. ``Military Readiness: Data and Trends for April 1995 to March 
        1996,'' August 1996, GAO/NSIAD-96-194.

    a. Summary.--This updates GAO's March 1996 report on 
military readiness (GAO/NSIAD-96-111BR) and discusses 
significant changes. From April 1995 through March 1996, 
readiness of the 87 military units covered by the earlier 
report was at levels consistent with service goals in 80 
percent of the units. This represents a 12-percent improvement. 
Readiness reductions were caused mainly by shortages of 
available personnel, particularly those trained to do highly 
skilled military jobs. Of the 31 Army and 5 Air Force units GAO 
reviewed that participated in the Bosnia operation, 5 Army 
units and 1 Air Force unit reported readiness reductions. The 
Army units had sent elements of key personnel to Bosnia, thus 
reducing resources available to the parent units. The Air Force 
unit has historically suffered from personnel shortages. The 
Bosnia operation did not affect the readiness of either Navy or 
Marine Corps units because they were either already in the 
theater or had planned a forward presence deployment to the 
area.
    b. Benefits.--Most of the Army units GAO reviewed (26 of 
31) that had participated in the Bosnia operation remained 
capable of performing major portions of their wartime missions. 
The readiness of Air Force and Naval units remained stable or 
improved.

181. ``Environmental Cleanup: Cash Management Practice at Rocky 
        Mountain Arsenal,'' August 1996, GAO/NSIAD-96-145.

    a. Summary.--The Rocky Mountain Arsenal, located on 17,000 
acres northeast of Denver, is one of the Defense Department's 
most contaminated installations. The military manufactured 
chemical weapons there for decades, and the Army leased part of 
the arsenal to the Shell Oil Co., which produced herbicides and 
pesticides. A cost-sharing arrangement between the Army and 
Shell does not provide for timely or efficient collection of 
what is expected to exceed $500 million in cleanup costs from 
Shell. When the Government does not collect receivables in a 
timely manner, it loses the opportunity to invest these funds 
until needed. Since the 1989 settlement agreement with Shell, 
weak cash management practices have cost the Government more 
than $1 million.
    b. Benefits.--GAO noted three weaknesses in cash management 
practices at the arsenal. First, the Army bills Shell 
quarterly, rather than monthly, as is the usual business 
practice. Second, the payment cycle allows 90 days--rather than 
the 60 days called for in the settlement agreement--to document 
cost claims, prepare a quarterly statement, and pay the amount 
due. Third, the Army and Shell exchange payments through the 
mail rather than electronically, which further delays access to 
the funds. Of the 10 checks GAO reviewed, 9 including 1 for $12 
million, were deposited after the due date.

182. ``Acquisition Reform: Purchase Card Use Cuts Procurement Costs, 
        Improves Efficiency,'' August 1996, GAO/NSIAD-96-138.

    a. Summary.--The National Performance Review recommended in 
1993 that agencies increase their use of Government commercial 
credit cards--called purchase cards--for small purchases to cut 
the red tape normally associated with Federal procurement. 
Since then, legislation has eliminated some requirements for 
purchases of $2,500 or less, called micropurchases. Agencies 
have found that they can carry out their missions at lower cost 
by having staff use the purchase cards for simple purchases. 
Further, agency studies have showed that card use reduces labor 
and payment-processing costs. In fact, a 1994 interagency study 
showed that costs had often been cut by more than half; other 
studies have identified millions in potential savings from card 
use. Since the cards first became available Governmentwide, 
their use has skyrocketed. Even so, significant room for growth 
exists: the average purchase card transaction was $375 in 
fiscal year 1995, well below the micropurchase threshold. 
Despite the growth in purchase card use, GAO found no evidence 
of increased abuses. In fact, the electronic data stored on all 
purchase card transactions permits close monitoring of card 
use. Officials at most agencies GAO reviewed believe that the 
Federal Acquisition Regulation, which governs Federal 
procurement, should more clearly address card use. Also, 
although agencies want to learn from one another's experiences, 
no mechanism exists for them to communicate with one another 
and to share their improvements.
    b. Benefits.--Agency officials have used the purchase card 
and the micropurchase authority to move simple purchases from 
procurement offices to program offices. Several studies have 
shown that this move reduced the labor and payment processing 
costs for those purchases by eliminating steps from the 
procurement process and consolidating bills for many purchases 
into one payment. GAO found that most agencies that were 
reviewed indicated that they were trying to improve their card 
programs by emphasizing card use, reengineering their 
processes, and increasing their use of automation.

183. ``State Department: Options for Addressing Possible Budget 
        Reductions,'' August 1996, GAO/NSIAD-96-124.

    a. Summary.--The State Department received appropriations 
of $2.695 billion for fiscal year 1995 and $2.671 billion for 
fiscal year 1996 to conduct foreign affairs. Although State has 
cut its staff and implemented cost reduction measures, it has 
been reluctant or unable to significantly reduce its overseas 
presence and the scope of its activities or to significantly 
change its business practices. Budgetary constraints make it 
highly unlikely that State will receive a level of funding that 
would allow it to maintain its current level of activities. The 
greatest opportunity to reduce costs is by closing, or reducing 
the size of, overseas posts, which cost about $1.9 billion 
annually--or nearly 70 percent of State's budget. State 
maintains diplomatic presence in more than 250 locations 
overseas, including countries where the United States has 
limited interests. This structure has not changed significantly 
since the end of the cold war. State could also reduce support 
costs by several hundred million dollars by accelerating 
changes to its business practices. State now spends nearly $1.8 
billion on communications, real estate, and other support 
services for domestic and overseas operations. Prompt disposal 
of unneeded overseas real estate is just one example of how 
State could reduce its support costs.
    b. Benefits.--In February 1995, the Secretary of State 
chose not to support reforms that might fundamentally change 
the Department's mission, organizational structure, and 
processes. The State Department believes that a substantial 
downsizing to accommodate potential funding reductions would 
severely jeopardize its ability to achieve U.S. foreign policy 
goals. However, GAO believes that State can take steps to 
reduce its costs, while continuing to protect U.S. interests. 
In light of potential funding reductions and post cold war 
realities, State needs to plan for how it can become a smaller, 
more efficient, and less expensive organization. Development of 
a downsizing strategy should start with identification of core 
missions and functions and critical locations and the resources 
required to support them.

184. ``U.S. Combat Air Power: Aging Refueling Aircraft Are Costly to 
        Maintain and Operate,'' August 1996, GAO/NSIAD-96-160.

    a. Summary.--The military's KC-135 tanker fleet used for 
air refueling is now 30 to 40 years old, and these aircraft are 
taking longer and costing more to maintain and operate. 
Moreover, the Air Force could spend more than $6 billion on 
modifications and structural repairs to keep the KC-135 fleet 
operational. Despite increasing demands on the tanker fleet, 
the Air Force has deferred a replacement program and is relying 
on reserve personnel to relieve pressure on active duty tanker 
crews. The reserve forces have been able to assume more of the 
tanker workload because many crew members have volunteered 
extra time, thus exceeding the reserves' legal training 
requirement of 38 days per year. In fact, many have served more 
than 100 days a year in training and flying sorties.
    b. Benefits.--GAO found that KC-135 tankers are the oldest 
aircraft the services operate and are becoming more expensive 
to operate because they require more maintenance, reducing the 
number or aircraft available for operations. The Air Force 
could spend over $6 billion for a variety of modifications and 
structural repairs to improve the reliability, maintainability, 
and capability of its DC-135's. GAO proposes that a dual-use 
replacement aircraft could fulfill both airlift and air 
refueling missions.

185. ``Electronic Warfare: Navy's New Radar Warning Receiver Needs More 
        Testing,'' June 1996, GAO/NSIAD-96-68.

    a. Summary.--The Navy plans to begin low-rate production of 
new radar warning receivers despite serious flaws in two 
earlier versions and performance problems that surfaced during 
testing of the latest version. The receivers developed under 
the ALR-67(V)3 radar receiver program are designed to sense the 
signals from hostile radars, provide an audio warning to the 
pilot, and display the warning information on a video screen in 
the cockpit. GAO concludes that the Navy risks acquiring a 
deficient system that may require expensive changes if the 
receivers are to effectively alert pilots to radar-controlled 
enemy weapons.
    b. Benefits.--GAO recommends that the Secretary of Defense 
require that the ALR-67(V)3 complete both phases of operational 
testing to determine its effectiveness and suitability, and 
that the deficiencies identified during developmental testing 
be resolved before committing to low-rate production in order 
to minimize the risk of procuring another deficient radar 
warning receiver.

186. ``Weapons Acquisition: Warranty Law Should Be Repealed,'' June 
        1996, GAO/NSIAD-96-88.

    a. Summary.--Requiring the use of warranties in weapon 
system acquisitions is impractical and provides the Government 
with few benefits. GAO estimates that the military spends about 
$271 million each year on weapon system warranties, which 
return only about 5 cents for every $1 spent. Congress expected 
warranties to improve weapon system reliability by providing a 
mechanism to hold contractors liable for poor performance. In 
practice, however, warranties have proved an expensive way for 
the Defense Department to resolve product failures with 
contractors. The Government has traditionally self-insured 
because its large resources make protection against 
catastrophic loss unnecessary. Further, it is often the sole 
buyer for a product and cannot share the insurance costs with 
other buyers. Because a contractor cannot allocate the cost of 
insuring against the risk of failure among multiple buyers, 
Defense Department ends up bearing the entire estimated cost. 
Moreover, Defense Department program officials said that 
warranties do not motivate contractors to improve the quality 
of their products. GAO believes that the warranty law should be 
repealed and the decision to obtain a warranty should be left 
to the program manager.
    b. Benefits.--Based on GAO reviews, the Defense 
Department's (DOD) costs for warranties have greatly exceeded 
any financial return it has received. For contracts on which 
DOD could provide both price and claim data, GAO estimated that 
DOD received about $1 in direct benefit for every $19 paid to a 
contractor for a warranty. Although warranties provide 
unquantifiable benefits such a prepaid maintenance support and 
a mechanism for resolving product performance disputes, some 
military officials claim that repairs were not performed 
quickly and that contractors routinely contested warranty 
claims.

187. ``Environmental Compliance: Continued Need for Guidance in 
        Programming Defense Construction Projects,'' June 1996, GAO/
        NSIAD-96-134.

    a. Summary.--Since GAO last reported on this subject in 
1993 (GAO/NSIAD-94-22), the military services have tried to 
improve the manner in which they program and prioritize 
environmental compliance construction projects. However, 
Defense Department (DOD) policy still does not specify how the 
military services should report costs for environmental 
compliance construction projects and how they should decide 
which appropriation account should provide the funds. 
Consequently, the military services and the Defense Logistics 
Agency continue to differ in how they classify and prioritize 
projects and how they determine their source of funding. These 
inconsistencies and lack of guidance inhibit congressional 
oversight and DOD program management. DOD's estimates for 
fiscal year 1997 environmental compliance construction 
requirements fell from $257 million in February 1995 to $84 
million in April 1996. Because of the lack of a uniform 
approach to categorizing these projects, GAO cannot determine 
the precise reasons for this drop in funding.
    b. Benefits.--GAO found the following service initiatives 
being taken: the Army is moving toward more centralization in 
the management of its military construction priorities to 
promote oversight of construction-related environmental issues 
on an Army-wide basis; the Air Force now requires its commands 
to prioritize and consolidate environmental compliance 
construction projects with other military construction 
projects; and the Marine Corps is updating its environmental 
compliance and tracking system to more easily identify 
environmental compliance and other environmental projects, and 
the Navy created a single-source headquarters sponsor for 
construction projects.

188. ``NASA Personnel: Challenges to Achieving Workforce Reductions,'' 
        August 1996, GAO/NSIAD-96-176.

    a. Summary.--By the end of fiscal year 1996, NASA will be 
about halfway to its goal of reducing its workforce from 25,000 
full-time-equivalent employees to about 17,500. NASA's success 
is due mainly to the use of buyouts to encourage employees to 
voluntarily resign or retire from the Government. About two-
thirds of the 4,000 people who left NASA in 1994 and 1995 took 
buyouts. Voluntary attrition should meet NASA's downsizing 
goals through fiscal year 1998, but the agency doubts whether 
attrition would provide sufficient personnel losses by fiscal 
year 1999. Thus, NASA intends to start planning for a 
reduction-in-force during fiscal year 1998 if not enough NASA 
employees are retiring or resigning voluntarily. NASA's ability 
to reach its goal of 17,500 employees is subject to major 
uncertainties, including the shifting of program management 
from headquarters to field centers and the award of a single 
prime contract for managing the space shuttle at Kennedy Space 
Center. Because of questions about NASA's ability to achieve 
major personnel reductions to meet likely future budgets, 
Congress may want to consider requiring NASA to submit a 
workforce-restructuring plan for achieving its fiscal year 2000 
goal.
    b. Benefits.--NASA recently requested buyout authority from 
Congress. GAO reports that savings from buyouts generally 
exceed those from reductions-in-force and that savings from 
downsizing largely depend, among other things, on whether the 
workforce restructuring has been effectively planned.

189. ``Defense Infrastructure: Budget Estimates for 1996-2001 Offer 
        Little Savings for Modernizations,'' April 1996, GAO/NSIAD-96-
        131.

    a. Summary.--The Pentagon is counting on large savings from 
streamlining infrastructure to pay for new weapons systems, but 
GAO found that substantial net savings from infrastructure 
improvements, such as base closures and military purchasing 
reforms, are unlikely during the next 5 years. In defining 
``infrastructure,'' the Defense Department (DOD) has excluded 
most intelligence; space; and command, control and 
communications programs. These programs will cost about $25 
billion in fiscal year 1996. If DOD's objective is to examine 
all possible infrastructure for savings, it should include 
these programs. Moreover, some infrastructure costs are hidden 
in accounts that are supposedly devoted to operations and 
maintenance and to quality-of-life programs for military 
personnel. Unless the Pentagon is willing to consider these 
areas, military overhead will likely remain relatively 
constant--at 60 percent of DOD's budget--through 2001. This 
report identifies options to consolidate and reengineer 
infrastructure that would yield savings of nearly $12 billion 
in future years.
    b. Benefits.--This report offers 13 options of estimated 
budgetary savings totaling $11.8 billion from fiscal years 
1997-2001. These options include discontinuing the National 
Guard youth programs, collocating and closing recruiting 
facilities, reassessing defense conversion spending, 
consolidating Air Force fighter squadrons, reducing the size of 
DOD's transportation infrastructure, establishing copayments 
for care in military hospitals, capping funding for the Civil 
Air Patrol, and reducing the size of DOD's finance and 
accounting infrastructure.

190. ``M1 Tanks: Status of Proposed Overhaul Program,'' April 1996, 
        GAO/NSIAD-96-100.

    a. Summary.--Concerns have been raised in Congress about 
the absence of a procurement program to modernize the M1 tank 
fleet beyond the current upgrade of existing tanks and to 
counter new tank threats. This report discusses whether the (1) 
current readiness level of the M1 tank is adequate to meet its 
war-fighting requirements, (2) operating condition of the tanks 
at the National Training Center is adequate to meet training 
requirements, and (3) change in repair parts funding harmed 
unit maintenance. GAO also reports on the status of the Army's 
proposed M1 tank overhaul program.
    b. Benefits.--Some Army officials have proposed an M1 
overhaul program, at a cost of $559,000 a tank, because they 
were concerned that latent deficiencies that do not show up 
during routing readiness inspections could show up during 
wartime and affect the tanks' performance. These officials 
believe that the overhaul program would not only increase 
availability, reliability, and fightability of the M1 tank 
fleet but would also protect industrial base core capabilities 
that would be needed in time of conflict.

191. ``Military Exports: Offset Demands Continue to Grow,'' April 1996, 
        GAO/NSIAD-96-65.

    a. Summary.--This report examines offset requirements 
associated with military exports. Offsets are the range of 
industrial and commercial compensation packages offered to 
foreign governments and companies as inducements to purchase 
military goods. They include coproduction, technology transfer, 
training, investment, marketing assistance, and commodity 
trading. Since the mid-1980's, U.S. firms have entered into 
offset agreements valued at more than $84 billion. GAO 
discusses the (1) ways in which the offset goals and strategies 
of major buying countries have changed, (2) offset requirements 
of these countries and the kinds of activities being undertaken 
to satisfy their requirements, and (3) effects of offsets and 
the steps that the U.S. Government has taken on this matter. 
GAO focuses on 10 buying countries from the Middle East, Asia, 
and Europe.
    b. Benefits.--Over the last 10 years, the countries in this 
GAO study have increased their demands for offsets in order to 
achieve more substantial economic benefits, begun to emphasize 
longer term offset projects and commitments to achieve lasting 
economic benefits, or initiated offset requirements.

192. ``DOD Infrastructure: DOD Is Opening Unneeded Finance and 
        Accounting Offices,'' April 1996, GAO/NSIAD-96-113.

    a. Summary.--In a September 1995 report (GAO/NSIAD-96-127), 
GAO evaluated the Defense Department's (DOD) justification and 
its cost analysis for consolidating more than 300 defense 
accounting centers into 5 large existing finance centers and 20 
new sites called operating locations. GAO challenged the need 
for the 20 operating locations because (1) DOD's analysis 
showed that finance and accounting operations could be 
consolidated into as few as 6; (2) some planned sites, 
particularly those located on closed or realigned military 
bases, would cost $173 million to renovate; and (3) DOD, in 
arriving at its decision, had not considered additional 
operating efficiencies expected from business process 
reengineering initiatives. DOD generally agreed with GAO's 
findings. This report raises an issue that, in GAO's view, 
warrants immediate attention: DOD is opening new finance and 
accounting centers even though its recent analysis shows that 
they are not needed.
    b. Benefits.--GAO recommends that DOD terminate plans to 
open the five facilities that Defense Finance and Accounting 
Service determined are no longer needed to effectively carry 
out DOD's finance and accounting operations. With the current 
trend of declining defense budgets, DOD should reconsider how 
many operating locations are absolutely necessary.

193. ``Cambodia: Limited Progress on Free Elections, Human Rights, and 
        Mine Clearing,'' February 1996, GAO/NSIAD-96-15BR.

    a. Summary.--The signing of the Paris Peace Accords in 1991 
ended years of devastating civil war and started Cambodia on 
the road to building a democratic civil society. The United 
Nations Transitional Authority in Cambodia, established to 
carry out the accords, supervised the withdrawal of Vietnamese 
forces from Cambodia, repatriated more than 360,000 refugees, 
improved human rights conditions, and conducted free and fair 
national elections in 1993. The authority concluded its mission 
in late 1993 with the formation of a duly elected Government in 
Cambodia. This briefing report provides information on 
Cambodia's progress since 1993. GAO discusses (1) Cambodia's 
prospects for holding free and fair national elections by 1998; 
(2) its progress in meeting international human and political 
rights standards; and (3) its progress in clearing millions of 
land mines left over from decades of war.
    b. Benefits.--Cambodia is having difficulty achieving its 
objectives to attain both domestic and international support. 
If it is to gain that support, the Cambodian Government must 
increase its efforts. The fact that Cambodia is making efforts 
to hold fair, democratic elections sometime in 1998 
demonstrates how far they have come since signing the peace 
accords in 1991. Although Cambodia still has far to go, with 
international assistance and support, their goals of holding 
fair elections and instilling and preserving human rights are 
attainable. These goals seemed out of reach 10 years ago.

194. ``Federal Fugitives: More Timely Entry on National Wanted Person 
        File Is Needed,'' February 1996, GAO/GGD-96-64.

    a. Summary.--As a result of earlier work on interagency 
coordination in apprehending Federal fugitives, GAO noted that 
many entries in the FBI's National Crime Information Centers' 
(NCIC) wanted persons file had been made long after arrest 
warrants had been issued. This was contrary to the policies of 
the agencies that had made the entries and the widespread view 
that the timely use of the file aids in the apprehension of 
fugitives and reduces risk to law enforcement personnel and the 
public. GAO did a follow-up review of the entries made in the 
wanted person file and found that the FBI; the U.S. Marshals 
Service; the Bureau of Alcohol, Tobacco, and Firearms (ATF); 
and the Customs Service had entered many fugitives in the file 
long after their arrests had been authorized. In response to 
GAO's finding, the FBI, ATF, and the Customs Service did their 
own reviews and discovered similar entry time problems. GAO 
concludes that NCIC and its participating agencies need clear, 
written policies that call for and define ``immediate entry'' 
and set forth any exceptions. Moreover, agencies should 
periodically monitor entry times and reasons for delays and 
communicate problems and suggest actions to their field 
offices. Although GAO did not review entry times for all law 
enforcement agencies in the Justice and Treasury Departments, 
GAO believes that the same reasons for timely entry generally 
would apply to these agencies.
    b. Benefits.--GAO's investigation and subsequent report to 
the Attorney General and the Secretary of the Treasury alerted 
them to a problem which jeopardized public safety. The report 
allowed them to address the problem. A consensus seems to be 
coming together among agencies reviewed that immediate entry 
means within 24 hours. Agencies are working to get the 24-hour 
threshold into written policy. Adherence to the policies could 
be better ensured if the agencies periodically monitored and 
reviewed entry times and reasons for delays, and communicated 
problems and suggested actions to their respective field 
offices.

195. ``Navy Aviations: AV-8B Harrier Remanufacture Strategy is Not the 
        Most Cost-Effective Option,'' February 1996, GAO/NSIAD-96-49.

    a. Summary.--The Navy could save millions per aircraft by 
buying new AV-8B Harrier fighters equipped with night attack 
and radar capabilities instead of disassembling and 
retrofitting older Harriers with the desired technology. The 
Navy estimates that each remanufactured AV-8B aircraft could 
cost as much as $29.5 million. Such aircraft are made up 
largely of used and refurbished components. GAO calculates that 
the Marines can buy new radar model AV-8Bs for about $23.6 
million per aircraft. Because the program is conducted under an 
annual contract, the Navy can change its procurement strategy 
and begin immediate negotiations to buy new radar models rather 
than continuing to rebuild the aircraft. The first aircraft 
rebuilt at the Naval Aviation Depot in Cherry Point, NC, took 
almost twice as long to disassemble as planned. Delays have 
also arisen from the inability of McDonnell Douglas and depot 
vendors to provide components promptly. In addition, the radars 
to be used in the Harriers are not going to be available as 
originally planned.
    b. Benefits.--This report helped the subcommittee 
understand one area that the Navy needs to improve its 
procurement practices in. It would be more cost-effective to 
buy new radar AV-8B aircraft, instead of modifying the day 
attack AV-8B, and GAO recommended that Congress direct the 
Secretary of the Navy to develop a current cost estimate for 
producing new radar model aircraft, and take advantage of the 
savings available through multiyear procurement.

196. ``Military Bases: Closure and Realignment Savings Are Significant, 
        but Not Easily Quantified,'' April 1996, GAO/NSIAD-96-67.

    a. Summary.--Savings from military base closures and 
realignments should be substantial. The Pentagon's accounting 
systems, however, do not provide Congress with an accurate 
picture of actual savings. The Defense Department (DOD) is 
counting on significant savings to pay for a host of 
initiatives--from force modernization to child care support. 
DOD will have difficulty funding these programs should the 
savings fall short of expectations. This report examines cost 
and savings estimates for past base closures and realignments. 
GAO discusses (1) the extent to which the DOD is achieving 
actual savings from the base closures and realignments and (2) 
the adequacy of DOD's process for developing the cost and 
savings estimates reported in its annual budget submissions.
    b. Benefits.--DOD indicated that the inconsistencies in its 
budget savings estimates we cited were the result of an attempt 
to give the services reporting flexibility. DOD recognized that 
cost estimates in BRAC budget submissions do not include some 
costs that were paid from other DOD accounts or from non-DOD 
appropriations. DOD agreed that the BRAC budget submissions 
should include an advisory statement that economic assistance 
and non-DOD costs are not included. DOD also showed interest in 
considering including a brief statement that the BRAC budget 
submissions are based on the initial cost and savings 
estimates, which are subsequently refined through the use of 
site surveys. GAO provided an alternative estimate of savings 
for the base closure program to insure the DOD has the best 
budgeting information available.

197. ``Defense Contractor Restructuring: First Application of Cost and 
        Savings Regulations,'' April 1996, GAO/NSIAD-96-80.

    a. Summary.--The National Defense Authorization Act for 
Fiscal Year 1995 restricts Defense Department (DOD) payments to 
contractors for costs associated with business combinations. 
Specifically, the law prohibits payment of restructuring costs, 
such as those associated with closing facilities and 
eliminating jobs, until a senior DOD official certifies that 
projected savings from the restructuring are based on audited 
data and should reduce DOD's overall costs. This report 
discusses whether the certification process (1) was carried out 
in accordance with the interim regulations and (2) reduced 
DOD's contract prices. GAO focuses on the United Defense, 
Limited Partnership business combination of FMC Corporations' 
Defense Systems Group and Hirsch Corporation's Defense 
Division--two manufacturers of tracked combat vehicle for the 
Army. This business combination is particularly significant 
because restructuring at United Defense could be a model for 
future DOD restructuring efforts.
    b. Benefits.--DOD has complied with its draft regulation 
and demonstrated the efficacy of this program.

198. ``Peace Operations: Reservists Have Volunteered When Needed,'' 
        April 1996, GAO/NSIAD-96-75.

    a. Summary.--United States participation in peace 
operations, such as those in Haiti and the former Yugoslavia, 
has increased dramatically since the end of the cold war in 
1989. At the same time, fewer active duty forces are available 
today as a result of defense downsizing, and the Defense 
Department (DOD) depends on the reserves to play a greater role 
in peace operations. Although authority to order reservists 
involuntarily to active duty has been available for recent 
operations in Haiti and Bosnia, DOD will likely have to rely on 
volunteers to meet some of its future needs. This report 
discusses (1) whether qualified volunteers have been accessible 
for recent peace operations, (2) differences among services in 
how much they rely on volunteers, (3) factors that affect the 
availability of volunteers, and (4) any steps being taken by 
DOD to ensure that volunteers are accessible.
    b. Benefits.--The problems with future reliance on 
volunteers lie in budgeting and operations which require 
greater needs. To date, volunteers have satisfied the DOD's 
need for reserve forces in peace operations. However, past 
success in obtaining volunteers may not be indicative of the 
future. The Air Force has relied most heavily on volunteers and 
has been considered a model in the DOD because they budget much 
more for volunteer support expenses than the other services. 
Availability of funding has been a critical factor in whether 
reserve volunteers are used to support active component 
operations. In most cases, the expenses of volunteer support 
are funded by the active component. The Assistant Secretary of 
Defense for Reserve Affairs has been working through the DOD 
budgeting process to obtain more funds for reserve support of 
the active component.

199. ``Army Acquisition: Medium Trucks Passed Key Operational and 
        Technical Tests,'' January 1996, GAO/NSIAD-96-4.

    a. Summary.--Army trucks--part of the family of medium 
tactical vehicles--passed technical and operational tests, 
paving the way for the Army's August 1995 decision to approve 
full-rate production. Following contractor modifications to 
correct vehicle deficiencies found in earlier testing, the Army 
conducted (1) a limited follow-on technical test to determine 
whether the trucks could meet contractual reliability and 
performance requirements and (2) a full operational test to 
determine whether it could meet its operation reliability and 
other mission requirements when operated and maintained by 
soldiers. The trucks exceeded reliability requirements in both 
tests and met most performance requirements. However, many of 
the test vehicles had not been produced on the production line 
or had been retrofitted to correct past deficiencies. Also, the 
contractor pretested both the technical and operation test 
vehicles and corrected deficiencies before delivering them to 
the Army for testing.
    b. Benefits.--DOD noted that the Army plans to perform the 
comparison tests on both retrofit and new production vehicles 
to verify that the quality and performance of the vehicles will 
continue to meet the requirements. GAO believes that these 
tests will be responsive to their observations on the 
differences in the Army's and DOT & E's operational test 
results, the modifications of test vehicles, and the needed 
corrections. DOD will save more appropriated funds if it 
continues to make sure the vehicles are up to specification 
before they are accepted from the contractor.

200. ``Navy Maintenance: Assessment of the Public-Private Competition 
        Program for Aviation Maintenance,'' January 1996, GAO/NSIAD-96-
        30.

    a. Summary.--GAO reviewed the Navy's plans and procedures 
for public-private competitions of aviation depot-level 
maintenance workloads. Various factors limited the amount of 
past depot-level work available for competitive awards, 
including time and costs for performing competitions. Although 
actual savings were difficult to quantify, GAO found that the 
Navy's competition programs generally reduced operating costs 
and in many cases streamlined production processes. The Navy 
ended its aviation maintenance competition program in 1993, and 
the Defense Department terminated the program in 1994 despite 
continued congressional support for it. However, as DOD begins 
to implement recommendations by the Commission on Roles and 
Missions leading to the possible privatization of most depot 
maintenance, use of competitive procedures for distribution of 
workloads between the public and private sectors should prove 
cost-effective.
    b. Benefits.--DOD needs to improve its financial accounting 
and information systems; however, completion of these 
improvements should not preclude public-private competitions. 
GAO believes that development of the Cost Comparability 
Handbook for preparing bids and the availability of the Defense 
Contract Audit Agency to review the current cost systems and 
assure that successful bids include comparable estimates of all 
direct and indirect costs provide reasonable bases for 
conducting such competitions. GAO's report shows that as the 
Navy adapts to the future, it may rely on public-private 
competition for cost savings.

201. ``Foreign Assistance: Controls Over U.S. Funds Provided for the 
        Benefit of the Palestinian Authority,'' January 1996, GAO/
        NSIAD-96-18.

    a. Summary.--A series of letters allegedly prepared by the 
Palestinian Authority's Finance Minister and the Director 
General of the Palestine Economic Council for Development and 
Reconstruction (PECDAR) indicates that $138 million from 
unidentified sources was ``diverted'' in late 1994 to finance 
several covert transactions. These transactions include 
purchasing land and building apartments in Jerusalem, funding a 
Palestinian journal, and providing financial support to groups 
inside Israel that are sympathetic to the Palestinian cause. In 
response to congressional concerns that United States 
assistance may have been involved in these transactions, this 
report discusses (1) the financial controls established by the 
World Bank and the U.S. Agency for International Development to 
monitor use of United States funds provided to the Palestinian 
Authority, PECDAR, or the Palestine Liberation Organization 
officials for budget support purposes and (2) what controls the 
U.S. Agency for International Development established over 
project funds provided to other United States Government 
agencies, private contractors, nongovernmental organizations, 
private voluntary organizations, and the United Nations for the 
benefit of the Palestinian Authority.
    b. Benefits.--GAO determined that all funds were under 
tight auditing controls and that no funds were directly 
disbursed to Palestinian Authority, PECDAR, or PLO officials. 
The auditing controls proved to be adequate in this instance, 
and included 1) grant and project officer oversight, 2) 
incremental funding, 3) monthly or quarterly financial status 
reports, 4) progress reports, and 5) auditing provisions. These 
auditing provisions call for annual audits of each contractor's 
overhead rate, contract-specific audits on an as-needed basis, 
and close-out audits valued in excess of $500,000.

202. ``Acquisition Reform: Regulatory Implementation of the Federal 
        Acquisition Streamlining Act of 1994,'' June 1996, GAO/NSIAD-
        96-139.

    a. Summary.--The Federal Acquisition Streamlining Act of 
1994 contained more than 200 sections changing the laws 
governing how agencies acquire nearly $200 billion worth of 
goods and services annually. The act sets deadlines for 
publishing proposed and final implementing regulations, 
prescribes a minimum 60-day period for public review and 
comment on proposed regulations, and requires the drafters of 
such regulations to make every effort to ensure that 
regulations are concise and understandable. This report (1) 
determines whether all regulations are necessary to implement 
the act were published in accordance with the act's 
requirements and (2) describes the efforts made to make the 
regulations concise and understandable.
    b. Benefits.--Implementation of the Federal Acquisition 
Streamlining Act utilized a number of training resources and 
explanatory materials, including: a five-part videotape series 
on operational uses of new policies and procedures; viewer 
reference materials; call-in question and answer sessions with 
drafting team leaders and other procurement expert; and a 
process-oriented ``Guide to Federal Acquisition Regulation 
Changes.''

203. ``Wartime Medical Care: Personnel Requirements Still Not 
        Resolved,'' June 1996, GAO/NSIAD-96-173.

    a. Summary.--Since 1994, the Defense Department (DOD) and 
the military services have produced several estimates of 
wartime medical personnel requirements. The National Defense 
Authorization Act of 1996 requires GAO to study the 
reasonableness of the models each military service uses to 
determine appropriate wartime medical personnel force levels. 
DOD recently embarked on, but has yet to complete, another 
major wartime medical requirements study. This study is 
expected to modify the data contained in the service models and 
is intended to produce a unified DOD position on medical 
requirements. This report addresses the service models' 
results, their methodologies, and their inclusion of active 
duty and reserve medical personnel. A separate report will 
examine DOD's updated wartime medical requirements study and, 
to the extent needed, address any remaining issues associated 
with the service models.
    b. Benefits.--Although the services used different 
techniques to determine wartime medical personnel requirements, 
each of the services considered appropriate factors, such as 
current defense planning guidance, DOD policies for evacuating 
patients from the theater, and casualty projections.

204. ``Operational Support Airlift: Analysis of Joint Staff Estimate of 
        Military Wartime Requirements,'' June 1996, GAO/NSIAD-96-157.

    a. Summary.--Operational support aircraft are used to meet 
short notice, generally smaller cargo and passenger 
requirements that cannot be met by regularly scheduled tactical 
resupply aircraft. A study by the Joint Chiefs of Staff found 
that the joint wartime requirement for operational support 
aircraft is 391 planes, or about 100 less than the fleet in 
existence at the time of the study. In response to a 
congressional request that GAO determine if the requirement for 
391 aircraft was excessive, this report (1) recalculates the 
Joint Staff's estimate using the same computerized model and 
(2) determines how changes in the flight frequency assumptions 
affected the calculation of aircraft requirements.
    b. Benefits.--GAO's calculations of the activity based 
demand found the need for 385 aircraft, 6 less than the 
estimate set forth by the Joint Staff.

205. ``Defense Ammunition: Significant Problems Left Unattended Will 
        Get Worse,'' June 1996, GAO/NSIAD-96-129.

    a. Summary.--The Defense Department (DOD) has poorly 
managed its huge stockpile of ammunition--a legacy of the cold 
war and Operation Desert Storm. Of an $80-billion inventory, an 
estimated $31 billion worth of conventional ammunition, 
explosives, and missiles were surplus. Much of this was old and 
unusable. For some types of ammunition, the military had more 
than 50 times its stated needs. The massive quantities of 
ammunition that were returned to the stockpile as a result of 
closed military bases in Europe and the end of the Persian Gulf 
War--combined with decreases in budgets, staff, and storage 
space--have severely taxed the military's ability to manage the 
ammunition inventory. Managers have difficulty (1) identifying 
ammunition beyond what is needed for the military's stated 
requirements, (2) sharing excess ammunition with military 
services that may need it, and (3) disposing of excess 
ammunition that it no longer makes sense to retain. In 
addition, ammunition inspections and tests have fallen so far 
behind that the military cannot guarantee the usability or 
readiness of the stockpile.
    b. Benefits.--To facilitate implementation of the single 
manager's plan for storing, maintaining, and disposing of 
ammunition, GAO recommends that the military services 
categorize their ammunition, update this information annually, 
and relinquish control of their excess ammunition to a single 
Army manager for distribution to other services that have 
shortages of ammunition or for disposal when it no longer makes 
sense to retain it.

206. ``Navy Mine Warfare: Budget Realignment Can Help Improve 
        Countermine Capabilities,'' March 1996, GAO/NSIAD-96-104.

    a. Summary.--Operation Desert Storm revealed major 
weaknesses in the Navy's ability to detect and disarm enemy 
mines. The Navy possessed only limited capability at the time 
to conduct mine countermeasures at various water depths. In 
addition, two Navy warships struck Iraqi mines in open waters 
in the Persian Gulf, causing $21.6 million worth of damage. By 
contrast, one of the mines was believed to cost $10,000 and the 
other $1,500. This report examines the steps the Navy is taking 
to ensure a viable, effective naval force that will be ready to 
conduct countermeasures in two nearly simultaneous regional 
wars. GAO evaluates the (1) status of the Navy's research and 
development projects, (2) readiness of the Navy's on-hand mine 
countermeasure assets, and (3) match between the Navy's planned 
and on-hand mine countermeasures assets and its mine 
countermeasures requirements.
    b. Benefits.--The systems and equipment installed on the 
Navy's ocean-going mine countermeasures ships have experienced 
reliability problems and parts shortages for several years. As 
a result, individual ships are not fully capable of performing 
their mine countermeasures missions, although collectively they 
may be able to carry out particular missions. The Navy is 
spending about $1.5 billion to acquire 12 coastal mine hunter 
ships that were designed specifically to protect United States 
coastal waters against the Soviet Union but not to travel 
across the ocean under their own power.

207. ``Marine Corps: Improving Amphibious Capability Would Require 
        Larger Share of Budget Than Previously Provided,'' February 
        1996, GAO/NSIAD-96-47.

    a. Summary.--The Navy and the Marine Corps estimate that it 
will cost about $58 billion during the next 25 years to 
modernize the amphibious force, which suffers from reduced 
vehicle lift capability and other operational limitations. This 
could be a major challenge for the Navy, which risks a $16 
billion gap between its projected shipbuilding budget and the 
cost estimate to build all ships planned between 2002 and 2005. 
The Navy and Marine Corps plan to spend a much larger share of 
their procurement funds to buy upgraded equipment for 
amphibious operations than has been the case for most of the 
past 40 years. The Navy and the Marine Corps will need to 
earmark beyond 2001 a large share of available procurement 
dollars for amphibious equipment to avoid delays in the 
modernization effort. Amphibious programs are competing with 
other major weapons programs, such as the DDG-51 destroyer, the 
Army's Apache helicopter, and the Air Force's F-22 fighter 
aircraft.
    b. Benefits.--Should Congress decide to support the planned 
Navy and Marine Corps amphibious programs, three options seem 
plausible: increase Navy and Marine Corps procurement funding, 
spend less on other Navy or other services' planned procurement 
or other parts of the defense budget, or implement some 
combination of the first two options.

208. ``State Department: Actions Needed to Improve Embassy 
        Management,'' March 1996, GAO/NSIAD-96-1.

    a. Summary.--The State Department has not acted on 
recommendations by GAO and Congress to improve the management 
of it's overseas posts. GAO suggested that each diplomatic post 
establish a proactive management improvement program. Although 
State has taken steps to improve embassy management controls, 
these initiatives were inconsistently implemented at embassies 
GAO visited. As a result, long-standing management deficiencies 
continue to hinder the efficiency and the effectiveness of many 
embassies' operations. By contrast, three embassies--those in 
Ankara, Turkey; Dhaka, Bangladesh; and Tunis, Tunisia--have 
implemented management practices to improve administrative 
operations. These practices, which include tracking accounts 
receivables and automating travel vouchers, have strengthened 
internal controls, improved compliance with regulations, 
reduced costs, and led to more efficient and effective 
operations. In addition, these embassies differed from other 
posts GAO visited because of the active involvement of senior 
management and the use of existing reporting mechanisms. These 
management practices could be replicated at other embassies.
    b. Benefits.--GAO believes reforms should be introduced in 
the following areas: (1) controlling personal property; (2) 
training for U.S. and foreign service national personnel; (3) 
contracting and procurement practices; (4) poor controls over 
cashiering functions; (5) medical insurance reimbursements; and 
(6) senior-level oversight of operations. The subcommittee has 
learned that the State Department has not established a 
Congress-endorsed proactive management improvement program, but 
it has taken some actions to improve embassy management 
controls. Actions such as providing additional embassy guidance 
and oversight in safeguarding resources and revising the 
overseas risk assessment questionnaire--a tool designed for 
posts to identify management weaknesses.

                      Postal Service Subcommittee

1. ``D.C. Area Mail Delivery Service: Resolving Labor Relations and 
        Operational Problems to Service Improvement,'' February 23, 
        1995. GAO/GGD-95-77.

    a. Summary.--At the request of the Treasury, Postal Service 
and General Government Subcommittee and the Committee on 
Appropriations, the General Accounting Office reported on mail 
delivery service in the Washington, DC, metropolitan area. The 
GAO reported that a number of systemic and operational problems 
caused poor mail service in the Washington, DC, metropolitan 
area. First, the Postal Service was unable to deal with the 
unexpected growth in local mail volume in 1994 which was twice 
the national average. Second, the Postal Service experienced 
mail processing problems. The Postal Service has taken a number 
of actions to address the mail delivery problems including 
increasing staffing, recombining responsibility for processing 
and customer service at the operational level, eliminating some 
duplicative handling of mail in Northern Virginia, and 
processing mail at an auxiliary postal facility in Southern 
Maryland. These initiatives should help to improve service, but 
substantial, long-term improvement will require that postal 
management and labor unions work together to address long-
standing employee relations problems that are reported to be 
more severe in Washington, DC, metropolitan area than in most 
other locations.
    b. Benefits.--By continuing to study the mail delivery 
service in the Washington, DC metropolitan area, this GAO 
review provides important information to the American people 
and the Congress that will help foster a full and open debate 
on the quality of mail service.

2. ``Automation Is Taking Longer and Producing Less Than Expected,'' 
        February 22, 1995, GAO/GGD-95-89BR.

    a. Summary.--As a joint request of subcommittee Chairman 
McHugh and Senator Stevens, the General Accounting Office 
reported on the U.S. Postal Service's progress in using optical 
scanning technology to achieve its goals of (1) bar coding 
virtually all letter mail; (2) automatically sorting mail to 
individual home and business addresses; and (3) adjusting work 
methods and employment to achieve workforce reductions. 
Barcoding of letter mail and automatic sorting of letters to 
homes and businesses, referred to as ``delivery point 
sequencing,'' has proven more difficult than the Service 
expected and is therefore behind schedule. The savings from 
automation continue to be small compared to overall labor costs 
and is more difficult to achieve than the Service anticipated.
    b. Benefits.--This report provided the Congress information 
to make informed oversight decisions on the effectiveness of 
postal automation, a $15 billion effort.

3. ``Many Challenges in a Changing Environment,'' February 23, 1995, 
        GAO/T-GGD-95-93.

    a. Summary.--As part of a general oversight hearing before 
the Subcommittee on the Postal Service, the General Accounting 
Office assembled data on (1) the key characteristics of the 
Postal Service of today, and (2) challenges that will face the 
Service and Congress as they consider how mail service will be 
provided in the United States in the future. GAO's testimony 
was based on work they have completed or have underway on 
Postal labor management relation, customer service, postal 
revenues, automation, and competition. Service delivery 
problems and other challenges have increased the calls for 
basic reforms of the Postal Service. Recent developments 
include legislation to turn the Postal Service into a publicly 
owned corporation, and a coalition request to the Postmaster 
General to suspend the monopoly over third class advertising 
mail. The Postal Service has suggested that it be given more 
operational flexibility in several areas.
    b. Benefits.--The GAO report highlights key characteristics 
of the Postal Service and the challenges that will face both 
the Service and the Congress as they consider how mail service 
will be provided in the future.

4. ``Performing Remote Barcoding In-House Costs More Than Contracting 
        Out,'' September 13, 1995, GAO/GGD-95-143.

    a. Summary.--At Chairman Lightfoot's request, the General 
Accounting Office compared the direct costs to the U.S. Postal 
Service of contracting out for remote barcoding services versus 
having the work done by postal employees. This examination was 
conducted for a 36-week period, from July 23, 1994, through 
March 31, 1995. GAO estimated on the basis of Postal Service 
data, that in-house barcoding of about 2.8 billion images cost 
about $4.4 million, or 6 percent more than if the images were 
processed by contractors. This 6 percent cost differential was 
based on an in-house mix of 89 percent transitional and 11 
percent career employee work hours through March 1995.
    b. Benefits.--This detailed study of contracting out for 
remote barcoding helped provide important information to the 
American people and Congress that will help foster a full and 
open debate on this decision by the Postal Service.

5. ``Postal Ratemaking In Need of Change,'' November 15, 1995, GAO/GGD-
        96-8.

    a. Summary.--At subcommittee Chairman McHugh's request, the 
General Accounting Office revisited matters for congressional 
consideration contained in its March 1992 report to Congress on 
postal pricing. The report focuses on (1) whether changes in 
policies concerning volume discounting and demand pricing 
should still be considered by Congress, (2) the issues 
surrounding the current ratemaking process, and (3) what 
proposals for modifying the postal ratemaking process and other 
changes merit further consideration by Congress. The GAO report 
finds that changes to the ratemaking provisions of the Postal 
Reorganization Act of 1970 may be necessary to recognize market 
realities which have contributed to the reasons why the Postal 
Service has not been an effective competitor in some markets. 
These reasons include such factors as price and regulatory 
constraints. GAO believes that if the Postal Service is to be 
competitive and is to keep rates lower for most mail classes 
over the long term, it needs more flexibility in setting postal 
rates and that postal rates should be based to a greater extent 
on economic principles that consider volume discounting and 
demand pricing.
    b. Benefits.--By studying the Postal Service's continued 
viability as a full service provider, this GAO review provides 
important information to the American people and the Congress 
on the effectiveness of the current process for setting postal 
rates.

6. ``New Focus on Improving Service Quality and Customer 
        Satisfaction,'' December 20, 1995, GAO/GGD-96-30.

    a. Summary.--As a joint request of subcommittee Chairman 
McHugh and Representative Gary Condit, the General Accounting 
Office reported on the Postal Service's efforts to measure, 
report, and improve customer satisfaction. The report contains 
recommendations to the Postmaster General to improve the 
dissemination and use of customer satisfaction and other 
performance measurement data. Among other recommendations, the 
report recommends that the Postal Service consult with 
appropriate congressional oversight committees to determine 
business and residential customer satisfaction data and what 
other performance data should be regularly provided to Congress 
for its use.
    b. Benefits.--This report provides the Congress information 
on ways the Postal Service can improve on all performance 
measures as part of a new initiative called Customer Perfect 
and how that information can be disseminated to Congress, the 
public, and within the Postal Service.

7. ``Postal Employment and Barcoding,'' December 15, 1995, GAO/GGD-96-
        54R.

    a. Summary.--At subcommittee Chairman McHugh's request, the 
General Accounting Office responded to questions raised during 
the Subcommittee on Postal Service meeting on September 21, 
1995. The GAO reported on (1) changes in the Postal Service 
employment subsequent to the 1992 downsizing decision, and (2) 
actions taken and planned by the Postal Service to convert 
remote barcoding sites from contractor to Postal Service 
operations. To obtain information on changes in Postal Service 
employment, the GAO interviewed responsible Postal Service 
headquarters officials, analyzed postal employment statistics, 
and reviewed related Postal Service documents.
    b. Benefits.--This detailed study of workforce growth and 
the effects of barcoding on Postal employment will help provide 
important information to the American people and Congress that 
will help foster a full and open debate on this decision by the 
Postal Service.

8. ``Postal Service: Conditions Leading to Problems in Some Major 
        Purchases,'' January 18, 1996, GAO/GGD 96-59.

    a. Summary.--The GAO reviewed whether changes are needed in 
the Postal Service's purchasing program, focusing on whether: 
1) certain problem purchases were due to some underlying causes 
that should be addressed through legislation; and 2) the 
Service should implement additional procedural safeguards to 
minimize future occurrences of such problems.
    b. Benefits.--This report served to focus the attention of 
postal management upon weaknesses in its contracting and 
purchases decisions and pointed out the problems encountered 
during the seven selected procurements. GAO reported that these 
weaknesses were attributable to Postal officials' poor 
judgement, circumventions of existing internal controls, and 
failure to resolve conflicts of interest. In response to this 
report, the Postal Service has taken action to increase 
accountability over its purchasing process and to safeguard 
against such future problems. The Postal Service has also taken 
steps to improve its ethics program and has established a 
formal ethics education and training program for contracting 
officers and personnel. It has also established one purchasing 
executive with management authority over the three separate 
purchasing groups.

9. ``U.S. Postal Service: A Look at Other Countries' Postal Reform 
        Efforts,'' January 25, 1996, T-GGD-96-50.

    a. Summary.--Many countries have recently reformed or made 
substantial changes to their postal systems. GAO highlighted 
these changes for the subcommittee and the Senate Subcommittee 
on Post Office and Civil Service during a joint hearing on 
January 25, 1996. The GAO found that while many countries have 
substantially reformed, privatized, corporatized or 
commercialized their postal systems, it cautioned the 
subcommittees to consider any postal reforms in the context of 
the complexities and unique attributes of the U.S. postal 
system.
    b. Benefits.--The subcommittee benefits and the American 
people benefit through a systematic review of foreign postal 
administrations in efforts to improve the Postal Service. GAO 
testified that most foreign postal systems share the U.S. goal 
of providing universal service and the use of a government-
granted postal monopoly to guarantee this mandate.

10. ``U.S. Postal Service: Unresolved Issues in the International Mail 
        Market,'' March 11, 1996, GAO/GGD-96-51.

    a. Summary.--Aware that many countries have recently 
reformed or made substantial changes to their postal systems 
and that certain postal issues, such as restricted access to 
individual mailboxes, are unique to the United States, the 
subcommittee asked the GAO to review and discuss reform efforts 
of other countries.
    b. Benefits.--This report examined the Service's statutory, 
current, and planned role in the delivery of international 
mail. Areas under examination include the existing 
relationships between the Postal Service, foreign postal 
administrations and the Universal Postal Union; and whether 
current postal laws and international agreements may limit the 
Service's ability to participate internationally. This reports 
benefits postal customers by allowing the subcommittee to 
examine the current international mail market to determine the 
appropriate role the U.S. Postal Service should play in this 
competitive arena.

11. ``U.S. Postal Service: Challenges In Improving Performance and 
        Meeting Competition,'' March 13, 1996, T-GGD-96-90.

    a. Summary.--In conduct of its general oversight authority, 
the subcommittee invited GAO to evaluate Postal Service 
performance and its ability to compete in a less regulated 
market environment. GAO reported that labor-management 
relations remained strained and that filed grievances were 
increased by 31 percent from 1993 to 1995. It pointed out that 
an effort to seek feedback from employees in the form of an 
employee opinion survey was hurt by one union's claim the 
results were used improperly during the subsequent labor 
negotiations. The GAO further found that the Postal Service was 
losing market share because of the way the Postal 
Reorganization Act required it to set rates and allocate 
revenues. GAO testified that the rate-setting requirements 
reduced Postal Service flexibility in responding to market 
changes and that the Postal Service must control the cost of 
its operations to remain competitive as a full-service 
provider.
    b. Benefits.--This report, in the form of testimony, 
provided the subcommittee with an excellent ``snapshot'' of 
challenges to postal competitiveness. It further aided the 
subcommittee in its effort to develop comprehensive postal 
reform legislation which would benefit all postal customers.

12. ``U.S. Postal Service: Improved Oversight Needed to Protect Privacy 
        of Address Changes,'' August 13, 1996, GAO/GGD-96-119.

    a. Summary.--The Postal Service National Change of Address 
(NCOA) Program mass disseminates postal customer address change 
data to 24 licensees who use the data to update proprietary 
address lists they sell nationwide. To protect the privacy of 
its customers, the Postal Service imposes restrictions on 
licensees' use of NCOA information and monitors compliance with 
these restrictions. However, an unresolved dispute is to what 
degree the restrictions on licensee's apply to the licensees' 
clients or contractors. The subcommittee is examining what 
restrictions the NCOA license agreement imposes regarding the 
use and release of address information; whether those 
restrictions are consistent with ``privacy'' requirements of 
Federal law; and how Postal Service monitors the licensees' 
compliance with NCOA license agreements and oversees corrective 
actions for identified violations.
    b. Benefits.--This report provided the subcommittee and 
others who are concerned about privacy issues with critical 
information regarding the privacy of individual postal patrons. 
The GAO determined that the Postal Service has been unable to 
prevent, detect or correct potential breaches in the licensing 
agreement and that Postal officials believe the NCOA licensing 
agreement helps to insure that Federal privacy guarantees are 
not compromised through the NCOA program. However, GAO 
expressed concerns regarding the Postal Service failure to 
express a clear and consistent position regarding the use of 
NCOA data to create ``new-movers'' lists and that it has failed 
to terminate licensees that fail to maintain address-matching 
software or enforcing the performance standards prescribed in 
the license agreements. In brief, the Postal Service needs to 
ensure that the use of NCOA-derived data is limited to the 
purpose for which it was intended. The subcommittee fully 
intends to continue to monitor the progress of the Postal 
Service on this issue as well as other privacy issues in 
regards to the Postal Service.

13. ``Inspectors General: A Comparison of Certain Activities of the 
        Postal IG with Other IGs,'' September 20, 1996, AIMD-96-150.

    a. Summary.--As part of the subcommittee's ongoing review 
of postal reform issues it requested that the GAO study and 
report on the functions of the various agency Inspectors 
General to determine the structural ability of the Postal 
Service Inspector General to conduct independent audits and 
investigations. Pursuant to the Inspector General Act 
Amendments of 1988, the Chief Postal Inspector, while serving 
as the chief law enforcement officer, also serves in the dual 
role as the Postal Service Inspector General. The subcommittee 
viewed this structure as organizationally impaired and 
questioned the independence of the Postal Service the Office of 
Inspector General.
    In its review the GAO found that the subcommittee's 
concerns were valid and stated that the Postal IG was unable to 
conduct audits of the Postal Service's law enforcement 
operations in accordance with required auditing standards 
because, as the Chief Postal Inspector and Inspector General, 
the position was not organizationally independent. These 
findings clarified and served as the basis for the amendment 
providing for the establishment of an independent Office of 
Inspector General within the Postal Service to Public Law 104-
208.

14. ``U.S. Postal Service: Revenue Losses From Express Mail Accounts 
        Have Grown,'' October 24, 1996, GAO/GGD-97-3.

    a. Summary.--The subcommittee received allegations that the 
Postal Service was accepting for shipment Express Mail from 
business clients with invalid Express Mail Corporate Accounts 
(EMCA) after reviewing the thousands of invalid EMCA numbers 
published monthly in the Postal Service's Postal Bulletin. This 
review was part of the continuing subcommittee efforts to 
review Postal Service efforts aimed at revenue protection. The 
subcommittee asked the GAO to review these accounts and the 
procedures used to govern EMCA acceptance.
    The GAO found that some mailers obtained Express Mail 
services using invalid EMCA numbers and the Postal Service did 
not collect the postage due or verify EMCA which were later 
determined to be invalid. GAO recommended that the Postal 
Service improve on weaknesses in EMCA procedures. Subsequently, 
postal management has agreed that stronger requirements for 
opening EMCA need to be implemented and that managers and 
employees must be held accountable for handling EMCA 
transactions. The Postal Service plans to automate the invalid 
account numbers giving acceptance personnel rapid access to 
invalid account information at post offices.
    b. Benefits.--This, and other subcommittee investigations 
and GAO reports, highlight the need for the Postal Service to 
emphasize and direct attention to revenue protection. 
Ratepayers benefit through the effective collection of properly 
assessed postal rates, thereby helping alleviate the need for 
further rate increases.

15. ``Final-Offer Arbitration as an Alternative Means of Resolving 
        Contract Disputes Between Postal Management and Labor Unions.''

    a. Summary.--In September 1994, GAO reported that 
adversarial postal labor-management relations have resulted in 
reliance on arbitration to settle contract disputes. Both 
management and unions have expressed dissatisfaction with such 
a procedure. The subcommittee asked that GAO obtain more 
information on final-offer arbitration as an alternative to the 
current procedure. Specifically: What is final-offer 
arbitration? How and where has final-offer arbitration been 
used? What do management and labor officials believe has been 
the impact of final-offer arbitration on their relations?
    GAO briefed the subcommittee regarding its informal 
findings. Specifically, GAO found that final offer arbitration 
is a specific approach to interest arbitration in which an 
arbitrator's decision is restricted to the selection of either 
management's offer or the union's offer. In contrast, the 
approach used by the Postal Service and its four major postal 
unions has been conventional interest arbitration, an approach 
that allows an arbitrator to develop an award decision that may 
be different from the offers submitted by the Service and the 
unions.
    b. Benefits.--The subcommittee is hopeful this review will 
indicate ways that Congress can encourage and assist postal 
management and unions to resolve longstanding labor relations 
problems. Resolution of these problems benefits postal workers, 
management and ratepayers by providing a workplace environment 
free of violence and conducive to gains in worker productivity.

                    B. OTHER REPORTS AND STATEMENTS

                   District of Columbia Subcommittee

    The following District of Columbia Auditor Reports for 1995 
have been sent to Congress as mandated by Section 455 of Public 
Law 93-198:
    1. (4/12/95) Review of the District of Columbia Board of 
Education's Personnel Screening Procedures for New Hires.
    2. (04/17/95) Audit of the D.C. Taxicab Commission 
Assessment Fund--Fiscal Years 1992, 1993, 1994.
    3. (06/01/95) FY 1992 Annual Report on Advisory 
Neighborhood Commissions.
    4. (06/08/95) Implementation of the Government Managers 
Accountability Act of 1995 and the Merit Personnel Law.
    5. (06/29/95) FY 1993 Annual Report on Advisory 
Neighborhood Commissions.
    6. (07/10/95) Review of the Agency Fund of the Office of 
the People's Counsel for Fiscal Year 1994.
    7. (07/12/95) Review of the Award and Administration of 
Parking Ticket Processing and Delinquent Ticket Collection 
Services Contracts.
    8. (07/13/95) Analysis of the Propriety of Lazard Freres 
Entering Into an Agreement with Merrill Lynch While Serving as 
the District's Financial Advisor.
    9. (07/27/95) Fiscal Year 1994 Annual Report on Advisory 
Neighborhood Commissions.
    10. (08/11/95) Water and Sewer Utility Administration's 
Participation in the District's Cash Management Pool.
    11. (09/05/95) Audit of the District of Columbia Lottery 
and Charitable Games Control Board for Fiscal Year 1994.
    12. (09/20/95) Financial Review of the District of 
Columbia's Drug Asset Forfeiture Program.
    13. (10/20/95) Review of the Public Service Commission 
Agency Fund for Fiscal Year 1994.
    14. (10/24/95) Audit of the District of Columbia's 
Recycling Program (Revised).
    15. (11/07/95) Performance Audit of the Office of Emergency 
Preparedness.

    Government Management, Information, and Technology Subcommittee

                    general services administration

Report to the Congress of the United States--Utilization and Donation 
        of Federal Personal Property--Fiscal Years 1991 and 1992, 
        December 1994.

    a. Summary.--This biennial report is required by section 
203(o) of the Federal Property Act (Property Act) (40 U.S.C. 
484 (o)). It is to present a full and independent evaluation of 
the programs for donation of Federal surplus personal property. 
It also contains statistics on excess personal property 
transferred to Federal agencies which thereupon furnished the 
items to certain non-Federal organizations. The report is to 
include such recommendations as GSA determines necessary or 
desirable.
    The instant report makes no recommendations. It states that 
evaluations and analyses of these programs indicate they are 
operating as intended by Congress. The report adds, however, 
that ``the proliferation of disposal authorities outside the 
Property Act is fragmenting both programs causing a loss of 
oversight and accountability for the transfer of Federal 
Property.'' The report speaks, for example, about DOD's 
Humanitarian Assistance Program. It notes that donation 
participants and Federal agencies have expressed concern to GSA 
and Congress that the priority assigned to humanitarian 
assistance for foreign countries is higher than for meeting 
domestic needs. Cited property categories are excess clothing, 
vehicles, and heavy-duty motor equipment, all generated in the 
continental United States and transferred in substantial 
quantities for foreign use through the DOD program. The report 
also discloses swift growth in other transfer programs that 
adversely impact the donation program, since they involve 
property at the excess stage before it can be determined 
surplus. This in effect gives these other transfer programs a 
priority over the donation program, which involves property at 
the later surplus stage. In addition, GSA has completed its 
Federal Operations Review Model (FORM) report on personal 
property disposal, and the subcommittee will be reviewing this 
report in detail in the second session of the 104th Congress.
    b. Benefits.--The structure of the present donation program 
was established in 1976 by Public Law 94-519. It consolidated 
numerous Federal programs for distributing unneeded personal 
property to State and local organizations. It made GSA, as a 
single agency, responsible for guiding the partnership with 
individual State governments. (The current requirement for a 
biennial report was added in 1988.) The instant report gives a 
clear picture of the continuing trend toward special 
legislative deviations outside the Property Act framework that 
adversely affect the consolidation intended by the 1976 act. 
The report supplies a solid basis for subcommittee review of 
the need for further legislative rationalization of this very 
large but fragmented form of unbudgeted Federal assistance.

                         explanatory statements

    During the first session of the 104th Congress, a total of 
12 explanatory statements of proposed negotiated disposal of 
Federal surplus property were referred to the subcommittee 
after submission to the full committee pursuant to section 
203(e)(6) of the Federal Property and Administrative Services 
Act of 1949. These properties include the Army Family Housing 
Site, Orangetown, NY, for $2.0 million; Air Force Plant 78, Box 
Elder County, UT, for $6.45 million; the Research Triangle 
Foundation in Research Triangle Park, NC, for other property; 
the golf course at Fort Benjamin Harrison, Marion County, IN, 
for $2.4 million; utility systems at Lowry Air Force Base, 
Denver, CO, for $1.025 million; Youngs Lake Family Housing 
Site, WA, for $1.6 million; and the Federal Building, Sanford, 
NC, for $141,000; Seattle Stadium Homesites, Seattle, WA, for 
$375,000; Chicago O'Hare Air National Guard Base, Chicago, IL, 
for $100 million; Rickenbacker Air National Guard Base, 
Columbus, OH, for $600,000; Housing at Myrtle Beach Air Force 
Base, Myrtle Beach, SC, for $5.05 million; and the electrical 
distribution system at Myrtle Beach Air Force Base, Myrtle 
Beach, SC, for $250,000. Of the 12, 3 were transmitted by the 
Administrator of General Services on behalf of GSA as the 
disposal agency. The other seven were transmitted by the 
Secretary of the Army or the Secretary of the Air Force. These 
were disposals of property determined surplus as a result of 
recent base closure and realignment legislation which directed 
GSA to delegate disposal functions under the Federal Property 
Act to the Secretary of Defense. During the 103d, 102d, and 
101st Congresses, the numbers of statements received were 16, 
20, and 13, respectively. This contrasts with 45 statements 
received during the 100th Congress. The decline in the number 
received results from several factors: (1) Public Law 100-612's 
raising the dollar threshold for statement submission; (2) the 
involved screening process for homeless assistance use and the 
priority of consideration required by section 501 of the 
Stewart B. McKinney Homeless Assistance Act; (3) the shifting 
of the approach to real property disposal that has accompanied 
enactment of the recent base closure and realignment statutes; 
and (4) special legislative authorizations of individual 
property transfers, which depart, in whole or in part, from the 
regular disposal procedures of the Federal Property Act.
    According to GSA data, since 1967 through fiscal year 1995, 
there have been over 1,000 negotiated sales of surplus property 
to public bodies. These have generated over $846 million in 
proceeds. The total number of all sales of surplus property 
since 1967 is 6,587, with an aggregate yield of $1.86 billion. 
For nearly 50 years, the Committee on Government Reform and 
Oversight or its predecessors have exercised, by House 
precedent, legislative and oversight jurisdiction over property 
management and surplus property disposal. The subcommittee 
takes seriously the responsibility to provide advance review of 
explanatory statements in order to monitor compliance with 
statutory and regulatory provisions.
    After thorough review of the statements and supporting 
documentary, the subcommittee frequently offers comments and 
recommendations regarding such matters as appraising, 
negotiating, and adhering to legal policy requirements. In 
recent Congresses, the subcommittee has directed comments and 
recommendations toward assuring, for example, that:
          1. GSA's or other disposal agency's negotiations are 
        conducted only with public bodies or such private 
        entities as meet strict statutory criteria and carried 
        out vigorously by the parties at arms length and in the 
        basis of approved valuations. (The Property Act 
        requires that in negotiated disposal the estimated fair 
        market value of the property be obtained.)
          2. If, after negotiations leading to a final offer to 
        the Government and before award, special circumstances 
        should cause the property's value to appreciate 
        substantially, GSA does not hesitate to reject the 
        offer and seek further negotiations with the party.
          3. The standard 10 percent earnest money deposit is 
        always obtained with the final offer.
          4. Any excess profits from resale by the original 
        purchaser are prevented for the standard period of 3 to 
        5 years.
          5. GSA restricts so-called pass-through sales, which 
        are early resales or long-term leases to a developer 
        made by the public body with which GSA has negotiated 
        an otherwise acceptable offer. (Sales to public bodies 
        should involve public-purpose use of the property; 
        otherwise the general statutory policy of disposal by 
        public advertising should be followed.) A local public 
        body should not, of course, be able to channel valuable 
        property directly into private entrepreneurship. (The 
        current GSA policy is set out in its Handbook PBS P 
        4000.1 CH 4-31. June 29, 1994.)
          6. Credit sales are made only on the basis of 
        standard credit terms as provided in the GSA 
        regulations.
          7. There is a close scrutiny of negotiations in which 
        part of the consideration to the Government is a 
        valuable nonmonetary benefit, such as parking spaces. 
        Sale should be for cash, credit or cash equivalent.
          8. Property under lease to the proposed purchaser is 
        disposed of only when made subject to required audit 
        and payment of lease revenues payable to the 
        Government.
          9. Negotiations be conducted only in the presence of 
        authorized representatives.
          10. GSA's acquisition of new property by exchanging 
        Federal property under the Property Act or under the 
        Public Buildings Act of 1959 follows precisely the 
        statutory and regulatory criteria which restrict 
        exchanges involving privately owned property. (See 
        further discussion below of a recent example.)
          11. The timely notice required by regulations to be 
        given local public agencies for screening purposes is 
        not waived.
          12. Interest in available surplus property expressed 
        by a representative of the homeless is recognized 
        consistently with the priority of consideration 
        afforded by section 501 of the Stewart B. McKinney 
        Homeless Assistance Act or, with respect to base 
        closure lands, the Base Closure Community Redevelopment 
        and Homeless Assistance Act of 1994 (Public Law 103-
        421) (10 U.S.C. 2684 note at ``SEC. 2905 (b)(7)'').
          13. A protective covenant is included the deed to 
        assure that the land will not be used for a structure 
        that the FAA finds would create a hazard to air 
        navigation.
          14. GSA's property appraisal data are not divulged to 
        the other party or to the public. (The Freedom of 
        Information Act [5 U.S.C. 552(b)(c)] has been 
        interpreted as sanctioning the withholding of such 
        information.)
          15. Appraisals and appraisal reviews follow uniform 
        standards of professional appraisal practice of the 
        Appraisal Standards Board of the Federal Financial 
        Institutions Examination Council.
          16. That departures from arms-length and vigorous 
        negotiations are not made through such devices as 
        agreement to use a third-party appraiser or appraisal 
        reviewer as a basis for settling price differences.
    During the 104th Congress, one explanatory statement was 
received involving disposal by property exchange. Exchanges of 
property are by nature negotiations. As a result of 
longstanding subcommittee concern about difficulties inherent 
in disposal by exchange, GSA's regulations have made 
subcommittee review of such proposed transactions a two-step 
process that involves a preliminary subcommittee examination 
(41 CFR 101-47.301-1). Important Federal interest to be served 
by the transaction may be clear; whereas a clear compliance 
with the narrow authority supporting exchange may not be 
ascertainable. Exchanges are even more difficult when the 
parties seek to exchange lands of equal value so that there be 
no payment of any cash differential. (GSA does not have 
authority to pay such a differential.) Appraisal and 
negotiation difficulties can prolong the transaction for years, 
as well as complicate eventual subcommittee review of the 
proposal.
    The Defense Base Closure and Realignment Acts of 1988 and 
1990 (10 U.S.C. 2687 note) provide that real property and 
facilities at a closed military installation are subject to the 
utilization disposal provisions of the Federal Property Act. 
These provisions also require the Administrator of General 
Services to delegate his property disposal authority under the 
Federal Property Act. As a result the subcommittee has now 
received explanatory statements from the Department of Defense. 
But amendments to the 1988 and 1990 statutes enacted as part of 
the National Defense Authorization Act for fiscal year 1994 
(section 2903 of Public Law 103-160) have given the Secretary 
supplemental authority to dispose of base closure property 
outside the Property Act in cases where severe economic impact 
on the community resulting from closure justifies a less than 
fair market value transfer to the recognized local 
redevelopment authority. In such cases, however the Secretary 
must furnish an explanation as to why the transfer is not for 
estimated fair market value and why the transfer could not be 
made in accordance with the still-effective provisions of the 
1988 and 1990 base closure acts which require that the Property 
Act disposal authority (delegated to the Secretary by GSA) be 
followed. Accordingly, the opportunity will remain for the 
review by cognizant, congressional committees of DOD 
transactions even under the supplemental authority.

                          C. COMMITTEE PRINTS

              Committee on Government Reform and Oversight

1. ``Deposition Transcripts From the Committee Investigation into the 
        White House Office Travel Matter, Volumes 1, 2, 3, 4, and 5''

    In the course of the committee's Travel Office 
investigation, it became clear that the committee would require 
the testimony of dozens of witnesses--most of whom were current 
or former White House staffers or volunteers--to complete its 
inquiry. A number of prospective witnesses generally were 
unwilling to be interviewed by committee staff, and most 
refused to testify under oath. In addition, on more than one 
occasion, the White House interfered with previously arranged 
interviews of former administration staffers and insisted on 
having White House lawyers attend committee depositions.
    In order to ensure access to all appropriate witnesses in 
its White House Travel Office investigation while minimizing 
the number of hearings required to complete the investigation, 
it was decided that the committee should seek the authority to 
depose Travel Office witnesses under oath.
    Chairman Clinger submitted H. Res. 369, which was referred 
to the Committee on Rules, on February 29, 1996. H. Res. 369 
provided special authority to the Committee on Government 
Reform and Oversight to obtain testimony for purposes of 
investigation and study of the White House Travel Office 
matter. The bill was limited to provide deposition authority to 
the Committee on Government Reform and Oversight for its 
investigation of the Travel Office and related matters. 
Deposition authority allowed the committee to obtain sworn 
testimony from witnesses while minimizing the number of 
hearings needed in order to complete the investigation.
    The House approved H. Res. 369 on March 7, 1996. Thereupon, 
the committee on Government Reform and Oversight notified 
witnesses it wished to testify under oath before the committee. 
Depositions commenced in late March 1996. Initially, they were 
expected to be completed by July 1996, but an additional 
extension of time was agreed upon to August 1, 1996.
    Without deposition authority, it would have been impossible 
for the committee to schedule and complete more than 70 
depositions with witnesses who, in many cases, otherwise would 
have been uncooperative. Deposition authority allowed the 
committee to complete its Travel Office investigation as well 
as an interim draft report on the related FBI files matter with 
minimal disruption to the committee and the witnesses involved.

                      Postal Service Subcommittee

1. ``Mail Service in the United States: Exploring Options for 
        Improvement,'' A Report prepared by Congressional Research 
        Service of the Library of Congress for the Committee on 
        Government Reform and Oversight, December 1995, 95-1105 E.

    a. Summary.--This report is an extensive review of the 
structure, operation and organization of the U.S. Postal 
Service (USPS) and was prepared at the request of subcommittee 
Chairman John McHugh.
    In recent years the USPS has come under severe criticism 
for its service and delivery operations. Furthermore, USPS 
general labor and overtime costs have far exceeded Service 
estimates. The Service had anticipated that automation would 
curb increases in operating costs; however, savings from this 
effort have fallen short of expectations. The Postal Service 
has said that it is hampered by constraints in law under which 
it must operate.
    The report discusses the mandate and mission for the Postal 
Service and questions whether such goals now create a barrier 
to the Service's attempt to compete in today's complex 
communications environment. It analyzes the current statutory 
structure, the Postal Reorganization Act of 1970, under which 
the Service operates and raises the question whether statutory 
change is warranted in helping the Postal Service meet the 
expectations of its customers. The report elaborates on 
competition in the modern communications industry, and the 
effective erosion of the postal monopoly by advances in 
communications technology. It also discusses the impediments 
the Postal Service faces in its attempts to respond to market 
developments and to modifying postal rates and services.
    b. Benefits.--The report is a comprehensive primer 
analyzing the scope and effectiveness of the U.S. Postal 
Service. It provides a reference point in the committee's 
deliberations to understand the problems of the Service and 
provide remedial legislation where necessary.
         V. Prior Activities of Current or Continuing Interest

                   District of Columbia Subcommittee

    The subcommittee will continue areas of interest from the 
103d Congress in the following areas:
          1. The 104th Congress drew heavily upon the work of 
        its predecessor in producing two pieces of legislation 
        which are H.R. 1345 (Public Law 104-8) and H.R. 2108 
        (Public Law 104-28) (see Section II.A.4., Legislation). 
        These laws relate respectively to the District's 
        financial condition and the proposed convention center 
        and sports arena.
          2. In May 1994, the Committee on the District of 
        Columbia commissioned a GAO study of the District's 
        finances. That report found that the District was 
        ``facing both unresolved long-term financial issues and 
        continual short-term financial crises.'' It warned that 
        the District would run out of cash by fiscal year 1995. 
        The GAO study found the District's budgetary 
        expenditures did not reflect historical and projected 
        trends and found its projections overly optimistic. The 
        104th Congress found the GAO study particularly helpful 
        as it attempted to ascertain the extent of the 
        District's problem.
          3. With regard to the convention center and sports 
        arena, the Committee on the District of Columbia of the 
        103d Congress commissioned a GAO study that concluded 
        that the District and the Congress needed better cost 
        and benefit projection estimates before commencing this 
        project and urged that a mechanism be found to generate 
        sufficient revenues to cover known expenses. Action was 
        taken on both of these fronts and the revenue source 
        was stipulated in the enacted legislation.
          4. The 103d Congress also considered the possible 
        transfer of ownership of St. Elizabeth's Hospital and 
        the District's unfunded pension liability. These remain 
        ongoing concerns. Although the District of Columbia 
        Subcommittee took no action regarding these issues 
        during the first session of the 104th Congress, it 
        intends to revisit them.

      Human Resources and Intergovernmental Relations Subcommittee

    1. Department of Veterans Affairs handling of medical 
claims by Gulf War veterans.
    2. Federal and State child support enforcement program 
implementation and coordination.
    3. HUD takeover of the Chicago Housing Authority and the 
department's capacity to manage that and other distressed 
housing authorities.
    4. Head Start program.
    5. Efforts to combat fraud against Medicare and Medicaid in 
the home health care industry and in nursing homes.
    6. Maximizing the use and efficiency of computers in the 
Social Security system.
    7. FDA drug advertising, promotion and labeling policies.
    8. Operation of the Vaccines for Children program.
    9. DoL enforcement authority and activities with regard to 
sweat shops, racketeering and organized crime.
    10. HUD management of public housing tenant initiatives.
    11. FDA standards for assessment of risk, safety and 
efficacy of medical devices, including breast and jaw implants.
    12. Health Care Finance Administration efforts to control 
the growth of Medicare and Medicaid expenditures.
    13. AIDS funding.
    14. Monitoring of emerging infectious diseases by the 
Centers for Disease Control and Prevention.
    15. Health Care Finance Administration's proposed 
``Medicare Transaction and Information Systems.''
    16. HUD compliance with statutory deadline to end the use 
of ``welfare hotels'' and other unfit transient facilities.
    17. Mission and level of coordination between the NLRB, 
National Mediation Board, the Federal Mediation and 
Conciliation Service and the Railroad Retirement Board.
    18. Social Security Disability Income claims screening for 
alcohol and drug abuse.
    19. FDA regulation of health claims for dietary 
supplements.
    20. Organizational structure of the Equal Employment 
Opportunities Commission.
    21. Review of rural health programs.
    22. Status of FDA action on the backlog of food additive 
petitions.
    23. Department of Veterans Affairs/Department of Defense 
Hospital coordination.
    24. Preventing teen pregnancy.
    25. DoL management of Multiemployer Welfare Arrangements 
with regard to health care fraud.
    26. Unfunded Mandates Reform Act (Public Law 104-4) 
compliance.
    27. Organizational structure and effectiveness of the 
Office of Workers Compensation Program.
    28. Preemption of State governments by Federal health and 
safety agencies.
    29. Safety of the Nation's blood supply.
    30. Department of Education's direct student lending 
program.
    31. Quality of health care provided by the Indian Health 
Service.
    32. Medicare reimbursement for durable medical equipment.
    33. National Institute of Health grant allocations process.
    34. Ensuring medical records privacy.

  National Economic Growth, Natural Resources, and Regulatory Affairs 
                              Subcommittee

    1. Investigation of the White House Database.
    2. Implementation of the Small Business Regulatory 
Enforcement Fairness Act of 1996.
          a. Congressional review of Federal agency 
        regulations.
    3. Investigation of senior executive travel practices of 
agencies under the subcommittee's jurisdiction.
    4. Regulatory reform--oversight of agency regulations and 
regulatory practices.
    5. Oversight of management and clean up of Superfund sites 
under the current law.
    6. Investigation of Federal agency and Federal grantee 
abuse of taxpayer-funded grants for lobbying and/or political 
purposes.

    National Security, International Affairs, and Criminal Justice 
                              Subcommittee

    1. National drug control strategy source country programs 
and management.
    2. The foreign assistance/drug cooperation certification 
process.
    3. U.S. support of alternative crop production in Peru and 
Bolivia.
    4. Coordination and effectiveness of counterdrug 
intelligence efforts at all levels of government.
    5. Southwest border narcotics interdiction, support and 
coordination.
    6. Maritime narcotics interdiction in the Caribbean.
    7. Review of Russia and Newly Independent States' 
involvement in narcotics transshipment.
    8. Examination of the role the Department of Defense plays 
in counterdrug efforts and how to maximize National Guard 
assistance.
    9. Examination of individual illegal drugs: 
methamphetamine; cocaine; heroin; marijuana; rohypnol; 
hallucinogens.
    10. Money laundering in support of narco-trafficking.
    11. Cooperation and effectiveness of Federal, State and 
local drug use prevention efforts.
    12. Oversight of the Safe & Drug Free School program.
    13. Oversight of Federal and non-federal prison drug 
treatment programs.
    14. The decennial census: sampling; adding a multiracial 
category to census forms; review Census 2000 preparations.
    15. The census: continuous measurement costs and benefits.
    16. Progress in implementing BRAC closure and 
consolidations.
    17. Review of DOD non-appropriated funds and resale 
activities.
    18. DOD information security procedures and maintenance.
    19. Review of DOD Fixed Wing Fleet (B-2, B-52, Fighter 
Aircraft including Joint Strike Fighter).
    20. Waste in DOD inventory management.
    21. Examination of readiness levels and adequacy of 
training funding levels.
    22. Review of Posse Comitatus Act: Implications in domestic 
counterdrug efforts.
    23. NASA shuttle privatization and safety concerns.
    24. Continuing review of NASA downsizing efforts.
    25. Setting Realistic Project Priorities for NASA.
    26. Abuses in spending by Federal Department of 
Corrections.
    27. Review of Justice Department weakening of child 
pornography prosecution policies.
    28. Effectiveness of FBI efforts in expanded 
counterterrorism role.
    29. Management of U.S. embassies.
    30. Management of overseas real estate.
    31. Foreign buildings operations and diplomatic security 
construction programs.
    32. Ballistic missile defense.
    33. Review of FEMA's discretionary spending, post-recovery 
expenditures, and audit procedures.
    34. Review of FEMA's flood insurance program and mapping 
activities.
    35. U.S. Customs corruption along the southwest border.
    36. NAFTA's impact of drug interdiction efforts.
    37. Review of ATF's efforts to decrease Federal firearms 
licensees.
    38. Merger of ATF law enforcement functions into FBI.
    39. Federal sentencing guidelines for cocaine and 
marijuana.
    40. National Archives and Records Administration: spacing 
problems due to accelerated archiving.

                      Postal Service Subcommittee

    The subcommittee will continue its investigations and 
oversight work in the following areas within its jurisdiction:
          1. Operation of the U.S. Postal Service. The 
        subcommittee will continue to exercise its general 
        oversight authority through the conduct hearings.
          2. Postal Service labor-management relations. The 
        subcommittee will continue to explore ways to reduce 
        the incidents of workplace violence.
          3. Postal Service and Bureau of the Census 
        cooperation in implementing plans toward the conduct of 
        the decennial census in 2000.
          4. Workplace safety, health and ergonomic issues. 
        Additionally, the subcommittee continues to monitor the 
        Postal Service's operation of its workers' compensation 
        program.
          5. Postal Service rate and reclassification 
        processes. The Postal Rate Commission issued its 
        recommended decision in Docket No. MC95-1, Mail 
        Classification Reform I. The subcommittee will monitor 
        any actions the Postal Service Board of Governors may 
        take on this decision and its implementation by the 
        Postal Service. In addition, the Postal Service is 
        expected to submit a second reclassification case for 
        nonprofit mailers and other mailers not included in the 
        original filing.
          6. Fiscal year budget proposals and impact on the 
        Postal Service, customers and employees. The 
        administration proposed a substantial Federal budget 
        obligation of $9.85 billion on the Postal Service in 
        its balanced budget submission for FY 1996. The 
        subcommittee will continue to monitor any legislative 
        action on this and other budget proposals affecting the 
        Service.
          7. Postal Service Reform. The subcommittee will 
        continue with its review of postal reform proposals in 
        an effort to develop a comprehensive legislative 
        package which will address the defects of the current 
        postal statutory structure.

                                
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