[House Report 106-1053]
[From the U.S. Government Publishing Office]




106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                    106-1053
_______________________________________________________________________

                                     

                                     

                                     

                                     

                                                 Union Calendar No. 615

                               ACTIVITIES

                                 of the

                  HOUSE COMMITTEE ON GOVERNMENT REFORM

                       ONE HUNDRED SIXTH CONGRESS

                       FIRST AND SECOND SESSIONS

                               1999-2000

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

                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

January 2, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed



                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
68-080                     WASHINGTON : 2001


                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
           David A. Kass, Deputy Counsel and Parliamentarian
                     Robert A. Briggs, Chief Clerk
                 Phil Schiliro, Minority Staff Director


                         LETTER OF TRANSMITTAL

                              ----------                              

                                  House of Representatives,
                                   Washington, DC, January 2, 2001.
Hon. Jeff Trandahl,
Clerk of the House of Representatives
Washington, DC.
    Dear Mr. Trandahl: I am pleased to submit the enclosed 
report entitled, ``Activities of the House Committee on 
Government Reform, 106th Congress, First and Second Sessions.''
    This report follows the committee's past practice of 
publishing its activities report annually 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, 
2001, 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 the following areas: the year 2000 
computer crisis (Y2K); the Federal Employees Health Benefits 
Program; the Persian Gulf war veterans illness; oversight and 
implementation of the Results Act; the Anthrax vaccine program, 
and, review of the Food and Drug Administration and its 
regulations involving the mandatory program for infants.
            Sincerely yours,
                                              Dan Burton, Chairman.

                                 (iii)

                                     
                            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....................................................15
        A. Subcommittees.........................................    15
        B. Rules of the Committee on Government Reform...........    16
 IV. Activities, 106th Congress......................................23
        A. Investigative reports.................................    23
        B. Legislation...........................................    24
        C. Reorganization plans..................................    29
        D. Committee prints......................................    29
        E. Committee action on reports of the Comptroller General    30
Part Two. Report of Committee Activities.........................    31

                 I. Matters of Interest, Full Committee

        A. General...............................................    31
              1. Oversight plans of the committees of the U.S. 
                House of Representatives.........................    31
              2. Investigations..................................    33
                  a. Johnny Chung: Foreign Connections, Foreign 
                      Contributions..............................    33
                  b. White House Insider Mark Middleton: His Ties 
                      to John Huang, Charlie Trie, and Other 
                      Campaign Finance Figures...................    33
                  c. The Role of John Huang and the Riady Family 
                      in Political Fundraising...................    34
                  d. The State Department's Handling of 
                      Allegations of Visa Fraud and Other 
                      Irregularities at the United States Embassy 
                      in Beijing.................................    34
                  e. National Problems, Local Solutions: 
                      Federalism at Work.........................    34
                  f. HUD Losing $1 Million Per Day--Promised 
                      ``Reforms'' Slow in Coming.................    36
                  g. Fraud and Waste in Federal Government 
                      Programs...................................    38
                  h. The Role of Complementary and Alternative 
                      Medicine in our Health Care System.........    39
                  i. A Review of Vaccine Safety Concerns, Policy 
                      Issues, and Concerns of Links to Autism and 
                      Other Chronic Conditions...................    79
                  j. Review of Vaccine Safety and Policy.........    83
                  k. The Department of Defenses' Handling of the 
                      Anthrax Vaccine Immunization Program.......    88
                  l. Missing White House E-mails: Mismanagement 
                      of Subpoenaed Records......................   102
                  m. Contacts Between Northrop Grumman 
                      Corporation and the White House Regarding 
                      Missing White House E-mails................   103
                  n. The Committee's Oversight of the Department 
                      of Justice's Campaign Finance Investigation   103
                  o. The Role of Yah Lin ``Charlie'' Trie in 
                      Illegal Political Fundraising..............   104
                  p. The Justice Department's Implementation of 
                      the Independent Counsel Act................   105
                  q. Has the Department of Justice Given 
                      Preferential Treatment to the President and 
                      Vice President.............................   105
                  r. Felonies and Favors: A Friend of the 
                      Attorney General Gathers Information from 
                      the Department of Justice..................   106
                  s. Russian Threats to United States Security in 
                      the Post Cold War Era......................   106
                  t. Rising Fuel Prices and the Appropriate 
                      Federal Response...........................   107
                  u. Further Investigation Into the Events Near 
                      Waco, TX in 1993...........................   108
                  v. Oversight of the Drug Enforcement 
                      Administration: Were Criminal 
                      Investigations Swayed by Political 
                      Considerations? December 6-7, 2000.........   108

                           II. Investigations
             a. investigations resulting in formal reports

Committee on Government Reform, Hon. Dan Burton, Chairman........   111
      1. ``The FALN and Macheteros Clemency: Misleading 
          Explanations, a Reckless Decision, a Dangerous 
          Message,'' House Report No. 106-488, December 10, 1999, 
          Third Report by the Committee on Government Reform, 
          together with Dissenting and Additional Views..........   111
      2. ``The Failure to Produce White House E-Mails: Threats, 
          Obstruction, and Unanswered Questions,'' House Report 
          106-1023, December 4, 2000, Eighth Report of the 
          Committee on Government Reform, together with Minority 
          and Additional Views...................................   113
      3. ``Janet Reno's Stewardship of the Justice Department: A 
          Failure to Serve the Ends of Justice,'' House Report 
          106-1027, December 13, 2000, Tenth Report of the 
          Committee on Government Reform, together with Minority 
          Views..................................................   114
      4. ``The Tragedy at Waco: New Evidence Examined,'' House 
          Report 106-1037, December 28, 2000, Eleventh Report of 
          the Committee on Government Reform, together with 
          Minority Views.........................................   114
Subcommittee on Criminal Justice, Drug Policy, and Human 
  Resources, Hon. John L. Mica, Chairman.........................   115
      1. ``The Vaccine Injury Compensation Program: Addressing 
          Needs and Improving Practices,'' House Report No. 106-
          977, October 12, 2000, Sixth Report by the Committee on 
          Government Reform......................................   115
Subcommittee on Government Management, Information, and 
  Technology, Hon. Stephen Horn, Chairman........................   116
      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. 106-50, March 11, 1999, 
          First Report by the Committee on Government Reform.....   116
      2. ``Making the Federal Government Accountable: Enforcing 
          the Mandate for Effective Financial Management,'' House 
          Report 106-170, June 7, 1999, Second Report by the 
          Committee on Government Reform, together with Minority 
          Views..................................................   119
      3. ``Making the Federal Government Accountable: Enforcing 
          the Mandate for Effective Financial Management,'' House 
          Report 106-802, July 27, 2000, Fifth Report by the 
          Committee on Government Reform, together with Minority 
          Views..................................................   126
      4. ``Management Practices at the Office of Workers' 
          Compensation Programs, U.S. Department of Labor,'' 
          House Report 106-1024), December 4, 2000...............   134
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs, Hon. David M. McIntosh, Chairman...........   137
      1. ``Non-Binding Legal Effect of Agency Guidance 
          Documents,'' House Report 106-1009, October 26, 2000, 
          Seventh Report by the Committee on Government Reform, 
          together with Minority and Additional Views............   137
Subcommittee on National Security, Veterans Affairs, and 
  International Relations, Hon. Christopher Shays, Chairman......   141
      1. ``The Department of Defense Anthrax Vaccine Immunization 
          Program: Unproven Force Protection,'' House Report 106-
          556, April 3, 2000, Fourth Report by the Committee on 
          Government Reform, together with Dissenting and 
          Supplemental Views.....................................   141

                        b. other investigations

Full Committee...................................................   143
      1. Investigate the current regulation of Federal wetlands, 
          in particular the area owned by Mr. John Pozsgai of 
          Morrisville, PA........................................   143
      2. Review of United States Counter-Narcotics Policy........   144
Subcommittee on the Census.......................................   146
      1. Oversight of the 2000 Census: Community Based Approaches 
          for a Better Enumeration...............................   146
      2. Oversight of the 2000 Census: Examining the Benefits of 
          Post-Census Local Review...............................   147
      3. Oversight of the 2000 Census: Examining the America 
          Counts Today [ACT] Initiatives to Enhance Traditional 
          Enumeration Methods....................................   148
      4. Oversight of the 2000 Census: Examining the Bureau's 
          Policy to Count Prisoners, Military Personnel, and 
          Americans Residing Overseas............................   149
      5. Oversight of the 2000 Census: Community-Based Approaches 
          for a Better Enumeration...............................   150
      6. Oversight of the 2000 Census: Examining the Census 
          Bureau's Advertising Campaign..........................   151
      7. Oversight of the 2000 Census: Discussion of the Effects 
          of Including Puerto Rico in the 2000 U.S. Population 
          Totals.................................................   152
      8. Oversight of the 2000 Census: A Midterm Evaluation of 
          the Local Update of Census Addresses Program...........   153
      9. The Rushed Census: Quality over Quality?................   154
      10. The American Community Survey [ACS]--A Replacement for 
          the Census Long Form?..................................   155
      11. The Accuracy and Coverage Evaluation [ACE]--Still More 
          Questions than Answers.................................   155
      12. A Transparent Census?..................................   156
      13. Census Bureau Data Processing Systems..................   157
      14. The Long Form..........................................   157
Subcommittee on the Civil Service................................   157
      1. Federal Reserve Board Retirement Portability............   157
      2. Long-Term Care Insurance for Federal Employees..........   159
      3. OPM's FEHBP Policy Guidance for Fiscal Year 2000........   166
      4. FEHBP as a Model for Medicare Reform....................   169
      5. Implementing the FEHBP Demonstration Project for 
          Military Retirees: A Good Faith Effort or Another 
          Broken Promise?........................................   173
      6. FEGLI: New Options for Federal Employees................   179
      7. Reauthorization of the Office of Government Ethics......   182
      8. Federal Law Enforcement Retirement: Who Qualifies and 
          Why?...................................................   184
      9. Civilian Personnel Readiness............................   186
      10. EEO Data and Complaint Processing Problems.............   193
      11. Fulfilling the Promise.................................   195
      12. The FEHBP Demonstration Project for Medicare-eligible 
          Military Retirees......................................   197
      13. FEHBP: OPM's Policy Guidance for 2001..................   200
      14. Wildland Firefighters Pay: Are There Inequities?.......   201
      15. Oversight of Wage-Grade Pay in Georgia and Oklahoma....   203
Subcommittee on Criminal Justice, Drug Policy, and Human 
  Resources......................................................   205
      1. National Drug Control Policy and Practices..............   205
      2. Public Safety and Criminal Justice Priorities...........   245
      3. International Commerce and Trade........................   248
      4. Immigration and Naturalization Service Operations and 
          Resources..............................................   250
      5. Student Education Loans.................................   251
      6. Health Issues...........................................   253
      7. Housing and Urban Development Problems..................   264
      8. The White House and the Privacy Act.....................   265
Subcommittee on the District of Columbia.........................   268
      1. New Visions for the District of Columbia................   268
      2. District of Columbia's Year 2000 Conversion Compliance..   270
      3. District of Columbia Public Schools.....................   275
      4. Public Law 104-8, District of Columbia Financial 
          Responsibility and Management Assistance Authority 
          (D.C. Control Board)...................................   277
      5. Receiverships...........................................   278
      6. The Washington Metropolitan Area Transit Authority 
          [WMATA]................................................   279
Subcommittee on Government Management, Information, and 
  Technology.....................................................   280
      1. Year 2000 Computer Challenge............................   280
      2. Oversight of Federal Real Property Management...........   295
      3. Oversight of the Minerals Management Service's Royalty 
          Valuation Program......................................   296
      4. Oversight of Government Debt Collection Practices.......   300
      5. Oversight of the Department of the Army's Chemical 
          Stockpile Disposal Project at the Umatilla Depot, 
          Hermiston, OR..........................................   305
      6. Oversight of Government Procurement.....................   307
      7. Oversight of Federal Geographic Information Systems 
          Policies and Programs..................................   311
      8. Implementation of the Government Performance and Results 
          Act....................................................   312
      9. Oversight of the National Archives and Records 
          Administration.........................................   315
      10. Oversight of Issues Involving Individual Privacy.......   317
      11. Creating an Office of Management.......................   319
      12. Oversight of Information Technology in the Federal 
          Government.............................................   320
      13. General Oversight Hearings.............................   329
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs.............................................   329
      1. Investigation of Government-Wide Paperwork Reduction 
          Initiatives and Accomplishments and Leadership in 
          Paperwork Reduction by the Office of Management and 
          Budget's Office of Information and Regulatory Affairs..   329
      2. Investigation of the Office of Management and Budget's 
          Congressional Review Act Guidance and Agency Compliance 
          with the Congressional Review Act......................   337
      3. Investigation of the White House Initiative on Global 
          Climate Change and the Kyoto Protocol..................   341
      4. Investigation of Other Environmental Protection Agency 
          Initiatives............................................   353
      5. Investigation of Two Department of Labor Major Rules....   358
      6. Investigation of Agency Responses to Waiver Requests by 
          the States Under Federal Grant Programs................   372
      7. Investigation of State Environmental Initiatives........   374
      8. Investigation of the Economic Effects of the Proposed 
          Merger of B.F. Goodrich Co. and Coltec Industries......   375
      9. Investigation of Reformulated Gasoline Regulations and 
          Their Effect of Midwest Gasoline Prices................   376
Subcommitee on National Security, Veterans Affairs, and 
  International Relations........................................   377
      1. Cabinet Department and Agency Oversight.................   377
      2. Oversight of the Application of the Prompt Payment Act 
          in the Department of Defense...........................   378
      3. Oversight of Department of Defense Anthrax Vaccination 
          Immunization Program [AVIP]............................   379
      4. Oversight of Government-wide Coordination of Programs to 
          Combat Terrorism.......................................   380
      5. Oversight of the Implementation of the Department of 
          Veterans Affairs Hepatitis C Testing and Treatment 
          Initiative.............................................   381
      6. Oversight of the Inter-American Foundation..............   382
      7. Oversight of the VA Implementation of the Persian Gulf 
          War Veterans Act of 1998...............................   382
      8. Views of Veterans Service Organizations.................   382
      9. DOD Administration of Investigational New Drugs on U.S. 
          Service Personnel......................................   383
      10. Defense Security Service Oversight.....................   383
      11. Combating Terrorism: Management of Medical Supplies....   384
      12. Combating Terrorism: Coordination of Non-medical R&D 
          Programs...............................................   384
      13. Joint Strike Fighter [JSF] Acquisition Reform..........   385
      14. F-22 Cost Controls.....................................   386
      15. Combating Terrorism: Assessing Threats, Risk 
          Management, and Establishing Priorities................   386
      16. Department of Defense Chemical and Biological Defense 
          Program: Management and Oversight......................   387
      17. Force Protection: Current Individual Protection 
          Equipment..............................................   388
      18. National Missile Defense: Test Failures and Technology 
          Development............................................   390
      19. The Biological Weapons Convention: Status and 
          Implications...........................................   391
      20. Hepatitis C: Access, Testing and Treatment in the VA 
          Health Care System.....................................   392
      21. VA Health Care in the New Millennium...................   393
      22. Oversight of the American Battle Monuments Commission 
          and World War II Memorial..............................   393
      23. Oversight of the State Department's Compliance with the 
          Results Act and Efforts to Improve Security............   394
      24. Gulf War Veterans' Illnesses...........................   394
Subcommittee on the Postal Service...............................   395
      1. General Oversight of the U.S. Postal Service: The 
          Inspector General; the General Accounting Office; the 
          Postmaster General, and Chief Executive Officer........   395
      2. Y2K Technology Challenge: Will the Postal Service 
          Deliver?...............................................   401
      3. Executive Relocation Benefits...........................   405
      4. Cost Pertaining to Processing Periodicals...............   406
      5. International Postal Policy.............................   406
      6. ``The U.S. Postal Service and the Postal Inspection 
          Service: Market Competition and Law Enforcement in 
          Conflict?''............................................   415
      7. General Oversight Hearing for the U.S. Postal Service...   420

                            III. Legislation
                            a. new measures

Subcommittee on the Census.......................................   429
      1. H.R. 929, the 2000 Census Language Barrier Removal Act..   429
      2. H.R. 1058, the Census in the Schools Promotion Act......   430
      3. H.R. 1010, to improve participation in the 2000 
          decennial census by increasing the amounts available to 
          the Census Bureau for marketing, promotion, and 
          outreach...............................................   430
      4. H.R. 928, 2000 Census Mail Outreach Improvement Act.....   431
      5. H.R. 472, Local Census Quality Check Act of 1999........   432
      6. H.R. 1009, the 2000 Census Community Participation 
          Enhancement Act........................................   432
      7. H.R. 683, the Decennial Census Improvement Act of 1999..   433
      8. H. Con. Res. 193, expressing the support of Congress for 
          activities to increase public participation in the 
          decennial census.......................................   434
      9. H.R. 1632, to provide that certain attribution rules be 
          applied with respect to the counting of certain 
          prisoners in a decennial census of population..........   434
      10. H.R. 2067, The Military Personnel Home of Record Act of 
          1999...................................................   435
      11. H.R. 3581, to make additional funds available to the 
          Secretary of Commerce for purposes of the 2000 
          decennial census, and for other purposes...............   435
      12. H.R. 3649, the Census of Americans Abroad Act..........   436
      13. H. Con. Res. 263, expressing support for a National 
          Teach Census Week......................................   436
      14. H.R. 4085, to provide that decennial census 
          questionnaires be limited to requesting only the 
          information required by the Constitution...............   436
      15. H.R. 4154, the Common Sense Census Act of 2000.........   437
      16. H.R. 4158, to limit the penalty that may be assessed 
          for not answering decennial census questions beyond 
          those necessary for an enumeration of the population...   437
      17. H.R. 4188, the Common Sense Census Enforcement Act of 
          2000...................................................   437
      18. H.R. 4198, to declare United States policy with regard 
          to the constitutional requirement of a decennial census 
          for purposes of the apportionment of Representatives in 
          Congress among the several States......................   438
      19. H.R. 4291, to limit the decennial census questionnaires 
          to basic questions needed for an enumeration of the 
          population.............................................   438
      20. H.R. 4458, to limit the information that may be 
          requested on decennial census questionnaires...........   438
      21. H.R. 4568, to provide funds for the planning of a 
          special census of Americans residing abroad............   439
Subcommittee on the Civil Service................................   439
      1. H.R. 206, a bill to provide for greater access to child 
          care services for Federal Employees....................   439
      2. H.R. 208, a bill to amend title 5, United States Code, 
          to allow for the contribution of certain rollover 
          distributions to accounts in the Thrift Savings Plan, 
          to eliminate certain waiting-period requirements for 
          participating in the Thrift Savings Plan, and for other 
          purposes...............................................   439
      3. H.R. 416, the Federal Retirement Coverage Corrections 
          Act....................................................   440
      4. H.R. 457, the Organ Donor Leave Act.....................   441
      5. H.R. 807, the Federal Reserve Board Retirement 
          Portability Act........................................   441
      6. H.R. 915, a bill to authorize a cost of living 
          adjustment in the pay of administrative law judges.....   442
      7. H.R. 1451, the Abraham Lincoln Bicentennial Commission 
          Act....................................................   442
      8. H.R. 2904, a bill to amend the Ethics in Government Act 
          of 1978 to reauthorize funding for the Office of 
          Government Ethics, and to clarify the definition of a 
          ``special Government employee'' under title 18, United 
          States Code............................................   442
      9. H. Res. 105, to recognize and honor Joe DiMaggio........   442
      10. H. Res. 244, a resolution expressing the sense of the 
          House of Representatives with regard to the U.S. 
          Women's Soccer Team and its winning performance in the 
          1999 Women's World Cup tournament......................   443
      11. H. Res. 264, a resolution expressing the sense of the 
          House of Representatives honoring Lance Armstrong, 
          America's premier cyclist, and his winning performance 
          in the 1999 Tour de France.............................   443
      12. H. Res. 269, a resolution expressing the sense of the 
          House of Representatives that Joseph Jefferson 
          ``Shoeless Joe'' Jackson should be appropriately 
          honored for his outstanding baseball accomplishments...   443
      13. H. Res. 279, a resolution congratulating Henry ``Hank'' 
          Aaron on the 25th anniversary of breaking the Major 
          League Baseball career home run record established by 
          Babe Ruth and recognizing him as one of the greatest 
          baseball players of all time...........................   443
      14. H. Res. 293, a resolution expressing the sense of the 
          House of Representatives in support of ``National 
          Historically Black Colleges and Universities Week.''...   444
      15. H. Res. 324, a resolution supporting National Civility 
          Week, Inc. in its efforts to restore civility, honesty, 
          integrity, and respectful consideration in the United 
          States.................................................   444
      16. H. Res. 344, a resolution recognizing and honoring 
          Payne Stewart and expressing the condolences of the 
          House of Representatives to his family on his death and 
          to the families of those who died with him.............   444
      17. H. Res. 363, a resolution recognizing and honoring 
          Sacramento, CA, Mayor Joe Serna, Jr., and expressing 
          the condolences of the House of Representatives to his 
          family and the people of Sacramento on his death.......   445
      18. H. Res. 370, a resolution recognizing and honoring 
          Walter Payton and expressing the condolences of the 
          House of Representatives to his family on his death....   445
      19. H. Con. Res. 94, a concurrent resolution recognizing 
          the public need for reconciliation and healing, urging 
          the United States to unite in seeking God, and 
          recommending that the Nation's leaders call for days of 
          prayer.................................................   445
      20. H.R. 4040, the Long-Term Care Security Act.............   446
      21. H.R. 2842, the Federal Employees Health Benefits 
          Children's Equity Act of 1999..........................   446
      22. H. Con. Res. 302, Calling on the people of the United 
          States to observe a National Moment of Remembrance to 
          honor the men and women of the United States who died 
          in the pursuit of freedom and peace....................   446
      23. H. Con. Res. 376, Expressing the sense of the Congress 
          regarding support for the recognition of a Liberty Day.   447
      24. H. Con. Res. 396, Celebrating the birth of James 
          Madison and his contributions to the Nation............   447
      25. H.R. 3312, Merit Systems Protection Board 
          Administrative Dispute Resolution Act of 1999..........   447
      26. H. Res. 347, Expressing the sense of the House of 
          Representatives in support of ``Italian-American 
          Heritage Month'' and recognizing the contributions of 
          Italian Americans to the United States.................   448
      27. H.R. 460, To amend title 5, United States Code, to 
          provide that the mandatory separation age for Federal 
          firefighters be made the same as the age that applies 
          with respect to Federal law enforcement officers.......   448
      28. H. Con. Res. 317, Expressing the sense of the Congress 
          on the death of John Cardinal O'Connor, Archbishop of 
          New York...............................................   448
      29. H. Con. Res. 381, Expressing the sense of the Congress 
          that there should be established a National Health 
          Center Week to raise awareness of health services 
          provided by community, migrant, and homeless health 
          centers................................................   448
      30. H.R. 4519, Baylee's Law................................   449
      31. H.R. 4404, To permit the payment of medical expenses 
          incurred by the U.S. Park Police in the performance of 
          duty to be made directly by the National Park Service, 
          to allow for waiver and indemnification in mutual law 
          enforcement agreements between the National Park 
          Service and a State or political subdivision when 
          required by State law, and for other purposes..........   449
      32. H.R. 4907, Jamestown 400th Commemoration Commission Act 
          of 2000................................................   449
      33. S. 3137, James Madison Commemoration Commission Act....   449
Subcommittee on the District of Columbia.........................   450
      1. H.R. 3995, the District of Columbia Receivership 
          Accountability Act of 2000.............................   450
      2. H.R. 4387, to provide that the School Governance Charter 
          Amendment Act of 2000 shall take effect upon the date 
          such act is ratified by the voters of the District of 
          Columbia...............................................   450
      3. H.R. 5537, to waive the period of congressional review 
          of the Child in Need of Protection Amendment Act of 
          2000...................................................   450
      4. H.R. 1198, District of Columbia Home Rule Act to 
          eliminate congressional review of newly passed District 
          laws...................................................   451
      5. H.R. 433, District of Columbia Management Restoration 
          Act of 1999............................................   451
      6. H.R. 974, the District of Columbia College Access Act...   451
Subcommittee on Government Management, Information, and 
  Technology.....................................................   452
      1. H.R. 437, placing a Chief Financial Officer in the 
          Executive Office of the President, becoming part of 
          Public Law 106-58......................................   452
      2. S. 468/H.R. 409, the Federal Financial Assistance 
          Management Improvement Act of 1999, Public Law 106-107.   453
      3. H.R. 1219, the Construction Industry Payment Protection 
          Act of 1999, becoming Public Law 106-49................   454
      4. H.R. 1442, the Law Enforcement and Public Safety 
          Enhancement Act of 1999, inserted as a provision of the 
          Floyd D. Spence National Defense Authorization Act for 
          Fiscal Year 2001 that passed both the House and Senate, 
          becoming Public Law 106-398............................   455
      5. H.R. 3137/H.R. 4931, the Presidential Transition Act 
          Amendments, becoming Public Law 106-293................   456
      6. H.R. 3582, the Federal Contractor Flexibility Act of 
          2000, inserted as a provision of the Floyd D. Spence 
          National Defense Authorization Act for Fiscal Year 2001 
          that passed both the House and Senate and became Public 
          Law 106-398............................................   458
      7. H.R. 4110, a bill to amend title 44, U.S. Code, to 
          authorize appropriations for the National Historical 
          Publications and Records Commission for fiscal years 
          2002 through 2005, passed both the House and Senate, 
          becoming Public Law 106-410............................   458
      8. Legislation to increase the salary of the President of 
          the United States was inserted as a provision of H.R. 
          2490, the Treasury Department, the United States Postal 
          Service, the Executive Office of the President, and 
          certain Independent Agencies Appropriations Act for the 
          fiscal year ending September 30, 2000. The act was 
          signed into law on September 29, 1999, becoming Public 
          Law 106-58.............................................   459
      9. H.R. 3218, the Social Security Number Confidentiality 
          Act of 1999, passed both the House and Senate, becoming 
          Public Law 106-433.....................................   460
      10. H.R. 5157, the Freedmen's Bureau Records Preservation 
          Act of 2000, passed the House and Senate, becoming 
          Public Law 106-444.....................................   460
      11. S. 1707, a bill to amend the Inspector General Act of 
          1978 (5 U.S.C. App.) to provide that certain designated 
          Federal entities shall be establishments under such act 
          and for other purposes, passed both the House and 
          Senate becoming Public Law 106-422.....................   461
      12. S. 1993, the Government Information Security Act, 
          inserted as a provision of the Floyd D. Spence National 
          Defense Authorization Act for Fiscal Year 2001 that 
          passed both the House and Senate, becoming Public Law 
          106-398................................................   461
      13. S. 2712, the Reports Consolidation Act of 2000, passed 
          both the House and Senate and is awaiting the 
          President's signature..................................   462
      14. H. Con. Res. 300, recognizing and commending the 
          Nation's Federal workforce for successfully preparing 
          the Nation to withstand any catastrophic year 2000 
          computer problem disruptions, passed the House of 
          Representatives under suspension of the rules by a vote 
          409 to 0...............................................   463
      15. H.R. 436, the Government Waste, Fraud and Error 
          Reduction Act, passed the House of Representatives on 
          February 24, 1999, by a vote of 419 to 1...............   463
      16. H.R. 1827, the Government Waste Corrections Act of 
          1999, passed the House of Representatives by a vote of 
          375 to 0 on March 8, 2000..............................   465
      17. H.R. 2513, a bill directing the General Services 
          Administration to acquire a building in Terre Haute, 
          IN, passed the House of Representatives under 
          suspension of the rules on November 2, 1999............   466
      18. H.R. 2885, the Statistical Efficiency Act of 1999, 
          passed the House of Representatives under suspension of 
          the rules by a voice vote on October 26, 2000..........   467
      19. H.R. 4519, Baylee's Law, to amend the Public Buildings 
          Act of 1959 concerning the safety and security of 
          children enrolled in childcare facilities located in 
          public buildings under the control of the General 
          Services Administration, passed the House of 
          Representatives on September 26, 2000..................   468
      20. H. Res. 15, expressing the sense of the House of 
          Representatives regarding Government procurement access 
          for women-owned businesses.............................   469
      21. H.R. 28, the Quality Child Care for Federal Employees 
          Act....................................................   469
      22. H.R. 1625, the Human Rights Information Act............   471
      23. H.R. 1788, the Nazi Benefits Termination Act of 1999...   472
      24. H.R. 2376, a bill providing for a procedure for 
          expedited reviews of State grant waiver requests.......   472
      25. H.R. 4049, the Privacy Commission Act..................   473
      26. H.R. 4181, the Debt Payment Incentive Act of 2000......   473
      27. H.R. 1599, the Year 2000 Compliance Assistance Act.....   474
      28. H.R. 88, legislation to amend the Treasury and General 
          Government Appropriations Act of 1999, to repeal the 
          requirement regarding data produced under Federal 
          grants and agreements awarded to institutions of higher 
          education, hospitals, and other nonprofit organizations   475
      29. H.R. 4670, ``Chief Information Officer of the United 
          States Act of 2000''...................................   475
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs.............................................   476
      1. H.R. 391, the Small Business Paperwork Reduction Act 
          Amendments of 1999.....................................   476
      2. H.R. 1074, the Regulatory Right-to-Know Act of 1999.....   478
      3. H.R. 2221, Small Business, Family Farms, and 
          Constitutional Protection Act..........................   479
      4. H.R. 2245, Federalism Act of 1999.......................   480
      5. H.R. 2376, a bill to require executive agencies to 
          establish expedited review procedures for granting a 
          waiver to a State under a grant program administered by 
          the agency if another State has already been granted a 
          similar waiver by the agency under such program........   481
      6. H.R. 3521, Congressional Accountability for Regulatory 
          Information Act of 2000, and H.R. 4744, H.R. 4294 and 
          S. 1198, Truth in Regulating Act of 2000...............   482
Subcommittee on the Postal Service...............................   483
      1. H.R. 22, The Postal Modernization Act of 1999...........   483
      2. H.R. 100, a bill to establish designation for U.S. 
          Postal Service buildings in Philadelphia, PA...........   507
      3. H.R. 170, a bill to require certain notices in any 
          mailing using a game of chance for the promotion of a 
          product or service, and for other purposes.............   509
      4. H.R. 197, a bill to designate the facility of the U.S. 
          Postal Service at 410 North 6th Street in Garden City, 
          KS, as the ``Clifford R. Hope Post Office''............   510
      5. H.R. 642, a bill to redesignate the Federal building 
          located at 701 South Santa Fe Avenue in Compton, CA, 
          and known as the Compton Main Post Office, as the 
          ``Mervyn Malcolm Dymally Post Office Building''........   511
      6. H.R. 643, a bill to redesignate the Federal building 
          located at 10301 South Compton Avenue, in Los Angeles, 
          CA, presently known as the Watts Finance Office, as the 
          ``Augustus F. Hawkins Post Office Building''...........   512
      7. H.R. 1251, a bill to designate the U.S. Postal Service 
          building located at 8850 South 700 East, Sandy, UT, as 
          the ``Noal Cushing Bateman Post Office Building''......   513
      8. H.R. 1327, a bill to designate the U.S. Postal Service 
          building located at 34480 Highway 101 South in 
          Cloverdale, OR, as the ``Maurine B. Newberger U.S. Post 
          Office''...............................................   513
      9. H.R. 1374, a bill to designate the U.S. Post Office 
          building located at 680 State Highway 130 in Hamilton, 
          NJ, as the ``John K. Rafferty Hamilton Post Office 
          Building''.............................................   515
      10. H.R. 1377, a bill to designate the facility of the U.S. 
          Postal Service at 13234 South Baltimore Avenue in 
          Chicago, IL, as the ``John J. Buchanan Post Office 
          Building''.............................................   515
      11. H.R. 2307, a bill to designate the building of the U.S. 
          Postal Service located at 5 Cedar Street in Hopkington, 
          MA, as the ``Thomas J. Brown Post Office Building''....   516
      12. H.R. 2319, a bill to make the American Battle Monuments 
          Commission and the World War II Memorial Advisory Board 
          eligible to use nonprofit standard mail rates of 
          postage................................................   517
      13. H.R. 2357, a bill to designate the U.S. Post Office 
          located at 3675 Warrensville Center Road in Shaker 
          Heights, OH, as the ``Louise Stokes Post Office''......   518
      14. H.R. 2358, a bill to designate the U.S. Post Office 
          located at 3813 Main Street in East Chicago, IN, as the 
          ``Lance Corporal Harold Gomez Post Office''............   519
      15. H.R. 2460, a bill to designate the U.S. Post Office 
          located at 125 Border Avenue West in Wiggins, MS, as 
          the ``Jay Hanna ``Dizzy'' Dean Post Office''...........   519
      16. H.R. 2591, a bill to designate the U.S. Post Office 
          located at 713 Elm Street in Wakefield, KS, as the 
          ``William H. Avery Post Office''.......................   520
      17. H.R. 3018, a bill to designate the U.S. Post Office 
          located at 557 East Bay Street in Charleston, SC, as 
          the ``Marybelle H. Howe Post Office''..................   520
      18. H.R. 3189, a bill to designate the U.S. Post Office 
          located at 14071 Peyton Drive in Chino Hills, CA, as 
          the ``Joseph Ileto Post Office''.......................   522
      19. S. 335, a bill known as the Deceptive Mail Prevention 
          and Enforcement Act....................................   523
      20. H.R. 2952, To redesignate the facility of the U.S. 
          Postal Service located at 100 Orchard Park Drive in 
          Greenville, SC, as the ``Keith D. Oglesby Station''....   525
      21. H.R. 3699 To designate the facility of the U.S. Postal 
          Service located at 8409 Lee Highway in Merrifield, VA, 
          as the ``Joel T. Broyhill Postal Building''............   526
      22. H.R. 3701, To designate the facility of the U.S. Postal 
          Service located at 3118 Washington Boulevard in 
          Arlington, VA, as the ``Joseph L. Fisher Post Office 
          Building''.............................................   527
      23. H.R. 1666, to designate the facility of the U.S. Postal 
          Service at 200 East Pinckney Street in Madison, FL, as 
          the ``Captain Colin P. Kelly Jr. Post Office''.........   528
      24. H.R. 4241, to designate the facility of the U.S. Postal 
          Service located at 1818 Milton Avenue in Janesville, 
          WI, as the ``Les Aspin Post Office Building''..........   529
      25. H.R. 3030, to designate the facility of the U.S. Postal 
          Service located at 757 Warren Road in Ithaca, NY, as 
          the ``Matthew F. McHugh Post Office''..................   530
      26. H.R. 2938, to designate the facility of the U.S. Postal 
          Service located at 424 South Michigan Street in South 
          Bend, IN, as the ``John Brademas Post Office''.........   531
      27. H.R. 4658, to designate the facility of the U.S. Postal 
          Service located at 301 Green Street in Fayetteville, 
          NC, as the ``J. L. Dawkins Post Office Building''......   532
      28. H.R. 4169, to designate the facility of the U.S. Postal 
          Service located at 2000 Vassar Street in Reno, NV, as 
          the ``Barbara F. Vucanovich Post Office Building''.....   533
      29. H.R. 3909, a bill to designate the facility of the U.S. 
          Postal Service located at 4601 south cottage Grove 
          Avenue in Chicago, IL, as the ``Henry W. McGee Post 
          Office Building''......................................   534
      30. H.R. 4447, to designate the facility of the U.S. Postal 
          Service located at 919 West 34th Street in Baltimore, 
          MD, as the ``Samuel H. Lacy, Sr. Post Office Building''   535
      31. H.R. 4437, to grant to the U.S. Postal Service the 
          authority to issue semipostals, and for other purposes.   535
      32. H.R. 4430, to redesignate the facility of the U.S. 
          Postal Service located at 11831 Scaggsville Road in 
          Fulton, MD, as the ``Alfred Rascon Post Office 
          Building''.............................................   537
      33. H.R. 4157, to designate the facility of the U.S. Postal 
          Service located at 600 Lincoln Avenue in Pasadena, CA, 
          as the ``Matthew `Mack' Robinson Post Office Building''   537
      34. H.R. 4517, to designate the facility of the U.S. Postal 
          Service located at 24 Tsienneto Road in Derry, NH, as 
          the ``Alan B. Shepard, Jr. Post Office Building''......   538
      35. H.R. 4554, to redesignate the facility of the U.S. 
          Postal Service located at 1602 Frankford Avenue in 
          Philadelphia, Pennsylvania, as the ``Joseph F. Smith 
          Post Office Building''.................................   539
      36. H.R. 4884, to redesignate the facility of the U.S. 
          Postal Service located at 200 West 2nd Street in Royal 
          Oak, MI, as the ``William S. Broomfield Post Office 
          Building''.............................................   540
      37. H.R. 4534, to designate the facility of the U.S. Postal 
          Service located at 114 Ridge Street in Lenoir, NC, as 
          the ``James T. Broyhill Post Office Building''.........   541
      38. H.R. 4615, to redesignate the facility of the U.S. 
          Postal Service located at 3030 Meredith Avenue in 
          Omaha, NE, as the ``Reverend J.C. Wade Post Office''...   541
      39. H.R. 3454, to designate the U.S. post office located at 
          451 College Street in Macon, GA, as the ``Henry McNeal 
          Turner Post Office''...................................   542
      40. H.R. 4484, to designate the facility of the U.S. Postal 
          Service located at 500 North Washington Street in 
          Rockville, MD, as the ``Everett Alvarez, Jr. Post 
          Office Building''......................................   543
      41. H.R. 2302, to designate the building of the U.S. Postal 
          Service located at 307 Main Street in Johnson City, NY, 
          as the ``James W. McCabe, Sr. Postal Office Building''.   544
      42. H.R. 4448, to designate the facility of the U.S. Postal 
          Service located at 35 Dolfield Avenue in Baltimore, MD, 
          as the ``Judge Robert Bernard Watts, Sr. Post Office 
          Building''.............................................   545
      43. H.R. 4449, to designate the facility of the U.S. Postal 
          Service located at 1908 North Ellamont Street in 
          Baltimore, MD, as the ``Dr. Flossie McClain Dedmond 
          Post Office Building''.................................   546
      44. H.R. 4975, to designate the post office and courthouse 
          located at 2 Federal Square, Newark, NJ, as the ``Frank 
          R. Lautenberg Post Office and Courthouse''.............   547
      45. H.R. 4625, to designate the facility of the U.S. Postal 
          Service located at 2108 East 38th Street in Erie, PA, 
          as the ``Gertrude A. Barber Post Office Building''.....   547
      46. H.R. 4786, to designate the facility of the U.S. Postal 
          Service located at 110 Postal Way in Carrollton, GA, as 
          the ``Samuel P. Roberts Post Office Building''.........   548
      47. H.R. 4450, to designate the facility of the U.S. Postal 
          Service located at 900 East Fayette Street in 
          Baltimore, MD, as the ``Judge Harry Augustus Cole Post 
          Office Building''......................................   549
      48. H.R. 4451, to designate the facility of the U.S. Postal 
          Service located at 1001 Frederick Road in Baltimore, 
          MD, as the ``Frederick L. Dewberry, Jr. Post Office 
          Building''.............................................   549
      49. S. 1295, a bill to designate the U.S. Post Office 
          located at 3813 Main Street in East Chicago, IN, as the 
          ``Lance Corporal Harold Gomez Post Office''............   550
      50. H.R. 5229, to designate the facility of the U.S. Postal 
          Service located at 219 South Church Street in Odum, GA, 
          as the ``Ruth Harris Coleman Post Office''.............   551
      51. H.R. 4831, to redesignate the facility of the U.S. 
          Postal Service located at 2339 North California Street 
          in Chicago, IL, as the ``Roberto Clemente Post Office''   551
      52. S. 2686, a bill to amend chapter 36 of title 39, United 
          States Code, to modify rates relating to reduced rate 
          mail matter, and for other purposes....................   552
      53. H.R. 4853, to redesignate the facility of the U.S. 
          Postal Service located at 1568 South Glen Road in South 
          Euclid, OH, as the ``Arnold C. D'Amico Station''.......   553
      54. H.R 5143, to designate the facility of the U.S. Postal 
          Service located at 3160 Irvin Cobb Drive, in Paducah, 
          KY, as the ``Morgan Station''..........................   554
      55. H.R. 5144, to designate the facility of the U.S. Postal 
          Service located at 203 West Paige Street, in 
          Tompkinsville, KY, as the ``Tim Lee Carter Post Office 
          Building''.............................................   554
      56. H.R. 5068, to designate the facility of the U.S. Postal 
          Service located at 5927 Southwest 70th Street in Miami, 
          FL, as the ``Marjory Williams Scrivens Post Office''...   555
      57. H.R. 5210, to designate the facility of the U.S. Postal 
          Service located at 200 South George Street in York, PA, 
          as the ``George Atlee Goodling Post Office Building''..   555
      58. H.R. 5016, to redesignate the facility of the U.S. 
          Postal Service located at 514 Express Center Drive in 
          Chicago, IL, as the ``J.T. Weeker Service Center''.....   556
      59. H.R. 5903, to designate the facility of the U.S. Postal 
          Service located at 2305 Minton Road in West Melbourne, 
          FL, as the ``Ronald W. Reagan Post Office Building''...   557
      60. S. 3194, a bill to designate the facility of the U.S. 
          Postal Service located at 431 George Street in 
          Millersville, PA, as the ``Robert S. Walker Post 
          Office''...............................................   558
      61. H.R. 4339, to designate the facility of the U.S. Postal 
          Service located at 440 South Orange Blossom Trail in 
          Orlando, FL, as the ``Arthur `Pappy' Kennedy Post 
          Office Building''......................................   559
      62. H.R. 4400, to designate the facility of the U.S. Postal 
          Service located at 1601-1 Main Street in Jacksonville, 
          FL, as the ``Eddie Mae Steward Post Office Building''..   559

           b. review of laws within committee's jurisdiction

Full Committee...................................................   560
Subcommittee on the Census.......................................   562
Subcommittee on the Civil Service................................   566
Subcommittee on the District of Columbia.........................   571
Subcommittee on Government Management, Information, and 
  Technology.....................................................   571
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs.............................................   572
Subcommittee on National Security, Veterans Affairs, and 
  International Relations........................................   573
Subcommittee on the Postal Service...............................   574

                      IV. Other Current Activities
                  a. general accounting office reports

Full Committee...................................................   577
Subcommittee on the Census.......................................   595
Subcommittee on the Civil Service................................   609
Subcommittee on Criminal Justice, Drug Policy, and Human 
  Resources......................................................   623
Subcommittee on the District of Columbia.........................   638
Subcommittee on Government Management, Information, and 
  Technology.....................................................   643
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs.............................................   651
Subcommittee on National Security, Veterans Affairs, and 
  International Relations........................................   656
Subcommittee on the Postal Service...............................   665

         V. Prior Activities of Current or Continuing Interest

Subcommittee on the Census.......................................   683
Subcommittee on the Civil Service................................   684
Subcommittee on the District of Columbia.........................   684
Subcommittee on Government Management, Information, and 
  Technology.....................................................   684
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs.............................................   686
Subcommittee on National Security, Veterans Affairs, and 
  International Relations........................................   686
Subcommittee on the Postal Service...............................   687

             VI. Projected Programs for the 107th Congress

Subcommittee on the Census.......................................   689
Subcommittee on Government Management, Information, and 
  Technology.....................................................   689
Subcommittee on National Economic Growth, Natural Resources, and 
  Regulatory Affairs.............................................   691

               VII. Views of the Ranking Minority Member

Views of Hon. Henry A. Waxman....................................   693
                                                 Union Calendar No. 615
106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                    106-1053

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


         ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM

                                _______
                                

January 2, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Burton, from the Committee on Government Reform, submitted the 
                               following


                                 REPORT

 
ACTIVITIES OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM, 106TH CONGRESS, 
                   1ST AND 2D SESSIONS, 1999 AND 2000

       PART ONE. GENERAL STATEMENT OF ORGANIZATION AND ACTIVITIES


             I. Jurisdiction, Authority, Powers, and Duties

    The Rules of the House of Representative provide for 
election by the house, at the commencement of each Congress, of 
19 named standing committees, 1 of which is the Committee on 
Government Reform.\1\ Pursuant to House Resolutions 6, 7, and 8 
(adopted January 6, 1999), membership of the Committee on 
Government Reform was set at 43 (7 vacancies at the beginning 
of the session) including 1 independent. Membership was 
decreased to 42 pursuant to communication to the Speaker on 
January 7, 1999. House Resolution 30 (adopted February 2, 
1999), increased the membership to 44. Membership was decreased 
to 43 pursuant to communication to the Speaker on March 3, 
1999. House Resolution 119 (adopted March 17, 1999), filled 
that vacancy, and brought the membership back to 44. Membership 
was decreased to 43 pursuant to communication to the Speaker on 
June 24, 1999, and House Resolution 223 filled that vacancy on 
June 25, 1999, and brought the membership back to 44.
---------------------------------------------------------------------------
    \1\ Rule X.
---------------------------------------------------------------------------
    Rule X sets forth the committee's jurisdiction, functions, 
and responsibilities as follows:

                                 RULE X


                       Organization of Committees


Committees and their legislative jurisdiction

    1. There shall be in the House the following standing 
committees, each of which shall have the jurisdiction and 
related functions assigned by this clause and clauses 2, 3, and 
4. All bills, resolutions, and other matters relating to 
subjects within the jurisdiction of the standing committees 
listed in this clause shall be referred to those committees, in 
accordance with clause 2 of rule XII, as follows:

           *         *         *         *         *


                   (h) Committee on Government Reform

    (1) The Federal Civil Service, including intergovernmental 
personnel; and the status of officers and employees of the 
United States, including their compensation, classification, 
and retirement.
    (2) Municipal affairs of the District of Columbia in 
general (other than appropriations).
    (3) Federal paperwork reduction.
    (4) Government management and accounting measures 
generally.
    (5) Holidays and celebrations.
    (6) Overall economy, efficiency, and management of 
government operations and activities, including Federal 
procurement.
    (7) National Archives.
    (8) Population and demography generally, including the 
Census.
    (9) Postal service generally, including 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 
proceeding provisions of this paragraph (and its oversight 
functions under clause 2(a) (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) The various standing committees shall have general 
oversight responsibilities as provided in paragraph (b) in 
order to assist the House in--
    (1) its analysis, appraisal, and evaluation of--
          (A) the application, administration, execution, and 
        effectiveness of Federal laws; and
          (B) conditions and circumstances that may indicate 
        the necessity or desirability of enacting new or 
        additional legislation; and
    (2) its formulation, consideration, and enactment of 
changes in Federal laws, and of such additional legislation as 
may be necessary or appropriate.
    (b)(1) In order to determine whether laws and programs 
addressing subjects within the jurisdiction or a committee are 
being implemented and carried out in accordance with the intent 
of Congress and whether they should be continued, curtailed, or 
eliminated, each standing committee (other than the Committee 
on Appropriations) shall review and study on a continuing 
basis--
          (A) the application, administration, execution, and 
        effectiveness of laws and programs addressing subjects 
        within its jurisdiction;
          (B) the organization and operation of Federal 
        agencies and entities having responsibilities for the 
        administration and execution of laws and programs 
        addressing subjects within its jurisdiction;
          (C) any conditions or circumstances that may indicate 
        the necessity or desirability of enacting new or 
        additional legislation addressing subjects within its 
        jurisdiction (whether or not a bill or resolution has 
        been introduced with respect thereto); and
          (D) future research and forecasting on subjects 
        within its jurisdiction.

           *         *         *         *         *

    (c) Each standing committee shall review and study 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 shall--
          (A) receive and examine reports of the Comptroller 
        General of the United States and submit to the House 
        such recommendations as it considers necessary or 
        desirable in connection with the subject matter of the 
        reports;
          (B) evaluate the effects of laws enacted to 
        reorganize the legislative and executive branches of 
        the Government; and
          (C) study 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 may at any time conduct 
investigations of any matter without regard to clause 1, 2, 3, 
or this clause conferring jurisdiction over the matter to 
another standing committee. The findings and recommendations of 
the committee in such an investigation shall be made available 
to any other standing committee having jurisdiction over the 
matter involved and shall be included in the report of any such 
other committee when required by clause 3(c)(4) of Rule XIII.

           *         *         *         *         *


Travel

    8. (a) Local currencies owned by the United States shall be 
made available by the committee and its employees engaged in 
carrying out their official duties outside the United States or 
its territories or possessions. Appropriated funds, including 
those authorized under this clause and clause 6 and 8, may not 
be expended for the purpose of defraying expenses of members of 
a committee or its employees in a country where local 
currencies are available for this purpose.
    (b) The following conditions shall apply with respect to 
travel outside the United States or its territories or 
possessions:
    (1) A member or employee of a committee may not receive or 
expend local currencies for subsistance in a country for a day 
at a rate in excess of the maximum per diem set forth in 
applicable Federal law.
    (2) A member or employee shall be reimbursed for his 
expenses for a day at the lesser of--
          (A) the per deim set forth in applicable Federal law; 
        or
          (B) the actual, unreimbursed expenses (other than for 
        transportation) he incurred during that day.
    (3) Each member or employee of a 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 and funds 
expended for any other official purpose and shall summarize in 
these categories the total foreign currencies or appropriated 
funds expended. Each report shall be filed with the chairman of 
the committee not later than 60 days following the completion 
of travel for use in complying with reporting requirements in 
applicable Federal law and shall be open for public inspection.
    (c)(1) In carrying out the activities of a committee 
outside the United States in a country where local currencies 
are unavailable, a member or employee of a committee may not 
receive reimbursement for expenses (other than for 
transportation) in excess of the maximum per diem set forth in 
applicable Federal law.
    (2) A member or employee shall be reimbursed for his 
expenses for a day, at the lesser of--
          (A) the per diem set forth in applicable Federal law; 
        or
          (B) the actual unreimbursed expenses (other than for 
        transportation) he incurred during that 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 actually paid for the transportation.
    (d) The restrictions respecting travel outside the United 
States set forth in paragraph (c) also shall apply to travel 
outside the United States by a member, delegate, Resident 
Commissioner, officer, or employee of the House authorized 
under any standing rule.

           *         *         *         *         *

    Rule XI provides authority for investigations and studies, 
as follows:

                                RULE XI


            Procedures of Committees and Unfinished Business


In general--

    1. * * *
    (b)(1) Each committee may conduct at any time such 
investigations and studies as it considers necessary or 
appropriate in the exercise of its responsibilities under rule 
X. Subject to the adoption of expense resolutions as required 
by clause 6 of rule X, each committee may incur expenses, 
including travel expenses, in connection with such 
investigations and studies.

           *         *         *         *         *

    (d)(1) Each committee shall submit to the House, no 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 each year.

           *         *         *         *         *


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 2 of Rule XII), a committee or 
subcommittee is authorized (subject to subparagraph (2)(A))--
          (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 
        as it considers necessary; and
          (B) to require, by subpoena or otherwise, the 
        attendance and testimony of such witnesses and the 
        production of such books, records, correspondence, 
        memoranda, papers, and documents as it considers 
        necessary.
    (2) The chairman of the committee, or a member designated 
by the chairman, may administer oaths to witnesses.
    (3)(A)(i) Except as provided in subdivision (A)(ii), a 
subpoena may be authorized and issued by a committee or 
subcommittee under subparagraph (1)(B) in the conduct of an 
investigation or series of investigations or activities only 
when authorized by the committee or subcommittee, 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 under such rules and 
under such limitations as the committee may prescribe. 
Authorized subpoenas shall be signed by the chairman of the 
committee or by a member designated by the committee.

           *         *         *         *         *

    (B) A subpoena duces tecum may specify terms of return 
other than at a meeting or hearing of the committee or 
subcommittee authorizing the subpoena.
    (C) Compliance with a subpoena issued by a committee or 
subcommittee under subparagraph (1)(B) may be enforced only as 
authorized or directed by the House.

           *         *         *         *         *

    The committee also exercises authority under a number of 
congressional mandates.

                           5 U.S.C. Sec. 2954


            Information to committees of Congress on request

    An Executive agency, on request of the Committee on 
Government Reform of the House of Representatives, or of any 
seven members thereof, or on request of the Committee on 
Governmental Affairs 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 under this title 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 or 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

           *         *         *         *         *


    (d) 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 Committees on Government Operations and 
Appropriations of the House, and the committees with 
jurisdiction over legislation related to the operation of each 
executive agency.\2\
---------------------------------------------------------------------------
    \2\ 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.\3\
---------------------------------------------------------------------------
    \3\ 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.\4\
---------------------------------------------------------------------------
    \4\ 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.\5\
---------------------------------------------------------------------------
    \5\ 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.\6\ From 1953 until January 1963, the 
committee's membership remained at 30.\7\
---------------------------------------------------------------------------
    \6\ H. Res. 60, 83d Congress, 1st session (97 Cong. Rec. 194).
    \7\ 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.\8\ 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).
---------------------------------------------------------------------------
    \8\ 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.\9\ The Congressional Record indicates the reasons 
underlying that change in name were, in part, as follows: \10\
---------------------------------------------------------------------------
    \9\ 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).
    \10\ 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.
    The 105th Congress and the Committee on Government Reform 
and Oversight under the leadership of Chairman Dan Burton (R-
IN) enjoyed a productive year as Congress continued to move 
closer to its goals established with the Contract of America to 
seek to achieve a smaller, smarter, and more efficient common 
sense government.
    In addition to the committee's oversight responsibilities, 
the Government Reform and Oversight Committee has pursued an 
active, ambitious agenda throughout the 105th Congress with its 
ongoing investigation of suspected illegal activities during 
the 1996 elections. The committee and its eight subcommittees 
conducted 252 hearings during the 105th Congress. Hearings 
covered the following diverse range of subjects: the year 2000 
computer crisis; the Federal Employees Health Benefits Program; 
the Persian Gulf war veterans illnesses; oversight and 
implementation of the Results Act; the investigation of 
political fundraising improprieties; and the review of the Food 
and Drug Administration and its regulations respecting 
terminally ill patients and their ability to access desired 
treatments. The committee staff developed a website 
(www.house.gov/reform) to post up-to-minute witness testimonies 
and reports for quick availability.
    The committee continued its oversight responsibilities 
during the 106th Congress. The committee continued with its 
investigation of suspected illegal fundraising during the 1996 
elections. Hearings also covered a wide range of subjects 
including the year 200 computer crisis, the President's 
decision to grant clemency to members of the FALN, oversight of 
Plan Colombia, an aid package to Colombia to fight the drug 
war, the Federal Employees Health Benefits Program, and 
oversight of the FDA. The committee also passed legislation to 
recover millions of dollars from government contractors through 
auditing. The committee also maintained a website 
(www.house.gov/reform) to post not only witness testimonies but 
live coverage of committee hearings.
                           III. Organization

                         A. SUBCOMMITTEES \11\

    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, the Honorable Dan Burton 
of Indiana, at the beginning of the 106th Congress, established 
eight standing subcommittees, which cover the entire field of 
executive expenditures and operations. The names, chairpersons, 
and members of these subcommittees are as follows:
---------------------------------------------------------------------------
    \11\ The chairman and the ranking minority member of the committee 
are ex-offico members of all subcommittees on which they do not hold a 
regular assignment (committee rule 9).
---------------------------------------------------------------------------
          Subcommittee on the Census, Dan Miller, Chairman; 
        members: John T. Doolittle, Thomas M. Davis, Paul Ryan, 
        Mark Souder, Carolyn B. Maloney, Danny K. Davis, and 
        Harold E. Ford, Jr.
          Subcommittee on the Civil Service, Joe Scarborough, 
        Chairman; members: Asa Hutchinson, Constance A. 
        Morella, John L. Mica, Dan Miller, Elijah E. Cummings, 
        Eleanor Holmes Norton, and Thomas H. Allen.
          Subcommittee on Criminal Justice, Drug Policy, and 
        Human Resources, John L. Mica, Chairman; members: Bob 
        Barr, Benjamin A. Gilman, Christopher Shays, Ileana 
        Ros-Lehtinen, Mark Souder, Steven C. LaTourette, Asa 
        Hutchinson, Doug Ose, David Vitter, Patsy T. Mink, 
        Edolphus Towns, Elijah E. Cummings, Dennis J. Kucinich, 
        Rod R. Blagojevich, John F. Tierney, Jim Turner, and 
        Janice D. Schakowsky.
          Subcommitte on the District of Columbia, Thomas M. 
        Davis, Chairman; members: Constance A. Morella, Stephen 
        Horn, Joe Scarborough, Eleanor Holmes Norton, Carolyn 
        B. Maloney, and Edolphus Towns.
          Subcommittee on Government Management, Information, 
        and Technology, Stephen Horn, Chairman; members: Judy 
        Biggert, Thomas M. Davis, Greg Walden, Doug Ose, Paul 
        Ryan, Jim Turner, Paul E. Kanjorski, Major R. Owens, 
        Patsy T. Mink, and Carolyn B. Maloney.
          Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs, David M. McIntosh, 
        Chairman; members: Paul Ryan, Bob Barr, Lee Terry, Greg 
        Walden, Helen Chenoweth-Hage, John T. Doolittle, David 
        Vitter, Dennis J. Kucinich, Tom Lantos, Paul E. 
        Kanjorski, Bernard Sanders, and Harold E. Ford, Jr.
          Subcommittee on National Security, Veterans Affairs, 
        and International Relations, Christopher Shays, 
        Chairman; members: Mark Souder, Ileana Ros-Lehtinen, 
        John M. McHugh, John L. Mica, David M. McIntosh, Mark 
        Sanford, Lee Terry, Judy Biggert, Helen Chenoweth-Hage, 
        Rod R. Blagojevich, Tom Lantos, Robert E. Wise, Jr., 
        Gary A. Condit, John A. Tierney, Thomas H. Allen, 
        Edolphus Towns, Bernard Sanders, and Janice D. 
        Schakowsky.
          Subcommittee on the Postal Service, John M. McHugh, 
        Chairman; members: Mark Sanford, Benjamin A. Gilman, 
        Steven C. LaTourette, Dan Miller, Chaka Fattah, Major 
        R. Owens, and Danny K. Davis.

             B. RULES OF THE COMMITTEE ON GOVERNMENT REFORM

    Rule XI, clause 1(a)(1)(A) of the House of Representatives 
provides:

          Except as provided in subdivision (B), the Rules of 
        the House are the rules of its committees and 
        subcommittees so far as applicable.
          (B) 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, each 
        shall be privileged in committees and subcommittees and 
        shall be decided without debate.

    Rule XI, clause 2(a)(1) of the House of Representatives 
provides, in part:

          Each standing committee shall adopt written rules 
        governing its procedures. * * *

    In accordance with this, the Committee on Government 
Reform, on February 3, 1999, adopted the rules of the 
committee:

                     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 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 a.m., when the House is 
in session. 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, clause 
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 XIII, clauses 2-
4.
    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, unless the House is in session on such days) 
before consideration of such proposed report in subcommittee or 
full committee. Any report will be considered as read if 
available to the members at least 24 hours before 
consideration, excluding Saturdays, Sundays, and legal holidays 
unless the House is in session on such days. 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. 
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, clause 2(l) and Rule XIII, clause 
3(a)(1). The time allowed for filing such views shall be three 
calendar days, beginning on the day of notice, but excluding 
Saturdays, Sundays, and legal holidays (unless the House is in 
session on such a day), 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.
    An investigative or oversight report may be filed after 
sine die adjournment of the last regular session of Congress, 
provided that if a member gives timely notice of intention to 
file supplemental, minority or additional views, that member 
shall be entitled to not less that seven calendar days in which 
to submit such views for inclusion with the report.
    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.--Record Votes

    A record vote 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 eight 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 judgement, 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 X, clauses 6, 7 
and 9, 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 X, clauses 6, 7 
and 9, 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, 
with the concurrence of the ranking minority member, or the 
committee determines by a vote, that there is good cause to 
begin such hearings sooner. So that the chairman of the full 
committee may coordinate the committee facilities and hearings 
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 and, when appearing in a non-governmental 
capacity, provide a curriculum vitae and a listing of any 
Federal Government grants and contracts received in the 
previous fiscal year.
        [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

    (1) A committee member may question a witness only when 
recognized by the chairman for that purpose. In accordance with 
House Rule XI, clause 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.
    (2) The chairman, with the concurrence of the ranking 
minority member, or the committee by motion, may permit an 
equal number of majority and minority members to question a 
witness for a specified, total period that is equal for each 
side and not longer than thirty minutes for each side.
    (3) The chairman, with the concurrence of the ranking 
minority member, or the committee by motion, may permit 
committee staff of the majority and minority to question a 
witness for a specified, total period that is equal for each 
side and not longer than thirty minutes for each side.
    (4) Nothing in paragraph (2) or (3) affects the rights of a 
Member (other than a Member designated under paragraph (2)) to 
question a witness for 5 minutes in accordance with paragraph 
(1) after the questioning permitted under paragraph (2) or (3). 
In any extended questioning permitted under paragraph (2) or 
(3), the chairman shall determine how to allocate the time 
permitted for extended questioning by majority members or 
majority committee staff and the ranking minority member shall 
determine how to allocate the time permitted for extended 
questioning by minority members or minority committee staff. 
The chairman or the ranking minority member, as applicable, may 
allocate the time for any extended questioning permitted to 
staff under paragraph (3) to members.

               Rule 15.--Investigative Hearing Procedures

    Investigative hearings shall be conducted according to the 
procedures in House Rule XI, clause 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 
witnesses.

                     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.--Audio and Visual Coverage of Committee Proceedings

    (1) An open meeting or hearing of the committee or a 
subcommittee may be covered, in whole or in part, by television 
broadcast, radio broadcast, Internet broadcast, and still 
photography, unless closed subject to the provisions of House 
Rule XI, clause 2(g). Any such coverage shall conform with the 
provisions of House Rule XI, clause 4.
    (2) Use of the Committee Broadcast System shall be fair and 
nonpartisan, and in accordance with House Rule XI, clause 4(b), 
and all other applicable rules of the House of Representatives 
and the Committee on Government Reform. Members of the 
committee shall have prompt access to a copy of coverage by the 
Committee Broadcast System, to the extent that such coverage is 
maintained.
    (3) Personnel providing coverage of an open meeting or 
hearing of the committee or a subcommittee by Internet 
broadcast, other than through the Committee Broadcast System, 
shall be currently accredited to the Radio and Television 
Correspondents' Galleries.

                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, clause 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, clause 2(c);
          (c) Submit to the Committee on the Budget views and 
        estimates required by House Rule X, clause 4(f), 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;
          (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; and
          (g) Will designate a vice chairman from the majority 
        party.

                     Rule 19.--Commemorative Stamps

    The committee has adopted the policy that the determination 
of the subject matter of commemorative stamps properly is for 
consideration by the Postmaster General and that the committee 
will not give consideration to legislative proposals for the 
issuance of commemorative stamps. It is suggested that 
recommendations for the issuance of commemorative stamps be 
submitted to the Postmaster General.
                     IV. Activities, 104th Congress

                                SUMMARY

    1. In the 106th Congress, the committee approved and 
submitted to the House of Representatives 11 investigative 
reports. In addition, the committee issued 3 committee prints.
    2. In the 106th Congress, 530 bills and resolutions were 
referred to the committee and studied. Of these, the committee 
reported 35. In addition, 22 Memorials, 6 Petitions, and 6 
Presidential messages were referred to the committee.
    3. Pursuant to its duty of studying reports of the 
Comptroller General, the Congress officially received 1,754 
such reports during the 106th Congress, and the committee 
studied 68. In addition, 1,418 Executive communications were 
referred to the committee under clause 2 of Rule XIV of the 
House of Representatives.
    4. The full committee met 71 days during the 106th Congress 
while the subcommittees met a total of 269 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 106th Congress, the Committee on Government 
Reform approved and submitted to the Congress eleven 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. 106-50): ``A Citizen's Guide 
        on Using the Freedom of Information Act and the Privacy 
        Act of 1974 To Request Government Records.'' 
        (Subcommittee on Government Management, Information, 
        and Technology)
          Second Report (H. Rept. 106-170): ``Making the 
        Federal Government Accountable: Enforcing the Mandate 
        for Effective Financial Management.'' * (Subcommittee 
        on Government Management, Information, and Technology)
---------------------------------------------------------------------------
    * Denotes report accompanied by additional, dissenting, minority, 
separate, or supplemental views.
---------------------------------------------------------------------------
          Third Report (H. Rept. 106-488): ``The FALN and 
        Macheteros Clemency: Misleading Explanations, A 
        Reckless Decision, A Dangerous Message.'' *
          Fourth Report (H. Rept. 106-556): ``The Department of 
        Defense Anthrax Vaccine Immunization Program: Unproven 
        Force Protection.'' * (Subcommittee on National 
        Security, Veterans Affairs, and International 
        Relations)
---------------------------------------------------------------------------
    * Denotes report accompanied by additional, dissenting, minority, 
separate, or supplemental views.
---------------------------------------------------------------------------
          Fifth Report (H. Rept. 106-802): ``Making the Federal 
        Government Accountable: Enforcing the Mandate for 
        Effective Financial Management.'' * (Subcommittee on 
        Government Management, Information, and Technology)
          Sixth Report (H. Rept. 106-977): ``The Vaccine Injury 
        Compensation Program: Addressing Needs and Improving 
        Practices.'' (Subcommittee on Criminal Justice, Drug 
        Policy, and Human Resources)
          Seventh Report (H. Rept. 106-1009): ``Non-Binding 
        Legal Effect of Agency Guidance Documents.'' * 
        (Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs)
          Eighth Report (H. Rept. 106-1023): ``The Failure to 
        Produce White House E-Mails: Threats, Obstruction, and 
        Unanswered Questions.'' *
          Ninth Report (H. Rept. 106-1024): ``Management 
        Practices at the Office of Workers' Compensation 
        Programs, U.S. Department of Labor.'' * (Subcommittee 
        on Government Management, Information, and Technology)
          Tenth Report (H. Rept. 106-1027): ``Janet Reno's 
        Stewardship of the Justice Department: A Failure to 
        Serve the Ends of Justice.'' *
          Eleventh Report (H. Rept. 106-1037: ``The Tragedy at 
        Waco: New Evidence Examined.'' *

                             B. LEGISLATION

    The legislative jurisdiction of the Committee on Government 
Reform covers a wide range of important governmental 
operations. In accordance with jurisdiction assumed from the 
former Committee on Government Reform and Oversight, 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 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 Administration Expenses Act, the Travel Expenses 
Act, the Employment Act of 1946, and 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, 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.
    During the 106th Congress, the committee reviewed 530 bills 
and resolutions referred to it and reported 85 to the House. 
The measures reported or ordered reported are discussed more 
fully in part two below. However, they are listed with the name 
of the subcommittee that initially considered them:
          H.R. 28, to provide for greater access to child care 
        services for Federal employees. (Subcommittee on 
        Government Management, Information, and Technology.)
          H.R. 170, to require certain notices in any mailing 
        using a game of chance for the promotion of a product 
        or service, and for other purposes. (Subcommittee on 
        the Postal Service.)
          H.R. 206, to provide for greater access to child care 
        services for Federal employees. (Subcommittee on the 
        Civil Service.)
          H.R. 208, to amend title 5, United States Code, to 
        allow for the contribution of certain rollover 
        distributions to accounts in the Thrift Savings Plan, 
        to eliminate certain waiting-period requirements for 
        participating in the Thrift Savings Plan, and for other 
        purposes. (Subcommittee on the Civil Service.)
          H.R. 391, to amend chapter 35 of title 44, United 
        States Code, for the purpose of facilitating compliance 
        by small businesses with certain Federal paperwork 
        requirements applicable to small businesses, and for 
        other purposes. (Subcommittee on National Economic 
        Growth, Natural Resources, and Regulatory Affairs.)
          H.R. 416, to provide for the rectification of certain 
        retirement coverage errors affecting Federal employees, 
        and for other purposes. (Subcommittee on the Civil 
        Service.)
          H.R. 436, to reduce waste, fraud, and error in 
        Government programs by making improvements with respect 
        to Federal management and debt collection practices, 
        Federal payment systems, Federal benefit programs, and 
        for other purposes. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 437, to provide for a Chief Financial Officer in 
        the Executive Office of the President. (Subcommittee on 
        Government Management, Information, and Technology.)
          H.R. 457, to amend title 5, United States Code, to 
        increase the amount of leave time available to a 
        Federal employee in any year in connection with serving 
        as an organ donor, and for other purposes. 
        (Subcommittee on the Civil Service.)
          H.R. 472, to amend title 13, United States Code, to 
        require the use of post census local review as part of 
        each decennial census. (Subcommittee on the Census.)
          H.R. 683, to facilitate the recruitment of temporary 
        employees to assist in the conduct of the 2000 
        decennial census of population. (Subcommittee on the 
        Census.)
          H.R. 807, to amend title 5, United States Code, to 
        provide portability of service credit for persons who 
        leave employment with the Federal Reserve Board to take 
        positions with other Government agencies. (Subcommittee 
        on the Civil Service.)
          H.R. 915, to authorize a cost of living adjustment in 
        the pay of administrative law judges. (Subcommittee on 
        the Civil Service.)
          H.R. 928, to require that the 2000 decennial census 
        include either a general or targeted followup mailing 
        of census questionnaires, whichever, in the judgment of 
        the Secretary of Commerce, will be more effective in 
        securing the return of census information from the 
        greatest number of households possible. (Subcommittee 
        on the Census.)
          H.R. 929, to amend title 13, United States Code, to 
        require that the questionnaire used in taking the 2000 
        decennial census be made available in certain languages 
        besides English. (Subcommittee on the Census.)
          H.R. 974, to establish a program to afford high 
        school graduates from the District of Columbia the 
        benefits of in-State tuition at state colleges and 
        universities outside the District of Columbia, and for 
        other purposes. (Subcommittee on the District of 
        Columbia.)
          H.R. 1009, to authorize the awarding of grants to 
        cities, counties, tribal organizations, and certain 
        other entities for the purpose of improving public 
        participation in the 2000 decennial census. 
        (Subcommittee on the Census.)
          H.R. 1010, to improve participation in the 2000 
        decennial census by increasing the amounts available to 
        the Bureau of the Census for marketing, promotion, and 
        outreach. (Subcommittee on the Census.)
          H.R. 1058, to promote greater public participation in 
        decennial censuses by providing for the expansion of 
        the educational program commonly referred to as the 
        ``Census in Schools Project.'' (Subcommittee on the 
        Census.)
          H.R. 1074, to provide Governmentwide accounting of 
        regulatory costs and benefits, and for other purposes. 
        (Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs.)
          H.R. 1219, to amend the Office of Federal Procurement 
        Policy Act and the Miller Act, relating to payment 
        protections for persons providing labor and materials 
        for Federal construction projects. (Subcommittee on 
        Government Management, Information, and Technology.)
          H.R. 1442, to amend the Federal Property and 
        Administrative Services Act of 1949 to continue and 
        extend authority for transfers to State and local 
        governments of certain property for law enforcement, 
        public safety, and emergency response purposes. 
        (Subcommittee on Government Management, Information, 
        and Technology.)
          H.R. 1788, to deny Federal public benefits to 
        individuals who participated in Nazi persecution. 
        (Subcommittee on Government Management, Information, 
        and Technology.)
          H.R. 1827, to improve the economy and efficiency of 
        Government operations by requiring the use of recovery 
        audits by Federal agencies. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 2842, to amend chapter 89 of title 5, United 
        States Code, concerning the Federal Employees Health 
        Benefits [FEHB] Program, to enable the Federal 
        Government to enroll an employee and his or her family 
        in the FEHB Program when a State court orders the 
        employee to provide health insurance coverage for a 
        child of the employee but the employee fails to provide 
        the coverage. (Subcommittee on the Civil Service.)
          H.R. 2885, to provide uniform safeguards for the 
        confidentiality of information acquired for exclusively 
        statistical purposes, and to improve the efficiency and 
        quality of Federal statistics and Federal statistical 
        programs by permitting limited sharing of records among 
        designated agencies for statistical purposes under 
        strong safeguards. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 2904, to amend the Ethics in Government Act of 
        1978 to reauthorize funding for the Office of 
        Government Ethics. (Subcommittee on the Civil Service.)
          H.R. 3137, to amend the Presidential Transition Act 
        of 1963 to provide for training of individuals a 
        President-elect intends to nominate as department heads 
        or appoint to key positions in the Executive Office of 
        the President. (Subcommittee on Government Management, 
        Information, and Technology.)
          H.R. 3995, to establish procedures governing the 
        responsibilities of court-appointed receivers who 
        administer departments, offices, and agencies of the 
        District of Columbia government. (Subcommittee on the 
        District of Columbia.)
          H.R. 4040, a bill to amend title 5, United States 
        Code, to provide for the establishment of a program 
        under which long-term care insurance is made available 
        to Federal employees, member of the uniformed services, 
        and civilian and military retirees, provide for the 
        correction of retirement coverage errors under chapters 
        83 and 84 of such title, and for other purposes. 
        (Subcommittee on the Civil Service.)
          H.R. 4049, to establish the Commission for the 
        Comprehensive Study of Privacy Protection.
          H.R.(Subcommittee on Government Management, 
        Information, and Technology.)
          H.R. 4110, to amend titled 44, United States Code, to 
        authorize appropriations for the National Historical 
        Publications and Records Commission for fiscal years 
        2002 through 2005. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 4387, to provide that the School Governance 
        Charter Amendment Act of 2000 shall take effect upon 
        the date such Act is ratified by the voters of the 
        District of Columbia. (Subcommittee on Government 
        Management, Information, and Technology.)
          H.R. 4437, to grant the U.S. Postal Service the 
        authority to issue semipostals, and for other purposes. 
        (Subcommittee on the Postal Service.)
          H.R. 4744, to require the General Accounting Office 
        to report to Congress on economically significant rules 
        of Federal agencies, and for other purposes. 
        (Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs.)
    There were also 50 bills dealing with the naming or 
renaming of U.S. Postal Offices. A description of these bills 
is located under the Subcommittee on the Postal Service section 
found on page 483.

                        OTHER LEGISLATIVE ACTION

    The following bills were referred to the Committee on 
Government Reform. After analysis by committee staff members 
the committee was discharged from further consideration, and 
therefore, the bills were not reported. They are listed as 
follows:
          H. Con. Res. 317, expressing the sense of the 
        Congress on the death on John Cardinal O'Connor, 
        Archbishop of New York.
          H. Con. Res. 381, expressing the sense of the 
        Congress that there should be established a National 
        Health Center Week to raise awareness of health 
        services provided by community, migrant, and homeless 
        health centers.
          H. Res. 264, expressing the sense of the House of 
        Representatives honoring Lance Armstrong, America's 
        premier cyclist, and his winning performance in the 
        1999 Tour de France. (Subcommittee on the Civil 
        Service.)
          H. Res. 293, expressing the sense of the House of 
        Representatives in support of ``National Historically 
        Black Colleges and Universities Week.'' (Subcommittee 
        on the Civil Service.)
          H. Res. 376, expressing the sense of the House of 
        Representatives in support of ``National Children's 
        Memorial Day.'' (Subcommittee on the Civil Service.)
          H. Res. 677, expressing the commitment of the Member 
        of the House of Representatives to fostering a 
        productive and collegial partnership with the 43rd 
        President.
          H.R. 417, to amend the Federal Election Campaign Act 
        of 1971 to reform the financing of campaigns for 
        elections for Federal office, and for other purposes. 
        (Subcommittee on the Civil Service.)
          H.R. 433, to restore the management and personnel 
        authority of the Mayor of the District of Columbia.
          H.R. 642, to redesignate the Federal building located 
        at 701 South Santa Fe Avenue in Compton, CA, and known 
        as the Compton Main Post Office, as the ``Mervyn 
        Malcolm Dymally Post Office Building.'' (Subcommitte on 
        the Postal Service.)
          H.R. 1907, to amend title 35, United States Code, to 
        provide enhanced protection for inventors and 
        innovators, protect patent terms, reduce patent 
        litigation, and for other purposes.
          H.R. 3312, to clarify the Administrative Dispute 
        Resolution Act of 1996 to authorize the Merit Systems 
        Protection Board to establish under such act a 3-year 
        pilot program that will provie a voluntary early 
        intervention alternative dispute resolution process to 
        assist Federal agencies and employees in resolving 
        certain personnel actions and disputes in 
        administrative programs. (Subcommittee on the Civil 
        Service.)
          H.R. 3488, to designate the U.S. Post Office located 
        at 60 Third Avenue in Long Branch, NJ, as the ``Pat 
        King Post Office Building.'' (Subcommitte on the Postal 
        Service.)
          H.R. 4404, to permit the payment of medical expenses 
        incurred by the U.S. Park Police in the performance of 
        duty to be made directly by the National Park Service, 
        to allow for waiver and indemnigication in mutual law 
        enforcement agreements between the National Park 
        Service and a State or political subdivision which 
        required by State law, and for other purposes. 
        (Subcommittee on the Civil Service.)
          H.R. 4519, to amend the Public Buildings Act of 1959 
        concerning the safety and security of children enrolled 
        in childcare facilities located in public buildings 
        under the control of the General Services 
        Administration. (Subcommittee on Government Management, 
        Information, and Technology.)
          H.R. 4853, to redesignate the facility of the U.S. 
        Postal Service located at 1568 South Glen Road in South 
        Euclid, OH, as the ``Arnold C. D'Amico Station.'' 
        (Subcommitte on the Postal Service.)
          H.R. 4931, to provide for the training or orientation 
        of individuals, during a Presidential transition, who 
        the President intends to appoint to certain key 
        positions, to provide for a study and report on 
        improving the financial disclosure process for certain 
        Presidential nominees, and for other purposes. 
        (Subcommittee on Government Management, Information, 
        and Technology.)
          H.R. 5157, to amend title 44, United States Code, to 
        ensure preservation of the records of the Freedmen's 
        Bureau. (Subcommittee on Government Management, 
        Information, and Technology.)
          S. 2686, a bill to amend chapter 36 of title 39, 
        United States Code, to modify rates relating to reduced 
        rate mail matter, and for other purposes.
          S. 3062, a bill to modify the date on which the Mayor 
        of the District of Columbia submits a performance 
        accountability plan to Congress, and for other 
        purposes. (Subcommittee on the District of Columbia.)

                        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 106th 
Congress.

                          D. COMMITTEE PRINTS

    Three committee prints, resulting from work by the 
committee staff, were issued during the 106th Congress, as 
follows:
          ``Rules of the Committee on Government Reform, 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.) (February 1999.)
          ``Title 5, United States Code, Government 
        Organization and Employees.'' (Subcommittee on the 
        Civil Service.) (May 1999.)
          ``Rules of the Committee on Government Reform, 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 2000.)

       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 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 a subcommittee for 
action. Furthermore, in implementation of section 236 of the 
Legislative Reorganization Act of 1970, the committee regularly 
receives GAO reports that are not addressed to Congress but 
contain recommendations to heads of the Federal agencies. The 
committee received a total of 1,754 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 session, the committee 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 that 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 to the Committee on House Administration.

    On March 31, 1999, Committee Chairman Dan Burton submitted 
the oversight plans of each House committee together with 
recommendations to ensure the most effective coordination of 
such plans and otherwise achieve the objectives of the House 
Rules.

         RECOMMENDATIONS OF THE COMMITTEE ON GOVERNMENT REFORM

             Oversight Plans of the Committees of the House

    Congressional oversight, as envisioned by the majority 
leadership of the House, is ultimately about the public 
interest, the liberty of citizens, and the taxpayers' dollars. 
The ability, and duty, of popularly-elected representatives to 
oversee the executive branch is a fundamental component of the 
system of checks and balances established by the founding 
fathers. The Rules of the House of Representatives ensure 
Congress' responsibility to the public in this regard. Pursuant 
to House Rule X, clause 2(b)(1), each standing committee of the 
House shall review and study on a continuing basis--
          (A) the application, administration, execution, and 
        effectiveness of laws and programs addressing subjects 
        within its jurisdiction;
          (B) the organization and operation of Federal 
        agencies and entities having responsibilities for the 
        administration and execution of laws and programs 
        addressing subjects within its jurisdiction;
          (C) any conditions or circumstances that may indicate 
        the necessity or desirability of enacting new or 
        additional legislation addressing subjects within its 
        jurisdiction (whether or not a bill or resolution has 
        been introduced with respect thereto); and
          (D) future research and forecasting on subjects 
        within its jurisdiction.
    Congressional oversight in the 106th Congress focused on 
three fundamental efforts:
    (1) Review the implementation by the executive branch of 
recent policy changes enacted by Congress to assess their 
effectiveness. Congress enacted significant reform legislation 
in the 105th Congress. These reforms include balancing the 
budget, restructuring the Internal Revenue Service, improving 
public education in our classrooms, and providing tax relief to 
small businesses, the self-employed, and families with 
children. Other reform efforts include healthcare reforms, 
anticrime legislation that is helping to significantly lower 
crime rates, protecting our children from pornography on the 
Internet, strengthening our military, and cracking down on 
deadbeat parents.
    Many of these reforms have already resulted in major cost 
savings, improvements in the efficiency of the Federal 
Government, and improvements to the health, safety, and welfare 
of American citizens. But they will need monitoring and 
oversight by the Congress to ensure their success as effective 
legislative changes. In their oversight plans for the 106th 
Congress, House committees recognize the importance of their 
responsibility to oversee the implementation of recent 
legislative reforms. The Government Reform Committee recommends 
that House committees fully utilize the auditing and oversight 
services of the General Accounting Office, the Congressional 
Research Service, and agency Inspectors General to augment 
their efforts to oversee the implementation of these critical 
legislative reforms.
    (2) Review existing government programs in order to inform 
the public and build a compelling case for further change and 
reform. While the legislative successes of the 105th Congress 
are laudable, many other opportunities for streamlining, 
improving efficiency, and reducing costs to the American 
taxpayer exist. The House committee oversight plans reveal 
priorities areas for additional programmatic and agency reform 
efforts in the 106th Congress, including: public education 
system reform, Social Security trust fund solvency, fundamental 
tax code reform; and reforms to assure minimal year 2000 
computer conversion problems. Most committees recognize the 
importance of the Government Performance and Results Act as a 
tool for building the case for reform. The use of this 
important tool is affirmed in most committee oversight plans, 
but is most evident as it filters into the daily work of 
committees, particularly in hearings and legislative 
decisionmaking. The Government Reform Committee recommends that 
each House committee continue using agency strategic plans and 
performance plans mandated by the Results Act as a basis for 
conducting oversight of agencies and programs in its 
jurisdiction, and for holding government more accountable for 
the activities and services it delivers.
    (3) Review government programs to root out waste, fraud, 
and abuse, thereby maximizing accountability in the Federal 
Government to the public. The merits of Federal programs and 
activities are, of course, subject to intense debate-
particularly in times of keen competition for limited Federal 
resources. However, the importance of efficient, effective, and 
honest management is not a debatable issue, and is perhaps even 
more important in an era of budget surpluses. Fraud, waste, 
abuse, and mismanagement serve no legitimate constituency or 
political interest. They cheat both the taxpayers and the 
intended beneficiaries of the programs and activities they 
affect. They also undermine the confidence of the American 
people in the capacity and will of the Federal Government to 
perform its functions effectively. The Government Reform 
Committee recommends that House committees rigorously conduct 
oversight of the problems identified in (1) the General 
Accounting Office's ``High Risk List'' of Federal programs at 
risk for serious fraud, waste, and abuse, (2) the General 
Accounting Office's January 1999 report entitled, ``Major 
Management Challenges and Program Risks'' [GAO/OCG-99-8]; and 
(3) agency Inspectors General semi-annual and annual reports to 
Congress. These documents are an important source of serious 
problems currently festering in the Federal Government that 
need immediate attention by Congress.
2. Investigations
            a. Johnny Chung: Foreign Connections, Foreign 
                    Contributions, May 11, 1999.
    The committee held a hearing into the illegal activities of 
Johnny Chung in the 1996 Presidential election. Mr. Chung was 
questioned about contributions to the DNC and various 
delegations of foreign officials and businessmen that he 
brought to the White House. Mr. Chung testified about how the 
Democratic National Committee [DNC] began to solicit him for 
many different fundraisers in exchange for access to officials, 
including President Clinton. Mr. Chung confirmed reports that 
the Chinese Government was funneling contributions into United 
States elections. At a meeting in August 1996, General Ji 
Shengde, chief of Chinese Military Intelligence, gave Mr. Chung 
$300,000 to funnel into the Democratic party. In total, Mr. 
Chung contributed over $366,000 to the DNC. Mr. Chung also 
advised the committee that he witnessed Charles Parrish, a 
consular official at the United States Embassy in Beijing, take 
a bag full of cash and passports so visas could be issued to 
Chinese nationals visiting the United States.
            b. White House Insider Mark Middleton: His Ties to John 
                    Huang, Charlie Trie, and Other Campaign Finance 
                    Figures, August 5, 1999.
    At this hearing, the committee called Mark Middleton to 
testify about his knowledge of alleged campaign financing 
violations during the 1992 and 1994 Federal election cycles. 
Mr. Middleton had relationships with many of the individuals 
who have since pled guilty to numerous campaign financing 
schemes to funnel money to the Clinton/Gore election and 
reelection efforts, as well as the Democratic National 
Committee. Documents and testimony showed that he had 
information related to John Huang, James Riady, Charlie Trie, 
and other individuals related to the committee's investigation. 
In addition, several allegations of illegal fundraising had 
been made against Mr. Middleton himself. Mr. Middleton was 
subpoenaed to testify. However, when he appeared before the 
committee he refused to testify, invoking his fifth amendment 
privilege against self-incrimination.
            c. The Role of John Huang and the Riady Family in Political 
                    Fundraising, December 15-17, 1999.
    The committee received testimony from John Huang, a central 
figure in the committee's campaign finance investigation, about 
his activities in the 1992 and 1996 Presidential elections. 
Both Mr. Huang and James Riady, Huang's former boss at the 
Lippo Group, are longtime associates of President Clinton and 
Vice President Gore. Mr. Huang testified that he and Mr. Riady 
conspired to funnel $1 million in illegal contributions to 
President Clinton's 1992 Presidential campaign. After President 
Clinton's election, Mr. Huang took a job at the Department of 
Commerce in July 1994, where Mr. Huang continued to solicit 
political contributions. In November 1995, after the 
President's personal intervention, Mr. Huang was hired as a 
fundraiser at the DNC. Mr. Huang's main outside contact and 
fundraising partner was Yah Lin ``Charlie'' Trie, another 
central figure in the committee's investigation. Mr. Huang 
embarked on a series of fundraisers that took in mostly illegal 
foreign and conduit contributions. The DNC returned almost $3 
million raised by Mr. Huang. Mr. Huang also had unfettered 
access to President Clinton and the White House which he 
visited over 80 times.
            d. The State Department's Handling of Allegations of Visa 
                    Fraud and Other Irregularities at the United States 
                    Embassy in Beijing, July 29, 1999.
    The committee conducted an investigation of allegations 
that the chief of the Non-Immigrant Visa Section in the United 
States Embassy in Beijing, Charles M. Parish, was both 
improperly issuing visas to Chinese citizens, and accepting 
gratuities from Chinese citizens. The first witness at this 
hearing was Mr. Parish. Mr. Parish invoked his fifth amendment 
rights rather than testify regarding his activities in Beijing. 
The second panel of witnesses were State Department personnel 
who investigated Mr. Parish: Peter Bergin, Acting Assistant 
Secretary and Director of Diplomatic Security; Jacquelyn L. 
Williams-Bridgers, Inspector General for the Department of 
State; Bonnie R. Cohen, Under Secretary for Management; Edward 
W. Gnehm, Director General of the Foreign Service; Mary Ryan, 
Assistant Secretary for Consular Affairs; and Don Schurman, 
former Regional Security Officer. The second panel was 
questioned about the adequacy of the investigation of Mr. 
Parish, including the failure to secure important evidence 
regarding Mr. Parish, the failure to obtain important evidence 
about Mr. Parish, and the failure to discipline Mr. Parish for 
his improper conduct.
            e. National Problems, Local Solutions: Federalism at Work.
    The committee conducted an investigation focusing on 
innovative and successful reforms in government programs at the 
State and local levels. In so doing, the committee sought to 
determine which existing Federal regulations and programs best 
assisted State and local governments, and which hindered 
progress. The committee also explored new ways that the Federal 
Government could best assist State and local governments. The 
committee's investigation focused on four major issues: 
criminal justice; taxes; education; and, welfare reform.
    The committee was in contact with numerous States about the 
progress they had made in the areas outlined above. After 
reviewing many of the State and local programs in these areas, 
the committee held three hearings to highlight the reforms at 
the State and local levels and to demonstrate that many of the 
solutions to the problems facing America originate at the State 
and local level, rather than with the Federal Government.
            Part I, Fighting Crime in the Trenches, March 3, 1999.
    At this hearing, the committee heard testimony from New 
York City Mayor Rudolph W. Giuliani, who has had unparalleled 
success in lowering the crime rate in America's largest city. 
Mayor Giuliani explained his approach to fighting both violent 
and non-violent crime in an effort to stem general disrespect 
for the law. The committee also heard from State Attorney Harry 
Shorstein of Jacksonville, FL. Mr. Shorstein explained his 
innovative policies and successes in the area of juvenile 
justice that have also gained him broad bipartisan support. 
According to Mr. Shorstein, the keys to tackling juvenile crime 
include early intervention, truancy prevention, incarceration 
of habitual violent juvenile offenders as adults, and 
rehabilitation and aftercare. Philadelphia Police Commissioner 
John F. Timoney also testified.
            Part II, Tax Reform in the States, April 14 and 15, 1999.
    At this hearing, the committee heard testimony from 
Governors Christine Whitman of New Jersey, Mike Huckabee of 
Arkansas, Jim Gilmore of Virginia, and George Pataki of New 
York. Each Governor spoke about the tax plans they had 
implemented in their respective States. Governor Whitman 
discussed the 17 tax cuts she has enacted since taking office 
in 1994. The tax cuts resulted in $6 billion returned to the 
New Jersey economy and a surplus of $700 million. Governor 
Huckabee explained his sweeping overhaul of Arkansas' income 
tax system, including the $80 million tax cut package signed 
into law in 1997. Governor Gilmore spoke about his popular 
phase out of the ``car tax'' in Virginia, as well as his 
program of tax credits to promote business growth in Virginia. 
Governor Pataki discussed his 25 percent income tax cut in New 
York. The hearing was held on tax day to call attention to the 
fact that the average family today pays more in taxes than it 
spends on food, clothing, shelter, and transportation combined. 
All of the Governors testified that by cutting taxes, their 
overall economy grew.
            Part III, Welfare Reform is Working: A Report on State and 
                    Local Initiatives, April 22, 1999.
    In 1996, the Federal Government passed the Personal 
Responsibility and Work Opportunity Act, or welfare reform. 
Through the act, the Federal Government ultimately gave all 
States greater flexibility to achieve reforms that would work 
for their citizens. Wisconsin Governor Tommy Thompson testified 
on his successful Wisconsin Works program. To assist in the 
transition from welfare to work, Wisconsin instituted programs 
to assist recipients in their struggle for independence, such 
as programs for childcare, health care, job search assistance, 
and transportation. Virginia Secretary of Health and Human 
Services Claude A. Allen spoke about Virginia's welfare reform 
efforts. Since 1995, Virginia's welfare rolls have dropped 47 
percent. The chairman of Florida's Board of Directors for its 
welfare program, Michael Poole, testified about Florida's 
unique, independent oversight body for the welfare program, 
composed of private sector interests and State agency 
directors. Representing the private sector was Julia Taylor, 
CEO of YW Works. YW Works is a for-profit company that the 
State of Wisconsin contracted with to administer its welfare 
program in one region of Milwaukee. Jason Turner, the 
commissioner of New York City's Department of Social Services 
and Human Resources Administration, testified about the efforts 
of the Giuliani administration. New York City's welfare rolls 
had dropped by 400,000 since Mayor Giuliani instituted his 
reforms. The hearing demonstrated that with fewer Federal 
Government regulations, the States were able to more 
effectively serve their citizens.
            f. HUD Losing $1 Million Per Day--Promised ``Reforms'' Slow 
                    in Coming, March 23, 1999.
    In a previous hearing, the committee heard testimony about 
Federal programs that are wasting billions of taxpayer dollars 
a year. As a result of that hearing, Chairman Burton and 
Chairman Young of the Appropriations Committee cosigned a 
letter to every major Federal agency. The letter stated that 
they wanted to see serious efforts by these agencies to resolve 
these kinds of problems, starting with specific, measurable 
performance goals, and their annual Government Performance and 
Results Act plans.
    On March 23, 1999, the committee held a hearing to focus on 
the Department of Housing and Urban Development [HUD], which at 
the time of the hearing had not yet submitted its annual 
performance report, as required by the Results Act. The hearing 
entitled, ``HUD Losing $1 Million Per Day--Promised ``Reforms'' 
Slow in Coming'' was chaired by Dan Burton. The hearing 
specifically examined HUD's Federal Housing Administration 
[FHA] program.
    FHA is the home mortgage insurer for many people who 
wouldn't ordinarily qualify for a home loan in the private 
marketplace. In his opening statement, Chairman Burton 
expressed his concern about the large number of defaulted FHA 
homes. These properties go back to HUD, and as a result, HUD 
sits on a huge backlog of repossessed properties that become 
poorly managed, run down, and vandalized.
    The committee first heard from Nancy Cooper, District 
Inspector General, Southeast Caribbean District, U.S. 
Department of Housing and Urban Development. She discussed the 
ongoing audit of HUD's single family property management and 
disposition program. The audit was initiated by GAO findings 
from March 1998, which revealed poor property conditions and 
management efficiencies. The IG investigation showed that 
conditions overall had not improved since the GAO study.
    First, they found that there was an inability to turn over 
properties acquired by HUD. Second, sales to homeowners went 
down, while sales to investors went up. Third, HUD's ability to 
maximize returns to the mortgage insurance fund also declined. 
Finally, preliminary data indicated that HUD had not been 
effective in dealing with non-performing contractors.
    The committee also heard from William Apgar, Assistant 
Secretary for Housing, Federal Housing Commissioner, U.S. 
Department of Housing and Urban Development. He talked about a 
different type of HUD. He spoke about the success of FHA. For 
example, by insuring low down payment loans for people with 
less than perfect credit history, FHA has helped 27 million 
American families to become homeowners. He also spoke highly of 
the HUD's new management and marketing approach.
    Gale Cincotta, executive director, National Training and 
Information Center, Chicago; Grace Jackson, volunteer, Roseland 
Neighborhood Housing Services, Chicago; and Carl Edwards, 
president, Organization for a New Eastside, Indianapolis, all 
discussed their own personal experiences with FHA.
    Ms. Cincotta expressed her concern about the increased rate 
of FHA foreclosures, leaving abandoned buildings throughout our 
Nation's neighborhoods. She blamed the FHA foreclosure increase 
on two things. First, the changing of the FHA appraisal process 
to what is called lender select, meaning lenders are able to 
chose their own appraisers. This usually results in houses 
getting over appraised. Second, HUD's mortgage assistance 
program was replaced with the Loss Mitigation Program that 
makes it optional for mortgage bankers to do workouts with 
families that are facing foreclosures. In her written 
testimony, Ms. Cincotta gave several solutions that would 
prevent FHA foreclosures and reduce the number of abandoned 
property.
    Mr. Edwards and Ms. Jackson also talked about the alarming 
rise in FHA foreclosures, and the negative impact this has had 
on both of their communities.
    Mr. Davis, director, Northeast Ohio Coalition for the 
Homeless and Mr. Czerwinski, Associate Director, Resources, 
Community and Economic Development Division, U.S. General 
Accounting Office, addressed the issue of homelessness. Mr. 
Davis focused on the status of the care system for homeless 
persons in Cleveland, OH, and the surrounding Cuyahoga County. 
In particular, he talked about a program operated by the 
Salvation Army that had problems working with HUD. He also 
discussed some modest changes that need to be made that could 
improve the HUD homeless assistance grant.
    Mr. Czerwinski summarized a GAO study that examined how 
well the Federal Government has been at helping State, local, 
and private entities assist homeless people. He urged the need 
for better coordination between the 50 different programs so 
that they could be more effective at providing services.
    The chairman voiced concern regarding the many problems at 
HUD, and expressed an interest in working with Mr. Cuomo to 
resolve these issues as quickly as possible.
            g. Fraud and Waste in Federal Government Programs, February 
                    10, 1999.
    Under House Rules, the Committee on Government Reform has 
the authority to look at the overall economy, efficiency, and 
management of all government operations. Therefore, it was very 
appropriate that the focus of the first full committee hearing 
investigate the waste, fraud, and abuse within Federal 
Government programs.
    The hearing reviewed reports recently delivered to the 
committee, specifically the Inspectors General's reports on the 
top 10 problems in their agency, GAO's ``High Risk List'' 
update, and GAO's ``Major Management Challenges and Program 
Risks.''
    The hearing was entitled, ``Fraud and Waste in Federal 
Government Programs.'' It was held on February 10, 1999, and 
was chaired by Dan Burton. In his opening statement Chairman 
Burton stressed that while it is important to publicize the 
dimensions of these problems, we must also begin to develop and 
enforce solutions, like the Government Performance and Results 
Act.
    Chairman Burton also appealed to appropriators to make 
better use of the Results Act, as well as the high-risk 
information available from the General Accounting Office. 
Appropriators have the authority to make agencies more 
accountable by cutting an agency's funding if it continues to 
waste taxpayers' dollars. Appropriators need to become part of 
the solution.
    The first panel had Inspector Generals from three problem-
plagued agencies, including Mr. Roger C. Viadero, Department of 
Agriculture; Susan Gaffney, Department of Housing and Urban 
Development; and June Gibbs Brown, Department of Health and 
Human Services.
    Mr. Viadero specifically discussed problems in the area of 
food safety and the Food Stamp Program at the Department of 
Agriculture. It was estimated that about $1 billion a year is 
lost in food stamp overpayments. Part of the problem is that 
prisoners and deceased individuals are included as members of 
the households receiving benefits.
    Ms. Gaffney talked about the overwhelming problems HUD is 
having with reinvention and reform, which is primarily due to 
internal control weaknesses. For example, the IG estimated that 
management delays in disposing of more than 41,000 properties 
in its inventory is costing HUD over $1 million per day.
    Ms. Brown discussed how HHS programs that are critical to 
the well being of all Americans are also vulnerable to waste, 
fraud, and abuse. The IG estimated $20.3 billion in net 
overpayments in fee-for-service payments in fiscal year 1997. 
These improper payments could range from inadvertent mistakes 
to outright fraud and abuse. HCFA's corrective action plan is 
to reduce the error rate to 10 percent by year 2002.
    The second panel included Mr. David Walker, Comptroller 
General at the General Accounting Office. His remarks 
highlighted the three major challenges facing the government. 
First, he stressed the importance of addressing high-risk 
areas. Since 1990, GAO has periodically reported to Congress on 
key areas in the Federal Government that are particularly 
vulnerable to waste, fraud, and abuse. The list has grown from 
14 areas in 1990 to 26 areas in 1999. Over that time period, 18 
problems were added, but only 6 have been addressed 
sufficiently to warrant removal.
    Second, he spoke about the urgency of moving toward full 
implementation of a management framework. Congress already has 
established this framework through the Results Act, the Chief 
Financial Officers [CFO] Act of 1990, and related financial 
management legislation, and information technology reforms. 
These laws should be used by agencies to instill a results-
oriented government, improve financial management, and revamp 
information technology practices.
    Unfortunately many agencies continue to struggle to 
implement basic tenets of performance-based management. For 
example, the government spends millions of dollars each year on 
information technology meanwhile the return on investment has 
been disappointing in some cases.
    Third, he said that there needed to be greater attention 
focused on human capital issues in order to achieve the goals 
of a performance-based government. Proper alignment of an 
agency's employees with program goals and strategies is 
essential to achieving program results.
    Chairman Burton expressed a firm commitment to work with 
GAO, department heads, and the Inspectors General to eliminate 
waste and enhance the effectiveness of important government 
services.
            h. The Role of Complementary and Alternative Medicine in 
                    our Health Care System.
    a. Summary.--Based on concerns raised during the 105th 
Congress regarding Federal agencies' prejudice against 
complementary and alternative therapies, the committee 
initiated an inquiry into the role of complementary and 
alternative medicine in the U.S. health care system. While 
complementary and alternative medicine [CAM] usage continues to 
increase, research, regulation, and access have not met the 
needs of many Americans. A 1997 survey in the Journal of the 
American Medical Association showed that 42.1 percent of 
Americans used at least 1 of 16 alternative therapies during 
the previous year. This was up from 33.8 percent in 1990.\12\ 
The survey also indicated that more visits were made to 
alternative practitioners than to U.S. primary care physicians. 
The World Health Organization estimates that between 65 and 80 
percent of the world's population relies on traditional 
medicine as their primary form of health care.\13\ Four basic 
issues arose:
---------------------------------------------------------------------------
    \12\ Eisenberg D.M., Davis R.B., Ettner S.L., et al, Trends in 
Alternative Medicine Use in the United States 1990-1997. JAMA, Vol. 
280: pp. 1569-1575, Nov. 11, 1998.
    \13\ Complementary and Alternative Medicine at the NIH, Vol. III, 
No. 1, p. 3.
---------------------------------------------------------------------------
         Even with the establishment of the Office of 
        Alternative Medicine \14\ at the National Institutes of 
        Health in 1992, research to evaluate the effectiveness 
        of complementary and alternative therapies continues to 
        be inadequate.
---------------------------------------------------------------------------
    \14\ Now the National Center for Complementary and Alternative 
Medicine.
---------------------------------------------------------------------------
         Reliable and useful information regarding 
        complementary and alternative therapies provided from 
        Government resources was woefully inadequate.
         Conventional health care providers who 
        integrate CAM, CAM practitioners, and companies that 
        provide products continue to be challenged with 
        agencies who create barriers to the integration of CAM 
        into our health care system.
         Medical freedom in the United States is very 
        limited. Individuals, especially those with life 
        threatening illnesses, are not fully able to access CAM 
        products and therapies in the United States.
    The U.S. medical model of the 1980's and 1990's is not 
fully addressing the needs of Americans. With the graying of 
our population and the epidemic levels of chronic diseases such 
as cardiac disease, diabetes, depression, arthritis, and 
asthma, different approaches to health care are needed. 
Oftentimes, these chronic diseases, as well as hard-to-treat 
conditions such as fibromyalgia, chronic fatigue syndrome, and 
allergies, are improved through an integrative medicine or CAM 
approach. Cancer rates remain high in the U.S. population. One 
in three Americans will get cancer and one in four will die 
from it. An integrated approach to care that respects the 
wishes of the patient while encompassing holistic approaches to 
healing including the recognition of the importance of 
nutrition, mind-body approaches, spirituality, and stress and 
pain management is needed. A recently published survey of 
patients attending one of eight outpatient clinics of the 
University of Texas MD Anderson Cancer Center, Houston, TX, 
showed that over 83 percent of adult cancer patients used some 
form of CAM.\15\
---------------------------------------------------------------------------
    \15\ Richardson M.A., Sanders L., Palmer J.L., Griesinger A., 
Singletary S.E., ``Complementary/Alternative Medicine Use in a 
Comprehensive Cancer Center and the Implications for Oncology,'' J of 
Clinical Oncology, Vol. 18, Issue 13 (July) 2000: 2505-2514.
---------------------------------------------------------------------------
    The Health Care Financing Administration estimates that 
health care costs will double by 2007, to exceed $2.13 
trillion. Of that estimate, almost $1 trillion of those dollars 
will be public funds.\16\ While the United States continues to 
outspend the rest of the world on health care (13.7 percent of 
Gross Domestic Product or $4,187 per person), a World Health 
Organization report released in June 2000 ranked the United 
States as 37th out of 191 countries in quality of health care 
services.\17\
---------------------------------------------------------------------------
    \16\ Smith S., Freeland M., Hefler S., et al, The Next Ten Years of 
Health Spending: What Does the Future Hold? Health Affairs, Vol. 17: 
pp. 128-140, 1998.
    \17\ World Health Report 2000, Health Systems: Improving 
Performance. http://www.who.int/whr/2000/en/report.htm.
---------------------------------------------------------------------------
    Between 25 and 40 percent of Americans receive some or all 
of their health care through Federal funds, including services 
provided through Medicare, Medicaid, Department of Defense 
[DOD], Veterans Administration [VA], Indian Health Services, 
and public and community health clinics.
    Ongoing at the DOD are two demonstration projects that will 
expand access for members of the military and their dependents 
to chiropractic medicine and to the Ornish Lifestyle 
Modification Program for Cardiovascular Disease. Additionally, 
some facilities offer acupuncture when medical personnel have 
received additional training and are licensed acupuncturists. 
In 1998, the VA conducted a CAM survey to determine what CAM 
therapies were being offered to our Nation's veterans. While 
numerous programs were identified, there has been no concerted 
effort as yet to expand access to CAM therapies at all VA 
facilities or to offer consistent referrals to CAM providers.
    Through the Fiscal Year 1999 Omnibus appropriations bill 
signed into law in October 1998, the National Center for 
Complementary and Alternative Medicine was created. This was 
done to elevate the Office of Alternative Medicine into a full 
Center at the National Institutes of Health.
    b. Benefits.--Complementary and Alternative Medicine [CAM] 
has the potential for reducing costs while improving the health 
and well-being of Americans. With the graying of the 
population, and the epidemic-level increases of chronic 
diseases such as cardiac disease, diabetes, arthritis, asthma, 
and depression; as well as the high percentages of cancers such 
as lung, breast, prostate, colon, and melanoma; the committee 
sought to be open-minded in its look at additional options in 
medical care, research funding levels, and patient access to 
treatments that patients and their health care providers deem 
appropriate.
    The Federal Government provides health care primarily 
through three Departments--the Department of Health and Human 
Services [HHS], the Department of Defense [DOD], and the 
Department of Veterans Affairs [VA]. Health care is provided to 
between 25 and 40 percent of the U.S. population through 
Federal funds.
    Cost, scientific evidence, patient preference, and the 
``first do no harm'' philosophy are important factors in 
determining inclusion of services. The health care delivery 
paradigm is shifting dramatically and part of that shift 
includes CAM. There is an increasing body of scientific 
evidence that shows the efficacy of some CAM therapies. 
Patients often mention the desire for a more natural approach, 
the desire for personal choice, and for the inclusion of a 
whole being or holistic (body, mind, spirit) philosophy in 
their health care. CAM therapies are often lower in cost than 
conventional treatments and especially in chronic illnesses 
where conventional therapies often do not meet with great 
success. In these cases, CAM approaches may be more effective 
or can be used in conjunction with conventional treatments to 
enhance and improve outcomes.
    Botanical products often have few adverse effects when used 
wisely, whereas many pharmaceutical products, even when used as 
directed, have high rates of adverse effects. Over 100,000 
individuals in the United States die each year from adverse 
reactions from prescription medications, while only about 16 
each year die from adverse reactions from dietary supplements.
    In 1994 Congress passed the Dietary Supplement Health and 
Education Act. This legislation created a new framework for the 
regulation of dietary supplements. It signals a major departure 
from the well-established ``food'' versus ``drug'' dichotomy 
that guided the Food and Drug Administration's [FDA's] policy 
with respect to products for over 50 years. The legislation, 
the outgrowth of a phenomenal grassroots effort, is premised on 
the role of nutrition and the benefits of dietary supplements 
to health promotion.
    As reflected in numerous surveys, Americans are 
increasingly using complementary and alternative medicine as a 
means of improving their health. A large part of this trend has 
been utilizing nutritional approaches including dietary 
supplements to improve health and prevent illness. While many 
universities and Government agencies have long researched the 
benefits of foods, herbs, and vitamins for health, most medical 
schools are not teaching doctors adequately in this area.
    It has been noted numerous times in congressional reports 
that there is persistent evidence of FDA bias against 
supplements. Senate Report 103-410 states, ``Despite the fact 
that the scientific literature increasingly reveals the 
potential health benefits of dietary supplements, the FDA has 
pursued a regulatory agenda which discourages their use by 
citizens seeking to improve their health through dietary 
supplements.''
    Dietary Supplements--vitamins, minerals, and botanical 
products--have been shown through traditional use and through 
research to provide health benefits. Examples of the health 
benefits include:
         Vitamin C is necessary for wound healing. It 
        is needed for many functions in the body, including 
        helping the body use carbohydrates, fats, and protein. 
        Vitamin C also strengthens blood vessel walls. Dr. 
        Linus Pauling made a connection between the use of high 
        doses of vitamin C daily and the prevention of cancer.
         Vitamin E is important for the proper function 
        of nerves and muscles. A 1998 analysis from a large 
        prevention trial conducted by the National Cancer 
        Institute [NCI] and the National Public Health 
        Institute of Finland, shows that long-term use of a 
        moderate-dose vitamin E supplement substantially 
        reduced prostate cancer incidence and deaths in male 
        smokers. A study published in 1997 in the New England 
        Journal of Medicine, from research conducted at 23 
        Alzheimer's Disease Cooperative Study [ADCS] sites 
        across the United States showed that vitamin E may slow 
        important functional signs and symptoms of Alzheimer's 
        disease by about 7 months.
         Folic acid is necessary for strong blood. 
        Folic acid taken by women before they become pregnant 
        and during early pregnancy may reduce the chances of 
        certain birth defects (neural tube defects). Folic Acid 
        may also help prevent heart disease by lowering 
        homocysteine levels.
         Coenzyme Q10 is a powerful antioxidant both on 
        its own and in combination with vitamin E and is vital 
        in powering the body's energy production [ATP] cycle. 
        Coenzyme Q10 has the ability to protect the heart 
        during periods of ischemia (lack of oxygen). Several 
        clinical trials have recently shown that when patients 
        with heart failure are treated with Coenzyme Q10 for 
        months to years, serious complications such as 
        pulmonary edema and ventricular arrhythmia are reduced 
        in frequency. The number of hospitalizations is reduced 
        and survival is increased.
         Hypericum Perforatum, also known as St. John's 
        Wort has a 2,400-year history of safe and effective 
        usage in folk, herbal, and ancient medicine. A series 
        of recent double-blind, placebo-controlled studies 
        indicate that a specific extract of Hypericum 
        perforatum was as effective as prescription 
        antidepressants but had far fewer side effects and cost 
        considerably less. In Germany, more than 50 percent of 
        depression, anxiety, and sleep disorders are treated 
        with hypericum.Many CAM therapies have been safely used 
        for thousands of years are backed by a substantial body 
        of scientific evidence. Acupuncture for example, has 
        been used in traditional Chinese medicine for at least 
        3,000 years. However, until 1996, the Food and Drug 
        Administration regulated acupuncture needles as Class 
        III ``investigational devices'' rather than as Class II 
        for ``general acupuncture use,'' which made it 
        difficult for licensed or certified practitioners to 
        obtain disposable acupuncture needles in the United 
        States unless you were conducting research.\18\ 
        According to an NIH consensus panel of scientists, 
        researchers, and practitioners who convened in November 
        1997, clinical studies have shown that acupuncture is 
        an effective treatment for nausea caused by surgical 
        anesthesia and cancer chemotherapy as well as for 
        dental pain experienced after surgery. The panel also 
        found that acupuncture is useful by itself or combined 
        with conventional therapies to treat addiction, 
        headaches, menstrual cramps, tennis elbow, 
        fibromyalgia, myofascial pain, osteoarthritis, lower 
        back pain, carpal tunnel syndrome, and asthma; and to 
        assist in stroke rehabilitation.\19\
---------------------------------------------------------------------------
    \18\ Acupuncture Needle Status Change, FDA Communications, http://
www.fda.gov/bbs/topics/ANSWERS/ANS00722.html.
    \19\ National Institutes of Health Consensus Panel. Acupuncture. 
National Institutes of Health Consensus Development Statement 
(Bethesda, MD, Nov. 3-5, 1997).
---------------------------------------------------------------------------
    Numerous complementary therapies are increasingly used in 
hospitals and clinics with good benefit. Those therapies 
include music therapy, aromatherapy, mind-body techniques, 
massage, qi gong, sand therapy, art therapy, and touch therapy. 
Additionally, the role of nutrition, including the use of 
dietary supplements--vitamins, minerals, and botanicals--is 
increasingly recognized by Americans as a valuable avenue to 
explore to improve and maintain health status. Diet and 
lifestyle play a major role in disease prevention.
    Dr. Dean Ornish and his research team have shown through 
rigorous research that heart disease can be reversed and that 
bypass and angioplasty surgery can be avoided at an immediate 
cost savings of $30,000 per patient.
    c. Hearings.--
    1. Complementary and Alternative Medicine in Government-
Funded Health Programs, February 24, 1999.--The purpose of the 
hearing was to explore the following questions:
    a. Have Federal agencies that deliver or fund health care 
begun integrating CAM therapies?
    b. Are research results translating into access to 
alternative treatments by the average American?
    c. Are alternative practitioners being included in Federal 
programs?
    d. What policies are currently in place or are proposed 
regarding integration?
    e. What, if any, impediments are there to further 
integration?
    f. How are Federal agencies combining patient access with 
the collection of outcomes research data on cost, 
effectiveness, and patient preference?
    The Department of Health and Human Services [HHS] is the 
Federal Government's principal agency for protecting the health 
of all Americans and providing essential human services, 
especially for those who are least able to help themselves. HHS 
is also the largest grantmaking agency in the Federal 
Government, providing approximately 60,000 grants per year. 
HHS' Medicare program is the Nation's largest health insurer, 
handling more than 900 million claims per year. HHS works 
closely with State and local governments, and many HHS-funded 
services are provided at the local level by State or county 
agencies, or through private sector grantees. In addition to 
the services they deliver, the HHS enable the collection of 
national health and other data. The HHS fiscal year 1999 budget 
was $387 billion.\20\
---------------------------------------------------------------------------
    \20\ HHS website--What We Do, http://www.hhs.gov/about/
profile.html.
---------------------------------------------------------------------------
    Through the National Institutes of Health's Office of 
Alternative Medicine, recently elevated through legislation 
\21\ to the National Center of Complementary and Alternative 
Medicine, the majority of Government-funded research in 
complementary and alternative medicine is coordinated and 
funded. Good quality research has been and is being conducted 
in CAM and results of those are published regularly in peer 
reviewed publications. There are still gaps in the knowledge 
base and much research work still to be done. Through the 
National Institutes of Health's Consensus Development and 
Technology Assessment Programs--the premier health technology 
assessment and transfer program in American medicine--several 
complementary and alternative therapies have been recommended 
for integration into mainstream medicine. In each instance the 
panel recommended coverage of the CAM therapies in order to 
provide access.
---------------------------------------------------------------------------
    \21\ Fiscal Year 1999 Omnibus Spending, Public Law 105-277.
---------------------------------------------------------------------------
    Organizations and individuals within HHS have approached 
CAM with varying levels of enthusiasm and trepidation. For 
example, the NIH Warren Grant Magnuson Clinical Center has long 
been progressive in extending the availability of CAM to its 
patients. Since the early 1990's the Clinical Center has had 
Ming Tian, M.D. on call to provide acupuncture treatments for 
pain relief to those patients in the Clinical Center whose 
pharmacological pain interventions were not adequate. 
Additionally, patients and family members have access to music 
therapy chairs and mats for stress and pain relief through the 
Rehabilitation Department. Classes in Qi Gong, meditation, and 
Tai Chi have frequently been available in the Clinical Center. 
The Indian Health Service in its South Central Foundation's 
\22\ program has implemented a traditional healing component of 
its primary care program. In the Navajo area programs, each of 
the eight units has incorporated varying levels of Navajo 
traditional healing/medicine including sweat lodges, 
traditional healing services and rooms, and traditional 
medicine practitioners. The Bureau of Primary Health Care held 
a conference in 1997 to initiate a discussion in making 
alternative medicine available in public health clinics, but as 
yet has no policy in place to do so.
---------------------------------------------------------------------------
    \22\ The South Central Foundation Traditional Healing Program 
serves as a resource to staff and patients for referral to traditional 
healers and practitioners in South Central Alaska.
---------------------------------------------------------------------------
    However, for the most part, HHS and other Federal agencies 
have been slow to integrate CAM into health programs. Medicare 
still does not reimburse for acupuncture, even though the NIH's 
consensus panel found it a scientifically valid treatment for 
chemotherapy nausea and numerous other disorders. Nor has there 
been integration of the mind-body techniques recommended by the 
NIH Technology Assessment conference on insomnia and pain. 
Medicare offers only limited access to chiropractic treatment. 
Even in States with certification and licensure for various 
alternative practices, there is limited access in Government 
programs to Naturopathic doctors, licensed massage therapists, 
licensed and M.D. acupuncturists, certified nutritionists, and 
chiropractors.
    The investigation in the 105th Congress indicated that 
there exists within Federal agencies an institutional bias 
against CAM or novel treatments that prejudices those in 
decisionmaking positions from establishing demonstration 
projects or other opportunities to provide access? Testimony 
was received from Douglas Kamerow, M.D., Director, Center for 
Health Care Technology, Agency for Health Care Policy Research, 
on behalf of the Department of Health and Human Services.
    The Department of Veterans' Affairs [VA] provides benefits 
and services to the country's veterans--a population of over 25 
million--as well as approximately 44 million family members. 
The fiscal year 2000 budget submission provides $18.1 billion 
(with provisions for $749 million in medical collections) to 
provide medical care to eligible veterans. The estimated number 
of eligible veterans that will receive care in 2000 is 3.6 
million.\23\ Given the increased demand by patients to have 
access to alternative therapies, in April 1998 the VA Under 
Secretary for Health, Kenneth W. Kizer, M.D., M.P.H., requested 
that the Office of Primary and Ambulatory Care assess what, if 
any, CAM therapies should be offered by the VA.\24\ The report 
which was due out in December 1998, had not been published 
prior to the February hearing.
---------------------------------------------------------------------------
    \23\ Department of Veterans' Affairs Fiscal Year 2000 Budget 
Submission, Summary, vol. 5; pp. 3-8.
    \24\ http://www.va.gov/NCHP/Pubs/summer98.pdf.
---------------------------------------------------------------------------
    In 1998, the VAnguard Magazine, a VA employee's magazine, 
featured a few examples of alternative medicine practices 
within the VA.\25\ These included:
---------------------------------------------------------------------------
    \25\ http://www.va.gov/vanguard/altmed, Vanguard Magazine, 
Washington, DC.
---------------------------------------------------------------------------
          1. The Honolulu VA Medical and Regional Office Center 
        sponsored an interdisciplinary orientation to healing 
        from Native Hawaiian, Native American and Asian 
        perspectives, focusing on tri-cultural healing 
        alternatives. Included were workshops on herbal 
        medicine, Hawaiian conflict resolution, tai-chi, 
        acupuncture, Native American philosophy and more.
          2. The Phoenix VAMC has held day-long seminars for 
        medical staff members on alternative medicine and has 
        established a sharing agreement with local Indian 
        tribes to contract with them to provide tribal medicine 
        to Indian patients at the facility.
          3. VA offers a number of creative arts therapies 
        including dance, music and art therapy. Many VA 
        facilities also offer programs in garden therapy, pet 
        therapy, wood-carving therapy, humor therapy, yoga, tai 
        chi and meditation.
          4. VA's Chaplain Service is currently conducting a 
        multi-site study on the effects of spiritual care on 
        homeless veterans residing in VA domiciliaries in 
        Dallas, TX; Dublin, GA; Mountain Home, TN; Portland, 
        OR; St. Cloud, MN; Los Angeles, CA; and Anchorage, AK.
          5. Eye Movement Desensitization and Reprocessing 
        [EMDR], is used by some VA psychologists in treating 
        veterans with post-traumatic stress disorder.
          6. A study by doctors at the Palo Alto, CA, VA 
        Medical Center has shown that anodyne therapy hypnosis 
        combined with guided imagery helps patients relieve 
        pain, quicken recovery, and replace feelings of anxiety 
        with those of empowerment.
          7. Dr. Emilio Felipe Romeno, a psychiatrist at the 
        San Antonio, TX, VA Medical Center, works with 
        individuals interpreting dreams. He finds that about 60 
        percent of dreams have some connection to daily 
        activities and can be used to make decisions.
          8. VA physical therapists offer a number of manual 
        techniques such as massage therapy, acupressure, 
        myofascial release, cranial-sacral therapy and 
        Feldenkrais, among others.
          9. Of VA's 7,984 full-time physicians, 34 are 
        osteopathic physicians, most of whom completed 
        additional training and are specialists in surgery, 
        medicine, anesthesia or other areas.
          10. Acupuncture, as a method of pain control, may be 
        used by VA anesthesiologists who are trained in its 
        use. Privileging the anesthesiologist, or other VA 
        health practitioner, for acupuncture is within the 
        purview of individual VA medical centers.
          11. A researcher at the Boston VA Medical Center is 
        working with laser light on acupuncture sites to treat 
        carpal tunnel syndrome, stroke, accident victims, and 
        other neurologically-impaired patients.
    The article stated that within the VA, alternative medical 
practices may be used for treatment if they meet certain 
criteria. The alternative practice or technique must do no 
harm, be accepted by the patient, and reflect the interest of 
the practitioner. The practitioner also must be trained or 
certified in the technique and obtain privileges to practice 
that technique, and the practice or technique must have some 
level of acceptance as an ``alternative.'' Thomas V. Holohan, 
M.D., Chief Patient Care Services Officer, testified on behalf 
of the Veterans Health Administration.
    The Department of Defense provides health care to its 
active duty service members and active duty dependents, 
retirees and their dependents, and survivors of deceased 
members and certain former spouses through the Military Health 
Services System [MHSS] and the Civilian Health and Medical 
Program of the Uniformed Services [CHAMPUS]. TRICARE is a new 
initiative to coordinate the efforts of the service's medical 
facilities. The MHSS currently includes 102 hospitals and 489 
clinics operating worldwide with 42,000 civilian and 102,000 
active duty military personnel. The DOD requested $15.6 billion 
for health care in fiscal year 1999--$5.3 billion for military 
personnel costs and $3.5 billion for CHAMPUS and TRICARE 
Managed Support Contracts. The Department of Defense has been 
mandated by Congress to conduct two CAM demonstration projects.
         Chiropractic Health Care Demonstration 
        Program.\26\
---------------------------------------------------------------------------
    \26\ THE CHCDP was initiated through the National Defense 
Authorization Act for Fiscal Year 1995.
---------------------------------------------------------------------------
         Ornish Lifestyle Modification Program.\27\
---------------------------------------------------------------------------
    \27\ The Ornish Lifestyle Demonstration Program was initiated 
through the Omnibus Spending Bill of Fiscal Year 1999.
---------------------------------------------------------------------------
    There are an increasing number of health care providers 
within the DOD what have specialized training in complementary 
and alternative therapies. Military physicians, when assigned 
to military hospitals, develop their scopes of practice based 
on their specific training and the comfort level of the 
hospital administration with allowing CAM. Walter Reed Army 
Hospital and Andrews Air Force Base Hospital each have 
physician acupuncturists on staff. However, these physicians do 
not focus entirely on acupuncture, nor is there a policy within 
the new managed care environment to allow referrals. 
Additionally, former Office of Alternative Medicine Director, 
Wayne Jonas, M.D., and others with specialized complementary 
and alternative medicine training are on faculty at the 
Uniformed Services University of the Health Sciences. John F. 
Mazzuchi, Ph.D., Deputy Assistant Secretary of Defense for 
Health Affairs, Clinical and Program Policy, testified on 
behalf of the Department of Defense.
    Actress Jane Seymour presented testimony regarding her 
experiences in integrating natural healing approaches into her 
life. Ms. Seymour's own father was a conventional physician who 
late in life developed cancer. After his physicians did all 
they felt they could for him, Ms. Seymour took her father to an 
alternative cancer clinic in California where he received 
vitamins, converted to a Macrobiotic diet, received counseling, 
and greatly improved his overall well-being.
    Brian Berman, M.D., provided testimony on the current 
status of research and treatment in complementary and 
alternative medicine. Dr. Berman is the director of the first 
alternative medicine program in a U.S. medical school. An 
associate professor at the University of Maryland School of 
Medicine, Dr. Berman has long been an advisor to the Federal 
Government on alternative medicine. He also is the director of 
one of the NIH-funded research centers in alternative medicine. 
Dr. Berman has conducted clinical research in acupuncture, 
mind-body and relaxation techniques, and coordinates the 
complementary medicine field group of the Cochrane 
Collaboration.
    Dean Ornish, M.D., clinical professor of medicine, 
University of California at San Francisco and Director of the 
Preventive Medicine Research Institute presented testimony 
regarding his clinical research in cardiovascular disease. Dr. 
Ornish developed a lifestyle modification program that has been 
shown through rigorous clinical trials that heart disease can 
be reversed and angioplasty and by-pass surgery can be avoided. 
This program which includes a low-fat diet, moderate exercise, 
yoga, meditation, and group therapy has been shown to be safe 
and effective including in an elderly population, as well as 
providing a tremendous cost-savings. (It is estimated that by 
avoiding by-pass or angioplasty, there is an immediate cost 
savings in excess of $20,000 per patient.) Dr. Ornish's 
research has been published in numerous peer-reviewed journals. 
Approximately 15 hospital-based centers, some at academic 
institutions, have been certified to offer the Ornish program. 
As a result of this hearing and with bi-partisan and White 
House support, the Health Care Financing Administration agreed 
to conduct a multi-site demonstration project in the Medicare 
population to determine if the program is viable as a means of 
avoiding by-pass surgery and improving cardiovascular health, 
while providing cost-savings.
    Ollie and Barbara Johnson of Columbia, SC, presented 
testimony about their personal experiences with the Ornish 
Lifestyle Modification Program. Mr. Johnson, retired both from 
the U.S. Air Force and the State of South Carolina Commission 
on Aging, was a prime candidate for a heart attack. Both his 
mother and sister died at 58 from cardiovascular disease. In 
the 5 years since they began the program, Mr. Johnson has had a 
reversal of his heart disease, and has avoided both angioplasty 
and by-pass surgery as well as drastically reducing 
prescription medication use.
    While there was some integration of CAM services within 
programs provided through HHS, DOD, and VA, there was no 
organized program in place within any agency to expand access 
to CAM therapies or practitioners. It appears to have been 
implemented at facilities where existing health care providers 
on their own initiative received additional training and gained 
licensure or certification in a CAM practice such as 
acupuncture. The full benefit, including cost-savings, and 
fewer adverse events of CAM therapies has not been realized. 
Because of long-term patient tracking capabilities, both the VA 
and DOD are optimum health systems to conduct CAM outcomes 
research studies including cost-benefit analysis.
    2. Cardiovascular Disease: Is the Government Doing More 
Harm Than Good? EDTA Chelation Therapy, March 10, 1999.
    The earlier committee investigation indicated that within 
the Federal Government there remains an institutional bias 
against some CAM therapies. There is no better example of a 
therapy that has been safely and effectively used for decades 
while a tremendous bias exists against it within the medical 
and Government establishments than EDTA Chelation Therapy. The 
off-label use of ethylene diamine tetraacetic acid [EDTA] 
Chelation Therapy consists of the intravenous injection into 
the body of a substance which, after bonding with heavy metals 
in the bloodstream, is expelled through the body's excretory 
functions. EDTA is a man-made amino acid and is used by some 
physicians to treat arteriosclerosis, claudication, and various 
other circulatory problems. It was originally licensed by the 
Food and Drug Administration for metal detoxification.
    When Congress created the Office of Alternative Medicine at 
the National Institutes of Health [NIH] it was with the express 
purpose of generating research interests in the areas of 
alternative, complementary, and unconventional medical 
practices; to evaluate and validate therapies; and to make that 
information known to the public. It has always been stated that 
the Institutes and Centers of the NIH were to cooperate with 
OAM and to further their congressional mandate. However, this 
has not always been the case. There are many alternative 
therapies that have generated great public debate through the 
years as well as having been the target of Federal agencies. In 
1998, the Committee on Government Reform heard testimony about 
the Food and Drug Administrations decade-long attack on Dr. 
Stanislaw Bryzynski's antineoplaston treatment for cancer. The 
committee also heard from physicians whose right to practice 
medicine was threatened because they chose to look at other 
options for treatment rather than the standards of chemotherapy 
and radiation. The committee also heard testimony regarding 
alternative medicine cancer research and the need for more 
focus on this area.
    It has been stated in interviews that everyone in the 
medical establishment has a bias against EDTA Chelation 
Therapy, even if they do not admit it. This bias has 
transcended across Federal agencies as well.
         The Food and Drug Administration fought (and 
        lost) legal battles in the 1970's to prevent a 
        physician from having access to EDTA Chelation.
         In 40 years, the National Heart, Lung, and 
        Blood Institute has never funded any research in EDTA 
        Chelation for cardiovascular and circulatory 
        treatments.
         The National Library of Medicine has refused 
        to index the Journal for the Advancement of Medicine in 
        MEDLINE.
         The Federal Trade Commission has launched an 
        attack on the free flow of information from a non-
        profit professional medical association.
         The FTC additionally has been working with the 
        Federation of State Medical Boards and State Medical 
        Boards to identify physicians who offer EDTA Chelation 
        for off-label use and to remove their licenses.
    Dr. Joseph Jacobs made the following statement about 
Chelation,

          In 1992, I became the first director of the Office of 
        Alternative Medicine (OAM) at the National Institutes 
        of Health. The OAM was created by Congressional mandate 
        amidst an atmosphere of scientific skepticism. My staff 
        and I sought to identify therapies in each area of 
        alternative medicine that were deserving of study by 
        virtue of a therapy's possible efficacy or because of 
        the public health implications of the practice. An 
        alternative therapy that caught our attention was EDTA 
        Chelation. EDTA Chelation consists of the intravenous 
        infusion of multiple doses of the agent ethylene 
        diamianetetraacetic acid, usually together with high 
        doses of vitamins and nutritional supplements. In the 
        area of cardiovascular medicine, I came to the 
        conclusion that EDTA Chelation merited study because of 
        the possible truth of the claims made in favor of the 
        therapy and because of the exceedingly large numbers of 
        Americans who seek out and submit to this therapy.\28\
---------------------------------------------------------------------------
    \28\ Dr. Joseph Jacobs, Foreword to A Critical Review of EDTA 
Chelation Therapy in the Treatment of Occlusive Atherosclerotic 
Vascular Disease, ISBN-0-9668200-0-2, p. i.

    There are several theories on the mechanism of action. 
Various peer-reviewed articles support the use of EDTA 
Chelation in heart disease because of the observed effects on 
the health of the patients. A large retrospective study of 
2,870 patients in Brazil showed that 89 percent of the patients 
treated with EDTA Chelation had marked or good improvement.\29\
---------------------------------------------------------------------------
    \29\ Alternative Medicine: Expanding Medical Horizons, NIH-
Publication 94-066, December 1994, pp. 163-165.
---------------------------------------------------------------------------
    In 1978, a U.S. District Court rejected the actions of the 
FDA when they sought an injunction against a physician that 
administered Chelation. The court characterized the FDA's 
actions as ``an attempt to compel physicians to practice 
according to state-sanctioned protocols.'' Furthermore, the 
court determined that the weight of the evidence submitted to 
it supported the practice of Chelation.\30\
---------------------------------------------------------------------------
    \30\ A Critical Review of EDTA Chelation Therapy in the Treatment 
of Occlusive Atherosclerotic Vascular Disease, ISBN-0-9668200-0-2, p. 
105.
---------------------------------------------------------------------------
    In 1981, the Office of Health Technology Assessment to the 
Health Care Financing Administration called for the safety and 
efficacy of EDTA Chelation to be established by well-designed, 
controlled clinical trials. The National Heart, Lung, and Blood 
Institute [NHLBI] was established in 1948 as the National Heart 
Institute through the National Heart Act with a mission to 
support research and training in the prevention, diagnosis, and 
treatment of cardiovascular disease. In 1962, the National 
Heart, Lung, and Blood Institute Act mandated the Institute to 
expand and coordinate its activities in an accelerated attack 
against heart, blood vessel, lung, and blood diseases. The 
current mission is to provide leadership for a national program 
in diseases of the heart, blood vessels, lung, and blood. This 
Institute plans, conducts, fosters, and supports basic 
research, clinical investigations and trials, observational 
studies, and demonstration and education projects. It 
coordinates with other Federal health programs relevant to 
activities in heart, blood vessel, lung, and blood 
diseases.\31\
---------------------------------------------------------------------------
    \31\ NHLBI Fiscal Year 1998 Factbook, p. 9.
---------------------------------------------------------------------------
    The NHLBI has never funded any research in the off-label 
use of EDTA Chelation in vascular disease. The committee 
learned that researchers from several leading U.S. medical 
schools approached the NHLBI with a desire to conduct studies 
in this area and were discouraged from doing so. Additionally, 
after extensive pre-application discussions with NHLBI 
leadership, another academic researcher submitted a grant 
proposal that was rejected by NHLBI in December 1998. In the 
review process, especially in areas that are not major research 
priorities for an Institute, getting a score on a grant is 
important, even if the score is too high for the Institute 
payline. The kiss of death to a grant proposal is to be triaged 
out with the ``Not Recommended for Further Consideration'' 
designation. This is what happened to the 1998 chelation 
proposal. The comments from the reviewers did not indicate 
anyone with any expertise in chelation having participated in 
the review.
    In the 40 years that EDTA Chelation has been used off-
label, various safety issues and toxicolgy issues have been 
addressed. According to Dr. Stephen Olmstead, conventional 
cardiologist in private practice in Washington with a clinical 
academic appointment at the University of Washington School of 
medicine, and the author of A Critical Review of EDTA Chelation 
Therapy in the Treatment of Occlusive Atherosclerotic Vascular 
Disease, ``only prospective controlled clinical trials can 
firmly establish whether EDTA chelation is effective for 
symptomatic coronary artery disease or can alter its natural 
history.''
    In a desire to address this public health need, Dr. 
Olmstead prepared a research proposal to conduct a clinical 
trial on EDTA Chelation. However, his own university refused to 
allow him to move forward with the study. He felt so strongly 
about the need for a clinical trial, that he assisted an 
associate of his from another institution in the preparation of 
a grant proposal that was submitted to NHLBI. This is the grant 
that NHLBI triaged out and did not even score. St. Mary's 
Hospital in England is currently developing two protocols in 
collaboration with a United States researcher to test Chelation 
in their facility. Additionally an Italian physician is having 
very good results with Chelation in the treatment of macular 
degeneration--a disorder for which there are few if any 
treatments. The problem with his treatment will be in tracking 
outcomes, for this Italian physician, just as all United States 
physicians, does not ordinarily conduct research. He does not 
have a nurse statistician on staff to extract research data 
from the patient files and track outcomes.
    It is estimated that maybe as many as 500,000 people 
receive off-label use of chelation in a year. While, this may 
not be the NHLBI's highest priority, it clearly warrants 
investigation by the premier biomedical research institute in 
this country. While the new National Center for Complementary 
and Alternative Medicine now has the ability to conduct 
research without clearing it through the various NIH Institutes 
and Centers, NCCAM leadership has stated that they will 
continue to utilize the expertise of these Institutes. 
Additionally, a large clinical trial which will be needed to 
address this therapy will likely cost over $30 million, which 
at present is approximately one-half of NCCAM's budget--much 
more than NCCAM could fund, but well within funding range for 
NHLBI. If the existing bias continues, it stands in the way of 
research.
    While many individuals within the medical establishment 
state that there is no research in the use of this treatment, 
there is in fact a vast repository of research conducted around 
the world. There have been several books published outlining 
the existing body of evidence.
         In 1991 there is a retrospective study in 
        Denmark of 470 patients with vascular disease treated 
        with Chelation. Most patients reportedly improved with 
        an 80 to 91 percent response rate depending on the 
        parameter measured. Of 92 patients who had been 
        referred for vascular surgery, only 10 needed surgery 
        after EDTA therapy. Of 30 limbs, 3 were considered 
        saved from amputation. Diabetes-related limb amputation 
        is a major concern and expense within the veteran's 
        population.
         In 1992, another Danish study was published 
        that stated that in a double-blind, prospective, 
        randomized, placebo-controlled trial demonstrates that 
        EDTA Chelation had no beneficial effect on exercise 
        capacity and noninvasive parameters of lower extremity 
        perfusion. This study was conducted by a group of 
        researchers who opposed Danish Governmental funding of 
        EDTA Chelation. It was found by the Danish Committee on 
        Scientific Dishonesty that the researchers violated the 
        blind in their trial and that they did not follow the 
        ACAM protocol (the accepted protocol known to be safe). 
        This is one of the two ``scientifically valid studies'' 
        that the NHLBI references as indicating that EDTA 
        Chelation is not effective. During the hearing, Dr. 
        LenFant, NHLBI Director, stated that he was not aware 
        that this study had been deemed invalid due to 
        scientific misconduct.
    The Federation of State Medical Boards of the United States 
established an ad hoc committee to research, review, and 
evaluate questionable health care treatments, procedures, and 
promotions which may be unsafe and a risk to the public. The 
committee was charged with making recommendations for State 
medical boards' use in evaluating such questionable practices 
and use in evaluating such questionable practices and taking 
disciplinary action against such providers. In preparation for 
their August 28, 1995 initial meeting, they sent the following 
question out to all State medical boards: ``Has your state 
enacted any legislation or board policy related to the 
regulation of chelation therapy?'' The growing interaction 
between Federal agencies and the Federation's obviously biased 
approach to approaching CAM practices is of concern to the 
committee and to the public.
    In United States of America, Plaintiff, v. H. Ray Evers, 
M.D., an individual doing business as Ra-Mar Clinic defendant, 
U.S. District court, Alabama, June 27, 1978, ``. . . While 
weight of medical opinion in United States was that chelation 
therapy was of no benefit to treatment of arteriosclerosis, 
there was a school of thought among medical experts of the 
United States and some foreign countries that arteriosclerosis 
could be satisfactorily treated with chelation therapy. 
Complaint dismissed.''
    ``A physician must be free to use a drug for an indication 
not in the package insert when such usage is part of the 
practice of medicine and for the benefit of the patient.'' \32\
---------------------------------------------------------------------------
    \32\ Federal Food, Drug, and Cosmetic Act, Sec. Sec. 301(k), 
502(f)(1), 21 U.S.C.A., Sec. Sec. 331(k), 352(f)(1). As referenced in 
1978 U.S. District Court Case, 1978.
---------------------------------------------------------------------------
    In 1988, a municipal court in the State of Ohio ruled in 
favor of providing coverage for chelation as a necessary 
treatment. The court found that it was a necessary treatment 
for patient with artheriosclerosis and that chelation was a 
broadly accepted treatment and that the services were covered 
under the insurance contract.
    The National Library of Medicine [NLM], founded in 1836, is 
the world's largest medical library. The Library produces 
MEDLINE, GenBank, and other online databases that are available 
free to scientists, health professionals, and the public via 
the World Wide Web. MEDLINE is NLM's premier bibliographic 
database covering the fields of medicine, nursing, dentistry, 
veterinary medicine, and the preclinical sciences. Journal 
articles are indexed for MEDLINE, and their citations are 
searchable, using NLM's controlled vocabulary, MeSH (Medical 
Subject Headings). MEDLINE contains all citations published in 
Index Medicus, and corresponds in part to the International 
Nursing Index and the Index to Dental Literature. Citations 
include the English abstract when published with the article 
(approximately 76 percent of the current file).
    The committee has concerns that physicians and the public 
who refer to MEDLINE for access to medical information are not 
gaining access to novel treatments that have not been accepted 
in mainstream publication. It is widely known that there exists 
a publication bias, both for alternative medicine in 
conventional journals and in topics that while not alternative, 
are not of the mainstream focus. Therefore, specialty journals 
play an important role in providing information about 
treatments that do not get published in mainstream journals. 
Additionally, the bibliographic database of alternative 
medicine research at the NIH is drawn from MEDLINE. Dr. Donald 
Lindberg testified on behalf of the NLM.
    The Federal Trade Commission [FTC] enforces a variety of 
Federal antitrust and consumer protection laws. The Commission 
seeks to ensure that the Nation's markets function 
competitively, and are vigorous, efficient, and free of undue 
restrictions. The Commission also works to enhance the smooth 
operation of the marketplace by eliminating acts or practices 
that are unfair or deceptive. In general, the Commission's 
efforts are directed toward stopping actions that threaten 
consumers' opportunities to exercise informed choice. Finally, 
the Commission undertakes economic analysis to support its law 
enforcement efforts and to contribute to the policy 
deliberations of the Congress, the executive branch, other 
independent agencies, and State and local governments when 
requested. In addition to carrying out its statutory 
enforcement responsibilities, the Commission advances the 
policies underlying congressional mandates through cost-
effective non-enforcement activities, such as consumer 
education.\33\
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    \33\ http://www.ftc.gov/ftc/mission.htm.
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    The FTC filed a complaint against the professional medical 
association, the American College for Advancement in Medicine 
[ACAM] stating that even though they are a professional 
association,\34\ the ACAM was under the purview of the FTC. The 
FTC determined that the ACAM disseminated to the public 
brochures and other written materials that constitute 
advertising under the Federal Trade Commission Act. These 
materials contain statements about chelation therapy. According 
to the complaint, ACAM distributes its brochures and other 
written materials to its members who disseminate the material 
to consumers. Additionally, ACAM disseminates its material to 
consumers through an Internet web page and to consumers who 
contacted ACAM through its toll-free telephone number.
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    \34\ http://www.acam.org/. Founded in 1973, the American College 
for Advancement in Medicine is a non-profit medical society dedicated 
to educating physicians on the latest findings and emerging procedures 
in complementary/alternative medicine, with special emphasis on 
preventive/nutritional medicine. ACAM's goals include both improvement 
of physicians' skills, knowledge, and diagnostic procedures, and 
enhanced awareness in the public at large of alternative methods of 
medical treatment.
---------------------------------------------------------------------------
    FTC determined that these activities constituted commerce, 
i.e. advertising. Even though there existed a legal precedent 
that EDTA Chelation therapy had been deemed by a court or law 
to be an acceptable treatment for arteriosclerosis, the FTC 
also determined that the statements of benefit for 
cardiovascular disease where unsubstantiated. The ACAM for fear 
of financial devastation if attempting to take on the Federal 
bureaucracy, entered into a consent agreement in December with 
the FTC. A comment period of 60 days was announced with the 
press statement. That comment period has been extended until 
March 31. At the time of our hearing, over 700 statements have 
been submitted. Of those reviewed by the committee, the vast 
majority are not ``boilerplates,'' but personal, supportive 
statements by patients and physicians who wish to have access 
to chelation therapy and to information about the potential 
benefits of chelation therapy. It should be noted that in the 
publications mentioned, the ACAM clearly states: ``The reader 
is advised that varying and even conflicting views are held by 
other segments of the medical profession. . . . This 
information represents the current opinion of independent 
physician consultants to ACAM at the time of publication.''
    Apparently, the standard of evidence that the ACAM relied 
upon did not meet the standard of evidence the FTC expected. It 
has not been made clear in the consent order what the level of 
evidence would need to be. Without the NHLBI's involvement in 
research projects for cardiovascular disease, it is unlikely 
that other research projects would be considered of high enough 
caliber to be accepted by the FTC. As stated previously, the 
NHLBI has never funded research and continues to discourage 
potential grantees and turn down applicants. One researcher 
stated to the committee when interviewed that there was such a 
bias against chelation therapy in the medical community, that 
to delve into this project would be the death of anyone's 
career.
    The ACAM has stated they felt they could not fight the 
Federal Government, that it was simply going to decimate the 
organization, when the FTC would have unlimited resources to 
wage court battles. Therefore, on December 8 they entered into 
an agreement that prohibits them from discussing the potential 
cardiovascular benefits of chelation as well as any part of the 
human circulatory system. In essence, this consent order 
restricts a nonprofit professional medical association who have 
made it their mission to provide information about alternative 
medicine to health care professionals and the public from doing 
so. Additionally, this order required the ACAM to notify the 
1,000 physician members, if they as physicians in the course of 
informing their patients about their treatment options provided 
information about the potential cardiovascular or circulatory 
benefits of chelation therapy could be prosecuted by the FTC 
also.
    Of additional concern is the increased activity of the FTC 
in working with other Federal and State agencies to target 
physicians who utilize alternative therapies and chelation in 
their practice. In 1997, the FTC sponsored a conference in 
Dallas, TX, with the National Association of Attorneys General 
and the Federation of State Medical Boards. The conference, 
which was closed to the public and media was entitled, 
``Preventing Healthcare Fraud: Building Partnerships--A 
National Conference to Explore Practical Solutions.'' Two 
panels that specifically addressed alternative medicine were 
``Fraudulent Marketing Practices That Must Be Addressed'' and 
``Alternative/Complementary Therapies: Impact on States' 
Alternative Medicine Practice Laws on Healthcare.''
    The Federation has stated that it will step up disciplinary 
actions against M.D.s and DOs \35\ who utilize ``questionable'' 
methods in the treatment of patients and it will try to stop 
health freedom legislation from passage at the Federal and 
State levels of government. It should be noted that in 
attendance and speaking to this private meeting were several 
anti-alternative medicine advocates. These self-proclaimed 
experts have made a profession out of attacking everything 
alternative. The Federation has formed a subcommittee to look 
into health fraud issues. A report issued in April 1997 by this 
group, lists the Special Committee on Health Care Fraud. Among 
its members is at least one anti-alternative medicine advocate 
whose opinion of alternative medicine is so biased as to render 
his judgement on these topics entirely unreasonable. This 
``expert'' has stated that he believes 60 percent of 
chiropractors are quacks, that 10 percent of DOs are quacks, 
that 80 percent of health food stores sell quack remedies and 
devices, that 98 percent of homeopaths are quacks, and that 99 
percent of the health clinics practicing outside the United 
States are practicing quackery.
---------------------------------------------------------------------------
    \35\ Doctors of Osteopathy.
---------------------------------------------------------------------------
    The subcommittee continues to meet and is currently 
focusing on Chelation therapy. The FTC is working with the 
Federation on this topic. It should be noted that the 
Federation of State Medical Boards promotes itself as a 
national non-profit association with membership consisting of 
medical licensing authorities in all 50 States, the District of 
Columbia, Guam, Puerto Rico and the Virgin Islands. It's stated 
goal is to provide services to its members to help them carry 
out the responsibilities mandated by State law. The mission of 
medical boards as stated by the Federation of State Medical 
Boards is as follows: ``The primary responsibility and 
obligation of a state medical board is to protect consumers of 
health care through proper licensing and regulation of 
physicians and, in some jurisdictions, other health care 
professionals.'' \36\ Jody Bernstein testified on behalf of the 
FDA.
---------------------------------------------------------------------------
    \36\ http://www.fsmb.org/consumer.htm.
---------------------------------------------------------------------------
    Testimony was also received from the following public 
witnesses:
    L. Terry Chappell, M.D., of Ohio, is board certified Family 
Practice, Chelation Therapy, Pain Management, and Added 
Qualification in Geriatric Medicine from the American Board of 
Family Practice. Dr. Chappel received his medical degree from 
the University of Michigan. Dr. Chappel is the immediate past 
president of the ACAM.
    Theodore Rozema, M.D., of North Carolina is board certified 
in Family Practice and Chelation Therapy. Dr. Rozema received 
his medical degree from Northwestern University Medical School. 
Dr. Rozema is the president-elect of ACAM.
    Norman Levin, M.D., of Virginia is board certified in 
Internal Medicine and Rheumatology. He received his medical 
degree from Temple University School of Medicine. Dr. Levin 
began looking into alternative therapies when he realized that 
he was not equipped in his standard medical practice to provide 
effective treatments.
    Dr. Victor Marcial-Vega of Florida is a physician board 
certified as an oncologist and medical examiner. He received 
his medical degree from the University of Puerto Rico School of 
Medicine and conducted his internship and residency in 
radiation oncology at the Johns Hopkins Hospital. Prior to 
going into private practice, Dr. Marcial-Vega was chief of Head 
and Neck Cancer Services at Washington University School of 
Medicine, and a clinical assistant professor, Department of 
Radiation Oncology, University of Miami School of Medicine.
    If shown to be a safe and effective treatment for 
cardiovascular conditions through high quality clinical 
research, EDTA would offer an additional treatment that is less 
costly and less risky than by-pass surgery. EDTA Chelation 
therapy remains one of the most controversial topics in 
alternative medicine. It is important to remove long-standing 
bias from our Government agencies to conduct research in areas 
such as this where there is a need, and to preserve the free 
flow of information in this country, including that of 
differing medical opinions.
    3. The Role of Early Detection and Complementary and 
Alternative Medicine in Women's Cancers, June 10, 1999.
    In the United States, a woman is diagnosed with a 
reproductive tract cancer every 64 minutes. One in eight women 
today will get breast cancer. In the 28 years since President 
Nixon declared the war on cancer, and after tens of billions of 
dollars in research, victory cannot yet be declared. Each week, 
1,355 women in America lose their lives to a reproductive tract 
cancer. Overall, 10,000 adults and children die each week from 
cancer.
    The purpose of the hearing was to update the committee on 
the availability and effectiveness of early detection tests and 
devices, learn about the role of complementary and alternative 
medicine in the treatment of women's cancers, and explore 
opportunities to integrate the advances of biomedical research 
with complementary and alternative medicine in order to reduce 
cancer incidence and improve the health status of women with 
cancer.
    The National Cancer Institutes [NCI] estimated that for 
1998 there would be 180,000 new cases of breast cancer (178,700 
of which are in women) and 80,400 new cases of cancers of the 
female genital organs (cervix, endometrium, ovary, vulva, 
vagina and other female genital organs.) It is also estimated 
that there would be 43,900 deaths from breast cancer in 1998 
(43,500 women) and 27,100 deaths from cancers of the female 
genital organs. The medical community recognizes that the 
earlier a cancer can be detected the better the chances of 
successful intervention. Surveys have shown that a growing 
number of cancer patients now include some form of 
complementary and alternative therapy in their treatment plan. 
Edward Trimble, M.D., testified on behalf of the NCI. At 
present the NCI only spends about $20 million of its $2.7 
billion budget on CAM research.
Ovarian Cancer
    There is no reliable early detection test for ovarian 
cancer. The CA125 is currently the best test available and is 
typically used only in high-risk patients and for relapse 
testing. Ultra sound can be used and laporoscopy when needed. 
Of ovarian cancers, 75 percent are not detected until late 
stage (3 and 4) and there is only a 25 percent survival rate of 
more than 5 years. However, of the 25 percent that are 
discovered in early stages, there is a 95 percent survival rate 
of more than 5 years. The symptoms of ovarian cancer are 
vague--bloating, sudden weight gain, gas pressure, lethargy. 
There is research to indicate that eating lots of meat and 
animal fats may increase your risk of ovarian cancer. There is 
also an indication that there can be familial clustering of 
cancers. That the women in families where the women who have 
ovarian cancer may be at a slightly higher risk for other 
cancers for breast and uterine cancer and colon cancer. 
Additionally, men in the family may be at higher risk for 
prostate cancer and these cancers may have an earlier onset. 
There is also epidemiologic data to indicate that the risk of 
ovarian cancer is reduced by as much as 50 percent for women 
who have used oral contraceptives for 6 premenopausal years and 
that the more children a woman has the lower risk for ovarian 
cancer is. The correlating factor is the increased time that a 
woman is not ovulating. In 1999, the American Cancer Society 
estimated that there were 25,200 new cases and 14,500 deaths. 
The current standard first line treatment is removal of the 
tumor and a plantinum type chemotherapy and taxol.
Breast Cancer
    More women get breast cancer than any other cancer except 
skin cancer. And more women die from breast cancer each year 
than any other cancer except lung cancer (which continues to be 
the leading cancer killer for men and women). Currently breast 
tumors are detected through one of three methods:
          (1) The Breast Self Exam [BSE] which every woman 
        should conduct on a monthly basis to check for lumps.
          (2) The Clinical Breast Exam [CBE] in which a 
        physician exams the breast and under arm tissue for 
        lumps and looks for unusual breast discharge.
          (3) The Mammogram which is a special x ray of the 
        breast that can often find tumors that are too small 
        for the patient or doctor to feel. Once a tumor is 
        found, a needle biopsy or similar procedure would be 
        conducted to test the tissue and determine if the mass 
        was benign or malignant.
    Unfortunately, the mammogram, as good as it is, is not a 
perfect system--many tumors go undetected sometimes. Of the 
three cancer survivors that testified, none had discovered 
their cancer through mammograms, even those who had annual 
mammograms. Thermography is a low cost and non-invasive 
procedure that may detect changes in breast tissue earlier than 
mammograms. Daniel Beilin, OMD, LAc., testified regarding the 
advances of cancer treatments involving alternative therapies 
and the latest developments of the thermography system and how 
it is being used to improve the diagnosis of breast cancer 
earlier and thus improve outcomes.
Other Gynecological Cancers
    Cervical cancer usually affects women between 40 and 55 
years of age. The Pap test is a valuable screening tool and has 
greatly reduced the deaths associated with cervical cancer. 
However, there are 16,000 cases of invasive cervical cancer 
each year in the United States and over 50,000 cases of 
preinvasive carcinoma in situ. There are over 400,000 cases of 
cervical cancer worldwide. For pre-cancerous lesions of the 
cervix, the great majority of women are cured without the need 
for hysterectomy. Cervical cancer may develop in women who have 
been infected with the human Papillomavirus [HPV], a sexually 
transmitted virus.
    Endometrial cancer of the uterus (sometimes called uterine 
cancer) is the most common type of cancer that develops in the 
pelvic area in women. About 35,000 new cases of endometrial 
cancer are diagnosed in the United States each year. The 
average woman who develops this type of cancer is in her early 
60's. Most of these cancers are carcinomas that develop in the 
glandular cells or endometrium lining on the inside of the 
uterine cavity. This is the same tissue that is shed each month 
during a normal menstrual period. A small number of endometrial 
cancers (3 percent) are sarcomas, which grow in the muscular 
and connective tissue elements of the uterus.
    The committee received testimony from the following public 
witnesses:
    Priscilla Mack, a breast cancer survivor and the national 
co-chair of the Susan B. Komen, National Race for the Cure 
testified about the importance of early detection. She also 
presented information on research activities sponsored by the 
Race for Cure and future research needs.
    Michio Kuchi, the world's leading authority on the 
macrobiotic diet testified about the use of this diet and other 
complementary and alternative healing methods in the treatment 
of women's cancer. Mr. Kuchi was honored during 1999 at the 
Smithsonian's National Museum of American History with an 
exhibit on the history of Macrobiotics and Alternative and 
Complementary Health Practices.
    Lee Gardener, Ph.D., a survivor of breast cancer from North 
Carolina, recently was able to return to work and begin using 
her personal experiences to help others facing cancer. Dr. 
Gardener used complementary and alternative therapies in her 
battle with cancer. Dr. Gardener stated during the course of 
her testimony concerns about preliminary research that 
indicated that for a small subset of the population, mammograms 
actually stimulated cancer growth.
    Carol Zarycki, a breast cancer survivor took an integrated 
approach also to treat her breast cancer and discussed the 
importance of doctors talking to their patients about 
supporting the immune system through diet. As a survivor, she 
has also become active in a women's cancer group in New York, 
SHARE.
    Linda Bedell-Logan's sister was a breast cancer victim. 
During her battle, Ms. Bedell-Logan's sister suffered with 
lymphadema. Linda, who was involved in health care researched 
her sister's treatment options and learned about manual 
lymphatic drainage. She has worked with individuals and the 
American Lymphadema Association to make this system available 
to cancer patients. Lymphadema is a serious complication for 
many cancer survivors which causes swelling, usually in an arm 
or leg, and sometimes the adjacent trunk quadrant. Anyone who 
has undergone lymph node dissection and/or radiation in the 
axillary, groin or neck region is at risk to develop 
lymphedema. If untreated, chronic lymphadema progresses to a 
fibrous, brawny texture and significantly impacts quality of 
life by: 1) acting as a constant reminder of the patient's 
cancer experience; 2) frequently causing pain or discomfort; 3) 
interfering with clothing fit; and 4) requiring lifelong 
management. Patients also express frustration that health 
professionals lack knowledge about the disorder and its 
treatment.
    Susan Silver of George Washington University's Integrative 
Medicine Center testified about the development of integrative 
approaches to treating women's cancers including the program 
being developed at George Washington University. Ms. Silver 
outlined the Quality of Life Program available to cancer 
patients at the Center for Integrative medicine.

          We have asked ourselves this fundamental question: 
        ``How can we enhance the quality of life of the person-
        as-patient?'' Traditionally, on assuming the role of 
        patient, a person has willingly surrendered quality of 
        life--her sense of orientation and personal control--in 
        exchange for a cure. But we are beginning to suspect 
        that surrender may be self-defeating. We would suggest 
        that successful medical outcomes are diminished when 
        the patient lacks control, information and support. 
        Conversely, if these inputs are maximized, the patient 
        may recover more quickly and completely, and have a 
        higher quality of life, whatever the ultimate outcome.
          Most cancer patients say that from the moment of 
        their diagnosis, everything in life is changed. A life 
        that was going along routinely is suddenly out of 
        control, the entire focus on the ``what ifs'' of cancer 
        treatment and its outcome.
          The Quality of Life Program of the Center for 
        Integrative Medicine can assist the patient throughout 
        the course of her illness. At whatever stage of illness 
        the relationship with the Center is initiated, we help 
        determine and meet the patient's needs and goals in a 
        comprehensive way.
          For patients newly diagnosed and awaiting treatment 
        we offer:
          Stress reduction with a focus on personal control and 
        empowerment
          Immune system enhancement to help combat disease
          Relief from symptoms caused by anxiety or depression 
        such as appetite loss, nausea, or sleeplessness
          For patients undergoing aggressive curative 
        treatment:
          Relief from side effects of treatment such as nausea 
        or post-operative pain
          Immune system enhancement to help maximize the 
        effectiveness of treatment
          Relaxation and stress reduction to help restore the 
        mind and body between enervating treatments
          For patients in remission:
          Stress reduction during periods of watchful waiting
          Rebuilding of stamina and flexibility following 
        medical and surgical treatments
          Resumption of healthful diet and nutrition with added 
        emphasis on cancer prevention
          For patients who experience a relapse:
          All of the services and objectives of the pre-
        treatment and treatment phase programs resumed with 
        even greater intensity
          For patients whose illness is not responsive to 
        curative treatment:
          Control of pain and symptoms of the progressive 
        illness
          Mobilization of the powers of the mind to maximize 
        quality of life
          Reduction of stress to allow for end of life planning 
        and resolution.
          Overall, the Center for Integrative Medicine aims to 
        restore a sense of control and well being and offer the 
        patient the freedom to heal physically, emotionally and 
        spiritually.\37\
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    \37\ Testimony of Susan Silver, Center for Integrative Medicine, 
George Washington University, http://www.house.gov/reform/hearings/
healthcare/womens--cancers/Silver.htm.

    During the hearing, it was learned that there are many 
cancer devices and treatments available in Europe, Canada and 
other countries that are showing tremendous promise for the 
early detection and less toxic treatment of cancer which are 
not currently available within the United States. And example 
of this is mistletoe. Several good clinical trials were 
conducted in Europe during the 1980's, but mistletoe is not 
available in the United States and the NCI had not picked it up 
as a potential new treatment for cancer. Upon being assured 
that the NCI was in close communication with its international 
colleagues and aware of promising treatments, the chairman 
asked for the NCI to prepare a list of devices, treatments, 
drugs, and alternative therapies available in Europe and Canada 
not available in the United States. At the end of 1999, the 
only thing that had been provided to the committee was a list 
of five chemotherapy agents licensed in Europe or Canada that 
were not available in the United States.
    While, the NCI created the Office of Cancer Complementary 
and Alternative Medicine to coordinate CAM activities within 
the NCI, neither the office, nor the Institute have gathered 
the data on innovative cancer therapies available outside the 
United States. One of the major complaints received by the 
committee from cancer patients, is that they were forced to 
travel outside the United States in order to have access to 
many alternative cancer approaches.
    4. Fighting Prostate Cancer: Are We Doing Enough? September 
23, 1999.
    This hearing provided an opportunity for the committee to 
review the current status of prostate cancer issues and 
illuminate issues regarding prevention, early detection, 
treatment, research, and the role of nutrition and 
complementary medicine. Prostate cancer is the most common 
cancer among men after skin cancer. In 1999 it was estimated 
that there would be 179,300 new cases of prostate cancer and 
37,000 deaths.\38\ The National Institutes of Health states in 
their report to Congress:
---------------------------------------------------------------------------
    \38\ http://www3.cancer.org/cancerinfo/documents/overviews/
prosover.asp?ct=36.

        Despite advances over the past decade, our treatments 
        for prostate cancer are inadequate, the side effects of 
        treatment are unacceptable, and troubling questions 
        remain about the relative benefit of early detection 
        for the disease. Every day, too many men in the United 
        States hear the life-changing words ``You have prostate 
        cancer.'' Every day, too many men are faced with the 
        agonizing decision of how to treat their prostate 
        cancer. And every day, too many men are dying too young 
---------------------------------------------------------------------------
        of this disease.

    Prostate cancer is the most common cancer among men after 
skin cancer and is the second leading cause of cancer death in 
men. There is a dramatically higher incidence of prostate 
cancer in African American men, with mortality rates more than 
twice as high. As with most cancers, the incidence increases 
with age. More than 75 percent of prostate cancers are 
diagnosed in men over 65. Genetic studies indicate that only 5 
to 10 percent of the cancers are from an inherited 
predisposition. There are an increasing number of studies that 
indicate that dietary fat may be a risk factor.
    The committee calculated the spending on prostate cancer 
research per each new case and found a disturbing disparity in 
research funding. In fiscal year 1999, for HIV/AIDS, the NIH 
spent on average $44,960 on research per each new case of HIV/
AIDS in the United States. In cardiovascular disease, the NIH 
spent $2,019.69 on research per new case of cardiovascular 
disease. And in prostate cancer in America, the NIH devoted 
$941.44 on research on average for each new case of prostate 
cancer in the United States.
    The signs and symptoms of prostate cancer are:
         Weak or interrupted urine flow;
         inability to urinate, or difficulty starting 
        or stopping the urine flow;
         the need to urinate frequently, especially at 
        night;
         blood in the urine;
         pain or burning on urination;
         continuing pain in lower back, pelvis, or 
        upper thighs.
Most of these symptoms are nonspecific and may be similar to 
those caused by benign conditions such as infection or prostate 
enlargement.
    Early detection: It is currently recommended that men over 
the age of 50 who have at least a 10-year life expectancy 
should talk with their health care professional about having a 
digital rectal exam of the prostate gland and a prostate-
specific antigen [PSA] blood test every year. The PSA blood 
test measures a protein (prostate specific antigen) made by 
prostate cells. PSA blood test results are reported as ng/ml 
which stands for nanograms per milliliter. Results under 4 ng/
ml are usually considered normal. Results over 10 ng/ml are 
high, and values between 4 and 10 are considered borderline. 
The higher the PSA level, the more likely the chance of 
prostate cancer. While PSA levels tell how likely a man is to 
have prostate cancer, the results do not provide a definite 
diagnosis. Men with a high PSA result are advised to have a 
biopsy to find out whether or not they have cancer.
    Current Treatment Options:
          Five kinds of treatment are commonly used:
                 surgery
                 radiation therapy
                 hormone therapy (using hormones to 
                stop cancer cells from growing)
                 chemotherapy
                 biological therapy (using the body's 
                immune system to fight cancer)
    Surgery is a common treatment of cancer of the prostate. 
Radical prostatectomy is the removal of the prostate and some 
of the tissue around it. Radical prostatectomy is done only if 
the cancer has not spread outside the prostate.
    Transurethral resection is a procedure in which the cancer 
is cut from the prostate using a tool with a small wire loop on 
the end that is put into the prostate through the urethra. This 
operation is sometimes done to relieve symptoms caused by the 
tumor before other treatment or in men who cannot have a 
radical prostatectomy because of age or other illness.
    Cryosurgery is a type of surgery that kills the cancer by 
freezing it.
    Radiation therapy is the use of high-energy x rays to kill 
cancer cells and shrink tumors. Radiation may come from a 
machine outside the body (external radiation therapy) or from 
putting materials that produce radiation (radioisotopes) 
through thin plastic tubes in the area where the cancer cells 
are found (internal radiation therapy). Impotence may occur in 
men treated with radiation therapy.
    Hormone therapy is the use of hormones to stop cancer cells 
from growing. Hormone therapy for prostate cancer can take 
several forms. Male hormones (especially testosterone) can help 
prostate cancer grow. To stop the cancer from growing, female 
hormones or drugs called LHRH agonists that decrease the amount 
of male hormones made may be given. Sometimes an operation to 
remove the testicles (orchiectomy) is done to stop the 
testicles from making testosterone. This treatment is usually 
used in men with advanced prostate cancer. Growth of breast 
tissue is a common side effect of therapy with female hormones 
(estrogens). Other side effects that can occur after 
orchiectomy and other hormone therapies include hot flashes, 
impaired sexual function, and loss of desire for sex.
    Chemotherapy is the use of drugs to kill cancer cells. 
Chemotherapy may be taken by pill, or it may be put into the 
body by inserting a needle into a vein or muscle. Chemotherapy 
is called a systemic treatment because the drug enters the 
bloodstream, travels through the body, and can kill cancer 
cells outside the prostate. To date, chemotherapy has not had 
significant value in treating prostate cancer, but clinical 
trials are in progress to find more effective drugs.
    Biological therapy tries to get the body to fight cancer. 
It uses materials made by the body or made in a laboratory to 
boost, direct, or restore the body's natural defenses against 
disease. Biological treatment is sometimes called biological 
response modifier [BRM] therapy or immunotherapy.\39\
---------------------------------------------------------------------------
    \39\ http://cancernet.nci.nih.gov/clinpdq/pif/Prostate--cancer--
Patient.html.
---------------------------------------------------------------------------
    While there are many advances in prostate cancer treatment, 
there is much more to the treatment to be considered than just 
the elimination of cancer. In addition to the side effects that 
all cancer patients may deal with--chemotherapy nausea, hair 
loss, mouth sores, fatigue, et cetera--prostate cancer patients 
have to make decisions about treatment that may leave them 
incontinent and/or impotent.
    The committee received testimony from two prostate 
survivors--Former Senator Robert Dole and Congressman Randy 
``Duke'' Cunningham (R-CA). Both shared personal stories of the 
agonies of facing cancer as well as the challenges in making 
decisions. Senator Dole also advocated expanded promotion of 
PSA testing. Congressman Cunningham compared the emotions 
generated by his cancer diagnosis to his Vietnam war 
experience, being shot at as an ace fighter pilot. He also 
shared information on the importance of dietary considerations 
such as the inclusion of tomatoes in the diet for lycopene.
    Mrs. Betty Gallo, the widow of former Congressman Dean 
Gallo--a prostate cancer victim--testified. Mrs. Gallo is now 
the Director for Advocacy and Fundraising of the Dean and Betty 
Gallo Cancer Institute of New Jersey: Only men can get prostate 
cancer, but it has a major effect on the women in their lives. 
Mrs. Gallo shared her perspectives on sharing Congressman 
Gallo's journey with cancer.
    Jeremy Geffen, M.D., executive director, Geffen Cancer 
Center and Research Institute, Vero Beach, FL, presented 
testimony on the human side of treating cancer patients, not 
only the physical issues of cancer, but the emotions and 
psychosocial issues. In addition to his oncology training, Dr. 
Geffen has studied Ayurvedic and Tibetan medicine in India, 
Nepal, and Tibet. He will outline a seven-step program he 
developed and uses in the Geffen Cancer Center. Dr. Geffen 
recently published a book entitled, The Journey Through Cancer.
    Konraid Kail, N.D., a naturopathic physician in Phoenix, 
AZ, testified. Dr. Kail is a member of the newly established 
National Advisory Council for Complementary and Alternative 
Medicine. Dr. Kail outlined natural therapies that may be used 
to treat prostate cancer and the coordination of care for 
patients who desire to include their naturopathic physician as 
part of their oncology team.
    Sophi Chen, Ph.D., associate professor, Brander Cancer 
Research Institute, New York Medical College, a chemist, 
testified about PC SPECs, a Chinese botanical compound that 
research indicates may be effective in slowing cancer cell 
growth.
    Alan Thornton, M.D., of Indiana Univeristy testified about 
proton therapy. This technique, uses protons--elementary 
particles found in the nuclei of all atoms rather than photons. 
Higher radiation doses can be delivered to the tumor by proton 
beam methods because the physical characteristics of protons 
mean that for many anatomic situations there can be a higher 
concentration of dose in the target and lesser doses to 
adjacent normal tissues.
    Richard Kaplan, M.D., testified on behalf of the National 
Cancer Institute. He presented National Institutes of Health's 
Five Year Plan for prostate cancer research.
    The minority called several witnesses. They included:
    Andrew C. vonEchenback, M.D., the executive vice president 
and chief academic officer of the Department of Urology at M.D. 
Anderson Cancer Center of Houston, TX, testified on behalf of 
the American Cancer Society.
    Dr. Ian Thompson, Col., M.D., University of Texas Health 
Science Center at San Antonio testified about ongoing research 
on prostate cancer prevention.
    5. Improving Care at the End of Life With Complementary 
Medicine, October 19, 1999.
    As the Committee investigated cancer therapies, it became 
obvious that end-of-life care in the United States needs 
improvement. Hospice care has become increasingly popular in 
the United States. Most individuals state they would prefer to 
die at home, or in a home-like setting, with their family and 
loved ones around them rather than in a hospital setting. 
Increasing discussion of euthanasia or physician-assisted 
suicide points to the severity of the problems with end-of-life 
care.
    The graying of America will accelerate dramatically between 
2010 and 2030, as baby boomers turn 65 years old. By the year 
2030, 75 million Americans will be over 65, more than 20 
percent of the population. In addition, there are 40 million 
Americans living now with chronic illness. It is estimated that 
this figure may triple by 2050. Each month, 32,000 World War II 
veterans die, many alone and with inadequate pain management.
    While the graying of America accelerates, private 
caregiving resources within Americans' individual networks of 
relatives and close friends are rapidly falling. Social trends, 
including geographic mobility, smaller families and families in 
which both adults are working have all contributed to this 
decline. Specifically, in 1970 there were 21 healthy adults 
representing potential caregivers for every person 85 years or 
older. In 2030, there will be just six such potential 
caregivers for the aged and just four by the middle of the next 
century.
    Informal caregiving provided by relatives and close friends 
represents the unrecognized backbone of care in America. It is 
an enormous resource that can be supported and expanded as we 
grapple with the crisis of how badly Americans now die. A 
survey conducted in 1996 by the National Alliance for 
Caregiving and AARP found that nearly one quarter of all 
households contained at least one caregiver.\40\ It is 
estimated that 25.8 million Americans spend an average of 18 
hours per week caring for frail relatives. The economic impact 
of such care is extraordinary. It amounts to $196 billion per 
year, more than formal home health care ($32 billion) and 
nursing home care ($83 billion) combined.\41\
---------------------------------------------------------------------------
    \40\ Family Caregiving in the U.S., Findings from a National 
Survey, National Alliance for Caregiving and the American Association 
of Retired Persons, 1997.
    \41\ Arno, P.S., Levine, C., Memmot, M.M., The economic value of 
informal caregiving. Health Affairs, 18(2): 182-188.
---------------------------------------------------------------------------
    Americans have come to fear the dying process. Studies have 
shown that Americans are afraid they will suffer and be in 
pain, that they will be alone at death, and that their family 
will be left destitute from exorbitant medical expenses. The 
Institute of Medicine's report, Approaching Death, details the 
severity and pervasive nature of this crisis and concludes that 
there are serious deficiencies in medical education, health 
systems financing, attitudes and culture, and extensive errors 
of omission and commission in clinical practice.\42\ Even in 
otherwise excellent medical institutions, pain and physical 
suffering among dying Americans remains inadequately treated--
or even recognized. Up to 40 percent of dying patients receive 
grossly inadequate analgesia.\43\ Being of minority ethnicity, 
older than 80, or having dementia seriously increase the risk 
of having one's pain untreated. In addition, most Americans 
still die in institutions, approximately 60 percent in 
hospitals and 20 to 25 percent in nursing homes.
---------------------------------------------------------------------------
    \42\ Approaching Death: Improving Care at the End of Life. 
Committee on Care at the End of Life, Institute of Medicine, ed: Field, 
M.J., Cassel, C.K., National Academy Press, Washington, DC, 1997.
    \43\ Knaus, W.A., Lynn, J., Teno, J., et. al. A controlled trial to 
improve care for seriously ill hospitalized patients, JAMA Nov. 22, 
1995, Vol. 274, No. 20. pp. 1591-1598; Cleeland, C.S., Gonin, R., 
Hatfield, A.K., et al. Pain and its treatment in outpatients with 
metastatic cancer. NEJM Vol. 330 (9) Mar. 3, 1994 pp. 592-596; 
Breitbart, W., Rosenfeld, B.D., Passik, S.D., et al. The undertreatment 
of pain in ambulatory AIDS patients, Pain 65: 243-249, 1996; Bernabei, 
R., Gambassi, G., Lapane, K., Landi, F., Gatsonis, C., Dunlop, R., 
Lipsitz, L., Steel, K., Mor, V., Management of Pain in Elderly Patients 
with Cancer, JAMA June 17, 1998, Vol. 279, No. 23, 1877-82.
---------------------------------------------------------------------------
    Patients' preferences for care often are not honored, even 
when those choices are clearly conveyed.\44\ Our health system 
as it exists today routinely pauperizes people and their 
families for being chronically ill and not dying quickly 
enough. In on large research study, one third of families of 
dying patients reported losing most or all of the family's 
major source of income; a third reported losing the family's 
life savings, and 20 percent said that a family member had to 
either move or delay their own medical care, education, or 
career to meet the basic needs of their dying loved one.\45\
---------------------------------------------------------------------------
    \44\ Danis, M., Mutran, E., Garrett, J., Stearns, S., Slifkin R., 
Hanson, L., Williams, J., Churchill, L., A Prospective Study of the 
Impact of Patient Preferences on Life-Sustaining Treatment and Hospital 
Cost, Crit Care Med 1996, 24(11), pp. 1811-1817.
    \45\ Covinsky, K., Goldman, L., Cook, E., Oye, R., Desbiens, N., 
Reding, D., Fulkerson, W., Connors, A., Lynn, J, Phillips, R., The 
Impact of Serious Illness on Patients' Families, JAMA, Dec. 21, 1994 
Vol. 272, No. 23. pp. 1839-1844.
---------------------------------------------------------------------------
    This hearing provided an opportunity to review the current 
status of end of life care across the United States including 
within the Veterans Administration and to discuss the role of 
improving care with complementary medicine. Death is not a 
subject most people like to discuss, but it is a necessary 
topic to cover when looking at improving health care.
    The importance of adequate and compassionate care is 
immeasurable. There are many challenges for physicians and 
health care workers today, including providing adequate pain 
management. The Veterans Administration has been looking at 
ways to improve care for dying veterans. A conference was held 
2 years ago to discuss this and to set up programs to assure 
that all veterans' facilities could provide quality and 
compassionate end of life care. We will hear about the progress 
to date and learn how complementary medicine can play a role at 
improving care.
    The Health Care Financing Administration oversees the 
Medicare program. Currently Medicare will reimburse up to 6 
months of hospice care. Hospice is a special kind of care 
designed to provide comfort and support to patients and their 
families in the final stages of a terminal illness. Hospice 
care seeks to enable patients to carry on their remaining days 
in an alert and pain-free manner, with symptoms under control, 
so that those last days may be spent with dignity, at home or 
in a home-like setting, surrounded by people who love them. 
Mrs. Kathy Buto testified on behalf of the Health Care 
Financing Administration.
    Hospice neither speeds up nor slows down the dying process. 
It does not prolong life and it does not hasten death. It 
merely provides its presence and specialized knowledge of 
medical care, psychological, emotional and spiritual support 
during the dying process in an environment that includes the 
home, the family and friends. Bereavement care is critical to 
supporting surviving family members and friends. Volunteers 
play an important role in supporting the family. Volunteers are 
there when the professional staff cannot be there.
    Hospice services are provided by a team of trained 
professionals--physicians, nurses, counselors, therapists, 
social workers, aides, and volunteers--who provide medical care 
and support services not only to the patient, but to the 
patient's family and caregivers. The patient is usually 
referred to hospice by the primary physician. Referrals can 
also be made by family members, friends, clergy, and health 
professionals.
    The National Institutes of Health [NIH] has funded projects 
in palliative and end of life care. At the Warren Grant 
Magnuson Clinical Center, patients have access to acupuncture 
when pain becomes unbearable. The Clinical Center also provides 
access to vibroacoustic chairs and mats for stress relief for 
patients and family members. These specially designed chairs 
and mats, deliver music to the entire body and are very 
effective in stress reduction. In March 1998, the National 
Institute of Nursing Research issued a report on managing 
symptoms at the end of life. Dr. Patricia Grady, Director of 
the Nursing Institute, testified about the research funded by 
the National Institutes of Health on palliative medicine and 
end of life care including complementary therapies. Dr. Grady 
indicated that a combination of music therapy and guided 
imagery had proven to be effected in improving pain management.
    Mrs. Carolene Marks of San Francisco, CA, testified about 
her personal insights on caring for someone at the end of life 
and the role of complementary therapies at this time. Mrs. 
Marks served on the Alternative Medicine Program Advisory 
Committee for 4 years, is a cancer survivor and an alternative 
medicine educator and advocate. She is the wife of the late 
California State senator, Milton Marks.
    Ira Byock, M.D., also testified. Dr. Byock is the director 
of the Palliative Care Service, Missoula, MT, and is a 
recognized authority on palliative and end of life care. He is 
also the author of the book Dying Well Peace and Possibilities 
at the End of Life. Dr. Byock testified about the need to 
improve pain management and end of life care.
    Xiao-Ming Tian, M.D., L.AC., Bethesda, MD, is a physician 
trained in acupuncture and Traditional Chinese Medicine. He is 
also a Qi Gong Master. Dr. Tian testified about his personal 
experiences being called upon to treat intractable pain and 
relieve suffering for almost 10 years at National Institutes of 
Health. Among the experiences shared was that of treating 
Charles Harkin, brother of Senator Tom Harkin. Charles was 
being treated at the NIH for thyroid cancer and suffered 
unresolved hiccups as a result of medications he was given. He 
also was in a great deal of pain. Through the use of 
acupuncture and Qi Gong, Dr. Tian was able to resolve Charles' 
hiccups and help him to rest.
    Mr. Dannion Brinkley, Aiken, SC, (and Los Angeles, CA), 
chairman of the board of Compassion in Action testified. 
Compassion in Action is a non-profit organization that trains 
hospice volunteers as well as provides community and 
professional education about death and dying issues. Mr. 
Brinkley has served tirelessly for over 20 years recruiting and 
now training hospice volunteers. As the author of two 
international best sellers (Saved by the Light and At Peace in 
the Light), and a motivational speaker, Mr. Brinkley travels 
the world sharing his personal story, and helping others 
overcome their fear of death. He has been credited over the 
years with recruiting over 20,000 volunteers. Through his own 
personal experiences and research, Dannion has become an 
advocate of the importance of integrating complementary and 
alternative medicine into the U.S. health care system. 
Compassion in Action trains hospice volunteers and provides 
volunteers to Veterans Facilities in 17 cities across the 
Nation. Their National Office is housed at the West Los Angeles 
Veterans Administration campus.
    Particular focus at the hearing was on improving end of 
life care for veterans. As Congress grapples with veterans 
issues such as Agent Orange and Gulf War Syndrome, it is 
necessary that we remember those who served in the World wars 
earlier in this century. These heroes that stormed the Normandy 
beaches on D-Day and raised the flag atop Mount Suribachi on 
the island of Iwo Jima. Thirty-two thousand World War II 
veterans die each month. Is the Veterans Health Administration 
providing quality and adequate care? Dr. Thomas Holoran 
testified about VA programs and was accompanied by Dr. Judy 
Salerno. It was learned that there are pockets within the VA 
where hospice care is done very well and the goal within the VA 
is to develop processes to insure that every veteran receives 
quality end of life care.
    Some of the concerns raised at the hearing about 
inconsistency in quality hospice care for veterans follow:
         Because of the frequent rotation of interns 
        and residents, there is a serious discontinuity in 
        patient care within Veterans facilities.
         Pain management is less than optimal, and 
        there have been times when veterans have died in 
        unnecessary pain.
         The dying are kept in rooms where the noise 
        level is so high--radios and televisions blaring--that 
        these individuals cannot die peacefully.
         Inadequate discharge planning often leaves 
        veterans and their loved ones unsupported.
         Well-intentioned nurses cannot serve their 
        patients adequately due to serious under-staffing.
         Patients are moved either within the hospital 
        or to a facility off the grounds of the hospital when 
        they are actively dying.
    There are many complementary therapies that can be helpful 
for end of life care. They include music therapy, acupuncture, 
aromatherapy, massage, and guided imagery. Improving end of 
life care also includes focusing on life review, spiritual, 
physical, emotional, and relationship issues.
    The week of the hearing, Congress was scheduled to vote on 
H.R. 2260, the Pain Relief Promotion Act of 1999--a bill that 
recognizes the importance of good pain management and the 
necessary and legitimate use of controlled substances in pain 
management and palliative care. The bill called for the 
Department of Health and Human Services to develop and advance 
the scientific understanding of palliative care, the 
development of practice guidelines and better education on 
these issues. Through increased research and education, we can 
find better and more compassionate ways of relieving pain for 
those in terminal conditions--including complementary 
therapies.
    d. Legislation.--As a result of these oversight activities, 
Chairman Burton introduced several pieces of legislation which 
were referred to a variety of committees. A brief summary these 
bills are attached here.
    1. H.R. 3305 Dietary Supplement Fairness in Labeling and 
Advertising Act.
    Introduced November 10, 1999, with two co-sponsors, H.R. 
3305 was referred to the Commerce Committee. A bill to amend 
the Federal Trade Commission Act to provide that certain types 
of advertisements for dietary supplements are proper was 
introduced to provide balance in the dispute process regarding 
FTC actions with dietary supplements.
    2. H.R. 3306.
    Introduced on November 10, 1999 with four co-sponsors, H.R. 
3306 was referred to the Committee on Ways and Means. A bill to 
amend the Internal Revenue Code of 1986 to provide that amounts 
paid for foods for special dietary use, dietary supplements, or 
medical foods shall be treated as medical expenses.
    3. H.R. 3304 Food Stamp Vitamin and Mineral Improvement Act 
of 1999 (Senate companion bill S. 1307).
    Introduced on November 10, 1999, with one cosponsor, H.R. 
3304 was referred to the Committee on Agriculture. A bill to 
amend the Food Stamp Act of 1977 to permit participating 
households to use food stamp benefits to purchase nutritional 
supplements providing vitamins or minerals.
    4. H.R. 2635 Access to Medical Treatment Act (Senate 
companion bill S. 1955).
    Introduced on July 29, 1999 with 43 co-sponsors, H.R. 2635 
was referred to the Commerce Committee. A bill to allow 
patients access to drugs and medical devices recommended and 
provided by health care practitioners that are not approved by 
the Food and Drug Administration.
    5. H.R. 2092 Inclusion of Alternative Approaches in Cancer 
Research Act.
    Introduced on June 9, 1999 and referred to the Commerce 
Committee. A bill to require that the membership of advisory 
bodies serving the National Cancer Institute include 
individuals who are knowledgeable in complementary and 
alternative medicine .
    6. H.R. 3677 Thomas Navarro FDA Patient Rights Act.
    Introduced in February 16, 2000 with 48 co-sponsors, H.R. 
3677 was referred to the Commerce Committee and testimony was 
heard at the Subcommittee on Health and the Environment in 
August 2000. A bill to amend the Federal Food, Drug, and 
Cosmetic Act to restrict the authority of the Food and Drug 
Administration to issue clinical holds regarding 
investigational drugs based on other existing treatments rather 
than safety concerns or to deny patients expanded access to 
such drugs.
    6. Dietary Supplement Health and Education Act: Is the FDA 
Trying to Change the Intent of Congress? March 25, 1999.
    There have been numerous complaints to the committee that 
the FDA's interactions with various supplement manufacturers 
have been less than helpful. One small manufacturer shared with 
staff that he was told by an inspector who showed up 
unannounced at his facility, ``we just want to get rid of all 
you little guys and only deal with the large manufacturers.'' 
Another manufacturer was forced into a long court battle when 
the FDA decided their botanical product was a drug not a 
dietary supplement. The manufacturer recently won this case. 
This product that has been shown in high quality research to 
have a beneficial health effect and is a good example of FDA's 
prejudice against supplements. The FDA has recently appealed 
another case they lost in which it was determined that in not 
allowing health claims on supplements they were violating first 
amendment rights.
    As part of the DSHEA legislation, a Presidential Commission 
was appointed to provide recommendations for the regulation of 
label claims and statements of dietary supplements, including 
the use of literature in connection with the sale of dietary 
supplements and procedures for evaluation of such claims. Their 
report was finalized in November 1997. FDA published their 
response to this report in April 1998 including a rulemaking 
that will take effect within 2 years after the report's 
issuance. Congressional intent clearly expressed that FDA 
authorize dissemination of more truthful and non-misleading 
health information about supplements on labels and in labeling, 
not less. FDA's proposed rule redefines ``disease or health-
related condition,'' a key term in the agency's definition of 
``health claims.'' This redefinition would so expand the scope 
of what a disease or health-related condition would include as 
to drastically reduce the amount of information allowed in a 
health claim. This action clearly contradicts the will of 
Congress and undermines the scope of protected speech under 
Section 6 of the DSHEA. Moreover, the proposed rule would 
render a structure function claim an impermissible health claim 
if it contained references to health components that could be 
used to diagnose a disease state by clinical or laboratory 
measures. This prohibition affects statements on liver tissue 
health, PMS, menopausal hot flashes, and other ``non-disease'' 
states.
    Of particular concern to the committee is the failure of 
the FDA to approve claims. Congress has found on several 
occasions that the Significant Scientific Agreement Final Rule 
violates congressional intent and results in suppression of the 
very health information Congress expected FDA to authorize. In 
Senate Report 105-43, it was noted that ``the failure of the 
current system to give adequate weight to the statements of . . 
. authoritative bodies, coupled with the prohibitive economic 
burden that permits only the largest food companies and trade 
organizations to file a health claim petition to gain approval 
of a new health claim, has deprived the public of the full 
disease prevention benefits health claims were intended to 
provide.''
    The primary focus of the hearing was the FDA's Proposed 
Rule on Structure/Function Statements. DSHEA was explicit in 
allowing for manufacturers to include information on labels 
regarding the benefits of a supplement on the structure or 
function of the body, while specifically not allowing for 
disease claims to be made. The FDA's proposed rule on 
Structure/Function was counter to congressional intent and 
specifically moved to redefine the term ``disease'' to make 
most, if not all, structure/function claims in violation of the 
rule.
    All systems of healing, except Allopathic medicine, 
including Ayurveda, Native American healing, or Traditional 
Chinese Medicine, have two parallel currents--the importance of 
spirituality in healing and the important role of botanical 
products and nutrition in healing. In earlier hearings the 
committee learned about the importance of herbal products and 
other dietary supplements in maintaining good health. The 
committee also received testimony from research experts about 
the importance of research into the use of dietary supplements 
such as Glucosamine to help Americans with arthritis and ginkgo 
biloba in delaying the onset of Alzheimer's disease. The 
potential cost savings to the Federal Government in these two 
debilitating illnesses is enormous, and justifies more research 
funding.
    Prior to the passage of DSHEA, the FDA relied principally 
on the 1938 Federal Food Drug and Cosmetic Act [FFDCA], to 
regulate dietary supplements. Under the FFDCA, any product that 
claimed to prevent, treat or mitigate a disease--or to affect 
the structure or any function of the body--was regulated as a 
drug by FDA, requiring pre-market approval and a substantial 
research investment. In today's research environment, bringing 
a new drug to market is estimated to cost upwards of $300 
million.
    During the 1960's, as Americans increasingly began to look 
to natural health methods, including recognizing the role of 
diet in health, and as the work of individuals such as Dr. 
Linus Pauling was published, dietary supplements began to play 
an increasing role in the U.S. diet. FDA continued to adhere to 
the regulatory precepts of the 1938 statute. In the early 
1970's, FDA attempts to limit the potencies of vitamins and 
minerals met with huge popular opposition, leading to the 
enactment of Section 411 of the FFDCA, known as the ``Proxmire 
Amendments.''
    The FDA then began to treat most health-related claims for 
dietary supplements as illegal drug claims. The FDA resisted 
efforts to allow Americans to receive health claims on labels 
on foods, including dietary supplements, in the early 1980's, 
which lead to the passage of the Nutritional Labeling and 
Education Act of 1990 [NLEA]. That act carved out health 
claims--essentially, claims that eating certain foods will 
reduce the risk of onset of chronic diseases--as an exception 
to the ``drug'' definition. At the same time, in Section 
403(r)(5) of NLEA, Congress gave FDA the opportunity to permit 
more information about advances in science to be communicated 
to consumers by adopting a different health claims evaluation 
process for supplements. However, the FDA declined that 
opportunity. In addition, the FDA determined that herbs were 
not ``nutritional'' in the sense that they did not have a 
recommended daily allowance or daily reference value, and thus 
leaving manufacturers unable to obtain health claims. These FDA 
pronouncements spawned a second consumer effort, this time to 
pass the Dietary Supplement Health and Education Act.
    The media, fueled by statements from FDA officials, 
frequently represent the passage of DSHEA as having stripped 
the FDA of the power to regulate dietary supplements and thus 
to remove unsafe supplements from the market. However, the FDA 
has seven points of authority to regulate dietary supplements. 
The FDA has the power to:
 Refer for criminal action any company that sells a 
dietary supplement that is toxic or unsanitary [Section 
402(a)].
 Obtain an injunction against the sale of a dietary 
supplement that has false or unsubstantiated claims [Section 
403(a),(r6)].
 Seize dietary supplements that pose an ``unreasonable 
or significant risk of illness or injury'' [Section 402(f)].
 Sue any company making a claim that a product cures or 
treats a disease [Section 201(g)].
 Stop a new dietary ingredient from being marketed if 
FDA does not receive enough safety data in advance [Section 
413].
 Stop the sale of an entire class of dietary 
supplements if they pose an imminent public health hazard 
[Section 402(f)], and
 Require dietary supplements to meet strict 
manufacturing requirements (Good Manufacturing Practices), 
including potency, cleanliness, and stability [Section 402(g)].
    Additionally, industry self-regulatory efforts supplement 
these governmental powers, as do Federal Trade Commission 
powers over advertising and state safety laws.
    In their zealous regulatory efforts against dietary 
supplements, the FDA claimed that dietary supplements were 
``food additives'' like chemicals added to foods for 
processing. For example, the agency argued that ginseng 
capsules were foods; that ginseng is added to a ginseng 
capsule; and that ginseng is therefore a ``food additive.'' The 
reason the FDA pursued this theory was that it could not lose 
such a case. If the FDA called ginseng a food, the FDA had to 
prove it was unsafe. If the FDA said it was a food additive, 
all that the FDA had to prove was that a scientific expert, 
even an FDA staff member, had to state they thought that the 
ingredient was not ``generally recognized as safe'' among 
experts in the field. Then the manufacturer had to try to 
disprove a negative: no amount of evidence by the manufacturer 
could overcome the FDA expert's conclusory statement. In 1993, 
two Courts of Appeals invalidated the FDA's food additive 
theory, and Congress confirmed in DSHEA that dietary 
supplements were not food additives. DSHEA thus did not change 
the FDA's burden to prove its adulteration cases--that burden 
already existed.
    Recent Court of Appeals decisions have struck down FDA 
efforts to regulate free speech by pharmaceutical companies in 
promoting prescription drug products and by dietary supplement 
manufacturers in making health claims. [Washington Legal 
Foundation and Pearson v. Shalala.] \46\
---------------------------------------------------------------------------
    \46\ Testimony of I. Scott Bass, JD, before the Government Reform 
Committee, Mar. 25, 1998.
---------------------------------------------------------------------------
    This was one of Dr. Henney's first opportunities to discuss 
at length her vision for implementing dietary supplement 
regulations and to explain specific steps that have been taken 
to rectify the bias against supplements among FDA personnel and 
policy. During the hearing, Dr. Henney informed the committee 
that the FDA had all the authority necessary to adequately 
regulate dietary supplements.
    Actress, Raquel Welch provided a public perspective on the 
importance of dietary supplements in maintaining good health. 
As part of her testimony, Ms. Welch stated:

          My understanding is what the FDA proposes is to 
        expand the Definition of disease to the point that 
        virtually all ``Structure/Function Statements'' would 
        be discouraged or outlawed. I know there are instances 
        where label statements are beyond the explicit limits 
        stated in the dietary supplement act. But I believe 
        that even FDA records will show that these claims are 
        found on an infinitesimal number of products, less than 
        1 percent. As a consumer, it seems to me that FDA 
        should use its enforcement powers to eliminate these 
        questionable and unsubstantiated dietary supplement 
        claims. That they be understandable and logical. 
        However, instead, the Agency is proposing virtual 
        elimination of an entire category of consumer 
        information, with broad restrictions and confusing 
        rules. I'd say that's killing a flea with a cannon. Mr. 
        Chairman, millions of consumers like me have and will 
        benefit from learning more about these supplements from 
        ``Structure/Function Statements.'' What the FDA is 
        proposing seems like a regulatory slight-of-hand to 
        stifle such statements. I implore you and the members 
        of this committee to urge the FDA to withdraw its 
        proposed rule. The language in the existing dietary 
        supplement act already gives sufficient direction and 
        establishes explicit limitations on ``structure/
        function statements'' and it gives the FDA the 
        authority it needs to chase down delinquent companies 
        and their products. The FDA's proposal ignores 
        congressional intent and flies in the face of the best 
        interest of the 100 million Americans who take dietary 
        supplements every day.\47\
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    \47\ Testimony of Raquel Welch, http://www.house.gov/reform/
hearings/healthcare/supplement3--25--99/Welch.htm.

    Also testifying were:
    I. Scott Bass, J.D., adjunct professor, Georgetown 
University Graduate School of Public Policy, Washington, DC, as 
well as leading food and drug attorney for Sidley & Austin, Mr. 
Bass was a key advisor to the drafting of the Dietary 
Supplement Health and Education Act. He is the author of 
Dietary Supplement Health and Education Act: A Legislative 
History and Analysis, published by the Food and Drug Law 
Institute in 1996. Mr. Bass presented a brief review of the 
history of legislation in dietary supplements and offered an 
explanation of the legal implications of the proposed FDA 
rules.
    Daniel Kracov, J.D., attorney, Patton Boggs, LLP presented 
testimony regarding Pharmanex's interactions with the FDA 
regarding the red yeast powder product, Cholestin. In 1999, a 
Salt Lake City judge ruled that Pharmanex was correct in 
marketing this product as a dietary supplement.
    Edward M. Croom, Jr., Ph.D., and ethnobotanist, is the 
coordinator of the Phytomedical Project, National Center for 
the Development of Natural Products Research Institute of 
Pharmaceutical Sciences at the School of Pharmacy for the 
University of Mississippi presented testimony about the status 
of research in botanical products and the level of information 
currently known about potential health benefits of botanical 
products.
    Robert S. McCaleb, president of the Herb Research 
Foundation of Boulder, CO, served on the President's Commission 
on Dietary Supplement Labels. Mr. McCaleb testified regarding 
the Commission and the development of their report as well as 
concerns regarding the FDA's proposed regulations. He stated:

          The future of dietary supplement regulation in the 
        United States is uncertain, because of the FDA's 
        proposed rules for implementation of DSHEA. These 
        appear to be an attempt to circumvent the language of 
        DSHEA by preventing the very type of claims which DSHEA 
        was designed to allow. The FDA rules (Docket No. 98N-
        0044) suggest sweeping changes to the regulation of 
        supplements, including a proposed redefinition of the 
        term ``disease.'' By changing the definition of 
        disease, the FDA in effect changes what type of 
        supplement label statements can be made about a health 
        condition. For example, under the proposed FDA new 
        definition, any deviation from the normal function of 
        any combination of parts, organs and systems of the 
        body would be classified as ``disease,'' even if that 
        deviation is universal, such as menstruation or 
        menopause in women. By this proposed new definition, 
        any dietary supplement with virtually any effect on the 
        body could be classified as a drug. This runs counter 
        to the letter, spirit and intent of the Dietary 
        Supplement Health and Education Act of 1994.

    James Turner testified on behalf of Citizens for Health 
regarding the importance of access to quality dietary 
supplements and increased information on labels and labeling.
    Dr. Annette Dickinson, vice president, Scientific and 
Regulatory Affairs, Council for Responsible Nutrition and 
Professor Margaret Gilhooley, Seton Hall University School of 
Law testified on behalf of the minority.
    After this hearing, and reviewing over 200,000 comments to 
the docket, the FDA opted not to attempt to change the 
definition of disease.
    7. How Accurate is the FDA's Monitoring of Supplements Like 
Ephedra? May 27, 1999.
    The committee called a hearing to look at a disturbing 
attempt to promulgate the first regulation on a specific 
ingredient of a dietary supplement based on non-scientific data 
unveiled disturbing information about the monitoring of adverse 
events at the FDA as well as fueling concern that such bias 
continues within the agency regarding dietary supplements that 
a fair and scientifically based regulation is not in 
development.
    The FDA is responsible for tracking adverse events for many 
health related products, pharmaceutical products, medical 
devices, over the counter products, cosmetics, some types of 
foods, dietary supplements, and even veterinary drug products. 
The Special Nutritionals/Adverse Events Monitoring System [SN/
AEMS] was established in early 1993 following the establishment 
of the Office of Special Nutritionals. Reports are received 
from FDA's MedWatch program, FDA's field offices, other 
Federal, State, and local public health agencies, letters and 
phone calls from consumers and health professionals. The 
objective of the hearing was to discuss the accuracy and 
effectiveness of the FDA's Special Nutritionals Adverse Events 
Monitoring System [SN/AEN], using the dietary supplement 
ephedra as an example. Through our investigation on the FDA's 
implementation of the Dietary Supplement Health and Education 
Act, concerns of the accuracy and effectiveness of the current 
monitoring of adverse events for dietary supplements have been 
raised.
    According to the FDA's website, adverse event monitoring 
systems serve as warnings for identifying emerging public 
health problems associated with use of marketed products:
          (1) Adverse event monitoring systems are designed to 
        identify unanticipated or unintended safety problems 
        with use of marketed products.
          (2) Patterns of adverse events help FDA identify the 
        need for further investigation to determine whether 
        public health actions are needed.
    In our March 25 hearing, Commissioner Henney testified that 
in the incidences where a manufacturer is erroneously listed in 
a report for a product they do not manufacture, the erroneous 
listing is not removed from the website, but a correction is 
listed as a footnote. We also learned that policymaking at a 
national an international level is based on this system while 
the FDA clearly admits that the system is fraught with errors. 
Through our investigation we have identified six problem areas:
    1. Timely updates to website: Adverse reactions are not 
promptly posted on the FDA website. Several months pass between 
site updates, leaving anyone outside the FDA unaware of 
potential clusters of adverse reactions. As of May 21, the site 
had not been updated since October 1998. This is of particular 
concern in light of the recent public alert that FDA issued 
regarding GBL, stating that 55 adverse events and 1 death had 
occurred. Most of these cases have not yet been posted on the 
website.
    2. Brand and corporate name identification without 
confirmation: Companies may find their corporate name and brand 
name posted on the FDA website with an adverse reaction about 
which they are not aware, with no evidence as to whether the 
patient actually consumed their product, or a determination as 
to whether the symptoms observed were likely to have resulted 
from the product.
    3. Time lag for Freedom of Information requests: The 
established process for a manufacturer or trade association 
that desires to follow-up on an investigation of an adverse 
event is to request through the Freedom of Information Act, 
information about the case. A frequent excuse from the FDA to 
FOIA requestors is that they do not have the resources to purge 
the case reports of personal information in order to provide 
this information to the requestor in a timely fashion. We have 
received numerous reports of a lack of responsiveness by the 
FDA through this mechanism. In at least one case, a requestor 
is still waiting after 12 months for information requested 
under the FOIA. If the industry is to be responsive to adverse 
events, it is imperative they have access to information 
regarding adverse events in a timely fashion.
    4. Incorrect information not purged: On occasion, a product 
or ingredient is incorrectly stated in a report. However, the 
initial report remains on the website unchanged even when 
errors are identified. The FDA Commissioner eluded to this 
problem in response to questions at the March 25 hearing. We 
have learned that it is a monumental task to have the FDA make 
any corrections to the system--and that as Dr. Henney stated, 
corrections and purging does not occur, rather footnotes are 
added.
    5. No classification of seriousness of event: There is no 
classification of adverse reactions as mild, moderate, or 
serious. The impression is sometimes given that there are 
hundreds of ``serious'' adverse reactions in a given year, when 
only a fraction of the reports actually involve serious 
reports. Additionally, MedWatch, the FDA's program for 
reporting serious reactions and problems with medical products 
such as drugs and medical devices, states that a reaction is 
considered serious if the product caused:
         death,
         a life-threatening situation,
         admission to a hospital or a longer than 
        expected hospital stay,
         a permanent disability,
         a birth defect, or
         the need for medical or surgical care to 
        prevent permanent damage.
    The SN/AEM's explanation of a serious adverse event is 
simply stated as an illness or injury associated with use of a 
special nutritional product: dietary supplements, infant 
formulas, and medical foods.
    6. Causality not established: There is no analysis of 
possible causal relationships between products and adverse 
reactions for dietary supplements. The principles of assessing 
possible cause are well established within the FDA and are 
applied in other arenas such as veterinary drugs. For example, 
in the Veterinary Medicine Reporting System, FDA evaluates 
reports to assess in terms of likely relation to use of the 
product. In 1997, of 3,000 adverse effects reports to the 
Center for Veterinary Medicine, only 1 percent were definitely 
associated with product, 31 percent probably were associated, 
45 percent possibly were associated, 12 percent were definitely 
not reported to the product, and 11 percent lacked adequate 
information to determine association.
    With the increased use of dietary supplements by Americans 
and with concerns of adulterated products, drug interactions, 
and the need to identify public health concerns, an accurate 
and effective reporting system for dietary supplements should 
be a high priority for the FDA.
Ephedra as an Example
    In January the FDA published its priority list for 1999. 
Ephedra was listed at the top of the Dietary Supplement ``A'' 
list. In June 1997, the FDA posted a proposed rule on dietary 
supplements containing ephedrine alkaloids. A proposed rule by 
the FDA has the same force and effective as law.

          The Food and Drug Administration (FDA) is proposing 
        to make a finding, which will have the force and effect 
        of law, that a dietary supplement is adulterated if it 
        contains 8 milligrams (mg) or more of ephedrine 
        alkaloids per serving, or if its labeling suggests or 
        recommends conditions of use that would result in 
        intake of 8 mg or more in a 6-hour period or a total 
        daily intake of 24 mg or more of ephedrine alkaloids; 
        require that the label of dietary supplements that 
        contain ephedrine alkaloids state ``Do not use this 
        product for more than 7 days''; prohibit the use of 
        ephedrine alkaloids with ingredients, or with 
        ingredients that contain substances, that have a known 
        stimulant effect (e.g., sources of caffeine or 
        yohimbine), which may interact with ephedrine 
        alkaloids; prohibit labeling claims that require long-
        term intake to achieve the purported effect (e.g., 
        weight loss and body building); require a statement in 
        conjunction with claims that encourage short-term 
        excessive intake to enhance the purported effect (e.g., 
        energy) that ``Taking more than the recommended serving 
        may result in heart attack, stroke, seizure or death''; 
        and require specific warning statements to appear on 
        product labels. FDA is proposing these actions in 
        response to serious illnesses and injuries, including 
        multiple deaths, associated with the use of dietary 
        supplement products that contain ephedrine alkaloids 
        and the agency's investigations and analyses of these 
        illnesses and injuries. FDA is also incorporating by 
        reference its Laboratory Information Bulletin (LIB) No. 
        4053, that FDA will use in determining the level of 
        ephedrine alkaloids in a dietary supplement.\48\
---------------------------------------------------------------------------
    \48\ Federal Register: June 4, 1997 (vol. 62, No. 107) proposed 
rules pp. 30677-30724 http://vm.cfsan.fda.gov/?lrd/fr97064a.html.

    The committee considered the following questions: If this 
proposed rule is based on an inadequate reporting system, then 
is the rule appropriate? Is it appropriate to establish law 
based on flawed information? Ephedra or Ma Huang has been used 
safely for thousands of years in Traditional Chinese Medicine. 
It is reported that over 15 billion servings of ephedra were 
consumed in the United States last year. Is the ratio of use to 
adverse events strong enough to warrant such a drastic 
regulation? Would a guidance document be more appropriate than 
a rulemaking, especially since several States have mandated 
regulations regarding ephedra at the State level?
    It is important to note that part of the problem with the 
ephedra issue was that a small number of companies marketed 
products specifically for purposes of abuse. There is the 
potential for a criminal element in every industry, including 
health care and dietary supplements. These euphoric products 
were a gross abuse of the system that responsible members of 
the supplement industry have worked diligently with the FDA to 
remove from the marketplace.
    Joseph A. Levitt, Director, Center for Food Safety and 
Applied Nutrition, Food and Drug Administration presented 
testimony on the development of the Special Nutritionals 
Adverse Events Monitory System. He outlined how this system 
functions and how it compares to other monitoring systems 
within the FDA and other HHS organizations. During the hearing, 
Mr. Levitt, admitted that the program was fraught with errors, 
that the FDA staff had not paid enough attention to responding 
to the FOIA requests and that a contractor had recently been 
hired to respond to the requests.
    R. William Soller, Ph.D., senior vice president and 
director of scientific and technical affairs, Consumer Health 
Care Products Association presented testimony regarding the 
elements of an effective monitoring system. Dr. Soller has 
extensive experience with non-prescription drugs and dietary 
supplements and offered viable solutions for the problems that 
have been identified.
    Theodore M. Farber, Ph.D., principal, ToxaChemica, is a 
pharmacologist and a board-certified toxicologist. Dr. Farber 
testified regarding the concern of some regarding FDA's misuse 
of adverse events reporting for policy setting. Dr. Farber 
conducted an extensive evaluation of the published adverse 
events on ephedra. He presented testimony about the scientific 
value of information gleaned from these reports. He reviewed 
the FDA's handling of the dietary supplement ephedra and the 
development of policy regarding its regulation. He showed a 
history of mishandling of this issue that points to the 
continued institutional bias against dietary supplements at the 
FDA.
    Daniel B. Mowrey, Ph.D., president, American Phytotherapy 
Research Laboratory presented testimony on the use of ma huang 
or ephedra historically. He discussed the level of scientific 
research in ephedra and what is already known through 
scientific evaluation on usage, serving size, side effects, and 
adverse events. Dr. Mowrey, has pioneered basic and clinical 
research in medical botany with an emphasis on safety and 
efficacy of whole plant materials, standardized extracts, and 
guaranteed potency herbs for 25 years.
    Annette Dickinson, Ph.D., vice president for scientific and 
regulatory affairs, Council for Responsible Nutrition returned 
to testify about the development of a good monitoring system. 
Also testifying were Mrs. Karen Schlendorff, the mother of a 
young man who while on spring break in 1996 took Ultimate 
Exphoria and died; Mrs. Barbara Michal, the founder of 
H.E.A.T.--Halt Ephedrine Abuse Today--a nonprofit organization 
whose mission is to increase public awareness about the dangers 
of ephedrine and its related drugs, and to promote the 
prevention of abuse of ephedrine and its related drugs; and Dr. 
Raymond Woosley, a professor of pharmacology and medicine at 
Georgetown University.
    The initial concern with ephedra was raised when several, 
less-than-scrupulous companies marketed illicit street drugs 
containing high doses of ephedrine. It is the committee's 
understanding that these illegal products have been removed 
from the market. If such illegal products remain in the 
marketplace, the FDA clearly has the authority to seize them.
    The FDA admits that the SN/AEMS is flawed, but has made no 
move to correct the problems. The FDA took an additional 12 
months to provide FOIA information to requestors. Research 
conducted after the May hearing has shown that ephedra can be 
used safely and effectively for weight loss.
    8. Cancer Care for the New Millennium--Integrative Oncology 
(June 7-8, 2000).
    During this two-day hearing, the committee received updates 
from the Food and Drug Administration, the National Cancer 
Institute, the National Center for Complementary and 
Alternative Medicine, and the Health Care Financing 
Administration regarding research focus and access to an 
integrative approach to cancer care. The committee also 
received testimony from Congresswoman Deborah Pryce and Michael 
and Raphael Horwin--parents who have lost children to cancer. 
Also testifying was James Navarro, father of Thomas Navarro, a 
4-year-old child with medulloblastoma who has become the focal 
point of a grass roots cry for medical freedom. H.R. 3677 was 
introduced to remedy problems at the FDA which have prevented 
Thomas and thousands of other Americans from receiving access 
to clinical trials without first having failed standard 
therapies that have unacceptable risks.
    9. Ethnic Minority Disparities in Cancer Treatment: Why the 
Unequal Burden? (September 25, 2000).I21Cancer strikes all 
socio-economic, cultural, and ethnic groups in America. But it 
often takes the deadliest toll among minorities.
    Although many ethnic minority groups experience 
significantly lower levels of some types of cancer than the 
majority of the U.S. white population, other ethnic minorities 
experience higher cancer incidence and mortality rates. Some 
examples of this include:
 The incidence and mortality rates for multiple myeloma 
rose sharply in the United States from the 1950's to the 
1980's, then leveled off. The rates for African Americans were 
twice as high as for whites.
 Asian-Americans are five times more likely to die from 
liver cancer associated with Hepatitis.
 Vietnamese women suffer cervical cancer at nearly five 
times the rate of white women.
 Hispanics have two to three times the rate of stomach 
cancer.
 Breast cancer occurs less often in African American 
women than white women, but it is typically detected later.
 African-American men develop cancer 15 percent more 
frequently than white males.
    The issues surrounding racial disparities in cancer are 
complex and not well understood. They can be related to a 
higher incidence of cancer, to later detection, and to cancer 
not being treated as well. Research has shown that all three of 
these factors contribute to the disparity in mortality.
            Other Health Issues
    a. Summary.--The acne drug Accutane, manufactured by Roche 
Pharmaceutical, has been linked to numerous serious adverse 
events. Through its adverse events monitoring system, the FDA 
has received reports of 66 suicides and 1,373 reports of 
depression and suicide ideation related to the drug Accutane. 
Accutane was licensed by the Food and Drug Administration [FDA] 
in 1982 as an oral prescription drug for the treatment of 
severe acne. Current recommendations indicate that the drug 
should only be used when a patient has not responded to other 
treatments including antibiotics. The committee learned that 
Accutane was intended to be used as a treatment of last resort, 
but that increasingly dermatologists are using it for less 
severe forms of acne. According to Roche Pharmaceutical, the 
manufacturer of Accutane, the number of domestic and foreign 
reports of serious adverse events in the post-marketing adverse 
events database for Accutane as of April 30 was 5,665. The 
largest percentage of these reports were psychiatric problems. 
Almost 19 percent of the adverse events reported to Roche were 
psychiatric. Also, the most recent Periodic Adverse Drug Event 
Report for Accutane includes, for a 12-month period, over 750 
new psychiatric adverse event reports (foreign and domestic), 
including 200 that were coded as serious events, nine reports 
of suicide attempts, and six reports of completed suicides.
    More aggressive patient education is needed. A Medguide is 
in development that will provide clear warning about depression 
and suicide. The existing patient informed consent document is 
being expanded to fully inform patients of all potential side 
effects.
    b. Benefits.--As a result of the raised awareness, 
Americans who are considering taking the drug Accutane will be 
better informed of all of the potential side effects. The 
manufacturer and FDA are finalizing a broader informed consent 
document that fully explains both the concerns about birth 
defects as well as the concern about depression and suicide. A 
Medguide will be developed and given to every patient by their 
pharmacist at the time they pick up their prescription. The 
committee learned that health care professionals, especially 
dermatologists that typically prescribe Accutane, need to more 
earnest in their actions to discuss possible side effects 
regarding Accutane and other drugs.
    c. Hearings.--One hearing was conducted.
    Accutane--Is this Acne Drug Treatment Linked to Depression 
and Suicide? (December 5, 2000).
    The committee conducted a hearing to receive testimony from 
families directly affected by suicide and suicide attempts as 
well as medical experts and the FDA. Two families testified 
whose sons committed suicide while taking Accutane. 
Additionally, the committee received testimony from Amanda 
Callais, a suicide-attempt survivor. While recovering from a 
suicide attempt, she continued on Accutane until the FDA's Talk 
Paper was issued warning families of concern about the link 
between Accutane and suicide. Shortly after ceasing the 
medication, she fully recovered from major depression and is 
now a senior in high school in an honors program.
            i. A Review of Vaccine Safety Concerns, Policy Issues, and 
                    Concerns of Links to Autism and Other Chronic 
                    Conditions.
    a. Summary.--Expanding on the vaccine investigations 
initiated in the Subcommittee on Criminal Justice, Drug Policy, 
and Human Resources, and the Subcommittee on National Security, 
Veterans Affairs, and International Relations the full 
committee began a review of vaccine safety, policy, and 
concerns about adverse effects of vaccines, including autism 
and other chronic conditions.
    Vaccines have been heralded as one of the most important 
public health advances of the 20th century. Indeed, vaccines 
have been instrumental in virtually wiping out many devastating 
childhood illnesses, such as polio. However, vaccines also have 
serious and unpredictable side effects for a small percentage 
of people who receive them. Each State establishes a mandatory 
childhood immunization schedule based on the recommendations of 
the Federal Government. Every child in the United States is 
required to receive these mandated vaccines prior to entry into 
day care and schools. Additionally, many adults are required to 
receive immunizations, in particular the Hepatitis B vaccine, 
as a condition of employment. Each State has established 
guidelines regarding medical and religious exemptions. Some 
States have established philosophical exemptions as well.
    Vaccines are the only medications that Americans are 
mandated to receive. Any policy that mandates a medical 
intervention to benefit the public at large creates an inherent 
conflict between the interests of the individual and the 
community. The tension between individual risks and public 
benefit is the classic ethical dilemma for public health. Some 
have described the current mandating of an increasing number of 
vaccines to children to be a good intention gone too far. The 
recommendations of the National Vaccine Immunization Committee 
now suggest that children receive at least 20 injections 
against 11 diseases by 6 years of age. If the current 
recommended schedule is followed, at 2 months of age, a child 
will be given four injections for six diseases in one medical 
visit. The same series would be repeated at 4 and 6 months. 
Between 12 and 18 months, a child will receive six injections 
in one visit for 10 diseases. Vaccines on the Childhood 
Immunization Schedule recommended for all children are for the 
following diseases: polio, diphtheria, pertussis (whooping 
cough), tetanus, hepatitis B, hemophilus influenza B, measles, 
mumps, rubella, and chicken pox. The Hepatitis A vaccine is 
recommended for children in certain geographic areas.\49\ The 
rotavirus vaccine had been included in this schedule and was 
removed when the manufacturer removed the rotashield vaccine 
from the U.S. market after serious adverse events occurred. The 
number of immunizations is expected to grow as new vaccines are 
licensed by the FDA.
---------------------------------------------------------------------------
    \49\ http://www.cdc.gov/nip/recs/child-schedule.PDF.
---------------------------------------------------------------------------
    During the course of the committee investigation, it was 
learned that there is a significant lack of science 
investigating long-term safety effects of vaccines, the 
interactions of multiple vaccines in a single day, the 
connection between the increased rates of immunization and the 
upswing in rates of autism, attention deficit disorder, 
diabetes, and pediatric cancers. Vaccines contain numerous live 
viruses, bacterial agents, and numerous ingredients that raise 
concern--including aluminum, mercury, formaldehyde, animal and 
plant RNA, and dyes.
    Many vaccines use the preservative Thimerosal, which is a 
mercury derivative. Mercury is a known neurotoxin. Mercury 
toxicity results in symptoms that are parallel to the symptoms 
seen in autistic children.\50\ In 1999 the FDA evaluated the 
amount of mercury children received through their immunizations 
and learned that the amount of mercury injected into infants 
exceeded Federal safety guidelines. Many children are receiving 
40 or more times the amount of mercury than what is considered 
safe from their mandated immunizations. Repeated requests for 
thimerosal-containing vaccines to be removed from the market 
have been rejected by the FDA and the Department of Health and 
Human Services. The FDA has asked vaccine manufacturers to 
voluntarily reduce or remove thimerosal from vaccines without 
mandating such action. Other mercury-containing medications 
have been removed from the market, including topical ointments, 
but the FDA maintains that no proof of harm has been shown.
---------------------------------------------------------------------------
    \50\ Autism a Unique Type of Mercury Poisoning http://
www.cureautismnow.org/sciwatch/autismandmercury4400.rtf.
---------------------------------------------------------------------------
    During the course of the investigation, the committee 
learned that the whole-cell pertussis vaccine continues to be 
used, even though the recommendation is for a-cellular 
pertussis vaccines are to be used. Whole-cell pertussis 
vaccines are known to cause adverse reactions 50 percent of the 
time. Many of the reactions are mild. However a significant 
number of these reactions are severe, brain-related reactions 
that cause death or disability. Because FDA did not recall the 
whole-cell pertussis vaccine, physicians, HMOs, and clinics 
continue to use their stock pile of vaccine rather than 
purchase newer, safer vaccines.
    Autism rates have risen dramatically in the last 20 years. 
What once was considered a rare disease affecting 1 in 10,000 
children, has now become all too common. Current estimates in 
the United States range from 1 in 500, to 1 in 150 children 
being affected with autism. California has reported a 273 
percent increase in children with autism since 1988. Florida 
has reported a 571 percent increase in autism. Maryland has 
reported a 513 percent increase between 1993 and 1998. While 
some increases in rates can be attributed to an expanded 
definition of autism and better reporting rates, the dramatic, 
near-epidemic levels far exceed what would be expected, and 
what is seen in other conditions over the same timeframe. The 
U.S. Department of Education reports dramatic increases in 
autism rates in every State. The State of California estimates 
an additional $2 million tax burden for each child diagnosed 
with autism in the State.
    Autism displays two distinct patterns--classical autism is 
typically recognized at birth, and late-onset or acquired 
autism typically develops in otherwise normal children in the 
second year of life. There has been no research to date to 
determine if acquired autism is completely genetic or whether 
environmental factors such as severe food allergies, 
immunizations, Vitamin A deficiencies, and environmental 
pollutants cause autism. Many of the children who develop 
autism after vaccination, when tested, have high levels of 
aluminum and mercury in their system. Because the Federal 
Government has not funded the research, many families and 
parent-driven organizations are now raising research funds to 
have these studies conducted.
    The committee received an overwhelming response to the 
investigation from families with autistic children. Mrs. Shelly 
Reynolds, the founder of End Autism Now collected thousands of 
pictures of autistic children from families across the United 
States. She testified, that when queried, 47 percent of the 
parents felt that vaccines contributed to their child's 
development of autism. We heard from physicians that 
oftentimes, children with acquired autism, would begin to 
recover if treated for the myriad of medical issues that arose 
with the onset of autism. Many of these children, when tested 
have high levels of mercury in their body, some have high 
levels of aluminum, copper, and tin as well. When these metals 
are removed through chelation therapy, the children will often 
calm and recover speech. Dr. Stephanie Cave, who testified, 
spoke of children who spoke almost immediately after the 
medical treatment. The committee also received testimony from 
physicians who have had success treating autistic children with 
a protocol that includes anti-fungal, anti-viral, and seratonin 
uptake medications as well as dietary approaches that include 
the exclusion of cassien and gluten products. The HHS position 
to date has been that no evidence of a link between autism and 
vaccines exists. However, HHS has neglected to focus any 
research on this issue. In fact, when researchers with history 
of obtaining NIH research funds, have submitted grant proposals 
to the NIH for studies to research vaccine adverse events, the 
studies are repeatedly rejected. Relevant clinical research 
showing evidence of measles in the bowel of autistic children 
has repeatedly been rejected by HHS while an epidemiologic 
review of children's immunization records that may have been 
flawed has been repeatedly touted as proof that there is not 
connection.\51\ Both researchers testified during the April 
2000 hearing. Dr. Taylor, to date, has been unwilling to share 
the data from the research for independant evaluation.
---------------------------------------------------------------------------
    \51\ Dr. Andrew Wakefield and Dr. Brent Taylor of the Royal Free 
and University College Medical School, London, England.
---------------------------------------------------------------------------
    The committee also initiated an investigation into the 
level of influence the pharmaceutical industry plays in the 
decisionmaking process at the FDA and the Centers for Disease 
Control and Prevention [CDC]. The committee found significant 
evidence to indicate that the conflict-of-interest waivers on 
two key advisory committees are issued too easily and that 
concerns about real or apparent conflicts need to be taken more 
seriously. The committee reviewed the records of the FDA's 
Vaccines and Related Biological Products Advisory Committee 
[VRBPAC], which makes recommendations on the licensing of new 
vaccines. The committee also reviewed the records of the CDC's 
Advisory Committee on Immunizations Practices [ACIP], which 
makes recommendations on which vaccines should be included on 
the Childhood Immunization Schedule.
    The committee focused its investigation on the evaluation 
of the Rotashield vaccine, which was approved by the FDA for 
use in August 1998 and recommended for universal use by the CDC 
in March 1999. Serious problems cropped up shortly after it was 
introduced. Children started developing serious bowel 
obstructions. The vaccine was pulled from the U.S. market in 
October 1999. The committee sought to determine if evidence 
existed at the time of licensing to indicate that the 
rotashield vaccine could cause intersucception, a life-
threatening bowel disorder that often requires corrective 
surgery. The committee found evidence to indicate that the 
intersucception concern had been raised and been discounted. 
There were also concerns about children failing to thrive and 
developing high fevers. Even with all of these concerns, the 
VRBPAC committee voted unanimously to approve it. the ACIP 
discussion centered around the cost-benefit ratio, yet 
unanimously to approve it as well. A number of problems were 
identified regarding conflict of interest and were detailed in 
a staff report.\52\
---------------------------------------------------------------------------
    \52\ Conflict of Interest in Vaccine Policy Making, Government 
Reform Committee Majority Staff Report, http://www.house.gov/reform/
staff--report1.doc.
---------------------------------------------------------------------------
    The committee learned that members, including the Chair, of 
the FDA and CDC advisory committees own stock in drug companies 
that make vaccines. Individuals on both advisory committees own 
patents for vaccines under consideration or affected by the 
decisions of the committee. Three out of five of the members of 
the VRBAC who voted for the rotavirus vaccine had conflicts of 
interest that were waived. Seven individuals of the 15 member 
VRBAC advisory committee were not present at the meeting, two 
others were excluded from the vote, and the remaining five were 
joined by five temporary voting members who all voted to 
license the product. The CDC grants conflict-of-interest 
waivers to every member of the ACIP a year at a time, and 
allows full participation in the discussions leading up to a 
vote by every member, whether they have a financial stake in 
the decision or not. The ACIP has no public members--no parents 
have a vote in whether or not a vaccine belongs on the 
childhood immunization schedule. The VRBPAC has only one public 
member.
            j. Review of Vaccine Safety and Policy.
    a. Summary.--In 1997, President Clinton directed Secretary 
Shalala to work with the States to develop an integrated 
immunization registry system and to require that all children 
in federally subsidized child care centers be immunized. This 
mass tracking of childhood vaccinations has created State 
registries that are tracking children from birth to grave. With 
these State systems reporting back to the Federal level, this 
administration has back-doored the initiation of national 
medical tracking, something the American people have vehemently 
opposed.
    One report stated that the long-term tracking strategy had 
three steps--first to notify families with a post card when 
their child was late for a vaccine. Second, if they did not 
comply, then a Government official would call them on the 
telephone and remind them, and third, if they still did not 
comply, a Government official would visit their home.
    b. Benefits.--The committee's investigation has raised 
awareness nationwide about the need to be fully informed prior 
to immunization. The committee learned that because 
vaccinations were required, many health care providers give 
sick children vaccines to meet immunization guidelines. Parents 
have not been receiving adequate information prior to 
vaccinations and their concerns about adverse events are often 
discounted. HHS has initiated an Institute of Medicine review 
of vaccine safety concerns beginning in 2001. The first 
question to be reviewed will be concerns about a potential 
Vaccine-Autism connection. A large meeting on research-needs to 
determine vaccine safety was conducted by the FDA in November 
2000. NIH institutes are expanding research into the causes of 
autism.
    c. Hearings.--
    1. Vaccines--Finding the Balance Between Public Safety and 
Personal Choice, August 3, 1999.
    As a result of the ongoing activities of the subcommittees 
and concerns raised to the full committee, a hearing was 
conducted to take a step back and look at the development of 
vaccine policy overall and to address numerous concerns about 
the short and long-term safety concerns with vaccines.
    U.S. Surgeon General, Dr. David Satcher, also serves as 
Assistant Secretary of Health for the Department of Health and 
Human Services [DHHS] to which office all vaccines programs 
within Department report. Dr. Satcher, former Director of the 
Centers for Disease Control and Prevention and a survivor of a 
childhood bout with whooping cough (pertussis) provided a 
review of the vaccine development and use in the United States.
Vaccine Injury Compensation Program
    Congress enacted the National Vaccine Injury Compensation 
Program as a no-fault alternative to the tort system for 
resolving claims resulting from adverse reactions to mandated 
childhood vaccines. Enacted in 1988, the program has received 
over 5,000 claims (85 percent were retroactive). This program 
is designed to provide compensation to those injured or killed 
by a vaccine, liability protection for vaccine manufacturers 
and administrators, and vaccine market stabilization. In 1986, 
255 lawsuits were brought against vaccine manufacturers for DTP 
injuries. That number dropped to just 4 in 1997. Claimants now 
must first have their case adjudicated and rejected through the 
Vaccine Injury Compensation Program before they can file a 
vaccine injury lawsuit against a physician who administers the 
vaccine or manufacturer.
    The Department of Health and Human Services has modified 
the injury table several times since Congress enacted the 
program. Some feel changes to this table have been specifically 
to exclude those cases that Congress specifically intended the 
program to cover. The Department states that these changes are 
science-based. The program is administered by the Health 
Resources and Services Administration within HHS.
Vaccine Adverse Event Reporting
    The Vaccine Adverse Event Reporting System [VAERS] is 
managed by the Food and Drug Administration. Licensed 
manufacturers are required to report adverse events. Health 
care providers are encouraged to report adverse events. Members 
of the public who have experienced an adverse event may also 
report this event. Unfortunately, it is estimated that only 1 
in 10 events is actually reported. Physicians and health care 
providers may not be adequately trained to recognize events or 
may not be diligent in making connections between illnesses and 
immunizations.
    Through subcommittee hearings, we learned that the 
Department of Defense filters their VAERS prior to submission 
to FDA. One DOD employee wrote us and said,

          I often read with interest the Anthrax statistics 
        that are published in various printed media both DOD 
        and non-DOD. The most recent article I read cited only 
        34 individuals were adversely effected by the Anthrax 
        vaccine out of hundred of thousands that have received 
        the vaccination. I have 12 employees that are required 
        to submit to the Anthrax vaccine as a condition of 
        employment. Of the 12, three have had adverse reactions 
        and were deemed by the DOD physician not to be able to 
        continue the series of shots.

It is suggested that the vast majority of adverse events with 
this shot are not being reported.
Vaccine Safety Datalink
    This CDC program is a partnership with four large health 
maintenance organizations to continually evaluate vaccine 
safety. While the VAERS system is passive, this system is 
active surveillance encompassing 2 percent of the U.S. birth 
cohort. The program is examining potential associations between 
vaccines and 34 serious conditions.
Research and Development
    Biomedical researchers, with funding from the National 
Institutes of Health and the pharmaceutical industry, are 
increasingly looking to vaccines as a mechanism of preventing 
disease. Recent news article touted that we may one day have a 
vaccine to prevent Alzheimer's Disease. There are over 100 
vaccines in development for a myriad of diseases at this time. 
The basic premise that vaccines work under is to introduce a 
weakened version of a disease into the body, and stimulate an 
immune response, that should develop immunity to the disease.
Immunization Schedule
    Currently, it is recommended that children from birth to 6 
years of age receive 22 doses of 7 vaccines and another 4 in 
the teen years.\53\ Each State sets its own policy as to which 
shots will be mandated and under what circumstances that 
someone may be exempted (medical exemption, religious 
exemption, et cetera.) Unfortunately, the committee heard 
numerous accounts of families who are being bullied by school 
officials who refuse to accept exemptions.
---------------------------------------------------------------------------
    \53\ Recommended Childhood Immunization Schedule, United States, 
January-December 1999, as Approved by the Advisory Committee on 
Immunization Practices [ACIP], the American Academy of Pediatrics 
[AAP], and the American Academy of Family Physicians [AAFP].
---------------------------------------------------------------------------
Information
    When interviewing parents about the vaccination process, we 
learned that there is no real conversation with a health care 
provider at the time a child is vaccinated. It appears that no 
thorough medical background is taken to determine the 
likelihood of an adverse event. It appears that the medical 
profession has become complacent by blindly trusting that 
licensure by the FDA assures that products are safe and that 
they can be given without any review and discussion. However, 
some package inserts of vaccines list ingredients including 
lactose and state not to give the vaccine if a patient is 
allergic to any of the ingredients of the vaccine.
    Witnesses included: Mrs. Tonya and Mr. Jerry Nelson, 
Indianapolis, IN, shared their experience of loosing their 
daughter Abby to a vaccine reaction that was mislabeled as 
Sudden Infant Death Syndrome [SIDS]. Ronald Kennedy, Ph.D., 
University of Oklahoma, recently published a paper in the 
January 1999 issue of Scientific American on DNA vaccines. With 
so many vaccines in development, and the need to make safer, 
more effective vaccines, Dr. Kennedy presented testimony on 
where the science is leading us in vaccine development. He also 
discussed the need for more discussion at the time of 
vaccination. During questioning, Dr. Kennedy stated that the 
DTP vaccine had a known adverse event rate of 50 percent, 
including mild and serious events. It was discovered during the 
hearing that while the DTaP vaccine is now recommended, that 
the DTP vaccine has never been recalled and is still being used 
in the United States.
    Carola Zitzman, Salt Lake City, UT, a board member of Voice 
of the Retarded and is a strong advocate for immunization. 
Carola's first son was born in 1964 with severe mental 
retardation due to gestational exposure to rubella. Mrs. 
Zitzman discussed the realities of raising a child with severe 
mental retardation and the role vaccines play in preventing 
disease birth defects. Mrs. Zitzman raised concerns about 
institutional care for children and adults with mental and 
physical handicaps including concerns about parents and 
custodians losing choices in housing. While the current trend 
is for group housing for the handicapped, there is concern that 
may be regulatory loop holes in providing insuring quality 
care.
    Ann Spaith, Falls Church, VA, is a Department of Defense 
civilian employee who received numerous vaccines at the request 
of her employer testified regarding the deleterious effects on 
her health of receiving work-related vaccines. Among these 
vaccines was anthrax and Bot Tox (an experimental vaccine). Ms. 
Spaith, was fit and healthy prior to vaccination, and was 
cleared for vaccination with blood work. As a result of her 
vaccinations, Ms. Spaith has a severe thyroid disorder that 
will require medication the rest of her life and may require 
removal of her thyroid. Additionally, she has suffered numerous 
other health maladies as a direct result of the vaccines, and 
is not taking the third dose. Along with Marines being court 
martialed for refusing the anthrax vaccine, other military 
members being discharged with dishonorable, or other than 
honorable discharges, reserve members who are resigning rather 
than risk a life of pain or illness from the anthrax vaccine, 
DOD civilian employees are now being fired for refusing the 
vaccine. This presents a serious military readiness issue. Ms. 
Spaith later filed a complaint with the committee that she was 
mistreated at work as a result of testifying before the 
committee.
    Marcel Kinsbourne, M.D., is a pediatric neurologist who has 
reviewed many vaccine injury compensation medical records. Dr. 
Kinsbourne will discuss the importance of vaccines as well as 
the injuries.
    Mr. Rick Rollens, California, a former employee of the 
California State Legislature, has a son that developed autism 
as a result of an adverse reaction to vaccines. The connection 
between autism and the MMR and DTP vaccine is very 
controversial. Mr. Rollens discussed a new California 
initiative that is tracking the upsurge in autism in 
California.
    Rebecca Cole, PKIDS, Chapel Hill, NC, and Keith Bergen Van 
Zandt, M.D., PKIDS, Winston-Salem, NC, and Samuel L. Katz, 
M.D., American Academy of Pediatrics, and the Infectious 
Disease Society of American, Durham, NC, testified in support 
of vaccines.
    2. Autism--Present Challenges, Future Needs--Why the 
Increased Rates? April 6, 2000.
    The committee received testimony regarding the dramatic 
rise in autism rates, the challenges families of autistic 
children face, including making treatment choices, paying for 
selected treatments, the lack of research in some new 
treatments, and educational challenges. The committee also 
received testimony from British researchers regarding concerns 
that the MMR vaccine is causally connected to autism in some 
children. At the conclusion of the hearing, Chairman Dan Burton 
asked HHS Secretary Donna Shalala to assemple a panel of 
preeminent scientific experts, who are free of conflicts of 
interest to:
 Evaluate the existing literature and research 
regarding autism, vaccines, and any possible adverse event that 
could lead to the onset of autism.
 Determine if there is enough existing science to make 
a clear determination about a possible link between autism and 
vaccines.
 Provide a systematic evaluation to the quality of the 
existing body of research.
 Provide recommendations regarding the research that 
would be needed to conclusively determine where or not any 
vaccines can be linked to the onset of autism.
    3. FACA: Conflicts of Interest and Vaccine Development--
Preserving the Integrity of the Process? (June 15, 2000).
    The committee examined conflict-of-interest concerns with 
two HHS committees involved with recommending the licensing and 
universal use of vaccines. Significant concerns were raised 
about the influence the pharmaceutical industry has on the 
approval and recommendation process. A staff report is 
available on the committee website.
    4. Mercury in Medicine--Are We Taking Unnecessary Risks? 
(July 18, 2000).
    The committee examined concerns that mercury-based 
preservatives in childhood vaccines, which may have serious 
health effects, are not being removed from the market fast 
enough. A report was presented to the committee entitled 
Autism--a Unique Type of Mercury Poisoning. This report 
reviewed the existing body of scientific knowledge on mercury 
poisoning and compared the symptoms to those of autism and 
found alarming similarities. Testimony from William Egan, PhD, 
Acting Office Director, Office of Vaccine Research and Review, 
Center for Biologics Evaluation and Review, FDA, determined 
that while the FDA has asked vaccine manufacturers phase out 
the use of the main mercury-based additive (thimerosal), the 
FDA has not used its authority to remove this product from the 
market.
            k. The Department of Defenses' Handling of the Anthrax 
                    Vaccine Immunization Program.
    a. Summary.--The Department of Defense's [DOD] mandatory 
Anthrax Vaccine Immunization Program [AVIP] has been fraught 
with problems since its inception. After the Gulf war, over 
100,000 of the 700,000 military members who served became ill. 
Over 20,000 have died. The symptoms of the condition, now known 
as Gulf War Syndrome or Persian Gulf Illness, are vague and 
often hard to treat. They include malaise, body aches, rashes, 
memory loss, and difficulty in concentrating. While 
environmental toxins may play a role in this condition, the 
experimental drugs and vaccines given to the troops have been 
cited as a potential contributing factor. Non-classified 
Intelligence briefings have indicated that several countries 
have or are suspected of having biological and chemical warfare 
capabilities including weaponized anthrax. The committee has 
received conflicting testimony as to the actual level of the 
threat and the ease with which anthrax can be weaponized.
    Secretary Cohen, when establishing the AVIP, gave four 
preconditions that were to be completed prior to the 
establishment of the program: supplemental testing of the 
vaccine; assured tracking of immunizations; approved 
operational and communications plans; and review of the health 
and medical aspects of the program by an independent expert. 
The DOD failed to successfully complete all of these 
preconditions before beginning the mandatory program.
    Additionally, adverse event rates in several of the initial 
Phase I recipients were significantly higher than expected. 
Pilots and flight crews at Dover Air Force Base suffered 
numerous adverse events such as heart lesions, dizzy spells, 
unresolving flu-like symptoms, malaise, difficulty in 
concentrating, arthritis, and Guillian Barre syndrome. Similiar 
reports have been received from other bases as well. The 
prospective studies indicate adverse events in about 20 percent 
of those who take the vaccine. Five to 35 percent will have a 
systemic reaction and women suffer adverse events at twice the 
rate of men.
    Many active duty and reserve service members raised serious 
concerns about the legality of the order to take the vaccine, 
since the vaccine was licensed for cutaneous exposure to 
anthrax and intended for use by veterinarians and mill workers 
who handled the skins of goats and sheep.
    Additionally, the sole manufacturer of the vaccine, 
Bioport, closed for remodeling rather than face an FDA 
enforcement action for repeated quality control violations. 
This has resulted in a serious shortage of the vaccine. At 
present all vaccine available for use comes from a stockpile of 
vaccine produced prior to 1998. After finishing renovations, 
Bioport has been slow to gain FDA approval to restart 
manufacturing. The DOD provided extraordinary financial relief 
to the company to keep it viable during the FDA approval 
process. Due to ongoing supply problems, the program continues 
to be slowed.
    b. Benefits.--While the DOD refused to halt the AVIP, DOD 
leadership have admitted that mistakes in implementing the 
program have been made and that communication with service 
members has improved. The committee continues to be disturbed 
at the effect on morale and readiness the AVIP program is 
having and the difficulty many vaccine injured have in 
obtaining adequate medical care.
    c. Hearings.--Three hearings were conducted:
    1. ``Defense Vaccines: Force Protection or False 
Security?'' October 12, 1999.
    The full committee examined the overall picture of vaccines 
for defense. As part of our ongoing investigation into 
vaccines, the committee examined the safety, efficacy, the 
importance of informed consent, the concerns about vaccine 
ingredients, purity, and the long-term safety concerns. The 
committee looked into the role of vaccines as a defense 
mechanism for biological warfare. Is it viable and appropriate 
to use vaccines as a defense mechanism? Will it be possible and 
practical to develop vaccines to protect against all known and 
potential biological threats.
    Chairman Burton made the following comments at the opening 
of this hearing:

          Much has been said by numerous Government officials 
        about the biological warfare threat. We have been told 
        in previous hearings and in testimony prepared for 
        today that ``at least 10 nation-states and two 
        terrorist groups are known to possess, or have in 
        development, a biological warfare capability.'' Are all 
        these nation-states our enemies? How many are confirmed 
        to actually have weapon-dispensable anthrax poised and 
        ready to launch? Intelligence and military officials 
        have testified that it is relatively easy to develop 
        and produce chemical and biological weapons. However, 
        they have also testified that it is much more difficult 
        to successfully deploy chemical weapons. For instance, 
        the Deputy Commander of the Army's Medical Research and 
        Materiel Command testified in 1998 that, ``an effective 
        mass-casualty producing attack on our citizens would 
        require either a fairly large, very technically 
        competent, well-funded terrorist or state 
        sponsorship.'' And in March 1999 another expert stated, 
        ``the preparation and effective use of biological 
        weapons by potentially hostile states and by non-state 
        actors, including terrorists, is harder than some 
        popular literature seems to suggest.
          We've also been told that anthrax is the most likely 
        candidate for a biological warfare threat. What is the 
        basis for that determination? With the aggressive 
        information offensive the Department has launched to 
        its military members and the American public, it's made 
        to sound like the equivalent of the Cuban Missile 
        Crisis. If that is so, then those who are in harms way, 
        and the American public, deserve to know the whole 
        story. A State Department fact sheet on chemical and 
        biological warfare states, ``The Department of State 
        has no information to indicate that there is a 
        likelihood of use of chemical or biological agent 
        release in the immediate future. The Department 
        believes the risk of the use of chemical/biological 
        warfare is remote, although it cannot be excluded.''
          There are several issues that need clarification 
        regarding the current anthrax vaccine program. 
        Including answering why the United States is the only 
        member of NATO that mandates this vaccine? The Defense 
        Department would have us believe that the concerns 
        raised about the anthrax vaccine are minor and by a 
        ``small and vocal group.'' In fact, on their website, 
        Major Guy Strawder, states, ``Much of the hand-wringing 
        and bizarre allegations about the vaccine is coming 
        from a vocal minority of people who think the `field' 
        is where a farmer works and `Gortex' is one of the 
        Power Rangers. Most of these folks have never spent a 
        single moment in harm's way and have no appreciation of 
        what that sacrifice means.'' How does that measure up 
        to the following statements that have been sent to us:
         ``I have served my country with honor and 
        total dedication since 1970. To have this unsafe and 
        unproven vaccine put an abrupt end to my service is a 
        travesty of justice. I have constantly received 
        excellent appraisals for the past three decades and had 
        nothing in mind but to continue receiving these favored 
        appraisals. We in the military have been told too many 
        false statements about this vaccine. We have been 
        misled about the safety, the long-term effects 
        associated with this vaccine, the proper number of 
        adverse reactions, and the attrition and refusals in 
        our total force. Many will leave the military because 
        of this vaccine and it's problems. Many of these folks 
        will give up a career dedicated to service to their 
        country.''
         Or the Pilot from Maine who said, ``I will be 
        forced out of the Air National Guard and lose my 
        retirement. I have put in 15 good years as a pilot and 
        have enjoyed every one of them. I will not however, put 
        my health and my future ability to take care of my 
        family on the line for a DOD that refuses to examine 
        their own programs for the safety and cohesion of our 
        military.''
         Or the F-16 fighter pilot who stated, ``I 
        personally have over 22 years of faithful service in 
        the Air Guard. My record is exemplary. I was not 
        planning to retire for at least two to three more years 
        but the anthrax vaccine program has expedited my 
        retirement plans. The commander of my unit will not 
        allow me to stay in until March 7, 2000, when I will 
        have three years time and grade to keep my LTC rank 
        into retirement. After almost 23 years of faithful 
        service to my country I will not be allowed to stay in 
        for the 67 additional days needed to carry Lieutenant 
        Colonel into retirement.''
          Either the Defense Department is being less than 
        forthcoming about objections being raised, or they have 
        their heads buried in the sand. At lot of the concerns 
        have been raised about the actual number of adverse 
        events from the anthrax vaccine. The numbers vary 
        greatly. Every thing from 0.0002 percent reported in 
        the media in February, to 0.2 percent on the package 
        insert, to 20 percent in the one active surveillance 
        currently underway. (Attachment). If the Department is 
        not doing active follow-up and tracking of health 
        concerns service-wide, then how will we ever garner an 
        accurate representation of adverse events?
          Vice Admiral Richard A. Nelson, Medical Corps Surgeon 
        General, U.S. Navy, stated, ``I am aware of the 
        controversy associated with AVIP and the concern our 
        troops have regarding potential side effects. The 
        vaccine is safe. . . . Of the over 82,000 Marines and 
        Sailors inoculated, only eight reactions have been 
        reported via the Vaccine Adverse Reporting System. All 
        have returned to full duty.'' In cross-examination, one 
        medic from 29 Palms had no knowledge of the existence 
        of a Vaccine Adverse Events Reporting System form. 
        Adverse event reports are difficult to file when the 
        medical personnel are not even aware that such a thing 
        exists.
          The Defense Department states that it requires their 
        medical personnel to report all adverse events that 
        cause a loss of duty of greater than 24 hours or 
        hospitalization. Are these the only types of events 
        that are truly adverse? How is it that the Defense 
        Department has been allowed to determine what 
        constitutes a reportable adverse event? The former FDA 
        Commissioner stated that adverse events are 
        dramatically underreported, only one in ten typically. 
        We also know from previous statements made by the 
        Defense Department that military reporting is one-
        seventh of the civilian rate. Given these figures, less 
        than 2 of every 100 systemic adverse event are being 
        reported. And for those who have an adverse event, is 
        adequate care being provided? Why is it that many 
        individuals who have been suffering for a very long 
        time with adverse events, are still waiting for 
        appointments with appropriate specialists? Or the 
        statement from one Sergeant from Georgia who suffered 
        with memory loss, swelling, dizziness, a rash, muscle 
        twitching, and a month of diarrhea, ``the doctors 
        repeatedly ignored my statement that I became sick 
        after taking the anthrax vaccinations.'' And the Master 
        Sergeant from Michigan who was told that his symptoms 
        showed that he had the flu for an entire year. This 
        diagnosis from a military doctor who chose only to talk 
        to him and did absolutely no blood work or examination. 
        And what about plans for more vaccines? Just how many 
        vaccines can one human being safely receive in their 
        lifetime? The Federal Government currently recommends a 
        total of 26 doses of vaccines for children. The typical 
        twenty-year career military member can expect an 
        additional 37 doses of vaccinations, plus the anthrax 
        and other deployment vaccinations that would total at 
        least 40 doses over twenty years. There are currently 
        another 18 vaccines in development under the Joint 
        Vaccine Acquisition Program. And if all the potential 
        biological warfare threats are developed into vaccines, 
        these numbers will skyrocket. Are we going to vaccinate 
        our military to death?
          Maybe we need to look at other approaches to dealing 
        with the biological threat. For instance, with good 
        detection equipment and protective gear, the use of 
        products like the orphan drug that we have just learned 
        is currently in development that causes the anthrax 
        spores to explode rather than synthesize and can also 
        be used to decontaminate equipment and clothing.
          I hope that we can find solutions to these issues, 
        get the full story on issues raised, and by doing so, 
        take action to begin to restore trust in the ranks and 
        restore and preserve the careers that have been 
        destroyed.

    This hearing provided an opportunity to review the 
development of policy regarding protection from biological 
warfare through the use of vaccines. The Subcommittee on 
National Security, Veterans Affairs, and International 
Relations has conducted five hearings on anthrax vaccine 
issues. Anthrax is an infectious bacterial disease spread by 
contact with infected animals, handling infected products, 
eating infected meat, or breathing weapon-dispersed anthrax 
spores. The Department of Defense has stated that anthrax is a 
confirmed threat and that the licensed vaccine is the only 
known protection for this threat. What is the role of detection 
devices, protection gear, and other vaccines? With increased 
concerns about the safety of the vaccine as well as concerns 
about military readiness, it is vital that all concerns be 
appropriately addressed and resolved.
    As part of our ongoing investigation, we learned that 
numerous vaccines are in development to protect the military 
against biological warfare agents. If implemented, these 
vaccines will equal about 300 shots for an individual during 
their military career, in addition to the routine immunization 
schedule they already comply with. Do we have scientific 
evidence to indicate that the human body can safely receive so 
many vaccinations? Do we have a well-developed policy in place 
for decisionmaking criteria?
    The Department of Defense categorizes the Persian Gulf war 
delivery of vaccines as the ``pre-modern era,'' stating that 
since that time, vast advances have been made in the tracking 
of vaccinations and of adverse events. They also have stated 
that no one has ever gotten anthrax that had received two 
vaccines. The Department stated that during the Persian Gulf 
war it was confirmed that Iraq had the capability to use 
anthrax as a weapon of mass destruction. It was stated that 
leaders in the field had the authority to use anthrax, but 
chose not to. The Department also stated that it was confirmed 
that North Korea has weapon-dispensable anthrax and, by flying 
close to the de-militerized zone at sunset, they could spray 
from airplanes enough anthrax that by dawn the next day, the 
entire South Korean population would be exposed to anthrax. If 
these statements are accurate, has the Department of Defense 
implemented an effective policy to insure the safe and 
appropriate delivery of protection to its members?
    The development of policy involves several Government 
agencies including the Department of State and the Food and 
Drug Administration. The Department of State is currently in 
discussion with DOD regarding the purchase of anthrax for 
dependents. The Food and Drug Administration is responsible for 
licensing manufacturers, inspecting facilities, for monitoring 
adverse events, and for monitoring Investigational New Drugs 
[INDs] of which the DOD has an IND for changing the shot 
delivery from subcutaneous to intramuscular and from a six shot 
cycle to a three shot cycle.
    Sue Bailey, M.D., Assistant Secretary for Health Affairs, 
Department of Defense, Major General Randall L. West, Special 
Assistant to the Secretary of Defense for Biological Warfare 
and Anthrax Department of Defense, and Lt. Col. Randy Randolph, 
Director, Anthrax Vaccine Immunization Program Agency testified 
on behalf of the Defense Department, presenting an outline of 
vaccine policy and adverse events monitoring.
    Cedric E. Dumont, M.D., medical director, Office of Medical 
Services, Department of State testified regarding State's 
consideration of making the anthrax vaccine available to 
dependents who reside in high-threat areas. Extensive 
discussion took place regarding the lack of research indicating 
safety for minors and the elderly. Dr. Dumont stated,

          Pre-exposure immunization against infectious diseases 
        is an integral part of Foreign Service life. Our 
        communities are often exposed to exotic infectious 
        agents and pre-exposure administration of vaccines is 
        the most effective means to protect against infectious 
        health risks. Good examples are the hepatitis and 
        yellow fever vaccines. Anthrax exposure, from our point 
        of view, is just one additional health risk. Placed 
        into this context, the anthrax vaccine has been added 
        to the Department's immunization armamentarium. Like 
        all our vaccines, it is offered on a strictly voluntary 
        basis. Aimed at protecting the workplace, this vaccine 
        is offered to eligible individuals overseas. It is 
        administered following strict FDA guidelines. The 
        mobility of the Foreign Service community and the 
        worldwide risk of a biological attack against our 
        missions compel us to make this vaccine available 
        worldwide. Recognizing the limited supplies of the 
        vaccine, we are implementing this program in a stepwise 
        manner, beginning at Posts where we previously pre-
        positioned the vaccine. As the vaccine becomes more 
        available, we plan on expanding the program to all our 
        missions throughout the world. Protection of the 
        Ineligible Population. One of the most difficult 
        challenges we face is how to protect those individuals 
        presently ineligible for the vaccine (less than 18 or 
        over 65 years of age or pregnant). The family members 
        of Foreign Service employees while arguably at a lower 
        risk of exposure to anthrax when its target is the work 
        place are still at risk of exposure especially at 
        missions where embassy housing is clustered near USG 
        offices and where services commonly used by family 
        members are located within the chancery (example: 
        commissary, medical services, etc. . . .). Sensitive to 
        this concern, the Department of State is engaged in a 
        dialogue with the Food and Drug administration and the 
        manufacturer of the vaccine, Bioport, in exploring the 
        feasibility of providing the vaccine on a voluntary 
        basis to presently ineligible individuals through a 
        Food and Drug Administration approved clinical 
        investigational new drug [IND] study. The purpose of 
        the IND study is to determine the safety and 
        immunogenicity of the vaccine in those individuals 
        otherwise ineligible.

    Kathryn C. Zoon, Ph.D., Director, Center for Biologics, 
Evaluation and Research, Food and Drug Administration testified 
regarding the FDA's role in the licensing and monitoring of 
vaccines and its interactions with the Defense Department 
regarding the Anthrax Vaccine Immunization Program. Dr. Zoon 
stated:

          In May 21, 1987, FDA entered into the current MOU 
        with DOD. This replaced the previous MOU signed in 
        1974. The 1987 agreement established procedures to be 
        followed by DOD and FDA regarding the investigational 
        use of drugs, biologics and medical devices. The MOU 
        affirms that clinical testing of new drugs will be done 
        in accordance with application regulations concerning 
        INDs and IRBs. The MOU addressed the possibility of a 
        need for expedited review of an IND by FDA to meet DOD 
        requirements concerning National defense 
        considerations. Under the MOU, DOD is responsible for 
        classifying medical research and development as it 
        relates to information that may be made public under 
        Freedom of Information Act regulations. It should be 
        stressed that this agreement, however, does not allow 
        DOD to perform research on humans without submitting an 
        IND and it requires DOD to comply with all FDA 
        regulations. FDA has not had an official role in the 
        development or operation of the Department of Defense's 
        Anthrax Vaccine Immunization Program, including the 
        AVIP tracking system or the program's adverse event 
        reporting system. In March 1997, DOD briefed FDA about 
        their draft plan for the possible use of the anthrax 
        vaccine to inoculate U.S. military personnel according 
        to the FDA approved labeling for six doses administered 
        on a specified schedule over eighteen months. 
        Subsequently, FDA learned that the DOD plan had been 
        adopted. In July 1998, DOD requested that CDC, in 
        conjunction with the Health Resources and Services 
        Administration, National Vaccine Injury Compensation 
        Program [VICP], organize and coordinate a program to 
        evaluate VAERS reports for the anthrax vaccine. In 
        response to the request by DOD, a group of non-
        government medical experts was convened by the VICP in 
        the fall of 1998 as the Anthrax Vaccine Expert 
        Committee [AVEC]. AVEC, coordinated by VICP, has met 
        eight times since 1998. These experts have been 
        reviewing all VAERS reports for the anthrax vaccine. 
        Representatives of VICP, FDA, CDC and DOD have attended 
        meetings, and FDA has provided information to assist 
        the committee in its deliberations. AVEC is unique in 
        that it provides an independent civilian expert 
        assessment of adverse events reported for the anthrax 
        vaccine. Upon learning that some DOD personnel may be 
        receiving their anthrax vaccine doses significantly 
        later than the FDA approved schedule, both Dr. Jane E. 
        Henney, Commissioner of the Food and Drug 
        Administration, and I, recently sent letters to DOD. In 
        the letters we asked DOD to expeditiously investigate 
        this matter as we are unaware of any data demonstrating 
        that any deviation from the approved intervals of doses 
        found in the approved labeling will provide protection 
        from anthrax infection. We will continue to monitor 
        this issue.

    John B. Classen, M.D., MBA, Baltimore, MD, raised concerns 
regarding the increased incidence of diabetes in veterans and 
the potential that this is linked to vaccines.
    Major Sonnie Bates, pilot, USAF was invited to testify 
before the committee to detail his observations and experiences 
with regards to the Anthrax Vaccine Immunization Program. Major 
Bates had intended to be innoculated with the anthrax vaccine 
as a part of his duties. After arriving at Dover Air Force 
Base, he learned of the unusually high rate of illnesses in 
otherwise healthy individuals who all had one common factor--
receiving the anthrax vaccine. Major Bates raised his concern 
during an initial meeting with his squadron commander, who was 
open and objective about the issue and recommended that Major 
Bates research the issue further in order to make an informed 
decision regarding innoculation. The information provided to 
the committee is a result of Major Bates' research. It is 
important to note that at the time of the hearing Major Bates 
had not yet been ordered to take the vaccine. At no time during 
the hearing did Major Bates indicate his decision to not take 
the vaccine. After the hearing, Major Bates felt retaliated 
against and felt that the order for him to take the vaccine was 
moved up. As a result of these actions, Major Bates refused the 
vaccine and eventually was granted a discharge from the Air 
Force.
    Major Bates learned 12 people, in his squadron alone, have 
unusual or disabling illnesses that did not exist prior to the 
anthrax vaccine and the causes are unknown. They included 
medically diagnosed conditions of thyroid damage, liver damage, 
external and internal cysts (including cysts around the heart), 
autoimmune disorders, crippling bone/joint pain, seizures, 
memory loss, vertigo, and inability to concentrate have been 
documented. In addition, there are as many as 60 cases of such 
unusual illnesses at DAFB. It is important to remember that in 
the military, physical fitness is a must, health status is 
rigorously monitored. If Major Bates' squadron health figures 
represented the norm, then approximately 4.4 percent of our 
military force would be disabled due to these strange 
illnesses. Major Bates expressed concern that the military 
leadership seems desensitized to the illnesses at Dover Air 
Force Base.
    Major Thomas L. Rempfer, Pilot, USAF Reserves offered the 
following testimony,

          I open my testimony with the core values of the US 
        Air Force.

          ``Integrity first, service before self, and 
        excellence in all we do.''

          I am not here today to speak about the safety and 
        efficacy of the anthrax vaccine. Instead, I am here to 
        discuss another reason for the growing retention 
        problem generated by the anthrax vaccination policy: it 
        is integrity, and its relationship to doctrine. After 
        exhausting all avenues within my chain of command, and 
        communicating with hundreds of service members over the 
        past year, I have concluded that the root cause of the 
        negative reaction to the anthrax vaccination policy is 
        a sense that the professional standards demanded of 
        military personnel have been consistently violated by 
        those implementing this policy. It is not, as DOD 
        officials assert, simply a failure to educate, but 
        instead a failure to communicate the truth, the whole 
        truth, and nothing but the truth. Here are just a few 
        examples:
         First, when the anthrax vaccination policy was 
        announced on December 15, 1997, a senior officer, who 
        refused to be named, told reporters: ``It's been 
        licensed since 1970, [and has a] proven safety record. 
        It's been documented.''
         The whole truth is that in April 1998, Dr. 
        Kathryn Zoon of the FDA stated in a letter that, ``data 
        for clinical studies conducted on the long term health 
        effects of taking the anthrax vaccine have not been 
        submitted to the FDA.''
         The General Accounting Office reiterated this 
        fact on April 30, 1999.
         Just last week the Army announced they would 
        now conduct such a study.
         Next, the Assistant Secretary of Defense for 
        Health Affairs, who is a physician, told Congress on 
        March 24th that ``the safety of our AVIP was also 
        confirmed by an independent review of the program.''
         She was referring to a report by a Yale 
        University Medical School professor who was selected by 
        DOD to review the health and medical aspects of the 
        anthrax vaccination policy before its implementation. 
        The whole truth is that the doctor our DOD repeatedly 
        cited for over a year as their independent expert is 
        really an obstetrician and gynecologist. He wrote 
        Congress, upon being requested to testify last April, 
        that he had informed DOD at the time of the review that 
        he had ``no expertise in anthrax.''
         DOD has never acknowledged this admission by 
        their ``expert'' or explained why they asked an OB/GYN 
        to review a biological warfare immunization program. As 
        a result DOD's independent review is perceived as a 
        sham.
         Next, the Assistant Secretary of Defense for 
        Public Affairs speaking about the vaccine in January 
        said, ``It's safe and reliable . . . It works and has 
        no side effects.''
         On June 29th he ridiculed the idea of adverse 
        reactions to the vaccine when he told reporters: ``I've 
        had three shots. My hair is growing more robust than 
        ever. I sleep better. I eat better, run farther. It's 
        been nothing but a great experience.''
         The whole truth is that DOD physicians met at 
        Ft. Detrick, MD, on 25 to 27 May, 1999 to discuss 
        adverse reactions to the vaccine, including the case of 
        an Air Force pilot who developed an auto-immune 
        disorder after receiving the vaccine and had been 
        grounded since November 1998.
         On September 30th the Army Surgeon General 
        admitted to 72 cases of adverse reactions that had 
        required hospitalization--while he continued to 
        minimize the risk of the vaccine.
         Next, the Assistant Secretary of Defense for 
        Public Affairs has also asserted for months that the 
        number of anthrax refusals is only about 200 service 
        members, inferring no significant impact to readiness. 
        Yet, on September 30th a DOD spokesman finally 
        acknowledged that DOD had made a conscious decision not 
        to track refusals.
         The whole truth is that DOD crafted a ``no bad 
        news'' tracking system that only tracks the 
        administration of shots, but does not track adverse 
        reactions or refusals. The Deputy Secretary of Defense 
        admitted to Congress on September 30th, ``he was 
        reluctant to count refusals through a central tracking 
        system because it would undermine command authority.''
         He did not elaborate why telling the truth 
        would undermine the chain of command. Next, the 
        Assistant Secretary of Defense for Reserve Affairs 
        stated on August 17, 1999: ``before Secretary Cohen 
        authorized the use of a single dose, he ordered 
        supplemental testing of the vaccine, doubly ensuring 
        the vaccine's safety and far exceeding any 
        pharmaceutical industry standards. Supplemental 
        testing, combined with the ongoing supervision of the 
        FDA, demonstrates that the vaccine is safe and 
        effective.''
         The whole truth is that on April 29, 1999, BG 
        Eddie Cain admitted that DOD had suspended the 
        supplemental testing after ``inconsistencies'' were 
        found in the procedures being used by the manufacturer, 
        Bioport, despite supervision by another DOD contractor 
        hired to oversee the testing.
         Additionally, the GAO reported that 
        supplemental testing couldn't compensate for a flawed 
        manufacturing process.
         Next, the Assistant Secretary of Defense for 
        Reserve Affairs additionally testified to Congress on 
        September 29th, after being reminded he was under oath, 
        that if someone is going to resign over anthrax, ``they 
        are certainly not going to be subject to any penalties. 
        This is one of the points of the Guard and Reserve.'' 
        The whole truth is that five days later the commander 
        of the 184th Bomb Wing, Kansas Air National Guard, 
        issued a written warning to a B-1 bomber pilot 
        threatening a $500 fine and six months in jail, because 
        the pilot had asked to transfer in lieu of submitting 
        to the vaccine.
         Next, the Deputy Secretary of Defense wrote 
        Newsweek Magazine on April 3, 1998 about the anthrax 
        vaccine manufacturer, stating, ``no shutdown was ever 
        directed or contemplated as a result of any FDA 
        inspection.''
         Additionally, on August 5, 1999, a senior 
        officer who refused to be named told reporters that a 
        threatened FDA shutdown of the manufacturer's 
        production line was an ``urban legend.''
         The whole truth is that the FDA sent a 
        ``notice of intention to revoke'' the manufacturer's 
        license on March 11, 1997 after ``significant 
        deviations'' discovered during previous inspections 
        remained uncorrected. (20) A follow-up FDA report in 
        February 1998 found that, ``the manufacturing process 
        for Anthrax Vaccine is not validated.''
         The manufacturer subsequently ``voluntarily'' 
        suspended anthrax vaccine production. All of the 
        vaccine used on service members to-date was 
        manufactured during the period of repeated significant 
        deviations from FDA manufacturing standards. Next, in 
        September 1998, the Secretary of the Army wrote a 
        letter indemnifying the anthrax vaccine manufacturer.
         It stated: ``The obligation assumed by [the 
        manufacturer] under this contract involves unusually 
        hazardous risks associated with the potential for 
        adverse reactions in some recipients and the 
        possibility that the desired immunological effect will 
        not be obtained by all recipients.'' When that letter 
        surfaced in June, DOD called it ``a misreading of a 
        routine contracting procedure.''
         The whole truth is that the last vaccine to 
        receive similar indemnification was the swine flu 
        vaccine in 1976--a health care fiasco that was 
        supported by the health care community as the anthrax 
        vaccine appears to be today.
         Next, the Director of the Air National Guard 
        testified under oath on September 29, 1999, that only 
        one member of the Air National Guard had left over the 
        anthrax vaccine. The whole truth is that eight pilots 
        from the Connecticut ANG resigned or transferred 
        specifically because of the anthrax vaccine, as did 
        seven pilots in the Wisconsin ANG who are now grounded 
        while awaiting out-processing. Four days after this 
        testimony denying attrition, 22 of 50 pilots in the 
        Tennessee ANG unit in Memphis quit--along with 38 other 
        service members. These are just a few examples of the 
        current attrition and pale in comparison to the 
        expected losses to a program just beginning in the 
        reserves. Finally, the Secretary of Defense has stated 
        that he would be ``derelict'' in his duty if he did not 
        mandate use of the anthrax vaccine.
         The whole truth is that weaponized anthrax has 
        been available since World War II and the anthrax 
        vaccine has been available since 1970. Additionally, 
        the GAO has testified that, ``the nature and magnitude 
        of the military threat of biological warfare has not 
        changed since 1990.''
         Accepting the Secretary's statement means that 
        every other Secretary of Defense in the post-Cold War 
        era has been derelict for not mandating the vaccine. 
        Framing the anthrax vaccination as a moral imperative 
        has precluded an intellectually honest debate about 
        this policy and has resulted in punishment of those who 
        question it.

          Analysis:

          These ten lapses of our core values are merely the 
        beginning in the unraveling of the truth. They have 
        placed military commanders at all levels in an 
        untenable position: either implement a questionable 
        policy or sacrifice their careers. Consequently, the 
        anthrax vaccine policy has turned into a biological 
        loyalty test. The anthrax vaccine is no longer a health 
        policy. Instead, it has become an issue of ``good order 
        and discipline'' and the ability of the military's 
        leadership to impose its will on subordinates. Loyal 
        service members now must express their fealty to the 
        chain of command by submitting to the vaccine. For 
        those who don't, there is arbitrary discipline--
        incarceration and court-martial for some, dismissal and 
        disgrace for others.
          Each of these examples demonstrates a breakdown of 
        intellectual honesty, which is the linchpin of 
        integrity and doctrine. Without honesty doctrine is 
        merely dogma. Congressman Shays has referred to the 
        anthrax vaccination policy as a ``medical Maginot 
        Line.''
          It requires the tacit cooperation of our adversaries 
        to use the only biological agent against which we have 
        invasively defended ourselves. It requires our 
        adversaries to not use chemical agents at all. It 
        requires our adversaries to attack only the one percent 
        of Americans who are vaccinated. Recognizing the 
        logical long-term implications of this facade of force 
        protection former deputy director of the Soviet 
        biological weapons programs, Dr. Ken Alibek, told the 
        Joint Economic Committee of Congress that: ``In the 
        case of most military and all terrorist attacks with 
        biological weapons, vaccines would be of little use.''
          Further, he recently stated: ``We need to stop 
        deceiving people that vaccines are the most effective 
        protection and start developing new therapeutic and 
        preventive approaches and means based on a broad-
        spectrum protection.'' Service members have discovered 
        an acute dichotomy between what defense officials are 
        telling Congress and the information readily available 
        in government documents, Congressional testimony, 
        medical research and news reports. This contrast 
        creates an ethical dilemma for service members whose 
        core values require the questioning of immoral orders. 
        Consequently, out of our respect for the Constitutional 
        imperative of civilian control of the military we have 
        reluctantly and repeatedly asked Congress to intercede 
        and stop the corrosive impact the anthrax vaccination 
        policy is having on our nation's military. If Congress 
        is not proactive in response to DOD's absence of 
        intellectual honesty, the unfortunate reality is that 
        those members of the all-volunteer military who do 
        embody its core values will simply leave.
          I close with an excerpt from The Soldier and the 
        State, by noted Harvard military scholar, Samuel 
        Huntington. He rhetorically asked, ``what does the 
        military officer do when he is ordered by a statesman 
        to take a measure which is militarily absurd when 
        judged by professional standards and which is strictly 
        within the military realm without political 
        implications?'' Huntington answered, ``the existence of 
        professional standards justifies military 
        disobedience.'' Our professional standards have been 
        made very clear: Integrity first, service before self, 
        and excellence in all we do. Therefore, I believe I 
        would be derelict in my duty if I did not take this 
        opportunity to express my adamant professional dissent 
        toward the Anthrax Vaccine Immunization Policy. As 
        well, it would be unconscionable for me not to seek 
        redress for all Service members, dedicated to the 
        profession of arms, who have been inexorably drawn into 
        this professional military dilemma.

    Neal A. Halsey, M.D., director, Institute for Vaccine 
Safety, Johns Hopkins University presented testimony supporting 
vaccine safety.
    Kwai-Cheung Chan, Director, Special Studies and Evaluation, 
U.S. General Accounting Office, presented the findings of the 
ongoing GAO investigation of the anthrax issues. The GAO's 
investigation has uncovered a higher than expected adverse 
reaction rate, including evidence that females have reactions 
at twice the rate that males do. Concerns raised by the GAO 
included the viability of the Anthrax Vaccine Immunization 
Program, concerns that the actual threat has not increased in 
10 years and is being misrepresented, and concerns that the 
program is having a deleterious effect on retention and morale.
    William J. Crowe, Jr. (Adm, USN Ret.) testified regarding 
the development of defense policy for biological warfare during 
his tenure as chairman of the Joint Chiefs of Staff and his 
role as part owner of Bioport, the anthrax vaccine manufacturer 
with a sole-source contract to sell anthrax vaccine to the 
Department of Defense to inoculate 2.4 million members of the 
military. Admiral Crowe testified,

        BioPort monitors all reports of any unusual reaction. 
        The company is dedicated ``first and foremost'' to 
        producing a safe vaccine. Since the takeover of the 
        laboratory in 1998, BioPort has installed an enhanced 
        quality system and made extraordinary efforts to ensure 
        the continued safety and efficacy of the vaccines. I 
        should note in this regard that not a single dose of 
        this vaccine has ever been released without FDA 
        approval. Frankly, there is no question in my mind that 
        we should bend every effort to protect our forces 
        against anthrax attacks. Believe me, the descriptions 
        of people dying from the anthrax spore are horrifying. 
        It is an agonizing way to die. The effect is very 
        similar to that of the Ebola virus. I suspect if we had 
        had more experience with anthrax deaths, we would 
        better appreciate what the Department of Defense is 
        trying to do. The argument as to whether the military 
        program should be voluntary or mandatory is outside my 
        purview. I have little desire to enter that argument 
        but, again, I have chosen personally to protect myself 
        by taking the vaccine. Before closing let me discuss 
        one peripheral issue. It would be naive of me not to 
        mention some of the vague and rather misinformed 
        criticisms of my association with BioPort. It has on 
        occasion been rumored that the decision to inoculate 
        all service personnel was made to benefit the BioPort 
        Corporation and indirectly me, presumably because of my 
        past associations with the military and the 
        Administration. If this charge were not so ridiculous, 
        it would be offensive. It outrageously exaggerates my 
        influence. I didn't have that much influence when I was 
        Chairman and I certainly don't have it now. Let me be 
        completely clear. I never, repeat never, solicited any 
        official of this Administration to install or promote a 
        mandatory inoculation program. Secretary Cohen's 
        announcement of the mandatory vaccine requirement was 
        made on May 18, 1998. The Steering Group's 
        deliberations took place many months before this date. 
        Actually, a Washington Post article reported in late 
        1996 that such a policy was being considered. At the 
        time of the official announcement, the group I was 
        associated with was engaged in a spirited competition 
        with a number of other bidders to privatize the old 
        Michigan Laboratory. The bid winner was not selected 
        until June 1998 and the decision was made by the State 
        of Michigan. The Department of Defense maintained a 
        neutral position throughout this process. Frankly, the 
        May 18 announcement made the final bidding phase of the 
        competition more intense. The attempt to link me with 
        the Secretary's decision is pure fantasy.

    Jack Melling, the Salk Institute, Biologics Development 
Center, Stroudsbourg, PA, testified regarding the development 
of the British program on biological defense and presented a 
comparison of the two programs including the use of the anthrax 
vaccine.
    Milton Leitenberg, senior scholar, Center for International 
and Security Studies at Maryland, University of Maryland, a 
policy expert on the proliferation of biological warfare 
testified regarding the current level of threat for anthrax to 
be used in war time situations.
    2. The Anthrax Vaccine Immunization Program--What Have We 
Learned? Part One (October 3, 2000).
    Congressman Metcalf presented his findings regarding the 
discovery of the additive Squalene in the anthrax vaccine. The 
committee also received testimony from numerous injured 
military members who feel their life-changing injuries are due 
to the anthrax vaccine.
    3. The Anthrax Vaccine Immunization Program--What Have We 
Learned? Part Two (October 11, 2000).
    This hearing reviewed the DOD's implementation of the 
anthrax vaccine program, including concerns about retention and 
readiness problems developing in the National Guard and Reserve 
forces due to seasoned military members, in particular pilots, 
leaving the military or transferring out of flight positions to 
avoid risks associated with the vaccine. The committee sought 
clarification from DOD witnesses on conflicting statements made 
under oath to Congress and to the troops.
    d. Legislation.--In July 1999, Congressmen Walter Jones and 
Ben Gilman introduced legislation in response issues raised 
through the committee's investigation. Both bills were referred 
to the Armed Services Committee.
    1. H.R. 2548 Department of Defense Anthrax Vaccination 
Moratorium Act.
    Congressman Gilman introduced this bill to suspend further 
implementation of the Department of Defense anthrax vaccination 
program until the vaccine is determined to be safe and 
effective and to provide for a study by the National Institutes 
of Health of that vaccine. There were 44 cosponsors.
    2. H.R. 2543 American Military Health Protection Act.
    Congressman Walter Jones introduced this bill to make the 
Department of Defense anthrax vaccination immunization program 
voluntary for all members of the Armed Forces. There were 40 
cosponsors.
            l. Missing White House E-mails: Mismanagement of Subpoenaed 
                    Records, March 23, March 30, May 3, and 4, 2000.
    On day one of these hearings, the committee heard testimony 
from six employees of Northrop Grumman Corp.--an outside 
contractor that provides technology support services to the 
Executive Office of the President [EOP]--and one EOP employee 
responsible for the Automate Records Management System [ARMS]. 
The witnesses testified about a technical failure in ARMS that 
prevented the White House from completely searching archived e-
mail in response to various congressional and grand jury 
subpoenas, about the White House's knowledge of the failure 
dating back 2\1/2\ years to the summer of 1998, and about the 
threats and secrecy requirements from White House officials 
Mark Lindsay and Laura Crabtree. The committee also heard 
testimony from Mark Lindsay and Laura Callahan who each denied 
the allegations against them.
    On day two of these hearings, the committee heard testimony 
from Counsel to the President Beth Nolan and Deputy Attorney 
General Robert Raben. Beth Nolan testified about her and her 
office's knowledge of the ARMS failures and why it had never 
informed the committee about its inability to search archived 
e-mail records. Robert Raben testified about the criminal 
investigation launched by the Justice Department following the 
committee's first hearing on the e-mail matter and the refusal 
of the Department to make Civil Division attorneys available 
for interviews with committee staff.
    During days 3 and 4 of the hearings, the committee 
continued its investigation of alleged threats and obstruction 
of justice regarding the White House's failure to produce 
hundreds of thousands of e-mails potentially responsive to 
subpoenas from Congress, the Justice Department and the Office 
of the Independent Counsel. During the first panel of the May 
3, 2000 hearing, the committee heard testimony from Karl 
Heissner, Branch Chief for Systems Integration and Development 
at the Office of Administration, as well as Michael Lyle, 
Director of the Office of Administration. The committee learned 
that, although the reconstruction project was handed over to 
Heissner, he received no direction from Office of 
Administration officials--including Mark Lindsay--to move 
forward with the project. During the second panel of the 
hearing, the committee heard from Assistant Attorney General 
Robert Raben on the Justice Department's criminal investigation 
of the e-mail matter.
    On May 4, 2000, the committee also heard two panels, the 
first comprised of Mark Lindsay, Assistant to the President for 
Management and Administration, Charles F.C. Ruff, former White 
House Counsel, and Cheryl Mills, former Associate White House 
Counsel. Mr. Ruff testified that he was ultimately responsible 
for a faulty comparison test that the White House relied on to 
conclude that there was not a problem with searches for e-
mails. In the second panel, the committee received testimony 
from Beth Nolan, White House Counsel, and Dimitri Nionakis, 
Associate White House Counsel. Nolan argued that the e-mails 
generated for the comparison test were not responsive to the 
committee's investigation, but the White House nevertheless 
produced the documents.
            m. Contacts Between Northrop Grumman Corporation and the 
                    White House Regarding Missing White House E-mails, 
                    September 26, 2000.
    At this hearing, the committee received testimony from 
Deputy Attorney General Alan Gershel of the Justice Department. 
The committee asked Mr. Gershel to testify to help the 
committee determine the extent to which the Justice Department 
was taking its criminal investigation into the e-mail matter 
seriously. However, Mr. Gershel was unwilling to disclose how 
many attorneys have worked on the Campaign Task Force's 
criminal investigation of the e-mail matter and was unable to 
cite any legal authority or written policy for refusing to 
provide the staffing levels to the committee.
    Also, Mr. Gershel conceded that he misspelled the name of 
Daniel Barry, a key individual implicated in the e-mail matter, 
in a letter notifying him that he was not a target in the 
Justice Department's investigation. And, despite that Mr. 
Gershel supervises the Campaign Financing Task Force, at the 
hearing, he was unable to identify individuals central to even 
that investigation.
            n. The Committee's Oversight of the Department of Justice's 
                    Campaign Finance Investigation.
    The committee's investigation of campaign finance 
irregularities and violations of law in the 1996 Federal 
elections led the committee to conduct oversight of the 
Department of Justice's parallel investigation. The committee 
became concerned about the Justice Department's handling of the 
campaign finance investigation when it learned through media 
reports that Director of the FBI Louis J. Freeh, wrote a 
November 24, 1997, memorandum to the Attorney General 
recommending that an independent counsel be appointed. The 
committee subpoenaed a copy of the memorandum and Attorney 
General Reno declined to produce it. Eight months later, 
Supervising Attorney of the Task Force Charles G. La Bella 
wrote a July 16, 1998, memorandum to the Attorney General Reno 
recommending the appointment of an independent counsel. The 
committee subpoenaed the La Bella memorandum, and again, 
Attorney General Reno declined to provide it to the committee.
    For 2\1/2\ years, the committee struggled to obtain copies 
of the Freeh and La Bella memorandum from the Justice 
Department. During that period of time, the committee issued 
four different subpoenas for the memos, in addition to a number 
of additional formal requests for the documents. In May 2000, 
the Justice Department finally relented, and provided copies of 
the Freeh and La Bella memos, and a number of other memoranda 
relating to the Attorney General's independent counsel 
decisionmaking process, to the committee. The committee 
released those documents to the public a short time later, on 
June 6, 2000.
    The memoranda showed that both Director Freeh and 
Supervising Attorney La Bella believed that an independent 
counsel should have been appointed to investigate the campaign 
finance investigation. Furthermore, they agreed that the 
Department of Justice was applying the Independent Counsel Act 
in a manner that almost ensured that one would not be 
appointed. Both believed that there was a higher standard for 
initiating an investigation of individuals covered under the 
Independent Counsel Act. The committee found the memoranda 
troubling in that they painted a bleak picture of the Justice 
Department's handling of the campaign finance investigation. In 
August 2000, the committee learned through the media that the 
new Supervising Attorney of the task force, Robert Conrad, 
recommended that the Attorney General appoint a special counsel 
to investigate Vice President Gore. The Independent Counsel Act 
expired on June 30, 1999, therefore, only a special counsel 
could be appointed. The committee subpoenaed the Conrad 
memorandum in August 2000, however, the Attorney General has 
refused to produce it.
    In the course of its oversight investigation, the committee 
sought to ascertain what information and evidence the Justice 
Department's Campaign Financing Task Force was collecting. In 
so doing, the committee subpoenaed from various entities and 
individuals the document requests or subpoenas they had been 
issued by the Department of Justice. The committee found that 
the Justice Department failed to pursue key individuals in the 
investigation. For example, the task force waited years to 
request from the White House information on people who played 
major roles in the investigation. In addition, the Democratic 
National Committee refused to comply with the committee's 
subpoena for Department of Justice requests or subpoenas.
    The committee conducted its oversight investigation to 
ensure that the Attorney General was carrying out her 
responsibilities as the chief law enforcement officer in 
situations where it was apparent that she had a conflict of 
interest. The committee found that the Attorney General did 
have a conflict in investigating the campaign finance matter, 
and her decision to retain control of the investigation of her 
superiors and her political party showed an unacceptable 
indifference to the appearance of impropriety. The committee 
held several hearings related to its oversight investigation of 
the Department of Justice's handling of the campaign finance 
investigation and issued a report as well.
            o. The Role of Yah Lin ``Charlie'' Trie in Illegal 
                    Political Fundraising, Part I, March 1, 2000.
    The committee held a hearing with Yah Lin ``Charlie'' Trie, 
a major figure in the campaign finance investigation. Mr. Trie 
was questioned about his links to various foreign governments 
and businessmen, his contributions to the Democratic National 
Committee [DNC], and his access to President Clinton and the 
White House. Mr. Trie testified about his relationships with 
several powerful overseas businessmen who have ties to the 
Chinese Government, including Ng Lap Seng (a.k.a. Mr. Wu) and 
Tomy Winata. Mr. Trie used money from Ng Lap Seng to funnel 
illegal foreign contributions to the DNC. Mr. Trie and his 
companies contributed approximately $230,000 to the DNC. Mr. 
Trie admitted that the hundreds of thousands of dollars he 
received from overseas was not reported on his U.S. income tax 
returns. Mr. Trie then worked with DNC officials to invite 
several foreign nationals to join the a DNC donor program in 
exchange for political contributions. Mr. Trie also testified 
about his relationships and business dealings with various 
employees of the Lippo Group, including John Huang and James 
Riady. Mr. Trie confirmed that he solicited, and illegally 
reimbursed, contributions for DNC fundraising events where John 
Huang was in charge. The DNC returned $645,000 in contributions 
solicited by Mr. Trie.
            p. The Justice Department's Implementation of the 
                    Independent Counsel Act, June 6, 2000.
    The committee called this hearing after it received 
numerous memoranda regarding the implementation of the 
Independent Counsel Act from the Department of Justice. The 
committee heard the testimony of Lee Radek, Chief of the Public 
Integrity Section, U.S. Department of Justice; William 
Esposito, former Deputy Director, Federal Bureau of 
Investigation; Neil Gallagher, Assistant Director for 
Terrorism, Federal Bureau of Investigation. The committee 
questioned the witnesses about a meeting which took place 
between them on November 20, 1996, at which Mr. Radek told Mr. 
Esposito that there ``was a lot of pressure on him'' regarding 
the campaign finance investigation, and that ``the Attorney 
General's job could hang in the balance.'' Mr. Radek was also 
questioned about his role in the campaign finance investigation 
and the various memoranda he had written regarding the 
implementation of the Independent Counsel Act.
            q. Has the Department of Justice Given Preferential 
                    Treatment to the President and Vice President, July 
                    20, 2000.
    The committee questioned four top Justice Department 
officials--Assistant Attorney General James Robinson, Deputy 
Assistant Attorney General Alan Gershel, Assistant Attorney 
General Robert Raben, and the Campaign Financing Task Force 
Supervising Attorney Robert Conrad--about disparate treatment 
President Clinton and Vice President Gore received in the 
campaign finance investigation. The Justice Department provided 
the President and Vice President copies of their April 2000 
interviews with the task force, which the President and Vice 
President subsequently released, without giving copies to the 
committee because the release of the interviews would harm 
ongoing criminal investigations. The Justice Department 
officials would not comment on videotape evidence where Vice 
President Gore appeared to tell Indonesian gardener Arief 
Wiriadinata that they should show DNC issue advertisements to 
James Riady, who resided in Indonesia, for the purpose of 
soliciting political contributions. The Justice Department 
officials would also not comment on subpoenas issued by the 
Justice Department to various government agencies, including 
the White House, which showed that records relating to key 
individuals in the investigation were either just recently 
subpoenaed or not subpoenaed at all.
            r. Felonies and Favors: A Friend of the Attorney General 
                    Gathers Information from the Department of Justice, 
                    July 27, 2000.
    At this hearing, the committee received evidence that 
Rebekah Poston, a prominent Florida attorney who was also a 
friend of the Attorney General, was involved in potentially 
illegal conduct, and had also obtained highly unusual favors 
from the Justice Department. The evidence showed that Ms. 
Poston, who was representing Soka Gakkai, a prominent Buddhist 
sect, had hired private investigators who illegally obtained 
National Crime Information Center [NCIC] arrest record 
information on Nobuo Abe, the leader of a rival Buddhist sect. 
The evidence also showed that Ms. Poston tried to obtain this 
same information legally through the Freedom of Information Act 
[FOIA] process. When her FOIA request was rejected, she 
approached high-level political appointees in the Justice 
Department, including John Hogan, the Attorney General's Chief 
of Staff, and John Schmidt, the Associate Attorney General. As 
a result of these contacts, Ms. Poston obtained a reversal of 
Justice Department policy, and obtained the information she 
sought from the Justice Department. The committee heard 
testimony from Rebekah Poston, Richard Lucas, a private 
investigator who had worked for Ms. Poston, and Philip Manuel, 
another private investigator who worked for Ms. Poston. The 
committee also heard testimony from Justice Department 
witnesses John Schmidt, the former Associate Attorney General, 
John Hogan, the former Chief of Staff to the Attorney General, 
and Richard Huff, the co-Director of the Office of Information 
and Privacy at the Justice Department.
            s. Russian Threats to United States Security in the Post 
                    Cold War Era.
    On January 24, 2000 the committee held a field hearing in 
Los Angles, CA to inquire about the threat of Soviet arms 
caches left in the United States after the cold war. Witnesses 
included: Congressman Curt Weldon; Congressman Tom Campbell; 
Stanislav Lunev, former GRU agent; Dr. Peter Pry, author of War 
Scare; Dr. William Green, California State University-San 
Bernadino; a representative from the CIA; and a representative 
from the FBI.
    The committee heard testimony from Congressman Curt Weldon 
on how he has questioned members of our government and the 
Russian Government. Stanislav Lunev gave compelling testimony 
about how the Soviet government asked him to find locations in 
the Washington, DC area to hide weapons of mass destruction. 
Dr. Pry and Dr. Green explained the current state of the 
Russian military and how they still pose a threat to the United 
States. The CIA and FBI provided testified under a closed 
session of the hearing.
            t. Rising Fuel Prices and the Appropriate Federal Response.
    On June 28, 2000 the committee held a hearing to examine 
the causes for rising gasoline prices, the impact on the U.S. 
economy, and the administration's response to the situation. 
Witnesses included: Mr. Scott Schneider, vice president of 
sales, ``Mister Ice''; Mr. Mark Hrobuchak, CEO/president of MPH 
Transportation & Logistics; Elaine Oberweis, CEO of Oberweis 
Dairy; Doug Wilson, farmer and member of NGCA; Charles Bailey, 
an electrician; Secretary Bill Richardson, Department of 
Energy; Administrator Carol Browner, Environmental Protection 
Agency; and Chairman Robert Pitofsky, Federal Trade Commission.
    Midwestern citizens told the committee heard the impact of 
the high price of gasoline in the summer 2000 on their personal 
lives and businesses. The committee asked Secretary Richardson 
why the price of gasoline rose so dramatically and what steps 
the Department of Energy was taking to reduce the cost of fuel. 
Administrator Browner responded to questions on the impact of 
reformulated gasoline and other EPA policies on the price of 
fuel. Chairman Pitofsky explained to the committee the FTC 
investigation into possible price fixing by the oil companies 
in the Midwest.
    On September 20 and 21, 2000, the committee held hearings 
on the potential energy crisis in the winter of 2000. Witnesses 
on September 20 included: Mr. John Santa, Chief Operations 
Officer, Santa Fuel; Mr. Ray Tilman, former president, Montana 
Resources; Mr. David Pursell, vice president of Upstream 
Research, Simmons & Company International; Mr. Steve J. Lane, 
senior facilities engineer, SDL, Inc.; Mr. David Hamilton, 
policy director, Alliance to Save Energy; Mr. Bob Slaughter, 
general counsel and director of public policy, National 
Petrochemical Refiners Association; Mr. Curt Hildebrand, vice 
president of project development, Calpine Corp.; Mr. Steve 
Simon, president of Worldwide Refining and Supply, Exxon Mobil 
Corp.; and Mr. David Hawkins, director of Air and Energy 
Programs, Natural Resources Defense Council. Witnesses on 
September 21 included: Secretary Bill Richardson, Department of 
Energy; Administrator Carol Browner, Environmental Protection 
Agency; and Chairman James J. Hoecker, Federal Energy 
Regulatory Commission.
    Industry experts told the committee that clear signs of 
strain have emerged across the U.S. energy markets, raising 
concerns about the ability to deliver reliable supplies of 
energy to major markets. The market is experiencing electricity 
price spikes because of greater demand and a lack of 
transmission capacity; home heating shortfalls due to the lack 
of refining capacity; and concerns over the natural gas 
industry's ability to meet the Nation's current and future 
needs due to greater demand, lack of new production and 
government restrictions on drilling and exploration. The 
committee asked Secretary Richardson about the administration's 
energy policy and what steps the Department is taking to assure 
the reliability of the Nation's energy supplies. Administrator 
Browner responded to questions regarding the impact of new EPA 
regulations on the domestic oil refining industry and their 
effects on energy markets. Chairman Hoecker responded to the 
committee's questions on natural gas pipeline capacity and 
FERC's investigation into electricity price spikes in 
California.
            u. Further Investigation Into the Events Near Waco, TX in 
                    1993.
    The Committee on Government Reform conducted a year-long 
investigation of the actions of the Federal Bureau of 
Investigation, the Department of Justice, and the Department of 
Defense with regard to the standoff which occurred at the Mt. 
Carmel Center outside Waco, TX, from February 28, 1993, through 
April 19, 1993, as well as actions taken after the tragic end 
of the standoff.
    Attorney General Reno, along with other Department of 
Justice and FBI officials, had been emphatic in their public 
statements about the means by which the FBI inserted gas into 
the Branch Davidian residence on April 19, 1993 were non-
pyrotechnic. However, it was publicly disclosed in late summer, 
1999 that pyrotechnic tear gas rounds had been used. As a 
result, the committee began its investigation and Attorney 
General Reno appointed John Danforth as Special Counsel to 
conduct a Justice Department investigation.
    In addition to questions about why the use of pyrotechnic 
devices was not disclosed to Congress and the American people, 
the committee investigated allegations that: (1) government 
personnel may have fired weapons at the Branch Davidian 
compound; (2) Department of Defense personnel may have violated 
the Posse Comitatus Act; and (3) the Department of Justice did 
not conduct a thorough investigation of its own actions 
following the tragedy.
    The committee's investigation was limited to resolving 
these new allegations, thereby building on, but not replacing, 
the report issued in 1996 by this committee's Subcommittee on 
National Security, International Affairs, and Criminal Justice 
and the Committee on the Judiciary's Subcommittee on Crime. The 
committee found no reason to revise the major findings of the 
1996 report.
            v. Oversight of the Drug Enforcement Administration: Were 
                    Criminal Investigations Swayed by Political 
                    Considerations? December 6-7, 2000.
    The committee held 2 days of hearings regarding a DEA 
investigation of a suspected drug trafficker in Houston that 
was curtailed, apparently as a result of political pressure. 
The investigation, which had produced more than 20 convictions, 
was shut down in 1999 following a letter of complaint to 
Attorney General Janet Reno from Representative Maxine Waters. 
Shortly following this intervention, the Special-Agent-in-
Charge of the DEA's Houston Field Office called a meeting of 
the investigating officers and informed them that the 
investigation was being closed down due to political pressure, 
according to the testimony of four DEA and Houston Police 
Department officers who were present.
    The Special-Agent-in-Charge, Ernest Howard, testified that 
he had never shut down the investigation. However, his 
testimony was contradicted by internal e-mails he sent to the 
DEA's Washington headquarters in March 2000. Those e-mails 
stated, in part,

          Now we bow down to the political pressure anyway. . . 
        . it is over now. The Houston Division will terminate 
        all active investigation of Rap-A-Lot, except for those 
        persons who have already been arrested/indicted.

Those e-mails followed by 2 days a visit from Vice President 
Gore to a church in Houston which receives substantial 
financial support from the target of the investigation--James 
Prince. That same week, the lead DEA investigator was re-
assigned to a desk job. In effect, an unsubstantiated complaint 
by the target of a drug investigation, made through a Member of 
Congress, resulted in the investigation against him being 
curtailed.
    On Wednesday, December 6, the committee heard testimony 
from one DEA agent and three Houston Police Department officers 
who were participating in the joint investigation. The 
committee also heard testimony from Special-Agent-in-Charge 
Howard, DEA Deputy Administrator Julio Mercado, and DEA Chief 
Inspector R.C. Gamble. On Thursday, December 7, the committee 
again heard testimony from the witnesses listed above, as well 
as DEA Administrator Donnie Marshall.
    Administrator Marshall stated that he had been unaware that 
the investigation was shut down, and that it should not have 
been. He stated that the Justice Department's Inspector General 
has been asked to conduct an internal investigation into the 
agency's handling of the case. The committee's inquiry into the 
matter is ongoing.
                           II. Investigations

             A. INVESTIGATIONS RESULTING IN FORMAL REPORTS

                             Full Committee

                       Hon. Dan Burton, Chairman

1. ``The FALN and Macheteros Clemency: Misleading Explanations, a 
        Reckless Decision, a Dangerous Message,'' House Report No. 106-
        488, December 10, 1999, Third Report by the Committee on 
        Government Reform, together with Dissenting and Additional 
        Views.
    a. Summary.--This report detailed the committee's findings 
and conclusions in its investigation into President Clinton's 
grant of executive clemency to 16 individuals who were members 
of the terrorist groups FALN and Macheteros. The committee 
found that, although the President has the Constitutional 
authority to grant clemency to anyone, several individuals 
working in the White House saw a political benefit in releasing 
the terrorists. In addition, the Justice Department, Office of 
the U.S. Attorneys, and the Federal Bureau of Investigation all 
recommended against granting clemency to the 16 individuals. 
The report detailed the background of the convictions of the 16 
individuals, the process leading up to the clemency offer, and 
the actual offer and acceptance of the clemency by 14 of the 
individuals. The President claimed executive privilege over 
numerous documents relevant to the investigation.
    b. Benefits.--The committee's investigation outlined the 
clemency process generally and provided insight into this 
particular grant of executive clemency to the American public.
    c. Hearings.--The committee held a hearing entitled, 
``Clemency for the FALN: A Flawed Decision?,'' on September 21, 
1999.
Investigation of the President's Decision to Grant Clemency to 16 
        Convicted Terrorists
    The Committee on Government Reform conducted an 
investigation of the President's decision to offer clemency to 
16 FALN and Macheteros terrorists. On August 11, 1999, 
President Clinton extended offers of clemency to these 
terrorists incarcerated in Federal prison. Prior to these 
offers, he had offered clemency to only three Federal 
prisoners. Thus, offers of clemency to so many members of a 
terrorist organization came as a great surprise. In an attempt 
to understand the justification for the offers of clemency, 
this committee subpoenaed documents from the White House and 
the Department of Justice (including, the Federal Bureau of 
Investigation, the Office of the Pardon Attorney, and the 
Bureau of Prisons). The President responded by claiming 
executive privilege over critical documents from all 
departments relating to his decision. In claiming executive 
privilege, the President refused to provide this committee with 
material that would allow Congress an opportunity to see what 
recommendations were made to the President prior to his 
decision.
    Granting clemency to violent terrorists is a matter of 
national significance. At least two of the individuals granted 
clemency were captured on videotape making bombs. Half of the 
individuals granted clemency were arrested in a van, along with 
an arsenal of weapons. The terrorist organizations to which 
these individuals belonged, the FALN and Macheteros, were 
responsible for hundreds of bombings in which U.S. citizens 
were killed and wounded. Nevertheless, the President granted 
them clemency. During its investigation, the committee found 
that there were serious discrepancies between the public 
statements about the clemency made by the President and his 
staff, and the documents and information reviewed by the 
committee. Documents showed that White House aides were 
actively supporting the clemency since the initial petition. In 
fact, White House staff assisted in organizing an outside 
campaign to support the clemency.
    When the lives of American citizens are endangered and the 
victims of violent crime are treated with contempt, the 
oversight function of Congress is never more important. This is 
particularly true because the President of the United States 
withheld information from the American people. In such a 
situation, Congress is obligated to exercise its oversight 
authority. The committee held a public hearing regarding the 
clemency matter on September 21, 1999, and a report was issued 
on December 10, 1999. The hearing was entitled, ``Clemency for 
the FALN: A Flawed Decision?'' Two Members of the House of 
Representatives testified before the committee on the first 
panel, the Honorable Vito Fossella and the Honorable Carlos 
Romero-Barcelo. Representative Fossella spoke about his 
opposition to the grant of clemency. He explained that one of 
his concerns was the message, that the United States was not 
serious about punishing terrorists, that clemency would send. 
Representative Romero-Barcelo testified that although he did 
oppose the unconditional release of the terrorists, he was able 
to support a conditional release. On the second panel, several 
victims of FALN violence testified: Detective Anthony Senft 
(retired NYPD); Detective Richard Pastorella (retired NYPD); 
Mr. Thomas Connor; and, Mrs. Diana Berger Ettenson. Each 
individual testified about how the FALN's violence had affected 
their lives. Detectives Senft and Pastorella were severely 
wounded and left crippled by an FALN bomb. Mr. Connor lost his 
father and Mrs. Berger Ettenson lost her husband in the FALN 
bombing of Fraunces Tavern in New York City. All of the victims 
were unconditionally opposed to the President's grant of 
clemency.
    The third panel of the hearing consisted of: Jon Jennings, 
Acting Assistant Attorney General for Legislative Affairs, 
Department of Justice; Michael B. Cooksey, Assistant Director 
for Correctional Programs, Bureau of Prisons; and, Neil 
Gallagher, Assistant Director for National Security, Federal 
Bureau of Investigation [FBI]. Mr. Cooksey testified about the 
role the Bureau of Prisons plays in the clemency process, as it 
maintains all of the records on Federal prisoners. Mr. 
Gallagher testified about the FBI's role in clemency. He made 
clear that the FBI believed that the individuals to whom the 
President granted clemency were violent criminals, members of a 
terrorist group that continued to pose a threat to the United 
States.
    The committee continued to receive documents relating to 
the clemency from the White House, Department of Justice, 
Bureau of Prisons and FBI, even after the hearing. From the 
documents, it became clear that both the Department of Justice 
and Federal Bureau of Investigation opposed the grant of 
clemency, and communicated their views to the White House. 
White House documents made it clear that several staffers on 
the President's Interagency Working Group on Puerto Rico were 
strongly advocating clemency for the FALN and Macheteros 
terrorists. They referred to the terrorists as ``political 
prisoners'' and organized outside groups to lobby the White 
House for clemency. However, the President continues to claim 
executive privilege over numerous documents relating to the 
clemency, making it impossible for the committee to come to any 
solid conclusions about the clemency.
2. ``The Failure to Produce White House E-Mails: Threats, Obstruction, 
        and Unanswered Questions,'' House Report 106-1023, December 4, 
        2000, Eighth Report of the Committee on Government Reform, 
        together with Minority and Additional Views.
    a. Summary.--Since February 2000, the committee has been 
investigating allegations of threats and obstruction of justice 
regarding the White House's failure to produce hundreds of 
thousands of e-mails potentially responsive to subpoenas from 
Congress, the Justice Department and the Office of the 
Independent Counsel. The committee's investigation also focused 
on the complete loss of about a year's worth of potentially 
responsive e-mail at the Office of Vice President.
    This report detailed the committee's work to date, and 
contained a number of new facts uncovered through the 
committee's work. For example, in the report, the committee 
found that the White House's e-mail problem was explained to 
senior White House staff but that the White House's management 
of the problem obstructed numerous investigations. The report 
also attributed the loss of a year's worth of potentially 
responsive e-mail at the Office of the Vice President to its 
decision not to store its e-mail in a way that would permit 
subpoena compliance. The committee also found that the White 
House failed to cooperate with its investigation into the 
committee's e-mail investigation and concluded that a special 
counsel must be appointed to investigate the e-mail matter. The 
committee also concluded that a special master should be 
appointed to supervise the review, reconstruction, and 
production of responsive White House e-mail.
    b. Benefits.--The committee's investigation into the White 
House's failure to produce subpoenaed e-mail revealed an 
affirmative attempt by the White House not to disclose to 
Congress, the Justice Department and the Office of the 
Independent Counsel, the existence of a massive universe of e-
mail potentially responsive to subpoenas issued by those 
investigative bodies. The committee's investigation also showed 
that handling of the matter by the White House Counsel's Office 
was either grossly negligent or purposefully inadequate. 
Because of the committee's investigation, prosecutors at the 
Justice Department and the Office of the Independent Counsel 
opened investigations into the e-mail matter. Generally, the 
report highlights the White House's refusal to appreciate the 
legitimate exercise of the committee's oversight jurisdiction.
    c. Hearings.--The committee held the following hearings 
entitled, ``Missing White House E-Mails: Mismanagement of 
Subpoenaed Records, Days 1 and 2,'' March 23 and 30, 2000; 
``Missing White House E-Mails: Mismanagement of Subpoenaed 
Records, Days 3 and 4,'' May 3-4, 2000; and ``Contacts Between 
Northrop Grumman Corporation and the White House Regarding 
Missing White House E-mails,'' September 26, 2000.
3. ``Janet Reno's Stewardship of the Justice Department: A Failure to 
        Serve the Ends of Justice,'' House Report 106-1027, December 
        13, 2000, Tenth Report of the Committee on Government Reform, 
        together with Minority Views.
    a. Summary.--This report detailed the committee's findings 
and conclusions in its investigation of the Justice 
Department's handling of the investigation into campaign 
financing irregularities and violations of law during the 1996 
Federal elections. The committee found that Attorney General 
Reno had a conflict of interest in conducting an investigation 
into activities relating to President Clinton, who appointed 
her, Vice President Gore, and her own political party. The 
Attorney General ignored her conflicts and disregarded the 
Independent Counsel Act by refusing to request the appointment 
of an independent counsel for the campaign finance matter. The 
report details facts which support the conclusion that the 
Department of Justice did not conduct a thorough investigation, 
and that the country would have been better served if an 
independent counsel or special counsel had been appointed to 
conduct the investigation.
    b. Benefits.--The committee's investigation brought to 
light the failures of the Department of Justice's 
investigation.
    c. Hearings.--The committee held the following hearings 
related to the investigation: ``The Role of Yah Lin `Charlie' 
Trie in Illegal Political Fundraising, Part I,'' March 1, 2000; 
``The Justice Department's Implementation of the Independent 
Counsel Act,'' June 6, 2000; ``Has the Department of Justice 
Given Preferential Treatment to the President and Vice 
President,'' July 20, 2000; and, ``Felonies and Favors: A 
Friend of the Attorney General Gathers Information from the 
Department of Justice,'' July 27, 2000.
4. ``The Tragedy at Waco: New Evidence Examined,'' House Report 106-
        1037, December 28, 2000, Eleventh Report of the Committee on 
        Government Reform, together with Minority Views.
    a. Summary.--This report details the committee's findings, 
conclusions and recommendations after a year long investigation 
of the action's of the Federal Bureau of Investigation, the 
Department of Justice, and the Department of Defense with 
regard to the standoff which occurred at the Branch Davidian 
compound outside Waco, TX, from February 28 through April 19, 
1993, as well as the actions taken after the tragic end of the 
standoff. The committee found no evidence that any FBI agent, 
or others, fired their weapons at the Davidians on April 19th, 
and, although pyrotechnic tear gas grenades were fired at the 
compound by FBI agents, there was no evidence found that these 
grenades contributed to the conflagration. Additionally, the 
committee found no evidence that any military members involved 
with the Waco events violated the Posse Comitatus Act. The 
committee further found that the Department of Justice did not 
conduct a thorough investigation of its action as directed by 
the President.
    b. Benefits.--The committee's investigation reviewed new 
and additional information built upon and did not replace the 
Waco report issued in 1996 by this committee's Subcommittee on 
National Security, International Affairs, and Criminal Justice 
and the Committee on the Judiciary's Subcommittee on Crime. 
This investigation of new evidence provided the committee the 
opportunity for an enhanced review of the evidence of events 
surrounding the tragedy at Waco.

   Subcommittee on Criminal Justice, Drug Policy, and Human Resources

                      Hon. John L. Mica, Chairman

1. ``The Vaccine Injury Compensation Program: Addressing Needs and 
        Improving Practices,'' House Report 106-977, October 12, 2000, 
        Sixth Report by the Committee on Government Reform.
    a. Summary.--Since the 105th Congress, the committee has 
been conducting an investigation of vaccination policies and 
practices, with a special focus on childhood vaccine related 
injuries and the national vaccine injury compensation program. 
In the 106th Congress, the Subcommittee on Criminal Justice, 
Drug Policy, and Human Resources, chaired by Representative 
John L. Mica (R-FL), conducted hearings and an intensive 
investigation regarding some of these topics. On October 5, 
2000, Chairman Mica submitted to the Committee on Government 
Reform a report that had been prepared by the subcommittee, 
with the assistance and support of members and staffs of the 
majority and minority of both the subcommittee and full 
committee. This report was presented by subcommittee Chairman 
Mica and approved by the full committee without objection on 
October 12, 2000, with supportive statements from Chairman 
Burton and Ranking Member Waxman. Mr. Mica and others noted 
that the report resulted from bipartisan subcommittee hearings 
and investigations. The report addresses reforms to the program 
that Congress established to compensate fairly, adequately and 
efficiently persons who are injured or die as a consequence of 
our universal childhood vaccination policy. The report 
recognizes that childhood vaccines now protect millions in this 
Nation. However, in a relatively small number of cases, they 
cause serious injuries or even death. This report identifies 
ways to improve the system for compensating those who are 
harmed. This report recommends several key reforms that are 
needed to improve the National Vaccine Injury Compensation 
Program, which is administered by HHS with legal assistance 
from the Department of Justice. The report supports reforms to 
make the program more efficient, fair and less adversarial--as 
was originally envisioned by Congress. Primary recommendations 
presented in this report include the following reforms and 
improvements: (1) review the Vaccine Injury Table (the table) 
to ensure that it reflects current science and knowledge; (2) 
continue developing and implementing speedy and fair informal 
dispute resolution practices; and (3)--determine a reasonable 
standard for deciding cases that are not covered under the 
``table.'' The first recommendation calls for additional 
efforts to evaluate types of injuries and circumstances that 
deserve presumed benefit coverage using the table. This review 
should acknowledge that deficiencies exist in the study of 
causes of vaccine-related injuries. The second recommendation 
promotes practices to assist in the informal resolution of 
claims whenever possible. This is intended to prevent 
unnecessary, prolonged and adversarial litigation. The third 
recommendation calls for an alternative standard to be 
determined that would replace the ``causation'' requirements 
now applied in deciding which cases are compensated.
    b. Benefits.--Congress has always intended that claimants 
whose injuries do not fall squarely within coverage of the 
table be given a realistic opportunity to demonstrate that 
their injuries are vaccine-related. This report reflects the 
strong bipartisan interest in Congress to support sound and 
reasonable reforms that will promote fairer and improved 
vaccine injury compensation practices. This report is intended 
to ensure that our Government is fulfilling its duties and 
obligations to those families in need of help as a consequence 
of our universal childhood vaccination policies.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, 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. 106-50, March 11, 1999, First Report by the 
        Committee on Government Reform.
    a. Summary.--The Freedom of Information Act [FOIA], enacted 
in 1966, presumes that 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 against an invasion of privacy by 
Federal agencies and permits individuals to see most records 
pertaining to them maintained by the Federal Government.
    ``A Citizen's Guide to Using the Freedom of Information Act 
and Privacy Act of 1974 to Request Government Records,'' 
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. 
The Government Printing Office and Federal agencies subject to 
the Freedom of Information Act and the Privacy Act of 1974 
distribute this report widely.
    c. Hearings.--In its continuing oversight of this issue, 
the subcommittee held the following hearings during the 106th 
Congress.
(1) ``H.R. 88, Regarding Data Available Under the Freedom of 
        Information Act,'' July 15, 1999.
    The Omnibus Consolidated and Emergency Supplemental 
Appropriations Act For Fiscal Year 1999 (Public Law 105-277) 
contains a provision (the Shelby Amendment) that would allow 
the public, for the first time, to obtain and review research 
data collected through federally funded grants and agreements 
with universities, hospitals, and other non-profit 
organizations. The amendment, sponsored by Senator Richard C. 
Shelby, R-AL, called for procedures established in the Freedom 
of Information Act [FOIA] to be used as the mechanism by which 
a third party could obtain these data.
    H.R. 88, introduced by Representative George Brown, D-CA, 
on January 6, 1999, sought to amend Public Law 105-277 and 
repeal the Shelby amendment. Those who favored the amendment's 
repeal were concerned that extending FOIA to include federally 
funded research would create a significant loss of voluntary 
participation in public health and bio-medical research. There 
was also concern that the Shelby amendment could facilitate the 
theft of intellectual property. Overall, proponents of H.R. 88 
who testified at the subcommittee hearing were concerned by the 
amendment's broad language and the lack of clarity in the 
Office of Management and Budget's proposed revisions to the 
amendment.
    The amendment, introduced by Senator Richard D. Shelby, R-
AL, requires the Director of the Office of Management and 
Budget to amend Section 36 of Circular A-110 to require that 
all data produced under a Federal award be made available 
through the procedures established in the Freedom of 
Information Act [FOIA]. The amendment also allows an agency 
that is obtaining data solely at the request of a private party 
may charge a reasonable user fee equal to the cost of obtaining 
the data. Federal research data that fall within any of the 
nine exemptions under FOIA, which relate to privacy, national 
security, trade secrets, commercial information, and law 
enforcement, would also be exempted under the Shelby amendment.
    While Circular A-110 sets the administrative requirements 
for grants and agreements between Federal agencies and 
institutions of higher education, hospitals, and other 
nonprofit organizations, Section 36 of Circular A-110 gives the 
Federal Government the right ``to obtain, reproduce, publish, 
or otherwise use the data first produced under an award.'' 
Until passage of the Shelby amendment, agencies were given the 
discretion over whether or not to distribute the data.
    The underlying rationale of the Shelby amendment is the 
premise that the public should be able to obtain and review 
taxpayer-funded research information, which is often used to 
support Federal policies, regulations and findings. Witnesses 
testified that citizen groups, businesses, and others who are 
impacted by these Government policies and regulations are often 
unable to obtain the research data to verify the Government's 
conclusions.
(2) ``Agency Response to the Electronic Freedom of Information Act,'' 
        June 14, 2000.
    Witnesses at this hearing testified that agencies are not 
posting their most commonly requested records online, as the 
Electronic Freedom of Information Act of 1998 [EFOIA] requires.
    The Office of Information and Regulatory Affairs within the 
Office of Management and Budget [OMB] exercises broad authority 
for coordinating and administering various aspects of 
governmentwide information policy, but the subcommittee's 
examination found that the Department of Justice, rather than 
the OMB, is providing policy guidance and overseeing agency 
compliance with the EFOIA. In addition, witnesses testified 
that although Federal departments and agencies have generally 
established specific offices for processing EFOIA requests, 
program implementation is lagging.
    Witnesses, representing reporters and several agencies 
involved in implementing EFOIA, including the Justice 
Department, Department of Defense, and the Office of Management 
and Budget, testified that most agencies were not complying 
with the law. According to agency representatives, part of the 
problem involved insufficient financial resources, which left 
them unable to fill requests for information within the 
mandatory 20-day timeframe. In addition, many agencies still do 
not have electronic reading rooms, and frequently requested 
records are difficult to access. The subcommittee will continue 
to monitor the progress of agency compliance with the 
Electronic Freedom of Information Act.
(3) ``Government Compliance with the Nazi War Crimes Disclosure Act,'' 
        June 27, 2000.
    The subcommittee held an oversight hearing on the findings 
of the Interagency Working Group regarding compliance with the 
Nazi War Crimes Disclosure Act. The subcommittee heard 
testimony from Representative Tom Lantos, D-CA, a holocaust 
survivor and sponsor of several human rights declassification 
bills, who discussed the importance of the Interagency Working 
Group's efforts to declassify these records. Representative 
Lantos also discussed legislation he introduced that would 
expand the Interagency Working Group's effort to include the 
disclosure of Japanese war crimes.
    Members of the Interagency Working Group discussed the 
thousands of documents that have been declassified without any 
congressional appropriations. However, members testified that 
they would need funding to continue the declassification 
effort. Subsequently, the subcommittee worked with 
Representative Carolyn Maloney, D-NY, who introduced 
legislation that would appropriate $5 million for the 
declassification effort.
2. ``Making the Federal Government Accountable: Enforcing the Mandate 
        for Effective Financial Management,'' House Report 106-170, 
        June 7, 1999, Second Report by the Committee on Government 
        Reform, Together with Minority Views.
    a. Summary.--Billions of taxpayer-provided dollars are 
being lost each year to fraud, waste, abuse, and mismanagement 
in hundreds of programs within the Federal Government. Audits 
continue to show that most agencies have significant weaknesses 
in controls and systems. As a result of these weaknesses, 
Federal decisionmakers do not have reliable and timely 
performance and financial information to ensure adequate 
accountability, manage for results, and make timely and well-
informed judgments.
    In the late 1980s, Congress recognized that one of the root 
causes of this loss was that the Federal Government's financial 
management leadership, policies, systems, and practices were in 
a state of disarray. Financial systems and practices were 
obsolete and ineffective. They failed to provide complete, 
consistent, reliable, and timely information to congressional 
decisionmakers and agency management.
    In response, Congress passed a series of laws designed to 
improve financial management practices and to ensure that tax 
dollars are spent for the purposes that Congress intends. Each 
executive agency covered by the Chief Financial Officers Act of 
1990 (CFO Act) or specified by the Office of Management and 
Budget [OMB] is required to prepare and have audited a 
financial statement covering all accounts and associated 
activities of each office, bureau, and activity within the 
agency. In addition, consolidated governmentwide financial 
statements must be prepared and audited annually. Federal 
agencies are required to conform to promulgated Federal 
Government accounting and systems standards, and to use the 
Federal standard general ledger.
    Despite the passage and implementation of these laws, there 
has been limited progress. Much remains to be done before the 
Federal Government's financial management systems and practices 
provide reliable, timely financial information on a regular 
basis.
    March 31, 1998, marked a significant milestone in the 
implementation of financial management reform legislation. The 
CFO Act, Public Law 101-576, as expanded by the Government 
Management Reform Act of 1994 [GMRA], Public Law 103-356, 
required for the first time the preparation and audit of 
consolidated financial statements of the Federal Government for 
fiscal year 1997, and each year thereafter. GMRA required that 
the General Accounting Office [GAO] issue an audit report no 
later than March 31 of each year on the consolidated financial 
statements for the preceding fiscal year.
    GMRA also required that, starting March 1, 1997, and each 
year thereafter, all 24 Federal agencies that are subject to 
the requirements of the CFO Act must submit audited financial 
statements to the Director of OMB. These 24 agencies were 
responsible for approximately 97 percent of the total Federal 
outlays during fiscal year 1997.
    Fiscal year 1997 also marked the first year of 
implementation of the Federal Financial Management Improvement 
Act of 1996, Public Law 104-208. The purpose of FFMIA is to 
ensure that agency financial management systems comply with 
Federal financial management system requirements, applicable 
Federal accounting standards, and the U.S. Government Standard 
General Ledger (standard general ledger) in order to provide 
uniform, reliable, and useful financial information. FFMIA 
required that beginning with the fiscal year ending September 
30, 1997, auditors for each of the 24 major departments and 
agencies named in the CFO Act must report, as part of their 
annual audits, whether the agency's financial systems comply 
substantially with Federal financial systems requirements, if 
applicable, Federal accounting standards, and the standard 
general ledger at the transaction level. FFMIA also required 
the GAO to report on agency implementation of FFMIA by October 
1, 1997, and each year thereafter.
    It is imperative that these acts are implemented 
successfully. They form the basis for the data used in 
measuring program performance under the Government Performance 
and Results Act, Public Law 103-62 (Results Act). Thus, at a 
minimum, strong congressional oversight is needed to achieve 
the primary goal of all these laws--a Federal Government that 
is accountable to American taxpayers.
    b. Benefits.--Billions of taxpayer-provided dollars are 
lost each year to fraud, waste, abuse, and mismanagement in 
hundreds of programs within the Federal Government. Audits 
continue to show that most agencies have significant weaknesses 
in controls and systems. As a result, Federal decisionmakers do 
not have reliable and timely performance and financial 
information to ensure adequate accountability, manage for 
results, and make timely and well-informed judgments.
    c. Hearings.--The subcommittee held 15 hearings examining 
the status of financial management in the executive branch of 
the Federal Government during the 106th Congress. In 1999, 
subcommittee hearings focused on the Internal Revenue Service, 
the Federal Aviation Administration, the Department of Justice, 
the Health Care Financing Administration, and the Department of 
Defense. Collectively, these agencies accounted for more than 
98 percent of the Federal Government's annual revenue and a 
majority of the costs (excluding interest on the national debt 
held by the public and the Social Security program). In 
addition, the Department of Defense accounted for a significant 
portion of the assets held by the Federal Government. 
Consequently, these agencies play a significant role in the 
production of governmentwide statements, and they significantly 
affect the audit results.
    The hearings explored the audit results for fiscal year 
1998, the second year of full implementation of GMRA. The 
subcommittee examined the consolidated audit results for the 
entire executive branch of the Federal Government in addition 
to the individual audit reports of the five agencies noted 
above. Each of these agencies has experienced problems with 
their financial management, and has had varying degrees of 
success in resolving those problems.
    The subcommittee considered what, if any, additional 
congressional action might be necessary to improve financial 
management in the executive branch, and reviewed options for 
possible congressional actions needed to ensure the successful 
implementation of Federal financial management reforms.
(1) ``Oversight of the Internal Revenue Service's Fiscal Year 1998 
        Financial Statements,'' March 1, 1999, and
(2) ``Clinton-Gore v. The American Taxpayer,'' April 15, 1999.
    The IRS collects more than 95 percent of the Federal 
Government's $1.7 trillion in annual revenue. In fiscal year 
1998, the IRS issued its first set of financial statements 
covering both its custodial and administrative activities. 
Prior to 1998, the IRS had issued two sets of financial 
statements; one set for its custodial operations--the revenues 
collected, refunds paid, and related taxes receivable and 
payable--and another for its appropriated funds. The IRS' 
financial data were then incorporated into the agencywide 
statements prepared by the Department of the Treasury.
    The IRS is responsible for enforcing tax laws in a fair and 
equitable manner, but the agency has long been criticized for 
the perceived abuse of its broad enforcement powers. In 
response to this criticism, Congress established the Commission 
on the Restructuring of the IRS. Led by Representative Rob 
Portman of Ohio and Senator Bob Kerrey of Nebraska, the 
bipartisan commission released a comprehensive report in June 
1997, proposing several changes in the IRS' management. The 
Commission's recommendations were the basis of H.R. 2676, the 
Internal Revenue Service Restructuring and Reform Act of 1997, 
which was signed into law by the President on July 22, 1998. 
The underlying theme of the act is one of creating a cultural 
change within the IRS. In the broadest terms, the act shifts 
the emphasis within the IRS from its self-defined role as an 
enforcement agency to a role more closely resembling a 
financial service organization.
    Also at congressional urging, the Clinton administration 
appointed a new Commissioner with extensive experience in 
managing large organizations. Charles O. Rossotti, founder of a 
firm in the management systems and technology industry, was 
appointed Commissioner of the IRS in September 1997. Since his 
appointment, Commissioner Rossotti has proposed a sweeping 
reorganization of the IRS that exceeded the changes mandated in 
the legislation. Testifying before the subcommittee, 
Commissioner Rossotti stated that he plans on ``shifting the 
entire focus of the agency from one which focuses solely on 
conducting our own internal operations to one which puts far 
more emphasis on trying to see things from the point of view of 
taxpayers and emphasizing service and fairness to taxpayers.''
    For the second consecutive year, the IRS was able to 
reliably report on its financial activity covering the 
collection and refunds of taxes in 1998. This achievement, 
however, required extensive, costly, and time-consuming ad hoc 
procedures to overcome pervasive internal controls and systems 
weaknesses. The ability to provide reliable year-end data is an 
important first step for the IRS, but it is not an end in 
itself. The GAO audit report stated that the ``IRS continues to 
face significant financial and other management challenges and 
risks.'' These weaknesses must be addressed before the IRS can 
make any significant improvement in the area of financial 
management.
    The IRS was unable to report on its administrative 
activities in fiscal year 1998. The GAO report found that 
``pervasive weaknesses in the design and operation of IRS' 
financial management systems, accounting procedures, 
documentation, recordkeeping, and internal controls prevented 
IRS from reliably reporting on the results'' of these 
activities.
    The subcommittee's oversight hearings on March 1, 1999, and 
April 15, 1999, highlighted the need for better computer 
systems to improve the IRS' debt management. At the time of the 
hearings, the IRS estimated that it collects only 11 percent of 
the $222 billion in debts the agency claims are owed by 
delinquent taxpayers. The hearing also illustrated the need for 
better controls over refunds. According to the GAO, the IRS 
does not have the preventive controls it needs to reduce the 
amount of inappropriate payments being disbursed for tax 
refunds.
(3) ``Oversight of Financial Management Practices at the Department of 
        Justice and the Federal Aviation Administration,'' March 18, 
        1999.
    The Department of Justice, under the direction of the 
Attorney General, is charged with protecting society against 
criminals and subversion, and upholding the civil rights of all 
Americans. In addition, the Department is responsible for 
ensuring healthy competition among businesses, safeguarding the 
consumer, enforcing environmental, drug, immigration, and 
naturalization laws, and representing the American people in 
all legal matters involving departments and agencies within the 
executive branch of Government.
    In 1998, the Department of Justice was again unable to 
provide reliable financial information to decisionmakers. Again 
this year, auditors were unable to render an opinion on 
Justice's financial statements. In addition, auditors reported 
significant weaknesses in internal controls and cases in which 
the law-enforcement department failed to comply with financial 
laws and regulations.
    At the March 18 hearing, the subcommittee learned that the 
weaknesses reported in the Department's consolidated financial 
statements were also prevalent in most of the Department's 
component entities. The audit report stated that weaknesses 
exist in the controls over computer security at the U.S. 
Marshals Service, the Federal Bureau of Investigation, the Drug 
Enforcement Administration, and the Immigration and 
Naturalization Service.
    The Federal Aviation Administration [FAA] operates the 
Nation's air traffic control system and regulates aviation 
safety, security, and the U.S. commercial space industry. In 
its position on the front line of aviation safety, the FAA 
works with the air transportation industry, other agencies at 
the Federal, State, and local level, and with its international 
counterparts.
    Due to long-standing and unresolved problems, the GAO 
designated financial management at the FAA as a high-risk area 
in its January 1999 report. The GAO report stated that 
``financial management weaknesses continue to render FAA 
vulnerable to waste, fraud, and abuse; undermine its ability to 
manage its operations; and limit the reliability of financial 
information provided to the Congress.''
    The subcommittee examined these weaknesses at a hearing on 
March 18, 1999. Because of the results of the Department's 1998 
financial statement audit, the subcommittee also discussed the 
findings with the Inspector General of the Department of 
Transportation. The Inspector General was unable to render an 
opinion on the 1998 financial statements. In addition, the 
Inspector General reported significant weaknesses in FAA's 
internal controls. These weaknesses included more than $9 
billion in property, plant and equipment that could not be 
verified. The FAA also could not reliably report on the costs 
of its operations. The combination of poor accounting and 
control over assets and costs are especially troubling, 
considering that the agency has an air traffic control 
modernization plan that is projected to cost more than $42 
billion by the year 2004.
    In 1981, the FAA had initiated earlier air traffic control 
modernization program. This effort involved acquiring new air 
traffic control facilities and a vast network of radar, 
automated data processing navigation, and communications 
equipment. The program, which was poorly managed, was shut 
down, costing taxpayers $4 billion for a system that did not 
work. The FAA's current modernization program has been put on 
the GAO high-risk list, due in large part to the agency's 
financial management problems, such as poor cost-accounting 
practices and lack of accountability over acquisitions.
(4) ``Can the Federal Government Balance Its Books? A Review of the 
        Federal Consolidated Financial Statements,'' March 31, 1999.
    The General Accounting Office released its audit report on 
the financial status of the Federal Government at the 
subcommittee's March 31 hearing. The financial audits for 
fiscal year 1998 were required under the Chief Financial 
Officers Act of 1990, as expanded by the Government Management 
Reform Act of 1994 and amended by the Federal Financial 
Management Improvement Act of 1996. The audits are intended to 
provide a more effective, efficient, and responsive Federal 
Government. To that end, the Government Management Reform Act 
specifically requires that consolidated governmentwide 
financial statements be prepared and audited, and that each 
executive branch agency prepare and have audited a financial 
statement covering all accounts and associated activities of 
each office, bureau, and activity within the agency.
    The subcommittee examined the results of this audit at its 
March 31 hearing. The 1998 audit report, the second annual 
report on the Government's financial management, once again 
provided a concise description of the myriad problems faced by 
the executive branch.
    In addition, the subcommittee released its second annual 
financial report card at the hearing. This report card measures 
the effectiveness of financial management in the 24 Cabinet 
departments and independent agencies with audited financial 
statements. The grades were based on the results of the audits 
prepared by the agencies' Inspectors General, independent 
public accountants, and the General Accounting Office. The 
report card is a gauge for Congress to see where attention is 
needed to prod agencies toward getting their financial affairs 
in order.
    The National Aeronautics and Space Administration and the 
National Science Foundation demonstrated they could effectively 
manage their finances. Both agencies received ``A's.'' The 
General Services Administration, the Department of Labor, and 
the Social Security Administration all earned commendable 
``B's.''
    These agencies were the exception rather than the rule. 
Seven of the 24 agencies--29 percent--had not filed reports by 
the subcommittee's March 31 hearing, 1 month after their March 
1st reporting deadline established by the Government Management 
Reform Act of 1994, and 6 months after the close of the 
Government's fiscal year--the Department of Commerce, the 
Department of Education, the Environmental Protection Agency, 
the Department of the Interior, the Small Business 
Administration and the Department of State, and the Department 
of Transportation.
(5) ``Oversight of the Financial Management Practices at the Department 
        of Defense,'' May 4, 1999.
    The General Accounting Office, the Defense Inspector 
General, and the Department's audit agencies have long reported 
problems in the Department of Defense's [DOD's] financial 
management systems and practices. Each year, numerous reports 
are issued with virtually the same problems as the prior years.
    The DOD's reported financial management problems include: 
inadequate control over assets such as real property, capital 
leases, construction in process, and inventories; the 
understatement of costs associated with environmental clean-
ups; liabilities, including military retiree benefits, that are 
not covered by current budgetary resources; and instances of 
noncompliance with laws and regulations. Because of these 
problems, the Inspector General was unable to render an opinion 
on the DOD's financial statements for fiscal year 1998. The GAO 
disclaimed an opinion on the Consolidated Governmentwide 
Financial Statements of the Federal Government, largely due to 
the Defense Department's inability to provide complete and 
verifiable information on its finances.
    The issues that need to be resolved cross operational lines 
within the DOD and the military services. Thus, action is 
needed at the top levels of DOD management to ensure that these 
long-standing problems are resolved.
    The subcommittee's May 4 hearing examined the results of 
the fiscal year 1998 audits at the DOD, and the status of the 
Department's plans to address its long-standing and severe 
problems. The GAO and DOD's Acting Inspector General 
highlighted the most serious financial management weaknesses at 
the Department. The subcommittee heard that the DOD remains 
unable to account for and properly report on billions of 
dollars worth of inventory and property, plants, equipment, and 
national defense assets, primarily weapons systems and support 
equipment. Nor could the Department estimate and report 
material amounts of its environmental and disposal liabilities, 
and related costs. In addition, the Department was unable to 
determine the liability associated with post-retirement health 
benefits for military employees, report the net costs of its 
operations, produce accurate budget data, or determine the full 
extent of improper payments.
    These weaknesses in DOD's financial management operations 
continue to result in wasted resources. Furthermore, they 
undermine the DOD's ability to manage an estimated $250 billion 
budget and $1 trillion in assets, all of which limit the 
reliability of financial information provided to Congress.
    During 1998, witnesses said that Department of Defense has 
taken these weaknesses more seriously than in previous years. 
The GAO testified before the subcommittee on March 4, stating 
that ``while in the past we have questioned the Department's 
commitment to fixing these long-standing problems, DOD has 
started to devote additional resources to correct its financial 
management weaknesses. The atmosphere of `business as usual' at 
DOD has changed to one of marked effort at real reform.'' The 
GAO went on to say, ``this commitment is imperative, as it will 
take considerable effort, time, and sustained top management 
attention to turn reform efforts into day-to-day management 
reality.''
(6) ``Oversight of Financial Management Practices at the Health Care 
        Financing Administration,'' March 26, 1999.
    The Health Care Financing Administration [HCFA] accounts 
for more than 18 percent of all Federal budget outlays and pays 
for one-third of the health-care costs throughout the United 
States. The growth of HCFA's Medicare and Medicaid payments has 
far exceeded the growth in the Consumer Price Index for medical 
goods and services. Yet, the agency is unable to provide timely 
or reliable financial information. The GAO has cited HCFA's 
Medicare program as a high-risk area for fraud, waste, and 
abuse.
    HCFA's fiscal year 1998 financial statements received a 
qualified opinion. The Inspector General of the Department of 
Health and Human Services was unable to find sufficient 
documentation to complete the Medicare accounts receivable. 
HCFA released its audited financial statements for fiscal year 
1998 at the subcommittee's March 26, 1999, hearing.
    Based on the last 2 years of audit results, the hearing 
focused on the actions HCFA is taking to resolve its financial 
management problems, including excessive Medicare payments. 
There has been marked improvement in the agency's annual 
overpayments, but the overpayment amount remains unacceptable. 
The estimated amount of overpayments for Medicare dropped from 
$23.2 billion in 1996 to $20.6 billion in 1997 and $12.6 
billion in 1998. The 1998 amount represents approximately 7.1 
percent of the total Medicare fee-for-service benefit payments 
made that year.
    The subcommittee found that, while progress has been made, 
much more is needed to ensure that the Medicare and Medicaid 
programs--critical to the security of 73 million elderly and 
impoverished Americans--are fiscally sound.
    The following specific issues were disclosed in the 
agency's audit report for fiscal year 1998: Medicare 
contractors were not maintaining the support necessary to 
determine the accuracy of reported collections of accounts 
receivable; auditors were unable to determine if records 
maintained by the contractors included all of the amounts owed 
to HCFA; and the GAO found that Medicare contractors did not 
have adequate control of their cash, including the collection 
of outstanding accounts receivable.
    During 1998, Medicare contractors reported more than $7.5 
billion in collections. Auditors reported serious breakdowns in 
controls in this area, including the fact that, in many cases, 
Medicare contractors failed to prepare bank reconciliations in 
a timely manner. When reconciliations were prepared, they were 
not adequately documented. In addition, at one location visited 
by auditors the same individual was responsible for receiving 
and endorsing incoming checks, preparing and recording 
deposits, and performing bank reconciliations. This situation 
greatly increases the risk that the money collected by this 
contractor could be misappropriated. The segregation of these 
duties is a common internal control adhered to by even the 
smallest private entities.
3. ``Making the Federal Government Accountable: Enforcing the Mandate 
        for Effective Financial Management,'' House Report 106-802, 
        July 27, 2000, Fifth Report by the Committee on Government 
        Reform, together with Minority Views.
    a. Summary.--In its continuing examination of financial 
management practices of Federal agencies in the executive 
branch, the subcommittee found that there has been a steady 
increase in the number of agencies that are successfully 
obtaining unqualified audit opinions on their financial 
statements as well as an increase in the number of agencies 
that are providing timely reports. This year, auditors gave 15 
of the 24 major agencies unqualified opinions on their fiscal 
year 1999 financial statements, compared to fiscal year 1998 
audits in which 12 agencies received unqualified audit 
opinions.
    b. Benefits.--Billions of taxpayer-provided dollars are 
lost each year to fraud, waste, and mismanagement in hundreds 
of programs within the Federal Government. Audits continue to 
show that most agencies have significant weaknesses in 
financial controls and systems. As a result, Federal 
decisionmakers do not have reliable and timely performance and 
financial information to ensure adequate accountability, manage 
for results, and make timely and well-informed judgments.
    c. Hearings.--During the year 2000, the subcommittee held 
eight hearings examining the status of financial management in 
the executive branch of the Federal Government. These hearings 
focused on Federal agencies, including the Internal Revenue 
Service, the Health Care Financing Administration, the 
Department of Agriculture, the Department of Housing and Urban 
Development, the Department of Defense. In addition, the 
subcommittee examined the Government's Consolidated Financial 
Statements, and agencywide compliance with the Federal 
Financial Management Improvement Act of 1997.
    These hearings explored the audit results for fiscal year 
1999, the third year of full implementation of GMRA. Again this 
year, the subcommittee examined the consolidated audit results 
for the entire executive branch of the Federal Government and 
individual audit reports of the agencies noted above.
(1) ``Results of the Internal Revenue Service's 1999 Financial Audit,'' 
        February 29, 2000.
(2) ``Oversight of the Internal Revenue Service: The Commissioner 
        Reports,'' April 10, 2000.
    The Internal Revenue Service [IRS] is responsible for 
collecting taxes, processing tax returns, pursuing collection 
of amounts owed, and enforcing tax laws. In fiscal year 1999, 
the IRS collected $1.9 trillion in Federal tax revenues, 
disbursed $185 billion in tax refunds, and reported $21 billion 
in net taxes owed to the Federal Government.
    The subcommittee held two hearings on the IRS's financial 
management. The first hearing, on February 29, 2000, focused on 
the financial management challenges facing the IRS. This 
hearing highlighted the need for continued involvement and 
commitment by IRS senior management to ensure that the agency 
is successful in attempting to address its serious financial 
management problems.
    The IRS prepares financial statements on its custodial 
operations--revenues collected, refunds paid, and related taxes 
receivable and payable--and on its administrative activities 
associated with more than $8 billion of appropriated funds. 
During the General Accounting Office's [GAO] fiscal year 1999 
audit, auditors found that ``the agency continues to experience 
pervasive material weaknesses in the design and operation of 
its automated financial management and related operational 
systems, accounting procedures, documentation, record-keeping, 
and internal controls, including computer security controls.'' 
\54\ Such problems prevented the IRS from reliably reporting on 
the results of its fiscal year 1999 administrative activities. 
However, for the third consecutive year, the IRS was able to 
reliably report on its financial activity covering the 
collection and refunds of taxes. As in previous years, this 
achievement was accomplished through extensive, costly, and 
time-consuming ad hoc procedures to overcome pervasive internal 
control and systems weaknesses. Major problems identified 
during the hearing included deficiencies in controls over 
unpaid tax assessments and tax refunds. Such a lack of controls 
could result in both increased taxpayer burden and potentially 
billions of dollars in lost revenue and improper refunds.
---------------------------------------------------------------------------
    \54\ ``Internal Revenue Service: Results of Fiscal Year 1999 
Financial Statement Audit,'' GAO/T-AIMD-00-104 p. 1.
---------------------------------------------------------------------------
    The second hearing, held on April 10, 2000, focused on the 
progress and challenges the IRS faces in re-engineering its 
business practices and technology to meet the requirements of 
the IRS Restructuring and Reform Act of 1998. As noted by the 
GAO, the ``IRS has taken important steps over the last year; 
however, some of its most important and difficult work lies 
ahead.'' \55\
---------------------------------------------------------------------------
    \55\ ``IRS Modernization: Business Practice, Performance 
Management, and Information Technology Challenges,'' GAO/T-GGD/AIMD-00-
144.
---------------------------------------------------------------------------
    The IRS has been the subject of many studies and much 
criticism. The studies have identified a long list of problems, 
including inadequate technology and the failure of technology 
modernization programs, poor service to taxpayers, and 
violations of taxpayer rights. On July 22, 1998, the IRS 
Restructuring and Reform Act of 1998 was signed into law.\56\ 
This law included many provisions to enhance taxpayer rights 
and to deal with specific organizational aspects of the IRS. 
The Commissioner of the IRS noted that because of the act, 
``the IRS continues to plan and implement the most significant 
changes to its organization, technology, and the way it serves 
taxpayers in almost a half-century.'' \57\ According to the 
Commissioner, progress is being made on the agency's short- and 
long-term goals and mandates set forth by the Restructuring and 
Reform Act, and with Congress's continued and assured support 
the IRS will be able to make the changes the American taxpayers 
expect and deserve. The GAO warned, however, that ``the 
magnitude of this modernization effort makes it a high-risk 
venture that will take years to fully implement.'' \58\
---------------------------------------------------------------------------
    \56\ Public Law 105-206, July 22, 1998.
    \57\ Testimony of Commissioner of Internal Revenue Charles O. 
Rossotti before the House Committee on Government Reform's Subcommittee 
on Government Management, Information, and Technology's hearing on 
``IRS Filing Season, IRS Restructuring Act and Budget,'' April 10, 
2000.
    \58\ ``IRS Modernization: Business Practice, Performance 
Management, and Information Technology Challenges,'' GAO/T-GGD/AIMD-00-
144.
---------------------------------------------------------------------------
    At both hearings, the subcommittee heard testimony that the 
IRS's ability to collect taxes in an effective and efficient 
manner continues to be hindered by significant long-standing 
financial management and operational problems. These problems 
will take years to correct and will require continuous 
commitment from the agency's senior management.
(3) ``Results of the Health Care Financing Administration's 1999 
        Financial Audit,'' March 15, 2000.
    The Health Care Financing Administration [HCFA] is 
responsible for nearly 18 percent of all Federal outlays and 
pays for one-third of the health care costs throughout the 
United States. It is the largest single purchaser of health 
care in the world.
    In fiscal year 1999, $200 billion in Medicare benefit 
claims were administered by more than 50 Medicare contractors 
and $110 billion in Medicaid benefit payments were administered 
by 57 States and territories. HCFA finances more than 860 
million Medicare benefits claims annually to nearly 40 million 
seniors and disabled Americans, and provides States with 
matching funds for Medicaid health care services for 
approximately 33 million low-income individuals.
    For fiscal year 1999, the Department of Health and Human 
Services Inspector General issued the first unqualified audit 
opinion on HCFA's financial statements. However, HCFA continues 
to have internal control weaknesses that hamper its ability to 
safeguard the fiscal integrity of the Medicare and Medicaid 
programs. As of September 30, 1999, HCFA estimated that its 
improper payments were approximately $13.5 billion or 8 percent 
of the $169.5 billion in processed Medicare fee-for-service 
benefits. Auditors reported that no methodology exists for 
estimating the range of improper Medicaid payments on a 
national level and that since Medicaid is a grant program, any 
estimating methodology would need to be done in conjunction 
with the State programs. HCFA is currently working with States 
to apply a uniform methodology of calculating an error rate in 
the administration of the Medicaid program.
    The subcommittee's hearing focused on HCFA's efforts to 
resolve its financial management problems and address the 
challenges associated with administering the Medicare program. 
The Inspector General reported that it was encouraged by HCFA's 
sustained success in reducing Medicare payment errors and by 
the important progress being made toward resolving prior years' 
financial reporting problems. But auditors noted, ``We remain 
concerned, however, that inadequate internal controls over 
accounts receivable leave the Medicare program vulnerable to 
potential loss or misstatement. As HCFA begins a lengthy 
process to integrate its accounting system with the Medicare 
contractor systems, internal controls must be strengthened to 
ensure that debt is accurately recorded, an adequate debt 
collection process is in place, and information is properly 
reflected on the financial statements.'' \59\ The GAO further 
noted that ``shortcomings in HCFA's financial operations mean 
that it could not adequately ensure the reliability of data 
that the agency and the Congress use to track the cost of the 
Medicare program and to help make informed decisions about 
future funding.'' \60\
---------------------------------------------------------------------------
    \59\ ``HCFA: Fiscal Year 1999 Financial Statement Audit,'' 
testimony of June Gibbs Brown, Inspector General, U.S. Department of 
Health and Human Services before the House Committee on Government 
Reform's Subcommittee on Government Management, Information, and 
Technology, March 15, 2000.
    \60\ ``Medicare Financial Management: Further Improvements Needed 
to Establish Adequate Financial Control and Accountability,'' GAO/T-
AIMD-00-118.
---------------------------------------------------------------------------
    HCFA reported that there are several initiatives underway 
to bring the claims payment error rate down and that it is 
aggressively addressing financial management issues. Top 
management's continued support of these initiatives and 
sustained actions will be key to HCFA's success in resolving 
its financial management problems.
(4) ``Results of the 1999 Financial Audit of the Department of 
        Agriculture,'' March 21, 2000.
    The Department of Agriculture's mission has evolved beyond 
agriculture programs to include programs in such diverse areas 
as economic development, food assistance, food safety, 
international trade and marketing, and land management. Today 
the Department of Agriculture is responsible for major programs 
that boost farm production and exports; promote small community 
and rural development; ensure a safe food supply for the 
Nation; manage natural resources; and improve the nutrition of 
families and individuals with low incomes. Its vast resources 
include more than $118 billion in assets.
    Since fiscal year 1992, the Department of Agriculture's 
financial statements have been unauditable, and it continues to 
have serious financial management problems. One of the more 
significant problems preventing the department from reporting 
reliable information is its inability to reasonably estimate 
its cost of extending or guaranteeing $93 billion of credit. As 
the largest direct lender in the Federal Government, the 
department's inability to properly account for the costs of its 
loan programs continues to negatively impact the reliability of 
the consolidated financial statements of the U.S. Government. 
In addition, such a lack of reliable cost estimates prevents 
Congress from making decisions about whether to scale back or 
increase the loan programs.
    At the subcommittee hearing the Inspector General stated 
that ``Financial information in USDA is, on the whole, not 
reliable,'' and, as a result of serious internal control 
weaknesses, ``managers of the programs and operations may be 
relying on highly questionable information.'' The Department of 
Agriculture's Chief Financial Officer acknowledged the 
problems, the various initiatives underway, and the 
department's progress in resolving those problems. The GAO 
concluded that many of the problems are deeply rooted and will 
take time, substantial resources, and sustained commitment from 
top management to correct.
(5) ``Results of the 1999 Financial Audit of the Department of Housing 
        and Urban Development,'' March 22, 2000.
    The Department of Housing and Urban Development was 
established to promote adequate and affordable housing, 
economic opportunity, and a suitable living environment free 
from discrimination. It's major functions include insuring 
mortgages for single-family and multi-family dwellings; 
channeling funds from investors into the mortgage industry; 
making direct loans for construction or rehabilitation of 
housing projects for the elderly and the handicapped; providing 
Federal housing subsidies for low- and moderate-income 
families; providing grants to States and communities for 
community development activities; and promoting and enforcing 
fair housing and equal housing opportunities.
    For fiscal year 1999, the Inspector General was unable to 
express an opinion on HUD's financial statements in time to 
meet the statutory deadline of March 1, 2000, because of 
problems related to HUD's conversion to a new accounting 
system. The Inspector General's report noted that ``material 
internal control weaknesses with HUD's core financial 
management system and U.S. Government Standard General Ledger 
[SGL], adversely affected HUD's ability to prepare auditable 
financial statements and related disclosures in a timely 
manner.''
    The Inspector General noted that material weaknesses and 
reportable conditions reported in previous years have 
essentially remained unchanged. However, the Inspector General 
stated that the department ``has recognized its areas of 
systemic weakness to a degree that it never did before, and 
that in each of these areas it has plans in place and 
activities underway to address the problems.''
    In addressing its financial management problems, the Deputy 
Secretary stated that HUD has ``dedicated resources to address 
each and every material weakness and reportable condition cited 
in the audit.'' He further stated that HUD's goal is to obtain 
unqualified opinions every year and that the final 
implementation of HUD 2020 Management Reform Plan will resolve 
each remaining material concern.
    Although an unqualified opinion is important, the 
department must continue to strive to achieve the goal of the 
financial management legislation passed by Congress--which is 
to ensure that agencies maintain financial systems that allow 
them to produce accurate, reliable financial information on a 
day-to-day basis.
(6) ``Are the Government's Financial Records Reliable?'' March 31, 
        2000.
    The Chief Financial Officers Act of 1990 (Public Law 101-
576), as expanded by the Government Management Reform Act of 
1994 [GMRA] (Public Law 103-356), required that the Federal 
Government produce annual audited, consolidated financial 
statements, beginning in fiscal year 1997. GMRA also required 
that beginning in 1998, the General Accounting Office issue an 
annual audit report on the consolidated financial statements no 
later than March 31 of the subsequent year.
    At the subcommittee's hearing on March 31, 2000, the 
Comptroller General of the United States released the results 
of the fiscal year 1999 audit of the financial statements of 
the Federal Government. For the third consecutive year, he 
reported that ``because of serious deficiencies in the 
Government's systems, record-keeping, documentation, financial 
reporting, and controls, amounts reported in the Government's 
financial statements and related notes may not provide a 
reliable source of information for decision-making by the 
Government or the public.'' \61\ The Comptroller General 
further noted that as of March 31, 2000, 19 of 22 major 
agencies' financial systems did not comply with the 
requirements of the Federal Financial Management Improvement 
Act of 1996 \62\ and that agency financial systems overall are 
in poor condition and cannot provide reliable financial 
information necessary for managing day-to-day Government 
operations.
---------------------------------------------------------------------------
    \61\ ``Auditing the Nation's Finances: Fiscal Year 1999 Results 
Continue to Highlight Major Issues Needing Resolution,'' GAO/T-AIMD-00-
137.
    \62\ The remaining two major agencies had not yet issued their 
audited financial statements. However, they had not complied with the 
act's requirements for fiscal years 1998 and 1997.
---------------------------------------------------------------------------
    The Office of Management and Budget recognized that 
necessary financial management improvements are difficult and 
require a great effort, and that modernizing financial 
management and reporting throughout the Federal Government is a 
long-term process that will take years, not months, to correct. 
The OMB reported, however, that steady progress is being made--
that the timeliness of financial reports has improved and the 
number of agencies receiving ``clean'' audit opinions has 
increased. Nonetheless, the Comptroller General cautioned that 
although clean audit opinions are essential to providing an 
annual public scorecard, they do not guarantee that agencies 
have the financial systems needed to produce reliable financial 
information. Modern financial management systems and good 
controls are essential to reaching the goal of providing 
reliable financial information necessary for managing 
Government operations on a day-to-day basis.
    On March 31, 2000, the subcommittee released its third 
annual report card, measuring the effectiveness of financial 
management in the 24 Cabinet departments and independent 
agencies required to produce audited financial statements. The 
grades were based on the results of the audits prepared by 
agency Inspectors General, independent public accountants, and 
the General Accounting Office.
    The report card is a gauge for Congress to see where 
attention is needed to prod agencies toward getting their 
financial affairs in order. Again, this year, the grades are 
dominated with ``D's'' and ``F's.'' This year, the subcommittee 
also graded the Federal Government as a whole. Based on this 
year's consolidated audit report, the subcommittee has 
determined that, overall, the Federal Government earned a ``D-
plus.''
    The National Aeronautics and Space Administration and the 
National Science Foundation demonstrated they could effectively 
manage their finances. Both agencies received ``A's.'' The 
Social Security Administration, General Services 
Administration, Department of Labor, and the Department of 
Energy earned ``B's.'' Five agencies could not pass muster and 
earned failing grades of ``F.'' They were: the Agency for 
International Development, the Department of Agriculture, the 
Department of Defense, the Office of Personnel Management, and 
the Department of Housing and Urban Development.
    Although 14 agencies received ``clean'' audit opinions, 
they still missed the most important goal, which is to maintain 
financial systems that allow them to produce accurate, reliable 
financial information on a day-to-day basis.
    Five of the 24 agencies were late in issuing their 
financial statements, and two--the Department of Interior and 
the Department of State--had not filed reports by the 
subcommittee's March 31st hearing--6 months after the close of 
the Government's fiscal year.
(7) ``Results of the 1999 Financial Audit of the Department of 
        Defense,'' May 9, 2000.
    The subcommittee's hearing focused on the status of 
financial management at the Department of Defense and the 
importance of reliable financial information to the logistics 
operations of the Army, Air Force, and Navy.
    The Department of Defense [DOD] is the largest of the 
Federal Government's 14 Cabinet-level departments. Fiscal year 
1999 was the fourth year the Department of Defense had prepared 
audited, agencywide financial statements. For fiscal year 1999, 
the department reported total assets of $599 billion and total 
net cost of operations of $378 billion.
    Once again, the agency's Inspector General [IG] disclaimed 
an opinion on the department's financial statements, stating 
that internal control weaknesses, compilation problems, and 
financial management system deficiencies continued to exist. 
The audit report noted that the internal controls did not 
ensure that accounting entries impacting financial data were 
fully supported and that assets, liabilities, costs, and budget 
resources were properly accounted for and reported. The report 
also identified noncompliance issues related to the Federal 
Financial Management Improvement Act of 1996, the Chief 
Financial Officers Act of 1990, and the Government Performance 
and Results Act of 1993.
    According to the Assistant Inspector General for Auditing, 
``Despite commendable progress, the DOD remains far from CFO 
Act compliance, and aggressive measures will be needed over the 
next few years to achieve success. . . . sustained involvement 
by senior managers and the Congress are vital ingredients for 
progress.'' The GAO also noted that the ``DOD continues to make 
incremental improvements to its financial management systems 
and operations. At the same time, the department has a long way 
to go to address the remaining problems. Overhauling DOD's 
financial systems, processes, and controls and ensuring that 
personnel throughout the department share the common goal of 
improving DOD financial management, will require sustained 
commitment from the highest levels of DOD leadership--a 
commitment that must extend to the next Administration.''
    At this hearing, a panel of two Generals and a Vice Admiral 
from the logistics side of the military also stressed the need 
of having reliable financial information to assist in making 
accurate, timely, and good decisions to ensure the Nation's 
military readiness.
(8) ``Compliance with the Federal Financial Management Improvement Act 
        of 1996: Agencies Continue to Struggle,'' June 6, 2000.
    Historically, Federal agencies have struggled with 
reporting complete, reliable, and useful financial information. 
The lack of such information has hindered managers ability to 
efficiently manage operations on a daily basis, and has 
prevented Congress from making fully informed decisions in 
allocating limited resources. Recognizing the importance that 
financial management systems play in providing timely and 
reliable financial information, Congress passed the Federal 
Financial Management Improvement Act [FFMIA] (Public Law 104-
208) of 1996.
    On June 6, 2000, the subcommittee held its first oversight 
hearing on the status of the 24 CFO Act agencies' 
implementation of the FFMIA. The hearing focused on the 
progress agencies have made in complying with the law as well 
as the significant challenges that are preventing many of the 
agencies from having management systems that provide reliable 
financial information on a day-to-day basis.
    At this hearing, both the OMB and the GAO noted that many 
agencies continue to struggle FFMIA because of the overall 
longstanding, poor condition of agency financial systems. Their 
systems were designed to track cash outlays under budget 
appropriations law, not accrual-based financial accounting. 
Specifically, the GAO found five primary reasons that agencies 
are in noncompliance: (1) nonintegrated financial management 
systems; (2) inadequate reconciliation procedures; (3) 
noncompliance with the Federal Government Standard General 
Ledger; (4) lack of adherence to Federal accounting standards; 
and (5) weak security over information systems.
    Even though more agencies are receiving unqualified or 
``clean'' audit opinions, continued noncompliance with FFMIA's 
requirements prevent them from meeting the intent of the 
financial management reform legislation--reporting complete, 
reliable, and useful financial information. As of July 2000, 20 
of 23 CFO Act agencies did not have financial management 
systems that comply with FFMIA even though 14 of the 23 
agencies received ``clean'' audit opinions. According to the 
GAO, these clean audit opinions were attained using costly, 
heroic efforts that go outside the financial systems.
    Meeting the requirements of FFMIA presents long-standing, 
significant challenges that will ultimately be attained through 
investment, and sustained emphasis. As with the Government's 
year 2000 conversion efforts, success is dependent on the 
commitment of top agency managers to the effort. As noted by 
the GAO, ``consistent and persistent top management attention 
is essential to solving any intractable problem.'' Such a 
commitment is needed if the requirements of the FFMIA are to be 
met.
4. ``Management Practices at the Office of Workers' Compensation 
        Programs, U.S. Department of Labor,'' House Report 106-1024), 
        December 4, 2000.
    a. Summary.--After 3 years of on-going oversight of the 
Office of Workers' Compensation Programs, on October 19, 2000, 
the subcommittee submitted a report entitled, ``Management 
Practices at the Office of Workers' Compensation Programs, U.S. 
Department of Labor,'' which was adopted by the full Committee 
on Government Reform. This report summarized the subcommittee's 
on-going oversight of management practices at the Office of 
Workers Compensation Programs.
    Over the last 3 years, the subcommittee has received 
hundreds of letters and documentation from Federal employees 
who have sustained work-related injuries, stating that the 
workers' compensation system is adversarial and biased against 
the injured worker.
    The subcommittee subsequently held three hearings to 
examine management practices at the Office of Workers' 
Compensation Programs. Hearing witnesses, who included 
claimants, their attorneys, union representatives, and health 
care providers, described similar problems to those cited by 
letter writers.
    The Office of Workers' Compensation Programs [OWCP] at the 
Department of Labor is responsible for processing injured 
employee compensation claims for most Federal workers. The 
subcommittee investigated the management of OWCP, including 
whether the Federal Employees' Compensation Act [FECA], 
administered by the Federal Employees' Compensation Program, is 
a fair, timely, and efficient process. The committee report 
summarized these problems and offers preliminary 
recommendations aimed toward resolving them.
    The subcommittee found that:
     Those responsible for the administration of the 
Federal Employees' Compensation Act at the Office of Workers' 
Compensation Programs are not providing adequate information or 
services to claimants who file appeals;
     Employees at the Office of Workers' Compensation 
Programs are not focused on customer service;
     In many cases, agencies are not providing adequate 
assistance to their employees who are injured while performing 
work-related duties; and
     Actions are needed to improve management practices 
and customer service at the Office of Workers' Compensation 
Programs.
    The subcommittee made the following recommendations:
     Provisions of the Federal Employees' Compensation 
Act must be enforced, specifically those provisions dealing 
with employers who interfere with an employee's legitimate 
claim for compensation due to a work-related injury or illness;
     Provisions in the Employees' Compensation Act must 
be clarified to require a third opinion by a qualified 
physician when an employee's attending physician and a second 
opinion physician disagree on the diagnosis or prognosis of a 
work-related injury or disease;
     The Division of Federal Employees' Compensation 
should make every effort to provide telephone access to the 
Office of Workers' Compensation Programs for claimants, their 
representatives and medical providers. This effort should 
include a centralized communications system and studying the 
feasibility of providing a toll-free telephone number;
     While timeframes must be set for claim 
resolutions, they must not be at the expense of a quality, 
well-thought-out decision; and
     Congress should consider establishing an 
independent board, such as the board currently overseeing 
ongoing reforms at the Internal Revenue Service, to review, 
make recommendations, and oversee reforms at the Office of 
Workers' Compensation Programs. This board should also consider 
and recommend to Congress whether appeals by Federal workers 
under the Office of Workers' Compensation Program should be 
extended to include the Federal court system.
    b. Benefits.--Subcommittee action responded to widespread 
concerns among injured Federal workers, the medical community, 
the legal community, employee unions congressional caseworkers 
and the concerns of the Inspector General regarding customer 
service at the Office of Workers' Compensation Programs.
    c. Hearings.--
(1) ``Oversight of the Management Practices at the Office of Workers' 
        Compensation Programs,'' July 6, 1998.
    The subcommittee began its examination of the OWCP with a 
July 6, 1998, field hearing in Long Beach, CA, that addressed 
the agency's management practices and administration of the 
Federal Employees' Compensation Act. The hearing focused on the 
timely adjudication of Federal injured workers' claim and the 
process of a fair and just appeal.
    Joseph Perez and William Usher, hearing representatives 
from the Office of Workers' Compensation Program, presented 
testimony on the first panel. These two witnesses expressed 
their frustrations and criticism over the way in which the 
Department of Labor administers its Office of Workers' 
Compensation Programs, the slowness of the adjudication 
process, as well as existing waste, fraud, and abuse within the 
agency.
    The second panel consisted of injured Federal workers from 
the U.S. Postal Service and the Navy. Witnesses described their 
personal experiences with the Department of Labor, in 
particular the Office of Workers' Compensation Programs.
    The third panel consisted of officials from the Department 
of Labor who presented a status update on any questionable 
management practices at the Office of Workers' Compensation 
Programs. Michael Kerr, Deputy Assistant Secretary, Office of 
Workers' Compensation Programs testified on the third panel. 
The hearing was conducted to determine whether injured Federal 
employees received timely and equitable adjudication of their 
compensation claims and to determine methods to improve the 
compensation system.
(2) ``Oversight of Customer Service at the Office of Workers' 
        Compensation Programs,'' May 18, 1999.
    On May 18, 1999, the subcommittee held a second hearing 
examining customer service issues at the Office of Workers' 
Compensation Programs. The Federal Employees' Compensation Act, 
administered by the Office of Workers' Compensation Programs, 
authorizes Federal agencies to compensate Federal employees for 
traumatic injuries sustained on the job. In its creation, FECA 
was intended to develop a non-adversarial arrangement whereby 
Federal employees would be compensated for their injuries in a 
fair and equitable manner while also saving the Federal 
Government from tort liability.
    The subcommittee has received numerous complaints from 
injured Federal employees, alleging that FECA is no longer a 
non-adversarial system. The first panel at the hearing 
consisted of three Federal injured workers who presented their 
cases and described their experiences with customer service at 
the Office of Workers' Compensation Programs. Most of the 
subcommittee's investigations have focused on the appeals 
process. The first two witnesses, Dianne McGuinness and Thomas 
M. Chamberlain described, their unsatisfactory experiences, and 
each provided evidence to show the lack of care, fairness, and 
attention that had been given to their individual cases by the 
Office of Workers' Compensation Programs. The third witness, 
Matthew Fairbanks, who was granted compensation immediately 
upon submitting his claim, described his experience with the 
Office of Workers' Compensation Programs as beneficial and 
rehabilitating.
    The second panel consisted of people who work closely with 
the OWCP. These witnesses discussed the shortcomings that exist 
in the OWCP's customer service and suggested approaches to 
overcome such shortcomings. Beth Balen, administrator for the 
Anchorage Fracture and Orthopedic Clinic, testified that the 
OWCP's lack of responsiveness often required her to place many 
calls before getting a response. She described the difficulty 
of obtaining reimbursement payments and resolving outstanding 
bills with the OWCP. Because of the clinic's negative 
experiences with the OWCP, it no longer treats injured Federal 
workers, unless it is an emergency. The clinic does, however, 
welcome injured workers who are employed by the State of Alaska 
or private organizations. John Riordan, a union representative 
from the American Federation of Government Employees testified 
regarding his negative experiences in assisting and 
representing injured Social Security Administration employees, 
one of whom was hearing witness Dianne McGuinness.
    Mr. Riordan described the difficult and unresponsive 
environment that exists at the New York Regional Office of the 
OWCP. He presented signed affidavits and testimony describing 
actions by the Regional Director of the New York and Boston 
Offices, Kenneth Hamlet, who accosted Mr. Riordan for being in 
the building while attempting to drop off a package. Mr. 
Riordan also worked in the same building he was thrown out of.
    James Linehan, a lawyer from Oklahoma, described the 
difficulty of representing injured workers during the 
administrative appeals process. He described the difficulty of 
getting calls returned, responses to correspondence, and 
gaining access to his client's files.
    Tina Maggio, a congressional caseworker, in the office of 
Representative Michael F. Doyle of Pennsylvania, testified that 
she also found the OWCP to be nonresponsive to her calls, 
including a clearly stated emergency call, until after leaving 
many messages with the District Directors at OWCP regional 
office. She also testified that among the Federal she deals 
with, the OWCP is the worst.
    The third panel consisted of Patricia Dalton, Deputy 
Inspector General of the Department of Labor, and Shelby 
Hallmark, Deputy Director of the Office of Workers' 
Compensation Programs. Patricia Dalton testified regarding the 
Office of Inspector General's report on the OWCP's customer 
service survey. She testified that the questions were biased 
and the questionnaire was poorly constructed. She stated that 
of the 36 questions on the survey, OWCP only used the first, 
which she said was biased in favor of the agency, to measure 
customer service. Additionally, she testified that the 
information gathered was not retained for further analysis and 
use.
    Shelby Hallmark testified regarding the allegations and 
evidence presented at the hearing. He stressed that the OWCP 
was very customer-friendly and that customer service rises each 
year. He described the situations and testimonies submitted at 
the hearing were unusual or unique situations and did not 
represent the whole of the OWCP's customer service in the 
appeals process.
(3) ``The Federal Workers' Compensation Programs: Are Injured Workers' 
        Being Treated Fairly?,'' September 21, 2000.
    Similar to previous hearings, witnesses testified about the 
problems they have encountered with the OWCP's appeals process. 
Witnesses at this hearing included an injured claimant, an 
attorney, a union representative, and the chairman of the 
Employees Compensation Appeals Board [ECAB]. Attorney Clete 
Weiser said that the average appeal takes about 2 years to be 
heard by the Employees Compensation Appeals Board. Claimant 
Greg Fox discussed the personal and financial hardships for 
claimants caused by these delays. ECAB Chairman Michael Walsh 
said that the Board has significantly reduced its backlog of 
appeals, but it often gets cases that must be returned to the 
OWCP because they need further review or files are incomplete.

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                    Hon. David M. McIntosh, Chairman

1. ``Non-Binding Legal Effect of Agency Guidance Documents,'' House 
        Report No. 106-109, October 26, 2000, Seventh Report by the 
        Committee on Government Reform, together with Minority and 
        Additional Views.
    a. Summary.--Various laws enacted by Congress ensure legal 
protections for the public so that agencies may not issue 
documents that bind the public without the public's opportunity 
to participate in the policymaking process. These good 
government provisions are a key to our democratic process. They 
protect citizens from arbitrary decisions and enable citizens 
to effectively participate in the process. If agencies avoid 
these legal protections or issue documents that do not clearly 
state if they have binding legal effect or not, the public may 
be confused or unfairly burdened--sometimes at great cost.
    Agencies sometimes claim they are just trying to be 
``customer friendly'' and serve the regulated public when they 
issue advisory opinions and guidance documents. This may, in 
fact, be true in many cases. However, when the legal effect of 
such documents is unclear, regulated parties may well perceive 
this ``help'' as coercive--an offer they dare not refuse. 
Regrettably, the subcommittee's investigation found that some 
guidance documents were intended to bypass the rulemaking 
process and expanded an agency's power beyond the point at 
which Congress said it should stop. Such ``backdoor'' 
regulation is an abuse of agency power.
    In 1996, Congress enacted the Congressional Review Act 
[CRA] to oversee agency legislative rules and agency guidance 
documents with any general applicability and future effect. 
Despite repeated requests by the subcommittee and specific 
direction by Congress in two appropriation cycles, the Office 
of Management and Budget [OMB] failed to provide sufficient 
guidance to Federal agencies for implementation of the CRA. The 
result has been some agency confusion over the legal effect of 
agency guidance documents and incomplete agency compliance with 
the CRA.
    As a result of the subcommittee's 1999-2000 investigation, 
the major regulatory agencies each submitted letters from their 
chief legal officials to the subcommittee stating that their 
agency guidance documents have no binding legal effect on the 
public and that they are taking steps to clearly communicate 
this fact to the public. These officials state that these 
guidance documents are ``not legally binding'' on the public 
and conclude by saying, ``We recognize the importance of using 
guidance properly, and we have taken--and will continue to 
take--appropriate steps to address the concerns that guidance 
not be used as a substitute for rulemaking and to make the 
legal effect of our documents clear to the public.''
    Nonetheless, as Law Professor Robert Anthony stated in a 
1998 article entitled, ``Unlegislated Compulsion: How Federal 
Agency Guidelines Threaten your Liberty,'' ``Even though those 
documents do not have legally binding effect, they have 
practical binding effect whenever the agencies use them to 
establish criteria that affect the rights and obligations of 
private persons'' (Cato Policy Analysis No. 312, August 11, 
1998, p. 1).
    b. Benefits.--The subcommittee found that, since the March 
1996 enactment of the CRA, OMB failed to provide sufficient 
guidance to the agencies on implementation of the CRA. The 
result was some agency confusion about the CRA, especially 
about agency guidance documents subject to congressional review 
under the CRA, and incomplete agency compliance with the CRA. 
Under the CRA, agency guidance with any general applicability 
and future effect is subject to congressional review. Without 
the required congressional review, covered agency guidance has 
no legal force or effect.
    The subcommittee also found that agencies have sometimes 
improperly used guidance documents as a backdoor way to bypass 
the statutory notice-and-comment requirements for agency 
rulemaking and establish new policy requirements.
    The subcommittee further found that agencies often do not 
clearly state within their guidance documents that they are not 
legally binding on the public. As a consequence, the public 
often is confused and unfairly burdened, sometimes at great 
cost.
    In response, the subcommittee requested information from 
the major regulatory agencies about their use of nonregulatory 
guidance documents, their submissions for congressional review 
under the CRA, and their specific explanations within each 
guidance document regarding its legal effect. The agencies 
responded by submitting letters to the subcommittee confirming 
that their guidance documents have no legally binding effect on 
the public.
    The report includes these agency letters for the public's 
use; however, the subcommittee remains concerned about future 
backdoor rulemaking attempts by the agencies and future agency 
guidance documents without explanations regarding their non-
binding legal effect on the public. Consequently, the 
subcommittee intends to continue its oversight in this area and 
asks the public to inform the subcommittee about any instances 
of agency guidance which either establishes policy through the 
backdoor or is unclear about its non-binding legal effect on 
the public.
    c. Hearings.--On February 15, 2000, the subcommittee held a 
hearing entitled, ``Is the Department of Labor Regulating the 
Public Through the Backdoor?'' The purpose of the hearing was 
to examine the Department of Labor's [DOL's] use of 
nonregulatory guidance documents and to determine whether DOL 
was regulating the public through the backdoor--by imposing 
binding legal requirements in nonregulatory guidance documents. 
The hearing allowed the Department's chief legal officer, 
Solicitor Henry Solano, to discuss DOL's use of nonregulatory 
guidance documents instead of public rulemaking and the ways in 
which DOL disclosed or failed to disclose whether or not each 
such guidance document is legally binding on the public.
    Besides Mr. Solano, witnesses included: Michael E. Baroody, 
senior vice president, Policy, Communications and Public 
Affairs, National Association of Manufacturers [NAM] and Former 
Assistant Secretary of Policy, DOL; Robert A. Anthony, George 
Mason University Foundation professor of law and former 
chairman, Administrative Conference of the United States; Jud 
Motsenbocker, owner, Jud Construction Co., Muncie, IN; Dixie 
Dugan, human resource coordinator, Cardinal Service Management, 
Inc., New Castle, IN; Dave Marren, vice president and division 
manager, the F.A. Barlett Tree Expert Co., Roanoke, VA; and 
Adele Abrams, attorney with Patton, Boggs in Washington, DC.
    The hearing revealed that: (a) DOL and the Department of 
Transportation [DOT] had admitted that none of their listed 
guidance documents for their Occupational Safety and Health 
Administration [OSHA] and the National Highway Traffic Safety 
Administration [NHTSA], respectively, were legally binding on 
the public; (b) DOL and DOT had admitted that none of their 
listed guidance documents for OSHA and NHTSA were submitted to 
Congress for review under the CRA; (c) the vast majority of 
DOL's and DOT's submitted guidance documents did not make it 
clear to the public that the documents are not legally binding 
on the public; and (d) only 8 percent of DOL's 1999 OSHA 
guidance documents included any explanation of legal effect and 
only 5 percent put this explanation at the beginning of the 
document. In contrast, DOT included an explanation of legal 
effect in about 40 percent of its NHTSA guidance documents.
    The hearing also examined several areas of DOL guidance. 
Mr. Baroody provided many examples of agency guidance documents 
which make ``the point that the problem of non-regulatory 
guidance, `non-rule rules,' back-door rulemaking as it is 
variously described, is not just a problem at the Occupational 
Safety and Health Administration, nor is it just a problem at 
the Department of Labor. It is a problem widespread in this 
Administration.''
    The hearing, including testimony by Ms. Dugan, examined one 
aspect of DOL's Family and Medical Leave Act [FMLA] guidance. 
The hearing revealed that DOL issued a nonregulatory but 
policysetting guidance opinion letter which redefined a 
``serious health condition'' under the 1993 FMLA. DOL's 1995 
opinion letter said that minor illnesses, such as the common 
cold, were not a serious health condition. However, in December 
1996, DOL retracted its previous definition and stated that the 
common cold, the flu, ear-aches, upset stomachs, et cetera, all 
are covered by the FMLA if an employee is incapacitated more 
than 3 consecutive days and receives continuing treatment from 
a health care provider. Ms. Dugan's testimony explained that 
the consequences of this nonregulatory and costly redefinition 
reverberated throughout the employer world and actually created 
a problem for needy people.
    Ms. Dugan, a human resource coordinator for a private, for-
profit corporation whose services include group homes and 
supported living apartments, explained, ``When employees are 
legitimately on leave we find a way to cover for them; however, 
under DOL opinion letters unscheduled and unplanned absences 
and illegitimate leave hurts us. They threaten our ability to 
serve our clients who are counting on us to be there 24 hours a 
day. We share this dilemma with many industries where 
unscheduled and unplanned absences can affect customers and 
coworkers.''
    The hearing noted DOL's backdoor work-at-home guidance. On 
January 5, 2000, the subcommittee wrote DOL about its November 
15, 1999, work-at-home policysetting guidance letter, which was 
not included in DOL's 3,374 OSHA documents submitted to the 
subcommittee, since it was issued after the subcommittee's 
October 8th request letter. The subcommittee sought to 
determine if DOL's 1999 guidance had been submitted to Congress 
for review under the CRA and if it was legally binding on the 
public. Of especial concern was DOL's expansion, without any 
express statutory delegation from Congress, of its jurisdiction 
into private homes. Subsequently, DOL withdrew this guidance 
document.
    The hearing, including testimony by Mr. Marren, explored 
DOL's 1998 and 1999 guidance documents for arborists. DOL 
withdrew both of these guidance documents after threats of 
lawsuits against DOL for not following the Administrative 
Procedure Act's [APA's] statutory procedures for new 
rulemaking.
    The next day (on February 16, 2000), the subcommittee 
submitted many post-hearing questions to DOL. For example, the 
subcommittee asked DOL to identify all other withdrawn guidance 
documents and to submit a chart identifying the number of 
guidance documents by category of guidance (e.g., compliance 
directives, compliance guides, interpretation letters, manuals, 
et cetera). Even though DOL, in its March 16th partial reply to 
some of the post-hearing questions, promised to provide this 
information to the subcommittee, it never did so despite the 
subcommittee's repeated requests for this information.

 Subcommittee on National Security, Veterans Affairs and International 
                               Relations

                    Hon. Christopher Shays, Chairman

1. ``The Department of Defense Anthrax Vaccine Immunization Program: 
        Unproven Force Protection,'' House Report No. 106-556, April 3, 
        2000, Fourth Report by the Committee on Government Reform, 
        together with Dissenting and Supplemental Views.
    a. Summary.--In the 106th Congress, the Subcommittee on 
National Security, Veterans Affairs, and International 
Relations held six hearings on issues raised by the Department 
of Defense [DOD] Anthrax Vaccine Immunization Program [AVIP]. 
The hearings examined the role of vaccines in force protection, 
specifically the design, implementation and procurement 
strategy of the AVIP. Witnesses also questioned the safety and 
effectiveness of the mandatory AVIP which proposes to 
administer an old, little-used vaccine to the entire 2.4 
million member U.S. military force.
    Based on the hearing record, and more than 100,000 pages of 
documents obtained from DOD and the Food and Drug 
Administration [FDA], the subcommittee staff prepared an 
oversight report containing five findings and five 
recommendations.
    The report finds the AVIP unsustainable in its present form 
due to an unreliable vaccine supply, unmanageable program 
logistics, uncertain safety monitoring and the unproven 
efficacy of the current vaccine against the biological warfare 
threat. The report recommends development of a safer, more 
effective vaccine for broad-based military use. In the 
meantime, the report recommends DOD undertake the research 
necessary to make the current vaccine safer, including limiting 
its use to clinical trials requiring informed consent of all 
those receiving the immunization. If necessary, DOD could 
request the President to authorize a waiver of informed consent 
procedures for certain deployed forces pursuant to the statute, 
regulation and Executive order put in place since the gulf war.
Findings:
    1. The AVIP is a well-intentioned but over-broad response 
to the anthrax threat. It represents a doctrinal departure 
overemphasizing the role of medical intervention in force 
protection.
    2. The AVIP is vulnerable to supply shortages and price 
increases. The sole-source procurement of a vaccine that 
requires a dedicated production facility leaves DOD captive to 
old technology and a single, untested company. Research and 
development on a second-generation, recombinant vaccine would 
allow others to compete.
    3. The AVIP is logistically too complex to succeed. 
Adherence to the rigid schedule of six inoculations over 18 
months for 2.4 million members of a mobile force is unlikely, 
particularly in reserve components. Using an artificial 
standard that counts only shots more than 30 days overdue, DOD 
tolerates serious deviations from the Food and Drug 
Administration [FDA] approved schedule.
    4. Safety of the vaccine is not being monitored adequately. 
The program is predisposed to ignore or understate potential 
safety problems due to reliance on a passive adverse event 
surveillance system and DOD institutional resistance to 
associating health effects with the vaccine.
    5. Efficacy of the vaccine against biological warfare is 
uncertain. The vaccine was approved for protection against 
cutaneous (under the skin) infection in an occupational 
setting, not for use as mass protection against weaponized, 
aerosolized anthrax.
Recommendations:
    1. The force-wide, mandatory AVIP should be suspended until 
DOD obtains approval for use of an improved vaccine. To 
accomplish this:
    2. DOD should accelerate research and testing on a second-
generation, recombinant anthrax vaccine; and,
    3. DOD should pursue testing of the safety and efficacy of 
a shorter anthrax inoculation regimen; and,
    4. DOD should enroll all anthrax vaccine recipients in a 
comprehensive clinical evaluation and treatment program for 
long term study.
    5. While an improved vaccine is being developed, use of the 
current anthrax vaccine for force protection against biological 
warfare should be considered experimental and undertaken only 
pursuant to FDA regulations governing investigational testing 
for a new indication.
    b. Benefits.--Acknowledging vaccine shortages and the 
failure of the sole-source vaccine producer to meet Food and 
Drug Administration requirements for new production, DOD scaled 
back the AVIP in July 2000, requiring inoculation of only those 
forces active in high threat areas for more than 30 days. 
Oversight of the AVIP also prompted a clarification of medical 
exemption policies, closer tracking of the immunization 
regimen, and a more focused effort to determine the impact of 
the program on reserve component readiness, retention and 
morale. As the result of sustained congressional interest in 
the AVIP, adverse medical events subsequent to inoculation are 
being more closely monitored by DOD, FDA and private 
organizations. U.S. service personnel have been provided a 
significant volume of objective information and testimony on 
the program's origins, design, implementation, policy 
implications and impacts.
    The report also helped define issues raised by a policy of 
reliance on medical force protection to the possible exclusion 
or detriment of other elements--protective suits, masks, 
detectors--effective against chemical and biological warfare 
agents.
    c. Hearings.--A hearing entitled, ``The Impact of the 
Anthrax Vaccine Program on Reserve and National Guard Units,'' 
occurred on September 29, 1999 with testimony from witnesses 
from the DOD and armed service members. A hearing entitled, 
``Force Protection: Improving Safeguards for Administration of 
Investigational New Drugs to Members of the Armed Forces,'' was 
held on November 9, 1999. Testimony was received from DOD and 
HHS witnesses on current procedures for obtaining informed 
consent from service personnel. Biomedical ethicists also 
testified on the implication of using investigational products, 
or licensed products for off-label purposes, in mandatory force 
medical force protection programs. Hearing entitled, ``Anthrax 
Vaccine Adverse Reactions,'' occurred on July 21, 1999 with 
testimony from GAO, FDA, DOD and service members; hearing 
entitled, ``Department of Defense's Sole-Source Anthrax Vaccine 
Procurement,'' occurred on June 30, 1999 with testimony 
received from officials from DOD, GAO and BioPort Corp.; a 
hearing entitled, ``DOD's Mandatory Anthrax Vaccine 
Immunization Program for Military Personnel,'' took place on 
April 29, 1999 with testimony from officials with GAO, DOD and 
members of the armed services. Hearing entitled, ``The Anthrax 
Immunization Program,'' occurred on March 24, 1999 with 
testimony received from officials with the DOD, members of the 
armed forces, and concerned citizens.

                        B. OTHER INVESTIGATIONS

                             Full Committee

                       Hon. Dan Burton, Chairman

1. Investigate the current regulation of Federal wetlands, in 
        particular the area owned by Mr. John Pozsgai of Morrisville, 
        PA.
    a. Summary.--Wetlands are valued by many Americans for the 
very practical reason that they can act as a buffer against 
flooding or can purify streams and rivers, in addition to 
providing a home for a diverse species of wildlife. However, 
regulation and protection of wetlands has been one of the most 
controversial environmental issues that Congress has had to 
face. The debate over wetlands has evolved around the balance 
between protecting wetlands and private property rights.
    The Clean Water Act is the principal issue instrument of 
America's wetlands policy, with the focus exclusively, in 
stopping pollution. Yet over the years, the Army Corps of 
Engineers and the Environmental Protection Agency [EPA] 
steadily have expanded their jurisdiction, using the Clean 
Water Act as a means to protect wetlands, moving the focus away 
from actual polluters. In effect, the Clean Water Act has been 
transformed into a means to protect wetlands, yet Congress has 
never passed such a law.
    b. Benefits.--The investigation hopefully will compel the 
next administration and Congress to review and clarify our 
current wetlands policy.
    c. Hearings.--On October 6, 2000, the Committee on 
Government Reform held a hearing entitled, ``Federal Wetlands 
Policy: Protecting the Environment or Breaching Constitutional 
Rights?''
    On the first panel, the committee heard testimony from Mr. 
Paul Kamenar from the Washington Legal Foundation, Ms. Susan 
Dudley, from the Mercatus Center. The committee also heard 
testimony from Mr. John Pozsgai's daughters, Ms. Victoria 
Pozsgai-Khoury and Ms. Gloria Pozsgai-Heater. The final witness 
on the first panel was Ms. Kathleen Andria, Director of 
American Bottom Conservancy and chairman of the Environment 
Committee for East St. Louis Community Action Network.
    Mr. Kamenar and Ms. Dudley discussed the confusion 
surrounding the current definition of a ``wetland,'' and argued 
that the Federal Government has expanded the use of 
``wetlands'' designation beyond what the law originally 
intended.
    The committee specifically looked at the case of former 
Hungarian freedom fighter, now self-employed truck mechanic, 
John Pozsgai of Morrisville, PA. His daughters, Ms. Victoria 
Pozsgai-Khoury and Ms. Gloria Pozsgai-Heater testified that 
their father decided to purchase a 14-acre parcel of property 
across the street from where they lived. The property had 
historically been used as old dump in a highly urban area, but 
Mr. Pozsgai saw it as an opportunity to expand the family 
business and make a better life for himself and his family.
    Mr. Pozsgai cleaned it up, which entailed removing over 
7,000 old tires and rusting car parts. In order to build on the 
property, Mr. Pozsgai proceeded to fill approximately 5 acres 
of property with clean fill. Clean fill consists of topsoil, 
rubble, and bricks. Unfortunately for Mr. Pozsgai, the Army 
Corps of Engineers and EPA claimed that his property was a 
federally protected wetland and that this clean fill was 
considered a ``pollutant.'' Federal prosecutors argued the 
same, and succeeded.
    In civil court proceedings, Mr. Pozsgai was fined $200,000. 
In a criminal prosecution, a few weeks later, he was sentenced 
to 3 years in prison and fined an additional $202,000. The 
fines were reduced in both the civil and criminal cases, due to 
Mr. Pozsgai's inability to pay them. Mr. Pozsgai, however, did 
serve a year and half in Allenwood Federal Penitentiary and a 
year and a half in a half way house.
    During the second panel, the committee heard testimony from 
Mr. Michael Davis, Deputy Assistant Secretary of the Army for 
Civil Works, and Mr. Robert Wayland, Director of the Office of 
Wetlands, Oceans, and Watersheds at the Environmental 
Protection Agency.
2. Review of United States Counter-Narcotics Policy
            Aid to Colombia
    The committee has worked jointly with the House 
International Relations Committee during the 106th Congress to 
conduct oversight of the administration's counter-narcotics 
policy and strategy, particularly toward Colombia.
    Colombia's unstable democracy is a threat to the entire 
Andean Region. This instability is the result of both 40 years 
of civil strife and nearly three decades of a false economy 
fueled by the illicit narcotics trade. Colombia borders 
Venezuela, where 23 percent of United States petroleum products 
originate. Colombia virtually borders the Panama Canal, where 
nearly 80 percent of the world's economy passes at one time or 
another.
    According to the DEA, nearly 90 percent of the cocaine and 
75 percent of the heroin on United States streets and 
schoolyards originates in Colombia. For the first time in our 
Nation's history, according to the CDC and the FBI, drug-
induced deaths surpassed homicides in 1998. Nearly 17,000 drug-
induced deaths occurred in America in 1998, the latest 
available statistics. In Baltimore, the DEA estimates that 1 in 
16 citizens is a heroin addict, and that the nearly 50,000 
heroin addicts in that city spend over $1 million per day on 
their habits.
    Working jointly, Chairman Burton of the Government Reform 
Committee and Chairman Gilman of the International Relations 
Committee have promoted a strategy of identifying and fighting 
the surging cocaine and heroin problems at their source, where 
our resources are most effective. They have been joined in this 
effort by Chairman John Mica of the Criminal Justice 
Subcommittee and the House leadership. Over the vigorous 
objections of the administration, Congress approved funding for 
equipment--including six Black Hawk Helicopters--for the 
Colombian National Police [CNP]--the main counternarcotics 
force in Colombia. Through the oversight process, the two 
committees have protested repeated delays in delivery of the 
helicopters approved by Congress. When the committees learned 
that the State Department planned to send the CNP 50-year-old 
ammunition and inadequate armour for the helicopters to 
Colombia, Chairmen Burton and Gilman protested forcefully. In 
the 6 months since the CNP received the helicopters mandated by 
Congress, they have eradicated more opium poppy than in all of 
last year, and 4 times as much as in 1998.
    In January 2000, the administration proposed ``Plan 
Colombia,'' a $1.3 billion aid package designed to assist the 
Colombian Government battle drug-trafficking. In the views of 
the two committees, the administration's package focuses its 
resources too heavily on the Colombian Army, which has been 
beset by human rights problems and a well-earned reputation for 
ineffectiveness. The Plan Colombia aid package focuses 90 
percent of its resources on the Colombian Army, and less than 
10 percent on the Colombian National Police, who have a proven 
track record in combating narco-terrorism. The Government 
Reform Committee will continue to closely monitor the 
administration of the ``Plan Colombia'' aid package.
            Field Hearing on Drug Trafficking through Cuba and Puerto 
                    Rico
    The committee held a field hearing in Miami, FL, on January 
3 and 4, 2000, focusing on Cuba and Puerto Rico as transhipment 
points for illegal drugs destined for the United States. On 
January 3, the committee heard vivid testimony about drug 
trafficking in Cuba by the Castro regime. A former Cuban 
Government official testified, along with the daughter of an 
executed Cuban Army officer. Also testifying were 
representatives from the DEA and the Customs Service. Witnesses 
were questioned about a seizure of 7.2 tons of cocaine in 
Cartegana, Colombia. The ship's manifest indicated that the 
drugs were to be shipped to Cuba. After investigating the 
seizure thoroughly in three countries, the committee firmly 
believes the drugs were ultimately destined for the United 
States, possibly through Mexico.
    On January 4, the committee heard testimony from several 
witnesses about the growing use of Puerto Rico as a 
transhipment point for drugs destined for the United States, as 
well as the lack of resources for combating this emerging 
problem.

                       Subcommittee on the Census

                       Hon. Dan Miller, Chairman

1. ``Oversight of the 2000 Census: Community Based Approaches for a 
        Better Enumeration,'' Phoenix, AZ, January 29, 1999.
    a. Summary.--The total undercount of the American Indian 
population was approximately 12.22 percent in 1990. Following 
the 1998 dress rehearsals, the Inspector General [IG] raised 
serious concerns that the Census Bureau had not become prepared 
to address the unique nature of the Tribal societies and 
American Indian Reservations to reduce this undercount in 2000. 
The IG's report on the dress rehearsal in Menominee, WI, 
indicated that complete count committees [CCCs] and paid 
advertising, both key components of a successful census, had 
problems. Advertising was found to be inappropriate for 
American Indians and the CCCs did not have strong coordination 
with the Tribal chairman.
    The dress rehearsal provided an opportunity for the Census 
Bureau to assess major risks which may be detrimental to the 
successful execution of the proposed plan. It is important that 
the Census Bureau be prepared to correct any problems which 
arose during the dress rehearsals and to work with local 
community members to find ways to reduce the undercount through 
partnership activities.
    b. Benefits.--This oversight provided the subcommittee with 
useful information about the unique nature of the Tribal 
societies and American Indian Reservations toward its effort to 
reduce this undercount for 2000. In addition, the subcommittee 
documented the problems associated with obtaining an accurate 
count in a rapidly growing community such as the greater 
Phoenix, AZ, area. The subcommittee elicited ideas and 
suggestions from stakeholders in the 2000 census, such as 
tribal leaders, local officials and community groups, about how 
local efforts can improve participation and accuracy of the 
census count.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: Community Based Approaches for a Better Enumeration,'' 
was held on January 29, 1999, in Phoenix, AZ. Witnesses 
included: The Honorable J.D. Hayworth (R-AZ); Dr. Taylor 
McKenzie, vice-president, Navajo Nation; the Honorable Ivan 
Makil, president, Salt River Pima Maricopa Indian Community; 
the Honorable Wayne Taylor, Jr., chairman, the Hopi Tribe; Mr. 
Rodney B. Lewis, general counsel, Gila River Indian Community; 
Mr. Scott Celley, executive assistant to Governor Jane Hull; 
Representative Doug Lingner, city council member, District 7; 
Mr. John R. Lewis, executive director, Inter-tribal Council of 
Arizona; Mr. Jack C. Jackson, Jr., director of Federal 
Relations, National Congress of American Indians; Mr. James 
Bourey, executive director, Maricopa Association of 
Governments; Ms. Levonne Gaddy, president, Multiethnics of 
Southern Arizona in Celebration [MOSAIC]; and Ms. Esther Lumm, 
chairwoman, Arizona Hispanic Community Forum.
    The hearing's primary focus revolved around the undercount 
of Native Americans in the 1990 census and several approaches 
that could be used in the 2000 census to reduce that 
undercount.
2. ``Oversight of the 2000 Census: Examining the Benefits of Post-
        Census Local Review,'' February 11, 1999.
    a. Summary.--During the 1990 census, the Census Bureau 
utilized a program called ``post census local review'' [PCLR]. 
Prior to the 1990 census, the Census Bureau conducted a ``pre-
census local review'' where local and tribal governments could 
add their input to the Census Bureau's mailing lists. Described 
as a local quality check, the post census local review [PCLR] 
program allowed participating local and tribal governments to 
check the Census Bureau's work before the books closed on the 
census. This quality check found and corrected over 400,000 
errors in the census. Some of these errors were errors in the 
geographic placement of households, while others were whole 
census blocks that were missed by Census Bureau enumerators. 
Although this program was voluntary for eligible jurisdictions 
during the 1990 census, the process is crucial because errors 
can be found and corrected while the census is still underway.
    b. Benefits.--A post census local review [PCLR] would 
provide local and tribal governments an opportunity to ensure 
that no households in their jurisdiction are missed by the 
Census Bureau during the enumeration. It is important for local 
and tribal governments to have an accurate count in their 
jurisdiction for many different reasons, and PCLR is a tool 
they can utilize to flag missing households and geographic 
errors in the placement of those households. For census 2000, 
the Census Bureau is utilizing a program at the front end of 
the census process called the local update of census addresses 
[LUCA]. This pre-census activity is a voluntary program that 
empowers local and tribal governments to review the address 
list in their jurisdiction to ensure the accuracy prior to 
census day. This process was made possible by the Census 
Address Improvement Act of 1994, (Public Law 103-430) which 
allowed local and tribal governments the opportunity to check 
the actual address lists and maps that the Census Bureau will 
use during the decennial census. At this time, the Census 
Bureau does not plan to complement this ``front end'' program 
with PCLR. On January 25, 1999, the U.S. Supreme Court ruled in 
Glavin v. Clinton and through U.S. House of Representatives v. 
Department of Commerce that the Census Bureau must follow up on 
100 percent of all non-responding households as part of their 
plans for census 2000. Given this fact, many census 
stakeholders have encouraged the Census Bureau to utilize every 
proven traditional and legal methods at their disposal to 
ensure that every American is counted.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: Examining the Benefits of Post-Census Local Review,'' 
was held on February 11, 1999, and a bill was marked-up at this 
time. The hearing provided a forum for various stakeholders 
from local government and Members of Congress to comment on the 
potential addition of PCLR to census 2000 plans. Witnesses at 
the hearing included: The Honorable Thomas Petri (R-WI); the 
Honorable Thomas Sawyer (D-OH); the Honorable Kenneth 
Blackwell, Secretary of State, Ohio and co-chair of the Census 
Monitoring Board; Ms. Carol A. Roberts, county commissioner, 
Palm Beach County, FL; the Honorable Timothy M. Kaine, mayor, 
city of Richmond, VA; Mr. James Bourey, executive director, 
Maricopa Association of Governments, Maricopa County, AZ; Mr. 
Lanier Boatwright, president, National Association of 
Developmental Associations; Ms. Barbara Welty, member, National 
Association of Towns and Townships; Dr. Everett Ehrlich, 
member, U.S. Census Monitoring Board; Dr. Barbara Bryant, 
former Director, U.S. Census Bureau, National Quality Research 
Center, School of Business Administration, University of 
Michigan; the Honorable Alex G. Fekete, mayor, city of Pembroke 
Pines, FL; Mr. Steven D. Whitener, member, Board of 
Supervisors, Loudoun County, VA; and Ms. Jessica F. Heinz, 
assistant city attorney, city of Los Angeles, CA. Ms. Heinz and 
Mr. Whitener submitted testimony for the record but did not 
appear in front of the subcommittee.
    The hearing revolved around whether a post census local 
review of addresses, which allows census stakeholders to review 
their census figures for accuracy after the census is 
completed, would be beneficial. Some argued that this step is 
imperative to getting a proper count, while others said that 
the local update of census addresses program, which already 
allows stakeholders to review the census address list prior to 
the count, is enough stakeholder input.
3. ``Oversight of the 2000 Census: Examining the America Counts Today 
        [ACT] Initiatives to Enhance Traditional Enumeration Methods,'' 
        March 2, 1999.
    a. Summary.--The debate over the 2000 census has been over 
how to eliminate the differential undercount found to exist in 
the 1990 census. Democrats have insisted that the only way to 
eliminate the undercount was to use statistical estimation. 
Republicans maintained that a full enumeration without 
statistical estimation could be successful, if new and/or 
improved outreach efforts were used in 2000. The America Counts 
Today [ACT] initiative was the culmination of proposed outreach 
activities and other programs the subcommittee felt would be 
helpful in eliminating the differential undercount in 2000. It 
was first introduced publicly at the winter meeting of the U.S. 
Conference of Mayors on January 27, 1999. The ACT initiative 
focused heavily on ideas that related directly to hard to count 
communities and would have provided funding to community 
outreach groups.
    b. Benefits.--ACT and its subsequent oversight provided the 
subcommittee with important tools to help eliminate the 
differential undercount. Several of the ACT initiatives, had 
been previously considered by the Census Bureau, used in the 
dress rehearsals or in the 1990 census. The hearing gave the 
subcommittee the opportunity to hear from the Census Bureau and 
used its recommendations for the ACT plan. The issue of post 
census local review [PCLR] a significant part of ACT was 
considered in a separate hearing.
    c. Hearings.--The hearing was held on March 2, 1999. 
Testifying before the subcommittee was the Honorable Sue Myrick 
(R-NC), the Honorable Carrie Meek (D-FL), and Dr. Kenneth 
Prewitt, Director, U.S. Census Bureau.
    The hearing focused on America Counts Today, a group of 10 
initiatives that could help improve the census count. These 
tactics to improve the accuracy of the census came about after 
sampling was declared unconstitutional by the Supreme Court for 
the apportionment of congressional seats. Such examples 
included a greater advertising and promotion budget and an 
extension to the census in the schools program. The Bureau's 
Director Prewitt favored all but three of the initiatives, 
which were the mailing of a second census questionnaire, a post 
census local review process and an increase in languages on the 
census forms.
4. ``Oversight of the 2000 Census: Examining the Bureau's Policy to 
        Count Prisoners, Military Personnel, and Americans Residing 
        Overseas,'' June 9, 1999.
    a. Summary.--The subcommittee examined three measures 
introduced by Members of Congress concerning census 2000. It 
investigated whether the Bureau of the Census should include in 
the 2000 decennial census all citizens of the United States 
residing abroad. The Census Bureau intends to exclude more than 
3,000,000 citizens of the United States living and working 
overseas from the 2000 census because such citizens are not 
affiliated with the Federal Government. Several groups 
representing citizens abroad have been working for years to 
ensure they are counted in the decennial census. They are a 
taxpaying, voting segment of America requesting to be included 
in the census. It is necessary to understand the implications 
and viability of such an undertaking.
    The subcommittee also investigated whether the Secretary of 
Commerce should require the Census Bureau to make changes in 
tabulating the total population of prisoners in the United 
States in a decennial census. Currently, the Census Bureau 
plans to add the number of prisoners to the count of the State 
in which they are incarcerated. It has been suggested that 
procedure be changed so that any prisoner who is convicted in 
one State but incarcerated in another would be counted as a 
resident of the State from which more than half the costs 
associated with such a prisoner's incarceration are 
recoverable. It is the responsibility of the subcommittee to 
determine whether prisoners will be accurately counted by the 
Census Bureau's current plans or whether a change is warranted.
    Finally, the subcommittee investigated whether the 
Secretary of Commerce should be required to ensure that the 
Census Bureau makes changes to the way they allocate active 
duty members of the armed services back to the States. 
Currently, the Census Bureau plans to use the ``usual 
residence'' rule that places domestically stationed military 
personnel into the counts of the States where they are living 
and sleeping most on census day. It has been suggested that 
instead, the Census Bureau first allocate members of the armed 
forces on active duty to their home of record. This matter was 
carefully scrutinized, as it is essential that the subcommittee 
ensure that residents are counted in the appropriate place of 
residence in order to ensure fair and equitable apportionment 
of Congress, redistricting, and distribution of Federal funds 
among the States.
    b. Benefits.--This oversight provided the subcommittee with 
information about the feasibility of counting Americans abroad, 
prisoners in their originating State, and military personnel in 
their home of record. These three portions of the U.S. 
population constitute millions of Americans that deserve to be 
as accurately counted and included in the decennial census as 
possible. The subcommittee's review of the issues at hand 
provided documented accounts by both the Census Bureau and the 
stakeholders of the viability and implications of the proposed 
legislation.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: Examining the Census Bureau's Policy to Count 
Prisoners, Military Personnel, and Americans Residing 
Overseas,'' was held on June 9, 1999. Testimony was received 
from: The Honorable Mark Green (R-WI); the Honorable Benjamin 
Gilman (R-NY); the Honorable Kenneth Prewitt, Director, Bureau 
of the Census; Mr. David Hamod, executive director of the 
Census 2000 Coalition; Mr. Don Johnson, vice president of the 
Association of Americans Resident Overseas; Mr. L. Leigh 
Gribble, secretary of the American Business Council of Gulf 
Countries and executive committee member of Republicans Abroad; 
Ms. Dorothy Van Schooneveld, executive director of American 
Citizens Abroad; and Mr. Joseph Smallhoover, chair of Democrats 
Abroad.
    This hearing discussed how to include certain groups--
Americans overseas, prisoners and the military--in the census 
count. The most prominent debate was over the American 
overseas. Bureau Director Prewitt said the Census Bureau could 
not credibly enumerate that population in the 2000 census 
because they did not know certain charactistics of the group, 
i.e., size. Legislation for an interim census of overseas 
Americans to prepare for their inclusion in the 2010 census was 
discussed.
5. ``Oversight of the 2000 Census: Community-Based Approaches for a 
        Better Enumeration,'' Racine, WI, June 28, 1999.
    a. Summary.--Although the Census Bureau is headquartered in 
Suitland, MD, just outside of Washington, DC, the census itself 
is a very localized project. In fact, it will be the Nation's 
largest peacetime mobilization ever, carried out in communities 
across the country. The Census Bureau depends on local 
governments to provide them with correct address lists and 
updated maps. They also rely heavily on local organizations, 
ranging from civic to religious, to help recruit workers and 
find unique ways to reach traditionally undercounted members of 
each respective community. The Census Bureau has developed many 
programs to tap into the vast knowledge of local officials. It 
is the job of the subcommittee to determine the effectiveness 
of those programs through hearings and oversight activities.
    b. Benefits.--As part of the subcommittee's pledge to reach 
out to traditionally undercounted populations across the 
country, a series of field hearings was held throughout 1998 
and 1999. The most accurate census possible has always been the 
primary goal of the subcommittee, and reaching outside 
Washington, DC, for ideas toward achieving that goal seemed 
only logical. The unique perspective of local government 
leaders and other stakeholders provided members of the 
subcommittee with insights otherwise unavailable to them. In an 
effort to make every experience different from the last, each 
hearing was held in a different setting than the previous one. 
This allowed members of the subcommittee to draw on several 
different perspectives in their oversight responsibilities.
    c. Hearings.--The third of three field hearings was held on 
June 28, 1999, in Racine, WI, at the request of subcommittee 
member Paul Ryan (R-WI). In keeping with the same theme as 
previous field hearings, entitled, ``Oversight of the 2000 
Census: Community-Based Approaches for a Better Enumeration.'' 
Members of Congress in attendance were subcommittee Chairman 
Dan Miller (R-FL), subcommittee Ranking Member Carolyn Maloney 
(D-NY), subcommittee member Paul Ryan (R-WI), and the Honorable 
Tom Petri (R-WI). Witnesses included: The Honorable Bonnie 
Ladwig, Wisconsin State representative (R-63), The Honorable 
Gwendolynne S. Moore, Wisconsin State senator (D-4), the 
Honorable James M. Smith, mayor, city of Racine, WI, the 
Honorable John M. Antaramian, mayor, city of Kenosha, WI, Mr. 
Nathaniel E. Robinson, Office of Governor Tommy G. Thompson, 
Ms. Jean S. Jacobson, Racine County executive, Mr. Allan K. 
Kehl, Kenosha County executive, and Dr. Paul Voss, Department 
of Rural Sociology, University of Wisconsin, Madison.
    Wisconsin had the Nation's best response rate in the 1990 
census. This hearing discussed certain tactics that Wisconsin 
is using to keep its response rates high. Wisconsin depends 
upon a good census count in 2000, because it is at risk of 
losing a seat.
6. ``Oversight of the 2000 Census: Examining the Census Bureau's 
        Advertising Campaign,'' July 27, 1999.
    a. Summary.--As part of census 2000, the Census Bureau has 
introduced the first ever paid advertising campaign to promote 
the decennial census. Young and Rubicam [Y&R] was awarded the 
contract for the advertising campaign. Y&R worked with several 
subsidiaries/subcontractors, who have experience creating 
advertising for racial and ethnic minorities, to design the 
program. The campaign was implemented during the 1998 dress 
rehearsals and underwent independent evaluations by Westat, 
Inc., to determine its effectiveness. Since then, Y&R and its 
subsidiaries have revised the campaign.
    The advertising campaign received $47 million for fiscal 
year 1999 and $13 million as part of a fiscal year 1999 
supplemental, and the Bureau has requested $114 million for 
fiscal year 2000 for a total of $174 million for the campaign. 
The English speaking base plan accounts for 51 percent of the 
spending, while in-language/in-culture overlays receive 49 
percent of the funding. While it is critical to reduce the 
undercount rate, it has not been proven that those unlikely to 
participate will be motivated by the advertising. Additionally, 
it is the concern of some members of the subcommittee that 
rural communities will receive a disproportionately low 
percentage of the advertising budget, despite high undercount 
rates in many rural areas.
    b. Benefits.--The subcommittee has investigated the 
campaign to obtain a better understanding of how the Census 
Bureau and Y&R have addressed the problems found in the dress 
rehearsals, how the advertising contract was awarded, and how 
the money will be spent in detail. The investigation has 
afforded the subcommittee the opportunity to oversee the 
spending of a large appropriation for a process which is new 
for the Census Bureau and the advertising agency responsible 
for carrying out the task.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: Examining the Census Bureau's Advertising Campaign,'' 
was held on July 27, 1999. Witnesses included: The Honorable 
Kenneth Prewitt, Director, U.S. Bureau of the Census; Ms. Terry 
Dukes, account managing director, Young and Rubicam, New York; 
Mr. Samuel J. Chisholm, chairman and CEO, the Chisholm-Mingo 
Group, Inc., and Mr. Curtis Zunigha, Census Advisory Committee 
member on the American Indian and Alaska Native Populations.
    The hearing's aim was to review the advertising campaign 
and ensure that money was being spent wisely. Bureau Director 
Prewitt explained the selection process for the advertising 
company, Young and Rubicam, and each of its divisions explained 
what they were doing to reach out to appeal to specific 
populations that would be counted by the census.
7. ``Oversight of the 2000 Census: Discussion of the Effects of 
        Including Puerto Rico in the 2000 U.S. Population Totals,'' 
        September 22, 1999.
    a. Summary.--Since 1910, the Census Bureau has been 
enumerating Puerto Rico's population as required by title 13. 
The methods and questionnaires used to enumerate Puerto Rico 
have always been different than the methods and questionnaires 
used in the United States. For the first time in Puerto Rico's 
history, the Census Bureau will enumerate the island's 
population using methods and questionnaires similar to what 
will be used in the United States. The change in how Puerto 
Rico is to be enumerated created a demand from Puerto Rican 
leaders to include Puerto Rico's 2000 population count in the 
national population totals that will be produced by the Census 
Bureau in 2001. The change prompted Congressman Jose Serrano 
(D-NY) to propose language to be inserted into the fiscal year 
2000 Commerce State Justice report that recognized the change 
of enumeration methods that will be used in Puerto Rico. The 
proposed language suggested that the Census Bureau include 
Puerto Rico's count in all of the Census Bureau's national data 
products. The suggestion of the inclusion of Puerto Rico's 
population in the national totals caused concern for the 
subcommittee and the Census Bureau. The main concern of the 
subcommittee was the potential effect this change would have on 
national statistics. Furthermore, what was the Census Bureau's 
position and would the change even be possible?
    b. Benefits.--The oversight of the change in Puerto Rico's 
enumeration methodology and its effects on national statistics 
allowed Congress to make an informed judgement about including 
Puerto Rico's population in the national summary totals. Prior 
to this oversight, Congress and the subcommittee were unsure 
what the effects of the change would be on national statistics. 
The Census Bureau clearly stated their opposition to such a 
move, citing the difficulty of adjusting all prior national 
statistics to accommodate the addition of roughly 4 million 
people to the national population.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: Discussion of the Effects of Including Puerto Rico in 
the 2000 U.S. Population Totals,'' was held on September 22, 
1999. Witnesses included: The Honorable Jose E. Serrano, (D-
NY); the Honorable Carlos A. Romero-Barcelo, (D-PR); the 
Honorable Eni F.H. Faleomavaega, (D-AS); and the Honorable 
Kenneth Prewitt, Director, Bureau of the Census.
    The hearing was designed to examine the effects of 
including Puerto Rico's popuation into national census totals. 
This prompted questions such as: How will the inclusion of 
Puerto Rico affect the numerous data products produced by the 
Census Bureau and other agencies?; what effects will the 
inclusion of data on Puerto Rico have on Federal policy 
decisions that primarily impact the 50 States and the District 
of Columbia? If we decide to include Puerto Rico, should we 
then include the population totals of other American 
Commonwealths, related territories, and possessions as well? 
Bureau Director Prewitt was opposed to adding the Puerto Rico 
population to national totals without more exploration: ``For 
reasons of statistical consistency, the Census Bureau would 
hesitate unilaterally to establish a new denominator . . . Any 
fundamental change in this definition should be fully explored 
with stakeholders within and outside the Federal Government.''
8. ``Oversight of the 2000 Census: A Midterm Evaluation of the Local 
        Update of Census Addresses Program,'' September 29, 1999.
    a. Summary.--The most critical element of a successful 
census is a complete and accurate address list. The Census 
Bureau's address list, or ``master address file,'' determines 
which households will receive a census questionnaire in the 
mail. The address list is also used to conduct non-response 
follow up for households that do not mail back the 
questionnaire. Without a complete address list for the country, 
the chances of all households being enumerated decrease 
sharply, resulting in a greater undercount. Congress realized 
this important connection and passed the Census Address List 
Improvement Act of 1994 (Public Law 103-430). The law directed 
the Census Bureau to form partnerships with local and tribal 
governments in the compilation of the census 2000 address list. 
The law also permitted the Census Bureau and the U.S. Postal 
Service to share address information for the first time. The 
local update of census addresses program [LUCA], was created to 
work with local and tribal governments in sharing address 
information.
    The basic steps of the LUCA program consisted of the 
following:
    1. Governmental units signed a confidentiality agreement 
with Census Bureau.
    2. The Census Bureau sent materials such as address lists 
and maps to the participating local and tribal governments.
    3. Governmental units were given 90 days to review the 
lists and maps, adding and deleting addresses according to the 
governmental units own records.
    4. The governmental units then submitted all changes to the 
Census Bureau.
    5. The Census Bureau then conducted a full canvass of all 
addresses to verify all submitted address additions and 
deletions.
    6. The Census Bureau then informed governmental units which 
additions and deletions were accepted based on their review.
    7. Finally, the governmental units were able to file an 
appeal with the Office of Management and Budget to rectify any 
final discrepancies. The LUCA program was conducted from 
January 1998 through December 1999.
    b. Benefits.--The benefit of the subcommittee's oversight 
of the LUCA program was the planning of future Census Bureau 
address list compilation programs that involve local and tribal 
governments. The Census Bureau had never interacted with local 
governments on such a national level before. The oversight and 
evaluation of specific LUCA procedures will be of valuable use 
in the planning and development of future 2010 census address 
list programs. Local participation is essential in designing 
the address list because it is the local governments that are 
the most knowledgeable when it comes to where people live. 
Future census address list programs are more than likely to 
have local participation as a key ingredient. Overseeing how 
local governments and the Census Bureau best work together will 
ensure a future address list that is accurate and complete.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: A Midterm Evaluation of the Local Update of Census 
Addresses Program,'' was held on September 29, 1999. Witnesses 
included: The Honorable Kenneth Prewitt, Director, Bureau of 
the Census; Mr. John Thompson, Associate Director for Decennial 
Census, Bureau of the Census; Mr. Preston Jay Waite, Associate 
Director for Decennial Census, Bureau of the Census; Mr. J. 
Christopher Mihm, Acting Associate Director of Federal 
Management and Workforce Issues, U.S. General Accounting Office 
[GAO]; Mr. Jack Maguire, planning/GIS manger for the city of 
Lexington, SC; Mr. George Pettit, assistant town manager of 
Gilbert, AZ; Mr. Don Rychnowski, executive director of the 
Southern Tier West RP&D Board; Ms. Jessica Heinz, Los Angeles 
City Attorney's Office; Mr. Michel Lettre, assistant director, 
Maryland Office of Planning.
    The hearing provided an interim look at the progress of the 
LUCA program. At the time of the hearing, the Census Bureau was 
in the process of verifying additions and deletions in a 
nationwide address canvass. Some witnesses who testified said 
the LUCA program had been of a little help and that a post 
census local review would help them achieve a more accurate 
count, while others said the LUCA program worked well and was 
sufficient.
9. The Rushed Census: Quantity Over Quality?
    a. Summary.--Numerous reports received by the subcommittee 
throughout decennial census operations from independent news 
media and persons involved with census operations indicate that 
in some parts of the country quality assurance measures were 
neglected in a push to finish operations more quickly. 
Instances in which the Census Bureau felt that the quality of 
data had been compromised resulted in the re-enumeration of 
nearly 100,000 households nationwide, the most significant of 
which was the re-enumeration of the entire Hialeah, FL Local 
Census Office. Subcommittee analysis of production and staffing 
data provided by the Census Bureau indicates that there are 15 
other areas of the country where fraudulent or improper 
procedures may have been implemented.
    b. Benefits.--Congress appropriated over $6.5 billion for 
this decennial census--more than twice that invested in the 
1990 census--to ensure that it be conducted as accurately as 
possible. Because of the stakes involved with the outcome of 
the census- apportionment of the House of Representatives, the 
drawing of political districts, the distribution of Federal 
funds--an accurate census is of utmost importance to the 
Nation. It is imperative that the Census Bureau use all of the 
resources available and do all that is necessary to get an 
accurate census count. If fraud occurred or quality control 
measures were ignored during the collection of census data, the 
quality of that data might have been compromised.
    c. Hearings.--The status of census operations was the topic 
of oversight hearings held throughout the session. Concern with 
a ``rushed census'' was specifically raised during the hearing 
entitled, ``Non-Response Follow-Up and Close Out,'' held June 
22, 2000.
10. The American Community Survey [ACS]--A Replacement for the Census 
        Long Form?
    a. Summary.--During the mailout/mail back phase of the 2000 
census, concerns were raised that the 53 questions of the 
census long form are an unnecessary and inappropriate invasion 
of privacy by the Federal Government. As a result of privacy 
concerns, various Members of Congress introduced legislation 
aimed at limiting the scope of census questions or the 
penalties for not answering them, and the Census Bureau noted 
their plans for the American Community Survey [ACS]. The ACS, 
which is currently in testing, is planned as an ongoing survey, 
to be delivered nationwide to 30 million households over a 10-
year period, that asks largely the same questions as the census 
long form.
    b. Benefits.--As an ongoing survey, proponents of the ACS 
note that it will be able to provide more up-to-date economic, 
social, demographic, and housing information to the Nation's 
data users each year. Additionally, because the ACS is 
delivered to 30 million households on a continuous basis--that 
is, at times other than during decennial census operations--it 
is hoped that public discomfort with answering the questions 
will be minimized. The financial benefits and/or shortcomings 
of the ACS are still being investigated.
    c. Hearings.--A hearing entitled, ``The American Community 
Survey [ACS]--A Replacement for the Census Long Form'' was held 
July 20, 2000. The hearing provided a forum for Members of 
Congress, government officials, privacy advocates and data 
users, to comment on the American Community Survey as a 
replacement to the census long form.
11. The Accuracy and Coverage Evaluation [ACE]--Still More Questions 
        than Answers.
    a. Summary.--The Accuracy and Coverage Evaluation [ACE] is 
the Census Bureau's statistical adjustment plan for the 2000 
census. Plans to use a similar statistical adjustment in the 
1990 census were discarded due to concerns regarding 
fundamental problems with its accuracy, legality, and its 
potential for political manipulation. Those same concerns still 
surround the Census Bureau's ACE plans. On January 25, 1999, 
the Supreme Court ruled in the case of Glavin, et al. v. 
Clinton, et al., that the use of sampling to determine the 
population for purposes of apportionment of the U.S. House of 
Representatives is illegal.
    b. Benefits.--Questions still remain regarding the Accuracy 
and Coverage Evaluation. The subcommittee remains concerned 
about the potential for political manipulation associated with 
the sampling plan, as well as its methodology, accuracy, and 
legality. Expert statisticians from across the Nation have 
likewise expressed their concerns with ACE plans.
    c. Hearings.--A hearing entitled, ``The Accuracy and 
Coverage Evaluation [ACE]--Still More Questions than Answers,'' 
was held May 19, 2000 to determine Census Bureau plans for 
conducting the ACE.
12. A Transparent Census?
    a. Summary.--With over $6.5 billion invested in this 
decennial census, the subcommittee has made a significant 
effort to ensure that the proper oversight authorities have 
access to the Census Bureau's operational information needed in 
order to determine that appropriated funds were properly used.
    b. Benefits.--Given the funds appropriated for this 
decennial census and the stakes related to its outcome, it is 
imperative that the Congress and all other oversight bodies 
have full access to the information they need to carry out 
their obligations. Transparency is necessary to build public 
confidence in the census and is one of the qualities that, 
according to Census Bureau Director Kenneth Prewitt, make for a 
good census.
    c. Hearings.--The subject of transparency and the access of 
oversight bodies to information from decennial census 
operations was raised in multiple subcommittee hearings. 
Oversight access to census operational plans, information, and 
data was the topic of a discussion with Director Kenneth 
Prewitt during ``Oversight of the 2000 Census: Status of Bureau 
of the Census Operations and Activities'' held March 8, 2000. 
The General Accounting Office updated the subcommittee on its 
findings and its access to census information in testimony 
during hearings entitled, ``Oversight of the 2000 Census: 
Examining the GAO's Census 2000 Oversight Activities,'' held 
February 15, 2000; ``Oversight of the 2000 Census: Status of 
Key Operations,'' held March 14, 2000; and ``Oversight of the 
2000 Census: Mail-Back Response Rates and Status of Key 
Operations,'' held April 5, 2000.
    Shortly before a hearing entitled, ``Non-Response Follow-Up 
and Other Key Considerations,'' held May 11, 2000, the 
subcommittee was made aware of an e-mail from a Census Bureau 
Area Manager instructing Local Census Office Managers that they 
``can and must not share'' a particular report ``with any GAO 
representative.'' The e-mail was largely the topic of the 
hearing, and both Subcommittee Chairman Miller and Subcommittee 
Ranking Member Maloney consequently requested on May 22 and May 
18, respectively, that the General Accounting Office [GAO] 
investigate the matter to determine whether there had been any 
attempt by the Census Bureau to prevent Congress, the GAO, or 
any other oversight body from having access to information.
13. Census Bureau Data Processing Systems.
    a. Summary.--The Census Bureau's headquarters processing 
systems perform the key functions of controlling, managing, and 
processing census data.
    In order to determine the nature and state of Census' 
processing systems, Subcommittee Chairman Miller and 
Subcommittee Ranking Member Maloney formally requested that the 
General Accounting Office examine the systems.
    b. Benefits.--Because of the central role the Census 
Bureau's headquarters processing systems have in the success of 
census 2000, it is important that they be operating properly 
and without error. The General Accounting Office's evaluation 
of the Bureau's headquarters processing system found weaknesses 
in the process that indicate the potential for the occurrence 
of serious problems.
    c. Hearings.--None.
14. The Long Form.
    a. Summary.--Although this year's census long form was 
shorter than its predecessors, it nonetheless was the subject 
of concern from those who felt that its questions are an 
unnecessary government invasion of privacy.
    b. Benefits.--Voiced opposition to the long form was the 
greatest during the week prior to March 26, during which census 
forms were delivered by mail to the Nation's households. There 
was approximately a 12 percent difference between the mail 
response rate for the long and the short form, continuing a 
general increase in the percentage of non-response for the long 
form, and representative of increased privacy concerns.
    c. Hearings.--A hearing entitled, ``Oversight of the 2000 
Census: Mail-Back Response Rates and the Status of Key 
Operations'' was held April 5, 2000. Another hearing entitled, 
``Oversight of the 2000 Census: Status of Non-Response Follow-
Up'' was held May 5, 2000, during which the subject of public 
concern over the long form was discussed.

                   Subcommittee on the Civil Service

                     Hon. Joe Scarborough, Chairman

1. Federal Reserve Board Retirement Portability.
    a. Summary.--Although most Federal employees are covered by 
either the Civil Service Retirement System [CSRS] or the 
Federal Employees Retirement System [FERS], the General 
Accounting Office [GAO] reported to the subcommittee in 1996 
that Federal employees participate in 34 defined benefit 
retirement plans and 17 defined contribution retirement plans. 
In reviewing these plans, GAO noted that most of the defined 
benefit plans operate on ``pay as you go'' principles 
comparable to CSRS. That system, which covers Federal employees 
hired before December 31, 1983, had an actuarial accrued 
unfunded liability of $512.4 billion as of September 30, 1996. 
By paying benefits from current revenues, the system provides 
inadequately for future benefit obligations, resulting in a 
growing gap between the annual retirement fund payments from 
employees and their agencies and the system's long-term 
obligations. During fiscal year 1999, the Civil Service 
Retirement and Disability Fund is projected to pay $43 billion 
in benefits, while collecting less than $10 billion in 
revenues. This shortfall is accommodated annually by redeeming 
the Fund's assets (nonmarketable Treasury Special securities) 
using general fund receipts. Within the next 20 years, the 
annual CSRDF shortfall is projected to exceed $100 billion 
annually, leaving future retirement benefits vulnerable. The 
Federal Employees Retirement System Act of 1986 reformed this 
system, creating a benefit package [FERS] that relies in part 
on a defined contribution component, the Thrift Savings Plan, 
that enables employees to provide for part of their future 
retirement benefit through investment accounts. These defined 
contribution accounts are portable, in the sense that the 
benefit vests with the employee as it accrues, and employees 
who leave Federal service are able to roll over these 
retirement funds into other employers' 401(k) plans. 
Alternatively, employees may leave the investment in the TSP to 
accrue until they become eligible to withdraw the funds.
    The Federal Reserve Board operates both defined benefit and 
defined contribution plans that are counterparts of CSRS and 
FERS. Unlike the CSRDF, however, the Federal Reserve retirement 
investments are largely invested in market instruments 
(equities such as common and preferred stocks, government and 
corporate bonds, et cetera) that provide a pool of assets from 
which the Federal Reserve Board pays the benefits earned by its 
retirees. Where the CSRDF has an actuarial accrued liability, 
the Federal Reserve's retirement fund currently holds reserves 
that amount to approximately 150 percent of future liabilities. 
Although the Board's retirement program provides opportunities 
for Federal employees to gain credit for their service under 
FERS, Board employees who might otherwise desire to work for 
other Federal agencies are unable to gain FERS credit for 
service after January 1, 1988. This quirk in current law 
originated with the Federal Employees Retirement System Act of 
1986, and the Federal Reserve Board reported seeking a 
statutory correction for 5 years.
    /Although the difficulties of the cash-flow accounting of 
Federal retirement programs have drawn increasing criticism in 
recent years, alternative funding mechanisms have not gained 
the support necessary for adoption. Indeed, in October 1998, 
when the administration sought congressional approval to 
liquidate assets that the Department of the Treasury acquired 
from the District of Columbia Retirement Board, the leading 
rationale for liquidation was to make the management of the 
District's retirement funds consistent with the administration 
of other Federal retirement programs. During a hearing on April 
29, 1997, then-CBO Deputy Director Blum estimated that the 
long-term cost of the D.C. retirement liabilities could 
approach $36 billion. When the Department of the Treasury 
liquidated the D.C. retirement assets, consistent with 
requirements of the Omnibus Appropriations Act of 1998, it 
effectively converted an income producing source of revenues 
that could have paid benefits for 8 to 15 years into receipts 
that were expended during the then current fiscal year.
    b. Benefits.--This investigation of retirement portability 
and retirement funding enabled the subcommittee to address two 
concerns. The research supported a hearing which led to House 
adoption of H.R. 807, a bill that resolves the retirement 
portability problem of Federal Reserve employees who transfer 
to other Federal agencies. The investigation provided further 
evidence that current funding of future retirement benefits is 
superior to the prevailing Federal practice of paying annuities 
out of current revenues.
    c. Hearings.--The subcommittee conducted a hearing 
entitled, ``H.R. 807, Federal Reserve Board Retirement 
Portability Act,'' on February 25, 1999. Witnesses at the 
hearing were the Honorable Edward W. Kelley, Jr., Governor of 
the Federal Reserve System, and Mr. William E. ``Ed'' Flynn, 
Associate Director, Retirement and Insurance Services, Office 
of Personnel Management. Mr. Scarborough described the funding 
differences between the two systems, and noted the recurrent 
vulnerability of Federal retirement benefits in light of annual 
budget problems. He reviewed the advantages derived from 
independent funding sources, and asked the Federal Reserve 
Board about the potential vulnerability of the Federal 
Reserve's surplus retirement funds if there were a future 
desire on the part of the Treasury, comparable to the 
vulnerability of the District of Columbia retirement funds. 
Although both Governor Kelley and Mrs. Norton distinguished the 
District's liability that resulted in the Federal assumption of 
its assets and liabilities, a May 24, 1999, letter outlining 
the fiduciary responsibilities under section 401 of the 
Internal Revenue Code indicated that the Federal Reserve 
Board's retirement funds could indeed be vulnerable to 
subsequent changes in law.
2. Long-Term Care Insurance for Federal Employees.
    a. Summary.--Long-term care [LTC] refers to a broad range 
of supportive, medical, personal, and social services designed 
for individuals who are limited in their ability to function 
independently on a daily basis. Long-term care needs may arise 
at any time due to an injury, chronic illness, or the effects 
of the natural aging process. Long-term care services can be 
provided in a nursing home, an assisted living facility, the 
community or in the home.
    Longer life spans coupled with a steady increase in the 
elderly population as baby boomers (people born between 1946 
and 1964) age will lead to a dramatic rise in the numbers of 
Americans who will need long-term care. Continuing increases in 
the number of two worker families, more single workers, and the 
increased geographic spread of family members means that there 
will be fewer family members available to provide care on an 
informal basis. As a result of these trends, long-term care 
will increasingly be provided in institutional settings or by 
hired personnel.
    Most people believe that they are covered for long-term 
care by their health care plans, disability insurance, or by 
Medicare. Unfortunately, many learn the hard way--when they or 
a family member needs care--that they are not sufficiently 
covered and must pay for long-term care on their own. As 
nursing home costs rise faster than overall inflation and 
incomes, many more middle income baby boomers could become 
impoverished by nursing home costs and thus become eligible for 
Medicaid. To the extent that individuals purchase long-term 
care insurance, the burden of paying for long-term care will be 
shifted from Medicaid and other public programs to private 
resources, and individuals will be able to protect their life's 
savings and other assets.
    The subcommittee conducted a series of three hearings to 
evaluate legislative proposals to establish a program under 
which Federal employees and annuitants may purchase long-term 
care insurance. The first hearing explored the need for a 
program to provide long-term care insurance to Federal 
employees and annuitants, the second hearing focused on the 
eligibility of active and retired members of the uniformed 
services for the Federal program, while the third hearing 
examined unresolved issues such as the how the competition 
should be structured. The hearings addressed additional program 
issues, such as OPM's administrative role, options available 
for benefit package design, and whether policies should be 
written on a ``guaranteed issue'' basis. Prior to the first 
hearing, Chairman Scarborough introduced H.R. 602, the Civil 
Service Long-Term Care Insurance Benefit Act. H.R. 602 
establishes a long-term care insurance program for Federal 
employees that relies on principles of market competition among 
multiple carriers. OPM would establish and administer the 
program through which Federal employees, annuitants, and 
eligible relatives could purchase long-term care insurance.
    b. Benefits.--Long-term care is expensive. According to the 
American Council of Life Insurance Policy Research Department, 
by 2030 the average annual cost of a nursing home stay will 
increase from $40,000 today to more than $97,000 (in 1997 
dollars). Long-term care insurance is an affordable way to 
protect against the risk of losing your savings to pay for 
long-term care services. As a large employer, the Federal 
Government can reach over 2.8 million workers and an additional 
2.1 million retirees and survivors. Competition among carriers, 
group discounts, and volumes of sales will keep premiums 
affordable for Federal employees and annuitants. By offering 
long-term care insurance to individuals in their working years, 
the Federal Government can help encourage the purchase of this 
product at younger ages, when premiums are lower.
    c. Hearings.--Three hearings were held to examine various 
aspects of the long-term care insurance issue.
    (1) On March 18, 1999, Chairman Scarborough conducted the 
first in a three part series of hearings entitled, ``Long-Term 
Care Insurance for Federal Employees,'' to address H.R. 602 and 
H.R. 110, both of which establish a program under which Federal 
employees and annuitants may purchase long-term care insurance.
    Chairman Scarborough stated that achieving maximum 
participation would require affordable premiums and an ability 
to satisfy the varying needs of a diverse population. The 
success of the program would be measured by the number of 
participants in the Federal program. The chairman also noted 
that as one of the Nation's largest employers, the Federal 
program would serve as a model for employers throughout the 
country.
    Three panels presented testimony to the subcommittee. The 
first panel consisted of Judy Kramer, a private individual with 
personal experience with the Medicaid spend-down process. The 
second panel provided the administration's views on H.R. 602 
and H.R. 110 through the testimony of OPM Director Janice 
Lachance and William E. Flynn III, Associate Director for 
Retirement and Insurance Services. The third panel consisted of 
representatives from the insurance industry, including the 
American Council of Life Insurance, the Health Insurance 
Association of America, and New York Life Insurance Co.
    Judy Kramer gave a compelling account of her struggles with 
the current system of government assistance as a custodian for 
her aging parents. After a difficult spend-down process, her 
parents had to rely on Medicaid to cover the costs of their 
nursing home care. She testified to her desire to purchase 
long-term care for herself and her husband, a retired Federal 
employee, yet noted without a group discount it would be 
difficult to afford such protection.
    Director Lachance provided the administration's views on 
H.R. 602 and H.R. 110. Director Lachance agreed that long-term 
care insurance for Federal employees is an idea whose time has 
come. The administration estimates that, initially, 300,000 
eligible participants would enroll in such a program. OPM hopes 
to seek competitive bids for long-term care insurance that 
meets specified quality and price criteria in order to select 
the best contractor or contractors possible. As program 
administrator, OPM envisions its role to negotiate an optimum 
price for a benefit package it predetermines and that 
subsequently information on available options is broadly 
disseminated.
    David Martin, on behalf of the American Council of Life 
Insurance, testified to the importance of a long-term care 
insurance program as an integral part of an employees' 
retirement security. Without this protection, retirement 
savings could be wiped out with just one long-term care 
episode.
    Mr. Martin's testimony spoke to the varying long-term care 
needs of individuals. Based on ACLI's experience in dealing 
with large employers, it would be appropriate for the Federal 
Government to offer a variety of options. More than one carrier 
would have to participate in order to underwrite the risk 
inherent in such a large population. The Federal participant 
group, as defined by both H.R. 602 and H.R. 110, would be 
greater than any group underwritten by a single carrier today.
    David Brenerman, on behalf of the Health Insurance 
Association of America, focused on the development of the long-
term care insurance market. He noted the ability of companies 
to offer quality products at affordable premiums results from 
the abilities of companies to freely compete with each other in 
the marketplace, not because of the imposition of Federal or 
State requirements that would regulate premiums, hinder product 
development, and stifle market competition. He drew a 
distinction between a quality, affordable product and the 
danger of promising a low-cost plan with ``rich'' benefits and 
minimum underwriting requirements that would be financially 
unsustainable in the long run.
    Ken Grubb provided the views of carriers who sell 
individual as opposed to group products. He raised concerns 
about the limitations in H.R. 602 and H.R. 110 restricting 
participation to group carriers only. He pointed out that 
several companies currently offer discounts on individual 
contracts or have specific individual LTC policies priced for 
offering on a group sponsored basis. Since the individual 
contracts are competitive with group coverage, Mr. Grubb 
stressed they ought not to be excluded from consideration in 
the Federal program.
    Mr. Grubb also highlighted the benefits of broad 
eligibility under H.R. 602, resulting in a broader, younger 
risk pool that would result in lower overall costs. Letting the 
marketplace dictate costs and benefits was key to both wide 
acceptance of the product and long term commitments from 
strong, reliable carriers.
    (2) On April 8, 1999, Chairman Scarborough held the second 
hearing entitled, ``Long-Term Care Insurance for Federal 
Employees,'' at the Naval Air Station in Jacksonville, FL. The 
purposes of the hearing were twofold. The subcommittee examined 
the benefit of including active and retired members of the 
uniformed services in any long-term care insurance program 
offered to civilian employees and retirees. The subcommittee 
also continued its examination of the scope of OPM's role in 
administering an LTC program and whether participating carriers 
would be required to offer policies on a ``guaranteed issue'' 
basis. Guaranteed issue refers to the practice of allowing 
individuals to purchase long-term care insurance without regard 
to their current health status and without answering any 
questions regarding their medical history. While of obvious 
benefit to at risk individuals, the costs of issuing policies 
on a guaranteed basis increase premiums substantially for all 
enrollees.
    Chairman Scarborough reiterated his intent to include both 
active and retired members of the uniformed services in the 
long-term care insurance program at the appropriate time in the 
legislative process. He recognized the valuable service active 
duty service men and women have provided as employees of the 
Federal Government. The chairman also emphasized the need to 
build on past successes in crafting legislation and the 
importance of offering competitive benefits at affordable 
prices.
    Two panels presented testimony to the subcommittee. The 
first panel consisted of representatives from the organizations 
representing active and retired members of the uniformed 
services including the Retired Officers Association [ROA], the 
National Military Families Association [NMFA], and the Retired 
Enlisted Association [REA]. The second panel consisted of 
witnesses on behalf of the Florida Health Care Association, the 
Health Insurance Association of America, and the Department of 
Defense.
    Speaking for NMFA, Marilyn Cobb Croach provided testimony 
on the importance of affordable premiums. Few military families 
have the disposable income after the basics of housing, health 
care and food to afford a policy with high premiums, no matter 
how wise an investment they felt it might be. She also stressed 
that service members and their families should not be left out 
of a program that includes civilian employees and annuitants.
    Of particular importance to the National Military Families 
Association was the inclusion of parents and parents-in-law as 
eligible to receive coverage. Since thousands of miles often 
separate military families from their parents, significant 
stress occurs when parents can no longer care for themselves. 
The high operations tempo facing the armed services often puts 
the burden of care for both sets of parents on the spouse, who 
is left with few alternatives. The safety net of an affordable 
long-term care insurance policy would relieve families of the 
stress involved in caring for an elderly parent.
    Larry Hyland testified on behalf of the Retired Enlisted 
Association. Mr. Hyland emphasized the equity of including the 
military in a program that will provide access to long-term 
care insurance at group rates for civilian employees. He 
highlighted the increasing anxiety among aging retirees who 
were ``promised free health care for life,'' by the Department 
of Defense. The ability to purchase long-term care insurance in 
the same program would ensure some financial security for 
retired members of the uniformed services and ensure quality 
health care is available.
    Colonel Klyne Nowlin presented testimony on behalf of the 
Retired Officers Association. Colonel Nowlin spoke to the need 
for the subcommittee to remember those who served in the Armed 
Forces and who need comprehensive long-term care coverage for 
their remaining years. His testimony also provided an estimate 
of participation. Based on the national participation rate of 6 
percent, TROA expects that participation for military members 
would be approximately 203,000 individuals. By broadening the 
participation base to include the military community, all 
participants could be the beneficiaries of reduced premiums or 
enhanced benefits packages. Without access to the government 
plan, it is feared that most service members would not be in a 
position to afford long-term care insurance.
    Pat Freeman, Director of the John Knox Medical Center, 
provided testimony on the effect both affordable premiums and 
choice among a variety would have in encouraging the purchase 
of private long-term care insurance. The John Knox Medical 
Center has both nursing and assisted living facilities.
    Ms. Freeman provided the subcommittee information on a 
recently released American Health Care Association survey on 
long term care. While female baby boomers expressed concerns 
about their retirement security, survey results indicated they 
were not saving adequately for long-term care costs that nearly 
three out of five of them will encounter. The overall 
conclusion drawn from the survey findings was the reality that 
an alarming gap exists in how baby boomers viewed their 
retirement needs. While 91 percent of baby boomers are covered 
by health insurance, many incorrectly believe either these 
policies or Medicare would pay for their long-term care needs. 
The study also highlighted that 41 percent of the women 
surveyed have either been forced to quit their jobs or take an 
extended leave of absence to provide long-term care to a family 
member or friend.
    Ken Grubb provided information regarding the desirability 
and relative importance of both competition in price and 
variety of insurance products. Mr. Grubb discussed the 
importance of market competition in determining the 
availability, quality and affordability of long-term care 
plans. He also noted the need for the government to encourage 
personal responsibility for financing long-term care through 
the expansion of the private long-term care insurance market, 
including enhancement of the tax status of long-term care 
insurance. As a retired Air Force Reserve Colonel, Mr. Grubb 
felt the military should have the opportunity to obtain 
affordable coverage to protect themselves against the financial 
ravages of a long-term illness.
    Bill Carr, Deputy Director of Force Management Policy for 
the Department of Defense, provided testimony on the desire of 
the Department of Defense to have the military included in the 
list of eligible participants. Mr. Carr noted the willingness 
of the Department of Defense to study how the inclusion of 
uniformed service personnel in long-term care proposals might 
contribute to recruitment, retention and morale of military 
personnel. He also stated the Department of Defense was willing 
to work with the appropriate committees on the issue of long-
term care insurance.
    (3) On June 14, 1999, Chairman Scarborough held the third 
hearing, this time in Baltimore, to further discuss the various 
legislative proposals to establish a long-term care insurance 
benefit for Federal employees. Three bills referred to the 
subcommittee were addressed: H.R. 602, H.R. 110, and H.R. 1111.
    Chairman Scarborough emphasized the importance of letting 
beneficiaries, not government officials, make their own long-
term care decisions. The chairman also stressed the need for 
the legislation to allow for continued innovation of policies 
as the insurance industry continues to evolve and mature.
    Two panels presented testimony to the subcommittee. The 
first panel consisted of two witnesses from AT&T and the 
Maryland Department of Health and Mental Hygiene, as well as a 
witness with the responsibility for caring for his elderly 
relatives. The second panel consisted of representatives of the 
National Association of Retired Federal Employees [NARFE], the 
Health Insurance Association of America, and Wright & Co.
    Charles Yocum provided an account of his experiences with 
long-term care as custodian for his aging relatives. His 
depiction of his struggles with the current system of 
government assistance further emphasized the necessity of 
finding a workable solution to the financing of long-term care. 
He described himself as a member of the ``sandwich 
generation.'' Although his children are not yet fully on their 
own, he now has the added responsibility of seeing to it that 
his parents and other elderly relatives are cared for. An 
attorney by profession, he noted the need to consult with an 
attorney specializing in ``elder law'' in order to understand 
the Medicaid spend-down process.
    Dr. Georges Benjamin provided informative testimony 
regarding the State of Maryland's initiatives to control the 
growth of public long-term care spending through partnership 
with public and private stakeholders. Maryland is implementing 
the Outreach Empowerment Campaign for Individual Long-Term Care 
Planning. Under this initiative, various Medicaid waivers and 
programs have been proposed or are under development to manage 
public long-term care spending and provide home and community 
based services as alternatives to institutionalization.
    Dr. Benjamin provided statistics regarding expenses for 
Maryland's Medicaid program. During fiscal year 1997, the 
program spent close to $557 million on long-term care for 
recipients aged 21 or over, representing 22 percent of the 
total Medicaid budget. His testimony highlighted the need for 
private long term care insurance to shift the burden of paying 
for long term care will be shifted from Medicaid and other 
public programs.
    David Carver testified about the long-term care insurance 
program offered by AT&T to its employees. In 1990, AT&T began 
work on the planning phase of its long-term care program. The 
market at that time was considerably less developed than it is 
today. AT&T looked for its plan to achieve two goals: (1) 
assure financial protection by making the breadth of benefits 
extensive, and (2) permit employees to meet specific needs by 
offering significant choice of plan designs. AT&T anticipated a 
5 to 7 percent enrollment rate for management, and a 2 to 3 
percent enrollment rate for retired employees and occupational 
employees. AT&T has exceeded these targets, with 14 percent of 
management enrolled, 3 percent of retired employees enrolled, 
and 4 percent of occupational employees enrolled. Since 
inception of the program, AT&T feels awareness for this type of 
coverage has increased, and touted its continued good 
experience with lower than expected lapse rates.
    The program was not without challenges, and AT&T continues 
to be frustrated by the ineligibility of children, the 
mandating of certain provisions in specific States, the 
difficulty in protecting the integrity of the plan as employee 
expectations exceed what can be offered due to underwriting 
requirements, and exclusion from Section 125 of the Internal 
Revenue Code.
    Dave Cavanaugh provided information on products that offer 
the benefits of life insurance and long-term care insurance in 
a single policy. This ``linked benefits'' approach provides 
various options during the completion of the aging process, 
including long-term care coverage, a cash accumulation fund, 
death benefits, and, if necessary, a recapture of the dollars 
paid in premium. A key advantage to this type of policy is that 
the ``gamble'' aspect of paying premiums for long-term care 
insurance coverage is eliminated. The entire life insurance 
benefit can be paid as a tax-free benefit to a beneficiary or 
can be used to provide long-term care services.
    Frank Atwater, president of the National Association of 
Retired Federal Employees, testified on the importance of long-
term care insurance to meet its goal of assuring financial 
stability in retirement for government employees. Protecting 
retirement assets through careful financial planning means 
considering long-term care insurance as an option. Mr. Atwater 
commended the efforts of all members of the subcommittee to 
provide a long-term care insurance program.
    While NARFE's goal is to ensure that annuitant underwriting 
standards are less burdensome than those offered in the private 
market today, Mr. Atwater did recognize that insurance carriers 
would be unlikely to participate in the proposed Federal 
program if they were forced to sell policies to senior citizens 
that are probable candidates for long-term care.
    Ken Grubb, on behalf of the Health Insurance Association of 
America, emphasized the necessity of public education about the 
risks and costs of long-term care. Without understanding the 
problem, the public cannot be expected to understand the 
appropriate solutions. It is critically important for the 
public and private sectors to provide long-term care insurance 
education. By making the investment now and designing a 
financing arrangement our elderly can live with today, our 
future retirees can protect their assets. Successful employer 
plans that have experienced high participation rates are those 
that have invested in multi-faceted education and marketing 
campaigns. The Federal Government's involvement, in partnership 
with carriers, is critical to the success of this program. 
Without substantial employer participation and commitment to 
educating employees about the importance of a long-term care 
insurance policy, the Health Insurance Association of America 
believes the Federal program will not be successful.
    Mr. Grubb's testimony provided information regarding the 
costs of long-term care to employers. Long-term care related 
expenses cost employers $29 billion a year in lost time, lost 
employees, and lost productivity. A Federal employee long-term 
care insurance program would be the clearest signal of 
government support for encouraging personal responsibility and 
planning for long-term care through avenues such as long-term 
care insurance. The sheer size of the Federal Government as an 
employer would assure an immediate and heightened awareness of 
long-term care financing among working adults.
3. OPM's FEHBP Policy Guidance for Fiscal Year 2000.
    a. Summary.--In the spring of each year, OPM issues a call 
letter to instruct FEHBP carriers on the policies OPM intends 
to pursue for the next calendar year, including the benefits or 
coverages that will be mandated. These policies affect the 
FEHBP premiums that taxpayers and employees will have to bear.
    In light of recent premium increases in the FEHBP, the 
subcommittee has become increasingly concerned that OPM's 
policies have both added costs to the program, e.g., by 
mandating benefits, and deprived carriers of the flexibility 
they need to develop innovative benefit packages to restrain 
premium increases, or even lower premiums. On average, FEHBP 
premiums rose by 8.5 percent in 1998 and 10.2 percent in 1999. 
Witnesses at previous hearings have warned the subcommittee to 
be wary of mandated benefits and over regulation of the 
program. Mandates carry with them both a visible cost, the cost 
of providing the mandated benefit, and a hidden cost. This 
hidden cost arises because carriers and consumers both are 
required to accept an increasingly standardized package of 
benefits, and carriers lose the freedom to use innovative and 
less costly alternative offerings. Blue Cross Blue Shield has 
testified at past hearings that mandated coverages have 
increased its program costs by about $100 million per year.
    In this year's call letter, OPM has identified seven 
``significant initiatives'' for contract year 2000:
          1. Imposing the so-called patient's bill of rights 
        [PBOR];
          2. Quality healthcare;
          3. Family-centered care;
          4. Customer service;
          5. Provider contracts (fee-for-service plans);
          6. The DOD/FEHBP demonstration project mandated by 
        last year's defense authorization act; and
          7. Y2K compliance.
    The subcommittee examined the impact of these mandates and 
proposals on FEHBP premiums.
    b. Benefits.--Information developed at this hearing will 
assist the subcommittee in evaluating the causes of FEHBP 
premium increases for the year 2000 and OPM's overall 
administration of the FEHBP.
    c. Hearings.--The subcommittee conducted an oversight 
hearing entitled, ``FEHBP: OPM's Policy Guidance for Fiscal 
Year 2000'' on May 13, 1999. Witnesses were William E. Flynn 
III, Associate Director, Retirement and Insurance Services, 
OPM; Stephen W. Gammarino, senior vice president, Federal 
Employee Programs, Blue Cross Blue Shield Association; Dr. 
Joseph Braun, chief medical officer, George Washington 
University Health Plan; Bobby L. Harnage, Sr., president, 
American Federation of Government Employees.
    Subcommittee Chairman Scarborough noted that the FEHBP is 
the largest employer-sponsored health benefits plan in the 
Nation, covering approximately 9 million individuals, Federal 
employees, retirees, and their families. Both employees and 
annuitants view it as one of the most important benefits the 
Federal Government provides for active and retired civil 
servants. He also pointed out that many experts consider the 
FEHBP a model employer-sponsored health benefits plan and a 
model for reforming Medicare. However, Mr. Scarborough also 
identified several disturbing developments in the direction of 
the FEHBP in recent years, the most visible of which has been 
the dramatic premium increases during the past 2 years. There 
has also been a trend toward more mandated benefits and 
increased standardization in the FEHBP. This development is 
contrary to the market orientation that has been the key to the 
FEHBP's success over the years.
    Mr. Scarborough cited OPM directives to implement such 
portions of the President's so-called patients' bill of rights 
[PBOR] as information disclosure and the right to amend one's 
medical records as examples of mandates that can drive up 
carrier costs without providing a commensurate benefit to 
enrollees. On the other hand, allowing carriers the flexibility 
to design benefit packages can help restrain--or even reduce--
premiums. He suggested that the subcommittee carefully examine 
OPM's policies by asking three questions: Does the policy 
address a real problem in the FEHBP? Will the directive 
increase premiums or lower the quality of health care for 
Federal employees or retirees? Will the directive be 
implemented in a reasonable manner?
    Mr. Flynn testified that OPM is confident its policies will 
strengthen its ability to provide high quality, affordable care 
through the FEHBP. He contended that OPM has been able to 
implement the PBOR for less than $10 dollars a year for each 
policyholder, although under questioning he admitted that this 
added over $30 million a year to FEHBP costs. Mr. Flynn also 
identified further implementation of the PBOR as one of OPM's 
objectives for 2000, along with implementation of the DOD 
demonstration project (see section II. B.(5) below). Mr. Flynn 
asserted that OPM is concerned about costs and argued that 
FEHBP premium increases were driven by forces in the overall 
health care market. He also noted that in recent years there 
have been significant advances in the measurement of health 
care quality to identify techniques that produce healthy 
outcomes. OPM will do more to identify treatments that are 
effective and cost efficient. Mr. Flynn also suggested that OPM 
will consider establishing a national prescription drug benefit 
for the entire FEHBP and ``partnering'' with other government 
agencies on the purchase of drugs for Federal employees and 
other beneficiaries of Federal programs.
    Mr. Gammarino focused on several trends that he believes 
are adversely affecting the FEHBP: increasing administrative 
burdens on participating carriers; reduced carrier flexibility, 
movement away from a level playing field, and the 
standardization of health plans and health plan administration.
    With respect to the impact of this year's call letter on 
FEHBP costs and premiums, Mr. Gammarino cited the 
implementation of the PBOR as one likely to impact both. For 
example, he noted, the PBOR would require that patients have a 
right to obtain and amend their medical records. This could 
force Blue Cross Blue Shield to renegotiate its agreements with 
over 400,000 providers, agreements developed for the most part 
for its non-FEHBP commercial business, at tremendous cost 
without adding much value for patients and policyholders. He 
also pointed out that Blue Cross Blue Shield has no reason to 
become involved in the relationship between the physician and 
the patient with regard to medical records. In addition, he is 
concerned that some providers would leave the Blue Cross Blue 
Shield networks rather than renegotiate. Mr. Gammarino also 
emphasized that, though some have cited the FEHBP experience 
with the PBOR as proof that various ``patient's rights'' 
legislation pending in Congress would not be costly, the PBOR 
is far less onerous than some of those bills.
    OPM's has failed to provide plans with sufficient 
flexibility to adapt their benefit packages to today's trends, 
according to Mr. Gammarino. For example, while the growth in 
prescription drug costs outpace other cost trends, OPM has for 
2 years refused to allow Blue Cross Blue Shield to introduce a 
cost sharing program. Consequently, its FEHBP plans has 
experienced ``wastage and high utilization'' encouraged by the 
availability of ``free drugs'' to some of its enrollees.
    Mr. Gammarino also informed the subcommittee that Blue 
Cross Blue Shield understood that OPM was planning to use the 
FEHBP administrative reserve fund to offset carrier losses in 
the FEHBP/military retiree demonstration project, which he 
believes would be unlawful. In addition, he also noted that he 
was concerned about the administration's continuing attempts to 
impose the Cost Accounting Standards on FEHBP carriers. 
Congress blocked the administration's previous attempt to 
impose these standards on the FEHBP because, as OPM has 
acknowledged, they are incompatible with insurance industry 
accounting practices and would add no value to the FEHBP.
    Mr. Harnage attacked OPM's administration of the FEHBP, 
citing the rising premiums in recent years and its failure to 
allow unions to participate in negotiating contracts with 
carriers. OPM has offered to consult more closely with his 
union. But he contended that he was not looking for mere 
consultation; he wanted ``full participation at the table.'' He 
complained that instead of pledging to bring premium inflation 
under control, OPM merely repeats the insurance industry's own 
``propaganda.'' He also argued that carriers should have to 
comply with the Cost Accounting Standards.
    Dr. Braun testified that the American Association of Health 
Plans, on whose behalf he testified, had a close working 
relationship with OPM. He also warned that many of the 
provisions in bills pending before Congress and other recent 
mandates would micromanage health plans and freeze medical 
practice in today's patterns. They would drive up both health 
care costs and the number of the uninsured. Several provisions 
in the PBOR, he noted, would be especially difficult to 
implement. For example, he argued that OPM's information 
disclosure requirements are overly broad and burdensome and 
that its transitional care mandates could impose unnecessary 
burdens on health plans. In general, Dr. Braun cautioned that 
administrative and benefit mandates may make the FEHBP 
unwieldy, more expensive, and less responsive to the 
beneficiaries' needs. He also raised concerns about OPM's data 
collection plans, specifically that OPM has underestimated its 
cost and that many plans may not have a sufficient survey pool 
to obtain statistically valid results. Dr. Braun also expressed 
concern about the qualifications of some of the non-physician 
providers that OPM is encouraging health plans to use. In order 
to promote affordability and improved access in the FEHBP, Dr. 
Braun said that OPM and the Congress must allow health plans 
the flexibility to meet the needs of Federal employees.
4. FEHBP as a Model for Medicare Reform.
    a. Summary.--In March 1999, the National Bipartisan 
Commission on the Future of Medicare (Bipartisan Commission), 
co-chaired by Senator John Breaux (D-LA) and Representative 
Bill Thomas (R-CA), developed a set of proposals that would 
modify the financing of Medicare along lines shaped by the 
Federal Employees Health Benefits Program [FEHBP]. The Civil 
Service Subcommittee initiated an investigation of the 
similarities of the financing and benefit structure of the two 
systems to assess whether the FEHBP might serve as an 
appropriate model for providing more secure funding for 
Medicare.
    Congress and the President have long recognized the 
challenges facing the financing and administration of Medicare. 
The Balanced Budget Agreement of 1997 introduced a 
Medicare+Choice component of the Medicare benefit package as an 
endeavor to rely more upon market forces than existing Medicare 
options. In earlier efforts to control escalating Medicare 
costs, the program moved beneficiaries away from fee-for-
service medicine and toward managed care services. Since those 
reforms, HMOs have been charged with rationing care by limiting 
access to specialists and expensive services, and restricting 
options for consumers. While an increasing portion of treatment 
is provided through prescription pharmaceuticals, Medicare does 
not provide a direct drug benefit. As a result, some Medicare 
consumers consider themselves effectively denied treatments 
that are increasingly available for much of the population.
    Escalating medical care costs are widespread in American 
society. As the Civil Service Subcommittee learned in previous 
oversight of the FEHBP, escalating costs stem largely from 
increased use of prescription drug treatments by an aging 
population and increasing amounts of preventive care account 
for a significant portion of rising costs. Although drug 
treatments are cheaper individually than some alternative 
treatments that they replace (notably invasive surgeries), they 
enable longer life spans and the treatment requirements are 
often continuous. Longer term use of the drugs effectively 
increases the lifetime cost of treatment. In many cases, newer, 
more effective drugs are more expensive than the drugs that 
they replace, and research costs are integrated into pricing 
structures. As people live longer, lives that are extended by 
more effective pharmaceutical care eventually end as a result 
of chronic medical conditions--which can also be very expensive 
to treat.
    Extended life spans are the largest single factor 
contributing to long-term population growth. Birth rates have 
declined since the 1960's, and they have declined most 
precipitously in developed nations. Immigration contributes to 
some population growth, but at significantly lower rates than 
the extended life spans of senior citizens. With an increasing 
portion of the population over age 65 (and usually retired from 
the workforce), the smaller working portion of the population 
must produce the revenue to support the retired population. 
Medicare, therefore, must develop more effective methods of 
identifying and delivering treatment while controlling costs.
    In looking to the FEHBP as a model for ameliorating 
Medicare's financial challenges, the Bipartisan Commission 
developed a three-track approach, beginning with design of a 
premium support system, incorporating current improvements in 
the Medicare program, and moving to a more comprehensive 
solution to the solvency challenges facing Medicare. The 
Bipartisan Commission acknowledged that the separation between 
Part A and Part B Medicare benefits had become outmoded, and 
opted for an integrated benefit structure known as a ``premium 
support'' option. That structure would be administered by an 
appointed board, which would oversee one national, government-
sponsored, fee-for-service plan, and a variety of other plans. 
The board would provide oversight of premiums and benefit 
structures in other plans, but providers would have the 
flexibility to design and administer systems of premiums, co-
payments, benefits, and other factors. The board would also 
oversee periodic open seasons, and people would be able to 
shift between their current coverage and either higher or lower 
benefit plans depending on their current medical care 
requirements. The government would pay approximately 88 percent 
of standard option premium costs. Enrollees would bear the 
incremental costs of any ``high option'' benefits, and would 
pay the balance of premiums and any co-payment requirements 
and/or costs of non-covered services. For senior citizens with 
income less than 135 percent of poverty levels (currently 
$10,568 for an individual and $13,334 for a couple), premiums 
would be paid by the government, up to 85 percent of the 
national average of high option plans. States would continue 
current levels of effort, but additional costs would be paid 
from the Federal Treasury.
    Participants would be required to pay 12 percent of the 
total cost of standard option plans. Beneficiaries would not be 
required to pay premiums for plans whose premiums remained 
below 85 percent of the national weighted average of standard 
option plans. Beneficiaries would pay all premium costs above 
the national weighted average. However, in areas where the 
government's fee-for-service plan has no competition, 
beneficiaries would be responsible for no more than 12 percent 
of costs. The government would continue to fund medical 
education costs and other indirect expenses now attributed to 
the Medicare program.
    The Bipartisan Commission also recognized the changing 
shape of Medicare and included several ideas to reform current 
health care coverage for senior citizens. It would extend a 
federally-paid prescription drug benefit to low-income seniors 
while adding prescription drug coverage to health insurance 
plans covering senior citizens. Additionally, the combination 
of Medicare Parts A and B would blend the current Part A 
deductible ($768) and the Part B deductible ($100) into a 
single medical cost deductible of $440. To guard against 
unnecessary premium increases, Medicare would include a 10 
percent coinsurance requirement for all services other than 
inpatient hospital stays and preventive care. Where higher co-
payment requirements already exist, they would be retained. The 
proposals would revise eligibility for Medicare by conforming 
the minimum eligibility age for Medicare to the increasing age 
requirement for full Social Security benefits. Individuals 
between the age of 65 and the then-current Social Security 
eligibility age would be eligible to ``buy-in'' to Medicare 
without subsidy. People over 65 could also qualify for benefits 
if they met specific needs-based criteria, such as the 
inability to perform a range of activities of daily living. The 
Bipartisan Commission expected these reforms to slow the growth 
rate by 1 to 1.5 percent per year from the current long-term 
growth assumptions of 7.6 percent (intermediate) or 8.6 percent 
(the no slowdown baseline). Reducing this growth in Medicare 
costs will improve the system's financing, but not resolve the 
long-term fiscal challenges. Improvements in the technology of 
health care will affect the system substantially, but in mixed 
ways. As Federal Reserve Chairman Alan Greenspan told the 
Bipartisan Commission, effective improvements in medical care 
could both reduce the per-unit costs of treatment and result in 
an expanding demand for services.
    Over the past 15 years, the Congressional Research Service 
has shown, the annual increase in FEHBP premiums has been lower 
than annual growth in medical expenditures. In part, this 
control of costs is achieved by FEHBP participants' flexibility 
in moving between plans and adapting their health insurance 
coverage to meet changing needs. Using a variety of co-
payments, managed care, preferred provider discounts, and other 
market-oriented devices, carriers develop flexibility in 
designing benefits. That flexibility appears to be diminishing 
as the Office of Personnel Management mandates additional 
benefits and increasingly appears to standardize benefit 
packages. Linking responsibility for payment to the consumption 
of services provides the greatest array of incentives to both 
producers and consumers to act responsibly. For providers, the 
market provides incentives to keep costs as low as possible, to 
avoid pricing themselves out of the market. Cost reductions can 
be achieved through refinement of procedures, introduction of 
new technologies, or other innovations in the types of 
products, services, and procedures available. Health care 
delivery systems that guarantee providers the full cost of 
services, or establish a flat rate per activity, significantly 
reduce incentives to cut costs below those levels.
    At the same time, the absence of payment requirements on 
beneficiaries reduces incentives to control inefficient, or 
wasteful uses. Some observers have noted that the availability 
of prescription drugs through mail order at no cost (as 
provided by some FEHBP carriers) effectively enables 
beneficiaries to accumulate additional medication beyond 
current needs. A system of copayments, even minimal fees, 
provides some incentive to beneficiaries to direct their use of 
health care to essential services. In the absence of effective 
incentives to reduce costs--on the part of both producers and 
consumers--other methods of allocating care, such as rationing, 
inevitably are substituted for market forces.
    b. Benefits.--This oversight of the FEHBP and assessment of 
the Medicare program provided a broader understanding of 
factors affecting the costs and services available to address 
medical care concerns. It provided insight into the dimensions 
of the FEHBP that are widely admired and respected in the 
health care community, and provided insight about changes in 
the FEHBP that could jeopardize the market dynamics that have 
been effective in controlling costs.
    c. Hearings.--On May 22, 1999, the subcommittee conducted a 
field hearing entitled, ``The Federal Employees Health Benefits 
Program as a Model for Medicare Reform,'' assessing the 
Bipartisan Commission's report and to consider factors in the 
FEHBP that might contribute to easing future cost pressures 
affecting medical care. Chairman Scarborough conducted the 
hearing, with Mr. Mica attending. Witnesses included Mr. 
Jeffrey Lemieux of the Progressive Policy Institute, who served 
as staff economist for the National Bipartisan Commission on 
the Future of Medicare, Ms. Grace Marie Arnett, president of 
the Galen Institute, and Ms. Becky Cherney, president of the 
Central Florida Health Care Coalition. The hearing was held in 
Sanford, FL.
    Mr. Scarborough explained the cost factors and limitations 
on services increasingly affecting the Nation, with intense 
effects on the Medicare program. Mr. Lemieux described the 
multiple factors that were involved in reaching the majority 
perspective in the Bipartisan Commission report, and indicated 
that related issues would be facing the Congress in the coming 
session. He noted that, more than a cost factor, developing a 
competitive environment will require major cultural change 
within the organization responsible for administering the 
Medicare program. As Ms. Arnett reported, doctors, medical 
institutions, nurses, and other providers are experiencing 
increasingly frequent administrative challenges to their 
medical decisions. These decisions to reduce or withhold 
payments for services transfer care options from doctors and 
patients to administrative personnel. Ms. Cherney emphasized 
the importance of recent professional training in effecting 
better treatment, and described effectively the difficulties 
that patients encounter when confronting the administrative 
procedures associated with justifying medical services under 
current Medicare processes. The Central Florida Health Care 
Coalition compiles information about the performance of 
different medical facilities, and reports on changes in 
treatment practices and results. The panelists concurred that 
the aging of the population and the research and technology 
necessary to improve services would ensure that medical care 
costs would continue to increase. They agreed, however, that 
competitive factors and improvements in treatments will 
strengthen the ability to control the escalation of these costs 
in the coming years. Ms. Cherney noted that, as a result of the 
long-term commitment to medical education, we now have a 
relative glut of doctors, and these skilled professionals are 
an important factor in efforts to control cost escalation.
5. Implementing the FEHBP Demonstration Project for Military Retirees: 
        A Good Faith Effort or Another Broken Promise?
    a. Summary.--Congress established a limited demonstration 
project in the defense authorization act for 1999 (Public Law 
105-261, Sec. 721) to test the Federal Employees Health 
Benefits Program [FEHBP] as an option for dealing with the 
numerous problems plaguing the military health care system, 
including TRICARE. Under that project, up to 66,000 
beneficiaries, primarily Medicare-eligible retirees and their 
families, in 6-10 test sites around the country are permitted 
to enroll in the FEHBP in lieu of military health care for a 
period of 3 years, beginning in 2000. The legislation also 
provided for the sale of assets to pay for the demonstration 
project.
    The subcommittee, which has jurisdiction over the FEHBP, 
has been actively involved in this issue since the 104th 
Congress. During that period, the subcommittee has considered a 
number of legislative proposals, including the provisions 
establishing this project, to offer various military 
beneficiaries the opportunity to participate in the FEHBP. In 
stark contrast to TRICARE, the FEHBP, which covers civilian 
employees, retirees, and Members of Congress, is widely 
acknowledged to be the model employer-sponsored health care 
benefit. It is a market-oriented program that has historically 
allowed participants to obtain high-quality health care at 
affordable prices.
    The subcommittee conducted this oversight hearing to 
determine whether the Department of Defense [DOD] and the 
Office of Personnel Management [OPM] were implementing the 
demonstration in the manner that Congress intended. The 
subcommittee found that actions of these two agencies have 
threatened the viability of the demonstration project. These 
actions include DOD's failure to adequately fund the project, 
the administration's refusal to use the funds Congress made 
available to pay for the project for that purpose, designing 
the site selection process to ensure a project much smaller in 
size than Congress intended, unsatisfactory efforts to educate 
potential participants about the project, and OPM's plans to 
use fees Congress intended to offset the agency's own expenses 
for the legally questionable purpose of subsidizing potential 
carrier losses.
    b. Benefits.--The information developed by the subcommittee 
through this examination will assist in evaluating the initial 
experience under the demonstration project and to develop 
corrective legislation, if necessary.
    c. Hearings.--``Implementing the FEHBP Demonstration 
Project for Military Retirees: Good Faith Effort or Another 
Broken Promise?,'' held June 30, 1999. Witnesses at this 
hearing were: Representatives Randy ``Duke'' Cunningham (CA) 
and James P. Moran (VA); Delegate Carlos Romero-Barcelo (P.R.); 
Sydney Talley Hickey, associate director, Governmental 
Relations, National Military Families Association; Charles C. 
Partridge, Col. (U.S. Army, Ret.), legislative counsel, 
National Association of Uniformed Services; Kristen L. Pugh, 
deputy legislative director, the Retired Enlisted Association; 
Stephen W. Gammarino, senior vice president, Federal Employee 
Program, Blue Cross Blue Shield Association; William E. Flynn 
III, Associate Director for Retirement and Insurance, OPM; and 
Rear Admiral Thomas P. Carrato (USPHS), Director, Military 
Health Systems Operations, TRICARE Management Activity, 
Department of Defense.
    Subcommittee Chairman Scarborough emphasized that providing 
high-quality health care to military retirees is a high 
priority issue for him because he represents more military 
retirees than any other Member of Congress, and he has seen 
first hand the problems that plague TRICARE. He recalled that 
he worked hard to persuade doctors in his district to join the 
TRICARE system only to see them leave again. Mr. Scarborough 
also said that it is unconscionable that miliary retirees, and 
only military retirees, are effectively expelled from their 
employer's health benefits program after a lifetime of 
dedicated service.
    Because of the way in which DOD and OPM have implemented 
the congressionally mandated demonstration program, however, 
Subcommittee Chairman Scarborough expressed his concern that 
many retirees will believe the Federal Government has broken 
yet another promise to them. Among other problems, he cited 
DOD's decision to limit the number of eligible beneficiaries 
living in the test sites to about 69,000. Unless almost all of 
these eligibles enroll in the FEHPB, which, as Mr. Scarborough 
noted, most believe unlikely since this is a temporary program, 
the demonstration project will be considerably smaller than 
Congress intended. He also pointed out that the small size of 
the project may drive up premiums for military retirees and 
deprive them of the wide range of choices available to other 
Federal retirees and employees.
    As chairman of the subcommittee, Mr. Scarborough pledged 
that he would continue to work with other Members, military 
organizations, and all other interested parties to improve the 
quality of health care available to military families and 
military retirees.
    Representative Cunningham described the sacrifices military 
personnel and their families are called upon to make, including 
frequent moves around the country and deployments to foreign 
lands. He also noted that the armed forces are having a 
difficult time retaining personnel, citing retention rates of 
only 23 percent for enlisted personnel and only 33 percent for 
pilots. He explained that the major reason for these low rates 
is the frequency of deployments, which separate servicemen and 
women from their families. But the second most important 
reason, he testified, is the erosion of promises that were made 
to those who joined the military, including the promise of 
health care for life. He cited the example of General Krulak, 
who retired as Commandant of the Marine Corps on the day of the 
hearing, to illustrate how the Federal Government treats 
military retirees and civilian retirees differently. While 
General Krulak is not guaranteed access to his employer's 
health care program after 30-years of dedicated service, 
including service in wars, at age 65, Mr. Cunningham noted, a 
65-year old civilian secretary who worked in the General's 
office would be able to participate in the FEHBP, as would a 
Member of Congress. This is wrong, he said; military retirees 
should have the same access to benefits as retired civilians 
and Members of Congress.
    Even though he sponsored legislation that established the 
Medicare subvention demonstration program for military 
retirees, Representative Cunningham characterized that program 
as a ``band-aid.'' To provide a level playing field for 
military veterans, Representative Cunningham said he, 
Representatives Moran and Watts, and others have sponsored 
legislation to expand the FEHBP demonstration project 
nationwide and remove the caps on participation. In response to 
questioning from the subcommittee chairman, Mr. Scarborough, 
Mr. Cunningham said the most important thing Congress could do 
to improve the demonstration project was to pass either his 
bill or one sponsored by Mr. Moran.
    Representative Moran testified that he has been involved in 
this issue for 4 years because of the difficulties his 
constituents encountered finding access to quality, affordable 
health care after they retired from the military. Mr. Moran 
noted that other solutions, such as Medicare subvention, are 
unsatisfactory because so few military retirees now live in the 
catchment area of a military treatment facility; the FEHBP, in 
contrast, is available everywhere in the Nation. In his view, 
Congress and the Department of Defense really should be 
expanding the FEHBP now to the larger military retiree 
population, and he characterized the demonstration project as 
an attempt to bide time, avoid tough decisions, and save money. 
Consequently, he has introduced legislation to open the FEHBP 
to all Medicare-eligible retirees.
    Nevertheless, Mr. Moran said he is pleased to see DOD 
moving forward with the project, but worries that its limited 
scope and funding will prevent Congress from obtaining a true 
measure of the FEHBP's effectiveness for military retirees. In 
order to achieve a worthwhile demonstration of the FEHBP, Mr. 
Moran said, DOD and OPM would have to ensure that the actual 
enrollment is as close to the 66,000 that Congress intended. He 
also urged expanding the demonstration project beyond its 
current sites. Representative Moran also emphasized that 
Congress must insist on adequate funding for the project, 
pointing out that it is incumbent on DOD to find the necessary 
offsets since it decided not to use the proceeds of selling 
assets to fund the demonstration as Congress intended. Finally, 
Mr. Moran urged the subcommittee to continue to conduct 
oversight on the project.
    Delegate Romero-Barcelo testified that he was very pleased 
that Puerto Rico was chosen as a test site for the FEHBP. He 
emphasized that military retirees have devoted a substantial 
part of their lives to defending the Nation and that the Nation 
must keep its promises to them. Puerto Rican veterans have 
particular difficulty in obtaining health care, according to 
Mr. Romero-Barcelo: Veterans Administration facilities on the 
island are inadequate and the only full service military 
treatment facility is in a remote location, an hour and a half 
from retirees in San Juan and 3 to 4 hours from retirees on 
Puerto Rico's western coast. These distances are unacceptable 
in medical emergencies, he noted, and impose unacceptable 
medical risks.
    Mr. Romero-Barcelo believes that many of the 9,900 eligible 
retirees in Puerto Rico will enroll in the FEHBP if the program 
is publicized adequately. (He plans to publicize it as much as 
he can.) He also believes Puerto Rico will provide a good test 
of the FEHBP's benefit for military retirees since so many are 
in remote locations and have limited proficiency in English.
    The representatives of the military organizations (Mrs. 
Hickey, Col. Partridge, and Ms. Pugh) were very critical of the 
way in which DOD and OPM have implemented the program. They all 
agreed that DOD's decision to limit the number of eligible 
beneficiaries living in the sites to slightly more than the 
maximum number of enrollees permitted in the project 
jeopardizes the test. They were all also concerned that certain 
decisions by OPM might drive premiums higher than they are in 
the FEHBP. And they all believed that additional test sites 
should be added, which would not require additional 
legislation. They also were concerned that DOD's marketing 
efforts will not sufficiently educate eligible beneficiaries 
about the FEHBP.
    In addition, Mrs. Hickey noted that one result of DOD's 
decision to choose sites by drawing them from a ``bingo drum'' 
was to include two sites, Dover, DE and Puerto Rico, that are 
not representative of the rest of the country. (Dover, the only 
site that also includes a subvention project, because of the 
small number of eligibles in it; Puerto Rico because its FEHBP 
enrollment pattern is very different than in other parts of the 
country.) She estimated that only around 20,000 eligibles would 
actually enroll. She also pointed out that while the military 
groups and many in Congress wanted a broader test, DOD wanted a 
limited test. Therefore, she suggested that DOD should ``bend 
over backwards'' to ensure that the test is as fair and 
representative as possible.
    Col. Partridge testified that not only are military 
retirees the only Federal employees who lose their health 
benefits at 65, but DOD has no plan for covering all 
beneficiaries by a date certain. He explained that TRICARE does 
not meet the needs of all beneficiaries, saying that, ``In 
addition to disenfranchising Medicare-eligibles, the 
reimbursement rates, the red tape, and the bureaucracy have not 
been solved.'' He also recommended that Congress enact 
legislation to modify the demonstration project to allow those 
who enroll in FEHBP to continue to use military treatment 
facilities, with those facilities billing FEHBP carriers, and 
to allow those who enroll after the first year have a full 3 
years in the program.
    Ms. Pugh emphasized that OPM must finalize operational 
regulations, particularly regulations to give carriers access 
to their own reserves, quickly so carriers can set rates and 
military groups can educate their members. Otherwise, she 
warned, carriers will have to set artificially high rates and 
OPM effectively will have created a system different than the 
FEHBP for the demonstration project. She also noted that by 
artificially restricting the number of eligibles in the test 
sites, DOD has increased the risk of adverse selection.
    Mr. Gammarino testified that the Blue Cross Blue Shield 
Association strongly supports the demonstration project and is 
committed to helping it succeed. Nevertheless, he criticized 
both DOD's decision to establish such a low ceiling on the 
number of eligibles in the demonstration site and OPM's 
proposal to use the FEHBP administrative fund to offset 
potential carrier losses under the project. Blue Cross Blue 
Shield actuaries have estimated that only around 20,000 
eligibles will actually enroll in the FEHBP under the current 
project design. He noted that this estimate was based on an 
analysis of the health care alternatives available to 
beneficiaries in the test sites, the cost of such alternatives, 
and the fact that the demonstration project is a temporary, 3-
year program. In his view, to reduce the risk of adverse 
selection the project should be expanded to provide a realistic 
opportunity to attract 66,000 actual enrollees and that it be 
done in a way that ensures the enrollees will truly be a cross-
section of the overall population of eligible beneficiaries.
    Mr. Gammarino said that OPM's proposal to use the FEHBP's 
administrative reserve fund to subsidize any losses carriers 
may incur in the demonstration project was illegal and could 
distort the project's FEHBP market. He explained that in Blue 
Cross Blue Shield's view, there is no statutory support for 
this scheme. The administrative reserve is intended to offset 
OPM's expenses, not carriers.'' In addition, Blue Cross Blue 
Shield believes this scheme could introduce a ``moral hazard'' 
that threatens the basic structure of the FEHBP as a market-
based program and, though limited now to the demonstration 
project, would establish a ``harmful precedent'' for the FEHBP 
as a whole. This ``moral hazard'' arises because OPM's proposal 
frees carriers from the discipline of sound actuarial rating 
practices by shifting the risk of loss from the carrier to OPM. 
According to Mr. Gammarino, Blue Cross Blue Shield provided OPM 
with its views and legal opinions on this issue. He also 
testified that, if necessary, Blue Cross Blue Shield would take 
legal action to challenge OPM's scheme in order to protect the 
integrity of the FEHBP market.
    Both Chairman Scarborough and Ranking Member Cummings asked 
whether the demonstration project had been designed to fail. 
The witnesses' responses raised troubling questions about the 
administration's good faith. Col. Partridge noted that there 
was substantial ``institutional opposition'' to the project 
within DOD. As he described it, military surgeons general 
``like to have their sheep pen with all the military retirees 
in that sheep pen'' so they can ``reach in there and pull out 
the ones they want for their training programs'' while the rest 
are left to get care where they can. Permitting military 
enrollees to join the FEHBP would reduce their ability to do 
this. Ms. Pugh stated that the demonstration project was ``on a 
one-way train to failure right now,'' citing the lack of 
guidance from OPM and DOD that prevents military groups from 
educating their members. She also noted that some members of 
the Retired Enlisted Association were willing to move to make 
themselves eligible for the FEHBP. (Chairman Scarborough said 
he is familiar with this phenomenon because many retirees live 
in one Pensacola zip code in his district to be close to the 
Navy hospital.)
    Admiral Carrato described the steps DOD has taken to select 
test sites and implement the demonstration project. He also 
defended DOD's decision to limit the overall population of 
eligible beneficiaries to slightly more than the maximum number 
permitted to enroll in the project, identifying two factors 
that influenced this decision. First, he asserted, DOD did not 
want to establish an ``artificial cap'' on enrollment. Second, 
he argued that Congress did not fund the demonstration project. 
According to his testimony, DOD estimated that a project in 
which 66,000 eligible beneficiaries actually enrolled in the 
FEHBP would cost over $130 million a year. However, he noted 
that the President's budget for fiscal year 2000 allocated only 
$79 million for this demonstration project and two others. 
Under questioning from Subcommittee Chairman Scarborough, 
Admiral Carrato disputed the enrollment estimates of the 
military groups and Blue Cross Blue Shield, saying that DOD 
expected about 83 percent of the eligible beneficiaries in the 
demonstration sites to enroll, not just 20,000. However, under 
additional questioning by Mr. Scarborough and Ranking Member 
Cummings, he admitted that the President's budget only 
allocated $62 million for this project. Admiral Carrato 
attempted to dismiss the discrepancy between this figure and 
the $112 million that would be needed to fund DOD's anticipated 
83 percent participation rate by pointing out that the 
President's budget covered only three quarters of calendar year 
2000. However, when converted to a calendar year expenditure of 
about $77 million, it is apparent that the allocation in the 
President's budget will not fund a project of the size DOD says 
it anticipates.
    In addition, Admiral Carrato described the marketing 
campaign DOD will employ to familiarize eligible beneficiaries 
with their options under the FEHBP. The campaign will include 
mailings, establishing an 800 number, and health fairs in 
November.
    Although Admiral Carrato denied that DOD had designed the 
demonstration project to fail, his written statement reflected 
DOD's deep-rooted hostility to offering the FEHBP to military 
beneficiaries. In that statement, he painted the FEHBP as 
prohibitively expensive and a threat to military medical 
readiness. He contended that DOD has a ``sincere and enduring 
responsibility for the health of'' military retirees, and said 
TRICARE will remain incomplete until it has the capacity to 
enroll retirees over 65.
    Mr. Flynn testified that OPM and DOD have worked together 
very well on the demonstration project and that OPM has worked 
extensively with carriers and representatives of military 
organizations. He believes this work will lead to an effective 
roll out of the demonstration project. Mr. Flynn also said that 
the health care delivery system in the demonstration project 
has been tailored to mirror the FEHBP, with departures from 
FEHBP practices only where required by the nature of the 
demonstration project. Based upon OPM's preliminary 
negotiations with carriers, Mr. Flynn forecast that military 
retirees in the project will have an adequate number of health 
care plans to choose from; the number of choices in each site 
will range from 8 to 15, with an average of 11. He also 
defended OPM's proposal to use the administrative reserve to 
protect carriers against losses in the project. Without such 
mitigation of risk, he argued, because of the demonstration 
projects structure and temporary nature, premiums for all 
carriers could not be kept competitive. He also contended that 
OPM's scheme complied with the law.
6. FEGLI: New Options for Federal Employees.
    a. Summary.--The 105th Congress passed the Federal 
Employees Life Insurance Improvement Act (Public Law 105-311), 
which made numerous improvements to the Federal Employees Group 
Life Insurance program [FEGLI] and directed OPM to conduct a 
study to determine whether Federal employees are interested in 
group universal life, or group variable universal life, or 
additional voluntary accidental death and dismemberment 
insurance. Among the improvements enacted, were the following:
          a. eliminating maximum limitations on Basic life 
        insurance and on additional Option B coverage (which 
        permits employees to purchase at their own expense 
        additional insurance up to 5 times their salary);
          b. increasing the maximum amount of insurance that 
        employees may purchase on spouses (from $5,000 to 
        $25,000) and children (from $2,500 to $12,500); and
          c. permitting employees to carry unreduced Option B 
        insurance on themselves and Option C coverage for their 
        families into retirement at their own expense. 
        [Previously, Option B and Option C coverage was 
        automatically reduced by 2 percent per month beginning 
        at age 65 (or at retirement, if later) until coverage 
        was eliminated.]
    Coincident with implementing the improved benefits required 
by the Federal Employees Life Insurance Improvement Act, OPM 
also adjusted FEGLI premiums and created three new age brackets 
for Option B and Option C coverage. OPM has periodically 
adjusted FEGLI premiums as circumstances change. In light of 
lower mortality rates in most age groups, OPM has reduced 
premiums for basic insurance. Premiums for Options B and C have 
also been reduced for most age groups. Premiums have risen, 
however, for some older employees and annuitants. (For example, 
Option B monthly premiums for those age 55-59 have increased 
from $0.650 per thousand to $0.672.)
    Because increased levels of coverage under these options 
can be carried into retirement and former employees may now 
also continue Option B for 3 years after separating, OPM has 
created new age brackets for them. Previously, there was a 
uniform rate for everyone 60 years of age or older. Under the 
new rate structure premiums are scheduled to increase as 
individuals move through the three new age brackets of 60-64, 
65-69, and 70 and over. The creation of these rates has 
generated considerable controversy among older employees and 
annuitants, including Federal judges. Because of this 
controversy, OPM has postponed the application of the new 
brackets.
    The purposes of this hearing were to examine OPM's 
implementation of the improvements mandated by law, to review 
OPM's studies of employee interest in new insurance products 
and proposals for such products, to examine new insurance 
products that might be offered to Federal employees, and to 
examine the new FEGLI rates established by OPM.
    b. Benefits.--The information developed through this 
oversight of the FEGLI program will assist the subcommittee in 
evaluating legislative proposals to offer new insurance 
products to Federal employees. It will also assist the 
subcommittee in evaluating the impact of OPM's new rates on 
various employees and retirees and to assess any legislative 
proposals to deal with the problems created by the new age 
brackets.
    c. Hearings.--The subcommittee conducted a hearing 
entitled, ``Life Insurance: New Options for Federal 
Employees,'' on July 22, 1999. Witnesses at the hearing were: 
William E. Flynn III, Associate Director, Retirement and 
Insurance Services, OPM; Michael J. Bartholomew, senior 
counsel, American Council of Life Insurance; Dennis J. New, 
vice president, Special Risk Products & Markets, Unum/Provident 
Life Insurance Co.; and G. Jerry Shaw, general counsel, Senior 
Executives Association.
    Subcommittee Chairman Scarborough noted that currently the 
Federal Government only offers its employees term life 
insurance and accidental death and dismemberment through the 
FEGLI program. Insurance companies, however, are now offering a 
variety of flexible products worthy of consideration, and, he 
pointed out, with the likelihood of a more mobile workforce in 
the future, it would be logical for the Federal Government to 
follow the lead of private employers in offering these new 
products to its workforce. He also observed that the current 
FEGLI program is essentially a self-insured program that has 
been administered since its inception in 1954 by one company, 
MetLife. This was a pertinent fact to consider in evaluating 
additions or alternatives to the existing FEGLI system.
    Mr. Flynn described OPM's actions in implementing the 
changes to FEGLI mandated by Public Law 105-311, including 
conducting a statutorily required open season for FEGLI from 
April 24 through June 30, 1999. OPM provided extensive 
information to employees about the improved benefits and their 
new options under the FEGLI program, and interest in the open 
season among them was high. However, Mr. Flynn also reported 
that OPM will not know the results of the open season until 
September 2000. He noted that while FEGLI premiums for most age 
groups went down, OPM re-evaluated its existing premium 
structure in light of the new opportunities for retirees under 
the new law. As a result of this review, OPM created new age 
bands covering those 65-69 years old and those 70 or older. 
Many seniors objected to the new, higher rates they would be 
required to pay. The premium for individuals at age 70 doubled, 
which Mr. Flynn characterized as creating an unforseen but 
significant burden on older employees. Accordingly, OPM has 
postponed these increases until at least April 24, 2001 while 
it examines alternative approaches, including new legislation, 
and it has also advised retirees over 65 how they may 
ameliorate the rate increases that have already gone into 
effect.
    Mr. Flynn also reported that OPM's survey revealed 
significant interest in group universal insurance and other new 
insurance products. The administration is currently considering 
offering these new products, and Mr. Flynn hoped their internal 
discussions would be completed by the end of the fiscal year.
    Mr. Bartholomew testified on behalf of the American Council 
of Life Insurance, whose members account for about 80 
Representative of the group insurance market. He described 
group universal life as a combination of traditional group term 
insurance and a cash accumulation feature. Group variable 
insurance is similar, but it provides employees with the 
opportunity to choose to invest the cash value of the insurance 
among a variety of investment options. These policies help 
employees secure financial protection in the event of premature 
death and enhance their retirement planning.
    ACLI's data show that in 1997 its member companies issued 
group universal insurance with a face amount of $77 billion, 
and sold nearly $26 billion of group variable universal. 
Studies by other organizations also show that more and more 
private employers are offering these products to their 
employees. One such study shows that 76 percent of employers 
with 1,000 to 5,000 employees offered such products. Since 
1994, there has been a steady increase in the amount of group 
universal life insurance sold. Mr. Bartholomew said group 
universal and group variable universal are becoming more 
popular options for employees looking for alternatives to other 
forms of insurance. ACLI supports Congress's efforts to expand 
the insurance options for Federal employees by offering 
additional life and accidental death policies.
    Mr. New testified that many of the Fortune 1,000 offer a 
stand-alone voluntary accidental death and dismemberment [AD&D] 
policy and that employees today want more choices in the 
insurance benefits offered to them. Voluntary AD&D also fills a 
real need, covering accidents 24 hours a day, on and off the 
job, and around the world. Statistics cited by Mr. New show 
that accidents are the leading cause of death for those under 
38 and the fifth leading cause of death overall; nearly 9 out 
of 10 deaths occur away from the job. AD&D can also be combined 
with a number of other benefits, such as paralysis benefits, 
home alteration and vehicle modification benefits, and travel 
assistance. It also requires no medical underwriting. 
Consequently it has been very popular with employees. Mr. New 
testified that in his company's experience between 35 percent 
to 50 percent of employees enroll in employer-sponsored AD&D 
plans.
    Mr. Shaw testified that although FEGLI has served many 
Federal employees well over the years, during the recent open 
season many private companies took the opportunity to educate 
employees on alternatives to FEGLI. Consequently, employees 
often found they had better options available from private 
companies in the open market. Some learned that they could 
purchase the same or better coverage at lower rates from 
private insurers, while others discovered additional products 
like group universal life insurance linked to long-term care 
insurance. He pointed out that his firm issues a free weekly 
on-line newsletter that is read by over 50,000 Federal 
executives and managers. Many of them contacted his firm to 
complain that they had been lulled by the Federal Government's 
sponsorship of FEGLI into erroneously believing the government 
had negotiated the lowest possible rates for them. He 
emphasized that the members of the Senior Executives 
Association want choices. He noted the controversy in 
congressional consideration of long-term care insurance over 
whether only one company or several would be permitted in the 
Federal program. The SEA would support an approach to both 
long-term care insurance and additional life insurance 
offerings that offers employees maximum choices and competition 
among carriers, citing the FEHBP as a successful model.
7. Reauthorization of the Office of Government Ethics.
    a. Summary.--The authorization for the Office of Government 
Ethics expired on September 30, 1999. Although the Office is a 
small agency, the functions it performs are important in 
preserving impartiality and integrity in government operations. 
Based upon its examination of this issue, the subcommittee 
found that on the whole, the Office has performed its mission 
very well.
    Testimony received at this hearing also reinforced the 
importance of clarifying the definition of ``special government 
employee'' in 18 U.S.C. Sec. 202. The statutory definition of a 
special government employee has not been materially revised 
since its enactment in 1962. Under it, a special government 
employee is someone who is retained or appointed to perform 
duties on a full-time or part-time basis with or without 
compensation for no more than 130 days within 365 consecutive 
days. This definition does not give adequate notice of who is 
covered by the definition and therefore covered by conflict-of-
interest and financial-disclosure laws. Guidance issued by the 
Office of Government Ethics and the Department of Justice 
focuses on whether the advisor is in fact performing a Federal 
function, but there is no functional test in the statute. 
Neither the current law nor this Federal agency guidance 
adequately covers the various situations in which informal 
advisers in the White House have performed Federal functions 
and otherwise participated in the government's decision or 
policymaking process in recent years.
    b. Benefits.--Subcommittee Chairman Scarborough relied upon 
the testimony received in this hearing to introduce H.R. 2904 
to reauthorize appropriations for the Office of Government 
Ethics through fiscal year 2003. (H.R. 2904 is described in 
section III.A.8. [Subcommittee on the Civil Service]).
    c. Hearings.--The Subcommittee on the Civil Service held an 
oversight hearing entitled, ``Reauthorization of the Office of 
Government Ethics'' on August 4, 1999. Witnesses at the hearing 
were Stephen D. Potts, Director of the Office of Government 
Ethics, and Gregory S. Walden, an attorney in private practice 
and a former Assistant Counsel in the White House.
    Subcommittee Chairman Scarborough observed that the Office 
of Government Ethics is a small but well-respected agency that 
promulgates policies and ethical standards that are implemented 
in the executive branch through a network of more than 120 
designated agency Ethics Officers. He also pointed out that the 
Ethics in Government Act relies on financial disclosure 
requirements and post-employment restrictions to guard against 
conflicts of interest. However, he questioned whether these 
were sufficient to protect the public interest in the integrity 
of public officials in light of experience with the Clinton 
administration.
    Mr. Potts described the functions and operations of the 
agency, which, he testified, had ``overall responsibility for 
executive branch policies related to preventing conflicts of 
interest on the part of officers and employees.'' The Office 
administers a program that is primarily preventive, with 
enforcement entrusted to other executive branch agencies, 
including the Department of Justice. The Office issues rules 
and regulations regarding such matters as conflict of interest, 
post-employment restrictions, standards of conduct, financial 
disclosure, and ethics training. It also reviews the financial 
disclosure forms filed by certain individuals nominated for or 
appointed to Federal office by the President and counsels those 
individuals on the avoidance of conflicts of interest and, when 
necessary, recommends appropriate corrective actions. Educating 
Federal employees about the ethical standards governing their 
conduct is also an important part of the Office's 
responsibilities. Toward this end, the Office trains agency 
ethics officials and assists agencies in conducting their 
internal ethics training programs.
    The Office also issues formal and informal guidance on a 
variety of ethics matters. In limited circumstances, the Office 
will investigate alleged ethics violations and order corrective 
action or recommend disciplinary action. In general, however, 
enforcement falls to individuals agencies or the Department of 
Justice. The Office also evaluates the effectiveness of 
conflict of interest laws and related statutes and rules and 
regulations. Mr. Potts testified that the Office has been 
enlisted by other executive agencies to provide technical 
assistance to the anti-corruption efforts of foreign countries.
    From time to time, the Office will recommend modifying or 
repealing existing ethics laws or enacting new ones. In 
response to questioning, Mr. Potts testified that 18 U.S.C. 
Sec. 202, which defines the term ``special government 
employee,'' should be clarified by codifying the elements on 
which the Office currently relies considers in determining 
whether an individual is a special government employee. He 
pointed out that the Office had supported, and indeed had been 
``one of the forces behind,'' legislation introduced by 
Representative Mica and Representative Horn in the previous two 
Congresses to clarify this definition. (However, he also 
expressed reservations about tying such legislation to a 
reauthorization bill.)
    Mr. Potts asked Congress to reauthorize the Office for 7 or 
8 years. In support of that request, he cited the Office's 
record over the years, its small size (a budget of $9.1 million 
for fiscal year 2000 and a workforce of 84 full time equivalent 
employees), and the fundamental nature of the work it performs.
    Mr. Walden testified that he supported both the agency's 
reauthorization and the clarification of the term ``special 
government employee.'' In his opinion, the Office ``has 
performed exceptionally well and deserves to be reauthorized.'' 
He pointed out that he worked closely with the Office as an 
Assistant Counsel in the Bush White House and noted that it was 
the policy and practice of the Bush White House to solicit the 
Office's advice before making decisions or taking a course of 
action, and urged future administrations to follow that 
practice as well. As an independent agency, he pointed out, the 
Office helps both to maintain the public's trust in the 
integrity of the government and protects Federal officials from 
unwarranted or politically motivated criticism.
    In his testimony, Mr. Walden identified several matters 
that he believes the Office should address: issuing rules to 
implement the post-employment restrictions in 18 U.S.C. 
Sec. 207, rules to implement section 209 of the same title, and 
rules covering such matters as legal defense funds, the outside 
activities of Federal employees in professional associations, 
and the expenses that Federal employees may accept for 
unofficial teaching, speaking, or writing. He also urged more 
involvement by the Office in ethics investigations and that the 
Office audit the White House and every Cabinet Department in 
the second year of a new administration. Other recommendations 
included joint ethics training of political appointees by the 
White House Counsel and the Office and increased attention to 
training for employees in the field.
    Mr. Walden criticized the Office for too narrowly 
construing section 208, the conflict of interest statute, when 
it reviewed allegations that Hillary Clinton's stock portfolio 
created a conflict of interest with her responsibilities as the 
chairman of the President's Task Force on National Health Care 
Reform. He argued that the Office's conclusion that health care 
legislative proposals were too broad to constitute ``particular 
matters'' within the meaning of the statute ``exempts some 
conduct that fits the classic notion of a conflict of 
interest.''
    In addition, Mr. Walden raised several legislative 
proposals, including clarification of the definition of 
``special government employee.'' The Clinton administration's 
``obvious struggle'' with the concept in connection with its 
perhaps unprecedented reliance on such informal advisers and 
consultants as Harry Thomason, Paul Begala, Dick Morris, and 
the numerous outsiders who worked on the Clinton health care 
proposal, as well as Mrs. Clinton's own unprecedented 
involvement in governmental affairs, according to Mr. Walden, 
highlight the need for such clarification. He pointed out that 
he had testified in support of legislation to do that in both 
1996 and 1997 and urged Congress to enact similar legislation 
before the next President is inaugurated.
    Mr. Walden testified that the length of the reauthorization 
period was a matter for congressional judgment on the best way 
to ensure regular oversight of the agency.
8. Federal Law Enforcement Retirement: Who Qualifies and Why?
    a. Summary.--In recent sessions, legislation has been 
referred to the subcommittee proposing to revise the terms and 
conditions extending enhanced retirement benefits (often 
referred to as ``law enforcement retirement coverage'' to 
additional occupations. During the first session of the 106th 
Congress, five bills addressing these issues were referred to 
the subcommittee. Two of these bills would extend enhanced 
retirement coverage, one to assistant U.S. attorneys, another 
to a broad range of occupational series, chiefly Immigration 
and Customs inspectors, Internal Revenue Service revenue 
officers, and police employed by several different Federal 
agencies. Additionally, other individuals who are currently 
covered by these enhanced retirement provisions have pursued 
legislation that would waive the mandatory retirement 
provisions associated with this benefit. Bills referred to the 
subcommittee include a measure to waive the age 57 retirement 
provision governing U.S. Capitol Police officers, a bill that 
would raise the mandatory retirement age for Federal 
firefighters from 55 to 57, and a bill that would increase the 
mandatory retirement age for all covered employees from 57 to 
60. In light of the interest in these proposals, and the 
differing effects associated with them, the subcommittee 
reviewed Federal employment practices associated with these 
occupations and conducted a hearing to assess the merits of 
such proposals and to evaluate their potential consequences for 
Federal workforce management and their costs to the government.
    b. Benefits.--This review of the proposed legislation and 
the employment practices of the agencies that would be affected 
by the legislation demonstrated that the bills extending the 
enhanced retirement benefit would be very costly. The 
Congressional Budget Office estimated the cost of extending the 
benefit to assistant U.S. attorneys at $660 million over 5 
years. The Department of the Treasury estimated its initial 
costs at more than $100 million per year in salaries and 
expense costs, plus causing additional unfunded liabilities of 
more than $1 billion on the Civil Service Retirement and 
Disability Fund. During the hearing addressing these issues, 
the Department of the Treasury, the Department of Justice, and 
the Office of Personnel Management concurred that, for most of 
the occupations targeted by these proposals, the Government 
does not have difficulty recruiting well-qualified employees 
under current pay and benefit structures. Additionally, the 
Department of Justice noted that granting this benefit to 
immigration inspectors would alter one of the career ladder 
opportunities that provides these employees entry into 
immigration examiner occupational classifications. The 
Department of Justice further testified that the extension of 
this benefit to attorneys would be inappropriate. The attorneys 
have no need of the physical fitness requirement normally 
associated with law enforcement responsibilities. Indeed, if 
such a physical requirement were imposed on attorneys, 
applicants who might be fine attorneys, but have physical 
limitations, might be barred from government service.
    In addressing the possibility of raising the mandatory 
retirement age associated with the enhanced retirement benefit, 
the Fraternal Order of Police recognized that this retirement 
age is linked to the enhanced accrual rate. If the mandatory 
retirement age were raised to age 60, then the covered 
individuals would be no different from other Federal employees 
who are eligible to retire with full benefits at age 60 with 20 
years' service. The Fraternal Order of Police concluded that 
the requirement for a young and vigorous workforce remains a 
valid policy consideration.
    As a result of this oversight, the subcommittee concluded 
that factors associated with costs, effects on career 
opportunities, and lack of support from employee organizations 
combined to support no change in the law at this time.
    c. Hearings.--The Civil Service Subcommittee conducted a 
hearing entitled, ``Law Enforcement Retirement Coverage,'' on 
the enhanced retirement benefits for law enforcement officers 
on September 9, 1999. Chairman Scarborough chaired the hearing, 
and Mr. Cummings and Mrs. Norton participated. Witnesses 
included: Mr. Bryant of Tennessee, Mr. Davis of Virginia, Mr. 
Filner of California, Mrs. Mink of Hawaii, and Mr. Traficant, 
of Ohio. Testifying on behalf of agencies were Mr. William E. 
Flynn, Associate Director, Retirement and Insurance Services, 
Office of Personnel Management; Ms. Kay Frances Dolan, Deputy 
Assistant Secretary for Human Resources, Department of the 
Treasury, and Mr. John Vail, Deputy Assistant Attorney General 
for Management, Department of Justice. Employee and taxpayer 
organizations' witnesses included: Mr. Peter J. Ferrara, chief 
economist of Americans for Tax Reform; Mr. Gilbert G. Gallegos, 
national president of the Fraternal Order of Police; and Ms. 
Colleen M. Kelley, national president of the National Treasury 
Employees Union.
    Mr. Scarborough noted the cost of the proposed extension of 
enhanced retirement coverage. Mr. Davis and Mr. Bryant 
supported the concept, but conceded that the CBO estimate of 
the costs associated with the current bill make the legislation 
``prohibitive.'' Agency witnesses agreed that the data on 
recruitment and retention provided by the Office of Personnel 
Management confirmed that the agencies do not face difficulties 
in most of the categories proposed for the enhanced benefit. 
Mr. Vail affirmed, in particular, ``The Department of Justice 
does not have problems recruiting attorneys.'' The Departments 
of Justice and the Treasury indicated that they would work with 
OPM to address concerns about projected increases in the 
inspections workforce of the Customs Service and the 
Immigration and Naturalization Service.
    Mr. Scarborough noted that, earlier in the session, when 
the subcommittee had required offsets before moving legislation 
to enhance participation in the Thrift Savings Plan, Federal 
employee organizations had opposed the offsets as likely to 
cause reductions in force [RIFs]. Although these retirement 
bills involved substantially greater costs, both the affected 
agencies and the employee organizations testified that these 
enhanced benefits could be administered in ways that would not 
require RIFs.
9. Civilian Personnel Readiness.
    a. Summary.--Over the past 10 years, the Department of 
Defense's civilian workforce has shrunk even more than our 
military forces. Active duty personnel have been reduced by 35 
percent from 1989 levels, while DOD has cut its civilian 
personnel by 38 percent. One third of that workforce reduction 
is attributable to base closures, but aggressive use of the 
contracting process, congressionally mandated reductions, and 
better ways of doing business have also contributed.
    This drawdown has raised questions about its impact on 
military readiness. Simply put, there is concern that military 
readiness will be degraded if the civilian resources available 
to DOD, both Federal employees and contractors, are 
insufficient in number or lack the requisite skills to support 
peak performance by our armed forces. Key issues include: (1) 
whether the dramatic reductions in personnel have so increased 
uncertainty about the stability of civilian careers at DOD that 
they are no longer attractive to highly qualified individuals; 
(2) whether the workforce has the skills to support DOD's 
current mission; (3) whether DOD has developed a strategic 
human capital program to ensure that its workforce will meet 
the requirements of the Department's missions in the future; 
and (4) whether its contracting activities have, in fact, saved 
money.
    b. Benefits.--This examination provided a useful background 
for the subcommittee in evaluating a number of issues that have 
come before it, including the challenges presented by an aging 
workforce, the adequacy of agency training programs, pension 
portability, and personnel processes for hiring, retaining, and 
compensating Federal employees. It also assisted the 
subcommittee in analyzing a number of legislative proposals 
that were offered during the second session in conjunction with 
defense authorization bills and other measures.
    c. Hearings.--On March 9, 2000, the subcommittee conducted 
a joint hearing with the Subcommittee on Military Readiness of 
the House Committee on Armed Services, entitled, ``National 
Defense Authorization Act for Fiscal Year 2001--H.R. 4205, and 
Oversight of Perviously Authorized Programs.''
    Witnesses at the hearing were Mr. Frank Cipolla, Center for 
Human Resources Management, National Academy of Public 
Administration [NAPA]; Mr. Michael Brostek, Associate Director, 
Federal Management and Workforce Issues, General Accounting 
Office; Mr. Barry Holman, Associate Director, Defense 
Management Issues, General Accounting Office; Dr. Diane Disney, 
Deputy Assistant Secretary of Defense (Civilian Personnel 
Policy); Mr. David Snyder, Deputy Assistant Secretary of the 
Army (Civilian Personnel Policy); Ms. Mary Lou Keener, Deputy 
Assistant Secretary of the Navy (Civilian Personnel/EEO); Ms. 
Mary Lou Keener, Deputy Assistant Secretary of the Air Force 
(Force Management and Personnel); Mr. David O. Cooke, Director 
of Administration and Management (Office of the Secretary of 
Defense).
    Representative Herbert Bateman, chairman of the 
Subcommittee on Military Readiness, noted that this was the 
first joint hearing conducted by these two subcommittees in his 
memory. He acknowledged that the civilian personnel provisions 
included in the defense authorizations bills that come before 
Congress each year fall within the civil service subcommittee's 
jurisdiction and thanked the subcommittee for its cooperation.
    Mr. Bateman noted that because of the way the agency's 
downsizing was conducted, employees with essential skills have 
permanently left the workforce. For that reason, he asked the 
witnesses to provide an assessment of their current skills 
inventory and what additional tools they would need to ensure 
that the agency's workforce will be able to support its current 
and future missions. He also addressed the issue of the aging 
workforce and asked whether the agency has planned for 
developing qualified successors to replace workers with 
critical skills when they retire. Mr. Bateman also emphasized 
that the agency has not yet demonstrated by careful analysis 
that the aging of its workforce presents a problem that can be 
solved only by abandoning long-established personnel practices. 
He also asked to learn what the agency has learned from the 
numerous demonstration projects it has been conducting. 
Pointing out that Federal jobs are still highly coveted in many 
areas, Mr. Bateman said it seems counterintuitive that the 
agency would have difficulty hiring new workers. Therefore, he 
would expect requests for new authorities to be supported by 
careful analysis and would insist that such new authorities be 
targeted at skills the agency has demonstrated it cannot hire.
    As the former chairman of the Civil Service Subcommittee, 
Mr. Mica thanked Mr. Bateman for his cooperation in the past 
and expressed his confidence that the two subcommittees would 
continue to work closely together on personnel issues. Defense 
downsizing, Mr. Mica noted, will account for 73 percent of the 
net government wide reductions in civilian personnel by the end 
of fiscal year 2001. He asked how this drawdown has affected 
the current ability of the workforce to support America's 
military, and he instructed the witnesses to identify critical 
short-term problems that must be addressed now and provide 
concrete proposals for the subcommittees to consider.
    Because an inadequate civilian support system will degrade 
the performance of even the best military force, Mr. Mica told 
the subcommittees it is incumbent on Congress to work with the 
executive branch to determine the optimum mix of contractors 
and employees and the optimum mix of skills in that support 
system. He expected the witnesses to demonstrate that their 
civilian personnel strategies are solidly tied to anticipated 
military needs. With respect to the aging workforce, Mr. Mica 
said he expected a clear explanation of why this is considered 
such a problem and what agencies are doing to train or retrain 
their employees. He also asked witnesses to address whether the 
civilian benefit structure should be modified to attract highly 
qualified and motivated individuals. In particular, he asked 
whether the Federal Government needs more flexible benefits and 
more portable retirement systems to compete for highly skilled 
workers, particularly younger ones who do not envision 
remaining with just one employer throughout their careers.
    Mr. Ortiz, ranking member on the readiness subcommittee, 
indicated that he was very concerned with the problems and 
challenges associated with a dwindling and aging workforce. He 
noted that by 2025, almost 18 percent of all Americans will be 
over the age of 65, which will impact, among other things, the 
quantity and quality of civilian personnel DOD will be able to 
recruit and retain to meet the department's technical and 
management challenges.
    Despite increased outsourcing, more reliable equipment, and 
innovative management and maintenance concepts, Mr. Ortiz 
believes a core DOD workforce will always be necessary. But he 
is not sure the agency is in the best position now to prepare 
for the future. In particular, Mr. Ortiz said the agency does 
not have in place the same kinds of programs for attracting, 
retaining, and training blue collar workers as it has for white 
collar workers. He proposed that the Department of the Army 
conduct a pilot apprentice program at Army depots to address 
future needs for blue collar technicians that are already hard 
to find. Noting that Congress needs to better understand the 
linkage between perceived problems, enacted legislation, and 
the agency's policies and practices, legislative proposals, and 
costs, Mr. Ortiz wants to ensure the development of an 
integrated investment strategy to guide implementation of 
rational and achievable civilian personnel goals.
    Mr. Cummings, ranking member of the Civil Service 
Subcommittee, said this hearing sent a message to agencies on 
the importance of planning for the future and developing 
strategic plans to manage, train, retain, develop, hire, pay, 
and evaluate their most valuable assets, their employees. He 
noted that downsizing, contracting out, reductions in force, 
and an aging workforce can depress employee morale and promote 
insecurity among employees. According to a 1996 GAO report 
cited by Mr. Cummings, DOD's civilian workforce has declined by 
about 25 percent since 1987, and will be 35 percent below 1987 
levels when the agency completes its downsizing plans in 2001. 
He asked the witnesses to address the current status of DOD's 
downsizing, its impact on civilian employees, and the agency's 
strategic plan to manage its workforce in the future.
    Mr. Cipolla testified that DOD's challenge of ensuring that 
the right people are in the right place at the right time is 
more daunting today than ever. DOD and other managers must 
determine what skills will be needed in the future, decide how 
to update and upgrade skills and knowledge of the current 
workforce, and identify the best approaches for recruiting 
individuals with scarce skills while retaining senior level 
employees with expertise in key occupations. Federal managers, 
he noted, are now competing with private employers for talented 
employees in a tough market.
    Managers in both the Federal Government and the private 
sector, according to Mr. Cipolla, are discovering that they 
cannot address these issues without instituting a systematic 
process of workforce planning. Most Federal agencies surveyed 
by NAPA are beginning to institute such processes.
    Mr. Cipolla identified seven key conclusions with respect 
to human capital planning:
          1. workforce requirements must be linked to the 
        agency's overall strategic plans;
          2. workforce planning must include collection and 
        analysis of data about the external environment as well 
        as information concerning the current workforce;
          3. projections of future workforce requirements must 
        be expressed in terms of needed skills and 
        competencies, and not just members of full time 
        equivalent employees;
          4. agencies should consider the use of flexible 
        employment arrangements;
          5. managers must be given maximum flexibility in 
        managing work and assigning staff to meet changing 
        mission and program requirements;
          6. human capital development and continuous learning 
        should be viewed as organizational investments and 
        given a high strategic priority;
          7. retirement incentives should be used selectively 
        to support restructuring and to retain needed talent in 
        scarce occupations.
    Mr. Brostek testified that DOD has undergone a significant 
downsizing of its civilian workforce, a process that is 
expected to continue and eventually result in a total reduction 
in the civilian workforce of about 43 percent from 1989 levels. 
In part, due to staffing reductions already made, imbalances 
appear to be developing in the age distribution of DOD civilian 
staff. The average age of this staff has been increasing, while 
the proportion of younger staff has been decreasing. To cope 
with downsizing, DOD also has numerous reform initiatives under 
way to change the way it does business. Such changes, Mr. 
Brostek observed, can affect the kinds of competencies that 
staff must have to carry out their responsibilities.
    In GAO's view, developments like these call for a strategic 
approach to human capital planning. And assessing human capital 
management policies and practices also is consistent with the 
management framework that Congress has adopted to focus 
agencies' attention on managing for results. To help agencies 
assess their human capital management policies and practices, 
GAO has developed a five-part self-assessment framework that 
can be useful in aligning human capital management with 
agencies' missions, goals, and other needs and circumstances. 
Federal agencies--DOD included--can and must define the kind of 
workforce they will need in the future, develop plans for 
creating that workforce, and follow up with needed actions and 
investments. This is important in order to ensure that when the 
future arrives, the right employees--with the right skills, 
training, tools, structures, and performance incentives--will 
be on hand to meet it. Mr. Brostek described that framework, 
whose parts, of necessity, are interrelated and overlapping, as 
including: (a) strategic planning; (b) organizational 
alignment; (c) leadership; (d) talent; and (e) performance 
culture.
    Dr. Disney testified that DOD's workforce has declined from 
1.15 million in fiscal year 1989 to 732,000 in fiscal year 1999 
(excluding employees of nonappropriated fund 
instrumentalities). Those 10 years of downsizing have 
significantly changed DOD's workforce in terms of age, 
occupational profile, grade, and educational level. The average 
age of the workforce has increased and will soon exceed 46, 
while the number of employees under 40 has dropped 
substantially. Dr. Disney warns that these developments present 
potential problems in the transfer of institutional knowledge. 
Because of sharp declines in clerical and blue collar 
occupations, DOD's workforce has become increasingly 
professional. Likewise, educational levels have risen because 
jobs that have remained in DOD require more advanced education 
and training than in the past. Grade levels have also 
increased, primarily because lower-ranked positions are more 
likely to have been outsourced or replaced by technology.
    According to Dr. Disney, DOD has accomplished the drawdown 
of its civilian workforce through base closure and realignment, 
privatization and outsourcing, re-engineering, attrition, and 
reductions in force. BRAC has accounted for about 44 percent of 
the reduction, a figure that would have been higher but about 
half of employees subject to it have been able to find jobs at 
other DOD locations. Based on a RAND Corp. study, Dr. Disney 
indicated that about 27 percent of contracting studies under 
OMB Circular A-76 resulted in outsourcing and 80 percent of 
outsourcings have resulted in some type of personnel 
displacement. However, DOD has been able to keep involuntary 
separations to less than 9 percent of total separations through 
use of a priority placement program, voluntary early 
retirements, and buyouts. Downsizing has also reduced 
promotional opportunities and brought to light skills 
imbalances. Despite the drawdown, according to a recent 
National Partnership for Reinventing Government study cited by 
Dr. Disney, 59-63 percent of DOD employees are satisfied or 
very satisfied with their jobs, compared to 60 percent overall 
in the Federal Government's workforce, and 62 percent of 
private sector workers.
    Dr. Disney also testified that while DOD's workforce has 
declined by about one third, constant-dollar costs for civilian 
personnel have only fallen by about 13 percent because of 
increases in age and grade levels, increased 
professionalization, and increases in compensation.
    A competitive job market, and rigidity in civil service 
regulations, Dr. Disney told the subcommittee, hinder Federal 
recruitment.
    To plan for the future, Dr. Disney said DOD is attempting 
to identify the skills it will need in the future. Her office 
is sponsoring, along with the joint staff, a ``Future Warrior/
Future Worker'' study by the RAND Corp. Preliminary indications 
from this study suggest that the jobs expected to change the 
most are: aircraft, automotive, and electrical maintenance 
specialists; computer systems specialists; environmental health 
and safety specialists; and intelligence specialists. Her 
office is also working with the Office of the Undersecretary of 
Defense for Acquisition, Technology, and Logistics to identify 
competencies that will be critical to the acquisition workforce 
in the future. The results of this work will be used to 
evaluate acquisition training and education and preparing a new 
curriculum.
    While the Goldwater-Nichols Act has yielded an officer 
corps that is more highly educated and with a stronger joint 
perspective, Dr. Disney said civilian personnel tend to remain 
``occupationally stove-piped'' even though their jobs are 
becoming broader and their responsibilities more complex. To 
address this problem, DOD created the Defense Leadership and 
Management Program [DLAMP] in 1997. This is the first 
systematic DOD-wide program to prepare civilians for key 
leadership positions at GS-14, 15, and SES levels. DOD is also 
considering expanding DLAMP and creating a DLAMP preparation 
program for lower-graded employees.
    Other activities that Dr. Disney cited were reorganizing 
the Defense Acquisition University, strengthening labor 
management relations, and making ``extensive and creative'' use 
of workforce shaping tools currently available to it.
    Dr. Disney asked the subcommittees for extension of 
authority to allow employees to volunteer for reductions in 
force, modification of existing authority for voluntary early 
retirements and buyouts, and to restructure restrictions on 
degree training. DOD is also working on a proposal for an 
alternative hiring system.
    Mr. Snyder testified that during the last 10 years, the 
Department of the Army has reduced total appropriated fund 
strength by more than 42 percent. By 2005, the Army's civilian 
personnel will be 48 percent below fiscal year 1989 levels. 
Demographic trends at Army, such as increased 
professionalization and higher educational levels, are similar 
to DOD-wide trends on the whole.
    Thirty percent of Army's civilians will be eligible for 
retirement in 2003 and 62 percent in 2010, according to Mr. 
Snyder. To counter these losses, Mr. Snyder said Army must 
significantly increase civilian recruitment and entry level 
hiring in professional, administrative, and technical 
occupations. However, an intern program through which Army 
hires and trains its future civilian leaders has declined 
substantially since 1989, when there were 3,800 interns in it. 
Mr. Snyder told the subcommittee there will be 950 interns in 
fiscal year 2001. The Army also anticipates greater difficulty 
in filling journeymen level and leadership vacancies with 
highly qualified and well-trained employees. Mr. Snyder 
ascribes this difficulty to civil service rules and regulations 
that put the agency at a competitive disadvantage in the job 
market. Army is working with the Office of the Secretary of 
Defense to develop an alternative hiring system.
    Ms. Welch described the impact of downsizing on the Navy's 
civilian workforce. She testified that Navy's workforce is 44 
percent smaller than it was 10 years ago, and she pointed out 
that the workforce is aging. Only 16 percent of Navy's 
workforce was eligible for retirement 10 years ago; today it is 
about 34 percent. According to Ms. Welch, in 5 years the 
retirement eligibility rates for several key white-collar 
occupations will be even higher (47 percent for engineers, 55 
percent for scientists, 64 percent for contract specialists), 
and 53 percent of blue collar workers will then be eligible for 
retirement.
    Through the use of such tools as the priority placement 
program, outplacement, and buyouts, Ms. Welch testified, Navy 
has been able to minimize downsizing's impact on employees. In 
particular, she noted that before buyouts became available in 
1993, 56 percent of Navy separations were involuntary, a figure 
that dropped to 17 percent after 1993. Nevertheless, she noted 
that Navy now has an older workforce that is closer to 
retirement without an adequate number of replacements in the 
pipeline.
    Navy recognizes its need to attract, retain, and develop 
employees. It is establishing and coordinating a recruiting 
effort to attract highly-qualified individuals and reviving its 
apprenticeship programs for blue-collar workers, which Ms. 
Welch described as having ``slowed to a trickle'' due to base 
closures over the past 10 years.
    For its current workforce, Ms. Welch said the Navy is 
focusing on workforce development, quality of work life, and 
workplace dispute resolution. Navy is committed to improving 
its current workforce through DOD's leadership and management 
program, Navy's civilian leadership development program, and 
continuous learning initiatives. It is also encouraging Navy 
commands and activities to use flexible work arrangements, such 
as job sharing, part-time employment, alternative work 
schedules, and satellite work locations. Navy has also 
established a pilot program to revamp the ``costly, lengthy, 
divisive'' EEO complaint process. Ms. Welch testified that Navy 
managers and employees had cited this process as the ``number 
one problem.'' Under the pilot, more complaints are being 
resolved informally, and the processing time and costs of 
resolving EEO complaints have been significantly decreased.
    Ms. Keener assured the subcommittees that the Air Force has 
a plan to meet the challenges of ensuring that its workforce 
will be able to support future Air Force missions. The major 
areas of that plan are force renewal, force skills development, 
and separation management. Force renewal is a priority for the 
Air Force, especially in the depots, which Ms. Keener described 
as suffering severe imbalances in skills and levels of 
experience because of a decade of hiring freezes. Because the 
Air Force expects to lose more employees, particularly in blue-
collar occupations, it needs to undertake aggressive hiring 
efforts.
    The Air Force will also invest in training and retraining 
current employees. However, Ms. Keener also contended that the 
Air Force must have the ability to offer targeted voluntary 
separation incentives that can be used with precision to shape 
the workforce so it will have the skills needed today and in 
the future.
    Mr. Cooke testified about the personnel situation in what 
he called the ``Fourth Estate,'' a wide variety of DOD 
components that are not part of one of the military 
departments. According to Mr. Cooke, the workforces in these 
components have higher proportions of civilians, white-collar 
workers, and women than the military departments. However, the 
problems of the ``Fourth Estate'' mirror those of the military 
departments. He also noted that while the ``Fourth Estate'' has 
grown over the years, primarily by consolidating functions 
previously fragmented among the military departments, it has 
also experienced workforce reductions similar to the military 
departments. The Office of the Secretary of Defense, for 
example, has been reduced by 33 percent. Mr. Cooke said the 
workforce shaping tools Dr. Disney described were also needed 
by the ``Fourth Estate.''
10. EEO Data and Complaint Processing Problems.
    a. Summary.--The subcommittee reviewed the backlog of cases 
regarding workplace disputes filed with the Equal Employment 
Opportunity Commission [EEOC], the lack of adequate data on 
discrimination complaints, and the use of alternative dispute 
resolution [ADR] techniques to resolve equal employment 
opportunity [EEO] disputes. In a report entitled, ``Equal 
Employment Opportunity: Data Shortcomings Hinder Assessment of 
Conflicts in the Federal Workplace'' (May 1999), GAO found that 
EEOC does not collect and report data that would shed light on 
several issues fundamental to understanding the nature and 
extent of workplace conflicts. It also reported that data EEOC 
collects from agencies is of questionable reliability. In 
addition, GAO's August 1999 study, ``Equal Employment 
Opportunity: Complaint Caseloads Rising, With Effects of New 
Regulations on Future Trends Unclear,'' revealed that the 
backlog of EEO cases at agencies and EEOC has continued to grow 
while the average age of these cases has also increased. The 
subcommittee has also examined alternative dispute resolution 
program of several agencies, including the Air Force, Navy, and 
the Postal Service.
    b. Benefits.--The subcommittee learned that alternatives to 
the current complaint procedures, especially the expanded use 
of ADR mechanisms, could aid agencies in resolving workplace 
disputes, thereby eliminating the involvement of EEOC. As a 
result of information revealed in the GAO reports and the 
hearing described in paragraph (c), Chairman Scarborough 
introduced H.R. 4362 to require agencies and the EEOC to 
maintain information necessary to assure fundamental questions 
about their EEO processes and make it available on the 
internet.
    c. Hearings.--The subcommittee held a hearing, ``EEO Data 
and Complaint Processing Problems'' on Wednesday, March 29, 
2000, in Washington, DC. Witnesses at the hearing were the 
following: The Honorable Albert R. Wynn (D-MD); Carlton Hadden, 
acting director of Federal operations, Equal Employment 
Opportunity Commission; Michael Brostek, Associate Director, 
Federal Management and Workforce Issues, General Accounting 
Office; Gerald R. Reed, president, Blacks in Government; 
Cynthia Hallberlin, Chief Counsel of Alternative Dispute 
Resolution Program, National Program Manager of REDRESS, U.S. 
Postal Service; and Roger Blanchard, Assistant Deputy Chief of 
Staff, Personnel, U.S. Air Force.
    Subcommittee Chairman Scarborough stated that Federal 
employees should have available a procedure for resolving EEO 
complaints that is fair, timely, and efficient. Mr. Scarborough 
expressed concern that EEOC fails to collect and report data in 
an efficient manner and spends an average of 3 years to process 
a case. Mr. Scarborough told subcommittee members that the use 
of ADR should be encouraged as a means by which agencies can 
resolve disputes in a more efficient manner.
    Congressman Wynn (D-MD) testified that unless the EEOC 
collects accurate data Congress would be unable to address 
discrimination in the Federal workplace. Mr. Wynn complained 
that he has heard from almost each Federal agency regarding 
discrimination complaints and thus, concludes that the 
``problem is systemic.'' Mr. Wynn told the subcommittee that a 
GAO report had found the number of unresolved complaints had 
increased by approximately 102 percent, from 16,964 at the end 
of fiscal year 1991 to 34,267 at the end of fiscal year 1997. 
Mr. Wynn concludes that the EEO process needs to be reformed. 
He called the current system ``underfunded [and] ineffective'' 
and called for new legislation that would address the current 
problems.
    Mr. Carlton M. Hadden, Acting Director, Office of Federal 
Operations, U.S. Equal Employment Opportunity Commission, 
testified that Chairwoman Castro, who has been the head of EEOC 
since 1998, has brought significant changes to the Federal 
sector EEO process. Mr. Hadden admitted that Federal employees 
wait too long for their complaints to be processed at almost 
every stage of the Federal EEO complaint process. Mr. Hadden 
reported that the rule on Federal Sector Regulatory Reform 
became final on November 9, 1999. The rule implements Federal 
sector reforms designed to streamline the complaint process. 
Mr. Hadden also referred to the change that requires agencies 
to institute ADR programs to resolve disputes.
    Mr. Roger Blanchard, Assistant Deputy Chief Of Staff, 
Personnel, U.S. Air Force, discussed the Air Force's use of ADR 
in resolving workplace disputes. Mr. Blanchard told the 
subcommittee that the Air Force has ``made significant 
progress'' with the ADR program. He testified that in fiscal 
year 1998, Federal agencies required an average of 384 days to 
resolve EEO complaints. However, the Air Force took 293 days, 
24 percent less.
    Ms. Cynthia J. Hallberlin, National Program Manager for the 
U.S. Postal Service testified about the Postal Service's ADR 
program, known as REDRESS, which is an acronym for ``Resolve 
Employment Disputes, Reach Equitable Solutions Swiftly.'' Under 
REDRESS, an employee contacts an EEO counselor and is given the 
option of mediation in place of traditional EEO counseling. 
When mediation is used, a professional mediator not from the 
Postal Service is used within 2 to 3 weeks. The idea behind 
REDRESS is a quick resolution of a dispute. This helps to 
ensure that mediation maximizes the chances of a resolution. 
REDRESS has been a success. In fiscal year 1999, over 8,500 
cases were mediated nationwide at the Postal Service; 61 
percent of these were successfully resolved with a mediator.
    Mr. Michael Brostek, Associate Director with GAO's Federal 
Management and Workforce Issues General Government Division, 
shared some of GAO's findings with the subcommittee. Mr. 
Brostek said that GAO concluded that EEOC failed to collect the 
type of data that would provide answers to basic questions such 
as the number of employees who filed complaints and the type of 
discrimination they alleged. GAO found that the number of 
complaints filed by Federal employees increased in the 1990's.
    Mr. Gerald R. Reed, president and CEO of ``Blacks in 
Government'' testified that Federal mismanagement should be a 
Federal offense. Specifically, Mr. Reed advocates new criminal 
laws to punish managers in the Federal workplace who commit 
discrimination.
11. Fulfilling the Promise.
    a. Summary.--The subcommittee examined extending enrollment 
in the Federal Employees Health Benefits Plan [FEHBP] to 
certain military health care beneficiaries. Throughout their 
career, military personnel are told in recruitment and 
retention brochures and by military officers that while their 
salary is low, part of their compensation package is lifetime 
medical care, earned by military service. However, when they 
reach age 65, military retirees are dropped from the military 
health care system, unless space is available in a military 
treatment facility. During the 106th Congress, two legislative 
proposals, H.R. 2966 and H.R. 3573, generated much discussion. 
The proposals recognize that those who entered the service 
prior to June 7, 1956 were promised free health care for life 
and should not be penalized by a subsequent change in statute. 
The legislation provided for health care under the FEHBP as 
part of a separate risk pool for military retirees, with 100 
percent of the associated premiums paid for by the Department 
of Defense.
    b. Benefits.--The subcommittee gained a clear understanding 
of the legislative options available in an effort to develop a 
consensus approach to implement necessary reforms to the 
military health care system.
    c. Hearings.--A hearing entitled, ``Fulfilling the 
Promise,'' was held on April 3, 2000, in Pensacola, FL. 
Witnesses at the hearing were the Honorable Ronnie Shows, D-MS; 
Colonel George ``Bud'' Day, Class Action Group; Colonel George 
Rastall, the Retired Officers Association; Stephen Gammarino, 
senior vice president, BlueCross BlueShield Association; 
William ``Ed'' Flynn III, Associate Director of Retirement and 
Insurance Programs, Office of Personnel Management; and Rear 
Admiral Thomas Carrato, director of military health system 
operations, TRICARE Management Activity.
    Subcommittee Chairman Scarborough stated that a strong 
military medical system was necessary to support not only the 
present active forces but also to uphold the promise made to so 
many of our military retirees. With recruiting shortages in all 
services except the Marine Corps, keeping faith with military 
retirees is necessary to maintain credibility with potential 
recruits and current service personnel. He reminded 
subcommittee members of the problems that have troubled 
TRICARE. The chief complaints have included the nonpayment of 
providers, lack of accessibility for patients, and 
unavailability of prescription drugs. Because of these and 
other deficiencies, TRICARE has fallen far short in delivering 
on its promised free medical care for life. He emphasized the 
issue of free medical care for life is a high priority for the 
Congress.
    Mr. Cummings emphasized that without a doubt, military 
families and retirees deserve a quality health care system. He 
stated that to differing degrees FEHBP plans cover inpatient 
and outpatient care, prescription drugs, and mental health 
services, and it would be unfortunate if Congress attempted to 
help one group of beneficiaries and hurt another.
    Mr. Shows referenced the support of over 250 Members of 
Congress for legislation he introduced, H.R. 3573. He 
recognized the extensive grassroots effort, which was very 
active in generating support for the legislation. He questioned 
how Congress could defend giving Federal employees and elected 
officials, including themselves, health care as part of their 
retirement and not providing it for the men and women who 
served the country as members of the uniformed services.
    Colonel Bud Day discussed the history of the promise of 
free medical care for life, including reference to the Federal 
Government's defense on March 7, 2000, in the Federal Circuit 
Court of Appeals which stated that ``yes, the promise had been 
made but they did not have to keep it because there was no 
legislation that specifically tied retired medical care to an 
appropriations measure.'' He reminded the subcommittee of the 
moral and legal basis for providing quality health care to 
military retirees and their dependents.
    Colonel George Rastall reminded the subcommittee of Florida 
Federal District Court Judge Vincent's decision, in which the 
judge said that the plaintiffs certainly had a strong argument 
that the government should abide by its promises. Relief for 
the plaintiffs must come from the Congress, however, and not 
from the judiciary due to the constitutional separation of 
powers. Colonel Rastall reaffirmed that uniformed service 
members want fair treatment along with civilian Federal 
employees, including the opportunity to participate in the 
FEHBP. For the 173,200 retirees in Florida, including the 
36,000 in Pensacola, care is only available on a diminishing 
space-available basis.
    Mr. Gammarino provided background on the FEHBP as a model 
of efficiency and effectiveness that the private sector is 
often called on to attempt to replicate. As the largest carrier 
in the program, he stated the special responsibility BlueCross 
and BlueShield feels toward the program and its desire to work 
with the subcommittee as it examines various legislative 
proposals to allow military retirees access to the FEHBP. He 
discussed four basic principles that should be considered when 
evaluating suggestions for extending the FEHBP beyond its 
current enrollment base: establishment of a logical connection 
between the Federal Government as an employer and the 
population proposed to receive the coverage, preservation of 
the competitive nature and existing private sector role in the 
program, expansion of the infrastructure to handle the 
increased enrollment, and preservation of the insurance 
underwriting principles.
    Mr. Flynn provided an overview of the FEHBP. In order to 
expand health care access to military retirees, Mr. Flynn 
outlined several important principles that must be met. First, 
a separate risk pool must be established for purposes of 
setting premiums. Second, the Department of Defense must be 
prepared to conduct enrollment administrative-related financial 
activities as Federal employing agencies do. Finally, OPM must 
have the authority to manage the inclusion of the new 
participants.
    Admiral Carrato stated the Department of Defense's 
opposition to provisions extending FEHBP coverage to military 
retirees on a permanent basis, owing to their high cost and 
adverse effects on military readiness. The most serious 
consequences of these provisions would arise, according to 
Admiral Carrato, if the costs had to be absorbed by the Defense 
Health Program.
    Admiral Carrato predicted space-available care in the 
military treatment facilities would ultimately be reduced. He 
reminded the subcommittee that current statutory authority 
provides for space-available care in military treatment 
facilities for military retirees who have reached age 65. 
However, the growing number of military retirees and 
infrastructure downsizing have resulted in less space-available 
care for retirees, resulting in Defense Secretary Cohen's 
recent iterations of his commitment to expand health care 
access for military retirees.
12. The FEHBP Demonstration Project for Medicare-Eligible Military 
        Retirees.
    a. Summary.--The subcommittee examined the administration's 
implementation of the demonstration project established in the 
Strom Thurmond National Defense Authorization Act for Fiscal 
Year 1999, which permits a limited number of Medicare eligible 
military retirees to enroll in the Federal Employees Health 
Benefits Program.
    As required by statute, the Department of Defense [DOD] 
selected at random eight demonstration sites, of the 6-10 
provided for under Public Law 105-261. In accordance with the 
legislative requirements, the sites included areas within and 
outside of the catchment areas of military treatment 
facilities, an area in which there is also a Medicare 
subvention demonstration project, and no more than one site per 
TRICARE region. The test sites selected were Dover, DE; 
Roosevelt Roads, PR; Fort Knox, KY; Greensboro, NC; Dallas, TX; 
Humboldt County, CA and surrounding counties; Camp Pendleton, 
CA; and New Orleans, LA. Each area contained enough fee-for-
service plans and HMOs participating in those areas to provide 
DOD beneficiaries an adequate choice of providers.
    The authorizing legislation limited participation in the 
demonstration to 66,000 military beneficiaries and dependents. 
DOD chose to offer an enrollment opportunity to only about 
70,000 persons. Consequently, almost 100 percent of eligible 
beneficiaries would have to enroll in the FEHBP to produce a 
demonstration project as large as Congress intended. After the 
first open season, which concluded December 31, 1999, there 
were 1,250 enrollees, slightly under 2 percent of the total 
eligible population.
    b. Benefits.--The subcommittee gained a clear understanding 
of the effects unsatisfactory marketing, artificial enrollment 
limitations, an ill-equipped information center, and poorly 
planned health fairs had on the success of the demonstration 
project.
    c. Hearings.--A hearing entitled, ``The Failure of the 
FEHBP Demonstration Project: Another Broken Promise?,'' was 
held on April 12, 2000. Witnesses at the hearing were the 
Honorable Randy ``Duke'' Cunningham, R-CA; the Honorable 
Charlie Norwood, R-GA; the Honorable Jim Moran, D-VA; Colonel 
Charles Partridge, co-chair, National Military and Veterans 
Alliance; Kristen Pugh, deputy legislative director of the 
Retired Enlisted Association, on behalf of the Military 
Coalition; William E. Flynn III, Associate Director of 
Retirement and Insurance Programs, Office of Personnel 
Management; and Rear Admiral Thomas Carrato, Director of 
Military Health Systems Operations, Tricare Management 
Activity.
    Subcommittee Chairman Scarborough expressed his concern 
that DOD's decision to artificially limit the total number of 
eligible beneficiaries in the test sites contributed to the 
dramatically depressed enrollment in the demonstration. He 
reminded the witnesses of his commitment to providing quality 
health care to America's men and women in uniform.
    Representative Mica expressed his disappointment at the 
manner in which the whole demonstration project had been 
handled, particularly with the limited number of beneficiaries 
eligible to participate. The demonstration project was not 
following the original intent of Congress to see that all 
personnel, retirees included, have access to health care on an 
affordable basis.
    Mrs. Morella stated she was eager to hear DOD and OPM 
explain what factors contributed to the initial low enrollment.
    Mr. Norwood reminded the subcommittee that many military 
retirees still have little or no access to health care, and are 
being kicked out of the TRICARE system at age 65. He referenced 
his legislation, H.R. 3573, which would expand the FEHBP option 
to all military retirees. Additionally, Mr. Norwood pointed out 
that military readiness was suffering since military retirees 
were less enthusiastic about encouraging young people to enlist 
with the armed services. He asked the subcommittee members if 
they would be willing to trade their healthcare, the FEHBP, for 
the TRICARE system. The answer was no.
    Mr. Moran discussed the overwhelming support of Congress 
for the original legislation authorizing the demonstration 
project and the importance of making the necessary resources 
available to meet the healthcare needs of military retirees. To 
achieve a worthwhile demonstration project, Mr. Moran felt OPM 
and DOD needed to ensure that enrollment is at least 66,000 
beneficiaries.
    Mr. Cunningham discussed steps Congress should take to 
address the inequities in the military health care system, 
including--lifting the geographic and numeric limits on the 
demonstration project, removing the prohibition on the use of 
military treatment facilities for those enrolled in the FEHBP, 
and allowing those participating in the demonstration project 
to continue their enrollment in the FEHBP at the conclusion of 
the demonstration.
    Colonel Charles Partridge stated that with base hospital 
closures, reductions in medical personnel, and perennial 
medical funding shortfalls, the increasing lack of available 
healthcare continues to be a major concern to active and 
retired personnel, alike. He predicted the situation would 
clearly get worse as additional hospitals are converted to 
clinics and medical personnel downsizing continues. Military 
retirees remain concerned that DOD has no plan to provide the 
promised health care benefit by a date certain. He reminded the 
subcommittee that military retirees are the only Federal 
employees that do not have a lifetime benefit.
    Colonel Partridge stated the reasons for low participation 
in the demonstration project included a lack of aggressive 
marketing, failure to educate military retirees on the 
interaction of FEHBP plans with Medicare, the 3-year limitation 
for participation, and the lock-out of participants from 
receiving care at military treatment facilities.
    Kristen Pugh stated the reasons for the extremely low 
participation rate included the lack of timely delivery of 
accurate and comprehensive information about the demonstration 
project, hastily planned health fairs conducted with little or 
no notification for eligible enrollees, and the lack of 
knowledgeable specialists at the call center to provide answers 
to simple questions and to send adequate educational materials. 
She cited several examples of poor marketing, including the 10 
percent error rate in DOD's first mail-out, which the 
department made no effort to correct. Ms. Pugh compared the 
inadequacy of marketing materials for the demonstration project 
with the informative post card, glossy brochures, and handsome 
benefit book prepared for the TRICARE senior prime supplement.
    On behalf of the Military Coalition, Ms. Pugh recommended 
the following in order to achieve a truly fair assessment of 
the demonstration project: a guaranteed enrollment beyond the 
conclusion of the demonstration project, an aggressive 
marketing and education program, mailings to all eligible 
beneficiaries in each site, and an expansion of the number of 
enrollees.
    Admiral Carrato shared the subcommittee's concern for the 
low enrollment and outlined the additional marketing activities 
undertaken by the Department, which resulted in an increased 
enrollment of 1,000. Given that enrollment fell far short of 
the levels authorized for the demonstration, the Department of 
Defense would be adding two additional sites to the 
demonstration, bringing the total number of sites to the 
statutory maximum of 10. Admiral Carrato felt the Department 
was gaining valuable information about beneficiary preferences 
and desires, and looked forward to the General Accounting 
Office's detailed findings from a beneficiary survey.
    Mr. Flynn stated the initial results from the demonstration 
project were, admittedly, disappointing. As a result, the 
demonstration would allow for belated open season enrollment, 
with coverage and premiums taking effect retroactive to 
January. A geographical evaluation of the enrollments suggested 
that when access to military treatment facilities was 
available, individuals were less likely to sign up for the 
FEHBP.
13. FEHBP: OPM's Policy Guidance for 2001.
    a. Summary.--OPM administers the FEHBP, negotiating rates 
and benefit packages with participating carriers. Each year it 
issues a ``call letter'' outlining its objectives for the 
upcoming contract year, including benefits and coverages that 
will be required of participating carriers.
    b. Benefits.--The subcommittee determined that the 
increases generally reflected rising health care costs, in 
particular pharmaceutical costs due to increased utilization. 
The subcommittee remains concerned that increased mandates have 
both hidden and direct costs, contributing to premium 
increases.
    c. Hearings.--A hearing entitled, ``FEHBP: OPM's Policy 
Guidance for 2001,'' was held on June 13, 2000. Witnesses at 
the hearing were William E. Flynn III, Associate Director of 
Retirement and Insurance Services, OPM; Stephen W. Gammarino, 
senior vice president, BlueCross BlueShield Association; Mr. 
Bobby Harnage, president, American Federation of Government 
Employees; and Dr. Scott Nystrom, adjunct scholar, the Mercatus 
Center at George Mason University.
    Subcommittee Chairman Scarborough emphasized that the 
FEHBP, which is often cited as a model employer-sponsored 
health benefits program, succeeds because of its market 
orientation. He expressed concern over the dramatic rises in 
premiums over the past 3 years, and the substantial increase 
that seemed imminent for 2001. He stated his disappointment in 
the 2001 call letter, in which there was no retreat from 
mandates being imposed on the FEHBP. In particular, he 
expressed concern about the rising cost of pharmaceuticals, and 
the importance of developing a complete understanding of the 
causes of the increases and the impact of possible responses to 
it.
    Mr. Cummings stated that given the aging Federal workforce 
and the fact that older Americans are the largest consumers of 
prescription drugs, the Federal Government had a responsibility 
to explore any and all avenues that may help contain premium 
and prescription drug costs.
    Mrs. Morella expressed her enthusiasm for mental health 
parity and patient safety initiatives to reduce medical errors 
within the FEHBP. In addition to her concern over the 
anticipated premium increases, she stated her desire to ensure 
that autologous bone marrow transplants for breast cancer were 
not hindering the use of more effective treatments.
    Mr. Flynn restated OPM's commitment to providing access to 
high-quality, affordable health coverage for Federal employees 
and retirees and members of their families. He provided details 
on OPM's mandate that coverage for clinically proven treatments 
for mental illness and substance abuse would be provided in a 
manner identical to coverage for other medical conditions. 
Networks of providers will be used to deliver the parity 
benefit. Analysts familiar with the FEHBP have projected that 
parity will result in cost increases somewhere between 1 and 3 
percent of the total premium. Mr. Flynn predicted the premiums 
would fall within the upper range of the estimate.
    Mr. Flynn stated that the budget for 2001 assumes an 
average premium increase of 8.7 percent. OPM feels the premium 
increases are unacceptable and will seek amendments to the 
current law to counteract them, including contracting directly 
for benefits. OPM has allowed the Special Agents Mutual 
Benefits Association to access the Federal Supply Schedule for 
prescription drugs for mail-order pharmaceuticals. Mr. Flynn 
said OPM looked forward to reviewing the results of this pilot 
to see whether or not the savings generated might be applicable 
to other areas of the FEHBP.
    Mr. Gammarino stated BlueCross and BlueShield's general 
opposition to mandates, believing they have a long-term adverse 
effect on the ability to provide affordable health care 
coverage. He described the care management strategy that would 
be implemented to accomplish mental health parity while 
controlling the costs associated with it. Mr. Gammarino 
believes that the true cost of this initiative would not be 
known for 3 to 5 years. He testified that the program currently 
spends about 30 percent of its premium dollar for 
pharmaceuticals. This cost continues to be driven by the rapid 
development of new, expensive drug therapies which substitute 
for less expensive existing therapies, rising prices for 
existing drugs, and heightened demand fueled by direct-to-
consumer advertising.
    Mr. Gammarino reiterated BlueCross and BlueShield's concern 
over OPM's continued efforts to impose cost accounting 
standards on the FEHBP. In his view, the standards are 
fundamentally incompatible and inappropriate for the FEHBP, and 
for these reasons Congress had granted annual exemptions from 
them. He reminded the subcommittee that BlueCross and 
BlueShield would not sign any contract with OPM that contains 
the CAS clause or otherwise sought to implement the standards.
    Mr. Harnage felt that while AFGE and OPM had been engaged 
in some dialog regarding the administration and pricing of the 
FEHBP, the relationship had fallen far short of what AFGE had 
wanted. He stressed the desire of AFGE to have a direct voice 
in negotiating the annual premiums and benefits. Mr. Harnage 
stated AFGE's strong opposition to proposals to contract 
directly for certain benefits on an employee-pay-all basis. Mr. 
Harnage felt cost accounting standards should be applied to the 
FEHBP to ensure the premium dollars are managed correctly.
    Dr. Nystrom provided an economic and market analysis of 
FEHBP access to the Federal Supply Schedule for prescription 
drugs. He highlighted two potential economic consequences of 
such a plan: increased prices for non-FEHBP purchasers of 
prescription drugs and increased prices of drugs for agencies 
currently receiving discounts on pharmaceuticals from the 
Federal Supply Schedule. He reminded the subcommittee that the 
group of non-FEHBP purchasers includes about one-third of all 
Medicare beneficiaries. With annual pharmaceutical costs of $5 
billion, the FEHBP dwarfs the Federal Supply Schedule, which 
has sold an estimated $1.6 billion in drugs for 1999.
14. Wildland Firefighters Pay: Are There Inequities?
    a. Summary.--The subcommittee reviewed H.R. 2814, a bill 
that would authorize equal overtime pay provisions for all 
Federal employees who work as wildland firefighters. Currently, 
pay equity problems have resulted in non-supervisors being paid 
more than supervisory firefighters at the Department of the 
Interior and the Department of Agriculture's Forest Service. 
The subcommittee is concerned about a reduction in the number 
of supervisory Federal wildland firefighters (the total number 
of firefighter teams decreased over 40 percent from 1992 to 
1997) because workforce reductions jeopardize not only the 
safety of persons and property located in wildland areas, but 
also the firefighters who perform their duties with support and 
assistance. According to a GAO report, ``Federal Wildfire 
Activities: Current Strategy and Issues Needing Attention,'' 
dated August 13, 1999, the Federal wildland firefighting 
workforce is becoming smaller, based in part, upon the current 
overtime pay structure under which many employees can earn more 
by refusing to accept more responsible positions that are 
exempt from the Fair Labor Standards Act, and many supervisory 
firefighters are nearing retirement age. Although H.R. 2814 
originally had the support of agency officials familiar with 
the problem, the administration subsequently opposed it. 
Interestingly, although invited, officials from Interior and 
Agriculture declined to testify at the hearing on this issue.
    b. Benefits.--The subcommittee learned that firefighters at 
Interior and Agriculture's Forest Service are working long 
hours battling wildfires that ravaged the Western part of the 
United States in 2000 with fewer crews than in previous years. 
The overtime pay disparity has affected the morale of many of 
the employees and made it difficult to attract highly qualified 
personnel.
    c. Hearings.--The subcommittee held a hearing, ``Wildland 
Firefighters Pay: Are There Inequities?,'' was held on Tuesday, 
September 26, 2000, in Washington, DC. Witnesses at the hearing 
were the following: the Honorable Richard Pombo (R-CA); the 
Honorable Tom Udall (D-NM); Kent Swartzlander, professional 
firefighter; and Henry Romero, Office of Personnel Management, 
Associate Director for Workforce Compensation & Performance.
    Subcommittee Chairman Scarborough referred to the valiant 
work performed by firefighters in protecting the country's 
natural resources from destruction by fire. Mr. Scarborough 
pointed to the epidemic of widely publicized fires that have 
ravaged national forests this summer as proof of the importance 
of wildland firefighter's work. Mr. Scarborough stated that 
well-qualified managers and supervisors are necessary to 
maintain an efficient and effective wildland firefighting 
force. Thus, Congress must ensure that it continues to provide 
incentives to attract highly skilled and qualified individuals 
to fill firefighter positions.
    Congressman Richard Pombo (R-CA), the author of H.R. 2814, 
testified that he introduced the bill after listening to 
firefighters in his district complain about pay inequity. Mr. 
Pombo told the subcommittee that over 6.9 million acres have 
burned in the United States this year. He referred to a hearing 
held June 7, 2000, before the House Resources Subcommittee, 
where witnesses testified that more wildland fires are expected 
to occur. Mr. Pombo attributed the shortage of firefighters to 
pay inequities. He stated that pay inequities also create a 
disincentive for less experienced firefighters to strive for 
management positions. Mr. Pombo expressed disappointment with 
the administration's opposition to H.R. 2814 after he had 
involved responsible agency officials in the drafting of his 
bill.
    Congressman Tom Udall (D-NM) testified about the fires that 
swept through portions of his district in New Mexico earlier 
this year, destroying over 73,000 acres of lands. He told the 
subcommittee the Southwest Coordination Center in Albuquerque, 
NM has only filled 16 percent of the orders for skilled 
supervisors and managers this year. He also referred to fires 
in Florida, where over 1 million acres of land have burned 
since 1998. Mr. Udall believes that the shortage of 
firefighting personnel is a result of the pay equity issue. 
According to Mr. Udall, the pay inequity discourages many 
potential firefighters from advancing to supervisory positions.
    Mr. Kent Swartzlander, a professional firefighter, with 26 
years of experience as a firefighter, testified before the 
subcommittee. Mr. Swartzlander has performed over 2,000 hours 
of fire suppression. He testified that he is required to be 
available for assignment 24 hours a day, while only being paid 
for 8 hours a day if he remains in his home base. Mr. 
Swartzlander testified that Federal wildland firefighters 
sometimes spend up to 120 days away from their home fighting 
fires. He testified that OPM's classification of Federal 
firefighters as ``forestry technicians'' is ludicrous.
    Mr. Henry Romero, Associate Director of Workforce 
Compensation and Performance Service at OPM testified before 
the subcommittee. Mr. Romero testified about the 
administration's plan to deal with overtime pay for Federal 
employees. OPM prefers to address the problem as it affects all 
Federal employees engaged in emergency work. Therefore, they 
are opposed to H.R. 2814, which deals only with Federal 
fighters engaged in emergency fire suppression. Mr. Romero 
testified that the administration's bill, H.R. 5333, would 
rectify the problem faced by Federal firefighters as well as 
other Federal employees including those at the National 
Transportation Safety Board and Federal Emergency Management 
Agency. The administration bill will raise the overtime pay cap 
from GS-10, Step 1, to GS-12, Step 1. In response to his 
questions, Mr. Romero conceded that under the administration's 
bill rank-file employees would continue to earn more than some 
key managers during emergencies.
15. Oversight of Wage-Grade Pay in Georgia and Oklahoma.
    a. Summary.--The subcommittee reviewed the Federal Wage 
System to evaluate the effectiveness of the process for making 
wage-grade pay determinations for particular localities in 
Georgia and Oklahoma.
    b. Benefits.--The subcommittee investigated whether pay 
determinations for wage-grade employees in Georgia and Oklahoma 
are sufficient in their ability to recruit and retain qualified 
civil servants. Additionally, the subcommittee explored the 
administrative remedies available to agencies and employees to 
address any discrepancies in wage-grade pay.
    c. Hearings.--The subcommittee held a hearing entitled, 
``Oversight of Wage-Grade Pay in Georgia and Oklahoma'' on 
Wednesday, October 4, 2000, in Washington, DC. Witnesses at the 
hearing were the following: the Honorable Saxby Chambliss (R-
GA); Jim Davis, national secretary-treasurer, American 
Federation of Government Employees; Donald Winstead, Assistant 
Director for Compensation Administration, Office of Personnel 
Management; Roger Blanchard, Assistant Deputy Chief of Staff 
for Personnel, U.S. Air Force. Dr. Diane Disney, Deputy 
Assistant Secretary for Civilian Personnel Policy, Department 
of Defense, submitted written testimony.
    Subcommittee Chairman Scarborough stated he wanted to 
ensure the pay determinations were sufficient to recruit and 
retain qualified civil servants. He reminded subcommittee 
members that blue-collar workers provide valuable services for 
the government; it is only fair they are compensated adequately 
for their effort. In a system with over 256 local wage areas, 
attempting to resolve such issues legislatively would raise 
difficult, if not insurmountable obstacles, and would likely 
result in perpetual congressional intervention. But, he 
stressed that this did not relieve the subcommittee from its 
responsibility to ensure that the process for determining blue-
collar wage rates is working correctly.
    Congressman Chambliss testified that our military services 
are facing serious recruiting and retention problems, forcing 
the Department of Defense to compete intensely with the private 
sector to hire and keep the best and brightest of the 
workforce. Using Robins Air Force as an example, Mr. Chambliss 
stated that with an aging depot workforce, 50 percent of which 
are likely to retire in the next 5 years, it will be 
increasingly difficult to replace the valuable wage-grade 
workers soon leaving the civil service. Mr. Chambliss was 
puzzled that given the facts, Congress continued to tolerate 
such a gross disparity in the wage-grade pay scales in Georgia. 
He stressed the need for providing better pay and maximizing 
the effectiveness and efficiency of the depot system.
    Mr. Davis testified that since its inception, the Federal 
wage system has been plagued with problems. Congressionally-
imposed pay caps and the withdrawal of the Monroney protections 
for Department of Defense employees have prevented tens of 
thousands of Federal employees from receiving what the Federal 
wage system envisioned: wages that reflect prevailing rates for 
similar work in the local private economy. He stressed that if 
the Department of Defense wants to recruit qualified people, it 
should push for a conversion of wage-grade employees to the GS 
pay scale.
    Mr. Winstead testified that the pay situations in both 
Georgia and Oklahoma are largely a consequence of the principle 
that levels of pay are to be maintained in line with prevailing 
levels for comparable work within each local wage area. The 
levels of pay vary from one wage area to another, and if the 
Federal Government did not compete on equal footing with 
private sector employees in each, our overall employment costs 
would rise unnecessarily. He stated that OPM is convinced the 
Federal Wage System is accomplishing the purposes for which it 
was established in 1972. However, OPM is committed to working 
expeditiously to use existing administrative authorities to 
deal with any recruitment or retention problems that were 
brought to its attention.
    Mr. Blanchard stressed the Air Force's commitment to hiring 
and retaining the highest-skilled employees available. He 
reminded subcommittee members the other side of this balancing 
act is ensuring the blue-collar work force is cost-effective 
and efficient. This is becoming more important as the 
Department of Defense goes through the competitive sourcing 
process for many of its functions.
    Mr. Blanchard expressed the Air Force's desire to add 
flexibility to the Federal Wage System by expanding the 
authority to offer recruitment and relocation bonuses and 
retention allowances authorized as part of FEPCA. Currently, 
this flexibility is only available to General Schedule 
employees. The Air Force believes this additional flexibility 
together with the administrative flexibility already available 
would further enhance the Air Force's ability to react quickly 
to specific recruiting and retention problems.

   Subcommittee on Criminal Justice, Drug Policy, and Human Resources

                      Hon. John L. Mica, Chairman

1. National Drug Control Policy and Practices.
    a. Summary.--Pursuant to the Government Reform Committee's 
jurisdiction over the Office of National Drug Control Policy 
[ONDCP], as well as other departments and agencies engaged in 
drug control and counternarcotics efforts, the Subcommittee on 
Criminal Justice, Drug Policy, and Human Resources convened 16 
oversight hearings during 1999 and 26 hearings during 2000 to 
assess the effectiveness of the National Drug Control Strategy 
developed by ONDCP and the strategy's implementation nationally 
and internationally, and related drug control issues and 
practices.
    Congressional Delegation.--From August 27, 1999, through 
September 7, 1999, Subcommittee Chairman John L. Mica was 
joined by Congressmen Rohrabacher, Peterson, Sanders, Hinchey, 
and Romero-Barcelo on a congressional delegation (CODEL) which 
visited Slovokia, Ukraine, Romania, Bulgaria, Hungary, and the 
Netherlands. A major purpose of the visit was to conduct in-
country reviews of current U.S. counternarcotic efforts and 
determine the level of cooperation by transit countries. In the 
Netherlands, for example, briefings were given on the types and 
patterns of trafficking through the port of Rotterdam, a major 
gateway for illegal narcotics. The CODEL had meetings with high 
level officials including Presidents and Members of Parliament, 
trade officials, law enforcement and interior officials, 
ambassadors, and American Chamber representatives at all 
country stops. In Hungary, the CODEL visited a joint United 
States-Hungarian operated International Law Enforcement Academy 
[ILEA] to evaluate effectivenesss of taxpayer dollars. The 
CODEL explored how current drug interdiction and international 
counternarcotic efforts could be coordinated more effectively.
    Counterdrug Operations Assessment Trips.--From February 22-
23, 2000, the House Committee on Government Reform sponsored a 
trip to Puerto Rico to meet with area law enforcement official 
who comprise the Executive Committee of the local High 
Intensity Drug Trafficking Area [HIDTA]. Subcommittee staff 
participated. The focus of the meeting was the increased drug 
threat in and around Puerto Rico, and the need for additional 
resources and enhanced cooperation among drug and law 
enforcement officials.
    Participants learned that the significant increases in the 
Federal law enforcement effort to stem the flow of illegal 
drugs into Puerto Rico had waned since passage of the fiscal 
year-1999 Emergency Drug Supplemental. The Puerto Rico HIDTA 
was asked to submit a list of priority resource requirements to 
properly address the growing drug problem in Puerto Rico. The 
staff toured the Relocatable Over-the-Horizon Radar [ROTHR] 
site on the island of Vieques. The expected activation date for 
the site was estimated to be in late March 2000. The 
vulnerability of the ROTHR site to terrorist attack or possible 
island protests was raised by the staff. Efforts to address 
these security concerns were raised with the Department of 
Defense, who is responsible for the all the ROTHR sites.
    From April 25-29, 2000, the National Guard sponsored a 
counterdrug operations assessment of the United States Southern 
Command in Miami, FL and two of the four Forward Operating 
Locations [FOLs], specifically, Manta, Ecuador and Curacao, 
Netherland Antilles. A briefing was provided on the move from 
Panama to Miami, FL. Briefings were held on the importance of 
SouthCom's counterdrug mission, SouthCom's forces involved in 
counterdrug operations, and Plan Colombia. Additionally, 
briefings were held regarding the Joint Interagency Task Force 
East's [JIATF-East] command mission, the National Guard's 
counterdrug support role, current and planned future 
counterdrug operations and the role of insurgents, notably the 
FARC, in the drug trade in Latin America.
    After the briefings at SouthCom, the participants traveled 
to the FOL site in Curacao, Netherland Antilles. Participants 
toured the FOL, received briefings on its operation, military 
construction initiatives, current and planned counterdrug 
military operations and quality of life for assigned U.S. 
military personnel on station. There were additional briefings 
on operation Coronet Nighthawk and the Senior Scout program. 
Additionally, the U.S. Customs Service provided an overview of 
maritime interdiction efforts.
    Participants proceeded to the FOL site at Manta, Ecuador. 
They toured the FOL site, received briefings on its operation, 
military construction initiatives, specifically, the progress 
of runway construction, and current and planned counterdrug 
military operations. The Drug Enforcement Administration 
provided an overview of the drug trade in Ecuador and detailed 
the challenges of counterdrug operations in that region and the 
increasing role of the Colombian FARC guerrillas in Ecuador. 
Participants went on counterdrug monitoring missions.
    On August 7-11, 2000, the National Guard sponsored a 
counterdrug assessment trip to the Appalachia HIDTA and the 
states of Kentucky, West Virginia and Tennessee. Participants 
visited the HITDA headquarters and the Civil Air Patrol in 
London, KY, the 130th Airlift Squadron in Charleston, WV, the 
134th Air Refueling Wing at McGhee Tyson Air National Guard 
Base in Knoxville, TN and the Scott County National Guard 
Armory in Oneida, TN.
    In each State, the National Guard took participants to 
observe and actively participate in marijuana eradication 
efforts. UH-60 Blackhawk helicopters were used for 
transportation to the marijuana growing areas.
    Congressional Hosting of International Drug Control 
Summit.--In conjunction with the United Nations International 
Drug Control Programme [UNDCP], the U.S. Congress hosted this 
year's annual meeting of international parliamentarians in 
Washington, DC, on February 8-9, 2000. Subcommittee Chairman, 
John L. Mica (R-FL), and the subcommittee staff organized the 
event.
    This groundbreaking international summit featured major 
addresses and vigorous roundtable debates focusing on many 
areas of drug control policy including: new global trafficking 
trends, the latest science on treatment, Plan Colombia, and 
money laundering. The goal of the International Drug Control 
Summit was to build consensus on priorities in drug control 
policy and provide participants from the European Community, 
Japan, Canada, and the United States, an opportunity to engage 
in a strategic dialog on the growing global drug crisis. Topics 
included: the latest illegal drug production and trafficking 
trends, drug enforcement, and demand reduction issues.
    The participation of key drug control policymakers from 
around the world facilitated a careful examination of the 
multifaceted, transnational drug problem and the development of 
effective strategies for the 21st century. Among the 
participants were: Speaker of the House Dennis Hastert, key 
Members of Congress, senior administration officials including 
ONDCP Director Barry McCaffrey, members of the European 
Parliament, members of the Japanese Diet and Former Prime 
Minister Hashimoto, members of the Canadian Government, and 
representatives from several Latin American countries. 
Congressman Ben Gilman, chair of the House International 
Relations Committee, Congressman Dan Burton, chair of the House 
Government Reform Committee and Congressman Mica took lead 
roles in the program.
    Highlights included a roundtable panel examining the Latin 
American perspective with Vice-President Jorge Quiroga of 
Bolivia and Colombian Police General Ishamel Trujillo among the 
featured speakers. The law enforcement round table featured 
William Ledwith, U.S. DEA Chief of International Operations, 
Paul Higdon, INTERPOL, Director of Criminal Intelligence, 
Jurgen Storbeck, EUROPOL Coordinator and Douglas Tweddle, World 
Customs Organization. Presentations were made on international 
money laundering, alternative development and enhancing the 
security belt around Afghanistan. Featured presenters included 
Pino Arlacchi, Executive Director of the UNDCP, Jack Stewart-
Clark, former MEP Speaker and Rand Beers with the U.S. 
Department of State.
    The Summit participants affirmed that international 
cooperation is a critical part of effective drug control. It is 
also recognized that the United Nations Office for Drug Control 
and Crime Prevention has an essential role in addressing the 
global challenges of the drug problem. Conclusions were reached 
that legislators and parliamentarians from around the world 
should continue to work together and share information about 
successful methods to reduce drug abuse, production and 
trafficking. A balanced approach--focusing on all aspects of 
drug control--was considered essential. Obtaining a significant 
reduction in the supply of and demand for illegal drugs, as 
called for at the UN General Assembly Special Session of June 
1998, was identified as a continuing priority. A series of 
specific drug control needs and steps for achieving them was 
identified.
    b. Benefits.--The numerous hearings on the National Drug 
Control Strategy, its implementation and the identification of 
additional priorities and needs have resulted in responsive 
actions domestically and internationally that will likely 
enhance drug control efforts, protect lives and punish drug 
criminals. The hearings have identified the need to improve 
domestic agency capabilities in preventing and treating drug 
abuse domestically. Federal agencies responsible for preventing 
and treating drug abuse and addiction have been notified of 
specific needs and their responsibilities to meet them more 
effectively. For example, major deficiencies in the Department 
of Education's Safe and Drug Free School Program have been 
identified and the department reportedly has embarked upon a 
major improvement effort. Similarly, significant contracting 
issues identified in the ONDCP national media campaign 
reportedly are being addressed. Subcommittee hearings on the 
issue of extradition have contributed to the recent successful 
extradition of criminals and drug traffickers from Mexico and 
Colombia. Finally, subcommittee hearings regarding military and 
strategic needs in protecting our border and interdicting drugs 
have been resulted in operational changes and improvements, as 
well as hastened the deployment of needed resources. The 
subcommittee initiated a letter, signed by members of the 
Border Caucus and the Speaker's Task Force on Drugs calling on 
the President to create a single border coordinator with 
decisionmaking authority. While the U.S. domestic and 
international drug control efforts continue to require further 
improvements and commitments in resources, the subcommittee 
hearings have been a critical forum for identifying specific 
needs and facilitating meaningful and timely responses.
    c. Hearings.--During the 106th Congress, the Subcommittee 
on Criminal Justice, Drug Policy, and National Security held 42 
hearings that addressed various aspects of the National Drug 
Control Policy, its implementation and the Nation's continuing 
drug control efforts and needs.
    (1) On February 25, 1999, the subcommittee, in its role as 
authorizing subcommittee for ONDCP, conducted a hearing to 
review its 1999 National Drug Control Strategy entitled, 
``Oversight of the 1999 National Drug Control Strategy.'' The 
report was endorsed and transmitted to Congress by President 
Clinton. The hearing examined the 1999 National Drug Control 
Strategy, as well as accompanying budget and performance 
measure documents. The 1999 National Drug Control Strategy 
outlined five specific goals: ``Goal 1: Educate and enable 
America's youth to reject illegal drugs as well as alcohol and 
tobacco; Goal 2: Increase the safety of America's citizens by 
substantially reducing drug-related crime and violence; Goal 3: 
Reduce health and social costs to the public of illegal drug 
use; Goal 4: Shield America's air, land, and sea frontiers from 
the drug threat; and Goal 5: Break foreign and domestic drug 
sources of supply.''
    Each of the subcommittee hearings held in 1999 on topics of 
national drug control efforts addressed issues and activities 
associated with one or more of the goals of the National Drug 
Control Strategy. The first National Drug Control Strategy goal 
of educating and enabling American youth to reject illegal 
drugs was a key topic of several subcommittee hearings in 1999.
    (2) On March 18, 1999, the subcommittee held a hearing 
entitled, ``Oversight of Agency Efforts to Prevent and Treat 
Drug Abuse.'' The hearing addressed prevention and treatment 
aspects of the National Strategy, including the role of Federal 
agencies and programs. A topic of importance at the hearing was 
developments regarding ONDCP's National Youth Anti-Drug Media 
Campaign. The 5-year media campaign is dedicated to reducing 
teen drug use. The administration claims that the campaign is 
beginning to show results. The campaign began in January 1998 
in 12 test sites and has now expanded nationwide. ONDCP claims 
that 95 percent of the target audience is being reached with 
anti-drug messages.
    The efforts of the Substance Abuse and Mental Health 
Services Administration [SAMHSA], a component of the Department 
of Health and Human Services [HHS], were of interest to the 
subcommittee. SAMHSA is responsible for providing national 
leadership to ensure that knowledge, based on science and 
``state-of-the-art'' practices, is used effectively for the 
prevention and treatment of addictive and mental disorders.
    The subcommittee considered expansion of SAMHSA's Substance 
Abuse and Prevention and Treatment Block Grant program. This 
grant program awards funds to States for prevention activities 
and treatment services. The grants include funding that targets 
substance-using pregnant women, women with dependent children, 
and injection drug users.
    SAMHSA also seeks to reduce the gap in treatment through 
its Targeted Capacity Expansion program that makes awards 
directly to States, counties, cities, and service providers. 
These grants are to target communities with serious and 
emerging drug problems. In 1999, this program is to include an 
HIV/AIDS component targeting minority populations at risk of 
contracting HIV/AIDS or living with HIV/AIDS.
    Another component of Federal prevention and treatment is 
work performed by the National Institute on Drug Abuse [NIDA], 
a component of the HHS National Institutes of Health [NIH]. 
NIDA conducts clinical and epidemiological research to improve 
the understanding of drug abuse and addiction. Over the past 
decade, NIDA-supported scientists have sought to develop and 
improve pharmacological and behavioral treatment for drug 
addiction. To improve treatment nationally, NIDA is 
establishing a National Drug Abuse Treatment Clinical Trials 
Network to conduct large, rigorous, multi-site treatment 
studies in community setting using diverse patients.
    (3) On October 14, 1999, the subcommittee held a hearing 
entitled, ``The National Youth Anti-Drug Media Campaign.'' This 
hearing closely examined the National Youth Anti-Drug Media 
Campaign to ensure that it is being conducted efficiently and 
effectively, and that Federal funds are being expended in 
accordance with congressional intent.
    ONDCP is responsible for conducting and administering the 
National Youth Anti-Drug Media Campaign. The predecessor of the 
current campaign was developed by the Partnership for a Drug 
Free America [PDFA], a not-for-profit organization created in 
1987. In a collaborative effort, the PDFA solicited anti-drug 
ads from various ad agencies that donated their creative talent 
to design and produce anti-drug television ads (pro bono). The 
PDFA solicited and obtained donated media airtime from the big 
three television networks to run the anti-drug ads as public 
service announcements [PSAs]. For over 10 years, the PDFA 
coordinated these activities with great success and at no 
expense to the American taxpayer. According to the annual 
University of Michigan Monitoring the Future survey, at the 
same time that the level anti-drug television ads were rising, 
attitudes about the social disapproval and the perceived risks 
of illegal drug use were also rising, and there was a 
corresponding decrease in illegal drug use among young people. 
The program seemed to be working.
    Beginning in 1991, the donated airtime from the big three 
media networks began to decline significantly due to increased 
competition resulting from industry deregulation. Throughout 
the 1990's, the PDFA worked diligently to rebuild the donated 
airtimes to previous levels (e.g., in 1991 the estimated value 
of donated media airtime was $350 million). In 1996 and 1997, 
the PDFA approached Congress for assistance. The PDFA worked 
with Congress to fund the President's budget request to replace 
the decline in donated media airtime. In 1996, the PDFA 
commissioned a study that an advertising agency that identified 
three target audiences and determined that the desired exposure 
rate. The minimum cost for such an effort was estimated to be 
$175 million.
    In 1997, Congress appropriated $195 million for the anti-
drug media campaign for fiscal year 1998, and another $185 
million was appropriated for fiscal year 1999. The funds, 
appropriated under the Treasury-Postal Appropriations Bill, 
were intended primarily to fund media buys. The ONDCP was 
selected as an appropriate organization to administer the new 
campaign, and a ``match'' requirement was established.
    ONDCP commissioned a contractor to produce a Communications 
Strategy Statement to guide the overall anti-drug media 
campaign. According to the Communications Strategy Statement, 
the goal of the media campaign includes ``preventing drug use 
and encouraging occasional user to discontinue use.'' The 
campaign now includes programs such as interactive Internet 
websites, entertainment outreach, corporate sponsorships, and a 
program on parenting strategies.
    The central focus of this oversight hearing was to 
determine whether the media campaign is being administered 
efficiently and effectively. Among the issues considered at the 
hearing was that of spending less than was intended for media 
buys and more than was intended for other aspects of the 
campaign, which did not have a proven track record. Significant 
questions were raised as to the efficiency of ONDCP's current 
contracting practices, and the benefits of non-media buying 
activities.
    (4) On October 21, 1999, the subcommittee held a hearing 
entitled, ``Substance Abuse Treatment Parity: A Viable Solution 
to the Nation's Epidemic of Addiction?'' It has been estimated 
that 26 million Americans are presently addicted to drugs and/
or alcohol. The cost of both drug and alcohol addiction to 
society--including costs for health care, substance addiction 
prevention and treatment, preventing and fighting substance-
related crime, and lost resources resulting from reduced worker 
productivity or death--was estimated at $246 billion for 1998.
    Substance abuse has an enormous impact on our society, both 
economically and psychologically. This hearing examined options 
for decreasing the demand for drugs and alcohol by providing 
treatment options for addiction recovery. More specifically, 
the hearing heard testimony regarding options for including 
substance abuse treatment coverage under certain employee 
health benefit plans. One proposal would require health care 
providers and employers to provide similar coverage for 
substance abuse treatment as other medical health needs, such 
as dental and emergency care coverage.
    A study by the Bureau of Labor Statistics [BLS] reported 
that more than 70 percent of those using illicit drugs and 75 
percent of alcoholics are employed. Currently, however, only 2 
percent of the alcoholics and addicts covered by health plans 
reportedly are able to receive adequate treatment. The BLS 
report indicated that fewer than 7 percent of employer provided 
health plans cover alcoholism and drug addiction treatment to 
the same degree as other medical conditions covered by health 
plans.
    Information was considered as to whether substance abuse is 
better classified as a behavioral condition or a brain disease. 
Brain disease research indicates that addicts experience 
changes in brain dopamine levels. Research shows that the brain 
can change in both structure and function after repeated 
exposure to drugs. In November 1995, the National Institute on 
Drug Abuse [NIDA] declared drug addiction to be a brain 
disease. The hearing focused on policy and legislative options 
for providing both medicinal and behavioral treatment to 
substance abusers who are covered by health care plans.
    Experts in the field of substance abuse prevention argue 
that treatment is an effective method to decrease the demand 
for drugs and alcohol, thus advancing the war on drugs. One 
study shows that every $1 spent on treatment saves $7 in health 
care costs, criminal justice costs and lost productivity from 
job absenteeism, injuries and sub-par work performance. Another 
recent study conducted by the Minnesota alcohol and drug 
authority reported that the State saved approximately $22 
million in annual health care costs by providing treatment. 
While these numbers sound impressive, employers are concerned 
about mandating the inclusion of substance abuse treatment 
coverage in employee health plans due to potential increase in 
costs.
    Mental health is a closely related condition that underwent 
similar legislative debate earlier in the decade. The Mental 
Health Parity Act of 1996 (Title VII of Public Law 104-204, 
``MHPA''), signed into law on September 26, 1996, provides 
limited parity for mental health coverage under employee-
sponsored group plans. The provision, which went into effect 
January 1, 1998, prevents insurers from establishing more 
restrictive annual and aggregate lifetime limits for mental 
health coverage than for other health coverage. The provision 
does not require that mental health benefits be offered as part 
of a health insurance package. Nor does it require parity in 
co-payments or deductibles for mental health services, or 
require a minimum number of inpatient days or outpatient 
visits. While the Congressional Budget Office estimated the 
provision would cause insurance premiums to rise by 0.16 
percent to 0.4 percent (depending on how employers react to the 
mandate), treatment requirement exemption can be granted if a 
plan's premiums increase by 1 percent or more due to required 
coverage. In addition to this waiver, health plans sponsored by 
employers with less than 50 employees are exempted from the 
provision.
    A number of legislative proposals have been introduced to 
address substance abuse treatment parity issues. H.R. 1977, the 
``Substance Abuse Parity Act of 1999,'' introduced by 
Representative Jim Ramstad (R-MN) is one proposal. This 
proposal would require parity and nondiscriminatory application 
of treatment limitations and financial requirements to 
substance abuse treatment benefits under private group and 
individual health plans which cover both mental and medical/
surgical benefits. As in the Mental Health Parity Act of 1996, 
this bill would provide an exemption for small employers with 
50 or fewer employees. This bill would go beyond the parity 
provided by the MHPA by prohibiting plans from imposing 
stricter limits on the frequency of treatments, the number of 
visits, or other stipulations on treatment for substance abuse 
benefits than for medical benefits. Further, the bill would not 
allow different co-payments, deductibles, out-of-network 
charges, or out-of-pocket contributions for substance abuse 
benefits than for medical benefits. As in the MHPA, H.R. 1977 
waives parity if premiums increase by more than 1 percent.
    H.R. 1515, the ``Mental Health and Substance Abuse Parity 
Act of 1999,'' introduced by Representative Marge Roukema (R-
NJ), would extend treatment and financial parity to both mental 
health and substance abuse benefits, prohibiting group and 
individual health plans from imposing treatment limitations or 
financial requirements on the coverage of ``behavioral health 
benefits'' (mental health, substance abuse and chemical 
dependency benefits) if similar limitations or requirements are 
not imposed on medical and surgical benefits. H.R. 1515 also 
repeals the 1 percent exemption offered in both the Mental 
Health Parity Act and H.R. 1977.
    S. 1447, the ``Fairness in Treatment: The Drug and Alcohol 
Addiction Recovery Act of 1999,'' introduced by Senator 
Wellstone (D-MN), provides full parity for substance abuse 
treatment. Also, S. 1447 reduces the 50-employee exemption down 
to 25 employees, and it does not include the 1 percent cost 
increase exemption.
    The second National Drug Control Strategy goal of 
increasing citizen safety by reducing crime and violence also 
was a key topic in several subcommittee hearings in 1999.
    (5) On January 22, 1999, the subcommittee held a hearing 
entitled, ``Our Drug Crisis: Where Do We Go From Here?'' Since 
this hearing was held before the official organization of the 
subcommittee, it is also listed as a full committee hearing. 
Hearing testimony indicated that central Florida teens are 
taking drugs at an unusually high rate. Arrests reportedly are 
skyrocketing and central Florida teenagers are dying from 
heroin overdoses each year. Drugs are increasingly playing a 
role in Orlando area teen suicides. For the first time, drug 
overdoses in 1998 surpassed homicides as a cause of death in 
greater Orlando.
    According to the Drug Enforcement Administration [DEA], 
Colombian heroin smuggled via Puerto Rico is the most common 
form of heroin found in Florida. Because of the close ties 
between Puerto Rico and Orlando, Puerto Rico's drug problem has 
become central Florida's drug problem. The drugs, the crime, 
and the violence associated with Puerto Rico reportedly have 
moved into Orlando. Central Florida has been designated as a 
High Intensity Drug Trafficking Area [HIDTA], making local and 
State agencies eligible for available Federal resource to fight 
illegal drugs. In 1998, Congress provided $1 million to fund 
the central Florida HIDTA. Local, State, and Federal officials 
are to use these resources to enhance and coordinate their 
intelligence gathering, law enforcement, interdiction, 
prevention and prosecution of drug criminals.
    (6) On February 24, 1999, the subcommittee held a hearing 
entitled, ``New York Mayor Rudolph Giuliani: Winning the War on 
Drugs and Crime.'' New York Mayor Rudolph Giuliani's first term 
in office resulted in a steep reduction in city crime rates. 
After his re-election, he promised to act as aggressively 
against illegal drugs.
    In October 1997, the mayor acknowledged the scope of New 
York's drug problem: 70 to 80 percent of arrestees testing 
positive for drug use; substance abuse costing the city more 
than $20 billion each year; $21 out of very $100 in taxes paid 
to New York City subsidizing the consequences of substance 
abuse; and 71 percent of children in foster care in New York 
City having at least one parent who was a substance abuser. The 
mayor's response was to announce a major anti-drug offensive to 
address drug abuse through enhanced treatment, education and 
law enforcement. The response included: 5 police anti-drug 
initiatives; increasing the number of drug-free school zones 
from 40 to 100; doubling the number of schools in the Safe 
Corridor program from 120 to 240; and designating 7 parks as 
drug-free zones. The mayor instituted a 24-hour, 7 day a week, 
toll-free drug hotline, encouraging New Yorkers to do their 
part in reporting drug activity, with an advertising campaign 
to make New Yorkers aware of the service.
    The mayor also responded to lax State laws dealing with 
repeat misdemeanor drug sellers, by supporting jail terms. The 
Department of Probation began a program designed to target 
1,000 juvenile probationers with court-imposed curfews as a 
result of a drug offense, using state-of-the-art tracking and 
beeper technology to monitor compliance on a 24-hour basis. The 
Board of Education was given resources to assign substance 
abuse specialists in each of the city's family courts, and to 
act as liaisons between the juvenile justice system and the 
school system. The Department of Correction was given resources 
to increase by 50 percent the number of drug treatment beds 
available in the Department's Substance Abuse Intervention 
Division--from 1,058 to 1,558 beds. The Department of Probation 
doubled its residential drug treatment capacity from 180 to 360 
probationers. Outpatient drug treatment capacity increased from 
890 to 965. Participating probationers have shown a 35 percent 
higher rate of completion of the terms of their probation than 
probationers who did not take part in drug treatment.
    The mayor opened a drug court in Manhattan (with plans for 
courts in Bronx, Queens & Staten Island), to complement one 
operating in Brooklyn. Defendants take part in an intensive 18-
month drug treatment program in exchange for reduced criminal 
charges and are monitored daily by case management court staff. 
The mayor created a Drug Treatment Coordinator unit within the 
mayor's office responsible for developing an on-line database 
of all available drug treatment services in the city, with a 
toll-free number.
    Under Mayor Giuliani, DARE was expanded in city schools, 
with extra resources made available to augment DARE program 
activities, such as the Gang Resistance Education Assistance 
Treatment [GREAT]. Other mayoral initiatives include: drug-
prevention youth programs in public housing; an anti-drug 
parent network program; making parents aware of the dangers of 
drugs, of counseling and of signs of drug use in their 
children; sponsorship of a clergy anti-drug abuse forum; a pro 
bono media anti-drug campaign through a major advertising 
agency; public service announcements to encourage mentoring; 
and mechanisms to measure the success of his anti-drug agenda.
    Over the past 5 years, crime in New York City reportedly 
decreased by 47.5 percent and the homicide rate by 70 percent. 
Besides making life better for city residents, tourism is at 
historic levels.
    (7) On May 13, 1999, the subcommittee held a hearing 
entitled, ``International Law: The Importance of Extradition.'' 
``Extradition'' is the formal surrender of a person by a State 
to another State for prosecution or punishment. Extradition to 
or from the United States is done pursuant to treaty. The 
United States has extradition treaties with over 100 nations. 
International terrorism and drug trafficking have made 
extradition an increasingly important law enforcement tool.
    Extradition is triggered by a request submitted through 
diplomatic channels. In the United States, it proceeds through 
the Departments of Justice and State. The request is presented 
to a Federal magistrate who typically holds a hearing to 
determine whether such request is in compliance with an 
applicable treaty. The magistrate also considers whether the 
request provides sufficient evidence to satisfy ``probable 
cause'' that the fugitive committed the identified treaty 
offense(s), and whether other treaty requirements have been 
met. If these conditions are established, the magistrate 
certifies the case for extradition at the discretion of the 
Secretary of State. Except as provided by treaty, the 
magistrate does not inquire into the nature of foreign 
proceedings likely to follow extradition.
    The laws of the country of refuge and the applicable 
extradition treaty govern extradition back to the United States 
of any fugitive located overseas. As a matter of practice, the 
fact that extradition may have been ignored, and a fugitive may 
have been forcibly returned to the United States for trial, 
typically constitutes no jurisdictional impediment to trial or 
punishment in the United States. Federal and foreign 
immigration laws sometime serve as a less controversial 
alternative to extradition to and from the United States.
    The United States and Mexico have had a mutual extradition 
treaty since 1980. In March 1999, the Government of Mexico 
extradited a Mexican national, Tirso Angel Robales, charged 
with drug trafficking and escaping from a United States Federal 
prison. On March 23, 1999, Robales was handed over by officials 
of Interpol-Mexico to the United States Marshals Service. 
Robales was convicted in the United States in 1991 for 
possession with intent to distribute a controlled substance, 
criminal association to possess a controlled substance with 
intent to distribute and continuous operation of a criminal 
enterprise. He escaped in 1995 from California's Terminal 
Island correctional facility and fled to Mexico. When he 
escaped, Robales had almost 12 years pending on his sentence.
    On December 4, 1995, United States authorities presented, 
under the provisions of the United States-Mexico Extradition 
Treaty, the formal request for his extradition. Mexican courts 
issued an arrest warrant on March 5, 1996. Robales was arrested 
on November 15, 1996. On February 10, 1997, judicial 
authorities opined that extradition should not be granted. In 
spite of the court's opinion, Mexico's Secretariat of Foreign 
Affairs granted extradition on February 28, 1997. Robales 
presented several appeals, including arguments of the 
unconstitutionality of both the extradition treaty and the 
decision granting extradition. The courts rejected these 
arguments. Extradition of Mexican nationals is not barred by 
the Constitution, but legislation allows an extradition from 
Mexico to the United States only in ``exceptional cases.'' 
Prior to 1995, no Mexican national had ever been extradited. 
Robales is the first Mexican national, non-dual citizen, to be 
extradited from Mexico, and while not a major drug kingpin, he 
was extradited.
    The U.S. Government has negotiated an assortment of 
treaties and agreements designated to serve as important tools 
in fighting drug trafficking. One type of bilateral agreement 
is the maritime counterdrug agreement, generally consisting of 
six parts and granting the United States full or partial 
permission for shipboarding, shiprider, pursuit, entry to 
investigate, overflight, and order to land. Bilateral 
agreements are not uniform and some provide very limited rights 
to U.S. law enforcement authorities.
    The third National Drug Control Strategy goal of reducing 
health and social costs of drug abuse was a key topic in 
hearings conducted by the subcommittee.
    (8) On June 16, 1999, the subcommittee held a hearing 
entitled, ``Pros and Cons of Drug Legalization, 
Decriminalization, and Harm Reduction.''
    (9) This hearing was followed by a related hearing on July 
13, 1999, entitled, ``The Decriminalization of Illegal Drugs.'' 
At both hearings, testimony was received arguing for and 
against a relaxation of existing anti-drug laws and law 
enforcement activities. Among the highlights of the hearing was 
the identification of many uncertainties and risks associated 
with significant changes to current laws and enforcement 
practices. Substantial human and social costs attendant with 
decriminalization and legalization options were highlighted and 
debated.
    Other subcommittee hearings (including those previously 
mentioned) have highlighted substance abuse prevention and 
treatment needs in the United States, and also are relevant to 
the third National Drug Control Strategy goal of reducing 
negative health consequences and social costs associated with 
drug abuse and addiction.
    The fourth National Drug Control Strategy goal of shielding 
America by air, land, and sea, was a key topic in at least five 
subcommittee hearings in 1999.
    (10) On March 4, 1999, the subcommittee held a hearing 
entitled, ``Oversight of United States/Mexico Counternarcotics 
Efforts.''
    (11) This hearing was shortly followed by another 
subcommittee hearing on March 24, 1999, entitled, ``Oversight 
of Mexican Counternarcotics Efforts: Are We Getting Full 
Cooperation?'' The purpose of the hearings was to examine the 
United States-Mexican cooperation in counternarcotic efforts. 
Serious concerns were raised over the degree of cooperation by 
Mexico with United States efforts to combat drug trafficking.
    Hearing testimony indicated that cocaine is transshipped 
from Colombia to Mexico and then transported into the United 
States using various land, air, and sea routes. Mexico is also 
a major producer of marijuana, heroin, and methamphetamine. DEA 
estimates that Mexico has become the second-largest source of 
heroin in the United States. DEA also has identified an 
increase in methamphetamine ``cooks'' trained in Mexico who 
enter the United States to produce the drugs. While Mexico 
continues to mount significant eradication and supply reduction 
efforts, many of the 1998 eradication and drug seizure 
statistics are lower than those of 1997. Cocaine seizures 
reportedly were down 35 percent. Heroin seizures, on the other 
hand, were up 4 percent.
    In the past 3 years, the United States has made 
approximately 60 extradition requests, and approximately 65 
percent of these requests have been fulfilled. Mexico has 
requested approximately 58 extraditions from the United States, 
48 percent that have been fulfilled. In 1998, three Mexican 
nationals were extradited to the United States. On November 13, 
1997, the United States and Mexico signed a protocol to the 
current extradition treaty that will permit the temporary 
extradition of criminals for trial in the requesting country 
before they finish serving their sentence. This protocol was 
ratified by the United States Senate, and is under discussion 
in Mexico's Senate. There are a number of individuals whom 
Mexico has agreed to extradite, but who have filed appeals. It 
is unclear if and when these individuals will be extradited to 
the United States.
    Money laundering has been a criminal offense in Mexico 
since 1990, however, banking regulations and enforcement 
efforts reportedly have been lagging. A specialized unit 
against money laundering was created in January 1998. The unit 
is to work closely with the U.S. Financial Crimes Enforcement 
Network (FinCEN), and other international anti-money laundering 
agencies and organizations.
    ``Operation Casablanca,'' concluded in May 1998, was the 
largest money laundering sting in U.S. history. The sting was 
conducted over 2 years by undercover agents from the U.S. 
Customs Service. Forty Mexican and Venezuelan bankers, 
businessmen, and suspected drug cartel members were arrested, 
and 70 others indicted are fugitives. Casablanca resulted in 
tensions in United States and Mexico anti-drug efforts. United 
States officials apparently did not fully inform Mexican 
counterparts of the operation because they feared Mexican 
corruption would endanger agent lives. The United States has 
requested the extradition of five men wanted in the money-
laundering case. The Mexico Attorney General's office had 
threatened to bring charges against United States Customs 
agents who had operated in Mexico, but later said it was unable 
to find proof they had committed any crimes under existing 
laws. Recently, the Mexican Government has publicly stated that 
it has concluded the investigation and will not take actions 
resulting from Operation Casablanca. Three of Mexico's most 
prominent banks are implicated in the investigation. Bancomer, 
Banca Serfin, and Confia banks were indicted, along with more 
than a dozen low- and mid-level bankers who were accused of 
knowingly participating in the laundering of Cali and Juarez 
drug cartel proceeds.
    On June 1, 1998, Mexican law enforcement arrested two 
leaders of the Amezcua-Contreras organization, the most 
powerful and dominant methamphetamine trafficking organization 
in Mexico. Luis and Jesus Amezcua are incarcerated at the same 
Federal maximum security prison that holds their brother Adan, 
who was arrested November 10, 1997. On February 4, 1999, the 
Mexican Government announced a multi-faceted plan to assert its 
dedication to combating drug cartels. The $400 million plan is 
intended to strengthen Mexico's anti-drug programs and 
agencies. The initiative will fund equipment such as infrared 
cameras for airplane surveillance, special x-ray machines at 
border crossings, and encrypted satellite-communications 
equipment.
    (12) On May 4, 1999, the subcommittee held a hearing 
entitled, ``Losing Panama: The Impact on Regional Counterdrug 
Capabilities.'' Panama, the hub of two oceans and two 
continents, has been home to the United States military since 
it seceded from Colombia in 1903. United States military forces 
in Panama have had several functions. A primary purpose for 
United States troops was to provide for the defense of the 
Panama Canal. Until September 1997, Panama served as the 
headquarters of the United States Southern Command (SOUTHCOM), 
a unified command responsible for all United States military 
operations throughout Latin America and the Caribbean, except 
for Mexico. In September 1997, SOUTHCOM moved to Miami, FL. 
Despite the move, SOUTHCOM has continued to provide support to 
Latin American nations combating drug trafficking, including 
such activities as aerial reconnaissance and counternarcotics 
training. Howard Air Force Base, in Panama, has provided secure 
staging for detection, monitoring, and intelligence collection.
    In spring 1999, there were less than 4,000 United States 
troops in Panama (down from 10,000 in 1993), stationed on four 
major military installations--Fort Sherman, Fort Clayton, 
Howard Air Force Base, and Fort Kobbe. Six major installations 
were returned to Panamanian control by that date--Fort Davis 
and Fort Espinar were returned in September 1995; Fort Amador, 
at the Pacific entrance to the Canal, was returned in October 
1996; Albrook Air Force Station was returned October 1997; 
Galeta Island was returned March 1999; and Rodman Naval Station 
was returned in March 1999. Implementation of the Panama Canal 
Treaty and the Neutrality Treaty have been major pillars of the 
United States-Panama bilateral relationship. The Panama Canal 
Treaty is to terminate on December 31, 1999, at which time the 
Government of Panama will assume control of the Panama Canal. 
At the same time, all United States military forces must be out 
of Panama, and all remaining United States military facilities 
revert to Panama.
    The Neutrality Treaty remains in force indefinitely and 
gives the United States the right to defend the neutrality of 
the Panama Canal. Roughly 13 percent of U.S. international 
shipborne commerce flows through the Canal. The figure for 
world trade is 4 percent. By the end of 1999, the United States 
military will have returned property consisting of about 70,000 
acres and about 5,600 buildings to the Government of Panama. 
Estimates of the value of the land and improvements range 
upward from $10 billion. The Panamanians plan to take advantage 
of reverting properties to make Panama a commercial and 
educational hub in the Western Hemisphere. The government plans 
on establishing new transshipment ports, a center of higher 
education, light manufacturing zones, and residential resort 
areas.
    Panama serves as a major transit point for illicit drugs 
heading to the United States. This is due to its proximity to 
major drug-producing countries, location on key transportation 
routes, openness to trade, and weak controls along borders and 
coasts. Panama's dollar-based economy and loosely regulated 
banking sector have made Panama attractive to money laundering. 
Panama also is an important hub for the distribution of South 
American-origin cocaine. The drugs pass through Panamanian 
waters in fishing craft and ``go-fast'' boats and either 
continue on to other central American countries or are dropped 
off in Panama. The shipments that get dropped off in Panama are 
repackaged and moved northward on the Pan-American Highway or 
depart in sea freight containers. Cocaine and heroin are also 
moved to the United States and Europe by couriers transiting 
Panama by air.
    On April 16, 1999, Defense Secretary William Cohen approved 
a plan to open new military operating facilities (Forward 
Operating Locations [FOLs]) on the Caribbean islands of Curacao 
and Aruba, and also in Ecuador. These FOLs are intended to 
offset the loss of Howard Air Force Base. Interim agreements 
have been agreed upon between the U.S. Government and the host 
nations. ``The Department of Defense is fully committed to 
ensuring that necessary steps are taken to bring the FOLs to 
full operational status,'' Cohen wrote in a memorandum. Among 
the features of the plan, Cohen said, is that ``the Air Force 
is designated `executive agent' for the FOLs at Curacao/Aruba, 
and Manta, Ecuador. As such, the Air Force will develop, 
establish and maintain the operation of these facilities.''
    The service designated as executive agent for a particular 
FOL would be responsible for funding it, and the concern is 
great among all the services that the moneys currently 
identified for the counterdrug mission will not cover the cost 
to open multiple operating sites on the Dutch islands of 
Curacao and Aruba, at Manta on Ecuador's Pacific coast, and 
possibly at Liberia, Costa Rica. Further complicating the 
matter is SOUTHCOM's insistence on counting Curacao and Aruba 
as a single FOL. The two islands are about 30 miles apart and, 
from the standpoint of the military operators, would reportedly 
require duplicate facilities. By SOUTHCOM's account, the Air 
Force is responsible as the executive agent at only two new 
FOLs: Curacao/Aruba as one, and Manta as another. The Navy 
would be responsible for a ``third'' site if an FOL is 
negotiated for Liberia, Costa Rica. A SOUTHCOM advance team was 
to be dispatched as early as this week to one or more of the 
FOLs to begin preparing the sites to accept assets on an 
expeditionary basis from Howard Air Force Base.
    The United States will not own or control the facilities in 
Ecuador, Aruba or Curacao. Rather, the United States will have 
operating rights, much as an airline operates at an airport. 
Critics say an important distinction, though, is that the 
United States will make a significant investment in building 
and upgrading facilities. Instead of permanently stationing 
aircraft at the three sites, the United States will rotate 
aircraft in and out on a temporary basis, probably from several 
weeks to months at a time. With the host nations performing 
many support functions, SOUTHCOM hopes to save on operating 
costs, which it currently projects at $14 million a year for 
the three sites. But Navy and Air Force officials counter that 
the use of three new sites instead of one could increase 
operations and maintenance costs by basing aircraft and ships 
at several locations. They estimate start-up costs of $50 
million or more, and a possible permanent force greater than 
that SOUTHCOM had proposed. The current effort to secure 
alternate sites was touched off by the collapse last September 
of negotiations with Panama to establish a Multinational 
Counternarcotics Center at Howard Air Force Base. The two 
countries had been negotiating to turn Howard Air Force Base 
into an anti-drugs center with intelligence-gathering 
facilities, air power and 2,000 U.S. troops, plus soldiers from 
other countries. In July, however, the talks reached an impasse 
when Panama would not offer more than a possibly renewable 
contract for 4 years for the counternarcotics center.
    No infrastructure work is planned until long-term 
agreements are signed with the host nations. DOD is planning 
that the appropriations for these upgrades and repairs will be 
handled by the Military Construction Subcommittee of the 
Committee on Appropriations. DOD is hopeful that these long-
term agreements will be for 10 years. DOD has made initial 
estimates of the costs that will be necessary to complete the 
requisite upgrades and repairs to the new FOLs, ranging from 
$78 to $125 million.
    (13) On September 24, 1999, the subcommittee held a hearing 
entitled, ``Examining the Drug Threat Along the Southwest 
Border.'' There are 10 States (4 United States and 6 Mexican) 
that adjoin the 2,000-mile border. The four United States 
border States (California, Arizona, New Mexico, Texas) include 
23 counties that touch the border and the 6 Mexican border 
States (Baja California, Sonora, Chihuahua, Coahuila, Nuevo 
Leon, Tamaupilas) include 39 municipalities that touch the 
border.
    There are five principal U.S. Governmental Departments 
concerned with drug control-related issues in the Southwest 
border region: Department of the Treasury (drug interdiction, 
anti-money laundering and anti-firearms trafficking); 
Department of Justice (drug and immigration enforcement, 
prosecutions); Department of Transportation (drug 
interdiction); Department of State (cooperation with Mexico); 
and Department of Defense (counterdrug support). In addition, 
the Office of National Drug Control Policy [ONDCP] administers 
the High Intensity Drug Trafficking Area [HIDTA] program. The 
Departments of Interior and Agriculture also have 
responsibilities along the border.
    Located at key points along this international border are 
38 legal ports of entry, 3 of which are among the busiest in 
the world. The significant transportation networks in the 
Southwest border region include airports, railroads, and major 
United States and Mexican highways which facilitate the 
smuggling and delivery of drugs to other areas in the country, 
and money out of the United States. The region's strategic 
location adjacent to Mexico makes the region vitally important 
to drug trafficking organizations which ship cocaine, heroin, 
marijuana and methamphetamine into the United States. Mexico is 
both a major transshipment country for most drugs and 
responsible for the production of marijuana, Mexican heroin and 
methamphetamine. Its drug trade is dominated by some of the 
more powerful drug cartels.
    In 1998, 278 million people, 86 million cars, and 4 million 
trucks and rail cars entered the United States from Mexico. 
More than half of the cocaine on America's streets and large 
quantities of heroin, methamphetamine, and marijuana enter the 
United States across the Southwest border.
    Illegal drugs enter by all modes of conveyance--car, truck, 
train, and pedestrian border-crossers. The drugs cross the open 
desert on the backs of human ``mules.'' The drugs are tossed 
over border fences and then whisked away on foot or by vehicle. 
Planes and boats find gaps in United States-Mexican coverage 
and position drugs close to the border for eventual transfer to 
the United States. Small boats in the Gulf of Mexico and the 
eastern Pacific seek to outflank United States interdiction 
efforts and deliver drugs directly to the United States. 
Traffickers seek opportunities to corrupt local, State, and 
Federal officials to facilitate drug smuggling.
    Rapidly growing commerce between the United States and 
Mexico has complicated efforts to keep drugs out of cross-
border traffic. It has been reported that drug gangs have 
expanded into many legitimate businesses that can be used for 
smuggling. U.S. officials have reported purchases of airlines, 
trucking companies, new and used car dealerships, petroleum 
transport corporations and others. However, the increasing use 
of intermediaries as owners has made it almost impossible to 
trace their activities in detail.
    Twenty-three separate Federal agencies and scores of State 
and local governments are involved in drug-control efforts 
along our borders, air, and seaports. Currently, no single 
official is in charge to oversee, integrate and coordinate 
Southwest border counterdrug efforts. The ONDCP Director has 
voiced support for creating a coordinating authority for the 
border with the ability to set objectives and priorities and to 
recommend to agency heads the deployment of resources.
    Statistics compiled by the El Paso Intelligence Center 
[EPIC] indicate that 70 percent of the cocaine imported into 
this country is transported through the Southwest border area 
of the United States. In the past, Mexico-based criminal 
organizations limited their activities to the cultivation of 
marijuana and opium poppies for subsequent production of 
marijuana and heroin. The organizations were also used by 
Colombian drug cartels to transport loads of cocaine into the 
United States, and to pass this cocaine on to other 
organizations for distribution in the United States. However, 
over the past 7 years, Mexico-based organized crime syndicates 
reportedly have gained increasing control over many aspects of 
the cocaine, methamphetamine, heroin and marijuana trade.
    DEA arrests of Mexican nationals within the United States 
increased 65 percent between 1993 and 1997. Most of these 
arrests took place in cities that many Americans would not 
expect to be targeted by international drug syndicates--cities 
such as Des Moines, IA; Greensboro, NC; Yakima, WA; and New 
Rochelle, NY.
    The damage caused by trafficking is enormous. Typically, 
large cocaine shipments are transported from Colombia, via 
commercial shipping and ``go fast'' boats, and off-loaded in 
Mexican port cities. The cocaine is transported through Mexico, 
usually by trucks, where it is warehoused in cities like 
Guadalajara or Juarez, which are operating bases for the major 
organizations. Cocaine loads are then driven across the United 
States-Mexico border and taken to distribution centers within 
the United States, such as Los Angeles, Chicago, or Phoenix.
    Methamphetamine trafficking works in a similar fashion. 
With major organized crime groups in Mexico obtaining the 
precursor chemicals necessary for methamphetamine production 
from sources in other countries, such as China or India, as 
well as from rogue chemical suppliers in the United States. 
Methamphetamine labs capable of producing hundreds of pounds of 
methamphetamine on a weekly basis are established in Mexico and 
California, where the methamphetamine is then provided to 
traffickers to distribute across the United States.
    The heroin that is available in the United States is coming 
predominantly from Colombia and Mexico. Heroin mortality 
figures in the United States are the highest ever recorded--
close to 4,000 people have died in each of the last 4 years 
from heroin-related overdoses across the country. Heroin from 
Mexico now represents 17 percent of the heroin supply seized in 
the United States.
    (14) On November 17, 1999, the subcommittee held a hearing 
entitled, ``Cuba's Link to Drug Trafficking.'' Cuba's location 
between the United States and this hemisphere's major drug 
producing countries makes it a logical transshipment point for 
drug trafficking. While the Cuban Government has consistently 
denied official involvement in drug smuggling, Cuba does not 
publish comprehensive information regarding either its internal 
drug use or the level of drug smuggling activity.
    Numerous drug smuggling cases involving Cuba have received 
public attention, including the highly publicized 1989 court 
martial and execution by the Castro government of a top 
military official and decorated combat hero, Major General 
Ochoa, Commander of Cuba's Western Army. In this incident, the 
head of the Interior Ministry, Major General Jose Abrantes, 
also was arrested, tried and sentenced to 20 years in prison 
for complicity in drug smuggling. In 1993, United States 
Federal prosecutors in Miami reportedly drafted (but did not 
act upon) an indictment for cocaine smuggling against Raul 
Castro, Fidel Castro's brother and head of the Cuban Defense 
Ministry.
    According to State Department's March 1999 International 
Narcotics Control Strategy [INCS] report, ``The lack of 
authoritative information about the illegal narcotics situation 
in Cuba makes it difficult to assess the severity of Cuban's 
drug use and smuggling problems.'' The report indicates a 
moderate overall rise in drug use in Cuba, including the use of 
crack cocaine. Cuban officials blame a lack of resources for 
its inability to patrol its territorial waters. In a May 1999 
letter, the ONDCP Director, General McCaffrey, stated, ``The 
intelligence and law enforcement communities report that 
detected drug overflights of Cuba, although still not as 
numerous as in the other parts of the Caribbean, increased by 
almost 50 percent last year.''
    On December 3, 1998, the Colombian National Police seized 
six shipping containers in Cartagena, with 7.2 metric tons of 
cocaine. The shipment was consigned to a Havana company (51 
percent owned by the Cuban Government with two Spanish 
associates). Cuba has asserted that the drugs were destined for 
the Spanish port of Valencia (where the Spaniards have other 
business interests). A congressional staff investigation 
concluded that there is no reliable evidence that the shipment 
was bound for Spain, and that the shipment was likely headed 
for the United States. This case raises serious questions about 
the role of the Cuban Government in the trafficking of 
narcotics through Cuba.
    First enacted in 1986, the certification process requires 
the President to submit the majors list to Congress on November 
1st of each year. The majors list (some 28 countries in 1999) 
are those countries that meet the definitions set out in the 
Foreign Assistance Act of 1961 [FAA]. A ``major illicit drug 
producing country'' under paragraph (2) of FAA is any country 
in which 1,000 hectares of illicit opium poppy or illicit coca 
is cultivated or harvested, or 5,000 hectares of illicit 
cannabis is cultivated or harvested in any year. A ``major drug 
transit country'' under paragraph (5) of FAA is any country 
that is a significant direct source of drugs to the United 
States or a country through which drugs are transported which 
significantly affects the United States. The FAA requires that 
50 percent of the assistance appropriated for any country on 
the majors list not be obligated or expended unless the country 
is certified. By March 1st of each year the President is 
required to submit certification decisions to Congress (the 
annual State Department INCS report provides the justification 
for certification decisions). Based on the INCS report, the 
President may choose one of three options: (1) certify as fully 
cooperating with the United States; (2) decertify with a 
waiver; or (3) decertify.
    Despite substantial evidence of Cuba being a major transit 
country in 1998 and 1999, on November 10, 1999, President 
Clinton notified the Congress by letter that Cuba was not 
included on the majors list. The hearing explored the rationale 
for the administration excluding Cuba from the list, and 
arguments supporting its inclusion.
    The fifth National Drug Strategy goal of breaking foreign 
and domestic drug sources of supply was a key topic in two 
subcommittee hearings in 1999.
    (15) On June 23, 1999, the subcommittee held a hearing 
entitled, ``Getting Away With Murder, Is Mexico a Safe Haven 
for Killers?: The Del Toro Case.'' The focus of the hearing was 
an incident involving a tragic murder in Florida of the mother 
of six children, including 2-year quadruplets. The person 
identified as the killer, Jose Luis Del Toro, Jr., fled to 
Mexico. Del Toro was captured on November 20, 1997, in 
Monterey, Mexico. Del Toro was scheduled to be deported, 
because he was in Mexico illegally. However, within an hour of 
his scheduled deportation, Mexican officials requested that a 
formal extradition request be filed by January 22, 1998. On 
December 4, 1997, the United States Department of Justice 
informed the Florida prosecutor that the Mexican Government had 
demanded assurance that Del Toro would not receive the death 
penalty if convicted. The assurance was provided to facilitate 
the extradition. Upon approval of the extradition by the 
Mexican Foreign Ministry, Del Toro filed multiple court 
appeals, further delaying his extradition. As of the hearing 
date, it was 1 year and 7 months since Del Toro was arrested in 
Mexico, and 1\1/2\ years since the Florida State attorney 
granted Mexican demands on the death penalty. Within weeks 
following the hearing and its attendant publicity, Del Toro was 
extradited to the United States.
    (16) On August 6, 1999, the subcommittee held a hearing 
entitled, ``The Narcotics Threat From Columbia.'' According to 
United States Government [USG] estimates, Colombia is now the 
world leader in coca cultivation. Gross coca cultivation 
estimates in Colombia increased from 67,000 hectares in 1996 to 
101,800 hectares in 1998, an increase of almost 50 percent. The 
USG reports that Colombian coca growers are now cultivating a 
more potent coca leaf. It is estimated that this new coca could 
increase potential Colombian cocaine production from 1998 
levels of 165 metric tons to between 195 and 250 metric tons 
over the next 2 years.
    Coca is grown chiefly on the eastern plains in Guaviare and 
neighboring areas, and also along the Ecuadorian and Peruvian 
borders in areas of Putumayo and Caqueta. In 1998, significant 
amounts of coca were discovered under cultivation in Bolivar 
and Norte de Santander. In the 1999 International Narcotics 
Control Strategy [INCS] report, the State Department (DOS) 
reported that Colombia remains the source country for over 
three-quarters of the world's cocaine. HCl laboratories can be 
found in all regions of the country, but primarily are located 
in the plains and jungle regions near the coca-growing zones 
under guerrilla control.
    The Drug Enforcement Administration [DEA] reports that 
there has been a dramatic shift in the United States heroin 
market from Southeast Asian to Colombian heroin. Colombia now 
produces about 6 metric tons of heroin annually, almost all of 
which is destined for the United States. DEA's Heroin Signature 
Program estimates that 75 percent of the heroin seized in the 
United States is of Colombian origin. Colombian heroin is 
transported into the United States in small quantities by 
numerous couriers aboard commercial airlines, either directly 
from Colombia or through countries in central America or the 
Caribbean. Most opium is grown on the eastern slopes of the 
central Cordillera Mountains in Tolima, Huila and Cauca 
departments, plus in the Perija Mountains adjacent to Venezuela 
and, to a limited extent, in Antioquia department. Most opiate 
laboratories produce small quantities of drugs and use simple 
equipment and limited amounts of precursor chemicals. Colombia 
accounts for an estimated 2 percent of the world's opium 
production.
    Colombian guerrilla organizations are increasingly involved 
in drug trafficking related activities and are controlling more 
territory. The two main Colombian guerilla organizations are 
the Revolutionary Armed Forces of Colombia (FARC) and the 
National Liberation Army (ELN). It has been reported that the 
guerrillas earn between $500 million and $600 million annually 
from drug-related activities.
    The FARC is the largest, and best-trained, and best-
equipped guerrilla organization in Colombia. It is estimated 
that the FARC consists of 10,000-15,000 armed combatants. FARC 
combatants have initiated attacks against Colombian political, 
economic, military, and police targets. The FARC has well 
documented ties to narcotics traffickers, principally through 
the provision of armed protection for coca and poppy 
cultivation and narcotics production facilities, as well as 
through attacks on government narcotics eradication efforts.
    The ELN is the second-largest guerrilla organization in 
Colombia. It is estimated that the ELN consists of 3,000-5,000 
armed combatants. ELN combatants have conducted assaults on oil 
infrastructure, extortion, and hundreds of kidnappings for 
profit. ELN combatants have also forced coca and opium poppy 
cultivators to pay protection money and attacks government 
efforts to eradicate these crops.
    Colombian President Andres Pastrana has initiated peace 
negotiations with the FARC and the ELN. These negotiations 
began in November 1998. In an effort to bring the FARC to the 
negotiating table, President Pastrana created a demilitarized 
zone covering about 42,000 square kilometers. The initial 
agreement was for the demilitarized zone to last for 3 months. 
In January 1999, the FARC broke off negotiations until April 
1999. The FARC demanded that the Colombian Government take more 
aggressive action against the paramilitary organizations. In 
February 1999, the ELN broke off negotiations and demanded a 
demilitarized zone. The FARC-controlled demilitarized zone is 
still recognized by the Government of Colombia [GOC]. In July, 
peace talks were postponed when disagreements over the role 
that international observers will play and for a clearer 
definition of a ``demilitarized zone'' controlled by the FARC.
    Despite the initiation of negotiations, the fighting has 
continued at an alarming pace. In a major offensive last fall, 
the FARC blew up one of the country's main oil pipelines. In 
February 1999, three Americans working with a remote indigenous 
Colombian group were kidnapped by FARC members and were found 
slain 2 weeks later on the Venezuelan side of the Arauca River 
that borders Colombia. Earlier in the year, the ELN hijacked a 
civilian airplane and committed two mass killings, including 
one attack on worshippers as they left a church in Cali.
    In 1998, the USG/GOC eradication program had its best year 
ever, successfully spraying over 65,000 hectares of coca and 
3,000 hectares of opium poppy. The traffickers responded by 
expanding coca cultivation to remote areas under guerrilla 
control beyond the reach of the spray aircraft operating from 
existing bases. Low altitude spray operations continue to be 
threatened by ground fire. Colombian and United States owned 
aircraft on eradication missions were hit 48 times during 1998. 
GOC counterdrug operations in 1998 resulted in the seizure of 
almost 57 metric tons of coca products, 418 kilograms of opium 
products, and 57 metric tons of marijuana; the destruction of 
145 cocaine base and 40 cocaine HCl labs and 10 heroin labs; 
the capture of over 1,130 metric tons of solid precursor 
chemicals and over 1.95 million gallons of liquid precursors; 
the seizure of over 300 vehicles, 300 boats, and 80 aircraft, 
and the arrest of over 1,400 persons.
    In 1997, the GOC signed a maritime shipboarding agreement 
with the United States. The agreement, which allows for a 
faster approval process for shipboardings in international 
waters and sets guidelines for improved counterdrug cooperation 
with the Colombian navy, has been credited with the seizure of 
over 13 metric tons of cocaine since its signing. Closure and 
reversion to Panamanian sovereignty of Howard Air Force Base 
and facilities at Fort Sherman, Fort Kobbe, Rodman Naval 
Station, and Galeeta Island have undercut United States 
counterdrug efforts in the region.
    On July 13, General McCaffrey released a discussion paper 
outlining proposed counterdrug program enhancements designed to 
meet the emerging drug control challenges in Colombia and the 
Andean Ridge. The program recommendations reflect preliminary 
interagency thinking. The major components include enhancements 
to: counterdrug operations in Southern Colombia; air 
interdiction; administration of justice; nationwide counterdrug 
operations; regional intelligence programs; interdiction 
support; alternative development programs; and USG interdiction 
and research and development.
    (17) On January 27, 2000 the subcommittee held a hearing to 
discuss the diminishing assets that the Department of Defense 
[DOD] under the Clinton administration has contributed to the 
Nation's efforts to curb the supply of illegal drugs. The 
nature and extent of DOD's reduced contributions to the 
Nation's drug control efforts were examined, as well as the 
reasons behind this serious development. The immediate 
ramifications and potential long term consequences to the 
Nation's drug control initiatives were explored. The hearing 
focused on findings by the General Accounting Office [GAO] Drug 
Control report issued in December 1999, entitled: ``Assets DOD 
Contributes to Reducing the Illegal Drug Supply Have 
Declined.''
    Despite the fact that DOD has critical responsibilities for 
interdicting drugs and stopping drugs at their source, GAO 
found that DOD's level of support to international drug control 
efforts has declined significantly since 1992. For example, the 
number of flight hours dedicated to detecting and monitoring 
illicit drug shipments has declined substantially--almost 70 
percent. This decline is particularly significant in view of 
recent developments, including increasing narco-terrorist 
activities in Colombia, the recent closing of Howard Air Force 
Base in Panama and delays in establishing new air bases in the 
region, and evidence of record amounts of heroin entering the 
United States.
    In 1999, closure of Howard Air Force Base and other U.S. 
facilities at Fort Sherman, Fort Kobbe, Rodman Naval Air 
Station, and Galeeta Island in Panama has undercut United 
States counterdrug efforts in the region. The failure to secure 
an agreement with Panama for continued access to these 
facilities forced the United States to identify three sites: 
Aruba and Curacao, in the Netherlands Antilles, and Manta 
Ecuador. The U.S. Southern Command [SOUTHCOM] estimates that by 
2002, it will be able to fly 85 percent of the counterdrug 
flights that were staged from Howard Air Force Base in 1997-
1998. Even with all of the 1997-1998 assets available, SOUTHCOM 
will only be able to cover 15 percent of key trafficking routes 
15 percent of the time. The administration is working to 
finalize plans for a fourth FOL in El Salvador.
    This oversight hearing examined GAO findings and explored 
whether the administration's practices were consistent with 
DOD's mission and role under the National Drug Control 
Strategy, and consistent with recent White House pronouncements 
of increased support for stopping the production of illegal 
drugs abroad and their flow into the United States.
    (18) On February 15, 2000, the subcommittee held an 
oversight hearing on the topic of: ``The U.S. Response to the 
Crisis in Colombia.'' The hearing examined the administration's 
efforts to stem rising narcotics trafficking and terrorist 
violence in Colombia, and the FY-2000 supplemental aid 
proposal. This hearing and a subsequent hearing (on October 12, 
2000) focused on the deteriorating situation in the oldest 
democracy in Latin America. In the past decade, approximately 
40,000 Colombians died in narco-guerrilla violence and the 
Nation's stability is at risk. Colombia has nearly 40 million 
people and a faltering economy. It continues to produce cocaine 
and heroin, with significant amounts reaching the streets of 
neighborhoods in the United States.
    According to United States Government estimates, Colombia 
is the world leader in coca cultivation. The 1999 United States 
State Department International Narcotics Control Strategy 
Report [INCSR], revealed that Colombia remains the source 
country for over three-quarters of the world's cocaine. Gross 
coca cultivation estimates in Colombia increased from 67,000 
hectares in 1996 to 101,800 hectares in 1998, an increase of 
almost 50 percent. Because Colombian coca growers are now 
cultivating a more potent coca leaf and because more efficient 
production methods are now being used, it has been estimated 
that Colombian cocaine production could increase from 165 
metric tons in 1998 to over 250 metric tons by the end of the 
year 2000.
    The Drug Enforcement Administration [DEA] reports that 
there has been a dramatic shift in the United States heroin 
market from Southeast Asian heroin to Colombian heroin, 
especially on the East Coast of the United States. Colombia now 
produces about 6 metric tons of heroin annually, most destined 
for the United States. DEA's Heroin Signature Program estimates 
that fully 75 percent of the heroin seized in the United States 
originates in Colombia.
    (19) On February 17, 2000, the subcommittee held an 
oversight hearing on the Substance Abuse and Mental Health 
Services Administration [SAMHSA]. The hearing focused on SAMHSA 
support for drug treatment services, including: (1) how 
effectively and efficiently Federal resources are utilized; and 
(2) what improvements are needed.
    On March 14, 2000, the subcommittee continued its hearing 
that began the previous month on February 17, examining the 
Substance Abuse and Mental Health Services Administration 
[SAMHSA]. The hearing continued to examine SAMHSA operations 
and program administration, including the agency's support for 
drug treatment services. The focus of this oversight included: 
1) how effectively and efficiently Federal resources are 
utilized; and 2) what improvements are needed.
    The Substance Abuse and Mental Health Services 
Administration, an agency of the Department of Health and Human 
Services [DHHS], is responsible for supporting mental health 
and substance abuse prevention and treatment services 
throughout the country by providing technical assistance, 
categorical grants, and block grants to the States. Created in 
1992 (Public Law 102-321), SAMHSA administers the Substance 
Abuse Prevention and Treatment [SAPT] Block Grant, which 
provides funds to States for alcohol and drug abuse prevention, 
treatment, and rehabilitation programs and activities. SAMHSA 
also administers the Block Grant for Community Mental Health 
Services, which provides funds to States for mental health 
services and support through community mental health centers. 
In addition to administering the two block grants and providing 
technical assistance to States, SAMHSA funds children's mental 
health programs, services to mentally ill homeless persons, 
programs designed to improve the delivery of substance abuse 
and mental illness prevention and treatment services. SAMHSA's 
fiscal year 2000 appropriation is $2.65 billion: $1.96 billion 
for substance abuse related activities; $632 million for mental 
health related activities; and $59 million for program 
management (Public Law 106-113).
    Over the last 30 years, Congress has created a variety of 
Federal programs supporting the prevention and treatment of, 
and research relating to, substance abuse and mental illness. 
From 1974 through 1992 these activities were administered in 
DHHS by the Alcohol, Drug Abuse, and Mental Health 
Administration [ADAMHA]. ADAMHA consisted of three research 
institutes: National Institute on Alcohol Abuse and Alcoholism 
[NIAAA]; National Institute on Drug Abuse [NIDA]; and, National 
Institute of Mental Health [NIMH] and two service offices: 
Office for Substance Abuse Prevention [OSAP] and Office for 
Treatment Improvement [OTI]. ADAMHA was responsible for 
administering the Alcohol, Drug Abuse, and Mental Health 
Services [ADMS] block grant, the major Federal program focused 
on these issues.
    The ADAMHA Reorganization Act of 1992 (Public Law 102-321) 
replaced ADAMHA with SAMHSA, a services-oriented agency, 
transferred ADAMHA's three research institutes to the National 
Institutes of Health [NIH], and replaced the ADMS block grant 
with two separate block grants: 1) the Block Grant for 
Prevention and Treatment of Substance Abuse, which provides 
funds to States for alcohol and drug abuse prevention and 
treatment programs and activities, and the Block Grant for 
Community Mental Health Services, which provides funds to 
States for mental health services and support through community 
mental health centers. SAMHSA's support of drug treatment, 
through its Block Grants for Prevention and Treatment of 
Substance Abuse, was a key topic of the hearing.
    (20) On February 29, 2000, the subcommittee held an 
oversight hearing on United States-Mexico counter-narcotics 
efforts. Held on the eve of the annual certification list 
release by the White House, the purpose of the hearing was to 
identify issues associated with United States-Mexico counter-
narcotics activities. A number of concerns were raised 
regarding the level of cooperation between the United States 
and Mexico.
    Cocaine continues to be transshipped from Colombia to 
Mexico and then transported into the United States using 
various land, air, and sea routes. Mexico is also a major 
producer of marijuana, heroin, and methamphetamine. Of 
increasing concern is the recent emergence of a higher purity 
Mexican heroin. DEA estimates that Mexico has become the 
second-largest source of heroin in the United States. 
Methamphetamine precursor chemicals, and increasingly the 
finished product, are smuggled in great volume into the United 
States. The DEA has also seen an increase in methamphetamine 
``cooks'' trained in Mexico coming to the United States to 
produce the drug.
    In the past several years, the United States has made 
approximately 70 extradition requests, and approximately 60 
percent of these requests have been fulfilled. Mexico has 
requested at least 58 extraditions from the United States, 48 
percent which have been fulfilled. To date, no major Mexican 
drug traffickers have been extradited to the United States.
    Money Laundering has been a criminal offense in Mexico 
since 1990, however banking regulations and enforcement efforts 
are just beginning to catch up with the intent of the 
legislation. The Specialized Unit against Money Laundering was 
created in January 1998, to implement the law. They work 
closely with the U.S. Financial Crimes Enforcement Network 
[FINCEN], and other international anti-money laundering 
agencies.
    (21) On March 6, 2000 at Woodland, CA, the subcommittee 
held a hearing to investigate the drug crisis in northern 
California. The hearing examined the effectiveness of local and 
Federal efforts to combat the growing drug problem in the 
region, and the coordination of efforts through the Central 
Valley California HIDTA. In addition, the hearing focused on 
methamphetamine use and production in the region.
    The nine counties (Sacramento, San Joaquin, Stanislaus, 
Merced, Madera, Fresno, Tulare, Kings, and Kern Counties) of 
the Central Valley California HIDTA area comprise a major 
agricultural center for the Nation. The region is populated by 
approximately 4 million residents although the population 
swells seasonally as the need for agricultural migrant labor 
fluctuates. The residents of the Central Valley are serviced by 
two international airports and hundreds of private airstrips. 
The Central Valley also contains several major interstate 
highways including Interstate 5 and Highway 99 which are the 
traffickers' favored routes of transportation for moving 
methamphetamine, heroin, and cocaine from Mexico and the 
Central Valley to northern California and the Pacific 
Northwest. Additionally, Interstate 80 runs east from San 
Francisco directly through Sacramento before traversing the 
length of the United States through the Rocky Mountains and 
Midwestern States and provides a major pipeline for the 
transportation of controlled substances headed to the Midwest 
and Eastern United States. The Central Valley is also home to 
rail, bus, cargo, and shipping port facilities.
    The Central Valley continues to be a primary manufacturing, 
transshipment, distribution, and consumption area for illegal 
narcotics, and for methamphetamine in particular. Within the 
last several years the area has experienced a dramatic increase 
in the number and scale of clandestine methamphetamine 
manufacturing labs operating within the region.
    These labs, most of which are operated by multi-drug 
trafficking organizations based in Mexico, infest the Central 
Valley. These organizations tend to situate their labs and so 
called ``super-labs'' in the Central Valley due to its 
proximity to the State's principal precursor chemical supply 
companies and its major interstate highways. These large-scale, 
relatively sophisticated labs are set up long in advance of 
use, are well concealed, often heavily guarded, and can produce 
from 20 to 200 pounds of high purity methamphetamine per 
cooking cycle.
    The Central Valley HIDTA has a fiscal year 2000 budget of 
$800,000, run by an executive committee comprised of six local 
officials, one State and seven Federal officials.
    (22) On March 7, 2000, at the U.S. Coast Guard Station in 
San Diego, CA, the subcommittee held a hearing to investigate 
the drug crisis in southern California. The hearing examined 
the effectiveness of local and Federal efforts to combat the 
growing drug problem in the region, and the coordination of 
efforts through the Southwest Border HIDTA and its California 
Border Alliance Group.
    Designated as one of the original HIDTAs in 1990, the 
Southwest Border HIDTA region is a critical line of defense in 
efforts to reduce drug availability in the United States. It is 
estimated that 59 percent of the cocaine entering the United 
States passes through Mexico from South America. Mexico is the 
No. 1 foreign producer and supplier of marijuana and 
methamphetamine to the United States; and Mexican heroin 
dominates the market in the western and southwester United 
States. The Southwest Border HIDTA (fiscal year 2000 budget: 
$46,009,946) is located in San Diego, CA, and coordinates 
regional partnerships between southern California (California 
Border Alliance Group), Arizona (Arizona Alliance Planning 
Committee), New Mexico (New Mexico Partnership), West Texas 
(West Texas Partnership) and South Texas (South Texas 
Partnership). This territory consists of 39 legal crossing 
points.
    Recent Southwest Border HIDTA initiatives include: (1) the 
Clandestine Laboratory Seizure System designed for centralized 
storage and remote retrieval of information relating to 
clandestine laboratory seizures for access by all HIDTA 
intelligence centers and law enforcement agencies; (2) the 
Southwest Border Unit, Research and Analysis Section that 
prepares organizational profiles of major drug trafficking 
organizations and trafficking along the Southwest Border by 
conducting research, analyzing and fusing local, State and 
Federal intelligence; and (3) the Southwest Border HIDTA 
Management and Coordination that develops border wide 
initiatives, identifies successful efforts, and recommends 
resource allocations.
    (23) On March 20, 2000, in Honolulu, HI, the subcommittee 
held a hearing to investigate drug challenges in Hawaii. The 
hearing examined the effectiveness of local and Federal efforts 
to combat the growing drug problem in the region, and the 
coordination of efforts through the Hawaii HIDTA.
    Marijuana cultivation continues to be significant in 
Hawaii--the market price for 1 pound of Hawaiian-grown 
marijuana is in the $5,000 to $8,000 price range, which is the 
highest price for domestic marijuana in the country. Both 
methamphetamine powder and more refined crystal ``ice'' are 
also a threat to the State, with an increasing number of 
clandestine methamphetamine laboratories. Finally, Honolulu is 
a principle financial center for the Pacific Rim, and often 
serves as the initial entry point for Asian money wire 
transfers, making money laundering a chief concern for the 
State.
    Earlier in the year, the Hawaii House Judiciary Committee 
approved the use of marijuana for medical purposes, bringing it 
one step closer to being the eighth State to pass legislation 
aimed at legalizing some use of marijuana. Additionally, in 
1999, Hawaii became the first State to obtain Federal approval 
to begin testing the viability of industrial hemp as an 
agricultural resource for the State.
    Located in the middle of the Pacific Ocean, the Hawaii 
HIDTA is positioned to collect and analyze international and 
regional intelligence relating to the drug threat posed by West 
Coast, Mexican and Asian/Pacific Islander drug traffickers 
operating in the Pacific Basin. The Hawaii HIDTA presently 
consists of two operational initiatives: (1) the Joint 
Investigative Support and Intelligence Center that gathers and 
disseminates intelligence relating to drug trafficking and 
money laundering activities, and (2) the Honolulu Airport Task 
Force that focuses on airport interdiction.
    (24) On March 27, 2000, at the University of Maryland 
School of Nursing, the subcommittee held an oversight hearing 
on drug issues in Baltimore, Maryland. The hearing was 
entitled, ``Alternatives to Incarceration: What Works and 
Why?'' The hearing examined the growing drug problem in 
Baltimore and explored the impact of incarceration and the 
effectiveness of treatment alternatives.
    The Washington/Baltimore HIDTA [W/B HIDTA], established in 
1994, is 1 of 31 anti-drug task forces established and financed 
by the White House Office of National Drug Control Policy 
[ONDCP]. Since 1994, the total amount of funds allocated to the 
W/B HIDTA has been almost $52 million. The region, consisting 
of Washington, DC, and counties in Maryland and Virginia, is a 
corridor for drugs being smuggled up and down the East Coast of 
the United States. The Port of Baltimore, with its huge 
quantities of bulk cargo entering the United States, is 
particularly vulnerable to maritime drug smuggling operations.
    The W/B HIDTA provides police department executives and 
investigators with a truer picture of the crime problem in the 
region. It receives $11.4 million per year for three program 
areas: treatment/criminal justice, law enforcement, and 
prevention.
    The W/B HIDTA treatment/criminal justice initiatives for 
Baltimore City are aimed at breaking the cycle of drug abuse 
and crime through well-organized, criminal justice based 
treatment programs for persons under correctional custody. The 
initiatives have focused on dismantling violent drug 
trafficking organizations, closing down open-air drug markets 
and disrupting illicit drug smuggling organizations that affect 
the Baltimore Metropolitan area.
    The 1999 threat assessment issued by the W/B HIDTA 
demonstrates that drug-related crime and homicides remain a 
major concern for Baltimore City. The W/B HIDTA has criticized 
the administration of the former mayor and recommended that 
priority be given to treatment of criminal offenders.
    (25) On April 4, 2000, the subcommittee held an oversight 
hearing on drug treatment options for the justice system. The 
hearing focused on promising drug treatment options for 
eligible non-violent offenders provided by drug courts and 
prosecutor-based programs. The hearing also examined 
operations, results and evaluations of programs.
    Federal funding to assist State courts in expediting and 
specializing in drug cases began in 1989, when the Department 
of Justice [DOJ] Bureau of Justice Assistance [BJA] announced 
funding for ``Expediting Management of Drug Cases'' as part of 
the Drug Control and System Improvement Discretionary Grant 
Program under the Anti-Drug Abuse Act of 1988. In 1991, BJA 
announced funding for ``Drug Night Courts,'' under its 
discretionary grants of the Edward Byrne Memorial State and 
Local Law Enforcement Assistance Program. In April 1991, the 
National Institute of Justice [NIJ] assessed the effects of 
expedited case management of drug cases as follows: 
``Differentiated Case Management [DCM] and Expedited Drug Case 
Management [EDCM] are new approaches to adjudication that 
streamline police, prosecution, public defender and court 
procedures with little additional costs. They have been shown 
to speed processing times, increase dispositions, and reduce 
jail crowding.'' (See ``Searching for Answers,'' A Report to 
the President, the Attorney General and the Congress, NIJ, 
April 1991.)
    Congress has continued to increase Federal funding for drug 
courts, prosecutor training, and drug treatment for offenders 
since 1989, eventually leading to authorization of a special 
funding program for drug courts. Title V of the Violent Crime 
Control and Law Enforcement Act of 1994 (Public Law 103-322) 
provided authority for the Attorney General to make grants to 
State and local governments and to court entities for drug 
court programs.
    In 1997 approximately 20,000 defendants appeared before the 
Nation's 215 drug courts, with 160 additional courts in the 
planning stages. In October 1999, 416 drug courts were reported 
operating nationwide, including 81 juvenile, 11 tribal, 10 and 
7 combined drug courts; 279 were in the planning stages, up 
from a dozen in 1994.
    According to the Arrestee Drug Abuse Monitoring system 
[ADAM] data, between one half and three-quarters of all 
arrestees tested in 35 cities around the country had drugs in 
their system at the time of arrest. Drug courts are designed to 
allow judges to hasten the disposal of drug cases and to 
monitor drug treatment of defendants as a means of ending their 
illicit use of drugs. Today, drug courts typically integrate 
alcohol and drug treatment services.
    There are two main activities associated with drug courts, 
with some courts engaged in one or both activities: (1) 
expediting the disposal of drug cases and (2) monitoring drug 
treatment.
    Funding for drug court programs established by the 1994 act 
totaled $11.9 million in fiscal year 1995. Although Congress 
repealed the program' authorization in fiscal year 1996, it 
continued to fund the program at $18 million in fiscal year 
1996; and $30 million each for fiscal year 1997 and fiscal year 
1998. Under the Omnibus Consolidated and Supplemental Emergency 
Appropriations Act (Public Law 105-77), the Drug Courts program 
received $40 million in fiscal year 1999. $40 million again was 
appropriated for fiscal year 2000. Additional sources of 
Federal funding have included the Local Law Enforcement Block 
Grants [LLEBG] and the Juvenile Accountability Incentive Block 
Grants [JAIBG].
    A Department of Justice [DOJ] funded evaluation of Dade 
County's program in 1993 compared defendants both within and 
outside the program over an 18-month period. Among the 
findings: fewer cases were dropped; lower incarceration rates 
resulted; rearrests decreased; longer periods of time elapsed 
before rearrest; and higher failure-to-appear rates, caused 
mainly by the more frequent appearances required of drug court 
defendants.
    In 1997, GAO reviewed 20 evaluation studies undertaken 
between 1991 and 1997 covering 16 drug courts. GAO found that 
existing studies were not comparable and did not include 
systematic cost/benefit analyses. GAO determined that time in 
treatment varied, as did completion rates.
    The National Drug Control Strategy: 2000 Annual Report 
issued by ONDCP in March 2000, states as follows: `` A review 
of thirty evaluations involving twenty-four drug courts found 
that these facilities keep felony offenders in treatment or 
other structured services at roughly double the retention rate 
of community drug programs. Drug courts provide closer 
supervision than other treatment programs and substantially 
reduce drug use and criminal behavior.''
    (26) On April 12, 2000 the subcommittee held an oversight 
hearing on the emerging drug threat from Haiti. Haiti's 
location between the United States and the major drug producing 
countries in South America makes it a logical transshipment 
point. As the poorest country in the Western Hemisphere, Haiti 
is also very vulnerable to official narcotics corruption.
    According to State Department's International Narcotics 
Control Strategy Report [INCRS] published in March 2000, 
``Haiti's weak democratic institutions, fledging police force, 
and eroding infrastructure provide South American-based 
narcotics traffickers with a path of very little resistance.'' 
Haiti is now responsible for 14 percent of the cocaine entering 
the United States from Colombia (up from 10 percent in 1998). 
The United States Government estimates that 67 metric tons of 
cocaine moved through Haiti last year (a 24 percent increase 
from the 1998 total). Haitian authorities continue to be 
deprived of long-needed criminal laws and law enforcement 
tools. The police to population ratio is one of the lowest in 
the world.
    According to DEA, the primary method for smuggling large 
quantities of cocaine through the Caribbean to the Untied 
States is via maritime vessels. Colombian drug traffickers have 
shifted to using ``go-fast'' boats to smuggle cocaine into 
Haiti. These drugs are often transferred overland to the 
Dominican Republic for further shipment to the United States 
(including Puerto Rico) and Europe. Over one third of the drug 
flow was done by ``airdrops'' into mountainous regions of 
Haiti.
    On February 29, 2000, President Clinton determined that it 
is in the ``vital national interests'' of the United States to 
certify Haiti. According to the Statement of Explanation, ``A 
cutoff would require termination of important USG initiatives, 
including programs targeting electoral support, police 
development, economic growth, education, social stability, 
hunger and environmental degradation. If critical U.S. aid is 
withdrawn, and U.S. support for the electoral process and 
public security is curtailed, assistance to illicit traffickers 
of drugs and migrants will be the unintended consequence. The 
risks posed to U.S. vital interests by a cutoff of bilateral 
assistance outweigh the risks posed by Haiti's failure to 
cooperate fully with the USG, or take adequate steps on its 
own, to combat the illicit drugs.''
    Democratic elections in Haiti have been repeatedly 
postponed. Protests, violence and theft have marred the 
election process in Haiti. Mobs of Haitians have stormed 
election offices, burned and stole voter material and several 
deaths have resulted from the violence arising from electoral 
protests and demonstrations.
    (27) On May 11, 2000, the subcommittee held an oversight 
hearing on drug sentencing practices, recent developments and 
issues. The hearing focused on Federal drug sentencing 
practices and Bureau of Prisons impacts, including drug 
treatment services. Additional topics explored included the use 
of mandatory minimum sentencing, and sentence reductions due to 
offender cooperation and prison ``good time'' credits.
    The U.S. Sentencing Commission (hereafter ``Commission'') 
is an independent agency in the judicial branch composed of 
seven voting and two non-voting, ex officio members (the 
Attorney General and chair of the U.S. Parole Commission). Its 
principal purpose is to establish sentencing policies and 
practices for the Federal criminal justice system that will 
assure the ends of justice by promulgating detailed guidelines 
prescribing the appropriate sentences for offenders convicted 
of Federal crimes. The Commission has the authority to submit 
guideline amendments to Congress each year between the 
beginning of a regular congressional session and May 1. Such 
amendments automatically take effect 180 days after submission 
unless a law is enacted to the contrary. For fiscal year 1999, 
the Commission's budget was $9,487,000.
    The act establishing the Sentencing Commission provides for 
the development of guidelines that will further traditional 
purposes of criminal punishment: deterrence, incapacitation, 
just punishment, and rehabilitation. The act contains detailed 
instructions as to how this determination should be made--the 
most important of which directs the Commission to create 
categories of offense behavior and offender characteristics. 
The Commission's initial guidelines were submitted to Congress, 
and took effect, in 1987, applying to all offenses committed 
after that date. The act abolished parole and substantially 
reduced and restructured good behavior adjustments.
    The Commission established a sentencing table that contains 
43 levels. Each level prescribes ranges that overlap with the 
ranges in the preceding and succeeding levels. A change of six 
levels roughly doubles the sentence. The guidelines are in 
keeping with the statutory requirement that the maximum of any 
range cannot exceed the minimum by more than the greater of 25 
percent or 6 months. According to the Commission, the table 
overlaps offense levels meaningfully, works proportionately, 
and at the same time preserves the maximum degree of allowable 
discretion within each level. An offender's criminal history 
category (for each offense level there are six permissible 
sentencing subcategories arranged according to the seriousness 
of the criminal defendant's history). Points are assessed for 
past convictions, for misconduct committed while under judicial 
supervision such as bail or parole, and for crimes of violence. 
Juvenile as well as general and specific court martial 
convictions are counted. There are past criminal activities 
which not only determine a defendant's criminal history 
category point total, but also provide the basis for increasing 
a defendant's offense level, as in the case or career 
criminals, armed criminals, or professional criminals.
    Normally, the sentencing court must select a sentence from 
within the guideline range. If, however, a particular case 
presents atypical features, the act allows the court to depart 
from the guidelines and sentence outside the prescribed range. 
The sentencing statute permits a court to depart from a 
guideline-specified sentence when it finds ``an aggravating or 
mitigating circumstance of a kind, or to a degree, not 
adequately taken into consideration by the Commission in 
formulating the guidelines that should result in a sentence 
different from that described.'' 18 U.S.C. Sec. 3553(b). In 
such instances, the court must specify reasons for departure. 
An appellate court may review the reasonableness of the 
departure. In sum, the court must impose a sentence within the 
guidelines unless: (1) the government moves for departure based 
upon the defendant's cooperation with law enforcement 
authorities; (2) the guidelines expressly authorize departure; 
or (3) the court feels that the Commission failed to consider 
adequately the kind of factors raised by a particular case when 
it developed the otherwise applicable guidelines.
    Nearly 90 percent of all Federal criminal cases involve 
guilty pleas and many of these cases involve some form of plea 
agreement. The Commission provides guidance regarding plea 
agreements by issuing general policy statements concerning the 
acceptance of plea agreements, and will collect data on these 
practices. The Federal Rules of Criminal Procedure govern the 
acceptance or rejection of such agreements.
    The statue provides that the guidelines are to ``reflect 
the general appropriateness of imposing a sentence other than 
imprisonment in which the defendant is a first offender who has 
not been convicted of a crime of violence or an otherwise 
serious offense . . .'' 28 U.S.C. Sec. 994(j). More 
specifically, the guidelines work as follows in respect to a 
first offender. For offense levels one through eight, the 
sentencing court may elect to sentence the offender to 
probation (with or without confinement conditions) or to a 
prison term. For offense levels 9 and 10, the court may 
substitute probation for a prison term, but the probation must 
include confinement conditions (community confinement, 
intermittent, or home detention). For offense levels 11 and 12, 
the court must impose at least one-half the minimum confinement 
sentence in the form of prison confinement, the remainder to be 
served on supervised release with a condition of community 
confinement or home detention.
    Mandatory minimums have existed in the American justice 
system throughout history. The most widely recognized are those 
that demand that offenders be sentenced to imprisonment for 
``not less than'' a designated term of imprisonment. Some are 
triggered by the offense, others by the criminal record of the 
offender. Some of the ``not less than'' category are less 
``mandatory'' than others, because Congress has provided a 
partial escape hatch or safety valve. For example, several of 
the drug-related mandatory minimums are subject to a ``safety 
valve'' that may render their minimum penalties less than 
mandatory for small time, first offenders.
    The Controlled Substances Act [CSA] assigns various plants, 
drugs and chemicals to one of five schedules and authorizes the 
Attorney General to add or reassign substances to the schedules 
according to the risks they represent and medical benefits they 
provide. Schedule I contains heroin, lysergic acid diethylamide 
[LSD] and other substances that are highly susceptible to 
abuse, have no accepted medical use, and cannot safely be made 
available under prescription. Schedule II house cocaine and 
other substances found to be highly susceptible to abuse and 
highly addictive, but for which there may be beneficial medical 
uses. The remaining schedules reflect progressively less 
dangerous and addictive--and progressively more beneficial--
classifications of substances. Within this basic scheme, the 
CSA and its offspring attack substance abuse and commerce in 
substance abuse at four levels: unlawful possession, 
production, distribution, and laundering of the proceeds 
illicit traffic generates.
    In 1998, there were more than 123,000 Federal prisoners. 
(92.5 percent of the prisoners were male; 59 percent were 
serving time for drug offenses). For drug offenders released in 
1998, the mean time served was about 40 months (41.4 months for 
trafficking; 9.3 months for possession); the median time served 
was 36.5 months (39.1 months for trafficking; 6 months for 
possession). In 1997, more than one-third (34.6 percent) of 
Federal prisoners serving time for drug offenses reported being 
under the influence of alcohol or drugs at the time of their 
offense (20 percent under influence of alcohol; 25 percent 
drugs). In 1997, 73 percent of all Federal prisoners reported 
prior drug use; 57.3 percent regularly; 44.8 percent within the 
month prior to offense; and 22.4 percent at the time of the 
offense. In 1997, among all Federal prisoners, 46.4 percent 
reported receiving prior drug treatment (39.2 percent while 
under correctional supervision; 28.2 percent since BOP 
admission).
    (28) On Tuesday, May 16, 2000, the subcommittee held an 
oversight hearing on the National Youth Anti-Drug Media 
Campaign. The hearing examined the effectiveness and efficiency 
of the National Youth Anti-Drug Media Campaign, now in its 
third year. At roughly $1B, this 5-year media campaign is the 
largest government sponsored and government funded campaign of 
its kind in history. The ONDCP is responsible for conducting 
and administering the National Youth Anti-Drug Media Campaign. 
The anti-drug media campaign is now in phase III. The National 
Institute on Drug Abuse [NIDA] is conducting the evaluation of 
phase III.
    The principle predecessor of anti-drug television ads was 
developed by the Partnership for a Drug Free America [PDFA], a 
not-for-profit organization created in 1987 to curb illegal use 
among America's youth. In a collaborative effort, the PDFA 
solicited anti-drug ads from various ad agencies who donated 
their creative talent to design and produce anti-drug 
television ads (pro bono). The PDFA also solicited and obtained 
donated media airtime from the big three television networks to 
run the anti-drug ads as public service announcements [PSAs]. 
For over 10 years, the PDFA coordinated these activities with 
great success and at no expense to the American taxpayer. 
According to the annual University of Michigan ``Monitoring the 
Future'' survey, at the same time that the level of anti-drug 
television ads was rising, attitudes about the social 
disapproval and the perceived risks of illegal drug use were 
also rising. Likewise, there was a corresponding decrease in 
illegal drug use among young people during the same period.
    Beginning in 1991, the donated airtime from the big three 
media networks began to decline significantly due to increased 
competition resulting from industry deregulation. Throughout 
the nineties, the PDFA worked diligently to rebuild the donated 
air times to previous levels (e.g., in 1991 the estimated value 
of donated media air time was $350 million). In 1996, the PDFA 
commissioned a study that identified three target audiences and 
determined that an effective media campaign would require an 
exposure rate of 4 times per day and frequency rate of 90 
percent of the target audiences. The minimum cost for such an 
effort was determined to be $175M (in 1996 dollars), which 
represented one-half of the $350 million donated in 1991. The 
remaining $175 million would come from donated media time and 
space. Realizing they needed help to reach their goals, the 
PDFA approached Congress for assistance. In 1997, the 
President's budget requested $175 million.
    In 1997, Congress appropriated $195M ($20 million over the 
President's request) for the National Youth Anti-drug Media 
Campaign for fiscal year 1998. Another $185M was appropriated 
for fiscal year 1999 and again for fiscal year 2000. The funds 
were appropriated under the Treasury-Postal Appropriations Bill 
primarily to purchase media time and space. The ONDCP was 
selected as the most appropriate Federal entity to administer 
the new anti-drug media campaign. Initially, the ONDCP did not 
have the appropriate staff to properly administer the various 
contracts related to the campaign, so they relied on an 
existing Department of Defense contract to allocate the funds 
and later used HHS contractors. Congress established a 100 
percent ``match'' requirement in the 1998 reauthorization of 
ONDCP.
    The ONDCP commissioned a contractor to produce a 
``Communications Strategy Statement'' for use in guiding the 
overall conduct of the anti-drug media campaign. According to 
the Communications Strategy Statement, published in 1997, the 
goal of the anti-drug media campaign is to ``educate and enable 
America's youth to reject illegal drugs . . .'' and ``. . . 
preventing drug use and encouraging occasional users to 
discontinue use.'' Phase I of the Campaign (March 1998--
September 1998) ran paid TV, radio and print media public 
service announcements [PSAs] in a 12-city pilot program. In 
phase II (September 1998--June 1998), the media campaign went 
nationwide. In phase III, which began in the summer of 1999, 
the campaign evolved into a comprehensive effort (beyond paid 
and donated advertising). Phase III includes interactive 
Internet Web sites, entertainment outreach, parenting 
strategies and a recently published corporate sponsorship plan.
    In mid-January 2000 press reports surfaced concerning the 
ONDCP initiative to exchange match credit for the inclusion of 
anti-drug content in TV programming and print media articles. 
News reports on the issue appeared on every TV network and in 
every major newspaper in the country as the controversy erupted 
into a national discussion over Government censorship. Some 
reports charged that ONDCP was reviewing TV scripts before the 
programs aired and interfering with TV programming content. 
ONDCP denied the allegations, but later issued revised 
guidelines in an effort ``to clarify pro-bono match component 
of the anti-drug media campaign.''
    The central focus of the oversight hearing was to explore 
whether the anti-drug media campaign is working (i.e., whether 
it is making a difference in changing attitudes about illegal 
drug use and also drug use behaviors). Additional issues 
included the match credit component of the media campaign.
    (29) On May 26, 2000, the subcommittee held an oversight 
hearing on the shipment of illegal narcotics in the mail system 
and via commercial carriers. News articles have highlighted the 
increased use of the U.S. mail system and various U.S. 
commercial shipping carriers to facilitate drug trafficking. 
Illegal drugs are being sent interstate and internationally.
    Shipments of ecstasy from Europe have increased because the 
demand for the drug has skyrocketed among U.S. teenagers. 
Because ecstasy is formed in tiny tablets and does not require 
bulky packaging and several dozen tablets can be mailed in a 
standard envelop anywhere in the world for a relatively low 
cost. Mailing the drugs also acts to insulate the producer by 
minimizing the risk of getting caught.
    The U.S. Postal Service facilitates the exchange of over 
206 billion pieces of domestic mail annually. The various U.S. 
commercial shipping carriers facilitate the exchange of more 
than 2.8 billion domestic letters, packages and freight 
annually. The sheer volume of letter and package traffic offers 
a highly desirable way for smugglers to transport and 
distribute illegal drugs.
    Websites, offering the sale of illegal drugs, direct their 
buyers to use the mail service and the commercial shipping 
companies to ship drugs because the producers and smugglers 
feel that there is less chance of detection and arrest than 
trying to employ individuals to smuggle illegal narcotics 
across State lines and across the world.
    (30) On May 30, 2000, at the De La Salle High School in New 
Orleans, LA, the subcommittee held a hearing on the 
effectiveness of school drug testing programs and the Gulf 
Coast HIDTA.
    In 1986, ONDCP established the Gulf Coast HIDTA for 
designated counties and parishes in Alabama, Mississippi and 
Louisiana. This area serves as a gateway for drugs due to the 
numerous deep water ports and 8,000 miles of coastline. Drug 
trafficking organizations utilize the deep water ports, railway 
and highway systems and airports to facilitate trafficking. The 
growing casino gaming industry in Louisiana and Mississippi 
attract drug trafficking organizations for money laundering 
activities. With a $6 million budget, the Gulf Coast HIDTA 
provides funding to 12 drug enforcement initiatives, two 
intelligence support initiatives, one community empowerment 
initiative, and a management and coordination initiative. 
Forty-nine agencies participate in these initiatives. An 
initiative that receiving close scrutiny involved school drug 
testing.
    Clearly, substance abuse by youth has reached epidemic 
levels in the United States and has been responsible for poor 
school performance and juvenile crime and violence. In an 
attempt to address these concerns and deter substance abuse, 
many school districts are developing drug testing policies. The 
U.S. Supreme Court in Vernonia School District v. Acton, 115 S. 
Ct. 2386 (1995) approved random drug testing by urinalysis for 
elementary and high school athletes. The court held that 
deterring drug abuse by school children was a compelling State 
interest and did not violate a student's fourth amendment right 
against unreasonable search and seizure. Since then, the U.S. 
Court of Appeals for the Seventh Circuit approved a drug 
testing program which tested all students engaged in any 
extracurricular activities.
    In 1993, the Orleans Parish District Attorney's office [DA] 
developed a new diversionary program for non-violent, first 
time offenders with drug abuse problems. The program was funded 
by a Department of Justice [DOJ] National Institute of Justice 
[NIJ] grant. The program utilized hair drug testing. The DA 
encouraged school districts to adopt drug testing programs. In 
1998, De La Salle High School implemented a student and faculty 
testing program. In addition to a number of private schools 
which have adopted the drug testing program, in January 1999 
the Louisiana High School Athletic Associations [LHSAA] 
mandated that all Louisiana high schools participating in LHSAA 
sports implement a drug testing program.
    In May 2000, the Orleans Parish School Board approved a 
pilot program to conduct random hair testing at Frederick A. 
Douglass Senior High School, a public high school. The policy 
requires consent from each student's parent. The test results 
are not used for law enforcement purposes. The results are used 
for counseling and treatment.
    (31) On June 1, 2000 in Orlando, FL, the subcommittee held 
a hearing to investigate the drug crisis in the greater Orlando 
area. The hearing examined the effectiveness of local and 
Federal efforts to combat the growing problem of dangerous 
drugs, particularly ``Club Drugs,'' in the region.
    The Central Florida HIDTA covers seven counties in central 
Florida ranging from Pinellas County on the gulf coast in the 
Southwest area of the HIDTA to Volusia County on the Atlantic 
coast in the Northeast area of the HIDTA. This area is commonly 
referred to as the I-4 corridor. This area encompasses three 
international airport two major seaports, and several hundred 
miles of coastline. In 1998 this area experienced in excess of 
72 heroin overdose deaths. National attention to this problem 
resulted in the designation of the Central Florida HIDTA.
    All areas of central Florida show an increase in the use of 
methamphetamine and related violent crimes. Medical Examiners 
have indicated that deaths due to methamphetamine use have 
increased. Both marijuana and cocaine remain plentiful and 
drugs of choice.
    (32) On June 5, 2000, at West Mesquite High School in 
Mesquite, TX, the subcommittee held a hearing on the 
effectiveness of drug prevention efforts in local communities 
and schools. Federal, State and local information and ideas on 
the topic of local drug challenges and successful prevention 
initiatives were discussed. Testimony was provided by law 
enforcement and education professionals, as well as students 
who had resisted and overcome drug abuse.
    (33) On June 9, 2000, the held an oversight hearing 
entitled, ``Counterdrug Implications of the U.S. Leaving 
Panama.'' Prior to December 31, 1999, Panama, which is located 
at the hub of two oceans and two continents, had been home to a 
significant United States military presence since it seceded 
from Colombia in 1903. United States military forces in Panama 
served several functions. The primary purpose of the United 
States troops was to provide for the defense of the Panama 
Canal. Until 1997, Panama served as the headquarters of the 
United States Southern Command [SOUTHCOM], a unified command 
responsible for all United States military operations 
throughout Latin America and the Caribbean (excluding Mexico). 
In September 1997, SOUTHCOM moved to Miami, FL. Despite the 
move, SOUTHCOM has continued to provide support to Latin 
American nations combating drug trafficking, such as aerial 
reconnaissance and counternarcotics training. Starting in 1988, 
the Department of Defense had ``detection and monitoring'' 
responsibility for U.S. counternarcotics efforts. Until last 
year, Howard Air Force Base in Panama provided secure staging 
for detection, monitoring, and intelligence collecting assets.
    The Panama Canal Treaty terminated at noon on December 31, 
1999, at which time the Government of Panama assumed complete 
control of the Panama Canal and all remaining United States 
military facilities. The Neutrality Treaty remains in force 
indefinitely and gives the United States the right to defend 
the neutrality of the Panama Canal. Roughly 13 percent of U.S. 
international shipborne commerce flows through the Canal. The 
United States is the No. 1 user of the Panama Canal, which 
carries 13,000 ships per year. Four percent of the world's 
trade transits through the Panama Canal.
    Today, there are no permanently stationed United States 
troops in Panama (down from 10,000 in 1993). In leaving Panama 
last year, the United States military abandoned four major 
military installations--Fort Sherman, Fort Clayton, Howard Air 
Force Base, and Fort Kobbe. Six major installations had been 
returned to Panamanian control earlier--Fort Davis and Fort 
Espinar were returned in September 1995; Fort Amador, at the 
Pacific entrance to the Canal, was returned in October 1996; 
Albrook Air Force Station was returned October 1997; Galeta 
Island was returned March 1999; and Rodman Naval Station was 
returned in March 1999. By the end of 1999, the United States 
military had returned property consisting of about 70,000 acres 
and about 5,600 buildings to the Government of Panama. 
Estimates of the value of the land and infrastructure range 
from $10-$13 billion. The Panamanians plan to take advantage of 
reverting properties to make Panama a commercial and 
educational hub in the Western Hemisphere. The government plans 
on establishing new transshipment ports, a center of higher 
education, light manufacturing zones, and residential resort 
areas.
    Panama serves as a major transit point for illicit drugs 
heading to the United States. This is due to its proximity to 
major drug-producing countries like Colombia, location on key 
transportation routes, openness to trade, and weak controls 
along borders and coastlines. Panama's strategic location 
between the drug producing countries of South America and the 
United States and its United States dollar based economy, and 
large, well established, and until recently, loosely regulated 
banking sector make Panama particularly vulnerable to criminal 
organizations involved in illegal drug trafficking and money 
laundering. The Colon Free Trade Zone (established in 1948) 
also make Panama a prime target for the transshipment of 
illegal goods which are co-mingled with cargo to avoid 
detection.
    In addition, border incursions by Colombia rebel groups 
(the FARC and the ELN) into the Darien in southern Panama are 
increasingly common. In October 1999, nearly 60 Colombians were 
murdered by FARC guerrillas in the Uraba Department of northern 
Colombia. The FARC reported fled into Panama to avoid pursuit 
by Colombian Security Forces. Smuggling of arms through Panama 
from war ravaged Central America to arms-thirsty rebels and 
drug smugglers in Colombia and Peru is rampant. Panama, which 
does not have an army, also does not have sufficient border 
agents to patrol its borders.
    In December 1989, when the United States invaded Panama to 
oust the former dictator General Manuel Noriega, the Panamanian 
Defense Forces were disestablished. Panama now has no military. 
Panamanian security forces are comprised of three components 
(the Panamanian National Police [PNP], the Coast Guard-type 
National Maritime Service [NMS] and the National Air Service 
[NAS].
    When the United States shut down operations at Howard Air 
Force Base in Panama on May 1, 1999, it had significant impact 
on United States counterdrug surveillance flights. On April 16, 
1999, Defense Secretary William Cohen had approved a plan 
drafted by the United States Southern Command to open new 
military operating facilities (Forward Operating Locations 
[FOLs]) on the Caribbean islands of Curacao and Aruba and in 
Ecuador. These FOLs are intended to offset the loss of Howard 
Air Force Base. Ten-year agreements have been agreed upon 
between the U.S. Government and the respective host nations. 
Runway and other infrastructure improvement are necessary 
before these FOLs are fully operational, although flights are 
now being flown out of Aruba and Curacao and limited flights 
out of Manta, EC as well.
    The United States does not own or control the facilities in 
Ecuador, Aruba or Curacao. Instead of permanently stationing 
aircraft at the three sites, the United States rotates aircraft 
in and out on a temporary basis, from several weeks to months 
at a time. With the host nations performing many support 
functions, SOUTHCOM hopes to save on operating costs, which it 
currently projects at $14 million a year for the three sites. 
But Navy and Air Force officials counter that the use of three 
new sites instead of one could increase operations and 
maintenance costs.
    (34) On June 23, 2000, the subcommittee held a hearing on 
the topic of ``money laundering.'' The hearing covered topics 
regarding where and how money laundering occurs, especially 
involving international drug traffickers, and what is being 
done to combat the problem.
    Money laundering has been described as ``the process by 
which one conceals the existence, illegal source, or illegal 
application of income, and then disguises that income to make 
it appear legitimate.'' The act of money laundering is 
difficult to investigate and prosecute. More particularly, 
often it is hard to successfully prosecute a person who, using 
funds or property which are the proceeds of some crime, directs 
a financial transaction which is intended to conceal or 
disguise those proceeds so that the money appears to be from a 
legitimate source.
    The global nature of money laundering and the tremendous 
sums of money involved have had the effect of making 
traditional international borders irrelevant and have enabled 
corrupt foreign officials to systematically divert public 
financial assets to their own use. Money laundering has also 
tainted our own financial institutions and, if unchecked, will 
undermine public trust in these institutions' integrity. There 
is a growing concern that rapid advances in technology, coupled 
with the globalization of financial and business institutions, 
is contributing to uncontrolled illegal laundering of huge sums 
of money that can threaten the world's financial stability. 
Finally, money laundering is impacting and involving non-
financial businesses and professions which are related to 
financial institutions.
    The Department of the Treasury and the Department of 
Justice are the primary Federal agencies with responsibility 
for enforcing the criminal prohibitions of money laundering. 
Under Treasury are the Financial Crimes Network [FINCEN], 
Internal Revenue Service Criminal, Investigations [IRS-CI], 
Customs, Secret Service and Alcohol, Tobacco and Firearms 
[ATF]. Under the Department of Justice, which is responsible 
for enforcement of all Federal law, are the Asset Forfeiture 
and Money Laundering Section [AFMLS], the FBI, the Special 
Operations Division [SOD] and the Drug Enforcement Agency 
[DEA]. Also involved are the Department of State, the U.S. 
Postal Service and the Office of National Drug Control Policy. 
Assisting through information sharing and other cooperative 
means with the recordkeeping and reporting requirements are: 
Federal banking regulators, the Securities and Exchange 
Commission [SEC], the Internal Revenue Service [IRS] and the 
Commodity Futures Trading Commission [CFTC].
    (35) On June 26, 2000 in Sioux City, IA, the subcommittee 
held a hearing to investigate the methamphetamine drug crisis 
in Iowa and the Midwest. The hearing examined the effectiveness 
of local and Federal efforts to combat the growing drug problem 
in the region. The hearing focused on methamphetamine use, 
production and trafficking in the region as well as the 
coordinating efforts of the Midwest HIDTA.
    In February 1997, Iowa became one of the five Midwest 
States (Iowa, Nebraska, Missouri, Kansas, South Dakota) to form 
the new methamphetamine specific Midwest High Intensity Drug 
Trafficking Area [HIDTA]. In 1999, North Dakota became the 
sixth State to join the Midwest HIDTA which now has a total 
annual budget of $11.9 million. Iowa receives approximately 
$1.2 million of the $11.9 million for its enforcement 
initiative.
    The Midwest HIDTA is responsible for promoting a 
comprehensive, cooperative strategy by law enforcement at the 
Federal, State, and local level to address needs associated 
with methamphetamine production and distribution. The 
establishment of the Midwest Intelligence Center is a priority 
of the Midwest HIDTA and the ONDCP.
    (36) On June 30, 2000 the subcommittee held an oversight 
hearing entitled, ``Black-Tar Heroin, Meth, Cocaine Continue to 
Flood U.S. from Mexico.'' The heroin that is available in the 
United States is now coming predominantly from Colombia and 
Mexico. Heroin mortality figures in the United States are the 
highest ever recorded--close to 4,000 people have died in each 
of the last 4 years from heroin-related overdoses across the 
country. Heroin from Mexico now represents 14 percent of the 
heroin supply seized in the United States, and it is estimated 
that organized crime figures in Mexico produced a total of 6 
metric tons of the drug last year.
    Mexico-based trafficking groups entered the illicit 
methamphetamine market in 1995 and now dominate the trade. With 
their ability to obtain large quantities of precursor chemicals 
on the international market, their access to already 
established smuggling and distribution networks, and their 
control over laboratories capable of large-scale production and 
distribution, these criminal groups from Mexico dominate 
trafficking in the United States.
    Statistics compiled by the El Paso Intelligence Center 
[EPIC] indicate that 70 percent of the cocaine imported into 
this country is transported through the southwest border area 
of the United States. In the past, Mexico-based criminal 
organizations had limited their activities to the cultivation 
of marijuana and opium poppies for subsequent production of 
marijuana and heroin. However, over the past 7 years or more, 
Mexico-based organized crime syndicates have gained increasing 
control over many aspects of the methamphetamine, heroin, 
cocaine and marijuana trade.
    (37) On July 11, 2000, the subcommittee held the second 
oversight hearing on the National Youth Anti-Drug Media 
Campaign. The hearing examined the effectiveness and efficiency 
of the National Youth Anti-Drug Media Campaign, now in its 
third year. The National Institute on Drug Abuse [NIDA] is 
responsible for conducting the evaluation of phase III and has 
contracted with Westat, Inc. and the Annenberg School of 
Communication at the University of Pennsylvania.
    (38) On September 18, 2000 at the Atlanta International 
School located in Atlanta, GA, the subcommittee held a hearing 
to investigate critical drug crisis issues particularly in 
Atlanta and neighboring areas. The hearing examined closely the 
effectiveness of local, State and Federal efforts to combat the 
growing problem of so-called ``club drugs'' in the region.
    Club drugs (including ``ecstasy,'' ``special-K,'' ``meth,'' 
``GHB'' and ``roofies'') are drugs of choice at many all-night 
dance parties called ``raves'' or ``trances.'' Gaining in 
popularity in the 1990's, club drugs include a wide variety of 
illegal drugs as well as prescription drugs taken illegally. 
Some are stimulants, some are depressants, and some are 
hallucinogens. They are all harmful and potentially deadly, and 
can produce immediate, as well as long-term, health problems. 
The use of ecstasy is a nationwide phenomenon. A federally 
sponsored survey of high-school students indicated that ecstasy 
increased 55 percent from 1998 to 1999. The Drug Abuse Warning 
Network [DAWN] estimates that 8 percent of high school seniors 
have used ecstasy at least once in their lifetime.
    (39) On September 19, 2000 the subcommittee held a hearing 
to examine drug trends, their consequences and implications for 
policies and programs.
    Numerous reports have been published and press releases 
issued on topics of drug abuse in America, based upon findings 
of some of the Nation's leading surveys and other research 
projects. Some surveys and research findings provide evidence 
of progress in combating drug abuse; others verify failures and 
disturbing trends that merit continuing concern and further 
efforts. An accurate assessment of the progress and failures of 
our drug demand reduction efforts is needed to: measure our 
progress in meeting national goals; identify where failures 
have occurred; determine what improvements are needed; and plan 
for how the improvements might be achieved. Within the 
Executive Branch, the Office of National Drug Control Policy 
[ONDCP] is assigned this responsibility.
    This subcommittee has oversight responsibility for ONDCP 
and its demand reduction activities, as well as the drug abuse 
and demand reduction efforts of the major Federal departments 
and agencies that play key roles, including the Departments of 
Health and Human Services [HHS] Education [ED] and Justice 
[DOJ].
    This hearing included testimony of representatives from HHS 
and DOJ programs that sponsor or conduct drug abuse surveys and 
other research on drug use trends. Testimony was heard from a 
representative of ONDCP as to how these trends have been 
considered, analyzed and used in identifying continuing needs 
and responses to them (i.e., policy and program implications). 
Finally, the hearing examined consequences and implications of 
these trends.
    (40) On October 4, 2000 the subcommittee held a third 
oversight hearing on the National Youth Anti-Drug Media 
Campaign. The hearing examined issues of contract 
administration and accountability. Developments identified 
issues as to whether the Federal Government's largest and most 
expensive media campaign is experiencing problems in regard to 
ensuring that hundreds of millions of dollars in contracts for 
the purpose of buying media time are being effectively and 
efficiently administered and monitored.
    In July 2000, GAO published its review of the experiences 
of ONDCP in meeting various congressional mandates, and the 
progress of evaluation efforts. That report indicated that 
ONDCP generally was meeting certain requirements to provide 
financial reports to specific congressional committees, and had 
complied with selected statutory spending restrictions imposed 
for fiscal years 1998 and 1999. It found ``ONDCP's success in 
meeting the congressionally mandated program requirements was 
mixed.'' (``Anti-Drug Media Campaign: ONDCP Met Most Mandates, 
but Evaluations of Impact Are Inconclusive,'' p. 5)
    The hearing focused on issues regarding the Media 
Campaign's contract administration, including ONDCP contract 
administration practices and oversight, and past and planned 
contractual arrangements with other Federal agencies. The 
subcommittee was provided documents that raise issues of 
excessive costs and questionable billing practices. Internal 
ONDCP documents identified problems with the primary contract 
for the Media Campaign, which is a ``cost plus'' type of 
contract. Problems and issues identified include: possible 
excessive staffing levels (representing almost 250 full or 
part-time staff) and top-heavy staffing arrangements, 
questionable salary levels, apparently altered time sheets, 
late billings, unallowable compensation, and apparently faulty 
management practices. An outside consultant obtained by ONDCP 
estimated that costs under the contract appeared to be out of 
line with industry standards, substantial overspending was 
indicated, and potential savings could reach into the millions 
of dollars. Issues were raised as to why ongoing audits had not 
been planned, why ONDCP or HHS contract management officials 
did not order an immediate audit upon notice of possible 
serious irregularities, and plans for how contract management 
and accountability issues would be resolved in a timely manner 
in the future.
    (41) On October 12, 2000, the subcommittee held a hearing 
on Colombia entitled, ``Getting United States Aid to 
Colombia.'' The hearing examined United States efforts to 
deliver promised United States aid to Colombia in the most cost 
effective and expedite manner. The hearing focused on GAO 
findings that were critical of past administration efforts to 
provide approved United States aid and equipment to Colombia. 
Additional criticisms were reported by the Department of State 
Inspector General's office in a June 2000 report. The hearing 
examined criticisms and explored options for improving 
processes to better implement the $1.3 billion aid package 
approved this year.
    (42) On October 31, 2000, at Port Everglades, FL, the 
sbcommittee held a hearing to investigate the security of 
Florida seaports, specifically the ports of Miami and Port 
Everglades. The hearing focused on drug smuggling challenges in 
south Florida, security measures being taken, and the findings 
and recommendations of the Florida Seaport Security Assessment 
report released in September 2000.
    The Florida Seaport Security Assessment was conducted by 
contractors for Florida's Office of the Governor. The primary 
threat examined by the study was drug trafficking in Florida 
seaports, primarily cocaine smuggling. The Florida Department 
of Law Enforcement estimates that 150 to 200 metric tons of 
cocaine annually enter the United States via Florida. With over 
1,350 miles of coastline, much of the cocaine enters by sea. 
Florida is home to the top 3 cruise ports in the world and 4 of 
the 20 busiest ports in the United States. Florida's proximity 
to Latin American source countries makes Florida a conduit for 
the illegal drug trade. The U.S. Customs Service reports that 
in 1998, a full 65 percent of U.S. cocaine seizures were made 
in Florida.
    The study categorized Florida's major ports into three risk 
groups: (1) ``maximum security'' (Miami, Port Everglades, 
Jacksonville, Tampa); (2) ``moderate security'' (Palm Beach, 
Canaveral, Manatee, Fernandina, Pensacola, Panama City); and 
(3) ``minimum security'' (Ft. Pierce, Key West, Port St. Joe, 
St. Petersburg).
    The study generally found that Florida seaports are very 
vulnerable to drug smuggling and have not adopted adequate 
measures to tighten security. The study found that U.S. Customs 
staffing was inadequate to conduct needed inspections in 
Florida ports. While the ports of Miami and Port Everglades 
have relatively high percentages of imports inspected by 
Customs officials (12 percent and 7.5 percent respectively), 
the statewide average is only around 2 percent. Coverage of 
exports was found to be more deficient. The study recommended 
additional staffing and improved assignment practices.
    The report specifically recommended additional and improved 
non-intrusive inspection technology [NIIT] equipment. The study 
reported that there are currently only two NIIT systems at 
Florida seaports (one in Miami and one in Port Everglades). The 
report was also critical of the lack of a ``life-cycle'' 
approach to procuring, operating and maintaining such 
equipment. The study recommended the adoption of uniform 
``minimum'' standards for security at all Florida seaports, 
better leadership and intelligence sharing to address port 
security needs, and that further study to determine which State 
agency should be assigned oversight responsibility for all 
Florida seaport security. The study also recommended bringing 
HIDTA resources to bear on security issues and the 
establishment of a North Florida HIDTA.
2. Public Safety and Criminal Justice Priorities.
    a. Summary.--Subcommittee hearings have addressed a range 
of topics related to crime and public safety that received 
national attention in 1999 and 2000. In the area of crime 
prevention (as well as drug abuse prevention), the hearing on 
school violence provided a forum for experts and practitioners 
to share their thoughts on understanding, preventing and 
responding to violent crime in the Nation's schools. The 
subcommittee hearing on the role of the Department of Housing 
and Urban Development [HUD] in promoting litigation against gun 
manufacturers explored the rationale for HUD involvement and 
identified problems associated with Federal agency support to 
private litigants in this controversial and complex area. A 
later hearing on a successful approach to drug and gun-related 
violence--Project Exile--examined why the administration has 
not done more to replicate this promising approach to saving 
lives and reducing crime in other jurisdictions. Other hearings 
addressed numerous public safety and criminal justice 
priorities in context of drug control issues.
    b. Benefits.--A product of the hearing on school violence 
was the identification of deficiencies and inefficiencies in 
current Federal programs and practices to combat crime, such as 
the Department of Education's Safe and Drug-Free Schools 
program, as well as prevention and treatment programs 
affiliated with the Substance Abuse and Mental Health Services 
Administration [SAMHSA], a component of the Department of 
Health and Human Services [HHS]. On the topic of gun violence, 
the hearings identified significant legal and policy issues 
associated with Federal involvement in civil litigation against 
gun manufacturers and the failures of the Department of Justice 
and the Bureau of Alcohol, Tobacco and Firearms, a component of 
the Department of Treasury, to assist and replicate proven 
approaches to curbing gun violence through effective 
enforcement of existing Federal gun laws.
    c. Hearings.--In 1999, the subcommittee held hearings on 
topics of school violence, Federal agency involvement in 
litigation against gun manufacturers, and successful approaches 
to combating gun-related crimes and violence though the 
effective enforcement of gun laws.
    (1) On May 20, 1999, the subcommittee held a hearing 
entitled, ``School Violence: What Is Being Done to Combat 
School Violence? What Should Be Done?'' The problem of school 
violence is an issue of critical importance to our communities 
and Nation. The tragedy at Columbine High School focused 
national attention on the seriousness of violence in our 
schools and the impacts felt across our Nation. The National 
School Safety Center keeps track of school associated violent 
deaths nationally. Since 1992, more than 250 deaths have 
occurred that are associated with schools. There is increased 
concern with multiple killings associated with schools, and 
school associated deaths occurring in suburban and rural areas. 
The Department of Justice's Bureau of Justice Statistics 
announced that, in 1996, students between the ages of 12 and 18 
experienced about 225,000 incidents of nonfatal serious 
violence while at school and about 671,000 incidents away from 
school. Students living in urban areas experienced higher 
levels of victimization than students in suburban and rural 
areas both at and away from school. Given the continuing 
seriousness of this problem, the hearing examined programs and 
initiatives being pursued at the Federal, State and local 
levels.
    At the Federal level, the Department of Health and Human 
Services [HSS] is responsible for providing leadership, 
information and targeted assistance to States and communities. 
Created in 1992 as an agency within HHS, the Substance Abuse 
and Mental Health Services Administration [SAMHSA] directs 
Federal policy and advises the HHS Secretary on ways to improve 
the quality and availability of substance abuse prevention, 
addiction treatment and mental health services. SAMHSA's budget 
in 1999 was $2.5 billion. With a staff of approximately 600, 
SAMHSA administers Federal block grants to States for substance 
abuse and mental health services and programs. Mental health 
and substance abuse are considered to be topics of interest in 
determining why juvenile violence and criminal behaviors occur.
    The U.S. Department of Education administers the Safe and 
Drug-Free Schools Program, established by the 1986 Safe and 
Drug-Free Schools and Communities Act [SDFSCA]. The Improving 
America's Schools Act of 1994 reauthorized the act, adding 
violence prevention to the program's original emphasis on 
substance abuse education. The purpose of the act, as 
reauthorized, is: ``to support programs to meet the seventh 
National Education Goal by preventing violence in and around 
schools and by strengthening programs that prevent the illegal 
use of alcohol, tobacco, and drugs, involve parents, and are 
coordinated with related Federal, State, and community efforts 
and resources.'' Since 1986, the program has distributed more 
than $6 billion to the States and approximately 15,000 school 
districts. Grants are distributed to States primarily on the 
basis of the number of school-age youth. State agencies receive 
80 percent of the total State allotment, and Governor's offices 
receive 20 percent. Most of the State grant money is passed on 
to local agencies, which target 30 percent to high-need 
districts. The fiscal year 1999 appropriation for the program 
is $566 million ($441 million for State grants, $90 million for 
national programs, and $35 million for a new ``Coordinative 
Initiative''). According to a 1997 evaluation of the program, 
few programs were effective and delivery was inconsistent. 
Recent research findings presented to the Brookings 
Institution, Brown Center for Education Research, have raised 
serious questions about the efficacy of this program. The 
assessment by a leading researcher characterizes the program as 
``symbolic pork.''
    The Nation's school administrators, principals, 
psychologists, teachers and students represent the front-line 
in our efforts to identify the potential for school violence 
and to take actions to prevent it. Accordingly, the 
subcommittee examined challenges faced in our schools, and the 
reasons that underlie them.
    (2) On August 4, 1999, the subcommittee held a hearing 
entitled, ``What Is HUD's Role in Litigation Against Gun 
Manufacturers?'' On Wednesday, July 28, 1999, the Wall Street 
Journal published an article entitled, ``HUD May Join Assault 
on Gun Makers.'' According to a source in the article, HUD had 
asked outside law firms to consider options for a lawsuit to be 
brought against gun manufacturers by the 3,400 public housing 
authorities that receive Federal funding.
    The justification for the lawsuit reportedly was based on 
the premise that public housing areas tend to harbor a 
disproportionate amount of gun-related violence, therefore the 
gun manufacturers should provide funding to increase security 
measures and emergency medical services for the afflicted 
neighborhoods. While HUD would not necessarily be a direct 
litigant in the suit, the Wall Street Journal article indicated 
that the agency was considering organizing the federally funded 
housing authorities for purposes of a lawsuit. According to the 
news article, the Department of Justice could be a potential 
impediment to HUD entering into the litigation.
    At the time of the hearing, there were 23 cities and 
counties throughout the country that already had waged court 
fights against gun manufacturers. The hearing examined 
litigation issues, including the appropriateness of HUD 
intervening into this litigation.
    (3) On November 4, 1999, the subcommittee held a hearing 
entitled, ``Project Exile: A Case Study in Successful Gun Law 
Enforcement.'' Prior to 1997, for almost a decade, gun violence 
had plagued the city of Richmond, VA. The city had become one 
of the top five cities in the Nation with the highest per 
capita murder rates. In 1997, the U.S. attorney's office in 
Richmond instituted a coordinated effort with local police, 
State police, Federal investigators, and local and Federal 
prosecutors to respond to this problem. The response was an 
initiative identified as ``Project Exile.'' The initiative 
enlisted support and assistance from a coalition of businesses, 
business and nonprofit organizations, and community and church 
leaders.
    The approach taken in Project Exile was to prosecute in 
Federal court cases involving felons with guns, gun/drug cases, 
and gun/domestic violence cases. Federal prosecutions had the 
advantage of stiffer bond rules and tougher sentencing 
guidelines, with mandatory minimum sentences. Additionally, a 
significant outreach and advertising effort was conducted, with 
substantial private sector financial contributions and 
assistance. The media message was simple and direct: ``An 
illegal gun will get you 5 years in Federal prison.'' The 
message was conveyed by television, radio, billboards, and 
business cards. A telephone number was provided for anonymous 
tips.
    After 1 year, more than 200 armed criminals were removed 
from Richmond's streets. More importantly, for the period 
November 1997 through May 1998, homicides were down 65 percent 
from the same preceding time period. In 1999, homicides in 
Richmond continued to drop. Project Exile has received 
bipartisan support, and is being studied for replication in 
various cities across the country. The Department of Justice 
has been criticized for not doing enough to support efforts 
aimed at implementing the approach in other jurisdictions.
3. International Commerce and Trade.
    a. Summary.--Subcommittee hearings on the critical economic 
issue of the Nation's trade deficit explored reasons that 
underlie the deficit as well as implications for our Nation's 
future. A topic of specific importance to the subcommittee was 
that of unfair trading practices. A related issue was examined 
in the hearing on defense offsets. That hearing identified 
benefits and costs to current practices in allowing defense 
offsets.
    b. Benefits.--The subcommittee's examination of the U.S. 
trade deficit highlighted the need to encourage and promote 
U.S. exports, and to identify and prevent unfair trade 
practices. The following hearing on defense offsets revealed 
the lack of comprehensive and reliable information in 
determining the magnitude and scope of current practices in 
engaging in offsets. The subcommittee requested that GAO 
produce a report to gather better information on the quantity 
and nature of offsets and to determine whether an official 
mechanism should be created to gather the information. Better 
information on the benefits and costs will enable the Nation to 
better regulate and monitor offsets in the world marketplace, 
and to ensure that national security interests are protected.
    c. Hearings.--In 1999, the subcommittee held hearings on 
the Nation's growing trade deficit, and the costs and benefits 
of defense offsets.
    (1) On March 25, 1999, the subcommittee held a hearing 
entitled, ``A Record Trade Deficit, How Can the U.S. Government 
Prevent a Looming Trade Crisis?'' The hearing examined the 
increasing U.S. trade deficit that, in 1998, reached an all-
time high of $233.4 billion. This deficit represented an 
increase of approximately 50 percent over the 1997 deficit. The 
Commerce Department predicted that the 1999 U.S. deficit could 
reach $300 billion. In 1998, the growing deficit was 
accompanied by a fall in U.S. exports of goods and services. 
The hearing highlighted critical problems and risks associated 
with the growing deficit, including the role of unfair trading 
practices and the possibility that the deficit during an 
economic downturn could undermine U.S. public and industry 
support for free trade.
    (2) On June 29, 1999, the subcommittee held a hearing 
entitled, ``Defense Offsets: Are They Taking Away Our Jobs?'' 
Offsets generally reflect practices where a purchasing entity, 
usually a government, demands that a seller not only provide a 
service or product, but in addition helps the purchaser to 
obtain additional technology, business, or investment. For 
example, offset agreements may commit the seller firm to 
provide technology, purchase locally produced components, or 
provide other forms of assistance to the buyer country that go 
beyond compensation economically necessary to support the sale.
    Offsets are particularly prevalent in military sales 
contracts with foreign countries. By signing a contract with 
the U.S. Government or a U.S. company to purchase military 
equipment, a foreign government essentially agrees to spend 
money abroad that could theoretically be spent domestically to 
directly promote industry and employment. In order to justify 
this expenditure, foreign governments often seek to ensure that 
the transaction will directly benefit their own economy. 
Ordinarily, offset agreements specify the type and monetary 
value of the offsets required. While an individual agreement is 
usually specific in stating its offset requirements, these 
offset agreements can contain a variety of activities that U.S. 
contractors agree to undertake to satisfy their obligations.
    Offsets generally fall into two categories: direct and 
indirect offsets. Direct offsets are side benefits to the 
purchasing country that directly relate to the goods and 
services sold in the transaction. Indirect offsets involve 
goods and services unrelated to the exports referenced in the 
contract. The General Accounting Office has identified several 
different types of offsets. Co-production, subcontracting, 
technology transfers and procurements are the most prevalent 
forms of offsets used in the aerospace industry. Co-production 
occurs when defense companies agree to assemble, build, or 
produce articles for the weapon system sale in the buyer's 
country. Subcontracting occurs when a U.S. contractor procures 
defense-related components and subsystems for exports from 
suppliers in countries where the contractor has offset 
obligations. In a study done by the General Accounting Office, 
co-production and subcontracting accounted for 20 percent of 
the reviewed transactions. Technology transfers are commonly 
used to satisfy offset obligations and often accompany co-
production and subcontracting activities. Technology transfers 
are also commonly used in indirect offsets, unrelated to the 
contract at hand. Technology transfers may take the form of 
research and development conducted abroad, technical 
assistance, or training to the buyer country. Procurement is an 
indirect offset activity that involves the purchase of goods 
and services unrelated to the sale. If an American company is 
involved in an offset agreement with a foreign country, the 
American company will often purchase unrelated items from the 
foreign country in an effort to strengthen relations with the 
foreign country.
    In April 1990, the first formal statement on offsets policy 
by the U.S. Government declared a policy of noninvolvement in 
defense offsets. Any exceptions to the policy must be approved 
by the President through the National Security Council. Policy 
statements in the 1997 National Export Strategy augmented this 
policy on offsets by: discouraging foreign governments from 
requiring offsets; giving U.S. support to any U.S. company 
forced to comply with an offsets agreement; and acknowledging 
that further monitoring is needed.
    The aerospace industry is central to a discussion of 
offsets. U.S. technology and weapon systems, notably aerospace, 
are some of the best available on the world market. The Bureau 
of Export Administration's database (1993-1996) indicates that 
more than 90 percent of the dollar value of all new offset 
agreements ($13.8 of $15.1 billion) were written against 
aerospace exports. Domestic and international sales by U.S. 
aerospace companies in 1998 are estimated at $140 billion, or 
about 3 percent of all U.S. manufacturing activity. The 
industry currently employs approximately 890,000 Americans. The 
industry's export performance has been most remarkable, 
particularly when compared to that of other U.S. industries. In 
1997, aerospace exports totaled $59 billion, while imports of 
aerospace products reached about $22 billion. This means the 
U.S. trade surplus in aerospace products was roughly $37 
billion, a continuation of a long-term trend of positive trade 
balances.
    Today about 50 percent of U.S. aerospace products are sold 
to the U.S. Government for defense, space, and air traffic 
control. Of the other 50 percent, about 75 percent is exported 
to both commercial and military buyers. Government purchases 
are expected to remain flat, so that most growth in the 
industry will depend on success in the international market 
place.
    This hearing discussed the impact of offsets on the U.S. 
economy and whether or not offsets unfairly take jobs away from 
the United States.
4. Immigration and Naturalization Service Operations and Resources.
    a. Summary.--The subcommittee hearing on the role of the 
Immigration and Naturalization Service [INS] in assisting State 
and local efforts to enforce laws and protect communities and 
businesses, revealed the need for significant operational 
improvements. Despite the commitment of substantial Federal 
resources to meet INS responsibilities, the hearing revealed 
that INS is deficient in its obligations to States and local 
governments, and to U.S. citizens.
    b. Benefits.--The need for greater enforcement of our 
Federal laws and coordination with local officials by INS was 
demonstrated. Improvements reportedly are underway. The 
subcommittee will continue to monitor INS progress to ensure 
that public safety is enhanced, our businesses and economy 
protected, our public dollars spent more wisely and immigration 
laws better enforced.
    c. Hearings.--On April 19, 1999, the subcommittee held a 
hearing entitled, ``INS Support for Local Efforts: Are There 
Sufficient Federal Resources?'' The hearing focused attention 
on problems encountered by local law enforcement officials, 
including problems posed by the failure of the Federal 
Government to apprehend and deport illegal aliens, especially 
those with criminal histories.
    From fiscal year 1993 to fiscal year 1998, Congress more 
than doubled the budget of the Immigration and Naturalization 
Service [INS], from $1.5 to $3.8 billion. INS staffing during 
this period increased from approximately 18,000 to nearly 
29,000 permanent positions, representing a 60 percent increase. 
INS is now the largest corps of Federal civilian employees 
empowered to make arrests and carry firearms. At the end of 
fiscal year 1997, the Federal Bureau of Prisons [BOP] estimated 
that 27 percent of its inmates in Federal and federally 
contracted correctional facilities were non-citizens subject to 
removal proceedings. From fiscal year 1993 to fiscal year 1998, 
funding for the Detention and Deportation Program grew from 
$193 to $733 million--an increase of 280 percent.
    The hearing addressed the need to respond to increasing 
State problems associated with the influx of illegal aliens.
5. Student Education Loans.
    a. Summary.--The subcommittee examined the operations of 
the Department of Education's student loan programs and 
identified numerous problems and deficiencies. The hearing 
explored a number of the problems recently identified in 
reviews conducted on the agency's operations, including reviews 
by the General Accounting Office [GAO] and the Department's 
Office of Inspector General. In particular, the subcommittee 
examined issues associate with the fairness and efficiency of 
the Department's Direct Loan Program in comparison with 
competing loan programs regulated by the Department.
    b. Benefits.--The hearings benefited the Department and 
other loan providers and servicing organizations by identifying 
deficiencies in Department of Education operations that result 
in problems and inefficiencies. Avoidable loan default 
consequences were identified for which changed regulations and 
practices are needed. As a consequence, the Department of 
Education is reportedly addressing some of the identified 
problems, and further streamlining its loan operations. The 
benefits of improved operations and fewer errors should accrue 
to many thousands of loan recipients across the Nation.
    c. Hearings.--On June 17, 1999, the subcommittee held a 
hearing entitled, ``Department of Education's Student Loan 
Programs: Are Tax Dollars At Risk?'' The hearing examined 
problems and issues associated with the Department of 
Education's regulation and administration of student loan 
programs.
    Title IV of the Higher Education Act [HEA], reauthorized in 
the 105th Congress, provides nearly $42 billion in federally 
supported student assistance (including grants, loans and work 
assistance), representing the largest source of aid for 
students. In fiscal year 1998, the combined student loans of 
the Federal Family Education Loan Program [FFELP] and the 
Federal Direct Loan Program ([FDLP] or ``Direct Loan'' Program) 
equaled $31.6 billion. The types of loans issued include: need-
based subsidized Stafford loans (government pays interest while 
borrower is in school); unsubsidized Stafford loans; Federal 
plus loans (for parents of undergraduates); and Federal 
consolidation loans. Student loan volume is increasing--from 
$24 billion in fiscal year 1994 to $32 billion in fiscal year 
1998. The average cumulative debt for undergraduates in 1995-
1996 was almost $12,000. Both FFELP and the Direct Loan Program 
are entitlements, with funding provided on a permanent 
indefinite basis, not subject to appropriations. Borrower 
defaults represent a significant Federal cost. Upon default, 
the guaranty agency or Federal Government engages in collection 
efforts. According to the General Accounting Office [GAO], the 
Federal Government paid out over $3.3 billion to cover 
defaulted student loans in fiscal year 1997. CRS reports annual 
default rates in fiscal year 1998 were $2 billion; collections 
in fiscal year 1998 were $1.8 billion. Cumulative FFELP 
defaults since fiscal year 1966 through fiscal year 1996 were 
$28.8 billion, out of total loan volume of more than $220 
billion. In recent years, default rates have declined and are 
now calculated at slightly below 10 percent, although 
implications of the definition and calculation of ``default'' 
are unclear.
    FFELP is one of the largest public/private partnerships 
sponsored by the Federal Government. FFELP, authorized by Part 
B of Title IV of the HEA, insures and subsidizes loans that 
private lenders make to students or their parents to assist 
with costs of post-secondary education. FFELP loans account for 
about two-thirds of the estimated $32.2 billion loan volume for 
fiscal year 1999. The Federal Government guarantees lenders 
against loss through borrower default, or death, permanent 
disability, or, in limited instances, bankruptcy. Besides 
lenders, FFELP involves secondary markets that buy loans from 
lenders and provide liquidity in the program, and the State and 
national nonprofit guaranty agencies that insure lenders 
against borrower default and provide other administrative 
services.
    In 1993, the Federal Direct Loan Program was authorized 
under Part D of the HEA. The Direct Loan Program competes with 
FFELP for student loan business. The Direct Loan Program has 
made more than $30 billion in loans to students pursuing post-
secondary education, and currently accounts for about one-third 
of total student loan volume. Unlike FFELP, the Direct Loan 
Program loans are made by the Federal Government to students 
through their schools, without utilizing private capital or 
guaranty agencies. Schools may serve as direct loan 
originators, or the loans may be originated by Education 
Department contractors. The Direct Loan Program has additional 
repayment options, including income contingent repayment.
    Outside reviews have identified significant issues and 
challenges facing the Department of Education in administering 
its loan programs. Since the establishment of the Federal 
Direct Loan Program, specific issues have been identified and 
questions raised regarding the program's administrative costs, 
effectiveness and efficiency. The Advisory Committee on Student 
Financial Assistance, created by Congress as an independent 
source of advice and counsel to Congress and the Secretary of 
Education on student aid policy, has issued a number of reports 
identifying issues and recommending improvements regarding the 
Department's student loan programs.
    The GAO, in its January 1999 report ``Education Department: 
Major Challenges and Program Risks,'' designated student loan 
programs as a ``high risk'' for fraud, waste, abuse, or 
mismanagement. The GAO report concluded that: ``Education 
continues to lack the financial and programmatic information 
necessary to effectively budget for and manage its student 
financial programs and to accurately estimate the government's 
liabilities. For example, Education continues to lack accurate, 
reliable data on costs associated with outstanding student 
loans.'' GAO noted that the Education Department is responsible 
for tracking approximately 93 million student loans and 
collecting more than $150 billion owed by students.
    Macro International, Inc. (``Macro'') contracted with the 
Education Department to evaluate the administration of the 
Direct Loan Program. Part of the evaluation being conducted by 
Macro--comparing administrative costs of the Direct Loan 
Program to FFELP administrative costs--was canceled by the 
Department. Macro issued a 1999 report covering Direct Loan 
Program administration for the years 1993-1998. A follow-up to 
the Macro cost comparison effort was completed by the 
Department's Office of Inspector General [OIG]. The OIG report 
(March 1999) included found that: ``inefficiencies likely 
affect the Department's administration of the two programs 
[FFELP and FDLP]. To approximate the effect of these 
inefficiencies, we compared our estimate of the Department's 
cost to manage the FDLP--$17 per loan--to the average cost that 
we estimated (based on Treasury research) that large private 
lenders would have incurred to manage the FDLP--$13 per loan.'' 
Specific factors--including incompatible systems and missing 
data--were identified as apparently contributing to cost 
inefficiencies.
    The Semiannual Report to Congress (October 1, 1998-March 
31, 1999) by the Department of Education OIG, identifies 
problems and issues associated with the Department's student 
loan programs, ranging from fraud investigations and 
prosecutions to improving the management of default aversion 
programs.
    Other topics associated with the Education Department's 
student loan programs discussed at the hearing included: the 
Direct Loan Program's advantages due to higher administrative 
costs and the Department's regulatory authority over 
competitors; educational institutions apparently preferences 
for FFELP; the adequacy of default prevention, loan 
consolidation, loan collection, and reconciliation practices; 
and challenges facing the Department's new Performance Based 
Organization.
6. Health Issues.
    a. Summary.--Among the most important and complex health 
issues facing the United States and other nations of the world 
is that of ensuring the most effective and safe administration 
of vaccines possible to combat serious and deadly diseases and 
illnesses. The subcommittee hearings identified problems 
associated vaccine administration for Hepatitis B, and problems 
associated with the Nation's vaccine injury compensation 
practices. A hearing devoted to the international HIV/AIDS 
epidemic revealed serious questions regarding the 
administration's policies that restrict the availability of 
drug treatment in certain foreign nations, such as South 
Africa. Two hearings devoted to Federal human subjects research 
oversight revealed serious shortcomings. Finally, a field 
hearing examined the quality of care being received by seniors 
and how regulatory policies and practices of the Department of 
Health and Human Services [HHS] impact such care.
    b. Benefits.--The hearings provide a forum that brought 
attention to numerous vaccine administration issues and vaccine 
injury compensation needs. Soon after the hearing on Hepatitis 
B, the U.S. Surgeon General announced changes to existing 
vaccination practices due to issues that had surfaced. After 
the subcommittee hearing on vaccine injury compensation 
practices, the Department of Justice began immediate training 
efforts for its attorneys dedicated to handling these claims. 
Further recommended actions were communicated to the Federal 
agencies and court officials by a bipartisan letter issued by 
the chairmen and ranking members of the full committee and 
subcommittee. The subcommittee and the full committee endorsed 
recommended reforms in the vaccine injury compensation program, 
reflected in bipartisan acceptance of the sixth report of the 
Committee on Government Reform (House Report No. 106-977), 
issued on October 12, 2000. Benefits of the hearings on human 
subjects research included bipartisan support for agency 
oversight improvements and reforms that would better protect 
the lives of those involved. The hearing on HHS regulation of 
healthcare and impacts on seniors revealed a continuing need 
for increased efficiencies and fairness.
    c. Hearings.--In 1999, the subcommittee held hearings on 
the safety of specific childhood vaccines and vaccination 
practices, the workings of the Federal program for compensating 
vaccine injuries, U.S. policies and practices that may limit 
other nations in providing much needed drug treatment to 
millions of HIV/AIDS infected persons, and oversight of human 
subjects research.
    (1) On May 18, 1999, the subcommittee held a hearing 
entitled, ``Hepatitis B Vaccine: Helping or Hurting Public 
Health?'' Hepatitis B vaccines currently administered are made 
using recombinant DNA technology. In 1986, the Food and Drug 
Administration gave certain pharmaceutical companies a license 
to market the first recombinant DNA vaccine. The vaccine is 
administered in three separate doses. The Centers for Disease 
Control [CDC] reports that Hepatitis B vaccines provide 95 
percent protection against chronic Hepatitis B infection.
    In 1991, the CDC issued guidelines recommending three doses 
of the vaccine for at-risk groups including: people with 
multiple ex partners, intravenous drug users, health 
professionals coming into contact with blood and every child 
born after 1990. Based on these guidelines, 42 States mandated 
the vaccine as a requirement for entering kindergarten. These 
State mandates have been of concern to some parents groups who 
argue that parents should not have to vaccinate their child if 
they have serious doubts about its appropriateness. In January 
1995, the CDC recommended universal immunization of children up 
to age 18. The CDC and the Federal Drug Administration [FDA] 
maintain the Vaccine Adverse Events Reporting System, which was 
established in 1986. While reports of adverse reactions to 
vaccines are usually reported by physicians, anyone can submit 
a report to VAERS.
    The National Vaccine Information Center [NVIC], an advocacy 
group dedicated to preventing vaccine injuries and deaths 
through public education, reported that between 1990 and 1998 
the system received 24,775 reports of adverse reactions to 
vaccinations including the Hepatitis B vaccination. The Center 
reported that more than two-thirds (16,000) of these reactions 
were from patients who had received only the Hepatitis B 
vaccine. The CDC asserted that Hepatitis B vaccines have been 
shown to be very safe when given to infants, children or 
adults. More than 20 million persons have received Hepatitis B 
vaccine in the United States.
    (2) On July 22, 1999, the subcommittee held a hearing 
entitled, ``What Is the U.S. Role in Combating the Global HIV/
AIDS Epidemic?'' Although the Acquired Immuno Deficiency 
Syndrome [AIDS] gained the world's attention less than 20 years 
ago, the virus has quickly grown to become one of the leading 
causes of death worldwide. Since 1994, AIDS has been the 
leading killer among adults between 25 and 44 years of age. 
Over 33 million adults and children are currently estimated to 
be living with HIV/AIDS. According to World Health Organization 
estimates, 11 men, women and children were infected with HIV/
AIDS per minute in 1998, bringing the total new infections for 
1998 close to 6 million. Since the beginning of the epidemic, 
13.9 million people have died due to the AIDS virus.
    Many of the viruses and diseases throughout history have 
remained relatively isolated to a specific region of the globe. 
The AIDS epidemic, however, has grown to impact almost every 
country in the world. The increasing globalization of the 
world's economy has further accelerated the spread of AIDS. 
Among the hardest hit in recent years have been the populations 
of developing countries. Of the 33.4 million people currently 
estimated to be living with HIV/AIDS worldwide, 95 percent 
(31.7 million) live in the developing world. Young adults in 
the prime of their productive and reproductive lives make up 
the most populous portion of the infected population. The 
impact of this statistic is worth noting for many reasons, 
including economic considerations in addition to health and 
humanitarian. In developing countries (as well as in 
industrialized countries), an epidemic that is concentrated 
among the young adult population will inevitably impact the 
productivity of the economy at large. As examples, productivity 
will decrease, the pool of skilled managers will diminish, 
health care systems will become overburdened, orphanhood will 
increase, life expectancy will decrease, all of which will 
further aggravate the struggling economies of all developing 
countries.
    Of the 33.4 million people infected worldwide, almost 23 
million victims live in Africa. Of this 23 million, 22.5 
million inhabit the region south of Saharan desert. While only 
one-tenth of the world's population lives in sub-Saharan 
Africa, the region accounts for 83 percent of all AIDS deaths. 
An UNAIDS report entitled, ``AIDS Epidemic Update: December 
1998'' estimates that 11.5 sub-Saharan Africans have died from 
the AIDS virus, a quarter were children. Sub-Saharan Africa has 
also faced the fastest spread of HIV/AIDS in the world. Of the 
5.8 million new HIV infections worldwide reported in 1998, 4 
million came from sub-Saharan Africa.
    Though 95 percent of all new HIV infections occur in 
developing countries, more than 90 percent of resources spent 
on HIV/AIDS prevention and care are devoted to people in 
industrialized countries. In other words, anti-HIV drugs are 
unavailable to more than 90 percent of the world's HIV 
sufferers. Furthermore, the developing world simply cannot 
afford the current high costs of treatment. AZT and the newer 
AIDS drugs cost between $500 and $1,000 a month, yet in sub-
Saharan Africa, for instance, the average annual income is $500 
a year.
    A central issue in the drug treatment access debate is how 
best to increase access to treatment drugs. In order to 
circumvent paying the high costs for AIDS drugs, for example, 
some developing countries are promoting parallel imports and 
compulsory licensing to increase the availability of AIDS drugs 
in their countries.
    Parallel imports (sometimes referred to as ``gray market'' 
imports) are cross border trade in a product, without the 
permission of the manufacturer or publisher. Parallel imports 
take place when there exists significant price differences for 
the same good in different markets. Parallel imports impact the 
pharmaceutical industry because of the substantial price 
differences in different markets. These varying prices are 
primarily due to differing levels of market competition and 
differences in intellectual property laws and regulations.
    When parallel importing is used with patented goods such as 
pharmaceuticals, an issue may arise regarding the 
``exhaustion'' of intellectual property rights and the resale 
of a legally purchased good. For example, if a French company 
legally purchases a patented AIDS treatment drug from an 
American drug company, the French company can turn around and 
sell the drug to the South African Government, perhaps at a 
dramatically reduced price.
    Compulsory licenses are licenses that are granted by a 
government to use patents, copyrighted works or other types of 
intellectual property. Compulsory licenses are used by a 
government to intervene in the market and limit patent and 
other intellectual property rights in order to prevent unfair 
market prices. The authority to issue a compulsory license is 
important, even when the right isn't exercised, because it may 
temper the exercise of market power or the abuse of a patent. 
In terms of pharmaceutical production, in times of a national 
emergency, trade agreements may permit the government of a 
developing country to grant production rights to a local 
company.
    These two market access methods lie at the heart of the 
HIV/AIDS drug trade dispute. On the one hand, the drug 
producing companies argue that these methods practices may 
promote generic drugs that undermine research incentives and 
place unregulated, substandard drugs on the market. Much of the 
revenue from highly priced drugs, pharmaceuticals argue, gets 
reinvested in costly research initiatives. If countries are 
allowed to produce their own drug products, then companies will 
be less likely to invest in the research necessary to discover 
new and improved drugs. In addition, compulsory licensing and 
parallel importing increase the availability of generic, 
unregulated drugs. AIDS treatment drugs are much more 
sophisticated than your typical over the counter drug. These 
AIDS drugs must be taken on a regimented schedule, under 
certain conditions, and often times the drugs must be stored at 
certain temperatures. Pharmaceuticals fear that if generic 
drugs are not properly distributed, new strands of HIV may 
develop that will be resistant to the treatments.
    In addition to the arguments above, drug company supporters 
suggest that compulsory licensing and parallel importing are in 
violation of the World Trade Organization agreement on Trade-
Related Aspects of Intellectual Property Rights [TRIPS]. 
However, due to disagreements at the time of the TRIPS 
negotiations, rules governing parallel importing and compulsory 
licensing were intentionally left ambiguous, leaving 
settlements up to the players involved. TRIPS provides for 
compulsory licenses of patents in Article 31, but also provides 
a number of restrictions on the use of compulsory licenses. 
TRIPS addresses parallel importing indirectly by addressing the 
exhaustion of intellectual property rights. The agreement also 
provides ``For the purposes of dispute settlement . . . nothing 
in this Agreement shall be used to address the issue of the 
exhaustion of intellectual property rights.'' Parallel 
importing disputes cannot come before the WTO for the purposes 
of dispute settlement.
    In 1997, the South African legislature passed the 
``Medicines and Related Substances Control Amendment Act No. 90 
of 1997'' that essentially gave the Minster of Health the 
ability to parallel import and compulsory license as needed. 
The goal of this legislation was presumably to make more HIV/
AIDS treatment drugs available to a country experiencing a 
national emergency because of the HIV/AIDS epidemic. However, 
pharmaceutical companies worldwide gathered together to take 
the bill to the South African court to test its 
constitutionality. The legislation has been held up in court 
since its passage and has not been implemented. South Africa's 
1997 Medicines Act has become the central focus of the drug 
treatment trade dispute. The pharmaceutical companies have 
gained the assistance of the administration in disputing the 
South African Medicines Act.
    On April 30, 1999, the Office of the U.S. Trade 
Representative announced the results of its Special 301 annual 
review, which ``examines in detail the adequacy and 
effectiveness of intellectual property protection in over 70 
countries.'' The USTR placed South Africa on a ``watch list,'' 
determining to conduct an out-of-cycle review of South Africa's 
intellectual property laws this September. The Trade 
Representative called upon the Government of South Africa to 
``clarify that the powers granted in the Medicines Act are 
consistent with its international obligations and will not be 
used to weaken or abrogate pharmaceutical protection.''
    In addition to pressure from the administration, a rider 
was inserted into the fiscal year 1999 omnibus appropriations 
law cutting off aid to the Government of South Africa, pending 
a State Department report outlining its efforts to ``negotiate 
the repeal, suspension, or termination of section 15(c) of 
South Africa's Medicines and Related Substances Control 
Amendment Act No. 90 of 1997.''
    With a majority of the HIV/AIDS research resources being 
spent in industrialized countries, and with 95 percent of HIV/
AIDS victims living in developing countries, a simple and 
comprehensive solution to the growing global HIV/AIDS problem 
is not apparent. This hearing examined the nature and magnitude 
of the epidemic and effective approaches to combating it--
including breakthroughs in the discovery of promising vaccines 
and the expanded availability of drug treatments.
    (3) On September 28, 1999, the subcommittee held a hearing 
entitled, ``Compensating Vaccine Injuries: Are Reforms 
Needed?'' The National Vaccine Injury Compensation Program, 
Subtitle 2 of Title XXI of the Public Health Service Act was 
enacted on October 1, 1988. The program is administered jointly 
by the Department of Health and Human Services [HHS], the U.S. 
Court of Federal Claims (the Court), and the Department of 
Justice [DOJ]. The program was designed as a Federal ``no-
fault'' system designed to compensate those individuals, or 
families of individuals, who have been injured by childhood 
vaccines. Vaccines covered under the program include: 
diptheria, tetanus, pertussis, (DTP, DTaP, DT, TT, or Td), 
measles, mumps, rubella (MMR or any components), and polio (OPV 
or IPV), whether administered individually or in combination. 
Hepatitis B, Haemophilus influenzae type b, and varicella 
(chicken pox) vaccines were added for coverage under the 
program in 1997, and the Rotavirus vaccine was added to the 
program in 1998. Eight years' retroactive coverage is provided 
for vaccine-related adverse events associated with these newly 
added vaccines. The program is funded by a 75-cent per-dose 
excise tax paid by the vaccine manufacturer.
    A claim may be made for any injury or death thought to be 
the result of a covered vaccine. Claims may be filed by the 
injured individual; or a parent, legal guardian, or trustee may 
file on behalf of a child or an incapacitated person. 
Compensable injuries are either those listed in the Vaccine 
Injury Table, or those which petitioners can demonstrate were 
caused by the vaccine.
    The program was set up to work in the following manner: 
First, an individual claiming injury or death from a vaccine 
files a petition for compensation with the Court and with the 
Secretary of HHS. The Secretary of HHS is named as the 
respondent. Next, a physician at the Division of Vaccine Injury 
Compensation, HHS, reviews the petition to determine whether it 
meets the medical criteria for compensation and makes a 
recommendation on compensability. This recommendation is 
provided to the Court through a report filed by DOJ, although 
it is not binding. The HHS position is represented by an 
attorney from DOJ in hearings before a ``Special Master.'' The 
Special Master is a full-time attorney appointed by the judges 
of the Court to decide vaccine injury compensation cases. The 
Special Masters operate in a manner that is similar to other 
Federal administrative judges, applying evidentiary burdens and 
adjudicative standards to available facts and expert testimony. 
Special Masters prefer to be acknowledged as judges. Their 
decisions may be appealed to the Court, then to the Federal 
Circuit Court of Appeals, and finally to the U.S. Supreme 
Court. No action may be filed under this program if a civil 
action is pending for damages related to the vaccine injury, or 
if damages were awarded by a court or in a settlement of a 
civil action against the vaccine manufacturer or administrator.
    Petitioners are not required to have attorney 
representation during this process, but petitioners almost 
always obtain legal counsel to represent them for reasons that 
include: strict procedural rules, complex medical evidence, 
onerous evidentiary and burden of proof standards, and 
adversarial hearing practices and compensation determinations 
involving DOJ attorneys. The act provides for the payment of 
reasonable attorney's fees and costs, regardless of the Court's 
decision on compensability, providing the case is brought in 
good faith and there is a reasonable basis for the claim.
    Guidelines for vaccine related injuries are as follows: 1) 
reasonable compensation for past and future unreimbursable 
medical, custodial care, and rehabilitation costs; 2) $250,000 
cap for actual and projected pain and suffering, emotional 
distress; 3) lost earnings; 4) reasonable attorneys' fees and 
costs; and 5) deadline for filing: within 36 months after the 
first symptoms appeared.
    Guidelines for vaccine related deaths are as follows: 1) 
$250,000 for the estate of the deceased; 2) reasonable 
attorneys' fees and costs; and 3) deadline for filing: within 
24 months of death and within 48 months after the onset of the 
vaccine-related injury from which the death occurred.
    Since the program's inception, approximately 6,000 
petitions have been filed with the program, 75 percent of which 
involved pre-1988 vaccine injury allegations. Of cases 
adjudicated, more than 3,500 have resulted in dismissal. Over 
the past 11 years, the National Vaccine Injury Compensation 
Program has allocated over $1 billion in compensation.
    The National Vaccine Injury Compensation Program was 
established to provide a no-fault alternative to litigating 
adverse reactions to childhood vaccinations for certain 
childhood diseases. The number of adverse reactions to 
childhood vaccines is small relative to the number of injuries 
for other products, medical malpractice, or motor vehicle 
injuries. The program was designed to operate expeditiously. In 
December 1989, Congress amended the statute, in part to 
simplify court procedures. The Conference Report explaining the 
amendment admonished all involved with the program to 
rededicate themselves ``to the creation of an expeditious, less 
adversarial, and fair system.'' In cases not clearly falling 
within coverage of the Vaccine Injury Table, some petitioners 
claim that causation and compensation issues have become very 
adversarial, including reports of questionable tactics in 
attempting to discredit petitioner's expert witnesses. There 
are reports of cases being handled in an adversarial manner for 
many years before a final verdict, as well as appeals by DOJ of 
adverse decisions.
    As amended and currently applied, the Vaccine Injury 
Table--which is central to compensation adjudications--is 
considered by some petitioners to be unnecessarily restrictive. 
It is argued that if a claim does not fit squarely within the 
table, the research used to support the criteria in the table 
is relied upon by DOJ to argue against petitioner claims, with 
a frequently insurmountable medical/scientific burden (a 
preponderance of the evidence standard) resting upon the 
claimant to show causation. This is particularly difficult in 
areas where scientific research is incomplete and evolving. If 
the likelihood of causation is found to be 50 percent or less 
and the case is not covered by the Vaccine Injury Table, the 
petitioner loses. Also, petitioners claim that the amount of 
compensation is determined restrictively, with recent opinions 
relying on sovereign immunity principles to favor decreased 
award amounts.
    Currently, the program has $1.4 billion in trust for making 
vaccine injury compensation awards. During fiscal year 1999 
(through August 30, 1999), 392 petitions have been filed, and 
awards so far this year have totaled $99.2 million. Awards to 
individuals with an injury judged to be vaccine related have 
averaged $800,737. At a full committee hearing in August, 
Surgeon General Satcher revealed that HHS Secretary Shalala is 
considering proposing the reduction of the per-dosage tax paid 
into the fund. In addition, the idea of devoting a large 
portion of the National Vaccine Injury Compensation Program's 
moneys to vaccine research was discussed.
    While the fund contains a significant sum of money, the 
subcommittee raised the issue of whether efforts to reduce 
funding sources (vaccine taxes) or to use the moneys for other 
purposes (e.g., vaccine research) were premature. Vaccine 
research is now exploding, with many promising vaccines on the 
horizon. It is predictable that childhood vaccinations will 
grow in number, as will required vaccinations by those in the 
health field and other recipients. Adverse reactions will 
continue to occur.
    A number of legislative proposals have been introduced to 
amend the Public Health Service Act, the act that mandates the 
Vaccine Injury Compensation Program. These proposals range from 
extending the deadlines for submissions for claims and 
petitions, to reducing the tax on vaccines from 75 cents per 
dose down to 50 cents per dose. The Advisory Commission on 
Childhood Vaccines [ACCV] also proposed a number of changes to 
the program. These recommendations have been consolidated into 
one bill that HHS has sent to Congress for consideration. 
Following the hearing, a bipartisan letter signed by the 
chairmen and ranking members of the full committee and 
subcommittee was sent to HHS, DOJ, and the Court, requesting 
that interim improvements be made in the operation of the 
vaccine compensation program.
    (4) On December 9, 1999, the subcommittee held a field 
hearing in New York City, NY, entitled, ``Do Current Federal 
Regulations Adequately Protect People Who Participate in 
Medical Research?'' to examine the Office of Protection from 
Research Risks [OPRR] within the Department of Health and Human 
Services [HHS], and its oversight of human subjects research 
associated with Federal funding. Specifically, the hearing 
examined whether adequate protections are in place, including 
whether institutional review boards [IRBs] are operating 
properly and recommendations of the HHS Office of Inspector 
General [OIG] and the National Bioethics Advisory Commission 
[NBAC] are being implemented.
    Due to a growing concern over the safety of human research 
subjects, and the exponential growth of research involving 
medical and pharmaceutical industries, Congress determined that 
legal and regulatory safeguards to protect human subjects 
should be established. In regulations stemming from the 
National Research Act of 1974, and in FDA regulations issued in 
1981, the Institutional Review Board [IRB] process was formally 
required.
    Institutional Review Boards review and approve research 
plans before research is carried out. This review encompassed 
the research protocol, the informed consent document to be 
signed by the subjects, any advertisements to be used in 
recruiting subjects and other relevant documents. In carrying 
out this review, IRBs seek to ensure any risks subjects may 
incur are warranted in relation to the anticipated benefits, 
that informed consent documents clearly convey the risks and 
the true nature of research, advertisements are not misleading 
and the selection of subjects is equitable and justified. IRBs 
review informed consent documents that are the vehicles for 
providing information to potential research subjects. In 
addition to the initial review, IRBs are responsible for 
conducting continuing oversight of research studies involving 
human subjects. This hearing discussed specific research and 
incidents involving research subjects.
    To provide oversight for these research projects, OPRR has 
set up agreements with more than 4,000 federally funded 
institutions to ensure common ethical standards for research 
activities. Each institution that receives funding must 
establish an Institutional Review Board [IRB] made up of 
doctors, scientists and patient representatives to clarify the 
standards that accompany Federal funding for research (e.g., 
Federal regulations require that a non-scientist and an 
individual not affiliated with the institution be included on 
every IRB). Under OPRR guidelines, all potential research 
subjects are to be fully briefed on the purpose, duration and 
procedures of a research project before agreeing to 
participation. OPRR also provides guidance to IRBs and 
administrators on the complex ethical issues relating to the 
use of animals and human subjects in research. OPRR has the 
authority to investigate and, if necessary, require corrective 
action or even suspend HHS funding to an institution until 
problems are resolved.
    In the early 1990's, the New York State Psychiatric 
Institute and the Mount Sinai School of Medicine and Queens 
College conducted studies that became the focus of OPRR 
investigations. Both institutions engaged in studies involving 
the administration of the drug fenfluramine to children who 
were determined by the researchers to be at risk of aggressive 
behavior. In these studies, researchers administered 
fenfluramine to produce increased levels of serotonin, a 
chemical produced by the brain that may help regulate behavior. 
Following administration of fenfluramine, researchers extracted 
blood through an intravenous catheter and measured changes in a 
blood chemical that is a by-product of serotonin production. 
The goal of the studies was to determine whether the serotonin 
levels in children may be affected by fenfluramine.
    The New York State Psychiatric Institute conducted its 
research on minority males aged 6-10 had an older sibling who 
was a juvenile offender. None of these children had ever been 
involved with the criminal justice system or exhibited violent 
behavior. The Mount Sinai School of Medicine conducted its 
research on white children over 12 years of age, all of whom 
came to the School for some kind of assistance, whether it was 
for attention deficit disorder, depression, or another form of 
mental disorder. Children in this study who were taking 
medication were subjected to a 1 month ``washout'' period 
during which they were removed from all medication. Both 
studies followed the same procedures, and both studies were the 
subjects of complaints filed with OPRR.
    In June 1998, OPRR issued its findings concerning the 
complaints. OPRR sharply criticized Mount Sinai and Queens 
College for procedural and substantive deficiencies in the 
research. OPRR found that it was impermissible to conduct the 
research on ``normal control children'' because they did not 
have the condition being studied and therefore could not 
legally be subjected to a greater than minimal risk experiment. 
OPRR did not penalize New York Psychiatric Institute. While 
OPRR found that the fenfluramine challenge exceeded the limits 
of minimal risk as defined by Federal law, it found the 
research unobjectionable because the IRB found that the 
``procedure was likely to yield generalizable knowledge about 
the subjects' condition which is of vital importance for the 
understanding or amelioration the subjects' condition.''
    The issue at stake in both studies dealt with the 
appropriateness of the human subjects, both those chosen and 
those excluded. The Mount Sinai study ended up receiving 
restrictions because it administered the tests on a control 
group of healthy children without signs of mental disorder or 
at risk of aggressive behavior. Prior hearings by the 
subcommittte in the 105th Congress had focused on this specific 
incident.
    The HHS Inspector General's Office issued a series of four 
reports on the effectiveness of IRBs in protecting human 
research subjects. The Inspector General made a number of 
findings and recommendations.
    Among the findings, the Inspector General noted that IRBs 
face major changes in the research environment, primarily that 
medical institutions are subject to increasing cost pressures 
due to the rise of managed care. In conjunction with the 
increase in managed care, a greater proportion of research is 
funded by commercial sponsors, and many research protocols are 
now multi-center trials involving thousands of subjects. This 
makes the IRB's task of overseeing research plans and human 
subject safety increasingly difficult.
    A second finding of the IG reports was that IRBs ``review 
too much, too quickly, with too little expertise.'' This has 
become especially apparent with the recent increase in multi-
center trials that have flooded the IRBs with adverse-events 
reports that the IRB must review. One IRB reported receiving 
200 such reports a month. In addition to the burdensome 
increase of adverse-event reports, the IG found that most of 
the review work done by IRBs involves paperwork, not on-site 
reviewing, and most of the review work results from 
investigating a complaint instead of resulting from regular 
oversight practices.
    A third IG finding was that IRBs experience conflicts that 
threaten their independence. Members of IRBs can be linked to 
the commercial groups that fund the research project. Pressures 
may arise from connections that are monetary, or less tangible 
influences such as the commercial group pressuring the IRB to 
expedite the plan's approval.
    In response to the findings listed above, the Inspector 
General made a series of recommendations to create a more 
streamlined approach to providing human-subjects protections, 
both at the local and Federal levels, while at the same time 
calling for a greater emphasis on accountability, performance 
and results.
    Institutional Review Boards should be granted more 
flexibility, but at the same time they should be held more 
accountable for their actions. For example, under current 
Federal regulations, IRBs must conduct full reviews of every 
research plan it oversees. The IG recommends that IRBs be 
allowed to strategize their reviews, focusing most of their 
attention on the studies most at risk of OPRR violations. At 
the same time, however, IRBs should undergo performance based 
evaluations made available to the public.
    The Inspector General report also recommends a 
reengineering of the Federal oversight process. In order to 
free up scarce OPRR resources currently devoted to reviewing 
and negotiating clinical research plans, the IG suggests 
reorienting the NIH/OPRR research approval process so that it 
rests essentially on an institutional attestation to conform to 
the IRB requirements set forth in Federal regulations. In 
addition, the IG recommends incorporating into their oversight 
efforts specific lines of inquiry to determine how well IRBs 
are actually protecting humans. This would call for the IRB to 
examine the processes of recruiting, selecting and gaining 
informed consent from human subjects to understand how the 
processes actually work.
    The IG also recommends strengthening the continuing 
protection for research subjects, moving beyond reliance on a 
signed informed consent document to ensure the integrity of the 
consent process itself. Existing groups like Data Safety 
Monitoring Boards could play a key role in this process of 
continuing protection, freeing the IRB up for other purposes.
    One other recommendation the IG reports makes is to enhance 
the education for research investigators and IRB members. For 
example, institutions that receive Federal funding for human 
subject research should have a program to educate investigators 
about human subject protections, a policy that is not currently 
in effect.
    The Inspector General's reports stressed that the 
effectiveness of the current system of human subjects 
protections is in need of reform--IRBs are struggling under 
intense workload and resource constraints, and the situation 
will likely intensify if funding for research is increased and 
if IRBs are expected to take on additional responsibilities.
    The hearing found that HHS and OPRR had not implemented 
major recommendations by the OIG and others, and that 
significant program deficiencies and dangers continue.
    (5) On April 10, 2000, in Fort Wayne, IN, the subcommittee 
held an oversight field hearing on the Health Care Financing 
Administration [HCFA], a component of the Department of Health 
and Human Services [HHS]. The hearing focused on HCFA's 
administration of Medicare benefits, including an examination 
of contractor practices and performance. Specific attention was 
devoted to issues of whether HCFA's regulations are unduly 
burdensome and deny due process to providers and beneficiaries. 
Service providers and patients expressed serious concerns and 
confusion regarding current regulations and practices.
    HCFA is the HHS agency with primary responsibility for 
administering the Medicare program. HCFA was created in 1977 to 
pull together the management of the Medicare and Medicaid 
programs. With expenditures of $316 billion, assets of $212 
billion, and liabilities of $39 billion, HCFA is the largest 
component of HHS. HCFA is also the largest single purchaser of 
health care in the world. In 1999, Medicare and Medicaid 
outlays represented 33.7 cents of every dollar of health care 
spent in the United States. The HHS Inspector General, in 
testimony before a congressional subcommittee on March 15, 
2000, noted that Medicare has 39.5 million beneficiaries, 870 
million claims processed and paid annually, complex 
reimbursement rules, and decentralized operations--resulting in 
the program being at risk for payment errors.
    Medicare makes payments based on a standard claim form. 
Providers typically bill Medicare using standard procedure 
codes without submitting detailed supporting medical records. 
However, regulations specifically require providers to retain 
supporting documentation and make it available upon request.
    Medicare is designed to provide health care coverage to 
people who are age 65 and older and to certain disabled 
persons. For fiscal year 1999, the total cost of the Medicare 
program was in excess of $200 billion, of which approximately 
$37 billion was spent on Medicare beneficiaries enrolled in 
prepaid health care plans commonly referred to as ``managed 
care organizations,'' and about $170 billion for the remaining 
85 percent of beneficiaries who chose Medicare's traditional 
pay-for-visit, or fee-for-service program. Medicare Part A--
hospital insurance--covers inpatient hospital care, some home 
health care, skilled nursing care and hospice services. 
Medicare Part B--supplementary medical insurance--covers the 
services which are provided by physicians, outpatient 
laboratories, and other service providers and suppliers.
    (6) On May 3, 2000, the subcommittee held a second hearing 
to discuss the Department of Health and Human Services [HHS] 
Office of Protection from Research Risks [OPRR]. The hearing 
examined HHS responses to the HHS Inspector General's 
recommendations to improve human research protection. The 
hearing identified continued deficiencies in OPRR policies and 
practices, and significant delays in fully implementing 
recommended and needed reforms. HHS selected new leadership for 
the program and reportedly further improvements are underway.
7. Housing and Urban Development Problems.
    a. Summary.--Subcommittee hearings on specific programs of 
the Department of Housing and Urban Development [HUD] revealed 
serious problems that support the agency ``at risk'' 
designation by the General Accounting Office [GAO]. HUD Federal 
Housing Authority [FHA] management and marketing efforts were 
found to have experienced serious and extensive waste, because 
it awarded a major contract covering 27 States to a company 
that proved incapable of performing its responsibilities. In 
addition, HUD developed and implemented an ill-defined 
``Community Builder'' program in a novel and questionable 
manner, resulting in the imposition of appropriations 
restrictions by Congress and critical reviews by the HUD Office 
of Inspector General.
    b. Benefits.--The subcommittee hearing identified serious 
problems of apparent waste and mismanagement. The findings have 
resulted in significant program changes and agency remedial 
actions. Also, continued monitoring is underway to identify and 
prevent further waste, and to provide remedies for some 
deserving businesses and individuals harmed by the defaulting 
HUD contractor. Continued monitoring is also underway to ensure 
that HUD does not repeat the mistakes made in administering the 
Community Builder program, and to better ensure that proper 
employment policies and practices are followed.
    c. Hearings.--On November 3, 1999, the subcommittee held a 
hearing entitled, ``Providing Adequate Housing: Is HUD 
Fulfilling Its Mission?'' The hearing examined two issues: (1) 
HUD's new property management and marketing program and agency 
problems with maintaining and selling houses to low and 
moderate income families; and (2) HUD's creation and 
administration of a new program that was intended to promote 
``community building.''
    The first hearing topic of HUD's new Marketing and 
Management initiative focused upon the failure of a major 
contract award to Intown Management Group. Intown went bankrupt 
soon after getting a $367 million contract from HUD, leaving 
many of its subcontractors and homeowners in financial 
distress. News reports indicate that one of the principals had 
a prior criminal conviction. The Assistant Secretary for 
Housing indicated that a clerk within the HUD Office of 
Inspector General might have been responsible for a deficient 
background check on the contractor. Subsequently, the Office of 
Inspector General indicated that it checks only its own 
records, as was communicated to HUD officials.
    The second hearing topic was HUD's community builders 
program, which hired 778 community builders at senior GS levels 
with accompanying high salaries during a period of planned 
budget cutting and personnel downsizing. Approximately one-half 
of the new hires involved the creation of temporary 
fellowships, utilizing special ``excepted service'' hiring 
authorities. Serious questions were raised about the selection 
and hiring process, the proper application of veteran 
preference requirements, nebulous roles and responsibilities 
assigned to community builders, identified and potential 
conflicts of interest, and conflicting performance assessments 
and accomplishments of those involved. The Senate 
Appropriations Committee on September 16, 1999, stated, ``In 
many cases, the Community Builders do not appear to act like 
HUD staff, but seemingly act in the capacity of lobbyists for a 
particular community or group.'' And the conference report on 
HUD appropriations went even further saying, ``. . . HUD must 
rebuild itself from within . . . Therefore, the conferees are 
terminating the external Community Builders program effective 
September 1, 2000 . . .'' The hearing highlighted continuing 
management problems, unnecessary expenses and the need to 
reduce risks in HUD's operations and programs.
8. The White House and the Privacy Act.
    a. Summary.--The hearing verified the importance of 
preventing privacy abuses by ensuring that White House 
officials are bound to the same requirements of the Privacy Act 
that apply to other Federal agencies and officials. Past 
privacy abuses by the Clinton administration and the Department 
of Justice were highlighted. Reforms were urged.
    b. Benefits.--The hearing identified the specific need for 
Congress to consider legislation to ensure that White House 
officials comply with Privacy Act requirements applicable to 
other Federal agencies and officials.
    c. Hearings.--On July 21, 2000, the subcommittee held a 
hearing on the topic of ``The Privacy Act and the Presidency.'' 
The hearing explored how the Privacy Act was intended to 
protect citizen privacy, and how these protections apply to the 
Executive Office of the President.
    The Privacy Act of 1974 (hereafter ``the Privacy Act'') is 
intended to provide individuals with safeguards against the 
loss of their privacy through misuse of their records by 
Federal agencies. The act and the Freedom of Information Act 
[FOIA] are the two major statutes that control information 
disclosure practices within the government. The Privacy Act is 
intended to protect an individual from the unauthorized 
collection of personal and inaccurate information, and from the 
release of certain information maintained in agency files.
    A fundamental purpose of FOIA is to provide an informed 
citizenry with information necessary to provide a check on 
activities and corruption in government. FOIA generally 
provides a right to access Federal agency records unless 
protected from disclosure by specific exemptions.
    The Privacy Act recognizes that an individual's right to 
privacy is a personal and fundamental right protected by the 
Constitution, the respect for which is essential to a 
democratic form of government. In general, the Privacy Act 
enables a citizen to learn how records are collected, 
maintained, used, and disseminated by the Federal Government, 
as well as limiting the Federal Government's collection, 
maintenance, use and dissemination of certain personal 
information from those records.
    Under the Privacy Act, an individual is provided with an 
additional safeguard in that he or she is permitted access to 
personal information, and to make changes to inaccurate, 
incomplete, untimely, or irrelevant information.
    The Privacy Act applies to personal information which is 
maintained by agencies in the executive branch of the Federal 
Government, including cabinet departments, military 
departments, government corporations, government controlled 
corporations, independent regulatory agencies and other 
establishments within the executive branch. The act does not 
apply to records which are kept by State and local governments, 
or by private companies and organizations. The Privacy Act only 
grants rights to U.S. citizens and aliens who have been 
lawfully admitted for permanent residence. A non-resident 
foreign national cannot use the act to protect his or her 
personal information.
    Generally, only those records maintained in a system of 
records are subject to the Privacy Act. A system of records is 
defined as a group of records from which information is 
retrieved by name, Social Security number, or other identifying 
symbol that has been assigned to an individual. The word, 
``record'' is itself defined to include most personal, 
individually identifiable information which is maintained by an 
agency about an individual including, but not limited to 
information concerning education, financial transactions, 
medical history, criminal history, or employment history.
    The Privacy Act provides for criminal penalties under the 
following circumstances: (1) Any officer or employee of an 
agency, who by virtue of his employment or official position, 
has possession of, or access to, agency records which contain 
individually identifiable information the disclosure of which 
is prohibited by this section or by rules or regulations 
established thereunder, and who knowing that disclosure of the 
specific material is so prohibited, willfully disclosed the 
material in any manner to any person or agency not entitled to 
receive it, shall be guilty of a misdemeanor and fined not more 
than $5,000. (2) Any officer or employee of any agency who 
willfully maintains a record system without meeting the notice 
requirements of this section shall be guilty of a misdemeanor 
and fined not more than $5,000. (3) Any person who knowingly 
and willfully requests or obtains any record concerning an 
individual from an agency under false pretenses shall be guilty 
of a misdemeanor and fined not more than $5,000.
    The Privacy Act also allows agency heads to promulgate 
rules to exempt record systems if the system is maintained by 
the CIA or maintained by an agency which has as a primary 
function any activity pertaining to criminal law enforcement. 
Specific exemptions, government contractors, mailing lists and 
matching agreements are addressed in subsequent sections. 
Finally, the Office of Management and Budget is given the 
responsibility for developing and prescribing guidelines and 
regulations for agencies to use in their implementations of the 
regulations and to provide these agencies with continuing 
oversight assistance of the act's implementation.
    There have been occasions when citizens have challenged 
whether or not the Privacy Act applies to the Executive Office 
of the President [EOP] and, if it does, whether that office 
feels bound by its provisions. One of these cases is Alexander 
v. Federal Bureau of Investigation (1997). The case resulted 
from the matter known as ``Filegate,'' involving the FBI's 
handing over of hundreds of personnel files of former political 
appointees and government employees from the Reagan and Bush 
administrations to the White House. The plaintiffs alleged that 
the White House violated the Privacy Act and that the EOP is 
included within coverage of the act as it applies to 
``agencies.'' The definition of ``agency'' as used in the 
Freedom of Information Act has been held to specifically apply 
to the EOP. The Clinton administration responded to this suit 
by arguing that the Office of Personnel Security and the Office 
of Records Management, both units within the EOP, were not 
subject to the Privacy Act. On March 29, 2000 the Federal 
District Court hearing the case rejected the administration's 
argument and held that ``under the Privacy Act, the word 
`agency' includes the EOP . . .'' DOJ continues to argue that 
the Privacy Act does not apply to the President and the White 
House.
    On May 26, 2000, in a related proceeding, the 
administration was unsuccessful in trying to protect 
information sought by plaintiffs during discovery. The 
Department of Justice, on behalf of EOP, filed an emergency 
petition for a writ of mandamus, seeking to vacate the March 29 
ruling. The court of appeals ruled that the administration had 
not met the burden of proof for relief. In sum, the court of 
appeals: (1) found that the 1997 decision of the district court 
concerning the applicability of the Privacy Act to the EOP 
could be reviewed in the appeal of the final judgment in the 
Alexander litigation; (2) disapproved some of the language in 
the lower court's March 29 decision as dicta; and (3) 
determined that the 1997 decision was not binding on White 
House operations in matters unrelated to the Alexander case.
    During the Clinton administration, Privacy Act issues 
reportedly have surfaced in matters involving Ms. Kathleen 
Willey, Ms. Linda Tripp and others. The Department of Defense 
[DOD] Office of Inspector General [OIG] concluded that DOD 
employees who took information from Ms. Tripp's government 
employment application and released it to a reporter violated 
the Privacy Act. The OIG recommended that the Secretary of 
Defense consider appropriate corrective action. Secretary Cohen 
sent letters to the two officials which expressed his 
``disappointment'' in their judgment and described their 
actions in releasing the information as ``hasty and ill-
considered.'' In the past, DOJ has been involved in defending 
Privacy Act lawsuits, and has paid numerous settlements.
    With the exception of the representative of DOJ, legal 
scholars and experienced attorneys who testified expressed 
strong support for legislation to ensure that Privacy Act 
protections apply to actions of White House officials. A 
statement was read from a person reporting serious White House 
abuses in apparent violation of the Privacy Act. Another 
witness reported past abuses by DOJ that resulted in 
substantial monetary awards against DOJ. Except for the witness 
representing DOJ, there was agreement among witnesses that 
there exists a serious need to prevent future privacy abuses by 
officials at the White House. DOJ reported that it had no 
official position on the issue of expanded applicability of the 
Privacy Act to White House officials and their actions.

                Subcommittee on the District of Columbia

                     Hon. Thomas M. Davis, Chairman

1. New Visions for the District of Columbia.
    a. Summary.--Chairman Tom Davis convened this oversight 
hearing with the purpose of reviewing the progress of the city 
especially as it related to Public Law 104-8 and Public Law 
105-33. This law created the District of Columbia Financial 
Management and Assistance Authority (D.C. Control Board). 
Public Law 105-33 made significant management reform changes in 
the city whereas control of key city agencies were shifted from 
the Mayor's office to the D.C. Control Board under the auspices 
of a chief management officer. With a newly elected Mayor of 
the District of Columbia and a recently appointed chair of the 
D.C. Control Board, Chairman Davis was interested in the 
``health'' of the city. Notedly, crime was down and home sales 
were up, however the emphasis was on the continuing need to 
restore Washington's image in the eyes of the world. Although 
the city is far more stable than it was 5 years ago, it still 
has a way to go. Regional priorities include traffic, economic 
development, education, and public safety. It has been the 
philosophy of the chairman that a healthy city makes for a 
healthy region.
    Mayor Anthony Williams of the District of Columbia 
(formerly the Chief Financial Officer for the District) 
testified that his administration will be one of openness and 
accessability. He acknowledged the importance of his partners, 
City Council chair, Linda Cropp, and D.C. Control Board chair, 
Alice Rivlin as they go forward in the District's 
rehabilitation. The Mayor went on to highlight the progress 
that the District has made to date such as: balancing the 
budget for the past 3 years; receiving an upgrade of the 
District's Bond Rating from Wall Street; receiving a clean 
audit demonstrating that the city's financial house was in 
order; and generating a budget surplus of nearly $400 million 
in fiscal 1998. He testified of other achievements in public 
safety, notably that the homicides in the District have 
declined by 46 percent since 1991, and are at their lowest 
levels in 12 years. Mayor Williams also testified that he 
wanted to foster a strong Federal relationship with the 
Congress and the White House and the D.C. Control Board. The 
Mayor went on to focus on his vision for the city, ``One 
Government-Good Government-Self-Government, One City, One 
Government.'' The Mayor placed several initiatives on his 
agenda: the District's children and programs to support them; 
human service network; workforce development; economic 
development; leverage public-private partnerships; health care 
priorities; service delivery improvements such as public works, 
licenses and permits; and restoring hope and confidence in the 
District government.
    Dr. Alice Rivlin, chair of the District of Columbia 
Financial Management Responsibility and Assistance Authority 
(D.C. Control Board) testified on the District's recent 
progress. She reflected optimism along with the new Mayor of 
the new era of an effective and responsive city government. She 
cautioned however that while fiscal progress has been 
gratifying, it is important to understand that the city still 
faces an uncertain financial future. Her case in point was that 
deferred maintenance and inadequate investment have left a 
legacy of decayed and outmoded infrastructure from bursting 
pipes to leaky roofs that will take substantial resources to 
make the situation right. Dr. Rivlin also discussed the 
relationship with the elected officials. She said that the 
Control Board along with the Mayor had signed a memorandum of 
agreement [MOA] describing their new relationship. Dr. Rivlin 
made clear that the memorandum makes clear while the Control 
Board retains all its responsibilities under statute, the Mayor 
will be in charge of the day to day operation of the city and 
supervision of the executive branch departments. She said that 
there must be no confusion about who is in charge of delivering 
services--the Mayor is. Dr. Rivlin went on to explain some of 
the other details of the MOA. Dr. Rivlin also explained the 
Control Board's relationship with the City Council. She said to 
ensure effective communication, the Control Board had invited 
the chairwoman of the City Council along with the Mayor to 
attend meetings of the Control Board in a non-voting capacity. 
She mentioned her optimism of working on the fiscal year 2000 
budget together with the city officials. Dr. Rivlin also said 
that the District must make the transition to normal 
governance. She said that although it is not there yet, the 
District was on its way to accomplishing the goals and 
objectives of the congressional statutes of 1995 (Public Law 
104-8) and 1997 (Public Law 105-33).
    D.C. City Council Chair Linda Cropp testified that although 
the District has recovered much more quickly than other cities 
that have faced similar problems, it still needs to make much 
more progress in managing the government and improving basic 
municipal services such as public schools, public works, and 
public safety. Council Chair Cropp said that the council was 
pleased that the Control Board had returned the day to day 
operations of nine agencies and four cross cutting issues to 
the elected Mayor of the District. Mrs. Cropp said that the 
Council is committed to working side by side with Mayor 
Williams and Dr. Rivlin in achieving both short-term and long-
term results for both the residents and businesses of the 
District. Mrs. Cropp also noted a comprehensive study in which 
the Council had requested by the National Conference of State 
Legislatures. She said this study is part of an ongoing process 
to review and reform the city's legislative operations so that 
the Council like the rest of the government can optimize their 
performance. There were other reforms which the Council Chair 
enumerated in which she saw as steps to a revitalized District 
of Columbia.
    b. Benefits.--With a new Mayor in place, Chairman Davis 
announced that he was introducing legislation to enforce a 
recently signed memorandum of agreement [MOA] between the D.C. 
Control Board and the Mayor. In it Chairman Davis' legislation 
would enforce the provisions of the MOA and shift substantial 
authority from the Control Board to the city's elected Mayor 
and to give the Mayor the greater flexibility he has sought 
over top personnel. Chairman Davis also announced at this 
hearing of his plans to introduce legislation to afford high 
school graduates from the District of Columbia opportunities to 
pay in-State tuition at the State universities outside the 
city.
    c. Hearings.--On January 22, 1999, Chairman Davis convened 
an oversight hearing entitled, ``New Visions for the District 
of Columbia.'' Those testifying were Honorable Anthony 
Williams, Mayor of Washington, DC; Dr. Alice Rivlin, chair of 
the District of Columbia Financial Responsibility and 
Management Assistance Authority; and Honorable Linda Cropp, 
chair, District of Columbia City Council.
2. District of Columbia's Year 2000 Conversion Compliance.
    a. Summary.--There were two hearings on this subject 
matter. Chairman Davis convened the first hearing on the year 
2000 conversion issue, commonly referred to as Y2K on February 
19, 1999. His concern was that this enormous challenge was not 
a high priority for the District of Columbia but for the rest 
of the world as well. The chairman acknowledged the leadership 
of two of his colleagues who are also members on the 
subcommittee for their national expertise and leadership in 
this field, Representative Steve Horn and Representative Connie 
Morella. These two members serve as co-Chairs of the House of 
Representatives Committee on Y2K Compliance. The chairman noted 
that the Y2K matter is a unique management issue for both the 
public and private sector. The systems may not be able to 
differentiate between the year 2000 and the year 1900. 
Microprocessors also have been programmed with the same two-
digit year and are therefore subject to the same failure 
potential. Several challenges are drawn in a special way to the 
District's challenges of the Y2K issue. The regional compacts 
which exist among various governmental entities require us to 
examine these matters in a more comprehensive manner. Examples 
include the D.C. Water and Sewer Authority, and the 
Metropolitan Washington Area Transit Authority. Regional 
cooperative agreements dealing with emergency response and 
emergency preparedness, along with several health and human 
services activities, just reinforces the need to work together 
to insure to the extent possible that none of these important 
public services are jeopardized. Additionally, the 
transportation and public safety activities which are critical 
to the ability of the Federal agencies to function efficiently 
are critical. The chairman reassured the city officials that he 
was committed to working closely with the District's technology 
office and others to help the city address these challenges.
    Mayor Anthony Williams of the District of Columbia 
testified that the Y2K project is proceeding in large part 
because of the financial and technical support that the city 
was receiving from Congress. He said that the success of the 
Y2K project is important because it mandates the District 
government review its systems in preparation for 21st century 
information technology applications. The Mayor said that the 
District had started late but is finishing strong. He said that 
the District's strategy has been to concurrently execute tasks 
that other cities executed sequentially. The Mayor referred to 
the detailed testimony which would be given by his chief 
technology officer later in the hearing. He said that he was 
confident that the District will meet its target dates for 
completion of the Y2K implementation.
    Mr. John Hill, executive director of the D.C. Control Board 
testified that the Control Board was effectively implementing 
an aggressive program to ensure that all major government 
services are provided throughout the millennium period.
    Mrs. Kathy Patterson, D.C. City Council member and chair of 
the council's Committee on Government Operations, testified 
that after a slow initial start, the District has mobilized 
resources and launched an aggressive program to meet the Y2K 
challenge. She said that she saw the three roles for the 
legislature in promoting a successful Y2K conversion: (1) 
oversight; (2) provide resources; (3) use of law to aid the 
conversion. She said that her committee will continue to 
monitor the Y2K conversion; to clear away regulatory and 
statutory obstacles; and to promote intergovernmental, 
regional, and public/private cooperation.
    Mrs. Suzanne Peck, chief technology officer for the 
District of Columbia government, testified in detail of the 
current status of the District's remediation and conversion for 
Y2K. She said that the District's system inventory consists of 
336 business applications. Of the 336 applications, 84 are Y2K 
ready, 117 require remediation and testing, and 135 have been 
remediated by their agencies and require testing only. 
Approximately 10 million lines of codes have been identified 
for remediation across the 117 applications in 16 different 
agencies. Mrs. Peck said that it is important to remember that 
when Y2K is over the District's overall technology 
infrastructure will need to be addressed. She said that the Y2K 
efforts are focused exclusively on existing, legacy information 
systems with the singular goal of fixing code so the millennium 
date changes will be recognized. The original management reform 
projects for information technology in the District are also 
focused in large part on stabilizing the information 
infrastructure rather than advancing it. She said that her 
office was looking forward to a group of follow-on projects 
which will establish the District of Columbia as an 
internationally recognized technology city, competing for and 
sharing in the technology growth of the region. She said that 
she envisions these projects as expanded and more user-friendly 
technological environment in which to do business with the 
District government.
    Mr. Jack Brock, Director of Government wide and Defense 
Information Systems Accounting and Information Management 
Division, U.S. General Accounting Office, testified that in a 
recent overview of the District's recent efforts, his office 
found the following in which the District had done: (1) 
identified 18 agencies that are critical to providing vital 
services to the city; (2) identified and prioritized 75 core 
business processes and over 200 mission-critical systems that 
support these processes; (3) developed a detailed project plan 
for remediating, testing, and implementing its mission-critical 
systems; (4) prepared and tested a contingency planning 
methodology and has begun to apply the methodology in 
developing business continuity and contingency plans for core 
business processes; (5) developed a system testing strategy; 
(6) strengthened its year 2000 organization by hiring 
additional staff; and (7) developed crisis management 
procedures to be used in the event a year 2000 failure is 
imminent or occurs. Mr. Brock further said that the District's 
schedule for year 2000 compliance offers little opportunity for 
further compression, no margin for error, and little room for 
corrective action if test results show continued problems with 
mission critical systems. GAO's recommendation to partially 
compensate was that the District place increased emphasis on 
(1) completing business continuity and contingency plans as 
early as possible to allow for testing and funding and (2) 
ensuring that contingency plans and priorities are updated to 
reflect information that becomes available as the Y2K project 
progresses, including new risk assessments based on the 
successes and failures encountered in the validation phase of 
the project. Second, GAO recommended that those who are the 
stakeholders (Mayor, agency heads, Control Board) must 
participate in making critical decisions throughout the 
reminder of the project by continued provision of resources and 
support for the program and taking action necessary to 
eliminate obstacles that could reduce the Y2K Program Office's 
chances of successfully executing its project plan.
    At the second hearing on September 24, 1999, Chairman Davis 
reemphasized his concern for the mitigation project. Because 
the Y2K remediation efforts started late, GAO reported serious 
problems along with communication, cooperation, and 
coordination. At this hearing, Chairman Davis was also 
concerned that a New Year's Eve ``Millennium Celebration'' of 
some sort was being planned for the District at the urging of 
the White House. Testimony addressed the impact and the ability 
of various local agencies to respond to potential Y2K problems.
    Mayor Williams testified at the second hearing that he was 
still committed to the promise of Y2K compliance. He said that 
despite of their late start, he believes that much progress had 
been made. He also said that he had initiated a resource review 
panel to conduct detailed implementation reviews. Mayor 
Williams said that while he was pleased with the city's 
progress, he takes nothing for granted. He tasked the city 
administrator with conducting an independent review of the 
District's Y2K efforts. After the findings of a consulting 
firm, he said that he has two concerns: (1) the lack of 
stringent financial management and tracking for the Y2K effort; 
and (2) responsibility is shared between the Y2K project office 
and the individual agencies, the management structure is 
fragmented. He said that his administration is addressing every 
contingency so that the city's services will continue to be 
delivered on January 1, 2000.
    Control Board Vice-Chair Connie Newman testified at the 
second hearing that recent reports indicated that marked 
progress had been made on a variety of critical projects 
underway to ready the District for January 1, 2000. She said 
that with respect to work that remains to be completed, the 
Control Board is working with the District officials to ensure 
that the highest priority be given to achieving Y2K readiness 
of all systems impacting health, safety, or economic welfare. 
Additionally, she said that the Control Board was monitoring 
the testing of contingency plans, and working with the Mayor's 
office to ensure that adequate resources will be in place to 
respond to any emergencies that may arise in the New Year.
    D.C. Councilmember Kathy Patterson testified during the 
second hearing that although the District started its Y2K 
effort late, it had made considerable progress during the past 
year and have adhered closely to the timetables set in June 
1998. Some tasks she said have fallen behind schedule, while 
others have been completed ahead of time. Mrs Patterson said 
that the Council has been a critical partner in the District's 
Y2K effort in providing oversight and in clearing away 
statutory and regulatory roadblocks. She said that the Council 
had worked closely and cooperatively with the Mayor, chief 
technology officer, and the Control Board and that they will 
continue to do so. She said that the partnership is important 
to have the Congress and the administration involved. She said 
that the Federal Government has contributed more than $100 
million to the District's Y2K project which has been essential 
to their progress.
    Chief Technology Officer Suzanne Peck testified during the 
second hearing that the District's systems and assessment 
process discovered 34 new systems, bringing the total to 370 
business applications in the District's systems inventory. Of 
these 370 applications, 242 (65 percent) were Y2K ready. Of the 
remaining 128 applications, 25 remain to be remediated, 40 have 
been remediated and are in testing, and 63 are in process of 
testing only. All 128 systems will complete their testing by 
the end of October 1999. All 370 applications will have been 
returned to production by the end of November 1999. She said 
that of the city's 370 systems, 223 are designated as mission-
critical. Of these 223 mission critical systems, 130 are Y2K 
ready as they stand; 23 remain to be remediated; 39 have been 
remediated and are in testing; and 31 are in process of testing 
only. The last 223 systems will be completing their testing by 
the end of October 1999 she said. Mrs. Peck also said that she 
was planning a group of projects to establish infrastructure 
for the electronic government initiative or ``technology 
city.'' Mrs. Peck said however, that the mission critical 
agencies such as the Police department and D.C. General 
Hospital have first call on her technical, financial and human 
resources.
    During the second hearing, GAO reported that the District 
has taken actions to strengthen its Y2K project management and 
continuity and contingency planning. For example, the District 
has done the following: (1) hired an outside contractor to 
review its project plan; (2) hired an outside contractor to 
oversee the contingency planning effort; (3) participated in 
the Metropolitan Council of Governments' Contingency Planning 
drill held on September 1, 1999; (beginning in June 1999), 
started to regularly convene its Year 2000 Steering Committee; 
(4) taken steps to establish consistent status reporting across 
agencies and reconcile differences in data reported by the 
agencies and the year 2000 program office which were discovered 
when preparing the District's most recent Y2K status report for 
the OMB.
    b. Benefits.--On October 2, 1998, this subcommittee, along 
with the Subcommittee on Government Management, Information, 
and Technology, and the Subcommittee on Technology, conducted 
an oversight hearing related to the District of Columbia's year 
2000 compliance effort. That hearing clearly established the 
fact that the District's Y2K compliance effort did not begin in 
any meaningful way until June 1998. That fact, in and of 
itself, put the effort into the ``emergency'' mode. The hearing 
that day provided an opportunity to define the magnitude of the 
challenge, including the corresponding risk, and the projected 
cost. It was also clearly established that because of the enemy 
of time, that the District would have no choice but to proceed 
with much of the remediation and testing effort simultaneously. 
This potentially has explosive ramifications, which could 
threaten not only the ability of the government of the District 
of Columbia to provide uninterrupted services, but also the 
ability, among other things, of the Federal workforce to get to 
their employment locations. On January 28, 1999, the District 
of Columbia's Office of the Inspector General issued its first 
management alert letter on the District of Columbia's year 2000 
readiness status. The OIG letter confirmed that a number of 
milestone dates related to Y2K efforts in the Metropolitan 
Police Department, the Department of Employment Services, and 
the Office of the Chief Financial Officer, had been met, yet 
there remained significant issues which had to be addressed.
    GAO testified at the second hearing by capitalizing on 
recent Y2K related experience, the District can implement 
management processes and controls needed to ensure that its 
technology assets are effectively supporting city operations. 
For example: (1) The District has learned that Y2K efforts 
cannot succeed without the involvement of top-level managers at 
the agency level and citywide level. Best practices have shown 
that top executives need to be similarly engaged in periodic 
assessments of major information technology investments to 
prioritize projects and make sound funding decisions. Such 
involvement is also critical to breaking down cultural and 
organizational impediments; (2) the District has recognized 
that having complete and accurate information on information 
systems can facilitate remediation, testing, and validation 
efforts. Maintaining reliable, up-to-date system information, 
including a system inventory, is also fundamental to well 
managed information technology programs since it can provide 
senior managers with timely and accurate information on system 
costs, schedule and performance; (3) the District has developed 
a better understanding of its core business processes and made 
some progress in prioritizing its mission-critical system based 
on their impact on these processes and the relative importance 
of the processes themselves. Once the Y2K program is completed, 
the District can build on these efforts to ensure that 
information technology initiatives will optimize businesses 
processes as well as to identify and retire duplicative or 
unproductive systems; (4) like many organizations, the District 
found that special measures were needed to build the technical 
expertise required to assist with all phases of the Y2K 
correction information technology management.
    c. Hearings.--On February 19, 1999, Chairman Davis convened 
a hearing entitled, ``Status of the District of Columbia's Year 
2000 Conversion Compliance.'' Those testifying were Honorable 
Anthony Williams, Mayor, Washington, DC; Honorable John Hill, 
executive director, District of Columbia Responsibility and 
Management Assistance Authority; Honorable Kathy Patterson, 
councilmember, D.C. City Council; Mrs. Suzanne Peck, chief 
technology officer, D.C. government; and Mr. Jack Brock, 
Director of Governmentwide and Defense Information Systems 
Accounting and Information Management Division, U.S. General 
Accounting Office.
    The second oversight hearing was on September 24, 1999, on 
the status of the District of Columbia's year 2000 conversion 
compliance and technology improvement plan. The slate of 
witnesses included all of the above listed witnesses with the 
exception of Mr. John Hill. In his place to represent the 
Control Board was Vice-Chair Connie Newman and Mrs. Gloria 
Jarmon, Director, Health, Education and Human Services 
Accounting and Financial Management Issues Accounting and 
Information Management Division, U.S. General Accounting 
Office.
3. District of Columbia Public Schools.
    a. Summary.--The purpose of this hearing was to review many 
of the issues and challenges and to examine the status of a 
number of reform efforts in the District of Columbia Public 
Schools. Chairman Davis stressed that there was a need to 
provide opportunities to achieve academic excellence in 
facilities that are safe; that have efficient heating and air 
conditioning; whose roofs don't leak; and that can be 
modernized. The hearing focused on the availability of 
opportunities for the schools to advance in technology, fiber 
optic cable, arts and science laboratories, and special 
programming activities.
    Mayor Anthony Williams of the District of Columbia 
testified that his vision for education has three central 
components: (1) the District's children deserve the best 
possible schools with first class teachers; (2) the District's 
approach to education must recognize that an equal part of a 
child's learning and development takes place outside the 
classroom--parents are first teachers; and (3) the District 
must mobilize all the resources of the community toward the 
education of the District's young people--involving parents, 
teachers, civic leaders, faith organizations, as well as the 
business community in the life of every child.
    D.C. City Councilmember Kevin Chavous, chairman of the 
Committee on Education on the Council testified that his 
committee has held an unprecedented number of hearings 
involving the District of Columbia Public Schools and Charter 
Schools over the last 6 months. He said that the topics 
included school bus transportation and certification of school 
bus drivers, as well as various other special education issues, 
student truancy and drop-out prevention policies and programs, 
public charter schools, long range facilities master plan, 
interagency collaboration and school based management. He said 
that there remains work to be done in support of the public 
education reform in the District. He stated his commitment to 
continue working together in support of public education with 
the Mayor, Control Board, superintendent and others. He said 
the school system had already begun to see a positive change 
with the superintendent, Mrs. Arlene Ackerman and pledged his 
support of her.
    D.C. Control Board Vice Chair Constance Newman testified 
that the Control Board devotes considerable time and attention 
to providing oversight over the D.C. Public Schools. She said 
that the Board's oversight efforts have focused on ensuring 
that the serious deficiencies in governance, academic 
performance, management, and the physical environment 
identified in the Board's November 1996 report, ``Children in 
Crisis: A Report on the Failure of the D.C. Public Schools,'' 
are corrected and that overall improvements in education are 
realized.
    D.C. Public School Superintendent Arlene Ackerman testified 
that the schools opened on time. She said that she hopes there 
will never be a question concerning basic educational issues 
again and that she would like to focus on the larger issues 
that face all urban systems as they try to provide youth with 
the skills and knowledge necessary to turn dreams into reality. 
She said that the central office and principals and teachers in 
each school have been busy with reform agenda. The focus she 
said was improving teaching and learning. Mrs Ackerman also 
said that she had invested more in professional development and 
plan to expand the department's efforts to reach every teacher 
with sustained learning opportunities. She talked about the 
department's partnership with the U.S. Army Corps of Engineers 
in making important capital improvements. The department's 
plans call for full school rehabilitation for one school in 
each ward next year while they wait for the elected Board's 
long range facility plan. She pledged her commitment to the 
children in that she agreed that to assure safe environments 
where principals and teachers have the adequate resources and 
support. Other subjects in which she testified to were 
principal evaluations, teacher evaluations, instructional 
technology, student achievement, special education, weighted 
student formula, and other reforms.
    Mrs. Maudine Cooper, chairwoman of the District of Columbia 
Emergency Transition Education Board of Trustees testified that 
over the past 11 months the board have witnessed a true 
renaissance in both spirit and actual reforms in the District's 
public school system. She said that spirit is catching and 
reforms are evident. She also gave testimony in detail 
concerning the Capital Improvement Plan and rehabilitation and 
modernization of facilities, academic plan, technology plan, 
teacher certification, budget in relation to resources to 
fulfill the academic excellence strategic plan, and the status 
of present as well as prospective public charter schools.
    b. Benefits.--Chairman Davis expressed confidence in the 
city by the recent events, including the decision of the bond 
houses in New York to upgrade the District's debt rating as 
evidence that overall efforts in the city across a wide front 
were producing results. Chairman Davis praised the 
superintendent for laying a foundation for future success. A 
priority mission as pointed out by Chairman Davis was to 
develop, update, and implement an academic plan which meets the 
needs of the school population and prepares students to compete 
in a global economy. However, in following the light of the 
management reform effort, it was stressed to the city schools 
officials to take care to operate in an environment in which 
students can learn without fear for their personal safety and 
an environment that invites stakeholders to share in the effort 
to develop creative solutions. The subcommittee's goal was to 
promote to the schools an environment that is not driven by 
crisis.
    c. Hearings.--On April 30, 1999, Chairman Davis convened an 
oversight hearing entitled, ``Status of the District of 
Columbia Public Schools Plan for Capital Improvements and 
Academic Excellence.'' Those testifying were Honorable Anthony 
Williams, Mayor, Washington, DC; Honorable Kevin Chavous, 
chairman, Education Committee, DC City Council; Honorable 
Constance Newman, vice-chair, District of Columbia Financial 
Responsibility and Management Assistance Authority; Mrs. Arlene 
Ackerman, superintendent of D.C. Public Schools; and Mrs. 
Maudine Cooper, chairwoman, District of Columbia Public Schools 
Transitional Education Board of Trustees.
4. Public Law 104-8, District of Columbia Financial Responsibility and 
        Management Assistance Authority (D.C. Control Board).
    a. Summary.--On April 17, 1995 Public Law 104-8, 
originating in this subcommittee, was signed by the President. 
It created the D.C. Control Board and, in part conferred upon 
it responsibility and authority. Based on the substantial 
progress which was then made, in 1997 Public Law 105-33 was 
enacted, entitled the National Capital Revitalization and Self-
Government Improvement Act of 1997 under which, in part, the 
Federal Government assumed certain responsibilities in the 
District of Columbia normally performed by States and the 
District was, in part, directed to pursue certain management 
reforms.
    b. Benefits.--The District of Columbia has largely 
recovered from the catastrophic conditions which existed in 
January 1995, when the subcommittee was created. At that time 
the city faced a crisis of epic proportions.
    c. Hearings.--On January 21, 2000 the subcommittee 
continued its ongoing investigation of major issues in the 
District of Columbia by conducting an oversight hearing 
focusing on efforts to monitor revitalization. Specific issues 
included the current and prospective financial condition in the 
Nation's Capitol, the progress of management reform initiatives 
undertaken by the District of Columbia government, mental 
health and public safety issues, and technology improvements. 
Witnesses included Mayor Anthony Williams, Control Board chair 
Alice Rivlin, and Linda Cropp, chair of the District of 
Columbia City Council.
5. Receiverships.
    a. Summary.--For more than 20 years the District of 
Columbia has been subject to significant court orders. Due to 
consistent failure to comply with various consent agreement, 
four entities were in receivership at the beginning of 2000. 
Federal and local court-appointed receivers governed operations 
and influenced the budgets of the District's mental health 
system, public housing, medical and mental health services for 
jail inmates and children and family services. Special Masters 
had been appointed by Federal courts to monitor compliance with 
mandates. These receiverships have made it very difficult for 
the city and Congress to control operations.
    b. Benefits.--The receiverships for public housing has 
ended successfully. The receiver for the Child and Family 
Services Agency [CFSA] has resigned and the parties to the La 
Shawn case, which triggered the receivership, have agreed to 
the terms for the transfer of CFSA from receivership to the 
District of Columbia government. Federal Judge Thomas Hogan has 
agreed to the terms.
    c. Hearings.--On May 5, 2000 the subcommittee investigated 
one of the receiverships then in force and effect in the 
District of Columbia by holding an oversight hearing entitled, 
``For Better or Worse? An Examination of the State of the 
District of Columbia's Child and Family Services 
Receivership.'' Witnesses included: Tom Delay, Majority Whip, 
U.S. House of Representatives; Cynthia Fagnoni, Director, 
Education, Workforce, and Income Security Issues, U.S. General 
Accounting Office; Judith Meltzer, deputy director, the Center 
for the Study of Social Policy; Ernestine F. Jones, general 
receiver, the District of Columbia Child and Family Services; 
Carolyn Graham, deputy mayor for Children, Youth and Families, 
District of Columbia; Grace Lopes, special counsel, 
Receivership and Institutional Litigation; Kimberly A. 
Shellman, executive director, the District of Columbia 
Children's Advocacy Center.
    On June 30, 2000 the subcommittee continued its 
investigation into receiverships in the District of Columbia by 
conducting an oversight hearing entitled, ``Beyond Community 
Standards and a Constitutional Level of Care: A Review of 
Services, Costs, and Staffing Levels by the Corrections Medical 
Receiver for the District of Columbia Jail.'' Witnesses 
included: Laurie Ekstrand, Director of Administration of 
Justice Issues, General Government Division, U.S. General 
Accounting Office; Ronald Shansky, M.D., corrections medical 
receiver; Karen Schneider, Special Office for the U.S. District 
Court for the District of Columbia; Erik Christian, deputy 
mayor for Public Health and Justice; and John Clark, District 
of Columbia corrections trustee.
    On September 20, 2000 the subcommittee continued its 
investigation of receiverships in the District of Columbia by 
holding a follow-up hearing entitled, ``Best Interests of the 
Child? A Reexamination of the District of Columbia's Child and 
Family Services Receivership.'' Witnesses included: Ernestine 
F. Jones, general receiver, the District of Columbia Child and 
Family Services; Carolyn Graham, deputy mayor for Children, 
Youth and Families, District of Columbia; Grace Lopes, special 
counsel, Receiverships and Institutional Litigation; Linda 
Mouzon, executive director, Social Services Administration, 
Maryland Department of Human Resources.
    The subcommittee also continued its investigation into the 
Transitional Receivership for the District of Columbia 
Commission on Mental Health Services, which is scheduled to 
terminate by April 2001, when the city will regain control of 
the agency. The subcommittee examined the progress of the 
Receivership in developing community-based mental health care 
and improving and expanding the services provided to its 
clients. The subcommittee worked with: Kathryn G. Allen, 
Associate Director of Health Financing and Public Health 
Issues, General Accounting Office; Dennis R. Jones, 
transitional receiver; Carolyn Graham, deputy mayor for 
Children and Families; Grace M. Lopes, Esq., special counsel 
for Receiverships and Institutional Litigation; and Susan 
Burke, Esq., of Covington and Burlington.
6. The Washington Metropolitan Area Transit Authority [WMATA].
    a. Summary.--In 1967, WMATA was created by a legislative 
compact between Maryland, Virginia, and the District of 
Columbia. Since then it has been responsible for planning, 
financing, construction, and operating a comprehensive mass 
transit system for the Washington Metropolitan Area. WMATA 
started building the Metrorail system in 1969, and the first 
phase of operation began in 1976. By 2001, WMATA expects to 
complete the originally planned 103-mile Metrorail system. In 
addition, Metrobus service began in 1973, when WMATA purchased 
four private bus companies. In fiscal year 1999 WMATA had a 
service area population of 3.4 million people and provided 339 
Metrorail and Metrobus passenger trips. Unfortunately, for 
about a year WMATA has been experiencing safety and reliability 
problems. The subcommittee saw a need to focus attention on 
improved communication, infrastructure, escalator repairs, 
overcrowding and emergency response.
    b. Benefits.--By investigating WMATA the subcommittee 
helped to highlight growing concerns, facilitate ongoing 
maintenance efforts, and bring the regional partners together 
under congressional aegis.
    c. Hearings.--On October 6 the subcommittee conducted an 
informational and oversight hearing of WMATA. The hearing was 
entitled, ``Examining Metro's Track Record.'' Witnesses 
included: Nuria Fernandez, Acting Administrator, Federal 
Transit Administration, U.S. Department of Transportation; 
Gladys W. Mack, chairman, Board of Directors, WMATA; 
Christopher Zimmerman, second vice chairman, Board of 
Directors, WMATA; the Honorable Decatur Trotter, vice chairman, 
Board of Directors, WMATA; Richard White, general manager and 
chief executive officer, WMATA; Ron Tober, chairman, American 
Public Transportation Association; Dorothy Dugger, deputy 
general manager, San Francisco Bay Area Rapid Transit [BART]; 
Honorable Kathy Porter, chairman, Transportation Planning 
Board, Metropolitan Washington Council of Governments; and 
Michael Carvalho, Transportation and Environment Committee, 
Greater Washington Board of Trade. A statement for the record 
was also included by Danny Alvarez, director, Miami-Dade 
Transit Agency.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, Chairman

1. Year 2000 Computer Challenge.
    a. Summary.--The Subcommittee on Government Management, 
Information, and Technology held its first hearing on the year 
2000 [Y2K] problem in April 1996. In the 106th Congress, the 
subcommittee held 25 hearings on the issue, including 6 field 
hearings. The hearings covered many topics including health 
care, domestic and international travel, defense, and local 
government preparations. The subcommittee also focused 
intensely on the executive branch, State and local governments, 
and private sector efforts to prepare computer systems and 
applications for the year 2000.
    In addition to the subcommittee's review of computer 
systems, it began a massive oversight undertaking to review the 
year 2000 readiness of the Federal Government's most essential 
``high impact programs'' such as Medicare, Temporary Assistance 
for Needy Families, and the Nation's air traffic control 
system. The Office of Management and Budget, in consultation 
with Federal agencies, identified 43 ``high impact programs'' 
that affect the lives of millions of families and individuals. 
Ten of these programs are Federal programs that are State-
administered. In June, we found that only 2 of the 43 programs 
were ready. In September, agencies reported that seven of these 
programs were ready. By November, the executive branch reported 
that 25 of the 43 programs were ready, leaving 18 that were 
not, including the 10 State-run programs that provide essential 
services such as child nutrition; food stamps; nutrition for 
women, infants, and children; child care; child support 
enforcement; child welfare; low income home energy assistance 
program; temporary assistance for needy families; and 
unemployment insurance.
    During the 106th Congress, the subcommittee also issued 
four quarterly report cards--one of the hallmarks of the 
subcommittee's year 2000 oversight work. In February 1999, the 
Federal Government received a ``C+.'' As a result of much hard 
work, by November, that grade had risen to a ``B+.''
    The year 2000 problem has many facets that pose great 
challenges particularly in light of the unmovable deadline of 
January 1. This effort has produced, perhaps, the most massive 
and coordinated worldwide computer repair efforts in history. 
Although much progress has been made, significant work remains. 
Rigorous management oversight and practical business continuity 
and contingency plans must remain top priorities if the job is 
to be completed on time.
    As noted above, the subcommittee held 25 hearings on this 
issue during the 106th Congress, of which 15 were held jointly 
with the Science Committee's Subcommittee on Technology. The 
first hearing focused on the status of the executive branch's 
year 2000 efforts. John Koskinen, chairman of the President's 
Council on Year 2000 Conversion provided an assessment of the 
council's work with State and local governments, as well as its 
work with foreign nations. Mr. Koskinen noted that Federal 
computer remediation was progressing and striving to meet the 
President's March 31, 1999, deadline for all Federal computer 
systems to be fixed. The committees also received testimony 
from the Lawrence Gershwin, National Intelligence Council, who 
provided a declassified assessment of the status of year 2000 
efforts among foreign governments. Mr. Gershwin noted that year 
2000 readiness data on foreign countries were sketchy. He also 
discussed concern over Russian nuclear power plants.
    Joel Willemssen of the General Accounting Office [GAO] 
testified that national, Federal, State, and local efforts must 
increase substantially to ensure that major service disruptions 
do not occur. He stressed that strong leadership and 
partnerships are essential if Government programs are to meet 
the needs of the public after the turn of the century. Mr. 
Willemssen also testified that agencies must perform end-to-end 
testing of their critical, core business processes to ensure 
that mission-critical systems can reliably exchange data with 
other systems and are protected from errors that could be 
introduced by external systems.
    The subcommittee's second hearing presented testimony on 
the efforts of the U.S. Postal Service [USPS], to prepare for 
the technical challenges associated with the year 2000 problem. 
The Postal Service is a critically important part of the 
Nation's infrastructure. Moreover, the subcommittees learned 
that the Postal Service is a vital part of the Y2K contingency 
plans of hundreds, if not thousands, of public and private 
agencies, organizations, corporations and individuals who 
currently rely on computers to exchange information. If those 
computer systems fail, nearly all will depend on the Postal 
Service to deliver their business and personal transactions.
    The USPS Inspector General and the GAO testified that the 
Postal Service had a long way to go to complete necessary 
computer systems remediation efforts and develop practical 
contingency plans. The Postal Service represented by Norman E. 
Lorentz, senior vice president, and chief technology officer, 
agreed that much work remained to be done, but the work was 
proceeding on schedule. The subcommittee also learned that the 
Postal Service had not thoroughly developed an overall, 
detailed year 2000 program plan. The Postal Service's initial 
plan was developed as a result of this hearing and was 
delivered to the subcommittee on March 12, 1999.
    The purpose of the third joint subcommittee hearing was to 
receive a status report on the year 2000 efforts of the 
Department of Health and Human Services [HHS]. Specifically, 
the subcommittees obtained information about HHS' payment 
management system, which processes about $170 billion annually, 
or approximately 75 percent of all Federal grant-in-aid funds. 
The HHS and GAO testified that this monolithic system was not 
yet year 2000 compliant, but would be ready by the early 
summer. In addition, the Health Care Financing Administration 
[HCFA] reported that it had 75 external computer systems that 
were deemed compliant. However, we learned that each of these 
75 systems had been reported as compliant ``with 
qualifications,'' meaning that fixes still remained.
    The fourth hearing focused on the year 2000 efforts at the 
Department of Defense [DOD]. According to Jack Brock of the 
General Accounting Office, this year 2000 dilemma was 
particularly daunting for the Defense Department for two 
reasons. First, the Department's size and scope of operations, 
criticality of mission, and heavy reliance on a diverse 
portfolio of information technology are unparalleled in either 
the public- or private-sector. Second, despite considerable 
progress during the prior 3 months, the Defense Department was 
still far behind schedule. The problem occurred largely because 
the Department had not had the necessary oversight and 
management framework to handle large-scale department-wide 
information technology projects.
    However, Dr. John Hamre, of the Department of Defense, 
testified that the Department had fixed most of its mission 
critical systems and was working hard to finish the remaining 
work. In addition, the Defense Department was developing and 
exercising continuity of operations plans for all key functions 
and processes. In particular, Dr. Hamre noted that the 
Department had focused special attention on nuclear systems and 
had already tested them several times. He closed by saying that 
the Defense Department is looking ahead, and plans to use its 
Y2K experience as a foundation for future information 
technology operations.
    The subcommittees' fifth hearing sought information on the 
prospects of litigation arising from potential year 2000 
computer problems. Some industry groups estimated that year 
2000-related litigation could cost as much as $1 trillion--
nearly double the estimated cost of actual computer repairs and 
testing worldwide. Thomas J. Donohue, president and chief 
executive officer of the U.S. Chamber of Commerce and chief 
executive officer of the U.S. Chamber Institute for Legal 
Reform, testified that he has a unique perception because he 
represented the interests of both potential Y2K plaintiffs and 
defendants. He testified that pending Y2K legislation would not 
alter the rights of people who are physically injured or 
otherwise truly harmed by a Y2K failure. Moreover, draft 
legislation before the House specifically excluded from its 
purview claims for personal injury. Finally, the legislation 
would allow those who are harmed because of a year 2000 problem 
to have access to the legal system and be fully compensated for 
their real losses. He also stated that the legislation 
encouraged remediation, and precluded costly litigation while 
allowing those with legitimate claims to have access to the 
legal system. In addition, it gave the courts the means to 
efficiently resolve Y2K-related disputes.
    However, another witness, Howard L. Nations, former vice 
president, American Trial Lawyers Association, testified that 
there was no need for Federal year 2000 legislation. He stated 
that year 2000 legislation was not needed because the 
principles of common law, State statutes and the Uniform 
Commercial Code, which has been approved in all 50 States, 
provide sufficient guidelines to measure the conduct of 
business entities, provide motivation for immediate remedial 
action, and remedies for wrongdoing. Mr. Nations added that the 
business law in question provides both rules and remedies. 
Responsible business leaders and consumers who have followed 
these business rules in matters relating to Y2K are now 
entitled to rely upon the remedies that business law provides 
in order to recover from those who ignore the rules and cause 
damage, he said. After lengthy negotiations between Congress 
and the administration, President Clinton signed the ``Y2K 
act'' into law in July 1999.
    The purpose of the sixth hearing was to receive a status 
report on the efforts of the Department of Transportation [DOT] 
and the Federal Aviation Administration [FAA] to prepare for 
Y2K technical challenges. FAA Administrator Jane Garvey 
testified that the FAA was meeting its milestones for planned 
activities. She stated that the FAA's project plan, published 
in March 1998, laid out a schedule for the FAA to complete 
renovation by September 30, 1998, validation by March 31, 1999, 
and implementation by June 30, 1999. In July 1999, the FAA 
reported that all of its mission-critical systems had been 
implemented by the June 30 deadline.
    Mr. Willemssen, GAO, reported that the FAA had made 
tremendous progress in the last year. However, much work 
remained to be done to complete validation and implementation 
of FAA's mission-critical systems. The FAA continued to face 
challenges in making its internal systems year 2000 compliant, 
he said. Additionally, Mr. Willemssen stated that the risk of 
failures caused by external entities, such as airports and 
foreign air traffic control systems could seriously affect 
FAA's ability to provide aviation services--which could have a 
dramatic effect on the flow of air traffic nationally and 
internationally. In order to mitigate the risk that critical 
internal or external systems will fail, FAA needed to develop 
sound business continuity and contingency plans, Mr. Willemssen 
said. Ken Mead, Department of Transportation Inspector General, 
testified that with less than 300 days until the year 2000, the 
DOT still has significant challenges ahead. He added that FAA 
faced a unique implementation challenge in fixing the air 
traffic control computer system. These systems, which had been 
operated in a test-center environment, were being installed at 
multiple sites throughout the system.
    The subcommittees' seventh hearing focused on lessons 
learned from emergency management. Over a 2-day session, 
emergency planning experts convened in four workshops and one 
hearing to discuss, catalog, and introduce emergency management 
products that could prove useful to citizens as well as public- 
and private-sector leaders. Mike Walker, Deputy Director, 
Federal Emergency Management Agency testified that two areas, 
in particular, needed greater attention: 911 emergency systems 
and fire services. Mr. Walker stated that results of a National 
Emergency Number Association [NENA] survey showed that only 17 
percent--or about 730--of more than 4,300 emergency centers 
were compliant, and an additional 69 percent--or 86 percent in 
all--were expected to be ready by January 1, 2000. He added 
that surveys of more than 2,300 students at the National Fire 
Academy [NFA], generally mid- to upper-level managers in fire 
departments, representing almost 1,300 departments in all 50 
States, revealed that 98 percent of the departments were aware 
of potential Y2K problems. Mr. Walker testified that 77 percent 
of these departments were actively working on solutions, and 35 
percent were already fully Y2K compliant.
    The subcommittees' eighth hearing focused on the status of 
the executive branch's year 2000 efforts. In addition, this 
hearing provided the groundwork for the executive branch to 
demonstrate the overall readiness of its critical business 
functions--the systems upon which the public relies. Witnesses 
included representatives from the Office of Management and 
Budget [OMB], Department of Agriculture, Department of State, 
Department of the Treasury, Agency for International 
Development, and the GAO. On March 26, 1999, the OMB issued a 
memorandum that listed the top 42 ``high impact Federal 
programs.'' (OMB later added a 43rd program.) For example, OMB 
noted that the Department of Agriculture had four ``high impact 
programs'': child nutrition, food safety inspection, food 
stamps, and special supplemental nutrition program for women, 
infants, and children.
    Deidre Lee, the OMB's Acting Deputy Director for 
Management, testified that the Federal Government fell short of 
meeting the President's March 31, 1999, deadline to complete 
remediation and testing of all mission-critical systems and 
have them back in operation. Ms. Lee reported that 92 percent 
of the Federal Government's mission-critical systems met the 
March 31 goal. Regarding the ``high impact Federal programs,'' 
she said that Federal agencies had been asked to help partners 
develop year 2000 plans to ensure that the program will operate 
effectively. According to Ms. Lee, such plans should include 
end-to-end testing, developing complementary business 
continuity and contingency plans, and sharing key information 
on readiness with partner organizations and with the public. 
The OMB asked agencies to report their year 2000 progress to 
OMB. Ms. Lee added that OMB's goal was to demonstrate to the 
public that these programs would work.
    Joel Willemssen, GAO, testified that, in some cases, 
serious problems had been discovered in compliant systems 
during the independent verification and validation process. For 
example, Mr. Willemssen noted previous subcommittee testimony 
in which the GAO found that none of HCFA's 54 external mission-
critical systems, which had reported compliant on December 31, 
1998, was, in fact, year 2000 ready. The non-compliance was 
identified by the validation contractor during the independent 
verification process.
    The purpose of the subcommittees' ninth hearing was to 
receive a status report on the efforts of the Federal 
Government to ensure that satellites, particularly the Global 
Positioning System [GPS], was ready for the new millennium. Dr. 
Marvin Langston, Deputy Assistant Secretary of Defense and 
Deputy Chief Information Officer and year 2000 for the 
Department of Defense, testified that the Global Positioning 
System [GPS] is a satellite-based radio-navigation system 
developed and operated by the Defense Department. GPS consists 
of a space segment (satellites), a ground-control segment, and 
a user-equipment (receiver) segment. Dr. Langston stated that 
GPS uses 24 satellites (28 are in orbit) to continuously 
broadcast coded signals that can be processed in a GPS 
receiver. These signals enable the receiver to computer 
position, velocity, and time 24 hours a day in all weather 
anywhere in the world. Receivers must process signals from at 
least four satellites in order to compute a position in three 
dimensions and time.
    Dr. Langston stated that there are two major issues 
concerning GPS: the end-of-week [EOW] roll over (from August 21 
to August 22, 1999) and the year 2000 compliance. He stated 
that the Defense Department would certify that its GPS 
receivers were Y2K compliant. However, he cautioned that 
consumers who have purchased commercial GPS receivers should 
have them checked by the manufacturer. Dr. Langston closed by 
stating that the Department of Defense will be prepared to 
execute its national security responsibilities before, on, and 
after January 1, 2000. Keith Rhodes, Chief Scientist, GAO, 
testified that GPS also plays a critical role in communications 
networks and, hence, the Internet. He also cautioned 
recreational users to ensure that their commercial GPS 
receivers were Y2K ready. In late August 1999, just after the 
GPS end-of-week rollover, Japan reported that thousands of 
automobile navigation systems failed and went blank, or 
displayed incorrect locations just after the rollover date.
    The purpose of the subcommittees' 10th hearing was to 
examine H.R. 1599, the ``Year 2000 Compliance Assistance Act,'' 
introduced by Representative Tom Davis, R-VA, on April 28, 
1999. The legislation would amend the Federal Property and 
Administrative Services Act of 1949 to authorize State and 
local governments to purchase information technology [IT] 
products and services related to the year 2000 computer problem 
through the Federal supply schedules. For further discussion of 
this hearing, please refer to section III.
    The Subcommittee on Government Management, Information, and 
Technology's 11th, 12th, and 13th hearings were field hearings 
during the July recess. The subcommittee traveled to Topeka, 
KS; Naperville, IL; and Detroit, MI to learn about local Y2K 
challenges and preparations. In general, the subcommittee 
received testimony from three distinct segments: government, 
utilities, and business. These sectors reported that much 
progress had been made during the previous year, and remaining 
efforts focused on testing and installing fixed computer 
systems, and developing and testing business continuity and 
contingency plans.
    Hearing witnesses in Topeka, KS, were: Joel Willemssen, 
GAO; Morey Sullivan, Kansas Department of Administration; Larry 
Kettlewell, Kansas Department of Administration; Jeff White, 
city of Topeka; Joy Mosier, State Adjutant General's Office; 
Bud Park, Western Resources; Shawn McKenzie, Southwestern Bell; 
Anne Rubeck, Kansas Hospital Association; Edwin Splichal, 
Kansas Bankers Association; and Al Lobeck, Kansas Broadcasters.
    Witnesses in Naperville, IL were: Joel Willemssen, GAO; 
Mary Reynolds, Illinois Governor's Office; Don Carlsen, city of 
Naperville; Tom Mefferd, DuPage County Office of Emergency 
Management; Robert Martin, DuPage Water Commission; Alan Ho, 
Commonwealth Edison; Dale Jensen, Ameritech; Craig Whyte, Nicor 
Gas; Philip Pagano, Metra; Gary Mielak, Edward Hospital; Clint 
Swift, Bank Administration Institute; Delores Croft, Illinois 
Attorney General's Office; Leonard Harris, Chatham Food Center; 
Ron Clark, Illinois Ayers Oil Co./National Association of 
Convenience Stores; Monty Johnson, Citgo Gas/American Petroleum 
Institute; and Ed Paulson, author.
    Hearing witnesses in Detroit, MI included: Joel Willemssen, 
GAO; George Boersma, State of Michigan; Captain Ed Buikema, 
Michigan State Police; Arun Gulati, Wayne County; Kathleen 
Leavey, Detroit Water and Sewerage Department; George Surdu, 
Ford Motor Co.; Don Constantino, General Motors Corp.; Roger 
Buck, Daimler Chrysler Corp.; John Parker, Northwest Airlines, 
Inc.; Jim Rosen, Detroit Edison; Raymond Laesione, Michigan 
Consolidated Gas; James Johnson, Wayne State University; Don 
Potter, Southeast Michigan Health and Hospital Council; and Dan 
McDougall, United Way.
    The subcommittees' 14th hearing focused on the potential 
for large financial and intellectual property losses due to 
year 2000 [Y2K] remediation-related fraud. Witnesses included 
the Gartner Group, Inc., Information Technology Association of 
America, WarRoom Research, and Bingham Dana LLP. Joe 
Pucciarelli, vice president and research director, Gartner 
Group, testified of Gartner's prediction that by 2004 there 
would be at least one publicly reported electronic theft 
exceeding $1 billion. In addition, he stated that the Gartner 
Group forecasted that year 2000 remediation efforts would be 
identified as a root cause of the security lapses that allow 
this theft to occur. Harris Miller, president, Information 
Technology Association of America, testified that ``information 
security'' is the next Y2K issue for the IT community and its 
users.
    Mr. Miller explained that aggressors attack at the point of 
maximum leverage. He stated that for modern society, that means 
critical infrastructure--transportation, telecommunications, 
oil and gas distribution, emergency services, water, electric 
power, finance and government operations. Mr. Miller stated 
that a critical ``information infrastructure'' supports all of 
these vital delivery systems and becomes itself a target of 
opportunity for terrorists, adversarial nations, and criminal 
organizations. He noted that disrupting the underlying 
information infrastructure of a transportation or finance 
system is often as effective or even more effective than 
disrupting the physical infrastructure. Wayne Bennett, partner, 
Commercial Technology Practice Area, Bingham Dana, agreed with 
Mr. Pucciarelli that a $1 billion fraud will likely occur. 
However, he testified that its connection to the Y2K 
remediation effort would be more in the nature of serendipity 
than statistical inference. He also said that law enforcement 
would be in a better position to identify the perpetrator 
because of the changes brought about by the Y2K effort.
    During the August recess, the Subcommittee on Government 
Management, Information, and Technology held its 15th, 16th, 
17th hearings. The subcommittee traveled to Sacramento, CA, San 
Jose, CA, and Seattle, WA, to learn about local Y2K challenges 
and preparations. In general, the subcommittee received 
testimony at each of these hearings from government, utilities, 
and business. These sectors reported that much progress had 
been made in the last year, and remaining efforts focused on 
testing and installing fixed computer systems and developing 
and testing business continuity and contingency plans.
    Hearing witnesses in Sacramento, CA, included: Joel 
Willemssen, General Accounting Office; Elias Cortez, director, 
California Department of Information Technology; Doug Cordiner, 
principal auditor, Bureau of State Audits, State of California; 
Steve Ferguson, chief of information technology, county of 
Sacramento; Carol Hopwood, Emergency Management, county of 
Sacramento; the Honorable Joan Smith, supervisor, Siskiyou 
County, representing the Regional Council of Rural Counties; 
Cathy Capriola, administrative services director, city of 
Citrus Heights; Garth Hall, manager of the year 2000 project, 
Pacific Gas and Electric Corp.; Mike Petricca, product manager, 
Pacific Bell; Roy Le Nave, senior project manager, Y2K 
readiness program, Sacramento Municipal Utility District: 
Kathleen Tschogl, manager, governmental and regulatory affairs, 
Raley's Supermarkets; and Allen Rabkin, Sierra West Bank, 
representing the California Bankers Association.
    Hearing witnesses in San Jose, CA, included: Joel 
Willemssen, General Accounting Office; Mark Burton, Y2K project 
manager, city of San Jose; Dana Drysdale, vice president, 
information systems, San Jose Water Co.; Ronald E. Garratt, 
assistant city manager, city of Santa Clara; Christian Hayashi, 
year 2000 communications manager, city of San Francisco; Brad 
Whitworth, Y2K program manager, customer service and support 
group, Hewlett Packard Co.; Richard Hall, director, California 
governmental affairs, year 2000 program manager, Intel Corp.; 
Mike Petricca, product manager, Pacific Bell; Ralph Tonseth, 
director of aviation, San Jose International Airport; Garth 
Hall, manager of project 2000, Pacific Gas & Electric Co.; 
Karen Lope, division manager, administrative services, Silicon 
Valley Power; Dr. Frances E. Winslow, director, Office of 
Emergency Services, city of San Jose; William Lansdowne, chief 
of police, city of San Jose; and John McMillan, deputy fire 
chief, city of San Jose.
    Hearing witnesses in Seattle, WA, included: Joel 
Willemssen, GAO; Chris Bedrock, State of Washington; Cliff 
Burble, King County; Mr. Marty Chakoian, city of Seattle; Barb 
Graff, city of Bellevue; Joe O'Rourke, Bonneville Power 
Administration; Jerry Walls, Puget Sound Energy; James Ritch, 
Seattle City Light; Marilyn Hoggarth, GTE; Dave Hilmoe, Seattle 
Public Utilities; Brad Cummings, University of Washington 
Academic Medical Centers; Willie Aikens, the Boeing Co.; Don 
Jones, Microsoft; Joan Enticknap, Seafirst Bank (a Bank of 
America Co.); William Jordan, Public Instruction for the State 
of Washington; Rich Bergeon, NueVue International LLC/Audit 
2000.
    The purpose of the subcommittees' 18th hearing was to re-
evaluate the Federal Aviation Administration's [FAA] progress 
in solving its Y2K challenges. FAA Administrator Jane Garvey 
testified that all FAA computer systems, mission-critical and 
non-mission-critical, were Y2K compliant. She added that an 
independent contractor had reviewed documentation on the 
repairs and verified FAA's work based on the contractor's 
engineering judgment. Ms. Garvey stated that Transportation's 
Office of the Inspector General had also validated FAA's 
compliance. She concluded by saying that she was confident that 
the FAA would make the transition to the year 2000 smoothly, 
without compromising aviation safety in the National Airspace 
System [NAS].
    Ken Mead, Department of Transportation Inspector General, 
testified that the FAA had met the significant challenge of 
implementing 152 repaired systems at over 4,000 sites. He 
stated that his office sampled 14 systems, and verified that 
documentation supported system implementation, validation 
problems had been resolved, an independent verification and 
validation had been performed on all 152 repaired systems, data 
exchange issues were resolved, vendor-supported systems were 
compliant, acceptance testing was performed, and affected 
databases had been addressed. However, he said, now that 
implementation is complete, FAA needed to ensure that year 2000 
compliant computer systems in the field were not adversely 
affected by local programs or upgrades to compliant systems.
    Joel Willemssen, GAO, testified that, despite tremendous 
progress, the FAA continued to face challenges in ensuring that 
its internal systems will work as intended through the year 
2000 date change. He reported that the FAA's challenges 
involved managing modifications to compliant systems, 
independent verification of systems compliance, and systems 
testing. Mr. Willemssen stressed the point that the FAA must 
also mitigate risks posed by external organizations, including 
airports, airlines, and foreign air traffic control systems. He 
warned that these factors could impede FAA's ability to provide 
reliable aviation services, which could seriously affect the 
flow of air traffic across the Nation and around the world. Mr. 
Willemssen also testified that in the event critical internal 
or external systems do not work as intended, the FAA must have 
a comprehensive and tested business continuity and contingency 
plan ready to implement, and a trained staff to execute the 
plan.
    At this hearing, Chairman Horn requested that the FAA make 
public any information pertaining to the readiness of domestic 
airlines and airports, and, to the extent possible, any 
information on the readiness of international air traffic 
organizations. The FAA heeded Chairman Horn's request, and in 
late September, posted information on a new Internet website: 
``www.dot.gov/fly2k.''
    The subcommittees' 19th hearing focused on the Department 
of State's efforts to minimize the potential international 
impact of the year 2000 computer problem. John O'Keefe, Special 
Representative for Y2K, Department of State, testified that a 
day earlier the Department had issued updated Consular 
Information Sheets for every country in the world, about 196 in 
total. He reported that each revised ``Consular Information 
Sheet'' contains a section that assessed general Y2K risks and 
preparedness in a specific country. The information was 
gathered from a number of open and confidential sources. Mr. 
O'Keefe noted that the State Department's fundamental purpose 
in releasing this information was to apprise U.S. citizens of 
potential disruptions they may encounter due to the Y2K 
phenomenon, and to allow Americans to prepare and to make 
informed personal decisions about travel on or about January 1, 
2000. He added that the statements in the Consular Information 
Sheets represent the Department's best judgment on potential 
problems for U.S. citizens living and traveling abroad. He 
advised the subcommittee that these sheets were not a 
scorecard, and warned that no one can predict what will occur 
on and after January 1st.
    The purpose of the subcommittees' 20th hearing was to 
assess the readiness of the Nation's Medicare program. 
Witnesses included Joel Willemssen, GAO; Dr. Gary Christoph, 
Heath Care Financing Administration [HCFA]; Dr. Whitney 
Addington, American College of Physicians and American Society 
of Internal Medicine; Fred Brown, American Hospital 
Association; Elizabeth Wilkey, BlueCross BlueShield of Georgia; 
Joe Baker, Medicare Rights Center. Dr. Christoph testified that 
HCFA was still completing recertification testing to re-verify 
that its systems were working and that software changes made 
during the summer to fulfill legislative mandates and improve 
program operations had not affected previously achieved year 
2000 compliance. In addition, he stated that HCFA believed that 
the greatest risk to the Medicare program involved the 
readiness of HCFA's partners, namely HCFA's Medicare providers, 
including managed care organizations.
    Mr. Willemssen testified that HCFA must continue monitoring 
and continue testing with its health care contractors (e.g., 
insurance companies), which at the time of the hearing, 
although limited, had uncovered Y2K problems. He added that 
HCFA needed to continue its efforts to ensure that managed care 
organizations were adequately addressing their Y2K challenges. 
Mr. Willemssen concluded that a considerable amount of work 
remained in the next few months. He noted that it was crucial 
that the development and testing of internal, contractor, and 
M.O. business continuity and contingency plans move forward 
rapidly to ensure that, no matter what happens, providers would 
be paid and beneficiaries would receive care.
    The subcommittees' 21st hearing focused on the Y2K 
readiness of several essential ``high risk Federal programs.'' 
In June, the subcommittee had graded the readiness of the 43 
``high risk Federal programs,'' including 10 federally funded, 
State-run programs such as Medicaid and food stamps. At that 
time, the subcommittee found that the 10 State-run programs 
would not be ready until December 1999. John Spotila, Office of 
Management and Budget [OMB], testified that OMB's goal was 
simple: to ensure the delivery of uninterrupted services to 
individuals who depend upon those services and to reassure 
those individuals that they can depend on the services. Overall 
progress had been good, he said. Of the 43 programs, OMB 
reported that 12 had completed all end-to-end testing, 19 
others would be completed by October; 4 others were expected to 
complete in November; and the remaining 8 in December. Mr. 
Spotila noted that the remaining seven programs, which are 
State-run Federal programs, would not be completely ready until 
December. He noted that the Departments of Health and Human 
Services, Agriculture and Labor must work with all 50 States 
and several territories to ensure the year 2000 readiness of 
these programs. Mr. Spotila concluded that since the primary 
concern is the recipients in each State, OMB would not consider 
the task completed until all of the States and territories were 
year 2000 ready.
    John Callahan, Chief Information Officer, Department of 
Heath and Human Services testified that HHS was very concerned 
about the compliance status of some territories, because their 
remediation effort may not be completed by January 1, 2000. He 
stated that a small number of programs in Alabama, Delaware, 
the District of Columbia, Georgia, Mississippi, New Hampshire, 
and South Carolina had been assessed as being at a high risk of 
Y2K failure. He attributed the high risk to these States 
because the remediation and testing of systems was either not 
complete or behind schedule, and contingency plans were either 
underdeveloped or nonexistent. Also a number of States, 
regardless of the status of their automated systems, lacked 
complete business continuity and contingency plans [BCCP]. Mr. 
Callahan pointed out that these plans are necessary in the 
event that unanticipated failures occur. BCCPs provide for the 
implementation of alternate procedures and processes to 
continue program operations while the system failure is 
corrected.
    The subcommittees' 22nd hearing focused on the Y2K 
readiness of domestic and international nuclear power plants. 
Witnesses were representatives from the General Accounting 
Office, Nuclear Regulatory Commission [NRC], and the Nuclear 
Energy Institute. Frank Miraglia, of NRC, testified that NRC 
had concluded that the Y2K problem would not adversely affect 
the continued safe operation of U.S. nuclear power plants. He 
noted that this assessment was based on NRC's review of 
responses from the nuclear power industry concerning Y2K 
readiness, independent inspection efforts at all 103 units, and 
ongoing regulatory oversight activities. Regarding 
international nuclear reactors, Mr. Miraglia stated that the 
NRC had been working with its foreign bilateral nuclear safety 
cooperation partners to raise awareness of the Y2K problem and 
offer assistance within means. He said that the most notable 
development in this area was the creation of the Y2K early 
warning system, which would allow all participating countries 
to rapidly share Y2K-related information on nuclear facility 
and grid performance.
    Keith Rhodes, of GAO, testified that, in general, the NRC 
had taken the lead in overseeing the Y2K nuclear problem. 
However, he noted that NRC had not required that its licensees 
perform independent verification and validation [IV&V] of their 
Y2K programs. Mr. Rhodes suggested that use of IV&Vs would 
provide NRC--and nuclear power plants and nuclear fuel 
facilities managers--with additional assurances that all 
critical applications and systems were Y2K ready.
    The purpose of the subcommittees' 23rd hearing was to 
assess the Federal agencies' year 2000 business continuity and 
contingency plans [BCCP] and day one plans. Chairman Horn 
stated that although agencies were making significant progress 
in renovating and testing their mission-critical systems, 
crossing the century boundary, nevertheless, presented many 
challenges. He stressed that each agency must have a BCCP and 
day one strategy for reducing the risk of failures occurring in 
agency facilities, systems, programs, and services during the 
weekend of the critical millennium rollover. Witnesses included 
Joel Willemssen, GAO; John Spotila, Office of Management and 
Budget; John Dyer, Social Security Administration; Dr. Marvin 
Langston, Department of Defense; John Gilligan, Department of 
Energy; Paul Cosgrave, Internal Revenue Service; and Norman E. 
Lorentz, U.S. Postal Service.
    Mr. Spotila, OMB, testified that based on the OMB's initial 
review of agency plans, the majority were on-track in preparing 
their plans. He added that although most agencies need to 
develop more detail to fill-out the plans, their submissions 
showed that they were or soon would be addressing all of the 
critical elements of effective day-one planning. Mr. Spotila 
concluded that although a few of the small independent agencies 
had provided excellent plans, a number of them had either not 
provided a plan or had provided incomplete plans. He concluded 
by saying that the OMB staff would continue working with each 
agency individually, providing them feedback during the coming 
weeks to help them complete their efforts.
    Mr. Cosgrave, IRS, stated that the IRS was still completing 
an inventory of its computer systems. Although this was very 
troubling, he stated that the IRS would soon finish the 
inventory process. In addition, Mr. Cosgrave said that the IRS 
had developed contingency plans that outline the necessary 
procedures to follow in the event that any of IRS' mission-
critical tax processing systems suffered a major failure. He 
stated that the IRS had completed testing on all but two of 
these plans, and had addressed GAO's suggestions in a recent 
report on IRS' contingency plans.
    Mr. Lorentz, U.S. Postal Service, testified that the Postal 
Service had identified its critical business processes--such as 
postage payment, and the acceptance, processing, 
transportation, and delivery of mail--and weighed them against 
a catalog of ``failure scenarios,'' essentially, external 
events that could interrupt the Postal Service's business 
processes. He stated that this exercise resulted in the 
creation of business continuity plans--a series of strategies 
to help the Postal Service work through disruptions to elements 
of its external support infrastructure, such as ground and air 
transportation, telecommunications, and utilities. Mr. Lorentz 
added that the basic continuity plans were then shared with the 
Postal Service's field units for customization to reflect 
specific local conditions. He mentioned that, for example, in 
the event of an airport closure, field operations officials 
would identify the best alternative transportation and routing 
for mail to and from that area.
    The purpose of the subcommittee's 24th and final hearing 
this year was to discuss and respond to Y2K questions that have 
been raised by the American public related to issues such as 
the Nation's overall preparedness, investor confidence, health 
care concerns, and Y2K marketing and myths. Witnesses included 
John Koskinen, chairman of the President's Council on Year 2000 
Conversion; Joel Willemssen, General Accounting Office; J. 
Patrick Campbell, Nasdaq-Amex Market Group, Inc.; Barry S. 
Scher, Giant Food, Inc.; and Ronald Margolis, University of New 
Mexico Hospital, Health Sciences Center, representing the 
American Hospitals Association.
    Mr. Koskinen testified that one of the more troubling Y2K 
myths is the notion that January 1 is a seminal date upon which 
everything--or nothing--Y2K-related will occur. He added that a 
corollary of this myth is that everyone will be able to ``close 
the books'' on the Y2K issue and declare victory or defeat by 
the end of New Year's Day. Mr. Koskinen stated that year 2000 
problems could occur any time that a non-compliant computer 
comes into contact with a year 2000 date--before or after 
January 1. He stated that a number of businesses and 
governments had already used year 2000 dates in their automated 
operations. In addition, information technology professionals 
are well aware that the Y2K challenge is not limited to January 
1, and will be monitoring systems well into the New Year for 
flaws in billing and financial cycles and possible slow 
degradations in service.
    Mr. Koskinen addressed myths in the form of Y2K 
``doomsday'' scenarios such as the claims that the Y2K issue 
could cause nuclear weapons to self-launch, or foreign trade to 
grind to a halt. He stated that none of the available 
information suggests that these stories are true. For example, 
nuclear weapons require human intervention to launch. A 
malfunctioning computer--Y2K or otherwise--could not cause 
weapons to misfire without human intervention. However, Mr. 
Koskinen was concerned about the ability of the Russian early 
warning systems to function effectively during the rollover 
period. He was pleased that Russia had agreed to participate 
with the United States in a joint stability center in Colorado, 
where information from United States and Russian early warning 
systems would be shared to ensure there would be no 
misunderstandings.
    Mr. Koskinen testified that there are several important Y2K 
realities. First, he said, it is important for the public to 
know that the U.S. infrastructure is ready for the date change. 
The information provided to the President's Council and the 
public indicates that the electric power grids, 
telecommunications networks, financial transaction systems, and 
key national transportation systems would make a successful 
transition into the year 2000. Mr. Koskinen added that the 
second Y2K reality is that, despite our best efforts to fix and 
test systems, there will be problems. Not every system will be 
fixed by January 1, and no amount of testing can ensure 
perfection. He stated that he had already seen Y2K problems 
surface in instances where systems had been fixed and tested, 
as was the case for a few Federal agencies that have already 
experienced minor problems with the transition to fiscal year 
2000. Mr. Koskinen said that he also expects failures in 
sectors where large numbers of organizations were late in 
starting or, even more troubling, are taking a ``wait-and-see 
approach'' to the date change. He concluded by stressing the 
importance of all organizations monitoring their systems for 
Y2K problems during the rollover period and having updated 
contingency plans to minimize potential disruptions.
    On January 1, 2000, the world awoke to find that little had 
changed. Lights still worked, telephones still rang, and planes 
kept flying. Y2K-related computer glitches did occur, but none 
was life threatening. The media and many citizens responded to 
this apparent non-event by pondering the wisdom of spending 
$100 billion on Y2K solutions.
    On January 27, 2000, the Subcommittee on Government 
Management, Information, and Technology, and the House 
Subcommittee on Technology jointly held the final Y2K hearing 
of the House Year 2000 Task Force. This hearing, entitled, 
``Year 2000 Computer Problem: Did the World Overreact and What 
Did We Learn?,'' presented the results of the Y2K computer 
problem, highlighting the Y2K-glitches that occurred and 
discussing the lessons learned from the experience. Concerns 
about possible disruptions on the forthcoming Leap Year date of 
February 29, 2000, were also discussed.
    Calling Y2K ``the greatest management challenge the world 
has faced in the last 50 years,'' John Koskinen, chairman of 
the President's Council on Year 2000 Conversion, credited the 
successful Y2K transition to the tremendous mobilization of 
people and resources in both the public and private sectors. 
Joel Willemssen of the General Accounting Office confirmed the 
relatively smooth transition noting that those Y2K-related 
errors that did occur did not affect the delivery of key 
services because they were either corrected quickly or 
contingency plans were implemented.
    Citing the potential consequences had the Government not 
adequately prepared for Y2K, witnesses also highlighted 
benefits and lessons learned that can continue to be applied to 
improve overall information technology management. In addition 
to the value of strong congressional oversight and leadership 
from the highest levels of Government, witnesses stressed the 
value of partnerships between private industry and the 
Government in solving major national issues. Other lessons 
included the need for ongoing top management involvement in 
information technology and the value of developing and testing 
contingency plans.
    b. Benefits.--The benefit of inspiring organizations to 
learn about the year 2000 problem and to take it seriously has 
been self-evident; the greater the progress in year 2000 
readiness, the fewer the failures on and after January 1, 2000. 
In addition, agencies generally reported they had developed 
practical, detailed contingency plans that were tested and 
ready for implementation in the event of unforeseen computer 
failures. Furthermore, serious action this year, promulgated by 
the actions of key Federal officials, served to reduce the 
panic this problem could have encouraged.
    Congressman Horn stated many times that the key to fixing 
the year 2000 problem is leadership. The subcommittees' 
oversight hearings, coupled with its year 2000 report cards, 
stressed the urgency to get the job done on time. Agency 
management needed to establish firm priorities and allocate the 
necessary resources to the project. This process was borne out 
this year.
    Furthermore, the year 2000 problem has been, and may 
continue to be, extremely costly to the taxpayers. Current 
executive branch cost estimates have grown from about $2.8 
billion in May 1997 to $8.9 billion in November 1999.
    c. Hearings.--The Subcommittee on Government Management, 
Information, and Technology held 25 hearings on this issue in 
the 106th Congress:
    (1) ``The Year 2000 Problem: Status Report on the Federal, 
State, Local, and Foreign Governments,'' January 20, 1999, held 
jointly with the Subcommittee on Technology of the Science 
Committee.
    (2) ``Y2K Technology Challenge: Will the Postal Service 
Deliver?,'' February 23, 1999, held jointly with the 
Subcommittee on the Postal Service and the Subcommittee on 
Technology of the Science Committee.
    (3) ``Oversight of the Year 2000 Problem: The Y2K Status of 
the Department of Health and Human Services,'' February 26, 
1999.
    (4) ``Oversight of the Year 2000 Problem at the Department 
of Defense: How Prepared is Our Nation's Defense?,'' March 2, 
1999, held jointly with the Subcommittee on Technology of the 
Science Committee.
    (5) ``The Impact of Litigation on Fixing Y2K,'' March 9, 
1999, held jointly with the Subcommittee on Technology of the 
Science Committee.
    (6) ``Will Transportation and the FAA Be Ready for the Year 
2000?,'' March 15, 1999, held jointly with the Subcommittee on 
Technology of the Science Committee.
    (7) ``Year 2000 Emergency Management,'' March 22, 1999.
    (8) ``Are the Federal Government's Critical Programs Ready 
for January 1, 2000?,'' April 13, 1999, held jointly with the 
Subcommittee on Technology of the Science Committee.
    (9) ``Y2K in Orbit: The Impact on Satellites and the Global 
Positioning System,'' May 12, 1999, held jointly with the 
Subcommittee on Technology of the Science Committee.
    (10) ``H.R. 1599, The Year 2000 Compliance Assistance 
Act,'' June 23, 1999.
    (11) ``Oversight of the Year 2000 Technology Problem: 
Lessons to be Learned from State and Local Experiences,'' 
Topeka, KS, July 7, 1999.
    (12) ``Oversight of the Year 2000 Technology Problem: 
Lessons to be Learned from State and Local Experiences,'' 
Naperville, IL, July 8, 1999.
    (13) ``Oversight of the Year 2000 Technology Problem: 
Lessons to be Learned from State and Local Experiences,'' 
Detroit, MI, July 9, 1999.
    (14) ``Impact of Y2K: Expanded Risks or Fraud?,'' August 4, 
1999, held jointly with the Subcommittee on Technology of the 
Science Committee.
    (15) ``The Year 2000 Computer Problem: Lessons to Be 
Learned from State and Local Experiences,'' Sacramento, CA, 
August 13, 1999.
    (16) ``The Year 2000 Computer Problem: Lessons to Be 
Learned from State and Local Experiences,'' San Jose, CA, 
August 14, 1999.
    (17) ``The Year 2000 Computer Problem: Lessons to be 
Learned from State and Local Experiences,'' Seattle, WA, August 
17, 1999.
    (18) ``FAA and Y2K: Will Air Travel Be Stopped or 
Significantly Delayed on January 1st and Beyond?,'' September 
9, 1999, held jointly with the Subcommittee on Technology of 
the Science Committee.
    (19) ``The Year 2000 Computer Problem Implications for 
International Travel,'' September 15, 1999, held jointly with 
the Subcommittee on Technology of the Science Committee.
    (20) ``Year 2000 and Medicare: Is Health Service Delivery 
at Risk?,'' September 27, 1999.
    (21) ``State of the States: Will Y2K Disrupt Essential 
Services?'' October 6, 1999, held jointly with the Subcommittee 
on Technology of the Science Committee.
    (22) ``Y2K and Nuclear Power: Will the Reactors React 
Responsibly?,'' October 22, 1999, held jointly with the 
Subcommittee on Technology of the Science Committee.
    (23) ``Y2K and Contingency and Day 1 Plans: If Computers 
Fail, What Will You Do?,'' October 29, 1999, held jointly with 
the Subcommittee on Technology of the Science Committee.
    (24) ``Y2K Myths and Realities,'' November 4, 1999, held 
jointly with the Subcommittee on Technology of the Science 
Committee.
    (25) ``Year 2000 Computer Problem: Did the World Overreact 
and What Did We Learn?,'' January 27, 2000.
2. Oversight of Federal Real Property Management.
    a. Summary.--Public buildings and lands are an integral 
part of Federal operations. They are used to house Federal 
workers, house historic, cultural and educational artifacts, 
and provide services to the public. As such, they should be 
viewed as capital resource tools that support agencies' goals 
and missions. Management of these facilities is especially 
challenging considering that roughly half of all Federal office 
buildings are 40 to 50 years old. More than half of the 8,000 
office buildings managed by the General Services Administration 
are over 50 years old. Faced with increasing budgetary 
constraints and the demand to improve public services, Federal 
agencies and departments must make the most cost-effective and 
efficient use of their capital assets.
    b. Benefits.--With a portfolio of more than 500,000 
buildings located on more than 560 million acres of land, the 
Federal Government is one of the world's largest land owners. 
These holdings are under the custody and control of more than 
30 Federal departments and agencies. They represent a taxpayer 
investment of more than $300 billion. The Federal Government, 
however, has not been a good steward of its real property 
assets. Enhanced congressional attention to the status of 
Federal real property assets is an essential step toward 
ensuring the maintenance of this substantial taxpayer 
investment.
    c. Hearings.--The subcommittee held 2 hearings on the 
Federal Government's real property holdings in the 106th 
Congress.
    (1) ``Federal Real Property Management: Obstacles and 
Innovative Approaches to Effective Property Management,'' April 
29, 1999.
    On April 29, 1999, the Subcommittee on Government 
Management, Information, and Technology held a joint hearing 
with the Transportation Committee's Public Buildings 
Subcommittee to review Federal real property management. The 
subcommittees reviewed the status of the Federal Government's 
management of its real property assets and heard from witnesses 
who discussed obstacles and innovative approaches to effective 
and efficient real property management.
    The subcommittees heard from a variety of witnesses 
representing some of the larger land-holding Federal 
departments and agencies. A number of these witnesses agreed 
that many Federal buildings are crumbling and require 
substantial repairs in order to bring them up to acceptable 
standards of health, safety and quality. As the wear and tear 
on buildings increase, the need for maintenance and repair to 
sustain their functionality also increases. A witness from the 
General Accounting Office discussed the results of a study the 
agency released on public-private partnerships and how the use 
of such property management relationships have aided in the 
maintenance of certain Federal properties. A witness from the 
National Research Council discussed the findings of a 1998 
report the agency issued entitled, ``Stewardship of Federal 
Facilities.'' In the report the National Research Council 
focused on the deteriorating condition of the vast portfolio of 
Federal buildings, and offered recommendations on ways to 
improve the condition of these structures through improved 
facility management. According to the National Research 
Council, Federal facilities program managers are being 
encouraged to be more businesslike and innovative. However, the 
council found that current management and financial processes 
create disincentives and, in some cases, barriers to cost-
effective property management and maintenance. Millions of 
dollars are being spent on buildings that no longer serve their 
intended purposes. Downsizing of the Federal workforce and 
changing agency missions have resulted in an excess of Federal 
buildings and work space that is a costly and inefficient use 
of taxpayers' money.
    A witness from the General Services Administration 
testified that certain elements of the Federal Property and 
Administrative Services Act of 1949 restrict the Government's 
ability to adopt some ``best practices'' that have become 
commercial standards in the management and disposal of real 
property. According to this witness, certain statutory barriers 
must be removed and certain authorities must be modernized to 
meet the challenges facing Federal real property managers.
    (2) Legislative Proposals to Reform the Government's 
Approach to Property Management, ``S. 2805, the Federal 
Property Asset Management Reform Act and H.R. 3285, the Federal 
Asset Management Improvement Act,'' on July 12, 2000.
    At a July 12, 2000, hearing, the subcommittee examined the 
merits of two legislative proposals to reform the Federal 
Government's approach to property management. One proposal 
contained provisions, developed by the General Services 
Administration, in collaboration with other agencies, that 
would provide Federal departments and agencies with incentives 
and flexibility to manage their real and personal property 
assets.
    The second proposal, H.R. 3285, the ``Asset Management 
Improvement Act of 1999,'' introduced by Representative Pete 
Sessions (TX), would have amended the Property Act to authorize 
the General Services Administration or other agencies under 
delegated authority to enlist private-sector capital and 
expertise in public-private partnerships to develop or improve 
Federal real property.
3. Oversight of the Minerals Management Service's Royalty Valuation 
        Program.
    a. Summary.--The Federal Government has been collecting 
royalties associated with mineral production from Federal 
onshore lands since 1920 and from offshore lands since 1953. 
The Minerals Management Service [MMS], an agency within the 
Department of the Interior, was established in 1982 with the 
mission of ensuring that all royalties from Federal and Indian 
mineral leases are accurately collected, accounted for, and 
disbursed to the appropriate recipients in a timely manner. To 
carry out its mission, the MMS manages the Offshore Minerals 
Management Program and the Royalty Management Program.
    Federal law requires that a portion of the royalties 
collected by the Federal Government be shared with the affected 
States. In the case of Indian lands, all royalties collected 
from mineral production go back to the Indian Tribes or 
individual landowners. Since 1982, nearly $100 billion has been 
disbursed from Federal onshore and offshore oil and gas leases. 
In fiscal year 1998, the Royalty Management Program generated 
nearly $6 billion from more than 26,000 leases--$4.6 billion 
from offshore leases and $1.4 billion from Federal onshore and 
Indian leases. Of that amount, $550 million was distributed to 
the States and used for schools, roads, public buildings, or 
general operations.
    Despite these accomplishments, there is concern that the 
Federal Government has not received its fair share of royalties 
from oil extracted from Federal lands. In the past two decades, 
a number of lawsuits have been filed alleging that oil 
companies have undervalued the price of oil extracted from 
Federal lands. Witnesses at a June 17, 1996, subcommittee 
hearing testified that oil royalties paid to the Federal 
Government were based on royalty valuations that were below 
market value. At this hearing, it was charged that the MMS 
delayed collecting the appropriate royalties and that the MMS' 
global settlements with major oil companies failed to protect 
taxpayers' financial interests.
    Current royalty regulations specify three types of contract 
prices: posted prices, which are offers made by purchasers to 
buy oil and often include a premium; spot prices, which are the 
prices reported in oil market survey publications based on 
contracts of oil sold and purchased at market centers; and 
prices of crude oil futures contracts that are sold on the New 
York Mercantile Exchange [NYMEX].
    Traditionally, posted prices were relied on for royalty 
valuation purposes because they were thought to represent 
market value. This assumption has been challenged, particularly 
in situations where crude oil moves internally within 
integrated companies. Recent evidence suggests that oil is sold 
for more than the posted prices, leading to the conclusion that 
the value of the oil from Federal leases and the amount of 
Federal royalties should both be higher.
    Allegations that posted prices do not reflect market value 
arose from a number of sources. In 1975, the State of 
California and the city of Long Beach initiated litigation 
against seven major oil companies operating in California. They 
alleged that the companies conspired to undervalue the price of 
crude oil produced on State leases, reducing the amount of 
royalties paid. In 1991, six of the oil companies involved in 
the suit settled with the city of Long Beach and the State of 
California for $345 million. As a result of this settlement, in 
1994 the MMS created an interagency task force to investigate 
whether posted prices were reflective of market value. The task 
force issued a report in 1996, charging that from 1978 to 1993 
oil companies underpaid by as much as $853 million. The task 
force also found that oil valuation regulations were confusing 
and difficult to administer. The task force recommended that 
the MMS recalculate the royalties owed and issue a new 
regulation to clarify royalty valuation.
    In response to the litigation and the recommendations of 
both the Subcommittee on Government Management, Information, 
and Technology and the interagency task force, the MMS issued 
bills to oil companies for several hundred million dollars. Not 
one company has thus far paid. Recently, charges of fraudulent 
undervaluation by seven oil companies were filed under the 
False Claims Act. One company has chosen to settle, but the 
remaining defendants deny the allegations, insisting they 
reported valuations of crude oil that accurately reflected 
market prices in the field.
    In an effort to simplify the valuation rules, in 1995, the 
MMS began revising its oil valuation regulations. To date, no 
new rule has been implemented. The Department of the Interior 
has reopened the comment period an unprecedented seven times. 
Also, twice in 1998, Congress passed specific language 
prohibiting the Department of the Interior from implementing a 
rule, unless a consensus could be reached with the oil 
companies. A third ``moratorium'' was attached to the 1999 
Senate supplemental appropriations bill.
    Under the MMS' current proposal, for transactions in which 
the parties have competing interests, called arms-length 
transactions, the rules would continue to require that gross 
proceeds be used to determine the royalties owed. For 
transactions that are not at arms-length, however, the proposed 
regulations amend the method for determining the price of the 
oil, no longer relying on the use of posted prices but instead 
relying on spot prices adjusted for the location and quality of 
the oil. The MMS proposal would define the price of oil not 
sold in arms-length transactions differently in each of the 
three domestic oil markets. The oil industry opposes this 
approach. As an alternative, it suggests that the Federal 
Government take its royalties in-kind.
    b. Benefits.--At the May 19, 1999, hearing, the 
subcommittee reviewed the Department of the Interior's 
management of the collection, valuation and distribution of 
revenues--or royalties--from oil produced on Federal lands. 
Royalties from oil and gas leases on Federal lands are one of 
the largest sources of non-tax revenues for the Federal 
Government. According to the Minerals Management Service, since 
1982, nearly $100 billion has been disbursed from Federal 
onshore and offshore leases. In fiscal year 1998, for example, 
the Royalty Management Program generated nearly $6 billion from 
more than 26,000 mineral leases. Of that amount, $550 million 
was distributed to the States and used for schools, roads, and 
public buildings. Congressional oversight into the management 
of this program along with the current efforts to produce a new 
royalty valuation rule are both essential to ensure a fair 
return to the American taxpayer. Oversight of the Department of 
the Interior's management of the valuation, collection and 
distribution of royalties from leases on tribal lands is also 
essential to ensure that the Federal Government is meeting its 
fiduciary responsibility as trust manager for the beneficiaries 
of these royalties.
    c. Hearings.--``Oversight of the Minerals Management 
Service's Royalty Valuation Program,'' May 19, 1999.
    On May 19, 1999, the Subcommittee on Government Management, 
Information, and Technology held a hearing to review the 
management of the Royalty Valuation Program by the Department 
of the Interior's Minerals Management Service. The subcommittee 
focused on the MMS' efforts to collect past-due mineral 
royalties as well as its progress in issuing a new regulation 
that clarifies the royalty valuation process and protects the 
financial interests of the Federal Government. Witnesses at the 
hearing included representatives from the Department of the 
Interior, the General Accounting Office, Indian tribes, the oil 
industry, and the State of California.
    James McCabe, deputy attorney for the city of Long Beach, 
CA, testified that oil produced on State lands should be sold 
at publicly quoted market prices rather than using posted 
prices. Alan Taradash, a private attorney representing the 
Jicarilla Apache Tribe discussed the undistinguished history of 
the Department of Interior and its attempts to account properly 
for tribal mineral development. According to Mr. Taradash, a 
conflict of interest exists between the United States as a 
mineral resource owner on its own account and as a trustee of 
tribal mineral resources. Actions taken by the United States 
regarding the Federal mineral estate on public lands affects 
both directly and indirectly the value of tribal mineral 
assets. As such, Mr. Taradash recommended that separate 
regulations govern tribal oil and gas leasing activities.
    David Deal, assistant general counsel for the American 
Petroleum Institute, and Ben Dillon, vice president of the 
Independent Petroleum Association of America testified on 
behalf of the American Petroleum Institute [API], the 
Independent Petroleum Association of America [IPAA], the 
Domestic Petroleum Council [DPC] and the U.S. Oil and Gas 
Association [USOGA]. Together, the members of these trade 
associations are responsible for the production of virtually 
all Federal oil and gas production from Federal lands and 
virtually all of the Federal royalties paid every month. Both 
of these witnesses testified in opposition to the MMS proposal 
that oil should be valued for royalty purposes using market 
prices or spot prices. According to these witnesses, the MMS 
rulemaking proposal falls short of reflecting all additions to 
the value of the oil and would lead, therefore, to inflated 
values and inflated royalty obligations. Moreover, these 
witnesses testified that the MMS proposal leads to an outcome 
at odds with the plain language of the mineral leasing statutes 
and the terms of the specific contracts or leases under which 
lessees operate. Notwithstanding their reservations about the 
proposed valuation rule, these witnesses testified that the 
valuation rule could be fixed if certain key changes are made.
    Susan Kladiva, associate director, Resources, Community, 
and Economic Development Division, General Accounting Office, 
discussed the results of a report issued by the GAO in August 
1998 on the Department of Interior's attempts to revise the 
Federal oil valuation regulations and the feasibility of the 
Government's taking its oil and gas royalties in kind. Ms. 
Kladiva testified that in deciding to revise its oil valuation 
regulations, the MMS relied heavily on the findings of its 
interagency task force. This task force concluded that the 
major oil companies' use of posted prices in California to 
calculate Federal royalties was inappropriate and recommended 
that the Federal oil valuation regulations be revised. Ms. 
Kladiva also provided an overview of the process the MMS had 
undergone to develop a new rule. At the time of the hearing, 
the MMS had solicited public comments on the proposed 
regulations in seven Federal Register notices, held 17 public 
meetings, and revised its regulations five times, she said.
    Sylvia Baca, the acting Assistant Secretary for Land and 
Minerals Management at the Department of Interior, gave an 
overview of the MMS Royalty Management Program and a status 
report on the Department's efforts to revise its regulations 
for valuing crude oil. Robert Williams, acting Inspector 
General of Department of Interior, discussed some audits and 
investigations performed by his office into the operations of 
the MMS and its oil royalty collection and valuation process. 
One Inspector General report discussed by Mr. Williams involved 
the MMS' failure to accurately identify additional royalties 
owed to the Federal Government for undervalued California crude 
oil. According to this report, the MMS did not adequately plan 
its work, accurately prepare supporting evidence, exercise due 
professional care in performing analyses, or have adequate 
quality control procedures to ensure the accuracy of its 
conclusions. As a result, 19 bills sent to oil companies were 
overstated by at least $185.6 million.
4. Oversight of Government Debt Collection Practices.
    a. Summary.--During the 106th Congress, the subcommittee 
held five hearings in addition to its ongoing oversight of the 
enormous tax and non-tax debt that is owed to the Federal 
Government. As of fiscal year 1999, the Government was owed $60 
billion in delinquent non-tax debts. The Debt Collection 
Improvement Act [DCIA], Public Law 104-134, which was moved by 
the subcommittee during the 104th Congress, established several 
programs to assist Federal agencies and State governments in 
collecting overdue non-tax debts. The Treasury Offset Program 
authorizes the Treasury Department to offset Federal payments, 
such as retirement and vendor payments and tax refunds, to 
satisfy delinquent non-tax debts owed to the Federal Government 
or delinquent child support and income tax debts owed to the 
States. The cross-servicing program requires Federal agencies 
to transfer debts that are more than 180 days delinquent to a 
designated debt collection center for processing. Currently, 
the Department of the Treasury's Financial Management Service 
is the only agency that has been designated as a governmentwide 
debt collection center. The Financial Management Service has a 
variety of tools available to collect these delinquent debts, 
including referring the debts to private collection agencies.
    b. Benefits.--In fiscal year 1999, the Government's offset 
and cross-servicing programs collected $2.6 billion, an 
increase of more than $570 million over that collected in 1998. 
To date, the program has collected nearly $2.4 billion in 
fiscal year 2000, including $1.3 billion in delinquent child 
support payments owed to States and $1.1 billion in non-tax 
debt owed to the Federal Government. Continued congressional 
oversight will encourage more Federal agencies to take 
advantage of these money-saving programs, which provide direct 
financial benefits for American taxpayers.
    The role of the Federal Government in the credit market is 
enormous. The Federal Government dominates the market for 
student loans and housing loans, and has a strong impact on 
other sectors as well. Effective Federal debt collection 
practices are essential to protect the interests of the 
taxpayers, but strong congressional oversight is essential to 
increase the effectiveness of the Federal Government's debt-
collection practices. At this point, the Government is still in 
the process of implementing the DCIA. There are a variety of 
steps in the implementation process that continue to warrant 
heightened congressional attention.
    c. Hearings.--During the 106th Congress, the subcommittee 
held three hearings examining Federal debt collection 
practices.
    (1) ``What is the Federal Government Doing to Collect the 
Billions of Dollars in Delinquent Debts it is Owed?,'' June 15, 
1999.
    On Tuesday, June 15, 1999, the subcommittee continued its 
oversight of the Government's implementation and compliance 
with the Debt Collection Improvement Act of 1996 [DCIA]. At the 
hearing the subcommittee evaluated the Department of the 
Treasury's progress in implementing the DCIA. The subcommittee 
also focused on compliance with the DCIA by three Federal 
departments holding some of the largest amounts of overdue 
debts: the Department of Agriculture, the Department of 
Education and the Department of Housing and Urban Development.
    As of fiscal year 1998, the Federal Government was owed $60 
billion in delinquent non-tax debt, reported the Department of 
the Treasury. Of that amount, more than $46 billion had been 
delinquent for more than 180 days. Of the $46 billion, $31.2 
billion was available for referral to the Financial Management 
Service [FMS] for collection action (including $8.1 billion 
that was eligible for referral to the cross-servicing program). 
Delinquent debt that is in bankruptcy, foreclosure, 
forbearance, disputed debt and foreign debt are excluded from 
offset and cross servicing. In April 1996, the Debt Collection 
Improvement Act [DCIA] was signed into law. The DCIA was 
enacted to improve the Federal Government's record in 
collecting delinquent debt. Since its enactment, however, the 
amount of delinquent non-tax debt owed to the Federal 
Government has increased. Total delinquencies rose from $51.9 
billion in fiscal year 1997 to its present level of $60 
billion. The DCIA centralizes non-tax debt collection 
responsibilities at the Department of the Treasury. The law 
requires Federal departments and agencies to refer debts more 
than 180 days delinquent to the Department of the Treasury for 
collection. The Department of the Treasury's Financial 
Management Service is responsible for administering the 
provisions of the DCIA.
    In addition to requiring agencies to transfer delinquent 
debts to the FMS for collection action, the DCIA expanded 
offset programs in which Federal payments are intercepted to 
satisfy delinquent debts owed to the Federal Government. The 
DCIA also authorized the offset of tax refunds to collect past-
due child support owed to the States. In addition, the DCIA 
established cross-servicing as a new debt-collection program. 
Cross-servicing is the process whereby the Department of the 
Treasury can collect delinquent debts by contacting a debtor to 
arrange repayment or refer the debt to private collection 
agencies for collection.
    The DCIA also contains a variety of other provisions 
designed to improve Federal debt collection. Under the DCIA, 
Federal departments and agencies are required to report both 
current and delinquent loans to consumer reporting agencies. 
The DCIA also bars delinquent debtors from obtaining new 
Federal loans or loan guarantees until the debt is repaid. The 
DCIA provides authority for Federal departments and agencies to 
sell their delinquent debts and authorizes them to retain a 
portion of the amount collected to be used for improving debt-
collection activities. The Secretary of the Treasury was 
required to report to the Congress, by April 1999, on 
collection services provided by the FMS and other entities that 
collect debts on behalf of Federal agencies.
    As of March 1999, Federal departments and agencies had 
referred $22.2 billion to the Department of the Treasury for 
collection ($2.3 billion of this total was referred 
specifically for cross-servicing). Of this amount, Treasury, 
using cross-servicing and administrative and tax refund offset, 
collected $863.1 million or about 3 percent of the total amount 
referred. The bulk of that amount was collected using the tax 
refund offset. Of the remaining amount collected, $20.9 million 
was collected using cross-servicing and private collection 
agencies and $5.6 million was collected using the Treasury 
Department's administrative offset program.
    The Tax Refund Offset Program was merged with the Treasury 
Offset Program on January 18, 1999. Prior to the merger, the 
Internal Revenue Service operated the Tax Refund Offset 
Program. This merger has increased the types of Federal 
payments that can be offset or intercepted to satisfy Federal 
debt. Other Federal payments that can be offset to satisfy 
delinquent debt include vendor payments and Office of Personnel 
Management retirement payments.
    The Federal Departments with the largest portfolios of 
debts delinquent for more than 180 days, include the Department 
of Education ($18.2 billion), the Department of Agriculture 
($6.09 billion), the Department of Health and Human Services 
($4.26 billion), the Department of Energy ($2.29 billion), and 
the Department of Housing and Urban Development ($2.22 
billion). Together, the debts owed to these five Federal 
departments that are more than 180 days delinquent account for 
more than $33 billion of the $46 billion owed to the Federal 
Government.
    The Department of Education administers the Federal Family 
Education Loan Program and the Federal Direct Loan Program. 
There are currently 59.6 million outstanding student loans 
totaling $152.7 billion. Of these, 13.3 million loans worth 
$26.7 billion are in default. In fiscal year 1998, the 
Department of Education's total student-loan portfolio 
increased by $13.8 billion. During the same period, 
delinquencies increased by $6.2 billion.
    The Department of Agriculture operates a variety of credit 
programs that finance utilities, housing, farms and businesses. 
As of fiscal year 1998, the Department of Agriculture had a 
total credit portfolio of $104 billion or 38 percent of the 
total non-tax debt owed to the Federal Government. Of the 
Department of Agriculture's delinquent-debt portfolio, $6.09 
billion had been delinquent for more than 180 days. Of that 
amount, $1.3 billion was eligible for referral to the 
Department of the Treasury for cross-servicing. However, as of 
April 30, 1999, only $5 million, or less than 1 percent, had 
been referred.
    The Department of Housing and Urban Development operates a 
number of credit programs that provide financial assistance for 
a variety of housing and community development programs. As of 
fiscal year 1998, the Department of Housing and Urban 
Development had debt more than 180 days delinquent that totaled 
$2.2 billion. Of that amount, $1 billion was eligible for 
referral to the Department of the Treasury for cross-servicing 
and $1.4 billion was eligible for referral for offset. Of these 
amounts, however, only $222 million and $400 million, 
respectively, had been referred.
    (2) Unpaid Payroll Taxes: Billions in Delinquent Taxes and 
Penalty Assessments are Owed to the Federal Government.
    On August 2, 1999, the Subcommittee on Government 
Management, Information, and Technology held a hearing to 
review the problem of employers withholding payroll taxes from 
employee paychecks, but failing to forward those amounts to the 
Federal Government, as required by law. At the hearing, the 
General Accounting Office released its report prepared on 
behalf of the subcommittee, entitled, ``Unpaid Payroll Taxes: 
Billions in Delinquent Taxes and Penalty Assessments Are 
Owed.'' This report outlines many of the problems associated 
with unpaid payroll taxes, the factors affecting the Internal 
Revenue Service's ability to force businesses to pay this debt, 
and its ability to collect this money. The Commissioner of the 
Internal Revenue Service also testified about the agency's 
efforts to combat this ongoing problem.
    As of September 30, 1998, nearly 2 million businesses owed 
the Federal Government approximately $49 billion in overdue 
payroll taxes, according to Internal Revenue Service [IRS] 
records. This amount represents about 22 percent of IRS' total 
$222 billion in outstanding, unpaid tax assessments. IRS 
records also revealed that on that same date, the assessed 
penalties, called trust fund recovery penalties, totaled about 
$15 billion. About 185,000 individuals were responsible for not 
paying the Federal taxes they had withheld from their 
employees' paychecks. The amounts withheld from the employees' 
salaries for Federal income tax, Federal Insurance Contribution 
Act [FICA] taxes, and the employer's matching portion of FICA 
taxes, comprise a businesses payroll taxes. FICA taxes finance 
the Social Security and Medicare trust funds.
    Each year, the Federal Government, through the IRS, 
collects tax revenue to finance various Government programs and 
activities. In fiscal year 1998, the IRS collected more than 
$1.7 trillion from individuals, businesses, corporations, and 
estates for taxes on wages, income, employment, sales, and 
consumption. While most individuals and businesses pay their 
taxes accurately and on time a substantial number do not. 
According to IRS records, on September 30, 1998, the Government 
was owed $222 billion in unpaid taxes, penalties, and interest. 
These amounts are referred to as unpaid tax assessments. Unpaid 
tax assessments include write-offs, compliance assessments, and 
tax receivables. The types of taxes that comprise the IRS' 
unpaid tax assessment balance are individual income taxes, 
self-employment taxes, payroll taxes, and corporate income 
taxes.
    When employers withhold money from an employee's salary for 
Federal income taxes and FICA obligations, they are holding 
these amounts ``in trust'' for the Federal Government. To the 
extent these withholdings are not forwarded to the Federal 
Government, the business is liable for these amounts as well as 
its matching FICA contribution. Individuals can also be held 
personally liable for the amounts withheld for Federal income 
taxes and the FICA obligations.
    The majority of businesses pay the taxes they withhold from 
employees' salaries, as well as the required matching amounts. 
However, a significant number of businesses do not, creating a 
situation in which the general revenue fund subsidizes the 
Social Security and Medicare trust funds to the extent that 
those taxes are not collected. Over time, the amount of this 
shortfall, or subsidy, rose to $49 billion last year.
    The Chief Financial Officers Act of 1990, as expanded by 
the Government Management Reform Act of 1994, required the 
preparation and audit of consolidated financial statements of 
the Federal Government for fiscal year 1997 and each year 
thereafter. The Government Management Reform Act also required 
that, beginning March 1, 1997, and each year thereafter, all 24 
Federal agencies that are subject to the requirements of the 
CFO Act must prepare audited financial statements.
    The subcommittee's hearing highlighted the need for 
increased attention to the problem of unpaid payroll taxes. 
According to the General Accounting Office report released at 
the hearing, an estimated 1.9 million, have collected money 
from their employee's paychecks, for programs such as Social 
Security and Medicare, then failed to forward it to the Federal 
Government. The General Accounting Office, Congress' accounting 
arm, estimates this problem has cost taxpayers about $49 
billion. Continued oversight of this issue is essential, as 
audits of the Internal Revenue Service's financial statements 
have revealed significant weaknesses in the agency's financial 
procedures.
    (3) ``H.R. 4181, the Debt Pay Incentive Act of 2000,'' May 
9, 2000.
    On May 9, 2000, the subcommittee held a hearing to consider 
H.R. 4181, the ``Debt Pay Incentive Act of 2000,'' introduced 
by the subcommittee's ranking member Jim Turner, D-TX. H.R. 
4181 would prohibit delinquent Federal tax and non-tax debtors 
from receiving Federal loans, loan guarantees or receiving 
Federal contracts, until the delinquency is resolved. The bill 
would amend the Debt Collection Improvement Act of 1996 to 
broaden a current provision in the law that bars delinquent 
non-tax debtors from obtaining loans or loan guarantees.
    As of fiscal year 1998, the Federal Government was owed $60 
billion in delinquent non-tax debt, according to the Department 
of the Treasury. Of this amount, more than $46 billion had been 
delinquent for more than 180 days. Moreover, according to 
Internal Revenue Service records, on September 30, 1999, the 
Government was owed $231 billion in unpaid taxes, penalties, 
and interest, called unpaid assessments. Of the $231 billion, 
an estimated $21 billion is considered to be collectible.
    At the May hearing, the subcommittee learned that Federal 
departments and agencies were doing a poor job of screening 
prospective loan applicants to determine if they owe an 
outstanding debt to the Federal Government that is in 
delinquent status. Office of Management and Budget Circular A-
129 requires Federal departments and agencies to determine 
whether loan applicants have delinquent Federal debt including 
tax debts. OMB Circular A-129 also requires agencies to 
question loan applicants if they have delinquencies. At the 
hearing, the General Accounting Office testified that Federal 
departments and agencies are not complying with this directive. 
Other witnesses testified that while information about 
delinquencies is requested by agencies in some instances to 
determine credit worthiness, the information is rarely verified 
or audited. Moreover, witnesses from Federal departments and 
agencies testified that few agencies are contacting the 
Internal Revenue Service to ascertain the credit worthiness of 
Federal loan applicants.
    Subcommittee investigations have found that implementation 
of these programs varies among Federal agencies. At a June 8, 
2000, hearing, the subcommittee learned that the Department of 
Veterans Affairs is currently owed $463 million in delinquent 
debts that by law should have been transferred to the 
Department of the Treasury for collection. However, the 
department has referred only $5 million, or about 1 percent of 
those debts to the Treasury Department's collection programs. 
The Social Security Administration is owed $390 million in 
qualifying delinquent debts. The agency has referred none of 
these debts to the Treasury Department.
5. Oversight of the Department of the Army's Chemical Stockpile 
        Disposal Project at the Umatilla Depot, Hermiston, OR.
    a. Summary.--The U.S. chemical weapons stockpile consists 
of 31,495 tons of chemical agents. These chemical agents are 
stored at eight sites in the continental United States and at 
the Johnson Atoll in the Pacific Ocean. On Monday, August 16, 
1999, the Subcommittee on Government Management, Information, 
and Technology conducted a field hearing in Hermiston, OR, to 
examine the management of the Chemical Stockpile Disposal 
Program at the Umatilla, OR, Chemical Depot. The Umatilla 
Chemical Depot houses more than 3,717 tons of chemical agents. 
Construction of an incineration facility has begun and disposal 
operations are scheduled to begin in 2002. The local 
communities surrounding the Umatilla Chemical Depot are 
concerned about emergency management and the economic impact of 
the development, operation, and closure of the incineration 
facility.
    On April 25, 1997, the Senate ratified the Chemical Weapons 
Convention, an international treaty banning the development, 
production, stockpiling, and use of chemical weapons. The 
Convention commits member nations to dispose of chemical 
weapons and related production facilities by April 29, 2007. To 
date, the United States is the farthest along, among member 
nations, in the destruction of their chemical weapons 
stockpile.
    To comply with congressional direction and meet the mandate 
of the Chemical Weapons Convention, the Army established the 
Chemical Stockpile Disposal Program and developed a plan to 
incinerate the agents and munitions on site in specially 
designed facilities. The Army currently projects the program 
will cost $12.4 billion to implement through 2007. Through 
fiscal year 1999, approximately $8 billion has been 
appropriated for the program.
    As of March 17, 1999, more than 13.5 percent, or 4,259 
tons, of the stockpile had been destroyed. The Department of 
Defense estimates that by the end of 1999, 6,865 tons of 
chemical agents (or 22 percent of the total amount) will be 
destroyed. The longer the weapons sit in storage the more 
unstable and dangerous they become. Currently, there are two 
sites that are actively incinerating chemical agents and five 
sites in the construction phase.
    The Umatilla Chemical Depot is located in eastern Oregon in 
Umatilla and Morrow counties. The facility, encompassing an 
area of about 19,728 acres, was established in 1941 as an 
ordinance facility for storing conventional munitions in 
support of the United States' entry into World War II. In 1962, 
the Army began storing chemical munitions at the facility. 
Conventional ordinance is no longer stored at the facility, 
however, the site houses 12 percent (3,717 tons) of the 
Nation's chemical weapons stockpile.
    Construction of a facility to incinerate the stockpile at 
the Umatilla Depot began in June 1997. Chemical agent disposal 
operations are scheduled to begin during the second quarter of 
2002.
    In 1988, the Army established the Chemical Stockpile 
Emergency Preparedness Program [CSEPP]. The program is intended 
to assist communities located near chemical stockpile storage 
sites to address emergencies from the storage and destruction 
of stockpiled chemical weapons. CSEPP provides community safety 
awareness, public education programs, coordinated response 
plans, and protective and decontamination equipment.
    The Army is responsible for determining the overall 
direction for CSEPP. Under a memorandum of understanding with 
the Army, the Federal Emergency Management Agency [FEMA] 
provides technical assistance and distributes Army funds to 
States through cooperative agreements. States and counties, in 
accordance with State and local laws, have primary 
responsibility for developing and implementing programs to 
enable communities to respond to a chemical stockpile 
emergency. FEMA provides both funds and technical assistance to 
Oregon Emergency Management for preparedness activities related 
to the chemical weapons storage site at the Umatilla Chemical 
Depot.
    In June 1997, the General Accounting Office [GAO] reported 
that State and local communities surrounding the chemical 
stockpile storage sites lacked some items critical to 
responding to a chemical stockpile emergency. The GAO 
attributed the slow progress of the CSEPP program to long-
standing management weaknesses, including disagreement between 
the Army and FEMA over their respective roles and 
responsibilities. Local communities have expressed concern that 
money allocated for emergency services has not been received.
    The August 16, 1999, subcommittee field hearing in 
Hermiston, OR, focused on the management of the disposal 
project at the Umatilla Depot and the impact of the project on 
the local communities. Witnesses at the hearing included 
officials from the Department of the Army and the Federal 
Emergency Management Agency responsible for the management and 
safety aspects of this disposal project. The subcommittee also 
heard from officials from the State of Oregon, local counties 
and tribal groups. At the hearing, representatives from the 
local communities expressed concern over the state of emergency 
preparedness planning associated with the disposal project. 
These witnesses also testified about the effect of this 
temporary Government project on the local economy and local 
infrastructure. Local community leaders are seeking impact aid 
from the Federal Government to offset the various impacts of 
the project. The construction of the incineration facility at 
the Chemical Depot had begun and the incineration operation is 
scheduled for completion by 2005. The facility is scheduled to 
shut down permanently in 2006.
    b. Benefits.--The U.S. chemical weapons stockpile consists 
of 31,495 tons of chemical agents. These chemical agents are 
stored at eight sites in the continental United States and at 
the Johnson Atoll in the Pacific Ocean. The Department of 
Defense Authorization Act for Fiscal Year 1986 directs the 
Department of Defense to safely destroy all U.S. chemical 
warfare munitions and related materiel while ensuring maximum 
protection of the public, personnel involved in the destruction 
effort, and the environment. Because of the lethal nature of 
chemical weapons and environmental concerns associated with the 
proposed disposal methods, the program has been controversial 
from the beginning and has experienced delays, cost increases, 
and management weaknesses. Continued congressional oversight of 
the management of this enormous chemical weapons disposal 
project and at all disposal facilities is essential if the 
Department of the Army is to meet its mandate of safely 
destroying chemical weapons while ensuring maximum protection 
of the public, the personnel involved in the destruction 
effort, and the environment.
    c. Hearings.--``Emergency Management and Preparedness,'' 
field hearing in Hermiston, OR, on August 16, 1999.
6. Oversight of Government Procurement.
    a. Summary.--During the 106th Congress, the subcommittee 
continued its oversight of Federal acquisitions by conducting 
oversight hearings, initiating studies, and reporting 
legislation. As the Nation's largest purchaser, the Federal 
Government buys nearly $200 billion worth of goods and 
services, including everything from defense weapons and space 
exploration equipment to paper clips and pencils. The 
Department of Defense is responsible for more than half of the 
Federal Government's acquisition expenditures. In recent years, 
Congress has passed a number of laws, including the Information 
Technology Management Reform Act (Clinger-Cohen Act) and the 
Federal Acquisition Streamlining Act, which were designed to 
improve the efficiency of the Federal acquisition system.
    On September 30, 1999, the Office of Management and Budget 
published a notice in the Federal Register announcing that 
inventories of commercial activities performed by 52 Federal 
departments and agencies were publicly available for review. 
The release of these inventories, which included five Cabinet-
level departments, is the first time this information has been 
available to the public under the Federal Activities Inventory 
Reform Act of 1998 [FAIR Act]. According to the Office of 
Management and Budget, the remaining agency inventories will be 
available in upcoming months.
    The FAIR Act directs the head of each executive branch 
agency to submit inventories of the agency's commercial 
activities to the Director of the Office of Management and 
Budget by the end of the third quarter of each fiscal year 
(June 30). The inventories must include three elements: the 
fiscal year the activity first appeared on the inventory; the 
number of full-time equivalents [FTEs] necessary to perform the 
activity; and the name of a contact person who can provide 
additional information about the activity.
    The FAIR Act requires the Director of the Office of 
Management and Budget to review the inventories and consult 
with the head of the agency regarding its content. The agency 
head is required to transmit a copy of the inventory to 
Congress and make it publicly available. The Director is also 
required to publish a notice in the Federal Register that the 
inventories are publicly available. Under the law, each time 
the head of an executive agency considers contracting with a 
private-sector source for the performance of such an activity, 
the head of the agency is required to use a competitive bidding 
process. Currently, the Office of Management and Budget's 
Circular A-76 defines the process for agencies to follow when 
outsourcing an activity on their inventories. The A-76 process 
requires a public-private competition for the work in which the 
Federal employees who currently perform the work compete 
against private-sector bidders. The FAIR Act mandates that when 
conducting cost comparisons, agencies must ensure that all 
costs are considered.
    Interested parties have 30 days from the date of 
publication in the Federal Register to challenge either the 
inclusion or exclusion of an activity on the inventory list. 
The law limits those who can file a challenge to the inventory 
to Federal employees, private sector contractors, 
representatives of business or professional associations, and 
Federal labor organizations. Interested parties have 30 days 
from the date of publication in the Federal Register to 
challenge either the inclusion or exclusion of an activity on 
the inventory list. The law limits those who can file a 
challenge to the inventory to Federal employees, private sector 
contractors, representatives of business or professional 
associations, and Federal labor organizations.
    b. Benefits.--As the Nation's largest purchaser of goods 
and services, the Federal Government stands poised to save 
taxpayers billions of dollars a year through efficient and 
cost-effective purchasing procedures. A number of laws are in 
place to ensure that Government agencies utilize these 
procedures, yet the General Accounting Office has found that 
many Federal procurement operations remain at high-risk of 
waste, fraud, and mismanagement. Ongoing congressional 
oversight is needed to bring these programs into compliance 
with Federal laws, which will ultimately conserve millions of 
taxpayer dollars.
    c. Hearings.--On October 28, 1999, the Subcommittee on 
Government Management, Information, and Technology conducted an 
oversight hearing on the implementation of the FAIR Act. The 
FAIR Act, signed into law on October 19, 1998, requires Federal 
departments and agencies to assemble inventories or lists of 
the non-inherently governmental (i.e., commercial) activities 
they perform. The law requires these inventories to be made 
available to the public, and it authorizes certain interested 
parties, including private-sector entities and agency 
employees, to challenge the inclusion or exclusion of 
activities on the inventories. At the hearing, the subcommittee 
heard from a variety of witnesses who discussed the 
implementation of the law. The subcommittee focused on a 
variety of issues involving implementation of the FAIR Act, 
including the processes used to develop the inventories and the 
usefulness of the inventories.
    The sponsors of the law, Senator Craig Thomas, R-WY, and 
Representative John Duncan, R-TN, raised concerns about the 
efforts being made to implement the law. Specific concerns 
included the format and method of publishing the FAIR Act 
inventories and the uncertainty over the procedures to follow 
in order to challenge the inclusion or omission of an agency 
activity on the lists.
    The FAIR Act provides an essential tool for Federal 
departments and agencies to identify activities they perform 
that are not inherently governmental and could potentially be 
put up for competition with the private sector. The first 
release of FAIR Act inventories revealed that there remains 
much work to be done to fully implement this law. Continued 
congressional oversight of this law is necessary to ensure its 
successful implementation.
    (1) ``Federal Acquisition: Why Are Billions of Dollars 
Being Wasted?'' March 16, 2000.
    On March 16, 2000, the subcommittee convened a hearing to 
assess current issues related to Federal acquisition. The 
subcommittee learned that despite the impact of recent 
procurement reforms, significant challenges remain. The General 
Accounting Office testified that a number of Federal 
procurement operations are at high-risk of waste, fraud, and 
mismanagement. According to the GAO, acquisitions by the 
Department of Defense too often contain significant risks of 
cost overruns, schedule delays, and degraded performance. The 
Office of Inspector General at the Department of Defense 
discussed the results of a recent audit of 105 defense-
contracting actions. These contract activities, valued at $6.7 
billion, involved a wide range of professional, administrative 
and management support services. The Inspector General said he 
was startled to find problems in each of the 105 contract 
actions.
    In addition, major problems persist with weapon systems 
acquisitions. The GAO testified that the Department of Defense 
is still buying systems that cost too much, that are delivered 
late, or that fail to perform as expected.
    As well, the GAO has documented that billions of dollars 
have been wasted in the Government's purchases of information 
technology products and services that failed to deliver 
expected results. This problem has involved important 
Government programs, including air traffic control, tax 
collection, Medicare transactions, weather forecasting, and 
national defense. The acquisition problems persist largely due 
to agencies' inability to properly select, control, and 
evaluate these major investments. Agencies also face challenges 
in successfully implementing electronic commerce and the use of 
a paperless procurement system.
    In addition, agencies are having difficulty recruiting, 
training and retaining top-flight acquisition personnel. 
Witnesses at numerous subcommittee hearings have testified that 
the Federal Government needs to address an impending crisis in 
human capital as aging baby boomers begin to retire. According 
to the GAO, within the next several years, there will be a huge 
knowledge drain as many of the Government's more experienced 
and valued people leave the Federal workforce. Both the 
Department of Defense Inspector General and the General 
Accounting Office have found deficiencies in training 
requirements and continuing education for Federal acquisition 
personnel. This workforce issue will require increased 
congressional oversight and, perhaps, legislation in the 
upcoming Congress.
    Representative Sue Kelly, D-NY, added as a member of the 
subcommittee for this hearing by unanimous consent, questioned 
the panel of witnesses about the lack of progress by Federal 
departments and agencies to meet the 5 percent procurement goal 
for women-owned businesses. A number of agencies, including the 
Department of Defense, have failed to meet this goal. Office of 
Federal Procurement Policy Administrator Deidre Lee 
acknowledged that the Government does not have provide training 
to its acquisition workforce to identify women-owned businesses 
for Federal procurement opportunities.
    To address the shortage of skilled information-technology 
professionals in the Government, the subcommittee passed H.R. 
3582, the ``Federal Contractor Flexibility Act,'' sponsored by 
Representative Tom Davis, R-VA. This legislation restricts the 
use of minimum experience and education requirements in Federal 
information technology contracts, unless those requirements are 
justified by the contracting agency. Minimum education and 
experience standards that are written into Federal contracts 
can prevent otherwise qualified individuals from providing 
information technology goods and services to the Federal 
Government. The standards often fail to account for the various 
ways individuals acquire technical expertise, such as military 
service, technical schools, and on the job training, as well as 
traditional colleges and universities. The legislation is 
consistent with the Government's approach to performance-based 
contracting. Performance-based contracting is a method of 
acquiring services that focuses on successful results, or 
outcomes, rather than dictating how the work is to be 
performed. H.R. 3582 was enacted into law as part of the 
``Floyd D. Spence National Defense Authorization Act for Fiscal 
Year 2001.''
    (2) ``Implementation of the Federal Activities Inventory 
Act,'' October 28, 1999.
    On October 28, 1999, the subcommittee examined the 
implementation of the Federal Activities Inventory Reform Act, 
which was reported to the full House by the Committee on 
Government Reform in the 105th Congress. The FAIR Act (Public 
Law 105-270) requires Federal departments and agencies to 
compile and publish lists of commercial activities they 
perform. The subcommittee's hearing assessed agency 
implementation of the FAIR Act. Federal departments and 
agencies had identified 904,000 full-time-equivalent employees 
performing commercial activities. A number of concerns about 
the lists were raised, however, including the varied quality, 
content and format of agency inventory lists. Concerns were 
also raised about the FAIR Act's challenge and appeals process. 
As a result, the subcommittee requested that the GAO conduct a 
study on implementation of the FAIR Act by executive branch 
departments and agencies and examine the guidance provided by 
the Office of Management and Budget. The GAO reported that, in 
many cases, agency inventory lists were neither clear nor 
understandable. The GAO recommended that the Director of the 
Office of Management and Budget re-examine the agency's FAIR 
Act guidance to agencies in this area.
    The subcommittee hearing also examined the Government's 
initiatives in the area of electronic commerce. The advent of 
the Internet as a procurement tool has the potential to 
revolutionize the manner in which the Government purchases 
goods and services. A number of concerns were raised about the 
General Services Administration's online ordering system, GSA 
Advantage! The GSA Advantage! program, the Government's first 
catalog on the Internet, allows agencies to search for products 
and services and place orders with the GSA's Federal supply 
schedule vendors. A GAO report requested by the subcommittee 
found that vendors had problems with excessive data 
requirements and incomplete orders. In response, the GSA agreed 
re-tool and update its Web site.
    (3) Legislative hearing on ``H.R. 4012, the Construction 
Quality Assurance Act,'' July 13, 2000.
    During the 106th Congress, the subcommittee also conducted 
oversight hearings related to issues affecting Federal 
construction contracting. H.R. 1219, the ``Construction 
Industry Payment Protection Act,'' which the subcommittee 
reported to the full committee in early 1999, was enacted into 
law on August 17, 1999 (Public Law 106-49). H.R. 1219 updates 
the 1935 Miller Act by increasing the amount of payment bond 
protections for companies furnishing labor or materials for 
Federal construction projects. Another Federal construction 
contracting bill, H.R. 4012, the ``Construction Quality 
Assurance Act,'' sponsored by Representative Paul Kanjorski (D-
PA), was the subject of a subcommittee hearing on July 13, 
2000. H.R. 4012 would have required companies that bid on 
Federal construction projects in excess of $1 million to list 
the subcontractors they intended to use on the project.
7. Oversight of Federal Geographic Information Systems Policies and 
        Programs.
    a. Summary.--Geographical Information Systems [GIS] are 
automated systems used to capture, store, retrieve, analyze, 
and display spatial data referenced to the Earth. GIS 
applications have assisted governments, businesses, and 
communities for critical decisionmaking. Enhancements in 
technology and plummeting hardware costs have placed GIS and 
associated technologies on desktops everywhere. However, data 
created for one application may not easily be translated into 
another application. Data sharing of geographical information 
could potentially save millions of dollars annually and enhance 
the efficiency and effectiveness of governments and businesses.
    In the United States, geographic data collection is a 
multi-billion-dollar business. In many cases, however, these 
efforts are duplicated when organizations and individuals 
collect the same information for a given piece of geography, 
such as a State or a watershed. Networked telecommunications 
technologies, in theory, permit data to be shared, but data 
sharing is often difficult, because data created for one 
application may not be easily translated into another 
application.
    The problems are not just technical. Institutions and 
governments are often not accustomed to working together. A 
local government may collect the best data, but they are 
unavailable to Federal and State government planners. 
Similarly, Federal agencies and State governments may not be 
willing to share data with one another or with local 
governments.
    Public access to GIS data is also a concern. Once found, 
digital data may be incomplete or incompatible, but the user 
may not know this because many data sets are poorly documented. 
The lack of metadata--or data that describes the content, 
quality, condition, and characteristics of other data--inhibits 
one's ability to assess the reliability of the data.
    b. Benefits.--The subcommittee focused on current 
challenges in sharing geospatial data maintained by Federal 
agencies. Data sharing of geographical information could 
potentially save millions of dollars annually and enhance the 
efficiency and effectiveness of governments and businesses, and 
better serve the public.
    The subcommittee held an oversight hearing on the Federal 
Government's policies and programs for GIS. The subcommittee 
focused on current challenges in sharing geospatial data 
maintained by Federal agencies. The subcommittee will evaluate 
the benefits of forming partnerships between multiple levels of 
government and the private sector to implement GIS, and in 
particular, how Federal, State, regional, and municipal 
governments are using GIS and spatial data to manage programs 
and serve the public more effectively and efficiently. The 
subcommittee also examined how the private sector uses GIS and 
spatial data to increase productivity, reduce operational 
expenses, and create new products and services. In addition, 
the subcommittee explored how Federal laws, regulations, and 
policies might be streamlined to improve compatibility across 
GIS networks.
    In addition, the subcommittee explored potential 
opportunities for the Federal Government to form partnerships 
with State, regional, and municipal governments, and the 
private sector to implement GIS in a cost-effective manner 
using the best data standards.
    c. Hearings.--``Geographical Information Systems Policies 
and Programs,'' June 9, 1999.
8. Implementation of the Government Performance and Results Act.
    a. Summary.--The American voters have made it clear that 
they think the Federal Government is too often ineffective, 
inefficient, and overly expensive. Real reform must involve 
fundamental changes in how the Government operates, beginning 
with the adoption of effective management techniques from the 
private sector. Outcome-oriented or results-driven performance 
management strategies adopted from the private sector are the 
driving force of the Government Performance and Results Act of 
1993.
    The Government Performance and Results Act is the 
centerpiece of Federal management reform in recent years. In 
essence, the act requires Federal agencies to ask and answer 
some very basic questions, such as: What is the agency's 
mission? What are its goals, and how will the agency achieve 
them? How can an agency's performance best be measured? How 
should that information be used to make improvements? These 
questions were to be answered in strategic plans, which were 
required by the Results Act to be completed by September 30, 
1997. The plans provide the framework for an agency's 
management to examine activities throughout the organization, 
ensuring that the activities relate to the agency's basic 
mission.
    The Results Act provides a unique opportunity to view the 
Federal Government on a comprehensive basis. In this context, 
the executive branch should seek to identify and set the 
priorities for the services that must be provided, the 
activities that must be carried out, and the measurement of the 
results that are achieved.
    The GAO found that agencies are confronting five key 
challenges that were limiting effective implementation of the 
Results Act: (1) establishing clear agency missions and 
strategic goals when program efforts are overlapping or 
fragmented; (2) measuring performance, particularly when the 
Federal contribution to a result is difficult to determine; (3) 
generating the results-oriented performance information needed 
to set goals and assess progress; (4) instilling a results-
oriented organizational culture within agencies; and (5) 
linking performance plans to the budget process.
    b. Benefits.--The quality of agency strategic plans and 
their derivative performance plans and performance reports 
affect the efficiency and effectiveness of the entire Federal 
Government. Without strategic plans and actual performance 
measures, it is impossible for any large organization to assess 
its success. That is particularly true of Federal departments 
and agencies because of the diverse nature of the programs they 
administer. For a large number of Federal programs it is very 
difficult to assess success. It is especially difficult to 
compare the relative success of duplicate or overlapping 
programs. Consequently, it is difficult for Congress to 
determine which programs are worth the taxpayers' investment; 
which programs should be expanded because they work efficiently 
and which programs should be canceled because they do not 
deliver the intended results.
    The subcommittee has conducted hearings to oversee the 
Government's implementation of GPRA and has made 
recommendations on how strategic plans should be developed. The 
subcommittee has explicitly expressed the intentions and 
expectations of Congress regarding the content and quality of 
GPRA strategic plans, and has worked with specific agencies 
such as the General Services Administration and the OMB to 
review their draft strategic plans. Further, because of the 
special function of the OMB in providing guidance to other 
Federal agencies, the subcommittee has insisted that the OMB 
set serious standards for all Federal agencies to deliver 
realistic strategic plans and meaningful performance measures.
    c. Hearings.--(1) ``The Results Act: the Status of 
Performance Budget Pilot Programs,'' July 1, 1999. A key 
expectation of the Results Act is that Congress will gain a 
clearer understanding of what is being achieved in relation to 
what is being spent. To accomplish this, the act required that, 
beginning in fiscal year 1999, agencies prepare annual 
performance plans. These plans are to contain annual 
performance goals covering the program activities in agencies' 
budget requests. In addition, the OMB guidance states that 
agency performance plans should display the funding level being 
applied to achieve performance goals. Plans that meet these 
expectations would provide Congress with useful information on 
the performance consequences of budget decisions.
    Paul Posner, Director of Budget Issues at the U.S. General 
Accounting Office [GAO], testified regarding their assessment 
of fiscal year 1999 performance plans and where Federal 
agencies stand in their efforts toward implementing performance 
budgeting. The GAO found that most of the agencies it reviewed 
were able to define some type of relationship between the 
program activities in their proposed budgets and the 
performance goals of their plans. However, far fewer translated 
these relationships into budgetary terms--that is, most plans 
did not explain how funding would be allocated to achieve 
performance goals. Agencies' first-year experiences show some 
progress in linking planning with budgeting structures and 
presentations, but much remains to be done if performance 
information is to be more useful for budgetary decisions.
    The Honorable Deidre Lee, Acting Deputy Director for 
Management at the Office of Management and Budget, provided a 
status update on agencies' progress in linking the budget to 
their respective performance plans. She was also asked to 
describe the status of agency pilot programs required by the 
Results Act. The act required these pilot programs to test 
innovative approaches to performance budgeting.
    The OMB, in consultation with the head of each agency, was 
required to designate for fiscal years 1998 and 1999 at least 
five agencies to prepare budgets ``that present, for one or 
more of the major functions and operations of the agency, the 
varying levels of performance, including outcome-related 
performance, that would result from different budgeted 
amounts'' (31 U.S.C. 1119 (b)). While the act requires agencies 
to define goals consistent with the level of funding requested 
in the President's budget, the pilot programs would also show 
how performance might change if the agency received more or 
less allocations than requested. The OMB was to include these 
pilot performance budgets as an alternative presentation in the 
President's budget for fiscal year 1999 and to transmit a 
report to the President and to Congress no later than March 31, 
2001. This report would detail the feasibility and advisability 
of including a performance budget as part of the President's 
budget. This report would also recommend whether legislation 
requiring performance budgets should be proposed.
    The performance budgeting pilot programs were to commence 
in fiscal year 1998 ``so that they would begin only after 
agencies had sufficient experience in preparing strategic and 
performance plans, and several years of collecting performance 
data.'' Recognizing the importance of a governmentwide 
implementation, the OMB announced on May 20, 1997, that the 
pilot projects would be delayed for at least a year. The OMB 
stated that the performance budgeting pilots would require the 
ability to calculate the effects on performance of marginal 
changes in cost and funding. According to the OMB, very few 
agencies had this capability, and the delay would give them 
time to develop it. In September 1998, the OMB solicited 
agencies' comments on these pilot programs, but no agencies 
were designated as pilots. At the time of the hearing, the OMB 
had no definite plans for proceeding with the performance 
budgeting pilot programs.
    (2) ``Seven Years of GPRA: Has the Results Act Provided 
Results?'' July 20, 2000.
    In a 1997 hearing before the Government Management, 
Information, and Technology Subcommittee, John Koskinen, the 
former Deputy Director for Management at the Office of 
Management and Budget believed that the Results Act forced 
Government agencies to ask the simple question: What are we 
getting for the money that we are spending? Under the Results 
Act, Federal agencies are required to develop strategic plans, 
annual performance plans, and performance reports. The 
subcommittee's hearing on July 20, 2000, coincided with the 
issuance of agency performance plans.
    At this hearing, the subcommittee reviewed the status and 
quality of the information contained in the performance 
reports. Hearing witnesses included Republican Majority Leader 
Richard K. Armey and a former New Zealand Cabinet Minister and 
Member of Parliament, the Honorable Maurice P. McTigue.
    Majority Leader Armey summarized the performance reports, 
saying that ``. . . 8 years after the Results Act was enacted, 
our Government is still too big and spends too much.''
    Witnesses testified that much work remains to be done 
before the Results Act works as it was envisioned.
9. Oversight of the National Archives and Records Administration.
    a. Summary.--The National Archives is an independent 
Federal agency charged with preserving the Nation's history by 
overseeing the management of all Federal records. The National 
Archives' mission is to ensure ready access to the essential 
evidence that documents the rights of American citizens, the 
actions of Federal officials, and the national experience, 
enabling citizens to inspect the records of the Federal 
Government and hold officials and agencies accountable for 
their actions.
    National Archives records document more than 200 years of 
American development. The agency has 33 facilities that hold 
about 21.5 million cubic feet of original text materials (more 
than 4 billion pieces of paper from the executive, legislative, 
and judicial branches of the Federal Government). The National 
Archives also contains nearly 300,000 reels of motion picture 
film, more than 5 million maps, charts, and architectural 
drawings, 200,000 sound and video recordings, 9 million aerial 
photographs, 14 million still pictures and posters, and about 
7,600 sets of computer data.
    Each year, the Federal Government creates an enormous 
quantity of official records. Generally, only about 3 percent 
of the documents that are created have sufficient historical or 
legal significance to become part of the National Archives. One 
of the agency's essential responsibilities is to determine 
which records should be preserved because they are essential 
documentation of the Nation's development and which documents 
are not.
    b. Benefits.--Subcommittee hearings help to ensure that 
Federal agencies are running their affairs in an effective and 
efficient manner. The National Archives maintains the most 
important records that detail American history. As the Nation 
moves from a paper-based society into the digital age, it is 
vital that the institution keep pace with the times and that 
its systems and procedures coincide with ongoing developments 
in the field of information technology.
    c. Hearings.--``The National Archives and Records 
Administration,'' October 20, 1999. The hearing focused on the 
myriad issues that are critical to the National Archives, 
including the agency's strategic plan, declassification of 
Government records, the agency's revolving fund, and electronic 
records management, including a July 19, 1999, GAO report 
entitled, ``National Archives: Preserving Electronic Records in 
an Era of Rapidly Changing Technology.''
    Governor John Carlin, Archivist of the United States, 
represented the National Archives at the hearing. His testimony 
focused on the National Archives' strategic plan. He described 
the agency's continuing efforts to provide state-of-the-art 
facilities and public access to archived records. Governor 
Carlin said that the National Archives is striving to maintain 
up-to-date records management standards. He stressed the 
importance of proper records management throughout the 
Government and described Archives' efforts to provide guidance 
to Federal agencies. Governor Carlin also addressed the issues 
of declassification, the agency's business process re-
eningeering plan, and its newly established reimbursable 
revolving fund.
    The second panel consisted of a variety of witnesses who 
generally praised the National Archives, but also noted some 
shortcomings. L. Nye Stevens, Director of Federal Management 
and Workforce Issues at the U.S. General Accounting Office, 
testified that the National Archives' re-engineering plan and a 
recent survey of governmentwide electronic records management 
were put on hold. Mr. Stevens expressed GAO's concern that 
Archives was delaying the survey until finalizing its re-
engineering plan, and described GAO's findings in a recent GAO 
report entitled, ``National Archives: Preserving Electronic 
Records in an Era of Rapidly Changing Technology.''
    Page Putman Miller, representing the Organization of 
American Historians, discussed the general issues that are 
important to those who wish to have access to National 
Archives' records, however, she concentrated on records 
declassification and electronic management. In regard to the 
declassification process, Ms. Miller said that National 
Archives was doing as effective as a job as possible, but she 
was concerned with the pace. Ms. Miller said that additional 
resources were needed to speed up the process. She also said 
that National Archives needed to issue more guidance for 
electronic records management and more effectively describe its 
own record holdings through record locators.
    Tom Hickerson, president of the Society of American 
Archivists focused on electronic records. He praised the recent 
work of the National Archives, but also stressed the need to 
provide Federal agencies with better guidance and better 
descriptions of record holdings.
    Stanley Katz testified regarding the newly instituted 
reimbursable revolving fund, which was to begin a pay-as-you-go 
basis for the services the National Archives provides Federal 
agencies for storage and maintenance of temporary records. Mr. 
Katz was primarily concerned that the new procedures mandating 
that agencies pay for services as they are rendered. He also 
provided insight as to the type of information that National 
Archives should include in the quarterly reports it is required 
to submit to the Subcommittee on Government Management, 
Information, and Technology and its appropriations committee.
    c. Hearings.--(1) Legislative hearing on the 
``Reauthorization of the National Historical Publications and 
Records Commission Act,'' April 4, 2000.
    The subcommittee held a legislative hearing to reauthorize 
the National Historical Publications and Records Commission 
[NHPRC] from fiscal year 2002 through fiscal year 2005. The 
National Historical Publications and Records Commission works 
to identify and preserve documents of historical significance 
for public use. The program provides grants for non-Federal 
documentation to non-Federal organizations such as historical 
societies, institutions, non-profit organizations, 
universities, and local and State governments. The NHPRC is 
affiliated with the National Archives and Records 
Administration, [NARA]. The work of NHPRC with non-Federal 
records complements NARA's work to preserve Federal documents.
    In addition to preserving historical records, witnesses 
testified that the NHPRC is also working to preserve electronic 
records. The subcommittee heard testimony from Anne Gilliland-
Swetland of the InterPARES Project, an international effort to 
develop technology policy and training requirements for 
preserving permanent records created by electronic systems. 
``Every organization in this country creates records, and very 
soon, some part of almost all those records will be 
electronic,'' Ms. Gilliland-Swetland said. ``Moreover, 
electronic commerce, as well as electronic government will need 
to rely heavily upon the trustworthiness of those records. 
There are many critical areas that still need to be addressed--
translating research outcomes into practice through the 
development of basic and affordable software tools, the design 
and implementation of multi-faceted education programs for 
archivists and records creators, and the building of models for 
widespread access to archival electronic records, to name but a 
few.''
    The subcommittee also heard testimony from Charles Cullen, 
president of the Newberry Library and NHPRC grant recipient for 
his work with the Founding Father's Project, a project to 
preserve the documents American historical figures. ``Without 
the Federal funding (of NHPRC,) most of these projects would be 
at risk for losing their host institution's support and would 
either not survive or be severely limited in what they could 
accomplish,'' Mr. Cullen said.
    (2) ``Freedmen's Bureau Preservation Act: Are These 
Reconstruction Era Records Being Protected?'' October 18, 2000.
    On October 18, 2000, the subcommittee held a hearing on 
H.R. 5157, the ``Freedmen's Bureau Records Preservation Act,'' 
introduced by Representatives Juanita Millender-McDonald, D-CA, 
and J.C. Watts, R-OK. Witnesses discussed efforts to preserve 
and index the deteriorating Reconstruction Era records of the 
Freedmen's Bureau, which represent a vital part of American 
history.
10. Oversight of Issues Involving Individual Privacy.
    a. Summary.--Americans are increasingly concerned that 
their personal information is no longer confidential. Recent 
public opinion polls have found that the threat of the loss of 
personal privacy is one of the leading issues concerning 
Americans today.
    Although personal privacy has always been a significant 
concern to many Americans, recent developments in information 
technology and changes in State and Federal laws have 
heightened attention to privacy issues. Increased access to the 
Internet now allows millions of Americans to access computer 
networks each month. Internet financial transactions have grown 
at an astounding rate. In the year 2000, an estimated 17 
million U.S. households will spend approximately $30 billion 
shopping online. This number is expected to grow with 
predictions that 42 million households will purchase over $64 
billion worth of online goods and services by the end of 
2001.\63\ Commercial use of the Internet will continue to grow, 
with predictions that 56 percent of U.S. companies will sell 
their products on-line by the end of the year 2000.
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    \63\ ``The Whole View'' by Forrester Research, Inc., Cambridge, MA, 
Sept. 19, 2000.
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    In addition to the resultant flow of information on the 
Internet, changes in financial laws and medical records 
policies have eliminated a number of traditional privacy 
protections. Advances in genetic testing and the sharing of 
medical records among insurance entities, pharmaceutical 
companies, and other health-related entities alarm many 
American who are concerned that the privacy of their medical 
histories or financial records could be compromised.
    Concerned by the increasing use and dependence on computer 
technology, the subcommittee conducted a series hearings on the 
issue of privacy during the 106th Congress. During these 
hearings, the subcommittee considered two legislative proposals 
aimed at enhancing the privacy of personal information, such as 
Social Security numbers, credit card account numbers, and 
medical and financial records. The subcommittee referred one 
proposal, H.R. 4049, a bill to ``establish the Commission for 
the Comprehensive Study of Privacy Protection'' to the 
Committee on Government Reform, which approved the legislation 
for consideration by the full House.
    b. Benefits.--Along with consumers, local, State, and 
Federal lawmakers have increasingly become concerned about 
privacy issues, leading to a rapid increase in the number of 
privacy-related legislative proposals. Yet few of these bills 
have been enacted, largely because of the issue's complexity 
and a lack of consensus on the appropriate approach to resolve 
the problems. Of the laws that have been enacted, several have 
resulted in unintended consequences, and at least one has been 
repealed. The subcommittee's oversight of this issue seeks to 
find the proper balance between protecting individual privacy 
and appropriate access to public information.
    c. Hearings.--The subcommittee held three hearings 
examining privacy legislation.
    (1) ``To Establish the Commission for the Comprehensive 
Study of Privacy Protection,'' April 12, 2000, and
    (2) Legislative hearing on ``H.R. 4049, to establish the 
Commission for the comprehensive study of Privacy Protection,'' 
May 15 and 16, 2000.
    The subcommittee held 3 days of legislative hearings on 
H.R. 4049, ``The Privacy Commission Act.'' Individuals 
discussed the need for establishing a Federal commission to 
spend 18 months to complete a comprehensive study on privacy 
protection in the United States.
    During the course of these hearings, witnesses discussed 
the advantages and disadvantages of establishing the 
commission. Sandra Parker, counsel for the Maine Hospital 
Association, discussed some of the problems associated with the 
State of Maine's medical privacy laws. Ms. Parker told the 
subcommittee that State legislators worked on the legislation 
for 2\1/2\ years before approving it. Yet despite their 
efforts, there were numerous complaints about the law. Six 
months after its enactment, the State legislature revised the 
law to address those complaints, Ms. Parker said, but problems 
still remain with provisions of the law that limit information 
hospital employees are allowed to provide.
    Sallie Twentyman, an identity theft victim and Robert 
Douglas, an investigator, discussed current privacy loopholes 
and the relative ease with which individuals and companies can 
obtain personal information. Mr. Douglas demonstrated the ease 
of obtaining personal information about an individual. Mr. 
Douglas supported H.R. 4049's creation of a Federal privacy 
commission, stating that ``a comprehensive review of current 
privacy law and the formulation of a privacy plan for the 21st 
century is important and long overdue.''
    Minnesota's Attorney General Mike Hatch, however, disagreed 
with Mr. Douglas's view the bill, saying that a privacy 
commission would stall much-needed privacy legislation at the 
Federal, State and local levels of government.
    (3) Legislative hearing on ``H.R. 220, the Freedom and 
Privacy Restoration Act,'' May 18, 2000.
    The subcommittee also held a legislative hearing on H.R. 
220, the ``Freedom and Privacy Restoration Act,'' sponsored by 
Representative Ron Paul, R-TX. During this hearing, witnesses 
from various governmental agencies testified about their need 
to use Social Security numbers as a single identifier.
    Charlotte Twight, a professor at Boise State University, 
testified about the potential risk associated with Federal 
agencies' use of these numbers. Ms. Twight stated that Social 
Security numbers are be used to obtain employment information, 
and health and financial status. In fact, she said, Social 
Security number is the identification number of choice for a 
vast array of Government records.
11. Creating an Office of Management.
    a. Summary.--Year after year, Congress has received reports 
that billions of tax dollars have been lost to waste, fraud and 
misuse. Last year, the Department of Agriculture's Food and 
Nutrition Service over-issued at least $193 million in food 
stamp benefits, and the Health Care Financing Administration 
paid out $13.5 billion in improper payments in its Medicare 
fee-for-service program. The agency cannot even estimate the 
amount of improper payments it may have made in its $108 
billion Medicaid program--nor can anyone else, including the 
General Accounting Office. The Department of Defense continues 
to overpay its contractors, and, similarly, the full extent of 
those overpayments is unknown.
    Another costly example of this serious lapse was the 
Federal Government's belated effort to prepare its critical 
computer systems for the date change at the end of the century. 
The effort was successful, but far more expensive than it would 
have been if Federal departments and agencies had begun the 
process years earlier. That management failure cost taxpayers 
$8.4 billion.
    Management experts agree that the management capacity of 
the Office of Management and Budget has steadily declined to 
the point that it barely exists, largely because of the 
agency's preoccupation with budget pressures. As one witness 
noted, ``Whether by intention or neglect, recent Presidents 
have, arguably, been ineffective managers, and the negative 
results have been cumulative.''
    b. Benefits.--Creating an independent Office of Management 
within the Executive Office of the President would greatly 
strengthen the management capacity of the President in carrying 
out his constitutional responsibility as Chief Executive. Such 
an office would plan and implement management reforms, help the 
President execute new legislation and policies, and provide the 
President and Congress with early warnings of emerging 
problems, potentially saving taxpayers billions of dollars.
    c. Hearings.--The subcommittee held two hearings on this 
issue in the 106th Congress.
    (1) ``To Establish an Office of Management in the Executive 
Office of the President,'' February 4, 1999.
    (2) ``Oversight Hearing on the Office of Management and 
Budget: Is OMB Fulfilling Its Mission?'' April 7, 2000.
12. Oversight of Information Technology in the Federal Government.
    a. Summary.--During the subcommittee's oversight of the 
year 2000 computer challenge, witnesses testified that the 
belated and rushed effort to prepare critical Government 
computer systems for the January 1st deadline may have 
inadvertently allowed these systems to become more vulnerable 
to unauthorized invasions. This governmentwide exercise to 
prepare computers for Y2K highlighted the computer security 
risks confronting Federal departments and agencies.
    Federal agencies increasingly rely on computers and 
electronic data to perform functions that are essential to the 
national welfare and directly affect the lives of millions of 
individuals. However, the same factors that benefit Federal 
operations--speed and accessibility--also make it possible for 
individuals and organizations to interrupt or eavesdrop on 
those operations from remote locations for purposes of fraud, 
sabotage, and other malicious or mischievous intents. Threats 
of these cyber attacks are increasing because the number of 
individuals with computer skills is increasing, and intrusion 
or ``hacking'' techniques have become readily accessible 
through various media, including the Internet itself. 
Inadvertent errors by authorized computer users and even 
natural disasters can further lead to negative consequences 
when computer information is poorly protected. In addition, the 
subcommittee examined the government's use of information 
technology in providing online services, whether the Government 
needs a Federal CIO agency efforts to update technology, and 
emerging technologies and their potential adaptation to improve 
the delivery of Government services and the Government's move 
toward offering more online services.
    b. Benefits.--Because of the Federal Government's 
increasing reliance on computer technology, it is imperative 
that Government systems are protected from unauthorized 
invasions by those seeking privileged information or seeking to 
disrupt vital Government services. The subcommittee's oversight 
hearings and first governmentwide report card on computer 
security focused attention on the significant vulnerabilities 
that exist within agency computer networks. Several agencies, 
most notably the Department of Veterans Affairs, began 
instituting new agencywide computer security programs shortly 
after the report card was issued on September 11, 2000. As the 
Government increases its online services to the public, it must 
guarantee to citizens that the information they provide will be 
properly protected.
    In the aftermath of the ``denial of service'' attacks which 
rendered Internet sites such as ``Yahoo!,'' ``Amazon.com,'' and 
``Ebay'' inaccessible for several hours, the subcommittee began 
a series of hearings related to computer security.
    c. Hearings.--(1) ``Computer Security: Are We Prepared for 
Cyber-War?,'' March 9, 2000. The first hearing, on March 9, 
2000, focused on raising awareness of the issue and examining 
the Federal Government's efforts to protect against and detect 
cyberspace attacks on Federal computer systems and the Nation's 
critical infrastructure.
    In addition to emphasizing the increasing threat posed by 
connecting to the Internet, several witnesses noted that as 
technology is becoming more widely distributed among Federal 
agencies, system administration and management functions often 
fall to people who do not have the training, skills, or 
resources to operate the system securely. As a result, John 
Gilligan, Chief Information Officer for the Department of 
Energy, said there are ``no brainer security weaknesses,'' such 
as system administrators using easily guessed passwords or not 
implementing the fixes provided for known software 
vulnerabilities.
    Finally, James Adams, the Chief Executive Officer of 
iDEFENSE, described the Federal Government's lack of clear 
leadership or coherent strategy for responding to the cyber-
attack threat. As a result, efforts are being duplicated, 
wasting billions of taxpayer dollars, he said.
    (2) ``Enhancing Computer Security: What Tools Work Best?,'' 
March 29, 2000.
    Financial audits of executive branch departments and 
agencies continue to disclose serious security weaknesses in 
their information technology systems. These weaknesses make 
Federal computer systems vulnerable to computer attacks, 
increasing the risk of losing billions of dollars in Federal 
assets, inappropriate disclosure of vast amounts of sensitive 
data, and disruptions to critical computer-based operations.
    The subcommittee held this second hearing to raise 
awareness of existing tools and techniques that organizations 
can use to arm themselves against computer attacks and, 
hopefully, mitigate hacker intrusions. For example, several no- 
or low-cost steps exist, such as rigorous ``password'' 
techniques (e.g., using alphanumeric, case-sensitive passwords) 
or prohibiting mass electronic mail distributions, which can 
clog computers. In addition, tools such as encryption (a.k.a., 
``public key infrastructure'') and biometrics should be used to 
protect especially sensitive Government data.
    In testimony, Jack Brock of the General Accounting Office 
described several procedures that could immediately improve 
agencies' computer security, including increasing security 
awareness at all levels of the organization, testing existing 
controls, and implementing computer software patches that fix 
known vulnerabilities. Mr. Brock stressed that a good computer 
security program begins by assessing the risks then building 
controls and policies based on that assessment. David B. 
Nelson, NASA's Deputy Chief Information Officer, emphasized the 
need for appropriate computer security spending and illustrated 
that this amount appears to be roughly 2 percent of an 
organization's information technology budget. He also 
underscored the importance of effective security training and 
tools to meet the challenge of the evolving security universe.
    Paul Collier of Identicator Solutions described positive 
user authentication as the greatest challenge in controlling 
access to computers and information. In particular, he noted 
the strength of biometrics in the authentication process, that 
is, the use of a quantitative measurement of a unique human 
attribute or behavioral characteristic, such as fingerprints, 
face, voice, or iris pattern. He demonstrated two of the 
products currently available--a computer workstation that uses 
both a smart card reader and a fingerprint scanner as part of a 
user log-in process, and a computer that has a built-in 
fingerprint scanner, which replaces a password.
    (3) ``H.R. 4246, the Cyber Security Information Act of 
2000: An Examination of Issues Involving Public-Private 
Partnerships for Critical Infrastructures,'' June 22, 2000.
    At this hearing, the subcommittee examined H.R. 4246, the 
``Cyber Security Information Act of 2000'' and the challenges 
of building public-private partnerships to address critical 
infrastructure security.
    The critical infrastructure of the United States is largely 
owned and operated by the private sector. As described by the 
President's National Plan for Information Systems Protection 
Version 1.0 issued in January 2000, the critical infrastructure 
denotes facilities or services so vital to the Nation or its 
economy that their disruption, incapacity, or destruction would 
have a debilitating impact on the defense, security, long-term 
economic prosperity, or health or safety of the United States. 
The critical infrastructure is composed of the financial 
services, telecommunications, information technology, 
transportation, water systems, emergency services, electric 
power, gas and oil sectors in private industry as well as the 
national defense, law enforcement and international security 
sectors within the Government. Traditionally, these sectors 
operated largely independently of one another and coordinated 
with Government to protect themselves against threats posed by 
traditional warfare. With the many advances in information 
technology, many of the Nation's critical infrastructure 
sectors are linked to one another, which increases their 
vulnerability to cyber threats. Technology interconnectivity 
increases the risk that a problem affecting one system will 
also affect other connected systems.
    Both Presidential Decision Directive 63 [PDD-63] issued in 
May 1998 and the President's National Plan call on the 
legislative branch to build the necessary framework to 
encourage information sharing to address cyber-security threats 
to the Nation's critical infrastructure. The President has 
called for the creation of Information Sharing and Analysis 
Centers [ISACs] for each critical infrastructure sector that 
will be headed by the appropriate Federal agency or entity, and 
a member from its private sector counterpart. For instance, the 
Department of the Treasury is running the first ISAC for the 
financial services industry in partnership with Citigroup. Many 
in the private sector have expressed strong support for this 
model but have also expressed concerns about voluntarily 
sharing information with the Government and the unintended 
consequences they could face for acting in good faith. 
Specifically, there has been concern that industry could 
potentially face antitrust violations for sharing information 
with other industry partners, have their shared information be 
subject to the Freedom of Information Act, or face potential 
liability concerns for information shared in good faith. H.R. 
4246, introduced by Representative Tom Davis, R-VA, addressed 
those concerns.
    In response to the findings of Presidential Decision 
Directive 63 and the President's National Plan, the Cyber 
Security Information Act aimed to encourage the sharing of 
cyber security information by the private sector with the 
public sector (i.e., the Federal Government) in order to 
protect the Nation's critical infrastructure. To facilitate 
this voluntary arrangement, the bill sought to promote the 
secure disclosure and protected exchange of information related 
to cyber security; to establish uniform legal principles in 
regard to those information disclosures and exchanges; to 
assist private industry and Government to effectively and 
rapidly respond to cyber security problems; to protect 
legitimate users of cyber networks and systems; and to protect 
the privacy and confidence of shared information.
    The subcommittee examined the following issues at the 
hearing.
     Current efforts to address threats to critical 
infrastructure, including an analysis of the most vulnerable 
sectors;
     Public versus private efforts to implement 
critical infrastructure protections;
     Current regulatory and statutory limitations to 
the successful establishment of public-private partnerships to 
address critical infrastructure vulnerabilities;
     Existence of overlapping Government policies on 
critical infrastructure hindering the ability of the Government 
to work with the private sector;
     Recommendations for efforts by Government to 
improve information security concerns;
     Recommendations for improving information sharing 
and analysis within the private sector and with the Government.
    (4) ``Computer Security: Cyber Attacks--A War without 
Borders,'' July 26, 2000.
    In addition to computer security risks within the Federal 
Government, the subcommittee examined international risks. On 
July 26, 2000, the subcommittee, with the assistance of the 
Federal Bureau of Investigation, convened a hearing that 
included--for the first time anywhere--a panel of international 
law enforcement officials to examine how Federal agencies and 
law enforcement can work together in tracking and investigating 
cyber attacks. The panel included representatives from Germany, 
Israel, the Philippines, Sweden and Latvia. Each member of the 
panel testified about his country's cyber crime capabilities, 
investigations, and ability to cooperate in international 
investigations.
    (5) ``How Vulnerable Are Federal Computers?'' September 11, 
2000.
    On September 11, 2000, the subcommittee held its final 
computer security hearing in the 106th Congress and issued its 
first report card on computer security efforts at executive 
branch agencies of the Federal Government. This report card 
graded agencies on the quality and implementation of their 
computer security policies and procedures. The grades were 
based on information provided by the agencies to the 
subcommittee, as well as on the results of computer security 
audit work performed by the GAO and agency Inspectors General.
    The subcommittee found that significant security weaknesses 
exist in the vast majority of the 24 major executive branch 
agencies. Overall, the Government received an average grade of 
``D-minus,'' with seven agencies receiving failing grades of 
``F,'' and six agencies with a nearly failing grade of ``D.'' 
Four agencies received a grade of ``Incomplete'' because there 
was insufficient audit work to validate the self-reported 
information provided to the subcommittee. Only two agencies 
received the highest grade given on the report card, a ``B'': 
the Social Security Administration and the National Science 
Foundation. Not surprisingly, these two agencies had also done 
well in their Y2K preparations.
    Strong congressional oversight played a significant role in 
the Federal Government's successful response to the year 2000 
problem by holding agencies accountable for fixing their 
computer systems and by increasing public awareness of the 
problem. In particular, hearings by the Subcommittee on 
Government Management, Information, and Technology and its 
periodic ``Y2K report card,'' which graded agencies on their 
progress, helped focus management attention and motivated them 
to resolve the problem. This same intensive congressional 
oversight is needed to meet the computer security challenge.
    OMB and agency witnesses acknowledged the need for improved 
computer security as indicated by the report card, and 
highlighted their accomplishments and initiatives currently 
underway. However, several, including John Spotilla from the 
OMB and John Gilligan from the Department of Energy, cited the 
need for adequate funding, and noted that individual agency 
budget requests for fiscal year 2001 include increases for 
computer security. These requests also include increases for 
crosscutting initiatives such as establishing an expert 
security review team at the National Institute of Standards and 
Technology and establishing scholarships so that Federal 
agencies can bolster their supply of personnel with computer 
security expertise. Chairman Horn noted that some security 
measures do not require additional funding, such as regularly 
changing passwords, safeguarding equipment, and turning off 
computers when they are not being used.
    (6) ``The Performance of Federal CIOs: How Do They Compare 
With The Private Sector?,'' March 24, 2000.
    The efficient, effective, and innovative use of information 
technology [IT] requires a level of leadership and focus that 
goes beyond that of a typical technical support function. To 
provide this leadership, in 1996, the Congress enacted the 
Clinger-Cohen Act mandating the chief information officer [CIO] 
position in executive branch departments and agencies. Nearly 
all of the major executive branch agencies have appointed CIOs, 
and many have taken positive steps toward implementing 
important information management processes. However, to reap 
the full benefits of information management reform, Federal 
agencies must fully utilize the potential of CIOs as 
information management leaders and active participants in the 
development of their agency's strategic plans and policies.
    To assess the effectiveness of Federal CIOs, the 
subcommittee held this hearing to compare and contrast them 
with other public- and private-sector counterparts. In 
particular, the subcommittee highlighted the General Accounting 
Office's new executive guide entitled, ``Maximizing the Success 
of Chief Information Officers: Learning From Leading 
Organizations'' (GAO/AIMD-00-83, March 2000) to provide a 
management comparison of leading private sector practices and 
the practices of Federal CIOs.
    Testimony by David McClure of GAO emphasized that private 
sector practices show CIOs must have top executive support, as 
well as working partnerships with the business side of the 
organization and the assistance of skilled and motivated 
people. Jim Flyzik, the Treasury CIO and vice-chair of the 
Federal CIO Council, pointed out that most business decisions 
involve information technology. Thus, the CIO should be 
positioned at the table to work as a senior management team 
with the chief executive officer, the chief operating officer, 
and the chief financial officer.
    Other witnesses representing State and private sector CIOs 
agreed with the importance of the practices discussed by Mr. 
McClure and Mr. Flyzik.
    Computer issues such as the year 2000 computer problem and 
computer security, and improving public access to information 
led the subcommittee to consider a more fundamental issue--the 
effectiveness of the Government's management of information 
technology. The efficient, effective, and innovative use of 
information technology [IT] requires a level of leadership and 
focus that goes beyond that of a typical technical support 
function. Congress recognized the need for greater leadership 
in IT management when it enacted the Clinger-Cohen Act in 1996, 
which mandated the Chief Information Officer [CIO] position in 
executive branch departments and agencies. This act, as well as 
other laws, defines general CIO responsibilities.
    Nearly all of the major executive branch agencies have 
appointed CIOs, and many have taken positive steps toward 
implementing important information management processes. To 
reap the full benefits of information management reform, 
Federal agencies must utilize the potential of CIOs as 
information management leaders and active participants in the 
development of the agency's strategic plans and policies.
    (7) ``Establishing a Federal CIO: Information Technology 
Management and Assurance within the Federal Government,'' 
September 12, 2000.
    On September 12, 2000, the subcommittee held a hearing to 
consider a number of issues relating to the question of whether 
the Federal Government needs a governmentwide Chief Information 
Officer. Among the issues discussed at the hearing, the 
subcommittee examined whether a Federal CIO position should be 
created, and if so, how that position could assist the 
Government in managing information technology. In addition, 
witnesses discussed issues such as where a Federal CIO might be 
located within the Government, how the position should be 
empowered, and how its relationship with agency CIOs and the 
Federal CIO Council should be defined. The subcommittee also 
examined how the creation of such a position would affect the 
roles and responsibilities of the agency CIOs and the current 
management structure in Office of Management and Budget.
    (8) ``Emerging Technologies: Where is the Federal 
Government on the High-Tech Curve?'' Moffett Field, CA, April 
24, 2000.
    From longer-lasting batteries to new software applications, 
the Federal Government can greatly benefit from today's 
technological advances. This hearing explored the emerging 
technologies being developed in the public- and private-sectors 
and how those technologies could benefit Government operations.
    Innovation has always been a major force in the U.S. 
economy, but its character and pace have changed dramatically 
in recent years.
    The Federal Government has been on the cutting edge of 
technology for nearly 50 years. Now. However, the private 
sector has taken the lead in developing new technologies such 
the laser, fiber optics, satellites, and ever-improving 
computer capabilities. These innovations and technological 
advancements have been the source of much of the Nation's 
economic growth and improved standard of living. Given the 
public's growing dependence on technology, it is important to 
consider the role of the Federal Government in this economic 
process.
    The Government sets public policies in key areas, such as 
education, research and development, electronic-commerce, 
business regulation and law, and intellectual property rights 
that could have profound effects on the continuing development 
of emerging technologies. These developments are, in part, the 
result of firms pursuing profits within an increasingly 
competitive environment. The Federal Government is now re-
doubling its efforts to stay on the cutting-edge of emerging 
technologies.
    This hearing examined innovative Government-sponsored 
programs such as In-Q-Tel, a nonprofit corporation chartered by 
the U.S. Central Intelligence Agency to focus on leading-edge 
information technology advancements that will benefit American 
citizens, corporations, and the Federal Government. Other key 
public- and private-sector witnesses, including NASA, provided 
examples of the Federal Government's role in developing and 
using emerging technologies.
    (9) ``H.R. 4401, the Health Care Infrastructure Act of 
2000,'' July 11, 2000.
    The Federal Government currently provides insurance 
coverage to millions of workers and retirees under a wide array 
of complex programs. H.R. 4401, the ``Health Care 
Infrastructure Act of 2000,'' sought to create a health care 
information architecture that could ultimately be used by all 
of the Federal Government's insurance plans. As proposed, the 
bill would set up a commission to oversee the design, creation, 
and implementation of a system to handle Part B of the Medicare 
program and the Federal Employees Health Benefits Program.
    The overriding goal of this proposed legislation was to 
streamline and simplify these programs for both beneficiaries 
and their health care providers, while ensuring beneficiaries 
that the privacy of their medical records is protected.
    At the same time, the measure intended to curb the 
Government's financial losses due to erroneous Medicare 
payments. Last year, the Inspector General at the Department of 
Health and Human Services estimated that the Medicare fee-for-
service program lost $13.5 billion due to erroneous payments. 
This legislation sought to enhance the internal controls that 
allowed these errors to occur at the Health Care Financing 
Administration, which administers the program. Hearing 
witnesses, which included the Health Care Financing 
Administration, the General Accounting Office, and 
representatives from Medicare health care providers and 
information technology providers, testified nearly unanimously 
that the legislation, as proposed, would likely exacerbate the 
agency's problem of erroneous payments, not resolve it. H.R. 
4401, was ultimately rewritten and reintroduced by Chairman 
Steve Horn as H.R. 5622, ``the Medicare Infrastructure Act of 
2000.''
    (10) ``FirstGov.Gov: Is it a Good Idea?,'' October 2, 2000.
    On September 22, 2000, the Federal Government launched 
FirstGov.gov--a Government-managed Internet portal that serves 
as a front door to millions of Government Web pages, 24-hours-
a-day, 7-days-a-week. FirstGov allows users to browse through a 
wealth of information--everything from conducting research at 
the Library of Congress to tracking a NASA space mission. The 
site also allows users to conduct business online, such as 
applying for student loans or Government grants, tracking 
Social Security benefits or comparing Medicare options. The 
subcommittee held this hearing to examine the FirstGov concept 
and strategy, as well as concerns that have been raised 
regarding long-term project funding, privacy protection, and 
the potential use of the site as one-stop access for computer 
hackers.
    Without exception, witnesses applauded FirstGov as an 
important first step in bringing electronic Government to the 
public. GSA Administrator David Barram acknowledged that this 
was made possible largely by Dr. Brewer who founded the 
nonprofit Federal Search Foundation (Fed-Search) to develop the 
FirstGov search engine and database of Federal Web pages at no 
cost to the Government--a gift that Dr. Brewer estimated would 
cost from $5 million to $10 million over the next 2 years. 
Responding to concerns that Fed-Search may have a competitive 
advantage, Dr. Brewer said that after this 2 to 3 year period, 
Fed-Search will turn over its servers and knowledge base to the 
Government, and the foundation will cease to exist. He also 
emphasized that the Government has no obligation to continue to 
use this search engine database.
    Acknowledging the challenge of creating FirstGov in just 90 
days, witnesses raised a number of concerns. In particular, 
they said, further clarification and public debate was needed 
on a plan to let public and private Web portals become FirstGov 
``partners'' to give their customers access to FirstGov search 
results. David McClure of the GAO noted that good security 
measures are in place for the FirstGov site, but a 
comprehensive security plan is needed, and security measures 
provided by different contractors should be coordinated. In 
addition, risk assessments of the site need to be completed and 
independently validated and verified. Patrice McDermott of OMB 
Watch noted that while FirstGov's privacy notice is very clear 
and useful, strong leadership is needed to ensure that privacy 
protections are uniformly applied by individual agencies. Other 
improvements were suggested, including increasing the relevance 
of search results to make it more useful, and refining the 
directory of topics provided on the FirstGov Web page.
    (11) ``Government Online: Strategies and Challenges,'' May 
22, 2000.
    The subcommittee convened this field hearing in Herndon, 
VA, to consider strategies and challenges the Government must 
consider to make information and services accessible to the 
public via the Internet. Electronic Government is an exciting 
and dynamic issue as new and emerging forms of information 
technology are transforming how citizens and businesses 
interact with their Government. The transformation to an 
electronic Federal Government, or e-government, can improve 
services, enhance delivery schedules and reduce transaction 
costs. Projections are that by the end of the 2001 fiscal year, 
nearly 40 million Americans will transact business with the 
Government electronically. And as more Americans gain Internet 
access, they, too, will expect to conduct Government 
transactions online. However, citizens and businesses must be 
confident that their online communications with the Government 
are secure and their privacy is protected. At the May hearing, 
the subcommittee heard from witnesses representing both Federal 
and non-Federal entities who discussed the strategies and 
challenges of e-government.
    The Government Paperwork Elimination Act [GPEA], Public Law 
105-277, signed into law on October 21, 1998, gives Federal 
agencies until October 2003, to provide citizens the option of 
conducting business with the Government electronically. The law 
provides that electronic records and their related electronic 
signatures are not to be denied legal effect, validity, or 
enforceability merely because they are in electronic form. The 
GPEA is an important tool to improve customer service and 
governmental efficiency through the use of information 
technology.
    Many Federal agencies have developed ``one-stop-shopping'' 
access to information on their agency Internet sites. However, 
witnesses at the hearing testified that there has not been a 
sufficient effort to provide Government information by the 
category of information and services--rather than by agency--in 
a way that meets people's needs. As public awareness and 
Internet use increases, the demand for online Government 
interaction and a simplified, standardized way to access 
Government information and services become increasingly 
important. At the same time, the public must have confidence 
that online communications with the Government are secure.
13. General Oversight Hearings.
    a. Summary.--As a subcommittee of the Committee on 
Government Reform, the Subcommittee on Government Management, 
Information, and Technology is responsible for overseeing the 
overall economy, efficiency and management of Government 
operations and activities. During the 106th Congress, the 
subcommittee examined management practices at the Customs 
Office, the General Accounting Office, and the Federal 
Communications Commission. In addition, the subcommittee 
examined innovative approaches to governing being used by 
several State and local agencies.
    b. Benefits.--Congressional hearings examining management 
practices within Federal departments and agencies enlighten the 
public and highlight many challenges and solutions that could 
be applied by other governing agencies.
    c. Hearings.--``Management Challenges at the U.S. Customs 
Office,'' April 20, 2000; ``Oversight Hearing on the U.S. 
General Accounting Office,'' July 18, 2000; ``Innovations in 
American Government: Are There Lessons To Be Learned?'' 
September 6, 2000; and ``Oversight of the Management Practices 
at the Federal Communications Commission: The Chairman 
Reports,'' October 6, 2000.

    Subcommittee on National Economic Growth, Natural Resources and 
                           Regulatory Affairs

                    Hon. David M. McIntosh, Chairman

1. Investigation of Government-Wide Paperwork Reduction Initiatives and 
        Accomplishments and Leadership in Paperwork Reduction by the 
        Office of Management and Budget's Office of Information and 
        Regulatory Affairs.
    a. Summary.--The subcommittee serves both as the 
authorizing and oversight subcommittee for the Office of 
Management and Budget's [OMB's] Office of Information and 
Regulatory Affairs [OIRA]. In 1999-2000, the subcommittee sent 
16 oversight letters to OMB relating to OIRA's 
responsibilities. Twelve letters (six in 1999 and six in 2000) 
addressed OMB's role in identifying specific paperwork 
reduction initiatives and actual paperwork reduction 
accomplishments across the government and OIRA's activities 
under the Paperwork Reduction Act of 1995 [PRA]. Four letters 
(all in 1999) addressed OMB's statutorily-required guidance to 
the agencies to ensure full compliance with the Congressional 
Review Act [CRA]. (See the next section for a discussion of the 
CRA).
    Additionally, the subcommittee sent two letters to the Vice 
President about government-wide paperwork reduction initiatives 
and accomplishments because of his role in the National 
Partnership for Reinventing Government [NPR] and as Chair of 
the President's Management Council and because regulatory 
Executive Order No. 12866 provides that the Vice President 
``shall coordinate the development and presentation of 
recommendations.''
    Last, the subcommittee twice sent letters to 28 Federal 
agencies. On December 6, 1999, the subcommittee asked the 
agencies to identify any substantive changes (e.g., deleted 
questions, reduced frequency of reporting, introduced a 
threshold to exempt small entities from reporting, et cetera) 
made by OMB to the agency's paperwork submissions and any 
paperwork reduction candidates added by OMB for the 6-month 
period from July 1 to December 31, 1999. The agencies reported 
a mere 1,915 hours of paperwork reduced by OMB out of an 
inventory of 7.3 billion hours, and no paperwork candidates 
added by OMB from the 7,563 paperwork dockets in OMB's 
paperwork inventory.
    On April 14, 2000, in response to witness claims at the 
subcommittee's April 12th hearing that some paperwork burden 
could be reduced by Congress' amending existing laws, 
Subcommittee Chairman McIntosh and Ranking Member Kucinich sent 
letters to 28 departments and agencies asking for 
recommendations for changes in specific laws which impose 
unnecessary or overly burdensome paperwork and which are good 
candidates for elimination or reduction. Interestingly, 
agencies submitted very few specific recommendations.
    In addition, the subcommittee held two hearings (on April 
15, 1999 and April 12, 2000) about specific paperwork reduction 
initiatives and actual paperwork reduction accomplishments, as 
required by the Treasury and General Government Appropriations 
Act for 1999. The first hearing revealed few Clinton-Gore 
administration paperwork reduction initiatives for 1999 and 
2000 and almost none to reduce tax paperwork, which accounts 
for nearly 80 percent of all government paperwork. The second 
hearing revealed basically the same abysmal record on paperwork 
reduction. The record shows a minimal number of actual 
paperwork reduction accomplishments and a minimal number of 
specific paperwork reduction initiatives in the 
administration's last 2 years. The two hearings also revealed 
basically no involvement by the Vice President in paperwork 
reduction, even though he heads the administration's 
Reinventing Government effort, and OMB's mis-management of the 
paperwork burden imposed on Americans.
    The subcommittee's oversight revealed that OIRA failed to 
satisfactorily perform its statutory responsibilities for 
paperwork reduction and the CRA.
            Paperwork Reduction
    The PRA was principally intended to ``minimize the 
paperwork burden for individuals, small businesses, educational 
and nonprofit institutions, Federal contractors, State, local 
and tribal governments, and persons resulting from the 
collection of information by or for the Federal Government'' 
(44 U.S.C. Sec. 3501). OIRA is required to review all new and 
revised paperwork requirements proposed by the agencies on the 
public before they can take effect. OIRA's reviews resulted in 
the government's paperwork burden on the public not meeting any 
of the statutory paperwork reduction goals in the last several 
years. The subcommittee believes that this noncompliance is 
very problematic. The 7 billion hours of paperwork burden 
experienced by the American people equates to $185 billion 
annually in compliance costs, which is about equal to the taxes 
paid to the Internal Revenue Service [IRS] by all businesses 
each year.
    As a result of the subcommittee's investigation and 
analysis in 1998, the Treasury and General Government 
Appropriations Act for 1999 included a statutory requirement 
that OMB submit a report by March 31, 1999 that identifies 
specific paperwork reduction accomplishments expected, 
constituting annual 5 percent reductions in paperwork expected 
in fiscal year 1999 and fiscal year 2000. The accompanying 
report states, ``The conferees have been assured that OMB will 
strictly adhere to the statutory requirements included in the 
bill on Paperwork Reduction and the Congressional Review Act. 
The conferees will monitor OMB's compliance with these 
requirements carefully.''
    On March 30, 1999, OMB asked for congressional comments by 
April 2nd on its draft report to Congress entitled, 
``Information Collection Budget of the United States 
Government--Fiscal Year 1999.'' The next day, the subcommittee 
commented that the:

        draft report is not responsive to the statutory 
        requirement in several ways. First, OMB estimates a 2.6 
        percent increase in paperwork in fiscal year (FY) 1999 
        and a 2.3 percent increase in paperwork in FY 2000 
        instead of five percent decreases in each FY. This 
        expectation follows three successive years of increases 
        in paperwork, instead of decreases in paperwork. 
        Second, the draft report only identifies some specific 
        expected reductions. . . . This aspect of the draft 
        report is not acceptable or responsive to the 
        Congressional requirement.

    In fact, 5 of the 14 Cabinet departments--Energy, Health 
and Human Services [HHS], Housing and Urban Development, State, 
and Veterans Affairs--and the IRS were unable to identify any 
paperwork reduction initiatives in 1 of the 2 years. IRS 
accounts for nearly 80 percent of the government-wide paperwork 
burden on Americans. The IRS failed to initiate any specific 
actions to reduce paperwork burdens during 1999 and 2000 for 
any of its 671 tax forms and recordkeeping requirements, which 
impose 5.8 billion hours of burden on the American public.
    Additionally, OMB has mis-managed the paperwork burden 
imposed on Americans. OMB is supposed to be the Federal 
Government's watchdog agency, guarding the public against 
waste, fraud, and abuse. Yet OMB has failed to push the IRS--
and other Federal agencies--to cut existing paperwork burdens 
on taxpayers. Worse, the General Accounting Office [GAO] 
confirmed that OMB misled the American people, providing a 
falsely inflated picture of the Clinton administration's 
paperwork reduction accomplishments.
    From 1998 to 2000, the subcommittee sent 17 oversight 
letters to OMB on the PRA (5 in 1998, 6 in 1999, and 6 in 
2000). On March 3, 1999, in response to the subcommittee's 
oversight letters, OMB finally acknowledged that its recent 
annual reports to Congress had falsely claimed many paperwork 
reduction accomplishments. Instead of working to achieve actual 
paperwork reductions, OMB was claiming paperwork successes for 
paperwork still in use but without legal authorization, as if 
forms not legally authorized but still in use do not exist. 
OMB's position is like saying that, if the Government continues 
to send you tax forms to complete after their authorization has 
expired, your tax burden has somehow gone down, even though you 
still fill out the forms and still pay your taxes. To justify 
this fraud, OMB illogically claimed that its computer ``data 
base tracks agency actions,'' not ``what agencies may be doing 
that they do not report'' to OMB.
    In fact, OMB's Information Collection Budget [ICB] report 
for fiscal year 1999 identified 872 violations of law in fiscal 
year 1998 where agencies levied unauthorized paperwork burdens 
on the American people--including over 100 violations each by 
the Departments of Agriculture, HHS, and Veterans Affairs. GAO 
says that there is a ``troubling disregard'' by the agencies 
for the requirements of the PRA. GAO says ``[a]s disconcerting 
as these violations are, even more troubling is that [OMB] 
reflects the hours associated with unauthorized information 
collections ongoing at the end of the fiscal year as burden 
reductions.'' The subcommittee believes that OMB has an 
obligation to Congress and the American people to accurately 
report paperwork burdens imposed on the public and that OMB 
must immediately take necessary steps to stop these violations 
of law. [OMB's ICB report for fiscal year 2000 revealed at 
least 710 violations of law in fiscal year 1999.]
    Besides OMB's falsely-claimed success stories, in the 
subcommittee's audit of OMB's dockets for other claimed 
paperwork reduction accomplishments--which each claimed 
reductions of 500,000 or more hours of burden on the public--
the subcommittee found that many paperwork dockets were missing 
or substantially incomplete. As a consequence, it was 
impossible to determine whether other claimed reductions were, 
in fact, realized. This failure by OMB to maintain complete and 
accurate files describing the nature of paperwork burden 
reductions, at best, conceals the true nature and extent of 
paperwork reductions. At worst, it misleads Congress and the 
American people into believing that the paperwork burden is 
being reduced when it is not. The subcommittee found other 
evidence of OMB mis-management of the paperwork imposed on the 
public. For example, many paperwork requirements found to be in 
use without current OMB approval 1 or 2 years ago are, 
incredibly, still in use without current OMB approval.
    The PRA has a ``Public Protection'' section (44 U.S.C. 
Sec. 3512), which provides that the public can ignore without 
penalty an unauthorized paperwork request. Both in 1998 and 
1999, the subcommittee made several recommendations to OMB to 
help the public know when paperwork requests by the Federal 
Government are no longer valid, and when paperwork has actually 
been reduced. For example, the subcommittee asked OMB to 
publish a monthly Notice in the Federal Register that can be 
widely circulated by interest groups to the affected public. 
The Notice would indicate paperwork without current OMB 
approval and describe specific actions taken by the executive 
branch to achieve each major program paperwork burden 
reduction.
    After the subcommittee's April 15, 1999 PRA hearing, in a 
April 20th letter, Subcommittee Chairman McIntosh asked the 
Vice President to clarify his involvement in government-wide 
paperwork reduction since ``it appears that, when it comes to 
Federal paperwork, what should be down is actually going up and 
up.''
    To supplement OMB's May 7th response to questions asked 
during the April 15th hearing, on May 11th, the subcommittee 
asked OMB to provide a chart for the hearing record showing the 
number of substantive changes made by OMB to each department's 
and agency's paperwork budget submission and the number of 
additional paperwork reduction candidates independently 
identified by OMB for each department and agency. Surprisingly, 
OMB was unable to provide the requested information, stating on 
June 4th, ``There is no ongoing record of the individual 
exchanges [between OMB and the agencies].'' In response, the 
subcommittee questioned OMB on June 9th, stating that:

        If there is no record of individual exchanges between 
        OMB's desk officers and the agencies which OMB 
        oversees, how does OMB management evaluate the 
        performance of individual OMB desk officers and the 
        agencies' responsiveness to OMB's specific 
        recommendations? Moreover, if there is ``no record,'' 
        how can Congress know--and why should Congress assume--
        that OMB is doing any paperwork reduction oversight at 
        all?

    Further, in its June 9th letter, the subcommittee requested 
that, starting July 1, 1999, OMB keep detailed and complete 
record of all substantive changes to agency paperwork budget 
submissions made by OMB and all additional paperwork reduction 
candidates independently identified by OMB. On October 13th, 
the subcommittee asked OMB to provide a chart identifying any 
substantive changes to an agency paperwork submission made by 
OMB and each additional paperwork reduction candidate 
independently identified by OMB during the July 1st through 
September 30th quarter.
    On November 16th, OMB provided a fraction of the 
information requested in the subcommittee's June 9th and 
October 13th letters. On November 22nd, the subcommittee sent a 
letter to OMB expressing its disagreement with OMB's assertions 
and its dissatisfaction with OMB's response. The subcommittee 
also requested OMB to provide missing information about OMB's 
changes to agencies' proposed and existing paperwork burden.
    On January 7, 2000, i.e., nearly 7 months after the 
subcommittee's June 9, 1999 request for detailed recordkeeping, 
OMB officially refused to keep detailed records of its role in 
paperwork reduction. OMB stated, ``Keeping track of substantive 
changes would divert OIRA staff from their substantive work.'' 
Also, OMB refused to provide other specifically requested 
information, such as its staffing changes, if any, to address 
the IRS paperwork problem uncovered in the April 15, 1999 
hearing. On January 14, 2000, the subcommittee rejected OMB's 
logic and again requested detailed and complete information 
from OMB on its role in paperwork reduction.
    The subcommittee also alerted OMB to its December 6, 1999 
letters to 28 agencies for them to identify any substantive 
changes (e.g., deleted questions, reduced frequency of 
reporting, introduced a threshold to exempt small entities from 
reporting, et cetera) made by OMB to the agency's paperwork 
submissions and any paperwork reduction candidates added by OMB 
for the 6-month period from July 1 to December 31, 1999.
    In its February 24, 2000 reply to the subcommittee's 
January 14th letter, OMB again refused to provide the requested 
information about its role in paperwork reduction. OMB made 
four arguments to attempt to justify its refusal. In its March 
2nd reply, the subcommittee found none of OMB's arguments to be 
convincing.
    First, OMB stated that keeping records ``would be 
expensive.'' This is not true. Adding one data cell to an 
existing computer system (``yes'' or ``no'' if OMB made any 
substantive changes to an agency submission) is easy and not at 
all costly. Additionally, requiring OMB staff to provide a one-
sentence summary on OMB's paperwork docket worksheet describing 
substantive changes made by OMB to an agency submission (e.g., 
deleted questions, reduced frequency of reporting, or 
introduced sampling) would involve nearly no cost. Second, OMB 
stated that keeping records ``would divert them from 
substantive reviews.'' This is not true. Asking OMB staff to 
indicate a ``yes'' or ``no'' and to provide a one-sentence 
summary would require seconds of staff time to provide.
    Third, OMB stated that keeping records ``would be of 
limited extra value.'' This is not true. The subcommittee has 
oversight responsibility for ensuring that OMB is indeed 
focusing on government-wide paperwork reduction 
accomplishments, as required by law. As a consequence, this 
information is essential to justify continued funding for OMB's 
OIRA and to inform Congress of necessary changes to the PRA. 
The subcommittee also expressed its hope that OMB management is 
interested in monitoring (and, thus, documenting) actual 
paperwork reduction results being accomplished by OMB staff.
    Fourth, OMB stated that ``information on changes . . . can 
already be obtained by examining the files.'' This is not true. 
The subcommittee tried to examine the 29 paperwork docket files 
referenced in OMB's November 16, 1999 reply; however, this 
effort was substantially thwarted because of missing files, 
incomplete files, and missing documentation in files. If 
information is already in OMB's files, then OMB has no excuse 
not to assemble it and provide it as the subcommittee 
requested.
    As a consequence, Subcommittee Chairman McIntosh saw no 
choice but to state, ``If we do not receive the requested 
items, we will invoke 2 U.S.C. Sec. 192. Under that section, 
any person who `willfully makes default' when asked in the 
course of a Congressional investigation to `produce papers' or 
`answer any question pertinent to the question under inquiry, 
shall be deemed guilty of a misdemeanor' (emphasis added).''
    In its March 24th reply to the subcommittee's March 2nd 
letter, OMB again refused to provide the simple accountability 
measures requested by the subcommittee, leaving Congress and 
the public in the dark about OIRA's efforts to reduce paperwork 
burdens. OMB stated, ``it is our view that a substantive change 
is `made by OMB' only when OMB exercises its authority to 
disapprove a collection or when an agency withdraws a 
collection during our review.'' On March 27th, the subcommittee 
responded by disagreeing with OMB's view.
    OMB also contended, ``At no time during the PRA's entire 
history have OIRA staff been required to form judgments about 
which agency--the collecting agency or OMB--should be given 
`credit' for each paperwork reduction. Doing so would take away 
from the success of their efforts.'' The subcommittee 
responded, ``that [reasoning] may partly explain why paperwork 
burdens have continued to rise in each of the last few years, 
even though the PRA mandates that such burdens should fall. 
Giving credit where credit is due is a great motivator of human 
effort and initiative. The Clinton-Gore administration's record 
of non-achievement in reducing paperwork burdens is strong 
evidence that OMB's failure to assign ``credit'' has produced a 
system of non-accountability, which is failing taxpayers and 
the regulated public. Such case-by-case determinations are the 
only way for OMB (and Congress) to know who in the paperwork 
reduction process is doing what. It is the only way OMB (and 
Congress) can hold OIRA and the agencies accountable and, thus, 
to motivate real paperwork reduction accomplishments on behalf 
of America's beleaguered taxpayers.
    The subcommittee also responded that, only after it warned 
of legal consequences, did OMB finally provide some readily 
available information. OMB stated, ``We regret not having 
supplied it to you earlier.''
    On April 12, 2000, the subcommittee held a followup hearing 
to its April 15, 1999 hearing, entitled, ``Reinventing 
Paperwork?: The Clinton-Gore Administration's Record on 
Paperwork Reduction.'' The PRA set government-wide paperwork 
reduction goals of 10 or 5 percent per year from 1996 to 2000. 
The hearing revealed that the Clinton-Gore administration has 
increased, not decreased, paperwork in each of these years. The 
hearing also revealed that the agencies, in response to the 
subcommittee's December 6, 1999 letters to them, reported a 
mere 1,915 hours of paperwork reduced by OMB out of an 
inventory of 7.3 billion hours, and no paperwork candidates 
added by OMB from the 7,563 paperwork dockets in OMB's 
paperwork inventory.
    The subcommittee's investigations of OMB for PRA, CRA, and 
global climate change revealed a disturbing pattern of contempt 
for congressional oversight. As a consequence, the subcommittee 
received testimony from an expert in the Congressional Research 
Service [CRS] on options available to Congress when faced with 
agency nonresponsiveness to congressional oversight, including 
subpoena requests for documents and letter requests for 
specific information.
    On April 14, 2000, the subcommittee sent detailed post-
hearing followup questions to OMB about: its passive role in 
paperwork reduction; transfer of some OMB staffing authority to 
IRS for paperwork reduction since OMB continues to have only 
one staff member devoted part-time to work with the IRS on 
burden reduction initiatives even though IRS accounts for 
nearly 80 percent of the total government-wide paperwork burden 
on the public; the most recent substantive changes made in the 
60 most burdensome paperwork requirements (each totaling over 
10 million hours of the public's time, which is equal to 85 
percent of the total government-wide burden on the public); 
OMB's falsely-claimed paperwork reduction accomplishments, 
including at least 872 violations of the PRA in 1998 and at 
least 710 violations of the PRA in 1999; sanctions for 
violations of the PRA; OMB's absence of crosscutting impact 
analyses for small business and for State and local 
governments; and regulatory compliance paperwork.
    On April 14th, in response to witness claims at the 
subcommittee's April 12th hearing that some paperwork burden 
could be reduced by Congress' amending existing laws, 
Subcommittee Chairman McIntosh and Ranking Member Kucinich sent 
letters to 28 departments and agencies asking for 
recommendations for changes in specific laws which impose 
unnecessary or overly burdensome paperwork and which are good 
candidates for elimination or reduction.
    On June 12th, OMB partially replied to the subcommittee's 
April 14th post-hearing followup questions. OMB continued to 
state its illogical and mistaken view that requiring OMB to 
reveal changes made by OMB during the course of its PRA reviews 
``would impair its administration of the PRA.'' As the 
subcommittee noted in four letters to OMB from November 1999 to 
March 2000, revealing changes made by OMB is the only way 
Congress can hold OMB accountable, especially given the 
Clinton-Gore administration's record of non-achievement in 
reducing paperwork burdens. Although OMB replied that it made 
no substantive changes in IRS's proposed ICB submission, OMB 
refused to increase its staffing of only one analyst working 
part-time on IRS paperwork. As a consequence, on June 20th, 
Subcommittee Chairman McIntosh requested that OMB immediately 
increase its staffing devoted to IRS paperwork to at least 
three full-time analysts.
    In reply to the subcommittee's questions about the last 
substantive revisions of each of the top 60 paperwork burdens, 
OMB revealed that the last revision only reduced burden for 11 
of the 60 and some of the reductions were not significant, 
e.g., the Defense Department's reduction of only 26,438 hours 
for a requirement imposing 23,986,320 burden hours.
    OMB submitted nonresponsive answers to other questions. For 
example, instead of responding to the subcommittee's questions 
if OMB has prepared crosscutting analyses of paperwork burdens 
on small businesses and on State and local governments, OMB 
merely provided computerized listings of 316 paperwork dockets 
and 929 paperwork dockets, respectively. In its June 20th 
letter, the subcommittee asked if OMB had analyzed these 
dockets to identify duplications and ensure maximum burden 
reductions in them.
    On July 19th, OMB replied to the subcommittee's June 20th 
letter. OMB continued to refuse the subcommittee's repeated 
requests for OMB to begin disclosing the results of its PRA 
reviews, as of July 1, 2000. On August 1st, Subcommittee 
Chairman McIntosh did not accept OMB's refusal for such 
disclosure and did not accept OMB's refusal to immediately 
increase its staffing devoted to IRS paperwork. Also, 
Subcommittee Chairman McIntosh asked OMB to rethink its refusal 
to indicate the next expected date for substantive revision of 
each of the 60 most burdensome paperwork requirements. Last, 
Subcommittee Chairman McIntosh urged OMB to conduct 
crosscutting analyses of paperwork burdens on small businesses 
and State and local governments, stating that ``Roundtables are 
not a substitute for governmentwide crosscutting analyses.''
    In response to the McIntosh-Kucinich letters to 28 agencies 
asking for recommendations for changes in specific laws which 
impose unnecessary or overly burdensome paperwork, the 
subcommittee received 27 responsive replies (the Department of 
Agriculture failed to provide a responsive reply). Of these 
responses, only HHS (for the Food and Drug Administration 
[FDA]), the Department of Transportation [DOT], the Department 
of the Treasury, the Federal Communications Commission [FCC], 
and the Federal Trade Commission [FTC] were able to identify 
any statutory changes that affected only their jurisdiction and 
which would reduce the public's paperwork burden.
    On July 27th, Subcommittee Chairman McIntosh and Ranking 
Member Kucinich forwarded these proposals to the appropriate 
House committees asking for their input on the advisability of 
making these recommended changes.
    b. Benefits.--OMB revealed a 2.7 percent increase in 
paperwork in fiscal year 1999 and estimated a 2.5 percent 
increase in paperwork in fiscal year 2000, instead of 5 percent 
decreases in each fiscal year. This expectation follows 3 
successive years of increases in paperwork, instead of the 
required decreases in paperwork. The subcommittee's 
investigation and oversight increased pressure on the 
administration to do more to identify specific paperwork 
reduction initiatives and actually reduce paperwork burdens 
imposed on the American public.
    c. Hearings.--A ``Clinton-Gore v. The American Taxpayer,'' 
hearing was held jointly with the Government Reform 
Subcommittee on Government Management, Information, and 
Technology on April 15, 1999. Witnesses included the 
Commissioner of the IRS, GAO, OMB, the Department of 
Agriculture, and private citizens. A ``Reinventing Paperwork?: 
The Clinton-Gore Administration's Record on Paperwork 
Reduction,'' hearing was held on April 12, 2000. Witnesses 
included the Commissioner of the IRS, OMB, GAO, a CRS 
specialist in American law, and private citizens.
2. Investigation of the Office of Management and Budget's Congressional 
        Review Act Guidance and Agency Compliance With the 
        Congressional Review Act.
    a. Summary.--The subcommittee serves both as the 
authorizing and oversight subcommittee for OMB's OIRA. In 1999, 
the subcommittee sent OMB four oversight letters relating to 
OIRA's responsibilities under the Congressional Review Act 
[CRA], including OMB's statutorily-required guidance to the 
agencies to ensure full compliance with CRA.
    The subcommittee continued to review OMB and agency 
compliance with the requirements of the CRA (5 U.S.C. ch. 8), 
finding that agencies continued to fail to report many 
interpretive rules, guidances, and policy statements that fall 
within the CRA's definition of a covered ``rule.'' The 
subcommittee believes that this noncompliance is largely due to 
insufficient implementation guidance from OMB. Under section 
801(a)(1)(A) of the CRA, the Federal agency issuing a rule must 
send a report to Congress, including the text of the rule, a 
summary description of the rule, and the proposed effective 
date. The agency must file such report with Congress ``[b]efore 
a rule can take effect . . .'' (emphasis added) (5 U.S.C. 
Sec. 801(a)(1)(A)). In other words, unless and until an agency 
properly reports a rule, the rule has no legal force or effect. 
Any action the agency takes to promulgate, implement, or 
enforce an unreported rule is legally null and void.
    The CRA broadly defines a rule as any ``agency statement of 
general . . . applicability and future effect designed to 
implement, interpret, or prescribe law or policy . . .'' (5 
U.S.C. Sec. Sec. 804(3) and 551(4)). This definition is not 
limited to ``legislative'' rules subject to the notice and 
comment provisions of the Administrative Procedure Act's [APA] 
section 553. On the contrary, the definition includes any 
interpretive rule or other agency statement used to apply 
existing law or implement policy. The legislative history 
confirms the plain text of the definition: ``Interpretive 
rules, general statements of policy, and analogous agency 
policy guidelines are covered without qualification because 
they meet the definition of a `rule' borrowed from section 551 
of title 5, and are not excluded from the definition of a 
rule'' (Statement of Representative McIntosh, March 28, 1996, 
Congressional Record at H3005).
    OMB failed to perform its responsibilities with respect to 
the CRA. Despite OIRA's obligation under President Clinton's 
Executive order to provide the agencies with guidance on 
compliance with regulatory laws, OIRA has done virtually 
nothing to insure that the agencies are complying with the CRA.
    To encourage OIRA to carry out its responsibilities under 
the CRA, the subcommittee proposed to increase OIRA's fiscal 
year 1998 budget by $200,000, specifically to help with CRA 
implementation and other responsibilities. Congress accepted 
this proposal. Regrettably, $200,000 and 12 months later, OIRA 
showed no signs of improvement. As a result of the 
subcommittee's oversight and analysis, the CRA provision within 
the appropriation for OMB in the Treasury and General 
Government Appropriations Act for 1999 directed OMB to issue 
guidance by March 31, 1999 on certain specific provisions of 
the CRA and a standard new rule reporting form for submissions 
for congressional review under the CRA. The accompanying report 
states, ``The conferees have been assured that OMB will 
strictly adhere to the statutory requirements included in the 
bill on Paperwork Reduction and the Congressional Review Act. 
The conferees will monitor OMB's compliance with these 
requirements carefully.''
    Soon after enactment of the CRA provision, the subcommittee 
reached an understanding with OMB, which was memorialized in a 
September 23, 1998 letter from the subcommittee to OMB and a 
September 24th return letter from OMB to the subcommittee. OMB 
did not share its draft guidance with the subcommittee until 
Friday, March 25, 1999. On Monday, March 29th, the subcommittee 
met with OMB and expressed its view that the draft was not 
responsive to the subcommittee's expectations, the previous 
agreements between the subcommittee and OMB, or congressional 
intent. In a nutshell, OMB was required to provide expanded and 
complete guidance; instead, OMB's draft barely expanded on its 
previous guidance and did not address the key issues which 
needed clarification and expansion.
    Nonetheless, OMB issued its revised guidance the next day 
(March 30th), making only four minor changes in its draft based 
on the subcommittee's comments. On April 1st, the subcommittee 
directed OMB to issue the previously agreed-upon expanded and 
complete guidance by April 30th, including an elaboration of 
the definition of ``rule,'' a discussion of the ``good cause'' 
exemption for a change in the effective date of rules, and a 
discussion of the legal standing, effectiveness, and potential 
for judicial review of rules not submitted for congressional 
review under the CRA.
    Throughout 1999, despite four letters from the subcommittee 
to OMB, OMB continued to resist issuing additional and complete 
CRA guidance to the agencies. After these repeated and 
unsuccessful requests to OMB, on October 8, 1999, the 
subcommittee began an investigation of the agencies' use of 
non-codified guidance documents (such as guidance, guidelines, 
manuals, and handbooks). The subcommittee sought to verify that 
each document with any general applicability and future effect 
was submitted to Congress under the CRA and that each document 
included an explanation to ensure the public's understanding of 
the document's legal effect.
    The subcommittee requested the General Counsels of the 
Department of Labor [DOL], DOT, and the Environmental 
Protection Agency [EPA]--three of the agencies imposing the 
most regulatory requirements on the public--to complete a 
compendium of all their non-codified documents in tabular 
format and to provide a copy of each non-codified document, 
including a highlighted and tabbed reference to the specific 
explanation in the document itself regarding its legal effect. 
The compendium required the agencies to reveal which documents 
had been submitted for congressional review under the CRA and 
which documents were legally binding.
    DOL and DOT asked the subcommittee to narrow the request. 
In response, the subcommittee narrowed the initial request to 
only those documents issued since the March 1996 enactment of 
CRA by DOL's Occupational Safety and Health Administration 
[OSHA] and DOT's National Highway Traffic Safety Administration 
[NHTSA], respectively. On December 31, 1999, DOT submitted its 
NHTSA compendium and 1,225 guidance documents. On January 3, 
2000, DOL submitted its OSHA compendium and guidance documents. 
On February 7, 2000, EPA submitted its compendium and 2,653 
guidance documents.
    However, after OSHA Assistant Secretary Charles Jeffress, 
in testimony before the House Education and the Workforce 
Committee's Subcommittee on Oversight and Investigations on 
January 28, 2000, cited an even higher number of guidance 
documents than DOL claimed in its earlier response to the 
Government Reform subcommittee's request, the subcommittee 
determined that the number of OSHA documents was not 1,641, as 
DOL had claimed, but actually 3,374. On August 23rd, DOL 
submitted its revised compendium.
    See Section II.A.1. of this report for a discussion of the 
subcommittee's findings relating to DOL's and DOT's guidance 
documents.
    After being unable to reach agreement with the minority and 
the administration on legislative language requiring agencies 
to clarify the legal status of each guidance document, on May 
19th, Subcommittee Chairman McIntosh wrote eight additional 
regulatory agencies for a compendium of their non-codified 
documents issued since March 1996 and a copy of the first page 
of each such document and all other pages with any specific 
explanation in the document itself regarding its legal effect. 
These agencies included: the Department of Agriculture, the 
Department of Energy, the Food and Drug Administration in the 
Department of Health and Human Services, the Fish and Wildlife 
Service in the Department of the Interior, the Consumer Product 
Safety Commission, the Federal Communications Commission, the 
Federal Trade Commission, and the Securities and Exchange 
Commission.
    In addition, DOL and DOT were asked to provide compendiums 
and the other information for the rest of their bureaus since 
they had previously only provided such information for OSHA and 
NHTSA, respectively. Since EPA had provided information on all 
of its guidance documents issued since March 1996 and since EPA 
had submitted March 1999 and October 1999 letters confirming 
that its guidance documents have no binding legal effect on the 
public, it was not additionally tasked.
    Instead of producing the requested compendiums and other 
information, DOT proposed and then orchestrated a model letter 
for each of the agencies to send the subcommittee to clarify 
the non-binding legal effect of their agency guidance 
documents. The subcommittee agreed and then worked with DOT 
staff to develop a mutually acceptable model letter. From July 
to September 2000, these eight agencies, along with DOL and 
DOT, each submitted their individual clarification letters from 
their chief legal officials stating that their agency guidance 
documents are not legally binding on the public. See Section 
II.A.1. of this report for a fuller discussion of these 
letters. Additionally, the letters explain that the public can 
``rely'' on agency guidance, especially in an enforcement 
action, i.e., the guidance provides a ``safe harbor.'' In fact, 
agency guidance is often legally binding on the agency itself.
    During this major investigation, the subcommittee continued 
to examine agency compliance with the CRA for specific policy 
issuances. For example, on January 5, 2000, the subcommittee 
wrote DOL about its November 15, 1999 non-codified guidance 
letter on OSHA's policies concerning employees working at home. 
The subcommittee posed several questions, such as why there had 
been no notice of its proposed development in the Federal 
Register during its over 2-year development period and if it 
had been submitted to Congress under the CRA. After the 
subcommittee's letter, DOL withdrew the guidance letter.
            Oversight of EPA Compliance with CRA
    The subcommittee's review of EPA's compliance with the CRA 
revealed that, in February 1998, EPA issued ``Interim Guidance 
for Investigating Title VI Administrative Complaints 
Challenging Permits'' (its environmental justice guidance). 
This guidance established a framework for handling complaints 
that are filed with EPA's Office of Civil Rights under Title VI 
of the Civil Rights Act of 1964, as amended, and allege 
disparate environmental impacts on minority populations 
resulting from the issuance of industrial site permits by State 
and local governments that receive EPA funding. In light of the 
legal and policy effects of this guidance, the subcommittee 
asked GAO to determine if this guidance is a rule within the 
meaning of the CRA. On September 1, 1998, GAO determined that 
this guidance is a rule under the CRA and indicated that EPA 
had not yet submitted this guidance for congressional review 
under the CRA.
    On December 8, 1998, the subcommittee asked EPA whether it 
intended to submit its ``Proposed Implementation Guidance for 
the Revised Ozone and Particulate Matter [PM] National Ambient 
Air Quality Standards [NAAQS] and Regional Haze Program,'' and 
many other related guidance documents, to Congress under the 
CRA. In a letter dated March 2, 1999, EPA replied that ``EPA 
does not intend its policy statements and guidance documents to 
be binding and they have no binding legal effect on the 
public'' (emphasis added). EPA further stated that ``if such 
documents do contain binding legal requirements, EPA considers 
them within the scope of the CRA and submits them to 
Congress.''
    In a letter dated September 20, 1999, the subcommittee 
asked EPA why it had not submitted its ``Final Guidance on 
Environmentally Preferable Purchasing for Federal Agencies'' 
for congressional review under the CRA. On October 6th, EPA 
replied that its guidance has no legal effect and is not 
binding; instead, it ``merely suggests'' and ``encourages 
agencies'' to follow EPA's guidance.
    The legal effect of these various EPA guidance documents 
was unclear to the subcommittee and members of the public. 
Therefore, late in 1999, the subcommittee initiated an 
investigation of all of EPA's non-codified documents (such as 
guidance, guidelines, manuals, and handbooks). This 
investigation sought to determine if each document with any 
general applicability and future effect was submitted to 
Congress under the CRA and what, if any, language within the 
document itself assisted the public in understanding each 
document's legal effect.
    b. Benefits.--Agencies continue to fail to comply with the 
rule reporting provisions of the CRA, including submitting each 
document with any general applicability or future effect to 
Congress for review. The subcommittee believes that this 
noncompliance is largely due to OMB's failure to issue 
sufficient guidance on the CRA to the agencies as well as OMB's 
failure to clarify the definition of a ``rule.'' Without full 
compliance, the public is robbed of the opportunity to have 
Congress review costly and burdensome requirements, some of 
which may exceed congressional authorization or intent.
    c. Hearings.--The subcommittee held hearings on OMB's 
implementation of the CRA on March 10, 1998 and June 17, 1998. 
On February 15, 2000, the subcommittee held a hearing entitled, 
``Is the Department of Labor Regulating the Public Through the 
Backdoor?'' For more information on this hearing, see Section 
II.A.1. of this report.
3. Investigation of the White House Initiative on Global Climate Change 
        and the Kyoto Protocol.
    a. Summary.--In the 106th Congress, the subcommittee 
continued its oversight of the Clinton-Gore administration's 
global climate change policies and agencies' actions with 
respect to the Kyoto protocol, the controversial, non-ratified, 
United Nations global warming treaty. The subcommittee 
conducted four hearings on Kyoto protocol-related issues, 
including a joint hearing with the Senate Energy Subcommittee 
on Energy Research, Development, Production and Regulation and 
a joint hearing with the House Science Subcommittee on Energy 
and Environment. The subcommittee also wrote 42 oversight 
letters on Kyoto protocol-related matters, investigating the 
actions, policies, or analyses of the Office of Management and 
Budget [OMB], the Environmental Protection Agency [EPA], the 
Department of Energy [DOE], and DOE's Energy Information 
Administration [EIA].
    The subcommittee's oversight focused on eight major areas 
of concern: (1) the administration's compliance with recent 
statutory provisions (chiefly the Fiscal Years 1999 and 2000 
Foreign Operations, Export Financing, and Related Programs 
Appropriations Acts provisions requiring the administration to 
develop program performance measures for its climate change 
program funding requests; and the Fiscal Years 1999 and 2000 
Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies [VA-HUD] Appropriations 
Act provision prohibiting Federal agencies from implementing 
the Kyoto Protocol through ``backdoor'' regulatory means); (2) 
the cost, fairness, and feasibility of the administration's 
Climate Change Technology Initiative [CCTI]; (3) the economic 
and political implications of proposals to provide regulatory 
credits for ``early action'' to reduce greenhouse gas 
emissions; (4) EPA's interpretation of the VA-HUD 
(``Knollenberg'') funding restriction; (5) EPA's interpretation 
of its authority under the Clean Air Act [CAA] with respect to 
carbon dioxide [CO2]; (6) the potential impacts on 
consumers and energy markets of proposals to establish 
mandatory caps on CO2 and other emissions from 
electric power plants, also known as ``multi-pollutant'' or 
``integrated'' air quality management; (7) the potential 
impacts on consumers and energy markets of EPA's New Source 
Review [NSR] litigation against seven major utility companies 
and the Tennessee Valley Authority [TVA]; and (8) the potential 
impacts of the Kyoto protocol on the burgeoning digital 
economy.
    b. Benefits.--The subcommittee's letters of inquiry, 
analysis, and hearings revealed very few program performance 
measures on which Congress and the American public could assess 
what benefits taxpayers would receive for the funding requested 
in the President's FYs 2000 and 2001 Budgets for climate change 
programs and activities. Partly as a consequence of the 
subcommittee's investigation of this problem during 1999-2000, 
Congress: (1) re-enacted language requiring program performance 
measures for climate change-related activities in the 
President's FY 2000 and FY 2001 Budgets, and (2) declined to 
fund the administration's $200 million fiscal year 2000 request 
and $85 million fiscal year 2001 request for a Clean Air 
Partnership Fund, a program ostensibly designed to help local 
communities reduce air pollution but potentially to fuel 
grassroots support for a global climate treaty.
    The subcommittee also analyzed other possible regulatory 
and statutory strategies for implementing the Kyoto protocol 
prior to ratification of the treaty by the United States 
Senate. Partly as a consequence, Congress included the 
Knollenberg funding restriction in seven fiscal year 2000 
appropriation bills and eight fiscal year 2001 appropriation 
bills. In House Report 106-286, accompanying the FY 2000 
Departments of Veterans Affairs and Housing and Urban 
Development, and Independent Agencies Appropriations Act, the 
House adopted report language proposed by the subcommittee to 
clarify the Knollenberg restriction. The subcommittee's 
analysis and oversight were also critical in blocking pro-Kyoto 
``credit for early action'' legislation, in building public and 
congressional opposition to EPA's claim of authority to 
regulate CO2, in spotlighting and challenging EPA's 
permissive reading of the Knollenberg provision, in fending off 
amendments designed to weaken the Knollenberg provision, and in 
exposing ``multi-pollutant strategies'' as a backdoor method of 
implementing the Kyoto protocol.
    c. Hearings.--In 1999-2000, the subcommittee held four 
hearings on the administration's global climate change policies 
and Kyoto protocol-related issues.
    Global Climate Change: the Administration's Compliance with 
Recent Statutory Requirements. The May 20, 1999 joint hearing 
with the Senate Energy Subcommittee on Energy Research, 
Production, and Regulation explored two main questions. First, 
is the administration heeding the Knollenberg restriction 
against ``backdoor'' regulatory implementation of the non-
ratified Kyoto protocol? Second, are the spending increases 
requested for the CCTI a prudent and effective use of taxpayer 
dollars? To pursue the latter question, the subcommittees 
examined the administration's compliance with provisions of the 
FY 1999 Foreign Operations, Export Financing, and Related 
Programs Appropriations Act, which required each climate change 
program funding request to be justified in terms of one or more 
performance measures.
    The subcommittee presented a table showing that the 
administration had not developed performance measures for most 
of the 44 climate change appropriation accounts scattered 
across 14 agencies. Senator Larry Craig reprimanded the 
administration for submitting its report to Congress on climate 
change programs 2\1/2\ months late. He observed that Congress 
was already well into the appropriations process, and because 
the report was late, appropriators had to make decisions 
without adequate information. Senator Pete Domenici chided the 
administration for proposing to spend far more money on wind 
and solar power, which supply less than 1 percent of U.S. 
electricity, than on nuclear power, which supplies over 20 
percent. Chairman Don Nickles remarked that there was zero 
chance Congress would approve the administration's proposed $1 
billion fiscal year 2000 funding increase for climate change 
programs.
    Testifying at the hearing were Representative Joe 
Knollenberg, Republican of Michigan; officials from OMB, the 
General Accounting Office [GAO], DOE, and EPA; Jerry Taylor, 
director of natural resource policy studies, Cato Institute; 
and William H. Lash III, professor of law, George Mason 
University.
    Representative Knollenberg emphasized that the language he 
authored in the FY 1999 Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies 
Appropriations Act, ``prevents the EPA from misusing its 
existing authority.'' In a colloquy with Subcommittee Chairman 
McIntosh, Knollenberg affirmed that the provision does not 
hinder EPA from acting in any way required by law but does 
limit the agency's use of discretionary regulatory authority.
    Mr. Lash pointed out that, under EPA's interpretation of 
the Knollenberg restriction, EPA may regulate 
CO2 and other greenhouse gases as long as such 
regulation is not ``for the purpose of implementing'' the Kyoto 
protocol. But, he said, because curbing greenhouse gas 
emissions is the purpose of the protocol, EPA argues, in 
effect, that it may implement the treaty as long as it ``does 
not truthfully report what it is doing.'' Lash concluded that 
``Congress is entitled to suspect EPA of implementing the Kyoto 
Protocol any and every time the agency proposes or issues any 
rule or regulation affecting CO2.''
    GAO testified that the administration's report did not 
always link its discussion of activities and performance goals 
to the specific line items shown in the President's Budget, and 
did not always provide a clear picture of intended performance 
across Federal climate change activities. It did not always 
specify, in measurable and quantifiable terms, the outcomes 
expected to be achieved by Federal spending.
    Mr. Taylor delivered a harsher assessment. Instead of 
providing performance and results measures for each of the CCTI 
line-item appropriation accounts, he noted, the administration 
provided performance goals for each industrial sector targeted 
by the CCTI. This makes it difficult for outside analysts to 
zero-in on specific budgetary successes or failures. A more 
fundamental problem is that none of the administration's 
performance measures link the proposed expenditures to 
measurable benefits in people's lives. Using the most 
sophisticated climate model and assuming the CCTI works exactly 
as advertised, Taylor calculated that the proposed CCTI 
programs would reduce global temperatures by a mere 0.0091 
degrees Celsius (16/1000ths of a degree Fahrenheit) below where 
they otherwise would be by the year 2050. Such a temperature 
change, he concluded, would be ``too small to measure,'' and 
would not ``affect the lives of the American people one whit.''
    The hearing launched several oversight inquiries by the 
subcommittee that uncovered additional problems in the 
administration's climate change policies. For example, in a 
letter of May 27th, the subcommittee asked OMB when it would 
fully comply with the House Government Reform Committee's June 
26, 1998 subpoena for documents addressed to or authored by 
then-OMB Program Associate Director (now DOE Deputy Secretary) 
T.J. Glauthier--documents that might explain the 
administration's decision, following the December 1997 Kyoto 
conference, to increase its request for additional climate 
change program funding from $5 billion to $6.3 billion. 
Although OMB, in its July 2nd response, claimed that it was 
``not aware'' of any missing documents, it acknowledged that 
``In producing documents, Mr. Glauthier did not include 
documents sent to him, only ones he originated and wrote on.'' 
Similarly, in a July 15th letter reply, Glauthier acknowledged 
the incompleteness of OMB's document search pursuant to the 
committee's subpoena, stating: ``Those materials generally did 
not include copies of memos or e-mails originating from others 
(including my staff, other White House offices, and other 
agencies) unless they had marginal notations from me.''
    In another oversight action growing out of the May 20th 
hearing, the subcommittee, using EIA and Nuclear Regulatory 
Commission [NRC] data, showed (in letters of August 18th and 
December 14th, 1999) that DOE's estimate of huge annual 
reductions in carbon emissions from the CCTI nuclear program 
was based on two faulty assumptions: (a) that the CCTI nuclear 
program would extend the life of all nuclear plants, not just 
those scheduled for retirement over the next 20 years; and (b) 
that the appropriate baseline for estimating avoided emissions 
is the ``average emissions rate'' of the current mix of coal- 
and natural-gas-fired electricity rather than the changing 
future mix, in which natural gas increasingly displaces coal. 
Using more realistic assumptions, the subcommittee calculated 
that the CCTI nuclear program would reduce emissions by as 
little as 30 million metric tons [mmt] per year, rather than 
150 mmt per year, as DOE claimed.
    On June 8, 1999 and again on March 10, 2000, the 
subcommittee commissioned EIA to assess the cost, fairness, and 
feasibility of the administration's CCTI tax credit proposals. 
EIA's analysis revealed that the CCTI tax credits would yield 
minuscule reductions in energy-related CO2  
emissions, cost up to 20 times more (on a per ton basis) than 
the administration's estimated cost of implementing the Kyoto 
protocol, and predominantly benefit ``free riders'' (those who 
would have made the targeted energy-efficiency investments 
anyway, without the inducement of special tax breaks).
    In March 2000, the subcommittee continued its critical 
assessment of the administration's program performance measures 
for climate change funding proposals. On March 22nd, the 
subcommittee wrote OMB Director Jacob Lew about the President's 
March 15th report, entitled, ``Federal Climate Change 
Expenditures Report to Congress.'' The subcommittee found few 
real output performance measures linking the 72 specific 
appropriation accounts to quantifiable reductions in greenhouse 
gas [GHG] emissions, and no actual outcome (results) measures 
showing how such GHG reductions will benefit human beings.
    Throughout 1999 and 2000, the subcommittee, in several 
oversight letters, challenged EPA's reading of the Knollenberg 
provision as permissive rather than prohibitive. EPA claims 
that it may, under the Knollenberg restriction, propose or 
issue regulations to control emissions of CO2  and 
other greenhouse gases as long as the regulation is not ``for 
the purpose'' of implementing, or preparing to implement, the 
Kyoto protocol. The problem with this interpretation is 
obvious. Controlling greenhouse gas emissions is the purpose of 
the Kyoto protocol. There is no practical difference between 
issuing regulations to accomplish the purpose of the protocol 
and issuing regulations ``for the purpose of implementing'' the 
protocol. Under EPA's interpretation, EPA may propose or issue 
regulations substantially similar to, or even identical with, 
those required to implement the treaty. In short, EPA 
interprets the Knollenberg provision as a practical nullity.
    Credit for Early Action: Win-Win or Kyoto through the Front 
Door? This July 15, 1999 hearing examined the economic and 
political consequences of legislation providing regulatory 
credits for early reductions of greenhouse gases. Testifying at 
the hearing were Jack Kemp, distinguished fellow, Competitive 
Enterprise Institute and former Secretary of Housing and Urban 
Development; Jay Hakes, Administrator, EIA; David A. Ridenour, 
vice president, National Center for Public Policy Research; 
Fred Krupp, executive director, Environmental Defense Fund; 
Frederick D. Palmer, general manager & chief executive officer, 
Western Fuels Association; and Kevin J. Fay, executive 
director, International Climate Change Partnership.
    In his opening statement, Subcommittee Chairman McIntosh 
outlined several reasons for concluding that credit for early 
action ``is the centerpiece of a strategy by the Clinton-Gore 
administration to divide and conquer business opponents of the 
Kyoto protocol.'' First, early action crediting would reward 
companies for doing today what they would later be compelled to 
do under a ratified Kyoto protocol. The original legislation 
introduced in the Senate contained no fewer than 11 places 
where the early action period was identified as ending on 
December 31, 2007--1 day before the start of the Kyoto protocol 
compliance period. Thus, said McIntosh, a more honest title for 
such proposals would be ``credit for early implementation.''
    Second, the program would create credits potentially worth 
millions of dollars if--but only if--the Kyoto protocol, or a 
comparable domestic regulatory program, is ratified or adopted. 
Thus, participating companies would acquire an economic 
incentive to support ratification.
    Third, although touted as ``voluntary'' and ``win-win,'' 
early action crediting is subtly coercive and would create a 
zero-sum game in which small business can only lose. Under the 
Kyoto protocol, credits awarded for early domestic reductions 
must be transferred out of--``drawn down'' from--the Nation's 
total emissions ``budget.'' Thus, for every company that earns 
an early action credit, there must be another that loses a 
credit in the 2008-2012 Kyoto compliance period. Consequently, 
companies that do not ``volunteer'' for early action would be 
penalized--hit with extra compliance burdens. Many large firms 
might ``volunteer'' just to avoid getting stranded in the 
shallow end of the credit pool in the compliance period, 
increasing the number of firms with a cash stake in supporting 
ratification. However, because small businesses and family 
farms typically lack the discretionary capital and technical 
personnel required to implement emission reduction projects, 
most would not participate. Therefore, while making the 
protocol more likely to be ratified, early action crediting 
would make the treaty more costly for small businesses and 
family farms.
    The subcommittee also challenged the argument that early 
action crediting is a prudent ``insurance policy.'' Proponents 
contend that, without an early action program, companies that 
voluntarily reduce their emissions today might have to pay 
twice, so to speak, under a ratified Kyoto agreement. However, 
as a practical political matter, the Senate would never 
repudiate the Byrd-Hagel resolution and ratify the Kyoto 
protocol unless pushed to do so by the very policymakers and 
companies advocating credit for early action. Thus, the 
insurance argument implausibly assumes that the pro-Kyoto 
coalition is either naive about its own interest or strangely 
bent on penalizing its own corporate base. Furthermore, 
Subcommittee Chairman McIntosh pointed out, there is something 
odd about an insurance policy that makes the insured-against 
event far more likely to happen: ``It would not be smart to 
purchase fire insurance that virtually guarantees your house 
will burn down. By the same token, it would not be smart to 
purchase Kyoto insurance that increases the odds of the Kyoto 
Protocol being ratified.''
    Fred Krupp and Kevin Fay testified on behalf of early 
action crediting. They offered four reasons why early action 
crediting would not penalize small business. First, the task 
that a company would have to accomplish to earn credits ``is 
environmentally rigorous.'' Second, the program would be ``open 
to any business, large or small,'' and would allow participants 
to use ``emission trading or pooling.'' Third, the program 
would slow down the projected increase in U.S. greenhouse gas 
emissions and boost investment in emission reduction 
technologies and strategies, lowering the economy-wide cost of 
complying with a future climate treaty. Fourth, most emissions 
are generated by large corporations, not small businesses, 
which are unlikely to face any significant requirements under a 
future climate treaty.
    The subcommittee finds these rebuttals unpersuasive. First, 
an ``environmentally rigorous'' accounting scheme only ensures 
that cheating will be minimized, not that big-business 
participants would not corner the emissions credit market. 
Second, most small businesses do not have the discretionary 
capital to absorb the transaction costs required for effective 
participation in ``emission trading or pooling.'' Third, even 
if early action crediting did lower U.S. emissions growth and 
drive down emission-reduction costs, it is doubtful that non-
participants, whose share of the national emissions budget must 
be reduced to ``pay'' for the early action crediting program, 
would experience a net gain. In effect, Krupp and Fay proffer a 
new kind of trickle-down economics: What is good for big-
business early emissions reducers is good for the country.
    Finally, it is far from clear that small businesses would 
be exempt from Kyoto-related energy taxes, mandates, and/or 
regulations. Small manufacturing and farming operations, and 
even small service companies, like dry cleaners, are currently 
subject to numerous environmental laws and regulations. An 
estimated 1 million small- and mid-sized entities emit upwards 
of 100 metric tons of CO2 per year. Their collective 
contribution to the supposed problem of global warming would be 
hard for Kyoto-implementing agencies to ignore.
    Jack Kemp argued that the Kyoto protocol is a strategy to 
empower a coterie of national and international politicians and 
bureaucrats, not only to control the energy sources that drive 
the world economy but also to decide how fast our economy 
should grow (or if it should grow at all), where the 
technologies of the future will come from, and under what terms 
the peoples of the developing world will participate in the 
global marketplace. Concurring with the subcommittee's 
analysis, Kemp stated that early action crediting is ``just the 
next campaign in the Battle of Kyoto, the fight over who will 
decide our energy future.''
    David Ridenour called attention to a potentially serious 
conflict of interest in the House and Senate early action 
crediting bills. The bills authorize independent third parties 
to measure and track reductions on behalf of corporations. 
However, there are no provisions defining or prohibiting 
conflict-of-interest relationships. For example, nothing in the 
legislation would prohibit environmental organizations from 
both auditing a corporation and accepting charitable 
contributions from it. Corporations may be tempted to pay 
tribute to environmental groups, if the latter gain the power 
to decide which companies do and do not deserve emission 
credits, which are environmentally responsible and which are 
not.
    Fred Palmer argued that early action crediting is ``an 
early departure on a dead-end road.'' Fossil fuels supply 85 
percent of the Nation's energy and are forecast to supply 90 
percent of all new energy supply over the next 20 years. To 
``start early'' making substantial reductions in fossil fuel 
use only can have one important effect: depress the U.S. 
economy. Palmer also argued that the Kyoto protocol is inimical 
to the burgeoning Internet economy. The Internet and all the 
devices connected to it (computers, routers, servers, printers) 
run entirely on electricity. Within the next decade, an 
estimated 1 billion people worldwide will be ``on line.'' 
Connecting 1 billion people to the Internet will require an 
additional electricity-generating base equal to that which we 
enjoy in the United States today. Palmer concluded: ``To wire 
the world, we must electrify the world. To electrify the world, 
most of the world's people will turn to their most abundant 
domestic resource: coal.'' Thus, either the Internet economy 
will doom the Kyoto protocol, or the Kyoto protocol will 
strangle the Internet economy.
    EIA testified on its existing voluntary greenhouse gas 
emissions reduction reporting program established by Section 
1605(b) of the 1992 Energy Policy Act. Under this program, 170-
plus companies and organizations have reported on more than 
1,000 emission reducing investments, practices, and projects. 
Although not a crediting system, the voluntary reporting 
program clarifies the kinds of issues that would have to be 
resolved to establish an early action crediting program. There 
are essentially three such issues.
    First, who can report emissions reductions? Should 
reductions be calculated and reported on a company-wide basis, 
on a plant or facility basis, or on a project or activity 
basis? Second, what is a reduction? Should emission reductions 
be measured against a historic baseline, or a projected future 
baseline? Should the baseline be the quantity of emissions 
released or the quantity per unit of production, or unit of 
sale? Third, who should own the emissions reduction? Must it be 
the entity that produces the emissions, or may it be an entity 
that ``causes'' others to reduce their emissions?
    Because the 1605(b) program is strictly a reporting system, 
designed to encourage experimentation and capture the maximum 
amount of activity, it allows all these approaches to flourish. 
In contrast, a credit-for-early-action program would have to 
choose among these methods to prevent double counting of 
emission reductions and to harmonize the program with the 
accounting rules of a future climate treaty. In the question 
and answer period, EIA stated that policymakers were only 
beginning to understand the basic design choices inherent in 
the construction of an early action credit program. EIA also 
stated that any early action crediting program enacted during 
the 106th Congress would prejudge, and potentially conflict 
with, the final implementing rules of the Kyoto protocol.
    As a follow-up to the hearing, on July 22nd, the 
subcommittee wrote an oversight letter to EPA. Noting that some 
environmental groups oppose early action crediting, viewing it 
a windfall for companies that would have achieved the emissions 
reductions without a special reward, the subcommittee asked 
whether, under a well-designed early action program, the 
credits would be valuable enough to motivate companies to make 
energy-efficiency, carbon reduction, or carbon sequestration 
investments beyond those they otherwise would make. Responding 
on August 12th, EPA stated that ``a well-designed early action 
credit program could motivate companies to make substantial 
investments in energy-efficiency, carbon reduction, or carbon 
sequestration beyond those that would occur anyway.'' This is a 
significant statement, because in two previous letters (June 
23rd and July 23rd), EPA denied that companies earning early 
action credits would be more likely to support the Kyoto 
protocol. But, if early action credits are valuable enough to 
change a company's economic behavior, how could they not be 
valuable enough to influence its lobbying behavior?
            Is CO2 a Pollutant and Does EPA Have the Power 
                    to Regulate It?
    This October 6, 1999 joint hearing with the House Science 
Subcommittee on Energy and Environment examined the central 
scientific and legal premises of the administration's global 
climate change policies. Those premises are: (a) 
CO2 is a pollutant, and (b) the CAA authorizes EPA 
to regulate CO2. Accordingly, the hearing had two 
panels, one addressing the legal issues connected with 
CO2, the other addressing the science issues. 
Testifying at the hearing were EPA General Counsel Gary Guzy; 
James Huffman, dean, Lewis and Clark Law School; Peter Glaser, 
Esq., Shook, Hardy & Bacon; Jeffrey Miller, professor of law, 
Pace University School of Law; Patrick Michaels, professor of 
environmental science, University of Virginia; Keith Idso, vice 
president, Center for the Study of Carbon Dioxide and Global 
Change; and, Christopher Field, professor of plant biology, 
Carnegie Institution of Washington.
    EPA's argument may be summarized as follows. The CAA 
authorizes EPA to regulate ``air pollutants''; Section 103(g) 
refers to CO2  and other emissions from power plants 
as ``air pollutants''; therefore, EPA may regulate 
CO2 . However, as Subcommittee Chairman McIntosh 
pointed out, Section 103(g)--the context for the CAA's sole 
mention of CO2 --is a nonregulatory provision, and 
concludes with a rather pointed admonition: ``Nothing in this 
subsection may be construed to authorize the imposition on any 
person of air pollution control requirements.'' If nothing in 
Section 103(g) shall be construed to authorize air pollution 
control requirements, then the passing reference therein to 
CO2  as an ``air pollutant'' does not authorize such 
requirements. In support of this interpretation, McIntosh 
introduced an October 5th letter written to him by 
Representative John Dingell, who chaired the House-Senate 
conference committee on the 19990 CAA Amendments. Dingell 
wrote: ``House and Senate conferees never agreed to designate 
carbon dioxide as a pollutant for regulatory or other 
purposes.''
    At the hearing, Subcommittee Chairman McIntosh, Peter 
Glaser, and James Huffman argued that the plain text, 
structure, and legislative history of the CAA all evince 
Congress' intent to withhold from EPA the power to regulate 
CO2. Their critiques of EPA's position may be 
summarized as follows. First, the CAA mentions 
CO2 and global warming only in the context of non-
regulatory activities, such as research and technology 
development. Nowhere does the act authorize the Administrator 
to list, or promulgate regulations to control, substances that 
may enhance the greenhouse effect. On an issue of longstanding 
controversy like global warming, Congress would not have 
delegated to EPA the power to launch a vast new regulatory 
program without ever saying so in the text of the statute.
    Second, the provisions EPA cites as ``potentially 
applicable'' to CO2 are, in fact, inapplicable. For 
example, the National Ambient Air Quality Standards [NAAQS] 
program is designed to address local air quality problems, not 
a global phenomenon like the greenhouse effect. If EPA were to 
set a NAAQS for CO2 that is below the current 
atmospheric level, the entire country would be out of 
attainment--even if every power plant and factory were to shut 
down. Conversely, if EPA were to set a NAAQS for 
CO2 that is above the current level, the entire 
country would be in attainment, even if fossil fuel consumption 
suddenly doubled. Thus, the attempt to mitigate global warming 
through the NAAQS program would be an absurd exercise in 
futility or even counterproductive--strong evidence that 
Congress, when it created the NAAQS program, never contemplated 
its being used to regulate CO2. Finally, Congress 
considered--and then rejected--greenhouse gas regulatory 
provisions when it amended the CAA in 1990.
    Keith Idso presented evidence that 
CO2 emissions, far from being pollution, are 
``greening'' the planet, enhancing global food security and 
biodiversity. Idso summarized the results of over 2,000 
scientific observations about the effects of CO2-
enriched environments on plants, food production, and natural 
eco-systems. Elevated CO2 levels enable most plants, 
trees, and food crops to grow faster, larger, and more 
profusely, and with greater resistance to environmental 
stresses, such as air pollution, extreme temperatures, and 
water deficiency. Since all animal life depends, directly or 
indirectly, on plant life, rising atmospheric 
CO2 levels will help sustain all animal species, 
human and non-human alike.
    Patrick Michaels concentrated on the weaknesses of the 
global climate models that form the scientific basis for the 
Kyoto protocol and the administration's climate change 
policies. The models imply that average global temperatures 
should have risen about 0.23 degrees Celsius per decade over 
the past two decades. In fact, average global temperatures at 
the planet's surface increased only 0.15 degrees Celsius per 
decade (of which 0.02 degrees was the result of changes in the 
sun, leaving 0.13 degrees ascribable to human influence or 
other natural variation). Most of that slight warming has been 
confined to Siberia and Northwest North America during the 
winter months and at night. These cold air masses--the 
deadliest on the planet--are warming up 10 times faster than 
the rest of the atmosphere. As a result, the average Siberian 
winter has ``warmed'' from -40 degrees Celsius to -38 degrees 
Celsius. From a biocentric perspective, this is good, not bad. 
The region now enjoys a slightly longer growing season and is 
not quite as lethal to humans and other living things.
    But, while there has been a slight warming of the Earth's 
surface during the past two decades, highly accurate satellites 
and weather balloons detect no warming of the troposphere, the 
atmosphere's most active weather zone. This is significant, 
because the models assume that the troposphere will warm at 
least as fast as the surface, and the troposphere, which 
extends from 5,000 feet to the bottom of the stratosphere, 
comprises over 80 percent of the atmosphere simulated by the 
models.
    In short, the data strongly suggest that the climate system 
is less ``sensitive'' to greenhouse ``forcing'' than the models 
assume. Based on the data, and given the ``linear'' (non-
geometric) nature of all computer model warming projections, 
the most reasonable forecast is that average global 
temperatures will increase by a modest 1.3 degrees Celsius over 
the next century, with most of the warming concentrated in the 
Earth's coldest air masses. The bottom line is that science 
does not support the claim that CO2 is a ``climate 
pollutant.''
            Kyoto and the Internet: the Energy Implications of the 
                    Digital Economy
    This February 2, 2000 hearing examined the costs of the 
Kyoto protocol in light of the energy requirements of the 
``new'' or digital economy. Will digital-economy efficiencies 
facilitate Kyoto-style decarbonization policies by decreasing 
the energy intensity of the United States economy? Or will 
digital-economy energy requirements sweep the Kyoto protocol 
into the dustbin of history by increasing United States and 
global demand for inexpensive, super-reliable electric power? 
Three witnesses testified: EIA Administrator Jay Hakes; Joseph 
Romm, executive director, Center for Energy and Climate 
Solutions, and former DOE Acting Assistant Secretary for Energy 
Efficiency and Renewable Energy; and Mark Mills, senior fellow, 
Competitive Enterprise Institute, and scientific advisor, 
Greening Earth Society.
    Mr. Hakes argued that current data support neither Mr. 
Mills' hypothesis that the digital economy is already a 
significant and growing source of U.S. electricity demand nor 
Mr. Romm's hypothesis that digital efficiencies are already 
achieving significant net energy savings. EIA estimates that 
U.S. electricity demand will grow by a modest 1.5 percent per 
year over the next two decades. Electricity consumption by 
computers and the Internet will grow 3.5 percent per year. 
However, information technologies have a low electric load 
compared to space heating, cooling, and other more traditional 
equipment, and will not produce major increases in aggregate 
electricity demand. On the other hand, digital efficiencies are 
unlikely to halt or reverse the growth of aggregate demand. 
Advances in efficiency can actually stimulate demand by making 
energy less expensive to use.
    Mr. Romm argued that, if the digital economy were energy-
intensive, electricity consumption should have exploded during 
the past few years. Instead, during 1996-1999, economic growth 
outpaced electricity demand growth. As companies manage their 
supply chains on-line and reduce inventories, overproduction, 
and mistaken orders, they achieve greater output with less 
energy consumption. Similarly, electronic commerce and 
telecommuting reduce the need for automobile use. Therefore, 
according to Romm, the Internet is a net energy saver. Romm 
also cited a Lawrence Berkeley National Laboratory [LBL] study 
that criticizes Mills for overestimating Internet-related 
electricity demand by a factor of eight. The growth of the 
digital economy will make Kyoto-style carbon reduction policies 
cheaper and easier to implement, according to Romm.
    Mr. Mills noted that every single one of the millions of 
Internet-related devices--personal computers [PCs], routers, 
servers, transmitters, and so on--runs on electricity. Our 
economy today spends four times as much purchasing electricity 
as oil--exactly the reverse of the oil-electricity ratio of 25 
years ago. During the past digital decade, U.S. consumption of 
electricity has risen by 650 billion kilowatt-hours--not a big 
increase in percentage terms but huge in absolute terms: an 
increment equal to the total electricity supply of Central and 
South America. The purchase rate of hardware in the information 
economy today runs at $400 billion a year. In the last several 
years, the United States purchased and installed trillions of 
dollars in telecommunications hardware and infrastructure. The 
Internet was the driving force behind that investment, and 
digital traffic now dwarfs voice traffic on the 
telecommunications networks. According to Mills, EIA 
underestimated the digital economy's electricity requirements 
because it analyzed computers and the Internet in a category 
separate from telecommunications equipment and infrastructure.
    Responding to his critics, Mills noted that LBL, while 
rejecting his estimate of 8 percent as the digital economy's 
share of total U.S. electricity demand, refused to offer an 
estimate of its own. Yet, in 1995, LBL estimated about 50 
billion kilowatts for commercial sector use of PCs and related 
equipment. Since then, the number of PCs and related equipment 
in offices, homes, and schools has exploded; millions of 
additional people came ``on line''; dot-com companies burst 
onto the scene; and usage levels for all computing and 
information technology equipment soared. One entirely new 
category of computer use since 1995 is Web servers. LBL claimed 
that Mills's estimate of 4 million servers should be adjusted 
downward by 80 percent to 1 million. In fact, the actual number 
of servers last year was 4 million, up from just 20,000 in 
1995.
    Mills agreed with Romm that the Internet may achieve 
significant energy efficiencies in particular applications. 
Indeed, total U.S. energy use per dollar of GDP has dropped 16 
percent since 1990. However, the Nation still uses more energy 
today than it did a decade ago. For example, people are flying 
and driving more, with the result that transportation fuel use 
is up 12 percent. The digital revolution is driving economic 
growth, and a robust economy tends to use more energy.
    In conclusion, Mills found it inconceivable that the 
digital economy and the Internet do not already account for a 
significant and growing share of the Nation's electricity 
demand. Since the Nation gets 70 percent of its electricity 
from fossil fuels, any policy of decarbonization is on a 
``collision course'' with the energy needs of the information 
age. Mills cautioned: ``No energy policy, including and perhaps 
especially the anti-electricity aspects of the Kyoto Protocol, 
should be considered without passing it first through a Digital 
sanity test.''
    At the hearing, Subcommittee Chairman McIntosh requested 
that EIA respond in writing to Romm's criticisms of EIA's 
October 1998 study, ``Impacts of the Kyoto Protocol on U.S. 
Energy Markets and Economic Activity.'' EIA's study cast 
serious doubt on the administration's economic analysis of the 
costs of the Kyoto protocol. Whereas the administration's 
estimated a Kyoto price tag of $14 to $23 per ton of carbon 
reduced or avoided, with annual GDP losses ranging from $1 
billion to $5 billion, EIA estimated carbon prices in the range 
of $67 to $348 per ton, with annual GDP losses ranging from $77 
billion to $338 billion. EIA delivered its response on March 
2nd. A brief summary of the three most important areas of 
contention follows.
    First, Romm alleged that EIA assumed the United States 
waits until 2005 to start reducing emissions, giving businesses 
only 3 years to meet the first Kyoto target. In fact, emission 
reductions in EIA's 1998 Kyoto study begin earlier due to 
anticipatory actions in the electricity, refining, and natural 
gas industries. Second, Romm alleged that EIA assumed the 
United States Government does not institute a single policy, 
such as utility deregulation and electricity restructuring, to 
reduce the impact of Kyoto. In fact, EIA included a 
``sensitivity'' analysis that assumed full competitive 
electricity pricing for all regions of the country. Third, Romm 
alleged EIA ignored or artificially limited technologies, such 
as cogeneration, fuel cells, and renewables, that other major 
studies indicate would reduce Kyoto's impacts. In fact, EIA 
carefully considered the contribution of such technologies. For 
example, full cells for automobiles are not likely to be 
economically competitive with other technologies for at least 
two decades. In summary, in the subcommittee's judgment, EIA 
refuted Romm's critique, effectively defending its Kyoto study, 
which discredited the administration's low cost estimates for 
implementing the protocol.
4. Investigation of Other Environmental Protection Agency Initiatives.
            Transportation Partners Program
    a. Summary.--In 1995, EPA established a program called 
Transportation Partners [TPP], a network of organizations 
advocating mass transit systems as an alternative to single 
occupancy vehicle [SOV] travel and various ``smart growth'' 
measures, including land-use planning initiatives, to reduce 
the growth of vehicle miles traveled [VMT]. The TPP developed 
from the administration's Climate Change Action Plan [CCAP] and 
became an important base of political support for Vice 
President Gore's ``livable communities'' agenda.
    During fiscal years 1994 through 1999, EPA dispensed over 
$7 million in grants to nine ``Principal Partners'': Bicycle 
Federation of America ($465,000), Center for Clean Air Policy 
($225,000), Environmental Defense Fund [EDF] ($1,485,000), 
International Council for Local Environmental Initiatives 
($1,075,937), Local Government Commission ($1,192,000), Public 
Technology, Inc. ($395,000), Renew America ($585,000), Surface 
Transportation Policy Project ($1,480,000), and the 
Transportation Demand Management Institute ($565,000). EPA's 
December 1997 publication indicated that the Principal Partners 
had built up a network of 347 ``Project Partners'' in 42 States 
and the District of Columbia.
    In 1997, EPA's Transportation Partners and the Surface 
Transportation Policy Project [STPP] published the Directory of 
Transportation Reform Resources. Posted on STPP's EPA-funded 
Web site, ``TransAct,'' the Directory revealed that many 
Project Partners were ``working in opposition'' to Federal 
highway construction and improvement projects. The fact that 
EPA was using taxpayer dollars to subsidize an anti-car, anti-
road activist network provoked the ire not only of automotive 
and highway construction interests but also of elected 
officials, like West Virginia Senator Robert Byrd, who regard 
highway expansion as critical to job creation and economic 
growth.
    The subcommittee began investigating the TPP in late May 
1999 as part of its oversight of the Vice President's urban 
sprawl initiative. The subcommittee staff learned that the TPP, 
although not listed anywhere in the President's FY 2000 Budget, 
was funded at almost $1 million per year in fiscal years 1998 
and 1999 under the Global and Cross Border subaccount of EPA's 
Environmental Programs and Management line-item budget account. 
The subcommittee further learned that EPA only funded 
unsolicited proposals, instead of following the standard 
Federal Government practice of awarding discretionary grants 
through a competition open to all eligible entities.
    On June 9th, the subcommittee wrote Administrator Browner 
requesting information about the specific statutory authority 
for the TPP, the funding for each of the nine Principal 
Partners, the output and performance measures EPA uses to 
evaluate the work of those organizations, and any litigation 
instigated by any of the Principal Partners to halt or restrict 
highway improvement or expansion. The subcommittee noted that 
EPA had not awarded TPP grants on a competitive basis. The 
subcommittee also asked for an explanation of why a program 
called ``Transportation Partners'' included no organizations 
promoting road and highway construction, even though ``the 
overwhelming majority of commuters drive to work.''
    Five days later, on June 16th, Administrator Browner wrote 
Senator Byrd informing him that EPA planned to make ``a number 
of important changes that will substantially improve the 
program's accountability and balance, broaden the group of 
funded participants, and lead to more effective policies to 
harmonize environmental and transportation policy.'' First, EPA 
would no longer fund the Principal Partners ``to maintain a 
network'' for the local activist groups. In this connection, 
EPA also terminated its funding of the TransAct Web site. 
Second, EPA promised to replace the existing non-competitive 
grant process ``with a competitive Request for Proposals [RFP], 
open to all transportation and environmental organizations.'' 
Last, EPA pledged to replace the TPP with a new, broadly 
representative ``forum'' called the Transportation and 
Environment Network [TNN]. In short, EPA terminated the TPP. 
Subcommittee Chairman McIntosh and Senator Byrd both deserve 
credit for this program termination.
    The subcommittee wrote EPA again about the TPP on August 
10th and November 16th. In the August 10th letter, the 
subcommittee noted a possible conflict between the statutory 
authority cited by EPA for the TPP--Section 103(g) of the CAA--
and activities funded by the program. Section 103(g) authorizes 
EPA to fund ``research,'' ``studies,'' ``investigations,'' and 
the like. It does not authorize support for grassroots 
advocacy. Yet, one of the TPP grants EPA awarded to EDF and two 
other groups outlined a vigorous advocacy component. The grant 
proposal states: ``[W]e intend to involve, educate and organize 
coalitions of citizens.''
    In its November 16th letter, the subcommittee inquired 
whether EPA had, in fact, taken several actions it had outlined 
in its July 13th and September 27th letters. Those actions were 
to: request an Office of Inspector General audit of TPP grants 
for possible improper use of taxpayer funds to support lobbying 
or litigation, provide an accounting of all EPA support for EDF 
via other EPA programs, and send written communications to all 
Principal Partners announcing the program's termination.
    In the same letter, the subcommittee also challenged EPA's 
legal opinion that ``reducing vehicle miles traveled (VMT) is 
an official goal of United States Government policy.'' The 
subcommittee wrote:

        Only in the CCAP [the President's Climate Change Action 
        Plan]--an Administration policy plan rather than a 
        statute--is reducing VMT affirmed as a goal in its own 
        right. In the statutes cited, reducing VMT is presented 
        as one among several means States may employ to improve 
        air quality in non-attainment areas, not as the 
        objective of the policy or program, and not for the 
        country as a whole. In contrast, the TPP assumes that 
        reducing VMT--i.e., limiting automobile use--is 
        inherently desirable, a goal to be pursued nationwide, 
        even in attainment areas.

    Finally, the subcommittee noted that EPA failed to retract 
a blatantly false statement about the relationship between 
automobiles and air quality. In its August 10th letter, the 
subcommittee asked EPA to verify its claim that ``vehicle-
caused pollution doubles periodically in most metropolitan 
areas.'' Specifically, the subcommittee asked EPA to estimate 
changes in vehicle-caused pollution in the 10 largest 
metropolitan areas. Instead, in its September 27th letter, EPA 
estimated the growth in VMT for the 10 largest metropolitan 
areas. Subcommittee Chairman McIntosh commented: ``EPA answered 
a question I did not ask, and did not answer the question I did 
ask.'' Therefore, the subcommittee's November 16th letter put 
the question to EPA again: Does the agency stand by, or 
retract, its statement that ``vehicle-caused pollution doubles 
periodically in most metropolitan areas''?
    b. Benefits.--The subcommittee's oversight contributed to 
EPA's termination of the TPP.
    c. Hearings.--None held.
            Comment on the Environmental Protection Agency's Notice of 
                    Proposed Rulemaking for the Tier II/Sulfur Rule
    a. Summary.--On August 5, 1999, the subcommittee submitted 
a comment to EPA on its proposed tier II rule on tailpipe 
emission standards and sulfur content in gasoline. The 
subcommittee's comment letter raised both procedural and 
substantive concerns about the proposed rule and clarification 
notice. These include: EPA may not be in compliance with 
Section 202(i) of the CAA, which requires the Administrator to 
show that reductions in vehicle emissions are necessary to 
attain NAAQS; EPA's preliminary Regulatory Impact Analysis 
[RIA] is incomplete and does not provide information necessary 
to allow timely and complete comments on the proposed rule; EPA 
did not provide access to key scientific data used in the 
benefit-cost analysis of the preliminary RIA; EPA did not 
adequately address the health impacts of the rule; and, EPA did 
not estimate how many areas will fall out of compliance with 
the NAAQS for ozone due to the negative environmental impacts 
of the rule.
    Of particular interest is subcommittee's finding that EPA 
may have ignored its own air quality analysis, performed by Abt 
Associates, which shows that in certain metropolitan areas, 
reducing NOx will paradoxically increase ozone smog 
levels. This is noteworthy, because EPA's insufficient 
consideration of the rule's negative impacts ignores the spirit 
of the recent U.S. Circuit Court of Appeals decision concerning 
the new air quality standard for ozone (American Trucking 
Associations, Inc., et. al. v. EPA). The court found that EPA 
must consider ``disbenefits,'' or negative health effects, when 
revising or creating new air quality standards. Although the 
decision does not directly apply to the tier II/sulfur rule, 
EPA should candidly analyze and divulge any potential negative 
health impacts of the proposed rule.
    b. Benefits.--The subcommittee's comment letter raised a 
serious concern that EPA addressed on February 10, 2000, in the 
preamble to its final rule (65 FR 6698). EPA acknowledged that 
a few metropolitan areas are projected to experience ozone 
increases in certain places at certain times. However, EPA 
claimed, most of those places would experience net ozone 
reductions as a result of tier II, and that the significant 
ozone reductions from the rule outweigh the limited ozone 
increases that may occur.
    c. Hearings.--None held.
            Investigation of EPA's Change in its Definition of Routine 
                    Maintenance and the Resulting Electric Utility 
                    Enforcement Actions
    a. Summary.--The subcommittee conducted oversight of EPA's 
recent Clean Air Act [CAA] enforcement action against certain 
electric utilities and the Tennessee Valley Authority [TVA]. 
The subcommittee sent three oversight letters (on February 28, 
2000, May 5th, and June 19th) concerning EPA's abandonment of 
its historical and common-sense interpretation of routine 
maintenance, repair, and replacement in its recent CAA lawsuits 
against 25 coal-fired power plants in the Midwest and Southern 
States and its Administrative Compliance Order against seven 
TVA facilities. The subcommittee's major concerns are that 
EPA's retroactive change in its rules is unfair and may force 
utilities to delay or forgo important maintenance projects, 
risking worker safety and electricity reliability at these 
units, to the detriment of the public.
    Under its New Source Review [NSR] program, EPA reviews the 
construction plans for environmental controls of new power 
plants and power plants undergoing a ``major modification.'' 
EPA's NSR regulations define a ``major modification'' as ``any 
physical change in or change in the method of operation of a 
major stationary source that would result in a significant net 
emissions increase of any pollutant subject to regulation under 
the [Clean Air] Act'' (40 CFR Sec. 52.21(b)(2)(i)). ``Routine 
maintenance, repair, and replacement'' are specifically 
excluded from the definition of ``major modification'' (40 CFR 
Sec. 52.21(b)(2)(iii)(a)). Thus, routine maintenance, repair, 
and replacement activity does not trigger NSR requirements to 
retrofit a power plant with state-of-the-art pollution control 
technology (40 CFR Sec. 51 et seq.).
    During 1999, in the midst of negotiations with the industry 
about reform of the NSR program, EPA sued 25 coal-fired power 
plants in the Midwest and Southern States alleging that they 
had repeatedly violated the CAA. EPA filed an Administrative 
Compliance Order against an additional seven TVA facilities 
making similar allegations. EPA's lawsuits represented a change 
in EPA's position. In effect, EPA now argued that only ``patch 
and weld'' repairs were covered by the routine maintenance 
exemption, and that all other common repair, maintenance, and 
replacement activities triggered NSR. EPA argued that these 
common activities, some of which occurred decades ago, were 
ongoing violations of the CAA.
    Until it filed its recent lawsuits, EPA's statements 
consistently indicated as recently as 1997 that maintenance, 
repair, and replacement commonly undertaken by utilities were 
not expected to trigger NSR. For example, in the preamble to 
the 1997 New Source Performance Standard [NSPS] rulemaking, EPA 
confirmed that ``[f]ew, if any changes typically made to 
existing steam generating units'' would be deemed to trigger 
NSR (62 FR 36948, 36957, July 21, 1997). Similarly, in a 1996 
letter to Senator Byrd, EPA stated that ``it is anticipated 
that no existing utility unit will become subject to the [NSPS] 
revision due to being modified or reconstructed.''
    EPA responded to the subcommittee's February 28th letter on 
March 31st and April 14th, and to the subcommittee's May 5th 
letter on June 23rd, August 21st, and September 14th. On June 
23rd, EPA responded to the subcommittee's June 19th questions 
about the procedure for resolving this issue in regard to TVA.
    The subcommittee's oversight letters expressed concern that 
EPA appears to be abandoning its historical and common sense 
interpretation of routine maintenance, repair and replacement 
activity. The subcommittee's investigation found that this 
retroactive change in EPA rules was not made through public 
notice and comment rulemaking. The subcommittee is concerned 
that EPA's lawsuit discourages utilities from performing needed 
maintenance, jeopardizing worker safety and the reliability of 
the Nation's electricity supply.
    In its March 31st response, EPA claimed that its 
enforcement actions are consistent with the Seventh Circuit's 
decision in Wisconsin Electric Power Co. v. Reilly (WEPCo), in 
which the court found that a utility's proposal for ``massive'' 
and ``unprecedented'' modifications was not routine (WEPCo, 893 
F.2d 901, 911, 7th Cir. 1990). However, the subcommittee found 
that, according to EPA's own documents, the WEPCo case is 
easily distinguishable from the facts in EPA's current 
lawsuits. Unlike the projects targeted by the current 
enforcement action, the comprehensive ``life extension'' 
project proposed by WEPCo was not routine because: (a) the 
project involved the replacement of ``numerous major 
components;'' (b) the purpose of the project was to extend the 
life of the facility beyond its originally planned retirement 
date as an alternative to building new capacity; (c) the units 
had been formally derated and operated in that condition, or 
had been shut down, for 4 years; (d) the work was ``highly 
unusual, if not unprecedented'' rather than ``regular'' and 
``customary;'' (e) the work involved 4 years of successive 9-
month outages; and (f) the project was extremely costly, 
estimated at $87.5 million or about 15 percent of the cost of a 
new facility.
    While EPA now professes a lack of prior knowledge of boiler 
maintenance, repair, and replacement projects, the 
subcommittee's investigation found that an EPA consultant, the 
Radian Corp., undertook a boiler life extension survey in 1986 
and reported to EPA that ``common repair/replacement jobs 
include: re-tubing, replacing waterwalls, air heater, duct 
work, or casing, and updating burners or controls''--some of 
the very types of projects now targeted in EPA's enforcement 
actions.
    b. Benefits.--The subcommittee's oversight revealed serious 
flaws in EPA's enforcement actions, such that they could be 
challenged in court.
    c. Hearings.--None held.
5. Investigation of Two Department of Labor Major Rules.
    a. Summary.--The subcommittee investigated two major 
regulatory proposals by the Department of Labor [DOL]: the 
``Birth and Adoption Unemployment Compensation'' rule 
(popularly known as ``Baby UI'') (64 FR 67972) and the 
``Ergonomics Program; Proposed Rule'' (64 FR 65768). Following 
up on its investigation of backdoor rulemaking through agency 
non-codified guidance documents, the subcommittee's Baby UI 
investigation was used to examine the Federal agencies' use of 
codified regulations instead of legislation for significant 
policy changes without a specific delegation by Congress, i.e., 
backdoor legislating. The subcommittee's ergonomics 
investigation focused on DOL's improper use of contractors in 
its rulemakings.
            Baby UI
    The subcommittee reviewed DOL's proposed Baby UI rule, the 
public comments received before its publication, during the 60-
day public comment period, and after the close of the comment 
period, and all of DOL's internal legal analyses relating to 
its decision to propose a regulatory change instead of 
initiating a legislative proposal (``DOL's 48 internal 
documents'').
    On May 18th, the subcommittee wrote the Office of 
Management and Budget [OMB] some of its concerns with the Baby 
UI rule, which was then under review at OMB under regulatory 
Executive Order No. 12866. The concerns included: the absence 
of a regulatory impact analysis [RIA] due to DOL's 
underestimate of the costs of its proposed rule; the absence of 
specification of the reporting and recordkeeping requirements 
which are essential to the evaluation of the Baby UI experiment 
and which require public review under the Paperwork Reduction 
Act [PRA]; and the statutory basis for the rulemaking.
    On May 31st, Subcommittee Chairman David McIntosh wrote the 
Department of Justice [DOJ] about both DOL major rules, which 
appeared to be defective. McIntosh asked DOJ to provide a legal 
opinion of its ability to defend the Baby UI rule against a 
claim of usurpation of legislative authority.
    On May 31st, the subcommittee sent detailed findings to DOL 
on its Baby UI rule. First, the subcommittee found that DOL's 
regulatory proposal to use unemployment compensation for paid 
family leave seemed to be backdoor legislating. The 
subcommittee expressed concerns not only about the statutory 
basis for this rulemaking but also about DOL's compliance with 
certain provisions governing codified regulations, including 
Executive Order No. 12866, the Small Business Regulatory 
Enforcement Fairness Act [SBREFA], the Regulatory Flexibility 
Act [RFA], the Unfunded Mandates Reform Act [UMRA], and the 
PRA. The subcommittee analyzed DOL's legal obligations under 
Executive Order No. 12866 and the aforementioned laws governing 
rulemaking.
    The subcommittee challenged DOL's decision to pursue a 
regulatory change instead of initiating a legislative proposal. 
Section 604.10 in DOL's proposed rule states, ``Under [DOL's] 
authority to interpret Federal unemployment compensation law, 
the DOL interprets the Federal able and available requirements 
to include experimental Birth and Adoption unemployment 
compensation'' (64 FR 67977). However, DOL's preamble admits 
that ``no explicit able and available requirements are stated 
in Federal law'' (64 FR 67972). Interestingly, there are also 
no able and available requirements in DOL's codified rules 
governing its unemployment compensation program.
    Instead, Federal law authorizes DOL to ``make and publish 
such rules and regulations, not inconsistent with this chapter, 
as may be necessary to the efficient administration of the 
functions with which [DOL] is charged under this chapter'' (42 
U.S.C. Sec. 1302(a)). Federal law requires DOL to approve any 
State law which provides that ``all money withdrawn from the 
unemployment fund of the State shall be used solely in the 
payment of unemployment compensation'' (26 U.S.C. 
Sec. 3304(a)(4), emphasis added). Federal law defines 
``compensation'' to mean ``cash benefits payable to individuals 
with respect to their unemployment'' (26 U.S.C. Sec. 3306(h)). 
Federal law does not define ``unemployment,'' presumably since 
its meaning is commonly understood.
    In a March 1999 memorandum, DOL's Solicitor's Office 
asserted that the design of the unemployment compensation 
system is rooted in the common understanding of the word 
``unemployment'' and that DOL has consistently held that 
unemployment must be involuntary and due to an inability to 
find suitable work. A 1945 Social Security Board non-codified 
guidance document provided by DOL stated, ``The Board has held 
consistently on the basis of the legislative history of the 
Federal Acts, that the word `unemployment' as used in the 
Social Security Act and the Federal Unemployment Tax Act refers 
only to unemployment due to lack of work.'' A November 1998 DOL 
internal document points to the DOL Bureau of Labor Statistics' 
definition of ``unemployed'' as referring to someone available 
to the labor market. In contrast, Baby UI is for persons who 
voluntarily take a leave of absence or quit their jobs and are 
not available to the labor market. Also, DOL admits in appendix 
B to its proposed rule that Baby UI ``will require some 
legislation on the part of every State seeking to adopt this 
program'' (64 FR 67977).
    Of especial importance is DOL's own rejection of a 1997 
proposal by Vermont to use unemployment compensation for paid 
family leave. On July 17, 1997, DOL wrote Senator Patrick Leahy 
that, ``We have consistently interpreted these provisions as 
requiring that State UI [unemployment insurance] laws contain 
tests to assure that UI is paid only to workers who lose their 
positions when employment slackens and who . . . cannot find 
other work . . . That this was the intent behind these 
provisions is clearly demonstrated by the history of the 1935 
legislation creating the Federal-State UI program . . . stated 
that, to serve its purposes, UI `must be paid only to workers 
involuntarily unemployed' '' (emphases added).
    A DOL internal document admitted that, after the decision 
was made to use unemployment compensation for paid family 
leave, DOL challenged its employees to think outside the box 
and see what flexibility actually existed in Federal law. 
Unfortunately, several DOL internal documents, including a 
March 1998 memorandum, conclude that Federal law needs to be 
amended to use unemployment compensation for paid family leave. 
In a March 1999 memorandum, DOL's Solicitor's office presented 
the pros and cons of a legislative fix as opposed to a 
regulatory fix, recommending that carefully drafted legislation 
is the best vehicle because a regulatory fix would likely not 
survive a court challenge given the legislative history, the 
legislative framework of the unemployment compensation program, 
and the Federal Government's longstanding interpretation. The 
memorandum concluded that the court is likely to invalidate 
such a DOL regulation as an arbitrary agency action. Another 
DOL internal document mentioned possible challenges to the rule 
on equal protection and/or Administrative Procedure Act [APA] 
grounds.
    As a consequence, the subcommittee found that, even for an 
experiment, such a major substantive revision of the 
unemployment compensation program requires a change in Federal 
law. Congress did not delegate its legislative authority to DOL 
to make such a major revision of this program through 
rulemaking. The Supreme Court recently struck down a similar 
attempt by an executive agency, holding that the Food and Drug 
Administration could not regulate tobacco products without a 
specific authorization from Congress. The Supreme Court found 
that ``an administrative agency's power to regulate in the 
public interest must always be grounded in a valid grant of 
authority from Congress'' (Food and Drug Administration v. 
Brown & Williamson Tobacco Corp., 120 S.Ct. 1291, p. 1315). The 
subcommittee found that DOL's proposed major revision of 
unemployment compensation was a usurpation of legislative 
authority solely granted to Congress under Article I of the 
Constitution and, therefore, is illegal.
    Second, Executive Order No. 12866 requires agencies to 
provide an assessment of the potential costs and benefits of 
the regulatory action for all ``significant'' regulatory 
actions, i.e., including DOL's Baby UI regulatory action. For 
those regulatory actions which ``may'' have an annual effect on 
the economy of $100 million or more, the order requires 
agencies to provide more detailed cost-benefit analysis (also 
known as a RIA), including an identification and assessment of 
``reasonably feasible alternatives to the planned regulation'' 
(Sec. 3(f)(1) & Sec. 6(a)(3)(C)). Section 804 of SBREFA defines 
a major rule as one which is likely to result in an annual 
effect on the economy of $100 million or more.
    The subcommittee questioned the underlying logic behind 
DOL's proposed rule cost estimate, which ranged from zero to 
$68 million, because DOL's flawed methodology assumed that only 
four States would volunteer for Baby UI. DOL's preamble admits 
that the $68 million estimate ``is based on the expressed 
interest of a small number of States'' (64 FR 67975). Many 
public commenters challenged DOL's underestimate of the costs 
and instead estimated costs up to $36 billion (e.g., see 2/2/00 
U.S. Chamber of Commerce, pp. 2 & 8). If more States 
volunteered, the cost clearly ``may'' exceed the $100 million 
threshold for an RIA. In fact, March 9, 2000 testimony before 
the House Ways and Means Subcommittee on Human Resources 
revealed that eight States are considering Baby UI. A March 
2000 DOL decision memorandum admitted that DOL's authority and 
cost considerations are, indeed, the most sensitive issues in 
the 3,800 congressional and public comments. However, this same 
memorandum did not reveal to the Secretary the methodologies 
behind the many estimates in the billions of dollars and the 
reasons for DOL staff's rejection of these methodologies. 
Instead, the memorandum revealed DOL staff's revised upper 
costs estimate as $91 million instead of $68 million.
    Commenters also expressed concern about noncompliance with 
the RFA and the SBREFA (e.g., see 2/2/00 U.S. Senate Committee 
on Small Business, pp. 1 & 3). Chairman Kit Bond stated,

        The Department has misconstrued its obligation under 
        the Regulatory Flexibility Act (RFA) and the Small 
        Business Regulatory Enforcement Fairness Act (SBREFA) 
        and consequently has wrongly decided not to determine 
        the consequences of this rulemaking on small 
        businesses. . . . this rule has a potentially very 
        serious impact on virtually all small businesses which 
        should have triggered a regulatory flexibility analysis 
        as required by the RFA . . . any employer that is 
        subject to the federal unemployment tax will be covered 
        and would be obligated to provide this leave if the 
        state in which the employer operates implemented this 
        provision (p. 3).

The subcommittee shared this concern, especially about the 
absence of a full analysis in DOL's proposed rule and DOL's 48 
internal documents of the substantial effects on small 
businesses.
    Congress specifically exempted small businesses from the 
Family and Medical Leave Act's [FMLA's] unpaid leave 
provisions. In fact, in recognition of the effect on employers, 
FMLA included other eligibility factors as well. The Associated 
Builders and Contractors, Inc. comment letter stated,

        this aspect of the proposal is inconsistent with 
        Federal FMLA law as written and passed by Congress. 
        Congress extensively debated and ultimately required a 
        whole host of eligibility factors for family leave 
        provided under the Family and Medical Leave Act. For 
        example, Congress decided to limit employee eligibility 
        to those with 12 months of service and to those who 
        worked at least 1,250 hours within the 12 months 
        preceding the leave. Congress also chose not to cover 
        businesses with fewer than 50 employees. Additionally, 
        Congress provided a key employee exemption that allows 
        companies to exclude certain highly compensated and key 
        individuals from the unpaid mandate. In contrast, the 
        BAA-UC [Baby UI rule] provides leave payments to all 
        covered individuals, regardless of income (2/2/00, p. 
        5).

    LPA, Inc. commented, ``Although Congress found that unpaid 
family leave was too burdensome to impose upon small business 
and therefore exempted them from the obligations imposed by the 
FMLA, see 29 U.S.C. Sec. 2612(c), no similar exception can be 
carved out of the unemployment compensation system because, as 
the NPRM recognizes, any eligibility test for unemployment 
compensation must relate directly to the fact or cause of the 
individual's unemployment'' (2/2/00, p. 12).
    The Republican Governors Association objected to the 
proposal on several grounds, commenting,

        The Department of Labor's proposed regulations also 
        create another layer of administrative burden on states 
        and employers, which could further harm the solvency of 
        the UI system. This action creates more opportunities 
        for fraud and abuse, again placing the solvency of the 
        fund at risk. This effort is a backdoor, unfunded 
        approach that would be harmful to state government 
        treasuries as well as the UI Trust Fund. It could also 
        threaten the continued growth and prosperity of small 
        businesses. If the federal government wants to pursue 
        this as national policy, then the issue should be taken 
        before the U.S. Congress, and funded accordingly 
        (emphasis added) (12/2/99, p. 1).

    The Employment Policy Foundation's comment letter analyzed 
the effect of Baby UI on recommended State solvency levels and 
projected State tax rate increases that would be needed to stem 
the trust fund depletion. For example, under four scenarios 
(with 12 or 26 weeks of paid leave and under two different 
take-up assumptions), New York would require a 32 percent to 
129 percent tax rate increase (1/26/00, p. 10).
    Interestingly, DOL's 48 internal documents gave short 
shrift to compliance with the UMRA. In fact, there appeared to 
be only one dismissive reference to the impact on States, 
referring to the fact that DOL's experimental approach calls 
for voluntary participation by a State. Nonetheless, as noted 
above, there are various costs and cost considerations for 
States under this significant rule. As a consequence, the 
subcommittee requested that DOL prepare a final RIA, including 
costs and cost considerations for States, and a final 
regulatory flexibility analysis, including costs for small 
businesses, before DOL issues a Baby UI final rule.
    Third, the subcommittee was surprised that DOL's preamble 
for the proposed experiment admits that ``The Federal 
evaluation methodology has not yet been completed'' (64 FR 
67974). In fact, a DOL internal document indicated that DOL 
felt that it seemed counterproductive to spend considerable 
time developing a methodology that would delay implementation 
of the experiment. However, an evaluation is critical for any 
experiment, especially this one since DOL's preamble states 
that the evaluation ``may also serve as a basis for further 
expanding coverage to assist a broader group of employees to 
better balance work and family needs'' (64 FR 67974). The 
subcommittee asked: what will be the effects of the experiment 
on State taxes, State unemployment benefit levels, solvency of 
State unemployment funds, et cetera and by what outcome 
performance measures will the success or failure of this 
experiment be judged?
    The subcommittee requested that DOL complete its proposed 
evaluation methodology, including the specifics of any 
necessary reporting and recordkeeping, and submit its proposed 
paperwork burden for public comment under the PRA before DOL 
issues a Baby UI final rule. The subcommittee also requested 
that DOL delay the final rule's effective date until DOL 
analyzed the public comments and finalized the reporting and 
recordkeeping requirements essential to the evaluation of the 
experiment.
    On June 13th, DOL issued a final Baby UI rule with a RIA, 
which never received public comment (65 FR 37210). Incredibly, 
DOL's final rule neither included a RFA analysis nor the 
specifics of the evaluation methodology for this 
``experiment.'' On June 26th, various parties filed a legal 
challenge to this rule--a complaint for declaratory, injunctive 
and other relief.
            Ergonomics
    Before the start of its investigation of improper use of 
contractors in DOL rulemakings, on January 28, 2000, the 
subcommittee submitted extensive comments to DOL on its 
proposed ergonomics major rule. The subcommittee's comment 
letter may be summarized as follows.
    First, OSHA's own data show that there is no ``market 
failure'' that might justify regulatory action to address 
workplace-related musculoskeletal disorders [MSDs]. Workplaces 
are becoming safer, not more hazardous, with total injuries and 
illnesses per 100,000 workers falling from 4,970 in 1974 to 
2,800 in 1991. Reported lost workday MSDs have declined each 
year from 1994 through 1997, the last year for which data were 
available. OSHA's 1993 ergonomics survey showed that 50 percent 
of all general industry employees worked in establishments that 
have ergonomics programs. That is a high degree of penetration, 
especially considering that OSHA did not hold major regional 
ergonomics conferences or establish an ergonomics Web site 
until 1997.
    However, OSHA's error goes deeper than a misreading of its 
own data. OSHA assumes that, if a company has not ``implemented 
engineering controls to reduce ergonomic risk factors,'' then 
the company's employees enjoy no protection from MSD hazards. 
That view betrays a basic misunderstanding of market processes. 
If, as OSHA reports, 80 percent of large companies have 
ergonomics programs, that sends a strong market signal to 
manufacturers of industrial machines and office equipment. It 
tells them to increase production and marketing of 
ergonomically-designed products. A company purchasing such 
products will effectively protect its employees, even if it has 
no ergonomics program.
    Second, a major study commissioned by the Small Business 
Administration concluded that the costs of the ergonomics rule 
may significantly exceed the benefits, especially for small 
businesses. Indeed, OSHA's own data show that, for numerous 
categories of small business, the compliance costs of the 
ergonomics rule would exceed 10 percent of profits. For 
example, the cost to men's and boys' clothing stores is 
estimated by OSHA to be 114.7 percent of profits. The costs to 
small manufacturers of primary metal products is 47.4 percent 
of profits. The cost to 10 other types of small business equals 
or exceeds 20 percent of profits. Such firms may be forced to 
cut back on bonuses, wages, new hires, health insurance 
coverage, or retirement benefits.
    Third, OSHA unreasonably rejected (or simply ignored) less 
costly alternatives. Under the ergonomics rule, employers would 
have to implement the ``full'' ergonomics program (engineering 
controls plus paid medical leave) if only one employee incurs 
an MSD. This is called the one-MSD ``trigger.'' A two-MSD 
trigger would appear to be more sensible, helping to ensure 
that the full program responds to systematic problems rather 
than isolated incidents. OSHA, however, rejects the two-MSD 
trigger, because in small businesses with five or fewer 
employers, it would take ``30 years before 50% of such 
establishments would have controlled any jobs.'' This comment 
betrays a falsely static conception of the marketplace. Few 
five-employee firms last 30 years, and few 30-year-old firms of 
any size have their original workforce. Therefore, the notion 
that a two-MSD trigger would exclude millions of people from 
ergonomic protections for decades at a stretch is not credible.
    OSHA similarly rejected a trigger of two MSDs in the same 
job category of the same establishment within 1 year. ``If this 
trigger were adopted,'' OSHA warned, ``it would be 95 years 
before 50% of all typical uncontrolled jobs . . . were 
controlled, and 325 years before 90% of such jobs were 
controlled.'' This statement borders on the frivolous. It 
implies that business practices are frozen in time--as if OSHA 
could foresee and prevent workplace injuries 95 or even 325 
years into the future! Nobody can imagine the workplace of 
2095, much less that of 2325. In all likelihood, the issues 
addressed by modern ergonomists will be about as relevant to 
the workplace of 2095 as steam-engine and horse-and-buggy 
hazards are to managers and engineers today.
    An even more fundamental problem was OSHA's failure to 
consider any non-regulatory alternatives. Given the recent 
vintage of ergonomics as a discipline, the fact that more than 
8 out of 10 large firms have ergonomics programs is nothing 
short of remarkable. OSHA's data point to widespread market 
success, not significant market failure. Therefore, instead of 
regulatory action, OSHA should develop legislative proposals to 
encourage voluntary business investment in ergonomic equipment 
and management practices. The chief barrier to such investment, 
especially by small businesses, is the cost of capital. The 
Federal Government can lower capital costs by accelerating 
depreciation schedules or, more potently, by allowing 
businesses to write off (``expense'') the full cost of 
equipment purchases and engineering investments in the year 
they are made. OSHA should withdraw the ergonomics rule and 
work with business and labor to develop worker safety-enhancing 
tax cuts.
    From December 3, 1999 through March 21, 2000, the 
subcommittee sent four letters to DOL which questioned possible 
augmentation of DOL full-time equivalents [FTEs] by use of 
contractors. These letters posed many questions, such as 
``under what specific legal authority is the Department using 
contractors `to perform specific tasks during peak workloads' 
and `when it would not be practical or cost effective to hire 
federal staff'?''
    On May 10, 2000, the subcommittee sent a letter to DOL 
focusing specifically on its draft, proposed and pending final 
ergonomics rule. The subcommittee requested the name of each 
contractor, the date of the award, the amount of the contract 
award, whether the contract was awarded competitively or not, 
the statement of work specified in the contract, and the 
deliverables specified in the contract. Also on May 10th, the 
subcommittee wrote the Eastern Research Group [ERG], DOL's 
major ergonomics contractor. The subcommittee requested copies 
of all contracts, and all documents and deliverables prepared 
under these contracts.
    On May 31st, Subcommittee Chairman David McIntosh wrote DOJ 
about both DOL major rules, which appeared to be defective. 
McIntosh asked DOJ to provide a legal opinion of the propriety 
of DOL's use of contractors for what may be inherently 
governmental functions related to the ergonomics rulemaking, 
DOL's use of paid witnesses in its rulemaking hearings, and 
DOL's use of noncompetitive contracting for noncommercial 
functions related to its rulemakings.
    On June 1st, the subcommittee requested 28 additional 
contractors, including 25 of the 28 individuals paid to testify 
as expert witnesses for this rulemaking, to produce documents 
relating to their work on the ergonomics rulemaking.
    On July 5th and August 10th, the subcommittee sent detailed 
findings to DOL on its improper use of contractors in its 
ergonomics rulemaking. The July 5th letter questioned possible 
augmentation of DOL FTEs by use of contractors, DOL's improper 
use of contractors for inherently governmental functions in the 
rulemaking process, and DOL's use of contractors to unfairly 
bias its ergonomics rulemaking.
    In response to the subcommittee's May 10th request for 
information about each DOL contract for its ergonomics 
rulemaking, on May 26th, DOL provided partial information about 
70 contracts awarded for $1.8 million from 1996 to the present, 
including 28 contracts (at $10,000 apiece) for individuals to 
testify as ``expert'' witnesses in this rulemaking. ERG, which 
DOL identified as only receiving $0.6 million in awards from 
1996 to the present, separately revealed to the subcommittee 
that it received $2.5 million in funding for its work on this 
rulemaking from 1992 to the present. Therefore, the total known 
to the subcommittee by July 5th was at least $3.7 million in 
contract awards for this rulemaking, which is a huge cost to 
the American public.
    At least 5 of the 28 individuals retained by DOL to serve 
as experts submitted invoices for less than their $10,000 
contracts. One of the 28 experts, who did not testify at the 
public hearings, was told, in a March 2000 e-mail from DOL to 
him, that DOL felt that he should invoice DOL for $5,000 even 
though DOL did not need his oral testimony. Another of the 28 
experts expressed, in an April 2000 e-mail to DOL, thanks to 
DOL for inviting him to revisit his bill to receive $18,000 
instead of $10,000.
    The Occupational Safety and Health [OSH] Act of 1970 
authorizes DOL to issue occupational safety or health standards 
and to follow procedures, including requested public hearings, 
more stringent than those established in the APA (29 U.S.C. 
Sec. 655(b)(3)). Federal law also authorizes DOL to employ 
experts and consultants but does not specifically state that 
they may be used in rulemaking proceedings (29 U.S.C. 
Sec. 656(c)). DOL's rules of procedure for promulgating 
occupational safety or health standards are specified in 29 CFR 
Part 1911. They specify that ``fairness may require an 
opportunity for cross-examination on crucial issues'' during 
DOL's rulemaking hearings (Sec. 1911.15(a)(3)) and that the 
presiding officer at the hearing shall conduct ``a fair and 
full hearing'' (Sec. 1911.16) (emphases added).
    A 1980 Court of Appeals 2-1 decision (United Steelworkers 
of America v. Marshall, 647 F.2d 1189, D.C. Cir. 1980) found 
nothing illegal in the Occupational Safety and Health 
Administration's [OSHA's] procedural conduct for its rulemaking 
establishing a new lead standard and did not object to DOL's 
use of expert consultants, including for testifying in the 
rulemaking hearing, reviewing the record, and preparing parts 
of the preamble. A dissent stated that ``fundamental 
requirements of fairness and due process in administrative law 
compel that these outside consultants to whom the agency 
delegates its obligation to evaluate the evidence must be 
unbiased and neutral in their evaluation of the record. Just as 
the actual decisionmaker is to be unbiased, so must those to 
whom such duty is delegated.'' No other court ruling examined 
so extensively DOL's use of contractors in an OSHA rulemaking. 
To ensure fairness and absence of any bias, Subcommittee 
Chairman McIntosh stated his belief that now, 20 years later, 
it is time for the court to reexamine this decision.
    The subcommittee's March 21st letter to DOL Solicitor 
Solano responded to his March 16th reply about DOL's use of 
contractors. The subcommittee stated,

        Your answers to Questions 12a and 12b about the 
        Department's use of contractors are quite troubling. 
        Office of Management and Budget Circular A-76, 
        ``Performance of Commercial Activities,'' and Office of 
        Federal Procurement Policy Letter 92-1, ``Inherently 
        Governmental Functions,'' are quite specific about the 
        restrictive use of contractors only for commercial 
        activities or for ``special knowledge and skills not 
        available in the Government.'' As a consequence, under 
        what specific legal authority is the Department using 
        contractors ``to perform specific tasks during peak 
        workloads'' and ``when it would not be practical or 
        cost effective to hire federal staff''?

DOL tried to defend its use of contractors in an April 20th 
Solano reply. However, the subcommittee remained concerned 
about: DOL's improperly augmenting its staffing ceiling by use 
of contractors; DOL's improperly using contractors for 
inherently governmental functions, which should be conducted by 
DOL employees; turning its truth-seeking, scientific rulemaking 
proceeding into an adversarial proceeding; and, use of 
contractors with a vested interest in the outcome of the 
rulemaking.
    The subcommittee expressed its disappointment in DOL's 
interference with its investigation of DOL's use of contractors 
for the ergonomics rulemaking. On May 10th, the subcommittee 
requested ERG to produce documents relating to its work on the 
ergonomics rulemaking. The subcommittee asked for production by 
May 24th. At ERG's request, this deadline was extended until 
June 7th. On June 7th, ERG's attorney stated that production 
was completed but delivery would not be possible because DOL 
refused to waive its special contract requirement entitled, 
``Treatment of Confidential Information.'' This DOL contract 
provision specified that ERG could ``not disclose the 
information to anyone without prior written approval [by 
DOL].'' DOL advised ERG that this nondisclosure provision 
applied to Congress.
    However, since Congress is part of the Federal Government 
and is not specifically named in DOL's contract provision, the 
subcommittee asserted that DOL's interpretation, which is 
inconsistent with case law allowing disclosure to Congress, was 
wrong. Nonetheless, ERG's attorney did not want his client to 
face a contractual disagreement with DOL and, thus, promised 
prompt delivery if the committee issued a subpoena. On June 
13th, with a June 12th House subpoena in hand but not yet 
served, the subcommittee finally reached agreement with DOL on 
the subcommittee's use of the information in these documents, 
including the ability for other Members of Congress, but not 
their staffs, to review the documents. On June 14th, DOL waived 
its confidentiality clause for ERG. ERG finally produced its 
documents on June 16th, i.e., 9 days after production was 
completed.
    On June 1st, the subcommittee requested 28 additional 
contractors, including 25 of the 28 individuals paid to testify 
as expert witnesses for this rulemaking, to produce documents 
relating to their work on the ergonomics rulemaking. The 
subcommittee asked for production by June 23rd. Apparently, 
prior to the June 13th agreement, DOL contacted the contractors 
and directed them not to produce the requested information to 
Congress. A June 2000 letter from one of them to DOL stated 
that he would send the documents to Congress unless he hears 
otherwise from DOL. In fact, as of July 5th, the subcommittee 
still did not have documents from seven experts, although five 
of them already provided the requested information to DOL.
    On June 21st, Senator Mike Enzi, chairman of the Senate 
Health, Education, Labor, and Pensions Subcommittee on 
Employment, Safety and Training, spent an hour in the 
subcommittee's office reviewing the initial set of contractor 
documents because DOL would not allow subcommittee staff to 
bring them to the Senator's office. On June 22nd, Senator Enzi 
spoke extensively in the U.S. Senate about his concerns with 
DOL's improper use of contractors for this rulemaking (146 CR 
S5592-4, S5634-5 & S5644).
    The subcommittee found from its investigation that DOL, in 
fact, was augmenting its FTEs by use of contractors. One of the 
contractors identified by DOL apparently worked for DOL under 
successive contracts and, 21 days after the end of his last 
contract, became a DOL employee. His contract tasks included a 
variety of ``project support tasks'' for the ergonomics 
rulemaking, which did not require any special knowledge or 
expertise. Other contractors, e.g., ERG and ICF Information 
Technology, Inc. [ICF], likewise performed a variety of tasks 
for the ergonomics rulemaking which did not require any special 
knowledge or expertise, such as reviewing public comments, 
developing draft summaries of the comments, developing basic 
spreadsheets for summarizing the comments and testimony, and 
drafting potential responses to the comments.
    The subcommittee also found from its investigation that 
DOL, in fact, had improperly crossed the line by using 
contractors for inherently governmental functions, such as 
regulatory policy development. For example, ERG's contract task 
orders revealed that DOL ``will need assistance with early 
policy development' and with ``policy development strategy.'' 
ERG tasks were comprehensive, including selecting supportive 
expert witnesses for DOL's hearings, assembling them into 
panels, assisting them in developing their written expert 
testimony, reviewing and analyzing comments by unpaid public 
witnesses, et cetera. ICF also analyzed public comments and 
testimony and prepared summaries of them for DOL use. It was 
unclear if at least one DOL employee read every public comment 
letter or if DOL, in its policy setting, instead relied on 
contractors' summaries of the points made by the public 
witnesses.
    Especially troubling to the subcommittee was DOL's unfairly 
turning its ergonomics rulemaking into an adversarial 
proceeding instead of a truth-seeking, scientific proceeding. 
In fact, the record shows that DOL did not disclose in its 
Federal Register notices of the hearings or orally at the start 
of the public hearings themselves that DOL's expert witnesses 
were paid ($10,000 each) to testify. The subcommittee stated 
its belief that the American people deserve better from their 
government. The contractor documents reveal that DOL:
     prepared an outline for its 28 expert individuals 
to use in preparation of their testimony;
     provided extensive substantive edits on their 
draft expert testimony, including specific points that DOL's 
attorneys wanted at least 3 of the 28 experts to make;
     allowed the 28 experts to read each other's draft 
expert testimony before finalizing their testimony to ensure 
consistency (or, as DOL stated in a March 2000 e-mail, for the 
doctors all together on the phone to just iron a few things 
out);
     rehearsed each of its expert witnesses in practice 
sessions in Washington, DC at considerable expense to the 
taxpayers, including mock cross examinations;
     required the 28 experts to review pre-delivery 
public ``opposition'' testimony and provide questions for DOL 
to use in cross examination of public ``opposition'' witnesses 
(interestingly, DOL, in a March 2000 e-mail, surmised that UPS 
canceled all of its witnesses because UPS was concerned that 
DOL's expert witnesses would be helping DOL prepare to cross 
examine UPS's witnesses); and
     required them to rebut points made and contradict 
the logic used by specifically-named public ``opposition'' 
witnesses during the hearing and challenge the credibility of 
their credentials for the post-hearing record (e.g., 1 of the 
28 experts submitted a detailed May 2000 rebuttal for the 
Chamber of Commerce's appearance). A May 2000 e-mail from DOL 
to 1 of the 28 experts stated that he would be receiving an e-
mail through her from the Solicitor's Office as to what is 
expected from him regarding rebuttal and post hearing comments 
and that he would be asked for rebuttal data on six 
specifically named witnesses (five individuals and one 
organizational witness).
    Last, the subcommittee also stated concerns that some of 
DOL's paid experts may have a vested interest in the outcome of 
the ergonomics rulemaking due to the nature of their 
businesses, e.g., a doctor working for Eastern Rehabilitation 
Network, which provides professional services in 16 Connecticut 
locations, and the executive vice president of the Ergonomic 
Technologies Corp. [ETC]. ETC, a privately held consulting 
company founded in 1993, provides ergonomic engineering 
consulting services to industry.
    The subcommittee concluded that DOL's ergonomics rulemaking 
is fatally flawed. A June 23, 2000 Washington Legal Foundation 
[WLF] paper, entitled, ``OSHA's Ergonomics Standard is Flawed 
Beyond Repair,'' analyzed DOL's flawed procedures, the flawed 
substance, the price of DOL's flexibility approach, DOL's not 
useful ``Grandfather Clause,'' and DOL's not so ``Quick Fix'' 
option. WLF's paper concluded that DOL's proposal is a 
``sham,'' which is ``designed to create the appearance of 
objective analysis while avoiding objectivity altogether'' (p. 
4). Also, the subcommittee encouraged DOL to change the way it 
is apparently conducting its OSHA rulemakings to ensure 
fairness and due process for the public in all future DOL 
rulemakings.
    The August 10th letter also questioned possible 
augmentation of DOL FTEs by use of contractors, DOL's improper 
use of contractors for inherently governmental functions in the 
rulemaking process, and DOL's use of contractors to unfairly 
bias its ergonomics rulemaking. It posed 10 sets of questions 
to DOL.
    The first set concerned DOL's incompletely-provided 
contract expenses. For example, it stated, ``Since the National 
Archives and Records Administration (NARA), in its `Baseline 
Services' document, currently commits to produce all Clinton 
Administration agency records within 24 hours, on what date(s) 
did DOL request archived information on pre-1996 awards and on 
what date(s) did DOL receive archived information?''
    The second set concerned augmenting FTEs. It requested DOL 
to provide information in chart form about DOL's actual (vs 
authorized) FTE staffing by year for all of OSHA's rulemaking 
activities from 1992 to present and separately for its 
ergonomics rulemaking, and DOL's contract expenses by year for 
all of OSHA's rulemaking activities from 1992 to present and 
separately for its ergonomics rulemaking.
    The third set concerned specific information about a 
contractor who became a DOL employee, including DOL's advise to 
him in how to respond to the subcommittee's questions. The 
fourth set concerned inherently governmental functions, 
including where DOL draws the line between allowable and 
unallowable contracting activities for regulatory policy 
development and what DOL considers unallowable activities for 
regulatory policy development.
    The fifth set concerned targeted outreach. Documents (e.g., 
a December 1999 ``Dear Stakeholder'' letter from OSHA 
Administrator Jeffress) submitted by DOL's contracted 
``expert'' witnesses reflected DOL's attempt to influence the 
record in support of OSHA's November 23rd proposed ergonomics 
program standard. The subcommittee requested DOL to provide 
information in chart form about each person or entity sent a 
Dear Stakeholder letter, with an indication if each submitted a 
written comment and/or testified orally and if the comment was 
in support or opposed to the standard.
    The sixth set concerned DOL editing, since documents 
submitted by DOL's contracted ``expert'' witnesses reflected 
DOL's editing of their draft testimony. The seventh set 
concerned DOL coaching, since documents submitted by DOL's 
contracted ``expert'' witnesses reflected DOL's rehearsal 
(practice) sessions.
    The eighth set concerned DOL advice to contractors on the 
subcommittee's requests to them. DOL staff had informed 
subcommittee staff that DOL had used a ``script'' for calls to 
the ``expert'' witnesses, asking for their delivery of 
subcommittee requested documents to DOL instead of to the 
subcommittee. Also, documents (e.g., a June 2000 DOL 
Solicitor's Office letter to the ``expert'' witnesses, which 
was after the subcommittee's June 23rd deadline for replies) 
submitted by DOL's contractors reflected DOL advice on how to 
respond to the subcommittee's requests. For example, since 
documents (e.g., a July 2000 e-mail from DOL to the ``expert'' 
witnesses) submitted by DOL's contractors reflected DOL's offer 
to increase their contract awards, the subcommittee asked how 
much will DOL be paying its contractors to respond to the 
subcommittee's requests and what procurement rules governed 
amendments to increase the dollar awards for these $10,000 
apiece contracts.
    The ninth question concerned conflict-of-interest. It 
stated, ``Even though Federal contractors are not subject to 
the strict conflict-of-interest restrictions applicable to 
Federal employees, what, if any, checks does DOL make to ensure 
that its contractors have no conflict-of-interest in the 
outcome of a rulemaking?''
    The last set of questions related to Marthe Kent, a key DOL 
official leading the ergonomics rulemaking effort. In 1994, she 
was president and CEO of Meridian Research, Inc., a company 
which DOL identified on July 21, 2000 as receiving a 1993 
contract for the ergonomics rulemaking. In 1995, Meridian sold 
its assets to ERG, a company which received at least $2.5 
million in DOL contract awards for the ergonomics rulemaking. 
According to a September 4, 1995 Washington Times article, 
``Three days before beginning at OSHA, Ms. Kent disqualified 
herself from all matters involving Meridian or its successor.'' 
The subcommittee asked for a copy of each release or any other 
document that Ms. Kent signed regarding her employment at DOL.
    The subcommittee also asked if Ms. Kent reviewed any ERG 
bids or proposals before DOL awarded contracts for its 
ergonomics rulemaking. Last, the subcommittee asked for DOL to 
provide a copy of all of Ms. Kent's ergonomics rulemaking 
documents (including but not limited to e-mails sent and 
received and memoranda sent and received) relating to Meridian 
and/or ERG. Since the Federal Acquisition Regulation [FAR] 
generally requires that contract records be retained 3 years 
after final payment (48 CFR Sec. 4.703), the subcommittee asked 
where Meridian's records are housed and for production of them 
if they are still in Ms. Kent's possession. To date, DOL has 
not yet produced a complete set of documents relating to Ms. 
Kent, such as her e-mails.
    On September 1st and September 14th, DOL provided a partial 
two-part reply to some of the subcommittee's August 10th 
questions. Unfortunately, much of the reply was not responsive 
to the specific questions asked. In response to the 
subcommittee's objections, DOL promised to provide some 
additional information ``as soon as possible.''
    Of especial concern to the subcommittee was whether the 
ergonomics rulemaking was in any way tainted because of ethical 
issues relating to three DOL employees. During December 1994, 
the three principals of Meridian Research joined OSHA's staff. 
On December 19th, Meridian Research president, Marthe Kent, 
became a full-time OSHA employee. On December 16th (i.e., 
before officially becoming a Federal employee), she signed a 
``Conflict of Interest Disqualification,'' disqualifying 
herself from personal participation in any Meridian Research 
and ERG matters. The disqualification states, ``Specifically, I 
will not be involved in assigning work to Meridian, Its 
Successor, or any other contractor, recommending that Meridian, 
Its Successor, or any other contractor be given additional work 
. . . or . . . a new contract.'' The disqualification appears 
to be permanent. She is now the principal OSHA official 
directing the ergonomics rulemaking. After Ms. Kent's hiring at 
DOL, ERG received at least $1.2 million in additional awards 
from OSHA for this rulemaking.
    On December 27th, Meridian Research vice president, William 
Perry, and secretary/treasurer, Robert Burt, became full-time 
OSHA employees. During January through March 1995, while Mr. 
Burt was a full-time Federal employee, he continued to conduct 
Federal contracting work for Meridian Research and signed 
documents on Meridian Research letterhead as its new president. 
In an October 1996 report, the House Education and the 
Workforce Subcommittee on Oversight and Investigations 
questioned the propriety of this behavior and reported that GAO 
``is reviewing several matters relating to the hiring of MRI's 
[Meridian Research's] principals.''
    In 1995, Meridian Research sold its assets to ERG. As part 
of the transfer, counsel for ERG confirmed to the subcommittee 
that Ms. Kent's son (Mr. Rosenthal) transferred from Meridian 
Research to ERG as a professional staff member.
    During the subcommittee's investigation, ERG revealed that 
it received at least $3.7 million in awards to ERG from OSHA 
for this rulemaking. (The $3.7 million total reflects 
additional information from ERG since the $2.5 million estimate 
reported in the subcommittee's July 5, 2000 letter to DOL.) As 
noted above, Federal procurement rules require contractors to 
retain records for at least a 3 year period after final 
payment. The subcommittee asked to see Ms. Kent's records (e-
mails sent and received, memoranda sent and received, et 
cetera) to ensure that she recused herself from all decisions 
relating to contract awards and additional task orders for ERG. 
In response to the subcommittee's requests, Ms. Kent did not 
supply any of records and claimed not to know where Meridian 
Research's procurement records are currently housed.
    Curiously, on July 13, 2000 and August 16th, the 
subcommittee received anonymous letters. The first stated, ``I 
read your July 5 letter to Alexis Herman about OSHA's 
violations of contracting procedures. You are on the right 
track but you need to pursue the conflict of interest route 
more thoroughly, especially with regard to ERG Corporation and 
Marthe Kent'' and ``One thing Marthe Kent got [from the sale of 
Meridian Research to ERG] was employment for her son--now hired 
by ERG--so Marthe gives contracts to ERG, who gives work to her 
son.'' The second stated, ``You are right to look at Marthe 
Kent's connection to ERG. The three main drafters of the Ergo 
reg for OSHA are Marthe Kent, Bill Perry, and Bob Burt. All 
three were officers of Meridian Corp. All three benefited 
financially from the sale of Meridian to ERG'' and ``ERG bought 
the Meridian business with the explicit understanding that they 
would get more business from OSHA.'' On September 11th, the 
subcommittee received an anonymous telephone call from an OSHA 
employee, requesting the subcommittee to pursue its 
investigation of the ethical issues surrounding the ergonomics 
rulemaking.
    On September 18th, the subcommittee sent DOL a draft 
subpoena for document production. On September 19th, DOL agreed 
to provide documents without a subpoena ``before Congress 
adjourns.'' To date, DOL has not yet provided the requested 
documents.
    b. Benefits.--The subcommittee's investigations revealed 
fatal flaws in both of DOL's major regulatory proposals, such 
that it is unlikely that either could withstand a legal 
challenge.
    c. Hearings.--None held.
6. Investigation of Agency Responses to Waiver Requests by the States 
        Under Federal Grant Programs.
    a. Summary.--Currently, Federal department and agency 
processes for reviewing State waiver requests are time 
consuming and costly, diverting time and dollars away from 
program delivery of services to those in need. President 
Reagan's federalism policies recognized the partnership between 
the Federal Government and State and local governments in the 
implementation of certain Federal programs. His federalism 
policies were premised on a recognition of the competence of 
State and local governments and their readiness to assume more 
responsibility.
    Currently, Federal agencies make awards to State and local 
governments under almost 600 categorical, block grant, and 
open-ended entitlement grant programs. In 1998, these awards 
totaled $267.3 billion, which is more than all Federal 
procurement for goods and services. Although 23 Federal 
departments and agencies make grant awards, six departments 
account for 96 percent of all grant award dollars--Health and 
Human Services [HHS] (58 percent), Transportation [DOT] (11 
percent), Housing and Urban Development [HUD] (9 percent), 
Education (8 percent), Agriculture [USDA] (7 percent), and 
Labor [DOL] (3 percent). The top 20 programs account for 78 
percent of all grant award dollars; the top 27 programs (all 
programs over $1 billion each) account for 87 percent. Several 
of these programs allow waivers of key statutory and/or 
regulatory requirements, including Medicaid (the largest 
Federal grant program, accounting for 39 percent of total 
dollars), welfare (the third largest Federal grant program, now 
called ``Temporary Assistance for Needy Families,'' accounting 
for 6 percent of total dollars), and Food Stamps (the 21st 
largest Federal grant program; however, the grant award only 
covers the administrative expenses for State administration of 
the program; if both the administrative expenses and benefit 
portions are included, the grant program would rate between the 
second and third largest grant program in size).
    On August 3, 1999, the subcommittee wrote all of the 
departments and agencies with Federal grant programs where 
States are eligible recipients to identify their statutory and 
regulatory waiver processes and to reveal their track records 
in responding to State waiver requests, including those that 
are similar to another State's already approved request. DOT, 
which is the second largest grantmaking agency, only provided 
some of the requested information.
    Sixteen of the 24 departments and agencies had any 
statutory waiver provisions; 12 of the 24 had any regulatory 
waiver provisions. Over the last 3 years, 12 of the 17 agencies 
with any statutory or regulatory waiver provisions received 
waiver applications from the States. Five of the 12 agencies--
the Departments of Energy, Justice, and Treasury, the 
Appalachian Regional Commission, and the Corporation for 
National Service--approved all such requests. Seven agencies--
the Departments of USDA, Education, HHS, HUD, DOL, and DOT and 
the Environmental Protection Agency--denied some waiver 
requests. Of the 1,801 waiver applications government-wide 
which were reported to the subcommittee, only 5 similar 
applications (or less than one-third of 1 percent) were denied.
    The bottom line is that 85 percent of all State waiver 
requests during this period were approved. DOL and USDA had the 
highest proportion of denials (29 percent and 13 percent, 
respectively). Curiously, both DOL and USDA denied a higher 
proportion of requests from Republican Governors (31 percent 
and 16 percent, respectively) than from Democratic Governors 
(23 percent and 8 percent, respectively).
    Statutory waiver provisions are diverse. For example, some 
allow waivers relating to program financing, such as both the 
grantee matching funds and maintenance of effort requirements 
for State pollution control agencies implementing the Clean Air 
Act, the maintenance of effort requirement under certain 
Education programs, and the grantee matching funds requirements 
under the Corporation for National Services' Learn and Serve 
and AmeriCorps programs. Besides program financing, some 
statutory provisions allow waiver of programmatic provisions. 
For example, the Social Security Act authorizes the Secretary 
of HHS to waive compliance with certain program requirements 
for an experimental, pilot, or demonstration program under 
Medicaid and the former Aid to Families with Dependent Children 
[AFDC] welfare program.
    b. Benefits.--States often take the initiative for major 
reform efforts. They end up being the experimental 
``laboratories of democracy'' (as Justice Brandeis called them) 
for the rest of the country. These reform efforts, performed on 
a small scale, often lead to a nationwide overhaul of outdated 
systems. In recent years, States have experimented successfully 
in reforming welfare and health care systems. It is important 
for the Federal Government not only to encourage these ``social 
experiments'' but also to provide an environment that will 
foster these types of initiatives. State and local governments 
often understand the needs of their constituents and the 
problems they face better than the Federal Government. They are 
more familiar with the unique problems that must be addressed 
in implementing a new system.
    The subcommittee reviewed how the Federal Government can 
create an environment that will encourage State and local 
governments to explore alternative solutions to social 
problems. It also examined agency processes for review of State 
requests for waivers of statutory and/or regulatory 
requirements for Federal grant programs, agency track records 
in processing such State requests, and ways to streamline 
agency processes for the States. Streamlining would result in a 
real reduction in paperwork and costs for the States, freeing 
up resources for additional delivery of services to the needy.
    c. Hearings.--A ``H.R. 2376, Grant Waivers and Streamlining 
the Process,'' hearing was held jointly with the Government 
Reform Subcommittee on Government Management, Information, and 
Technology on September 30, 1999. Witnesses included the 
executive directors of the National Governors' Association and 
the National Conference of State Legislatures, USDA, HHS, and 
DOL.
7. Investigation of State Environmental Initiatives.
    a. Summary.--Over the past 30 years, environmental 
protection in the United States has taken a largely top down, 
command-and-control approach to solving environmental problems. 
This approach has largely been implemented by pollution type. 
For example, Congress passed one law to address air, another 
law to address water, another to address endangered species, 
another to address toxic waste in the ground, et cetera. 
Policymakers in Washington, DC, prescribed uniform 
environmental standards and, in certain cases, the means of 
attaining those standards for the entire country.
    When Congress first began enacting environmental laws, that 
approach was feasible. In the 1970's, the United States was 
faced with rivers that were catching fire, raw sewage being 
discharged directly into our rivers and streams, smokestacks 
billowing untreated fumes, and toxic waste threatening 
neighborhoods. Current environmental problems, however, such as 
habitat conservation, agricultural runoff, and watershed 
management, are more complex than those the United States faced 
in the 1970's, and more dependent on local circumstances and 
knowledge for their solution. The original top down, command-
and-control, one-size-fits-all approach cannot easily solve 
these problems.
    Recognizing the need to tailor local solutions to local 
circumstances, State environmental agencies increasingly set 
priorities, partner with EPA and the private sector, streamline 
permitting procedures, develop new performance measures of 
environmental quality, and utilize market forces to achieve 
greater results at lower cost.
    At the subcommittee's September 13, 2000 hearing, 
representatives of several State environmental agencies gave 
examples of the innovations in their States, Pennsylvania's 
brownfields cleanup program, Oregon's Green Permits program, 
Florida's environmental performance indicators program, and 
Minnesota's shift from medium-specific environmental 
departments to multi-media departments divided along geographic 
lines.
    b. Benefits.--Investigating the successes of various State 
environmental initiatives should help set the stage to improve 
both the efficiency and effectiveness of Federal environmental 
laws.
    c. Hearings.--``Lessons From the Laboratories of Democracy: 
Environmental Innovation in the States,'' hearing was held on 
September 13, 2000. Witnesses included the National Conference 
of State Legislatures, Florida Department of Environmental 
Protection, Minnesota Pollution Control Agency, Oregon 
Department of Environmental Quality, Pennsylvania Department of 
Environmental Protection, Reason Public Policy Institute, and 
Natural Resources Defense Council.
8. Investigation of the Economic Effects of the Proposed Merger of B.F. 
        Goodrich Co. and Coltec Industries.
    a. Summary.--The B.F. Goodrich Co. [BFG] and Coltec 
Industries [Coltec] announced intentions to merge in November 
1998. This proposed merger would mean the existence of only one 
major domestic and two major international suppliers of 
airplane landing gears. Because of the domestic monopoly this 
merger would create, the subcommittee began an investigation of 
this merger, including the Federal Trade Commission's [FTC] 
review of the proposal. In June 1999, the subcommittee wrote 
the FTC about its intention to commence an investigation and 
request all relevant documents. In a second letter, the 
subcommittee expressed its concerns with the FTC's review of 
the merger.
    The subcommittee brought to light several confidential 
documents that appeared to detail plans that contradicted BFG's 
public and private statements to the Federal Government, the 
press and the public about its post merger intentions. 
Furthermore, the subcommittee learned that AlliedSignal, Inc., 
which objected to the merger, offered to purchase a BFG landing 
gear facility that would have ensured competition in the 
domestic market. BFG rejected this offer. After the 
subcommittee's investigation, BFG, Coltec and AlliedSignal, 
Inc. agreed to terms that would allow more than one domestic 
supplier of airplane landing gears.
    b. Benefits.--The existence of competition in the domestic 
market for airline landing gears is important for: consumers, 
who benefit from lower equipment cost; the Department of 
Defense and the Federal Government, which do not have to rely 
on only one domestic manufacturer; and, the economy.
    c. Hearings.--``Economic Effects of the Proposed Merger of 
B.F. Goodrich Company and Coltec Industries, Part I'' was held 
in South Bend, IN. ``Economic Effects of the Proposed Merger of 
B.F. Goodrich Company and Coltec Industries, Part II'' was held 
in Cleveland, OH. Witnesses included representatives from BFG, 
Coltec, AlliedSignal, and an anti-trust law professor.
9. Investigation of Reformulated Gasoline Regulations and Their Effect 
        on Midwest Gasoline Prices.
    a. Summary.--Gasoline prices in the Chicago-Milwaukee area 
dramatically escalated during the spring and summer of 2000. 
For example, in June, gas prices in Chicago surpassed $2, going 
as high as $2.30. According to energy economists, there were 
several identifiable factors that contributed to the increase 
in prices. These include the rise in world crude oil prices and 
low world stocks resulting from OPEC's production decisions.
    Within the United States, interrelated problems associated 
with the introduction of more stringent, phase II reformulated 
gasoline [RFG] this year inhibited both domestic production and 
imports. The UNOCAL patent infringement case further inhibited 
supply. Disruptions to the logistics system, notably pipelines 
serving the Midwest, and problems of blending ethanol as 
opposed to MTBE in making phase II gasoline, contributed to 
even sharper price increases in the Midwest, than elsewhere.
    The hearing included testimony from witnesses regarding the 
effect of the Environmental Protection Agency's [EPA's] 
recently implemented gasoline standards and from environmental 
experts on the reasons for the new gasoline standards, 
particularly in rural counties. The hearing also included 
testimony from affected small businesses, local governments and 
consumers.
    Of particular concern to many counties in the Midwest is 
the fact that the new RFG is required to maintain air quality, 
in particular for ozone. According to hearing witnesses, ozone 
is produced when volatile organic compounds [VOCs], such as 
solvents, or gasoline, breakdown in the atmosphere. In the 
Chicago-Milwaukee non-attainment zone, the majority of VOCs are 
produced in counties in Chicago and Indiana. Nearby rural 
counties, although in the non-attainment zone, are relatively 
insignificant contributors to the overall pollution problem. 
Nonetheless, rural counties are required by the EPA to sell the 
reformulated gasoline even though, according to air quality 
experts, they are not significant contributors of the air 
quality problem.
    b. Benefits.--Gasoline price spikes cause immediate 
economic hardship to businesses, local governments and 
consumers, particularly those on fixed incomes or budgets. Long 
term high energy prices can also produce a significant drag on 
the local, regional or national economy. Understanding the role 
of Federal regulatory policy in producing these elevated prices 
enhanced the ability of policymakers to avoid policies that 
would result in higher energy prices.
    c. Hearings.--``Ozone Transport and Reformulated Gasoline: 
How EPA Regulations Are Raising Gas Prices,'' was held in 
Racine, WI on July 6, 2000. Witnesses included EPA, the Lake 
Michigan Air Directors Consortium, the Racine County Sherrif's 
Department, the Cato Institute, and North Star Shell.

Subcommittee on National Security, Veterans Affairs, and International 
                               Relations

                    Hon. Christopher Shays, Chairman

1. Cabinet Department and Agency Oversight.
    a. Summary.--The National Security, Veterans Affairs, and 
International Relations Subcommittee, which has oversight 
jurisdiction over those departments and agencies of government 
managing defense, international relations and veterans affairs, 
conducted an oversight investigation examining the most 
pressing management and programmatic problems facing those 
departments and agencies in the 106th Congress. The 
subcommittee also explored the extent to which they are able to 
comply with the requirements of the Government Performance and 
Results Act [GPRA]. According to GAO, too often the 
government's performance is limited by a failure to manage on 
the basis of a clear understanding of the results that agencies 
are to achieve and how performance will be gauged. Over the 
course of its investigation, the subcommittee reviewed budget 
data, department and agency reports to Congress, Inspector 
General [IG] reports and audits, and General Accounting Office 
[GAO] studies and recommendations including the GAO's High Risk 
Series Update and a new series of special GAO reports entitled 
Performance and Accountability Series: Major Management 
Challenges and Program Risks. The undertaking culminated in 
oversight hearings with Under Secretaries of the Department of 
Defense [DOD], Department of State [DOS], and Department of 
Veteran Affairs [VA] as well as representatives from IG offices 
and GAO.
    The DOD inquiry focused on the problems and challenges that 
led the $267 billion department to be rendered a ``high-risk'' 
agency by the GAO--namely systematic management challenges 
dealing with financial management, information management, 
weapon systems acquisition and contract management, and program 
management challenges dealing with infrastructure, inventory 
management, and personnel. In addition, the subcommittee 
reviewed the DOD-IG's 10 most serious management problems 
facing DOD. The DOD-IG identified similar management problems 
confronting the Department of Defense including financial and 
information management issues, inventory and other procurement 
issues, and quality of life issues including military health 
care.
    The subcommittee's investigation into the $43 billion 
Department of Veterans Affairs began with an examination of the 
VA's decentralized health facilities management structure. Both 
the GAO and the VA-IG identified significant management 
problems including poor infrastructure utilization, poor 
monitoring of the effects of health service delivery changes on 
patient outcomes, ineffective management of non-health care 
benefits and inefficient management information systems.
    The Department of State is the lead agency responsible for 
the conduct of American diplomacy. DOS accomplishes this with a 
budget of $2.7 billion. The oversight inquiry into the 
Department focused on the IG's concerns about the immediate 
need to address physical security vulnerabilities, 
consolidation of foreign affairs agencies, and inadequately 
secure information systems and financial management.
    b. Benefits.--The record developed through the 
subcommittee's oversight of Department and agency problems and 
weaknesses provided valuable information regarding how and 
where the government can take corrective action. The hearings 
also gave members a valuable overview and insight into how to 
focus future oversight efforts.
    c. Hearings.--The subcommittee held oversight hearings with 
each of the three Cabinet agencies under its jurisdiction. 
``Waste, Fraud and Abuse at the Defense Department, Veterans 
Affairs, and Department of State,'' was held on February 25, 
1999. ``Vulnerabilities to Waste, Fraud, and Abuse: Views of 
the Departments of Defense, State, and Veterans Affairs,'' was 
held on March 2, 1999.
2. Oversight of the Application of the Prompt Payment Act in the 
        Department of Defense.
    a. Summary.--The General Accounting Office [GAO] reported 
that serious financial management weaknesses continue to plague 
the Department of Defense [DOD] stewardship of $1 trillion in 
assets and $250 billion in annual spending. Despite ongoing 
reform efforts and some improvements to financial systems, 
erroneous, fraudulent and improper payments persist. Though not 
always asked to do so, contractors return almost $1 billion in 
overpayments from DOD every year. The subcommittee examined one 
aspect of the complex, erratic DOD disbursement process: 
compliance with the Prompt Payment Act [PPA]. The PPA requires 
agencies to pay interest to contractors and vendors for any 
late payments for goods or services. For fiscal year 1998, DOD 
penalty interest payments were $36.7 million, and in fiscal 
year 1999 (March) DOD penalty interest payments were $ 28.8 
million.
    b. Benefits.--The subcommittee identified a number of 
potential modifications which might improve DOD's payment 
processes under the PPA. These included easier implementation 
of best commercial practices such as the use of electronic 
payments, elimination of small interest payments, streamlining 
the allocation of penalty interest payments, clarifying when 
penalty interest is paid, taking better advantage of vendor and 
contractor cash discounts, and the inclusion of interim 
payments and progress payments under the PPA.
    c. Hearings.--A hearing entitled, ``Financial Management: 
Time to Reform the Prompt Payment Act?,'' was held on June 16, 
1999.
3. Oversight of Department of Defense Anthrax Vaccination Immunization 
        Program [AVIP].
    a. Summary.--The subcommittee investigated the Anthrax 
Vaccine Immunization Program [AVIP] as a medical program and as 
a force protection measure, examining the concept, operation 
and management of the force-wide anthrax vaccine program begun 
in 1997.
    With the assistance of the GAO, the subcommittee studied 
safety issues raised by the widespread use of a rudimentary 
vaccine previously administered to a very limited population. 
The subcommittee learned that data on adverse events and 
adverse reactions are not being systematically gathered. DOD 
reliance on a passive surveillance system, the Vaccine Adverse 
Events Reports System [VAERS], means actual health effects will 
be under-reported. As a result, the actual health effects of 
the program will remain difficult to determine.
    GAO also studied the AVIP acquisition strategy and the 
risks attendant to the precarious financial condition of the 
sole-source vaccine manufacturer. Despite DOD indemnification 
of the vaccine maker against liability for adverse reactions, 
including death, and against liability for any failure of the 
vaccine to confer the desired immunity, the company was found 
to need substantial, extraordinary financial assistance from 
DOD in addition to the contract amounts negotiated less than a 
year before.
    In response to investigative requests, the subcommittee 
received more than 100,000 pages of documents and electronic 
records from DOD and the Food and Drug Administration [FDA]. 
Review of those documents disclosed weaknesses in the AVIP 
recordkeeping system and communication effort. The documents 
also raised questions as to the efficacy of the vaccine against 
the most deadly threat--aerosolized mixtures of multiple 
strains of virulent anthrax spores. The subcommittee also 
discovered that weaknesses in DOD's medical recordkeeping also 
resulted in an apparent tolerance for deviations from the FDA-
approved inoculation schedule. Although GAO discovered the 
anthrax vaccine regimen of six shots over 18 months was arrived 
at arbitrarily, it is the only approved course to protect 
against anthrax infection. The likely effect of deviations from 
the schedule is a reduction in the degree of protection 
provided by the vaccine against the disease.
    The investigation also looked at the potential impact of 
the mandatory vaccination program on unit readiness, retention 
and morale, specifically in reserve component units. The 
subcommittee received reports of numerous resignations and 
transfers from Reserve and Guard units as a result of 
opposition to the anthrax vaccine program. Active duty 
personnel are being disciplined, demoted or court martialed. 
DOD was unable to provide the subcommittee accurate data on the 
impact of the anthrax program, but claimed those effects to be 
``negligible.''
    b. Benefits.--The subcommittee investigation into the 
Anthrax Vaccination Immunization Program prompted the 
Department to re-examine the sole-source acquisition strategy 
and to study broader, more secure procurement sources for the 
current, or a more advanced, vaccine. Service members has an 
opportunity to express their concerns about the safety, 
effectiveness and necessity of a mandatory force protection 
program. In response to issues raised by the subcommittee, DOD 
has also begun to design an active surveillance study of 
adverse events associated with the vaccine, particularly those 
experienced by women.
    c. Hearings.--A hearing entitled, ``The Impact of the 
Anthrax Vaccine Program on Reserve and National Guard Units,'' 
occurred on September 29, 1999, with testimony from witnesses 
from the DOD and armed service members. A hearing entitled, 
``Anthrax Vaccine Adverse Reaction'' occurred on July 21, 1999, 
with testimony from GAO, FDA, DOD and service members. A 
hearing entitled, ``Department of Defense's Sole-Source Anthrax 
Vaccine Procurement,'' occurred on June 30, 1999, with 
testimony received from officials from DOD, GAO and BioPort 
Corp. A hearing entitled, ``DOD's Mandatory Anthrax Vaccine 
Immunization Program for Military Personnel,'' took place on 
April 29, 1999, with testimony from officials with GAO, DOD and 
members of the armed services. A hearing entitled, ``The 
Anthrax Immunization Program,'' occurred on March 24, 1999, 
with testimony received from officials with the DOD, members of 
the armed forces, and concerned citizens.
4. Oversight of Government-wide Coordination of Programs to Combat 
        Terrorism.
    a. Summary.--The subcommittee investigated the overall 
Federal effort to prevent and combat terrorism in the United 
States and abroad. The subcommittee examined government-wide 
spending coordination of anti- and counter-terrorism programs 
found in more than 40 agencies and departments, including the 
specific programs and initiatives to train first responders, 
deploy National Guard rapid response teams, and enhance public 
health capabilities to deal with weapons of mass destruction 
[WMD]. The subcommittee also examined the scientific and 
practical aspects of terrorists carrying out large-scale 
chemical or biological attacks on U.S. soil.
    The subcommittee investigation focused on reports issued by 
the U.S. General Accounting Office [GAO] entitled, ``Combating 
Terrorism: FBI's Use of Federal Funds for Counter Terrorism-
Related Activities''; ``Combating Terrorism: Spending on 
Governmentwide Programs Requires Better Management and 
Coordination''; ``Combating Terrorism: Federal Agencies' 
Efforts to Implement National Policy and Strategy''; 
``Combating Terrorism: Threat and Risk Assessment Can Help 
Prioritize and Target Program Investment''; ``Combating 
Terrorism: The Need for Comprehensive Threat and Risk 
Assessment of Chemical and Biological Attacks''; ``Combating 
Terrorism: Use of National Guard Response Teams is Unclear.''
    b. Benefits.--The subcommittee inquiry continues to be the 
only government-wide review of the evolving response to the 
terrorism threat. The subcommittee inquiry permitted Members 
and the public to weigh the benefits and pitfalls of the 
proposed transfer of certain Nunn-Lugar-Domenici act 
responsibilities from the DOD to the DOJ. Investigations led to 
a more precise understanding of the role of National Guard 
Rapid Assessment and Initial Detection [RAID] teams in domestic 
response scenarios. This investigation also kept administration 
focus on the need for more sophisticated, updated threat and 
risk assessments to guide U.S. programs and policies to prevent 
and combat terrorist attacks.
    c. Hearings.--A hearing entitled, ``Combating Terrorism: 
Assessing the Threat,'' took place on October 20, 1999, with 
testimony from GAO, and subject matter experts. A hearing 
entitled, ``Terrorism Preparedness: Medical First Response,'' 
occurred on September 22, 1999, with testimony from Health and 
Human Services [HHS] and the Center for Disease Control and 
Prevention [CDC], State and local government officials, and 
subject matter experts. A hearing entitled, ``Combating 
Terrorism: Role of the National Guard Response Teams,'' 
occurred on June 23, 1999, with testimony from officials from 
the GAO, DOD National Guard Bureau. A hearing entitled, 
``Combating Terrorism: Proposed Transfer of the Domestic 
Preparedness Program,'' occurred on May 26, 1999, with 
testimony from officials with the DOD, DOJ, and the Federal 
Emergency Management Agency [FEMA]. A hearing entitled, 
``Government-wide Spending to Combat Terrorism: General 
Accounting Office Views on the President's Annual Report,'' 
took place on March 11, 1999, with testimony from the GAO.
5. Oversight of the Implementation of the Department of Veterans 
        Affairs Hepatitis C Testing and Treatment Initiative.
    a. Summary.--The subcommittee investigated implementation 
of a major new VA health initiative. The Hepatitis C virus 
[HCV] represents a serious health threat nationwide, but is 
found at a much higher rate among the veteran population. 
Recognizing the public health threat Hepatitis C poses to 
veterans, in January 1999 the Department of Veterans Affairs 
[VA] announced their intention to undertake a program to 
respond to this epidemic among veterans. Those efforts included 
testing and treatment for all veterans diagnosed with the 
illness. The VA initiative is consistent with recommendations 
for HCV outreach and treatment made by the Government Reform 
Committee in the 105th Congress.
    Despite the positive response to this VA initiative, the 
subcommittee was concerned that current resources of the 
department may be inadequate to meet the demand for HCV 
screening and treatment. In addition, veterans groups remain 
concerned the program is not being implemented equitably within 
or between the 22 Veterans Integrated Service Networks. 
Veterans groups argue the regional network structure lacks the 
accountability, in the form of data tracking and reporting, to 
ensure the promised reach of the HCV program.
    b. Benefits.--The investigation gave veterans and health 
groups the opportunity to expand their involvement in the VA's 
HCV initiative. The goals and time lines of the VA program were 
clarified, as were treatment criteria. The need for more 
refined tracking and accountability systems was documented. The 
subcommittee explored the potential budget implications of 
addressing an epidemic of unknown size. VA made commitments HCF 
programs would not be pursued at the expense of other core VA 
health care efforts.
    c. Hearings.--The subcommittee held a hearing entitled, 
``VA Outreach to Veterans at Risk for Hepatitis C Infection,'' 
on June 9, 1999, and heard testimony from VA, the American 
Liver Foundation, private researchers and others.
6. Oversight of the Inter-American Foundation.
    a. Summary.--The subcommittee's oversight investigation of 
the Inter-American Foundation examined its mission, management 
and performance. The Foundation is an independent and 
experimental Federal agency that supports social and economic 
development in Latin America and the Caribbean. It makes grants 
primarily to private, indigenous organizations that carry out 
self-help projects benefiting poor people. Following years of 
inattention, the Inter-American Foundation came under scrutiny 
after a number of public reports came to light regarding IAF 
grants to alleged criminals and terrorists, mismanagement and 
internal agency strife. The subcommittee focused on two issues: 
(1) the post-cold war mission of the Inter-American Foundation, 
and (2) how effectively was the Inter-American Foundation 
addressing its management, accountability, and internal control 
problems.
    b. Benefits.--After 10 years without an authorizing or 
oversight hearing on the Inter-American Foundation, the IAF was 
subject to long overdue scrutiny. Policymakers got a clearer 
view of the challenges and choices facing international aid 
efforts seeking to reach the grass roots level while still 
attaining sufficient critical program mass to be able to 
measure effectiveness.
    c. Hearings.--A hearing entitled, ``Oversight of the Inter-
American Foundation,'' was held on October 13, 1999.
7. Oversight of VA Implementation of the Persian Gulf War Veterans Act 
        of 1998.
    a. Summary.--The subcommittee examined efforts by the 
Department of Veterans Affairs to implement the Persian Gulf 
War Veterans Act of 1998. Included in the act was the provision 
that the VA contract with the National Academy of Sciences 
[NAS] to review any associations between illnesses and wartime 
exposure that warrant a presumption of service-connection for 
sick Gulf war veterans. VA claimed a pre-existing agreement 
with NAS met the spirit, if not the letter, of the 1998 law. 
The objective of the inquiry was to determine if timeliness 
under the law would be met by VA.
    b. Benefits.--As a result of the hearing, Congress, VA and 
the public better understood the sequence of events and time 
lines anticipated under the Persian Gulf War Veterans Act of 
1998, and the importance of establishing a presumption of 
service connection for undiagnosed illnesses that can be 
associated with wartime exposures.
    c. Hearings.--A hearing was held on April 22, 1999, 
entitled, ``VA Oversight: Implementation of the Persian Gulf 
War Veterans Act of 1998.'' The Honorable Robert C. Byrd, 
Senator from West Virginia, testified along with officials from 
the Department of Veterans Affairs, and the Institute of 
Medicine.
8. Views of Veterans Service Organizations.
    a. Summary.--The National Security Subcommittee examined 
the fiscal year 2000 budget for the Department of Veterans 
Affairs [VA] as proposed by the President. Discussion with 
veterans service organizations and other advocacy groups 
centered on the impact of the proposed budget on existing 
healthcare and benefits programs. Other issues were raised 
regarding the impact of VA reorganization on health care 
quality and the effects of funding shifts under the Veterans 
Equitable Resource Allocation [VERA] system.
    b. Benefits.--The investigation provided insight on the 
likely growth in demand for mental health services and long-
term care. Each VSO provided specific recommendations on issues 
they believed need to be resolved by the VA and the DOD.
    c. Hearings.--A hearing entitled, ``Views of Veterans' 
Service Organizations,'' occurred on March 18, 1998, with 
witnesses from the American Legion, Veterans of Foreign Wars, 
AmVets, Disabled American Veterans, Vietnam Veterans of America 
and the National Gulf War Resource Center.
9. DOD Administration of Investigational New Drugs on U.S. Service 
        Personnel.
    a. Summary.--As a result of a recommendation approved by 
the committee in the 105th Congress, Congress enacted 
legislation strengthening protections for U.S. service 
personnel when requested or ordered to take an experimental 
drug or vaccine as protection against, or treatment for, 
chemical or biological weapons exposures. During the Gulf war, 
investigational products were used with FDA approval, but DOD 
failed to provide information to those receiving the 
substances, failed to follow agreed-upon medical protocols and 
failed to keep required medical records. Under the new law, 
written medical information must be provided before any drug or 
vaccine is administered. Only the President may authorize 
administration of an investigational product to service 
personnel, and only after certification by DOD of adherence to 
FDA standards. A new FDA regulation was proposed and the 
President issued an Executive order reflecting his 
responsibilities under the act. The subcommittee inquired 
regarding the new authorization process, the rigor of the 
proposed review and the adequacy of the medical recordkeeping 
required under investigational protocols.
    b. Benefits.--This investigation helped reassure U.S. 
service personnel they will not be used as ``guinea pigs'' in 
future conflicts under the pretext that the threat of 
biological or chemical warfare justifies the hurried 
abandonment of longstanding ethical and medical protections for 
those involved in research.
    c. Hearing.--A hearing entitled, ``Force Protection: 
Improving Safeguards for the Administration of Investigational 
New Drugs to Members of the Armed Forces,'' occurred on 
November 9, 1999.
10. Defense Security Service Oversight.
    a. Summary.--The General Accounting Office [GAO] reported 
serious performance and management challenges confronting the 
Defense Security Service [DSS] resulting in a backlog of 
personnel security investigations [PSI]. Despite ongoing 
efforts to reduce this backlog the number of pending PSI cases 
is growing. Awaiting reinvestigation are thousands who should 
not, or need not, have access to classified material any 
longer. Historically one-half of 1 percent of these backlogged 
individuals would have had their clearances revoked as the 
result of a timely reinvestigation. At the same time, agencies 
are losing qualified new hires who cannot wait almost a year 
for DSS to complete an initial investigation. Defense 
contractors have found themselves unable to perform billions of 
dollars worth of work because employees have not obtained 
routine clearances. These delays threaten to affect some 
facilities' ability to effectively perform on defense contracts 
and meet cost schedules.
    b. Benefits.--The record identified problems and weaknesses 
of the Defense Security Service's [DSS] handling of personnel 
security investigations. Through the subcommittee's oversight, 
it was determined DSS needed to redouble their efforts to 
render accurate and timely personnel security investigation 
[PSI] reports, insure a fully trained investigative staff, 
determine the size and then reduce and eventually eliminate the 
reinvestigation backlog and provide for a fully functional case 
control management system.
    c. Hearings.--A hearing entitled, ``Defense Security 
Service Oversight,'' occurred on February 16, 2000 with 
testimony from witnesses from GAO and DSS, and a hearing 
entitled, ``Oversight of the Defense Security Service: How Big 
is the Backlog of Personnel Security Investigations?,'' on 
September 20, 2000 with testimony from witnesses from GAO, DOD-
AS3CI, DDS and DOD-IG.
11. Combating Terrorism: Management of Medical Supplies.
    a. Summary.--Congressional concern about the control and 
adequacy of current medical stockpiles under the management of 
the Office of Emergency Preparedness [OEP], the Department of 
Veterans Affairs [VA] and the Marine Corps' Chemical Biological 
Incident Response Force [CBIRF] resulted in an October 1999 
General Accounting Office [GAO] report entitled, ``Combating 
Terrorism: Chemical and Biological Medical Supplies are Poorly 
Managed.'' GAO's report focused on the inventory and management 
of Federal medical stockpiles which would be used to treat 
civilians should a chemical or biological attack occur. GAO 
found the OEP, VA, and CBIRF all lacked the internal controls 
needed to manage these stockpiles, thereby resulting in 
overages, shortages, expired, missing and improperly recorded 
supplies.
    b. Benefits.--The oversight record resulting from the 
investigation of the management of medical stockpiles provided 
members of the subcommittee the opportunity to question the VA 
and OEO how risks are identified that could threaten the use 
and availability of medical stockpiles. It established a record 
of the VA's, OEO's and CBIRF's intention to conduct risk 
assessments and implement a tracking system that retains 
complete documentation for all stockpiled medical supplies that 
have been ordered, received, and destroyed.
    c. Hearings.--A hearing entitled, ``Combating Terrorism: 
Management of Medical Supplies,'' was held on March 8, 2000 
with testimony from witnesses from GAO, the Department of 
Veterans Affairs [VA], the Office of Emergency Preparedness 
[OEP], the Center for Decease Control and Prevention [CDC], and 
the Chemical Biological Incident Response Force [CBIRF].
12. Combating Terrorism: Coordination of Non-Medical R&D Programs.
    a. Summary.--The General Accounting Office [GAO] has 
reported the importance of achieving better coordination of the 
various individual agency efforts that conduct research and 
development of nonmedical chemical and biological defense 
technology. The subcommittee explored the extent to which the 
Department of Defense [DOD], the Department of Justice [DOJ], 
and the Department of Energy [DOE] include a sound threat and 
risk assessment process to prioritized and focus funding of 
research and development [R&D] for programs to detect, identify 
and protect troops and civilians.
    b. Benefits.--The subcommittee was able to determine there 
is no clear threat or risk assessment for either prioritizing 
funding or for research and development for programs to detect, 
identify and protect troops and civilians. The hearing gave 
members a valuable overview and insight into the coordination 
of non-medical R&D programs and how to best focus their 
energies as an oversight body for future reform and savings.
    c. Hearings.--A hearing entitled, ``Combating Terrorism: 
Coordination of Non-Medical R&D Programs,'' occurred on March 
22, 2000 with testimony from witnesses from GAO, DOD's Defense 
Threat Reduction Agency [DTRA], DOE's Chemical and Biological 
Nonproliferation Program and the FBI.
13. Joint Strike Fighter [JSF] Acquisition Reform.
    a. Summary.--The Joint Strike Fighter [JSF] is part of the 
Department of Defense's tactical aircraft modernization plan, 
which includes the Air Force F-22 Raptor, and the Navy F/A-18 
E/F Super Hornet. The Joint Strike Fighter [JSF] program is 
unique because the aircraft would incorporate common components 
and parts for several services and allied governments for their 
different missions.
    Rushing weapon systems from laboratory, through 
development, and into production has been a persistent problem 
for the Department of Defense [DOD]. The Joint Strike Fighter 
acquisition strategy is designed to meet affordability goals by 
reducing program risk before proceeding into the engineering 
and manufacturing development [EMD] phase. To that end, the 
acquisition strategy is designed to ensure a better match 
between the maturity of key technologies and aircraft 
requirements. At the subcommittee's request, the General 
Accounting Office [GAO] analyzed the Joint Strike Fighter [JSF] 
acquisition strategy to determine to what extent DOD is staying 
within the JSF acquisition strategy. GAO recommended the JSF 
development schedule should changed be reduced potential 
program risks.
    b. Benefits.--The oversight record resulting from the 
investigation of the Joint Strike Fighter provided members of 
the subcommittee the opportunity to question the effectiveness 
of acquisition reform. The subcommittee learned the JSF will 
enter the EMD phase without having an acceptable level 
technology maturation the JSF program office identified as 
critical to meeting the programs cost's and requirement 
objectives. This is not consistent with best commercial 
practices in which technologies are more fully developed before 
proceeding into product development.
    c. Hearings.--A hearing entitled, ``Joint Strike Fighter 
[JSF] Acquisition Reform: Will it Fly?,'' occurred May 10, 2000 
with testimony from witnesses from GAO, DOD, U.S. Air Force, 
RAND, 3M Corp., and Massachusetts Institute of Technology.
14. F-22 Cost Controls.
    a. Summary.--The F-22 Raptor is part of the Department of 
Defense's tactical aircraft modernization plan, which includes 
the Joint Strike Fighter [JSF], and the Navy F/A-18 E/F Super 
Hornet. The development of the F-22 Raptor emerged from the 
considerable research effort the Air Force mounted in the 
1980's during the Reagan administration defense buildup. The 
Air Force decided on the procurement of a new tactical fighter 
to replace the current F-15 Eagle after a series of tests and 
after evaluating two competing aircraft designs.
    In 1996, due to unanticipated cost growth in the F-22 
program, the Assistant Secretary of the Air Force for 
Acquisition established the Joint Estimating Team [JET] 
consisting of personnel from the Air Force, Department of 
Defense, and private industry. The objective of the JET was to 
estimate the most probable cost of the F-22 program and to 
identify realistic initiatives that could be implemented to 
lower both EMD and production costs. Because of escalating 
program costs over the last 10 years, the quantity of aircraft 
in the F-22 Raptor program was reduced from 750 to 648 in 1991, 
then to 438 in late 1993, and then to 339 in 1997, and to 333 
aircraft in late 1999.
    In December 1999, the subcommittee held an oversight 
hearing to examine how the Air Force implemented EMD cost 
control strategies and dealt with schedule overruns in the F-22 
Raptor program. The Deputy Undersecretary of the Air Force 
indicated at least $15.1 billion in cost reduction initiatives 
were needed to stay within the cap portion of the production 
program from the airframe manufacturer and $2.5 billion from 
the engine manufacturer.
    As a follow-up to that hearing, the subcommittee requested 
the General Accounting Office [GAO] to study the F-22 Raptor 
production cost reduction plans [PCRP] initiated by the 
Department of Defense and the contractors and determine what 
progress has been made in implementing and achieving production 
cost reductions by the projected $16 billion.
    b. Benefits.--As a result of the subcommittee's oversight 
of the F-22 program, members learned about half of the $21.0 
billion in cost reductions identified by the F-22 contractors 
and program office have not yet been implemented and the Air 
Force may not be able to achieve the expected results from some 
of the plans because they are beyond the Air Force's ability to 
control. The discussions brought out the need for better 
coordination of production cost estimates between the Air Force 
program office and the Department of Defense.
    c. Hearings.--A hearing entitled, ``F-22 Cost Controls,'' 
occurred on December 7, 1999, and a hearing entitled, ``F-22 
Cost Controls: Will Production Cost Savings Materialize?,'' 
occurred on June 15, 2000 with testimony from witnesses from 
GAO, DOD and the U.S. Air Force.
15. Combating Terrorism: Assessing Threats, Risk Management, and 
        Establishing Priorities.
    a. Summary.--The Subcommittee on National Security, 
Veterans Affairs, and International Relations investigated how 
current threat assessments and associated risk management 
strategies affect funding priorities to combat terrorism. Over 
the past 4 years funding to combat terrorism increased 43 
percent to $11.3 billion. The administration argues increased 
funding is required to enhance ongoing efforts and launch new 
initiatives to deter and respond to terrorist attacks. The 
requirement for the increased spending is based on the emerging 
terrorist threat and how vulnerable the United States is to 
such an attack. In the fall of 1999, the General Accounting 
Office [GAO] recommended the Federal Bureau of Investigation 
sponsor a national-level risk assessment using national 
intelligence estimates and inputs from the intelligence 
community and others to help form the basis for and prioritize 
programs and associated funding to combat terrorism. GAO 
further explained that terrorist threat assessments are 
decision support tools. The assessments would form a 
deliberate, analytical approach resulting in a prioritized list 
of risks. This list would assist in establishment of funding 
priorities for counterterrorism programs. The Department of 
Justice [DOJ] concurred with the recommendation. In an 
associated effort, the GAO, in April 2000, assessed how other 
countries allocate their resources to combat terrorism. 
Officials in other countries, because of limited resources, 
make funding decisions by assessing the likelihood of terrorist 
activity actually taking place, not the countries' overall 
vulnerability.
    b. Benefits.--The investigation found the administration 
had not developed a comprehensive or integrated threat 
assessment incorporating the threat to military installations 
and forces, the threat to embassies and diplomats, the 
international terrorist threat, and the domestic terrorist 
threat. It was concluded all programs to combat terrorism could 
not be funded equally. Priorities should be established. 
Listing the threats, determining which are most likely, and 
establishing priorities will assist in determining which 
programs are most important and receive priority funding. Such 
an assessment forms the basis for establishment of overall 
Federal funding priorities.
    c. Hearings.--A hearing entitled, ``Combating Terrorism: 
Assessing Threats, Risk Management, and Establishing 
Priorities,'' was held on July 26, 2000. The hearing had open 
and closed sessions. During the closed session witnesses from 
GAO, the Congressional Research Service [CRS], Federal Bureau 
of Investigation, Central Intelligence Agency, Defense 
Intelligence Agency, and Department of State testified. The 
transcript for the closed session will not be printed. During 
the open session witnesses from the GAO, CRS, RAND Corp., 
National Commission on Terrorism, National Defense University, 
and Monterey Institute of International Studies testified.
16. Department of Defense Chemical and Biological Defense Program: 
        Management and Oversight.
    a. Summary.--The Subcommittee on National Security, 
Veterans Affairs, and International Relations investigated the 
Department of Defense [DOD] Chemical and Biological Defense 
Program [CBDP]. The program's objective is to enable U.S. 
forces to survive, fight, and win in a chemical or biological 
contaminated warfare environment. The DOD CBDP provides for 
development and procurement of systems to enhance the ability 
of U.S. forces to deter and defend against chemical and 
biological [CB] agents during regional contingencies. According 
to DOD, the probability of U.S. forces encountering CB agents 
during worldwide conflicts remains high. An effective defense 
reduces the likelihood of a CB attack, and if an attack occurs, 
enables U.S. forces to survive, continue operations, and win. 
In August 1999, the General Accounting Office [GAO] evaluated 
the CBDP and examined the extent to which DOD applied the 
Government Performance and Results Act's outcome-oriented 
principles to the CBDP. The GAO concluded DOD has not 
incorporated key Results Act principles, as evidenced by the 
fact the goals of the CBDP are vague and unmeasurable and do 
not articulate specific desired impacts. Additionally, the GAO 
stated DOD emphasized activities rather than impacts. The 
program is not being evaluated according to its impact on the 
defensive or operational capabilities of U.S. forces, either 
individually or collectively. Finally, GAO concluded the DOD 
CBDP incorporated Results Act principles inconsistently. The 
GAO recommended the Secretary of Defense take actions to 
develop a performance plan for the CBDP based on the outcome-
oriented management principles embodied in the Results Act. GAO 
also recommended the plan should be agreed to and supported by 
the relevant organizations and incorporated in DOD's annual 
report to Congress. The DOD concurred with the GAO report and 
attempted to describe its CBDP vision, mission, and goals in 
the March 2000 CBDP Annual Report to Congress.
    b. Benefits.--Investigation of the CBDP provided members of 
the subcommittee the opportunity to question to what extent, 
and when, the DOD CBDP management intends to comply with the 
Results Act. Additionally, the investigation brought to light 
problems with the management and oversight structure of the 
CBDP, specifically; the CBDP management structure is redundant 
and convoluted.
    c. Hearings.--A hearing entitled, ``Department of Defense 
Chemical and Biological Defense Program: Management and 
Oversight,'' was held on May 24, 2000. The GAO and Deputy 
Assistant Secretary of Defense for Chemical and Biological 
Defense provided testimony.
17. Force Protection: Current Individual Protective Equipment.
    a. Summary.--The Subcommittee on National Security, 
Veterans Affairs, and International Relations investigated the 
acquisition and the maintenance of selected chemical and 
biological individual protective equipment for U.S. forces. The 
Defense Logistics Agency [DLA] is the Department of Defense 
[DOD] logistics combat support agency whose primary role is to 
acquire supplies and services to military forces worldwide. 
Chemical/biological protective equipment for military forces is 
acquired from various vendors by the DLA. In 1999, the General 
Accounting Office [GAO] identified DOD's management of 
secondary inventories (spare and repair parts, clothing, 
medical supplies, and other items to support the operating 
forces) as a high-risk area because levels of inventory were 
too high and management systems and procedures were 
ineffective. A DOD Office of Inspector General [IG] audit 
(February 1997) at a Defense Depot in Columbus, OH found that 
the Depot did not include 696,380 chemical protective suits in 
its inventory records. A second IG audit (February 2000) found 
that the February 1997 problems were not corrected. In late 
February an Associated Press article reported ``The Pentagon 
has alerted U.S. facilities around the world that hundreds of 
thousands of protective suits meant to shield GIs from gas and 
germ attack may have holes and other critical defects.''
    In a related problem, it was found there were failures of 
protective masks. Chemical protective masks provide 
respiratory, eye, and face protection against chemical and 
biological agents. It is critical for the warfighter to be 
fully protected and have a fully serviceable protective mask in 
such an environment in order to survive and accomplish the 
mission. In response to a DOD Hotline allegation the IG 
completed (June 30, 1994) a quick-reaction, independent, random 
test of the Army's protective masks. The allegation questioned 
the serviceability of fielded protective masks. The complete 
results of the test are classified, however an unclassified 
portion states numerous failures were found among the masks 
tested.
    One of the reasons for the failures was that soldiers were 
not adequately following the procedures for performing 
preventive maintenance checks and services. A more detailed 
audit was completed on November 2, 1994 and found that soldiers 
were not adequately performing the checks and services or 
reporting maintenance problems as required by technical 
manuals. The report concluded there was a lack of oversight by 
unit leaders. Leaders were not ensuring soldiers were 
performing the necessary checks and services or following and 
adhering to the PMCS instructions in the technical manuals. 
Based on these lingering concerns about protective masks, DOD's 
Joint Service Integration Group [JSIG] initiated a 2-year pilot 
program to assess the condition of fielded protective masks. 
Testing was conducted on over 19,000 protective masks utilizing 
visual examinations followed by assessments using special test 
equipment. Defective severity was classified as minor (dirty 
mask), major (may cause leakage), and critical (leakage will 
result). The assessment team found over 1,400 minor defects, 
2,500 major defects, and 10,000 critical defects. The report 
concluded that technical manuals are not being used 
effectively, training is not adequate, and leaders need to 
place greater emphasis on nuclear, chemical and biological 
defense. Several letters were sent to the Office of Secretary 
of Defense requesting how the recommendations would be 
implemented. The Deputy Assistant to the Secretary of Defense 
for Chemical and Biological Defense, Dr. Anna Johnson Winegar, 
stated in a letter to the IG that the problems identified in 
the audits were of a logistical and training nature and 
therefore a service branches' problem. She forwarded the 
recommendations to the Joint NBC Defense Science Board for 
further distribution to the service branches.
    b. Benefits.--The investigation concerning acquisitions 
revealed significant problems with DLA management of individual 
protective equipment stocks. First, GAO documented inventory 
problems for individual protective equipment. The DLA appears 
to have adequate inventory procedures in place, however 
inventories are not accurate. If inventories are not accurate, 
commanders do not know if there are adequate quantities of 
wartime stocks available. The investigation on maintenance of 
individual protective equipment revealed the DOD, especially 
the service branches, need to place more emphasis on chemical 
and biological defenses. Based on IG reports, it was determined 
warfighters are not paying attention to the critical 
requirement of preventive maintenance for protective masks. 
Warfighters fight the same way they train. If leaders emphasize 
the need for maintenance and incorporate it in training, the 
soldier, sailor, airman, and marine will be better prepared for 
a chemical/biological attack. A second problem concerning 
maintenance appears to be the lack of responsiveness by DOD to 
the IG recommendations. After several requests by the IG to 
determine corrective action OSD stated the matter was referred 
to the service branches for corrective action. This may be a 
service branches related problem; however it was determined 
this should not absolve the manager of the Chemical and 
Biological Defense Program from responsibility for oversight of 
the service branches' corrective action.
    c. Hearings.--A hearing entitled, ``Force Protection: 
Current Individual Protective Equipment,'' occurred on June 21, 
2000. Testimony was provided by witnesses from the DOD IG, DLA, 
Defense Criminal Investigative Service, U.S. Army Soldier and 
Biological Chemical Command, Deputy Assistant Secretary of 
Defense (Chemical and Biological Defense), U.S. Army, Navy, Air 
Force, and Marines.
18. National Missile Defense: Test Failures and Technology Development.
    a. Summary.--The Subcommittee on National Security, 
Veterans Affairs, and International Relations investigated 
National Missile Defense [NMD] technology development and the 
impact of test failures and other constraints on deployment of 
an effective ballistic missile defense system. NMD is a program 
designed to protect the continental United States, Alaska, and 
Hawaii against a limited long-range missile attack, such as the 
small arsenal of a regional power or an accidental or 
unauthorized launch of a major power. Congress passed H.R. 4 on 
May 20, 1999. The President signed the legislation in July 
making it the policy of the United States ``to deploy as soon 
as is technologically possible an effective National Missile 
Defense system capable of defending the territory of the United 
States against limited ballistic missile attack--with funding 
subject to the annual authorization of appropriations and the 
annual appropriation of funds for National Missile Defense.'' 
Several tests of have taken place. On October 2, 1999, the 
Ballistic Missile Defense Office [BMDO] reported it had 
successfully intercepted an intercontinental ballistic missile 
over the Pacific Ocean. On January 18, 2000, a second test 
failed to destroy its target as planned. On July 7, 2000, 
another test failure occurred. Critics say the rigorous test 
program is causing the test failures. Others conclude the 
United States should pursue more robust and advanced 
technologies. However, in order to proceed with a robust and 
advanced program other constraints need to be eliminated. The 
ABM Treaty constrains development of an effective NMD program. 
A recent study by the Heritage Foundation concluded that the 
ABM Treaty does constrain the research, design, testing, and 
deployment of effective ballistic missile defenses for the 
United States. Because of interpretations of the ABM Treaty, 
the United States is restricted from fully developing 
technologies such as early-warning sensors, boost-phase 
(immediately after launch of a ballistic missile) intercept 
capability, and space-based defenses. President Clinton 
provided an assessment of NMD on September 1, 2000. He said he 
would not make a decision to deploy a NMD system because more 
testing is required. These test failures identify problems with 
the technology. There are also constraints on the program.
    b. Benefits.--The investigation revealed that although 
there have been technological problems the problems are not 
insurmountable. Modifications of the testing program need to be 
made. One of the problems is the compressed scheduling of the 
test program that does not allow effective evaluation of 
technology development. DOD should use the same type of testing 
techniques as commercial firms. This testing technique should 
be applied to the NMD program; test components individually, 
test components together in a controlled setting, and test 
components together in a realistic setting. Additionally, the 
ABM Treaty constrains deployment of an effective missile 
defense system. The Treaty is a relic of the cold war in which 
strategic stability between two nuclear powered adversaries was 
required. The concept behind the Treaty was, and still is, 
mutual assured destruction or allowing each side to annihilate 
the other with no means of defense. There can be no decisive 
anti-missile protection for the American homeland or for U.S. 
troops and allies overseas so long as the ABM Treaty continues 
to be observed. The Treaty is no longer strategically valid in 
a multipolar world of proliferating weapons of mass destruction 
with threats coming from quarters other than the former Soviet 
Union.
    c. Hearing.--A hearing entitled, ``National Missile 
Defense: Test Failures and Technology Development,'' occurred 
on September 8, 2000. Witnesses from the DOD, Department of 
State, Council on Foreign Relations, Union of Concerned 
Scientists, the Heritage Foundation, and National Security 
Research, Inc. provided testimony.
19. The Biological Weapons Convention: Status and Implications.
    a. Summary.--The Biological Weapons Convention [BWC] is an 
arms control treaty prohibiting the development, production, 
and stockpiling of biological weapons. Ratified by the United 
States in 1972 and in effect since 1975, the BWC does not 
include any enforcement mechanism. Signatory governments 
decided in November 1996 to begin negotiating how to verify 
compliance with the agreement and are developing a BWC 
protocol. Verification is the process of determining whether 
the behavior of other parties is consistent with an arms 
control treaty. The verification process consists of three 
objectives, monitoring, evaluation, and implementation. 
Monitoring it provides ground truth through on-site inspection 
that a nation is abiding by an agreement. There has always been 
a debate over how much verification is enough for arms control 
treaties. There are two standards, adequate verification and 
effective verification. Adequate verification is the ability to 
identify attempted evasion if it occurs on a large enough scale 
to pose a significant risk and can be done in time to mount a 
sufficient response. Effective verification means having the 
ability to detect a violation, regardless of its significance. 
The proliferation of biological programs and advances in 
biotechnology demand stronger international controls on these 
weapons of mass destruction. On the other hand, the ease of 
producing biological weapons and the large number of facilities 
capable of such production preclude an effective verification 
regime. Additionally, industry has expressed concern about the 
intrusiveness of the verification regime and the possible loss 
of proprietary information. The intelligence community is also 
concerned about on-site inspections.
    b. Benefits.--Investigation of the status and implications 
of the BWC protocol highlighted industry and national security 
concerns about the BWC intrusive inspection regime under 
development. Additionally, witnesses testified the BWC is not 
verifiable. The verification regime under development would not 
stop violations of the agreement.
    c. Hearings.--A hearing entitled, ``The Biological Weapons 
Convention: Status and Implications,'' occurred on September 
13, 2000. Witnesses from the DOD, Department of State, 
Department of Commerce, and General Accounting Office 
testified.
20. Hepatitis C: Access, Testing and Treatment in the VA Health Care 
        System.
    a. Summary.--On January 27, 1999 the Department of Veterans 
Affairs [VA] announced its Hepatitis C Virus Initiative. This 
initiative established ``two hepatitis C centers of 
excellence'' in Miami and San Francisco in order to coordinate 
hepatitis C treatment efforts, promote research and provide 
education for patients, and health-care providers. Since that 
time, veterans groups have expressed concern that funding for 
hepatitis C patients is insufficient, outreach is lacking, and 
data regarding hepatitis C patients is inadequate. There has 
also been concern that the lack of funding for hepatitis C has 
put a strain on the Veterans Integrated Service Networks 
[VISNs].
    b. Benefits.--The subcommittee hearing enabled members to 
examine and question the status of the Department of Veterans 
Affairs HCV (Hepatitis C Virus) Initiative, including outreach 
to veterans, screening, consistency of care, access to care, 
and treatment outcomes. During the oversight hearing, it became 
apparent that the Department of Veterans Affairs does not have 
an effective system in place to accurately track and record 
hepatitis C costs. The VA could not explain why it had to dip 
into the National Reserve Fund in order to offset network 
expenditures on hepatitis C, when the VA had only spent $39.2 
million of the $190 million that was allocated for hepatitis C. 
The VA explained that it is in the process of setting up a 
system to track patients and the costs associated with them, 
but it is not completed. Since the hearing, the Department of 
Veterans Affairs has responded to concerns of insufficient 
funding by establishing a new Complex Care patient class for 
hepatitis C patients who are on drug therapy for fiscal year 
2001. This will provide more money to the Veterans Integrated 
Service Networks [VISNs] to cover the cost of treating 
hepatitis C patients.
    c. Hearings.--A hearing entitled, ``Hepatitis C: Access, 
Testing and Treatment in the VA Health Care System,'' occurred 
on July 12, 2000 with testimony from Miss America, Veterans 
Aimed Towards Awareness, Inc., Vietnam veterans, the Department 
of Veterans Affairs, and staff physicians from VA medical 
centers. The hearing record is in preparation for printing.
21. VA Health Care in the New Millennium.
    a. Summary.--In April 1997, the VA established a new system 
to allocate funds called the Veterans Equitable Resource 
Allocation [VERA]. VERA attempts to create a more effective an 
efficient system in which veterans will be able to receive 
equal treatment no matter where they live, and a system in 
which facilities experiencing an increase in patient workload 
will have sufficient resources to cover all care. Efficiency is 
achieved by eliminating duplications (combining medical 
facilities) and by moving from expensive inpatient care to less 
expensive outpatient care. VERA distributes funds to the 22 
Veterans Integrated Service Networks [VISNs] which in turn 
distribute funds to each individual VA health care facility. 
VERA bases network funding on the number of veterans who use 
the VA health care system (workload) and three national 
capitation rates, rather than historic funding patterns. VISN 1 
is the VA New England Health care System [VA NEHS].
    b. Benefits.--The subcommittee was able to examine the 
impact the VERA system had on the VA New England Health care 
System [VA NEHS]. The move from inpatient to outpatient 
services has increased the number of veterans served. Since 
access to facilities has improved, and networks have an 
incentive to seek out patients, veterans are more likely to 
take part in the VA health care system. VA NEHS hopes to 
increase the number of veterans served by 5 percent and 
decrease the price of treatment by 5 percent by fiscal year 
2001. Since VERA allots funds based on workload, VA NEHS plans 
to increase workload through outreach. Plans also include 
consolidating Boston and West Roxbury facilities in order to 
save money and eliminate duplications.
    c. Hearings.--A hearing entitled, ``VA Health Care in the 
New Millennium,'' occurred on April 10, 2000 with testimony 
from witnesses from the Department of Veterans Affairs, the 
Director of VISN 1 and local veterans services directors from 
Massachusetts. The hearing record is in preparation for 
printing.
22. Oversight of the American Battle Monuments Commission and World War 
        II Memorial.
    a. Summary.--The subcommittee's oversight investigation of 
the American Battle Monuments Commission [ABMC] and World War 
II Memorial examined its mission, management and performance. 
The Commission is a small independent agency established by 
Congress in 1923 to honor the accomplishments of the American 
Armed Forces and commemorate their sacrifices. The ABMC 
maintains 24 American cemeteries overseas and 27 monuments and 
memorials, most of which are located abroad. The ABMC has also 
been tasked with the erection of the World War II Memorial to 
be located on the Mall in Washington, DC. The subcommittee 
focused its attention on two questions: (1) how is the ABMC 
measuring its performance and meeting its mission?; and (2) 
what is the status of the World War II Memorial?
    b. Benefits.--After 6 years without an oversight hearing on 
the Inter-American Foundation, the subcommittee conducted its 
proper oversight role over the agency. The agency demonstrated 
its commitment to be a model government agency, working 
effectively to meet the five goals it established under the 
Government Performance and Results Act. The subcommittee was 
also able to establish that the ABMC would meet its fundraising 
goals to build the World War II Memorial.
    c. Hearings.--A hearing entitled, ``Oversight of the 
American Battle Monuments Commission and World War II 
Memorial,'' was held on June 6, 2000.
23. Oversight of the State Department's Compliance with the Results Act 
        and Efforts to Improve Security.
    a. Summary.--The subcommittee's oversight investigation of 
the State Department focused on two issues, the Department's 
compliance with the Government Performance and Results Act 
(Results Act) and the Department's continuing problem with 
security issues. The Department continued to struggle with the 
requirements of the Results Act. While the Department showed 
some improvement in refining its goals and measurement systems, 
it continues to view the Results Act as a seemingly fruitless 
endeavor in an unpredictable environment.
    In regards to security matters, in 1998 two Embassies in 
Africa were blown up in terrorist attacks, and in 1999 and 2000 
Department suffered a number of security breaches, prompting 
Secretary Albright to comment that any Department employee who 
was not following security protocols was a failure, no matter 
the quality of their other work. Unfortunately, while the 
Department has made progress in improving the physical security 
of property and has finally instituted new intelligence 
security measures and punishments, the Department has made a 
little progress in changing the culture of Department 
employees, giving the Secretary's comments a hollow ring.
    b. Benefits.--Following the 1998 terrorist bombings in 
Africa, several security breaches, and structural and 
organizational changes, the Department has found itself 
flailing to adapt itself to new challenges. The investigation 
was able to establish that the Department is continuing to make 
progress on both its compliance with the Results Act and its 
efforts to improve security. However, our investigation also 
demonstrated a difficulty in getting Department employees, 
especially management and senior-level staff, to embrace these 
necessary changes.
    c. Hearings.--A hearing entitled, ``Oversight of the State 
Department: Is Management Getting Results,'' was held on July 
19, 2000.
24. Gulf War Veterans' Illnesses.
    a. Summary.--More than 125,000 veterans of the gulf war 
have complained of illnesses since the war's end in 1991. Many 
believe they are suffering chronic disabling conditions as a 
result of wartime exposures to 1 or more of 33 toxic agents 
known to be present in the gulf war theater of operations. 
These potential exposures include chemical and biological 
warfare agents as well as pesticides, insect repellants, leaded 
diesel fuel, depleted uranium, oil well fires, infectious 
agents, the experimental drug pyridostigmine bromide [PB], and 
multiple vaccines including anthrax. Gulf war veterans are 
concerned about inappropriate medical treatment or denial of 
treatment, inaccurate diagnoses, missing or inadequate personal 
medical records, claims and compensation issues, difficulty of 
establishing service-connection, and lack of valid and timely 
research conclusions about the causes of their illnesses.
    b. Benefits.--The subcommittee hearings enabled members to 
evaluate the status of the Federal Government's research 
program into gulf veterans' illnesses. The Department of 
Veterans Affairs [VA] signed a contract with the National 
Academy of Sciences' [NAS] Institute of Medicine [IOM] to 
``review the potential exposures of military members who served 
in the gulf war and summarize the biological plausibility that 
those risk factors, or synergistic effects of combinations of 
those risk factors, are associated with illnesses suffered by 
gulf war veterans.'' The IOM examined published, peer reviewed 
research in order to find, ``any evidence of a link between 
long-term health effects and exposure to sarin, pyridostigmine 
bromide [PB], depleted uranium, and the vaccines to prevent 
anthrax and botulism.'' The study found that most of the toxic 
agents fell into the category of inadequate/insufficient 
evidence to determine whether an association does or does not 
exist. Sarin was the only agent that the NAS was able to 
categorize as having sufficient evidence of a casual 
relationship. The fact that the IOM could not determine whether 
there was an association between an agent's exposure and a 
subsequent illness, re-enforces the subcommittee's 
recommendation that the Department of Veterans Affairs act now 
to help veterans, instead of waiting for scientific certainty.
    c. Hearings.--A hearing entitled, ``Gulf War Veterans 
Illnesses: The Current Research Agenda,'' occurred on February 
2, 2000. Another hearing entitled, ``Gulf War Veterans: Linking 
Exposure to Illnesses,'' occurred on September 27, 2000.

                   Subcommittee on the Postal Service

                     Hon. John M. McHugh, Chairman

1. General Oversight of the U.S. Postal Service: The Inspector General; 
        the General Accounting Office; the Postmaster General, and 
        Chief Executive Officer.
    a. Summary.--The Inspector General and the General 
Accounting Office are America's postal watchdogs and report to 
the subcommittee on a broad range of postal operations. The 
independent Office of Inspector General [OIG] has been in 
existence for 3 years. Congress recognized that an independent 
and objective perspective was needed to monitor the activities 
and operations of the Postal Service. The first year the OIG 
established a separate mission from the Inspection Service, 
developed a strategic plan, crafted a budget and drew up 
initial office plans. The next year it identified Postal 
operations, hired personnel and initiated audits and 
investigations. In the 3rd year the OIG reviewed key Postal 
Service programs, initiatives and activities. The OIG has 
issued more than 100 reports, saving the Postal Service more 
than $1.1 billion and has initiated investigative projects to 
target fraud and corruption. Additionally, it has more than 190 
ongoing investigations that have resulted in 5 arrests, 7 
indictments, 5 convictions, and $2 million in civil case 
recoveries and more than $100,000 in fines and restitution. The 
OIG has provided recommendations to improve Postal Service 
operation in five critical areas: performance, technology, 
financial management, labor relations, Inspection Service 
oversight, and other areas.
    The Office of the Inspector General and the U.S. Postal 
Service Inspection Service submit unified reports semi-annually 
to Congress. This reporting provides stakeholders a complete 
accounting of the Postal Service's major programs and 
activities and their joint efforts to deter and detect 
mismanagement, waste, fraud, and abuse. During this reporting 
period, the Inspection Service issued 225 other audits and 121 
expenditure, financial and revenue investigative reports, and 
the OIG issued 22 audit reports, 81 management advisory reports 
and other products, and closed 36 investigations.
    Among these reports, the examples of work include Corporate 
Call Management Program where the OIG identified potential cost 
avoidance of nearly $1 billion as a result of technological 
changes. The OIG determined that the USPS could save more than 
$100 million through better contract administration and 
oversight of emergency trip expenditures on highway routes. It 
was further determined that rail detention costs could be saved 
by nearly $50 million by ensuring that trailers are not used by 
facilities management. The OIG determined that a 
telecommunications contractor had subcontractors who billed the 
USPS for services it did not render or provided incomplete and 
defective work; so far the Postal Service was able to recover 
$2 million from the subcontractors. The Inspector General 
reported that as compared to other Federal agencies, the Postal 
Service rarely suspends or debars contractors. The Postal 
Service is now establishing a task force to review and improve 
its suspension and debarment procedures.
    Other reviews by the OIG found that the Atlanta Olympic 
Facility Improvement Plan did not receive approval and 
oversight at an appropriate level, which contributed to an 
increased cost of at least $9 million over projections. The 
Priority Mail Processing Center Network was found to cost the 
Postal Service $101 million, or 23 percent more, to process 
through this contract rather than in-house. A considerable 
amount of the OIG resources were utilized to review Postal 
Services' Y2K readiness; nine reports were issued in 18 months 
on this issue. The Postal Service accepted the OIG 
recommendations that ultimately helped to improve the quality 
of the systems. At the time of the testimony, the OIG had four 
more ongoing projects on Postal Service Y2K readiness and their 
own vendor certification. The IG reported her office would be 
monitoring the newly announced Postal Service high-level 
Internet strategy.
    Additional areas of review by the OIG and the Inspection 
Service are: improvement of registered priority and first-class 
mail service; recommendations to improve computer security, 
ensuring that the Postal Service's electronic commerce products 
and service remain secure; review of the Dinero Seguro money 
transfer program and the subsequent discovery of the money 
laundering scheme; monitoring of the Postal Service compliance 
with the Bank Secrecy Act; audits to review the adequacy of 
internal controls; and investigation of a major printer of 
catalogs and magazines for underreporting charges due to the 
USPS which led to a $22 million settlement. The OIG has focused 
on issues related to labor management and issues related to 
violence in the workplace, investigations of 62 robberies and 
the arrest of 14 Postal Service employees for narcotics 
violations.
    The IG, Karla Corcoran, reported that labor management is 
one of the most difficult areas to address. The OIG has 
received more than 2,500 individual labor management complaints 
since 1996. The Postal Service also identified labor management 
as being an important challenge in achieving its goals in the 
next century. It has, therefore, put in place various 
initiatives focused on reducing workplace conflicts. The Postal 
Service estimated that it has spent at least $216 million on 
grievances in fiscal year 1997. The IG testified that the 
Postal Service must give labor management issues more 
visibility if it is to address these challenges. Because of the 
sensitivity of labor-management issues and the sheer volume of 
complaints, the Inspector General has focused on systemic 
issues and conducted Postal-wide reviews designed to identify 
and nip potential problems.
    Other investigations and reviews include the administrative 
improvement of the Postal Service's ethics program, 
investigations of senior-level Postal Service executives, 
monitoring of the Government Performance and Results Act, 
physical security, narcotics trafficking, fraud against 
businesses, consumers, and the government, child exploitation, 
mail bombs and prohibited mail.
    One of the statutory duties of the OIG is to have oversight 
on the Postal Inspection Service which employees about 4,500 
persons--including 2,100 Postal Inspectors in 185 offices who 
enforce more than 200 statutes relating to crime against the 
U.S. mail, Postal Service employees and customers. All 
complaints received by the OIG against the Inspection Service 
are investigated. By way of a hotline tip, OIG investigations 
determined that $82,000 of the expenditures for the Postal 
Inspection Service Leadership Conference was extravagant and 
unnecessary. The OIG also established that a greater level of 
investigative effort by the Inspection Service was needed to 
deter the use and sale of illegal drugs on Postal Service 
premises. Postal Inspectors are required to spend at least 50 
percent of their time performing duties of law enforcement 
officers. The OIG found that 250 Postal Inspectors who 
performed audits did not meet the law enforcement component of 
their jobs. Because this performance deficiency will be 
corrected, the OIG may need to hire additional personnel to 
take over the audit function that the Inspection Service will 
now not be performing. Additionally, the OIG must hire 200 
additional personnel to meet the hiring level prescribed by the 
Board of Governors.
    Several other challenges face the OIG, such as continuing 
to add value to the Postal Service endeavors by providing 
meaningful work results in a timely manner, educating the 
management and employees of the Postal Service on the 
responsibilities and independence of the OIG role, and its duty 
to report significant issues to the Board of Governors and to 
Congress. The OIG is still continuing to gain expertise on 
Postal Service issues to become more effective and trying to 
make the results of their work public without harming the 
Postal Service's competitive position.
    The General Accounting Office testified that the Postal 
Service, during the past 5 years has made significant 
improvements in its delivery performance in specific classes 
and has recorded a positive financial position. In spite of 
these improvements, the Postal Service expects declines in its 
core business products in the following years due to growth of 
electronic communication, electronic commerce and the Internet. 
In an effort to combat these challenges, the Postal Service 
must make changes to maximize performance, manage employees, 
maintain financial viability and adapt to competition. Time is 
growing short to address these formidable tasks and to remain 
competitive in a fast paced and changing environment.
    In addition, the Postal Service faces increasing 
competition from private delivery companies and mail 
alternatives. It projects an annual 0.8 percent decline in 
first-class-mail volume during fiscal years 1999 to 2008; it is 
this category of mail service for which the Postal Service is 
charged to providing universal service at reasonable rates. 
Most of the diversion to electronic mail would be as a result 
of consumer movement to alternative bill payment methods and 
the consolidation of the financial sector resulting in less 
bills, statements, and payments in the mail stream. It is 
projected that total mail volume, however, will continue to 
increase in fiscal years 2000 through 2008 by an average annual 
rate of 1.7 percent with the growth rate tapering off and the 
total mail volume peaking in fiscal year 2006. Even though 
total mail volume increases, the decline in first-class mail 
would require the Postal Service to make corresponding 
reduction in the cost of handling that class of mail in order 
to hold down first-class rates. A reduction in first-class mail 
volume would reduce its contribution to institutional costs, 
which may cause higher postal rates. However, the Postmaster 
General has noted that because of the rapidly changing 
environment, the Service cannot precisely predict when, or to 
what extent, competitive pressures may affect revenues. He 
stated that the Postal Service is cutting costs to preserve 
affordable rates but service would not be affected. The 
Service's Integrated Financial Plan for fiscal year 2000 
reported that to accomplish net income of $100 million in 
fiscal year 2000, it would need to realize a 1-percent 
reduction in work hours.
    A major challenge the USPS faces is to maximize performance 
because of customers' demands and choices. The Government 
Performance and Results Act of 1993, in which the Postal 
Service participated, will provide the framework to fulfill 
these objectives. The Postal Service will publish its first 
annual program performance report under this act next year, 
which will help Congress and other stakeholders assess USPS 
performance in this and other areas.
    The GAO reported that, under an agreement between the USPS, 
the Postal Rate Commission and the GAO, A.T. Kearney, Inc., 
studied the Postal Service's data quality, which is vital to 
decisionmaking in various mission-critical areas of the Postal 
Service. The report issued by A.T. Kearney, Inc., included 47 
recommendations designed to improve and enhance the integrity 
and completeness of the Service's data provided for ratemaking 
and related data systems. However, the contractor concluded 
that the quality of the Postal Service data provided for 
ratemaking has been sufficiently complete and accurate to 
enable subclass rates to be based on reasonably reliable data, 
though, in some instances, the best available data were used 
regardless of their intrinsic levels of error or antiquity. 
Some of their key recommendations were in reference to: better 
measuring costs relating to mail processing; updating and 
improving the quality of special study data used to determine 
delivery costs; improving the measurement of capital and 
support costs; and improving the completeness and accuracy of 
mail revenue, volume, and weight data and the accuracy of the 
impact of weight on costs. This report was requested by the 
chairman of the subcommittee to address the concerns brought to 
his attention by the chairman of the Rate Commission regarding 
data deficiencies during the 1994 rate filing case.
    GAO recognized that the Postal Service is the largest 
single civilian Federal agency, therefore, Postal management 
must give human capital issues higher priorities, mainly to 
enhance the contribution of each employee to the organization, 
emphasizing that the end result should achieve organizational 
and individual success. The GAO in the past has reported on 
labor-management friction in the Postal Service and those 
barriers still exist in spite of some improvements. These 
barriers have obstructed the ability of contract agreements to 
be reached with the employee organization. Though the Postal 
Service has identified goals and strategies to improve these 
relations it is evident that success is unlikely without a 
partnership between employees and management.
    In the most recent contract negotiations with unions whose 
contracts expired in November 1998, contracts between two of 
three unions produced settlements without the use of 
arbitration. The third union, the National Association of 
Letter Carriers, utilized interest arbitration involving a 
third-party negotiator to settle contract disputes regarding 
wages and benefits. Recent information indicates that the 
fourth union, the National Rural Letter Carriers Association, 
has broken off contract negotiations with the Postal Service.
    The General Accounting Office supports the subcommittee in 
its efforts to oversee and to improve the performance of the 
Postal Service for the benefit of the users of this mail 
service. The GAO, by request of the chairman of the 
subcommittee and guided by its own findings, has issued several 
reports to the subcommittee on matters that have been of 
concern and interest to the subcommittee. These issues, 
discussed in more detail under the topic, Other Current 
Activities, have been used to monitor the Postal Service's 
National Change of Address program to improve the quality of 
mail address to improve the quality of mail, including the 
efficient delivery of mail. Mail sortation and distribution has 
been enhanced through automation. Much of this effectiveness is 
dependent on the Postal Service's ability to provide address 
management services that assist mailers in accurately 
addressing their mail. The National Change of Address [NCOA] 
program began in 1986. It used the change-of address 
information submitted by postal customers and provided that 
information to business mailers to update their mailing lists. 
Improperly addressed mail is costly to the Postal Service to 
sort, transport, deliver and dispose. In 1996, the Postal 
Service spent an estimated $1.5 billion a year in this 
endeavor. In 1997, incomplete or inaccurate address elements 
affected the delivery of more than 63 billion pieces, or about 
one-third of all mail processed. NCOA data are disseminated to 
business mailers through a network of 21 private businesses 
licensed for a fee. Various issues emanate from this framework 
which the subcommittee is able to monitor because of the 
information provided by the GAO.
    The Postmaster General [PMG], Bill Henderson, testified to 
a century of postal service. He said that the Postal Service 
earned record revenues of more than $62 billion and broke the 
200 billion mark in total annual mail volume, achieving its 
best overall performance ever in first-class mail delivery and 
an unprecedented 5th straight year of positive net income. The 
PMG articulated that the American public is the beneficiary of 
the exceptional performance by the Postal Service. This 
included the reduction of its negative equity by about $1 
billion (the USPS still carries a $3.5 billion deficit on its 
books, accumulated during the years when it operated in the 
red). Furthermore, the decision to delay the smallest rate 
increase in postal history by 7 months provided a $800 million 
``dividend'' to the American people. The next rate increase is 
not expected until 2001.
    The Postal Service is continuing to invest in automation 
and introduction of robotic handling systems in processing 
mail. The USPS expects fully automated processing facilities 
within the next several years that will give postal customers 
and managers real-time performance information. The Postal 
Service is hardwiring postal facilities into a national network 
providing a communications backbone for new information 
technologies. The Postal Service will make a priority of 
encouraging employee success in the use of technology.
    The Postal Service reported progress in: developing more 
effective means of resolving workplace differences; improving 
workplace safety; improving workplace relations; training for 
all craft and EAS employees; issuing quarterly surveys to 
understand and measure employee concerns; and, issuing and 
developing of a fair and inclusive environment. The Postal 
Service is one of the most diverse work forces in the Nation; 
therefore, the Postal Service Governors commissioned an 
independent study on diversity. The Service adopted the 23 
diversity initiatives recommended in that study which include: 
comprehensive communications; appropriate recruitment, 
retention and promotion practices; an environment which is free 
of discrimination and sexual harassment and which utilizes a 
diverse supplier base.
    The busiest time for the Postal Service is during the 
holiday season, which is also the period of the presumed Y2K 
computer problems. As the Postal Service is a vital part of the 
Nation's communication's infrastructure, it is critical that 
the Service not be disrupted by these concerns. The PMG 
testified that all the mission critical information and mail-
processing systems have been tested and independently verified. 
More than 500 local contingency plans have been completed based 
on the Postal Service's experience in dealing with natural 
disasters that disrupt utilities, transportation and other 
important services.
    The PMG recognized that the new century would present 
crucial challenges to the Postal Service because of growth in 
electronic communications and communications' choices to postal 
customers from private delivery carriers and deregulated 
foreign posts. The Postal Service will increase the value of 
mail by keeping costs low and quality high but it still 
anticipates nearly $17 billion at risk from electronic 
diversion alone. The USPS will have to generate new growth in 
order to maintain affordable prices and sustain the existing 
infrastructure and delivery network that continues to grow at 
the rate of a million stops each year.
    The Postal Service has an Internet presence--the most 
heavily trafficked government site. It is used to find ZIP 
Codes, calculate rates, buy stamps, track packages and obtain 
other postal information. Mr. Henderson said that the Postal 
Service would continue to endeavor to combine private-sector 
efficiency with the responsibilities of good government and 
public service.
    b. Benefits.--The Office of the Inspector General and the 
GAO provide Congress with complete and unbiased information 
regarding Postal Service operations. The OIG is able to 
initiate its own studies and audits as they see problems as 
well as when issues are brought to their attention. Several 
topics of investigation by both the GAO and the OIG were a 
result of subcommittee inquiry. Though there may be some broad 
areas of overlap, the organizations are careful to consult with 
each other so that they do not duplicate the other agencies 
work due to limitations of time and funding. Generally both 
entities are privy to the same information which is used in 
context of the independent judgment of each organization. These 
evaluations give the subcommittee a more complete study of the 
issues. The reports of these agencies will result in greater 
economy, efficiency and integrity of the Postal Service. Also, 
relative to the OIG, it will provide employees and stakeholders 
of the Postal Service a venue to report allegations of 
mismanagement, waste fraud and abuse.
2. Y2K Technology Challenge: Will the Postal Service Deliver?
    a. Summary.--As the country prepares to avoid the Y2K 
millennium computer challenges, it is evident that the Postal 
Service has become the back up delivery system for the 
government, other major industries, banks and other financial 
entities, if there is a major malfunction and electronic-mail 
users are unable to utilize their preferred mode of 
communication. To meet this challenge, the Postal Service must 
be totally prepared with its own computers. Additionally, it 
must make its contingent plans to proceed with its own delivery 
of mail in a timely manner during its busiest season of the 
year, and be prepared to take on additional challenges from 
those entities that are using the Postal Service as their 
contingency plan.
    The Postal Service was late in assessing and updating its 
computer system and was slow to recognize the scope of the 
problem; it failed to take early and necessary action to ensure 
that the computers were Y2K compliant. It is expected that the 
total cost for fixing the potential Postal Service computer 
problems would be one-half to three-quarters of $1 billion.
    At the time of the hearing, 311 days before the anticipated 
year 2000 challenge, 148 of the 156 most critical systems had 
been repaired and placed into service. However, just 40 of the 
148 systems had had their repairs tested and verified.
    The following witnesses presented testimony before the 
three subcommittees: Karla W. Corcoran, Inspector General, U.S. 
Postal Service; Jack L. Brock, General Accounting Office; and 
Norman E. Lorentz, U.S. Postal Service.
    Ms. Corcoran said that the Office of the Inspector General 
asked four key questions to evaluate the Y2K problem: why is it 
critical for the Postal Service to address the Y2K issue; will 
the Postal Service be able to deliver mail after January 1, 
2000; what is the current status of the Postal Service's Y2K 
effort; and what can the Postal Service do to minimize the Y2K 
risk?
    To these questions, the OIG answered that the Postal 
Service is heavily dependent on automation for its delivery of 
650 million pieces of mail daily and for transmittal of 
information to its more than 38,000 post offices and facilities 
and for its payment to its nearly 800,000 employees. The IG 
reported that while the Postal Service has made progress in 
finding solutions to the Y2K problems and is currently spending 
about $200 million to address the Y2K challenge, it still faces 
significant challenges in the period that remains. The total 
estimate for resolving these problems will be about $607 
million. Whether the Postal Service is able to deliver the mail 
over the Y2K crucial period depends on how much progress the 
Postal Service will make over the following 10 months. The 
Postal Service has 661 critical national suppliers, but knows 
the readiness status of less than 15 percent of these 
suppliers. The Postal Service has 7,000 field suppliers but 
knows very little about their Y2K readiness. Postal operation 
may be disrupted if the suppliers are not Y2K compliant. In the 
area of data exchange, the Inspector General testified that 
only 6 percent of its 2,000 exchanges needed to transfer data 
with other government agencies are ready. At this time the 
Postal Service was still assessing whether the controls for 
heating, cooling and fire suppression, and other support 
systems to maintain its 38,000 facilities were compliant. 
Additionally, the major automated systems for moving mail were 
almost compliant but the concern was whether the Postal Service 
would adequately deploy and test them. Information systems and 
information technology infrastructure had solutions developed 
but independent verification to these systems could become a 
challenge and the Postal Service had not yet made final 
determination of when readiness testing would be performed. The 
Postal Service plans to complete their continuity plan by July 
and test it in August. The Inspector General said there are 
three things that the Postal Service should do to minimize the 
Y2K risk: reevaluate its initial assessment to identify only 
the most critical business operation systems; focus on 
correcting systems, equipment and processes that are essential 
to ensure core business practice; and develop, implement and 
test business continuity plans for core business processes.
    With just 10 months remaining this process is challenging. 
The Inspector General and her office will continue to work with 
and help the Postal Service identify and minimize the Y2K risk. 
The OIG supplied the Postal Service four audit reports 
regarding Y2K issues.
    Mr. Jack Brock, Director of the General Accounting Office's 
Government-wide and Defense Information System under the 
Accounting and Information Management Division testified that 
the Postal Service faces the same sorts of problems as all 
computer-dependent entities. However, the Postal Service is a 
huge organization that is, in reality, a public utility that 
the 130 million household and business customers it serves 
assume will function without interruption. Information 
technology is integral to postal operations, including sorting, 
processing, distributing mail, dealing with customers, 
accounting for and managing cash flow, communicating with 
business partners and modernizing Postal facilities. Though the 
Service has been working hard to address the Y2K problem, it is 
running behind the Office of Management and Budget's schedule 
for system renovation. It must still complete equipment 
correction and testing, ensure the readiness of hundreds of 
local facilities and verify the readiness of key suppliers. The 
Postal Service also needs to complete simulation testing and 
complete the development and testing of its business continuity 
and contingency plans. Mr. Brock commented that this activity 
is intensified because the surge in workload due to the holiday 
rush and requires greater management attention. Because the 
Postal Service will become the contingency plan for so many 
entities, disruption of mail delivery would have a serious 
impact on each sector of American economy.
    The GAO compared the Postal Service's efforts to their Year 
2000 Assessment Guide, Business Continuity and Contingency 
Planning Guide, and Testing Guide to obtain a structured 
comparison. These studies were conducted between September 1998 
and February 1999 with the cooperation with the Office of the 
Inspector General of the Postal Service and in accordance with 
generally accepted government auditing standards.
    The Postal Service has 152 ``severe and critical'' business 
systems that must be assessed, corrected, and verified to 
ensure Y2K compliance. These systems include the Postal 
Metering System, Money Order System, Mail Distribution 
Requirements Systems, Air Contracting Support System, Vehicle 
Tracking and Performance System and critical financial 
management systems. Many of these systems do not have any 
``workarounds'' and any disruption to their operation would 
disrupt the postal system. The Postal Service reported to the 
GAO that by the OMB's target March 31, 1999, deadline, all but 
11 of the 152 systems would be compliant; 10 of the 11 
remaining systems would be ready by July 1999, and the 
remaining 1 by mid-November 1999. The 349 ``important'' 
business systems owned by the Postal Service have 
``workarounds'' so disruption in their workings would cause an 
inconvenience but would not be a catastrophe. Of these systems, 
215 have been renovated and are not required to undergo 
independent validation and verification. Various other computer 
systems, hardware and software, would be corrected on an as 
needed basis.
    Because of the vast scope of the Postal Service, 
contingency plans and validation of mission-critical systems 
should have been done in a more timely manner. The delays in 
correcting the problem were in part attributable to the fact 
that the USPS was slow to recognize the severe impact of the 
problem and lacking in sufficient planning process and 
involvement. However, when the Postal Service was reorganized 
in 1998 to strengthen management and to ensure continuity of 
operations, the program better reflected the year 2000 effort; 
the new organizational structure represents a matrix approach 
to managing ongoing efforts. Senior vice presidents have been 
tasked with taking responsibility within their functional areas 
and the Chief Operating Officer will be responsible for 
developing business continuity plans. There are still unknowns 
regarding the Postal Service's core business processes; the 
Service does not have a complete inventory and status of its 
information technology infrastructure, interfaces and field 
equipment and systems. Without simulation testing and 
contingency and business plans being in place and tested, there 
is no assurance on Postal Service readiness. GAO concluded that 
the Postal Service should ensure that adequate support is being 
provided throughout the process and that key stakeholders make 
key decisions. However, because the Postal Service has been 
behind schedule, the primary challenge is time.
    Norman E. Lorentz, senior vice president and chief 
technology officer of the Postal Service testified that the 
fact that this hearing is taking place is proof of the 
relevance of paper-based communications and the dependency of 
the American people on reliable, reasonably priced postal 
service. The challenges of the year 2000 have been met by the 
Postal Service, he said. The Postmaster General and the senior 
management team meet weekly with the Management Committee for 
discussion, and have conferred for a number of years to 
minimize and eliminate potential disruption that could arise 
from the Y2K computer problem. Because the Postal Service will 
become the contingency plan for numerous organizations, its 
readiness efforts must be able to process and deliver normal 
mail volumes and to absorb additional volumes that could be 
diverted to it from the electronic message stream. Mr. Lorentz 
unequivocally stated that the USPS was ready; it has delivered 
mail under most difficult of situations and natural disasters 
and it would continue to deliver. He said that the Postal 
Service started with an inventory of all components and systems 
that can be affected, then an assessment of the criticality of 
these systems. After that was the remediation process of the 
mission-critical systems. Independent verification was done on 
these systems and processes and they were on schedule. The USPS 
is focusing on business continuity planning and recovery 
management to give employees a structured way to report 
problems and implement plans that have been designed to address 
them. Simulation testing in an actual operating environment 
will further confirm the status of the remediation. Critical 
mail-processing systems were tested in Tampa and Atlanta in 
August 1998 and the results of the tests are encouraging. 
However, despite the best efforts to fix all the vulnerable 
systems and components and testing them to make sure they work, 
there may still be some Y2K problems. The Postal Service is 
developing ``workarounds'' to help minimize potential problems. 
Throughout the processes of remediation, business continuity 
planning and recovery management the schedule has been 
consistent with those taken by other government and private-
sector organizations. The Postal Service contracted with 1,300 
technical support personnel to implement and manage many of the 
critical technical elements of the program. Mr. Lorentz 
testified that unlike other government agencies, the Postal 
Service is not receiving any appropriations for this readiness 
program. Though there can be no guarantee of problem-free 
performance, the Postal Service is confident of delivering the 
mail.
    b. Benefits.--The joint hearing on the Postal Service's Y2K 
readiness gave the subcommittees and the Postal Service timely 
insights into this important planning and strategy to insure 
that the Nation's financial and communication lines will not be 
interrupted because of computer problems. Because the Postal 
Service is the contingency plan for so many entities it was of 
particular necessity to air the efforts and problems facing the 
Postal Service; the hearing provided important information in 
this regard.
    c. Hearings.--A hearing under the auspices of three 
subcommittees, the Subcommittee on the Postal Service, the 
Subcommittee on Government Management, Information, and 
Technology, and the Subcommittee on Technology of the Committee 
on Science was conducted on February 23, 1999.
3. Executive Relocation Benefits.
    a. Summary.--The chairman received an anonymous complaint 
alleging that two Postal Service officers, the Chief Financial 
Officer and the Comptroller, received relocation benefits for 
changes in residence without change of duty station. An audit 
was requested by the subcommittee. The results of the audit by 
the Office of the Inspector General of the Postal Service 
revealed that the two officers received relocation benefits of 
about $248,00 for moves within the local commuting area. One 
officer received about $142,000 and the other officer received 
about $106,000. These relocations were paid as part of an 
incentive plan and approved by postal management as deviations 
from postal policy. These relocation benefits exceeded the 
relocation packages offered to executives by private industry 
and other government agencies. These benefits, which were not 
included in the statutory limits on compensation of Postal 
Service employees, also could be perceived as a way to 
circumvent the limits. The audit found that the controls were 
not in place to ensure that postal management requested and 
obtained Board of Governor approval of all significant 
provisions of incentive plans such as relocation benefits. 
Board approval for deviations was generally not obtained for 
relocation of those officers because relocation benefits were 
not considered compensation.
    b. Benefits.--This investigation and resultant policy 
changes to address the concern that such special benefits 
violated the public trust. The Postal Service Board of 
Governors adopted a resolution that expanded its review to 
executive compensation to include each component of the 
compensation and benefits, including relocation benefits, to be 
provided to each officer. Such compensation and benefits shall 
be submitted for the approval of the Board of Governors. In 
addition, the resolution called for the Board to set standards 
for deviation from the benefits program. The Board called for 
further review by the Inspector General of executive benefits 
in comparison with other agencies and corporations in order to 
consider further policy changes.
    c. Hearings.--None.
4. Cost Pertaining to Processing Periodicals.
    a. Summary.--The Postal Service has struggled to control 
the cost of processing periodicals (magazines and newspapers). 
Such cost increases have recently led to rate increases for 
periodicals above the rate of inflation. This has seriously 
impacted the periodicals industry. Congress has always 
recognized that periodicals support free speech and education, 
cultural, scientific, and informational values. As part of the 
program to control the cost of periodicals, the Service worked 
with the periodicals industry to identify and implement 
operational changes to reduce such costs. The Periodicals Joint 
Industry/Postal Service Task Force recommended a number of 
operational changes that would, if implemented, result in cost 
savings. Nonetheless, when the Postal Service filed its request 
for a recommended decision before the Postal Rate Commission on 
January 12, 2000, it proposed an average 15 percent postal rate 
increase for Periodicals. The Postal Service's cost projection 
from the base year to the test year did not include many of the 
cost savings as identified by the task force. The subcommittee 
sent a letter signed jointly by Chairman Burton, and Chairman 
Kolbe of the Subcommittee on Treasury, Postal Service, and 
General Government, Committee on Appropriations to the 
Postmaster General urging the Postal Service to redouble its 
efforts in this area. Subsequently, top Postal Service 
officials including the Postmaster General ensured the industry 
that the originally proposed 15 percent increase would be 
reduced to no more than a single digit, and the Postal Service 
would identify cost savings to achieve that result.
    b. Benefits.--Following the letter to the Postmaster 
General, the Postal Service provided testimony to support cost 
savings that would allow the Postal Rate Commission to 
recommend an average rate increase for Periodicals of less than 
10 percent.
    c. Hearings.--October 21, 1999.
5. International Postal Policy.
    a. Summary.--The United States of America has been a leader 
in promoting free trade and international competition. It has 
set the trends in telecommunications and the airline industry. 
However, we have not been trend setters in the international 
mail system. The U.S. Postal Service has not met the measure 
for competition in the international mail system. A variety of 
customs and competition rules govern the moving of goods and 
services inbound and outbound. The U.S. Customs Service 
enforces two standards for the international exchange of 
documents and parcels: one for postal shipments and one of 
private carriers. Although there may be justifiable reasons to 
maintain this two-tiered system depending on items shipped, it 
appears there is no reason to maintain widely differing 
standards for comparable shipments. Maintaining different 
standards implicates America's position in trade as it limits 
our ability to request opening of markets in other countries 
and it adds additional costs for the consumer. Domestically, we 
remain enmeshed in the debate between the private and public 
sector of who enjoys greater advantages or is burdened by 
operational disadvantages. It is apparent that unless we make 
available a variety of customs and competition rules that meet 
the needs of the American consumer, commercially focused 
foreign postal and delivery firms will overtake American 
initiatives. The issues have been longstanding. Even if the 
laws governing the U.S. Postal Service are modernized, the 
challenge is whether U.S. traditions for fair and undistorted 
competition will translate into advocating needed changes at 
the Universal Postal Union, the World Trade Organization, and 
the World Customs Organization. In 1998, the U.S. Congress 
enacted legislation to transfer primary responsibility for U.S. 
policy concerning the UPU from the U.S. Postal Service [USPS] 
to the Department of State. The legislation further required 
that the Department of State consult with private providers and 
users of international postal services, the general public, and 
such Federal agencies and other persons that it considers 
appropriate in carrying out its international postal 
responsibilities. Under this new law, the Department of State 
may, with the consent of the President, negotiate and conclude 
postal treaties, conventions, and amendments within the 
framework of UPU agreements that are binding on the United 
States and other UPU member countries. USPS can also negotiate 
agreements and conduct business with foreign countries, 
provided such actions are consistent with the policies set by 
the Department of State.
    A ``Sense of Congress'' resolution included in the 1998 
legislation stated that ``any treaty, convention, or amendment 
entered into . . . should not grant any undue or unreasonable 
preference to the Postal Service, a private provider of postal 
services, or any other person.'' Private operators are anxious 
to ensure that congressional intent is being followed and that 
the development of U.S. policies for all international exchange 
treaties and policies is fair, evenhanded, and open to all 
interested parties. However, USPS has expressed concern about 
the influence of private parties who may share their market, 
but who are not subject to the same statutory responsibilities, 
such as a universal service mandate. The legislation also 
mandated that the Department of Commerce add ``postal and 
delivery services'' to the International Trade Administration's 
[ITA] Service Industries Development Program, which is intended 
to help American business compete in the global marketplace by 
ensuring market access and compliance with existing trade 
agreements.
    Among key international postal and delivery issues include 
``terminal dues'' which are assessed on all inbound 
international mail, as a means of compensating the receiving 
country for the cost of delivery within its borders. The rates 
are established in the UPU Convention and increased every 5 
years by the UPU Congress. Dues are higher for developed 
countries, which generally have a high volume of outbound mail, 
than they are for developing countries, which generally have a 
low volume of outbound mail. Some countries have formed 
agreements to negotiate cost-based terminal dues with those 
countries that exchange large volumes of mail. Private 
operators have alleged that these terminal dues agreements are 
designed solely to discourage re-mailing and are anti-
competitive. Participants in such agreements claim, however, 
that they are necessary to lower terminal dues losses by making 
the system more consistent with operating and delivery costs.
    Re-mailing is a process through which private carriers 
deposit outbound domestic mail directly into foreign postal 
systems either for return to the originating country, for 
delivery to a foreign country, or for delivery to a third 
country. Because the mail is routed through the most 
economically advantageous countries, mailers can save on the 
cost of international postage rates or terminal dues. Some 
public postal operators claim that re-mailing results in 
substantial losses because the postal service of the 
destination country performs the in-country delivery but does 
not collect the terminal dues that would have been assessed if 
the mail had been posted in its actual country of origin. 
Therefore, the destination country's postal service receives a 
fraction of its anticipated revenue per piece, and the balance 
of costs between those countries exchanging large volumes of 
mail is not maintained. UPU Article 40 permits its member's 
postal administrations to intercept inbound international mail 
that has been posted in a country other than where the sender 
is considered to reside. Private operators have alleged that 
Article 40 operates as an anti-competitive market-allocation 
scheme.
    The UPU coordinates with the World Customs Organization 
[WCO] on international postal customs issues. Private operators 
have complained that international customs procedures put them 
at a competitive disadvantage because government postal 
services currently enjoy simplified customs procedures that are 
unavailable to non-governmental entities. While the Department 
of State filed a formal statement at the UPU Congress urging a 
commercially neutral customs policy in the future, the U.S. 
Customs Service has been opposed to liberalizing customs 
procedures and has sought to raise the level of data required 
of public operators.
    Questions remain whether the UPU will allow membership for 
private postal and delivery services. Some nations in the UPU 
have raised concerns about admitting private operators since 
thy do not operate under commitments similar to those of public 
operators, such as a guarantee of universal service. FedEx and 
other private operators have countered that they are currently 
affected by UPU agreements, including those they consider to be 
anti-competitive (such as those concerning customs procedures 
and re-mailing), but have not been permitted any input into 
those decisions. At the Congress in Beijing, the UPU formed a 
``High Level Group'' to study the reform proposals, but it is 
unclear whether the group's work will result in any 
modifications.
    b. Benefits.--The movement of international goods and 
services by our Nation's postal and delivery operators is worth 
billions of dollars and millions of jobs to the U.S. economy. 
New communication technologies such as the Internet are 
changing the nature of international communication, while 
postal regulatory reform in other industrialized countries is 
changing the landscape on which operators must compete. Steps 
taken at the UPU Congress have raised the stakes for U.S. 
policy on international delivery. The study of this situation, 
the results of the UPU Congress, and the impact of the 
organization on international document and package delivery 
operation, the issue of terminal dues, re-mailing, customs 
procedures and the status of the U.S.-backed UPU reform will be 
valuable as we endeavor to keep pace with the aggressive 
development of mail operations and delivery by other nations 
that may undermine our national efforts. The process for the 
development of U.S. postal policy has also changed in the past 
year, and may be in need of further revision. Many have urged 
that a more transparent policymaking system is required to 
complete the congressional mandate of forming undistorted and 
nondiscriminatory postal policy. The effectiveness of the 
Department of State, the interrelationship between State and 
other agencies, and the quality of private operator's input 
will determine the success of U.S. international postal policy.
    c. Hearings.--The subcommittee held a hearing on 
International Postal Policy on March 9, 2000. The witnesses 
included: Director, Government Business Operations Issues, GAO; 
vice president, TNT Post Group; member of the Management Board 
of Deutsche Post AG; Postmaster General and Chief Executive 
Officer, United States Postal Service; chairman, president, and 
chief executive officer, FedEx Corp.; Deputy Assistant 
Secretary for International Organization Affairs, Department of 
State; Deputy Assistant Secretary for the Services Industry 
U.S. Department of Commerce-International Trade Administration; 
Assistant U.S. Trade Representative for Services, Investments, 
and Intellectual Property, Office of U.S. Trade Representative; 
Director of Trade Programs, U.S. Department of Treasury, U.S. 
Customs Service; Deputy Assistant Attorney General, U.S. 
Department of Justice, Antitrust Division; Director of Office 
of Rates, Analysis and Planning, U.S. Postal Rate Commission.
    Mr. Ungar of the General Accounting Office summarized his 
prepared statement. He stated that despite the short time 
period that the State Department had between enactment of the 
October 1998 legislation shifting responsibility for U.S. 
policy development, coordination and oversight from the U.S. 
Postal Service to the State Department, the State Department 
did a reasonably good job and made progress. It provided 
stakeholders, including private sector participants, with an 
opportunity to provide input, and conducted the proceedings in 
an even-handed manner. At the UPU Congress, the State 
Department signaled a new direction in policy for the United 
States with respect to the UPU and included private sector 
participants in the U.S. delegation. The U.S. Department of 
State was able to get a number of issues on the table, 
including terminal dues, and commenced work toward changes in 
those policies. However, Mr. Ungar mentioned that probably 
because of the short time period, the Department did not have a 
structured, well documented, process to get input which 
resulted in short advance notice of some meetings, and lack of 
minutes of the meetings resulting in no public record. Because 
of the complexity of the issues undertaken by the UPU, the 
State Department was at a disadvantage because of the turnover 
in its staff that handles such matters. The Department was 
receptive to the recommendation made by GAO that the State 
Department provide sufficient staff continuity and expertise to 
handle its UPU responsibilities.
    Ms. Simone Bos, vice president of the TNT Post Group, 
emphasized the changing postal world within the past few years 
and the importance of globalization, liberalization, and 
consolidation in the postal world. She summarized her core 
message as firmly believing that the government should take the 
lead in reshaping the international regulatory framework and 
creating a level playing field for all parties, though this is 
a difficult task. She said that public postal operators should 
be able to set their rates in a normal manner like other 
companies do and be able to invest and to negotiate their own 
collective labor agreements. Though public postal operators 
have special rights and special obligations there should be a 
good framework to ensure that there is no abuse of dominant 
position. She also said that UPU needs to change just as postal 
operators need to change. She opined that UPU appears to 
promote commercial service of public postal operators to the 
disadvantage of other in the market. International postal 
policy must be seen in the context of rapid developments of 
cross-border exchange and market of documents and parcels. 
Increasing more businesses are focusing on trade in goods and 
services on both the national and international market, 
therefore their ability to compete depends on the quality and 
reliability of cross border physical and electronic networks 
and supply chains. The impact of international regulations, the 
development of an international policy toward the delivery of 
goods and services, and the role of governments is crucial to 
its success. Where rules are opaque and discriminatory, they 
create artificial trade barriers to the detriment of both the 
senders and the service providers.
    Mr. Uwe R. Doerken of Deutsche Post explained that the 
newly unified Germany in 1991 had to restructure and integrate 
two postal systems into one. For the benefit of their 
customers' needs, it was determined that just remaining a 
German distribution company would not bring sustainable 
business in the long run and would endanger the employment of 
the people and the universal service for the country. They 
started an international and diversification strategy. They now 
base their business on the German and cross-border worldwide 
mail, including forwarding services, and a banking service in 
Germany. Though Deutsche Post is highly unionized, it was able 
to decrease its staff without major layoffs in an amicable and 
cooperative manner, extending the project over a period of 
year. They have fulfilled the universal service obligation. 
Their parcel distribution industry is almost as large as the 
United States, because it encompasses the European market. He 
submitted that the international competitive environment of 
traditional postal services is determined by the globalization 
of markets, the growing demand of customers for full service 
one-stop shopping and the liberalization and privatization of 
the postal sector.
    William J. Henderson, Postmaster General said that the 
international mail market is characterized by accelerating 
competition, affecting domestic postal markets as well. There 
is tremendous aggressive competition. Liberalization and 
deregulation that has occurred overseas have enabled alliances 
between various posts that would not have been expected 
previously. Competition and technology have made letter 
monopoly less relevant in our country. There is need to better 
anticipate the changing needs of customers. He said that 
successful postal systems of the future will be competitive and 
develop value-added services to keep mail relevant. The PMG 
said that the Postal Service supports H.R. 22, introduced by 
Chairman McHugh. The reforms therein would increase flexibility 
to introduce and price products and service competitively and 
balance competitive freedom with the interest of competitors. 
The PMG said that the new role for the Department of State to 
promote the interests of American industry are consistent with 
public policy and the business objects of the Nation and the 
Postal Service. He commended the Department and Ambassador 
Southwick for their prompt actions in developing a plan and 
strategy. The Postal Service assumed the role of the State 
Department's advisor to the UPU Beijing Congress. The courier 
industry submitted proposals calling for dramatic changes for 
the development of all global delivery services--public and 
private--to assure fair competition among all operators. The 
issues raised by this group, the USPS believes, deserve serious 
consideration by the UPU. Another proposal to eliminate UPU 
Convention provisions protecting postal administration from 
remail was strongly opposed by the USPS unless there was a more 
objective and in-depth analysis of its implication of our 
Nation's domestic revenue base and ability to assure adequate 
revenues to finance our universal service obligations. USPS's 
preliminary estimates show a loss of more than $1 billion to $5 
billion. A more thorough study, in cooperation with the Postal 
Rate Commission, the Department of State and other interested 
parties is being arranged. The PMG said that the outcomes of 
the Beijing Congress are mixed. Some nations who had been 
traditionally supportive of U.S. proposals were confused and 
suspicious of USPS's aggressive support of UPU reform, as they 
viewed the U.S. position to be in greater support of the 
interests of private sector competitors and to the interests of 
universal service providers. Ultimately, the UPU reform was 
approved by the Beijing Congress in a modified form. The 
Congress adopted a new terminal dues structure that moves the 
UPU closer to a cost-based system for postal administrations to 
reimburse each other for the cost of delivering each other's 
mail. The PMG stated that the private carriers hold about two-
thirds of the revenue in the outbound international mail 
market. They are dominant in the higher growth segments such as 
expedited mail. Foreign post have privatized or have been 
authorized by their governments to aggressively seek and 
acquire new assets and market their services internationally. 
The Department of State and other intergovernmental agencies 
have understood that the Postal Service must fulfill its 
universal service obligation and must cooperate with other 
postal administrators to deliver international mail originating 
in the United States. The USPS is still dependent on delivery 
services with other postal administrators.
    Frederick W. Smith, chairman, president, and chief 
executive officer of FedEx Corp. made the points that delivery 
services are evolving into a global business that includes 
elements of postal, express, and logistics services. The legal 
framework for this sector, the UPU is outdated. It needs to be 
revised to become pro-consumer, pro-competitive, pro-global, 
and pro-reform. He opined that the new UPU Beijing Congress in 
1999 was anticompetitive and anti-reform; it should not be 
ratified at this time. Transferring policy responsibility of 
UPU to the State Department was a major improvement but 
additional legislation, such as reforms envisioned in H.R. 22, 
is urgently needed. The United States needs to put the case for 
reform of the international legal framework directly to other 
governments, but it also must undertake a major review of its 
policy goals and options. FedEx, in less than three decades, 
has helped to change how we view delivery service. Economic 
trends have favored national and global economy and air express 
has been integral in global economic advancement. Though air 
transport accounts for less than 2 percent of the weight of 
internationally shipped goods, it accounts for more than 40 
percent of the value. International delivery service has 
specialized in collection and delivery of urgent document and 
parcels; they have developed a seamless global service that is 
dependable nationally and globally making it a central feature 
of world-wide economics. There is serious question of whether 
the international legal structure will help or hinder the 
process. Mr. Smith, in his submitted testimony proposed that 
the fundamental flaw of the UPU is that it is an inter-
governmental organization of post offices, by post offices for 
post offices. But post offices no longer speak for their 
governments; they are commercial self-interests competing more 
aggressively against private operators. The UPU Convention 
hinders reform and simplification of customs laws, thereby 
reinforcing national barriers rather than encouraging global 
economy. The greatest consideration should be given to the 
consumer, not the provider. He asserts that the Postal Service 
continues to insist that it is both an interested party and a 
government decisionmaker, maintaining a dual status; the 
decisionmaking process, even following the 1998 legislation, is 
still opaque.
    Michael Southwick, Ambassador and Deputy Assistant 
Secretary, Bureau of International Organization Affairs, U.S. 
Department of State clarified that the Department of State did 
not seek the lead role to the UPU, but it is an extremely 
important and difficult position, which it takes seriously. 
Participation in the UPU congresses was always considered part 
of the Postal Service's job, so the State Department had to 
learn the job hurriedly in time for the Beijing Congress. State 
found that UPU was an organization which was in danger of being 
eclipsed by developments in the sector where it was supposed to 
be a major player. The UPU is led by an American who was 
elected to the post. The UPU is a 100-year-old organization 
whose members believed that they were representing the interest 
of the public. Now the UPU is more an organization for other 
organizations, that is, state monopoly postal services. The 
State Department believes that much reform is needed of the 
UPU. That reform includes: openness and transparency; 
encouragement of a more open and competitive system; entry 
opportunities to all stakeholders; fairness to all competitors; 
providing postal consumers with valuable benefits, including 
lower costs, faster deliver time, and a greater choice of 
services. Because of the need to consult with other countries 
in the matter of postal issues, the State Department can use 
its entire diplomatic structure and diplomatic missions to 
engage postal services of other nations along with their 
foreign, trade and other pertinent ministries, and therefore 
have a wider audience abroad. Nationally, Ambassador Southwick 
has endeavored to engage all stakeholders while following the 
mandate of the legislation. An open door policy is maintained 
and many public meetings have been held. Though there were few 
experts on board in the realm of postal service, it was found 
that there were many who volunteered their advice. Though the 
UPU has been successful in dealing with direct mailers, it has 
excluded the competitors. Ambassador Southwick made efforts to 
make sure that UPU documents were available to all and that 
private sector stakeholders were included in the delegation to 
Beijing. Several issues were of import in Beijing: Article 40, 
customs, and the terminal dues structure. The State Department 
was responsible for authoring the reservation on the terminal 
dues agreement. There is now a serious reform in consideration 
after the State Department's participation. The UPU is trying 
to get input from interested stakeholders.
    Robert Cohen, Director of Office for Rates, Analysis and 
Planning, U.S. Postal Rate Commission, spoke about the PRC's 
first international mail report, submitted to Congress in June 
1999. The most important conclusion of the report was that 
international mail is not cross-subsidized, but it does make a 
much smaller contribution to institutional costs than domestic 
mail. The important contribution of the UPU is creating a 
single, worldwide postal territory, which includes the 
universal service obligation [USO]. However, that is not a good 
reason not to have fair and open competition in international 
mail. The universal service obligation is not supported by 
international mail activities but by the domestic mail monopoly 
which sufficiently supports the USO. The PRC believes that the 
State Department exercised its authority in a most competent 
and skillful manner. PRC recommends that Congress should call 
on State to establish an advisory commission under the Federal 
Advisory Committee Act to institutionalize a consultative 
process. It also suggested that State should issue and make 
public statements of policy under procedures resembling notice 
and comment in the Federal Register to memorialize 
decisionmaking and prevent arbitrary changes in policy.
    Mr. T.S. Chung, Deputy Assistant Secretary, Services 
Industry, International Trade Administration, U.S. Department 
of Commerce, said that his agency is the U.S. Government's 
chief agency with responsibility for promoting the interest of 
U.S. businesses overseas. The involvement of the Department of 
State in the UPU congress has been beneficial to the Department 
of Commerce and has better aligned international postal policy 
with U.S. international trade policy. The Department of 
Commerce is involved in the UPU congress as a member of the 
U.S. delegation. This department works to improve the 
international competitive position of U.S. private business 
providers, including international postal and parcel services 
sector, as well as major customers of their services--the 
direct mailers. As a general rule, the Department of Commerce 
favors the efficient and timely facilitation of movement of 
goods across international borders. The Commerce Department is 
also actively seeking reform of the UPU which has enjoyed 
status quo for many decades. The collective effect of 
liberalization, removal of barriers and reform will improve 
international commerce for the United States. The international 
postal and delivery services serves the global economy 
therefore private postal providers must be given similar access 
to customs facilities as that given to public postal service 
providers.
    Mr. Joseph Papovich, Assistant U.S. Trade Representative 
for Services, Investments and Intellectual Property, Office of 
the U.S. Trade Representative testified that one of the central 
goals in trade negotiation is opening markets to trade and 
services. The services industries range from finance to 
telecommunication to distribution, health, education, travel, 
tourism, construction, engineering, architecture, law, and 
postal and delivery services. These industries provide over 86 
million American jobs and more than $5.5 trillion worth of 
products, nearly 70 percent of our gross national product. The 
Department is cognizant of the importance of postal and 
delivery services in international trade; exporters and 
importers rely on these serves to deliver their products, 
documents, advertising materials, bills, and payments. 
Individuals also make up a significant percent of those 
dependent on these services to deliver their ordered goods. 
There are fundamental changes taking place globally and the 
structure and competitive status of postal and express delivery 
services is evident. In Europe many postal services are being 
privatized or outsourced to the private sector and the line 
between government and private sector services is diminishing.
    Ms Elizabeth Durant, Director of Trade Programs, U.S. 
Customs Service, U.S. Department of Treasury summarized her 
testimony. She said that there is tremendous growth in trade 
and particularly in the small package delivery industry. There 
is a blurring of traditional roles between the Postal Service 
and the express consignment operators. The Customs Service has 
been approached by traditional passenger carriers expressing 
interest in expedited clearance of small packages from foreign 
suppliers. Customs has been concerned that it is not unfair in 
its treatment of one business entity over another. Because of 
the requirements to provide automation and to present outbound 
shipment for examination and to reimburse costs of service to 
Customs, there has been minimal risk. However, lack of this 
capability and authority in postal setting has impeded meeting 
the goals. Customs is constantly pressured to move shipments 
more swiftly, but is unable to control small parcels. Customs 
regulation require express consignment operators to present in-
transit and export shipments for examination, but the Postal 
Service is not required to present the same types of shipments 
to Customs and the packages are not made available for Customs' 
examination. Customs believes that this exception is an 
obstacle. Customs provides clearance of international mail at 
little or no expense to the Postal Service, and the Postal 
Service is not required to reimburse Customs for examination of 
inbound mail which include expenses of staffing, rental of 
offices, x-ray machines, computers, et cetera. Express 
consignment operators are statutorily required to fully 
reimburse Customs. Customs acknowledges that there is disparate 
treatment between the Postal Service and consignment operators 
and is working to end this scenario, but not to lower the bar.
    Ms. Donna E. Patterson, Deputy Assistant Attorney General, 
Antitrust Division, U.S. Department of Justice, testified on 
the role of competition in the American economy and the 
importance of the antitrust laws in preserving competition. 
Competition is one of the most fundamental national policy 
objectives and must be maintained in America's participation in 
multinational organizations, such as UPU. The United States has 
committed itself to protection free and unfettered competition 
for more than a century. In general, this Nation operates a 
free-market economy subject to the antitrust laws. Free market 
competition has benefited consumers with more innovation, 
choice and lower prices. The enactment of the Postal 
Reorganization Act of 1970, the Department of Justice has 
advocated a program of competition regarding international 
postal issues and opposed efforts to restrict competition on 
international mail services. The fundamental premise is that 
all who wish to compete in international mail services should 
have equal opportunity to compete for a customer's business. 
The rules of the marketplace should not favor one competitor 
over another without compelling justification. Section 633 of 
Public Law 105-277 authorizing the Secretary of State to be 
responsible for the negotiation of international postal 
agreement on behalf of the United States was a major advance 
for competition. A low terminal dues rate for outbound 
international mail may provide a postal administration with 
competitive advantage over another mailer. However, low 
terminal dues may not fully compensate the postal 
administration for its actual cost of delivering inbound 
international mail and place the postal administration at a 
competitive disadvantage.
6. ``The U.S. Postal Service and the Postal Inspection Service: Market 
        Competition and Law Enforcement in Conflict?''
    a. Summary.--Postal Inspectors of the Postal Inspection 
Service have enforced Federal statutes protecting the mail for 
more than 200 years. Because of their low public profile, the 
have been called the ``silent service'' even as they play a 
major role in a wide range of law enforcement activities.
    When the Postal Reorganization Act was enacted in 1970, the 
Postal Service became an independent establishment of the 
executive branch of the Government of the United States. The 
Inspection Service remained with the Postal Service and 
continued its investigation and audits as it had done in the 
past. The act stipulated that the Chief Postal Inspector be 
appointed by, and serves at the pleasure of, the Postmaster 
General who is also the Chief Executive Officer of the Postal 
Service. Because of the increasingly competitive position of 
the Postal Service, there is potential for conflict of interest 
between Postal management's commercial objectives and the 
Inspection Service's law enforcement mission. Examples include 
the use of Inspection Service agents for revenue collection, 
and recent marketing initiatives that tout the Inspection 
Service as a security advantage unique to the Postal Service's 
products and services, particularly for its new electronic 
commerce ventures. Such activities raise the question of 
whether control of the Inspection Service gives the Postal 
Service an unfair competitive edge over private delivery 
companies that do not have the luxury of an in-house Federal 
law enforcement agency.
    The Federal Law Enforcement Officers Association raised 
concern that Postal management may allocate Inspection Service 
resources to the investigation of those matters that are most 
likely to cause the greatest losses for the Postal Service 
(such as worker's compensation fraud) at the expense of law 
enforcement efforts targeted at more serious crimes. While such 
a decision may be entirely reasonable, the fact that the Postal 
Service has a financial interest in the priorities of the 
Inspection Service raises the possible perception that these 
priorities may not be driven solely by law enforcement 
concerns. Several solutions to this potential conflict have 
been proposed such as: (1) Title 39 might be amended to give 
the Inspection Service independence from postal management in 
the same manner as the current Office of the Inspector General. 
Under such a structure, the Chief Postal Inspector would be 
appointed by, and report to, the Board of Governors instead of 
the Postmaster General. (2) Congress could enact legislation 
transferring authority over the Inspection Service from the 
Postal Service to another executive agency with law enforcement 
responsibility. Such a transfer would also have to address the 
issue of transferring the funding of the Inspection Service 
budget from the Postal Service Fund, to a taxpayer-supported 
appropriation. (3) Others suggest that in order to address the 
competition policy problems, it would be appropriate to either 
greatly expand the jurisdiction of the Inspection Service or to 
greatly reduce it. Those who advocate expansion note that the 
Inspection Service was created to ensure the security of 
private communication and in light of this unique mission, as 
well as its extensive expertise and proven record, the Service 
should be permitted to investigate criminal activity conducted 
through both private carriers and e-mail. Under current law, 
the only provision of Title 18 that addresses criminal activity 
conducted through private carriers is Section 1341 (mail 
fraud). Critics who advocate limiting Inspection Service 
authority note that it share jurisdiction with several other 
capable and well-funded Federal law enforcement agencies. They 
suggest that the role of the Inspection Service should be 
limited to only internal security and crimes directly related 
to the postal monopoly. Such a contraction of authority would 
ease concerns of unfair competition and lighten the financial 
burden on the Postal Service, and ultimately, the ratepayers.
    b. Benefits.--The subcommittee focused on issues regarding 
whether control over the Postal Inspection Service give the 
Postal Service an unfair advantage over its private 
competitors; whether it is appropriate for the Postal Service 
to market the Inspection Service in order to increase the value 
of its products and services that are unrelated to letter mail; 
if the Postal Service has effectively and appropriately managed 
the Postal Inspection Service to best fulfill its law 
enforcement mission; does the fact that the Inspection Service 
relies on Postal revenue have the potential to compromise its 
effectiveness as a law enforcement agency; and whether Congress 
should take steps to ensure that the Postal Inspection Service 
remain exclusively focused on its law enforcement mission, and 
free of competitive business concerns. The airing of these 
issues benefit the manner in which the Postal Service utilizes 
the Postal Inspection and allays the fears of many private 
sector competitors and consumers.
    c. Hearings.--The subcommittee conducted a hearing on July 
25, 2000, entitled, ``The U.S. Postal Service and the Postal 
Inspection Service: Market Competition and Law Enforcement in 
Conflict.'' The witnesses were the Deputy Postmaster General, 
accompanied by the Chief Postal Inspector, an attorney who is a 
postal policy scholar, the national president of the Federal 
Law Enforcement Officers Association [FLEOA] accompanied by the 
FLEOA agency president of the U.S. Postal Inspection Service.
    John Nolan, Deputy Postmaster General, testified that the 
Postal Inspection Service is an integral part of the Postal 
Service that can trace its roots to the first Postmaster 
General, Benjamin Franklin. The Inspection Service predates 
postal activities such as free city delivery, street letter 
boxes and postage stamps. The Service today is made up of 
approximately 2,000 Postal Inspectors, 1,500 uniformed Postal 
Police Officers and 900 professional and technical support 
personnel. It upholds more than 200 Federal criminal and civil 
statutes that effect the integrity of the U.S. mail and the 
postal system and benefit postal customers, postal employees, 
and the American taxpayer. He stated that the growth and 
development of our mail system is linked with the Postal 
Inspection Service since colonial times. It has been known, 
nationally and internationally, as a model among law 
enforcement agencies because of its effectiveness. Its 
effectiveness is measured by its professionalism, integrity, 
efficiency, and the result of successful court actions--90 
percent of the cases brought to trial by the Inspection Service 
are concluded in convictions. The Postal Inspection Service has 
been used by the U.S. Government in various kinds of sensitive 
investigations (i.e., Ruby Ridge, Waco, Martin Luther King 
assassination). Part of its effectiveness is due to its 
independence and not being affiliated with the Departments of 
Justice or Treasury. Postal Inspectors have a thorough 
understanding of the mail system; they are working partners 
with postmasters, clerks, carriers and all postal employees, 
ensuring safety, security and integrity of the mail and those 
who deliver it. Postal Inspectors are the most local of all law 
enforcement officers and are interlinked with State and local 
law enforcement agencies. He stated that the Inspection Service 
does not provide an unfair competitive advantage for the Postal 
Service in its increasingly commercial operations. The Postal 
Service introduced parcel service in 1913, Express Mail in 1970 
but though they have both grown considerably, the Postal 
Service market share has been overtaken by private sector 
competitors, therefore the presence of the Inspection Service 
has not deterred private sector competitors from dominating the 
market. However, the USPS has shown competitive strength in its 
other markets, due to the efforts of its nearly 800,000 career 
employees. He testified that the major benefit of the 
Inspection Service lies in its support of congressional 
oversight of the mail and for universal service. It has been an 
effective agent in protecting the mail from consumer fraud, 
child pornography, physical security of property and the mail. 
Consolidating the Inspection Service under a single agency 
would dilute the unique perspective and expertise that it now 
provides. He opined that moving the Inspection Service and its 
budget to another would transfer current postal obligation to 
the backs of taxpayers from the ratepayer.
    James I. Campbell, Jr., a postal scholar and attorney, 
testified that it was timely and appropriate to take extra care 
to ensure that national police authority is not lowered to the 
status of a commercial chip in increasing competitive game in 
which the Postal Service finds itself. Enforcement of the 
postal monopoly has not been the primary function of the 
Inspection Service; its primary mission has been to protect the 
security of the mails and the Inspection Service has upheld 
this mandate. He believes that the competition issues presented 
by the activities of the Inspection Service are issues arising 
from the organization and mandate of the Postal Service, not 
from administration of the Inspection Service. He stated that 
he saw no reasonable objection to the Postal Service 
investigating private competitors for possible violation of law 
in the same manner as a private entity might investigate 
whether a competitor is contravening the antitrust law in a 
manner injurious to its interests. Following the Postal 
Reorganization Act in 1970, the Inspection Service became more 
active in defending the postal monopoly by intrusion into the 
affairs of mailers and customers of private express companies. 
The legal basis for this increase in activities of the 
Inspection Service lies in the comprehensive postal monopoly 
regulation adopted by the Postal Service in 1974. These postal 
monopoly regulation were different in kind and degree from 
anything advanced by the Post Office Department. He said that 
the practical effect of the 1974 regulations was to circumvent 
normal legal process and place the Inspection Service in the 
business of enforcing the postal monopoly by intimidation of 
mailers. The 1974 regulations defined every tangible 
communication to be a ``letter'' and fixed the scope of the 
monopoly by administrative regulations which ``suspended'' the 
postal monopoly for specific types of communications or 
particular classes of mailers or services. The new definition 
of ``letter'' became ``a message directed to a specific person 
or address and recorded in or on a tangible object.'' This 
definition, then, included all printed matter and commercial 
papers as well as non-verbal media, such as photographs and 
blueprints. Then, to counter public opposition, the new 
regulation announced ``suspensions'' of the postal monopoly to 
allow for the private carriage of newspapers, magazines, checks 
(when sent between banks), and, under certain conditions, data 
processing materials. In 1979, the Postal Service adopted a 
suspension of the postal monopoly to allow private carriage of 
urgent letters. This provision strengthened the role of the 
Inspection Service by requiring that all records, not merely 
covers of shipments, be made available to postal inspectors. 
The Postal Service issued regulation and procedural rules for 
the adjudication of postal demands for back postage which could 
become quite expensive for a large company, depending on the 
length of time over which pack postage was calculated. 
Postmasters are designated as process servers; the accused has 
no right to trial by jury and no access to subpoena authority. 
Failure to cooperate with the postal inspectors created a 
presumption of guilt, shifting the burden of establishing the 
fact of compliance to the shipper or carrier. Mr. Campbell 
questions the authority of the Postal Service, without approval 
of the Postal Rate Commission, to establish alternate 
provisions for domestic postage payable on items transmitted by 
private carrier. Modern express companies were developed in the 
1970's. Though the Board of Governors of the Postal Service 
appreciated the economic benefits of private express companies, 
the Postal Service used the Inspection Service to thwart their 
development. The 1974 postal monopoly regulation put mailers on 
notice that the USPS could impose large fines against companies 
using private express companies, and deny a mailer the right to 
use private express companies for transmitting vital business 
documents. In many instances the Postal Service law department 
issued letters to mailers claiming that the use of private 
express companies was illegal, and, these law department 
opinions were generated, in many cases, in response to, or in 
coordination with, investigation conducted by the Inspection 
Service. This legal intimidation was supplemented by postal 
inspectors making calls on customers of private express 
companies to dissuade them from using private express 
companies. Mr Campbell concluded that in the past few years, 
the Postal Service, by means of the Inspection Service, has the 
ability to offer products which are secured by the police power 
of the U.S. Government. It is clear that in a commercial 
market, that Federal police protection may offer a competitive 
advantage. As a matter of principle, the Inspection Service 
should not be used to confer competitive advantage for the 
Postal Service's competitive products. He suggested that the 
subcommittee may want to consider the following reforms: (1) 
Simplify the definition of the postal monopoly that does not 
depend on extensive investigation of mailers or customers of 
private express companies or on administrative discretion. (2) 
Transfer responsibility for enforcement of the postal monopoly 
to an impartial agency, such as the Department of Justice or 
another Federal agency. (3) Transfer responsibility for 
administration of the postal monopoly to an impartial Federal 
agency, such as the Postal Rate Commission. (4) Limit the 
ability of the Postal Service to use the Inspection Service for 
competitive advantage by either limiting the jurisdiction of 
the Inspection Service to non-competitive postal products or to 
expanding its jurisdiction to include private sector companies.
    Gary Eager, member of the National Executive Board of the 
Federal Law Enforcement Officers Association [FLEOA] provided 
testimony on the feasibility of having the U.S. Postal 
Inspection Service separated from the U.S. Postal Service. 
FLEOA believes that any discussion of this nature must include 
the current direction of the Inspection Service and also 
discussion of the Postal Service's move toward reform and/or 
privatization. FLEOA has great concern on the issue of privacy 
and sanctity of communications and the future role of the 
Inspection Service. The Inspection appears to have difficulty 
obtaining fiscal and personnel resources; it is presenting a 
``value added'' approach to Postal Service management to garner 
recognition of what the Inspection Service means to the USPS. 
FLEOA is also concerned about the perception by the private 
sector that the Postal Service has undue advantage because of 
the presence of a Federal law enforcement agency. Major 
commercial and technological changes over the last three 
decades have surpassed what was envisioned by the Postal 
Reorganization Act; the Postal Service must adjust to the 
changing business environment. The Postal Inspection role 
changed from its traditional roles in 1996 when the Office of 
the Inspector General for the U.S. Postal Service was created. 
The priorities for the Inspection Service changed to criminal 
investigations supporting the concept of sanctity of the mail, 
security and crime prevention. In the years when the chief of 
the Inspection Service wore two hats, Inspector General and 
Chief Postal Inspector, there was an appearance that the Postal 
Service placed greater value on the audit and revenue 
protection programs than on the criminal programs. When the 
independent Office of the Inspector General was created and 
there was a transferring of responsibilities, there was a loss 
of Postal Inspector positions. Mr. Eager testified that the 
Inspection Service has not been allocated an increase in 
personnel resources for more than 20 years, even though there 
is an increase in demands for its public service commitment. 
During these years, the Postal Service experienced a 
significant growth in the complement of employees and the 
volume of mail being handled. In a survey conducted by FLEOA in 
1997 among its Postal Inspector membership, it was found that 
61 percent of that membership thought the public was not 
receiving the proper level of service; 75 percent said there 
was not enough personnel resources assigned to the criminal 
programs; 74 percent indicated that the workload was not fairly 
distributed, and 76 percent believed that the Inspection 
Service's position among the Federal law enforcement community 
had weakened. Only 25 percent of the Postal Inspectors belong 
to FLEOA. Mr. Eager expanded on areas where there financial 
allocations have been reduced to various programs, including 
the Mail Fraud Program and to provide adequate pay for lab 
personnel. Crime labs are an integral part of the Inspection 
Service and denying pay comparability with other Federal labs 
is a bad law enforcement decision as well as a bad business 
decision. Presently, the future of the Inspection Service is 
tied to the fiscal viability of the U.S. Postal Service, in 
addition to the value placed on its public service obligations. 
The need for the Inspection Service is as valid and necessary 
as when the Service was started. FLEOA is concerned that there 
is a perception by some that having a law enforcement agency 
tied to the Postal Service is an unfair business advantage. 
This perception is stronger since the Postal Service in 
venturing into the area of e-commerce and the presence of the 
Inspection Service is viewed as a marketing tool. Mr. Eager 
said that what competitors view as unfair competition is seen 
by FLEOA as crime prevention. The Inspection Service is the 
only major Federal law enforcement agency affiliated with a 
quasi-government, quasi-business agency. FLEOA suggests that 
should consideration be given to placing the Inspection Service 
under the executive branch of government with other law 
enforcement agencies, that the issue be debated to ensure the 
Inspection Service remains the primary agency to conduct 
investigation of violation of the sanctity and fraudulent use 
of communications as originally intended.
7. General Oversight Hearing for the U.S. Postal Service.
    a. Summary.--The Postal Service is facing uncertain times 
and formidable challenges. It has encountered financial 
difficulties as mail volumes have declined, falling below 
anticipated projections. The cost of delivery has also risen. 
In an effort to reign in these obstacles, the Postal Service is 
seeking innovative approaches and solutions. The Postal Service 
is facing a $300 million loss for fiscal year 2000, due in part 
to significant electronic diversion. The challenge for the 
Postal Service is to at least maintain, if not improve, its 
mail delivery service and continue to provide affordable postal 
rates. It must also try to remain self-supporting through 
postal revenues. With growing cost pressures and a shrinking 
revenue base, postal reform is urgently needed. The 
subcommittee has considered a comprehensive, well-refined, 
reform measures over the past 5 years but the support for 
passage has not been clear. The concern is that if left too 
long without an enacted reform measure, a crisis situation may 
overtake sensible and thoughtful change. The legislation under 
which the Postal Service is now functioning is 30 years old; 
the Service must meet the challenges and restrictions of that 
legislation as it works to gain revenues and compete in a 
changing marketplace.
    b. Benefits.--Periodic oversight hearings of the Postal 
Service with suggestions from the General Accounting Office 
encourage the Postal Service to fine-tune its operations. 
Hearings such as this one helps to focus the Postal Service on 
how to maintain affordability, improve the workplace climate, 
enhance productivity and meet its new challenges. The GAO and 
the Office of the Inspector General presented initiatives that 
would help the Postal Service to improve its own performance. 
In the latest Performance Report (1999) the Postal Service 
reported that it wholly fulfilled or exceeded 26 of the 37 
performance targets planned and undertaken in 1999. From fiscal 
year 1998 to 1999, local first-class mail service improved 94 
percent from 93 percent delivered overnight, while 2 to 3 day 
mail service improved to 88 percent from 87 percent. On January 
12, the Postal Service filed for another rate increase 
averaging about 6.4 percent. The case, Docket No. R2000-1 was 
decided in November 2000. Rates are expected to increase in 
January 2001, only 2 years after the last increase. A number of 
controversial issues emerged in the case including: the cost of 
processing flats and the attendant double-digit increases for 
periodicals, the cost of non-profit mail and the required 
increases under current law, the quality of costing and revenue 
data, the late inclusion of fiscal year 1999 data into the 
record, and the revenue requirement, particularly wage level 
assumptions in the forecast model. However, due to the current 
legal framework, the Postal Rate Commission had little 
discretion to significantly modify the Postal Service's 
request.
    In compliance with the Results Act, the Postal Service has 
issued its Annual Performance Plan which outlines how the 
Service will implement its strategic plan on an annual basis. 
The USPS plans a $4 billion capital commitment to improve 
automation, facilities, vehicles, and retail and support 
equipment. The plan sets forth most goals for improving first-
class mail service in 2000: a 1 percent increase or maintenance 
of the current 87 percent on-time service for 2 to 3 day mail, 
and 93 percent for overnight mail--1 percent lower than what 
was attained in 1999.
    c. Hearings.--A general oversight hearing on the U.S. 
Postal Service was conducted in September 2000. The witnesses 
included the Postmaster General and Chief Executive Officer of 
the U.S. Postal Service, the Inspector General of the U.S. 
Postal Service, and the Director, Government Business 
Operations Issues of the General Government Division of the 
U.S. General Accounting Office.
    William J. Henderson, Postmaster General and Chief 
Executive Officer of the U.S. Postal Service testified that the 
Postal Service is at a critical point. Traditional competition 
is intense and technology has created alternatives that are 
challenging to the Postal Service. Foreign postal 
administration, empowered by their governments, realize that a 
contemporary postal model is needed for the fast-paced, rapidly 
evolving communication of this century. He recognized the 
exceptional work done by Chairman McHugh in formulating H.R. 22 
after consultation with every stakeholder and conveyed 
disappointment that the prospect for postal reform was dimming 
and uncertain. He stressed that the need for reform will 
continue to grow. He said that clearly, special interests and 
lack of a crisis have made the task of postal reform difficult. 
There are sweeping changes through the mailing industry but the 
American public appears to be immune to the changes and 
continue to find great value in the mail. A study by the 
International Communication Research group found 42 percent of 
Americans strongly look forward to reading their daily mail; 
this was a higher percentage than recorded for personal phone 
calls, the daily newspaper, e-mail, and television. The study 
also showed that 66 percent of the people believe that mail is 
the most private and secure form of communication; 87 percent 
said mail is more secure than e-mail. By a huge majority, 
Americans prefer that their confidential documents and personal 
messages come through the Postal Service and not the Internet. 
The Postal Service is the gateway to the American household. No 
other organization has the reach of the Postal Service. He 
credited the Postal employees for their dedication and 
professionalism. They are also aware that the future is 
difficult and fragile. The U.S. Postal Service delivers more 
than 40 percent of the world's mail with an unsurpassed 
combination of low price and quality service. The Postal 
Service has made an effort to promote growth by increasing the 
value of the mail, introducing new services, and strengthening 
customer outreach. System improvements have raised service to 
its highest levels, while the real price of postage has 
declined over the past 6 years due to rate increases which are 
below the rate of inflation. New services such as delivery 
confirmation, signature capture, on-demand pick-up and 
customized packaging have been implemented. New partnerships 
and alliances with the private sector has enabled expanded 
customer access and new, cost-effective mailing solutions. 
Partnerships are critical in the demand for eBusiness service. 
These partnerships have enabled customers to obtain postage by 
Internet and Internet bill payment and message certification. 
The Internet has become a means to order stamps, confirm 
package delivery, access ZIP Codes and other mailing 
information. Major mailer utilize the Internet to schedule 
their mail shipments and verify the quality of service they are 
receiving. In spite of these accomplishments, the Postal 
Service is facing severe competition from traditional 
competitors, start-up delivery firms, liberalized foreign posts 
that have opened offices in the United States and purchased 
American subsidiaries, and the accelerating growth of 
electronic alternatives to the mail. The Postal Service has 
experiences less growth than anticipated. This has resulted in 
relentless cost cutting to meet its financial goals and 
deferment of beneficial improvements that could not be afforded 
under the present fiscal situation. Revenue growth was $750 
million less than forecasted for the year; record fuel and 
workers compensation costs have added $500 million to the 
expenses. Though increased productivity resulted in saving of 
more than $1 billion, increased labor costs and rising 
inflation will add to financial costs. The Postal Service 
intends to deal with these matters by maintaining cost controls 
directly related to the affordability of the mail; a multi-year 
breakthrough productivity initiative designed to take billions 
of dollars out of the cost structure; in the areas of 
transportation, purchasing, administration, and operations, 
they are reengineering work process and employing technology to 
achieve savings and lower workforce needs. Furthermore, it will 
increase revenues by helping the industry grow, which is not a 
simple solution as there is so much competition and first-class 
mail is growing more slowly. A report by the American Bankers 
Association shows that banks have reduced their mailing by 18 
percent since 1996, not including electronic banking. Also, 
there are 30 percent fewer banks than there were 10 years ago. 
Also, the Postal Service remains vulnerable to electronic bill 
presentment and payment. Many of the costs associated with the 
Postal Service are not volume variable, and costs associated 
with universal service continues to rise and the American 
population increases. Each delivery day is increased by 5,600 
deliveries or 1.7 deliveries per year. The Postal Service is 
searching for a legislative alternative to help keep the USPS 
in its leadership position among all the posts.
    The Inspector General of the U.S. Postal Service, Ms. Karla 
W. Corcoran testified that the establishment of an independent 
Office of Inspector General [OIG] 4 years ago has resulted in a 
more effective Postal Service today. Though the Postal Service 
has encountered numerous, it has made many accomplishments: it 
had smooth delivery over the universal year 2000 concern, 
showing that it is capable of overcoming technological hurdles; 
its traditional deliveries were expanded to include new 
products and services; the Postal Service successfully 
delivered 120 million pieces of misaddressed Census mail; it 
cut billions of dollars in operating costs; it was named one of 
the top employers for minorities by Fortune magazine; and its 
service performances were appreciated by 9 out of 10 customers. 
The OIG worked with the Postal Service to ensure that it met 
the challenges of the new electronic era while maintaining its 
reputation. This partnership helped to highlight postal 
processes and systems in need of improvements, uncovered 
illegal activities that affect postal operations, identified 
ways to save costs and increase revenues; and helped to uncover 
issues that affected the workplace environment, improving the 
morale of Postal employees. The OIG has grown from 400 to 660 
employees. There are five additional offices throughout the 
Nation, thereby enabling the OIG to increase its visibility 
with stakeholders, extend coverage of postal operations, and 
provide Congress, the Governors of the Postal Service and 
postal management with independent and objective analyses. The 
OIG has issued more than 500 reports with recommendation that 
could benefit the Service by $1.4 million. Their investigations 
have yielded 42 arrests, 13 indictments and 11 convictions. 
Additionally, they have recovered $13 million, suspended and 
debarred 36 contractors and brought in about $160,000 in fines 
and restitution.
    The major management challenge facing the Postal Service 
are growing revenues and competing in a rapidly changing 
market; maintaining affordability by controlling costs; 
improving the workplace climate and labor relations; leveraging 
technology to enhance productivity. Electronic commerce 
threatens to reduce first-class mail by as much as $33 billion 
over the next 9 years. Outbound international mail has been 
siphoned away from the U.S. Postal Service by foreign postal 
services. This has caused the Postal Service to find new 
revenue sources simultaneously with the challenge the Postal 
Service is facing to fulfill its core mission of delivering 
mail in a timely manner and improve customer service. A GAO 
audit showed that the Postal Service paid approximately 
$250,000 to two senior Postal Service executives who moved 20 
miles with no change of duty station, and without sufficient 
documentation explaining why the payments were in the best 
interest of the Postal Service. The OIG questioned whether the 
relocation benefits were used to augment the salary of the 
executives above the statutory pay cap. The Board of Governors, 
as a result of the report, adopted a resolution requiring their 
approval of each component of compensation and benefits for 
postal executives, including relocation benefits. The 
resolution also stated that the Board shall, as appropriate, 
establish standards for deviation from the benefits program. A 
subsequent audit was conducted which found that the Postal 
Service paid its executives miscellaneous relocation expenses 
of $10,000 or $25,000 without requiring proof of expenses 
incurred. Through benchmarking it was found that the amount 
paid to Postal Service executives was up to five times higher 
than those paid by comparable private companies. Yet a third 
audit is being conducted regarding equity loss payments, shared 
equity appreciation, and incentive packages.
    Based on its revenues, the Postal Service would rank in the 
top 10 of the Fortune 500 companies. The size and the 
complexity of the postal operation there are teams of 
strategically located at three accounting service centers and 
headquarters to validate the accuracy end reliability of the 
financial information maintained in postal systems. As a part 
of the process, the OIG is also reviewing the controls over 
software and data security to ensure the confidentially and 
integrity of the data maintained on these systems. The OIG 
finds that there are irregularities by some Postal Service 
executives in the use of chauffeur driven vehicles. Daily logs 
were either inadequate or nonexistent, so the misuse continued 
for an extended time. These matters have the potential for 
violations of Federal law. The matter of revenue deficiencies 
were studied at the request of the chairman. The OIG 
ascertained that revenue deficiency assessments were not done 
at times, mailers did not receive advance notice of 
deficiencies, and deficiencies assessed were sometimes due to 
incorrect information given by Postal Service personnel to 
mailers. The OIG conducted a review of the Postal Service's 
Economic Value Added Variable Pay Program. On the basis of the 
Postal Service projection as of March 24, 2000, the program 
payment has increased annually from 16 percent of net income in 
fiscal year 1996 to an estimated 325 percent of projected net 
income in fiscal year 2000. The Postal Service management 
defends the program because they believe it forces improved 
productivity. According to management, productivity in the 
Postal Service is the highest it has been since 1992. The issue 
is whether when the Postal Service may face negative net 
income, when it has requested a rate increase and is reducing 
its workforce, such a payout may be viewed negatively by postal 
stakeholders.
    In reviewing the Breast Cancer Research Stamp program, the 
OIG found that the Postal Service did not follow its own policy 
in recovering costs for this program. Money that should have 
been used to offset costs of the program was contributed to BCR 
funds. As a result, ratepayers who purchased other postal 
products contributed in a small way to the Breast Cancer 
Research funds. The OIG is concerned that without proper 
controls, the Postal Service will continue to pass associated 
costs of additional semipostal stamps, unwittingly, to 
ratepayers.
    Each day Americans send more than 650 million pieces of 
mail through the Postal Service expecting it to be processed 
accurately and in a timely manner and the Postal Service must 
accomplish this to ensure that customer service does not 
suffer. The chairman requested the OIG to conduct a review of 
certified mail delays in California, Connecticut, Delaware, 
Illinois, and New York. Preliminary findings confirmed that 
certified mail was delayed in four of the five locations and 
exceeded delivery standards by at least 10 days during the tax 
season. It was found that the delay in mail was attributable to 
inadequate planning, staffing and supervision of mail 
processing operations. OIG believes that there was inadequate 
staffing because managers tried to keep overtime to a minimum 
to meet Economic Value Added goals that drive cash awards for 
managers. In some instances, mail arrived late due to 
transportation delays. These delivery delays went undetected 
because of the lack of a standard system to report certified 
mail. Another review was conducted to verify allegations that 
mail service had deteriorated. In a Mid-Atlantic area, it was 
found that approximately 1.2 million pieces of standard mail 
was up to a week late. In another location in the Pacific area, 
200,000 pieces of delayed and unprocessed international mail 
was found--some were over 3 weeks old. Approximately 75,000 
pieces of unprocessed mail including time sensitive material, 
such as tax documents and medical information, were discovered 
in the Southwest area. The Postal Service could not identify 
the causes of late mail or the timeliness of mail movement 
because the air carrier performance system was inadequate. The 
OIG discovered that the Postal Service had accepted more than 
21,00 delivery vehicles under a $441 million contract, even 
though the fuel pumps on the vehicles failed within 100 hours 
when used with ethanol fuel.
    The independent status of the OIG enables the office to 
continue to add value to the Postal Service.
    Mr. Bernard L. Ungar, Director, Government Business 
Operation Issues, General Government Division, U.S. General 
Accounting Office testified that the Postal Service has 
slightly improved its delivery performance, productivity and 
cost cutting measures this year. But, it has faced financial 
difficulties because mail volumes are declining faster than 
anticipated and postal costs have risen. There is concern that 
the Postal Service is heading for financial shortfalls that 
could impede its mission of providing universal, affordable 
services that bind the Nation. The Postal Service's 5-Year 
Strategic Plan for Fiscal Years 2001 through 2005 raised their 
concern about these public service obligations. The chairman of 
the Postal Rate Commission [PRC] raised the question whether 
the nature of universal postal service delivery to every 
address 6 days each week may need to be reconsidered if there 
is a large decline in mail due to competition. Federal 
governmental obligations have also affected postal mail 
volumes. Government is mandated to move information, billing 
and payment as quickly as possible and to reduce paperwork, 
hence, the adoption of electronic billing and payment. 68 
percent of the 880 million Social Security checks, tax refunds 
and other payments sent by the Department of the Treasury in 
1999 were sent electronically, which cost the USPS $180 million 
in first-class revenue. The effect from new technologies on the 
Service's mail volume will have significant negative impact on 
the categories of mail which the Postal Service handles most 
efficiently, first-class bills and payments. Though it is 
difficult to predict the timing and extent of further 
diversion, the Postal Service has begun to plan how to address 
such situations. The basic strategy is aggressive cost-cutting 
and new revenue generation. Also, a number of issues must be 
addressed: the definition of universal postal service; the 
potential realignment of service standards, and the 
configuration of current operations and infrastructure. It is 
anticipated that if there is a drastic change in volume, 
particularly in those categories that carry the bulk of the 
contribution to institutional overhead, postal rates will 
likely increase dramatically for other mail categories. Long-
term increase in productivity is key to the future success of 
the Postal Service. Though productivity rose during the past 
fiscal year, the net result is low due to productivity decline 
during 5 of the last 6 fiscal years. In this regard, and 
because the Service recognizes the difficulty in achieving cost 
reduction in fiscal year 2001, the first year of the 
breakthrough productivity initiative, oversight attention 
should be given to what, how and when the Service expects to 
achieve breakthrough productivity. Mr. Ungar said that GAO 
continues to believe that the Postal Service and its major 
postal labor unions and management associations must focus on 
common approaches to address labor-management problems that 
persist. This would improve the work environment and help 
maintain a competitive position. The Report of the Postal 
Service Commission On A Safe and Secure Workplace stated that 
in order to contain the number of grievances, it is vital to 
establish an environment of trust; there must be a change of 
attitude by all parties. The annual cost of postal grievances 
is about $217 million a year. A new program at the Postal 
Service, Resolving Employee Disputes, Reaching Equitable 
Solutions Swiftly [REDRESS] has helped to reduce Equal 
Employment Opportunity [EEO] complaints. However, the GAO 
continues to be concerned that continuing disagreement in 
labor-managements may impede improvements in achieving postal 
productivity. GAO suggested that another area of congressional 
oversight is the need for complete and reliable information on 
Postal performance which is essential for the USPS, Congress 
and stakeholders to monitor whether the Service is meeting its 
goals. The Service plans to spend about $2 billion on 
information systems over the next 5 years. The quality and 
transparency of the information is vital. This includes issues 
such as data quality used in ratemaking. Data for e-commerce 
initiates were found to be inaccurate, inconsistent and 
incomplete. The GAO also has concerns regarding the manner in 
which information is presented, for instance, not using data 
for the full fiscal year, but using data only from peak 
periods. GAO recommended that the Postmaster General (1) take 
appropriate steps to ensure that e-commerce and other 
initiatives are appropriately identified and maintain accurate 
and complete information related to the status of these 
initiatives; (2) follow processes and controls that have been 
established for developing and approving e-commerce 
initiatives; and (3) provide complete and accurate information 
on costs and revenues for the financial data on e-commerce 
initiatives.
    In GAO reports issued to Mr. Chaka Fattah, ranking minority 
member, Subcommittee on the Postal Service concerning diversity 
it was stated that women and minorities represented about 35 
percent of the Postal Career Executive Service [PCES] where as 
their representation was 58 percent of the overall workforce of 
the USPS. The Service reported that various efforts were 
planned in an effort to increase diversity among PCES 
executives, including management training programs and a 
diversity oversight group to oversee corporate diversity 
initiatives. In another product, the GAO reported that in a 
study of diversity in 83 postal districts throughout the 
Nation, GAO found that representation of women and minorities 
varied from 22 percent to 95 percent. In districts where the 
representation in EAS positions almost mirrored the overall 
workforce, it was found that the districts were utilizing the 
REDRESS program as well as their individual initiatives.
    Regarding the Breast Cancer Research Stamp [BCRS], the GAO 
was concerned that the Postal Service had not formalized its 
criteria for determining what costs would be recovered from the 
surcharge revenue generated by the BCRS. Upon GAO's concern 
that all costs were not being tracked, even informally, GAO 
recommended to the PMG (and the PMG obliged) that issue 
regulations that clearly state the criteria to determine costs 
that would be recouped from the BCRS surcharge revenue and 
ensure that the criteria be applied in the same manner to all 
costs.
    Mr. Ungar stated that the GAO is continuing to work on 
supervisory pay differentials in reference the Service's policy 
that certain postmasters and supervisory personnel be paid at a 
higher salary rate under certain circumstances. Due to the USPS 
complex payroll system and the lack of documentation, the work 
for this project is taking longer than anticipated.
                            III. Legislation

                            A. NEW MEASURES

                       Subcommittee on the Census

                       Hon. Dan Miller, Chairman

1. H.R. 929, the 2000 Census Language Barrier Removal Act.
    a. Report number and date.--House Report No. 106-96, April 
19, 1999.
    b. Summary of measure.--H.R. 929 amends Title 13, U.S.C., 
to require the short form questionnaire used in taking the 2000 
decennial census be made available in 33 languages, including 
Braille and in addition to English. The bill was introduced by 
the Honorable Dan Miller to address concerns that the Census 
Bureau plans to print census forms in only 5 languages other 
than English. Given that the United States is home to 
immigrants from nearly 100 countries around the world, 
providing the census questionnaires in more languages would 
enable immigrants to correctly complete and return a census 
form. The bill also gave the Secretary of Commerce the 
authority to determine the method in which the additional forms 
would be made available to the public to best enhance response 
rates.
    c. Legislative status.--The Honorable Dan Miller (R-FL) 
introduced H.R. 929 on March 2, 1999. The bill was referred to 
the Committee on Government Reform on March 2, 1999, and it was 
referred to the Subcommittee on the Census on March 10, 1999. 
The subcommittee held a mark-up on March 11, 1999. No 
amendments were offered, and the measure was ordered favorably 
reported to the full committee by the yeas and nays 6-4 in a 
roll call vote. On March 17, 1999, the Committee on Government 
Reform met to consider the bill. The committee marked-up and 
subsequently approved the bill by the yeas and nays 23-21 in a 
roll call vote. The bill was then favorably reported to the 
House. H.R. 929 was placed on the Union Calender on April 19, 
1999, and House Report No. 106-96 was issued. No further 
action.
    d. Hearings.--A hearing on H.R. 929 was held on March 2, 
1999 as part of ``Oversight of the 2000 Census: Examining the 
America Counts Today [ACT] Initiatives to Enhance Traditional 
Enumeration Methods.'' Dr. Kenneth Prewitt, Director, Bureau of 
the Census, testified that the Census Bureau opposed this bill 
because designing, testing, printing, and preparing to scan 
additional forms in other languages would not be practical. In 
addition, he noted that the Bureau planned to offer telephone 
questionnaire assistance in five languages and to staff 15,000 
questionnaire assistance centers in local communities to ensure 
that assistance in languages other than English would be 
provided to those who need it. Dr. Prewitt contended that their 
planned program would be more effective than one that includes 
printing questionnaires in 33 languages.
2. H.R. 1058, the Census in the Schools Promotion Act.
    a. Report number and date.--House Report No. 106-105, April 
26, 1999.
    b. Summary of measure.--H.R. 1058, the ``Census in the 
Schools Promotion Act,'' promotes greater participation in 
decennial censuses by providing for the expansion of the Census 
Bureau's ``Census in the Schools Project.'' Under the current 
program design, the Bureau will be sending invitations to all 
principals, but to teachers in only 40 percent of schools 
nationwide. H.R. 1058 would simply require that the Census 
Bureau send an invitation-to-participate to elementary teachers 
and secondary math and social studies teachers in all 
communities, rather than only in the targeted areas.
    c. Legislative status.--H.R. 1058 was introduced on March 
10, 1999 by the Honorable Dan Miller (R-FL). The bill was 
referred to the Committee on Government Reform on March 10, 
1999. On March 17, 1999 the Committee on Government Reform met 
to consider the bill. Mrs. Norton (D-DC) offered an amendment 
to require the Secretary of Commerce to provide a written 
invitation to participate in the program to the head of each 
elementary school and secondary school. The amendment offered 
by Mrs. Norton (D-DC) failed by recorded vote, 20 ayes, 21 
noes. The committee approved the bill by voice vote. The 
committee then favorably reported the bill to the House by 
voice vote.
    d. Hearings.--The committee held no hearings and received 
no written testimony on H.R. 1058. The Subcommittee on the 
Census held a hearing on March 2, 1999, entitled, ``Examining 
the America Counts Today [ACT] Initiatives to Enhance 
Traditional Enumeration Methods,'' where Dr. Kenneth Prewitt, 
Director of the Census Bureau supported an effort to reach 100 
percent of schools.
3. H.R. 1010, to improve participation in the 2000 decennial census by 
        increasing the amounts available to the Census Bureau for 
        marketing, promotion, and outreach.
    a. Report number and date.--House Report No. 106-97, April 
19, 1999.
    b. Summary of measure.--H.R. 1010 authorizes $300 million 
for fiscal year 2000 to be appropriated to the Census Bureau to 
carry out promotional, outreach, and marketing activities in 
connection with the 2000 decennial census.
    c. Legislative status.--H.R. 1010 was introduced on March 
4, 1999 by the Honorable Dan Miller (R-FL), chairman of the 
Subcommittee on the Census, Government Reform Committee. The 
bill was referred to the Committee on Government Reform on 
March 4, 1999 and then referred to the Subcommittee on the 
Census on March 11, 1999. The subcommittee held a legislative 
hearing on March 2, 1999. A markup was held by the subcommittee 
on March 11, 1999. Mr. Davis (D-IL) offered an amendment to the 
bill which would have required the Census Bureau to make every 
effort to utilize funds to contract with entities that 
represent undercounted communities of color with income less 
than the poverty-line or who have limited proficiency in 
English. Mr. Souder (R-IN) offered and withdrew an amendment to 
the amendment offered by Mr. Davis (D-IL). The amendment 
offered by Mr. Davis (D-IL) was defeated by voice vote. The 
measure was ordered favorably reported to the full committee by 
a voice vote.
    On March 17, 1999, the full committee met to consider the 
bill. Mr. Davis (D-IL) offered an amendment to the bill which 
would require the Bureau of the Census to make every effort to 
utilize funds to contract with entities that have a 
demonstrated record of making an impact on undercounted 
communities with significant numbers of individuals of color, 
with incomes less than the poverty-line, or who have limited 
proficiency in English. The amendment offered by Mr. Davis (D-
IL) passed by voice vote. The committee approved the bill, as 
amended, by voice vote. The committee then favorably reported 
the bill, as amended, to the House by voice vote.
    d. Hearings.--The committee held no hearings and received 
no written testimony on H.R. 1010. The Subcommittee on the 
Census held a hearing on March 2, 1999, entitled, ``Examining 
the America Counts Today [ACT] Initiatives to Enhance 
Traditional Enumeration Methods,'' where Kenneth Prewitt, 
Director of the Census Bureau supported a more extensive 
advertising campaign.
4. H.R. 928, 2000 Census Mail Outreach Improvement Act.
    a. Report number and date.--House Report No. 106-88, April 
13, 1999.
    b. Summary of measure.--H.R. 928 requires the 2000 
decennial census to include a second mailing of census 
questionnaires, either targeted (to those households who have 
not yet responded by mail) or general (to each household 
included in the original mailing). Data from the census 2000 
dress rehearsals and reports from the National Academy of 
Sciences suggested strongly that a second mailing would result 
in increased mail response rates. The legislation granted the 
Secretary of Commerce the authority to determine which method 
(targeted or general mailing) would achieve the highest number 
of responses possible, and simultaneously be the most feasible 
for the Census Bureau to implement.
    c. Legislative status.--H.R. 928 was introduced by the 
Honorable Dan Miller (R-FL) on March 2, 1999. The bill was 
referred to the Committee on Government Reform on March 2, 
1999, and was referred to the Subcommittee on the Census on 
March 10, 1999. The subcommittee held a mark-up on March 11, 
1999. No amendments were offered and the measure was ordered 
favorably reported to the full committee by the yeas and nays 
5-2 in a roll call vote. On March 17, 1999, the Committee on 
Government Reform met to consider the bill. The committee 
marked-up and subsequently approved the bill by the yeas and 
nays 23-20 in a roll call vote. The bill was then favorably 
reported to the House. H.R. 928 was placed on the Union 
Calendar on April 13, 1999, and House Report No. 106-88 was 
issued. No further action.
    d. Hearings.--A hearing on H.R. 928 was held on March 2, 
1999 as part of ``Oversight of the 2000 Census: Examining the 
America Counts Today [ACT] Initiatives to Enhance Traditional 
Enumeration Methods.'' Dr. Kenneth Prewitt, Director, Bureau of 
the Census testified that the Census Bureau opposed this bill. 
He sited increased costs, delays in the nonresponse follow-up 
operation, and increased duplication as reasons why passage of 
H.R. 928 would result in a lower quality census.
5. H.R. 472, Local Census Quality Check Act of 1999.
    a. Report number and date.--House Report No. 106-71, March 
19, 1999.
    b. Summary of measure.--H.R. 472 amends Title 13, United 
States Code, to require the use of a ``Post Census Local 
Review'' [PCLR] as part of each decennial census. A similar 
post census local review program was utilized by the Census 
Bureau as part of plans for the 1990 census with encouraging 
results. PCLR affords local officials the opportunity to 
pinpoint mistakes the Census Bureau may have made in their 
respective jurisdictions before the final census housing counts 
are released. These may include clusters of missed housing 
units, geographic misallocations (housing units listed in the 
wrong location), or incorrectly displayed political boundaries. 
Specifically, this legislation allows local governmental units 
and tribal leaders, or their designees, to review household 
counts, boundary maps, and other data the Secretary of Commerce 
considers appropriate in order to identify discrepancies in 
housing unit counts before the release of apportionment data on 
December 31, 2000. The bill also establishes a timeframe that 
provides both the Census Bureau and the local governmental 
units the time necessary to complete this review process and 
develop a challenge, and it ensures that the local challenges 
are responded to in a timely manner.
    c. Legislative status.--H.R. 472 was introduced on February 
2, 1999, by Subcommittee Chairman Miller (R-FL) and referred to 
the Committee on Government Reform and then to the Subcommittee 
on the Census. Subsequently, the subcommittee held a hearing 
and mark-up on February 11, 1999, and favorably forwarded the 
bill to the full committee for consideration. On March 17, 1999 
the Committee on Government Reform marked-up the bill and 
Chairman Dan Burton (R-IN) ordered the yeas and nays for 
passage. H.R. 472 passed the full committee 23-21, and the 
committee then favorably forwarded the bill to the House by 
voice vote. H.R. 472 was placed on the Union Calendar on March 
19, 1999, and House Report No. 106-71 was issued. H.R. 472 was 
brought to the full House for consideration on April 14, 1999 
under Rules Committee Resolution H. Res. 138. An amendment by 
ranking Minority Member Carolyn Maloney (D-NY) failed by the 
yeas and nays 202-226, Roll Call Vote No. 88. H.R. 472 passed 
the House by the yeas and nays 223-206, Roll Call Vote No. 89. 
H.R. 472 was received in the Senate on April 15, 1999, and read 
twice then referred to the Committee on Governmental Affairs. 
No further action.
    d. Hearings.--A hearing on H.R. 472, ``The Local Census 
Quality Check Act of 1999,'' was held on February 11, 1999 as 
part of ``Oversight of the 2000 Census: Examining the Benefits 
of Post Census Local Review.''
6. H.R. 1009, the 2000 Census Community Participation Enhancement Act.
    a. Report number and date.--House Report No. 106-89, April 
13, 1999.
    b. Summary of measure.--H.R. 1009 authorizes the Secretary 
of Commerce to administer grants to units of local government, 
tribal organizations, and nonprofit organizations to promote 
the census within their communities. The bill requires the 
Secretary of Commerce to prescribe regulations to carry out the 
act within 60 days. Applicants are required to submit their 
applications to the Census Bureau regional centers. The 
Secretary then would have 60 days to notify the applicant 
whether the application has been approved or disapproved. The 
grant program would match $2 in Federal funds for every $1 of 
non-Federal contribution. Non-Federal contributions could be 
made in-kind. The total amount of Federal funds available would 
be $26 million.
    c. Legislative status.--H.R. 1009 was introduced on March 
4, 1999 by the Honorable Dan Miller (R-FL), chairman of the 
Subcommittee on the Census, Government Reform Committee. The 
bill was referred to the Committee on Government Reform on 
March 4, 1999 and then to the Subcommittee on the Census on 
March 11, 1999. The subcommittee held a legislative hearing on 
March 2, 1999. A markup was held by the subcommittee on March 
11, 1999. Mrs. Maloney (D-NY) offered an amendment to the bill 
to restrict grants to communities with a population undercount 
of 2 percent or greater. The amendment made available sums as 
may be necessary and required the Secretary of Commerce to 
select a nonprofit organization(s) to administer the grants 
program. Mrs. Maloney's amendment failed on voice vote. The 
measure was ordered favorably reported to the full committee by 
a voice vote.
    On March 17, 1999, the full committee met to consider the 
bill. Mrs. Maloney offered an amendment to the bill to restrict 
grants to communities with a population undercount of 2 percent 
or greater. This amendment made available sums as may be 
necessary and requires the Secretary of Commerce to select a 
nonprofit organization(s) to administer the grants program. 
Mrs. Maloney's amendment failed on voice vote. Mr. Miller 
offered a technical amendment which passed by voice vote. The 
committee approved bill, as amended, by voice vote. The 
committee then favorably reported the bill, as amended, to the 
House by voice vote.
    d. Hearings.--The committee held no hearings and received 
no written testimony on H.R. 1009.
7. H.R. 683, the Decennial Census Improvement Act of 1999.
    a. Report number and date.--House Report No. 106-104, April 
26, 1999.
    b. Summary of measure.--H.R. 683 allows individuals working 
on a temporary basis in a position related to the 2000 
decennial census to remain eligible for public assistance at 
the Federal, State, and local level in those programs that are 
at least partially funded by the Federal government.
    c. Legislative status.--The Honorable Carrie Meek (D-FL) 
introduced H.R. 683 on February 10, 1999. The bill was referred 
to the House Committee on Government Reform on February 10, 
1999, and it was referred to the Subcommittee on the Census on 
February 22, 1999. The subcommittee met to consider the bill on 
March 4, 1999. The Honorable Dan Miller (R-FL) offered an 
amendment, which was approved by a voice vote. The amendment 
prevents a reduction in benefits but does not prevent 
recipients from receiving an increase in benefits. Individuals 
are only eligible for services performed during calendar year 
2000, and the waiver does not apply if the individual was 
appointed before January 1, 2000. The waiver of compensation 
for benefits has no effect on the Internal Revenue Code of 
1986. The measure, as amended, was ordered favorably reported 
to the full committee by a voice vote. On March 17, 1999, the 
Committee on Government Reform met to consider the bill. The 
committee approved the bill (as amended) by yeas and nays 31-1 
in a roll call vote. The bill was then favorably reported to 
the House.
    d. Hearings.--On March 2, 1999, the Subcommittee on the 
Census held a hearing on the America Counts Today [ACT] 
initiative. Two witnesses at the hearing addressed the 
legislation: Dr. Kenneth Prewitt, Director, U.S. Bureau of the 
Census and the Honorable Carrie Meek (D-FL). Dr. Prewitt 
indicated that the Census Bureau readily embraced the waiver 
initiative. Mrs. Meek supported the legislation and indicated 
that granting waivers for those on Federal assistance should 
both encourage those on assistance to work for the census, and 
result in an improved count in the decennial census.
8. H. Con. Res. 193, expressing the support of Congress for activities 
        to increase public participation in the decennial census.
    a. Report number and date.--None.
    b. Summary of measure.--H. Con. Res. 193 recognizes the 
importance of achieving a successful census, encourages 
partners to continue to work toward this goal, reaffirms a 
spirit of cooperation between Congress and the Census Bureau, 
and asserts a partnership between Congress and the Census 
Bureau to promote the 2000 decennial census.
    c. Legislative status.--H. Con. Res. 193 was introduced on 
October 6, 1999 by the Honorable Dan Miller (R-FL) and the 
Honorable Carolyn Maloney (D-NY). The bill was referred to the 
Committee on Government Reform on October 6, 1999. On November 
2, 1999 the bill was taken up by the House under suspension of 
the rules. The resolution was agreed to by voice vote.
    d. Hearings.--The committee held no hearings and received 
no written testimony on H. Con. Res. 193.
9. H.R. 1632, to provide that certain attribution rules be applied with 
        respect to the counting of certain prisoners in a decennial 
        census of population.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1632 directs the Secretary of 
Commerce to direct the Census Bureau to make changes in 
tabulating the total population of the United States in a 
decennial census. H.R. 1632 provides that any prisoner who is 
convicted in one State but incarcerated in another shall be 
counted as a resident of the State from which more than half 
the costs associated with such a prisoner's incarceration are 
recoverable.
    c. Legislative status.--H.R. 1632 was introduced by the 
Honorable Mark Green (R-WI) on April 29, 1999 and referred to 
the Committee on Government Reform. Subsequently, H.R. 1632 was 
referred to the Subcommittee on the Census on May 10, 1999. No 
further action.
    d. Hearings.--A hearing on H.R. 1632 was held on June 9, 
1999 as part of ``Oversight of the 2000 Census: Examining the 
Bureau's Policy to Count Prisoners, Military Personnel, and 
Americans Residing Overseas.''
10. H.R. 2067, The Military Personnel Home of Record Act of 1999.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2067, the Military Personnel 
Home of Record Act of 1999--for purposes of the 2000 decennial 
census, this bill requires the Secretary of Commerce to ensure 
that the Census Bureau make changes to the way they allocate 
active duty members of the armed services back to the States. 
The Census Bureau must first allocate members of the armed 
forces on active duty to their home of record, legal residence, 
or last permanent duty station in the United States, in that 
order of priority. Second, the Census Bureau must allocate any 
dependents of such a member assigned to a permanent duty 
station outside of the United States who are residing with such 
a member to their last State or U.S. territory of residence. 
The exception being if such a dependent never resided in the 
United States (or a U.S. territory) and is a U.S. citizen, such 
dependent shall be allocated in the same manner as applies to 
such member.
    c. Legislative status.--H.R. 2067 was introduced by Census 
Subcommittee Member Paul Ryan (R-WI) on June 8, 1999 and 
referred to the Committee on Government Reform. Subsequently, 
H.R. 2067 was referred to the Subcommittee on the Census on 
June 16, 1999. No further action.
    d. Hearings.--A hearing on H.R. 2067 was held on June 9, 
1999 as part of``Oversight of the 2000 Census: Examining the 
Bureau's Policy to Count Prisoners, Military Personnel, and 
Americans Residing Overseas.''
11. H.R. 3581, to make additional funds available to the Secretary of 
        Commerce for purposes of the 2000 decennial census, and for 
        other purposes.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3581 appropriates additional 
funds for fiscal year 2000 for necessary expenses to conduct 
the 2000 decennial census, in order to obtain an accurate and 
timely census should sufficient funds not otherwise be 
available. The bill additionally permits members of the armed 
services to work in decennial census operations regardless of 
their status and allows those receiving Federal, State or local 
benefits financed with Federal funds to remain eligible to work 
regardless of the compensation received for service performed 
in a 2000 census position.
    c. Legislative history/status.--H.R. 3581 was introduced 
February 7, 2000 by the Honorable Carolyn Maloney (D-NY), 
ranking member of the Subcommittee on the Census. The bill was 
referred to the Committee on Government Reform on February 7, 
2000 and subsequently referred to the Subcommittee on the 
Census on February 11, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 3581.
12. H.R. 3649, the Census of Americans Abroad Act.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3649, the ``Census of American 
Abroad Act,'' directs the Secretary of Commerce to provide for 
an interim census of all Americans residing abroad, and to 
require that such individuals be included in the 2010 decennial 
census.
    c. Legislative history/status.--H.R. 3649 was introduced 
February 14, 2000 by the Honorable Carolyn Maloney (D-NY), 
ranking member of the Subcommittee on the Census. The bill was 
referred to the Committee on Government Reform on February 14, 
2000 and subsequently referred to the Subcommittee on the 
Census on February 17, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 3649.
13. H. Con. Res. 263, expressing support for a National Teach Census 
        Week.
    a. Report number and date.--None.
    b. Summary of measure.--H. Con. Res. 263 expresses the 
sense of Congress that: (1) a National Teach Census Week should 
be established to recognize the importance of participating in 
the 2000 decennial census; and (2) the President should issue a 
proclamation calling on elementary, secondary, and high school 
teachers across the Nation, particularly those involved in 
teaching American history and government, to instruct their 
students on the importance of participating in such census.
    c. Legislative history/status.--H. Con. Res. 263 was 
introduced March 2, 2000, by the Honorable Dan Miller (R-FL), 
chairman of the Subcommittee on the Census. The bill was 
referred to the Committee on Government Reform on March 2, 
2000, and subsequently referred to the Subcommittee on the 
Census on March 7, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H. Con. Res. 263.
14. H.R. 4085, to provide that decennial census questionnaires be 
        limited to requesting only the information required by the 
        Constitution.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4085 amends title 13, United 
States Code, to limit decennial census questions to those 
requesting only the information required by the Constitution, 
specifically, only the number of individuals residing or 
staying at a particular address or location, and the names of 
those individuals.
    c. Legislative history/status.--H.R. 4085 was introduced 
March 23, 2000 by the Honorable Ron Paul (R-TX). The bill was 
referred to the Committee on Government Reform on March 23, 
2000, and subsequently referred to the Subcommittee on the 
Census on April 3, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 4085.
15. H.R. 4154, the Common Sense Census Act of 2000.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4154, the ``Common Sense 
Census Act of 2000,'' amends title 13, United States Code, to 
provide that the penalty for refusing or neglecting to answer 
decennial census questions shall apply only to the extent 
necessary to allow the Government to obtain the information 
needed for its enumeration of the population. The provisions of 
the Common Sense Census Act of 2000 shall apply to the 2000 
decennial census.
    c. Legislative history/status.--H.R. 4154 was introduced 
April 3, 2000 by the Honorable Duncan Hunter (R-CA). The bill 
was referred to the Government Reform Committee on April 3, 
2000 and subsequently referred to the Subcommittee on the 
Census on April 7, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 4154.
16. H.R. 4158, to limit the penalty that may be assessed for not 
        answering decennial census questions beyond those necessary for 
        an enumeration of the population.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4158 amends title 13, United 
States Code, to decrease the penalty that may be assessed for 
not answering decennial census questions beyond those necessary 
for an enumeration of the population, from $100 to $10. The 
provisions of the bill shall apply to a decennial census taken 
in 2000 or later.
    c. Legislative history/status.--H.R. 4158 was introduced 
April 3, 2000 by the Honorable Nick Smith (R-MI). The bill was 
referred to the Committee on Government Reform on April 3, 
2000, and subsequently referred to the Subcommittee on the 
Census on April 7, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony on H.R. 4158.
17. H.R. 4188, the Common Sense Census Enforcement Act of 2000.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4188, the ``Common Sense 
Census Enforcement Act of 2000'' amends title 13, United States 
Code, to provide that the penalty for refusing or neglecting to 
answer one or more of the questions on a decennial census shall 
not apply, so long as all of the short form questions on such 
schedule have been answered.
    c. Legislative history/status.--H.R. 4188 was introduced 
April 5, 2000 by the Honorable Mac Collins (R-GA). The bill was 
referred to the Committee on Government Reform on April 5, 2000 
and subsequently referred to the Subcommittee on the Census on 
April 13, 2000. No further action.
    d. Hearings.--On July 20, 2000 the Subcommittee on the 
Census held a hearing entitled, ``The American Community 
Survey: A Replacement for the Census Long Form.'' 
Representative Collins testified in support of his bill before 
the subcommittee at the hearing.
18. H.R. 4198, to declare U.S. policy with regard to the constitutional 
        requirement of a decennial census for purposes of the 
        apportionment of Representatives in Congress among the several 
        States.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4198 declares that it is the 
policy of the United States that the sole purpose of the 
decennial enumeration of the population is to allow for the 
apportionment of Representatives in Congress among the several 
States. The only information needed in order to carry out that 
purpose are the names, ages, and the number of individuals 
residing in a household, and the address or location of such 
household. Additionally, the penalty for refusing or neglecting 
to answer decennial census questions shall be imposed only on 
individuals failing to provide that information needed to carry 
out that purpose.
    c. Legislative history/status.--H.R. 4198 was introduced 
April 6, 2000 by the Honorable Helen Chenoweth-Hage (R-ID). The 
bill was referred to the Committee on Government Reform, and in 
addition to the Committee on the Judiciary, on April 6, 2000. 
The Government Reform Committee subsequently referred the bill 
to the Subcommittee on the Census on April 13, 2000. No further 
action.
    d. Hearings.--The subcommittee held no hearings and 
received no written testimony regarding H.R. 4198.
19. H.R. 4291, to limit the decennial census questionnaires to basic 
        questions needed for an enumeration of the population.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4291 amends title 13, United 
States Code, to authorize the Secretary of Commerce to request 
no information apart from that needed to allow for an 
enumeration of the population. The only questions needed to 
allow for such an enumeration are those asking for an 
individual's name or the number of individuals in a household. 
The provisions in H.R. 4291 will be effective in the 2010 
decennial census and each thereafter.
    c. Legislative history/status.--H.R. 4291 was introduced 
April 13, 2000 by the Honorable Tom Campbell (R-CA). The bill 
was referred to the Committee on Government Reform on April 13, 
2000 and subsequently referred to the Subcommittee on the 
Census on April 27, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 4291.
20. H.R. 4458, to limit the information that may be requested on 
        decennial census questionnaires.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4458 amends title 13, United 
States Code, to authorize the Secretary of Commerce to request 
no information apart from what is asked on the short form 
questionnaire in the decennial census.
    c. Legislative history/status.--H.R. 4458 was introduced 
May 15, 2000 by the Honorable Lee Terry (R-NE). The bill was 
referred to the Committee on Government Reform on May 15, 2000 
and subsequently referred to the Subcommittee on the Census on 
May 17, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 4458.
21. H.R. 4568, to provide funds for the planning of a special census of 
        Americans residing abroad.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4568 expresses the sense of 
Congress that the Bureau of the Census should: (1) carry out a 
special census of all Americans living abroad in 2003; (2) 
review the means by which Americans may be included in the 2010 
decennial census; and (3) provide for the inclusion of such 
Americans in such censuses thereafter.
    c. Legislative history/status.--H.R. 4568 was introduced 
May 25, 2000 by the Honorable Carolyn Maloney (D-NY), ranking 
member of the Subcommittee on the Census. The bill was referred 
to the Committee on Government Reform on May 25, 2000 and 
subsequently referred to the Subcommittee on the Census on June 
6, 2000. No further action.
    d. Hearings.--The committee held no hearings and received 
no written testimony regarding H.R. 4568.

                   Subcommittee on the Civil Service

                     Hon. Joe Scarborough, Chairman

1. H.R. 206, a bill to provide for greater access to child care 
        services for Federal employees.
    a. Report number and date.--H. Rept. 106-169, June 7, 1999.
    b. Summary of measure.--This legislation would authorize 
Federal agencies to use funds appropriated for Federal 
employees' salaries and expenses to help make child care at 
Federal facilities more affordable for lower-income Federal 
employees.
    c. Legislative status.--H.R. 206 has not been considered by 
the House. However, substantially similar language was included 
in section 643 of the Treasury and General Government 
Appropriations Act, 2000, Public Law 106-58.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this measure.
2. H.R. 208, a bill to amend title 5, United States Code, to allow for 
        the contribution of certain rollover distributions to accounts 
        in the Thrift Savings Plan, to eliminate certain waiting-period 
        requirements for participating in the Thrift Savings Plan, and 
        for other purposes.
    a. Report number and date.--H. Rept. 106-87, April 13, 
1999.
    b. Summary of measure.--H.R. 208 authorizes Federal 
employees to begin participation in the Thrift Savings Plan 
immediately upon being hired rather than waiting 6 months to a 
year as is required by current law. This legislation also 
authorizes new Federal hires to contribute eligible rollover 
distributions from qualified trusts, including private sector 
401(k) accounts, to the Thrift Savings Fund.
    c. Legislative status.--Passed the House under suspension 
of the rules on April 20, 1999. On July 21, 2000, the 
legislation passed the Senate with amendments by Unanimous 
Consent. The House concurred with the Senate action on October 
10, 2000 by recorded vote, 382-0. It is now Public Law 106-361.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
3. H.R. 416, the Federal Retirement Coverage Corrections Act.
    a. Report number and date.--H. Rept. 106-29, Parts I and II 
(February 23, 1999, March 23, 1999).
    b. Summary of measure.--Through no fault of their own, 
thousands of Federal employees have been erroneously placed in 
the wrong Federal retirement system. The vast majority of these 
errors involve misclassifications in either the Federal 
Employees Retirement System [FERS] or the Civil Service 
Retirement System [CSRS]. When these errors are discovered, the 
Office of Personnel Management [OPM] and other Federal agencies 
must correct the mistake by automatically enrolling 
misclassified employees in the correct system. Because 
corrections do not currently include make-whole relief, their 
effects are often devastating for the employees involved.
    The Federal Retirement Coverage Corrections Act addresses 
this problem and accomplishes a number of objectives. It 
provides comprehensive coverage of retirement coverage errors. 
Employees affected by an error are provided a status quo 
option, and employees' Thrift Savings Plan [TSP] accounts are 
made whole. Agencies are held accountable for their mistakes. 
Unfair tax consequences of corrections are prevented. To ensure 
fairness and accuracy, the bill requires centralized oversight 
of the corrections process and provides affected employees with 
administrative and judicial review. The bill protects the 
integrity of the Social Security trust funds, and it protects 
all employees from reductions in force [RIFs] to pay for the 
required remedies.
    The bill provides a consistent framework to correct all 
retirement coverage errors for employees with accounts in the 
Civil Service Retirement and Disabilities Fund [CSRDF] and also 
covers former employees, annuitants, and survivors. It extends 
the same correction options to employees in retirement systems 
for the Foreign Service and the Central Intelligence Agency.
    With two exceptions, employees may choose between the 
retirement system they were mistakenly placed in or the system 
they should have been placed in retroactively to the date of 
the error. One exception prevents employees who were 
erroneously placed in the CSRS from electing that system; they 
may, however, choose to be enrolled in the CSRS-Offset system. 
The other exception affects employees who should have been in 
Social Security only, without retirement participation, but who 
were erroneously enrolled in one of the Federal retirement 
systems. These employees may not remain in a Federal retirement 
system unless they had already vested.
    The bill adapts an Internal Revenue Service [IRS] Revenue 
Procedure that applies to similar mistakes in the private 
sector as a model for make whole contributions to employees' 
TSP accounts. The agencies responsible for retirement coverage 
errors bear the cost of making up lost earnings on employees' 
TSP accounts. Agencies, not employees, make all necessary 
contributions to the Civil Service Retirement and Disability 
Fund [CSRDF], Social Security trust funds, as well as the TSP. 
They also pay the reasonable costs of financial and legal 
advice employees need to make informed decisions under the act. 
In some cases, agencies may collect from employees an amount 
equal to the refund of Social Security contributions due the 
employees.
    OPM will be required to issue regulations to ensure uniform 
implementation of the bill's provisions and to ensure that 
employees are properly informed as to the status of their 
various retirement accounts in order to make an informed 
election. Corrections under the bill are not final until 
approved by OPM. Employees may appeal corrections to the Merit 
Systems Protection Board [MSPB], and seek judicial review by 
the U.S. Court of Appeals for the Federal Circuit. The bill 
does not impair any right employees may have to sue for other 
damages under the Federal Tort Claims Act.
    c. Legislative status.--Passed the House under suspension 
of the rules on March 23, 1999; referred to the Senate 
Committee on Governmental Affairs. Congress included language 
addressing this issue in a different bill, H.R. 4040, which is 
now Public Law 106-265. See Part III.A.20 [Subcommittee on the 
Civil Service].
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter during the 106th Congress. It did hold 
several hearings during the previous Congress.
4. H.R. 457, the Organ Donor Leave Act.
    a. Report number and date.--H. Rept. 106-174, June 8, 1999.
    b. Summary of measure.--Permits a Federal employee to use 
paid leave not exceeding 7 days in any calendar year to serve 
as a bone marrow donor, and paid leave not exceeding 30 days to 
serve as an organ donor.
    c. Legislative status.--Public Law 106-56.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
5. H.R. 807, the Federal Reserve Board Retirement Portability Act.
    a. Report number and date.--H. Rept. 106-53, March 16, 
1999.
    b. Summary of measure.--H.R. 807 authorizes Federal Reserve 
Board employees who transfer to other Federal agencies to 
receive credit under the Federal Employees Retirement System 
[FERS] for post-1988 Board employment. This legislation also 
permits employees who have transferred or will transfer to the 
Board to move the funds in their Thrift Savings Plan [TSP] 
accounts to the Board's Thrift Plan. The legislation also 
provides veterans hired under Public Law 105-339 with the same 
civil service protections and job opportunities as their co-
workers.
    c. Legislative status.--Passed the House under suspension 
of the rules on March 16, 1999; referred to the Senate 
Committee on Governmental Affairs. The language from H.R. 807 
was also included in S. 335, which is now Public Law 106-168.
    d. Hearings.--The subcommittee's hearing on this matter is 
summarized in Section II.B.(1)(c) [Subcommittee on the Civil 
Service].
6. H.R. 915, a bill to authorize a cost of living adjustment in the pay 
        of administrative law judges.
    a. Report number and date.--H. Rept. 106-387, October 18, 
1999.
    b. Summary of measure.--H.R. 915 amended 5 U.S.C. Sec. 5372 
to change the method for adjusting the basic pay of the more 
than 1,300 administrative law judges [ALJ] employed by the 
Federal Government. It gives the President the same authority 
to provide annual pay adjustments to ALJs that he now has with 
respect to the Senior Executive Service [SES].
    c. Legislative status.--Public Law 106-97.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this measure. However, the Subcommittee on 
Commercial and Administrative Law of the Committee on the 
Judiciary, to which this measure was originally referred in 
error, held a hearing on May 27, 1999.
7. H.R. 1451, the Abraham Lincoln Bicentennial Commission Act.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1451 would establish a 15-
member commission to study and recommend various activities 
that would be fitting and proper to honor Abraham Lincoln on 
the occasion of the bicentennial anniversary of his birth in 
2009.
    c. Legislative status.--Public Law 106-73.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this measure.
8. H.R. 2904, a bill to amend the Ethics in Government Act of 1978 to 
        reauthorize funding for the Office of Government Ethics, and to 
        clarify the definition of a ``special Government employee'' 
        under title 18, United States Code.
    a. Report number and date.--H. Rept. 106-433, Part I, 
November 2, 1999.
    b. Summary of measure.--H.R. 2904 reauthorizes 
appropriations for the Office of Government Ethics for fiscal 
years 2000 through 2003. It also revises and clarifies the 
definition of the term ``special government employee'' to make 
unofficial advisers more accountable to the American people.
    c. Legislative status.--Passed the House under suspension 
of the rules on November 8, 1999.
    d. Hearings.--The subcommittee's hearing on this issue is 
summarized in Part II.B.7(c) [Subcommittee on the Civil 
Service].
9. H. Res. 105, to recognize and honor Joe DiMaggio.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 105 recognizes and honors 
Joe DiMaggio for his storied baseball career, for his many 
contributions to the Nation throughout his lifetime, and for 
transcending baseball and becoming a symbol for the ages of 
talent, commitment, and achievement.
    c. Legislative status.--Passed the House under suspension 
of the rules on March 16, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
10. H. Res. 244, a resolution expressing the sense of the House of 
        Representatives with regard to the U.S. Women's Soccer Team and 
        its winning performance in the 1999 Women's World Cup 
        tournament.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 244 congratulates the U.S. 
Women's Soccer Team on its winning championship performance in 
the World Cup tournament; recognizes the important contribution 
each individual team member has made to the United States and 
to the advancement of women's sports; and invites the members 
of the U.S. Women's Soccer Team to the U.S. Capitol to be 
honored and recognized by the House of Representatives for 
their achievements.
    c. Legislative status.--Passed the House under suspension 
of the rules on July 13, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
11. H. Res. 264, a resolution expressing the sense of the House of 
        Representatives honoring Lance Armstrong, America's premier 
        cyclist, and his winning performance in the 1999 Tour de 
        France.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 264 congratulates Lance 
Armstrong on his spectacular performance, winning the 1999 Tour 
de France; and recognizes the contribution Lance Armstrong's 
perseverance has made to inspire those fighting cancer and 
survivors of cancer around the world.
    c. Legislative status.--Passed the House under suspension 
of the rules on July 30, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
12. H. Res. 269, a resolution expressing the sense of the House of 
        Representatives that Joseph Jefferson ``Shoeless Joe'' Jackson 
        should be appropriately honored for his outstanding baseball 
        accomplishments.
    a. Report number and date.--None.
    b. Summary of measure.--Expresses the sense of the House of 
Representatives that Joseph Jefferson ``Shoeless Joe'' Jackson 
should be appropriately honored for his outstanding baseball 
accomplishments.
    c. Legislative status.--Passed the House under suspension 
of the rules on November 8, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
13. H. Res. 279, a resolution congratulating Henry ``Hank'' Aaron on 
        the 25th anniversary of breaking the Major League Baseball 
        career home run record established by Babe Ruth and recognizing 
        him as one of the greatest baseball players of all time.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 279 congratulates Henry 
``Hank'' Aaron on his great achievements in baseball, 
recognizes him as one of the greatest professional baseball 
players of all time, and commends him for his commitment to 
young people, which have earned him a permanent place in both 
sports history and American society.
    c. Legislative status.--Passed the House under suspension 
of the rules on October 19, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
14. H. Res. 293, a resolution expressing the sense of the House of 
        Representatives in support of ``National Historically Black 
        Colleges and Universities Week.''
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 293 supports the goals and 
ideas of ``National Historically Black Colleges and 
Universities Week''; and it requests that the President issue a 
proclamation calling on the people of the United States and 
interested groups to conduct appropriate ceremonies, 
activities, and programs to demonstrate support for 
historically black colleges and universities in the United 
States.
    c. Legislative status.--Passed the House under suspension 
of the rules on September 22, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
15. H. Res. 324, a resolution supporting National Civility Week, Inc. 
        in its efforts to restore civility, honesty, integrity, and 
        respectful consideration in the United States.
    a. Report number and date.--None.
    b. Summary of measure.--The House of Representatives 
supports the efforts of National Civility Week, Inc. to restore 
civility, honesty, integrity, and respectful consideration in 
the United States.
    c. Legislative status.--Passed the House under suspension 
of the rules on November 2, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
16. H. Res. 344, a resolution recognizing and honoring Payne Stewart 
        and expressing the condolences of the House of Representatives 
        to his family on his death and to the families of those who 
        died with him.
    a. Report number and date.--None.
    b. Summary of measure.--The House of Representatives 
recognizes and honors Payne Stewart as one of the greatest 
golfers; for his many contributions to the Nation throughout 
his lifetime; and for transcending the game of golf and 
becoming a timeless symbol of athletic talent, spirited 
competition, and a role model as a Christian gentleman and a 
loving father and husband; and extends its deepest condolences 
to the families of Payne Stewart and the other victims in the 
plane crash, Van Arden, Stephanie Bellegarrigue, Bruce Borland, 
Robert Fraley, and Michael Kling, on their tragic loss. The 
Clerk of the House of Representatives is instructed to transmit 
an enrolled copy of this resolution to the family of each of 
the victims.
    c. Legislative status.--Passed the House under suspension 
of the rules on November 2, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
17. H. Res. 363, a resolution recognizing and honoring Sacramento, CA, 
        Mayor Joe Serna, Jr., and expressing the condolences of the 
        House of Representatives to his family and the people of 
        Sacramento on his death.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 363 recognizes and honors 
Sacramento Mayor Joe Serna, Jr., as a profoundly successful 
leader whose drive and energy inspired thousands, for his many 
lifetime contributions to Sacramento, the State of California, 
and the Nation, and for selflessly devoting his life to the 
advancement of others through activism, public service, 
education, and dedication; and extends the deepest condolences 
to Mayor Joe Serna's wife and family, as well the citizens of 
Sacramento, CA, for the loss of their dedicated mayor.
    c. Legislative status.--Passed the House under suspension 
of the rules on November 16, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
18. H. Res. 370, a resolution recognizing and honoring Walter Payton 
        and expressing the condolences of the House of Representatives 
        to his family on his death.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 370 recognizes and honors 
Walter Payton as one of the greatest professional football 
players; for his many contributions to Mississippi and the 
Nation throughout his lifetime; and for transcending the game 
of football and becoming a timeless symbol of athletic talent, 
spirited competition, and a role model as a Christian gentleman 
and a loving father and husband; and extends the House's 
deepest condolences to Walter Payton's wife Connie and his 
family on their tragic loss. The Clerk of the House of 
Representatives is instructed to transmit an enrolled copy of 
this resolution to the family of Walter Payton.
    c. Legislative status.--Passed the House under suspension 
of the rules on November 16, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
19. H. Con. Res. 94, a concurrent resolution recognizing the public 
        need for reconciliation and healing, urging the United States 
        to unite in seeking God, and recommending that the Nation's 
        leaders call for days of prayer.
    a. Report number and date.--None.
    b. Summary of measure.--H. Con. Res. 94 recognized the 
unique opportunity that the dawn of a millennium presents to a 
people in a nation under God to humble and reconcile themselves 
with God and with one another; urged all Americans to unite in 
seeking the face of God through humble prayer and fasting, 
persistently asking God to send spiritual strength and a 
renewed sense of humility to the Nation so that hate and 
indifference may be replaced with love and compassion, and so 
that the suffering in the Nation and the world may be healed by 
the hand of God; and recommended that the leaders in national, 
State, and local governments, in business, and in the clergy 
appoint, and call the people they serve to observe a day of 
solemn prayer, fasting, and humiliation before God.
    c. Legislative status.--Defeated under suspension of the 
rules on June 29, 1999.
    d. Hearings.--The Civil Service Subcommittee held no 
hearings on this matter.
20. H.R. 4040, the Long-Term Care Security Act.
    a. Report number and date.--House Report No. 106-610, May 
8, 2000.
    b. Summary of measure.--H.R. 4040, as amended, establishes 
a program under which Federal civilian employees, members of 
the uniformed services, as well as civilian and military 
retirees can purchase private group long-term care insurance 
for themselves and certain qualified relatives at a discount. A 
Senate amendment to the bill also provides for redress of 
Federal employees misclassified in the wrong retirement system.
    c. Legislative status.--Public Law 106-265.
    d. Hearings.--The subcommittee held no legislative hearings 
on H.R. 4040. However, three hearings were held to examine 
various aspects of the long-term care insurance issue. (See 
Part II.B.2(c) [Subcommittee on the Civil Service].
21. H.R. 2842, the Federal Employees Health Benefits Children's Equity 
        Act of 1999.
    a. Report number and date.--House Report No. 106-779, July 
24, 2000.
    b. Summary of measure.--H.R. 2842, as amended, enables the 
Federal Government to enroll an employee and his or her family 
in the Federal Employees Health Benefits Program when a State 
court orders the employee to provide health insurance coverage 
for a child of the employee but the employee fails to provide 
the coverage. Moreover, if such an employee fails to enroll and 
cannot show that the child is covered by other health 
insurance, this amendment would require the employing agency to 
enroll the employee for self and family under the low-option 
Service Benefit Plan (currently Blue Cross/Blue Shield). The 
bill also delays the adjustment of annuity supplements received 
by certain FERS retirees. The delay permits more accurate 
calculation of the adjustments.
    c. Legislative status.--Public Law 106-394.
    d. Hearings.--There were no hearings held on H.R. 2842.
22. H. Con. Res. 302, Calling on the people of the United States to 
        observe a National Moment of Remembrance to honor the men and 
        women of the United States who died in the pursuit of freedom 
        and peace.
    a. Report number and date.--There was no report filed.
    b. Summary of measure.--This resolution calls on the people 
of the United States to observe a National Moment of 
Remembrance to honor the men and women of the United States who 
died in the pursuit of freedom and peace.
    c. Legislative status.--The resolution passed the House by 
recorded vote, 362-0, on May 22, 2000. On May 25, 2000, the 
resolution was agreed to in Senate without amendment and with a 
preamble by Unanimous Consent.
    d. Hearings.--There were no hearings held on H. Con. Res 
302.
23. H. Con. Res. 376, Expressing the sense of the Congress regarding 
        support for the recognition of a Liberty Day.
    a. Report number and date.--There was no report filed.
    b. Summary of measure.--This legislation expresses the 
sense of the Congress regarding support for the recognition of 
a Liberty Day.
    c. Legislative status.--This resolution passed the House 
under suspension of the rules on October 10, 2000. On October 
19, 2000, this resolution was agreed to in the Senate without 
amendment and with a preamble by Unanimous Consent.
    d. Hearings.--There were no hearings held on H. Con. Res. 
376.
24. H. Con. Res. 396, Celebrating the birth of James Madison and his 
        contributions to the Nation.
    a. Report number and date.--There was no report filed.
    b. Summary of measure.--This legislation celebrates the 
birth of James Madison and his contributions to the Nation.
    c. Legislative status.--This legislation passed the House 
under suspension of the rules on October 2, 2000. On October 
25, 2000, the measure was agreed to in the Senate without 
amendment and with a preamble by Unanimous Consent.
    d. Hearings.--There were no hearings held on H. Con. Res. 
36.
25. H.R. 3312, Merit Systems Protection Board Administrative Dispute 
        Resolution Act of 1999.
    a. Report number and date.--H. Report 106-994.
    b. Summary of measure.--This legislation amends Federal 
civil service law to authorize the Merit Systems Protection 
Board to establish a 3-year pilot program to provide Federal 
employees and agencies with voluntary early intervention 
alternative dispute resolution [ADR] processes to apply to 
workplace disputes involving removals, suspension for more than 
14 days, and other adverse actions under Federal civil service 
law. Directs the Board to test and evaluate a variety of ADR 
techniques. Authorizes any Federal agency or employee to 
request such ADR. The legislation also requires the Board's 
Office of Policy and Evaluation to establish criteria for 
evaluating such ADR program, prepare a report, and submit it to 
the President and Congress.
    c. Legislative status.--H.R. 3312 passed under suspension 
of the rules on October 24, 2000.
    d. Hearings.--There were no hearings held on H.R. 3312.
26. H. Res. 347, Expressing the sense of the House of Representatives 
        in support of ``Italian-American Heritage Month'' and 
        recognizing the contributions of Italian Americans to the 
        United States.
    a. Report number and date.--There was no report filed.
    b. Summary of measure.--This measure expresses support for 
the goals and ideas of Italian-American Heritage Month and 
recognizes the significant contributions that Italian Americans 
have made to the United States.
    c. Legislative status.--H. Res. 347 passed the House under 
suspension of the rules on October 24, 2000.
    d. Hearings.--There were no hearings held on H. Res. 347.
27. H.R. 460, To amend title 5, United States Code, to provide that the 
        mandatory separation age for Federal firefighters be made the 
        same as the age that applies with respect to Federal law 
        enforcement officers.
    a. Report number and date.--There was no report filed.
    b. Summary of measure.--This legislation amends Federal 
civil service law relating to the Civil Service Retirement 
System and the Federal Employees' Retirement System to provide 
that the mandatory separation age for Federal firefighters, 
currently, 55, be made the same as the age that applies with 
respect to Federal law enforcement officers, currently, 57.
    c. Legislative status.--H.R. 460 passed the House under 
suspension of the rules on October 17, 2000.
    d. Hearings.--There were no hearings held on H.R. 460.
28. H. Con. Res. 317, Expressing the sense of the Congress on the death 
        of John Cardinal O'Connor, Archbishop of New York.
    a. Report number and date.--No report was filed.
    b. Summary of measure.--This resolution expresses the sense 
of the Congress on the death of John Cardinal O'Connor, 
Archbishop of New York.
    c. Legislative status.--H. Con. Res. 317 passed the House 
by voice vote on May 4, 2000. On May 8, 2000, the resolution 
was agreed to by the Senate under unanimous consent.
    d. Hearings.--There were no hearings held on H. Con. Res. 
317.
29. H. Con. Res. 381, Expressing the sense of the Congress that there 
        should be established a National Health Center Week to raise 
        awareness of health services provided by community, migrant, 
        and homeless health centers.
    a. Report number and date.--No report was filed.
    b. Summary of measure.--This resolution expresses the sense 
of the Congress that there should be established a National 
Community Health Center Week to raise awareness of health 
services provided by community, migrant, and homeless health 
centers and that the President should issue a proclamation 
calling on the people of the United States and interested 
organizations to observe such a week with appropriate programs 
and activities.
    c. Legislative status.--H. Con. Res 381 passed the House by 
unanimous consent on July 27, 2000.
    d. Hearings.--There were no hearings held on H. Con. Res. 
381.
30. H.R. 4519, Baylee's Law.
    a. Report number and date.--House Report 106-869.
    b. Summary of measure.--This legislation amends the Public 
Buildings Act of 1959 concerning the safety and security of 
children enrolled in childcare facilities located in public 
buildings under the control of the General Services 
Administration. It also directs OPM to study the pay and 
benefits of the various Federal police forces.
    c. Legislative status.--The legislation passed the House by 
voice vote under suspension of the rules on September 26, 2000.
    d. Hearings.--The subcommittee held no hearings on H.R. 
4519.
31. H.R. 4404, To permit the payment of medical expenses incurred by 
        the U.S. Park Police in the performance of duty to be made 
        directly by the National Park Service, to allow for waiver and 
        indemnification in mutual law enforcement agreements between 
        the National Park Service and a State or political subdivision 
        when required by State law, and for other purposes.
    a. Report number and date.--House Report 106-854.
    b. Summary of measure.--This measure permits the payment of 
medical expenses incurred by the U.S. Park Police in the 
performance of duty to be made directly by the National Park 
Service, to allow for waiver and indemnification in mutual law 
enforcement agreements between the National Park Service and a 
State or political subdivision when required by State law, and 
for other purposes.
    c. Legislative status.--The legislation passed the House by 
voice vote under suspension of the rules on October 17, 2000.
    d. Hearings.--House Resources Subcommittee on National 
Parks and Public Lands held a hearing on May 12, 2000.
32. H.R. 4907, Jamestown 400th Commemoration Commission Act of 2000.
    a. Report number and date.--There was no report filed.
    b. Summary of measure.--This measure establishes the 
Jamestown 400th Commemoration Commission.
    c. Legislative status.--This measure passed the House under 
suspension of the rules on October 30, 2000.
    d. Hearings.--There were no hearings held on this 
legislation.
33. S. 3137, James Madison Commemoration Commission Act.
    a. Report number and date.--None.
    b. Summary.--This measure establishes the James Madison 
Commemoration Commission.
    c. Legislative status.--This measure passed the Senate by 
unanimous consent on October 25, 2000 and passed the House 
under suspension of the rules on December 4, 2000.
    d. Hearings.--None.

                Subcommittee on the District of Columbia

                     Hon. Thomas M. Davis, Chaiman

1. H.R. 3995, the District of Columbia Receivership Accountability Act 
        of 2000.
    a. Report number and date.--House Report No. 106-63, June 
12, 2000.
    b. Summary of measure.--H.R. 3995, the District of Columbia 
Receivership Accountability Act of 2000, establishes procedures 
governing the responsibilities of court-appointed receivers who 
administer departments, offices, and agencies of the District 
of Columbia government.
    c. Legislative status.--The bill was introduced by Delegate 
Eleanor Holmes Norton on March 15, 2000. It was referred to the 
Committee on Government Reform and subsequently referred to the 
Subcommittee on the District of Columbia on March 28, 2000. The 
subcommittee forwarded the bill, amended, to the full committee 
on May 5, 2000. On June 12, 2000 the Committee on Government 
Reform ordered the bill, as amended, reported to the House by 
voice vote. The House passed the bill on June 12, 2000, as 
amended, under suspension of the rules. The measure was passed 
by the Senate on October 12, 2000, and the President signed the 
bill on October 30, 2000.
    d. Hearings.--None were held.
2. H.R. 4387, to provide that the School Governance Charter Amendment 
        Act of 2000 shall take effect upon the date such act is 
        ratified by the voters of the District of Columbia.
    a. Report number and date.--House Report 106-664, June 12, 
2000.
    b. Summary of measure.--H.R. 4387 provides that the School 
Governance Charter Amendment Act of 2000 shall take effect upon 
the date such act is ratified by the voters of the District of 
Columbia voting in a referendum held to ratify such act.
    c. Legislative status.--The bill was introduced by Delegate 
Eleanor Holmes Norton on May 4, 2000. It was referred to the 
Committee on Government Reform and subsequently reported by the 
committee on June 12, 2000 to the House, by voice vote. The 
House passed the legislation on June 12, 2000, under suspension 
of the rules. The measure was passed by the Senate on June 14, 
2000, and signed by the President on June 27, 2000, becoming 
Public Law No. 106-226.
    d. Hearings.--None were held.
3. H.R. 5537, to waive the period of congressional review of the Child 
        in Need of Protection Amendment Act of 2000.
    a. Report number and date.--Does not apply.
    b. Summary of measure.--H.R. 5537 waives the period of 
congressional review of legislation enacted by the District of 
Columbia government cited as the ``Child in Need of Protection 
Amendment Act of 2000.''
    c. Legislative status.--The bill was introduced by 
Subcommittee Chairman Tom Davis on October 25, 2000. It was 
referred to the House Committee on Government Reform. On 
October 3, 2000 Mr. Davis moved to suspend the rules and pass 
the bill, which was agreed to by voice vote. On October 31, 
2000 the bill was received in the Senate.
    d. Hearings.--None were held.
4. H.R. 1198, District of Columbia Home Rule Act to eliminate 
        congressional review of newly passed District laws.
    a. Report number and date.--None.
    b. Summary of measure.--The bill amends the District of 
Columbia Home Rule Act to repeal the mandate of congressional 
review of newly-passed District laws.
    c. Legislative status.--Bill did not pass.
    d. Hearings.--No hearings were held.
5. H.R. 433, District of Columbia Management Restoration Act of 1999.
    a. Report number and date.--None.
    b. Summary of measure.--A bill to restore the management 
and personnel authority of the Mayor of the District of 
Columbia.
    c. Legislative status.Became Public Law 106-1.
    d. Hearings.--None.
6. H.R. 974, the District of Columbia College Access Act.
    a. Report number and date.--House Report No. 106-158, May 
24, 1999.
    b. Summary of measure.--H.R. 974, the District of Columbia 
Access Act, directs the Mayor of the District of Columbia to 
award grants to eligible public institutions of higher 
education in Maryland or Virginia (or outside such States if 
specified conditions are met) that enroll eligible District of 
Columbia students to pay the difference between in-State and 
out-of-State tuition and fees on behalf of such students. A 
student is limited to an award of not more than $10,000 per 
year, and a total of not more than $50,000. The bill also 
requires the Mayor to prorate award payments for eligible part-
time students.
    c. Legislative status.--The bill was introduced by 
Subcommittee Chairman Tom Davis on March 4, 1999. It was 
referred to the Subcommittee on the District of Columbia and 
the Committee on Ways and Means. The subcommittee marked up the 
bill by voice vote on April 15, 1999. It was forwarded to the 
full committee in the nature of a substitute. On May 19, 1999, 
the Committee on Government Reform ordered the bill to be 
reported by voice vote. The Committee on Ways and Means 
discharged the bill on May 24, 1999. It was then passed by the 
House under suspension of the rules. The bill was referred to 
the Senate Committee on Governmental Affairs. The Senate 
Committee on Governmental Affairs ordered the bill to be 
reported to the Senate with an amendment in the nature of a 
substitute. It passed the Senate with an amendment under 
unanimous consent on October 19, 1999. Subcommittee Chairman 
Davis moved that the House suspend the rules and agree to the 
Senate amendment. It passed the House on November 1, 1999. The 
bill was signed by the President on November 12, 1999, becoming 
Public Law No. 106-98.
    d. Hearings.--None.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, Chairman

1. H.R. 437, placing a Chief Financial Officer in the Executive Office 
        of the President, becoming part of Public Law 106-58.
    a. Report number and date.--House Report No. 106-7, 
February 5, 1999.
    b. Summary of measure.--This measure brings the agencies of 
the Executive Office of the President [EOP], to the fullest 
extent practicable, within the framework of the Chief Financial 
Officers Act (CFO Act). H.R. 437 authorizes the President to 
appoint a Chief Financial Officer in a unit or office within 
the Executive Office of the President and, to the fullest 
extent practicable, mandates adherence to most provisions of 
the CFO Act. In recognition of the decentralized structure of 
the EOP and the unique functions its agencies perform for the 
President, the legislation provides considerable discretion for 
the President to exempt the new CFO from a number of 
responsibilities stipulated by the CFO Act.
    Notwithstanding such possible exemptions, the legislation 
establishes that the CFO for the EOP shall perform, to the 
extent practicable, the general functions and duties 
established under the CFO Act in order to implement needed 
financial management improvements. The intent of this 
legislation is to foster improved systems of accounting, 
financial management and internal controls throughout the 
component entities of the Executive Office of the President. 
This should facilitate prevention, or at least early detection, 
of waste, fraud, and abuse within the Executive Office of the 
President, as well as in the other executive branch agencies 
already covered by the CFO Act. Implementation of these 
provisions will promote accountability and proper fiscal 
management, which should lead to greater efficiency and 
operational cost reductions.
    c. Legislative status.--H.R. 437 is identical to H.R. 1962, 
which was approved by the House of Representatives in the 105th 
Congress by a vote of 413 to 3.
    H.R. 437 was introduced on February 2, 1999, by 
Representative Stephen Horn of California, chairman of the 
Subcommittee on Government Management, Information, and 
Technology. The legislation was considered by the Committee on 
Government Reform on February 3, 1999, and passed unanimously 
by voice vote.
    The measure was considered by the full House of 
Representatives on February 11, 1999, and approved by a vote of 
413 to 2. The measure was subsequently attached to the Fiscal 
Year 2000 Treasury, Postal Service and General Government 
Appropriations bill and agreed upon in conference. On September 
15, 1999, the House passed its conference report, and on 
September 16, 1999, the Senate passed its conference report. On 
September 29, 1999, President Clinton signed the measure into 
law, becoming Public Law 106-58.
    d. Hearings.--``Presidential and Executive Office Financial 
Accountability Act of 1997 and the Special Employee Act of 
1997,'' May 1, 1997.
    The Subcommittee on Government Management, Information, and 
Technology held this hearing to solicit comments from 
interested parties on the Presidential and Executive Office 
Accountability Act proposal. Witnesses testified about the need 
for the legislation and suggested various modifications. 
Chairman Horn opened the hearing with a discussion of the 
Presidential and Executive Office Accountability Act of 1996, 
which passed the House by an overwhelming margin of 410 to 5 on 
September 24, 1996. Unfortunately, time was short and the 
Senate removed several provisions of the House-approved 
legislation, including the provision to apply the CFO Act to 
the White House, prior to passage.
2. S. 468/H.R. 409, the Federal Financial Assistance Management 
        Improvement Act of 1999, Public Law 106-107.
    a. Report number and date.--Senate Report No. 106-103, July 
1, 1999.
    b. Summary of measure.--H.R. 409 requires Federal agencies 
to coordinate and streamline the process by which applicants 
apply for assistance programs, particularly where similar 
programs are administered by different Federal agencies. The 
purpose of the legislation is to facilitate better coordination 
among Federal, State, local and tribal governments, and 
nonprofit organizations; to simplify Federal financial 
assistance application and reporting requirements; and 
ultimately to improve the delivery of services to the public.
    More than 600 Federal programs provide assistance to State, 
local and tribal governments and nonprofit organizations. Funds 
provided under these programs are intended to meet a variety of 
domestic policy needs and objectives. Many of the programs 
serve similar purposes but are administered by different 
agencies. The result is a maze of overlapping programs that is 
difficult to navigate. Among other problems, this maze results 
in varied and different applications for similar programs; 
duplicative information collection requirements; unnecessary 
separate and distinct reporting requirements; and, 
inefficiently timed dispersal of funds. These problems cause 
frustration and inefficiency, which reduces the effectiveness 
of these programs at all levels.
    The legislation also attempts to simplify the process by 
which States, localities and nonprofits apply for and report on 
the use of the funds that are available under these programs. 
It requires relevant Federal agencies, with oversight from the 
Office of Management and Budget [OMB], to develop and implement 
plans within a specific timeframe that will do the following: 
streamline application, administrative, and reporting 
requirements; demonstrate active participation in an 
interagency process to achieve the legislation's objectives; 
develop a uniform application (or set of applications) for 
related programs; designate a lead agency official to carry out 
the responsibilities of the act; allow applicants to 
electronically apply for, and report on the use of funds; 
ensure that recipients of Federal financial assistance provide 
timely, complete, and high-quality information in response to 
Federal reporting requirements; establish specific annual goals 
and objectives to further the purposes of this legislation, and 
measure annual performance in achieving those goals and 
objectives.
    c. Legislative status.--H.R. 409 passed the House under an 
open rule on February 24, 1999, by a unanimous vote of 426 to 
0. S. 468, a companion bill in the Senate, passed the Senate on 
November 5, 1999. The House passed S. 468 under suspension of 
the rules with an amendment on November 2, 1999. The Senate 
passed the amended House version by unanimous consent on 
November 4, 1999. S. 468 was signed by the President on 
November 20, 1999, becoming Public Law 106-107.
    d. Hearings.--The substance of H.R. 409 was introduced in 
the 105th Congress in the form of H.R. 3921. The Subcommittee 
on Government Management, Information, and Technology held a 
legislative hearing on ``H.R. 3921, the Federal Financial 
Assistance Management Improvement Act of 1998,'' on July 30, 
1998. That bill was marked-up, and referred to the Committee on 
Government Reform and Oversight on August 6, 1998. 
Unfortunately, the committee did not act on the legislation 
before the close of the 105th Congress. The bill's counterpart 
legislation in the Senate, S. 1642, passed on October 12, 1998, 
by unanimous consent.
3. H.R. 1219, the Construction Industry Payment Protection Act of 1999, 
        becoming Public Law 106-49.
    a. Report number and date.--Report No. 106-277, Part 1, 
July 30, 1999.
    b. Summary of measure.--H.R. 1219, the Construction 
Industry Payment Protection Act of 1999, amends and updates the 
1935 Miller Act (40 U.S.C. 270a et seq.). Under the Miller Act, 
contractors performing work on any Federal Government public 
works project costing in excess of $100,000 are required to 
provide a payment bond. The payment bond is intended to protect 
subcontractors and suppliers of materials against the risk of 
nonpayment when working on Federal construction projects. The 
Miller Act also requires the prime contractor to provide a 
performance bond for the protection of the Government.
    The purpose of H.R. 1219 is to improve payment bond 
protections for persons who furnish labor or material for use 
on Federal construction projects. The legislation would achieve 
this objective in a manner that does not unreasonably increase 
the financial exposure or other burdens placed on the prime 
contractor, usually a general contractor, or on the surety bond 
producers and corporate sureties that provide the Miller Act 
payment bonds.
    The legislation makes a number of targeted amendments to 
the Miller Act. First, the legislation increases the amount of 
the payment bond from a level that has remained unchanged since 
the law was enacted in 1935. The legislation requires that the 
amount of the payment bond be equal to the contract price. 
Second, the legislation modernizes the methods by which notices 
required under the act may be transmitted, but with the 
safeguard of requiring that the methods of notice generate a 
written third-party confirmation of receipt. Third, the 
legislation would void waivers of Miller Act payment bond 
protections prior to commencing the work.
    c. Legislative status.--H.R. 1219, the ``Construction 
Industry Payment Protection Act of 1999,'' was introduced on 
March 23, 1999, by Representative Carolyn Maloney, D-NY, and 
was co-sponsored by Representative Stephen Horn, R-CA, chairman 
of the Subcommittee on Government Management, Information, and 
Technology and Representative George Gekas, R-PA, chairman of 
the Subcommittee on Commercial and Administrative Law, 
Committee on the Judiciary. The legislation was referred to the 
Committee on the Judiciary and the Committee on Government 
Reform. On May 13, 1999, the legislation was considered by the 
Subcommittee on Government Management, Information, and 
Technology and passed unanimously, as amended, by voice vote. 
The legislation was considered by the Committee on Government 
Reform on May 19, 1999, and passed by a voice vote. The 
Committee on the Judiciary waived its jurisdiction to consider 
the legislation, and on August 2, 1999, the legislation passed 
the House under suspension of the rules by a unanimous vote of 
416 to 0. The legislation passed the Senate without amendment 
by unanimous consent on August 5, 1999, and signed by the 
President on August 17, 1999, becoming Public Law 106-49.
    d. Hearings.--No hearings were held on H.R. 1219 during the 
106th Congress. The committee relied on the extensive record 
generated during the second session of the 105th Congress on 
the legislation's predecessor, H.R. 3032, the ``Construction 
Subcontractors Payment Protection Enhancement Act of 1998.'' 
The committee had the benefit of the administration's views on 
the legislation, provided in the form of a letter from the 
Administrator for Federal Procurement Policy, Office of 
Management and Budget, on May 17, 1999. On September 11, 1998, 
the Subcommittee on Government Management, Information, and 
Technology and the Subcommittee on Commercial and 
Administrative Law of the Committee on the Judiciary held a 
joint hearing on H.R. 3032, the ``Construction Subcontractors 
Payment Protection Enhancement Act of 1999.'' Testimony was 
received from representatives of the American Subcontractors 
Association, the Associated General Contractors of America, and 
the Surety Association of America. The subcommittees also heard 
from subcontractors with direct experiences relating to the 
need to modernize the Miller Act.
4. H.R. 1442, the Law Enforcement and Public Safety Enhancement Act of 
        1999, inserted as a provision of the Floyd D. Spence National 
        Defense Authorization Act for Fiscal Year 2001 that passed both 
        the House and Senate, becoming Public Law 106-398.
    a. Report number and date.--H.R. 1442, Report No. 106-275, 
July 30, 1999.
    b. Summary of measure.--H.R. 1442, the ``Law Enforcement 
and Public Safety Enhancement Act of 1999,'' introduced by 
Representative Ken Calvert, R-CA, on April 15, 1999, would make 
permanent the General Services Administration's authority to 
transfer surplus real and related property at no cost to State 
governments for law enforcement or emergency management 
response purposes. Public Law 105-119 authorized such transfers 
through December 31, 1999. H.R. 1442 eliminates the sunset 
date, allowing the program to continue.
    c. Legislative status.--H.R. 1442 was introduced by 
Representative Calvert on April 15, 1999, and was referred to 
the Committee on Government Reform and its Subcommittee on 
Government Management, Information, and Technology. On May 13, 
1999, the subcommittee held a mark-up session for H.R. 1442. On 
May 19, 1999, the Committee on Government Reform considered 
H.R. 1442, as amended, by voice vote, and favorably ordered the 
legislation to be reported. The legislation, as amended with 
the language from H.R. 436, was passed by the House under 
suspension of the rules on August 2, 1999. At the end of the 
first session of the 106th Congress, H.R. 1442 was pending in 
the Senate. As a short-term remedy to the December 31, 1999, 
sunset date, Representative Calvert introduced H.R. 3187. This 
legislation extended the termination date by 7 months until 
July 31, 2000. This legislation was added to S. 335 that passed 
the House and the Senate, and was signed into law. Permanent 
authorization for these public benefits discount conveyances 
was included in the Fiscal Year 2001 National Defense 
Authorization Act that passed both the House and the Senate and 
was signed into law by the President, becoming Public Law 106-
398.
    d. Hearings.--Although there were no hearings held on H.R. 
1442 during the 106th Congress, on July 3, 1997, the 
Subcommittee on Government Management, Information, and 
Technology held a legislative hearing to consider the base 
legislation, H.R. 404, entitled, ``H.R. 404, Authorizing the 
Transfer to State and Local Governments of Certain Surplus 
Property for Use for Law Enforcement or Public Safety 
Purposes.''
5. H.R. 3137/H.R. 4931, the Presidential Transition Act Amendments, 
        becoming Public Law 106-293.
    a. Report number and date.--House Report No. 106-432, 
November 1, 1999.
    b. Summary of measure.--The amendments to the Presidential 
Transition Act of 1963 authorize the use of transition funds 
for the purpose of providing orientations for individuals the 
President-elect plans to nominate and appoint to top White 
House positions, including Cabinet positions. This legislation 
only affects the top political appointments in executive branch 
agencies and in the Executive Office of the President, and it 
gives greater assurance that the orientation process takes 
place before or shortly after the incoming President assumes 
office. It is the committee's expectation that this will also 
lead to a larger orientation process for lower level political 
appointments.
    c. Legislative status.--H.R. 3137, the ``Presidential 
Transition Act Amendments of 1999,'' was introduced on October 
25, 1999, by Subcommittee Chairman Stephen Horn. On October 13, 
1999, the Subcommittee on Government Management, Information, 
and Technology held a legislative hearing on the proposal, 
which was still in draft form. H.R. 3137 passed the 
subcommittee by a voice vote on October 26, 1999, and passed 
the full committee on Government Reform unanimously by voice 
vote on October 28, 1999. The bill passed the House of 
Representatives under suspension of the rules on November 2, 
1999. The ``Presidential Transition Act Amendments,'' 
reintroduced as H.R. 4931 by Chairman Horn on July 24, 2000, 
contained a number of amendments resulting from negotiations 
between the House and the Senate. H.R. 4931 passed the House by 
unanimous consent on September 13, 2000, and passed the Senate 
on September 28, 2000. H.R. 4931 was signed into law on October 
12, 2000, becoming Public Law 106-293.
    d. Hearings.--(1) On October 13, 1999, the Subcommittee on 
Government Management, Information, and Technology conducted a 
legislative hearing entitled, ``H.R. 3137, an Amendment to the 
Presidential Transition Act.'' The hearing examined various 
issues involving presidential transitions. Witnesses testified 
regarding the intent of the legislation, its objectives and 
provisions, and suggested changes.
    A number of distinguished witnesses testified in support of 
the legislation, including the Honorable Elliot Richardson, 
former Attorney General to President Nixon, and the Honorable 
Lee White, former Assistant Counsel to President Kennedy and 
Counsel to President Lyndon Johnson. These witnesses presented 
a unique perspective of the Presidency and the transition 
period. Both said that the legislation is an important step 
toward preventing future missteps by political appointees.
    In addition, the subcommittee heard from three other 
witnesses who supported the legislation: Dwight Ink, former 
Acting Director of the Office of Management and Budget; Paul 
Light, director of the Center for Public Service at the 
Brookings Institution; and Norman J. Ornstein, resident scholar 
at the American Enterprise Institute for Policy Research.
    Additional written testimony supporting the legislation was 
submitted for the record by General Andrew Goodpastor, former 
Staff Secretary to President Eisenhower; the Honorable John 
Gardner, former Secretary of Health, Education, and Welfare for 
President Lyndon Johnson; and the Honorable Pendleton James, 
former Director of Presidential Personnel for President Reagan.
    (2) ``Transitioning to a New Administration: Can the Next 
President Be Ready?,'' December 4, 2000.
    Because of the uniquely close Presidential race and ensuing 
litigation following the November 2000 election, the 
Administrator of the General Services Administration elected 
not to relinquish Presidential transition funds or offices to 
either candidate, saying that there was no apparent winner. On 
December 4, 2000, nearly 4 weeks after the election, the 
subcommittee convened a hearing to examine the administrator's 
decision, and to look for ways to expedite the transition 
process. The Presidential Transition Act requires the 
Administrator to determine the ``apparent'' winner before 
releasing transition money or relinquishing the keys to the 
transition offices. The Administrator, however, said that the 
ongoing legal challenges to the election by both candidates 
prevented him from such a determination.
    The first panel of witnesses at this hearing included 
former officials who were closely involved in the Presidential 
transitions of Presidents Johnson, Nixon, Ford, Carter, Bush 
and Clinton. The second panel included David Barram, 
Administrator of the General Services Administration, Sally 
Katzen, Deputy Director for Management of the Office of 
Management and Budget, and several legal and other experts 
familiar with the Presidential Transition Act.
    Witnesses generally agreed that the act, as written, did 
not provide adequate guidance to the Administrator in 
determining the winning candidate. Most witnesses also 
acknowledged that the Administrator's decision, based on the 
available legislative history, was probably correct. However, 
they stated, the law needed to be clarified for future 
elections. Witness Dwight Ink, president emeritus of the 
Institute of Public Administration and former Assistant 
Director for executive management of the Office of Management 
and Budget, suggested amending the law by requiring that if 
there is no clear winner 10 days after an election, transition 
funds should be released to both candidates. Witnesses, 
including Administrator Barram, agreed with Mr. Ink's 
suggestion.
    Subcommittee Chairman Stephen Horn, R-CA, and Ranking 
Minority Member Jim Turner, D-TX, agreed to pursue one-time 
legislation to address the November 2000 election, and to 
examine other legislative changes needed to clarify the Act for 
future elections.
6. H.R. 3582, the Federal Contractor Flexibility Act of 2000, inserted 
        as a provision of the Floyd D. Spence National Defense 
        Authorization Act for Fiscal Year 2001 that passed both the 
        House and Senate and became Public Law 106-398.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3582, the ``Federal Contractor 
Flexibility Act,'' introduced by Representative Tom Davis, R-
VA, would preclude Federal departments and agencies from 
including minimum education and experience requirements in 
Federal information technology contracts unless the use of such 
provisions are justified by the contracting agency. H.R. 3582, 
with modifications, was inserted into the Fiscal Year 2001 
National Defense Authorization Act. The modified version would 
preclude the use of minimum education and experience 
requirements in bid solicitations for information technology 
service contracts, unless the contracting officer determines 
that the needs of the agency cannot be met without such 
requirements, or that the needs of the agency require the use 
of a contract other than a performance-based contract.
    c. Legislative status.--The subcommittee reported H.R. 3582 
by a voice vote on April 5, 2000. The bill passed the House of 
Representatives under suspension of the rules by a voice vote 
on May 2, 2000. H.R. 3582, with modifications, was included in 
the National Defense Authorization Act for Fiscal Year 2001, 
which passed the House on October 11, 2000, the Senate on 
October 12, 2000, and was signed into law, becoming Public Law 
106-398.
    d. Hearings.--The subject matter of H.R. 3582 was discussed 
at a subcommittee hearing entitled, ``Federal Acquisition: Why 
Are Billions of Dollars Being Wasted?'' on March 16, 2000 
(section II.B.7).
7. H.R. 4110, a bill to amend title 44, U.S. Code, to authorize 
        appropriations for the National Historical Publications and 
        Records Commission for fiscal years 2002 through 2005, passed 
        both the House and Senate, becoming Public Law 106-410.
    a. Report number and date.--House Report No. 106-768, July 
20, 2000; Senate Report No. 106-466, October 3, 2000.
    b. Summary of measure.--H.R. 4110, introduced by 
Subcommittee Chairman Stephen Horn, R-CA, authorizes 
appropriations for the National Historical Publications and 
Records Commission for fiscal years 2002 through 2005. The 
National Historical Publications and Records Commission [NHPRC] 
works to identify and preserve documents of historical 
significance for public use. The program provides grants for 
non-Federal documentation to non-Federal organizations such as 
historical societies, institutions, non-profit organizations, 
universities, and local and State governments. NHPRC is 
affiliated with the National Archives and Records 
Administration [NARA]. The work of NHPRC with non-Federal 
records complements NARA's work with Federal documents and 
agencies.
    c. Legislative status.--H.R. 4110 introduced on March 29, 
2000, was passed by the subcommittee by a voice vote on April 
5, 2000. The Subcommittee on Government, Management, 
Information, and Technology reported the bill by a voice vote 
on April 5, 2000. The Committee on Government Reform reported 
the bill by a voice vote on July 20, 2000, and the House of 
Representatives, under suspension of the rules, approved the 
bill by a voice vote on July 24, 2000. The legislation passed 
the Senate Committee on Governmental Affairs on October 3, 
2000, and the Senate on October 19, 2000, becoming Public Law 
106-410.
    d. Hearings.--On April 4, 2000, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing entitled, ``Reauthorization of the National Historical 
Publications and Records Commission,'' to consider H.R. 4110 
(see section II.B.9).
8. Legislation to increase the salary of the President of the United 
        States was inserted as a provision of H.R. 2490, the Treasury 
        Department, the United States Postal Service, the Executive 
        Office of the President, and certain Independent Agencies 
        Appropriations Act for the fiscal year ending September 30, 
        2000. The act was signed into law on September 29, 1999, 
        becoming Public Law 106-58.
    a. Report number and date.--None.
    b. Summary of measure.--The salary of the President has not 
been increased since 30 years ago. Pursuant to the 
Constitution, the salary of the President may not be adjusted 
while the person is serving. The only opportunity to change the 
salary is before the start of a new administration. Under 
current law, the salary of the Vice President and other senior 
Federal officials are given cost of living adjustments. If the 
salary of the President is not changed (or the COLAs of the 
senior officials not eliminated) before the end of the next 
administration, the Vice President and the Chief Justice of the 
U.S. Supreme Court will be paid more than the President.
    c. Legislative status.--Legislative language to increase 
the salary of the President of the United States to $400,000 
was included as a provision of H.R. 4985, the Fiscal Year 2000 
Appropriations Act for the Department of the Treasury, the 
United States Postal Service, the Executive Office of the 
President, and certain Independent Agencies. H.R. 4985 was 
signed into law on September 29, 1999, becoming Public Law 106-
58.
    d. Hearings.--On May 24, 1999, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing entitled, ``Salary of the President of the United 
States,'' to examine the issue of increasing the President's 
salary. The subcommittee heard the views from a distinguished 
panel of witnesses that included former Chiefs of Staff and 
Counsels to past President's dating back to the administration 
of President Lyndon Johnson. These witnesses generally 
supported the need to increase the President's salary to keep 
up with inflation, to prevent the salaries of other Federal 
officials from eclipsing that of the President, and to attract 
viable candidates for Federal office.
9. H.R. 3218, the Social Security Number Confidentiality Act of 1999, 
        passed both the House and Senate, becoming Public Law 106-433.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3218, introduced by 
Representative Ken Calvert, R-CA, directs the Secretary of the 
Treasury to take necessary action to ensure that Social 
Security account numbers (including derivatives of such 
numbers) are not visible on or through unopened mailings of 
Government checks or other drafts.
    c. Legislative status.--H.R. 3218, introduced on November 
4, 1999, passed the House under suspension of the rules by a 
vote of 385 to 0 on October 18, 2000. The bill passed the 
Senate by unanimous consent on October 25, 2000, and was signed 
into law on November 6, 2000, becoming Public Law 106-433.
    d. Hearings.--No hearings were held on this legislation 
during the 106th Congress.
10. H.R. 5157, the Freedmen's Bureau Records Preservation Act of 2000, 
        passed the House and Senate, becoming Public Law 106-444.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5157, the ``Freedmen's Bureau 
Records Preservation Act of 2000,'' introduced by 
Representatives Juanita Millender-McDonald, D-CA, and 
Representative J.C. Watts, Jr., R-OK, requires the Archivist of 
the United States to take steps to help preserve the records of 
the Bureau of Refugees, Freedman, and Abandoned Lands, commonly 
known as the Freedmen's Bureau. The bill authorizes the 
Archivist to use all available technology for the restoration 
and indexing of the documents.
    c. Legislative status.--H.R. 5157, introduced on September 
12, 2000, passed the House of Representatives by unanimous 
consent with an amendment in the nature of a substitute offered 
by Subcommittee Chairman Stephen Horn, R-CA, on October 19, 
2000. The bill passed the Senate by unanimous consent on 
October 26, 2000. The President signed the bill on November 6, 
2000, becoming Public Law 106-444.
    d. Hearings.--On October 18, 2000, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing entitled, ``Freedmen's Bureau Preservation Act: Are 
These Reconstruction Era Records Being Protected?,'' to examine 
the merits of H.R. 5157 (see section II.B.9.c).
11. S. 1707, a bill to amend the Inspector General Act of 1978 (5 
        U.S.C. App.) to provide that certain designated Federal 
        entities shall be establishments under such act and for other 
        purposes, passed both the House and Senate becoming Public Law 
        106-422.
    a. Report number and date.--Senate Report No. 106-218, 
November 8, 1999.
    b. Summary of measure.--S. 1707 introduced by Senator Fred 
Thompson, R-TN, amends the Inspector General Act of 1978 (the 
act) to include the Inspector General [IG] of the Tennessee 
Valley Authority [TVA] among the ranks of Inspectors General 
who are appointed by the President and confirmed by the Senate. 
Previously, the IG at TVA was appointed and could be removed by 
the TVA's board of directors. The bill also establishes, within 
the Department of the Treasury, a Criminal Investigator Academy 
to perform investigator training services for offices of 
Inspectors General and a General Forensic Laboratory for 
performing forensic services for such offices.
    c. Legislative status.--S. 1707, introduced on October 7, 
1999, and was reported by the Senate Committee on Governmental 
Affairs with an amendment on November 3, 1999. The bill passed 
the Senate with an amendment by unanimous consent on November 
19, 1999. The bill passed the House under suspension of the 
rules on October 17, 2000, and was signed by the President on 
November 1, 2000, becoming Public Law 106-422.
    d. Hearings.--No congressional hearings were held on S. 
1707. However, the independence of the Tennessee Valley 
Authority's Inspector General as an entity appointed by the TVA 
board of directors was the subject of a report issued by the 
General Accounting Office in September 1999.
12. S. 1993, the Government Information Security Act, inserted as a 
        provision of the Floyd D. Spence National Defense Authorization 
        Act for Fiscal Year 2001 that passed both the House and Senate, 
        becoming Public Law 106-398.
    a. Report number and date.--Senate Report No. 106-259, 
April 10, 2000.
    b. Summary of measure.--S. 1993, introduced by Senator Fred 
Thompson, R-TN, requires the Director of the Office of 
Management and Budget [OMB] to establish governmentwide 
policies for the management of programs that: (1) support the 
cost-effective security of Federal information systems by 
promoting security as an integral part of each agency's 
business operations; and (2) include information technology 
architectures as defined under the Clinger-Cohen Act of 1996. 
The measure requires such policies to: (1) be founded on a 
continuous risk-management cycle; (2) implement controls that 
adequately address the risk; (3) promote continuing awareness 
of information security risks; (4) continually monitor and 
evaluate information security policy; and (5) control 
effectiveness of information security practices. The act 
outlines the information security responsibilities of each 
agency, including the development and implementation of an 
agencywide security plan for the operations and assets of such 
agency. The act makes each program subject to Director approval 
(with the approval of the Secretary of Defense and the Director 
of Central Intelligence in respect to mission critical national 
security systems or intelligence information) and annual review 
by agency program officials. Each Federal agency is required to 
undergo an annual independent evaluation of its information 
security program and practices. The Department of Commerce is 
required to develop, issue, review, and update standards and 
guidance for the security of information in Federal computer 
systems. The Department of Defense [DOD] and the Central 
Intelligence Agency [CIA] are required to develop and issue 
information security policies for mission critical systems of 
such entities and ensure the implementation of such policies. 
The Department of Justice is required to review and update its 
guidance to agencies on legal remedies regarding security 
incidents and coordination with law enforcement agencies 
concerning such incidents. The General Services Administration 
is required to review and update guidance on addressing 
security considerations relating to the acquisition of 
information technology. The Office of Personnel Management is 
required to review and update regulations concerning computer 
security training for Federal civilian employees. Mission 
critical information security policies developed by the DOD and 
the CIA to be adopted by the OMB Director and heads of other 
Federal agencies with respect to the mission critical systems 
of such agencies. The legislation allows agencies to develop 
and implement more stringent information security policies than 
those required by the act.
    c. Legislative status.--S. 1993, introduced on November 19, 
1999, and was reported by the Senate Committee on Governmental 
Affairs on April 10, 2000, with an amendment in the nature of a 
substitute. The bill was inserted as a provision of the Fiscal 
Year 2001 National Defense Authorization Act that passed the 
House and the Senate, and was signed into law on October 30, 
2000, becoming Public Law 106-398.
    d. Hearings.--On September 11, 2000, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing entitled, ``Computer Security: How Vulnerable are 
Federal Computers?'' at which the subcommittee released its 
first report card grading Federal departments and agencies on 
computer security (see section II.B.12). In addition, the 
subcommittee held a hearing entitled, ``Establishing a Federal 
CIO: Information Technology Management and Assurance within the 
Federal Government,'' on September 12, 2000 (see section 
II.B.12).
    S. 1993 and a related bill, H.R. 5024, the ``Information 
Policy Act of 2000,'' introduced by Representative Tom Davis, 
R-VA, were also the subjects of congressional hearings in both 
the House and the Senate, revealing numerous deficiencies in 
information assurance policies and practices at Federal 
departments and agencies.
13. S. 2712, the Reports Consolidation Act of 2000, passed both the 
        House and Senate, becoming Public Law 106-531.
    a. Report number and date.--Senate Report No. 106-337, July 
11, 2000.
    b. Summary of measure.--S. 2712 authorizes executive branch 
departments and agencies to consolidate statutorily mandated 
financial and performance management reports, into a single 
annual report. The consolidated reports present in one document 
an integrated picture of an agency's performance. The bill also 
includes provisions that make the annual reports more useful. 
The bill requires that the reports include an assessment by the 
agency head on the reliability of the agency's performance 
data, and an assessment by the agency Inspector General of the 
agency's progress in addressing its most serious management 
challenges. The bill also moves up the deadline for submission 
of the performance reports required under the Government 
Performance and Results Act from March 31st to March 1st. The 
earlier deadline would provide more timely information for the 
budget cycle. Another important part of this legislation is 
that it requires agencies to submit their annual, audited 
financial statements to Congress, in addition to the President.
    c. Legislative status.--S. 2712, introduced on June 12, 
2000, by Senator Fred Thompson, R-TN, was reported by the 
Senate Committee on Governmental Affairs on June 14, 2000, and 
passed the Senate without amendment by unanimous consent on 
July 19, 2000. The bill passed the House of Representatives 
under suspension of the rules on October 27, 2000, by a vote of 
385 to 0, and was signed into law on November 22, 2000, 
becoming Public Law 106-531.
    d. Hearings.--No legislative hearings were held during the 
106th Congress.
14. H. Con. Res. 300, recognizing and commending the Nation's Federal 
        workforce for successfully preparing the Nation to withstand 
        any catastrophic year 2000 computer problem disruptions, passed 
        the House of Representatives under suspension of the rules by a 
        vote 409 to 0.
    a. Report number and date.--None.
    b. Summary of measure.--H. Con. Res. 300 recognizes and 
commends the meritorious service of the Federal workforce and 
all those who assisted in the efforts to successfully address 
the year 2000 computer challenge.
    c. Legislative status.--H. Con. Res. 300 introduced on 
April 6, 2000 passed the House of Representatives under 
suspension of the rules by a vote of 409 to 0 on May 2, 2000.
    d. Hearings.--(See section II.B.1.)
15. H.R. 436, the Government Waste, Fraud and Error Reduction Act, 
        passed the House of Representatives on February 24, 1999, by a 
        vote of 419 to 1.
    a. Report number and date.--H.R. 436, the Government Waste, 
Fraud, and Error Reduction Act of 1999, Report No. 106-9, Part 
1, February 5, 1999.
    b. Summary of measure.--H.R. 436, the ``Government Waste, 
Fraud, and Error Reduction Act of 1999,'' amends title 31 of 
the United States Code and builds upon earlier debt-collection 
authorities to improve the collection of non-tax, delinquent 
debts owed the Federal Government. The legislation was drafted 
in response to concerns about the implementation of the Debt 
Collection Improvement Act [DCIA] raised at a number of 
hearings held by the Subcommittee on Government Management, 
Information, and Technology. Shortcomings in financial 
management at Federal agencies, including the screening of 
Federal benefit applicants, and timely referrals of delinquent 
debt to the Department of the Treasury for offset and cross-
servicing also prompted the introduction of H.R. 436. The 
legislation provides for improved reporting of delinquent debt, 
enhanced loan sales authority, and additional offset authority.
    The legislation authorizes the offset of Social Security, 
Black Lung and Railroad Retirement benefits to satisfy past-due 
child support owed to a State in the same manner and under the 
same conditions as those benefits can be offset for debts owed 
the United States. The Congressional Budget Office estimates 
that adding past-due child support to the list of debts that 
can be administratively offset from those payments would result 
in $10 million more in annual child support collections, of 
which the Federal Government would, on average, retain $4 
million.
    The legislation contains several provisions related to the 
use and evaluation of Private Collection Contractors [PCA] in 
the collection of non-tax delinquent debts owed the Federal 
Government. A PCA, attempting to collect a debt owed the United 
States would be authorized to verify the employment information 
of a debtor. The legislation also includes a provision 
mandating the Secretary of the Treasury or the head of an 
executive, legislative, or judicial agency, to consider the 
collection performance of PCAs in evaluating their overall 
performance for the purpose of allocating accounts or awarding 
bonuses. Also, when evaluating the performance and awarding 
contracts to PCAs, the legislation requires that the frequency 
of valid debtor complaints should be taken into consideration.
    H.R. 436 builds upon the provisions of the DCIA that bar 
delinquent debtors from obtaining loans, loan insurance, or 
loan guarantees. Under this legislation, a delinquent debtor 
may not obtain financial assistance in the form of a loan 
(other than a disaster loan), loan insurance, loan guarantee, 
or Federal permit or license. The legislation requires the 
Secretary of the Treasury to maintain a schedule of eligible 
PCAs and debt collection centers and to refer delinquent non-
tax debts promptly in order to maximize collections. It also 
requires PCAs to be responsible for any administrative costs 
associated with a collection contract.
    The legislation prohibits agencies from writing off or 
discharging debts prior to the initiation of collection 
activity, and specifically requires that prior to discharging a 
debt, a Federal agency must attempt one of a number of debt-
collection activities, including referring the debt to a PCA or 
debt collection center, referring the debt to the Attorney 
General for litigation, selling the debt, or administratively 
garnishing the debtor.
    The legislation contains a provision that seeks to improve 
travel management by requiring that Federal employees use 
travel management centers, authorized travel agents, and 
electronic reservation and payment systems. It requires the 
Administrator of General Services to develop a mechanism to 
ensure that Federal employees are not charged State and local 
taxes during official travel.
    The legislation promotes the sale of non-tax debts owed the 
Federal Government. Loan sale programs would benefit the 
Federal Government in a number of ways. The sale of loans in a 
competitive market could yield substantial proceeds. Loan sales 
would also reduce Federal agencies' administrative costs and 
permit them to focus limited resources on other programs. The 
legislation authorizes Federal agencies to exempt specific loan 
programs or classes of debt from the sales requirement if the 
sale would interfere with the mission of the agency.
    In an effort to expose debtors who are delinquent on non-
tax debt exceeding $1 million, H.R. 436 requires agencies to 
submit annual reports to Congress, listing the name of the 
debtor, the amount of the debt, collection actions taken by the 
Federal agency, specification of any portion of the debt 
written-down, and an assessment of why the borrower defaulted. 
Where appropriate, Federal agencies are also authorized to 
seize assets pledged to secure the delinquent high-value, non-
tax debt.
    To promote the use of electronic payments by the Federal 
Government, the legislation authorizes Federal agencies to 
provide for early payment of vendors if they use electronic 
payment technology that improves their cash management and 
business practices. Federal agencies are also authorized to 
accept payment electronically, including debit and credit 
cards, to satisfy a non-tax debt owed to the Federal agency.
    c. Legislative status.--H.R. 436, the ``Government Waste, 
Fraud and Error Reduction Act of 1999,'' was introduced by 
Subcommittee Chairman Stephen Horn, R-CA, on February 2, 1999. 
The legislation was reported by the Committee on Government 
Reform to the House of Representatives on February 5, 1999 
(Report No. 106-9). The legislation passed the House under an 
open rule on February 24, 1999, by a vote of 419 to 1.
    d. Hearings.--``What is the Federal Government Doing to 
Collect the Billions of Dollars in Delinquent Debts It is 
Owed?,'' on June 15, 1999, and ``Oversight of the 
Implementation of the Debt Collection Improvement Act,'' on 
June 8, 2000 (see section II.B.4).
16. H.R. 1827, the Government Waste Corrections Act of 1999, passed the 
        House of Representatives by a vote of 375 to 0 on March 8, 
        2000.
    a. Report number and date.--Report No. 106-474, November 
17, 1999.
    b. Summary of measure.--H.R. 1827, the ``Government Waste 
Corrections Act of 1999,'' amends chapter 35 of title 31, 
United States Code, to require Federal agencies to perform 
recovery audits if their direct purchases for goods and 
services total $500 million or more per fiscal year. Agencies 
that must undertake recovery auditing would also be required to 
institute a management improvement program to address 
underlying problems with their payment systems.
    c. Legislative status.--H.R. 1827 was introduced by 
Committee on Government Reform Chairman Dan Burton, R-IN, on 
May 17, 1999. The legislation was referred to the Committee on 
Government Reform and, subsequently, to the Subcommittee on 
Government Management, Information, and Technology. On June 29, 
1999, the subcommittee held a hearing on the legislation, and 
on July 21, 1999, marked-up the legislation and reported it to 
the Committee on Government Reform, as amended, by voice vote. 
The committee marked-up the legislation on November 10, 1999, 
and reported it to the House of Representatives, as amended, by 
voice vote. The bill passed the House of Representatives by a 
vote of 375 to 0 on March 8, 2000.
    d. Hearings.--On June 29, 1999, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing entitled, ``H.R. 1827, the Government Waste Corrections 
Act of 1999,'' to examine the merits of the bill (see section 
II.B.4).
17. H.R. 2513, a bill directing the General Services Administration to 
        acquire a building in Terre Haute, IN, passed the House of 
        Representatives under suspension of the rules on November 2, 
        1999.
    a. Report number and date.--None filed.
    b. Summary of measure.--H.R. 2513 would require the 
Administrator of General Services to acquire the U.S. Postal 
Service building located in downtown Terre Haute, IN, at no 
charge. The General Services Administration would be required 
to provide the Postal Service an option to occupy 8,000 square 
feet of the building at no cost for a 20-year term. The 
legislation would authorize the appropriation of $5 million to 
the General Services Administration to renovate the building 
and acquire parking spaces.
    c. Legislative status.--H.R. 2513 was marked-up by the 
Subcommittee on Government Management, Information, and 
Technology on September 22, 1999, and reported to the full 
committee by voice vote. The Committee on Government Reform 
waived its jurisdiction over this legislation and the 
legislation passed the House of Representatives by voice vote 
under suspension of the rules on November 2, 1999.
    d. Hearings.--On September 29, 1999, the Subcommittee on 
Government Management, Information, and Technology held a 
legislative hearing entitled, ``H.R. 2513, Regarding the 
Transfer of Terre Haute Postal Service Building to GSA,'' to 
examine the merits of H.R. 2513, introduced by Representative 
Edward Pease, R-IN. H.R. 2513 would direct the General Services 
Administration to acquire a Postal Service building in Terre 
Haute, IN's ninth largest city with a population of 61,125. The 
three-story Federal building, which was opened in 1935, was 
constructed through a public works project during the 
Depression. The building is of Art Deco design using marble and 
Indiana limestone and is listed on the National Register of 
Historic places.
    Pursuant to the Postal Reorganization Act of 1970, the 
building was transferred to the inventory of the U.S. Postal 
Service. According to the General Services Administration, the 
building requires between $4 million and $5 million of 
renovations.
    At one time, the Postal Service operated its main 
distribution center for Terre Haute in the Federal building. 
However, due to the deteriorating condition of the building, 
the Postal Service relocated its distribution center to a newly 
constructed facility outside of the downtown area.
18. H.R. 2885, the Statistical Efficiency Act of 1999, passed the House 
        of Representatives under suspension of the rules by a voice 
        vote on October 26, 2000.
    a. Report number and date.--Report No. 106-413, October 25, 
1999.
    b. Summary of measure.--H.R. 2885, the ``Statistical 
Efficiency Act of 1999,'' would provide uniform standards for 
safeguarding the confidentiality of information acquired for 
exclusively statistical purposes and would permit the limited 
sharing of records among designated agencies for statistical 
purposes.
    Federal statistical agencies operate under a number of 
laws, policies, or regulations that govern the collection, use, 
and confidentiality of statistical information. Some of these 
laws, policies, and regulations apply only to a specific 
agency, prohibiting it from sharing this data with other 
agencies. For example, the Bureau of the Census and the Bureau 
of Labor Statistics each compile and maintain their own lists 
of businesses, in large part because they cannot share this 
information.
    This inability to share statistical data is one of the most 
significant issues facing the statistical system. It affects 
the quality of Government statistical data, the efficiency of 
the system, and increases the burden placed on those who 
provide information to statistical agencies. One important 
opportunity created by this legislation would be to improve the 
efficiency of statistical surveys in the Federal Government. 
H.R. 2885 would make it possible for statistical agencies to 
access the Census Bureau master address file for drawing 
samples for surveys. This access would improve the efficiency 
of those surveys, reduce the cost to agencies, and reduce the 
burden on the public.
    H.R. 2885 addresses these concerns. In addition, the 
legislation would enhance the confidentiality protections for 
those who provide statistical data. Data or information 
collected or acquired by a designated Statistical Data Center 
for statistical purposes could only be used for statistical 
purposes. In addition, information acquired for statistical 
purposes could not be disclosed in identifiable form, for a 
purpose other that a statistical purpose, unless the person or 
entity supplying the information consents to the disclosure of 
such information in identifiable form. Disclosure of 
information to a Statistical Data Center must not be 
inconsistent with any law and must be made under the terms of a 
written agreement that identifies the data to be disclosed, the 
purpose for the disclosure, and the procedures to be used to 
safeguard the confidentiality of the information.
    The legislation establishes uniform privacy protections to 
those agencies with weaker or, in some cases non-existent, 
privacy provisions. Additionally, any designated Statistical 
Data Center receiving statistical information from another 
agency would be required to comply with the providing agency's 
data's disclosure laws or policies. An agent of a Statistical 
Data Center would also be subject to criminal penalties for the 
unauthorized disclosure of statistical data or information.
    c. Legislative status.--Subcommittee Chairman Stephen Horn, 
R-CA, introduced H.R. 2885 on September 21, 1999. The 
legislation was referred to the Committee on Government Reform 
and was subsequently referred to the Subcommittee on Government 
Management, Information, and Technology. On September 22, 1999, 
the subcommittee reported the legislation, as amended, by voice 
vote to the Committee on Government Reform. The Committee on 
Government Reform met on September 30, 1999, and favorably 
reported the legislation, as amended, by voice vote to the 
House of Representatives. On October 26, 1999, the legislation 
passed the House under suspension of the rules by a voice vote.
    d. Hearings.--Although there were no committee hearings in 
the 106th Congress on H.R. 2885, the Subcommittee on Government 
Management, Information, and Technology has held three hearings 
since the 104th Congress on proposals to improve the efficiency 
of the Federal statistical system. In the 104th Congress, the 
subcommittee held a hearing on March 22, 1996, on H.R. 2521, 
the ``Statistical Consolidation Act of 1995.'' In the 105th 
Congress, the subcommittee held a hearing on July 29, 1997, 
entitled, ``Oversight of Statistical Proposals,'' and another 
hearing on March 26, 1998, on two similar bills, the 
``Statistical Consolidation Act of 1998,'' and S. 1404, the 
``Federal Statistical System Act of 1997.''
19. H.R. 4519, Baylee's Law, to amend the Public Buildings Act of 1959 
        concerning the safety and security of children enrolled in 
        childcare facilities located in public buildings under the 
        control of the General Services Administration, passed the 
        House of Representatives on September 26, 2000.
    a. Report number and date.--Report No. 106-869, Part 1, 
September 19, 2000.
    b. Summary of measure.--H.R. 4519 would amend the Public 
Buildings Act of 1959 to require the General Services 
Administration [GSA] to provide certain information regarding 
the safety and security of childcare facilities operated in 
buildings under its administrative control. H.R. 4519 would 
require the GSA to provide a list of a building's tenants and 
its designated level of security to any parent or guardian who 
is considering enrolling a child in a childcare facility that 
is operated in a GSA building. In addition, the bill would 
direct the GSA to notify parents or guardians of any new 
Federal tenants and of any serious threat that it determines 
may exist to the safety and security of the children. Finally, 
H.R. 4519 would require the agency to identify and describe 
each childcare facility that is located in one of its buildings 
and assess the facility's level of safety and security, and 
recommend methods for enhancing such safety and security. GSA 
would have 1 year from enactment to submit that report to 
Congress.
    c. Legislative status.--H.R. 4519, introduced on May 23, 
2000, was referred to the Committees on Transportation and 
Government Reform. The bill was reported by the Committee on 
Transportation on September 19, 2000, and was discharged by the 
Committee on Government Reform on September 19, 2000. The bill 
passed the House of Representatives under suspension of the 
rules by a voice vote on September 26, 2000.
    d. Hearings.--On March 23, 2000, the Subcommittee on 
Economic Development, Public Buildings, Hazardous Materials and 
Pipeline Transportation of the Committee on Transportation and 
Infrastructure held a hearing on the General Services 
Administration Fiscal Year 2001 Capital Investment Program. 
Testimony was given by Aren Almon-Kok, founder of the 
Protecting People First Foundation, the Commissioner of the 
Public Buildings Service of the General Services 
Administration, Members of Congress and Federal judges. The 
hearing did not specifically address H.R. 4519, but addressed 
weaknesses in current policies regarding Federal childcare 
centers in GSA-controlled buildings. H.R. 4519 corrects many 
concerns that were raised at the hearing.
20. H. Res. 15, expressing the sense of the House of Representatives 
        regarding Government procurement access for women-owned 
        businesses.
    a. Report number and date.--None.
    b. Summary of measure.--H. Res. 15 expresses the sense of 
the House of Representatives that all Federal agencies would 
benefit from reviewing specified recommendations for improving 
equitable access for women-owned businesses to the Federal 
procurement market.
    c. Legislative status.--H. Res. 15, introduced on January 
6, 1999, was reported by the Subcommittee on Government 
Management, Information, and Technology on April 5, 2000.
    d. Hearings.--On March 16, 2000, the Subcommittee on 
Government Management, Information, and Technology held a 
hearing entitled, ``Federal Acquisitions: Why are Billions of 
Dollars Being Wasted?,'' to consider a variety of acquisition 
challenges facing the Federal Government (see section II.B.7).
21. H.R. 28, the Quality Child Care for Federal Employees Act.
    a. Report number and date.--House Report No. 106-323, Part 
1, September 15, 1999.
    b. Summary of measure.--H.R. 28 builds upon Public Law 100-
202, passed in 1987, which allowed child-care centers to be 
based in Federal buildings for the convenience of Federal 
employees and their agencies. The purpose of H.R. 28 is to 
provide for enhanced standards for Federal child-care centers, 
with the goal of improving the quality and accountability of 
Federal child-care facilities throughout the country. The 
legislation would require the Administrator of the General 
Services Administration to: (1) establish and enforce child 
care health, safety and facility standards; and (2) require 
child-care centers to comply with accreditation standards 
issued by a nationally recognized accreditation organization 
approved by the Administrator, and prescribe enforcement 
procedures.
    The legislation would allow the GSA to offer child-care 
services to more children by expanding the definition of 
Federal employee children to include all children in the 
custody of Federal employees, such as grandparents and legal 
guardians, and children of on-site Government contractors. It 
would also modify the existing requirement that 50 percent of 
the children enrolled at each center must belong to Federal 
families. Instead, the 50 percent requirement would be based on 
a national average, giving priority to children of Federal 
workers. If enrollment at a facility falls below this goal, the 
provider would be required to develop and implement a business 
plan with the sponsoring Federal agency to achieve the goal 
within a reasonable timeframe.
    In addition, H.R. 28 would authorize an agency or the 
Administrator of the General Services Administration to enter 
into an agreement to provide care with an existing non-Federal, 
licensed and accredited child-care facility, or a planned 
facility that will become licensed and accredited. In addition, 
upon approval of the agency head, a pilot program for up to 2 
years could be developed to test innovative approaches to 
providing more cost-effective alternative forms of child-care 
assistance for Federal employees. The Administrator is 
designated to serve as an information clearinghouse for such 
pilot programs. The legislation would require all existing and 
newly hired workers in any child-care center located in 
federally owned or leased facilities to undergo a criminal 
background check. In addition, 1 year after enactment of this 
act, each agency head is directed to require that each new 
child-care facility the agency operates or contracts with must 
provide reasonable accommodations for nursing mothers and their 
infants.
    The legislation provides for technical assistance, studies, 
and reviews in order to assist child-care center operators in 
complying with this act. It instructs the Administrator of the 
GSA to establish an interagency council to facilitate 
cooperation and coordinate policies regarding the provision of 
child-care centers in the Federal Government.
    c. Legislative status.--H.R. 28, the ``Quality Child Care 
for Federal Employees Act,'' is similar to H.R. 9282, passed in 
the 105th Congress. On February 11 and 12, 1998, the 
Subcommittee on Government Management, Information, and 
Technology held a legislative hearing on H.R. 2982, also 
introduced by Representative Benjamin A. Gilman, R-NY. After 
consultation with minority members and the administration, the 
subcommittee marked up the legislation and reported it to the 
Committee on Government Reform and Oversight on February 12, 
1998. The committee passed the measure in the form of an 
amendment to H.R. 4280, introduced by Representative Constance 
Morella, R-MD. H.R. 4280 passed the House of Representatives by 
voice vote on July 8, 1998, however, it no longer contained the 
Gilman language.
    H.R. 28 was introduced January 6, 1999, by Representative 
Gilman and was again considered by the Subcommittee on 
Government Management, Information, and Technology and 
unanimously approved on May 13, 1999 by voice vote. On May 19, 
1999, the Committee on Government Reform considered H.R. 28 and 
passed the measure unanimously by voice vote.
    d. Hearings.--On February 11, 1998, the Subcommittee on 
Government Management, Information, and Technology conducted 
legislative hearings on H.R. 2982, the ``Quality Child Care for 
Federal Employees Act,'' which was similar to H.R. 28. The 
hearing examined various issues involving child-care programs 
at Federal facilities. Witnesses testified concerning the 
intent of the legislation; the proposal's objectives; and the 
reason for various provisions and suggested changes.
    Representative Gilman testified in support of the 
legislation, stressing the need for improved Federal childcare 
nationwide. He described instances in which his constituents 
have suffered the tragic deaths of their children, which 
resulted from inadequate day care. Representative Gilman said 
that such tragedies occur when child-care facilities have 
deplorable conditions, unqualified personnel, and a blatant 
disrespect for the laws intended to protect children in their 
care. Mr. Gilman added that H.R. 2982 was needed to ensure that 
tragedies such as he described would not take place in Federal 
facilities.
    Susan Clampitt, the Associate Administrator for Management 
and Workplace Programs at the GSA testified in support of H.R. 
2982. She stated that H.R. 2982 would strengthen the Federal 
Government's ability to provide the two most critical concerns 
involving child-care programs' quality care and affordability.
    Ms. Clampitt said that, despite the size of the GSA 
program, there are vast differences in the quality of child-
care centers. She supported the legislation's requirement for 
an interagency council to coordinate policy and share best 
practices, saying that it would increase accountability by 
requiring child-care centers to adhere to a uniform set of 
regulations. H.R. 28, similar to H.R. 2982, requires the GSA to 
develop uniform regulations with assistance from 
representatives of the legislative branch of the Government. 
She suggested that the legislation would set national health, 
safety and facility standards and require centers to meet State 
and local licensing and national accreditation requirements.
    Ms. Clampitt also testified in favor of the 
administration's proposed amendment that would modify the 
requirement that 50 percent of each center's enrollment be 
children of Federal workers.
22. H.R. 1625, the Human Rights Information Act.
    a. Report number and date.--None filed.
    b. Summary of measure.--H.R. 1625, the ``Human Rights 
Information Act'' would require certain Federal agencies to 
identify and organize all human rights records regarding 
activities occurring in Guatemala and Honduras after 1944 for 
declassification and disclosure purposes, and to make them 
available to the public. The bill would instruct the President 
to report to Congress regarding agency compliance. The bill 
would prescribe guidelines under which the Interagency Security 
Classification Appeals Panel shall review agency determinations 
to postpone public disclosure of any human rights record. H.R. 
1625 would authorize postponement of such public disclosures on 
specified grounds. The bill required any U.S. agency, upon 
request by an entity created by the United Nations, the 
Organization of American States (or similar entity), a national 
truth commission (or similar entity), or from the principal 
justice or human rights official of a country that is 
investigating a pattern of gross violations of internationally 
recognized human rights, to review, declassify, and publicly 
disclose any human pertinent rights records. The bill would 
direct the Information Security Policy Advisory Council to 
report to Congress on declassification of human rights records 
relating to other countries and to make such report available 
to the public.
    The bill would add two additional positions in the panel in 
order to implement the act.
    c. Legislative status.--H.R. 1625, introduced on April 29, 
1999, was reported by the Subcommittee on Government 
Management, Information, and Technology on April 5, 2000.
    d. Hearings.--Although there were no hearing to consider 
H.R. 1625 during the 106th Congress, the Government Management 
Subcommittee considered similar legislation, H.R. 2635 at a 
hearing during the 105th Congress.
    At a hearing held on May 11, 1998, the subcommittee held a 
hearing to consider H.R. 2635, the ``Human Rights Information 
Act.'' At the hearing, the subcommittee focused on information 
policy, including classification and declassification as well 
as the process of requesting documents from the Federal 
Government. The subcommittee also examined the merits of H.R. 
2635, including the need for this measure given current 
compliance with related requests and the soundness of the 
targeted approach to declassification taken by the bill.
23. H.R. 1788, the Nazi Benefits Termination Act of 1999.
    a. Report number and date.--Report No. 106-321, Part 2, 
October 6, 1999.
    b. Summary of measure.--H.R. 1788, the ``Nazi Benefits 
Termination Act of 1999,'' would authorize the termination of 
Federal public benefits to a Nazi persecutor apart from the 
deportation or denaturalization process. The legislation would 
establish a procedure to determine whether a Federal benefit 
recipient is also a Nazi persecutor. If an individual were 
found in a benefits revocation proceeding to have been a Nazi 
persecutor, an immigration judge (or the Attorney General) 
would be required to issue an order prohibiting that individual 
from either applying for or receiving Federal public benefits.
    c. Legislative status.--H.R. 1788 was introduced by 
Representative Bob Franks, R-NJ, on May 13, 1999, and was 
referred to the Committee on the Judiciary, and to the 
Committee on Government Reform. On July 21, 1999, the 
Subcommittee on Government Management, Information, and 
Technology ordered H.R. 1788 favorably reported by voice vote. 
On September 30, 1999, the Committee on Government Reform 
considered the legislation and ordered it favorably reported by 
voice vote, as amended.
    d. Hearings.--No hearings were held during the 106th 
Congress.
24. H.R. 2376, a bill providing for a procedure for expedited reviews 
        of State grant waiver requests.
    a.Report number and date.--None filed.
    b. Summary of measure.--H.R. 2376, legislation introduced 
by Representative Mark Green, R-WI, would require Federal 
agencies to establish expedited review procedures for State-
requested waivers if the agency previously authorized a similar 
waiver under the same program to another State.
    c. Legislative status.--The Subcommittee on Government 
Management, Information, and Technology marked-up H.R. 2376 on 
November 4, 1999, and reported it to the Committee on 
Government Reform, with an amendment in the nature of a 
substitute, by a voice vote.
    d. Hearings.--On September 30, 1999, the Subcommittee on 
Government Management, Information, and Technology held a joint 
hearing with the Subcommittee on National Economic Growth, 
Natural Resources and Regulatory Affairs entitled, ``Grant 
Waivers: H.R. 2376, Streamline the Process,'' to consider H.R. 
2376.
    Currently, Federal departments and agencies award grants to 
State and local governments through nearly 600 categorical, 
block grant, and open-ended entitlement programs. In 1998, 
these awards totaled $267.3 billion. Although 23 Federal 
department and agencies award these grants, six departments 
account for 96 percent of all Federal grant dollars. They 
include the Departments of Health and Human Services (58 
percent), Transportation (11 percent), Housing and Urban 
Development (9 percent), Education (8 percent), Agriculture (7 
percent), and Labor (3 percent).
    The top 27 Federal grant programs (each over $1 billion) 
account for 87 percent of all grant award dollars. Several of 
these programs allow States to waive key statutory or 
regulatory requirements of the programs, including Medicaid, 
which accounts for 39 percent of the total grant dollars; 
welfare (now called ``Temporary Assistance for Needy Families), 
6 percent of the total grant dollars; and Food Stamps, which 
covers only the cost of State administration of the program. 
States apply for these waivers largely to allow them to 
experiment with alternative ways to achieve more effective or 
efficient program results.
25. H.R. 4049, the Privacy Commission Act.
    a. Report number and date.--House Report No. 106-919, 
September 29, 2000.
    b. Summary of measure.--The Privacy Commission Act 
establishes the Commission for the Comprehensive Study of 
Privacy Protection to study and report to Congress and the 
President on issues relating to protection of individual 
privacy and the appropriate balance to be achieved between 
protecting such privacy and allowing appropriate uses of 
information. The bill requires the Commission to conduct at 
least four hearings in each of the five geographical regions of 
the United States, and authorizes appropriations.
    c. Legislative status.--H.R. 4049, introduced on March 21, 
2000, was reported by the Subcommittee on Government 
Management, Information, and Technology on June 14, 2000, and 
was reported by the Committee on Government Reform with 
amendments on June 29, 2000. The bill, as amended, failed under 
suspension of the rules on October 2, 2000, by a vote of 250 to 
146.
    d. Hearings.--During the second session of the 106th 
Congress, the subcommittee held legislative hearings on H.R. 
4049, the ``Privacy Commission Act,'' on April 12, May 15, and 
May 16, 2000 (see section II.B.10).
26. H.R. 4181, the Debt Payment Incentive Act of 2000.
    a. Report number and date.--None filed.
    b. Summary of measure.--H.R. 4181, the ``Debt Payment 
Incentive Act of 2000,'' introduced by the subcommittee's 
ranking member Jim Turner, D-TX, would prohibit delinquent 
Federal tax and non-tax debtors from receiving Federal loans, 
loan guarantees or receiving Federal contracts, until the 
delinquency is resolved. The bill would amend the Debt 
Collection Improvement Act of 1996, to broaden a current 
provision in the law that bars delinquent non-tax debtors from 
obtaining loans or loan guarantees.
    c. Legislative status.--H.R. 4181, introduced on April 5, 
2000, was reported by the Subcommittee on Government 
Management, Information, and Technology on May 9, 2000, and was 
reported by the Committee on Government Reform on October 4, 
2000.
    d. Hearings.--On May 9, 2000, the subcommittee held a 
legislative hearing on H.R. 4181, the ``Debt Pay Incentive Act 
of 2000'' (see section II.B.4).
27. H.R. 1599, the Year 2000 Compliance Assistance Act.
    a. Report number and date.--None filed.
    b. Summary of measure.--The legislation was the subject of 
a hearing held by the Subcommittee on Government Management, 
Information, and Technology on June 18, 1999. H.R. 1599 was 
introduced in order to assist State and local governments to 
address the year 2000 computer problem. The legislation 
specifically would authorize State and local governments to use 
the General Services Administration's [GSA] Federal supply 
schedules to procure automated data processing equipment, 
software, supplies, support equipment, and services related to 
the year 2000 computer problem; would make participation by a 
firm listed on the Federal supply schedules voluntary with 
respect to sales to State or local governments; would require 
the GSA Administrator to establish procedures to implement the 
provisions of this legislation no later than 30 days after its 
enactment; would sunset the authorities provided in the 
legislation on December 31, 2002; and would require the GSA 
Administrator to report to Congress on the implementation and 
the impact of the provisions of the legislation no later than 
December 31, 2003.
    c. Legislative status.--H.R. 1599 was the subject of a 
legislative hearing held by the Subcommittee on Government 
Management, Information, and Technology on June 18, 1999.
    d. Hearings.--The purpose of this hearing was to examine 
H.R. 1599, the ``Year 2000 Compliance Assistance Act,'' 
introduced by Representative Tom Davis, R-VA, on April 28, 
1999. The legislation would amend the Federal Property and 
Administrative Services Act of 1949 to authorize State and 
local governments to purchase information technology [IT] 
products and services related to the year 2000 computer problem 
through the Federal supply schedules.
    The year 2000 technology problem was the most significant 
problem to arise within the IT industry. Although the Federal 
Government had made significant progress toward fixing the year 
2000 problem, State and local government progress has been 
mixed. The year 2000 readiness of State and local government 
systems is essential to the seamless delivery of governmental 
services affecting the lives of millions of Americans on a 
daily basis.
    The Federal Government depends on the States to deliver 
services for key domestic programs including Medicaid, child 
nutrition aid and welfare assistance. If State and local 
governments had not finished their year 2000 repairs, the 
Federal Government would be unable to fully test the readiness 
of these critical programs. In essence, this legislation would 
provide State and local governments an additional resource to 
fix their systems.
28. H.R. 88, legislation to amend the Treasury and General Government 
        Appropriations Act of 1999, to repeal the requirement regarding 
        data produced under Federal grants and agreements awarded to 
        institutions of higher education, hospitals, and other 
        nonprofit organizations.
    a. Report number and date.--No report was issued.
    b. Summary of measure.--H.R. 88, introduced by 
Representative George Brown, D-CA, would amend the Treasury and 
General Government Appropriations Act of 1999. The bill would 
repeal the requirement that all data produced under Federal 
grants and agreements awarded to institutions of higher 
education, hospitals, and other nonprofit organizations become 
available under the Freedom of Information Act [FOIA]. Senator 
Richard C. Shelby, R-AL, introduced this requirement as a 
provision in the Treasury, Postal Service, and General 
Government Omnibus Appropriations Act for Fiscal Year 1999, 
known as the ``Shelby Amendment.''
    H.R. 88 would repeal the Shelby Amendment due to concerns 
that the amendment's language is overly broad and could lead to 
unintended consequences.
    c. Legislative status.--On January 6, 1999, H.R. 88 was 
introduced by Representative Brown, R-CA. On July 15, 1999, the 
Subcommittee on Government Management, Information, and 
Technology held a legislative hearing on H.R. 88.
    d. Hearings.--On July 15, 1999, the subcommittee examined 
H.R. 88 during a hearing entitled, ``H.R. 88, Research Data 
Available under the Freedom of Information Act'' (see section 
II.A.1).
29. H.R. 4670, ``Chief Information Officer of the United States Act of 
        2000.''
    a. Report number and date.--None filed.
    b. Summary of measure.--H.R. 4670, introduced by 
Representative Jim Turner, D-TX, finds that new leadership is 
needed to improve coordination among agencies and create 
opportunities for the innovative use of information technology 
[IT] to improve Government operations and the delivery of 
services to the public. The bill creates an Office of 
Information Technology in the Executive Office of the 
President. The office shall provide analyses, leadership, and 
advice for the President and executive branch agencies 
regarding the Government use of information technology. The 
Office of Information Technology would be headed by the Chief 
Information Officer [CIO] of the United States, who would also 
be a special assistant to the President. The CIO would serve as 
the principal adviser to the President on matters relating to 
the use of IT by the Federal Government. The CIO would be an 
Executive Level I position, appointed by the President and 
confirmed by the Senate. The CIO would submit an annual report 
to the President and to Congress, describing major 
accomplishments and the results of activities of the CIO 
Council. The bill provides a 5-year authorization of 
appropriations, which ensures congressional oversight. Support 
can also be provided by other executive branch agencies, and 
the CIO can direct the use of the Information Technology Fund, 
administered by GSA, to support IT initiatives. The bill 
establishes a CIO Council, chaired by the Federal CIO. The bill 
does not apply to national security systems, but national 
security agencies are to consult with the Federal CIO regarding 
IT best practices.
    c. Legislative status.--On June 15, 2000, H.R. 4670 was 
introduced by Representative Jim Turner, D-TX.
    d. Hearings.--On September 12, 2000, the subcommittee 
examined H.R. 4670 during a hearing entitled, ``Establishing a 
Federal CIO: Information Technology Management and Assurance 
within the Federal Government.''

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                     Hon. David McIntosh, Chairman

1. H.R. 391, the Small Business Paperwork Reduction Act Amendments of 
        1999.
    a. Report number and date.--House Report 106-8, February 5, 
1999, Together with Minority Views.
    b. Summary of measure.--The purpose of the ``Small Business 
Paperwork Reduction Act Amendments of 1999'' is to reduce the 
burden of Federal paperwork on small businesses by: requiring 
the Office of Management and Budget [OMB] to publish of a list 
of all Federal paperwork requirements on small businesses; 
requiring each Federal agency to establish one point of contact 
for small businesses on paperwork issues; requiring the 
agencies to allow small businesses to correct first-time 
paperwork violations before civil fines are assessed, except 
when doing so would potentially harm or threaten public health 
and safety, impede criminal detection, or involve an internal 
revenue law; requiring the agencies to further reduce paperwork 
for small businesses with fewer than 25 employees; and, forming 
a task force of agency representatives to study the feasibility 
of streamlining Federal reporting requirements on small 
businesses. The bill amends Chapter 35, Title 44, otherwise 
known as the ``Paperwork Reduction Act of 1995'' [PRA].
    In brief, the Small Business Paperwork Reduction Act 
Amendments of 1999 are intended to do the following:
    A. Require OMB's Office of Information and Regulatory 
Affairs [OIRA] to publish a list annually on the Internet and 
in the Federal Register of all the Federal paperwork 
requirements for small business. Section 2(a) requires the 
Director of OMB to authorize the Administrator of OIRA to 
publish this list. The definition for ``small business'' in 
this section and throughout the bill is the one used in the 
Small Business Act (15 U.S.C. Sec. 631 et seq.). Small business 
is defined as an enterprise which is ``independently owned and 
operated and which is not dominant in its field of operation.'' 
It is further defined by the Small Business Size Regulations 
(13 CFR Sec. 121), which set the size standards businesses must 
meet to qualify as a small business. ``Collection of 
information'' is the term used throughout the PRA to define 
paperwork. It includes requirements for reporting to the 
government and disclosure to third parties, as well as 
recordkeeping.
    B. Require each agency to establish one point of contact to 
act as a liaison with small businesses. Section 2(b) requires 
each agency to establish one point of contact to act as a 
liaison between small businesses and the agency regarding 
paperwork requirements and the control of paperwork.
    C. Suspend civil fines on small businesses for first-time 
paperwork violations so that the small businesses may correct 
the violations. Section 2(b) provides that civil fines may be 
suspended for 6 months unless the agency head determines that 
the violation could potentially cause serious harm; that 
waiving the fine would impede the detection of criminal 
activity; that the violation is a violation of the internal 
revenue laws or any law concerning the assessment or collection 
of a tax, debt, revenue or receipt; or that the violation 
presents an imminent and substantial danger to the public 
health and safety.
    If the agency head determines that the violation presents 
an imminent and substantial danger to the public health and 
safety, the agency head may impose a fine or suspend the fine 
for 24 hours to allow the small business to correct the 
violation. In making this determination, the agency head shall 
take into account all the facts and circumstances of the 
violation, including the following factors: (1) the nature and 
seriousness of the violation, including whether it is willful 
or criminal; (2) whether the small business has made a good 
faith effort to comply and correct the violation; (3) the 
previous compliance history of the small business, including 
any past enforcement actions against its owners or principals; 
and (4) whether the small business has obtained a significant 
economic benefit from the violation. Only civil fines may be 
suspended, not criminal fines. Only fines assessed for 
violations of collection of information (paperwork) 
requirements may be suspended, not fines for violations of 
other regulatory requirements. The suspension of fines 
provisions of this section also apply to States that are 
administering Federal regulatory requirements.
    D. Further reduce paperwork for businesses with fewer than 
25 employees. Section 2(c) requires each agency to make further 
efforts to reduce paperwork for small businesses with fewer 
than 25 employees, in addition to meeting the current paperwork 
reduction requirements of the PRA.
    E. Establish a task force, convened by OIRA, to study the 
feasibility of streamlining reporting requirements for small 
businesses. Section 3 establishes a task force to study the 
feasibility of streamlining reporting requirements for small 
businesses. The Director of OMB will authorize the 
Administrator of OIRA to appoint the members of the task force. 
The members will include representatives from different 
agencies. The task force will examine the feasibility of 
requiring the agencies to consolidate reporting requirements in 
order that each small business may submit all information 
required by the agency to one point of contact at the agency, 
in a single format or using a single electronic reporting 
system, and on one date. After 1 year, the task force will 
report its findings to the House Government Reform and Small 
Business Committees and the Senate Governmental Affairs and 
Small Business Committees. If the task force finds that 
consolidating reporting requirements so that small businesses 
can make annual submissions to each agency on one form or a 
single electronic reporting system will not work or reduce the 
burden in a meaningful way, the task force will make 
recommendations to the committees on what will work to 
streamline and reduce the burden of reporting requirements for 
small businesses.
    c. Legislative status.--H.R. 391 was approved by the House 
on February 11, 1999 by a vote of 274 to 151.
    d. Hearings.--``H.R. 3310, Small Business Paperwork 
Reduction Act Amendments of 1998,'' hearings were held on March 
5, 1998, and March 17, 1998. No hearings were held in 1999 on 
H.R. 391, which is nearly identical to H.R. 3310 in the 105th 
Congress.
2. H.R. 1074, the Regulatory Right-to-Know Act of 1999.
    a. Report number and date.--House Report 106-168, June 7, 
1999, Together with Minority and Additional Views.
    b. Summary of measure.--The purposes of the ``Regulatory 
Right-to-Know Act of 1999'' are to promote the public right-to-
know about the costs and benefits of Federal regulatory 
programs and rules, to increase Government accountability, and 
to improve the quality of Federal regulatory programs and 
rules. The bill requires OMB to prepare an annual accounting 
statement and an associated report. The accounting statement 
would provide estimates of the costs and benefits of Federal 
regulatory programs in the aggregate, by agency, by agency 
program, and by major rule. The associated report would analyze 
the impacts of Federal rules and paperwork on various sectors 
and functional areas. Currently, there is no report that 
analyzes the cumulative impacts of Federal regulations. 
Americans have a right to know the cumulative costs, benefits, 
and impacts of Federal regulations.
    In brief, the Regulatory Right-to-Know Act of 1999 is 
intended to do the following:
    A. Require that OMB annually submit to Congress, 
simultaneously with the Budget of the U.S. Government, an 
accounting statement and associated report on the annual costs 
and benefits of Federal regulatory programs.
    Section 4(a) requires OMB to identify regulatory costs and 
benefits: (1) in the aggregate; (2) by agency, agency program, 
and program component; and (3) by major rule. Section 4(c) 
requires OMB to identify the net benefits or net costs for: (1) 
each program components, (2) each major rule, and (3) each 
regulatory option for which costs and benefits were included in 
any regulatory impact analysis. Section 4(e) requires that each 
accounting statement cover the current fiscal year, the 2 
preceding fiscal years, and the 4 following fiscal years. This 
is the identical time series used in the Budget of the U.S. 
Government.
    Section 4(b) requires that the associated report include 
three parts. First, OMB shall provide an analysis of the 
impacts of Federal rules and paperwork on State and local 
government, the private sector, small business, wages, consumer 
prices, economic growth, public health, public safety, the 
environment, consumer protection, equal opportunity, and other 
public policy goals. Second, OMB shall identify and analyze 
overlaps, duplications, and potential inconsistencies among 
Federal regulatory programs. Finally, OMB shall provide 
recommendations to reform inefficient or ineffective regulatory 
programs or program components, including recommendations for 
addressing market failures. Section 4(f) provides that the 
various analyses are phased in over a 3-year period.
    B. Require that OMB provide a summary table including the 
number of major rules and the number of nonmajor rules issued 
by each agency in the preceding fiscal year.
    C. Require that OMB, before finalizing the accounting 
statement, associated report, and OMB guidelines, provide the 
public with notice and an opportunity to comment, and peer 
review by two or more experts. Section 5 requires OMB to 
consult with the Congressional Budget Office [CBO] on the 
accounting statement, associated report, and OMB guidelines. 
Section 5 also requires OMB, after consideration of the public 
and peer review comments, to incorporate an appendix to the 
report addressing the public and peer review comments. To 
ensure openness, Section 5 also provides that OMB will make all 
final peer review comments available in their entirety to the 
public.
    Section 7 requires OMB to arrange for external peer review 
by individuals or organizations with nationally recognized 
expertise in regulatory analysis and regulatory accounting. 
Section 7 also requires that these persons are independent of 
and external to the Government. Further, Section 7 requires 
that the peer reviewers be fairly balanced with respect to the 
points of view represented, that the peer reviewers have no 
conflict of interest, and that the comments provided are not 
inappropriately influenced by any special interest and are the 
result of independent judgment.
    D. Require that OMB, after consultation with the Council of 
Economic Advisors, issue guidelines to the agencies to 
standardize the most plausible measures of costs and benefits, 
the means of gathering information used to prepare the 
accounting statements and impact analyses, and the format of 
the accounting statements and summary tables. Section 6 
requires that OMB review submissions from the agencies to 
ensure consistency with OMB's guidelines.
    c. Legislative status.--H.R. 1074 was approved by the House 
on July 26, 1999 by a vote of 254 to 157.
    d. Hearings.--A ``Should Agencies Be Allowed To Keep 
Americans in the Dark About Regulatory Costs and Benefits?,'' 
hearing was held on March 24, 1999. This hearing addressed the 
need for legislation due to the limitations of OMB's 
statutorily-required reports to Congress on regulatory 
accounting, as required by the Treasury and General Government 
Appropriations Acts for 1997, 1998, and 1999. Witnesses 
included House Commerce Committee Chairman Tom Bliley, the vice 
president of the National Conference of State Legislatures, 
OMB, and three think tank experts in regulatory accounting.
3. H.R. 2221, Small Business, Family Farms, and Constitutional 
        Protection Act.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2221 is intended to prohibit 
the use of Federal funds to implement the Kyoto protocol to the 
United Nations Framework Convention on Climate Change until the 
Senate gives its advice and consent to ratify the protocol, and 
to clarify the authority of Federal agencies with respect to 
the regulation of emissions of carbon dioxide (CO2).
    H.R. 2221 prohibits Federal agencies from implementing the 
Kyoto protocol prior to ratification. In part, the bill is 
intended to educate and expand the anti-Kyoto coalition by 
spotlighting the pro-Kyoto strategy behind early action 
crediting and EPA's claim of authority to regulate 
CO2.
    H.R. 2221 has three main legislative provisions. Section 
3(a) makes permanent the Knollenberg restriction prohibiting 
the use of Federal funds to propose or issue regulations for 
the purpose of implementing, or in preparation for 
implementing, the Kyoto protocol. Section 3(b) prohibits 
Federal agencies from promulgating regulations to limit 
emissions of CO2 without new and specific statutory 
authority. Section 3(c) prohibits the use of Federal funds to 
advocate, implement, or develop a program providing regulatory 
credits for early greenhouse gas emission reductions until and 
unless the Senate ratifies the Kyoto protocol.
    c. Legislative status.--H.R. 2221 has 32 co-sponsors 
besides Mr. McIntosh, who introduced the bill.
    d. Hearings.--In 1999, the subcommittee held no hearings on 
the legislation. However, each of the subcommittee's 1999 
hearings on the administration's climate change policies 
focused on one of the key concerns of the legislation. The May 
20th hearing examined the administration's compliance with the 
Knollenberg funding restriction. The July 15th hearing examined 
the case for early action crediting. The October 6th hearing 
examined EPA's claim that the Clean Air Act authorizes EPA to 
regulate CO2.
4. H.R. 2245, Federalism Act of 1999.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2245 is intended to promote 
and preserve the integrity and effectiveness of our federalist 
system of government, and to recognize the partnership between 
the Federal Government and State and local governments in the 
implementation of certain Federal programs.
    H.R. 2245 was developed in response to a request by the 
seven major organizations representing State and local elected 
officials and in cooperation with them. It establishes new 
discipline for the legislative branch and the executive branch 
before either imposes requirements that preempt State or local 
authority or have other impacts on State or local governments. 
Building on the Unfunded Mandates Reform Act [UMRA], H.R. 2245 
requires that the report accompanying each bill identify any 
preemption of State or local authority and the reasons for such 
preemption. The report must also include a Federalism Impact 
Assessment [FIA] prepared by the Congressional Budget Office 
[CBO]. Likewise, H.R. 2245 requires executive branch agencies 
to include a FIA in proposed, interim final, and final rule 
publications.
    H.R. 2245 establishes new rules of construction for the 
judicial branch relating to preemption. Additionally, H.R. 2245 
includes other provisions to recognize the special competence 
of and partnership with State and local governments, including 
deference to State management practices for certain Federal 
grant programs and cooperative determination of program 
performance measures for State-administered Federal grant 
programs.
    c. Legislative status.--The subcommittee marked up a 
substitute bill on July 29, 1999.
    d. Hearings.--A ``H.R. 2245: Legislation to Promote and 
Preserve Federalism,'' hearing was held on June 30, 1999. 
Witnesses included the executive director of the National 
Governors' Association, the president of the National 
Conference of State Legislatures, the president of the National 
League of Cities, a vice president of the National Association 
of Counties, and the General Accounting Office [GAO].
5. H.R. 2376, A bill to require executive agencies to establish 
        expedited review procedures for granting a waiver to a State 
        under a grant program administered by the agency if another 
        State has already been granted a similar waiver by the agency 
        under such program.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2376 is intended to streamline 
the processing of State requests for waivers of certain 
statutory or regulatory requirements, including a similar State 
request to an already approved waiver for another State. H.R. 
2376 would result in a real reduction in paperwork and costs 
for the States, which are the Federal Government's partners in 
program administration, freeing up resources for additional 
delivery of services to the needy.
    Section 1 basically codifies section 7 of President 
Clinton's Executive Order No. 13132, issued on August 4, 1999, 
which directs agencies to act on State waiver requests within 
120 days ``to the extent practicable and permitted by law.'' 
Section 2 requires agencies to establish expedited procedures 
under capped grant programs (where there is no budget 
neutrality issue) for waiver requests similar to a waiver 
already approved for another State, with a 2-year exemption for 
new grant programs and a 1-year lag to see if an approved 
waiver is workable. Section 3 would provide increased 
accountability since it requires quarterly publication of each 
agency's actions on State requests for flexibility in program 
administration and of the amount of processing time taken by 
the agency before making a decision on these requests. Section 
4 requires OMB, and the Departments of Agriculture and Health 
and Human Services [HHS], working cooperatively with the 
National Governors' Association and the National Conference of 
State Legislatures, to develop a Memorandum of Understanding: 
specifying a common approach and common requirements for budget 
neutrality across the open-ended entitlement programs and other 
Agriculture and HHS programs, and providing a multi-year 
analysis of costs.
    c. Legislative status.--The Government Reform Subcommittee 
on Government Management, Information, and Technology marked up 
a substitute bill on November 4, 1999.
    d. Hearings.--A ``H.R. 2376, Grant Waivers and Streamlining 
the Process,'' hearing was held jointly with the Government 
Reform Subcommittee on Government Management, Information, and 
Technology on September 30, 1999. Witnesses included the 
executive directors of the National Governors' Association and 
the National Conference of State Legislatures, and the 
Departments of Agriculture, HHS, and Labor.
6. H.R. 3521, Congressional Accountability for Regulatory Information 
        Act of 2000, and H.R. 4744, H.R. 4924 and S. 1198, Truth in 
        Regulating Act of 2000.
    a. Report number and date.--House Report 106-772, July 20, 
2000, Together with Minority and Additional Views, on H.R. 
4744.
    b. Summary of measure.--All three House bills (H.R. 3521, 
H.R. 4744, and H.R. 4924) and S. 1198, the ``Truth in 
Regulating Act of 2000,'' establish a regulatory analysis 
function within the General Accounting Office [GAO]. This 
function is intended to enhance congressional responsibility 
for regulatory decisions developed under the laws Congress 
enacts and to help check and balance the executive branch in 
the regulatory process. GAO was a logical location since it 
already has some regulatory review responsibilities under the 
Congressional Review Act [CRA].
    Under S. 1198, the last bill approved by the House, the 
chairman or ranking member of a committee of jurisdiction may 
request that GAO submit an ``independent evaluation'' to the 
committee of a major proposed or final rule within 180 days. 
GAO's analysis shall include an evaluation of the potential 
benefits of the rule, the potential costs of the rule, 
alternative approaches in the rulemaking record, and the 
various impact analyses.
    Congress currently has two opportunities to review agency 
regulatory actions. Under the Administrative Procedure Act 
[APA], Congress can comment on agency proposed and interim 
rules during the public comment period. The APA's fairness 
provisions require that all members of the public, including 
Congress, be given an equal opportunity to comment. Late 
congressional comments cannot be considered by the agency 
unless all other late public comments are equally considered. 
Therefore, since GAO cannot be given more time than other 
members of the public to comment, GAO should complete its 
review of agency regulatory proposals during the public comment 
period, while there is still an opportunity to influence the 
cost, scope and content of an agency's regulatory proposal. S. 
1198 does not require GAO to submit timely comments but neither 
does it preclude GAO from doing so.
    Under the CRA, Congress can disapprove an agency final rule 
after it is promulgated but before it is effective. GAO needs 
to analyze the legislative history to see if there is a non-
delegation problem, such as in the Food and Drug 
Administration's proposed rule to regulate tobacco products, 
which was struck down by the Supreme Court in FDA v. Brown & 
Williamson, or backdoor legislating, such as in the Department 
of Labor's ``Baby UI'' rule, which provides paid family leave 
to small business employees, even though Congress in the Family 
and Medical Leave Act said no to paid family leave and no to 
any coverage of small businesses.
    Sometimes the best way to find out that an agency has 
ignored congressional intent or failed to consider less costly 
or non-regulatory alternatives, is to examine non-agency (i.e., 
``public'') data and analyses. In preparing its independent 
evaluation of an agency's regulatory proposal, GAO needs to 
examine public data. Although S. 1198 does not require GAO to 
review public data, neither does it forbid or preclude GAO from 
doing so. GAO should comment substantively on an agency's 
regulatory proposal. S. 1198 does not require GAO to comment on 
the scope and content of an agency's regulatory proposal but 
neither does it preclude GAO from doing so.
    Under S. 1198, GAO would not retain its traditional role as 
auditor. Instead, S. 1198 requires GAO to prepare an 
independent evaluation or analysis of agency regulatory 
proposals. Evaluation is not equivalent to auditing; evaluation 
requires a thorough analysis, e.g., consideration of less 
costly or non-regulatory alternatives not presented in an 
agency's documents.
    S. 1198 does not require or expect GAO to conduct any new 
Regulatory Impact Analyses [RIAs], cost-benefit analyses, or 
other impact analyses. However, GAO's independent evaluation 
should lead the agencies to prepare any missing cost/benefit, 
small business impact, Federalism impact, or any other missing 
analysis.
    Instructed by GAO's independent evaluations, Congress will 
be better equipped to review final agency rules under the CRA. 
More importantly, Congress will be better equipped to submit 
timely and knowledgeable comments on proposed rules during the 
public comment period.
    c. Legislative status.--H.R. 4744 was approved by the 
Government Reform Committee on June 29, 2000 by voice vote. 
H.R. 4924 was approved by the House on July 25, 2000 by voice 
vote. S. 1198, the very similar Senate companion bill to H.R. 
4924, was approved by the House on October 3, 2000 by voice 
vote. On October 17, 2000, the President signed it into law 
(Public Law 106-312).
    d. Hearings.--On June 14, 2000, the subcommittee held a 
hearing entitled, ``Does Congress Delegate Too Much Power to 
Agencies and What Should be Done About It?'' Witnesses 
included: Senator Sam Brownback; Representative J.D. Hayworth; 
Dr. Wendy Lee Gramm, former Administrator, Office of 
Information and Regulatory Affairs, OMB; Alan Raul, former OMB 
general counsel; and David Schoenbrod, professor of law, New 
York Law School.

                   Subcommittee on the Postal Service

                     Hon. John M. McHugh, Chairman

1. H.R. 22, The Postal Modernization Act of 1999.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 22 is legislation that would 
fundamentally modernize and reform the Nation's postal laws for 
the first time since 1970 in order to give the Postal Service 
both the tools and the incentive to adapt itself to the demands 
of the 21st century. At the same time, the legislation 
establishes new rules to ensure fair competition and protect 
the public interest. The bill was originally introduced in June 
1996, after a year and a half of development through oversight 
hearings. After five more hearings and taking into account 
additional extensive public comments on this plan, the 
Subcommittee on the Postal Service approved the legislation in 
a bipartisan manner in 1998. After its reintroduction in 
January 1999, the subcommittee held 2 more days of hearings, in 
which it received testimony from more than 36 witnesses 
representing the varied postal interests in the public and 
private sectors. After careful evaluation of all the testimony 
received in these latest hearings, Chairman McHugh proposed a 
comprehensive amendment in the nature of a substitute which 
incorporates and responds to many of the comments received. The 
provisions of the measure are easily available on the 
subcommittee's Web page in a manner that the public and all 
postal stakeholders have the opportunity to access and 
understand the provisions. In total, there have been more than 
40 witnesses on the bill over the past 5 years and 
approximately 60 witness on the issue of the challenges facing 
the postal system and the need to modernize the laws governing 
the Postal Service.
    The purpose of the legislation is to improve and update the 
laws that shape the operation of the postal system, a system 
that not only includes the U.S. Postal Service, but also 
impacts private express companies, hundreds of regional and 
local delivery services and small businesses. Each postal 
patron depends on the efficient and effective operation of the 
U.S. postal delivery system.
    The basic charter for this industry is the Postal 
Reorganization Act of 1970 codified in title 39, U.S. Code. The 
1970 act abolished the Post Office Department, an executive 
department within the Cabinet of the President, and created the 
U.S. Postal Service. The Postal Service is an independent 
agency that is directed by a Board of Governors, an 11-member 
committee consisting of nine ``Governors'' chosen by the 
President for staggered 9-year terms, and a Postmaster General 
and a Deputy Postmaster General who are selected by the 
Governors. The Postal Service itself determines the types and 
level of postal services it will provide and how much total 
revenue it will need to provide these services. The Postal 
Service also issues regulations that purport to define what 
types of services are within the scope of the statutory postal 
monopoly and what types of services may be offered by private 
companies.
    Before the Postal Service introduces new rates or new types 
of services, it must request an opinion from a second agency, 
the Postal Rate Commission [PRC]. The PRC is a five-member 
agency whose members are appointed by the President. The 
Commission holds public hearings on the fairness of differences 
between postage rates and can recommend modification that will 
reduce unfair or unreasonable discrimination, a concept defined 
by several statutory criteria. Because even slight changes in 
rates can involve very large sums of money, the PRC's review of 
changes in rates or classifications usually involves a complex 
and contentious administrative litigation lasting up to 10 
months. Many aspects of this system have led to calls for 
modernization of our postal laws.
    Since the early 1990's, the Postal Service has argued that 
it needs more commercial flexibility to respond to increased 
competition from private express companies, new forms of 
communication, and changing business practices. The Postal 
Service would like to be able to change rates without the costs 
and delays associated with the current practice of PRC review. 
It would also like to offer rates that are better tailored to 
the needs of large business customers and to enter the new 
types of commercial activities that are replacing the business 
of delivering traditional letters. Many large customers of the 
Postal Service agree as to the necessity of these changes, 
while many smaller customers are more skeptical. However, all 
agree on the need to maintain a vibrant Postal Service that can 
provide universal service at a reasonable cost to all areas of 
the United States.
    Meanwhile, captive customers of the Postal Service's 
monopoly as well as private companies who compete with the 
Service have also been calling for reform. They suggest that 
the Postal Service's increasing commercial emphasis on 
competitive services require clearer statutory guidelines as to 
what is fair competition for a public monopolist. Many small 
customers of the Postal Service who have no other practical 
alternative for the delivery of their letters, due to existing 
law, emphasize that the Postal Service can compete with the 
private sector while loading a disproportionate share of its 
overhead costs onto their postage rates. Likewise, many private 
companies argue that it is inappropriate for a government 
agency to compete in a private market while it also 1) adopts 
regulation (such as the scope of the mail monopoly or postage 
metering technology) that determine the rules of competition, 
2) operates with an exemption from laws that prohibit 
fraudulent business practices (such as the antitrust and unfair 
competition laws), and 3) loads its overhead costs in monopoly 
customers' rates. Some customers, competitors, and economists 
have suggested that the Postal Service, as a government entity, 
should be excluded from the competitive market altogether and 
wound down as changing technology and new business practices 
reduce the need for a governmental letter delivery 
establishment. H.R. 22 offers a more moderate course: to allow 
the Postal Service to compete in all markets, provided it does 
so on the same terms and conditions as faced by private 
companies.
    A third impetus for postal legislation is the fact that 
other developed countries, facing the same problems of how to 
modernize their postal systems in light of changing 
technologies, have concluded that the time has come to reform 
their postal laws. After a 10-year debate, the European Union 
has adopted legislation that will limit the postal monopolies 
in all 15 member states to services priced at five times the 
stamp price or less, or when conveying items weighing 12.5 
ounces or less. Sweden and Germany have enacted legislation 
abolishing their postal monopolies; New Zealand is not far 
behind. The Netherlands has privatized the majority interest in 
its post office and is considering abolition of the postal 
monopoly. Australia and the United Kingdom are considering 
introducing more competition and commercial flexibility into 
their postal systems. All countries have moved forward with the 
same commitment to preserving universal postal service in their 
countries that we demand here in the United States.
    There is opposition to H.R. 22 but, in most cases, parties 
have expressed concern about specific provisions of H.R. 22 
rather than its general approach. Those who have expressed the 
greatest initial concern about the legislation appear to be 
entities who fear competition from a better, more efficient 
Postal Service. H.R. 22 is sympathetic to such concerns; it 
seeks to provide new, stringent safeguards against unfair 
competition but, simultaneously, tries to give the Postal 
Service a fair chance to compete.
    H.R. 22 is divided into eight titles. Title 1 provides for 
the redesignation of the Board of Governors to the ``Board of 
Directors of the U.S. Postal Service'' to modernize and convey 
the business responsibility of the Directors for ensuring 
effective and efficient operations of the Service on behalf of 
the American public. The change to ``Directors'' is consistent 
with other Federal entities including, among others, Amtrak, 
Tennessee Valley Authority Rural Telephone Bank, Corporation 
for Public Broadcasting, Federal Deposit Insurance Corporation, 
Fannie Mae, and Freddie Mac. This section also adds to the 
title of Postmaster General, the designation ``and Chief 
Executive Officer'' which codifies current practice. It also 
changes the name of the Postal Rate Commission [PRC] to the 
``Postal Regulatory Commission.'' This change is intended to 
recognize the greater responsibilities, authority, and role for 
the PRC than exists under its present, more limited mandate. 
The amendment provides that whenever reference is made in law, 
regulation, rule, document or other U.S. record to the entities 
affected by these sections will be considered a reference to 
the entities as redesignated.
    Title II establishes a new system for establishing Postal 
Rates, Classes, and Services. Section 3701 introduces the term 
``product'' which was amended to underscore that each rate cell 
is a product and that this definition relates to ``postal'' 
products. This definition is critical for the application of 
the new regulatory regime as the classes of mail and services 
are regulated as either noncompetitive or competitive products. 
The term ``rate'' will encompass both the concepts of rates and 
fees. That is, any rate or fee that appears on the Postal 
Service's published ``ratefold'' would be subject to the rules 
regarding a product. Prices of products in the noncompetitive 
mail category will be indexed to the ``CPI,'' specifically the 
Consumer Price Index for all urban consumers as published 
monthly by the Bureau of Labor Statistics of the Department of 
Labor.
    Any pricing discretion above the CPI-X percentage in a 
given year could only occur for a rate that had not been set at 
the maximum amount allowed by rule 2 (thereby permitting use of 
banked pricing discretion of this title requires the Postal 
Service to initiate an omnibus rate case before the Postal Rate 
Commission within 18 months after enactment of the legislation 
under the recommended decision authorities and criteria in 
current law and provides for no exceptions. However, the 
recommended decision is on rates for all products in the 
noncompetitive category of mail and all products in the 
competitive category of mail. This would result in the PRC 
recommending rates for all international mail matter because 
this mail would now be regulated as either a competitive or 
noncompetitive product. The Postal Services current authority 
to set international mail rates would be preserved until the 
baseline rates are place in effect and then the Service would 
be permitted to use its new pricing authority for international 
mail in the competitive category. This provision ensures that 
the most current rates and fees are in effect for all products 
before the application of the new formula for rate setting is 
established. The 18-month timeframe gives the service 
sufficient time to request and prepare for this important case. 
This subsection retains the current ratemaking features as well 
as the 10-month limit for a recommended decision to be 
rendered. However, in response to the Postal Service's request 
to expedite implementation of the legislation, this section was 
amended by the subcommittee to reduce the time permitted for 
the Postal Service to file the baseline case from 18 months to 
6 months. The current statutory provision for contingencies 
would be eliminated given that the concept of allowances for 
recovery of future excess costs would be in direct 
contradiction to the basic premise of price caps that the 
regulated entity bears the burden of excess costs as well as 
realizing the benefits from any profit.
    The next sections in this subchapter clarify that while a 
request is considered by the PRC under the current statutes, 
the PRC is authorized to disallow unnecessary revenues. It 
should be noted that current law does not give the PRC specific 
authority to review the revenue demanded by the Postal Service. 
PRC has testified to Congress that such authority is necessary 
to prevent the Postal Service from demanding a large revenue 
increase in the baseline rate case in order to set a high base 
figure for future price caps. The ``honest, efficient, and 
economical management'' standard used in current law would be 
the criteria used by the PRC in this case.
    Recognizing the potential challenges of mandating minimum 
rate requirements at the rate cell level, the subcommittee-
amended bill permits the PRC to waive the requirements if its 
application to a particular rate cell, or cells, would be 
impractical.
    Products contained in the competitive mail category will 
still be priced by the Board according to market conditions, as 
long as each product is priced to cover its cost, and 
competitive products collectively make a contribution to the 
overall overhead of the Postal Service in at least an equal 
percentage to the contribution made by all noncompetitive and 
competitive products combined. The legislation mandates certain 
costs for the PRC's consideration when assessing adjustments to 
the cost-coverage requirement, and mandates a PRC review of the 
cost-coverage requirements' operation and continuing need. The 
criteria for discontinuing loss-making competitive products are 
made more explicit in the subcommittee-adopted McHugh 
amendment. Other provisions clarify the PRC's ability to review 
new competitive products.
    The Postal Service will still be required to track revenues 
and expenditures of competitive products by way of a separate 
new account, ``the Postal Service Competitive Products Fund.'' 
Recognizing the complexity of separating the assets and 
liabilities between competitive and noncompetitive products, as 
well as the need to reassess the Service's accounting for 
competitive products' revenues and costs, the legislation 
requires the Postal Service to develop recommendations to 
identify and value the assets and liabilities, which would be 
reviewed in a PRC proceeding, before the PRC promulgates such 
rules.
    For experimental products, the prohibition against 
``unreasonable market disruption'' is more clearly specified as 
a prohibition that such tests cannot ``create an unfair or 
otherwise inappropriate competitive advantage for the Postal 
Service, particularly in regard to small business concerns.''
    The bill currently provides that Postal Service will be 
annually audited, as well as reviewed upon complaint, by the 
PRC to ensure that prices are set in accordance with the laws 
and that delivery and performance standards are being met. 
Several clarifying changes are added to these provisions. 
Additionally, the PRC must still report at least every 6 years 
on the operation of the ratemaking system with recommendations 
for any legislative or other measures necessary to improve it. 
However, the amendment specifically adds a review of the 
operations of the cost-coverage requirement for competitive 
products, the Competitive Products Fund, and the Private 
Corporation authorized by Section 204. Hereby, a formal and 
regular review process is established to consider any necessary 
modifications.
    Section 3702 clarifies that nothing in this chapter will 
affect the current language regarding free mail. This includes 
mail for correspondence of members of the diplomatic corps and 
consuls of the countries of the Postal Union of Americas and 
Spain, the blind and disabled, and mailing of balloting 
materials under the Uniformed and Overseas Citizens Absentee 
Voting Act. Section 3723 recognizes that potential challenges 
of mandating minimum rate requirement at the that if, upon 
enactment of this legislation any action is pending related to 
an on-going or previous rate case, that case is considered null 
and void. Section 3731 defines the terms that will be used in 
the noncompetitive category of mail. This section creates four 
``baskets'' of products in order to group the various classes 
and subclasses of mail and postal services in the 
noncompetitive mail category with similar and like classes and 
services. All descriptions are as defined in the mail 
classification schedule as of enactment, and the lists of 
products in each basket will be revised by the PRC following a 
product transfer, reclassification, or new products 
introduction.
    The next amendment, Section 3722 mandates that reduced-rate 
categories of mail will receive the lesser of the rate 
calculated under current law, or the rate the Postal Service 
would offer under the price cap regime. The amendment also 
addresses a problem regarding the fact that current law for 
reduced rate mailers does not provide sufficient clarity to 
ensure that their rates are indeed reduced an appropriate 
amount below the most closely corresponding regular-rate 
category. The legislation changes current law for reduced-rates 
by modifying the requirement for an absolute contribution of 
one-half of the commercial mailers' contribution to overhead 
costs, allowing it to be ``one-half or less,'' as the Postal 
Service may prescribe. It should be noted that while the 
amendment maintains an absolute limitation that all rates must 
cover attributable costs as the floor, this section states that 
the reduced-rate mailers' estimated costs attributable (on a 
per-unit basis) should not exceed the estimated costs 
attributable for the closely corresponding regular rate 
category.
    One of the most significant modifications to Title II 
provides authorization for the Postal Service to establish a 
private, for-profit corporation. Adapted from the 
organizational provisions of Conrail and Comstat, this 
corporation would not be an agency, instrumentality, or 
establishment of the United States, a Government corporation, 
or a Government-controlled corporation; it would not be a part 
of the Postal Service. The ``USPS Corporation,'' as provided 
for in H.R. 22, addresses the current issue of the Postal 
Service broadening its mission under questionable statutory 
authority to engage in nonpostal activities and businesses, 
such as electronic commerce services. While the proposal 
rejects the argument that the Postal Service should be confined 
to its traditional letter mail business and wither as demand 
for that business declines, H.R. 22's proposed structure for 
nonpostal activities prevents the Service from leveraging its 
government status and $60 billion revenue stream as it does 
today. The bill clarifies the authority of the Postal Service 
to continue providing nonpostal services as a means of meeting 
its public service obligations, but requires it to provide such 
products only through a private corporation. The independent 
Postal Regulatory Commission (also known as the PRC), 
authorized by H.R. 22, would oversee the corporation's 
activities and relationship with the Postal Service. The Postal 
Service is required to include the activities of the 
corporation in the annual reports to the PRC to ensure 
compliance with the firewall established between the Service 
and the corporation (such as the requirement that prices 
charged the corporation by the Postal Service for goods and 
services reflect fair market value).
    The McHugh amendment makes additional changes to this 
section: (1) the corporation is prohibited from providing any 
mail preparation, processing, or packaging services that are 
delivered by means of noncompetitive products offered by the 
Postal Service, unless the corporation is authorized in a PRC 
hearing on the record in which it considers various factors the 
firs of which is ``the fair and equitable treatment of small 
business concerns which have invested in the development of 
such services, if any'';
    (2) the restrictions on interaction between the Postal 
Service and the corporation are further clarified (beyond the 
current requirements on purchase of goods and services from the 
Postal Service) to explicitly mandate that the Postal Service 
must treat the corporation in the same manner as it would any 
other private corporation, and that the goods and services 
provision cannot be considered to exempt the corporation from 
the rates established pursuant to the pricing rules for 
noncompetitive and competitive products;
    (3) the corporation and its employees are explicitly 
subject to the laws of the State in which it is incorporated in 
the exact same way as any other corporation (and its employees) 
incorporated in that State;
    (4) rather than a blanket waiver of post-government 
employment restrictions for former Postal Service employees, 
the waiver is limited to only the first 3 years of the 
corporation's existence; and
    (4) the corporation's specific authorities are clarified to 
include borrowing money on its own behalf and interactions with 
other private companies.
    The McHugh amendment responds to the testimony received 
from witnesses as to their suggestion that the noncompetitive 
product customers more explicitly benefit from the existence, 
if any, of a corporation created under this title. Under a new 
provision, if the corporation is created, any excess revenues 
that occur in a given year from competitive products 
collectively (which will include any earnings paid by the 
corporation) must be shared equally with the Postal Service 
Fund (noncompetitive products) and the Competitive Products 
Fund. Without placing unfair burdens on the corporation, this 
section ensures that (2) to the extent that benefits flowing to 
the Postal Service from the corporation result in excess 
revenues, these moneys will be shared with noncompetitive 
product customers, and (2) such customers share equally in the 
benefits of the success of competitive postal products before 
such revenues are available for investment in the corporation.
    The subcommittee conducted two hearings on postal 
modernization. The Postmaster General, the Postal Rate 
Commissioners, and the Postal Service's employee unions and 
management associations testified at the hearing held on 
February 11, 1999 and four panels of witnesses testified at the 
March 4, 1999 hearing. They included the Deputy Assistant 
Attorney General of the Antitrust Division of the Department of 
Justice, the Deputy Assistant Secretary for Government 
Financial Policy of the Department of Treasury, the chairman 
and CEO of the FDX Corp., the chairman and CEO of the United 
Parcel Service, the senior vice-president for government 
affairs of the Director Marketing Association, Inc. 
representing the Mailers Coalition for Postal Reform, the 
executive director for the Alliance of Nonprofit Mailers, the 
chairman of the Board of ADVO Inc. representing the Saturation 
Mail Coalition, the executive director of the Main Street 
Coalition accompanied by representatives of the Newspaper 
Association of America, the National Federation of Nonprofits, 
the Associated Church Press, the Greeting Card Association, the 
American Business Press, the National Newspaper Association, 
and the Coalition against Unfair USPS Competition.
    The purpose of these hearings was to air any other concerns 
that may exist even after extensive hearings and thorough input 
from interested parties in previous years.
    Postmaster General Henderson, at the February 11 hearing 
testified on the importance of H.R. 22. He said that the U.S. 
Postal Service [USPS] is the Nation's largest customer base 
with the largest civilian labor force of more than 765,00 
career employees. The USPS serves all of American with more 
than 130 million households and businesses addresses, 
delivering a daily average of 630 million pieces of mail. This 
represents about 41 percent of all the mail volume in the 
world. Most American businesses utilize the mail - America's 
competitive advantage in global economy is based on the mail 
system. Mr. Henderson elaborated that the next century will 
require competitively superior methods and results from all 
postal systems and that Americans have inherited the best 
postal system in the world. Forward-looking postal 
administration throughout the world are restructuring and are 
attempting to prove that they can perform with market-driven 
standards of efficiency and customer service while still 
covering the traditional social obligation for universal 
service. The U.S. Postal Service has a strong revenue base and 
customer-driven methods such as work sharing. Mr. Henderson 
underscored that the challenge is to formulate the correct 
formula of forward-looking reforms in a manner consistent with 
the values and traditions of our country. He stated that H.R. 
22 is the mark to move the postal community toward with an 
acceptable, modern package of reforms that would match 21st 
century postal service with modern expectations though there 
may be some dissension; it offers a framework for providing 
positive reform. The bill provides a price cap feature. This, 
along with indexing, productivity offsets and incentive-based 
compensation, has the potential for improving efficiency and 
providing more predictability of postage costs. He stated that 
some additional modest pricing flexibility should increase 
opportunities for customers by improving Postal Service 
responsiveness to market conditions. Transparency in the costs 
and financing of competitive service offerings should provide 
reassurances to the public that there are no cross-subsidies 
and that reasonable contribution is being made to institutional 
costs. Universal service requirements would be studied and 
defined and retained, assuring access to good postal service. 
The Postmaster General acknowledged that the object of price 
caps would abolish cost-of-service ratemaking and there would 
be no legal guarantee the Service would meet its costs and pay 
its bills by raising rates. Financial success will depend on 
performance and efficiency. He further acknowledged that the 
Postal Service must learn to be more efficient, more skillful, 
more customer-focused, and more market-driven. He expressed 
that a higher level of consensus is required within the postal 
community to implement the provisions of the competitive and 
noncompetitive categories provided for in H.R. 22, and offered 
several possible amendments for consideration. The Postmaster 
General reiterated that the Postal Service is committed to see 
reform and that it would work with all stakeholders to complete 
this endeavor.
    The chairman of the Postal Rate Commission commented that 
though the Postal Service had made operational and financial 
progress within the past 3 years the future was not promising. 
A major part of first-class mail appears to be susceptible to 
electronic diversion. If this should happen, the Postal Service 
would be forced to raise rates, unless costs are reduced and 
new profits realized. Mr. Gleiman said that with some 
adjustment, H.R. 22 could help the process. In reference to the 
amendments to H.R. 22 recently circulated by the Postal 
Service, Chairman Gleiman expressed that they appear to be 
contrary to the underlying principles of H.R. 22. The gist of 
his extensive testimony indicated that the Commission's review 
of H.R. 22 shows that with minor adjustments there could be 
smooth transition from current postal ratemaking to the 
proposed price cap regime. He suggested that there be a longer 
transition period whereby the Commission could develop an 
effective, workable set of regulations under the mandate of 
their extended functions provided by H.R. 22.
    Ted Carrico, national president of the National Association 
of Postmasters of the United States [NAPUS], an organization 
representing 45,000 active and retired postmasters, cautioned 
that deregulation, whether for airlines or the Postal Service, 
should be attempted with caution. Rural areas and inner city 
neighborhoods stand to lose in such endeavors. He testified 
that restrictions imposed on the Postal Service to confine its 
activities to only delivering single-piece hard-copy mail would 
result in the demise of universal service at uniform rates 
concept for which the Postal Service was created. He said that 
there are critics who would like the Postal Service to be 
extinct, but they are critical of the innovations that the 
Postal Service is implementing. NAPUS testified that the Postal 
Service was making these products available to the public at 
reasonable rates. The subcommittee was reminded that a recent 
AP Poll found that 75 percent of the American public thought 
the Postal Service was doing an ``excellent'' or a ``good'' 
job. The PriceWaterhouseCoopers survey found that 93 percent of 
overnight first-class was being delivered on time. Additionally 
the Pew Research Center survey found that the Postal Service 
has a 90 percent approval rating. Mr. Carrico stated that 
Americans demand a strong Postal Service that will continue to 
provide valued service, therefore, the Postal Service must be 
permitted to enhance its revenues. Deregulation would permit 
other entities to pick off the most lucrative Postal products 
and leave it out of competitive ventures. The Postal Service is 
responsible to each citizen and business in the country, 
whereas for-profit competitors are not accountable to anyone 
but their Board of Directors and their shareholders; they are 
not mandated to provide universal service. NAPUS, because 
postmasters oversee all facets of postal operations, understand 
the need for the Postal Service to modernize; they recognize 
the value of H.R. 22 and know that it will enable the Postal 
Service to continue its core mission and they agree with most 
of its provisions including the provision for greater pricing 
and operation flexibility, the new rate setting mechanism and 
NAPUS agreed to continue to work on other issues. However, 
NAPUS has concern about the direct appropriation to the Postal 
Rate Commission. They believe that this would establish a type 
of congressional micro-management that the Postal 
Reorganization Act tried to eliminate. NAPUS is concerned about 
the diminution of the double-postage rule believing that 
revenues earned by the lucrative ``priority mail'' would be 
diverted resulting in this product being left to the Postal 
Service to deliver in low volume, high cost areas, raising the 
price for the product.
    Joseph Cinadr, president of the National League of 
Postmasters (League) testified that his membership is very 
interested in H.R. 22, and would have suggestions once the 
legislation was finalized. The League's primary focus is for 
the USPS to remain the foremost postal system worldwide, 
providing superior universal service at reasonable prices for 
all Americans. The League asks for financial flexibility, rate 
stability, and the authority to offer competitive volume 
discounts but it opposes Congress' involvement in postal rates 
or wage scales and believes that H.R. 22 is reregulating the 
wrong organization. Since the 1970 reorganization, the Postal 
Service has become efficient, cost-conscious and competitive. 
He stated that the American postal service has served this 
Nation well for more than 224 years and now the achievements 
have raised envy from competitors.
    The National Association of Postal Supervisors [NAPS], an 
organization of 37,000 active and retired postal supervisors, 
managers and postmasters, represented by their president, 
Vincent Palladino, objected to the Presidentially appointed 
Postal Management Commission whose responsibility would be to 
review labor-management issues. However they were willing to 
support an independent study by the National Academy of Public 
Administration only if the Summit process conducted by the 
Federal Mediation and Conciliation Service should fail. They 
were pleased at the exclusion of the Postal Service appeal of 
the Merit Systems Protection Board decisions against the agency 
and the mailbox demonstration project from the revised H.R. 22. 
NAPS continues to oppose the requirement that the Postal 
Service forward the mail of former renters received at 
commercial mail receiving agencies [CMRA] without the 
appropriate fee being paid to the Service. NAPS offered an 
amendment to Section 307 of H.R. 22 that requires the Postal 
Service to comply with all zoning, planning and land use 
regulations and building codes applicable to State and local 
public entities. The NAPS' suggested language would require 
that the Postal Service ``shall make every reasonable effort to 
faithfully comply with all'' the above-referenced regulations. 
Mr. Palladino submitted a question to the subcommittee: what 
commercial enterprise would remain in business if its officers 
had to operate under Federal statues governing the types of 
products and services it would offer and their pricing as well 
as the review of a Board of Governors/Directors, a Postal Rate/
Regulatory Commission, an Inspector General and congressional 
oversight?
    Moe Biller, president of the American Postal Workers Union 
[APWU], AFL-CIO, testified on behalf of its 361,000 members. He 
said that APWU has fundamental problems with H.R. 22 and cannot 
support the legislation. He stated that the measure has a 
``prefixed formula specifying a rate cap on `non competitive' 
mail.'' He stated that as a labor-intensive industry, the 
Postal Service should not subject its workers to concessions 
should there be unanticipated adverse changes in market demand 
or competition. Mr. Biller said that it would not be certain 
whether such concessions would take the form of wage and 
benefit cuts or harsher working environment to induce more 
productivity. He maintained that price caps push the risk of 
adverse changes in price or market conditions on the employees 
whereas mailers and managers retain the benefits of low 
inflation and a growing economy. Mr. Biller reported that the 
APWU and the Postal Service recently reached and ratified a 
collective-bargaining agreement--the first in 11 years to be 
reached without interest arbitration. He said that this would 
not have been possible if there had been a price cap regime. 
APWU has further concerns with specifications in H.R. 22 which 
would enable a letter to be carried out of the mail stream when 
the amount paid for private carriage is at least six times the 
postage for the first ounce of first-class mail. The witness 
testified that this proposal is the first step toward postal 
privatization and the proposed $4 billion disadvantage to the 
Postal Service would be borne at the expense of the workers. 
This would result in cream skimming and jeopardize the Postal 
Service's ability to provide universal service at uniform 
rates. APWU also opposed the proposed study of labor-management 
relations by the National Academy of Public relations, but 
lauded the ongoing work of the Federal Mediation and 
Conciliation Service. The APWU, however, indicated that it was 
interested in the provision authorizing the Postal Service to 
enter new competitive markets.
    Vincent R. Sombrotto, president of the National Association 
of Letter Carriers, presented testimony for this 310,000-member 
association. He cited the results of the Pew Research Center 
for the People and the media that gave the Postal Service an 89 
percent positive rating. The NALC believes that any postal 
reform must fit into the framework of uniform service at 
reasonable rates with a normal 6-day a week delivery. The NALC 
was gratified by the elimination of the mailbox demonstration 
project and the encouraged the inclusion of Mr. Gilmam's 
proposal to ensure that the Postal Regulatory Commission would 
not undermine the collective bargaining process. They also 
appreciated Mr. Fattah's proposal that would create a labor 
seat on the Postal Board of Directors. Mr. Sombrotto testified 
that the issue regarding the authority over the Universal 
Postal Union would have been better served had the topic been 
broached by using the normal legislative process. Furthermore, 
he testified that Postal Service competitors are attacking 
profitable enterprises of the Service; the revenue generated by 
services such as priority mail help to maintain universal 
service.
    Billy Quinn, president of the National Postal Mail Handlers 
Union [NPMHU], an organization of more than 50,000 members, 
testified that any attempts at postal reform must include the 
protection of the Postal Service to provide universal service 
at affordable rates; these rates must be sufficient to protect 
and support universal service and provide postal employees with 
a decent and fair standard of living. Furthermore, the 
collective bargaining process should not be adversely affected, 
including legislative restraints or constraints such as price 
caps, which translate into wage caps. Mr. Quinn informed the 
subcommittee that the NPMHU and the Postal Service recently 
signed a new 2-year collective bargaining agreement, a result 
of face to face negotiations. Generally, the union supports the 
legislative efforts to modify the difficult ratemaking process 
and pricing flexibility. It also supports the subcommittee-
adopted amendments, which would add a labor representative to 
the Board of Governors, provide reemployment assistance if any 
postal employee loses a job because of displacement through 
automation or privatization. The union, however, opposes 
anything that would limit pricing flexibility with unfair caps 
on rates.
    Steve Smith, president, represented the 63,000 member 
National Rural Letter Carriers'' Association [NRLCA]. He 
testified that members of his organization deliver the mail 6 
days a week in their own vehicles, which also serves as a post 
office on wheels. They travel more than 3 million miles each 
day to 27.4 million delivery points on 63,000 rural routes 
across this Nation. He reminded postal competitors that the 
Postal Service is not the cause of their market share decline; 
the UPS strike was not caused by the Postal Service, and 
European business mail was lost because of competition by 
European postal administration--not USPS competition. NRLCA is 
skeptical of the separate accounting for competitive products 
because of the manner mail is handled by its membership that 
uses personal vehicles to carry both competitive and non 
competitive mail in varying volumes.
    The Department of State submitted a written statement at 
the February 11 hearing welcoming its new duty in overseeing 
international postal policy concerning the Universal Postal 
Union [UPU]. The Department of State takes this new position 
very seriously and is committed to a fair and open process to 
ensure the views of private providers, postal users, the 
general public, and other agencies. The Department has looked 
at various ways to develop a working process with UPU 
stakeholders and to integrate the views of industry, consumer 
and government interests. UPU stakeholders would like to see an 
open, transparent method wherein their views are considered 
seriously and incorporated in preparations for the Beijing 
Postal Congress in August 1999. The first formal public meeting 
was held in January 1999 with a series of others planned before 
August. Written comments will be accepted from all parties at 
any time and made publicly available. All views will be 
considered in formulating the U.S. position, and adjustments to 
the process will be considered to achieve the objectives to 
level the playing field in the U.S. policy toward the UPU. It 
is the intention of the Department of State that its views on 
issues of concern to the private sector will be made public.
    Four panels of witnesses made up of stakeholders in the 
postal modernization debate appeared at the March 4, 1999 
hearing. Additionally, a number of organizations were invited 
to submit statements for the hearing record.
    Panel I included Donna E. Patterson, Deputy Assistant 
Attorney General of the Antitrust Division, Department of 
Justice; and Lewis A. Sachs, Deputy Assistant Secretary, 
Government Financial Policy, Deputy Assistant Secretary, 
Government Financial Policy, Department of Treasury.
    Panel II included Fred Smith, chairman and chief executive 
officer, FDX Corp.; and James P. Kelly, president and chief 
executive officer, United Parcel Service.
    Panel III included Jerry Cerasale, senior vice president of 
government affairs, Direct Marketing Association, Inc. 
(testifying on behalf of the Mailers Coalition for Postal 
Reform); Neal Denton, executive director, Alliance of Nonprofit 
Mailers; and Robert ``Kam'' Kamerschen, Saturation Mailers 
Coalition.
    Panel IV included John T. Estes, executive director, Main 
Street Coalition; John F. Sturm, Newspaper Association of 
America; Lee Cassidy, National Federation of Nonprofits; Joe 
Roos, the Association Church Press; David Stover, the Greeting 
Card Association; Guy Wendler, American Business Press; Kenneth 
B. Allen, National Newspaper Association; and Charmaine Fennie, 
chairperson, Coalition Against Unfair USPS Competition.
    Ms. Donna Patterson, on behalf of the Antitrust Division of 
the Department of Justice commented on the antitrust 
application of H.R. 22, and not on the entire bill. For the 
past century the United States has been committed to protecting 
free competition and operation of a free-market economy subject 
to antitrust laws. The fundamentals of those laws are section 1 
and section 2 of the Sherman Act of 1890, which prohibits 
contracts and conspiracies in restraint of trade and prohibits 
monopolization or attempts to monopolize, respectively. And, 
section 7 of the Clayton Act, which prohibits mergers or 
acquisitions that may tend to substantially lessen competitions 
and provides the antitrust enforcement tools. The Antitrust 
Division shares civil antitrust enforcement responsibility with 
the Federal Trade Commission. Since the enactment of the 1970 
Postal Reorganization Act, the Department of Justice has 
engaged in an active program of competition advocacy regarding 
postal matters. The Department has appeared before the Postal 
Rate Commission and has challenged Postal Service's efforts to 
expand the scope of the protections afforded under the Private 
Express Statutes. The Department has also suggested the need 
for a comprehensive review of competition in domestic and 
international markets for mail services, noting the USPS's 
expansion into competitive markets and the ambiguities 
encompassing the legal status under the Private Express 
Statutes. Some of the recent issues addressed by the division 
include the comments critical of the USPS proposal modification 
to the terminal dues system for delivery of international mail. 
The Division took an active role in urging support for a 
legislative amendment transferring responsibility for 
international postal policy from the USPS to the Department of 
State. Since the signing of the bill into law, the USPS no 
longer has direct representation of U.S. interest at meetings 
of the Universal Postal Union. Over the years, the Department 
of Justice has not wavered on its stand affecting domestic and 
international mail. They have criticized USPS attempts to use 
its regulatory authority to expand the scope of statutory 
protections provided by the Private Express Statutes. The 
Department maintains a firm stand that statutory exception to 
the Federal antitrust laws should be avoided whenever possible. 
Additionally, their policy is that Federal competition 
objectives are best served when Federal antitrust laws are 
applied uniformly, rather than allowing the laws to be 
distorted to give special protection to certain classes of 
competitors or to selected industries or economic sectors. 
Legislative exceptions to antitrust laws should be created only 
in exceedingly rare instances when the government's strong 
interest in preserving competition is outweighed by a 
compelling and irreconcilable social policy objective and 
should be narrowly drawn. Since the last three decades 
following postal reorganization the Postal Service is engaging 
in activities that can be considered competitive, such as 
express mail. However, at the same time, no other entity has 
the infrastructure or authority to compete for general first-
class mail delivery. The question is then, how can the Postal 
Service and its competitors be put on the same footing? 
Competitive products must bear at least an equal proportional 
mark-up for institutional costs. The rationale being that the 
Postal Service should not be allowed to subsidize its 
competitive activities by loading its overhead costs in the 
non-competitive category of products for which it is guaranteed 
earnings and return. H.R. 22 provides that as long as the 
cross-subsidization is avoided, the Postal Service will have 
the same freedom to price its competitive goods and services as 
its competitors. This grants greater flexibility to the Postal 
Service, while subjecting it to the same antitrust laws facing 
its competitors. Commenting on provisions in H.R. 22 regarding 
pricing regulations, the Division stated that generally, price-
cap regulation tends to have advantages over a purely cost-
based system, which lacks incentives for cost control and is 
not conducive to efficiency. The price-cap system has more of 
an incentive to attempt to lower the cost. The witness, Ms. 
Patterson, expressed some concern with section 305 of H.R. 22 
because the standard of this section seems to swerve from 
antitrust laws. The provisions of this section could inhibit 
procompetitive business practices. American economy, which is 
based on the principle of competition, should be maximized to 
the fullest in the legislation.
    Lewis A. Sachs, Deputy Assistant Secretary of the 
Department of the Treasury (Government Financial Policy) 
testified on the financial provision in Title II of H.R. 22 as 
it had done earlier by letter. These provisions would separate 
the finances and operation of the Postal Service in to three 
distinct components: (1) non-competitive Postal (2) competitive 
Postal and (3) non-Postal. The current bill has strengthened 
the firewalls between the components. In the bill under 
consideration, the competitive products would no longer be 
authorized to borrow from the Postal Service Fund. 
Additionally, in the current bill, the Postal Service would not 
be authorized to borrow from the Postal Service Fund. Also, it 
would be required to submit any annual reports to the Secretary 
of the Treasury and to the Postal Regulatory Commission that 
address matters such as risk limitations, allocations of 
moneys, reserve balances, liquidity requirements, and measures 
to safeguard against losses. The Department of the Treasury 
continues to have concerns about the provision, even though the 
bill was altered to take into consideration Treasury's previous 
uncertainties. Specifically, Treasury objected to permitting 
the Postal Service to borrow money for its Competitive Products 
Fund from the market, rather than continuing to borrow from the 
Federal Financing Bank [FFB] because of the increased borrowing 
costs to the Postal Service. In accordance with longstanding 
Federal Financial policies, Federal entities should borrow from 
the Treasury or the FFB because it is the most efficient method 
of financing such debt. The bill would permit the Postal 
Service to borrow on behalf of the Competitive Products Fund 
from market at preferential rates because of perceived 
Government backing of the debt. The Postal Service Competitive 
Fund could then invest any excess moneys to the Non-Postal 
Corp., which, in turn could reinvest in individual private 
companies. The Postal Service could, ultimately borrow at 
preferential rates and invest at potentially higher rates. Any 
risks in this endeavor would ultimately be borne by the 
taxpayers because of the financial links between the 
Competitive Products Fund and the Postal Service. The bill 
permits the Postal Service to deposit funds from the 
Competitive Products Fund into entities outside the Treasury 
without the approval of the Secretary of the Treasury. It would 
be permitted to move its funds in and out of the Competitive 
Products Fund at its sole discretion. Current law does not 
permit the Service to deposit funds outside the Treasury 
without approval from the Secretary because sound Government 
fiscal policy, which is necessary to allow centralized 
management of government cash, would be adversely affected if 
exceptions were to be made. The Department of the Treasury 
would consider the Non-Postal Corp. as an on-budget Federal 
agency, even though H.R. 22 classifies it as a private 
corporation. The Department said that the Non-Postal Corp. 
should be viewed as a Federal agency because it would be solely 
owned by the Competitive Products Fund and therefore would have 
strong links to the Postal Service, which is a government 
entity. Due to these concerns, the Department of the Treasury 
cannot support the financial provisions of H.R. 22 as currently 
drafted but will work with the subcommittee and the Postal 
Service to resolve these concerns.
    Frederick W. Smith, chairman, president, and chief 
executive office of the FDX Corp. provided comprehensive and 
complete testimony on all aspects of H.R. 22. He testified that 
H.R. 22 is the most ``substantial and thoughtful proposal to 
reform the postal laws'' in 25 years. Mr. Smith said that his 
corporation would support the bill provided that no amendments 
undermine the carefully struck balance provided in the 
legislation. During the course of the past months, major 
international postal services, including the USPS are competing 
with private industry. He opined that H.R. 22 provides a 
rational basis for further decisions otherwise more drastic 
measures may be necessary. The Postal Service has tremendous 
competition in mail delivery, however, closing down the Postal 
Service, should it outlive its usefulness, would be difficult 
given the practical and political problems which would be 
apparent--the Nation has long been dependent on the Postal 
Service, in spite of its decline in usefulness. The alternative 
is to permit the Postal Service to compete on a level playing 
field. H.R. 22 creates a structure for the Postal Service to 
perform in the non-competitive, public service mission as well 
as giving it the freedom to offer competitive products. Mr. 
Smith observed that the Postal Service is shifting more of its 
focus to the competitive side yet it is operating under the 
1970 rules which do not address what businesses the Postal 
Service can participate or how the competitive ventures are to 
be financed. The Postal Rate Commission [PRC] does not have the 
tools to enforce rules when the Postal Service makes 
competitive deals. H.R. 22 would clarify this vague area. 
Universal service is necessary where needed but a monopoly 
should not be able to expand its business into all areas to 
lower the cost for the monopoly product; this would breed 
inefficiencies. He said that the postal monopoly has probably 
increased, not decreased, the cost of universal postal service 
in the United States. No one knows the magnitude of those 
costs. H.R. 22 puts in place measures that would begin to 
develop the data and mandates that the Postal Regulatory 
Commission provide an annual estimate of the costs of universal 
service. The quality of universal service would also be 
evaluated and the Postal Service will be required to provide 
the PRC with regular reports on the quality of noncompetitive 
services. H.R. 22 would move the Postal Service toward a more 
efficient, more-effective, universal postal service, better 
tailored to the needs of the Nation. With the introduction of 
price caps for baskets of products, the legislation proposes a 
change in the regulation of noncompetitive products thereby 
addressing a fundamental flaw in the 1970 act. Mr. Smith 
favored the negotiated service agreements provided for in this 
bill, over previous language in the former bill. He stressed 
the importance of the firewall provision that would separate 
the non-competitive and the competitive products. These 
firewalls would provide for reliance on objective factual 
criteria, administered by the PRC, to define competitive and 
non-competitive categories; there would be a separation of 
accounts--both operating and capital assets; the equal cost 
coverage rule would be in place providing a structural 
separation for Postal Service participation in joint ventures 
and non-postal markets; and there would be an end to legal 
privileges favoring the Postal Service in the provision of 
competitive products. The FDX Corp. could not support the 
legislation without the firewall in place or if the bill were 
to be amended to change the integrity of the provisions. Should 
H.R. 22 be amended to change this provision, Mr. Smith stated 
that FDX would join those who believe that the Postal Service 
should be confined to noncompetitive markets and dismantled as 
those markets shrink. He further said that FDX was ready, 
willing and able to compete with the Postal Service on equal 
terms, and if H.R. 22 was not weakened, FDX could accept the 
commercial freedom granted the Service to participate in 
competitive postal products. However, he said that the language 
giving the PRC the standard to re-set rates was not 
sufficiently clear, so he proposed a technical amendment on 
this issue. He strongly endorsed the provision applying the 
same laws to the Postal Service in its participation in the 
competitive market to the same degree as is applicable to the 
private sector, i.e., antitrust law, tort law, unfair 
competition law, and zoning law. The witness urged that the 
mailbox rule be amended to permit equal access to all 
competitive products. He also urged that the Postal Service pay 
vehicle license fees based on the overall proportion of 
competitive products delivered by its vehicular fleet in a 
given State. He testified that customs laws are the single 
largest impediment to the development of international trade. 
Regarding competitive products in foreign trade, H.R. 22 
provides that the Postal Service may not take advantage of 
discriminatory foreign customs procedures designed exclusively 
for postal shipments. Implementation is thereby deferred for 5 
years. Mr. Smith suggested that the provision should be amended 
to read that the Postal Service should not be allowed to take 
advantage of the grace period to develop new international 
products and services that take advantage of these 
discriminatory procedures. Simply, the grace period provisions 
should apply to existing international postal services. The 
witness stressed that there must not only be equal application 
of the laws to the Postal Service and the private sector, but 
they must also be equally administered. In this area, H.R. 22 
divests the Service's authority to issue regulation 
administering postal monopoly; this would go far in improving 
relationship between the Postal Service and the private sector. 
The legislation provides an important provision prohibiting the 
Postal Service from competing in areas that it regulates, or 
regulating areas in which it competes. Mr. Smith proposed that 
the parameters of postal monopoly be narrowed, as is being done 
in progressive industrialized countries, to enhance further 
competition in delivering letter mail, while still protecting 
much of the Postal Service's monopoly; he submitted some 
proposals on this issue. Regarding the provision of a private 
law corporation, FDX supports the provision though other 
entities are skeptical of the Postal Service entering non-
traditional businesses. Mr. Smith observes that the Postal 
Service has already experimented with non-traditional postal 
products, joint ventures, and non-postal products. Unless 
Congress stops this direction, it is important that these 
activities be under a separate corporate structure. 
Furthermore, Congress can decide after a period of time if the 
Postal Service can or should operate like a private company or 
whether it should be divested of such activities. Mr. Smith 
cautioned that the corporation should be placed under the 
restrictions of the Competitive Products Fund and the equal 
cost coverage rule. By the same token, should the Postal 
Service place assets in the corporation, these assets must be 
evaluated independently and the fund should receive payment in 
the form of stocks or bonds issued by the corporation. The 
pricing of transaction between the Postal Service and the 
corporation should be subject to the scrutiny of the Postal 
Regulatory Commission. The assets of the corporation do not 
belong to the Postal Service but are assets of the people of 
the Nation, Mr. Smith said. He suggested that rules should be 
made to ensure that the corporation is motivated to act like a 
profit-oriented company, and barring the Postal Service from 
shifting monopoly payments/rents to the corporation.
    He also suggested that Congress should provide for 
comprehensive examination of the corporation's operations, 
including evaluation by the Department of the Treasury, 
Department of Justice and the Postal Regulatory Commission. 
H.R. 22 would submit international mail to the same regulatory 
oversight as domestic mail and would vest authority for 
international postal policy in the Department of State to set 
pro-competitive objectives--FDX supports these provisions. FDX 
agreed with the Postal Service that Postal Service reform 
should be quick and that most reforms can take effect when 
baseline rates are effective and the Competitive Products Fund 
is established. A baseline case is necessary for international 
rates as these rates have never been reviewed by the PRC, 
though it may not be necessary for other rates depending on 
whether realignment cases are allowed.
    Mr. James P. Kelly, chairman and CEO of the United Parcel 
Service [UPS] offered testimony on behalf of this company which 
was founded in 1907. It is the world's largest express carrier 
and package delivery company, serving more than 200 nations and 
territories worldwide. It employs about 330,000 people. Mr. 
Kelly stated that H.R. 22 would create a greater danger of the 
Postal Service abusing its monopoly powers. He stated that 
presently the Postal Service is a hybrid whereby it does not 
have the same controls as a government agency, nor the same 
discipline and obligation of a private business. The Postal 
Service enjoys exemptions from taxes, licensing requirements 
and zoning. He stated that this has resulted in the Postal 
Service abandoning its focus of providing superior first class 
service to the Nation in an effort to accumulate market share 
from private sector competitors under the guise of protecting 
universal service in a changing marketplace. The Postal Service 
has gone into markets not anticipated by Congress at the time 
of postal reorganization in 1970. The Service has engaged in 
direct predatory competition by utilizing revenues from its 
monopoly customers and taking advantage of its government 
status to under-price its competitors. UPS stated that absent 
the demise of the monopoly, Congress should strengthen the 
Postal Rate Commission to increase the Postal Service's 
accountability. The PRC has no jurisdiction in ratemaking in 
the international market and should be given that power. The 
PRC should be enabled to encourage cost efficiency and given 
authority over the Service's revenue requirement. These reforms 
would help to simplify and streamline the rate-setting process.
    Jerry Cerasale testified on behalf of the Mailers Coalition 
for Postal Reform. This organization was created to present a 
uniform voice for business mailers on the issues presented in 
postal reform. The members are Advertising Mail Marketing 
Association, American Express, Direct Marketing Association, 
Magazine Publishers of America, Mail Order Association of 
America, and Parcel Shippers Association. These members 
represent mailers who use all classes of mail and also use the 
services of Postal Service competitors. They all want a 
financially functional Postal Service in the next century. 
Though the Nation has experienced a tremendous economic boom, 
first-class mail has lost its market share due to electronic 
technology supplanting mail volume. Mr. Cerasale said that 
though H.R. 22 does not guarantee the survival of the Postal 
Service well into the 21st century, it does provide the tools 
to improve and maintain productivity, and provide the products 
that are needed in the marketplace. The legislation separates 
classes of mail into competitive and non-competitive categories 
and provides rate flexibility. The Coalition agrees with the 
bill's provision to protect those who must use the monopoly 
products by indexing the rates in the non-competitive category. 
Mr. Cerasale supported the Postal Service's suggested amendment 
that it should be able to initiate a request to the Postal 
Regulatory Commission [PRC] to change a product classification 
from non-competitive to competitive. However, the Coalition 
firmly stated that once the change had been made, the Service 
should not be able to change the product back to non-
competitive. The Coalition agrees with the rate baskets 
proposed for noncompetitive products but suggests that 
international mail should be competitive and should be removed 
from the formula. Regarding pricing, the Coalition agrees with 
the provisions of the bill that the PRC should establish base 
line rates without provisions for contingency and prior years' 
losses. But, if the Commission has issued a recommended 
decision in an omnibus rate case within a year of the effective 
date of the bill, that decision, as implemented by the 
Governors, should be the base line rates. The Coalition 
disagrees with the provisions of H.R. 22 that the minimum mark-
up for competitive classes of mail must equal the average mark-
up for all postal products because this would be too 
restrictive and could increase costs as much as 10 percent for 
competitive classes of mail. The minimum contribution for these 
classes should be set by the PRC and should be calculated on a 
revenue-weighted basis for all contributions of the competitive 
subclasses. The minimum contribution should sunset after 5 
years, as this would give the Postal Service and its 
competitors time to adjust to the new marketplace. The 
Coalition agreed with the use of indexing to establish rates 
for non-competitive products. Mr. Cerasale said that the 
productivity factor should be linked to the CPI; it is needed 
as an incentive to the Postal Service to contain costs. Failure 
to improve productivity would compromise the Postal Service's 
ability to meet its mandates of universal service and 
reasonable rates. Mr. Cerasale testified that the pricing 
provisions outlined in the legislation are too rigid. The 
application of rate bands around the index reduces flexibility 
needed by the Service. Also, the Coalition objected to the 
Postal Service amendment to permit ``banking'' for 5 years any 
unused percentage increase allowed under the index; at the most 
it should not be more than 1 year. One of the objectives of 
postal reform was to have predictability and manageable annual 
rate increases. The Coalition supports the filing of an exigent 
rate case with the Postal Regulatory Commission when the 
Service faces a severe financial crisis. Similarly, if there 
are circumstances beyond the control of the Postal Service 
which result in cost increases, the Service should be able to 
petition the PRC for a waiver of the index. In the case of a 
particular subclass which may fail to recover costs, the Postal 
Service should have the authority to petition the PRC for a 
waiver of the index for that subclass on a one-time, one-year 
adjustment. The Postal Service should have the ability to test 
new products and be allowed to fail if not successful. Unless 
it is able to do so, the Postal Service will not be able to 
market new products and will be limited in its adjustment to 
the information age. Negotiated service agreements [NSA] should 
be implemented immediately after the Postal Service provides 
public notice of the agreement and the terms. This would enable 
any party that believes it can meet the terms of the agreement 
to be eligible for NSA. Should a party be denied it may 
complain to the PRC, which will have 90 days to render a final 
decision subject to judicial review.
    Neal Denton testified in his capacity as executive director 
of the Alliance of Nonprofit Mailers [AMN] which represents 
more than 200 nonprofit organizations, including their 
affiliates, chapters and vendors. The membership includes 
religious, charitable, educational, scientific and 
philanthropic organizations. Mr. Denton expressed that the 
postal rate hike in January 1999 was unfair, unnecessary and 
unlawful. Whereas the first-class stamp rate rose by 1 cent, 
the nonprofit standard A mail rose by 3 cents. And, nonprofit 
educational publications with no advertising often pays higher 
postal rates than commercial publications of identical size, 
shape and weight. The Postal Service is supposed to break even. 
However, it received a $550 million surplus in fiscal year 
1998. The ANM has been adversely affected by Postal Service 
actions and is therefore leery of giving USPS more freedom to 
set prices without rigorous oversight of the PRC. The ANM 
testified that H.R. 22 creates a fair system of rate increase 
of ``caps'' and ``bands'' that would protect nonprofits from 
being singled out and would protect mailers from piling on 
increases. The bill offers an important protection preventing 
the Postal Service from attributing more costs to nonprofit 
mail than to commercial rate with identical characteristics. It 
also provides safeguards to prevent tampering with preferred 
rates in the future. They are pleased with the inclusion of 
``requester'' language that would permit greater dissemination 
of educational material and thereby for greater contribution to 
USPS institutional costs. They also expressed appreciation for 
the retention of revenue forgone, or authorization for annual 
appropriation to the Postal Service for preferred rate mail, 
free mail for the blind, and voter registration. They expressed 
surprise at the Postal Service proposed amendments, which would 
have weakened H.R. 22, such as banking rate increases, the 
curtailing of the productivity factor, the retaining of rates 
that are in effect 8 months after passage of the legislation to 
become the baseline rate, the possible secret dealmaking in 
negotiated service contracts which could occur if the Postal 
Service amendments were adopted, the pricing of competitive 
products by permitting the markup of overhead contribution from 
competitive products, and concern about the Private Law Corp. 
However, the Alliance was interested in the amendment creating 
a separate basket for preferred rate products, though massing 
nonprofit standard A and nonprofit periodicals in the same 
basket could lead to serious, unanticipated problems. The PRC 
proposed amendments were also of interest to the ANM. 
Worksharing discounts as it relates to negotiated service 
agreements and a clear definition of the word ``product'' would 
enhance the legislation. The ANM encouraged providing each 
Governor with a staff member. They brought to the attention of 
the subcommittee that some Postal Inspectors have bullied and 
aggressively attempted to bankrupt community-based nonprofit 
organizations or have tried to drive nonprofit mailings out of 
that mailstream.
    Robert ``Kam'' Kamerschen, chairman of the Board of ADVO, a 
shared mail advertising distributor for more than 23,00 retail 
and service oriented businesses, testified on behalf of the 
Saturation Mailers Coalition, an organization of more than 40 
print advertising companies that include weekly community 
newspapers, shopper publications, enveloped coupon distributors 
and shared mailers. Mr. Kamerschen said that traditional mail 
flow is dwindling but the popularity of print advertising is 
growing. Though not everyone reads the newspaper or has access 
to a computer, everyone receives mail, and herein lies the 
strength of mailed advertising. This presents the Postal 
Service an opportunity to grow revenue from saturation mail, 
which can happen only if it is priced competitively. The goal 
of modernizing the Postal Service and bringing predictability 
and stability to pricing is important to the companies 
participating in mailed advertising. There is competition 
between mailed advertising, newspaper advertising and private 
delivery companies, which has stimulated the economy over the 
past 20 years. It has resulted in innovation, efficiency, new 
products and services. Competition has made pricing flexibility 
crucial to attracting and keeping saturation mail viable; this 
class of mail has the highest cost coverage of any subclass in 
the system. The inability of the Postal Service to lower the 
cost of this class of mail endangers its ability to grow or 
maintain current volumes. This, in turn could endanger the 
Postal Service and cause it to lose its only growth area. The 
price-cap, proposed in H.R. 22, keeps in place the unfair 
allocation of institutional costs, which could trigger the 
demise of this class of mail. The witness proposed that 
negotiated service language would give the Postal Service the 
pricing freedom necessary to act in a business environment. The 
language prevents attrition of contribution to overhead and 
permits customers to save by worksharing or increased volume; 
NSAs are a necessary tool in doing business. The biggest 
challenge to the Postal Service, according to Mr. Kamerschen, 
is retaining its core volumes, or replenishing lost volumes in 
an age where there is technological diversion of mail and 
competition in hard copy delivery. The Postal Service must have 
flexibility to respond to marketplace changes. The witness 
suggested that pricing flexibility be available at the basket 
level, not the subclass level. He proposed some changes to H.R. 
22 to improve the legislation, such as: 1) Negotiated Service 
Agreements as long as they produce an equal or greater total 
monetary contribution to institutional costs; 2) pricing 
flexibility within the noncompetitive category baskets, except 
for single-piece first class mail as proposed by the Postal 
Service and 3) elimination of the prohibition on transferring 
products covered by the postal monopoly into the competitive 
category. There has already been some shift of mail from the 
Postal Service to its ADVO's own private delivery operation in 
the Cincinnati market, translating into a loss for the Postal 
Service of 18 million pieces and more than $2 million in 
postage. Additionally, Postal Service has lost more than 44 
million pieces resulting in $8 million in lost revenue in the 
Philadelphia and Boston markets. Competition is healthy and 
should be encouraged and not stifled.
    John T. Estes, executive director of the Main Street 
Coalition testified along with other colleagues in the 
Coalition on behalf of small mailers representing about 40 
percent of Postal Service's annual mail volume. Mr. Estes said 
that the Postal Service should first be a public service that 
offers fair and affordable rates, provides universal service, 
and commits to frequent and timely delivery. It should be an 
agency that is dedicated to productivity, efficiency and 
stability. The Coalition is against any bias favoring large 
mailers. Basically they do not believe that a case has been 
made for drastic change to the Postal Service though they do 
not question that efficiency and effectiveness of the Postal 
Service should be accomplished. They agreed that the Postal 
Regulatory Commission with subpoena authority is long overdue 
and relaxing restriction on Postal Service banking procedures 
would give the Service more responsive financial management. 
The testimony indicated that the Directors of the Postal 
Service should have a variety of skills and experience. The 
witness opined that price-cap ratemaking may not be suitable 
for the Postal Service, because there is no close examination 
of costs and there is potential to escalate prices rather than 
controlling it. Furthermore, it could lead to service reduction 
rather than cost reduction. The Coalition suggested that there 
is no justification to divide first-class mail into two 
baskets. The witness testified that permitting market test up 
to $10 million and in some cases $100 million is unwise. The 
organization was totally opposed to Negotiated Service 
Agreements stating that the Postal Service being a public 
service should provide delivery services equally for the 
benefit of all mailers--equal rates for equal service. The 
organization also opposed the establishment of the USPS Corp. 
The Coalition advocates improvement of the Postal Service but 
not necessarily reform.
    John Sturm, president and chief executive officer of the 
Newspaper Association of America [NAA], representing about 
1,700 newspapers, mostly daily papers and some weekly papers, 
testified generally about the same concerns espoused by the 
Main Street Coalition and included some other points. He said 
that the Postal Service is important to newspapers and that 
newspapers receive most of their revenues through the mail. He 
said that though newspapers are a large mailing customer, the 
Postal Service views them as competitors. The USPS has targeted 
newspaper-advertising revenue to direct mail advertising. The 
NAA believes that the Postal Service should remain a public 
service and should improve its core mission, providing 
universal mail service at non-discriminatory rates. NAA would 
like to see the office of the Inspector General strengthened 
and supports the improvement of contracting, transportation, 
and law enforcement and labor issues. NAA has concern that a 
government agency with a monopoly would be allowed to compete 
with the private sector; it opined that the government should 
offer service only when the market fails or if the private 
sector cannot or will not provide the service. The Postal 
Service should not be allowed to have pricing flexibility, as 
this would give the Service the ability to discriminate in 
favor of large mailers. The Postal Service should not offer 
contract rates or volume discounts. Also, the USPS should not 
execute market tests, which could move business from the 
private sector to a government agency. NAA is against the 
application of the price cap regime to a government entity. 
This method of ratemaking would be best served in an entity 
that has shareholders. Finally, the NAA strongly opposes a 
separate private law corporation unless it was clearly a 
private entity with no attachments to the Postal Service.
    Lee Cassidy testified on behalf of the National Federation 
on Nonprofits [NFN] which is a 17 year old coalition of more 
than 300 charities, religious groups, colleges, universities 
and their alumni associations, museums and other nonprofit 
organization which use direct mail for fundraising and 
communicating. To achieve their mission NFN said it is critical 
to have a strong, efficient Postal Service. Affordable 
nonprofit postage rates are crucial as well. NFN is a member of 
the Main Street Coalition for Postal Fairness, and though they 
do not agree on all points, they are generally together on 
major legislative issues. The NFN expressed that H.R. 22 may 
represent more modernization than some organizations may be 
able to handle. NFN is pleased with the ``requestor'' rate 
provision and supports giving the Postal Regulatory Commission 
additional powers, including subpoena powers. They would like 
to see the PRC as the final arbiter for deciding what is a 
nonprofit mailing and what is not in dispute--as opposed to the 
current procedure that gives the Postal Service the authority 
to determine the mailability of the piece. They support the 
H.R. 22 language to put nonprofit and commercial mail in 
pricing baskets based on the mail class. The history of 
nonprofit rates has not been predictable nor have they been 
affordable. They have had 23 rate increases since 1971 and one 
rate rollback. In the recent postal rate case, nonprofit rates 
for standard A mail increased five times the percent increased 
by commercial mailers, and in last rate case, nonprofit rates 
were, in some cases, higher than commercial rates. Nonprofit 
organizations need small increases and predictable rates. NFN 
asked that legislation be enacted prior to enactment of H.R. 22 
to roll back nonprofit rates to the same percentage increase 
assigned to commercial mailers for equivalent mail, consistent 
with the optional pricing method for nonprofit rates that are 
included in H.R. 22.
    David F. Stover testified on behalf of the 58-year Greeting 
Card Association [GCA] whose membership consists of publishers 
of 7 billion greeting cards that are exchanged in this country 
and about 5 billion are sent through the mail as single-piece 
first class letter. GCA believes that a healthy Postal Service 
is vital to the industry and to customers who use the mail for 
personal communication. GCA testified that the changes it 
supports in H.R. 22 are a strengthened Postal Regulatory 
Commission with powers to gather information, a mandate for 
independent study for labor relations, a streamlined, more 
flexible financial management process for the Postal Service 
and certain qualification for the Directors of USPS. They are 
particularly supportive of the measure to protect mailers who 
utilize the monopoly classes of mail who have no alternatives. 
GCA submitted that it would be detrimental to use the 
``deregulation-plus-price-cap approach.'' Splitting up the 
first class market into bulk and single piece letters could 
invite discrimination by the Postal Service who may concentrate 
on cost and revenue issues. The GCA opposed the amendments 
proposed by the Postal Service, as they would harm the citizen 
mailer.
    Guy H. Wendler, testified on behalf of the American 
Business Press [ABP], a founding member of the Main Street 
Coalition. ABP is an association of the country's leading 
business-to-business professional publications and has been 
active in postal matters and has promoted and protected the 
interests of the smaller circulation periodicals. The 
membership relies on the Postal Service to deliver its 
publications. Mr. Wendler testified that ABP members have been 
the target of proposed USPS changes in periodic rate design, 
for example the elimination of the flat, unzoned editorial rate 
that has been in existence since the founding of the Nation in 
order to give readers equal access to information. In the 1995 
reclassification request the Postal Service proposed that a few 
hundred of the largest periodical publications would receive 
double-digit decreases while 20,000 smaller publications would 
be hit with increases of 20 percent or more. The ABP raised 
concerns regarding what the Postal Service might do with 
flexibility and authority that H.R. 22 would permit.
    Charmaine Fennie, chair of the Coalition Against Unfair 
USPS Competition, testified for the 12,000 privately owned 
small businesses. These business include 10,000 mail and 
packaging stores operating under franchises and independent 
names, including Mail Boxes Etc., Parcel Plus, PostNew, Pak 
Mail, etc., and 2,000 independently owned office supply stores. 
The Coalition recommends some changes to H.R. 22 before 
supporting it. These changes include elimination of the Private 
Law Corp. [PLC] because neither the Postal Service nor any 
other advocate has brought up a compelling case for authorizing 
USPS competition with the private sector. There is no 
obligation for the PLC to provide financial support for the 
USPS. The Coalition asked for an amendment that would prohibit 
the Postal Service from engaging in competition against small 
businesses such as in packaging services. They endorsed the 
section of H.R. 22 dealing with the dual regulatory/competitive 
issue. The Coalition also asked for relief from the proposed 
CMRA regulations.
    The executive vice president and CEO of the National 
Newspaper Association, Kenneth B. Allen, testified on behalf of 
the organization that was established in 1885 and has a 
membership of almost 4,000 daily and weekly newspapers. NNA 
members utilize first class, and periodicals category--both 
regular rate and within county periodicals mail. As a member of 
the Coalition, the NNA reiterated similar testimony and 
included general statements regarding the need for a level 
playing field so the USPS does not pick winners and losers 
among mailers; the need for adequate oversight but not 
overregulation; adequate public participation and public notice 
to ensure fairness; work sharing discounts based on costs 
avoided by the Postal Service. It was not apparent to the NNA 
whether work-sharing discounts would be available in a price 
cap regime and whether the USPS would engage in favored pricing 
beneath the cap. The NNA opined that the USPS serves the public 
best when it delivers existing mail rather than focusing on 
generating more mail. They are not comfortable with negotiated 
service agreements because of the element of secrecy and NNA 
questioned the justification of a Federal agency participating 
in private endeavors. They expressed support for the division 
between competitive and noncompetitive mail if the firewall was 
firmly established. Meanwhile, there was a concern after study 
of the Postal Service amendments that the captive mail could 
cross-subsidize competitive mail.
    Michael Dzvonik, chairman of the Mail Advertising Service 
Association International [MASA], the trade association for the 
mailing services industry testified on behalf of the 680 member 
organization. The companies in the membership are comprised of 
lettershops, data processing companies, mailhouses, direct mail 
agencies, fulfillment operations and suppliers to these 
businesses. Their role is to prepare mail that is delivered by 
the Postal Service, and thus, they consider themselves a 
partner with the Postal Service. MASA favors postal reform and 
supports the regulatory reform in H.R. 22 specifically 
flexibility in pricing competitive and non-competitive products 
and proposing new and experimental products and negotiated 
service agreements for competitive products. MASA does not 
support NSA for non-competitive monopoly products if piece 
volume is one of the price determinants nor the concept of the 
private law corporation, for fear that the Postal Service could 
enter into direct competition with businesses that already 
supply much of the mail the Postal Service delivers.
    Several entities submitted written remarks regarding H.R. 
22. They are:
    The Honorable Duncan Hunter; Val-Pack Direct Marketing 
Systems, Inc.; Willmar Associates International, Inc.; Major 
Mailers Association; Advertising Mail Marketing Association; 
Parcel Shippers Association; Pitney Bowes; and Patton Boggs.
    c. Legislative status.--Chairman John McHugh introduced 
H.R. 22 on January 6, 1999. It was referred to the Committee on 
Government Reform, and additionally to the Committee on the 
Judiciary, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as 
fall within the jurisdiction of the concerned committee. The 
measure was referred to the Subcommittee on the Postal Service 
on January 25, 1999, and hearings were conducted on February 11 
and March 4, 1999. The subcommittee considered the bill on 
April 29, 1999 and it was forwarded to the Committee on 
Government Reform in the nature of a substitute by voice vote. 
On September 24, 1999 the Committee on the Judiciary referred 
the measure to the Subcommittee on Crime.
    d. Hearings.--Hearings were conducted on H.R. 22 on 
February 11 and March 4, 1999.
2. H.R. 100, a bill to establish designation for U.S. Postal Service 
        buildings in Philadelphia, PA.
    a. Report number and date.--None.
    b. Summary of measure.--The legislation names three post 
offices located in Philadelphia, PA. The building located at 
2601 North 16th Street, Philadelphia will be designated as the 
``Roxanne H. Jones Post Office Building.'' In 1984, Roxanne H. 
Jones was the first African-American woman elected to the State 
Senate in Pennsylvania. She was reelected for two additional 
terms prior to her death in 1997. During her tenure she helped 
pass legislation that aided people on welfare to break the 
cycle of welfare dependency by supporting legislation providing 
job training opportunities, introducing and passing legislation 
to expand affordable housing and to obtain State funding for 
drug treatment centers for addicted mothers and their children. 
Ms. Jones was a former welfare recipient. The bill also 
designates the post office located at 5300 West Jefferson 
Street in Philadelphia, as the ``Freeman Hankins Post Office 
Building.'' Freeman Hankins was elected to the Pennsylvania 
Senate in 1967 and served until his retirement in 1989. Senator 
Hankins served on the boards of the Pennsylvania Higher 
Development Agency, Lincoln University and the Mercy Douglas 
Corp. Additionally, H.R. 100 provides that the U.S. Postal 
Service building located at 2037 Chestnut Street in 
Philadelphia be designated as the ``Max Weiner Post Office 
Building.'' Mr. Weiner, a steadfast advocate for consumer 
rights and protections, was the founder of the Consumers 
Education and Protective Association, and the Independent 
Consumer Party. He was effective in helping many Pennsylvanians 
to keep their homes, heat their homes, protect their privacy 
and have access to public transportation.
    c. Legislative status.--The legislation was introduced by 
Representative Fattah on January 6, 1999, and supported by all 
members of the House delegation of the State of Pennsylvania. 
The bill was referred to the House Committee on Government 
Reform the same day and then to the Subcommittee on the Postal 
Service on January 20, 1999. The subcommittee considered and 
marked-up the bill on April 29, 1999, forwarding it to full 
committee by voice vote. The committee on Government Reform 
considered and marked-up H.R. 100 on May 19, 1999, and ordered 
it to be reported by voice vote. The measure was then brought 
before the House under suspension of the rules and was 
considered as unfinished business. The motion to suspend the 
rules and pass the bill was agreed to by a 368-0 vote (Roll no. 
146). The legislation was received in the Senate, read twice 
and referred to the Committee on Governmental Affairs on May 
27, 1999. It was referred to the Subcommittee on International 
Security on June 21, 1999. On November 3, 1999, the Committee 
on Governmental Affairs ordered the bill to be reported 
favorably. It was then reported to the Senate without amendment 
or written report on November 4, 1999 and placed the Senate 
Legislative Calendar No. 391 under general orders. The bill 
passed the Senate by unanimous consent on November 19, 1999, 
and was cleared for the White House. It was signed by the 
President on November 29, 1999, and became Public Law No. 106-
111.
    d. Hearings.--No hearings were held on this measure.
3. H.R. 170, a bill to require certain notices in any mailing using a 
        game of chance for the promotion of a product or service, and 
        for other purposes.
    a. Report number and date.--House Report No. 106-431, 
November 1, 1999.
    b. Summary of measure.--As introduced, the Honesty in 
Sweepstakes Act of 1999 amends postal laws to prohibit delivery 
of any mail constituting a solicitation or offer in connection 
with a sales promotion for a product or service that uses any 
game of chance offering anything of value (including any 
sweepstakes) or anything resembling a negotiable instrument, 
unless specified notices in a specified font are printed on the 
envelope and enclosed material. The bill specifies that nothing 
in the act shall preempt any State law that regulated 
advertising or sales of goods and services associated with any 
game of chance. Following in-depth subcommittee hearings, the 
original legislation was amended by a substitute agreed to by 
the Subcommittee on the Postal Service and the full committee. 
It provides that H.R. 170 require sweepstakes mailings to 
clearly and conspicuously display a statement in the mailing, 
including the rules and order form, that no purchase is 
necessary to enter the contest; a statement that a purchase 
would not improve the recipient's chances of winning; that all 
terms and conditions of the sweepstakes promotion, including 
the rules and entry procedures be in language that is easy to 
find, read and understand; the name of the sponsor or mailer of 
the promotion and the principal place of business or other 
contact address of the sponsor or mailer and the rules; rules 
that clearly state the estimated odds of winning each prize, 
the quantity, estimated retail value and nature of each prize, 
and the schedule of any payments made over time. Furthermore, 
the legislation would prohibit sweepstakes mailings from making 
certain statements, including statements that an entry must be 
accompanied by an order or payment for a product previously 
ordered or that an individual is a winner of a prize unless 
that individual actually has won a prize.
    H.R. 170, as amended imposes requirements on skill contest 
mailings. These mailings would be required to follow provisions 
on rules and disclosures of the sponsor similar to sweepstakes 
promotions and must also disclose the number of rounds, the 
cost to enter each round, whether subsequent rounds will be 
more difficult, and the maximum cost to enter all rounds. 
Additionally, they must also disclose the percentage of 
entrants who may solve the skill contest correctly and the date 
the winner will be determined as well as the quantity and 
estimated value of each prize. The legislation imposes new 
Federal standards on facsimile checks sent in any mailing. 
These checks must include a statement on the check itself that 
it is non-negotiable and has no cash value. The legislation 
strengthens existing law on government look-alike mailings. 
Such mailings often come in a brown envelope and may use terms 
that imply a connection with the Federal Government, but they 
are actually solicitations by a private entity for a product or 
service. The amended bill prohibits mailings that imply a 
connection to, approval or endorsement by the Federal 
Government through the misleading use of a seal, insignia, 
reference to the Postmaster General, citation to a Federal 
statute, trade or brand name, or any other term or symbol, 
unless the mailings carry two disclaimers already provided for 
in existing law. The bill prohibits mailings that contain any 
false representation implying that Federal Government benefits 
or services will be affected by any purchase or non-purchase of 
a product. Any mailing that offers to provide any product or 
service provided by the Federal Government without cost must 
contain a notice to that effect. Anyone who uses the mail for 
sweepstakes or skill contests would be required to adopt 
reasonable practices and procedures to prevent the mailing of 
these materials to any person, who by virtue of a written 
request, including requests made by a conservator, guardian, 
individual with power of attorney or a State attorney general, 
states their intent not to receive such mailings. Records of 
such requests must be kept on file for 5 years. The bill 
requires companies sending sweepstakes or skill contest to 
establish a notification system, which would allow consumers to 
call a toll-free number to be removed from mailing lists of 
such companies. The name must be removed from such mailing 
lists within 60 days. The bill establishes a private right of 
action in State court for citizens who receive a follow-up 
mailing despite having requested removal from a mailer's lists. 
Mailers or promoters will have an affirmative defense against 
such actions if they have established and implemented, with due 
care, reasonable practices and procedures to effectively 
prevent mailings in violation of the section allowing names to 
be removed.
    Presently, the U.S. Postal Service has inadequate authority 
to investigate, penalize, and stop deceptive mailing. This 
legislation grants the Postal Service subpoena authority, 
nationwide stop mail authority, and the ability to impose civil 
penalties and increases the civil penalties that the Postal 
Service may impose. Nothing in the legislation would preempt 
State or local law that imposes more restrictive requirements, 
regulations, damages, costs or penalties. Most of the 
provisions of H.R. 170 would take effect 120 days after the 
date of enactment.
    c. Legislative status.--H.R. 170 was introduced by 
Representative LoBiondo on January 6, 1999, and referred to the 
House Committee on Government Reform. On January 20, 1999, the 
legislation was referred to the Subcommittee on the Postal 
Service. It was considered by the subcommittee on September 30, 
1999, and reported as amended in the nature of a substitute by 
voice vote. On November 1, 1999, the Committee on Government 
Reform reported it as amended and issued House Report No. 106-
431. It was placed on the Union Calendar No. 251 on November 1, 
1999, and considered under suspension of the rules and was 
agreed to by voice vote. H.R. 170 was received in the Senate on 
November 3, 1999.
    d. Hearings.--No hearing was conducted specifically on H.R. 
170. However, aspects of the bill were examined during the 
hearing on sweepstakes and deceptive mailings which was held on 
August 4, 1999.
4. H.R. 197, a bill to designate the facility of the U.S. Postal 
        Service at 410 North 6th Street in Garden City, KS, as the 
        ``Clifford R. Hope Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 197 designates the facility of 
the U.S. Postal Service at 410 North 6th Street in Garden City, 
KS, as the ``Clifford R. Hope Post Office.'' The legislation 
honors former Congressman Clifford R. Hope who represented the 
Seventh Congressional District of Kansas from 1927 to 1957. Mr. 
Hope served as the chairman of the House Committee on 
Agriculture. Many of the policies that he was responsible for 
establishing during his 30-year tenure in Congress are still in 
existence today. Mr. Hope was a strong advocate of the defense 
and the military programs essential to World War II.
    c. Legislative status.--This measure was introduced by 
Representative Moran of Kansas on January 6, 1999 and was 
referred to the House Committee on Government Reform. Each 
member of the House delegation of the State of Kansas 
cosponsored the measure. H.R. 197 was referred to the 
Subcommittee on the Postal Service on January 20, 1999. The 
subcommittee voted on the bill by voice vote on April 29, 1999, 
and forwarded it to full committee. The Committee on Government 
Reform considered the bill on May 19, 1999, and ordered it to 
be reported by voice vote. The House considered H.R. 197 under 
suspension of the rules and the bill was agreed to by voice 
vote. The Senate received the measure on May 27, 1999; it was 
read twice and referred to the Committee on Governmental 
Affairs. On June 21, 1999 it was referred to the Subcommittee 
on International Security. On November 3, 1999, the Committee 
on Governmental Affairs ordered the bill to be reported 
favorably, and on November 4, 1999 the committee referred it to 
the Senate without amendment or written report. H.R. 197 was 
placed on the Senate Legislative Calendar (No. 392) under 
general orders.
    d. Hearings.--There were no hearings on H.R. 197.
5. H.R. 642, a bill to redesignate the Federal building located at 701 
        South Santa Fe Avenue in Compton, CA, and known as the Compton 
        Main Post Office, as the ``Mervyn Malcolm Dymally Post Office 
        Building.''
    a. Report number and date.--None.
    b. Summary of measure.--This legislation redesignates the 
Federal building located at 701 South Santa Fe Avenue in 
Compton, CA, presently known as the Compton Main Post Office, 
as the ``Mervyn Malcolm Dymally Post Office Building.'' The 
legislation honors former Representative Dymally who was born 
and studied in Trinidad prior to coming to the United States at 
the age of 19 to study at Lincoln University in Missouri. He 
graduated with a BA from California State University, Los 
Angeles in 1954, a MA from California State University in 1969 
and a Ph.D. from the U.S. International University in San Diego 
in 1978. Mervyn Dymally was a California State Assemblyman from 
1963 to 1966 and a State Senator from 1967-1975. He was 
Lieutenant Governor of California from 1975 to 1979. Dr. 
Dymally was elected to the 97th Congress and served for five 
succeeding terms. He was a member of the Committee on Post 
Office and Civil Service, the House Foreign Affairs Committee--
chairing its Subcommittee on International Operations, and the 
District of Columbia Committee--chairing--its Subcommittee on 
Judiciary and Education. He was chairman of the Congressional 
Black Caucus from 1987 to 1989.
    c. Legislative status.--H.R. 642 was introduced by 
Representative Millender-McDonald on February 9, 1999; and was 
referred to the House Committee on Government Reform. The 
measure was referred to the Subcommittee on the Postal Service 
on February 23, 1999. Every member of the House delegation of 
the State of California cosponsored the bill. The subcommittee 
forwarded H.R. 642 to the full committee by voice vote on 
August 4, 1999. The committee considered the measure on 
September 30, ordering it to be reported by voice vote. The 
House passed H.R. 642 under unanimous consent on November 18, 
1999. The Senate received the legislation on November 19, 1999, 
where it was read twice and referred to the Committee on 
Governmental Affairs.
    d. Hearings.--No hearings were conducted on this 
legislation.
6. H.R. 643, a bill to redesignate the Federal building located at 
        10301 South Compton Avenue, in Los Angeles, CA, presently known 
        as the Watts Finance Office, as the ``Augustus F. Hawkins Post 
        Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 643 redesignates the Federal 
building located at 10301 South Compton Avenue, in Los Angeles, 
CA, presently known as the Watts Finance Office, as the 
``Augustus F. Hawkins Post Office Building.'' This legislation 
honors former Representative ``Gus'' Hawkins who was born in 
Louisiana but moved to California with his parents when he was 
11 years old in 1918. He earned his AB from the University of 
California in 1931 with a major in economics and completed his 
graduate degree in 1932 from the University of Southern 
California. After working in the real estate business, he was 
elected as a member of the California State Assembly from 1934 
to 1963. Mr. Hawkins was elected to the 88th Congress and to 13 
succeeding Congresses (1963-1991), choosing not to seek 
reelection in the 102d Congress. He was chairman of the 
Committee on House Administration in the 97th and 98th 
Congresses and chairman of the Committee on Education and Labor 
in the 98th through the 101st Congresses. Mr. Hawkins also 
served on the Joint Committee on Printing, and the Joint 
Committee on the Library. Mr. Hawkins served his constituents 
in the Watts area of Los Angeles for 48 years--28 years in the 
State Assembly and 20 in the House of Representatives. He was 
known for the Humphrey-Hawkins Act, a bill to reduce 
unemployment and implement job training and employment.
    c. Legislative status.--H.R. 643 was introduced by 
Representative Millender-McDonald on February 9, 1999 and 
referred to the House Committee on Government Reform the same 
day. It was then referred to the Subcommittee on the Postal 
Service on February 17, 1999. The entire House delegation of 
the State of California cosponsored H.R. 643. The subcommittee 
considered and marked-up the legislation on August 4, 1999 and 
forwarded it to the full committee by voice vote. The committee 
considered and marked-up the bill on September 30, 1999 and 
ordered it to be reported by voice vote. The House under 
suspension of the rules considered H.R. 643 on October 12, 1999 
and the bill passed by voice vote. The Senate received the bill 
on October 13, 1999. It was read twice and referred to the 
Committee on Governmental Affairs and further referred to 
Subcommittee on International Security. The committee reported 
the bill on June 21, 2000, and it was placed on the Senate 
Legislative Calendar No. 612. It passed the Senate by unanimous 
consent on June 23, 2000, and was cleared for the White House. 
The bill was presented to the President on June 27, 2000, and 
the President signed it on July 6, 2000, when it became Public 
Law No. 106-231.
    d. Hearings.--None.
7. H.R. 1251, a bill to designate the U.S. Postal Service building 
        located at 8850 South 700 East, Sandy, UT, as the ``Noal 
        Cushing Bateman Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1251 honors Noal Cushing 
Bateman by naming the U.S. Postal Service building located at 
8850 South 700 East, Sandy, UT after him. Mr. Bateman served in 
the Sandy City Council for 20 years and was mayor for 6 years. 
He also served as head of the local PTA chapter and led a 
successful school construction bond.
    c. Legislative status.--Representative Cook introduced H.R. 
1251 on March 24, 1999. It was referred to the House Committee 
on Government Reform and subsequently referred to the 
Subcommittee on the Postal Service on April 6, 1999. Each 
member of the House delegation of the State of Utah supported 
the bill. The subcommittee considered and marked-up the 
legislation on April 29, 1999, and forwarded it to the full 
committee by voice vote. The committee considered H.R. 1251 on 
May 19, 1999, and ordered it to be reported by voice vote. On 
May 24, 1999, the legislation was brought before the House 
under suspension of the rules and was considered as unfinished 
business. On motion to suspend the rules and pass H.R. 1251 the 
bill was agreed to and passed by a vote of 362-0 (Roll No. 
145). The Senate received the legislation on May 27, 1999. It 
was read twice and referred to the Committee on Governmental 
Affairs. On June 21, 1999, it was referred to the Subcommittee 
on International Security. The Committee on Governmental 
Affairs ordered the bill to be reported favorably and on 
November 4, 1999, the Committee on Governmental Affairs 
reported H.R. 1251 without written report. The legislation was 
placed on the Senate Legislative Calendar (No. 395) under 
general orders. The Senate passed the legislation by unanimous 
consent on November 19, 1999, and it was cleared for the White 
House. A message regarding Senate action was sent to the House 
on November 22, 1999, and on November 30, 1999, the bill was 
presented to the President. The President signed H.R. 1251 on 
December 6, 1999, and it became Public Law No. 106-124.
    d. Hearings.--No hearings were held on this measure.
8. H.R. 1327, a bill to designate the U.S. Postal Service building 
        located at 34480 Highway 101 South in Cloverdale, OR, as the 
        ``Maurine B. Newberger U.S. Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1327 honors Maurine B. 
Neuberger by naming after her the U.S. Postal Service building 
located at 34480 Highway 101 South in Cloverdale, OR. Maurine 
Newberger was born in Cloverdale, OR in 1907. She attended 
public school and completed her education at the Oregon College 
of Education and the University of Oregon. She also attended 
the University of California at Los Angeles. After she married 
Richard Newberger, he won a seat in the Oregon State Senate and 
Maurine won a seat in the Oregon House. The Newbergers were the 
first husband and wife team to serve simultaneously in the 
Oregon Legislature. When Mr. Newberger was elected to the U.S. 
Senate in 1955, Maurine decided not to seek reelection to the 
Oregon House. After Senator Newberger's unexpected death in 
1959, Maurine chose to run for her husband's seat in 1960 and 
won, making her the second woman in the Nation and first and 
only woman so far from Oregon, to serve in the U.S. Senate. She 
made her mark in the Senate by fighting for consumer rights, 
civil rights, the rights of the poor, conservation, campaign 
finance reform and public health. She lead the crusade to put 
warnings on cigarette packages and is credited with coining the 
phrase, ``The Surgeon General has Determined that Smoking may 
be Hazardous to your Health.'' She worked diligently to 
establish a Department of Consumer Affairs and to improve 
packaging and labeling regulations by the Food and Drug 
Administration. She was known as a consensus builder but she 
never backed down from fighting for principles in which she 
believed. Senator Neuberger was the first woman to filibuster 
the Senate, speaking for 4\1/2\. Even while pursuing other 
issues, Senator Maurine Newberger continued to remember her 
home State and was instrumental in preserving Oregon's 
beautiful coastline while, at the same time, working to attract 
tourism and programs to coastal towns, and to reducing rural 
poverty. Senator Neuberger did not seek reelection in 1966. She 
served instead on the President's Consumer Advisory Committee, 
the U.S. Advisory Committee for Arms Control and Disarmament, 
and the President's Commission on the Status of Women. She was 
also a consultant on consumer relations for the FDA, and served 
on the National Boards of Directors for the American Society 
and the American Association for the United Nations. She taught 
American government at Boston University, the Radcliffe 
Institute, and Reed College in Portland, OR.
    c. Legislative status.--Representative Hooley introduced 
H.R. 1327 on March 25, 1999. It was referred to the House 
Committee on Government Reform that day and subsequently 
referred to the Subcommittee on the Postal Service on April 8, 
1999. Each member of the House delegation of the State of 
Oregon cosponsored the bill. On June 24, 1999, the subcommittee 
discharged the legislation and the Committee on Government 
Reform considered the bill and marked it up, ordering it to be 
reported by voice vote. The House considered H.R. 1327 under 
suspension of the rules and on motion the bill was agreed to by 
voice vote. The Senate received H.R. 1327 on June 30, 1999, 
read it twice and referred it to the Committee on Governmental 
Affairs. On June 15, 1999, it was referred to the Subcommittee 
on International Security. On November 3, 1999, the Committee 
on Government Affairs ordered the measure to be reported 
favorably. On November 4, 1999, the committee reported the bill 
to the Senate without written report and it was placed on the 
Senate's Legislative Calendar (No. 396) under general orders. 
The legislation passed the Senate by unanimous consent and was 
cleared for the White House. On November 22, 1999, a message 
was sent to the House regarding the Senate's action. H.R. 1327 
was presented to the President on November 30, 1999, and it was 
signed by him on December 6, 1999, becoming Public Law No. 106-
125.
    d. Hearings.--There were no hearings on H.R. 1327.
9. H.R. 1374, a bill to designate the U.S. Post Office building located 
        at 680 State Highway 130 in Hamilton, NJ, as the ``John K. 
        Rafferty Hamilton Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1374 designates the U.S. Post 
Office building located at 680 State Highway 130 in Hamilton, 
NJ as the ``John K. Rafferty Hamilton Post Office Building.'' 
Mr. Rafferty has served his community of Hamilton for more than 
30 years. He first worked on the Hamilton committee for 6 years 
and then became Hamilton's first full-time mayor, serving 
continuously since 1976. Mr. Rafferty is the recipient of 
numerous awards and recognition, including the Young Men's 
Christian Association Man of the Year award in 1992, the Boy 
Scouts of American Distinguished Citizen Award in 1996, and in 
1997 the New Jersey Conference of Mayors awarded him the Mayor 
of the Year award.
    c. Legislative status.--H.R. 1374 was introduced on April 
4, 1999, by Representative Smith of New Jersey and was referred 
to the House Committee on Government Reform. On September 30, 
1999, the committee considered the measure and ordered it to be 
reported as amended by voice vote. The amendment corrected the 
address. On October 12, 1999, the House considered H.R. 1374 
under suspension of the rules and the motion to suspend the 
rules and pass the bill, as amended, was agreed to by voice 
vote. The Senate received the bill on October 13, 1999. It was 
read twice and referred to the Committee on Government Affairs. 
On November 7, 1999, it was referred to the Subcommittee on 
International Security. The committee ordered the bill to be 
reported on March 23, 2000. The Senate passed the bill by 
unanimous consent and the President signed it on April 13, 
2000, when it became Public Law No. 106-183.
    d. Hearings.--No hearings were conducted on H.R. 1374.
10. H.R. 1377, a bill to designate the facility of the U.S. Postal 
        Service at 13234 South Baltimore Avenue in Chicago, IL, as the 
        ``John J. Buchanan Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1377 designates the facility 
of the U.S. Postal Service at 13234 South Baltimore Avenue in 
Chicago, IL as the ``John J. Buchanan Post Office Building.'' 
This naming honors James Buchanan who served as Alderman of 
Chicago's 10th ward from 1963 to 1971 and again from 1991 to 
April 1999, when he retired. However, he still serves on the 
Board of Directors of the Hegewisch Chamber of Commerce, South 
Chicago YMCA, SouthEast Alcohol and Drug Abuse Center, and 
Trinity Hospital Governing Council. Mr. Buchanan also served as 
a member of the U.S. Navy.
    c. Legislative status.--H.R. 1377 was introduced by 
Representative Weller on April 13, 1999, and referred to the 
House Committee on Government Reform. On April 20 the measure 
was referred to the Subcommittee on the Postal Service. The 
entire House delegation of the State of Illinois cosponsored 
H.R. 1377. The subcommittee considered it on April 29, 1999, 
and marked-up and forwarded to the full committee by voice 
vote. On May 19, 1999 the committee scheduled a mark-up session 
and ordered the bill to be reported by voice vote. The House 
considered H.R. 1377 under suspension of the rules and the 
measure was agreed to by voice vote. The Senate received the 
bill on May 27, 1999. It was read twice and referred to the 
Committee on Governmental Affairs. It was referred to the 
Subcommittee on International Security on June 21, 1999. The 
Committee on Governmental Affairs ordered the bill to be 
reported with an amendment in the nature of a substitute and an 
amendment to the title. H.R. 1377 was placed on the Senate 
Legislative Calendar (No. 397) under general orders on November 
4, 1999. The Senate passed the legislation with an amendment 
and an amendment to the title by unanimous consent. On November 
22, 1999, the Senate sent a message to the House on its 
actions. On May 15, 2000, Mr. Gilman moved that the House 
suspend the rules and agree to the Senate amendments, which 
were agreed to by voice vote. The legislation was cleared for 
the White House the same day and signed by the President on May 
26, 2000, becoming Public Law No. 106-209.
    d. Hearings.--There were no hearings on H.R. 1377.
11. H.R. 2307, a bill to designate the building of the U.S. Postal 
        Service located at 5 Cedar Street in Hopkington, MA, as the 
        ``Thomas J. Brown Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2307 designates the building 
of the U.S. Postal Service located at 5 Cedar Street in 
Hopkinton, MA, as the ``Thomas J. Brown Post Office Building.'' 
The honoree, Thomas Brown, is a past president of the Boston 
Athletic Association and former postmaster of the town of 
Hopkinton, which is the starting point for the Boston Marathon. 
Mr. Brown has been actively involved in the Boston Marathon in 
his capacity as president of the Boston Athletic Association.
    c. Legislative status.--Representative McGovern introduced 
this legislation on June 22, 1999 and it was referred to the 
House Committee on Government Reform. It was referred to the 
Subcommittee on the Postal Service on June 30, 1999. The entire 
House delegation of the State of Massachusetts cosponsored H.R. 
2307. The subcommittee considered and marked-up the bill on 
August 4, 1999, and forwarded it to the full committee by voice 
vote. The committee considered and marked up the legislation on 
September 30, 1999, and ordered it to be reported by voice 
vote. The bill was considered under suspension of the rules on 
the House floor and it was agreed to by voice vote. The Senate 
received the legislation on November 9, 1999. The bill was read 
twice on November 19, 1999 and referred to the Committee on 
Governmental Affairs. H.R. 2307 was referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services on December 2, 1999, and reported by the 
committee on Governmental Affairs on June 21, 2000. The measure 
was placed on the Senate Legislative Calendar No. 615 on the 
same day. It was passed by unanimous consent by the Senate on 
June 23, 2000, and was cleared for the White House. The 
President signed the bill on July 6, 2000; it became Public Law 
No. 106-234.
    d. Hearings.--There were no hearings on H.R. 2307.
12. H.R. 2319, a bill to make the American Battle Monuments Commission 
        and the World War II Memorial Advisory Board eligible to use 
        nonprofit standard mail rates of postage.
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2319 is legislation that is 
needed to help Americans construct a memorial to thank our 
World War II veterans. Public Law 103-32 authorizes the 
construction of a memorial to honor members of the Armed Forces 
who served in World War II and those who supported them 
stateside. The legislation designated the American Battle 
Monuments Commission as the Federal agency charged with 
establishing the memorial, and it created the Presidentially-
appointed World War II Memorial Advisory Board: to promote the 
building of the memorial and encourage the donation of private 
contributions for it. In authorizing the Memorial, Congress 
minimized the Memorial's cost to the taxpayer by requiring the 
Commission and the Board to solicit voluntary contribution as 
the primary source of funds. Congress did not intend these 
government agencies to be ``for profit'' organizations. The 
Internal Revenue Service has ruled that these donations are tax 
deductible. Nevertheless, the U.S. Postal Service has refused 
to allow the Commission or Board access to the reduced postage 
rates that are available to any other nonprofit mailer. The 
Postal Service bases the decision on a technical reading of its 
regulations. The USPS acknowledged that specific legislative 
direction would be needed to correct the problem to clarify 
Public Law 103-32 by stating that the American Battle Monuments 
Commission and the World War II Memorial Advisory Board are 
eligible for nonprofit mail rates in carrying out their 
congressionally-mandated task of raising the necessary 
voluntary contributions. The legislation limits the nonprofit 
rate privilege to only those World War II Memorial fundraising 
activities and dated by the legislation in 1993. The Department 
of Veterans Affairs reports that of the 16.5 million who served 
in the Armed Forces during World War II there are currently 6.3 
million who survive today. By building this memorial the Nation 
will be able to show the survivors the appreciation of a 
grateful Nation. However, if voluntary contributions made 
specifically for the purpose of erecting the memorial are 
diverted for postage, the building of the memorial will be 
further delayed.
    c. Legislative status.--This legislation was introduced by 
the chairman of the Subcommittee on the Postal Service, 
Representative McHugh, on June 23, 1999, and referred to the 
House Committee on Government Reform. On June 30, 1999, the 
legislation was referred to the Subcommittee on the Postal 
Service. The subcommittee considered and marked up H.R. 2319 on 
August 4, 1999, and forwarded to the full committee by voice 
vote. (The provisions of this legislation was attached to H.R. 
2490, the Fiscal Year 2000 Treasury, Postal Service, and 
General Government Appropriation Act which became Public Law 
106-58 on September 30, 1999.)
    d. Hearings.--There were no hearings held on H.R. 2319.
13. H.R. 2357, a bill to designate the U.S. Post Office located at 3675 
        Warrensville Center Road in Shaker Heights, OH, as the ``Louise 
        Stokes Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2357 is a bill to designate 
the U.S. Post Office located at 3675 Warrensville Center Road 
in Shaker Heights, OH, as the ``Louise Stokes Post Office.'' 
This measure honors Louise Cinthy Stone Stokes, the 8th of 11 
children born to Reverend William and Fannie Stone. She married 
Charles Louis Stokes, a laundry worker, and they were parents 
of Louis and Carl. Charles Stokes died when his son Carl was 13 
months and Louis was 2 years old. Louise, now widowed, worked 
as a domestic worker and lived in public housing with her sons 
and her mother. Louise Stokes insisted that her sons get jobs 
at an early age and that they get an education. Louis Stokes 
graduated from Case Western Reserve and Cleveland Marshall Law 
School and Carl Stokes graduated from Marshall Law School. 
Louis served as a civil rights attorney and, in 1968, he became 
the first African-American Congressman from Ohio. That same 
year, Carl became the first African American mayor of a major 
U.S. city; he later became an U.S. Ambassador. Louise Stokes 
was selected Cleveland's Woman of the Year, Ohio Mother of the 
Year, and received numerous awards from religious and civic 
organizations. The guiding principles of Louise Stokes' life 
were the value of hard work, education and religion.
    c. Legislative status.--H.R. 2357 was introduced by 
Representative Traficant on June 24, 1999, and it was referred 
to the House Committee on Government Reform. It was referred to 
the Subcommittee on the Postal Service on July 6, 1999. Each 
member of the House delegation of the State of Ohio cosponsored 
H.R. 2357. The subcommittee considered and marked-up the bill 
on August 4, 1999, and forwarded it to the full committee by 
voice vote. The committee considered and marked up the 
legislation on September 30, 1999. On October 12, 1999, the 
House considered H.R. 2357 under suspension of the rules. The 
bill was agreed to by voice vote. The Senate received the 
legislation on October 13, 1999; it was read twice and referred 
to the Committee on Governmental Affairs. The bill was referred 
to the Subcommittee on International Security on November 7, 
1999. The committee ordered the bill to be reported favorably 
on June 14, 2000, and it was placed on the Senate Legislative 
Calendar No. 616 on June 21, 2000. The Senate passed the bill 
by unanimous consent on June 23, 2000, and it was cleared for 
the White House. The President signed the measure on July 6, 
2000, and it became Public Law No. 106-235.
    d. Hearings.--There were no hearings on H.R. 2357.
14. H.R. 2358, a bill to designate the U.S. Post Office located at 3813 
        Main Street in East Chicago, IN, as the ``Lance Corporal Harold 
        Gomez Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2358 designates the U.S. Post 
Office located at 3813 Main Street in East Chicago, IN, as the 
``Lance Corporal Harold Gomez Post Office.'' Harold Gomez, son 
of Mr. and Mrs. Alfredo Gomez, was born in September 1946 in 
East Chicago, IN. He enlisted in the U.S. Marine Corps in 1965 
and was sent to Vietnam in March 1966 following basic infantry 
training. Corporal Gomez was a fire team leader in a rifle 
company of the Third Marine Division, when, in 1967, a land 
mine explosion in South Vietnam killed him. He received 
numerous awards, including the Purple Heart Medal, Combat 
Action Ribbon, Presidential Unit Citation, National Defense 
Service Medal, Vietnam Service Medal, RVN Military Merit Medal, 
RVN Gallantry Cross Medal, Vietnam Campaign Medal, and the 
Rifle Sharpshooters Badge. Corporal Gomez was posthumously 
awarded the Silver Star Medal for his courageous leadership and 
heroism. He was the first citizen from Northwest Indiana to die 
in the Vietnam War. After his death, Central High School in 
East Chicago, from where Corporal Gomez graduated, named and 
dedicated the library to him and the American GI Forum of the 
United States chartered the Harold Gomez Chapters in East 
Chicago.
    c. Legislative status.--Representative Visclosky introduced 
H.R. 2358 on June 24, 1999, and the bill was referred to the 
House Committee on Government Reform. Each member of the House 
delegation of the State of Indiana cosponsored the bill. It was 
referred to the Subcommittee on the Postal Service on June 30, 
1999. The Committee on Government Reform considered and marked 
up the legislation on September and ordered it to be reported 
by voice vote.
    d. Hearings.--No hearings were conducted on H.R. 2358.
15. H.R. 2460, a bill to designate the U.S. Post Office located at 125 
        Border Avenue West in Wiggins, MS, as the ``Jay Hanna ``Dizzy'' 
        Dean Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2460 designates the U.S. Post 
Office located at 125 Border Avenue West in Wiggins, MS, as the 
``Jay Hanna ``Dizzy'' Dean Post Office.'' Jay Hanna Dean was 
born in January 16, 1911. He made his home at his wife's 
ancestral home in Stone County, MS. ``Dizzy'' Dean loved his 
adopted home and was an ardent supporter of the community of 
Bond, the city of Wiggins, Stone County, and the State of 
Mississippi. ``Dizzy'' Dean had an outstanding record as a 
major league baseball pitcher. He was also a baseball 
telecaster, featuring the major league baseball's ``Game of the 
Week.'' Jay Hanna Dean died on July 17, 1974.
    c. Legislative status.--Representative Taylor introduced 
H.R. 2460 on July 1, 1999 and the bill was referred to the 
House Committee on Government Reform. On August 3, 1999, the 
measure was referred to the Subcommittee on the Postal Service. 
The bill was cosponsored by the entire House delegation from 
the State of Mississippi. The committee considered and marked-
up the legislation on September 30. 1999, and ordered it to be 
reported by voice vote. The House considered the legislation 
under suspension of the rules on October 12, 1999, and agreed 
to pass the bill by voice vote. The Senate received H.R. 2460 
on October 13, 1999, and it was read twice and referred to the 
Committee on Governmental Affairs. On November 7, 1999, the 
legislation was referred to the Subcommittee on International 
Security. The committee ordered the bill to be reported on June 
14, 2000l, and it was placed on the Senate Legislative Calendar 
No. 617 on June 21, 2000. The Senate passed H.R. 2460 by 
unanimous consent on June 23, 2000, when it was cleared for the 
White House. The President signed the bill on July 6, 2000, and 
it became Public Law No. 106-236.
    d. Hearings.--None were held on this legislation.
16. H.R. 2591, a bill to designate the U.S. Post Office located at 713 
        Elm Street in Wakefield, KS, as the ``William H. Avery Post 
        Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2591 designates the U.S. Post 
Office located at 713 Elm Street in Wakefield, KS, as the 
``William H. Avery Post Office.'' William Avery was born the 
son of a farmer and rancher near Wakefield, KS in 1911. After 
graduating from the University of Kansas he returned home to 
raise crops and livestock on his family farm. Mr. Avery was 
elected to the State House of Representatives and served from 
1951 to 1955; he was a member of the Legislative Council from 
1953 to 1955. Mr. Avery won the Republican nomination for the 
U.S. Congress and served in Congress from 1955 to 1965. In 1965 
the people of Kansas elected him to serve one term as the 37th 
Governor of Kansas. Mr. Avery continues to live in Wakefield.
    c. Legislative status.--Representative Moran of Kansas 
introduced H.R. 2591 on July 22, 1999, when it was referred to 
the House Committee on Government Reform. On July 28, 1999, the 
bill was referred to the Subcommittee on the Postal Service. 
All members of the House delegation of the State of Kansas 
supported the measure. The Committee on Government Reform 
considered and marked-up the legislation on September 30, 1999. 
The House considered H.R. 2591 on October 12, 1999, under 
suspension of the rules and the bill was agreed to by voice 
vote. The Senate received the legislation on October 13, 1999. 
It was read twice and referred to the Committee on Governmental 
Affairs. On November 7, 1999, H.R. 2591 was referred to the 
Subcommittee on International Security. The committee ordered 
the bill reported favorably on June 14, 2000, and it was placed 
on the Senate Legislative Calendar No. 618 on June 21, 2000. 
The Senate passed the bill by unanimous consent on June 23, 
2000, and it was cleared for the White House. The President 
signed the bill on July 6, 2000, and it became Public Law No. 
106-237.
    d. Hearings.--None were held on this bill.
17. H.R. 3018, a bill to designate the U.S. Post Office located at 557 
        East Bay Street in Charleston, SC, as the ``Marybelle H. Howe 
        Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3018 as introduced designates 
the U.S. Post Office located at 557 East Bay Street in 
Charleston, SC, as the ``Marybelle H. Howe Post Office.'' 
Marybelle Higgins was born in South Carolina. She graduated 
with a degree in journalism from the University of South 
Carolina in 1937 and married Gedney Howe, who she met there. 
The family settled in Charleston where Marybelle was a 
homemaker, active in the church and in politics. In 1950, she 
was elected president of Church Women United, a biracial group 
that administered to the need of migrant laborers and their 
families on Sea Island--south of Charleston. In the late 1950's 
she worked with others to open Camp Care on John's Island to 
minister to the children of migrant worker--this later became 
known as Rural Mission, Inc. Before her death, the mission 
honored Mrs. Howe by making her the first person to be placed 
on its Honor Roll. Her work for migrant workers was 
instrumental in establishing the South Carolina Commission for 
Farm Workers, which later became a model for Federal assistance 
programs. Mrs. Howe also worked to help African-Americans. She 
was named the founding chairman of the Charleston County 
Commission on Economic Opportunity. She served as a board 
member of the Charleston County Library for 25 years and chair 
of its board of trustees for many years. She also served on the 
Board of Women Visitors of the University of South Carolina for 
several years and was honored by the University for her service 
to her church, community and the University. Marybelle Howe 
pursued her convictions even though they may not have been 
popular. She was a great inspiration to others in addition to 
being a wife, mother, journalist and community leader.
    The legislation was amended to include the provisions of 
H.R. 3016, H.R. 3017 and H.R. 3019. H.R. 3018 now provides that 
the following U.S. Post Offices be named to honor other 
citizens of South Carolina deserving such an honor: (a) Section 
1 of the amendment designates the U.S. Post Office located at 
301 Main Street in Eastover, SC, as the ``Layford R. Johnson 
Post Office,'' (b) Section 2 of the amendment designates the 
U.S. Post Office located at 78 Sycamore Street in Charleston, 
SC, as the ``Richard E. Fields Post Office,'' (c) Section 3 of 
the amendment honors Marybelle Higgins Howe (the original H.R. 
3018), and (d) Section 4 of the bill designates the U.S. Post 
Office located at 4026 Lamar Street in Columbia, SC, as the 
``Mamie G. Floyd Post Office.''
    c. Legislative status.--Representative Clyburn introduced 
H.R. 3018 on October 5, 1999, with the original cosponsorship 
of all members of the House delegation from the State of South 
Carolina. The legislation was referred to the House Committee 
on Government Reform on October 5, 1999, and referred to the 
Subcommittee on the Postal Service on October 8, 1999. The 
subcommittee considered and marked-up the legislation on 
October 21, 1999, amending it and forwarding it to the full 
committee by voice vote in the nature of a substitute. The 
amendment, as proposed by Ranking Member Fattah, included the 
provisions of H.R. 3016, H.R. 3017 and H.R. 3019, which were 
all introduced by Mr. Clyburn on October 5, 1999, and 
cosponsored by the South Carolina delegation to the House. Each 
of these bills was referred to the Subcommittee on the Postal 
Service on October 8, 1999. The subcommittee considered the 
legislation on October 21 and forwarded it to full committee in 
the nature of a substitute by voice vote. On October 28, 1999, 
the committee considered and marked-up the legislation and 
ordered it to be reported in the nature of a substitute by 
voice vote. The legislation was brought to the floor by 
Representative Terry who moved to suspend the rules and pass 
the bill, as amended. At the conclusion of debate, the chair 
put the question on the motion to suspend the rules. Mr. Terry 
objected to the yea-nay vote on the grounds that a quorum was 
not present. Further proceedings on the motion were postponed. 
The point of no quorum was withdrawn. It was considered as 
unfinished business. The motion to suspend the rules and pass 
the bill, as amended, was passed by a vote of 375-0 (Roll no. 
31). The motion to reconsider was laid on the table was agreed 
to without objection. The title of the measure was amended and 
agreed to without objection. The bill was received in the 
Senate on March 9, 2000, and read twice and referred to the 
Committee on Governmental Affairs. It was referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services on April 4, 2000. The Committee on 
Governmental Affairs ordered the bill to be favorably reported 
on June 14, 2000. The committee reported the bill without 
written report on June 21, 2000. The bill was placed on the 
Senate Legislative Calendar No. 620. The Senate passed the bill 
by unanimous consent on June 23, 2000, and it was cleared for 
the White House. On June 26, 2000, a message was sent by the 
Senate to the House. H.R. 3018 was presented to the President 
on June 27, 2000, and it was signed on July 6, 2000, becoming 
Public Law No. 106-239.
    d. Hearings.--None was held on this measure.
18. H.R. 3189, a bill to designate the U.S. Post Office located at 
        14071 Peyton Drive in Chino Hills, CA, as the ``Joseph Ileto 
        Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3189 designates the U.S. Post 
Office located at 14071 Peyton Drive in Chino Hills, CA, as the 
``Joseph Ileto Post Office.'' The legislation honors Joseph 
Santos Ileto, an employee of the U.S. Postal Service, who was 
slain while on duty on August 10, 1999 in a hail of bullets by 
a white supremacist. According to an affidavit filed in Federal 
court, the gunman had just, an hour before shooting Mr. Ileto, 
opened fire at a Jewish community center in Los Angeles, 
wounding five children and employees. While making his rounds 
delivering mail, Mr. Ileto encountered the assassin who, 
according to the affidavit, thought it would be a good idea to 
kill a nonwhite person who was also a government employee. Mr. 
Ileto was the oldest of five children, born and raised in the 
Philippines and named after St. Joseph, the patron saint of the 
worker. He immigrated to the United States when he was 14 years 
old. After completing high school, he studied at East Los 
Angeles College, earning an associate degree in engineering in 
1983. He had two jobs, one to test electronic filters for heart 
pacemakers, and the other was a part time job as a substitute 
mail carrier. He was substituting for a regular letter carrier 
when he was killed at age 39. Mr. Ileto took the postal 
position 2 years ago because he was seeking better pay and an 
outside job. Mr. Ileto was known for his goodness, his good 
humor, his willingness to help and for being reliable. His work 
ethic and reliability won him a special achievement award from 
the Postal Service. He was known to be very competitive and was 
a skilled chess player, having been taught to play the game at 
age 7 by his father.
    c. Legislative status.--Representative Miller of California 
introduced the legislation on November 1, 1999, and it was 
referred to the House Committee on Government Reform. The 
legislation was considered by the House under suspension of the 
rules and was agreed to by voice vote. The Senate received the 
legislation on November 9, 1999. It was read twice and referred 
to the Committee on Governmental Affairs on November 19, 1999. 
On December 2, 1999, the bill was referred to the subcommittee 
on International Security, Proliferation, and Federal Services. 
The committee reported the bill on March 27, 2000, and it was 
placed on the Senate Legislative Calendar No. 475. The Senate 
passed the bill by unanimous consent on April 3, 2000, and it 
was cleared for the White House. The President signed the bill 
on April 14, 2000, and it became Public Law No. 106-184.
    d. Hearings.--No hearing was held on this bill.
19. S. 335, a bill known as the Deceptive Mail Prevention and 
        Enforcement Act.
    a. Report number and date.--Senate Report No.106-102, July 
1, 1999.
    b. Summary of measure.--The Deceptive Mail Prevention and 
Enforcement Act amends Federal law to revise the current 
prohibition against mail solicitations by a nongovernmental 
entity for a product or service, for information, or for the 
contribution of funds or membership fees, which contain a seal, 
insignia, trade or brand name which could reasonably be 
construed as implying any Federal Government connection or 
endorsement. The bill prohibits any matter that contains a 
reference to the Postmaster General, citation to a Federal 
statute, or the name of a Federal agency, department, 
commission, or program. Additionally it prohibits any reference 
to the Postmaster General or a citation to a Federal statute 
that misrepresents either the identity of the mailer or the 
protection or status afforded such matter by the Federal 
Government. It permits mailings of such matter if it meets 
certain existing requirements and, in addition, it does not 
contain a false representation implying that Federal Government 
benefits or services will be affected by any purchase or 
nonpurchase.
    Section 2 of the bill declares nonmailable any matter 
otherwise legally acceptable in the mails if it constitutes a 
solicitation for the purchase of any product that is provided 
by and may be obtained without cost from the Federal 
Government, but does not contain a statement giving notice of 
such information.
    Section 3 prescribes mailing restrictions and disclosure 
requirements for sweepstakes, skill contests, and facsimile 
checks. It exempts from such restrictions and requirements any 
matter containing a facsimile check, skill contest, or 
sweepstakes that appears in a magazine, newspaper, or other 
periodical if the matter is not directed to a named individual 
or does not include an opportunity to make a payment or order a 
product or service. The bill requires persons who use the mails 
for any matter containing sweepstakes, skill contests, 
facsimile checks or specified related material to adopt 
reasonable practices and procedures to prevent the mailing of 
such matter to persons who submit written requests to the 
mailer or to the attorney general of the appropriate State (who 
then transmits the request to the mailer) that such materials 
should not be mailed to them. The bill requires persons who 
mail matter to which nonmailability restrictions apply to 
maintain or cause to be maintained records of all such requests 
that permit the suppression of the names of such requesters for 
a 5-year period beginning on the date of the written requests.
    Section 4 makes postal law sanctions involving false 
representations and lotteries applicable to deceptive mailings 
under this act.
    Section 5 allows the Postal Service to apply for a 
temporary restraining order and preliminary injunctions in the 
preparation for or during pendency of proceedings concerning 
deceptive mailings.
    Section 6 increases civil penalties for violation of 
current postal law sanctions and establishes civil penalties 
for violation of this act.
    Section 7 authorizes the use of administrative subpoenas by 
the Postmaster General in any investigation involving 
nonmailable matter.
    Section 8 creates a new, uniform notification system 
requiring a promoter who originates and mails or causes to be 
mailed any skill contest or sweepstakes (except those not 
directed to a named individual, or that do not include an 
opportunity to make a payment or order a product or service) 
to: (1) include with each mailing a clearly and conspicuously 
displayed statement which includes the address or toll-free 
telephone number of the notification system established under 
this act and states that such system may be used to prohibit 
the mailing of any skill contest or sweepstakes by that 
promoter to such individual; and (2) establish and maintain a 
notification system that provides for an individual or other 
duly authorized person to notify the system of the individual's 
election to have his or her name and address excluded from all 
lists of names and addresses used by that promoter to mail such 
material. This section declares nonmailable any skill contest 
or sweepstakes otherwise legally acceptable in the mails that 
is addressed to an individual who made an election to be 
excluded from the promoter's list and prohibits the commercial 
use of any list of names and addresses compiled from 
individuals who exercise an election to be excluded from such a 
list. Furthermore, it establishes civil penalties for persons 
who violate the prohibitions and for promoters who recklessly 
mail such nonmailable matter or fail to comply substantially 
with the notification system requirements.
    Section 9 states that nothing in this bill shall be 
construed to preempt any provision of State or local law that 
imposes more restrictive requirements, regulation, damages, 
costs or penalties.
    Section 10 provides that the bill will take effect 120 days 
after the date of enactment.
    c. Legislative status.--Senator Collins introduced the 
legislation on February 3, 1999. It was read twice in the 
Senate and referred to the Committee on Governmental Affairs. 
On March 8, 1999, it was referred to the Subcommittee on 
International Security. The Committee on Governmental Affairs 
ordered the legislation to be reported favorably with an 
amendment in the nature of a substitute. On July 1, 1999, the 
Committee on Governmental Affairs reported the legislation as 
amended with an amendment in the nature of a substitute to the 
Senate with a written report No. 106-102. The legislation was 
placed on the Senate Legislative Calendar (No. 191) under 
general orders. The measure laid before the Senate by unanimous 
consent on August 2, 1999. Senator Collins proposed amendment 
SP 1497 that was agreed to in the Senate by voice vote. The 
committee substitute as amended was agreed to by voice vote. S. 
335 passed the Senate with an amendment and an amendment to the 
title by yea-nay vote (93-0) Record vote No. 248. On August 3, 
1999, a message of Senate action was sent to the House and the 
legislation was referred to the House Committee on Government 
Reform. On August 6, 1999, S. 335 was referred to the 
Subcommittee on the Postal Service. The legislation was brought 
to the House floor on November 9, 1999, under suspension of the 
rules. The motion to suspend the rules and pass the bill, as 
amended, was agreed to by voice vote. On November 10, 1999, a 
message on House action was received in the Senate and S. 335 
was placed on the desk with the House amendment to the Senate 
bill. The legislation as amended by the House was brought 
before the Senate on November 19 and passed unanimously. The 
legislation was cleared for signature by the President who 
signed the bill on December 12, 1999, and became Public Law No. 
106-168.
    d. Hearings.--The subcommittee held hearings on the general 
topic of ``Deceptive Sweepstakes Mailings'' on August 4, 1999.
20. H.R. 2952, To redesignate the facility of the U.S. Postal Service 
        located at 100 Orchard Park Drive in Greenville, SC, as the 
        ``Keith D. Oglesby Station.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2307 designates the facility 
of the U.S. Postal Service located at 100 Orchard Park Drive in 
Greenville, SC, as the Keith D. Oglesby Station.'' This bill 
recognizes Mr. Oglesby, a postmaster of Greenville for 6 years 
who drowned tragically in 1999 while on vacation with his 
family. Among the numerous activities Postmaster Oglesby was 
associated with are: chairperson for Greenville County's 
Combined Federal Campaign; postal co-chair for the Upstate 
Postal Customer Council; Board of Directors and President of 
Senior Action, an organization to provide and raise funds for 
social events for senior adults in Greenville County. Mr. 
Oglesby was awarded the Benjamin Award, the Postal Service's 
top public relations honor. He received the second Benjamin 
award posthumously.
    c. Legislative status.--H.R. 2952 was introduced by 
Representative DeMint on September 27, 1999, and was 
cosponsored by the House delegation from the State of South 
Carolina. The bill was referred to the House Committee on 
Government Reform on September 27, 1999, and to the 
Subcommittee on the Postal Service on October 8, 1999. The 
subcommittee considered and marked-up the legislation and 
forwarded it to the committee by voice vote on October 21, 
1999. The committee considered and marked-up H.R. 2952 on 
October 28, 1999, and ordered it reported by voice vote. The 
House called up the bill under suspension of the rules on March 
3, 2000. At the conclusion of the debate, the chair put the 
question on the motion to suspend the rules. Mr. Terry objected 
the yea-nay vote on the grounds that a quorum was not present. 
Further proceedings on the motion were postponed. The point of 
no quorum was withdrawn. The bill was considered as unfinished 
business. The motion to suspend the rules and pass the bill was 
agreed to by recorded vote (377-0) and the motion to reconsider 
laid on the table was agreed to without objection. The Senate 
received the legislation on March 9, 2000. It was read twice 
and referred to the Committee on Governmental Affairs. On April 
4, 2000, the bill was referred to the Subcommittee on 
International Security, Proliferation and Federal Services. On 
June 14, 2000, the Committee on Governmental Affairs ordered 
the bill to be reported favorably without amendment. On June 
21, 2000, Senator Thompson, Chair Committee on Governmental 
Affairs, reported the bill without amendment and without 
written report. It was placed on the Senate Legislative 
Calendar No. 619 under general orders. The bill passed the 
Senate on June 23, 2000 without amendment and by unanimous 
consent and was cleared for the White House. A message on 
Senate action was sent to the House on June 26, 2000, and the 
bill was presented to the President on June 27, 2000. The 
President signed the bill on July 6, 2000 and it became Public 
Law No. 106-238.
21. H.R. 3699 To designate the facility of the U.S. Postal Service 
        located at 8409 Lee Highway in Merrifield, VA, as the ``Joel T. 
        Broyhill Postal Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3699 designates the facility 
of the U.S. Postal Service located at 8409 Lee Highway in 
Merrifield, VA, as the Joel T. Broyhill Postal Building. This 
measure recognizes the accomplishments of Congressman Broyhill 
who was elected to the 83rd Congress in 1955 and served in the 
House for 22 years. Born in Hopewell, VA, Mr. Broyhill was the 
first Member of Congress to represent the newly created 10th 
Congressional District of Virginia and served as a Republican 
Member. He was a member of the then-Committee on Post Office 
and Civil Service, the Committee on the District of Columbia, 
and the Committee on Ways and Means. Congressman Broyhill is a 
decorated veteran of World War II. He served as a captain in 
the 106th Infantry Division. At the age of 25, he fought in the 
``Battle of Bulge'' and was taken prisoner and held in a German 
POW camp until he heroically escaped and rejoined the advancing 
Allied forces. Congressman Broyhill dedicated most of his life 
to service to his country in both a public and military 
capacity.
    c. Legislative status.--H.R. 3699 was introduced by 
Representative Wolf on February 29, 2000, and was cosponsored 
by all members of the House delegation from the State of 
Virginia. It was referred to the House Committee on Government 
Reform the same day and to the Subcommittee on the Postal 
Service on March 1, 2000. The committee considered and marked-
up the legislation on March 9, 2000, and ordered it to be 
reported by Voice Vote. The measure was brought to the floor on 
March 14, 2000, by chairman of the Subcommittee on the Postal 
Service, Mr. McHugh, who moved to suspend the rules and pass 
the bill. At the conconclusion of debate, the yeas and nays 
were demanded and ordered. The Chair announced that further 
proceedings on the motion would be postponed. It was considered 
as unfinished business. Later that day, the motion to suspend 
the rules and pass the bill was agreed to by the yeas and nays 
(405-0). The motion to reconsider laid on the table was agreed 
to without objection. On March 20, 2000, H.R. 3699 was received 
in the Senate and read twice and referred to the Committee on 
Governmental Affairs. On April 4, 2000, the bill was referred 
to the Subcommittee on International Security, Proliferation 
and Federal Services. The Committee on Governmental Affairs, on 
June 14, 2000, ordered the bill to be reported favorably with 
amendment. The bill was placed on the Senate Legislative 
Calendar under general orders. H.R. 3699 passed the Senate 
without amendment by unanimous consent on June 23, 2000 and was 
cleared for the White House. The Senate sent a message to the 
House on its action on June 26, 2000. The bill was presented to 
the President on June 27, 2000, and was signed by the President 
on July 6, 2000, when it became Public Law No. 106-240.
    d. Hearings.--No hearings were held on this measure.
22. H.R. 3701, To designate the facility of the U.S. Postal Service 
        located at 3118 Washington Boulevard in Arlington, VA, as the 
        ``Joseph L. Fisher Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3701 honors the late 
Congressman Fisher. Congressman Fisher was born in Pawtucket, 
RI. He held a Ph.D in economics from Harvard University and 
then was an economist at the U.S. Department of State. He 
served in World War II in the Pacific Theater from 1943 to 
1946. In 1963 he was elected to the Arlington County Board 
where he advocated regional air, water pollution and transit 
improvement projects. He then served as chairman of the 
Washington Metropolitan Area Transit Authority. Later, he was a 
senior economic advisor on the Council of Economic Advisors 
during the Truman Administration. Mr. Fisher was elected as the 
Representative of the 10th District of Virginia in 1974 as a 
Democrat and served for three terms. During this period, he was 
a member of the House Ways and Means Committee, and the Budget 
Committee, earning the reputation for his diligent work on 
taxation, energy and budget policy. He chaired seven task 
forces charged with national policy issues. After his service 
in Congress, he served as secretary of human resources for the 
Commonwealth of Virginia. He was a professor of political 
economy at George Mason University and chairman of the National 
Academy of Public Administration. He also served as head of the 
Unitarian Universalist Association. Congressman Fisher died in 
Virginia in 1992.
    c. Legislative status.--Representative Wolf introduced H.R. 
3701 on February 29, 2000, with the cosponsorship of all 
members of the House delegation from the State of Virginia. The 
bill was referred to the House Committee on Government Reform 
the same day and referred to the Subcommittee on the Postal 
Service on March 1, 2000. The committee considered and marked 
up the bill on March 9, 2000, and it was ordered to be reported 
by voice vote. On March 14, Mr. McHugh, chairman, Subcommittee 
on the Postal Service moved to suspend the rules and pass the 
legislation. At the conclusion of debate, the yeas and nays 
were demanded and ordered. Pursuant to the provision of clause 
8, rule XX, the Chair announced that further proceedings on the 
motion would be postponed. It was considered as unfinished 
business and the bill was agreed to by the yeas and nays (400-
0). The motion to reconsider laid on the table agreed to 
without objection. The bill was received in the Senate on March 
20 and was read twice and referred to the Committee on 
Governmental Affairs. On April 4, 2000, it was referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services. The Committee on Government Affairs ordered 
the bill to be favorably reported without amendment on June 14, 
2000. The Committee on Governmental Affairs reported the bill 
without amendment or written report on June 21, 2000. H.R. 3701 
was placed on the Senate Legislative Calendar No. 622 under 
general orders on June 21, 2000. The bill passed the Senate 
without amendment by unanimous consent on June 23, 2000, and it 
was cleared for the White House. A message on the Senate action 
was sent to the House on June 26, 2000, and the bill was 
presented to the President on June 27. The President signed the 
bill on July 6, 2000, and it became Public Law No. 106-241.
    d. Hearings.--No hearings were held on this legislation.
23. H.R. 1666, to designate the facility of the U.S. Postal Service at 
        200 East Pinckney Street in Madison, FL, as the ``Captain Colin 
        P. Kelly Jr. Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 1666 names a post office after 
Colin P. Kelly, Jr., widely recognized as our Nation's first 
World War II hero. Colin Kelly was born in 1915 in Madison, FL, 
and was raised there. He entered West Point in the summer of 
1933, and after graduation was assigned to flight school and a 
B-17 group. He was the first Army officer to fly the Boeing 
Flying Fortress in the Far East. He was shot down on December 
10, 1941.
    c. Legislative History/Status.--H.R. 1666 was introduced by 
Representative Boyd on May 4, 1999. The bill was cosponsored by 
all members of the House delegation from the State of Florida. 
H.R. 1666 was referred to the House Committee on Government 
Reform on May 4, 1999, and to the Subcommittee on the Postal 
Service on May 5, 1999. The subcommittee considered and marked-
up the legislation on August 4,1999, and forwarded it to full 
committee by voice vote. The committee considered and marked-up 
the bill on September 30, 1999, and ordered it to be reported 
by voice vote. The Chairman of the subcommittee, Mr. McHugh, 
moved to suspend the rules and pass the bill on March 21, 2000. 
The motion to suspend the rules and pass the bill was agreed to 
by voice vote, and the motion to reconsider was laid on the 
table was agreed to without objection. The Senate received the 
bill on March 22, 2000, and it was read twice and referred to 
the Committee on Governmental Affairs. The bill was referred to 
the Subcommittee on International Security, Proliferation and 
Federal Services on April 4, 2000. The Committee on 
Governmental Affairs ordered the measure to be reported 
favorably, without amendment, on June 14, 2000. On June 21, 
2000, the bill was placed on the Senate Legislative Calendar 
No. 614 under general orders and the Senate passed it on June 
23, 2000, by unanimous consent. It was cleared for the White 
House the same day. A message on the Senate action was sent to 
the House on June 26, 2000. The bill was presented to the 
President on June 27, 2000, and signed by the President on July 
6, 2000, becoming Public Law No. 106-233.
    d. d. Hearings.--No hearing were conducted on H.R. 1666.
24. H.R. 4241, to designate the facility of the U.S. Postal Service 
        located at 1818 Milton Avenue in Janesville, WI, as the ``Les 
        Aspin Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--This measure names a post office 
after Les Aspin, who was born in Milwaukee, WI on July 21, 
1938. He received his B.A. from Yale University in 1960, M.S. 
from Oxford University, England in 1962, and a Ph.D. in 
economics from the Massachusetts Institute of Technology in 
1965. He became an assistant professor of economics at 
Marquette University in Milwaukee. Mr. Aspin was a staff member 
to U.S. Senator William Proxmire and staff assistant to Walter 
Heller, chairman of President Kennedy's Council of Economic 
Advisers. While serving as a Captain in the U.S. Army from 1966 
to 1968, Dr. Aspin was an economic adviser to the Secretary of 
Defense. The First Congressional District of Wisconsin elected 
Les Aspin as a Democrat to the 92nd Congress and to the 11 
succeeding Congresses. He was a member of the Committee on 
Armed Services and was its chairman from the 99th through the 
102nd Congresses. Representative Aspin became Secretary of 
Defense in 1993 until his resignation on January 20, 1994. 
Additionally, from August 1994 until his death at age 57 on May 
21, 1995, he was professor of international policy, Washington 
Center for Government, Marquette University; Chair of the 
Foreign Intelligence Advisory Board and of the Commission on 
the Roles and Capabilities of the U.S. Intelligence Community.
    c. Legislative status.--H.R. 4241 was introduced by 
Representative Ryan on April 11, 2000, and referred to the 
House Committee on Government Reform. All members of the House 
delegation from the State of Wisconsin cosponsored the 
legislation. On April 19, 2000, the bill was referred to the 
Subcommittee on the Postal Service. The legislation was brought 
to the floor on June 6, 2000, and a motion was made to suspend 
the rules and pass the bill. At the conclusion of debate, the 
yeas and nays were demanded and ordered. Pursuant to the 
provisions of clause 8, rule XX, the Chair announced that 
further proceedings on the motion would be postponed. It was 
considered as unfinished business; the motion to suspend the 
rules and pass the bill was agreed to by the yeas and nays 
(378-6) (Roll No. 235). The motion to reconsider was laid on 
the table and agreed to without objection. The bill was 
received in the Senate and read twice on June 7, 2000, and 
referred to the Committee on Governmental Affairs. On June 14, 
2000, the Committee on Governmental Affairs ordered H.R. 4241 
to be reported favorably without amendment. The committee, on 
June 21, 2000, reported the bill without written report. On 
June 21, 2000 the bill was placed on the Senate Legislative 
Calendar No. 623 under general orders. The Senate passed the 
bill by unanimous consent on June 23, 2000, and it was cleared 
for the White House. A message on Senate action was sent to the 
House on June 26, 2000; the bill was presented to the President 
on June 27, 2000. H.R. 4241 was signed by the President on July 
6, 2000, and it became Public Law No. 106-242.
    d. Hearings.--No hearings were conducted.
25. H.R. 3030, to designate the facility of the U.S. Postal Service 
        located at 757 Warren Road in Ithaca, NY, as the ``Matthew F. 
        McHugh Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--This legislation venerates Matthew 
McHugh who represented the 27th and 28th Congressional 
Districts of New York. He was elected to Congress in 1975 and 
served until 1992. Mr. McHugh studied at Mount St. Mary's 
College in Emmitsburg, MD, where he graduated magna cum laude 
in 1960. He then received his Juris Doctor from Villanova Law 
School where he was the editor of the law review. He was city 
prosecutor in Ithaca, then practiced law in Ithaca, NY. He was 
elected to Congress and served on the Committee on 
Appropriations from 1978 to 1992 (Subcommittee on Foreign 
Operation, Export Financing and Related Programs, and the 
Subcommittee on Rural Development, Agriculture and Related 
Agencies). He also served on the Permanent Select Committee on 
Intelligence where he was chairman of the Subcommittee on 
Legislation; acting chairman of the Committee on Standards of 
Official Conduct; Select Committee on Children, Youth and 
Families; Veterans Affairs Committee; Agriculture Committee; 
Interior Committee; Arms Control and Foreign Policy Caucus; and 
chairman of the Democratic Study Group. After leaving the 
House, Mr. Hugh continued his participation in improving our 
Nation and the world. He is presently the counselor to the 
President of the World Bank in Washington, DC, a position he 
assumed in 1993. Prior to that he was vice president, 
University counsel, and secretary to the Corp. of Cornell 
University in Ithaca, NY. He continues to serve in various 
capacities at organizations such as the National Endowment for 
Democracy; the Central and East European Law Initiative of the 
American Bar Association; the International Crisis Group; 
president of the Association of Former Members of Congress; 
Bread for the World; New York State Regents Commission on 
Higher Education; the Board of Consultors of the Villanova 
School of Law; and chairman of the Board of Trustees of Mount 
St. Mary's College.
    c. Legislative status.--Representative Hinchey introduced 
H.R. 3030 on October 6, 1999. The measure was cosponsored by 
all members of the House delegation from the State of New York. 
The bill was referred to the Committee on Government Reform on 
October 6, 2000, and to the Subcommittee on the Postal Service 
on October 18, 2000. The committee considered and marked up the 
bill on March 3, 2000, and ordered it to be reported by voice 
vote. The measure was brought to the floor on June 6, 2000, 
under suspension of the rules. At the conclusion of debate, the 
yeas and nays were demanded and ordered. Pursuant to the 
provision of clause 8, rule XX, the Chair announced that 
further proceedings on the motion would be postponed and it was 
considered as unfinished business. The motion to suspend the 
rules and pass the bill was agreed to by the yeas and nays 
(385-2, Roll No. 236). The motion to reconsider was laid on the 
table was agreed to without objection. The bill was received in 
the Senate and read twice on June 7, 2000, and referred to the 
Committee on Governmental Affairs. On June 20, the bill was 
referred to the Subcommittee on International Security, 
Proliferation and Federal Services. The Committee on 
Governmental Affairs ordered the bill to be favorably reported 
on September 27, 2000. On September 29, 2000, the Committee on 
Governmental Affairs by Senator Thompson under authority of the 
order of the Senate of September 28, 2000, reported the bill 
without written report. It was placed on the Senate Legislative 
Calendar No. 865 under general orders. H.R. 3030 passed the 
Senate by unanimous consent on October 6, 2000, and was cleared 
for the White House. On October 10, 2000, the Senate sent a 
message to the House on its actions. The measure was presented 
to the President on October 12, 2000 and it was signed on 
October 19, 2000. It became Public Law No. 106-321.
    d. Hearings.--No hearing was conducted.
26. H.R. 2938, to designate the facility of the U.S. Postal Service 
        located at 424 South Michigan Street in South Bend, IN, as the 
        ``John Brademas Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 2938 designates the facility 
of the U.S. Postal Service located at 424 South Michigan Street 
in South Bend, IN, as the ``John Brademas Post Office.'' The 
bill recognizes the accomplishments of John Brademas who was 
born in Mishawaka, IN in 1927. He joined the Navy and was a 
Veterans National Scholar at Harvard University from which he 
graduated in 1949 with a B.A. magna cum laude and was elected 
to Phi Beta Kappa. He was a Rhodes Scholar at Oxford University 
and received the Doctor of Philosophy in Social Studies in 
1954. Dr. Brademas was the first native-born American of Greek 
origin to be elected to Congress. He represented the Third 
Congressional District of Indiana for 22 years (1959 to 1981). 
He served on the Committee on Education and Labor and was House 
Majority Whip for his last 4 years in Congress. While in 
Congress, he worked tirelessly in support of legislation 
promoting education. He was primary sponsor of legislation 
improving elementary and secondary education, vocational 
education and services for the elderly and the handicapped. In 
1977, Dr. Brademas chaired the first congressional delegation 
to visit the People's Republic of China, and in 1985 took part 
in the first Chinese-United States University presidents' 
seminar, held in Beijing. After his service in Congress, Dr. 
Brademas became president of New York University, the largest 
private university in the United States, for 11 years, 
transforming NYU from a regional commuter school into a 
national and international residential research university. He 
served on the boards of Americans for the Arts, Kos 
Pharmaceuticals, Inc., Loews Corp., Oxford University Press-USA 
and Scholastic, Inc. He is a former member of the Board of 
Overseers of Harvard and of the boards of the Aspen Institute, 
New York Stock Exchange and the Rockefeller Foundation. 
Additionally he is president of the King Juan Carlos I of Spain 
Center of New York University Foundation. He also serves on the 
boards of the society for the Preservation of the Greek 
Heritage, the Spanish Institute, the United States-Japan 
Foundation and the Alexander S. Onassis Public Benefit 
Foundation (USA).
    c. Legislative status.--Representative Roemer introduced 
H.R. 2938 on October 19, 1999, which was then cosponsored by 
all members of the House delegation of the State of Indiana. 
The legislation was referred to the House Committee on 
Government Reform on September 23, 1999, and to the 
Subcommittee on the Postal Service on September 28, 1999. The 
committee considered and marked-up the bill on September 30, 
1999, and ordered it to be reported by voice vote. The bill was 
scheduled for consideration on the floor on June 20, 2000. 
Chairman McHugh moved to suspend the rules and pass the bill. 
The motion was agreed to be voice vote and the motion to 
reconsider was laid on the table was agreed to without 
objection. The Senate received H.R. 2938 on June 21, 2000, and 
it was read twice and referred to the Committee on Governmental 
Affairs. The Committee on Governmental Affairs discharged the 
measure by unanimous consent on October 6, 2000, it passed the 
Senate by unanimous consent, and it was cleared for the White 
House. A message on the Senate action was sent to the House on 
October 10, 2000. The measure was presented to the President on 
October 12, 2000, and signed by the President on October 19, 
2000, becoming Public Law No. 106-320.
    d. Hearings.--No hearing was conducted on this bill.
27. H.R. 4658, to designate the facility of the U.S. Postal Service 
        located at 301 Green Street in Fayetteville, NC, as the ``J. L. 
        Dawkins Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4658 designates the facility 
of the U.S. Postal Service located at 301 Green Street in 
Fayetteville, NC, as the ``J.L. Dawkins Post Office Building'' 
in honor of J.L. Dawkins who was born in North Carolina and 
spent his youth in Fayetteville. He attended Wake Forest 
University for 2 years and returned to Fayetteville to work. 
J.L. Dawkins' father, a former State representative, died when 
his son was 15 years old. Young J.L. Dawkins always knew he 
wanted to go into politics and set his sights on being mayor. 
He was elected to the city council and served for six terms in 
that position before being elected mayor in 1987. He was 
reelected six times. He never lost an election even when he was 
being treated for cancer with experimental and aggressive forms 
of chemotherapy for more than a year. Mayor Dawkins was known 
for his friendly and gracious ways and was known as 
Fayetteville's ``Mayor for Life.''
    c. Legislative status.--H.R. 4658 was introduced by 
Representative Hayes on June 14, 2000. The legislation was 
cosponsored by all members of the House delegation of the State 
of North Carolina. It was referred to the House Committee on 
Government Reform on June 14, 2000, and to the Subcommittee on 
the Postal Service on June 20, 2000. The subcommittee 
considered and marked-up the bill on June 29, 2000, and 
forwarded it to the full committee by voice vote. The bill was 
brought to the floor for consideration by Chairman McHugh on 
July 11, 2000, who moved to suspend the rules and pass the 
bill. The motion was agreed to by voice vote and the motion to 
reconsider was laid on the table and agreed to without 
objection. The legislation was received in the Senate and read 
twice and referred to the Committee on Governmental Affairs. It 
was referred to the Subcommittee on International Security, 
Proliferation and Federal Services on July 25, 2000. The 
Committee on Government Affairs ordered the measure to be 
reported favorably on September 27, 2000. The Committee on 
Governmental Affairs reported the bill on the floor on 
September 29, 2000, without written report. It was placed on 
the Senate Legislative Calendar No. 879 under general orders. 
The measure passed the Senate by unanimous consent. It was 
cleared for the White House on October 6, 2000; a message on 
the Senate action was sent to the House on October 10, 2000. 
The bill was presented to the President on October 12, 2000, 
and signed into law on October 19, 2000, becoming Public Law 
No. 106-341.
    d. Hearings.--No hearing was conducted on this legislation.
28. H.R. 4169, to designate the facility of the U.S. Postal Service 
        located at 2000 Vassar Street in Reno, NV, as the ``Barbara F. 
        Vucanovich Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4169 honors Representative 
Vucanovich by naming the facility of the U.S. Postal Service 
located at 2000 Vassar Street in Reno, NV, as the ``Barbara F. 
Vucanovich Post Office Building.'' Barbara Vucanovich was born 
in Camp Dix, NJ. She grew up in Albany, NY, and attended 
college there after which she moved to Nevada. Barbara 
Vucanovich served as the U.S. Representative of the then-newly-
created Second District of Nevada from 1983 until 1997. As a 
Republican Member of the House of Representatives, she focused 
on issues important to Nevadans including Federal wilderness 
and national park policy, public land use, and nuclear waste 
disposal. Ms. Vucanovich retired from Congress after serving on 
the Committee on Interior and Insular Affairs, the Committee on 
House Administration, and as the Chairperson of the 
Appropriations Subcommittee on Military Construction.
    c. Legislative status.--The legislation was introduced by 
Representative Gibbons on April 4, 2000, and cosponsored by the 
House delegation from the State of Nevada. The bill was 
referred to the House Committee on Government Reform on April 
4, 2000, and to the Subcommittee on the Postal Service on April 
11, 2000. On July 11, 2000, the chairman of the subcommittee 
moved to suspend the rules and pass the bill. At the conclusion 
of debate, the chair put the question on the motion to suspend 
the rules. Mr. McHugh objected to the vote on the grounds that 
a quorum was not present. Further proceedings on the motion 
were postponed until July 12, 2000. The point of no quorum was 
withdrawn. The bill was considered as unfinished business on 
July 12, 2000. The motion to suspend the rules and pass the 
bill was agreed to by a recorded vote of 418-1 (Roll No. 389). 
The motion to reconsider laid on the table was agreed to 
without objection. The Senate received the legislation on July 
13, 2000; it was read twice and referred to the Committee on 
Government Affairs. On July 25, 2000, the committee referred 
the legislation to the Subcommittee on International Security, 
Proliferation and Federal Services. On September 27, 2000, the 
Committee on Government Affairs ordered the bill to be reported 
favorably. On September 29, 2000, the committee under the 
authority of the order of the Senate reported the bill without 
written report. It was placed on the Legislative Calendar under 
general orders on September 29, 2000, and passed by unanimous 
consent on October 6, 2000, and was cleared for the White 
House. A message on the Senate action was sent to the House on 
October 10, 2000. The bill was presented to the President on 
October 12, 2000, which he signed on October 19, 2000. It is 
now Public Law No. 106-328.
    d. Hearings.--No hearing was held.
29. H.R. 3909, a bill to designate the facility of the U.S. Postal 
        Service located at 4601 south cottage Grove Avenue in Chicago, 
        IL, as the ``Henry W. McGee Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3909 designates the facility 
of the U.S. Postal Service located at 4601 South Cottage Grove 
Avenue in Chicago, IL, as the ``Henry W. McGee Post Office 
Building.'' Mr. McGee was born in 1910 in Hillsboro, TX, and 
moved to Chicago in 1966. He started working for the Postal 
Service when he was 20 years old and retired in 1973 after 
working for 45 years. Mr. McGee was Chicago's first African-
American postmaster in 1966 and was also the first career 
postmaster in Chicago. During World War II, he was a member of 
the Illinois State Militia. He earned his bachelor of Science 
degree from the Illinois Institute of Technology in 1949 and a 
masters degree in public administration from the University of 
Chicago in 1961. Mr. McGee was the founding board member of the 
Rochelle Lee Fund for Children's Literacy. He died in March 
2000 at the age of 90.
    c. Legislative status.--This measure was introduced on 
March 14, 2000, by Representative Rush. Each member of the 
House delegation from the State of Illinois cosponsored the 
bill which was referred to the House Committee on Government 
Reform. It was then referred to the Subcommittee on the Postal 
Service on March 21, 2000. The subcommittee considered and 
marked up the bill on June 29, 2000, and it was forwarded to 
full committee by voice vote. The chairman of the subcommittee, 
Mr. McHugh, moved to suspend the rules and pass the bill on 
July 11, 2000. The motion was agreed to by voice vote and the 
motion to reconsider was laid on the table and agreed to 
without objection. The Senate received the measure on July 12, 
2000. It was read twice and referred to the Committee on 
Governmental Affairs. The committee referred it to the 
Subcommittee on International Security, Proliferation and 
Federal Services. On September 27, 2000, the Committee on 
Governmental Affairs ordered the bill to be favorably reported. 
The Committee on Governmental Affairs reported the bill by 
authority of the Senate of September 28, 2000 without written 
report. On September 29, the legislation was place on the 
Senate Legislative Calendar No. 867. H.R. 3909 passed the 
Senate without amendment by unanimous consent on October 6, 
2000, and was cleared for the White House. A message on the 
Senate action was sent to the House on October 10, 2000, and 
presented to the President on October 12, 2000. It was signed 
by the President on October 19, 2000, and became Public Law No. 
106-325.
    d. Hearings.--No hearing was held on this measure.
30. H.R. 4447, to designate the facility of the U.S. Postal Service 
        located at 919 West 34th Street in Baltimore, MD, as the 
        ``Samuel H. Lacy, Sr. Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--The legislation designates the 
facility of the U.S. Postal Service located at 919 West 34th 
Street in Baltimore, MD, as the ``Samuel H. Lacy, Sr. Post 
Office Building.'' H.R. 4447 honors Mr. Samuel H. Lacy, Sr. who 
was a renowned sports writer and editor for the Baltimore Afro-
American Newspaper since 1944. He spent 60 years in journalism, 
working with radio, television, and the print media.
    c. Legislative status.--H.R. 4447 was introduced on May 15, 
2000, and was cosponsored by all members of the House 
delegation of the State of Maryland. It was referred to the 
House Committee on Government Reform on May 15, 2000, and to 
the Subcommittee on the Postal Service on May 17, 2000. On July 
11, 2000, Chairman McHugh moved to suspend the rules and pass 
the bill on the House floor and it was considered under 
suspension of the rules. At the conclusion of debate, the chair 
put the question on the motion to suspend the rules. Mr. McHugh 
objected to the vote on the grounds that a quorum was not 
present. Further proceedings on the motion were postponed until 
July 12, 2000. The point of no quorum was withdrawn. On July 
12, 2000, it was considered as unfinished business. On motion 
to suspend the rules, the bill was agreed to by recorded vote 
(412-0), and the motion to reconsider was laid on the table 
without objection. H.R. 4447 was received in the Senate and 
read twice and referred to the Committee on Governmental 
Affairs on July 13, 2000. It was referred to the Subcommittee 
on International Security, Proliferation and Federal Services 
on July 25, 2000. The Committee on Governmental Affairs ordered 
the bill favorably reported on September 27, 2000, and on 
September 29, 2000 Senator Thompson under authority of the 
order of the Senate reported the bill without written report. 
It was placed on the Senate Legislative Calendar No. 871 under 
general orders. The measure passed the Senate by unanimous 
consent on October 6, 2000, and was cleared for the White House 
the same day. A message on the Senate action was sent to the 
House on October 10, 2000. The bill was presented to the 
President on October 12, 2000. The President signed it into law 
on October 19 and it became Public Law No. 106-333.
    d. Hearings.--No hearing was held on H.R. 4447.
31. H.R. 4437, to grant to the U.S. Postal Service the authority to 
        issue semipostals, and for other purposes.
    a. Report number and date.--H. Rept. No. 106-734.
    b. Summary of measure.--H.R. 4437 authorizes the Postal 
Service to issue semipostal stamps to help provide funding for 
a particular area of medical research. The purchase or use of 
any semipostal stamp issued is voluntary on the part of postal 
patrons. Since the success of the Breast Cancer Research Stamp 
[BCRS] more than a dozen bills have been introduced in Congress 
which are semipostal in nature. Not all these bills are medical 
or geared to research. It makes little sense to have the Postal 
Service deal only with the medical research stamps and Congress 
with all other semipostal legislation. Therefore, the amended 
version of the legislation which was enacted, gives the Postal 
Service the authority to issue and sell all stamps which help 
provide funding for a cause which the Postal Service considers 
to be in the national public interest and is appropriate. It 
also mandates that the Postal Service recover its costs before 
transferring funds to an agency or agencies involved in 
benefiting from the sale of semipostals. The amendment was made 
in nature of a substitute reflecting the changes and making 
stylistic changes to enhance clarity. No changes were made to 
the reporting requirement or to Section 3 of H.R. 4437, which 
is an extension of the breast cancer research stamp for an 
additional 2 years. This section is the same language as H.R. 
4068, the Stamp Out Breast Cancer Reauthorization Act, 
legislation introduced by Representative Bass. When bills are 
introduced to raise money for worthy causes, it is a dilemma 
for Members to support all or many of the measures. The General 
Accounting Office, in its testimony before the Senate reported 
that the saturation of commemorative coins in the marketplace 
diluted the interest and purchase of the coins for worthwhile 
purposes. By granting the Postal Service the authority to issue 
semipostal stamps, and requiring that regulations be 
established prior to the production of the stamps, and how many 
semipostal stamps should be issued each year, will simplify the 
process. H.R. 4437 provides that the provisions sunset 10 years 
after the issuance of the first semipostal, excluding the 
breast cancer research stamp.
    c. Legislative status.--H.R. 4437 was introduced by 
Chairman McHugh on May 11, 2000, and the bill was referred to 
the Committee on Government Reform, in addition to the 
Committees on Commerce, and Armed Services, for a period to be 
subsequently determined by the Speaker, in each case for 
consideration of such provision as fall within the jurisdiction 
of the committees concerned. The measure was referred to the 
Subcommittee on the Postal Service and to the Subcommittee on 
Health and Environment on May 17, 2000. The Subcommittee on the 
Postal Service considered and marked-up the bill on June 28, 
2000, and it was forwarded by the subcommittee to the Committee 
on Government Reform as amended by voice vote. The committee 
reported the bill as amended on July 17, 2000 accompanied by H. 
Rept. 106-734. The House Committees on Commerce and the Armed 
Services granted an extension for further consideration ending 
not later than July 17, 2000, and later that day, both 
committees discharged the bill. The bill was placed on the 
Union Calendar No. 415. Chairman McHugh moved to suspend the 
rules and pass the bill, as amended on July 17, 2000. It was 
considered under suspension of the rules on July 17, 2000, and 
was agreed to by voice vote. The motion to reconsider was laid 
on the table and was agreed to without objection. The measure 
was received in the Senate on July 18, 2000, and read twice. 
The Senate passed the bill by unanimous consent on July 26, 
2000, and it was cleared for the White House the same day. H.R. 
4437 was presented to the President on July 27, 2000, and it 
was signed by him on July 28, 2000, becoming Public Law No. 
106-253.
    d. Hearings.--No hearing was conducted on this legislation.
32. H.R. 4430, to redesignate the facility of the U.S. Postal Service 
        located at 11831 Scaggsville Road in Fulton, MD, as the 
        ``Alfred Rascon Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4430 honors Alfred Rascon who 
was born in Chihuana, Mexico, but settled in Oxnard, CA, when 
his parents immigrated to the United States. Alfred enlisted in 
the U.S. Army for airborne training in 1963, shortly after 
graduating from high school. He was assigned to Fort Sam 
Houston, TX, for basic and specialist medical training. He 
deployed with the Airborne Brigade to south Vietnam as the 1st 
Battalion Reconnaissance Platoon medic and was seriously 
wounded in 1966. He was honorably discharged from active duty 
and placed in the Army Reserves. He then worked and attended 
college and graduated from the Army's Infantry Officers 
Candidate School in 1970 and was commissioned as Second 
Lieutenant. He served in a number of combat assignments. He 
worked with the Department of Justice's Drug Enforcement 
Administration and presently serves as Inspector General of the 
Selective Services System. On February 8, 2000, 34 years after 
the fact, Alfred Rascon was awarded the Congressional Medal of 
Honor, for his heroic efforts and serious injuries in 1966 in 
south Vietnam where he risked his life for his fellow soldiers 
and wounded squad members.
    c. Legislative status.--H.R. 4430 was introduced by 
Representative Bartlett on May 11, 2000. All House members of 
the State of Maryland cosponsored the legislation. It was 
referred to the House Committee on Government Reform on May 11, 
2000 and to the Subcommittee on the Postal Service on May 15, 
2000. The committee considered and marked-up the legislation on 
June 29, 2000, and it was ordered to be reported as amended, by 
voice vote. On July 18, 2000, Chairman McHugh moved to suspend 
the rules of the House and pass the bill as amended. The motion 
to suspend the rules and pass the bill as amended, was agreed 
to by voice vote. The motion to reconsider was laid on the 
table, the title of the measure was amended and agreed to 
without objection. The Senate received the amended legislation 
on July 19, 2000, where it was read twice and referred to the 
Committee on Governmental Affairs. The committee referred the 
legislation to the Subcommittee on International Security, 
Proliferation and Federal Services.
    d. Hearings.--No hearing was conducted on H.R. 4430.
33. H.R. 4157, to designate the facility of the U.S. Postal Service 
        located at 600 Lincoln Avenue in Pasadena, CA, as the ``Matthew 
        `Mack' Robinson Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4157 honors Matthew Robinson 
by naming the postal facility located at 600 Lincoln Avenue in 
Pasadena, CA, after him. Matthew Robinson was born in Cairo, 
GA, and moved to Pasadena at age 6 where he attended Pasadena 
public schools. He attended Pasadena Junior College where he 
shone as an athlete. He was a contemporary of other great 
athletes while he studied at Pasadena--his younger brother, 
Jackie, was one of baseball's giants, and Jesse Owens who `Mac' 
joined on the 1936 Olympic team to Berlin. After the Olympics, 
Mack attended the University of Oregon. Unfortunately, his 
family was struck with hardship and Mack returned home to 
Pasadena to support his family. He found work with the city of 
Pasadena often sweeping streets in his Olympic jersey. The New 
York Times reported that Mack lost his job when the city fired 
all its African American employees in a desegregation battle. 
Mack then began a lifetime service to his community as a 
volunteer. His work helped to lead Pasadena from segregation to 
unification and today Pasadena is known for its diversity.
    c. Legislative status.--This legislation was introduced by 
Representative Rogan on April 3, 2000. It was referred to the 
House Committee on Government Reform on April 3, 2000, and then 
to the Subcommittee on the Postal Service on April 7, 2000. The 
subcommittee considered and marked-up the bill on June 29, 
2000, and forwarded it to the full committee by voice vote. 
Chairman McHugh moved to suspend the rules of the House and 
pass the bill on July 18, 2000. The motion was agreed to by 
voice vote and the motion to reconsider was laid on the table 
and agreed to without objection. The measure was received in 
the Senate, read twice and referred to the Committee on 
Governmental Affairs on July 19, 2000. It was referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services, on July 25, 2000. The Committee on 
Governmental Affairs ordered the bill to be reported favorably 
on September 27, 2000. The bill was placed on the Senate 
Legislative Calendar No. 869 under general orders on September 
29, 2000. H.R. 4157 passed the Senate by unanimous consent on 
October 6, 2000 when it was cleared for the White House. It was 
presented to the President on October 12, 2000, and signed by 
the President on October 19, 2000, when it became Public Law 
No. 106-327.
    d. Hearings.--No hearing was conducted on this legislation.
34. H.R. 4517, to designate the facility of the U.S. Postal Service 
        located at 24 Tsienneto Road in Derry, NH, as the ``Alan B. 
        Shepard, Jr. Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4517 honors retired Rear 
Admiral of the U.S. Navy, Alan B. Shepard, Jr., who was born in 
East Derry, NH in 1923 and grew up in the area. He received a 
bachelor of science degree from the U.S. Naval Academy in 
Annapolis. He graduated from the Naval Test Pilot School in 
Patuxent River, MD, in 1951, and the Naval War College, in 
Newport, RI in 1957. Alan Shepard was one of the Mercury 
astronauts in 1959 and holds the distinction of being the first 
American to journey into space. He was designated chief to the 
Astronaut Office in 1963. In 1971, Shepard made his second 
space flight as spacecraft commander on Apollo 14. He retired 
from NASA in 1974.
    c. Legislative status.--This legislation was introduced by 
Representative Sununu on May 23, 2000. It was referred to the 
House Committee on Government Reform on May 23, 2000, and to 
the Subcommittee on the Postal Service on June 1, 2000. The 
bill was considered and marked up by the subcommittee on June 
29, 2000, and forwarded by the subcommittee to full committee 
by voice vote. On July 18, 2000, Chairman McHugh moved to 
suspend the rules of the House and pass the bill. After the 
conclusion of debate, the yeas and nays were demanded and 
ordered. Pursuant to the provisions of clause 8, rule XX, the 
Chair announced that further proceedings on the motion would be 
postponed. It was considered as unfinished business. On motion 
to suspend the rules and pass the bill was agreed to by the 
yeas and nays (4243-0). The motion to reconsider laid on the 
table was agreed to without objection. The bill was received in 
the Senate on July 19, 2000, and read twice and referred to the 
Committee on Governmental Affairs and was placed on the Senate 
Legislative Calendar No. 876 and passed by the Senate by 
unanimous consent on October 6, 2000, when it was cleared for 
the White House. The bill was signed by the President on 
October 19, 2000, and became Public Law No. 106-337.
    d. Hearings.--No hearing was conducted on H.R. 4517.
35. H.R. 4554, to redesignate the facility of the U.S. Postal Service 
        located at 1602 Frankford Avenue in Philadelphia, Pennsylvania, 
        as the ``Joseph F. Smith Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--This bill honors Joseph F. Smith, 
by naming a post office building in Philadelphia after him. 
Joseph Smith was born and raised in St. Anne's Parish in 
Philadelphia. He served in the U.S. Army and received a Purple 
Heart for action in World War II. He then became a 
congressional staffer and later served in the Pennsylvania 
State Senate from 1970 to 1981. In 1981 he was elected to the 
97th Congress and represented the Philadelphia area. He served 
as the Democrat city chairman in Philadelphia from 1983 to 
1986. Former Congressman Smith died in May 2000.
    c. Legislative status.--Representative Borski introduced 
H.R. 4554 on May 25, 2000 and the bill was referred to the 
Committee on Government Reform. All members of the House 
delegation from the State of Pennsylvania cosponsored the 
measure. It was referred to the Subcommittee on the Postal 
Service on June 5, 2000. The subcommittee considered and 
marked-up the bill favorably on June 29, 2000, and forwarded to 
the committee by voice vote. On July 18, 2000, Chairman McHugh 
moved to suspend the rules of the House and pass the bill. The 
motion to suspend the rules and pass the bill was agreed to by 
voice vote and the motion to reconsider was laid on the table 
and agreed to without objection. The Senate received the 
legislation on July 19, 2000, and it was read twice and 
referred to the Committee on Government Affairs. The committee 
referred the bill to the Subcommittee on International 
Security, Proliferation and Federal Services on July 25, 2000. 
The committee on Governmental Affairs ordered the legislation 
to be reported favorably on September 27, 2000, and it was 
reported to the Senate without written report and placed on the 
Senate Legislative Calendar No. 877 on September 29, 2000. The 
Senate passed H.R. 4554 by unanimous consent on September 6, 
2000, and it was cleared for the White House. The bill was 
presented to the President on October 12, 2000 and signed by 
him on October 19, 2000, when it became Public Law No. 106-339.
    d. Hearings.--No hearing was conducted on H.R. 4554.
36. H.R. 4884, to redesignate the facility of the U.S. Postal Service 
        located at 200 West 2nd Street in Royal Oak, MI, as the 
        ``William S. Broomfield Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4884 honors former Member of 
Congress, William S. Broomfield by naming a post office in his 
honor at 200 West 2nd Street in Royal Oak, MI. Mr. Broomfield 
was born in Royal Oak, MI, and graduated from Michigan State 
College (now known as Michigan State University). He served in 
the U.S. Army Air Corps during the Second World War and then 
went into the real estate and property-management business. He 
was elected to the Michigan State House of Representatives from 
1949 to 1954, and served as speaker pro tempore in 1953. He was 
elected to the State Senate in 1955 and 1956. In January 1957, 
Michigan's 18th District elected him to the 85th Congress. He 
served for 17 succeeding Congresses until January 1992, when he 
retired voluntarily. During his tenure in Congress, 
Representative Broomfield served as a member of the Committee 
on Foreign Affairs and was ranking member from 1975 until his 
retirement. After his retirement, Mr. Broomfield started a 
foundation in Michigan that supports various charities in 
southeast Michigan, including the efforts to cure cancer, spina 
bifida, Alzheimer's and the Salvation Army.
    c. Legislative status.--H.R. 4884 was introduced by 
Representative Knollenberg on July 19, 2000, and cosponsored by 
all members of the House delegation from the State of Michigan. 
It was referred to the Committee on Government Reform on July 
19, 2000, and to the Subcommittee on the Postal Service on July 
31, 2000. The bill was brought to the House floor on September 
6, 2000, and Representative Morella moved to suspend the rules 
and pass the bill. At the conclusion of debate, the yeas and 
nays were demanded and ordered. Pursuant to the provisions of 
clause 8, rule XX, the Chair announced that further proceedings 
on the motion would be postponed. It was considered as 
unfinished business. Later that day, the motion to suspend the 
rules and pass the bill was agreed to by the yeas and nays 
(404-0). The motion to reconsider was laid on the table and 
agreed to without objection. The Senate received the bill on 
September 7, 2000, where it was read twice and referred to the 
Committee on Governmental Affairs. It was referred to the 
Subcommittee on International Security, Proliferation, and 
Federal Services. The Committee on Governmental Affairs ordered 
H.R. 4884 to be reported favorably and without written report. 
The bill was placed on the Senate Legislative Calendar No. 880 
under general orders on September 29, 2000. The measure passed 
the Senate by unanimous consent on October 6, 2000, and it was 
cleared for the White House. It was presented to the President 
on October 12, 2000, and signed by the President on October 19, 
2000, becoming Public Law No. 106-342.
    d. Hearings.--No hearing was conducted on H.R. 4884.
37. H.R. 4534, to designate the facility of the U.S. Postal Service 
        located at 114 Ridge Street in Lenoir, NC, as the ``James T. 
        Broyhill Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4534 designates the facility 
of the U.S. Postal Service located at 114 Ridge Street in 
Lenoir, NC, as the ``James T. Broyhill Post Office Building'' 
honoring Senator Broyhill. James Thomas Broyhill was born in 
Lenoir, NC in 1927. He attended public schools and graduated 
from the University of North Carolina in 1950 with a BS degree 
in business administration. Later he was elected to the 88th 
Congress to represent the 10th District of North Carolina in 
1962 and was reelected to 11 succeeding Congresses until 
January 1986. During this period he served as the ranking 
member of the Committee on Energy and Commerce. Mr. Broyhill 
resigned his House seat in July 1986 when he was appointed to 
the U.S. Senate to fill the unexpired term of Senator James 
East of North Carolina who died unexpectedly.
    c. Legislative status.--H.R. 4534 was introduced by 
Representative Burr on May 24, 2000. All members of the House 
delegation from the State of North Carolina cosponsored this 
bill. The bill was referred to the Committee on Government 
Reform on May 24, 2000, and to the Subcommittee on the Postal 
Service on June 5, 2000. The subcommittee considered and 
favorably marked-up the bill, as amended, on June 29, 2000, and 
it was forwarded to the committee by voice vote. On September 
6, 2000, Representative Morella moved that the House suspend 
the rules and pass the bill, as amended. The motion was agreed 
to and passed by voice vote and the motion to reconsider was 
laid on the table was agreed to without objection. The title of 
the measure was amended and agreed to without objection. H.R. 
4534 was received in the Senate, read twice and referred to the 
Committee on Governmental Affairs on September 7, 2000, and 
then referred to the Subcommittee on International Security, 
Proliferation and Federal Services on September 12, 2000. The 
Committee on Governmental Affairs ordered the bill to be 
favorably reported on September 27, 2000. On September 29, 
2000, H.R. 4534 was placed on the Senate Legislative Calendar 
No. 873 under general orders. The Senate passed the bill by 
unanimous consent on October 6, 2000, and it was cleared for 
the White House. The bill was presented to the President on 
October 12, 2000, and was signed by the President on October 
19, 2000, when it became Public Law No. 106-338.
    d. Hearings.--No hearing was conduced on H.R. 4534.
38. H.R. 4615, to redesignate the facility of the U.S. Postal Service 
        located at 3030 Meredith Avenue in Omaha, NE, as the ``Reverend 
        J.C. Wade Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--This legislation names the facility 
of the Postal Service located at 3030 Meredith Avenue in Omaha, 
NE, as the ``Reverend J.C. Wade Post Office.'' Reverend James 
Commodore Wade was a noted pastor and a civic leader. He was 
born in Oklahoma in 1909. His mother died when he was 5 years 
old, his father died when he was 8, and his grandfather died 
when he was 11. At age 17 he was completely out on his own. He 
joined the ministry at age 21. He was known as being the 
youngest pastor in the State of Oklahoma. J.C. Wade was invited 
to speak in Omaha in 1944 and decided to stay on there. He 
served on the mayor's Advisory Committee in Omaha and organized 
the first Head Start program in Salem, NE. He was a member of 
the Baptist Pastor's Conference and the Interdenominational 
Alliance. He served as the President of the New Era Baptist 
State Convention, Inc., for 9 years and also as the State vice-
president to the national Baptist convention for 9 years. On 
the national level, he was a member of the National Baptist 
Convention U.S.A., Inc. the Gospel Music Workshop of America, 
and the NAACP. Dr. Wade died in August 1999.
    c. Legislative status.--This bill was introduced by 
Representative Terry on June 8, 2000, and was cosponsored by 
all members of the House delegation from the State of Nebraska. 
The legislation was referred to the House Committee on 
Government Reform on June 8, 2000, and to the Subcommittee on 
the Postal Service on June 14, 2000. The committee considered 
and marked-up H.R. 4615 on June 29, 2000, and ordered it 
reported by voice vote. On September 6, 2000, Representative 
Morella moved to suspend the rules of the House and pass the 
bill. The motion was agreed to by voice vote and the motion to 
reconsider was laid on the table and agreed to by voice vote. 
The Senate received the bill on September 7, 2000, and it was 
read twice and referred to the Committee on Governmental 
Affairs. The bill was referred to the Subcommittee on 
International Security, Proliferation, and Federal Services on 
September 12, 2000. On September 27, 2000, the Committee on 
Governmental Affairs, ordered the measure to be reported 
favorably without written report. The bill was placed on the 
Senate Legislative Calendar No. 878 under general orders on 
September 29, 2000, and on October 6, 2000, H.R. 4615 passed 
the Senate by unanimous consent and cleared for the White House 
the same day. It was presented to the President on October 12, 
2000, and he signed it on October 19, 2000; the bill became 
Public Law No. 106-340.
    d. Hearings.--No hearings were conducted on H.R. 4615.
39. H.R. 3454, to designate the U.S. post office located at 451 College 
        Street in Macon, GA, as the ``Henry McNeal Turner Post 
        Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 3454 names a post office in 
Macon, GA after Henry McNeal Turner, a well known missionary, 
pastor, evangelist, church administrator, Army chaplain, author 
of religious publication, and postmaster. Henry Turner faced 
many obstacles in his youth. However, he taught himself how to 
read, and at age 19 he became a preacher in the African 
Methodist Episcopal Church. In 1863, he organized the first 
regiment of African American troops. He became the first 
African American Army Chaplain and then became a chaplain of 
the regular troops. Mr. Turner was appointed as a delegate to 
the Constitutional Convention in 1867. He was elected to the 
Georgia State Legislature in 1868 and in 1870. He was appointed 
postmaster of Macon in 1869. After a year as postmaster, Mr. 
Turner returned to the State legislature and founded the 
Georgia Equal Rights League. He actively championed equal 
rights and led mission trips to Sierra Leone, Liberia, and 
South Africa.
    c. Legislative status.--H.R. 3454 was introduced by 
Representative Chambliss on November 18, 1999. It was 
cosponsored by the entire House delegation from the State of 
Georgia. The bill was referred to the Committee on Government 
Reform on November 18, 1999, and to the Subcommittee on the 
Postal Service on November 30, 1999. The subcommittee 
considered and marked-up the legislation favorably on June 28, 
2000, by voice vote and it was forwarded to the full committee 
by voice vote. On September 6, 2000, Representative Morella 
moved that the House suspend the rules and pass H.R. 3454. The 
motion was agreed to by voice vote and the motion to reconsider 
was laid on the table and agreed to without objection. The 
Senate received the measure on September 7, 2000, where it was 
read twice and referred to the Committee on Government Affairs. 
On September 12, 2000, it was referred to the Subcommittee on 
International Security, Proliferation, and Federal Services. 
The Committee on Governmental Affairs ordered the measure to be 
reported favorably on September 27, 2000. On September 29, 
2000, the bill was placed on the Senate Legislative Calendar 
No. 866, under general orders. On October 6, 2000, the Senate 
passed the bill by unanimous consent and the bill was cleared 
for the White House. The bill was presented to the President on 
October 12, 2000, and the President signed it on October 19, 
2000, when it became Public Law, No. 106-322.
    d. Hearings.--No hearings were conducted on H.R. 3454.
40. H.R. 4484, to designate the facility of the U.S. Postal Service 
        located at 500 North Washington Street in Rockville, MD, as the 
        ``Everett Alvarez, Jr. Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4484 is legislation naming the 
Rockville, MD Post Office after Everett Alvarez, Jr. Everett 
Alvarez is a distinguished military officer and public servant. 
He was the first in his family to go to college; he earned a 
bachelor of science in electrical engineering from the 
University of Santa Clara in 1960 and then joined the U.S. 
Navy. On August 5, 1964, he was the first American aviator shot 
down over North Vietnam. He was then a Lieutenant Junior Grade, 
an A-4 Skyhawk pilot assigned to Attach Squadron 144 on board 
the U.S.S. Constellation. He was shot down and captured on the 
first raid in North Vietnam. He was kept in a local jail cell 
in Hon Gai and then moved to a nearby farm until he was taken 
to Hanoi and place in the infamous ``Hanoi Hilton'' where he 
lived until March 1965, when other American prisoners started 
to arrive. Everett Alvarez was the longest confirmed prisoner 
of war in North Vietnam. He was released in February 1973, 
after 8\1/2\ years of imprisonment. For his courageous service, 
Mr. Alvarez was awarded numerous military decorations, 
including the Silver Star, two Legions of Merit (with combat 
``v''), two Bronze Stars (with combat ``v''), the Distinguished 
Flying Cross, and two Purple Heart medals. He retired after 
serving in the Navy for 20 years and then accepted an 
appointment as Deputy Director of the Peace Corps. In 1982, 
President Reagan nominated him, and the Senate confirmed his 
appointment, as the Deputy Administrator of the Veterans 
Administration.
    c. Legislative status.--H.R. 4484 was introduced by 
Representative Morella on May 17, 2000. This legislation is 
cosponsored by all members of the House delegation of the State 
of Maryland. The legislation was referred to the Committee on 
Government Reform on May 17, 2000, and to the Subcommittee on 
the Postal Service on June 2, 2000. The subcommittee marked up 
the bill on June 29, 2000, and forwarded it to the full 
committee by voice vote. The bill was brought to the House 
floor and Mrs. Morella moved to suspend the rules and pass the 
bill on September 6, 2000. At the conclusion of debate, the 
yeas and nays were demanded and ordered. Pursuant to the 
provisions of clause 8, rule XX, the Chair announced that 
further proceedings on the motion would be postponed. It was 
considered as unfinished business, and later the motion to 
suspend the rules and pass the bill was agreed to by the yeas 
and nays (403-0). The motion to reconsider laid on the table 
was agreed to without objection. The bill was received in the 
Senate and read twice on September 7, 2000, and referred to the 
Committee on Governmental Affairs. On September 12, 2000, the 
bill was referred to the Subcommittee on International 
Security, Proliferations, and Federal Services. The Committee 
on Governmental Affairs ordered the bill to be reported on 
September 27, 2000, and on September 29, 2000, it was placed on 
the Senate Legislative Calendar No. 875. The Senate passed the 
bill without amendment by unanimous consent on October 6, 2000, 
and it was cleared for the White House. The President signed 
the legislation on October 19, 2000, and it became Public Law 
No. 106-336.
    d. Hearings.--No hearings were conducted on this 
legislation.
41. H.R. 2302, to designate the building of the U.S. Postal Service 
        located at 307 Main Street in Johnson City, NY, as the ``James 
        W. McCabe, Sr. Postal Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--This bill designates the building 
of the U.S. Postal Service located at 307 Main Street in 
Johnson City, NY, as the ``James W. McCabe, Sr. Post Office 
Building.'' James W. McCabe was born and attended elementary 
school in Johnson City, NY, in 1917. He graduated cum laude 
from the University of Notre Dame where he majored in Latin and 
had minors in English and philosophy. He attended SUNY-Albany 
to complete teaching requirements, and he also received a 
master's degree in education. He did further graduate studies 
at Syracuse University, Colgate University, and Ithaca College. 
Mr. McCabe served with the Army Air Corps from 1943 through 
1945. He was stationed in the south Pacific with a B-24 bomber 
crew. He was awarded the Air Medal with an oak leaf cluster and 
was honorably discharged with the rank of technical sergeant. 
After military service, Mr. McCabe taught Latin and English at 
Johnson City High School. James McCabe served as mayor of 
Johnson City from 1963 to 1971 and on the executive committee 
of the New York Conference of Mayors in 1970-1971. He was 
elected to represent his constituents as an Assemblyman from 
January 1973 to 1985. For his efforts on behalf of the mentally 
disabled, the mayor of New York, on behalf of New York City and 
the Advisory Board of the New York City Department of Mental 
Health and Mental Retardation Services, presented Mr. McCabe 
the Human Service Award in 1977. Also, in 1977, he received the 
Legislator of the Year Award from the New York State Personnel 
and Guidance Association for his work in mental health. In 1981 
and 1982, Mr. McCabe was named Legislator of the Year by the 
New York State Association of Counties, and the Friend of 
Education Award. After his service in the State Assembly, Mr. 
McCabe served on the New York State Board of Regents for 5 
years. Mr. McCabe died in Johnson City on May 23, 1999.
    c. Legislative status.--H.R. 2302 was introduced by 
Representative Hinchey on June 22, 1999, and was cosponsored by 
all members of the House delegation from the State of New York. 
The bill was referred to the House Committee on Government 
Reform on June 22, 1999, and to the Subcommittee on the Postal 
Service on June 30, 1999. The committee considered and marked 
up the bill on June 30, 1999, and it was ordered to be reported 
by voice vote. On September 6, 2000, Representative Morella 
moved to suspend the rules of the House and pass the bill. The 
motion to suspend the rules and pass the bill was agreed to by 
voice vote and the motion to reconsider was laid on the table 
and agreed to without objection. The Senate received the 
legislation on September 7, 2000, and it was read twice and 
referred to the Committee on Governmental Affairs. On September 
12, 2000, the bill was referred to the Subcommittee on 
International Security, Proliferation, and Federal Services. 
The Committee on Governmental Affairs ordered H.R. 2302 to be 
reported favorably on September 27, 2000. The bill was placed 
on the Senate Legislative Calendar No. 864 and it passed the 
Senate by unanimous consent on October 6, 2000 and was cleared 
for the White House. H.R. 2302 was presented to the President 
on October 12, 2000, and was signed by the President on October 
19, 2000, when it became Public Law No. 106-315.
    d. Hearings.--No hearings were held on this legislation.
42. H.R. 4448, to designate the facility of the U.S. Postal Service 
        located at 35 Dolfield Avenue in Baltimore, MD, as the ``Judge 
        Robert Bernard Watts, Sr. Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4448 designates the facility 
of the U.S. Postal Service located at 3500 Dolfield Avenue in 
Baltimore, MD, as the ``Judge Robert Bernard Watts, Sr. Post 
Office Building.'' Judge Watts graduated with honors from 
Morgan State College in 1943. He joined the Army and served 
until 1945. After military service he earned a law degree from 
the University of Maryland in 1949. Judge Robert was deeply 
involved with the Civil Rights Movement and worked closely with 
the NAACP. He was instrumental in desegregating numerous 
theaters, restaurants, department stores, hotels, and the Gwynn 
Oak Amusement Park. Judge Robert Bernard Watts was the first 
African-American to be appointed full time to the Bench of the 
Municipal Court of Baltimore City and was the first judge in 
Maryland to open hundreds of adoption records.
    c. Legislative status.--Representative Cummings introduced 
H.R. 4448 on May 15, 2000. The bill was cosponsored by all 
members of the House delegation from the State of Maryland. The 
bill was referred to the Committee on Government Reform on May 
15, 2000, and to the Subcommittee on the Postal Service on May 
17, 2000. On September 6, 2000, Representative Morella moved to 
suspend the rules of the House and pass the bill. At the 
conclusion of debate, the yeas and nays were demanded and 
ordered. Pursuant to the provisions of clause 8, rule XX, the 
Chair announced that further proceedings on the motion would be 
postponed; it was considered as unfinished business. The motion 
to suspend the rules and pass the bill was agreed to by the 
yeas and nays (404-0). The motion to suspend the rules laid on 
the table was agreed to without objection. The Senate received 
the bill on September 7, 2000, and it was read twice and 
referred to the Committee on Governmental Affairs. On September 
12, 2000, the bill was referred to the Subcommittee on 
International Security, Proliferation, and Federal Services. 
The Committee on Governmental Affairs ordered the bill to be 
reported favorably on September 27, 2000. On September 29, 
2000, the bill was placed on the Senate Legislative Calendar 
No. 872. It passed the Senate by unanimous consent on October 
6, 2000, and was cleared for the White House. It was presented 
to the President on October 12, 2000, and was signed by the 
President on October 19, 2000, when it became Public Law No. 
106-334.
    d. Hearings.--No hearing was conducted on H.R. 4448.
43. H.R. 4449, to designate the facility of the U.S. Postal Service 
        located at 1908 North Ellamont Street in Baltimore, MD, as the 
        ``Dr. Flossie McClain Dedmond Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4449 honors Dr. Flossie 
McClain Dedmond by naming a post office for her at 1908 North 
Ellamont Street in Baltimore. Dr. Dedmond earned a bachelor's 
degree in English from Fisk University, a master's degree from 
Columbia University and she pursued postgraduate studies in 
English and speech at Ohio State University and Catholic 
University of America, respectively. Dr. Dedmond taught and 
held administrative positions at Allen University, Benedict 
College, Knoxville College, Morgan State University and Coppin 
State College, where she spent 31 years in various posts, 
including Professor of English, Head of the English Department 
and chair of numerous committees, and Director of the Summer/
Evening College. She retired as Dean of the Arts and Sciences 
Division. The first residence hall at Coppin State College was 
named ``The Flossie M. Dedmond Center for Living and 
Learning.'' Dr. Dedmond was bestowed the honor of ``Dean 
Emeritus'' when she retired from Coppin State. Dr. Dedmond 
passed away in September 1998.
    c. Legislative status.--Representative Cummings introduced 
H.R. 4449 on May 15, 2000. The bill was cosponsored by all 
members of the House delegation from the State of Maryland. The 
bill was referred to the Committee on Government Reform on May 
15, 2000, and to the Subcommittee on the Postal Service on May 
17, 2000. On September 6, 2000, Representative Morella moved to 
suspend the rules of the House and pass the bill. The motion to 
suspend the rules and pass the bill was agreed to by voice 
vote. The motion to suspend the rules laid on the table was 
agreed to without objection. The Senate received the bill on 
September 7, 2000, and it was read twice and referred to the 
Committee on Governmental Affairs. On September 12, 2000, the 
bill was referred to the Subcommittee on International 
Security, Proliferation, and Federal Services. The Committee on 
Governmental Affairs ordered the bill to be reported favorably 
on September 27, 2000. On September 29, 2000, the bill was 
placed on the Senate Legislative Calendar No. 872. It passed 
the Senate by unanimous consent on October 6, 2000, and was 
cleared for the White House. It was presented to the President 
on October 12, 2000, and was signed by the President on October 
19, 2000, when it became Public Law No. 106-335.
    d. Hearings.--No hearings were conducted on H.R. 4449.
44. H.R. 4975, to designate the post office and courthouse located at 2 
        Federal Square, Newark, NJ, as the ``Frank R. Lautenberg Post 
        Office and Courthouse.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4975 designates the post 
office and courthouse located at 2 Federal Square, Newark, NJ, 
as the ``Frank R. Lautenberg Post Office and Courthouse.'' 
Frank Lautenberg is the Senator from New Jersey who was 
appointed to complete the unexpired term of Senator Brady and 
was reelected in 1988 and 1994 for the term ending January 3, 
2001. He is the son of an immigrant silk mill worker. He served 
with distinction in the U.S. Army Signal Corps from 1942 until 
1946. Senator Lautenberg received his BS degree from Columbia 
University School of Business in New York in 1949 and served as 
commissioner of the Port Authority of New York and New Jersey 
from 1978 to 1982.
    c. Legislative status.--Representative LoBiondo introduced 
H.R. 4975 on July 26, 2000. The bill was supported by the 
entire New Jersey congressional delegation. The bill was 
referred to the House Committee on Transportation and 
Infrastructure on July 26, 2000. The Committee on 
Transportation discharged it on September 14, 2000, and it was 
then referred to the House Committee on Government Reform. On 
September 19, Representative Barr moved to suspend the rules of 
the House and pass the bill. The motion was agreed to by voice 
vote and the motion to reconsider was laid on the table without 
objection. The bill was received in the Senate on September 20, 
2000, and read twice. It passed the Senate by unanimous consent 
on October 6, 2000 and was cleared for the White House. H.R. 
4975 was presented to the President on October 12, 2000, and 
signed by the President on October 23, 2000, when it became 
Public Law No. 106-347.
    d. Hearings.--No hearing was conducted on this measure.
45. H.R. 4625, to designate the facility of the U.S. Postal Service 
        located at 2108 East 38th Street in Erie, PA, as the ``Gertrude 
        A. Barber Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4625 designates the facility 
of the U.S. Postal Service located at 2108 East 38th Street in 
Erie, PA, as the ``Gertrude A. Barber Post Office Building.'' 
Dr. Barber was a nationally and internationally known advocate 
for the developmentally disabled and a teacher by profession. 
President Kennedy appointed her as a delegate to the White 
House Conference on Children and Youth and as a member of his 
taskforce on mental retardation. In 1952 Dr. Barber opened a 
center, which now bears her name, for people with mental 
retardation and related development disabilities. The Barber 
Center later opened other group homes in Philadelphia and 
Pittsburgh. Dr. Barber died at the age of 80 in April 2000.
    c. Legislative status.--H.R. 4625 was introduced by 
Representative English on June 9, 2000, and cosponsored by all 
members of the House delegation from the State of Pennsylvania. 
The bill was referred to the House Committee on Government 
Reform and referred to the Subcommittee on the Postal Service 
on June 20, 2000. The subcommittee considered and marked-up the 
bill on June 29, 2000, and forwarded it to the committee by 
voice vote. On September 19, 2000, Representative Barr moved to 
suspend the rules of the House and pass the bill. The motion 
was agreed to by voice vote and the motion to reconsider laid 
on the table was agreed to without objection. The bill was 
received in the Senate, read twice, and referred to the 
Committee on Governmental Affairs on September 20, 2000. The 
committee discharged the bill by unanimous consent and the 
Senate passed the bill by unanimous consent on October 24, 
2000, when it was also cleared for the White House. It was 
presented to the President on October 26, 2000, and signed by 
the President on November 6, 2000, when it became Public Law 
No. 106-440.
    d. Hearings.--No hearing was held on this legislation.
46. H.R. 4786, to designate the facility of the U.S. Postal Service 
        located at 110 Postal Way in Carrollton, GA, as the ``Samuel P. 
        Roberts Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4786 honors Samuel P. Roberts 
by naming a post office after him at 110 Postal Way in 
Carrollton, GA. Sam Roberts was born in 1937 in Rome, GA, and 
obtained a degree in insurance management from Georgia State 
University in 1963. He ran his own insurance agency for several 
years and decided to run for the Georgia State Senate, wining 
the seat in 1996. He was reelected in 1998, but his second term 
was cut short by his untimely death in January 2000.
    c. Legislative status.--Representative Barr introduced H.R. 
4786 on June 29, 2000. It was referred to the Committee on 
Government Reform on June 29, 2000, and then to the 
Subcommittee on the Postal Service on August 11, 2000. All 
members of the House delegation from the State of Georgia 
cosponsored the legislation. On September 19, 2000, 
Representative Barr moved to suspend the rules of the House and 
pass the bill. The motion was agreed to by voice vote and the 
motion to reconsider laid on the table was agreed to without 
objection. H.R. 4786 was received in the Senate, read twice, 
and referred to the Committee on Governmental Affairs on 
September 20, 2000. The committee discharged the bill by 
unanimous consent on October 24, 2000, and the Senate passed 
the bill by unanimous consent the same day and cleared it for 
the White House. It was presented to the President on October 
26, 2000, and signed by the President on November 6, 2000, 
becoming Public Law No. 106-441.
    d. Hearings.--No hearing was conducted on this measure.
47. H.R. 4450, to designate the facility of the U.S. Postal Service 
        located at 900 East Fayette Street in Baltimore, MD, as the 
        ``Judge Harry Augustus Cole Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4450 designates the facility 
of the U.S. Postal Service located at 900 East Fayette Street 
in Baltimore, MD, as the ``Judge Harry Augustus Cole Post 
Office Building.'' Judge Harry August Cole was a man of many 
firsts. He was the first African American Assistant Attorney 
General in Baltimore City; the first African American to be 
elected to the State Senate of Maryland; the first chairman of 
the Maryland Advisory Committee to the U.S. Civil Rights 
Commission; and the first African American to be named to the 
Maryland Court of Appeals. Judge Cole was a veteran of World 
War II. He graduated from the University of Maryland School of 
Law and practiced criminal and civil rights law.
    c. Legislative status.--Representative Cummings introduced 
this legislation on May 15, 2000. It was referred to the 
Committee on Government Reform and on May 17, 2000, it was 
referred to the Subcommittee on the Postal Service. All members 
of the House delegation of the State of Maryland cosponsored 
H.R. 4450. On September 19, 2000, Representative Barr moved to 
suspend the rules of the House and pass the bill. The motion to 
pass the bill was agreed to by voice vote, and the motion to 
reconsider laid on the table was agreed to without objection. 
H.R. 4450 was received in the Senate on September 20, 2000, 
read twice and referred to the Committee on Governmental 
Affairs. The committee discharged the bill by unanimous consent 
on October 24, 2000, and the Senate passed the bill by 
unanimous consent. It was cleared for the White House the same 
day and presented to the President on October 26, 2000. The 
President signed the bill on November 6, 2000, and it became 
Public Law No. 106-438.
    d. Hearings.--No hearing was conducted on this bill.
48. H.R. 4451, to designate the facility of the U.S. Postal Service 
        located at 1001 Frederick Road in Baltimore, MD, as the 
        ``Frederick L. Dewberry, Jr. Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4451 designates the U.S. 
Postal Service facility located at 1001 Frederick Road in 
Baltimore, MD, as the ``Frederick L. Dewberry, Jr. Post Office 
Building.'' Frederick L. Dewberry, Jr., was born and raised in 
Baltimore City. He received his undergraduate degree from 
Loyola College and his law degree from the University of 
Baltimore. Mr. Dewberry served with distinction during World 
War II. He became the chairman of the Baltimore County Council 
in 1964 and he was then appointed Deputy Secretary of the 
Maryland Department of Transportation from 1979 to 1984.
    c. Legislative status.--Representative Cummings introduced 
H.R. 4451 on May 15, 2000. All members of the House delegation 
from the State of Maryland cosponsored the legislation. The 
bill was referred to the Committee on Government Reform on May 
15, 2000. On September 25, 2000, Representative Biggert moved 
to suspend the rules of the House and pass the bill. The motion 
was agreed to by voice vote and the motion to reconsider laid 
on the table was agreed to without objection. H.R. 4451 was 
received in the Senate on September 26, 2000, read twice and 
referred to the Committee on Governmental Affairs. The 
committee discharged the measure by unanimous consent on 
October 24, 2000. The same day, the Senate passed the bill by 
unanimous consent and it was cleared for the White House. It 
was presented to the President on October 26, 2000, and signed 
by the President on November 6, 2000, becoming Public Law No. 
106-439.
    d. Hearings.--No hearing was conducted on this measure.
49. S. 1295, a bill to designate the U.S. Post Office located at 3813 
        Main Street in East Chicago, IN, as the ``Lance Corporal Harold 
        Gomez Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--S. 1295 designates the U.S. Post 
Office located at 3813 Main Street in East Chicago, IN, as the 
Lance Corporal Harold Gomez Post Office.'' Harold Gomez was 
born in 1946 in East Chicago, IN. After graduating from high 
school he enlisted in the U.S. Marine Corps in 1965. Following 
basic training in San Diego, CA, he was sent to Vietnam in 
March 1966. Corporal Gomez was a fire team leader in a rifle 
company of the third Marine Division when, in 1967, a landmine 
explosion in South Vietnam killed him. He was the first citizen 
from northwest Indiana to die of casualties in the Vietnam War. 
Corporal Gomez received numerous awards, including the Purple 
Heart, the Combat Action Ribbon, the Presidential Unit 
Citation, the National Defense Service Medal, the Vietnam 
Service Medal, RVN Military Merit Medal, RVN Gallantry Cross 
Medal, the Vietnam Campaign Medal, and the Rifle sharpshooters 
Badge. Corporal Gomez was posthumously awarded the Silver Star 
Medal for his courageous leadership and heroism.
    c. Legislative status.--This bill was introduced by Senator 
Lugar on June 28, 1999. (This legislation is identical to H.R. 
2358, introduced by Representative Visclosky on June 24, 1999.) 
S. 1295 was read twice and referred to the Committee on 
Governmental Affairs on June 28, 1999. It was referred to the 
Subcommittee on International Security on July 15, 1999. On 
November 3, 1999, the Committee on Governmental Affairs ordered 
the bill to be favorably reported. It was placed on the Senate 
Legislative Calendar No. 398 under general orders. The Senate 
passed the bill by unanimous consent on November 19, 1999, and 
it was received in the House on November 22, 1999, and held at 
the desk. On January 27, 2000, S. 1295 was referred to the 
House Committee on Government Reform and on February 4, 2000, 
it was referred to the Subcommittee on the Postal Service. On 
September 27, 2000, Chairman McHugh moved that the House 
suspend the rules and pass the bill. The motion was agreed to 
by voice vote and the motion to reconsider laid on the table 
was agreed to without objection. S. 1295 was cleared for the 
White House on September 27, 2000 and was presented to the 
President on September 29, 2000. The President signed the 
legislation on October 10, 2000, which became Public Law No. 
106-289.
    d. Hearings.--No hearing was held on this bill.
50. H.R. 5229, to designate the facility of the U.S. Postal Service 
        located at 219 South Church Street in Odum, GA, as the ``Ruth 
        Harris Coleman Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5229 designates the facility 
of the U.S. Postal Service located at 219 South Church Street 
in Odum, GA, as the ``Ruth Harris Coleman Post Office.'' Ruth 
Coleman was a schoolteacher and played a dynamic role in the 
activities of Odum as the originator and director of Odum Day. 
She was named Odum's Citizen of the Year in 1998, and was the 
former Chair of the Wayne County chapter of the AARP. She was a 
member of the Wayne Memorial Hospital Auxiliary and chaired the 
American Red Cross Blood Drive in Wayne County for many years. 
She also served as Chair of the Harris Family Reunion and was 
the organizer of the Odum Sunlighters. Ruth Harris Coleman 
passed away in 1998 at age 70.
    c. Legislative status.--Representative Kingston introduced 
H.R. 5229 on September 20, 2000. The bill was referred to the 
Committee on Government Reform and on October 4, 2000, it was 
referred to the Subcommittee on the Postal Service. All members 
of the House delegation from the State of Georgia cosponsored 
this measure. Representative Morella moved to suspend the House 
rules and pass the bill on October 10, 2000. The motion was 
agreed to by voice vote and the motion to reconsider laid on 
the table was agreed to without objection. The bill was 
received in the Senate on October 11, 2000, and read twice. 
H.R. 5229 passed the Senate by unanimous consent on October 24, 
2000, and it was cleared for the White House. The legislation 
was presented to the President on October 26, 2000, and the 
President signed it on November 7, 2000. It became Public Law 
No. 106-454.
    d. Hearings.--No hearing was conducted on the bill.
51. H.R. 4831, to redesignate the facility of the U.S. Postal Service 
        located at 2339 North California Street in Chicago, IL, as the 
        ``Roberto Clemente Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4831 designates the U.S. 
Postal Service facility located at 2339 North California Street 
in Chicago, IL, as the ``Roberto Clemente Post Office.'' 
Roberto Clemente was born in 1934 in Carolina, Puerto Rico, the 
son of a foreman of a sugar cane plantation and grocery store 
operator. He played softball as a youngster and then played 
with a professional, major-league caliber team until 1953 when 
his .356 batting average came to the attention of the Brooklyn 
Dodgers. The Dodgers gave Roberto a bonus and sent him to the 
Montreal Royals, ordering that he should not play because 
another team may draft him. He was, however, drafted by the 
Pittsburgh Pirates after an observant Pirate scout spotted him. 
Roberto Clemente played for several years as their star 
outfielder until 1972 when he met his untimely and tragic death 
when he was only 38 years old. He was thought by many as the 
greatest and most complete player but he was also the victim of 
dual discrimination for being Black and Hispanic. 28 years 
after the fatal plane crash while on a mission of mercy, taking 
humanitarian supplies to the victims of an earthquake in 
Nicaragua, he is no longer the invisible player. Roberto 
Clemente led the Pirates to World Series victories in 1960 and 
1971; he was the National League batting champion in 1961, 
1964, 1965, and 1967; he was awarded 12 gold gloves; he 
established a major league record by leading the National 
League in assists five times, and he was inducted into the 
Baseball Hall of Fame at Cooperstown, the first Latin player so 
honored.
    c. Legislative status.--Representative Gutierrez introduced 
H.R. 4831 on July 12, 2000. It was referred to the House 
Committee on Government Reform and then, on July 21, 2000, it 
was referred to the Subcommittee on the Postal Service. The 
legislation was cosponsored by the entire House delegation from 
the State of Illinois. The subcommittee considered and marked-
up the bill on October 4, 2000, and forwarded it to the 
committee, as amended, by voice vote. Representative Morella 
moved to suspend the House rules and pass the bill, as amended, 
on October 10, 2000. The motion was agreed to by voice vote and 
the motion to reconsider laid on the table was agreed to 
without objection. The title of the measure was amended and 
agreed to without objection. The Senate received the bill on 
October 11, 2000, and it was read twice. On October 24, 2000, 
the Senate passed the bill by unanimous consent and cleared it 
for the White House. The bill was presented to the President on 
October 26, 2000. On November 7, 2000, the President signed the 
bill and it became Public Law No. 106-452.
    d. Hearings.--No hearing was held on this measure.
52. S. 2686, a bill to amend chapter 36 of title 39, United States 
        Code, to modify rates relating to reduced rate mail matter, and 
        for other purposes.
    a. Report number and date.--Senate Report 106-468.
    b. Summary of measure.--S. 2686 provides relief to the 
category of mail that provides educational magazines for 
students in kindergarten through high school. The legislation 
provides that nonprofit periodicals and classroom publication 
receive the same treatment. It ensures that future rate 
increases for both categories are predictable. The report 
language strongly recommends that the rates be monitored to 
evaluate the impact postal rates have on the economic 
capability of these mailers to determine if there is a need for 
more fundamental resolution to the rate concerns of classroom 
publishers. This legislation contains a provision to alleviate 
the impact of the changes on regular-rate payers in the postal 
rate case before the Postal Rate Commission. Under this 
provision, the estimated reduction in postal revenue from 
Nonprofit Standard (A) mail case by the enactment of the new 
ratemaking rules is to be treated as a reasonably assignable 
cost of the Postal Service to be apportioned among the various 
classes of mail and types of postal service in accordance with 
existing provisions in title 39 of the United States Code.
    c. Legislative status.--S. 686 was introduced by Senator 
Cochran on June 7, 2000. It was read twice and referred to the 
Committee on Governmental Affairs. It was referred to the 
Subcommittee on International Security, Proliferation and 
Federal Services on June 20, 2000. The Committee on 
Governmental Affairs ordered the legislation to be reported 
favorably on September 27, 2000. The Committee on Governmental 
Affairs passed the bill with a written report No. 106-468 on 
October 3, 2000. It was placed on the Senate Legislative 
Calendar No. 917 under general orders. It passed the Senate 
with an amendment by unanimous consent. The bill was received 
in the House on October 1, 2000, and referred to the House 
Committee on Government Reform. The committee discharged the 
bill on October 11, 2000. Chairman McHugh asked unanimous 
consent to discharge from committee and consider the bill. The 
bill passed without objection and the motion to reconsider laid 
on the table was agreed to without objection. The bill was 
cleared for the White House on October 11, 2000. It was 
presented to the President on October 19, 2000. The President 
signed the bill on October 27, 2000. It became Public Law No. 
106-384.
    d. Hearings.--No hearing was scheduled on this legislation.
53. H.R. 4853, to redesignate the facility of the U.S. Postal Service 
        located at 1568 South Glen Road in South Euclid, OH, as the 
        ``Arnold C. D'Amico Station.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4853 designates the U.S. 
Postal Service facility located at 1568 South Glen Road in 
South Euclid, OH, as the Arnold C. D'Amico Station. Mr. D'Amico 
was born in Warren, OH. He served in the Army during World War 
II and then attended and graduated from Kent State University 
with a degree in business administration. He became the 
Comptroller of the Alenbrah Park Center of the Aging in 
Beachwood, OH, in 1968. He then was elected to the South Euclid 
City Council in 1968, and in 1972 he was elected mayor of South 
Euclid. He became the city's first full time mayor in 1976. He 
was president of the Cuyahoga County Mayors Association, 
chairman and treasurer of the Regional Income Tax Authority and 
Service on the Cuyahoga County Planning Commission and the Ohio 
Municipal League. He was also a member of the American Legion, 
Little Italy Retirees, Italian Sons and Daughters of America 
and served on the Board of the Advisors of Notre Dame College 
of Ohio.
    c. Legislative status.--H.R. 4853 was introduced by 
Representative Stephanie Tubbs Jones on July 13, 2000, and it 
was referred to the Committee on Government Reform. The bill 
was cosponsored by the entire House delegation of the State of 
Ohio. It was referred to the Subcommittee on the Postal Service 
on July 21, 2000. The subcommittee considered and marked up the 
bill on October 4, 2000. It was forwarded to the committee, as 
amended, by voice vote. On October 12, 2000, Chairman McHugh 
asked unanimous consent to discharge the legislation from the 
Committee on Government Reform and to consider the measure 
under unanimous consent. Mr. McHugh offered an amendment in the 
nature of a substitute (H. Amdt. 1055), and the House agreed to 
the McHugh amendment without objection. The legislation passed 
without objection and the motion to reconsider laid on the 
table was agreed to without objection. The title was amended 
and agreed to without objection. H.R. 4853 was received in the 
Senate on October 13, and read twice. It passed the Senate by 
unanimous consent on October 24, 2000, and was cleared for the 
White House. It was presented to the President on October 26, 
and was signed by the President on November 7, 2000. It became 
Public Law No 106-453.
    d. Hearings.--No hearing was scheduled on this measure.
54. H.R 5143, to designate the facility of the U.S. Postal Service 
        located at 3160 Irvin Cobb Drive, in Paducah, KY, as the 
        ``Morgan Station.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5143 designates the U.S. 
Postal Service facility located at 3160 Irvin Cobb Drive in 
Paducah, KY, as the ``Morgan Station.'' Fred Morgan, who is 
being honored, grew up in the Littleville community of 
Paducah's southside in Kentucky. Mr. Morgan served in the 
General Assembly of Kentucky for most of his 30 year span in 
public service. He devoted his time to improving education, and 
helping the poor and downtrodden.
    c. Legislative status.--This legislation was introduced by 
Representative Whitfield on September 7, 2000. It is 
cosponsored by the entire House delegation of the State of 
Kentucky. The legislation was referred to the Committee on 
Government Reform and then referred to the Subcommittee on the 
Postal Service on September 13, 2000. On October 4, 2000, the 
subcommittee considered and marked-up the bill and forwarded it 
to the committee by voice vote. On October 24, 2000, 
Representative LaTourette moved to suspend the rules of the 
House and pass the bill. The motion was agreed to and the bill 
passed by voice vote. The motion to reconsider laid on the 
table and was agreed to without objection. The bill was 
received in the Senate on October 25, 2000.
    d. Hearings.--No hearing was scheduled on H.R. 5143.
55. H.R. 5144, to designate the facility of the U.S. Postal Service 
        located at 203 West Paige Street, in Tompkinsville, KY, as the 
        ``Tim Lee Carter Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5144 designates the U.S. 
Postal Service facility located at 203 West Paige Street, in 
Tompkinsville, KY, as the ``Tim Lee Carter Post Office 
Building.'' Representative Tim Carter was born in Tompkinsville 
in 1910. He graduated from Western Kentucky University in 1934 
and earned a medical degree from the University of Tennessee. 
He spent 3\1/2\ years as a combat medic in World War II. He was 
elected to Congress and gained national attention as the first 
Republican Congressman to seek withdrawal from Vietnam; 
however, he never wavered in his support for the troops 
fighting in that theater. He was known as a defender of 
President Nixon during the impeachment hearing of 199784, but 
he was also allied with President Johnson's Great Society 
programs to improve our Nation's poorest districts to improve 
schools, water systems, libraries, airports, roads, and 
recreation; he supported taxes to pay for these programs. He 
was the only practicing physician during much of his 16 years 
service in the House. He said that the passage of a law that 
provided preventative medical care for poor children was his 
most important legislative achievement. He was an early 
advocate of National Insurance for catastrophic illness. When 
he retired from Congress, Dr. Carter returned to the practice 
of medicine and his farm on the Cumberland River. Dr. Carter 
died in 1987.
    c. Legislative status.--H.R. 5144 was introduced by 
Representative Whitfield on September 7, 2000. All members of 
the House delegation from the State of Kentucky cosponsored the 
bill. The legislation was referred to the Committee on 
Government Reform. On September 15, 2000, the bill was referred 
to the Subcommittee on the Postal Service. The subcommittee 
considered and marked up the bill on October 4, 2000, and 
forwarded it to the committee by voice vote. On October 24, 
Representative LaTourette moved to suspend the rules of the 
House and pass the bill. The bill was agreed to by voice vote 
and the motion to reconsider laid on the table was agreed to 
without objection. The legislation was received in the Senate 
on October 25, 2000.
    d. Hearings.--No hearings were scheduled on this 
legislation.
56. H.R. 5068, to designate the facility of the U.S. Postal Service 
        located at 5927 Southwest 70th Street in Miami, FL, as the 
        ``Marjory Williams Scrivens Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5068 designates the facility 
of the U.S. Postal Service located at 5927 Southwest 70th 
Street in Miami, FL, as the ``Marjory Williams Scrivens Post 
Office.'' Marjory Scrivens started working for the U.S. Postal 
Service in 1970 and in 1972, she was one of the first women to 
deliver mail in the Miami-Dade County area in Florida. Ms. 
Scrivens died in 1999.
    c. Legislative status.--Representative Meek introduced this 
legislation on July 27, 2000. All members of the House 
delegation from the State of Florida cosponsored this 
legislation. The bill was referred to the Committee on 
Government Reform on July 27, 2000, and to the Subcommittee on 
the Postal Service on August 11, 2000. On October 24, 
Representative LaTourette moved to suspend the House rules and 
pass the bill. The motion to suspend the rules and pass the 
bill was agreed to by voice vote. The motion to reconsider laid 
on the table was agreed to without objection. The legislation 
was received in the Senate on October 25, 2000.
    d. Hearings.--No hearings were scheduled on the bill.
57. H.R. 5210, to designate the facility of the U.S. Postal Service 
        located at 200 South George Street in York, PA, as the ``George 
        Atlee Goodling Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5210 designates the facility 
of the U.S. Postal Service located at 200 South George Street 
in York, PA, as the ``George Atlee Goodling Post Office 
Building.'' George Goodling was born in Loganville, PA in 1896. 
He attended public schools in York Country, York Collegiate 
Institute, and Bellefont Academy. He graduated from 
Pennsylvania State University with a BS degree in 1921. During 
World War I, he served as a Seaman, Second Class with the U.S. 
Navy. Mr. Goodling also held positions as director of a bank, 
motor club, and insurance company. In 1943, Mr. Goodling was 
elected to the Pennsylvania House of Representatives and served 
until 1957. He also served as a school director from 1933 to 
1961. Mr. Goodling was elected to serve in the 87th and 88th 
Congresses and was again elected to the 90th and to three 
succeeding Congresses. After retirement from Congress in 1975, 
he lived in Loganville and tended his fruit orchards that have 
been in his family for more than a century. Representative 
George Goodling lived in Loganville, York County, PA, until his 
death in October 1982.
    c. Legislative status.--Representative Goodling introduced 
this legislation on September 19, 2000. All members of the 
House delegation of the State of Pennsylvania cosponsored H.R. 
5210. The bill was referred to the Committee on Government 
Reform on September 19, 2000. On October 17, 2000, 
Representative Ose moved to suspend the rules and pass the 
bill. The bill was agreed to by voice vote and the motion to 
reconsider laid on the table was agreed to without objection. 
The legislation was received in the Senate and read twice on 
October 18, 2000. The Senate passed the bill by unanimous 
consent on December 14, 2000, and sent a message to the House 
on its action.
    d. Hearings.--No hearing were scheduled on this 
legislation.
58. H.R. 5016, to redesignate the facility of the U.S. Postal Service 
        located at 514 Express Center Drive in Chicago, IL, as the 
        ``J.T. Weeker Service Center.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5016 designates that the 
facility of the U.S. Postal Service located at 514 Express 
Center Drive in Chicago, IL, as the ``J.T. Weeker Service 
Center.'' John Thomas ``J.T.'' Weeker was born in New York, NY, 
in 1947 and grew up in Webster, NY. He graduated from Cornell 
University in 1969 and commenced his career with the Postal 
Service in Akron, OH, in 1972 as District Director, Employee 
Relation. He served in a number of management positions with 
the Postal Service throughout the Nation. In 1988 he was 
appointed General Manager and Postmaster of the Albany, NY 
Field Division. In 1993 he was appointed District Manager for 
the Albany District. Mr. Weeker was noted for his innovative 
leadership style and team building abilities. Mr. Weeker died 
at the age of 52 in January 2000.
    c. Legislative status.--H.R. 5016 was introduced by 
Representative Blagojevich on July 7, 2000. All members of the 
House delegation from the State of Illinois cosponsored the 
measure. The bill was referred to the House Committee on 
Government Reform on July 27, 2000, and to the Subcommittee on 
the Postal Service on August 11, 2000. The legislation was 
considered and marked up by the subcommittee on October 4, 
2000, and forwarded to the committee, as amended, by voice 
vote. On October 17, 2000, Representative Ose moved to suspend 
the rules of the House and pass the bill, as amended. The 
motion to pass the bill, as amended, was agreed by voice vote 
and the motion to reconsider laid on the table was agreed to 
without objection. H.R. 5016 was received in the Senate on 
October 18, 2000, and read twice. The Senate passed the bill by 
unanimous consent on December 14, 2000, and sent a message to 
the House on its action.
    d. Hearings.--No hearing was scheduled for this 
legislation.
59. H.R. 5903, to designate the facility of the U.S. Postal Service 
        located at 2305 Minton Road in West Melbourne, FL, as the 
        ``Ronald W. Reagan Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 5903 designates the postal 
facility at 2305 Minton Road in West Melbourne, FL, as the 
``Ronald W. Reagan Post Office Building.'' Mr. Reagan was our 
40th President. He won a landslide victory in 1980 and was 
easily reelected 4 years later. Ronald Wilson Reagan came from 
humble beginnings. He was born in Tampico, IL, the son of an 
unsuccessful salesman with a serious drinking problem. His 
mother was a devout member of the Disciples of Christ Church. 
After moving to various locations the family settled in Dixon, 
IL, where his father became part owner of a shoe store, and his 
mother did occasional work to supplement the family's meager 
income. Young Ronald Reagan excelled in sports and received a 
scholarship to attend Eureka College. Even with a scholarship, 
he had to work hard at several jobs to stay in college. He 
graduated with a BA in economics and sociology, the first 
person in his family to attend college. He showed an early 
interest in politics but did not participate. He became a very 
popular sportscaster in Iowa and soon thereafter he went to 
Hollywood. He brought his parents to live with him in 
California. Though he wasn't an instant star, he was a steady 
worker and became the president of the Screen Actors Guild 
[SAG] in 1947. His activities with SAG aroused his latent 
interest in politics. He helped his longstanding friend, Barry 
Goldwater, in his bid to win Presidency and soon afterwards, 
Mr. Reagan was persuaded to run for Governor of California, a 
race he won by a landslide over a popular incumbent Governor. 
He won reelection in 1970. Ronald Reagan was nominated for 
President in 1980, supporting issues of family, work, 
neighborhood, peace, and freedom. He became the oldest 
President to be elected in our Nation's history. Two months 
after his election, he was the victim of an assassination 
attempt, but made a remarkable recovery. In 1994, after several 
years of writing, travelling, and silence, former President 
Reagan--who was known as the Great Communicator--wrote a 
handwritten letter informing the Nation that he had early 
stages of Alzheimer's disease.
    c. Legislative status.--This bill was introduced by 
Representative Dave Weldon on September 26, 2000. All members 
of the House delegation of the State of Florida cosponsored it. 
The bill was referred to the House Committee on Government 
Reform on September 26 and to the Subcommittee on the Postal 
Service on October 12, 2000. On October 26, 2000, Chairman 
McHugh moved to suspend the rules of the House and pass the 
bill. At the conclusion of the debate, the chair put the 
question on the motion to suspend the rules. Ms. Brown (FL) 
objected to the vote on the grounds that a quorum was not 
present. Further proceedings on the motion were postponed until 
October 27, 2000. The point of no quorum as withdrawn. On 
October 27, 2000, H.R. 5309 was considered as unfinished 
business. The motion to suspend the rules and pass the bill was 
agreed to by a recorded vote (376-8). The motion to reconsider 
laid on the table was agreed to without objection. The bill was 
received in the Senate on October 27, 2000.
    d. Hearings.--No hearing was conducted on this bill.
60. S. 3194, a bill to designate the facility of the U.S. Postal 
        Service located at 431 George Street in Millersville, PA, as 
        the ``Robert S. Walker Post Office.''
    a. Report number and date.--None.
    b. Summary of measure.--S. 3194 designates the U.S. Postal 
Service facility located at 431 George Street in Millersville, 
PA, as the ``Robert S. Walker Post Office.'' Robert Walker 
represented the people of Millersville and the people of the 
16th District of Pennsylvania for 20 years in the U.S. House of 
Representatives before he decided to retire from the House. He 
became a member of the Republican leadership early in his 
career and was known as a strategist, tactician, and expert on 
parliamentary process. He was the floor manager, chairman of 
the Republican Leadership, and Chief Deputy Minority Whip. For 
more than a decade he was a major player in all the major 
decisions made by the House GOP. When the Republican gained a 
majority in the House, he became the chairman of the House 
Science Committee and the vice-chairman of the Budget 
Committee. NASA awarded him its highest honor, the 
Distinguished Service Medal, in 1996 for his leadership in 
advancing the Nation's space program, particularly commercial 
space endeavors. He was the first sitting House Member to 
receive this award. Though he retired from the House, he 
remains a strategist, and continues his interest and 
participation in public policy. Among his numerous activities, 
Mr. Walker also serves on the Board of Trustees of the 
Aerospace Corporation, the U.S. Capitol Historical Society, and 
the U.S. Space Foundation.
    c. Legislative status.--S. 3194 was introduced by Senator 
Santorum on October 12, 2000. It was read twice and referred to 
the Committee on Governmental Affairs. The committee discharged 
the measure by unanimous consent on October 24, 2000, and it 
passed the Senate by unanimous consent. The House received the 
legislation the next day and it was referred to the Committee 
on Government Reform. On October 26, 2000, Chairman McHugh 
moved to suspend the rules of the House and pass the bill. At 
the conclusion of debate the chair put the question on the 
motion to suspend the rules. Ms. Brown (FL) objected to the 
vote on the grounds that a quorum was not present. Further 
proceeding on the motion were postponed until October 27, 2000. 
The point of no quorum was withdrawn. On October 27, 2000, the 
motion to suspend the rules and pass the bill was agreed to by 
recorded vote (379-7). The motion to reconsider laid on the 
table was agreed to without objection. The bill was cleared for 
the White House on October 27, 2000, and presented to the 
President on November 14, 2000. The President signed the 
measure on November 22, 2000 and it became Public Law No. 106-
535.
    d. Hearings.--No hearing was scheduled on S. 3194.
61. H.R. 4339, to designate the facility of the U.S. Postal Service 
        located at 440 South Orange Blossom Trail in Orlando, FL, as 
        the ``Arthur `Pappy' Kennedy Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4339 designates the facility 
of the U.S. Postal Service located at 440 South Orange Blossom 
Trail in Orlando, FL, as the ``Arthur `Pappy' Kennedy Post 
Office Building.'' Mr. Arthur Kennedy was elected to the 
Orlando City Council in 1972. He was the first African-American 
commissioner of that city. Arthur Kennedy, fondly known as 
``Pappy,'' attended Bethune-Cookman College. He worked 
tirelessly as an advocate for the poor and underprivileged and 
is associated with many organizations, including the NAACP, 
Meals on Wheels, and the United Negro College Fund. Arthur 
Kennedy died in 2000.
    c. Legislative status.--Representative Brown introduced 
H.R. 4339 on May 9, 2000. It was referred to the Committee on 
Government Reform and further referred to the Subcommittee on 
the Postal Service on May 12, 2000. All members of the House 
delegation from the State of Florida cosponsored the 
legislation. On October 26, 2000, Chairman McHugh moved to 
suspend the rules and pass the bill, as amended. At the 
conclusion of the debate, the chair put the question on the 
motion to suspend the rules. Mr. McHugh objected to the vote on 
the grounds that a quorum was not present. Further proceedings 
on the motion were postponed until October 27, 2000. The point 
of no quorum was withdrawn. The measure was considered as 
unfinished business on October 27, 2000. The motion to suspend 
the rules and pass the bill, as amended, was agreed to by voice 
vote. The motion to reconsider laid on the table was agreed to 
without objection and the title of the measure was amended and 
agreed to without objection. The bill was received in the 
Senate on October 27, 2000.
    d. Hearings.--No hearing was scheduled on this bill.
62. H.R. 4400, to designate the facility of the U.S. Postal Service 
        located at 1601-1 Main Street in Jacksonville, FL, as the 
        ``Eddie Mae Steward Post Office Building.''
    a. Report number and date.--None.
    b. Summary of measure.--H.R. 4400 designates the U.S. 
Postal Service facility located at 1601-1 Main Street in 
Jacksonville, FL, as the ``Eddie Mae Steward Post Office 
Building.'' Ms. Steward's single-handed efforts lead to court-
ordered desegregation of the schools in Duval County, FL. Ms. 
Steward was a graduate of Edward Waters College in 
Jacksonville. Ms. Steward was a dedicated civil rights activist 
who served as Florida State President of the NAACP from 1973-
1974, and as the secretary of the Duval County Democratic 
Executive Committee. Ms Steward passed away in March 2000.
    c. Legislative status.--H.R. 4400 was introduced by 
Representative Brown on May 9, 2000. All members of the House 
delegation of the State of Florida cosponsored the measure. It 
was referred to the Committee on Government Reform and further 
referred to the Subcommittee on the Postal Service on May 12, 
2000. On October 26, 2000, Chairman McHugh moved to suspend the 
rules and pass the bill, as amended. At the conclusion of the 
debate, the chair put the question on the motion to suspend the 
rules. Mr. McHugh objected to the vote on the grounds that a 
quorum was not present. Further proceedings on the motion were 
postponed until October 27, 2000. The point of no quorum was 
withdrawn. The measure was considered as unfinished business on 
October 27, 2000. The motion to suspend the rules and pass the 
bill, as amended, was agreed to by voice vote. The motion to 
reconsider laid on the table was agreed to without objection 
and the title of the measure was amended and agreed to without 
objection. The bill was received in the Senate on October 27, 
2000.
    d. Hearings.--There were no hearings on H.R. 4400.

           B. REVIEW OF LAWS WITHIN COMMITTEE'S JURISDICTION

                             Full Committee

                       Hon. Dan Burton, Chairman

1. Review of the Implementation of the Government Performance and 
        Results Act of 1993, Public Law 103-62.
    The Committee on Government Reform has primary jurisdiction 
over a series of important accountability laws, primarily the 
Government Performance and Results Act of 1993, the Chief 
Financial Officers Act of 1990, the Clinger-Cohen Act of 1996, 
and the Inspector General Act of 1980. These laws require 
Federal agencies to provide Congress with performance 
information regarding their programmatic, financial, and 
information systems. With this information, the quality of 
Federal agency decisionmaking is enhanced and Congress is 
better able to hold government accountable to the American 
taxpayers.
    Prior to enactment of the Government Performance and 
Results Act [Results Act], congressional policymaking, spending 
decisions, and oversight had been severely handicapped by a 
lack of clear program goals and inadequate program performance 
and cost information. The goal of the Results Act was to remedy 
that situation by requiring agencies to clarify their missions, 
set clear goals, and report on their progress.
    The Results Act is designed to provide policymakers and the 
public with systematic, reliable, information about Federal 
programs and activities. This law is an important part of the 
legislative framework enacted by Congress during the last 
decade to hold agencies accountable for improvements in the way 
they manage their programs, finances, and information 
technology.
    As described in the section on ``Review of Laws Within the 
Committee's Jurisdiction,'' the Government Reform Committee has 
worked closely with the House Republican leadership to educate 
and involve all congressional committees in the successful 
implementation of the Results Act. Part of that educational 
process has included several subcommittee hearings, 
highlighting the act as a tool for more productive oversight 
and ultimately better-informed policy decisions.
    During the 106th Congress, the committee continued its 
review of the implementation of the Results Act. In March 1999, 
Chairman Burton and Chairman Bill Young of the House 
Appropriations Committee sent a letter to agency heads urging 
them to develop ``specific and measurable annual performance 
targets'' to deal with their management problems and to address 
these issues in appropriations hearings.
    On March 31, 2000, agencies' first performance reports were 
required by the Results Act. The purpose of performance reports 
is to describe an agency's performance relative to its goals, 
and steps an agency would take to achieve goals that were not 
met.
    On October 27, 2000, the House passed S. 2712, the Reports 
Consolidation Act of 2000. The bill provides permanent and 
enhanced authority for the consolidation of financial and 
performance management reports; the most significant of these 
reports is the Results Act Annual Performance Report. It also 
contains several enhancements designed to make the reports more 
useful to Congress, the executive branch, and the public. For 
example, the bill changed the deadline for Annual Performance 
Reports to March 1st effective 2002 in order to make the 
reports more useful for the budget cycles.
    The bill was sponsored jointly by Chairman Fred Thompson of 
Senate Governmental Affairs Committee and Ranking Minority 
Member Joe Lieberman. The legislation passed the Senate on July 
19, 2000. It was signed by the President and became law on 
November 22, 2000 (Public Law 106-531).
    In July 2000, the Subcommittee on Government Management, 
Information, and Technology held a hearing entitled, ``Seven 
Years of GPRA, Has the Results Act Provided Results?'' 
Testimony addressed the quality and use of fiscal year 1999 
performance reports, performance plans, and the use of results-
related information in budgeting and appropriations processes. 
Chairman Burton submitted testimony stating that one way to 
further implement the Results Act in the executive branch was 
through performance agreements.
    In November of 2000, GAO released a study entitled, 
``Managing for Results: Emerging Benefits From Selected 
Agencies' Use of Performance Agreements'' requested by Chairman 
Dan Burton. The report focused on the efforts of three 
agencies, Veterans Health Administration, the Department of 
Transportation, and the Department of Education's Office of 
Student Financial Assistance.
    These agencies established performance agreements between 
their top leadership and senior political and career 
executives. The agencies use performance agreements with their 
top executives to define accountability for goals, monitor 
progress during the year, and then evaluate executive 
performance at the end of the year. The GAO report concluded 
that these performance agreements clearly benefit the agencies, 
as well as the executives.
    More work needs to be done by agencies and Congress in 
order for this law to be successfully implemented. For example, 
many problems persist within agencies due to non-validated and 
non-verifiable data. General Accounting Office reports and 
congressional reviews indicate that many agencies still do not 
use results-oriented goals and measures. Also, many Results Act 
goals and measures do not reflect an agency's day to day 
management activities.
    Although, the 106th Congress has shown that more work needs 
to be done in this area, it also has proven that there is a 
growing interest in using results-oriented information in 
authorizations, oversight, and appropriations by Congress.

                       Subcommittee on the Census

                       Hon. Dan Miller, Chairman

1. Title 13, United States Code, Committee Print 105-C, January 1998.
    On January 25, 1999, the U.S. Supreme Court handed down its 
decision in Department of Commerce, et al. v. United States 
House of Representatives, et al., 119 S. Ct. 765 (1999). The 
court held that the Census Act prohibits statistical sampling 
in determining the population for purposes of apportionment of 
the U.S. House of Representatives. This decision was a 
culmination of two lawsuits brought to challenge the Census 
Bureau's proposed plan to use statistical sampling to determine 
the population for purposes of apportionment of the U.S. House 
of Representatives. Two separate lawsuits, United States House 
of Representatives v. Department of Commerce, et al., 11 F. 
Supp.2d 76 (D.D.C 1998) and Glavin, et al. v. Clinton, et al., 
19 F. Supp.2d 543 (E.D. Va. 1998) challenged the legality and 
constitutionality of the Census Bureau's plans. Convened as 
three-judge courts, both the District Court for the District of 
Columbia and the District Court for the Eastern District of 
Virginia held that the Census Act, 13 U.S.C. Sec. 1 et seq., 
prohibited statistical sampling in the apportionment census. 
United States House of Representatives, 11 F. Supp.2d at 104; 
Glavin, 19 F. Supp.2d at 552-53. Further, both courts ordered 
that the Department of Commerce and the Census Bureau were 
permanently enjoined from using any form of statistical 
sampling, including their program for nonresponse follow-up and 
integrated coverage measurement, to determine the population 
for purposes of apportionment. Id. As the statutory 
interpretation was dispositive of the sampling issue, both 
courts declined to decide the constitutional question. Id.
            a. Justice O'Connor Delivered the Opinion of the Court
    The U.S. Supreme Court began its analysis with whether the 
Glavin plaintiffs had satisfied article III standing. The court 
noted that to establish standing, `` `[a] plaintiff must allege 
personal injury fairly traceable to the defendant's allegedly 
unlawful conduct and likely to be redressed by the requested 
relief.' '' Id. at 772 (citations omitted). Furthermore, ``a 
plaintiff must establish that there exists no genuine issue of 
material fact as to justiciability or the merits'' in order to 
prevail on a motion for summary judgment. Id. Though the lower 
court did not consider whether there was any genuine issue of 
material fact, the court affirmed the lower court's finding of 
article III standing because the record supported the 
plaintiffs' position. Id. at 773.
    The court found article III standing on two grounds. First, 
the Indiana plaintiff successfully showed that under the 
Department's proposed plan, Indiana would lose a seat in the 
U.S. House of Representatives, thereby diluting the votes of 
Indiana residents. This threat of vote dilution was `` 
`concrete and >actual or imminent, not conjectural or 
hypothetical.' '' Id. at 774. Furthermore, this injury was 
traceable to the use of sampling and the requested relief, an 
injunction against the use of sampling, would redress the 
alleged injury. Id.
    The plaintiffs also established standing on the expected 
effects of sampling on intrastate redistricting. Id. at 774. 
The court noted that many State laws require the use of Federal 
decennial census population numbers for State redistricting. 
The plaintiffs who live in those States ``have a strong claim 
that they will be injured by the Bureau's plan because their 
votes will be diluted vis-a-vis residents of counties with 
larger `undercount' rates. . . . [T]his expected intrastate 
vote dilution satisfies the injury-in-fact, causation, and 
redressibility requirements.'' Id. at 775.
    On the merits, the court began with an examination of the 
historical background of the census, as well as the Census Act, 
13 U.S.C. Sec. 1, et seq. Until 1957, enumerators were required 
to collect all census information through personal visits to 
every household. Id. at 776. At the Secretary of Commerce's 
request, Congress enacted Sec. 195 to authorize the use of 
sampling in gathering nonapportionment census information, much 
of which is collected today through the ``long form'' 
questionnaire. Id. In 1964, Congress repealed the law requiring 
that information be obtained through personal visits. This 
permitted the Census Bureau to replace the personal visit with 
a mailed census questionnaire to be returned by the U.S. Postal 
Service. Id.
    Then, in 1976 Congress revised both Sec. Sec. 141 and 195. 
Section 141 was amended to provide for the use of sampling 
procedures and special surveys in collecting a range of 
demographic data during the decennial census. Id. at 776-77. 
However, this broad grant of authority was not necessarily an 
authorization to use sampling when collecting all the 
information for a census. Further examination of the Census Act 
revealed Sec. 195's prohibition on the use of sampling in 
matters related to apportionment. Id. at 777. The court held 
that the amended Sec. 195 did not alter this prohibition. Id.
    Justice O'Connor disagreed with Justice Stevens' conclusion 
that the 1976 amendments had no purpose if not to change the 
prohibition on sampling to determine the apportionment 
population. Id. at 778. While the decennial census is the only 
census used for apportionment purposes, it also ``serves as 
`linchpin of the federal statistical system by collecting data 
on the characteristics of individuals, households, and housing 
units throughout the country.'' ' Id. Justice O'Connor 
concluded that the amendment required the use of sampling to 
collect this data, but only if the Secretary considered it 
``feasible.'' Id.
    Justice O'Connor also disagreed with Justice Breyer's 
analysis that Sec. 195 permitted the use of sampling as a 
``supplement'' to traditional enumeration methods. Justice 
O'Connor argued that whether sampling was used as a 
``supplement'' or a ``substitute,'' it was still 
``determining'' the population. Id. at 779. ``Under the 
proposed plan, the population is not `determined,' not decided 
definitely and firmly, until the NRFU [nonresponse follow-up] 
and ICM [Integrated Coverage Measurement] are complete.'' Id.
    As a result of the court's conclusion that the Census Act 
prohibited the proposed use of statistical sampling for 
apportionment, the court did not reach the constitutional 
question presented. Id. at 779. Furthermore, because the 
decision resolved the substantive issues presented by 
Department of Commerce, et al. v. United States House of 
Representatives, the appeal was dismissed. Id.
            b. Concurring and Dissenting Opinions
    Justice Scalia wrote his concurring opinion to respond to 
Justice Stevens' analysis that a reading of Sec. 195, as 
prohibiting sampling for apportionment purposes, contradicted 
Sec. 141(a). Id. at 780. The phrase ``decennial census of 
population'' in Sec. 141(a) referred to more than just the 
apportionment census. Id. at 780; 13 U.S.C. Sec. 141(g). 
Justice Scalia reasoned that the authorization to use sampling 
was not a blanket authorization in all aspects of the decennial 
census, nor an authorization of all sampling techniques. Id. 
The remainder of the Census Act will ``determine what 
techniques, and what aspects of the decennial census, the 
authorization covers.'' Id.
    Justice Scalia acknowledged that the ``statutory intent to 
permit [the] use of sampling for apportionment purposes is at 
least not clear. In these circumstances, it is our practice to 
construe the text in such fashion as to avoid serious 
constitutional doubt. It is in my view unquestionably doubtful 
whether the constitutional requirement of an `actual 
Enumeration' is satisfied by statistical sampling.'' Id. at 781 
(citations omitted). Justice Scalia then proceeded to cite 
several dictionaries that were roughly contemporaneous with the 
drafting of the Constitution, to establish that ``enumeration'' 
and ``enumerate'' required an actual counting and not an 
estimation of the number. Id. He also pointed out the 
longstanding history of Congress prohibiting an estimation of 
the population for purposes of the apportionment census. Id. 
Further, Justice Scalia believed that sampling injected 
political manipulation into the process. ``To give Congress the 
power, under the guise of regulating the `Manner' by which the 
census is taken, to select among various estimation techniques 
having credible (or even incredible) `expert' support, is to 
give the party controlling Congress the power to distort 
representation in its own favor. In other words, genuine 
enumeration may not be the most accurate way of determining 
population, but it may be the most accurate way of determining 
the population with the minimal possibility of partisan 
manipulation.'' Id. at 782. Justice Scalia believed that a 
strong case could be made that a sampled apportionment census 
would not satisfy the constitutional requirement of an ``actual 
Enumeration.'' Id.
    In his dissent, Justice Breyer held that Sec. 195 did not 
prohibit the use of statistical sampling as proposed by the 
Census Bureau. He noted that the Census Bureau has a practice 
of using sampling in the decennial census. Id. at 783. This 
practice included conducting a quality check on the headcount, 
and the use of an estimation process called ``imputation'' to 
fill in the gaps in a headcount. Id. In addition, the 1970 
headcount was adjusted to add 0.5 percent to the total 
population to account for mistakenly assuming that a 
significant portion of housing units were vacant. Id. at 783-
84. Justice Breyer stated that Sec. 195's prohibition on 
sampling was only as to a ``substitute'' for traditional 
enumeration methods, and not for a ``supplement'' of those 
methods. Id. at 782. As the Secretary's plan for the 2000 
Census (namely, Integrated Coverage Measurement [ICM]) would 
only ``supplement'' a traditional headcount, it would achieve 
the basic purpose of the statutes, which was a more accurate 
census. Id. at 784. Justice Breyer acknowledged that earlier 
attempts at ICM-like adjustments failed to make the census more 
accurate, but accepted the current proposal because the 
Secretary believed it would be more accurate. Id. Although more 
difficult to justify, Justice Breyer also held that the 
nonresponse follow-up program, the use of sampling to determine 
the last 10 percent of the population in each census tract, 
could be considered a ``supplement'' because its impact upon 
the headcount was too small to fall within Sec. 195's except 
clause. Id. at 785. Justice Breyer also gave considerable 
weight to the Secretary's discretionary authority in using 
sampling to determine 10 percent of the population. ``The 
Secretary's decision to draw the line at the last 10%, rather 
than at the last 5% or 1%, of each census tract's population 
may well approach the limit of his discretionary authority. But 
I cannot say that it exceeds that limit.'' Id. at 785-86.
    In his dissent, Justice Stevens argued that the Census Act, 
as amended in 1976, authorized the Secretary to use sampling 
procedures when taking the decennial census. Id. at 786. The 
Census Act contains an unlimited authorization in Sec. 141(a) 
and a limited mandate in Sec. 195. Id. He found that the 
limitation in Sec. 195 is that the Secretary need not use 
sampling when determining the population for apportionment 
purposes, and he need not use it unless he considers it 
feasible. Id. While Sec. 195 did not require the Secretary to 
use sampling, it also did not prohibit its use for determining 
the population for apportionment purposes. Id. Furthermore, if 
there were any conflict between the two sections, Sec. 141(a) 
would prevail because it specifically refers to the decennial 
census, whereas Sec. 195 referred to both the mid-decade and 
the decennial census. Id. Justice Stevens found the text of 
both to be very clear: ``They authorize sampling in both the 
decennial and the mid-decade census, but they only command its 
use when the determination is not for apportionment purposes.'' 
Id. Furthermore, Justice Stevens believed that the words 
``actual Enumeration'' required the apportionment to be based 
on actual counts and not mere speculation, ``but they do not 
purport to limit the authority of Congress to direct the 
`Manner' in which such counts should be made.'' Id. at 788. 
Justice Stevens held that the goal of equal representation was 
best served by a ``Manner'' that provided for the most complete 
and accurate census. Id. at 789. Finally, Justice Stevens held 
that the U.S. House of Representatives would have had article 
III standing to challenge a process used to determine the size 
of each State's congressional delegation. Id.
    Justice Ginsburg wrote a dissenting opinion because she 
would not have found article III standing for the Glavin 
plaintiffs on the expected effects of the sampling plan on 
intrastate redistricting. Id.

                   Subcommittee on the Civil Service

                     Hon. Joe Scarborough, Chairman

1. Statutes reviewed in connection with the Defense Authorization Acts, 
        S. 1059, Public Law 106-65, and H.R. 4205, Public Law 106-398.
    The subcommittee reviewed laws within its jurisdiction in 
both sessions of this Congress in connection with its 
examination of various provisions in those bills relating to 
civilian personnel matters.
    The following statutes were examined in the first session 
in connection with the Defense Authorization Act for fiscal 
year 2000, S. 1059, Public Law 106-65:
    a. 5 U.S.C. Chapter 55 and section 6101.--These statutes 
were reviewed in connection with provisions that the 
Secretaries of the military departments may establish salary 
schedules and work schedules for academic faculty at the 
military academies.
    b. 5 U.S.C. Chapters 83 & 84.--These statutes were reviewed 
in connection with provisions that reformed National Guard and 
Reserve military technician retirement.
    c. 5 U.S.C. Chapter 84, subchapter III.--These statutes 
were reviewed in connection with provisions that allow military 
personnel to participate in the Thrift Savings Plan.
    d. 5 U.S.C. Chapter 89.--These statutes were reviewed in 
connection with provisions to exempt FEHBP contracts from the 
Cost Accounting Standards issued under 41 U.S.C. 422(f).
    e. 5 U.S.C. Sec. 5373.--This statute was reviewed in 
connection with provisions that (1) equalizes the pay cap 
applicable to senior executives at nonappropriated fund 
instrumentalities and the cap for the Senior Executive Service 
and (2) exempt salary schedules for faculty and staff of the 
Uniformed Services University of the Health Sciences from the 
limitations established in section 5373.
    f. 5 U.S.C. Sec. 5532.--This statute was reviewed in 
connection with a provision that repealed it to allow retired 
military officers to accept Federal employment without losing a 
part of their retired pay.
    g. 5 U.S.C. Sec. Sec. 5595, 5597, and 8905.--These statutes 
were reviewed in connection with provisions to allow the 
Department of Defense to continue to provide certain benefits 
during workforce reductions and restructuring. Sections 5595 
and 8905 were also reviewed in connection with provisions that 
authorized the Department of Energy to make lump sum payments 
of severance pay and to continue coverage of health benefits to 
employees affected by the establishment of the National Nuclear 
Security Administration.
    h. 5 U.S.C. Sec. 6304.--This statute was reviewed in 
connection with a provision to restore leave to certain 
Department of Defense employees who deploy to a combat zone.
    i. 5 U.S.C. Sec. 6323.--This statute was reviewed in 
connection with a provision that allows (1) dual status 
technicians performing active duty without pay while on leave 
from technician employment to receive a per diem in lieu of 
subsistence and quarters and (2) expands the purposes for which 
military reserve technicians may use leave provided under 
subsections (a)(1) and (d)(1).
    j. 5 U.S.C. Sec. 8336 and section 1109 of Public Law 105-
261.--These statutes were reviewed in connection with 
provisions to accelerate the implementation of authority for 
the Department of Defense to authorize voluntary early 
retirement authority and to authorize the Department of Energy 
to offer such retirements to employees during the period while 
it is undergoing a major reorganization as a result of the 
establishment of the National Nuclear Security Administration.
    k. Section 663 of the Treasury, Postal Service, and General 
Government Appropriations Act, 1997 (as contained in section 
101(f) of division A of Public Law 104-208) and 5 U.S.C. 
Sec. 5597.--These statutes were reviewed in connection with 
provisions to extend the authority of the Department of Energy 
to offer buyouts.
    l. 42 U.S.C. Sec. 2201(d).--This statute was reviewed in 
connection with a provision that authorizes the Administrator 
of the National Nuclear Security Administration to appoint and 
fix the compensation of no more than 300 scientific, 
engineering, and technical positions.
    The following statutes were examined in the second session 
in connection with, H.R. 4205, Public Law 106-398, the Floyd D. 
Spence National Defense Authorization Act for Fiscal Year 2001:
    a. 5 U.S.C. Sec. 5379(a)(2).--This statute was amended to 
set forth the authority to repay student loans and provide 
incentives for potential employees.
    b. 10 U.S.C. Sec. 1596.--This statute was amended to give 
the Secretary of Defense authority to award special pay to 
those employees who are certified to be proficient in a foreign 
language. The special pay will not exceed 5 percent of the 
employee's rate of basic pay. The employee must be assigned 
duties requiring proficiency in the foreign language during 
contingency operations supported by the armed forces.
    c. 10 U.S.C. Sec. 1745(a)(2).--This statute is amended by 
extending the authority for tuition reimbursement to defense 
acquisition personnel to September 30, 2010 from September 30, 
2001.
    d. 5 U.S.C. Chapter 47.--This section requires the 
Secretary of Defense to adopt work safety models currently 
being used in the private sector. The demonstration program 
will be implemented at no ``fewer than two installations of 
each of the Armed Forces'' (not including the Coast Guard.) The 
demonstration program will terminate on September 30, 2002.
    e. 5 U.S.C. Sec. 3161.--Chapter 31 of Title 5 is amended by 
adding a new subsection to govern pay and benefits of employees 
of temporary organizations.
    f. 5 U.S.C. Sec. 3502(f)(5).--This statute extends DOD's 
authority to allow employees to volunteer for reductions in 
force from September 30, 2001 to September 30, 2005.
    g. 5 U.S.C. Sec. 4302.--This statute is amended to permit 
the head of an agency to electronically maintain a performance 
appraisal system.
    h. 5 U.S.C. Sec. 4502.--This statute is amended to permit 
the Secretary of Defense to unilaterally grant a cash award 
over $10,000 without seeking OPM approval.
    i. 5 U.S.C. Sec. 6305 (c)(2).--This statute is amended to 
create an exception to the prohibition against a lump-sum 
payment arising from a leave of absence granted to an 
``employee serving aboard an oceangoing on an extended 
voyage.'' This section pertains to ``Civil service marines of 
the Military Sealift Command on temporary promotion aboard 
ship.''
    j. 5 U.S.C. Sec. 8702.--This statute is amended to provide 
life insurance for employees designated emergency essential who 
previously submitted a notice of an intent not to be insured, 
if an election is made within 60 days of date of designation.
    k. Title V, Chapter 47 Generally.--This section requires 
the Secretary of Defense to perform a study to examine various 
personnel services relating to civilian personnel in the 
Department of Defense. Specifically, the study is to analyze 
how the performance of personnel services would be affected by 
conducting competition between the public and private sector.
    l. 5 U.S.C. Sec. 3104 note.--This statute is amended to 
increase the ``experimental personnel program for scientific 
and technical personnel'' in the Defense Advanced Research 
Projects Agency. It extends the length of the experimental 
program for 2 years, to October 16, 2005, and allows the 
defense laboratories to participate in the personnel 
flexibilities provided by this program. The number of positions 
subject to this provision are limited to 40 at the Defense 
Advanced Research Projects Agency, 40 at the laboratories of 
each military service and 10 in National Imagery and Mapping 
Agency and the National Security Agency.
    m. Public Law 103-337; 108 Stat. 2721.--This statute is 
amended to give the Defense Department the authority to manage 
a Personnel Demonstration Project as opposed to the current 
situation that gives the Director of OPM final authority.
    n. 5 U.S.C. Sec. 4107. This statute is amended to permit 
DOD to pay for classes leading to a degree when it is part of a 
DOD-approved training program.
    o. 10 U.S.C Sec. 10218.--This statute is amended to extend 
the mandatory retirement age for certain military reserve 
technicians to 60. It also allows the appropriate Secretary to 
reinstate certain previously separated reserve technicians.
    p. 42 U.S.C. Sec. 2000e-16.--This section requires the 
Secretary of Defense to implement a pilot program to streamline 
the resolution of Equal Employment Opportunity disputes filed 
by DOD employees. The Secretary is permitted to extend the 
pilot program for a 3 year period. Employee participation in 
the pilot program would be voluntary. The House bill's 
provision was limited to the Navy's EEO program. The conference 
agreement provides that at least one military department and 
two defense agencies will carry out the pilot program.
    q. 5 U.S.C. Sec. Sec. 5754(b), 6303, 8905a.--These sections 
were reviewed in connection with Section 3133 of the Defense 
Authorization Bill and authorize the Secretary of Energy to 
provide employees of closure project facilities with 
compensation incentives. Under these changes, employees may 
accumulate specified amounts of annual leave, and receive lump-
sum retention allowances in excess of 25 percent of the 
employee's basic rate of pay; volunteer for a reduction in 
force and continue to receive an employee FEHBP contribution if 
they are separated because of a facility closure.
    r. Public Law 103-337; 42 U.S.C. Sec. 7231 note. This 
statute is amended to extend the authority for appointment of 
certain scientific, engineering, and technical personnel to 
September 30, 2002.
    s. 5 U.S.C. Sec. 8440 note; Public Law 106-65; 113 Stat. 
673.--This statute is amended to enable military personnel to 
participate in the Thrift Savings Plan.
    t. 5 U.S.C. Sec. 5597(b). This statute is amended to permit 
the Air Force to conduct workforce reshaping among its civil 
service employees by providing limited authority for the use of 
buyouts and voluntary early retirements during fiscal years 
2001 through 2003.
2. Statutes reviewed in connection with the American Inventors 
        Protection Act of 1999 (H.R. 1907).
    a. 5 U.S.C. Chapter 53.--These statutes were reviewed in 
connection with provisions setting the compensation of the 
Commissioner for Patents and the Commissioner for Trademarks.
    b. 5 U.S.C. Sec. 5574.--This statute was reviewed in 
connection with a provision requiring the Patent and Trademark 
Office to submit to the Congress a proposal to provide 
incentive to retain retirement-eligible patent and trademark 
examiners of the primary examiner grade or higher for the sole 
purpose of training patent and trademark examiners.
3. Statutes reviewed in connection with the Treasury, Postal Service, 
        and General Government Appropriations Acts, H.R. 2490, and H.R. 
        4985.
    The subcommittee reviewed laws within its jurisdiction in 
both sessions of this Congress in connection with its 
examination of various provisions in those bills relating to 
civilian personnel matters.
    The following statutes were examined in the first session 
in connection with the Treasury, Postal Service, and General 
Government Appropriations Act for fiscal year 2000, H.R. 2490, 
Public Law 106-58:
    a. 5 U.S.C. Sec. Sec. 5303, 5304.--These statutes were 
reviewed in connection with provisions establishing a 4.8 
percent pay increase for employees under the General Schedule.
    b. 5 U.S.C. Chapter 89.--These statutes were reviewed in 
connection with a provision exempting FEHBP contracts from the 
Cost Accounting Standards issued under 41 U.S.C. Sec. 422(f).
    c. Section 636 of the Treasury, Postal Service, and General 
Government Appropriations Act, 1997 (as contained in section 
101(f) of Public Law 104-208).--This statute was reviewed in 
connection with a provision requiring agencies to subsidize 
liability insurance for certain Federal employees.
    The following statutes were examined in the first session 
in connection with the Treasury, Postal Service, and General 
Government Appropriations Act for fiscal year 2001, H.R. 4985:
    a. 5 U.S.C. Chapters 83 & 84.--These statutes were examined 
in connection with provisions regarding retirement for certain 
police officers at the Metropolitan Washington Airports 
Authority.
    b. 5 U.S.C. Sec. 5304.--This statute was examined in 
connection with a pilot project on the use of alternative data 
in determining comparability pay.
    c. 5 U.S.C. Chapter 73.--These statutes were examined in 
connection with a provision requiring the removal of law 
enforcement officers who commit a felony.
    d. 5 U.S.C. Chapters 83 & 84.--These statutes were examined 
in connection with provisions to reduce employees' retirement 
contributions.
    e. 5 U.S.C. Sec. Sec. 5546 and 8114.--These statutes were 
examined in connection with a provision to the treatment of 
overtime for firefighters in calculating workers' compensation.
    f. 5 U.S.C. Sec. 6323.--This statute was examined in 
connection with a provision to amend it to establish a minimum 
charge for military leave.
    g. 5 U.S.C. Chapter 53.--This statute was examined in 
connection with a provision to establish a pay rate for 
administrative appeals judges at the Social Security 
Administration.
4. Statutes reviewed in connection with Commerce, Justice, State 
        Appropriations Act, 2000 (H.R. 3421) (as contained in section 
        1000(a)(1) of the Consolidated Appropriations Act for 2000 
        (H.R. 3194)).
    a. 5 U.S.C. Sec. 5542.--This statute was reviewed in 
connection with a provision that prohibits the payment of 
overtime to attorneys at the Department of Justice.
5. Statutes reviewed in connection with the Department of Interior and 
        Related Agencies Appropriations Act, 2000 (H.R. 3423) (as 
        contained in section 1000(a)(3) of the Consolidated 
        Appropriations Act for 2000 (H.R. 3194)).
    a. 5 U.S.C. Sec. 3105.--This statute was reviewed in 
connection with a provision that would have permitted the 
Department of the Interior to appoint administrative law judges 
to hear Indian probate cases without regard to the provisions 
of title 5 of the United States Code.
6. Statutes reviewed in connection with the National Transportation 
        Safety Board Amendments Act of 1999 (H.R. 2910).
    a. 5 U.S.C. Sec. 5542.--This statute was reviewed in 
connection with a provision that establishes special overtime 
rates for accident investigators.
7. Statutes reviewed in connection with S. 2915.
    a. 5 U.S.C. Chapters 87 and 89.--These statutes were 
reviewed in connection with provisions relating to the 
retirement of judges of the Court of Federal Claims.
8. Statutes reviewed in connection with H.R. 809.
    a. 5 U.S.C. Chapters 53, 83, and 84.--These statutes were 
reviewed in connection with provisions related to the pay and 
retirement benefits of GSA police officers.
9. Statutes reviewed in connection with H.R. 4642 (Public Law 106-303).
    a. 5 U.S.C. Sec. Sec. 8336(d) and 8414.--These statutes 
were reviewed in connection with provisions to provide the 
Comptroller General with certain flexibilities in conducting 
voluntary early retirements.
    b. Section 663 of the Treasury, Postal Service, and General 
Government Appropriations Act, 1997 (5 U.S.C. Sec. 5597 
note).--These statutes were reviewed in connection with 
provisions to provide the Comptroller General with certain 
flexibilities in offering buyouts to GAO employees.
    c. 31 U.S.C. Chapter 7, Subchapter III.--These statutes 
were reviewed in connection with provisions to provide the 
Comptroller General with certain personnel flexibilities 
related to reductions-in-force, senior-level positions, and 
experts and consultants.

                Subcommittee on the District of Columbia

                     Hon. Thomas M. Davis, Chairman

1. District of Columbia Self-Government and Governmental Reorganization 
        Act, Public Law 93-198.
    An act to reorganize the government structure of the 
District of Columbia, to provide a charter for local government 
in the District of Columbia, to provide a charter for local 
government in the District of Columbia subject to the 
acceptance of the majority of the registered qualified electors 
in the District of Columbia, to delegate certain 
recommendations of the commission on the organization of the 
government of the District of Columbia, and for other purposes.
2. District of Columbia Financial Responsibility and Management Act, 
        Public Law 104-8.
    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.
3. Balanced Budget Act of 1997, Public Law 105-33, Title XI.
    ``National Capital Revitalization and Self-Government 
Improvement Act of 1997.''
4. District of Columbia College Access Act, Public Law 106-98.
    To establish a program to afford high school graduates from 
the District of Columbia the benefits of in-state tuition at 
State colleges and universities outside the District of 
Columbia, and for other purposes.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, Chairman

    1. Chief Financial Officers Act of 1990, 104 Stat. 2838, 
Public Law 101-576 (see section II.A.2.)
    2. Clinger-Cohen/ITMRA, 110 Stat. 679, 40 U.S.C. 759, 
Public Law 104-106 (see sections II.B. 1 and 2; and sections 
IV.A. 3, 4, and 5.)
    3. Competition in Contracting Act of 1984, 98 Stat. 1175, 
41 U.S.C. 251 et seq., 41 U.S.C. 253 (see sections II.B.6 and 
IV.A.2.)
    4. Debt Collection Improvement Act of 1996, 110 Stat. 1321, 
Public Law 104-134 (see sections II.B.4 and IV.A.6.)
    5. Federal Financial Management and Improvement Act of 
1996, 110 Stat. 3009-389, 31 U.S.C. 3512 note (see section 
II.A.2.)
    6. Federal Property and Administrative Services Act of 
1949, as amended, 63 Stat. 377, 40 U.S.C. 475 et. seq. (see 
section II.B.20.)
    7. Freedom of Information Act, 80 Stat. 250 (see section 
II.A.1.)
    8. Government in the Sunshine Act, 90 Stat. 1241, 5 U.S.C. 
5526 (see section II.A.1.)
    9. Government Management and Reform Act of 1994, 108 Stat. 
3410, Public Law 103-356 (see section II.A.2.)
    10. Government Performance and Results Act, 107 Stat. 285, 
Public Law 103-62 (see section II.B.8.)
    11. Inspector Generals Act of 1978, as amended, 92 Stat. 
1101-1109, 102 Stat. 2515-2530, Public Law 95-452 (see section 
II.A. 2 and 3; section II.B. 1, 4, 6 and 12.)
    12. Office of Federal Procurement Policy Act, 41 U.S.C. 
Sec. 1-34 (see section IV.A.1.)
    13. Office of Government Ethics Amendment Act of 1996, 5 
U.S.C.A. 405 (see section III.A.5.)
    14. Privacy Act of 1974, as amended, 5 U.S.C. 552a (see 
section II.B.10.)
    15. Single Audit Act of 1984, as amended, 98 Stat. 2327, 31 
U.S.C. 75, Public Law 104-156 (see section IV.A.7.)

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                     Hon. David McIntosh, Chairman

1. Paperwork Reduction Act of 1995, Public Law 104-13, May 22, 1995, 
        and Paperwork Reduction provision within the appropriation for 
        the Office of Management and Budget in the Treasury and General 
        Government Appropriations Act, 1999, Public Law 105-277, 
        October 21, 1998.
    The Paperwork Reduction Act of 1995 furthers the goals of 
the Paperwork Reduction Act of 1980, including making the 
Federal agencies more responsible and publicly accountable for 
reducing the burden of Federal paperwork on the public. Under 
this law and Executive Order No. 12866 (and its predecessor 
orders), the Office of Management and Budget's [OMB's] Office 
of Information and Regulatory Affairs [OIRA] is responsible for 
paperwork and regulatory reviews of agency paperwork and 
regulatory plans and proposals. The Paperwork Reduction 
provision in the Treasury and General Government Appropriations 
Act for 1999 directed OMB to submit a report by March 31, 1999 
that identifies specific paperwork reduction accomplishments 
expected, constituting annual 5 percent reductions in paperwork 
expected in fiscal year 1999 and fiscal year 2000.
2. Congressional Review Act, Public Law 104-121, March 29, 1996 and the 
        Congressional Review Act provision within the appropriation for 
        the Office of Management and Budget in the Treasury and General 
        Government Appropriations Act, 1999, Public Law 105-277, 
        October 21, 1998.
    The Congressional Review Act [CRA] requires the agencies to 
file certain reports with Congress for each new rule before 
that rule can legally take effect. If a rule is not reported, 
it is an illegal rule. The CRA restored accountability to 
regulation by giving Congress the opportunity to review and, if 
necessary, disapprove any new rule or regulation. The CRA 
provision in the Treasury and General Government Appropriations 
Act for 1999 directed OMB to issue guidance by March 31, 1999 
on certain specific provisions of the CRA and a standard new 
rule reporting form for submissions for Congressional review 
under the CRA.

Subcommittee on National Security, Veterans Affairs, and International 
                               Relations

                    Hon. Christopher Shays, Chairman

1. National Defense Authorization Act for Fiscal Year 1998, Public Law 
        105-85.
    This law requires the Office of Management and Budget 
establish a reporting system for executive agencies on 
government-wide spending for counterterrorism programs. The law 
also requires a report be developed and submitted to Congress 
describing such expenditures. The administration requested over 
$11 billion in funding for fiscal year 2000. The subcommittee 
examined administration spending on terrorism-related programs. 
The subcommittee will continue to oversee the process of 
developing funding priorities and agency coordination 
shortfalls.
2. The Prompt Payment Act of 1982, as amended in 1988.
    The act requires agencies, in accordance with regulations 
prescribed by the Director of Office of Management and Budget, 
to pay interest to contractors and vendors for any late 
payments for goods or services. General Accounting Office and 
private auditors highlighted the severity of DOD's payment 
problems. The subcommittee examined the Department of Defense's 
application of the Prompt Payment Act, and determined what 
reforms may be required to improve the payment process.
3. Defense Against Weapons of Mass Destruction [WMD] Act of 1996, 
        Public Law 104-201.
    The act mandates implementation of a program to provide 
civilian personnel of Federal, State, and local agencies with 
training and expert advice regarding emergency responses to a 
use or threatened use of a WMD or related material. Department 
of Defense was initially designated lead agency to administer 
the program. The subcommittee examined the status and 
implication of the proposed transfer of the Domestic 
Preparedness Program to the Department of Justice.
4. The Persian Gulf War Veterans Health Act of 1998, Public Law 105-
        277.
    The act establishes in law the presumption of service-
connection for illnesses associated with exposure to toxins 
present in the war theater. The Veterans Administration is 
required to accept the findings of an independent scientific 
body as to the illnesses linked with actual and presumed toxic 
exposures. The subcommittee takes an active role in overseeing 
the legislation will continue to closely monitor its 
implementation.
5. National Defense Authorization Act for Fiscal Year 1994, Public Law 
        103-160.
    The act mandates the coordination and integration of all 
Department of Defense [DOD] chemical and biological programs. 
Each year the Secretary of Defense is required to submit to 
Congress a report assessing and describing plans to improve 
readiness to survive, fight, and win in a nuclear, biological, 
and chemical environment. This assessment also includes a 
description of coordination and integration of the DOD Chemical 
and Biological Defense Program [CBDP]. The General Accounting 
Office found the CBDP lacked specific goals and the program was 
not being evaluated according to its impact on defensive or 
operational capabilities. The subcommittee examined the 
management and oversight structure of the CBDP.

                   Subcommittee on the Postal Service

                     Hon. John M. McHugh, Chairman

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 directs Congress 
``(t)o establish Post Offices and Post Roads.'' An 11-member 
Board of Governors governs the U.S. Postal Service. Nine 
Governors are appointed by the President and confirmed by the 
Senate. They in turn employ a Postmaster General and Deputy 
Postmaster General who also become members of the Board.
    The U.S. Postal Service handles more than 40 percent of the 
worlds mail volume. It processed more than 200 billion pieces 
of mail in fiscal year 1999 or about 650 million pieces of mail 
per day and delivered to 130 million addresses 6 days a week. 
To carry out this work, the Postal Service employs 792,041 
career employees or 1 out of every 170 Americans. The total 
revenue for the U.S. Postal Service is $62.6 billion in 1999.
    The U.S. Postal Rate Commission functions independently 
from the U.S. Postal Service. It is governed by five, full-
time, Presidentially appointed and Senate-confirmed 
Commissioners. It is responsible for hearing requests 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 Postal Rate 
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 on 
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.
    The subcommittee continues its in-depth oversight of the 
operations of these entities.
                      IV. Other Current Activities

                  A. GENERAL ACCOUNTING OFFICE REPORTS

                             Full Committee

                       Hon. Dan Burton, Chairman

1. ``Financial Management: Federal Financial Management Improvement Act 
        Results for Fiscal Year 1998,'' October 1, 1999, AIMD-00-3.
    a. Summary.--Pursuant to a legislative requirement, GAO 
reviewed Federal agencies' efforts to implement the Federal 
Financial Management Improvement Act [FFMIA], focusing on: (1) 
compliance of chief financial officer [CFO] agencies' financial 
systems with FFMIA's requirements; (2) whether CFO agencies' 
financial statements have been prepared in accordance with 
applicable accounting standards; and (3) agencies' plans to 
ensure that their systems comply with FFMIA requirements.
    Findings.--GAO noted that: (1) as a result of the audits of 
CFO agencies' financial statements and FFMIA's requirements, 
agencies are more aware of their financial management 
weaknesses and have started addressing them; (2) however, in 
terms of agency auditors' assessments of compliance with FFMIA, 
there has been little discernible progress since last year; (3) 
for the agencies whose fiscal year 1998 audit reports had been 
issued as of September 14, 1999, those whose financial 
management systems were not in compliance with FFMIA in fiscal 
year 1997 were still not in compliance in fiscal year 1998; (4) 
issues GAO identified in its report last year under FFMIA 
proved to be continuing significant challenges to agencies; (5) 
for fiscal year 1998, auditors for 17 of 20 CFO agencies 
reported that the agencies' financial systems did not comply 
substantially with FFMIA's requirements; (6) although the 
statutory reporting deadline is March 1, the remaining four CFO 
agencies, as of September 14, 1999, had not yet issued their 
audited financial statements for fiscal year 1998; (7) all four 
of the agencies were found by their auditors to be noncompliant 
with FFMIA for fiscal year 1997; (8) auditors reported that the 
financial systems of 11 of these 17 agencies found to be 
noncompliant in fiscal year 1998 were noncompliant with all 
three FFMIA requirements--Federal financial management systems 
requirements, applicable Federal accounting standards, and the 
Standard General Ledger; (9) auditors for 16 of the 17 agencies 
had reported for fiscal year 1997 that the agencies likewise 
did not comply with FFMIA; (10) the 17th agency was reported as 
complying with the requirements of FFMIA in fiscal year 1997 
but was found to be noncompliant with systems requirements in 
fiscal year 1998 due to auditors' interpretations of what 
constitutes substantial compliance; (11) further, in some 
agencies, factors that contributed to systems being found 
noncompliant increased, in part because agencies had problems 
implementing new accounting standards that became effective in 
fiscal year 1998; (12) GAO's audit of the financial statements 
for the U.S. Government for fiscal year 1998 also showed that 
many agencies did not meet applicable accounting standards; 
(13) GAO issued a special series of reports this year that 
discusses major management challenges and program risks that 
must be addressed to improve the performance, management, and 
accountability of Federal agencies; and (14) significant time 
and investment are needed for agencies to address and correct 
long-standing financial management systems problems.
2. ``Anthrax Vaccine: Safety and Efficacy Issues,'' October 12, 1999, 
        T-NSIAD-00-48.
    a. Summary.--Pursuant to a congressional request, GAO 
discussed the results of its ongoing examination of the safety 
and efficacy of the anthrax vaccine, focusing on the: (1) need 
for a six-shot regimen and annual booster shots; (2) long- and 
short-term safety of the vaccine; (3) efficacy of the vaccine; 
(4) extent to which problems the Food and Drug Administration 
[FDA] found in the vaccine production facility in Michigan 
could compromise the safety, efficacy, and quality of the 
vaccine; and (5) effects of the anthrax vaccine on children, 
pregnant women or lactating women.
    Findings.--GAO noted that: (1) no studies have been done to 
determine the optimum number of doses of the anthrax vaccine; 
(2) although annual boosters are given, the need for a six-shot 
regimen and annual booster shots have not been evaluated; (3) 
the long-term safety of the licensed vaccine has not been 
studied; (4) however, the Department of Defense [DOD] is 
designing studies to examine the vaccine's long-term effects; 
(5) data on the prevalence and duration of short-term reactions 
to the vaccine are limited but suggest that women experience a 
higher rate of adverse reactions than do men; (6) FDA's system 
for collecting data on adverse events associated with the 
vaccine, which DOD uses, relies on vaccine recipients or their 
health care providers to report adverse events; (7) studies 
have shown that such systems may not accurately reflect the 
incidence of events due to underreporting; (8) however, data 
from two recent DOD efforts to identify the prevalence of 
adverse events associated with anthrax vaccine show that a 
higher proportion of women reported both local and systemic 
reactions to the vaccine than their male counterparts; (9) in 
addition, more than twice the proportion of women reported that 
they missed one or more duty shifts after their vaccinations 
than did males; (10) a study on the efficacy of the earlier 
vaccine concluded that it provided protection to humans against 
anthrax penetrating the skin but did not provide information to 
determine the effectiveness against inhalation anthrax; (11) in 
the 1980's, DOD began testing the efficacy of the licensed 
vaccine in animals, focusing on its protection against 
inhalation anthrax; (12) the studies showed that the vaccine 
protected some animals against inhalation anthrax; (13) 
however, the level of protection varied for different species 
and the results cannot be extrapolated to humans; (14) DOD 
recognizes that correlating the results of animal studies to 
humans is necessary and told GAO that it is planning research 
in this area; (15) DOD also plans to develop a second 
generation anthrax vaccine and, as part of this effort, will 
need to address whether strains of deliberately engineered or 
naturally occurring anthrax can overcome the protective 
immunity of such a vaccine; and (16) FDA's inspections of the 
vaccine production facility in 1997 and 1998 found a number of 
deficiencies.
3. ``Human Capital: Key Principles From Nine Private Sector 
        Organizations,'' January 31, 2000, GGD-00-28.
    a. Summary.--Pursuant to a congressional request, GAO 
identified the private sector's key principles for 
strategically and effectively managing their human capital to 
provide Federal agencies with information and examples to help 
them improve their human capital management.
    Findings.--GAO noted that: (1) each of the nine private 
sector organizations that GAO reviewed implemented human 
capital strategies and practices that were designed to directly 
support the achievement of their specific missions, strategic 
goals, and core values; (2) GAO identified 10 underlying and 
interrelated principles of human capital management that are 
common to the nine organizations and viewed as the foundation 
for their ongoing success and viability: (a) treat human 
capital as being fundamental to strategic business management 
by integrating human capital considerations with the 
organization's mission, strategic goals, core values, and 
operational policies and practices; (b) integrate human capital 
functional staff into management teams and expand the strategic 
role of the staff beyond providing traditional personnel 
administration services; (c) supplement internal human capital 
staff's knowledge and skills with outside expertise from 
consultants, professional associations, and other 
organizations, as needed; (d) hire, develop, and sustain 
leaders according to leadership characteristics identified as 
essential to achieving specific missions and goals; (e) 
communicate a shared vision that all employees, working as one 
team, can strive to accomplish by promoting a common 
understanding of the mission, strategic goals, and core values 
toward which all employees are directed to work as a team to 
achieve; (f) hire, develop, and retain employees according to 
competencies--knowledge, skills, abilities, and behaviors--
needed to achieve high performance of mission and goals; (g) 
provide incentives, including pay and other meaningful 
incentives, to link performance to results and hold employees 
accountable for contributing to the achievement of mission and 
goals; (h) support and reward teams to achieve high performance 
by fostering a culture in which individuals interact and 
support and learn from each other as a means of contributing to 
the high performance of their peers, units, and the 
organization as a whole; (i) integrate employee input into the 
design and implementation of human capital policies and 
practices to develop responsive policies and practices; and (j) 
measure the effectiveness of human capital policies and 
practices by evaluating and making fact-based decisions on 
whether human capital policies and practices support high 
performance mission and goals; and (3) Federal agencies need 
only to adopt and adapt to these principles, if necessary, to 
give human capital higher priority as they implement 
performance-based management to achieve success and higher 
performance.
4. ``Managing for Results: Challenges Agencies Face in Producing 
        Credible Performance Information,'' February 4, 2000, GGD-00-
        52.
    a. Summary.--Pursuant to a congressional request, GAO 
identified some of the challenges agencies face in producing 
credible performance information and how those challenges may 
affect performance reporting, focusing on: (1) whether the 
weaknesses identified in agencies' performance plans imply 
challenges for the performance reports; (2) some of the 
challenges agencies face in producing credible performance 
data; and (3) how performance reports can be used to address 
data credibility issues.
    Findings.--GAO noted that: (1) it appears unlikely that 
agencies consistently will have for their first performance 
reports the reliable performance information needed to assess 
whether performance goals are being met or specifically how 
performance can be improved; (2) over the past several years 
GAO has identified limitations in agencies' abilities to 
produce credible data and identify performance improvement 
opportunities; (3) these limitations are substantial, long-
standing, and will not be quickly or easily resolved; (4) they 
are likely to be reflected in agencies' initial performance 
reports as they have been in the performance plans to date; (5) 
in administering programs that are a joint responsibility with 
State and local governments, Congress and the executive branch 
continually balance the competing objectives of collecting 
uniform program information to assess performance with giving 
States and localities the flexibility needed to effectively 
implement intergovernmental programs; (6) the relatively 
limited level of agencies' program evaluation capabilities 
suggests that many agencies are not well positioned to 
undertake necessary evaluations; (7) program evaluations are 
important to providing information on the extent to which an 
agency's efforts contributed to results and to highlight 
opportunities to improve those results; (8) long-standing 
weaknesses in agencies' financial management capabilities make 
it difficult for decisionmakers to effectively assess and 
improve many programs' financial performance; (9) in order to 
help agency managers select appropriate techniques for 
assessing, documenting, and improving the quality of their 
performance data, some agencies proposed or adopted reasonable 
approaches to verify and validate performance information; (10) 
these approaches include senior management actions, agencywide 
efforts, and specific program manager and technical staff 
activities, which could be used, where appropriate, to improve 
the quality, usefulness, and credibility of performance 
information; (11) performance reports provide agencies with an 
opportunity to show the progress made in addressing data 
credibility issues; (12) the Government Performance and Results 
Act requires agencies to describe in their annual performance 
plans how they will verify and validate the performance 
information that will be collected; and (13) including 
information in performance reports describing the quality of 
the reported performance data and the implications of missing 
data can be equally important and can provide key contextual 
information to Congress and other users of the performance 
reports.
5. ``Marine Pollution: Progress Made to Reduce Marine Pollution by 
        Cruise Ships, but Important Issues Remain,'' February 28, 2000, 
        RCED-00-48.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the actions being taken by Federal 
regulators and the cruise ship industry to prevent future 
illegal discharges of waste, focusing on: (1) the nature and 
extent of reported illegal discharge cases for foreign-flagged 
cruise ships from 1993 through 1998; (2) Federal agencies' 
efforts to prevent, detect, investigate, and prosecute illegal 
discharges from foreign-flagged cruise ships; (3) the actions 
cruise ship companies with proven illegal discharge violations 
have taken to prevent future illegal discharges; and (4) the 
views of relevant Federal agencies and third-party interest 
groups regarding the actions that cruise ship companies have 
taken, and what issues, if any, they believe require further 
attention.
    Findings.--GAO noted that: (1) Federal data indicate 
foreign-flagged cruise ships were involved in 87 confirmed 
illegal discharge cases in U.S. waters from 1993 through 1998; 
(2) overall, the number of confirmed illegal discharge cases by 
cruise ships in U.S. waters generally declined during this 
period; (3) oil or related chemicals were discharged in 81 
cases and 6 cases involved discharges of garbage or plastic; 
(4) GAO determined that about three-fourths of these cases were 
accidental, while the remainder were either intentional or 
their cause could not be determined; (5) the Coast Guard, the 
Department of Justice, and other agencies undertake a variety 
of efforts to prevent, detect, investigate, or prosecute 
illegal marine discharges by foreign-flagged cruise ships; (6) 
the Coast Guard inspects ships in port, watches them as part of 
aircraft surveillance in the open sea, investigates reported 
incidents and adjudicates cases under its civil penalty 
procedures; (7) however, the Coast Guard's ability to detect 
and resolve violations is constrained by the narrow scope of 
its routine inspections, a significant reduction in aircraft 
surveillance for marine pollution purposes, and a breakdown of 
the process for identifying and resolving alleged violations 
referred to flag states; (8) 12 cruise ship companies that have 
been involved in nonaccidental pollution cases have implemented 
new or updated environmental plans designed to enhance ship 
safety and prevent pollution; (9) the plans, which were 
prepared pursuant to new international standards or were 
mandated by U.S. district courts after the companies pled 
guilty to pollution violations, call for such steps as regular 
third-party verification of ships' compliance with 
environmental procedures; (10) officials from the Coast Guard, 
the Department of Justice, and the Center for Marine 
Conservation said that cruise ship companies were making 
progress toward changing a maritime culture that once permitted 
discharges of garbage and oil from ships before international 
standards and U.S. laws to control such discharges were 
adopted; (11) however, cruise ship companies must demonstrate a 
sustained commitment to eliminate illegal discharges at sea; 
and (12) some officials expressed concern about the large 
volume of wastewater from sinks, showers, drains, and sewage 
systems that cruise ships legally discharge at sea and the 
possible effects of these discharges on sensitive marine life.
6. ``Pesticides: Improvements Needed to Ensure the Safety of 
        Farmworkers and Their Children,'' March 14, 2000, RCED-00-40.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on issues related to the safety of 
children who may be exposed to pesticides in agricultural 
settings, focusing on: (1) what Federal requirements govern the 
safe use of pesticides, particularly as they relate to 
protecting children in agricultural settings; (2) what 
information is available on the acute and chronic effects of 
agricultural pesticide exposure, particularly on children; and 
(3) what the Environmental Protection Agency [EPA] has done to 
ensure that its Worker Protection Standard considers the needs 
of children and is being adequately implemented and enforced.
    Findings.--GAO noted that: (1) two laws principally govern 
the safe use of pesticides: (a) the Federal Insecticide, 
Fungicide, and Rodenticide Act, which requires that pesticides 
be approved by EPA for specified uses; and (b) the Federal 
Food, Drug, and Cosmetic Act, which regulates the residues of 
pesticides on or in foods; (2) in 1996, the Food Quality 
Protection Act amended these two laws, requiring EPA to 
reevaluate the amount of pesticide residues allowed on or in 
food, taking into account consumers' aggregate exposure from 
other sources, including residential exposures; (3) EPA is 
generally required to apply an additional margin of safety in 
setting limits on pesticide residues to ensure the safety of 
food for infants and children; (4) EPA must also consider any 
available information concerning ``major identifiable subgroups 
of consumers'' in reevaluating the amount of pesticide residues 
that can remain on or in foods; (5) in October 1998, the 
Natural Resources Defense Council and others petitioned EPA to 
identify children living on and near farms as a major 
identifiable subgroup for the purposes of the Food Quality 
Protection Act; (6) in its initial response, EPA said it was 
funding several studies aimed at assessing the effects of farm 
children's exposure to pesticides; (7) comprehensive 
information on acute and chronic health effects due to 
pesticide exposure does not exist, and data sources to track 
acute--short term--pesticide illnesses are incomplete and have 
limitations that result in the underestimation of both the 
frequency and the severity of such illnesses; (8) a number of 
federally sponsored studies are under way related to the 
chronic effects of pesticide exposure, but it will be many 
years before conclusive results from these studies are known; 
(9) EPA implemented the Worker Protection Standard to reduce 
farmworkers' exposure to pesticides; (10) according to EPA, one 
of the most important protections afforded by the standard is 
the time intervals between when the pesticides are applied and 
when workers may enter treated areas; (11) these entry 
intervals were designed for adults and children 12 years and 
older; (12) EPA has little assurance the protections in the 
standard are being provided at all; and (13) GAO found EPA 
regions have been inconsistent in whether they set goals for 
the number of worker protection inspections States should 
conduct, in defining what constitutes a worker protection 
inspection, and in the extent to which they oversee and monitor 
States' implementation and enforcement of the standard.
7. ``Financial Audit: Independent Counsel Expenditures for the Six 
        Months Ended September 30, 1999,'' March 31, 2000, AIMD-00-120.
    a. Summary.--Pursuant to a congressional request, GAO 
audited the expenditures of eight offices of independent 
counsel [OIC] for the 6 months ended September 30, 1999.
    Findings.--GAO noted that: (1) the statements of 
expenditures for OIC were fairly presented in all material 
respects; (2) GAO's consideration of internal controls, which 
was limited for the purpose of determining GAO's procedures for 
auditing the statements of expenditures disclosed no material 
weaknesses; and (3) GAO's audits included limited tests of 
compliance with laws and regulations that disclosed no 
reportable instances of noncompliance with the laws and 
regulations GAO tested.
8. ``Telecommunications: GSA's Estimates of FTS2001 Revenues Are 
        Reasonable,'' April 14, 2000, AIMD-00-123.
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed the General Services Administration's [GSA] estimates 
of the Federal Technology Service [FTS] 2001 revenues and the 
implications of allowing other service providers to compete in 
the FTS 2001 market, focusing on: (1) the percentage of FTS 
2001 contracts that are minimum revenue guarantees [MRG]; (2) 
when MRGs are likely to be satisfied; (3) the factors that 
could significantly alter the estimates of total program 
revenue and corresponding timeframes for satisfying MRGs; and 
(4) how competition could affect the estimates.
    Findings.--GAO noted that: (1) GAO found that GSA's revenue 
estimation process, which relies on historical and known agency 
requirements for FTS 2001-offered services, produced a 
reasonable estimate of program revenues; (2) GAO's independent, 
high-level estimate, which used the most currently available 
traffic forecasts and pricing information, produced essentially 
the same estimate--$2.3 billion in revenue over the life of the 
FTS 2001 program, assuming all 4 of the contracts' option years 
are exercised; (3) during GAO's review, GAO identified a number 
of technical issues with regard to GSA's revenue estimation 
process that did not affect the integrity of its revenue 
estimates; (4) the MRGs--a total of $1.5 billion--represent 
about two-thirds of current estimated program revenues over 8 
years; (5) according to the results of both GSA's and GAO's 
analysis, the FTS 2001 MRGs are expected to be satisfied for 
both contractors during fiscal year 2004; (6) three primary 
factors could significantly alter estimates of total program 
revenue and corresponding timeframes for satisfying the MRGs: 
(a) pricing; (b) agency demand for FTS 2001 services; and (c) 
transition progress; (7) additional competition could yield 
price reductions, cause further transition delays, and reduce 
demand for services from the two existing FTS 2001 contractors; 
(8) in turn, these factors would decrease program revenues and 
lengthen the time needed to satisfy the MRGs; (9) in regard to 
the potential benefits of reduced prices and transition costs, 
it is difficult to quantify the effect on estimates without 
knowing an added competitor's prices or the specifics of 
related transition costs; (10) however, two factors would have 
to be considered in such an analysis; (11) savings in 
transition costs would occur only if the new competitor was an 
incumbent FTS 2000 provider and only to the extent that 
transition costs have not yet been incurred; (12) reductions in 
revenues to current FTS 2001 contractors would increase the 
timeframe for satisfying the MRGs; and (13) if MRGs are not 
satisfied during the contracts' term, GSA may be liable for 
additional payments to the contractors.
9. ``Bid Protests: Characteristics of Cases Filed in Federal Courts,'' 
        April 17, 2000, GGD/OGC-00-72.
    a. Summary.--Pursuant to a legislative requirement, GAO 
provided information on small business bid protests that have 
been filed in district courts and the United States Court of 
Federal Claims [COFC] since the Administration Dispute 
Resolution Act took effect on December 31, 1996, focusing on 
the: (1) number of bid protest cases filed in the U.S. district 
courts and COFC between January 1, 1997, and April 30, 1999, 
that were filed by small businesses, the type of agencies 
involved, and the amount of the procurement at issue; (2) 
perceived advantages and disadvantages for small businesses 
filing bid protest cases in each judicial forum; and (3) 
characteristics of district court and COFC bid protest cases, 
particularly those filed by small businesses, that could be 
used to assess these perceived advantages and disadvantages.
    Findings.--GAO noted that: (1) between January 1, 1997, and 
April 30, 1999, at least 66 bid protest cases were filed in 
U.S. district courts; (2) during the period January 1, 1997, 
through August 1, 1999, 118 bid protest cases were filed in 
COFC; (3) on the basis of available data, using an inclusive 
definition of small business, GAO found about half of the cases 
in both district courts and COFC were filed by small 
businesses; (4) defense procurements were the subject of the 
majority of small business protests in both district courts and 
COFC; (5) for those cases for which the value of the 
procurement was available, the majority of the small business 
procurements in district courts and COFC were for $10 million 
or less; (6) the case data available provide a limited basis 
for assessing the perceived advantages and disadvantages of 
retaining district court jurisdiction for bid protest cases, 
therefore, GAO draws no conclusions based on these data; (7) 
proponents of retaining district court jurisdiction assert that 
small businesses may be able to reduce the costs of filing a 
protest case in Federal court by filing in their local district 
court using counsel from those local districts; (8) requiring 
small businesses to file all their judicial protest cases with 
COFC could raise their protest costs, perhaps prohibitively; 
(9) GAO found that more small businesses filed in COFC than 
filed in district courts; (10) of the 33 small business cases 
filed in district courts, 18 were filed in the protesters' 
local district courts; (11) with regard to potential 
jurisdictional issues associated with bid protest cases, GAO 
found that the legal issues raised in the bid protest cases 
filed in district courts and COFC fell into the same general 
categories; (12) in both forums, the issue raised most 
frequently was the propriety of agency evaluation of proposals; 
(13) in both district courts and COFC, the results of bid 
protests were mixed; (14) it was not clear that small 
businesses were more likely to prevail in district courts than 
COFC; (15) the courts usually denied injunctive relief to 
protesters regardless of whether they were small businesses or 
not; (16) in 30 district court cases and 29 COFC cases, the 
courts dismissed the cases on the voluntary motion of the 
protester or the protester and government jointly; (17) in some 
cases the voluntary dismissal was because the parties had 
reached a settlement that responded to the protester's claims; 
and (18) in actions other than granting motions for voluntary 
dismissal, the courts generally ruled against the protester, 
with only one district court ruling in the protester's favor.
10. ``Welfare Reform: Improving State Automated Systems Requires 
        Coordinated Federal Effort,'' April 27, 2000, HEHS-00-48.
    a. summary.--GAO reviewed States' efforts to meet the 
information needs associated with welfare reform, with a focus 
on Temporary Assistance for Needy Families [TANF], focusing on 
the: (1) extent to which automated systems in selected States 
meet key information needs of programs that help low-income 
individuals with children obtain employment and become 
economically independent; (2) approaches States are using to 
develop or modify their automated systems to better meet these 
information needs; and (3) major obstacles States have 
encountered in working to improve their automated systems as 
well as the potential role of the Federal Government in helping 
overcome these obstacles.
    Findings.--GAO noted that: (1) although automated systems 
in the States GAO examined support welfare reform in many ways, 
a number of these systems have major limitations in one or more 
of three key areas; (2) with respect to information needs for 
case management, the major shortcoming is an inability to 
obtain data on individual TANF recipients from some of the 
agencies serving them, including job assistance agencies; (3) 
this situation makes it difficult for TANF case managers to 
arrange needed services, ensure that the services are provided, 
and respond quickly when problems arise; (4) officials in the 
States, especially those at the local level, said that it is 
sometimes difficult or impossible to query automated systems to 
obtain information for planning service strategies for their 
overall TANF caseloads, such as information on the number of 
adults with no prior work experience; (5) automated systems 
have shortcomings for program oversight purposes, specifically, 
they do not provide enough information to support enforcement 
of the 5-year TANF time limit and to monitor the employment 
progress of TANF recipients overall in some instances; (6) 
States' automated systems projects embody a range of approaches 
to expanding the ability of system users to obtain and analyze 
data from multiple sources; (7) some projects are designed 
primarily to support TANF case managers and other frontline 
workers in providing more coordinated delivery of services; (8) 
other projects, geared more to improving the ability of program 
managers to collect and analyze data from different programs, 
involve developing new query tools and databases that are 
expected to help program managers with key tasks, such as 
determining program results and assessing the performance of 
service providers; (9) States face a number of obstacles to 
improving their automated systems, such as the magnitude of 
changes in the mission and operations of welfare agencies due 
to welfare reform, the inherent difficulties associated with 
successfully managing information technology projects, 
competition with the private sector to recruit and retain 
information technology staff, and the complexity of obtaining 
Federal funding for systems projects that involve multiple 
agencies; (10) the Federal Government could take various 
actions to help overcome such obstacles, such as providing more 
information on best practices for managing information 
technology; and (11) in this way, the Federal Government could 
serve a facilitative role, in addition to its regulatory role, 
in helping States improve automated systems for social 
programs.
11. ``Women's Health: NIH Has Increased Its Efforts to Include Women in 
        Research,'' May 2, 2000, HEHS-00-96.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the National Institutes of Health's 
[NIH] efforts to include women in clinical research, focusing 
on: (1) the extent to which women are being included in 
clinical research that NIH funds; (2) the activities and 
accomplishments of the NIH Office of Research on Women's Health 
[ORWH] in promoting women's health research at NIH; and (3) how 
much funding NIH has allocated to research on health issues 
that affect women.
    Findings.--GAO noted that: (1) NIH has made significant 
progress in implementing a strengthened policy on including 
women in clinical research; (2) NIH issued guidelines to 
implement the 1993 NIH Revitalization Act and conducted 
extensive training for scientists and reviewers; (3) the review 
process for extramural research now treats the inclusion of 
women and minorities as a matter of scientific merit, which 
affects a proposal's eligibility for funding, and it appears 
that NIH staff and researchers are working to ensure that, when 
appropriate, study findings will apply to both women and men; 
(4) NIH implemented a centralized inclusion tracking data 
system that is an important tool for monitoring the 
implementation of the inclusion policy; (5) NIH has made less 
progress in implementing the requirement that certain clinical 
trials be designed and carried out to permit valid analysis by 
sex, which could reveal whether interventions affect women and 
men differently; (6) more than 50 percent of the participants 
in clinical research studies that NIH funded in fiscal year 
1997 were women, according to NIH; (7) minority women were well 
represented, especially black and Asian and Pacific Islander 
women, however, the proportion of Hispanic women enrolled was 
below their proportion in the general population; (8) ORWH has 
lead responsibility for ensuring that women and minorities are 
included in clinical research that NIH funds; (9) its budget 
grew from $9.4 million in fiscal year 1993 to about $20 million 
in fiscal year 2000; (10) ORWH uses its budget to leverage 
increased funding for research on women's health by the 
institutes and centers; (11) it has carried out extensive 
training and education on the inclusion policy for staff 
members, investigators, and institutional review boards; (12) 
however, ORWH has not conducted updated training on the data 
tracking system to ensure that its data are accurate and 
consistent; (13) NIH annually reports how much it spends on 
women's health, men's health, and conditions that affect both 
women and men; (14) however, the nature of scientific inquiry 
makes it impossible to predict how research will affect 
specific populations, especially with regard to the basic 
research that receives a substantial portion of NIH resources, 
and GAO found inconsistencies in the methods NIH staff use to 
produce its expenditure estimates; (15) according to NIH, 
spending on women's health conditions grew by 39 percent 
between fiscal years 1993 and 1999; and (16) NIH's total 
spending on diseases and conditions unique to or more prevalent 
in women grew more rapidly than NIH's overall spending from 
fiscal year 1993 to fiscal year 1999.
12. ``Federal Lobbying: China Permanent Normal Trade Relations (PNTR) 
        Lobbying Activities,'' GGD-00-130R.
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed efforts by the White House China Trade Relations 
Working Group and selected agencies to garner support for 
permanent normal trade relations [PNTR] with China, focusing 
on: (1) whether these efforts may be in violation of 18 U.S.C. 
1913; and (2) applicable appropriations provisions that 
prohibit the expenditure of appropriated funds for publicity or 
propaganda purposes or to lobby Congress.
    Findings.--GAO noted that: (1) some agencies provided 
preliminary information pertaining to PNTR activities at 
initial meetings with GAO; (2) the bulk of the material that 
GAO has received to date was provided during the week of May 1, 
2000; (3) this material included speeches, talking points, fact 
sheets, and electronic mail (e-mail) messages; (4) because of 
time constraints, GAO instructed the White House and other 
agencies in GAO's initial discussions to provide the requested 
documents on a continual, rolling basis, rather than waiting 
until all documents are compiled and ready for GAO's review, 
and they have done so; (5) GAO has not yet obtained all 
requested data for China PNTR-related travel; (6) GAO's review 
of documents received to date--for example, speeches, talking 
points, fact sheets, e-mail messages--show extensive outreach 
and coordination by the administration with outside groups such 
as public corporations and trade coalitions; (7) GAO has not 
yet received all of the information requested and have not been 
able to completely review what has been received; (8) 
therefore, GAO is not in a position at the present time to say 
that the criminal lobbying provision at 18 U.S.C. 1913 or the 
applicable appropriations restrictions have been violated; and 
(9) GAO expects that the agencies will provide additional 
information on a continuing basis.
13. ``Foster Care: HHS Should Ensure That Juvenile Justice Placements 
        Are Reviewed,'' June 9, 2000, HEHS-00-42.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Department of Health and Human 
Services' [HHS] approval of the Social Security Act's title IV-
E reimbursements for foster care placements, focusing on: (1) 
the number of title IV-E foster care placements made by 
juvenile justice agencies in fiscal year 1998 and the amount of 
Federal care funding expended for these placements; (2) how 
selected States ensure that title IV-E funds are not used for 
placements in detention facilities and ensure that procedural 
requirements to protect the welfare of children in title IV-E 
funded juvenile cases are met; and (3) HHS' processes for 
ensuring the appropriate use of funds and compliance with these 
procedural requirements in title IV-E funded juvenile justice 
placements.
    Findings.--GAO noted that: (1) in fiscal year 1998, about 
$300 million in title IV-E funds was used to support foster 
care placements of children in the juvenile justice system; (2) 
almost half of the States used some portion of their title IV-E 
funds in this way; (3) nearly 60 percent of the total amount of 
title IV-E funding used for juvenile justice placements was 
used by California; (4) the $300 million used for children in 
the juvenile justice system is 10 percent of all fiscal year 
1998 title IV-E expenditures; (5) to ensure that title IV-E 
funds are not being used for placements in detention 
facilities, the 10 States that used the largest amount of such 
funding in fiscal year 1998 rely primarily on the requirements 
that a facility must meet in order to be licensed as a child 
care institution; (6) licensing regulations in those States 
establish standards designed primarily to ensure a healthy and 
safe physical environment for the children; (7) in some States, 
these regulations allow a facility to engage in some 
restrictive practices that have been associated with detention; 
(8) State licensing regulations also play a role with regard to 
meeting title IV-E procedural requirements intended to protect 
the welfare of children in foster care cases--namely, that case 
plans be developed, administrative case reviews be conducted, 
and procedural safeguards be in place; (9) States enforce their 
licensing regulations through periodic on-site visits and 
facility inspections; (10) in addition to their licensing 
regulations, the two States whose procedures GAO examined more 
closely have administrative regulations for protecting children 
in foster care, which address in detail the title IV-E 
procedural requirements; (11) HHS has acknowledged that States 
have sometimes encountered difficulty in determining whether 
the facilities in which juvenile justice system children are 
placed qualify to receive title IV-E funding and in meeting 
procedural requirements in these cases; (12) HHS conducts two 
broad oversight reviews in each State, a title IV-E eligibility 
review and a child and family services [CFS] review; (13) title 
IV-E eligibility reviews primarily verify children's and foster 
care providers' eligibility for title IV-E funding in random 
sample of title IV-E funded foster care placements in each 
State; and (14) CFS reviews assess systems States use to 
determine the eligibility of foster care providers for title 
IV-E funding and systems States use to ensure that procedural 
requirements are met in title IV-E funded placements.
14. ``Federal Rulemaking: Agencies' Use of Information Technology to 
        Facilitate Public Participation,'' June 30, 2000, GGD-00-135R.
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed how Federal agencies are using information technology 
[IT] to facilitate public participation in the rulemaking 
process, focusing on the: (1) potentially beneficial uses of IT 
in the rulemaking process that have not yet been adopted by 
Federal agencies; and (2) benefits and drawbacks of 
standardizing innovative uses of IT across multiple agencies.
    Findings.--GAO noted that: (1) all five of the regulatory 
agencies that GAO examined were using some form of IT to notify 
the public about opportunities to participate in rulemaking and 
to facilitate the receipt of public comments; (2) all of these 
agencies had Web sites that conveyed rulemaking information to 
the public or maintained some rulemaking records in electronic 
form, and all of them accepted electronic comments for at least 
some of their proposed rules; (3) however, the specific 
features and uses of IT differed significantly between and 
sometimes within the agencies; (4) for example, the Department 
of Transportation [DOT] had established an Internet Web site 
that housed regulatory information for every agency within DOT 
and was searchable in a variety of ways; (5) other agencies 
either had no such information electronically available or the 
nature of the information available varied from one part of DOT 
to another; (6) some of the agencies were beginning to use 
targeted, proactive notifications of forthcoming rules, and 
some were experimenting with interactive comment processes; (7) 
the individuals and organizations with whom GAO spoke did not 
identify any potentially beneficial IT-based public 
participation applications that had not been adopted by at 
least one of the regulatory agencies that GAO examined; (8) 
however, some of them indicated that certain IT practices 
should be more widely used; (9) several individuals and 
organizations suggested that agencies move to a more consistent 
organization, content, and presentation of information to allow 
for a more common ``look and feel'' to agencies' IT-based 
public participation mechanisms in rulemaking; (10) although 
some of the individuals and organizations that GAO contacted 
said that standardization of IT-based public participation 
innovations across agencies could lead to more participation in 
the rulemaking process, the agency representatives that GAO 
contacted generally did not believe that cross-agency 
standardization was either necessary or appropriate; (11) they 
said that each agency needed to develop systems appropriate for 
their particular circumstances and that there were no data 
indicating that the lack of standardization was a problem, or 
that standardization would improve either the quantity or the 
quality of the participation that agencies receive during the 
rulemaking process; and (12) they also said that 
standardization would require substantial resources and that 
those resources might be better used in other endeavors.
15. ``Information Technology: Selected Agencies' Use of Commercial Off-
        the-Shelf Software for Human Resources Functions,'' July 31, 
        2000, AIMD-00-270.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the use of commercial off-the-shelf 
[COTS] software applications to improve human resource [HR] 
functions within Federal agencies, focusing on: (1) how five 
Federal agencies were using COTS systems/applications to 
improve their HR functions; and (2) for these five agencies, 
identify the agencies' reported estimated costs and expected 
benefits from using HR COTS systems.
    Findings.--GAO noted that: (1) the Department of Defense 
[DOD], the General Services Administration, the Centers for 
Disease Control and Prevention [CDC], the Department of Labor, 
and the Department of Veterans Affairs [VA] all have efforts 
underway to use COTS systems and applications to improve their 
HR functions; (2) quantifiable benefits expected included 
requiring fewer employees to perform H.R. functions, reducing 
manager time for transactions and data analysis, eliminating 
duplicative or multiple systems, and implementing self-service 
HR functions, such as employee changes to health and life 
insurance benefits; (3) nonquantifiable benefits expected 
included a more user-friendly environment, easier manager/
employee access, better decisionmaking and data analysis, 
improved data accuracy, and better information sharing; (4) 
despite these expectations, four of the five agencies' systems 
efforts have encountered delays, while three of the four 
agencies have increased cost estimates; and (5) to date, three 
of the five agencies--DOD, Labor, and VA--have reportedly 
achieved quantifiable benefits, such as full-time equivalent 
reductions from their HR COTS systems or related efforts.
16. ``Office of Personnel Management: Health Insurance Premium 
        Conversion,'' August 7, 2000, AIMD-00-270.
    a. Summary.--Pursuant to a legislative requirement, GAO 
reviewed the Office of Personnel Management's [OPM] new rule on 
health insurance premium conversion.
    Findings.--GAO noted that: (1) the interim rule enables 
Federal employees to pay Federal Employees Health Benefits 
premiums with pre-tax dollars, as provided by statutory law; 
and (2) OPM complied with applicable requirements in 
promulgating the rule.
17. ``Medicare: HCFA Could Do More to Identify and Collect 
        Overpayments,'' September 7, 2000, HEHS/AIMD-00-304.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on efforts to recover Medicare's 
overpayments, focusing on: (1) how the Health Care Financing 
Administration [HCFA] and its contractors identify potential 
overpayments, and whether techniques used by recovery auditors 
would improve overpayment identification; (2) how well HCFA and 
its contractors collect overpayments once they are identified, 
and whether the services of recovery auditors would improve 
HCFA collection efforts; and (3) what challenges HCFA would 
face if it were required to hire recovery auditors to augment 
its overpayment identification and collection activities.
    Findings.--GAO noted that: (1) despite HCFA's efforts to 
pay claims correctly in its $167 billion fee-for-service 
Medicare program, several billions of dollars in Medicare 
overpayments occur each year; (2) it is therefore critical that 
HCFA undertake effective postpayment activities to identify 
overpayments expeditiously; (3) HCFA's claims administration 
contractors use several postpayment techniques to identify 
overpayments; (4) these include medical review to ensure 
reports for providers that are paid on the basis of their 
costs, and reviews to determine if another entity besides 
Medicare has primary payment responsibility; (5) the 
contractors identify and collect billions of dollars through 
these activities, but how well each contractor performs them is 
not clear because HCFA lacks the information it needs to 
measure the effectiveness of contractors' overpayment 
identification activities; (6) while recovery auditors may also 
save money for clients, such as State Medicaid agencies, by 
identifying overpayments, the identification techniques they 
use are generally similar to those already used by HCFA and its 
contractors; (7) this does not mean that HCFA could not benefit 
from a stronger focus on specific postpayment activities; (8) 
however, doing so may require additional program safeguard 
funding so as not to shift funds away from HCFA's other 
efforts, such as prepayment review to prevent overpayments; (9) 
Congress has given HCFA assured funding for program safeguard 
activities; (10) however, the funding level is about one-third 
less than it was in 1989 and, although it will increase until 
2003, it will only keep pace with expected growth in Medicare 
expenditures; (11) for fiscal year 1999, based on HCFA 
estimates, the Medicare Integrity Program saved the Medicare 
program more than $17 for each $1 spent--about 55 percent from 
prepayment activities and the rest from postpayment activities; 
(12) because these activities can bring a positive return, GAO 
suggests that Congress consider increasing HCFA's funding to 
bolster its postpayment review program; (13) HCFA plans to 
expand its pilot projects from some to all of its claims 
administration contractors; and (14) however, it has 
established minimum thresholds for referrals for collection 
that are higher than the Department of the Treasury and debt 
collection center will accept because HCFA says that it does 
not have the resources needed to pursue collection on the large 
volume of debt below its thresholds.
18. ``Financial Audit: Independent and Special Counsel Expenditures for 
        the Six Months Ended March 31, 2000,'' September 29, 2000, 
        AIMD-00-310.
    . Summary.--Pursuant to a congressional request, GAO 
audited the expenditures of seven offices of independent 
counsel and one office of special counsel for the 6 months 
ended March 31, 2000.
    Findings.--GAO noted that: (1) the statements of 
expenditures presented for the offices of seven independent 
counsel and one special counsel were fairly presented in all 
material respects; (2) GAO's consideration of internal controls 
disclosed no material weaknesses; and (3) GAO's audits included 
limited tests of compliance with laws and regulations that 
disclosed no reportable instances of noncompliance with the 
laws and regulations GAO tested.
19. ``Program Evaluation: Studies Helped Agencies Measure or Explain 
        Program Performance,'' September 29, 2000, GGD-00-204.
    . Summary.--Background: Pursuant to a congressional 
request, GAO reviewed how Federal agencies used evaluation 
studies to report on their achievements, focusing on: (1) how 
program evaluation studies or methods served in performance 
reporting; and (2) circumstances that led agencies to conduct 
evaluations.
    Findings.--GAO noted that: (1) evaluations helped the 
agencies improve their measurement of program performance or 
understanding of performance and how it might be improved--some 
studies did both; (2) to help improve their performance 
measurement, two agencies used the findings of effectiveness 
evaluations to provide data on program results that were 
otherwise unavailable; (3) one agency supported a number of 
studies to help States prepare the groundwork for and pilot-
test future performance measures; (4) another used evaluation 
methods to validate the accuracy of existing performance data; 
(5) to better understand program performance, one agency 
reported evaluation and audit findings to address other, 
operational concerns about the program; (6) four agencies drew 
on evaluations to explain the reasons for observed performance 
or identify ways to improve performance; (7) three agencies 
compared their program's results with estimates of what might 
have happened in the program's absence in order to assess their 
program's net impact or contribution to results; (8) two of the 
evaluations GAO reviewed were initiated in response to 
legislative provisions, but most of the studies were self-
initiated by agencies in response to concerns about the 
program's performance or about the availability of outcome 
data; (9) some studies were initiated by agencies for reasons 
unrelated to meeting Government Performance and Results Act 
requirements and thus served purposes beyond those they were 
designed to address; (10) in some cases, evaluations were 
launched to identify the reasons for poor program performance 
and learn how that could be remedied; (11) in other cases, 
agencies initiated special studies because they faced 
challenges in collecting outcome data on an ongoing basis; (12) 
one departmentwide study was initiated in order to direct 
attention to an issue that cut across program boundaries and 
agencies' responsibilities; (13) as agencies governmentwide 
update their strategic and performance plans, the examples in 
this report might help them identify ways that evaluations can 
contribute to understanding their programs' performance; and 
(14) these cases also provide some examples of ways agencies 
might leverage their evaluation resources through: (a) drawing 
on the findings of a wide array of evaluations and audits; (b) 
making multiple use of an evaluations findings; (c) mining 
existing databases; and (d) collaborating with State and local 
program partners to develop mutually useful performance data.
20. ``Financial Management: Federal Financial Management Improvement 
        Act Results for Fiscal Year 1999,'' September 29, 2000, AIMD-
        00-307.
    a. Summary.--Pursuant to a legislative requirement, GAO 
provided information on the implementation of the Federal 
Financial Management Improvement Act [FFMIA] in fiscal year 
1999, focusing on: (1) compliance of the Chief Financial 
Officers [CFO] Act agencies' financial systems with FFMIA's 
requirements; (2) agencies' plans to bring their systems into 
compliance; and (3) other efforts to improve the government's 
financial management systems.
    Findings.--GAO noted that: (1) for fiscal year 1999, 
auditors for 21 of the 24 CFO Act agencies reported that the 
agencies' financial systems did not comply substantially with 
FFMIA's requirements--Federal financial management systems 
requirements, applicable Federal accounting standards, and the 
U.S. Government Standard General Ledger [SGL]; (2) as a result, 
the vast majority of agencies' financial management systems 
fall short of the CFO Act and FFMIA goal to provide reliable, 
useful, and timely information on an ongoing basis for day-to-
day management and decisionmaking; (3) reasons for systems' 
noncompliance include: (a) nonintegrated systems; (b) 
inadequate reconciliation procedures; (c) noncompliance with 
the SGL; (d) lack of adherence to accounting standards; and (e) 
weak security over information systems; (4) although the 
financial management systems of most agencies do not yet comply 
with FFMIA's requirements, the number of agencies receiving 
``clean'' or unqualified audit opinions is increasing; (5) 15 
of the 24 CFO Act agencies received unqualified audit opinions 
on their financial statements for fiscal year 1999, up from 12 
in fiscal year 1998 and 11 in fiscal year 1997; (6) auditors of 
12 of the 15 agencies that received unqualified opinions 
reported that the agencies' financial systems did not comply 
substantially with FFMIA's requirements in fiscal year 1999; 
(7) through the rigors of the financial statement audit process 
and the requirements of FFMIA, agencies have gained a better 
understanding of their financial management weaknesses and the 
impetus to resolve problems caused by those weaknesses; (8) at 
the same time, agencies are slowly making progress in 
addressing their problems; (9) while an increasing number of 
agencies are receiving ``clean'' audit opinions on their 
financial statements, the continued widespread noncompliance 
with FFMIA shows that there is still a long way to go to having 
systems, processes, and controls that routinely generate 
reliable, useful, and timely information for managers and other 
decisionmakers; and (10) many leading finance organizations 
have a goal to reduce the time spent on routine accounting 
activities, such as financial statement preparation, so that 
financial management staff can spend more time on activities 
such as business performance analysis or cost analysis.
21. ``Federal Lobbying: China Permanent Normal Trade Relations [PNTR] 
        Lobbying Activities and Costs,'' September 29, 2000, GGD-00-
        199R.
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed the efforts of the White House China Trade Relations 
Working Group, focusing on: (1) whether such efforts violated 
the antilobbying provisions of 18 U.S.C. 1913 or any applicable 
appropriations statutes; and (2) how much the administration 
has spent on its efforts to garner support for China Permanent 
Normal Trade Relations [PNTR].
    Findings.--GAO noted that: (1) after reviewing the 
documents that the White House and agencies represented on the 
Working Group provided to GAO through August 31, 2000, GAO has 
not found any further violations of the antilobbying 
restrictions, aside from the one violation GAO already 
reported; (2) the administration spent at least an estimated 
$1.6 million on its China PNTR efforts through about May 24, 
2000, when the House of Representatives voted on China PNTR; 
(3) GAO computed this amount on the basis of estimates that the 
White House and agencies associated with the Working Group 
provided to GAO; (4) these estimates included the cost of 
personnel working full-time or part-time on China PNTR, trips 
associated with the PNTR effort, developing the Working Group's 
Internet Web site, and printing charts, booklets, and other 
documents; (5) of the $1.6 million, an estimated $1.3 million 
was for personnel costs; (6) a number of different Federal 
organizations provided personnel for the China PNTR effort; (7) 
the time period covered by the White House and two agencies' 
personnel costs included the period from the Working Group's 
establishment on February 1, 2000, through May 24, 2000, when 
the House voted on H.R. 4444; (8) for three agencies, the time 
period was slightly different, all three began January 1 and 
individually ended on April 7, May 3, and May 31; (9) the White 
House and four agencies reported 21 trips within the United 
States and to China at an estimated cost of about $299,000; 
(10) the travel cost estimate does not include the cost of 
military airfare for a trip to China sponsored by the 
Department of Agriculture, which was paid for by the Department 
of State; (11) one agency, the State Department, has not 
provided travel data; (12) a limitation to the travel cost data 
is that the trips were not always exclusively devoted to China 
PNTR; (13) according to agency officials, a large number of 
trips were related to the specific agency's mission and were 
planned prior to the emphasis on China PNTR; (14) other costs 
related to the China PNTR effort, such as printing and the 
``China Trade Relations Working Group'' Web site, totalled 
about $61,000; (15) all of the reported costs were borne by the 
Department of Commerce; (16) the bulk of the costs, about 
$58,000 was for the printing of such items as booklets, 
briefing books, and State reports; and (17) the design and 
development of the Web site cost $3,000.
22. ``Anthrax Vaccine: Preliminary Results of GAO's Survey of Guard/
        Reserve Pilots and Aircrew Members,'' October 11, 2000, GAO-01-
        92T.
    a. Summary.--This testimony discusses the Department of 
Defense's [DOD] Anthrax Vaccine Program. Many questions have 
been raised about the program since DOD began vaccinating its 
2.4 million active duty and reserve members in 1998. A major 
concern has been the program's effect on the National Guard and 
Air Force Reserve's retention of trained and experienced 
personnel. A questionnaire sent to 1,253 randomly selected 
Guard and Reserve pilots and others revealed that the anthrax 
immunization was a key reason these individuals left or 
otherwise changed their military status. Since September 1998, 
an estimated 25 percent of the pilots and aircrew members of 
the Guard and Reserve in this population transferred to another 
unit, left the military, or moved to inactive status.
23. ``Managing for Results: Emerging Benefits From Selected Agencies' 
        Use of Performance Agreements,'' October 30, 2000, GAO-01-115.
    a. Summary.--The Veterans Health Administration, the 
Department of Transportation, and the Office of Student 
Financial Assistance have begun to use results-oriented 
performance agreements to align agency expectations with 
organizational goals. Each agency developed and implemented 
agreements that reflected their specific organizational 
priorities, structures, and cultures. GAO identified the 
following five common emerging benefits: (1) better alignment 
of results-oriented goals with daily operations; (2) 
collaboration across organizational boundaries; (3) 
opportunities to use performance information to improve Federal 
programs; (4) results-oriented basis for individual 
accountability; and (5) continuity of program goals during 
leadership transitions. The three agencies' experiences show 
that effective implementation of performance agreements can 
encourage communication about progress toward agency goals. 
Their experiences also indicate that performance information 
should be provided to executives and managers in a timely 
fashion and in a useful format.
24. ``Drug Prices Paid by DOD and VA Are, on Average, Lower Than Those 
        Certified to HCFA as Best Price,'' October 31, 2000, GAO-01-
        175R.
    a. Summary.--GAO compares the drug prices paid by the 
Department of Defense [DOD] and the Department of Veterans 
Affairs [VA] with the prices paid by the Health Care Financing 
Administration [HCFA]. On average, for the sample of drug 
prices analyzed by GAO, HCFA's prices were higher than those of 
either DOD or VA.

                       Subcommittee on the Census

                       Hon. Dan Miller, Chairman

1. ``Formula Grants: Effects of Adjusted Population Counts on Federal 
        Funding to States,'' February 1999, GAO/HEHS-99-69.
    a. Summary.--Proponents of sampling in the 2000 census have 
often cited a total dollar amount of ``lost'' Federal funding 
for each person that was not enumerated in the 1990 census. A 
hypothetical example would be a mayor who would claim the 1990 
census missed 5,000 people in his city and the direct result 
was a loss of $10 million from federally funded programs. To 
clarify this matter the subcommittee asked the General 
Accounting Office to determine which Federal programs use the 
1990 population figures in determining their disbursements. The 
study calculated the Federal program disbursements using the 
Census Bureau's 1990 post enumeration survey [PES] figures and 
the official 1990 population figures.
    Summary of results.--The GAO found that 22 of the 25 large 
formula grant programs rely, at least in part, on data derived 
from the decennial census to apportion funding among States and 
units of local government. Medicaid was the single largest 
program, representing 63 percent of the $167 billion in fiscal 
year 1998 obligations under the 25 programs that were reviewed. 
For the 15 programs included in their detailed analysis, they 
determined that the use of adjusted population figures would 
reallocate a total of $449 million among the 50 States and the 
District of Columbia, or 0.33 percent of apportioned by formula 
in their detailed analysis. The report detailed the following:
          California accounted for about 20 percent of the 
        adjusted population and would receive nearly half of 
        the total reallocation of Federal funds, or $223 
        million of the $449 million.
          The four States that border Mexico (California, 
        Arizona, New Mexico, Texas) accounted for over one 
        third of the adjusted population and would receive 
        nearly 75 percent of the total reallocation, or $336 
        million.
          The largest dollar reduction would occur in 
        Pennsylvania ($110 million), and the largest percentage 
        reduction would occur in Rhode Island (1.8 percent).
          Medicaid accounted for 90 percent of funds 
        reallocated.
          Funding would generally shift from Northeastern and 
        Midwestern States to the Southern and Western States.
    The GAO found that 22 of the 25 large programs use 
decennial census data, at least in part, to apportion grant 
funding. The 22 programs represent 97 percent of fiscal year 
1998 obligations for the largest 25 programs included in our 
analysis. The remaining 3 programs accounted for $5.2 billion. 
They also concluded that the use of adjusted population counts 
based on the 1990 PES in the 15 formula grants analyzed by the 
GAO would result in 23 States receiving less Federal funding 
and 27 States and the District of Columbia receiving more.
    b. Benefits.--The great benefit of this report was to 
finally establish which programs use population counts to 
determine their allocations and roughly what the dollar amounts 
are. The report was often used by the subcommittee to clarify 
who would lose or gain Federal funds based on the sampling 
counts.
2. ``Census 2000: Analysis of Fiscal Year 2000 budget Amendment,'' 
        September 1999, GAO/GGD-99-291.
    a. Summary.--At the request of Subcommittee Chairman Dan 
Miller, the General Accounting Office [GAO] was asked to review 
the $1.7 billion supplemental budget request submitted by the 
Clinton administration. The request asked GAO to (1) provide an 
overall analysis of the key changes in assumptions resulting in 
the $1.7 billion requested increase, (2) provide details on the 
components of this increase (3) explain which changes, 
according to the Census Bureau, are attributable to its 
inability to use statistical sampling, and which were not (4) 
describe the process the Census Bureau used for developing the 
increase in the original fiscal year 2000 budget request and 
the amended budget request.
    Background.--The GAO reported that for the 2000 census, the 
Census Bureau planned to augment the traditional census 
methodology with statistical estimation to develop a unified 
census count. In November of 1997, in the Commerce Justice 
State Appropriations Act for 1998, the Congress questioned the 
constitutionality of using statistical sampling and directed 
the Census Bureau to plan to implement a census in 2000 without 
using statistical methods. The Census Bureau reported to the 
Congress on possible components in a traditional census plan in 
April 1998.
    However, the Census Bureau did not begin detailed budgeting 
for a nonsampling-based census until after the Supreme Court 
ruled that the Census Act prohibited the use of statistical 
sampling for purposes of determining the population count used 
to apportion the House of Representatives. As recently as 
August 1997, the Census Bureau estimated that without sampling, 
the cost of the 2000 census would increase from $675 million to 
$800 million and would be less accurate than the 1990 census. 
Prior to the Supreme Court decision the administration had 
requested $2.8 billion for decennial activities in fiscal year 
2000.
    Results.--The GAO found that the net $1.7 billion 
supplemental resulted primarily from changes in assumptions 
relating to a substantial increase in workload, reduced 
employee productivity, and increased advertising. According to 
GAO, under the nonsampling design, census costs will increase 
because the Census Bureau expects to follow-up on more 
nonresponding households than it would have in a sampling-based 
census. It also plans to use additional programs to improve 
coverage. These changes are due to the fact it cannot rely on 
statistical methods to adjust for undercounting and other 
coverage errors.
    The Census Bureau assumed an increased workload because the 
housing units that the Census Bureau expects to visit increased 
from an estimated 30 million to 46 million.
    The increase of 16 million housing units includes visiting 
12 million additional nonresponding housing units and 4 million 
additional housing units that the Postal Services says are 
vacant or nonexistent. Also contributing to the workload 
increase were a number of programs that were not in the 
original budget. These programs were primarily aimed at 
improving the accuracy of the 2000 census through quality 
control operations, such as reinterviewing households that had 
been previously visited by an enumerator. However, it is 
unclear whether these additional programs will result in a 2000 
census that is more accurate than the 1990 census. This 
increased workload, which increased costs for most Census 
Bureau program activities, relates primarily to additional 
salaries, benefits, travel, data processing, infrastructure, 
and supplies.
    The GAO also reported another key factor which 
substantially increased the fiscal year 2000 budget request was 
the Census Bureau's reduction of the assumed productivity rate 
of its enumerators by 20 percent from the original to the 
amended budget requests--from 1.28 to 1.03 households per hour. 
This reduction relates to all enumerator employees for 
nonresponse follow-up--both those employees to be hired to 
visit the 30 million nonresponding housing units in the 
original budget request as well as those for the 16 million 
additional housing units. In essence the productivity rate was 
reduced across the board not just for the hard to enumerate. 
The Census believes that the productivity of all their workers 
will suffer. The Census Bureau did not provide any documented 
internal or external quantitative analysis or other analysis to 
support the initial or revised productivity rates. This 
reduction was primarily based on senior management judgments, 
which the Census Bureau acknowledges are very conservative, 
that the Census Bureau could have difficulty hiring a 
sufficient number of quality temporary workers in such a tight 
labor market.
    Due to the assumed increase in workload and reduction in 
productivity, the total number of temporary field positions 
increased from 780,000 in the original budget to 1,350,000 in 
the amended budget request (note: a position does not always 
equate to an employee; many employees will hold more than one 
position). The 570,000 new positions included 200,000 for 
following up on nonresponding households, 120,000 for 
enumerator activities such as counting people in homeless 
shelters, and 220,000 related to additional coverage 
improvement and quality control programs.
    The Census Bureau also included nearly $72 million for 
advertising purposes in the amended budget request to increase 
public awareness and hopefully increase response rates for 
mailed questionnaires. However, the Census Bureaus amended 
budget request did not assume any cost savings from the 
increased advertising dollars in the form of increased response 
rates and, accordingly, a reduced workload.
    According to the Census Bureau, about $1.6 billion of this 
increase was related to the inability to use statistical 
sampling and $100 million is not. As discussed above, the 
additional costs were due to primarily increased workload, 
reduced productivity, and increased advertising. The items 
unrelated to the sampling issue included costs not included in 
the original budget request and revisions of previously 
submitted estimates. For example, the Census Bureau did not 
include $52 million for rent and long distance telephone 
service in the original budget for Local Census Offices.
    The Census Bureau developed its $4.5 billion amended budget 
request for fiscal year 2000 using a cost model consisting of a 
series of interrelated software spreadsheets. The original and 
amended budget requests were developed using this cost model, 
with each estimate being developed independently using 
different versions of the cost model. The Census Bureau derived 
the $1.7 billion requested increase by calculating the net 
difference between the original budget request of $2.8 billion 
and the amended budget request of $4.5 billion.
    b. Benefits.--This report was used to shed light on the 
$1.7 billion supplemental budget request by the Census Bureau. 
The report provided critical insight into how the Census Bureau 
developed key budget assumptions and helped to highlight key 
areas where both the appropriations and oversight subcommittees 
should focus attention during the upcoming fiscal year.
    The subcommittee highlighted several areas of the GAO 
report that were of serious concern: Ignoring the 1997 
congressional mandate to prepare on a dual track until after 
the Supreme Court decision in January 1999, making $1 billion 
in budget assumptions outside the cost models, lowering 
productivity rates without justification, and failing to 
calculate any benefit or costs savings in increased mail 
response rates from the additional $72 million in advertising.
    Ignoring the 1997 congressional mandate to prepare on a 
dual track until after the Supreme Court decision in January 
1999.--The subcommittee had always suspected that the Census 
Bureau was not putting in a full faith effort in preparing for 
a full enumeration. Although they had submitted some 
rudimentary outlines of their plan, they had not detailed the 
specifics of how they planned to conduct a full enumeration. 
The GAO confirmed the subcommittee's fears, saying, ``the 
Census Bureau reported to the Congress on possible components 
in a traditional census plan in April 1998. However, the Census 
Bureau did not begin detailed budgeting for a nonsampling-based 
census until after the Supreme Court ruled that the Census Act 
prohibited the use of statistical sampling for purposes of 
determining the population count used to apportion the House of 
Representatives.''
    The Census Bureau made $1 billion in budget assumptions 
outside costs models.
    GAO said, ``Of the $4.5 billion amended budget request, 
about $1.05 billion (23 percent) was calculated outside the 
[cost] model. This $1.05 billion includes costs for 
headquarters activities and contracts. The assumptions are 
developed by program managers and are generally based on either 
third party evidence, such as independent studies, or senior 
management's judgement.'' The GAO and the House/Senate 
appropriations staff raised serious concerns about this budget 
approach. In fact, the Census Bureau had told the appropriators 
that all of their budget numbers had been developed within cost 
models.
    Lowering productivity rates without justification. GAO 
reported ``a significant factor increasing the Census Bureau's 
budget request is a 20 percent reduction in the assumed 
productivity rate for temporary employee enumerators--in the 
original budget request, the Census Bureau used an average 
productivity rate of about 1.28 households per hour, which was 
reduced in the amended budget request to about 1.03.'' The 
Census Bureau told GAO that the lowered productivity estimate 
was the result of the potential difficulty in hiring quality 
employees due to the low unemployment rate. However, the GAO 
noted that ``the Census Bureau did not provide any documented 
internal or external quantitative analysis or other analysis 
that supported the original or the revised productivity rate. 
Consequently, the 20 percent reduction in productivity is based 
on senior management judgments, which the Census Bureau 
acknowledges are very conservative.''
    Failing to calculate any benefit or costs savings in 
increased mail response rates from the additional $72 million 
in advertising. GAO reported, ``the bureau included nearly $72 
million for advertising intended to increase questionnaire 
responses, including advertising that will be targeted to hard-
to-enumerate communities.'' Chairman Miller has been very 
supportive of the advertising campaign and, in fact, 
recommended increasing funding for the program. However, the 
chairman remains concerned that the Census Bureau apparently 
sees no cost savings as a result of an increased mail response 
rate. It costs significantly less to enumerate someone by mail 
than to enumerate him or her in the field. The GAO noted ``the 
Census Bureau has no data available to support how much, if 
any, the increased advertising will increase the response rate. 
As a result, the Census Bureau's assumed average questionnaire 
response rate of 61 percent in the original budget request did 
not increase in the amended budget request. Thus, the Census 
Bureau has assumed no cost savings in the form of increased 
response rate and resultant reduced workload from the increased 
advertising dollars.''
    These areas of concern gave Chairman Miller a heightened 
sensitivity to how the Census Bureau intends to spend its $4.5 
billion appropriation in 2000. Furthermore, the chairman may, 
at some point, ask for a full agency audit of the Census 
Bureau.
3. ``2000 Census: Information on the Implications of a Post Census 
        Local Review Program,'' October 13, 1999, GAO/GGD-00-9R.
    a. Summary.--Background: A hearing and mark-up was held on 
February 11, 1999 on H.R. 472, the Local Census Quality Act of 
1999. This bill would re-enact a 1990 census program, with 
several enhancements, called post census local review [PCLR]. 
This program was popular with many cities and towns because it 
represented the last opportunity for local and tribal 
governments to check the Census Bureau's work for errors before 
the census was completed.
    Members of the subcommittee and various census stakeholders 
were concerned that the Census Bureau's staunch opposition to 
this program was unfounded. The Census Bureau stated that a 
post census local review would interfere with their planned 
accuracy and coverage evaluation [ACE], and give local and 
tribal governments a chance to slow down the census process and 
possibly cause the Census Bureau to miss statutory deadlines to 
produce data. In 1990 the Census Bureau was in the field an 
additional 4 to 6 weeks longer than they had anticipated for 
non-response follow-up and were still able to conduct post 
census local review, not to mention meeting the statutory 
guidelines for data products.
    In his letter dated, April 8, 1999, Chairman Miller asked 
the Honorable David M. Walker, Comptroller General of the 
General Accounting Office [GAO] a series of questions regarding 
the implementation of an enhanced post census local review to 
census 2000 plans, and what consequences that it may bring.
    The GAO issued an official response on October 13, 1999 to 
questions posed by Chairman Miller on the implications of 
including the post census local review program to census 2000. 
The response to Chairman Miller's letter is entitled, ``GAO 
Responses to Questions From Chairman Miller on the Use of a 
Post Census Local Review in the 2000 Census.'' The official 
response from the GAO and answers to the questions contained in 
the aforementioned letter took longer than anticipated because 
the Secretary of Commerce demanded that his written comments on 
the release of the GAO's findings be included. The Secretary 
stated that he had fundamental concerns about the position the 
GAO was taking in response to Chairman Miller's questions.
    Question #1: What effect will the implementation of a PCLR 
program have on the implementation of other programs already 
scheduled for census 2000?
    In response, the GAO stated, ``The extent to which a PCLR 
program would affect other operations already scheduled for the 
2000 Census is unclear.'' The GAO also suggested that the 
effect of PCLR on the quality of the ACE estimates would be 
minimal. Furthermore, based on the Bureau's experience in 1990, 
the Census Bureau's contention that PCLR must be completed 
prior to starting the ACE matching and reconciliation process 
was too rigid.
    Question #2: Will the implementation of a PCLR program 
increase or decrease the accuracy of the census counts before 
any adjustment is applied due to a coverage and evaluation 
survey?
    The GAO contended that based on lessons learned from the 
1990 census, PCLR could add small numbers of housing units and 
people to the count and make a contribution the overall 
accuracy of census 2000. The Census Bureau stated that 
evaluations of 1990 late census data showed that a majority of 
these additions had a high rate of error.
    Question #3: If the Bureau projects any such decrease in 
accuracy, are there any specific scientific studies that back 
this assertion?
    The Census Bureau has not studied the effect that post 
census local review could have on census 2000.
    Question #4: Given the fact that the ACE (accuracy and 
coverage evaluation) will only be conducted in 10,000 out of 5 
million populated census blocks and significant PCLR 
corrections for missed housing units should only be reported 
for a fairly small number of blocks (somewhere around 50,000 to 
100,000 out of 5 million blocks), what effect will a PCLR have 
on the timely field implementation and analysis of the ACE?
    The GAO was unable to get to the root of this question 
because, according to Census Bureau officials, information on 
the extent of overlap between 1990 post enumeration survey 
[PES] and PCLR blocks was not available for comparison 
purposes. However, the GAO found that on the basis of 1990 
evaluations, there would not be a significant reduction if the 
PES estimate of accuracy in the PCLR data were not used in the 
ACE.
    Question #5: What are the actual overlaps between the two 
processes? (PCLR and ACE) The GAO found that there would be no 
overlaps in time between PCLR and ACE. The Census Bureau 
countered that if they were required to do PCLR for census 
2000, they would have to delay the ACE matching and 
reconciliation process to accommodate for PCLR operations much 
as they did in 1990. The Census Bureau expressed concern that 
the PCLR process would keep them in the field longer and thus 
delay the ACE matching and reconciliation process by up to 6 
weeks.
    Question #6: Other than the cost factors that have already 
been projected by the Congressional Budget Office, what other 
benefits or problems do you envision with the incorporation of 
a PCLR in the 2000 decennial census?
    b. Benefits.--The GAO list the following potential benefits 
of incorporating the post census local review program into 
census 2000:
    PCLR could allow local government officials a last chance 
to review and correct housing unit counts within their 
jurisdictions before the census is over. In 1990, roughly 25 
percent of eligible local governments participated.
    PCLR could correct some errors in the Bureau's files 
showing the exact geographic location of an address (known as 
geocodes) and delete nonexistent housing units from the Census 
Bureau's master address list. In 1990, 198,347 housing units 
were geographically transferred, and 101,887 housing units were 
deleted from the Bureau's records.
    PCLR could add people and housing units to the overall 
census count in the correct location.
    PCLR could identify pockets of missed housing units as it 
did during the 1990 census.
    The GAO also listed some of Post Census Local Review's 
potential problems:
    PCLR has unknown implications for timely and accurate 
completion of other census operations because of an unknown 
volume of challenges from local governments. Based on the 1990 
experience, the volume of challenges was low, but the Census 
Bureau is cautious for census 2000.
    PCLR could create logistical problems. The GAO cites the 
example that the printing of maps and address lists on a random 
basis for local governments could be an added cost.
    If PCLR follows the 1990 pattern, there may be lower 
participation by smaller local governments that lack the 
available resources of larger cities.
    The GAO suggests that PCLR may be more expensive than some 
other post census day coverage improvement programs in terms of 
housing units and people added to the final census counts. In 
1990, the Census Bureau spent $9.6 million on PCLR, $118.67 per 
housing unit added, or $78.89 per person added. The GAO goes on 
to point out that when measured by the total number of 
corrections made, PCLR costs drop to $25.19 per housing unit 
corrected. During the 1990 census, PCLR added 80,929 housing 
units, deleted 101,887 housing units, and corrected 198,347 
geocoding errors for total housing unit corrections of 381,163.
4. ``Contingency Planning Needed to Mitigate Formidable Risks That 
        Threaten the Census' Success,'' December 1999, GAO/GGD-00-6.
    a. Summary.--The 1990 census was the most costly census in 
U.S. history and data were less accurate than the 1980 census, 
leaving millions of Americans--especially members of minority 
groups-- uncounted. Throughout this decade, the General 
Accounting Office [GAO] has reviewed the Bureau's preparations 
for the 2000 census and has expressed a growing sense of 
concern over the developmental and operational challenges 
surrounding key census taking operations. Per subcommittee 
request, this GAO report reviews the Bureau's progress in 
reducing the risks involved with two of their long-standing 
concerns for census 2000. The first is a need to boost the 
level of public participation in the census. The second is the 
Bureau's need to collect timely and accurate data from non-
respondents. With less than 4 months remaining before census 
day (April 1, 2000), the GAO found that significant 
uncertainties regarding the Census Bureau's efforts in these 
matters still remained. Motivating the public to complete and 
mail back their census forms would prove to be a formidable 
task given a declining trend attributed to various demographic 
and attitudinal factors, as well as concerns over privacy, and 
mistrust of government. In addition, the field follow up 
efforts would be costly, and, due to time restraints and 
operational challenges, concerns existed that the non-response 
phase of census 2000 could produce unreliable data. Given the 
Bureau's history of staffing problems and the magnitude of the 
Bureau's staffing challenge for 2000, the GAO recommended that 
the Bureau develop contingency plans to mitigate the impact of 
a lower than expected response rate. This recommendation is 
consistent with suggestions GAO made in their 1992 summary 
assessment of the 1990 Census (GAO/GGD-92-94, June 9, 1992). 
The GAO also suggested that Congress might wish to consider 
opportunities to expand the potential census applicant pool.
    b. Benefits.--This report was used to highlight several 
areas of particular concern to GAO and the subcommittee 
regarding the readiness of the Census Bureau to conduct the 
2000 census. The report provided critical insight into how the 
Census Bureau's failure to accept this subcommittee's 
recommendations may hurt the final success of the 2000 census. 
The subcommittee remains concerned that the failure to 
implement a second mailing and the Bureau's insistence on an 
abbreviated non-response follow up operation may affect 
coverage and accuracy.
5. ``New Data Capture System Progress and Risks,'' February 4, 2000, 
        AIMD-00-61.
    a. Summary.--In preparation for census 2000, the largest 
peacetime mobilization in the Nation's history, the Census 
Bureau planned for staffing 1.35 million temporary field 
positions to capture 1.5 billion pages of data from about 119 
million households. To meet this massive challenge, the Bureau 
relied heavily on information technology, including its new 
Data Capture System, DCS 2000. The system is operating at four 
data capture centers (Baltimore, MD; Jeffersonville, IN; 
Pomona, CA; and, Phoenix, AZ.) The DCS 2000 will check in, 
digitally image, and optically read the data handwritten onto 
census forms and convert these data into files that will be 
sent to Bureau headquarters for tabulation and analysis. At the 
request of Subcommittee Chairman Dan Miller, the General 
Accounting Office [GAO] was asked to write a report that 
discussed the state and quality of the DCS 2000 as well as the 
risks that the Bureau faced in successfully completing the 
system. The GAO report indicates that the Bureau made 
considerable progress on DCS 2000 (21 of the system's 23 
planned application software releases had been completed in all 
4 data capture centers as of January 7, 2000), although the 
Bureau delivering the final promised DCS 2000 capabilities 
remains at risk. The Bureau had less than 2 months remaining 
before data capture operations were to begin, leaving them 
little room for error. In addition, many development and test 
activities remained and would likely reveal more system defects 
thus compounding an uncertain picture of system maturation. GAO 
discussed the risks with DCS 2000 program officials, who agreed 
that delivering promised system capabilities on time is a risk. 
They subsequently provided evidence that they have (1) 
designated this as a high risk under the DCS 2000 risk 
management program and (2) defined and initiated proactive 
steps to mitigate the risk and its potential impact on the 
program.
    b. Benefits.--This General Accounting Office report was 
used to shed light on risks associated with the readiness and 
quality of the DCS 2000 system. Through this report the 
subcommittee was able to have an interim account of this 
critical operation which afforded the opportunity to review 
testing and potential risks facing the system.
6. ``Actions Taken to Improve the Be Counted and Questionnaire 
        Assistance Center Programs,'' February 2000, GGD-00-47.
    a. Summary.--The Census Bureau created several initiatives 
aimed at increasing the accuracy and completeness of census 
2000. These initiatives included a program called ``Be 
Counted'' as well as the opening of walk-in Questionnaire 
Assistance Centers [QACs]. The ``Be Counted'' program was 
designed to count people who believed that they did not receive 
a census questionnaire, or who believed they were otherwise not 
included in the census. Aimed at traditionally hard-to-
enumerate population groups, the ``Be Counted'' program was to 
make its forms available in various public locations, such as 
community centers, churches, and businesses. QACs were designed 
to help people, especially those with little or no English 
speaking ability, complete their census questionnaires by 
providing assistance in various languages on a walk in basis. 
The centers are also intended to distribute ``Be Counted'' 
forms. This General Accounting Office [GAO] report provides 
information on the status of the ``Be Counted'' and 
Questionnaire Assistance programs and paid particular attention 
to the steps that the Bureau had taken to address certain 
shortcomings it had encountered during the 1998 dress rehearsal 
for the 2000 census. To obtain the information, the GAO: 1) 
interviewed Bureau officials from headquarters and local 
offices responsible for planning and implementing the two 
programs, as well as local government officials who helped the 
Bureau execute the dress rehearsal; 2) made on site inspections 
of ``Be Counted'' program locations and QACs at the three dress 
rehearsal sites; and 3) examined relevant Bureau documents and 
data, including the Bureau's May 1999 evaluation of the ``Be 
Counted'' program. The GAO also received evaluations by the 
Department of Commerce Inspector General of how the dress 
rehearsal programs performed. GAO notes that the Bureau had 
taken several important steps to improve the ``Be Counted'' and 
QAC programs following the dress rehearsal. The actions were 
necessary because the Bureau found that although the ``Be 
Counted'' program added people to the population totals, the 
program sites were not well-targeted and people may have had 
trouble finding the ``Be Counted'' forms in the places where 
they were supposed to be available. The Bureau's findings were 
consistent with GAO observations during the dress rehearsal in 
processes and procedures used to select staff and monitor site 
locations did not always achieve their intended results. This 
GAO report cites that if effectively implemented, the Bureau's 
actions could address the operational shortcomings it 
encountered in the dress rehearsal in regard to these programs. 
Key among the remaining uncertainties, was whether the Bureau 
would open as many program sites as it originally planned and 
whether it has the ability to monitor and maintain them.
    b. Benefits.--This report provided important information to 
the subcommittee regarding the procedures the Bureau would need 
to implement to make the ``Be Counted'' and QAC programs 
effective in the 2000 Census.
7. ``Information on Short and Long Form Response Rates,'' June 7, 2000, 
        GAO/GGD-00-127R.
    a. Summary.--Due to concerns over the differential response 
rates between the short and long census questionnaire forms, 
the subcommittee asked the GAO to provide a report that would 
show the response rates for short and long forms in the 1998 
Census Dress Rehearsal, the 1990 census and the 1988 census 
dress rehearsal. This request was also made in order to 
determine whether the short form/ long form differential in the 
1998 dress rehearsal foreshadowed the difference in response 
rates that was occurring in the 2000 census. The GAO found that 
during the 1990 and 2000 census cycles, questionnaire response 
rates were higher for the short-form questionnaire than for the 
long-form questionnaire. However, their data also indicated 
that the gap between the two rates has widened over time from 
the 1990 census to the 2000 census. GAO reported that after the 
1990 census, the Bureau expected a more difficult time 
obtaining public cooperation in census 2000 due to factors that 
include: concerns about privacy, lack of confidence in civic 
institutions, non-English speaking immigrants, and illiteracy 
rates. In response, the Bureau took several actions designed to 
boost response rates--including developing streamlined and 
simplified questionnaires, a paid advertising campaign, and 
partnerships with local governments and other organizations.
    b. Benefits.--The questionnaire response rate data provides 
an indication of the scope of the Bureau's field follow-up 
operation with non-responding households. The overall (short 
and long form) initial response rate for 2000 was 65 percent--
approximately what it was in 1990 and 4 percentage points above 
what the Bureau had anticipated. Nevertheless, the 1990 
experience, the 1998 Dress rehearsal results and other 
demographic and societal trends that GAO and the Bureau have 
often noted throughout the decade suggested that there likely 
would continue to be a significant and perhaps growing, short- 
and long-form questionnaire differential mail response rate for 
the 2000 census.
8. ``Update on Data Capture Operations and System,'' September 29, 
        2000, GAO/AIMD-00-324R.
    a. Summary.--To address the concerns addressed in the 
previous GAO report on the readiness of it's Data Capture 
System for Census 2000 (DCS 2000) (AIMD-00-61, 02/00), the 
Census Bureau adopted a two-phase approach to capturing 
household data. Under phase one, which the Bureau terms ``first 
pass,'' only the data necessary to determine the reapportioning 
of seats in the House of Representatives, which the Bureau 
calls 100 percent data, are captured. Under the ``second 
pass,'' the remaining data, which the Bureau calls sample data, 
are captured. To implement this two-pass approach, the Bureau 
had to modify the DCS 2000, so that during the first pass only 
the 100 percent data from the digitally-imaged census forms 
(short and long) would be optically read (and keyed) and so 
that the long-form images could be written to a mass storage 
device. Following the release of their last report, the 
Subcommittee on the Census asked GAO to periodically report (1) 
the Bureau's progress in performing first-pass data capture 
operations, including the performance of DCS 2000, and (2) the 
Bureau's progress in modifying DCS 2000 to perform planned 
second-pass data capture operations.
    The GAO concludes that the Bureau has made significant 
progress toward completing first-pass data capture operations 
as planned, and during these operations DCS 2000 has performed 
as intended. Similarly, the Bureau's development contractor has 
made significant progress toward modifying DCS 2000 to support 
second-pass data capture operations and has taken effective 
testing and risk management steps to ensure that the modified 
version of DCS 2000 is effectively implemented and performs as 
intended.
    b. Benefits.--To conduct the 2000 census, the bureau is 
relying on 10 key systems. These systems enable the Bureau to 
develop and maintain address lists, maps and geographic 
reference files; collect census data through the Internet; scan 
and process household-completed paper forms; analyze census 
data; recruit and support temporary workers; facilitate follow-
up surveys; and track costs and performance related to taking 
the census. The DCS 2000 is one of these key systems. It 
performs many of these high-level functions. Having periodic 
checks on these systems insures that the Census data is being 
collected efficiently.
9. ``Census Monitoring Board Disbursements, Internal Control 
        Weaknesses, and Other Matters,'' September 29, 2000, GAO/AIMD-
        00-317.
    a. Summary.--Thursday, March 23, 2000, the National Journal 
published an investigative story stating that the State 
Department Inspector General's Office was investigating the 
financial affairs of former Census Monitoring Board Co-chair 
and Presidential appointee Tony Coelho with respect to his 
activities as U.S. Ambassador to the World's Expo in 1998. The 
article alleged that Mr. Coelho attempted to use Census 
Monitoring Board [CMB] funds for activities relating to his 
tenure as Ambassador. The subcommittee became concerned that 
there may have been misuse of funds for these and other 
activities on the part of Mr. Coelho and so it requested that 
GAO perform a complete audit on both sides of the CMB to ensure 
that proper procurement regulations and other standards under 
which the CMB is required to operate were being adhered to at 
all times. The CMB was created in 1998 and consists of two 
members appointed by the Speaker of the House, two members 
appointed by the Senate Majority Leader (the congressional CMB) 
and four members appointed by the President (the Presidential 
CMB), with each side having a co-chairman, an executive 
director and full staff. In general, the GAO found little 
documented evidence to substantiate possible improprieties in 
connection with seven specific matters that the subcommittee 
had identified in it's request letters:
          - No Presidential CMB funds were used to print 
        reports for the 1998 World Exposition.
          - Congressional CMB videotapes did not have a narrow 
        political distribution.
          - No CMB funds were used for political travel.
          - Presidential CMB contracts for studies on census 
        undercounting were not improperly procured.
          - No evidence existed that former congressional CMB 
        employees accessed protected census data.
          - Two out of 27 questions in a congressional CMB 
        contractor focus group study made some mention of 
        political parties.
          - Some verbal confrontation occurred between a 
        congressional CMB contractor and Bureau of the Census 
        employees, and the contract was terminated shortly 
        thereafter for a variety of reasons.
    The remaining GAO efforts focused on CMB documentation for 
expenditures and an assessment of the internal control 
environment established to ensure disciplined financial 
operations. The GAO found a pattern of significant CMB internal 
control weaknesses related to travel, personnel, and the 
procurement of services, some of which resulted in 
inappropriate and wasteful practices.
    Weak internal controls allowed unreconciled payroll, 
benefits, and annual leave accounts; weak contract accounting; 
and disbursements without required approvals to pay. In 
addition, some CMB policies were inconsistent with Federal law, 
such as granting unlimited sick leave and two extra Federal 
holidays annually. More seriously, inadequate internal controls 
led to inappropriate practices such as employees (1) routinely 
arriving late and leaving early, (2) not recording annual leave 
when taken, and (3) being late in paying their government 
credit cards for official travel or not paying them at all. In 
addition, for the Presidential CMB, some individuals improperly 
used their own and other staff members' government credit cards 
for personal expenses, such as local restaurant bills, clothing 
purchases, and amusement park admission. The GAO also found 
uncontrolled personal telephone usage for the Presidential CMB. 
Additionally, GAO was not given key supporting documentation, 
such as vendor invoices and evidence that items were received 
for about $119,000 of expenditures, all but about $1,000 of 
which were related to the Presidential CMB. GAO noted that, 
while weaknesses related to travel, personnel, and procurement 
existed for both sides, the congressional and Presidential CMB 
operated in substantially different internal control 
environments. GAO found that the congressional CMB made a 
considerable effort to establish an internal control 
environment, including using written approvals, implementing 
recommendations based on a contract study to improve internal 
controls, and contracting for independent financial audits. The 
Presidential CMB operations were primarily characterized by 
weak or unenforced policies, oral authorizations, and poor 
records management, largely due to a lack of administrative 
leadership.
    The GAO also identified transactions involving prior 
business relationships among CMB officials, including employer/
employee or contractor affiliations. GAO found 13 congressional 
and 11 Presidential CMB related-party relationships involving 
about $1 million in salaries and contracts for each side. GAO 
disclosure of related-party relationships and transactions does 
not imply any improprieties but is in response to the 
subcommittee request for the information.
    b. Benefits.--The GAO recommended a number of actions to 
improve CMB policies, procedures, and internal controls. They 
also proposed a matter for congressional consideration to avoid 
future problems with board filing of financial disclosure 
forms. As discussed in its response to a draft to this GAO 
report, CMB plans to implement all of their recommendations.
10. ``Headquarters Processing System Status and Risks,'' October 17, 
        2000, GAO-01-1.
    a. Summary.--The accuracy of census 2000 depends in part on 
the proper functioning of 10 interrelated information systems, 
one of which is the Bureau's headquarters (HQ) processing 
system. Given the criticality of this system, the Census 
Subcommittee asked GAO to (1) identify the nature and status of 
the HQ processing system and (2) assess the quality of the 
system and the risks facing the Bureau if effective quality 
controls are not in place. The GAO performed it's work from 
July through September 2000 and briefed the subcommittee on 
it's results on September 14, 2000. The GAO found that the 
Bureau lacks effective, mature software and system development 
processes to control development of its HQ processing system 
applications. They found that the HQ processing system relies 
on the efforts of individuals to deliver applications on time 
and within budget--an approach that increases the risk that the 
applications will not be available when needed and/or perform 
as intended. As a result, the Bureau lacks adequate assurance 
that the functions performed by the HQ processing system 
applications--such as ensuring accurate and complete address 
files and identifying the correct households for enumerators to 
contact--are properly executed. Given the short amount of time 
remaining before the results of the decennial census will be 
used, the Bureau will need to take immediate steps to mitigate 
the near-term risks it faces with the quality of the 
applications that these process weaknesses may have caused.
    b. Benefits.--The GAO concluded that the Bureau does not 
have adequate assurance that the functions performed by the HQ 
processing applications--such as having accurate and complete 
address files and identifying the correct households for 
enumerators to contact--are properly executed. While Bureau 
management has implemented some practices to promote HQ 
processing application quality, the Bureau does not have 
effective and mature software and system development processes, 
such as those specified in the Software Engineering Institute's 
Capability Maturity Model and the GAO test management guide. 
Instead, Bureau management is counting on the efforts of 
individuals to deliver quality applications on time and within 
budget. This approach unnecessarily increases the risk that 
these applications will not be available when needed and will 
not perform as intended.
    The Bureau's Director provided written comments on a draft 
of this GAO report, in which the Bureau agreed that its 
software and system development procedures do not provide the 
kind of rigor and discipline advocated in SEI and GAO guidance. 
The Bureau also agreed that decennial census operations could 
have benefited from earlier implementation of GAO 
recommendations and it stated that it welcomes the opportunity 
to work with GAO in enhancing the Bureau's procedures prior to 
decennial census 2010 operations. The Bureau did, however, 
disagree on the GAO recommendations that it needs to take 
immediate steps to assess and understand the near-term risks 
that it faces with HQ processing system applications supporting 
decennial census 2000, and to thoroughly test these 
applications on the basis of the priorities established by this 
risk assessment. After responding to each of the Bureau's 
points of disagreement with their report, the GAO continues to 
question the Bureau's decision to not apply its staff and 
resources in a way that mitigates the risks of cited problems 
occurring.

                   Subcommittee on the Civil Service

                     Hon. Joe Scarborough, Chairman

1. ``IRS Personnel Administration: Use of Enforcement Statistics in 
        Employee Evaluations,'' November 30, 1998, (GAO/GGD-99-11).
    a. Summary.--Although IRS policy and Federal tax law 
prohibit the use of tax enforcement results to evaluate 
personnel, the General Accounting Office discovered systemic 
weaknesses in the IRS' administration of this policy. During 
fiscal years 1996 and 1997, IRS' regional offices had reported 
11 potential violations (in 368 quarterly certifications) and 
found 4 actual violations. GAO concluded, however, that there 
was confusion among IRS officials about what constituted 
violations, that IRS had provided inadequate guidance to 
identify violations, that the agency had failed adequately to 
integrate performance evaluations and the certification 
process, and that the agency had provided unclear guidance 
about the sanctions that could be applied against managers for 
misusing tax enforcement results or submitting false 
certifications.
    In surveying examination and collections employees, GAO 
found widespread perceptions that managers considered 
enforcement results in preparing annual performance 
evaluations. Fully 75 percent of front-line employees and 81 
percent of group managers believed that tax enforcement results 
had influenced their performance evaluations. These perceptions 
were based on comments at staff meetings and feedback provided 
by supervisors. Only 9 percent of written performance 
evaluations contained prohibited reference to enforcement 
results, but an estimated 69 percent of evaluations in the GAO 
sample contained allusions that reasonably could have referred 
to tax enforcement results. As a result of this report, the IRS 
revised its guidance to supervisors regarding the prohibition 
on the use of tax enforcement statistics, and implemented new 
performance appraisal procedures for its enforcement divisions. 
GAO contended that the agency should have provided stronger 
examples of prohibited language in performance evaluations, and 
clearer explanations of the prohibited practices.
    b. Benefits.--This report contributed to the subcommittee's 
continuing oversight of performance management in the Federal 
workplace. In a Federal work environment that stresses the 
accumulation of information and evaluation of performance based 
on results, the agency will face serious challenges developing 
adequate performance management procedures in areas such as tax 
enforcement, where current law prohibits use of critical 
performance information. As a result of the audit, IRS has 
substantially revised its management training regarding the use 
of its enforcement statistics, and is monitoring performance 
evaluations more closely to prevent the misuse of its data.
2. ``Medical Savings Accounts: Results from Surveys of Insurers,'' 
        December 31, 1998, (GAO/HEHS-99-34).
    a. Summary.--This study of medical savings accounts was 
required under the provisions of the Health Insurance 
Portability Act of 1996 that created a medical savings account 
[MSA] demonstration project. The efforts to conduct useful 
surveys of enrollees, employers, or financial institutions were 
impaired by the limited enrollment in MSAs. As a result, GAO 
only contracted for a survey of insurers. That survey reported 
that consumer demand for MSAs had been lower than the industry 
anticipated. Although more than 50 insurance carriers offered 
MSA products by the summer of 1997, that number declined to 48 
during the next year, with little expectation in the industry 
that new carriers would enter this market. The insurers 
attributed low effort to market qualified plans and the limited 
acceptance of MSAs to limitations inherent in the demonstration 
project design. Premiums for qualifying plans have dropped in 
many cases, from the levels comparable to high-deductible plans 
where they were originally set. Nonetheless, sales of 
qualifying plans have remained well below the statutory caps, 
as few insurers have approached the market aggressively.
    b. Benefits.--This report confirms concerns about the 
emergence of the MSA market under the demonstration project 
that the subcommittee heard during a 1998 field hearing at Ft. 
Monmouth, NJ. Although insurers continue to experience limited 
growth in MSA demand and sales, the survey concluded that the 
limitations of the demonstration project design hamper 
significant development in this market.
3. ``U.S. Department of Agriculture: Problems Continue to Hinder the 
        Timely Processing of Discrimination Complaints,'' January 29, 
        1999, (GAO/RCED-99-38).
    a. Summary.--Following the February 1997 report of the 
Department of Agriculture's Civil Rights Action Team, the 
Department's Office of Civil Rights had made the processing of 
civil rights complaints a priority. GAO learned that the 
Department was falling short of its goals for processing 
employment discrimination complaints, which adhere to the 
Federal sector EEOC procedures. As of October 1998, the 
Department had closed only 64 percent of more than 2,100 
backlogged employment discrimination complaints, and the agency 
was missing interim milestones in its processing of new 
complaints. In addition to problems in these procedures which 
are common among Federal agencies, GAO reported that the 
Department was not making adequate use of alternative dispute 
resolution procedures that might facilitate case processing. 
Reorganization of the office, increases in staffing and 
resources had proven inadequate to resolve the backlogs of 
complaints. GAO claimed that the USDA's record for processing 
employment discrimination complaints is among the worst in the 
Federal sector, with many complaints taking more than 3 years 
to resolve when no EEOC hearing is required. The statutory 
limit for such cases is 270 days. GAO made several 
recommendations to revise processing of these complaints, and 
the Department agreed with the findings and accepted the 
recommendations.
    b. Benefits.--This report complements oversight that the 
subcommittee has conducted regarding employment discrimination 
in the Federal workforce. The Department of Agriculture had 
been identified as a problem agency during September 9, 1997, 
subcommittee hearings, and this report confirms the limits of 
USDA's progress toward improving its procedures since the 
hearing.
4. ``Federal Retirement: Key Elements Are Included in Agencies' 
        Education Programs,'' March 29, 1999, (GAO/GGD-99-27).
    a. Summary.--As Federal employees approach retirement, 
agencies sponsor retirement planning training that provide 
opportunities to understand key provisions of the employees' 
retirement programs, including differences between the Civil 
Service Retirement System and the Federal Employees Retirement 
System, requirements for withdrawal of Thrift Savings Plan 
benefits, provisions for survivor benefits, effects of court 
orders, health insurance, life insurance, and other issues of 
concern to Federal retirees. GAO reported that the retirement 
education programs sponsored by the agencies provide nearly all 
of the essential information. The report also noted that 
agencies provide the information in a variety of formats, using 
flexible design components to adapt the training to particular 
organizations' needs. Agency officials reported to GAO that 
retirement education is conducted when new employees join the 
Federal service, and provided intermittently during their 
careers. GAO reviewed agencies' programs, and concluded that 
most of them covered the material extensively. Accordingly, GAO 
made no recommendations in this report.
    b. Benefits.--Sen. Carl Levin requested this report after 
learning of the series of retirement coverage errors that 
necessitated congressional action to address the inadequate 
mechanisms available to correct retirement coverage errors. 
Improved retirement education for Federal employees would 
enable them to identify potential retirement coverage errors 
before retirement dates, and reduce the difficulties that 
employees encounter under current procedures to ``correct'' 
retirement coverage errors. This report assisted in reassuring 
that agencies are taking steps to reduce the incidents of 
retirement coverage errors that led to H.R. 416, Federal 
Retirement Coverage Corrections Act.
5. ``Social Security Reform: Experience of the Alternate Plans in 
        Texas,'' February 26, 1999, (GAO/HEHS-99-31).
    a. Summary.--In 1981, employees of Galveston, Matagorda, 
and Brazoria Counties, TX, withdrew from the Social Security 
system and were provided individual retirement accounts by 
their employer as an alternative retirement benefit. In light 
of financial challenges facing the Social Security system, GAO 
reviewed the status of the retirement program in these counties 
to compare the investment option--which is widely considered as 
a component of Social Security reform--with the projected 
financial needs of Social Security. Where Social Security is 
designed as a social insurance program that is operated on a 
pay-as-you-go basis, the alternative plans in place in Texas 
collect contributions from employees and the employers that are 
capped at 13.915 percent of income. Those contributions are 
invested to fund future retirement benefits. Through computer 
simulations, GAO concluded that Social Security provided 
comparatively larger benefits for low-wage earners, single-
earner couples, and individuals with dependents. Additionally, 
these projections showed that some median-wage employees might 
also receive higher benefits from Social Security 4 to 12 years 
after retirement as a result of Social Security being indexed 
for inflation. Under all simulations, employees who become 
disabled fared better under the alternative plans than they 
would have under Social Security. The alternative plans provide 
60 percent of income at the time of injury to disabled 
employees, and only low-income employees would qualify for that 
replacement rate under Social Security's disability provisions. 
In commenting on this analysis, managers of the alternative 
plans reported that they were strengthening the benefits 
provided to employees, and that their investments had provided 
adequate funding for such enhancements. In contrast, the pay-
as-you-go Social Security system is projecting negative cash 
flow in 2013 and exhaustion of resources by 2032 unless 
reforms--increased taxes, reduction of benefits, or a 
combination of both--are enacted.
    b. Benefits.--Although based on simulations, this report 
indicates some of the opportunities that result from shifting 
retirement benefits from a cash-flow to a forward-funded basis. 
For employees above the median income level, and for employees 
who serve for brief periods in the system, forward-funding 
provides a more stable foundation for future retirement 
benefits. This report provides additional perspective for the 
Congress to consider in addressing proposed reforms of Social 
Security benefits and Federal employees' retirement benefits.
6. ``DOD Competitive Outsourcing: Questions About Goals, Pace, and 
        Risks of Key Reform Initiative,'' February 22, 1999, (GAO/
        NSIAD-99-46).
    a. Summary.--In reviewing support functions performed 
throughout the Department of Defense, the Department has 
increasingly used the competitive procedures authorized by 
Office of Management and Budget Circular A-76 to identify 
opportunities to reduce costs of commercial services. On 
request of the Subcommittee on Military Readiness of the House 
Committee on Armed Services, GAO reviewed recent A-76 
activities to (1) identify competition and savings goals, (2) 
assess the accuracy of savings estimates provided to Congress, 
and (3) to evaluate the adequacy of planning to support 
commercial activities programs. The Department plans to subject 
229,000 current positions to commercial competition during the 
period 1997 through 2003, with projected savings of $6 billion 
within that period and $2 billion annually thereafter. GAO 
concluded, however, that the estimates of competitive savings 
provided to Congress were overstated, and that DOD had not 
adequately included either the investment costs associated with 
these competitions nor the personnel separation costs 
associated with completing them. Although the Department had 
estimated the costs of conducting cost comparisons at $2,000 
per position, that estimate was based on in-house estimates and 
omitted the costs of developing most efficient organization 
[MEO] models that would allow current employees to compete for 
their positions. When contractor support was factored in, and 
with full in-house costs associated with MEO development 
included, the costs of conducting competitions approached 
$6,800 per position. GAO recommended that DOD slow down the 
pace of its plans to conduct cost comparisons to provide more 
complete and accurate assessments of current costs and 
projected savings.
    b. Benefits.--This report continues GAO's oversight of 
contracting activities in the Federal sector, and provides 
additional data on the costs of human capital and the savings 
that can be realized through contractor support. GAO has 
previously testified before the Civil Service Subcommittee that 
the dynamics of competition, and changes in both the government 
agency and the contracting organization that occur after 
contracts are awarded, make it difficult to develop a reliable 
data base for comparing costs pre- and post-competition. GAO's 
oversight contributes to the analysis of factors relevant to an 
accurate understanding of the costs and benefits of Federal 
contracting.
7. ``DOD Competitive Sourcing: Results of Recent Competitions,'' 
        February 23, 1999, (GAO/NSIAD-99-44).
    a. Summary.--In response to the Department of Defense's 
increased contracting, the Senate Armed Services Subcommittee 
on Readiness and Management Support requested that GAO (1) 
determine the number of sourcing competitions completed between 
October 1995 and March 1998, (2) compare these competitions 
with previous competitions in terms of costs, numbers of 
positions affected, kinds of functions performed, and projected 
savings, and (3) identify problems in implementing the results 
of competitions.
    The Air Force had conducted 41 of the 53 competitions 
completed during this period, covering 85 percent of the 
positions affected by cost comparisons. Agencies had conducted 
these competitions in accord with OMB Circular A-76 to the 
extent that they resulted in only 10 appeals, and only one of 
those appeals was sustained against the Department. Private 
competitors won about 60 percent of the contracts (compared 
with 50 percent pre-1995), and these studies were completed in 
18 to 30 months, in contrast to the 51 months required to 
conduct earlier competitions. GAO concluded that DOD data bases 
are still inadequate to track contract savings over time, and 
that the number of competitions was insufficient to provide 
accurate information about actual savings. GAO could not 
generalize about the requirements involved in implementing the 
contracts, concluding only that these varied substantially with 
the size and complexity of the contracts. DOD is complying with 
recommendations to improve the data bases used to administer 
its contracting competitions.
    b. Benefits.--This study contributes to the larger 
perspective on competition and contracting, and assists the 
subcommittee's efforts to monitor the cost comparisons and to 
improve data supporting contracting for commercial services.
8. ``Year 2000 Computing Challenge: OPM Has Made Progress on Business 
        Continuity Planning,'' May 24, 1999, (GAO/GGD-99-66).
    a. Summary.--GAO provided this report as part of its 
government-wide oversight of efforts to address computer 
programs that might be affected by flaws that result in an 
inability to distinguish 1900 and 2000 because the year is 
coded as a two-digit variable. GAO evaluated OPM's efforts to 
develop a planning strategy to ensure the continuity of 
operations, assess the impact and risks of systems failure on 
the agency's core business processes, prepare contingency plans 
that for continuing operations in the event of failure of 
critical systems, and tests of those plans to mitigate the 
effects of potential threats. GAO concluded that OPM had 
developed an effective planning process, with business 
continuity planning beginning in April 1998. OPM made effective 
contingency plans, centered around five core business 
processes, and involved senior managers in the development and 
oversight of planning efforts. The agency also developed 
extensive procedures to check for anticipated system failures. 
Although OPM hired a contractor to conduct independent 
verification of risks to its 109 mission-critical systems, that 
contractor will not provide a report of these risk assessments 
to the agency until November 1999, when it might be too late 
for the agency to take corrective measures before January 1, 
2000. In response to this review, OPM accelerated the schedule 
for the delivery of these assessments. The agency has also 
instituted a ``Zero Day'' oversight process to intensify system 
monitoring at the change of the year.
    b. Benefits.--This report contributed to the Congress' 
oversight of Y2K compliance among the agencies, with a special 
focus on programs, such as retirement and insurance benefit 
payments that have high priority for Federal employees. The 
report resulted in corrective action that will provide more 
timely risk assessment information to OPM to reduce its 
vulnerability to end-of-century computer program failures.
9. ``Small Business Administration: Review of Selected Personnel 
        Practices,'' April 23, 1999, (GAO/GGD-99-68).
    a. Summary.--In response to the administration's efforts to 
``reinvent government,'' the Small Business Administration 
reduced its workforce by approximately 15 percent, with many of 
the reductions coming from the regional office, an intermediary 
management layer. GAO conducted this review at the request of 
the Senate Small Business Committee, which had received reports 
of political favoritism in hiring, improper salary-setting and 
reassignments, and other violations of merit system principles. 
GAO reviewed the selection of 46 District Director appointees, 
and found that 6 had been hired from outside of the agency, and 
2 had previous political experience. Although the agency used a 
variety of procedures for selecting these officials, GAO found 
nothing procedurally amiss in the hiring procedures. It did 
conclude, however, that the agency had not provided sufficient 
justification for placing people above the first step of the 
salary grade at which they were hired. GAO also provided 
several recommendations to improve the agency's ability to 
collect reimbursements from employees who are detailed to other 
locations.
    b. Benefits.--This report provided intensified oversight of 
the personnel practices of an agency in transition, and 
addressed concerns about improper placement of political 
appointees and other abusive personnel practices. It resulted 
in recommendations that will provide additional reimbursements 
of unwarranted expenditures on details.
10. ``NPR's Savings: Claimed Agency Savings Cannot All Be Attributed to 
        NPR,'' July 23, 1999, (GAO/GGD-99-120).
    a. Summary.--In publicizing its accomplishments, the 
administration has attributed more than $137 billion in savings 
to reforms instituted as a result of the National Performance 
Review. GAO examined several of the recommendations for reforms 
at the Department of Agriculture, the Department of Energy, and 
the National Aeronautics and Space Administration to assess 
these claims. GAO concluded that, in estimating the savings in 
government since 1993, the Office of Management and Budget made 
no effort to distinguish between the NPR- (National Performance 
Review (or National Partnership for Reinventing Government) 
generated recommendations and initiatives in progress when the 
administration took office. In several instances, GAO concluded 
that OMB double-counted some of the savings, and in other 
instances omitted program costs associated with implementing 
the reforms. OMB's program examiners usually did not retain 
documentation used to develop estimates of NPR's savings. GAO 
reviewed six government-wide initiatives, and concluded that 
insufficient documentation was available to estimate some of 
the alleged savings, but estimated that OMB might actually have 
understated savings on two initiatives to the extent of 
approximately $1.9 billion. The report concluded that the 
savings claimed could not be substantiated, and deficiencies in 
procedures made it impossible to replicate the information used 
to claim these savings.
    b. Benefits.--This report provided useful confirmation of 
the limitations of Congress's ability to monitor the claims 
attributed to a reform program in the absence of systematic 
data.
11. ``Results Act: Observations on the Office of Personnel Management's 
        Fiscal Year 2000 Annual Performance Plan,'' July 30, 1999 (GAO/
        GGD-99-125).
    a. Summary.--GAO concluded that OPM's fiscal year-2000 
annual performance plan addressed OPM's major programs and 
priorities at a general level. However, it lacks cost-based 
performance measures that would enable comparison of its 
performance with other agencies or that might measure the 
efficiency of unique operations, such as the payment of Federal 
retirement benefits. GAO noted improvements in comparison with 
the agency's fiscal year-1999 performance plan, but observed 
that there is little data to provide a confidence that its 
performance information will be credible. GAO noted the 
changing character of the Federal workforce, and the dynamic 
environment of current Federal employment, and questioned 
whether this performance plan reflects an agency that is 
prepared to provide effective leadership to Federal agencies as 
they face key human resources management questions. The report 
notes, ``Although Congress has provided statutory frameworks 
for financial and information technology management and the 
Results Act for performance-based management practices, it has 
not addressed human capital management in a systematic fashion 
since the 1978 Civil Service Reform Act.''
    b. Benefits.--This report reflects continuing oversight of 
the implementation of the Government Performance and Results 
Act of 1993. It incorporated many of the concerns raised during 
congressional discussions with OPM, including concerns about 
the adequacy of survey measures to assess critical performance 
factors. This assessment provides important, independent 
support for the congressional oversight process.
12. ``Federal Workforce: Payroll and Human Capital Changes During 
        Downsizing,'' August 13, 1999 (GAO/GGD-99-57).
    a. Summary.--Although the non-Postal Federal civilian 
workforce was reduced by more than 300,000 employees between 
1991 and 1997 (or 13.8 percent), the costs of pay and benefits 
to Federal employees increased by 9.3 percent between the 
beginning of fiscal year-1993 and fiscal year-1997. Personnel 
compensation and benefits now constitute annual expenditures of 
$102.4 billion for Federal agencies. GAO estimated that the 
costs of an average employee increased by $11,600 during this 
period, with the annual pay adjustment intended to provide 
Federal employees' increases consistent with the civilian labor 
force leading to 58.9 percent of the increase. In estimating 
these costs, GAO included agencies' spending on voluntary 
separation incentives (buyouts) as part of compensation. Other 
leading factors in the increased costs of personnel include 
career step increases based on tenure and satisfactory 
performance (27.3 percent), increased benefit costs (13.6 
percent). Increases in premium pay (overtime, night 
differentials, hazardous duty pay, et cetera) accounted for 
only 0.3 percent of the increased costs of personnel. GAO 
concluded that early buyout programs had contributed to the 
increased costs of personnel, and noted improvements in buyout 
programs following the adoption of strategic planning 
requirements in Public Law 104-208.
    b. Benefits.--This report highlights the cost of human 
resources in the Federal sector, especially the cost factors 
that continue to increase without reference to the performance 
or skills of the employees. It also reaffirmed the importance 
of effective management planning in the administration of 
buyout programs. These concerns address issues raised by the 
subcommittee during more than 4 years of oversight of 
performance management in the Federal sector and the use of 
buyout programs by government agencies.
13. ``Background Investigations: Program Deficiencies May Lead DEA to 
        Relinquish Its Authority to OPM,'' September 7, 1999 (GAO/GGD-
        99-173).
    a. Summary.--Although the Office of Personnel Management is 
responsible for ensuring that agencies require Federal 
employees and contractors to complete background investigations 
that evaluate their suitability and security for Federal 
employment or access to classified information, OPM has 
delegated that authority to some agencies, including the Drug 
Enforcement Administration [DEA]. As of July 1999, DEA was 
considering relinquishing that authority as a result of several 
critical reviews of its background investigations, which were 
performed by contractors who acquired the business 
competitively. Senator Charles Robb and Representative Frank 
Wolf requested this review, noting that, if the delegation were 
withdrawn, the business would revert to OPM's contractor, a 
company that was established as an employee stock ownership 
program when OPM reduced its investigations workforce in 1996.
    GAO concluded that OPM had been objective and independent 
in its reviews of DEA's performance of its delegated authority 
to conduct background investigations. DEA had been reviewed 
with the same frequency as other agencies with delegated 
background authority, even though these previous reviews had 
identified serious deficiencies in the program. OPM reported to 
GAO that it had not conducted more intensive oversight because 
of commitments made to congressional oversight committees at 
the time of the privatization of OPM's investigative workforce. 
GAO is continuing assessments of background investigations 
programs in light of other findings related to this assessment 
of delegations of authority over background investigations.
    b. Benefits.--This report continues oversight begun when 
the Civil Service Subcommittee monitored OPM's privatization of 
its background investigations function. This oversight is 
essential to ensure that Federal agencies are supported by 
background investigations programs that ensure the suitability 
and security of Federal employees and contractors, and that 
appropriate corrective measures resolve any concerns about the 
adequacies of all investigative programs.
14. Reports Related to EEOC Complaints: ``Equal Employment Opportunity: 
        Data Shortcomings Hinder Assessment of Conflicts in the Federal 
        Workforce,'' May 4, 1999, (GAO/GGD-99-75); ``Equal Employment 
        Opportunity: Complaint Caseloads Rising, With Effects of New 
        Regulations on Future Trends Unclear,'' August 16, 1999, (GAO/
        GGD-99-128); and ``Equal Employment Opportunity: The Postal 
        Service Needs to Better Ensure the Quality of EEO Complaint 
        Data,'' September 28, 1999 (GAO/GGD-99-75).
    a. Summary.--In its May report on data shortcomings, GAO 
pointed out that relevant and reliable data about the bases and 
specific issues underlying complaints would assist 
decisionmakers and program managers. Such information would 
help them understand the nature and extent of conflict in the 
Federal workplace, as well as plan corrective measures and 
measure the results of interventions. Nevertheless, GAO found, 
EEOC does not collect and report data that would help answer 
fundamental questions about the nature and extent of workplace 
conflicts. Examples of basic data that is not available from 
EEOC include:
          1. How many individuals filed complaints?
          2. In how many complaints was each of the bases for 
        discrimination alleged?
          3. What were the most frequently cited issues in 
        employees' discrimination complaints and in how many 
        complaints was each of the issues cited?
    GAO also found data EEOC collected from other agencies was 
unreliable. They report basis and issue data to EEOC in an 
inconsistent manner. They also did not report some of the data 
EEOC collected and reported some other data incorrectly. In 
addition, because EEOC did not have procedures that ensured the 
reliability of the data it collected, some of the data it 
published in its annual report on EEO complaint processing was 
unreliable. GAO recommended that EEOC collect the critical data 
that is currently uncollected and establish procedures to 
improve the reliability of the data it does collect.
    GAO's September report on problems with the Postal 
Service's EEO data illustrates another aspect of the difficulty 
in obtaining reliable information. GAO found errors in 
statistics on the underlying bases for EEO complaints and on 
the Postal Service's backlog of EEO complaints. It also found 
that required data on issues raised in complaints were not 
completely reported. Among the errors found, was a computer 
programming error that vastly overstated the number of race-
based complaints filed by whites. GAO reported that the Postal 
Service corrected most of the problems when they were 
discovered, but recommended that the Postal Service review its 
controls over the recording and reporting of the data that it 
submits to the EEOC.
    GAO's August report on EEOC Federal sector caseloads and 
the effects of that agency's new complaint procedures found 
that the backlog of EEO complaints has continued to grow. From 
fiscal year 1991 to fiscal year 1998, complaint inventories at 
other agencies rose by about 114 percent. EEOC's hearing 
inventories increased by 280 percent and its appeals inventory 
shot up by 648 percent during the same period. The average age 
of EEO complaints at agencies and the EEOC also reached new 
highs. Both of these trends continued during fiscal year 1998 
as EEOC and other agencies failed to keep pace with the influx 
of new cases. While the average processing time at other 
agencies declined by 7 days (from 391 to 384 days) in fiscal 
year 1998, EEOC's processing time increased significantly. The 
time EEOC required to process hearing requests rose from 277 to 
320 days, and the length of appeals jumped from 375 to 423 
days. Overall, GAO found, the average time it took a case to 
travel through the complete complaint process procedures, from 
initial filing with an employing agency to the EEOC's decision 
on appeal, increased by a full 3 months during fiscal year 
1998. On average it now takes more than 3 years and 2 months to 
complete the entire complaint procedure. EEOC has implemented a 
new complaint procedure, but GAO could not project the impact 
on caseloads and processing times since the regulations did not 
take effect until November 9, 1999.
    b. Benefits.--The subcommittee has closely monitored the 
appeals procedures available to Federal employees, including 
the procedures for processing EEO complaints. The information 
in these reports will assist the subcommittee in evaluating the 
current EEO process and assessing alternatives.
15. ``Human Capital: Key Principles From Nine Private Sector 
        Organizations,'' January 31, 2000 (GAO/GGD-00-28).
    a. Summary.--Each of the nine organizations reviewed 
implemented human capital strategies and practices that were 
designed to directly support the achievement of their specific 
missions, strategic goals, and core values. GAO identified 10 
underlying and interrelated principles of human capital 
management that are common to the nine organizations and viewed 
as the foundation for their ongoing success and viability:
    (a) treat human capital considerations with the 
organizations mission, goals, core values, and policies and 
practices;
    (b) integrate human capital functional staff into 
management teams and expand the role of the staff beyond 
providing traditional personnel administration services;
    (c) supplement internal human capital staff's knowledge and 
skills with outside expertise;
    (d) hire, develop, and sustain leaders according to 
essential leadership characteristics;
    (e) communicate a shared vision that all employees, working 
as one team, can strive to accomplish;
    (f) hire, develop, and retain employees according to 
competencies needed to achieve high performance of missions and 
goals;
    (g) provide incentives to link performance to results and 
hold employees accountable for contributing to the achievement 
of mission and goals;
    (h) support and reward teams that achieve high performance 
by fostering a culture in which individuals interact, support, 
and learn from each other;
    (i) integrate employee input into the design and 
implementation of human capital policies and practices to 
develop responsive policies and practices;
    (j) measure effectiveness of human capital policies and 
practices by evaluating and making fact-based decisions on 
whether human capital policies and practices support high 
performance mission and goals.
    Federal agencies need only to adopt and adapt to these 
principles, if necessary, to give human capital higher priority 
as they implement performance-based management to achieve 
success and higher performance.
    b. Benefits.--This report provides useful benchmarks for 
the subcommittee as it evaluates the performance of the Office 
of Personnel Management and of other agencies in managing the 
Federal workforce. The report will also assist the subcommittee 
to evaluate current statutes, regulations, and legislative 
proposals that affect the future human capital needs of the 
Federal Government.
16. ``Equal Employment Opportunity: Responses to Questions Related to 
        Equal Employment Opportunity: Responses to Questions Related to 
        Equal Employment Opportunity and Dispute Resolution Issues,'' 
        April 21, 2000 (GGD-00-123R).
    a. Summary.--This report is GAO's response to a 
congressional request regarding GAO's testimony on the Equal 
Employment Opportunity [EEO] complaint process for Federal 
employees, focusing on: (1) whether minorities are placed in 
positions that are ``dead end employment tracks;'' (2) whether 
GAO studied the Navy's Pilot Dispute Resolution Program, which 
is used to resolve EEO complaints; (3) whether the Equal 
Employment Opportunity Commission's [EEOC] Comprehensive 
Enforcement Program will be able to measure progress toward its 
goal of eradicating discrimination in the Federal workplace; 
and (4) the prerequisites to a successful alternative dispute 
resolution [ADR] program. GAO noted that: (1) GAO has not done 
any work that specifically addresses the representation of 
minorities in the Federal workforce; (2) however, GAO reviewed 
data by the Office of Personnel Management [OPM] and EEOC; (3) 
these data show that from fiscal years 1993 through 1998, the 
proportion of the Federal workforce made up by minorities 
increased by 1.5 percentage points; (4) both the number and 
percentage of minority representation in mid- and senior-level 
Federal white-collar jobs increased; (5) however, these data 
also show that, proportionately, minorities are more likely 
than whites to hold General Schedule positions below Grade 13; 
(6) OPM reports that the average grade level of minority 
employees is lower than that of white Federal workers; (7) the 
Merit Systems Protection Board [MSPB] reported that although a 
large portion of the grade level differences between minorities 
and White men could be accounted for by differences in 
education and experience, even after controlling for these 
differences, MSPB found that there was generally a negative 
effect on the careers of minorities in professional and 
administrative positions because of their race or national 
origin; (8) GAO has not studied the Navy's Pilot Dispute 
Resolution Program; (9) although GAO has not examined 
initiatives under the Comprehensive Enforcement Program, GAO 
believes that they are clearly steps in the right direction; 
(10) however, sustained commitment and follow-through on the 
part of EEOC will be required if EEOC is to achieve meaningful 
results; (11) in order for EEOC to measure progress toward its 
goal of eradicating discrimination, there need to be reliable 
indicators and measures of discrimination in the Federal 
workplace; (12) measures could be developed that gauge the 
outcome of discrimination prevention efforts; (13) the 
strongest feature of the Comprehensive Enforcement Program, in 
GAO's opinion, is the changes to complaint program regulations 
that were implemented in November 1999, particularly the 
requirement for ADR to be used; and (14) based on GAO's report 
on employers' experiences with ADR in the workplace, the 
prerequisites to having a successful ADR program are the: (a) 
need for visible support by top management; (b) importance of 
involving employees in ADR program development; (c) importance 
of employing ADR processes early in a dispute before positions 
have solidified and underlying interests have been obscured; 
and (d) need to balance the desire to settle and close cases 
against the need for fairness to employees and managers alike.
    b. Benefits.--This report was useful in evaluating some of 
the testimony received at the subcommittee's hearing on March 
29, 2000, entitled, ``EEO Data and Complaint Processing 
Problems.'' (See EEO Data and Processing Problems).
17. ``Federal Employees' Health Program: Reasons Why HMOs Withdrew in 
        1999 and 2000,'' May 2, 2000 (GAO/GGD-00-100).
    a. Summary.--This report analyzed the withdrawal of health 
maintenance organizations [HMO] from the Federal Employees' 
Health Benefits Program [FEHBP], focusing on: (1) changes in 
the number of HMOs participating in FEHBP from plan years 1994 
to 2000; (2) the reasons why HMOs withdrew from FEHBP in plan 
years 1999 and 2000; and (3) FEHBP enrollment experiences for 
HMOs that withdrew from the program in 2000. GAO noted that: 
(1) for plan years 1999 and 2000, 136 HMOs withdrew from FEHBP; 
(2) while a limited number of new plans entered FEHBP in 1999 
and 2000, the withdrawals, combined with plans that either 
merged, consolidated service areas, or left service areas 
reduced the number of HMOs participating in FEHBP from 476 in 
1996 to 277 HMOs in 2000; (3) the growth or decline in the 
number of HMOs participating in FEHBP was not always the result 
of plans entering or withdrawing from the program; (4) some 
HMOs added new service areas, while others split their existing 
service areas; (5) in other cases, HMOs merged, consolidated 
service areas, or left service areas; (6) in any event, about 
64,000 of the 4.1 million FEHBP enrollees were affected by 
HMOs' decisions to withdraw in 2000; (7) according to OPM 
officials and representatives from HMOs that left FEHBP, the 
factors most frequently cited for HMO withdrawals from the 
program in plan years 1999 and 2000 were insufficient 
enrollments, unpredictable plan utilization/excessive risk, and 
noncompetitive premium rates; (8) in addition to citing these 
as the major factors influencing plans' decisions to withdraw, 
these officials and representatives noted that oftentimes it 
was a combination of these factors, rather than a single 
factor, that caused a plan's withdrawal; (9) other factors that 
plan representatives cited for withdrawing from FEHBP included 
mergers, Federal mandates to provide selected benefits, OPM's 
administrative requirements, and saturated market areas; (10) 
however, plan representatives and others with whom GAO spoke 
generally agreed that mandates and administrative requirements 
would not have been major factors contributing to a plan's 
decision to withdraw; (11) an official from the Employee 
Benefit Research Institute told GAO that recent plan 
withdrawals from FEHBP represented a market correction in that 
plans with low FEHBP enrollments in areas dominated by large 
plans concluded that they could not compete effectively and 
therefore withdrew; (12) OPM plan enrollment information showed 
that 46 of the 62 HMOs that withdrew from FEHBP in 2000 
actually increased enrollments between 1998 and 1999, 12 plans 
lost enrollment between 1998 and 1999, and 4 plans only had 
enrollment data for 1 year; (13) from 1998 to 1999, of the 46 
HMOs that increased enrollments, these increases numbered less 
than 100 enrollees for 26 of these HMOs; and (14) in addition, 
of the 62 plans that withdrew in 2000, 26 had fewer than 300 
enrollees.
    b. Benefits.--The subcommittee regularly monitors policy 
directives OPM issues to plan carriers as well as the rate 
setting process for premiums. The subcommittee remains 
interested in minimizing mandates in order to permit as much 
market competition among plans as possible. The withdrawal of 
plans is important to determine what negative impacts can be 
prevented on the program, as well as ensuring a minimal number 
of plans leave the program so Federal employees nationwide have 
a wide variety of healthcare options to choose from for 
themselves and their families.
18. ``Senior Executive Service: Retirement Trends Underscore the 
        Importance of Succession Planning,'' May 12, 2000 (GGD-00-
        113BR).
    a. Summary.--This report examined retirement trends in the 
Senior Executive Service [SES], focusing on: (1) trends for the 
SES' workforce government-wide and for selected agencies and 
occupational series through fiscal year 2005 and how they 
compared with the trends over the 7-year period ending fiscal 
year 1998; and (2) the implications of SES retirement trends 
for SES succession planning. GAO noted that: (1) the proportion 
of career SES members employed in selected agencies and 
occupational series who will be eligible to retire by the end 
of fiscal year 2005 varies by agency and occupational series 
and differs from the government-wide rate of 71 percent; (2) 
the Department of Veterans Affairs [VA] will have the highest 
SES regular retirement eligibility rate of the 14 selected 
agencies in GAO's review; (3) VA may have to replace a large 
number of its career SES members because 82 percent of those 
members and 81 percent of SES members in health system 
administration, who are primarily employed at VA, will be 
eligible to retire by September 30, 2005; (4) health system 
administration will have the second highest retirement 
eligibility rate of the eight selected occupational series 
included in GAO's review--criminal investigation will have the 
highest; (5) conversely, the Environmental Protection Agency 
[EPA], the Nuclear Regulatory Commission, and attorneys will 
have the lowest SES retirement eligibility rates by September 
30, 2005; (6) both EPA and the attorney series will experience 
the greatest increase in the proportion of the career SES 
workforce to attain retirement eligibility; (7) the SES 
retirement trends projected for the first few years of this 
decade illustrate that the SES is an aging workforce; (8) 
because individuals normally do not enter the SES until well 
into their careers, SES retirement eligibility generally is 
much higher than for the workforce in general, but SES 
retirement eligibility also is growing compared with 
eligibility early in the 1990's; (9) these trends highlight the 
importance of SES succession planning because the SES 
retirements will result in a loss in leadership continuity, 
institutional knowledge, and expertise among the SES corps with 
the degree of the loss varying among agencies and occupations; 
(10) available evidence suggests that formal SES succession 
planning is not being done universally; (11) SES members from 
more than 24 agencies said their agencies do not have a formal 
succession planning program for the SES; (12) Office of 
Personnel Management officials said most agencies will not 
likely have formal, comprehensive succession plans; and (13) 
studies by the National Academy of Public Administration in 
1994 and 1997 showed that formal SES succession planning 
generally was not being done in the Federal Government.
    b. Benefits.--The report was beneficial to the subcommittee 
as it continues to oversee OPM and agency actions to develop 
sound succession plans for the SES. It has also been useful in 
evaluating whether or not legislative or regulatory changes are 
needed to maintain the SES as a highly-qualified executive 
corps of the Federal Government.

   Subcommittee on Criminal Justice, Drug Policy, and Human Resources

                      Hon. John L. Mica, Chairman

1. ``Drug Control: Update on U.S.-Mexican Counternarcotics 
        Activities,'' March 1999, GAO/NSIAD-99-98.
    a. Summary.--This GAO report discussed the counternarcotics 
efforts of the United States and Mexico, focusing on: (1) 
Mexico's efforts in addressing the drug threat; and (2) the 
status of United States counternarcotics assistance provided to 
Mexico. The report found that: (1) while some high profile law 
enforcement actions were taken in 1998, major challenges 
remain; (2) new laws passed to address organized crime, money 
laundering, and the diversion of chemicals used in narcotics 
manufacturing have not been fully implemented; (3) moreover, no 
major Mexican drug trafficker was surrendered to the United 
States on drug charges; (4) in addition, during 1998, opium 
poppy eradication and drug seizures remained at about the same 
level as in 1995; (5) Mexican Government counternarcotics 
activities in 1998 have not been without positive results; (6) 
one of its major accomplishments was the arrest of Jesus and 
Luis Amezcua who, along with their brother Adan, are known as 
the Kings of Methamphetamine; (7) although all drug-related 
charges against the two have been dropped, both are still in 
jail and being held on United States extradition warrants; (8) 
the Mexican foreign ministry has approved the extradition of 
one of the traffickers to the United States, but he has 
appealed the decision; (9) in addition, during 1998 the 
Organized Crime Unit of the Attorney General's Office conducted 
a major operation in the Cancun area where four hotels and 
other large properties allegedly belonging to drug traffickers 
associated with the Juarez trafficking organization were 
seized; (10) Mexico also implemented its currency and 
suspicious transaction reporting requirements; (11) the Mexican 
Government has proposed or undertaken a number of new 
initiatives; (12) it has initiated an effort to prevent illegal 
drugs from entering Mexico, announced a new counternarcotics 
strategy and the creation of a national police force; (13) one 
of the major impediments to United States and Mexican 
counternarcotics objectives is Mexican Government corruption; 
(14) recognizing the impact of corruption on law enforcement 
agencies, the President of Mexico: (a) expanded the role of the 
military in counternarcotics activities; and (b) introduced a 
screening process for personnel working in certain law 
enforcement activities; (15) since these initiatives, a number 
of senior military and screened personnel were found to be 
either involved in or suspected of drug-related activities; 
(16) since 1997, the Departments of State and Defense have 
provided the Government of Mexico with over $112 million worth 
of equipment, training, and aviation spare parts for 
counternarcotics purposes; and (17) the major assistance 
included UH-1H helicopters, C-26 aircraft, and two Knox-class 
frigates purchased by the Government of Mexico through the 
foreign military sales program.
    b. Benefits.--This report describes the progress that is 
being made by Mexico in addressing the drug threat and further 
progress that is needed. It also details the assistance that 
has been provided to Mexico to support its efforts. This 
information is critical to understanding Mexico's efforts and 
ascertaining future needs for effective and coordinated drug 
threat strategies and operations.
2. ``Medicare: Early Evidence of Compliance Program Effectiveness Is 
        Inconclusive,'' April 1999, GAO/HEHS-99-59.
    a. Summary.--This GAO report reviewed the compliance 
programs established by health care providers to reduce 
improper payments by Medicare, focusing on the: (1) prevalence 
of compliance programs among hospitals and other Medicare 
providers; (2) costs involved with compliance programs; and (3) 
effectiveness of the programs, to the extent that could be 
measured. The report found that: (1) although there is no 
comprehensive data on the number of providers with compliance 
programs, many hospitals are implementing them; (2) two recent 
hospital surveys, one focusing on academic health centers and 
the other including a broad range of hospital types, found that 
most hospitals responding either had or planned to soon 
implement a compliance program; (3) the hospitals in GAO's 
study said they felt compelled to implement a compliance 
program for a variety of reasons, including the heightened 
enforcement environment, suggestions from the Department of 
Health and Human Services' Office of the Inspector General, and 
expectations that the Health Care Financing Administration and 
accrediting bodies would soon require compliance programs; (4) 
although compliance programs are apparently becoming widely 
accepted, most of the hospitals in GAO's study have only 
recently begun implementation; (5) hospitals report that 
compliance programs require an investment of considerable time 
and money; (6) however, measuring the cost of compliance 
programs is difficult; (7) hospitals could not always 
distinguish costs attributable to their compliance programs 
from those of their normal operations, in part because the 
hospitals often had existing compliance-oriented activities 
that were subsumed by the compliance program; (8) hospitals 
reported a variety of significant direct costs, such as 
salaries for compliance staff and professional fees for 
consultants and attorneys; (9) according to the information GAO 
was able to obtain, direct compliance program costs appear to 
account for a very small percentage of total patient revenues--
less than 1 percent in all but one of the hospitals studied; 
(10) the hospitals also reported indirect costs, such as time 
spent by employees in compliance-related training and away from 
their regular duties; (11) these indirect costs are more 
difficult to measure and may be larger than the direct costs 
reported; (12) the principal measure of a compliance program's 
effectiveness is its ability to prevent improper Medicare 
payments; (13) it is difficult to measure effectiveness in this 
way because of the lack of comprehensive baseline data and the 
existence of many other factors that could affect measurement 
results; (14) other measures have been suggested as a proxy for 
measuring compliance program effectiveness; (15) Medicare 
contractors reported that they have received refunds of 
provider overpayments with more frequency; (16) GAO has also 
noted an increase in formal provider self-disclosures during 
the last few years; and (17) however, this preliminary evidence 
does not demonstrate that compliance programs have reduced 
improper Medicare payments.
    b. Benefits.--This report describes the current state of 
knowledge regarding the operation of compliance program 
effectiveness. This is a topic of continuing concern to the 
subcommittee and will be addressed in future hearings. As 
compliance implementation is ongoing, compliance experiences to 
date provide the basis of current appraisals of the benefits 
and deficiencies of this new program and its operations.
3. ``Drug Control: ONDCP Efforts to Manage the National Drug Control 
        Budget,'' May 1999, GAO/GGD-99-80.
    a. Summary.--This GAO report reviewed the role of the 
Office of National Drug Control Policy [ONDCP] in shaping the 
national drug control budget that the President ultimately 
proposes to Congress to implement the National Drug Control 
Strategy, focusing on: (1) whether the process ONDCP followed 
to certify Federal agencies' drug control budgets for fiscal 
year 1999 was consistent with statutory requirements; and (2) 
the system ONDCP has developed to assess the extent to which 
drug control agencies and programs achieve intended results. 
The report found that: (1) the process ONDCP used to certify 
fiscal year 1999 drug budgets was generally consistent with the 
requirements of the Anti-Drug Abuse Act of 1988; (2) ONDCP 
provided budget guidance to agencies and reviewed some 
agencies' preliminary budgets in the summer and others in the 
fall; (3) based on its budget reviews, ONDCP notified agencies 
of recommended changes to incorporate into their final budgets 
that were submitted to the President for approval; (4) ONDCP 
reviewed budgets of 14 drug control agencies specifically for 
certification to determine whether they were adequate to 
support the goals and objectives of the National Drug Control 
Strategy; (5) ONDCP certified all but the Department of Defense 
[DOD] budget; (6) DOD was not certified because DOD and ONDCP 
could not agree on funding levels for certain drug program 
initiatives; (7) later, however, DOD's budget was significantly 
increased following ONDCP's appeals to the Office of Management 
and Budget and the President; (8) ONDCP continued to monitor 
development of the national drug control budget during the 
remaining budget and congressional appropriations process; (9) 
to assess the extent to which agencies and programs achieve 
intended results, ONDCP has initiated a system known as 
Performance Measures of Effectiveness--a long-term effort 
designed to assess the effectiveness of the Nation's drug 
control efforts; (10) although this system represents a 
blueprint for the first accountability in the area of drug 
policy, some questions remain about: (a) the availability of 
adequate data to measure performance; (b) how the system is to 
interface with the drug budget process; and (c) how agencies 
will link the performance expected of them by the National 
Strategy with the performance goals they prepare in response to 
the Government Performance and Results Act; and (11) ONDCP 
plans to continually monitor the system's operation to ensure 
that it is fully functional and achieving its designed purpose.
    b. Benefits.--This report provides critical information for 
the effective oversight of ONDCP and the implementation of the 
National Drug Control Strategy. Budget issues and decisions 
will define the success of the agency and the accomplishment of 
its mission. The performance measures that are being 
implemented also will be critical to assessing agency and 
strategy progress. This overview describes actions taken to 
date.
4. ``Drug Control: Narcotics Threat From Colombia Continues to Grow,'' 
        June 1999, GAO/NSIAD-99-136.
    a. Summary.--This GAO report provided information on the 
narcotics threat from Colombia, focusing on: (1) the nature of 
the drug threat from Colombia; (2) recent initiatives of the 
Colombian Government to address the threat, and obstacles it 
faces; and (3) the status of United States efforts to assist 
the Colombian Government in furthering its counternarcotics 
activities and reducing the flow of illegal narcotics to the 
United States.
    The report found that: (1) despite the efforts of United 
States and Colombian authorities, the illegal narcotics threat 
from Colombia has grown; (2) Colombia remains the primary 
source country for cocaine products for the United States 
market; (3) for the third year in a row, coca cultivation has 
increased so that Colombia is now the world's leading 
cultivator of coca; (4) more potent coca leaf is being grown 
within Colombia, which is likely to lead to an estimated 50-
percent increase in cocaine production in the next 2 years; (5) 
Colombia is now the major supplier of heroin to the eastern 
part of the United States; (6) the Colombian Government has 
lost a number of battles to insurgent groups who, along with 
paramilitary groups, have increased their involvement in 
illicit narcotics activities and gained greater control over 
large portions of Colombia where drug-trafficking activities 
occur; (7) the Government of Colombia has undertaken a number 
of initiatives to address the narcotics threat; (8) these 
include: (a) the initiation of peace talks with the insurgents; 
(b) the development of a national drug control strategy; (c) 
the establishment of a joint military-police task force to 
combat drug traffickers; (d) the development of a new 
counternarcotics unit within the Colombian army that will be 
fully screened for human rights abuses; and (e) the 
implementation of legislative reforms on extradition, money 
laundering, and asset forfeiture; (9) in 1998, these efforts 
led to the seizure of record amounts of cocaine and arrests of 
drug traffickers; (10) the Government of Colombia faces a 
formidable challenge in overcoming a number of significant 
obstacles in addressing the narcotics problem; (11) the 
Colombian military has several institutional weaknesses that 
have limited its capability to support counternarcotics 
operations; (12) government corruption, budgetary constraints, 
and a weak judicial system have hindered the Colombian 
Government's ability to reduce drug-trafficking activities; 
(13) the United States has had limited success in achieving its 
primary objective of reducing the flow of illegal drugs from 
Colombia; (14) despite 2 years of extensive herbicide spraying, 
United States estimates show there has not been any net 
reduction in coca cultivation--net coca cultivation actually 
increased 50 percent; and (15) the growing involvement and 
strength of insurgent groups in the areas where coca and opium 
poppy are grown complicate United States support for 
counternarcotics activities.
    b. Benefits.--This report provides additional important 
data on the mounting drug threat from Columbia. This data 
reveals current problems and areas of priority need. The 
findings highlight the need for a more comprehensive effort on 
the part of the United States and Columbia if mutual objectives 
in countering this drug threat are to be achieved. It appears 
that Congress will be required to assume a greater role in this 
effort.
5. ``Student Loans: Default Rates Need To Be Computed More 
        Appropriately,'' July 1999, GAO/HEHS-99-135.
    a. Summary.--This GAO report reviewed the Department of 
Education's method of calculating a school's student loan 
default rate, focusing on: (1) whether there has been an 
increase in the number of borrowers who entered repayment but 
subsequently received deferments or forbearances; (2) what 
effect would excluding borrowers whose loans were in deferment 
or forbearance have on the most recent default rate 
calculation; and (3) whether additional schools would have 
exceeded the 25-percent default rate threshold under the 
alternative method of calculating the default rate. The report 
found that: (1) between 1993 and 1996, the percentage of 
borrowers with loans in deferment or forbearance more than 
doubled, from 5.2 percent of borrowers who had begun repaying 
to 11.3 percent; (2) this doubling was consistent across the 
various types of schools, including 4-year and less-than-4-year 
public and private schools as well as proprietary schools; (3) 
according to Education officials, the increase was 
attributable, in part, to provisions of the 1992 amendments to 
the Higher Education Act of 1965 that eased the requirements 
for obtaining deferments and forbearances as a way of helping 
minimize loan defaults; (4) excluding borrowers with loans in 
deferment or forbearance entirely from the calculation of the 
cohort default rate would have had the effect of increasing the 
overall default rate from 9.6 percent to 10.9 percent for 1996, 
the most recent cohort year for which data are available; (5) 
the proportional increases would have been roughly similar for 
the various types of schools; (6) for example, the rate at 4-
year schools would have risen from 6.8 to 7.7 percent, while 
the rate at proprietary schools would have risen from 18.3 to 
20.1 percent; (7) for the 1996 cohort, excluding borrowers with 
loans in deferment or forbearance from the calculation would 
have increased the number of schools with rates exceeding the 
25-percent threshold by 181 schools, from 352 to 533, an 
increase of 51 percent; (8) under the law, these schools would 
have become ineligible to participate in student loan programs 
if their cohort default rate had exceeded the threshold for 3 
consecutive years; (9) since 1991, the Department has denied 
participation in the programs to more than 1,000 schools 
because their default rates were too high; and (10) most of the 
additional schools that would have exceeded the threshold under 
the alternative calculation method were proprietary schools, 
but 12 were 4-year colleges and universities and 57 were public 
or private schools with degree programs of less than 4 years.
    b. Benefits.--This report identifies the need to compute 
loan default rates more accurately. The student loan programs 
of the Department of Education are experiencing significant 
changes and substantial administrative problems. The 
calculation of an accurate default rate is critical to 
assessing future financial exposures, and in determining what 
efforts may be effective in preventing huge financial losses. 
It also helps in comparing the loan collection experiences of 
various schools and institutions.
6. ``Assets DOD Contributes to Reducing the Illegal Drug Supply have 
        Declined,'' December 1999, GAO/NSIAD-00-9.
    a. Summary.--The Department of Defense has plans and 
strategies that support the goal of reducing the Nation's 
illegal drug supply as specified in the National Drug Control 
Strategy. DOD supports this goal by providing military 
personnel, detection and monitoring equipment, intelligence 
support, communication systems, and training. However, DOD has 
not yet developed a set of performance measures to assess its 
effectiveness in contributing to this goal but has taken some 
initial steps to develop such measures. These steps include the 
development of a database to capture information that can be 
used to assess the relative performance of DOD's detection and 
monitoring assets.
    DOD's level of support to international drug control 
efforts has declined significantly since 1992. For example, the 
number of flight hours dedicated to detecting and monitoring 
illicit drug shipments declined from approximately 46,000 to 
15,000 or 68 percent, from 1992 through 1999. Likewise, the 
number of ship days declined from about 4,800 to 1,800, or 62 
percent, over that same time period. Some of the decline in air 
and maritime support has been partially offset by increased 
support provided by the U.S. Coast Guard and Customs Service. 
Nevertheless, DOD officials have stated that coverage in key, 
high-threat drug-trafficking areas in the Caribbean and in 
cocaine-producing countries is limited. The decline in assets 
DOD uses to carry out its counterdrug responsibilities is due 
to (1) the lower priority assigned to the counterdrug mission 
compared with that assigned to other military missions that 
might involve contact with hostile forces such as peacekeeping 
and (2) overall reductions in defense budgets and force levels. 
DOD officials believe that their operations are more efficient 
today than in the past and that this has partially offset the 
decline in assets available for counterdrug operations. Because 
of a lack of data, however, the impact of the reduced level of 
DOD support on drug trafficking is unknown.
    DOD faces several challenges in providing counterdrug 
support to host-nation military and law enforcement 
organizations. These organizations often lack the capability to 
operate and repair equipment and effectively utilize training 
provided by the United States. In addition, DOD faces 
restrictions on providing training support to some foreign 
military units and sharing intelligence information with 
certain host-nation counterdrug organizations because of the 
past evidence of human rights violations and corruption within 
these organizations.
    GAO recommends that DOD develop measures to assess the 
effectiveness of its counterdrug activities.
    b. Benefits.--This report provides information identifying 
critical decreases in resource allocations and a faltering 
commitment by the Department of Defense to drug control 
efforts. The report acknowledges that some of the shortfalls in 
ship days and flight hours were offset by the U.S. Coast Guard 
and the U.S. Customs Service. It further establishes the need 
for the Department of Defense to reprioritize the drug threat 
within the national security apparatus to ensure that adequate 
resources are dedicated to this mission in the future. These 
and other deficiencies will continue to be monitored by the 
subcommittee until improvements are made.
7. ``U.S. Assistance to Colombia Will Take Years to Produce Results,'' 
        October 2000, GAO-01-26.
    a. Summary.--Despite United States and Colombian efforts, 
the illegal narcotics threat from Colombia continues to grow 
and become more complex. From 1995 through 1999 coca 
cultivation and cocaine production in Colombia more than 
doubled and Colombia became a major supplier of heroin consumed 
in the United States. Moreover, over time, the drug threat has 
become more difficult to address. This is due in part to the 
increasing number and types of organizations involved in 
illegal drug activities, including insurgent groups, and also 
the lack of Colombian Government control over more than 40 
percent of its territory. The situation makes eradication and 
interdiction operations to reduce illegal drug activities 
difficult.
    Although United States-provided assistance has enhanced 
Colombian counternarcotics capabilities, it has sometimes been 
of limited utility because of long-standing problems in 
planning and implementing this assistance. For example, 
helicopters that State provided to the National Police and the 
military have not had sufficient spare parts or the funding 
necessary to operate and maintain them to the extent possible 
for conducting counternarcotics operations. Moreover, the U.S. 
Embassy has made little progress implementing a plan to have 
the National Police assume more responsibility for the aerial 
eradication program, which requires costly U.S. contractor 
assistance to carry out. U.S. Embassy officials also expressed 
concern that the National Police has not always provided 
documentation about its use of some counternarcotics 
assistance.
    The Governments of the United States and Colombia face 
financial and management challenges in implementing Plan 
Colombia. The total cost and activities required to meet the 
plan's goals remain unknown, and it will take years before drug 
activities are significantly reduced. U.S. agencies are still 
developing implementation plans, and manufacturing and 
delivering equipment. GAO finds that placing staff in Colombia 
to manage activities will take time. As a result, agencies do 
not expect to have many of the programs to support Plan 
Colombia in place until late 2001. Moreover, additional funds 
will be needed to ensure that equipment provided remains 
operable. State planning documents indicate that it has not 
budgeted funds to train pilots and mechanics, provide 
logistical support, and support the operations of certain U.S.-
provided helicopters. To date, the Colombian Government has not 
demonstrated that it has detailed plans, management structure, 
and funding necessary to effectively implement its programs and 
achieve stated goals. While Colombia is relying on 
international donors in addition to the United States to help 
fund Plan Colombia, much of that support has yet to 
materialize. Colombia faces continuing challenges associated 
with its political and economic instability fostered by 
Colombia's long-standing insurgency and the need to ensure that 
the Colombian Police and military comply with human rights 
standards in order for United States assistance to continue.
    GAO recommends to the Secretaries of State and Defense that 
efforts be undertaken to help ensure that United States 
counternarcotics assistance to Colombia is used more 
effectively and problems in supporting United States-provided 
equipment do not recur. In commenting on a draft of this 
report, State and Defense generally concurred with the 
information presented and the recommendations.
    b. Benefits.--This report describes past problems within 
the Department of State and Department of Defense in getting 
needed aid down to the security forces in Colombia. It also 
details the assistance that has been provided to Colombia to 
support its counterdrug efforts. This information is critical 
to understanding Colombia's efforts and ascertaining future 
needs for effective and coordinated drug threat strategies and 
operations. The findings are very important as the 
administration attempts to implement the U.S. assistance 
approved by the Congress and signed into law this past summer 
in the Fiscal Year-2000 Supplemental Aid package for Plan 
Colombia. The information contained in the report will assist 
the subcommittee monitor the delivery of future United States 
aid to Colombia.
8. ``Drug Abuse Treatment: Efforts Under Way to Determine Effectiveness 
        of State Programs,'' February 15, 2000, GAO/HEHS-00-50.
    a. Summary.--GAO reviewed the efforts by the Substance 
Abuse and Mental Health Services Administration [SAMHSA] and 
states to provide effective drug abuse treatment programs, 
focusing on: (1) activities supported by SAMHSA's Substance 
Abuse Prevention and Treatment [SAPT] block grant and Knowledge 
Development and Application [KDA] grant funds for drug abuse 
treatment; (2) SAMHSA and State mechanisms for monitoring fund 
use; and (3) SAMHSA and State efforts to determine the 
effectiveness of drug abuse treatment supported with SAPT block 
grant funds. GAO noted that: (1) about $581 million in SAMHSA's 
fiscal year 1996 grant funds was spent on drug abuse treatment 
activities; (2) more than $478 million was spent by all States 
for treatment services funded through the SAPT block grant 
program; (3) the 16 States GAO surveyed reported that SAPT 
funds supported both residential and outpatient drug abuse 
treatment services, including detoxification and methadone 
maintenance; (4) for half of the States in GAO's survey, 
outpatient drug abuse treatment services accounted for 57 to 85 
percent of their block grant expenditures; (5) all of the 
States GAO surveyed reported providing methadone treatment 
services almost exclusively on an outpatient basis; (6) SAMHSA 
spent another $25 million of the SAPT block grant for technical 
assistance and evaluation activities related to drug abuse 
treatment; (7) the remaining $78 million of SAMHSA's fiscal 
year 1996 grants were KDA funds provided to community-based 
organizations, universities, and State and local government 
agencies to develop and disseminate information on promising 
drug abuse treatment practices; (8) to monitor grantees' use of 
SAPT and KDA program funds, SAMHSA uses on-site reviews, 
reviews of independent financial audit reports, and application 
reviews; (9) these mechanisms are primarily used to monitor 
grantees' compliance with program requirements, identify 
grantees' technical assistance needs, and provide grantees 
guidance for improving program operations; (10) the 
accountability system for the SAPT block grant is mostly based 
on a review of State expenditures; (11) SAMHSA primarily 
monitors States' compliance with certain statutory requirements 
for use of funds; (12) the States also monitor SAPT block grant 
funds using mechanisms similar to SAMHSA's; (13) they used the 
results of their monitoring efforts, in part, to make drug 
abuse treatment funding allocation decisions and determine 
technical assistance needs; (14) several State and SAMHSA 
efforts are under way to determine the effectiveness of drug 
abuse treatment programs using client outcome measures, such as 
drug use, employment, criminal activity and living arrangement; 
(15) 9 of the 16 States that GAO surveyed have conducted such 
assessments, but the results vary from State to State; (16) 
SAMHSA officials believe that collecting uniform State-level 
client outcome and other performance data are critical to 
determining the effectiveness of State programs supported with 
SAPT block grant funds; and (17) however, this effort is not 
likely to result in uniform State data because some of the 
States reported that they would not be able to submit all of 
the requested data.
    b. Benefits.--This report describes developments and plans 
regarding SAMHSA's research and evaluation efforts involving 
drug treatment programs and approaches. The report describes 
the scope and funding levels of the agency's efforts, and 
serves to identify that significant research remains to be 
completed.
9. ``Drug Abuse: Efforts Under Way to Determine Treatment Outcomes,'' 
        February 17, 2000, GAO/HEHS-00-60.
    a. Summary.--GAO discussed the Substance Abuse and Mental 
Health Services Administration's [SAMHSA] efforts to support an 
effective drug abuse treatment system, focusing on: (1) 
activities supported by SAMHSA's Substance Abuse Prevention and 
Treatment [SAPT] block grant and Knowledge Development and 
Application [KDA] grant funds for drug abuse treatment; (2) 
SAMHSA and State mechanisms for monitoring fund use; and (3) 
SAMHSA and State efforts to determine the effectiveness of drug 
abuse treatment supported with SAPT block grant funds. GAO 
noted that: (1) about $581 million in SAMHSA's fiscal year 1996 
grant funds was spent on drug abuse treatment activities; (2) 
more than $478 million was spent by the States for treatment 
services funded through the SAPT block grant program; (3) the 
16 States GAO surveyed reported that SAPT funds supported 
residential and outpatient drug abuse treatment services, 
including detoxification and methadone maintenance; (4) for 
half of the States in GAO's survey, outpatient drug abuse 
treatment services accounted for 57 to 85 percent of their 
block grant expenditures; (5) all the States GAO surveyed 
reported providing methadone treatment services almost 
exclusively on an outpatient basis; (6) SAMHSA spent $25 
million of the SAPT block grant for technical assistance and 
evaluation activities related to drug abuse treatment; (7) the 
remaining $78 million of SAMHSA's 1996 grant funds were KDA 
funds provided to community-based organizations, universities, 
and State and local government agencies to develop and 
disseminate information on promising drug abuse treatment 
practices; (8) SAMHSA monitors grantees' use of these funds 
through on-site reviews, reviews of independent financial audit 
reports, and application reviews; (9) these mechanisms are used 
to monitor grantees' compliance with program requirements, 
identify grantees' technical assistance needs, and provide 
grantees guidance for improving program operations; (10) the 
accountability system for the SAPT block grant is mostly based 
on a review of State expenditures designed to determine whether 
States comply with statutory spending requirements for use of 
funds, such as those that stipulate that a certain percentage 
of SAPT block grant funds be spent for alcohol prevention and 
treatment, drug prevention and treatment, and special 
populations; (11) SAMHSA's monitoring has not focused on the 
outcomes of the effectiveness of States' drug abuse treatment 
programs; (12) several State and SAMHSA efforts are under way 
to determine the effectiveness of drug abuse treatment programs 
using client outcome measures, such as drug use, employment, 
criminal activity, and living conditions; (13) 9 of the 16 
States have conducted such assessments, but the outcomes 
measured, populations assessed, methodologies used, and 
availability of results vary from State to State; (14) SAMHSA 
is funding a pilot effort to help 19 States develop and 
uniformly report on a core set of client outcomes; and (15) 
however, this effort is not likely to result in uniform State 
data because some States are not collecting requested data.
    b. Benefits.--This report describes SAMHSA's evaluation and 
funding practices aimed at determining treatment outcomes. 
Significant assessment challenges continue.
10. ``Export Promotion: Federal Agencies' Activities and Resources in 
        Fiscal Year 1999,'' April 10, 2000, GAO/NSIAD-00-118.
    Pursuant to a congressional request, GAO provided 
information on U.S. Government programs intended to help 
businesses promote their products and services in overseas 
markets, focusing on: (1) the Federal agencies involved in 
promoting exports of U.S. goods and services and the export 
promotion activities they perform; (2) these agencies' total 
resources devoted to export promotion in fiscal year 1999; and 
(3) the agencies' overseas resources devoted to export 
promotion during this period. GAO noted that: (1) 10 Federal 
agencies are involved in export promotion activities: (a) the 
Departments of Agriculture, Commerce, Energy, State, and 
Transportation; (b) the Export-Import Bank of the United 
States; (c) the Overseas Private Investment Corporation; (d) 
the Small Business Administration; (e) the Agency for 
International Development; and (f) the U.S. Trade and 
Development Agency; (2) all of these agencies help educate U.S. 
businesses about the export process by participating in trade 
shows and other events; seven provide financial assistance to 
exporters or investors in overseas projects; seven provide 
trade contacts; and six gather and disseminate market and trade 
lead information; (3) these agencies received approximately 
$1.9 billion for export promotion activities in 1999; (4) the 
Export-Import Bank and the Department of Agriculture, agencies 
that provide direct financial support to U.S. exporters, 
received $1.47 billion, or almost 78 percent, of this amount; 
(5) another $299 million (16 percent) was received by the 
Department of Commerce, which employed the equivalent of almost 
2,000 full-time people in these activities during this period; 
(6) the remaining 6 percent was devoted to eight other 
agencies; (7) seven agencies devoted approximately $174 million 
in estimated expenses to export promotion activities at U.S. 
overseas posts in fiscal year 1999; (8) of this amount, about 
+$110 million came from the Commerce Department, which devoted 
the equivalent of over 700 full-time people to these activities 
during this period; (9) the Departments of Agriculture and 
State devoted $48 million and $14 million respectively; and 
(10) these expenditures covered salaries and expenses of 
overseas staff and administrative costs associated with 
overseas facilities.
    b. Benefits.--Overlapping activities and a piecemeal 
approach to achieving various trade objectives are evident from 
the descriptive report.
11. ``Medicare: Contractors Screen Employees but Extent of Screening 
        Varies,'' June 30, 2000, GAO/HEHS-00-135R.
    a. Summary.--GAO provided information on the use of 
employee screening measures by Medicare claims administration 
and program safeguard contractors, focusing on the: (1) 
requirements the Health Care Financing Administration [HCFA] 
has placed on Medicare contractors to conduct employee 
background checks; (2) steps Medicare contractors are taking to 
ensure that employees are trustworthy in handling Medicare 
funds and sensitive information; and (3) costs to Medicare 
contractors of conducting background checks or using other 
employee screening measures. GAO noted that: (1) HCFA expects 
its contractors to exercise sound business judgment when they 
make hiring decisions; (2) as a result, HCFA does not 
specifically require its Medicare claims administration and 
program safeguard contractors to conduct background checks or 
undertake other employee screening measures; (3) however, HCFA 
does advise its claims administration contractors to adopt 
personnel selection safeguards, specifically employment 
verification and applicant certifications; (4) HCFA also 
requires its claims administration contractors to obtain 
fidelity bonds for certain employees; (5) in addition, both 
Medicare claims administration and program safeguard 
contractors are required to collect and submit to HCFA conflict 
of interest information; (6) the Medicare claims administration 
and program safeguard contractors GAO surveyed screen their 
employees as common business practice without specific 
requirements from HCFA to do so; (7) nearly all the contractors 
in GAO's sample said that they perform typical screening 
measures, such as employment and education verification, 
reference checking, and credential validation; (8) most of the 
claims administration contractors GAO spoke to also reported 
that they perform more extensive screening measures, such as 
criminal background checks and drug tests; (9) in contrast, the 
two program safeguard contractors GAO surveyed indicated that 
they do not conduct criminal background checks or require drug 
testing unless such requirements are included in their 
contracts; (10) both claims administration and program 
safeguard contractors reported that they rarely use less 
traditional screening measures, such as credit checks and 
government debarment and exclusion database reviews; (11) the 
costs associated with employee screening vary by the complexity 
and urgency associated with each screening measure; (12) 
however, the Medicare contractors GAO surveyed could not 
calculate the total cost of their employee screening measures; 
and (13) the fact that employee screening efforts are conducted 
and continue to be recognized as a common business practice 
within the Medicare contractor community suggests that such 
measures are considered worthwhile.
    b. Benefits.--Valuable information regarding current 
personnel background information collection and uses is 
provided. The information is useful in determining safeguards.
12. ``Civilian Acquisitions: Selected Agencies' Use of Criminal 
        Background Checks on Contractor Principals to Prevent Fraud,'' 
        September 28, 2000, GGD-00-194R.
    a. Summary.--GAO provided information on selected agencies' 
use of criminal background checks to help prevent contractor 
fraud, focusing on: (1) policies and practices for making 
contractor responsibility determinations and conducting 
criminal background checks on contractor principals; (2) 
efforts to suspend, debar, or otherwise prevent firms or 
contractor principals that have violated relevant Federal laws 
and regulations from receiving government contracts; and (3) 
Office of Inspector General [OIG] completed contractor fraud 
investigations involving principals and whether the principals 
who committed fraud had criminal histories. GAO noted that: (1) 
the Federal Acquisition Regulation [FAR] sets forth seven 
general standards that agencies' contracting officers are 
required to use in determining whether prospective contractors 
are responsible; (2) these standards require prospective 
contractors to have adequate financial resources to perform the 
contract, the ability to comply with contract schedules, 
satisfactory performance records, and satisfactory records of 
integrity and business ethics; (3) although FAR does not 
specifically require criminal background checks on contractor 
principals, agencies are not prohibited from performing such 
checks and may do so when they believe it is necessary or 
appropriate; (4) the Department of Housing and Urban 
Development [HUD], the Department Treasury, and General 
Services Administration [GSA] have acquisition regulations and 
guidance that implement and supplement the FAR requirements 
concerning the information that contracting officers are 
expected to obtain when making contractor responsibility 
determinations; (5) while HUD's practices for making contractor 
responsibility determinations appeared consistent with the FAR 
and the HUD procurement handbook, they did not include criminal 
background checks on contractor principals; (6) according to 
Treasury and GSA officials, their contracting officers rely on 
certain types and sources of information to make responsibility 
determinations; (7) Treasury and GSA officials said that such 
determinations do not include criminal background checks on 
contractor principals; (8) as of March 2000, HUD was among the 
top five agencies regarding debarments, but according to HUD 
officials, most of these debarments were not related to 
acquisition activities; (9) the Department of Health and Human 
Services [HHS] and Office of Personnel Management [OPM] 
accounted for about 70 percent of debarments government-wide; 
(10) like HUD, most of HHS' and OPM's debarments were not 
related to acquisitions, but typically involved health care 
providers, such as doctors and nursing homes; (11) during 
fiscal years 1997 through 1999, the OIGs at the Departments of 
Agriculture, HUD, Justice, Transportation, Veterans 
Administration, and at GSA investigated a total of 151 
contractor principals for allegedly committing fraud; (12) of 
these principals, 56, or 37 percent, were found to have 
committed fraud; and 8 of the 56 principals who committed fraud 
had criminal histories.
    b. Benefits.--These findings provided new information that 
identified a serious need for greater scrutiny of agency 
acquisition practices, and consideration by agencies of needs 
to conduct criminal background checks when situations warrant 
them. At HUD, criminal background checks of principals may have 
prevented mismanagement of agency business, saved millions of 
dollars, and prevented moneys and program operations from 
unnecessarily being placed at risk.
13. ``Economic Development: Multiple Federal Programs Fund Similar 
        Economic Development Activities,'' September 29, 2000, RCED/
        GGD-00-220.
    a. Summary.--GAO identified Federal programs that supported 
economic development, focusing on: (1) the programs that more 
directly fund economic development activities, including the 
level of financial support that they provide; and (2) comparing 
selected aspects of these programs, such as program applicants, 
to identify areas of potential overlap. GAO noted that: (1) 10 
agencies and 27 sub-agency units administer 73 programs that 
can be used to support one or more of the six activities that 
GAO identified as being directly related to economic 
development; (2) in some cases, a single program can be used to 
fund multiple activities, while in some cases, a single program 
can be used to fund only one type of activity; (3) while these 
73 programs had total combined obligations of about $58 billion 
during fiscal year 1999, most of the individual programs each 
had obligations of less than $50 million; (4) in many cases, 
only a portion of the obligations was related to the six 
activities that GAO identified as being directly related to 
economic development; (5) specifically, for 30 of the 
programs--those for which agencies could provide more detailed 
obligation information--approximately $7 billion was obligated 
to support one or more of the six economic development 
activities for fiscal year 1999; (6) in many cases, the 
programs required the applicants to supplement or match these 
funds with funds from other sources; (7) in each of the six 
activity areas, GAO identified programs that fund a similar 
activity and also have the same applicants; and (8) while GAO 
identified overlap among many Federal programs that support 
economic development, additional information is needed to 
determine whether that overlap resulted in the inefficient or 
ineffective delivery of the programs involved.
    b. Benefits.--This descriptive information is needed to 
complete an evaluation of whether the multiple agencies and 
overlapping economic development activities result in 
inefficiencies that should be remedied. The report makes clear 
that the activities and arrangements of the various economic 
development programs and agencies represent a complex approach 
to achieving economic development goals and policies, and that 
current practices are ripe for further simplification.
14. ``Anti-Drug Media Campaign: Investigation of Actions Taken 
        Concerning Alleged Excessive Contractor Cost,'' October 4, 
        2000, GAO-01-34T.
    a. Summary.--This testimony discusses the Office of the 
National Drug Control Policy's [ONDCP] contract with Ogilvy & 
Mather, the lead media campaign contractor for the National 
Youth Anti-Drug Media Campaign. GAO reviewed ONDCP 
investigations into (1) the facts and circumstances surrounding 
actions taken by ONDCP after receiving the allegations that 
Ogilvy may have over-billed the government; (2) allegations 
that Ogilvy had provided services unrelated to the contract and 
submitted invoices under the contract for those services; and 
(3) the Director of ONDCP, General Barry McCaffrey, knew about 
the allegations concerning Ogilvy's billing practices but did 
not act. GAO found that Director McCaffrey had a private 
meeting with Ogilvy's project director after internal ONDCP 
discussions of the need for an external audit. However, based 
upon available evidence, GAO concluded that this meeting did 
not result in a negative decision with respect to an external 
audit of Ogilvy. Based upon available evidence, GAO concluded 
that Ogilvy did not write congressional testimony for ONDCP 
employees, which would have gone beyond the scope of its 
contract with ONDCP. Ogilvy did provide ONDCP with figures, 
research, and documentation for use in responding to 
congressional inquiries and testimony. Available evidence 
indicated that Ogilvy did not provide services to Director 
McCaffrey involving his response to an article in the New 
Yorker magazine that was critical of Director McCaffrey's 
actions when he was in the military.
    b. Benefits.--This report was very helpful to the 
subcommittee in identifying serious problems and concerns that 
merited further investigation. GAO has begun an audit and 
examination to determine whether these substantial Federal 
program funds are being spent wisely, whether proper billing 
practices are being followed, and whether evidence of serious 
contractor fraud or mismanagement exists. The subcommittee 
continues to monitor this activity.
15. ``Drug Control: Challenges in Implementing Plan Colombia,'' October 
        12, 2000, GAO-01-76T.
    a. Summary.--This testimony discusses the challenges facing 
the United States and Colombia in implementing Plan Colombia, 
which is designed to help curb drug trafficking. The United 
States believes that the drug threat from Colombia has both 
expanded and become more complex during the past several years. 
During fiscal years 1996-2000, the United States provided 
Colombia more than $765 million in assistance to help reduce 
illegal drug activities. Both governments face several 
management and financial challenges in implementing Colombia's 
strategy to cut the cultivation, processing, and distribution 
of narcotics by in half in 6 years. Although both governments 
are taking steps to address the challenges, the total cost and 
activities required to meet the plan's goals remain unknown, 
and significantly reducing drug activities will likely take 
years. Problems include the lack of spare parts for 
helicopters, lags in equipment supply, the failure of the 
Colombian National Police to take control of aerial operations, 
and funding.
    b. Benefits.--This testimony highlighted serious problems 
and challenges that executive branch officials must consider in 
determining how best to implement Plan Colombia successfully. 
The testimony and hearing raises numerous and significant 
concerns regarding past and present assistance practices, and 
raises additional concerns regarding future plans and efforts. 
The testimony demonstrated that the situation in Colombia is 
complex and volatile, and that a rethinking of approaches and 
practices is in order, especially given past practices and 
experiences.
16. ``Drug Control: U.S. Assistance to Colombia Will Take Years to 
        Produce Results,'' October 17, 2000, GAO-01-26.
    a. Summary.--The United States has been providing 
assistance to Colombia since the early 1970's to help the 
Colombian National Police and other law enforcement agencies, 
the military, and civilian agencies in their efforts to reduce 
illegal drug production and trafficking activities. Recognizing 
that illegal drug activities are a serious problem, the 
Colombian Government announced a counternarcotics plan known as 
Plan Colombia. This report reviews the United States 
counternarcotics efforts in Colombia. Although United States-
provided assistance has enhanced Colombian counternarcotics 
capabilities, it has sometimes been of limited utility because 
of long-standing problems in planning and implementing this 
assistance. For example, little progress has been made in 
implementing a plan to have Colombia's National Police assume a 
larger role in managing the aerial eradication program, which 
requires costly United States contractor assistance. The 
governments of the United States and Colombia face continuing 
and new financial and management challenges in implementing 
Plan Colombia. The costs and activities needed to implement the 
plan are unknown at this time, and it will take years before 
any significant reduction in the drug trade is seen. Colombia 
must resolve problems with its political and economic stability 
and improve its management of counternarcotics funding in order 
to be successful in implementing Plan Colombia.
    b. Benefits.--The report reiterated the testimony of GAO, 
and further demonstrated the need for rethinking past policies 
and practices in assisting Colombia. Colombian officials have 
not demonstrated a capability to effectively use United States 
assistance, nor has the United States demonstrated its 
capability to provide assistance in a timely and responsive 
manner during the Clinton administration. The report indicates 
that an improved assistance plan is needed, and that 
dysfunctional past practices should be avoided.
17. ``Defense Trade: Data Collection and Coordination on Offsets,'' 
        October 26, 2000, GAO-01-83R.
    a. Summary.--Defense offsets are the full range of 
industrial and commercial benefits that firms give to foreign 
governments as conditions for the purchase of military goods 
and services. They have gained attention because of the 
potential impact they may have on the economy and national 
security. In 1984 and 1999, data collection and reporting 
requirements were levied by Congress to obtain information on 
the impact of offsets on the U.S. industrial base; the 
Departments of Commerce, State, and Defense are all required to 
report to Congress on defense offsets. GAO found that although 
coordination of data collection is limited, it may not be 
significant because the agencies collecting offsets cover 
different time periods or situations. Additional coordination 
may occur after the National Commission on the Use of Offsets 
begins its work.
    b. Benefits.--The report provides descriptive information 
regarding defense offsets that identifies impacts and potential 
problem areas, such as insufficient coordination. The report is 
useful in beginning to evaluate options for limiting various 
negative consequences of offset practices. The usefulness of 
this report to evaluating benefits and costs of offsets--
including offset impacts--will become more apparent once 
further study is completed.

                Subcommittee on the District of Columbia

                     Hon. Thomas M. Davis, Chairman

1. District of Columbia Courts: Improvements needed in Accounting for 
        Escrow and other Funds, October 29, 1999.
    a. Summary.--Information was received for purpose of 
oversight and implementation of reforms.
2. Issues Related to the Youngstown Prison Report and Lorton Closure 
        Process, April 7, 2000.
    a. Summary.--Information was received for purpose of 
oversight.
3. District of Columbia Courts: Implementation of Personnel Policies 
        Requiring Further Attention From the Courts' Leadership, April 
        12, 2000.
    a. Summary.--Information was received for purpose of 
oversight and implementation of reforms.
4. District of Columbia Government: Performance Report's Adherence to 
        Statutory Requirements, April 14, 2000.
    a. Summary.--Information was received for purpose of 
oversight.
5. Foster Care: Status the District of Columbia's Child Welfare System 
        Reform Efforts, May 5, 2000.
    a. Summary.--Information received for purposes of oversight 
hearings.
6. District of Columbia Receivership: Selected Issues Related to 
        Medical Services at the District of Columbia Jail, June 30, 
        2000.
    a. Summary.--Information received for purposes of an 
oversight hearing.
7. Status of District of Columbia Convention Center Project, August 30, 
        2000.
    a. Summary.--Information received for purpose of oversight.
8. Washington Metropolitan Area Transit Authority, ongoing inquiry.
    a. Summary.--Hearing held, awaiting report.
9. District of Columbia Mental Health Services, ongoing inquiry.
    a. Summary.--Hearing planned, awaiting report.
10. District of Columbia Private Use of Official Vehicles, GAO/GGD-99-
        50.
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed the District of Columbia's compliance with Public Law 
105-100, focusing on whether: (1) any District employees were 
authorized, as of September 1998, to take home official 
vehicles; and (2) these employees were aware of the statutory 
restriction on using District government vehicles for other 
than official business, including home-to-work transportation.
    b. Benefits.--GAO noted that: (1) all of the 46 District 
entities reported to have vehicles as of September 30, 1997, 
now report compliance with the prohibition against using 
appropriated funds for government vehicles taken home be 
employees; (2) in response to GAO's September 1998 
questionnaire to or interviews with the 46 District entities 
that had vehicles under their control, 37 entities reported 
that they did not authorize anyone to take home a public 
vehicle; (3) the remaining 9 entities reported that 44 
employees were authorized to take home a public vehicle; (4) 
subsequently, 8 of the 9 entities told GAO that 21 employees 
who were still authorized as of September 1998 to take home 
public vehicles were no longer doing so; (5) the other entity, 
the District of Columbia Housing Authority [DCHA], which had 23 
employees authorized to take home public vehicles, planned to 
comply with the law by funding the cost of vehicles taken home 
with nonappropriated funds; (6) GAO concurred that the 
statutory restriction does not prohibit DCHA from spending its 
nonappropriated funds on vehicles that are taken home; (7) GAO 
also contacted the 10 entities identified in the District's 
Public Vehicle Report as allowing vehicles to be taken home as 
of September 30, 1997, about steps they had taken to inform 
their affected employees of the restriction on this practice; 
(8) officials at these 10 entities said that they had notified 
their staff of the change in the law; (9) 21 of the 22 District 
employees GAO contacted who were authorized to take home 
vehicles as of September 30, 1997, were aware of the 
restriction; and (10) the remaining employee said that his 
entity had not notified him of the change in policy, but when 
he became aware of it from GAO's survey, he stopped taking home 
a vehicle.
11. District of Columbia Authority Needs to Improve Its Procurement 
        Practices, GAO/GGD-99-134, August 1999.
    a. Summary.--Allegations have been made about procurement 
improprieties at the District of Columbia Financial 
Responsibility and Management Assistant Authority, which 
Congress established in 1995 to repair the District's failing 
financial condition and to improve the effectiveness of city 
operations. The Authority was given the authority to award 
contracts itself and to review and approve contracts awarded by 
the District.
    b. Benefits.--GAO found that the Authority did not always 
comply with its procurement regulations and procedures or 
follow sound contracting principles when it awarded and 
administered the nine contracts GAO assessed. In addition, the 
Authority's files for these contracts were incomplete.
12. D.C. Courts Staffing Level Determination Could Be More Rigorous, 
        GAO/GGD-99-162, August 1999.
    a. Summary.--This report provides information on personnel 
management in the District of Columbia courts. Specifically, 
GAO discusses staffing and workload levels for the courts from 
1989 through 1998, assesses how the courts evaluate the 
sufficiency of the levels of nonjudicial staff who work on the 
processing and the disposition of cases, and compares the D.C. 
courts' staffing methodology to other available methodologies.
13. D.C. Courts Planning Budgeting Difficulties During Fiscal Year 
        1998, September 1999, GAO/AIMD/OGC-99-226.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the planning and budgeting difficulties 
faced by District of Columbia [DC] Courts during fiscal year 
1998. GAO noted that: (1) DC Courts incurred obligations of 
$115.4 million, $119 million, and $125.6 million in fiscal 
years 1996, 1997, and 1998, respectively; (2) fiscal year 1998 
obligations reflect a different scope of activities than prior 
year obligations, primarily because of changes necessitated by 
the Revitalization Act of 1997; (3) these changes include the 
transfer of a DC Courts function to another entity and 
increased costs of employee benefits during fiscal year 1998; 
(4) DC Courts also gave its nonjudicial employees a 7-percent 
pay raise and assumed responsibility for judges' pension costs 
as part of its fiscal year 1998 appropriation for court 
operations; (5) DC Courts did not prepare and execute a budget 
based on amounts appropriated for fiscal year 1998; (6) records 
showed that throughout the year, DC Courts was aware that its 
spending was on pace to exceed available resources; (7) rather 
than managing within its available funds, DC Courts incurred 
obligations in anticipation of receiving additional resources 
from Congress and others to cover the difference; (8) faced 
with an impending shortfall in operating funds, DC Courts 
officials deferred payments totalling $5.8 million owed to 
court-appointed attorneys and expert service providers during 
the last 3 months of fiscal year 1998; (9) Congress transferred 
$1.7 million in fiscal year 1998 funds to DC Courts that was 
used for deferred court-appointed attorney payments and 
authorized DC Courts to use the fiscal year 1999 appropriations 
to fund the remaining deferred amount of $4.1 million; (10) as 
of May 25, 1999, GAO found that DC Courts fiscal year 1998 
obligations exceeded available resources by $4.6 million, in 
violation of the Anti-Deficiency Act; (11) this funding 
shortfall reflected the $4.1 million in deferred payments to 
court-appointed attorneys that should have been recorded as 
fiscal year 1998 obligations and GAO's assessment of 
deobligations for fiscal year 1998 submitted by DC Courts; (12) 
DC Courts treated $773,000 in interest--earned primarily on the 
bank balances from quarterly apportionments of its fiscal year 
1998 appropriation--as an available budgetary resource for 
court operations without having legislative authority to do so; 
(13) DC Courts processed vouchers for court-appointed attorneys 
and expert-service providers in accordance with established 
policies and procedures; (14) however, its policies did not: 
(a) include timeframes for processing the vouchers and making 
payments; or (b) require that judges document decisions to 
reduce claimed voucher amounts; and (15) DC Courts did not have 
procedures for retaining data on vouchers reported as lost or 
missing.
14. Financial Audit District of Columbia Highway Trust Funds's Fiscal 
        Years 1998 and 1997 Financial Statements, September 1999, GAO/
        AIMD-99-263.
    a. Summary.--Pursuant to a legislative requirement, GAO 
presented the results of its audit of the District of 
Columbia's Highway Trust Fund, focusing on: (1) GAO's opinion 
on the effectiveness of the District's internal control related 
to the fund as of September 30, 1998; and (2) the results of 
GAO's evaluation of the District's fiscal year 1998 compliance 
with laws and regulations as they relate to the fund.
    b. Benefits.--GAO noted that: (1) the financial statements 
for 1998 and 1997 were fairly presented, in all material 
respects; (2) the District did not maintain effective internal 
control related to the fund as of September 30, 1998; (3) GAO 
found material weaknesses related to accounting for revenue, 
cashier operations, and computer system general controls; (4) 
there was a reportable noncompliance with one of the laws GAO 
tested relating to the licensing and bonding of motor vehicle 
fuel wholesalers/businesses; and (5) the underlying assumptions 
made and methodology used to develop the fund's revised 
forecasted statements provided a reasonable basis for such 
statements, and the statements were presented in conformity 
with guidelines established by the American Institute of 
Certified Public Accountants.
15. District of Columbia Status of the New Convention Center, dated 
        September 1999, GAO/AIMD-99-258.
    a. Summary.--Pursuant to a congressional request, GAO 
provided a status report on the construction of the new 
Washington Convention Center, focusing on: (1) the status of 
the project; (2) changes in the Washington Convention Center 
Authority's [WCCA] estimated project costs and financing plan 
since GAO's last report; and (3) actual expenditures and 
collection of dedicated taxes. GAO noted that: (1) in March 
1999, work started on slurry wall construction, site 
excavation, and removal of contaminated soil; (2) based on 
information provided by WCCA officials as of June 1999, total 
estimated project costs decreased $55 million from $846 million 
to $791 million; (3) this decrease was due to reduced 
financing-related costs, which resulted primarily from the 
purchase of a surety bond covering debt servicing instead of 
funding the initially planned for Debt Service Reserve Fund; 
(4) WCCA estimated the total construction cost of the project 
at $714 million--$6.3 million, or less than 1 percent, more 
than the June 1998 estimate; (5) the $6.3 million increases to 
$24 million the estimated value of equipment that WCCA 
anticipates being provided by vendors at no initial cost to 
WCCA; (6) however, WCCA remains at risk for the cost of the 
equipment until contracts are executed with vendors; (7) within 
the $714 million construction cost estimate, WCCA made a number 
of changes, increasing the estimated cost of some project 
components and decreasing others to reflect more current data; 
(8) proceeds from the September 1998 bond sale covered about 66 
percent of the $791 million June 1999 project cost estimate; 
(9) WCCA's financing plan covered the remaining cost through 
dedicated taxes over the 4-year construction period, 
anticipated interest earnings, anticipated Federal grants, and 
reliance on vendors to provide without cost, equipment that 
WCCA estimates would cost $24 million--an amount for which WCCA 
is at risk until such time that there are executed contracts to 
cover these arrangements; (10) dedicated tax collections for 
the first 10 months of fiscal year 1999 were $42.2 million--a 
little higher than the amount assumed in the bond offering 
documents prorated for the same period; (11) in addition to the 
amounts already collected, WCCA may receive some portion of 
amounts in the lockbox exceptions account; (12) these amounts 
cannot be determined until all collections held in the lockbox 
exceptions account have been appropriately allocated by the 
District of Columbia and appropriate amounts transferred to 
WCCA; and (13) WCCA's share of interest earnings on amounts in 
the exceptions account cannot be determined until the District 
determines the appropriate allocation.
16. D.C. Courts Improvements needed in Accounting for Escrow and Other 
        Funds, October 1999, GAO/AIMD/OGC-00-6.
    a. Summary.--The District of Columbia Courts did not 
properly account for the funds in half of its 18 bank accounts 
during fiscal year 1998, as shown by its problems in 
determining its cash balances and reconciling its accounting 
records to supporting documentation. In addition, DC Courts 
lacked adequate controls and procedures during fiscal year 1998 
to help ensure that the fines and the fees that were collected 
were accurately recorded. Although DC Courts was authorized to 
deposit fines, fees, and penalties specified in District Law 
into the Crime Victims Fund to provide financial assistance to 
crime victims, in fiscal years 1998 and 1999 DC Courts also 
deposited other fines, fees, and penalties into the Fund that 
should have been deposited in the U.S. Treasury.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, Chairman

1. ``Year 2000 Computing Challenge: Agencies' Reporting of Mission-
        Critical Classified Systems,'' August 5, 1999, GAO/AIMD-99-218.
    a. Summary of subcommittee action.--(See section II.B.1.)
    b. Benefits.--The subcommittee and OMB used the information 
provided by the agencies to monitor year 2000 progress across 
the Federal Government. This audit showed that, as of July 31, 
1999, one agency--the Department of the Treasury--had not 
reported the status of its mission-critical, classified systems 
to OMB, and therefore, to Congress. Ultimately, however, all 
Federal departments and agencies completed their year 2000 
remediation work before the January 1, 2000, deadline. As a 
result of this focused governmentwide effort, there were no 
major disruptions in Federal services.
2. ``Performance Budgeting: Past Initiatives Offer Insights for GPRA 
        Implementation,'' March 27, 1997, GAO/AIMD-97-46.
    a. Summary of subcommittee action.--(See section II.B.8.)
    b. Benefits.--The Subcommittee on Government Management, 
Information, and Technology held two hearings to investigate 
the effectiveness of the Government Performance and Results Act 
[GPRA] based on input from previous public- and private-sector 
experiences. Using the lessons learned from these experiences, 
the subcommittee was able to direct the Office of Management 
and Budget and Federal agencies in more profitable directions.
3. ``Inspectors General: Information on Operational and Staffing 
        Issues,'' January 1999, GAO/AIMD-99-29; and
4. ``Inspectors General: Views on Semiannual Reporting,'' August 25, 
        1999, GAO/AIMD-99-203.
    a. Summary of subcommittee action.--The subcommittee has 
held numerous meetings to discuss potential legislation to 
update the 21-year-old Inspectors General Act.
    b. Benefits.--Pursuant to a congressional request, the GAO 
surveyed inspectors general in the executive branch to obtain 
information on their organizational structure, staffing, and 
workload; and their views on current policy issues affecting 
them in order to apprise Congress of the successes or failures 
of existing law. The GAO found the following:
    The inspector general's work covers a broad spectrum of 
agency programs and operations.
    In general, the inspectors general responded that they have 
the expertise and resources necessary to assemble the staff 
they need to perform the major types of work for which they are 
responsible.
    While the inspectors general anticipate the level of work 
to remain the same or slightly increase across the range of 
areas that were reviewed, they anticipate that the greatest 
increase will be in information technology reviews.
    The inspectors general also indicated that they were 
generally satisfied with their role and the overall legislation 
governing them, but did identify certain potential areas for 
modification.
5. ``Public-Private Partnerships: Key Elements of Federal Building and 
        Facility Partnerships,'' February 3, 1999, GAO/GGD-99-23.
    a. Summary of subcommittee action.--(See section 
II.B.2.(c)(1).)
    b. Benefits.--With a portfolio of more than 500,000 
buildings located on more than 560 million acres of land, the 
Federal Government is one of the world's largest landowners. 
These holdings are under the custody and control of more than 
30 Federal departments and agencies. They represent a taxpayer 
investment of more than $300 billion. The Government, however, 
is not a good steward of its real property assets. The 
Government must find innovative ways to ensure the proper 
maintenance of this substantial taxpayer investment.
6. ``Financial Audit: IRS's Fiscal Year 1998 Financial Statements,'' 
        March 1, 1999, GAO/AIMD-99-75.
    a. Summary of subcommittee action.--(See section II.A.2(c) 
(1) and (2).)
    b. Benefits.--In response to a congressional request, the 
GAO examined the audit of the Internal Revenue Service's [IRS] 
fiscal year 1998 financial statements. Currently, billions of 
dollars are being wasted because of poor accounting procedures 
throughout the departments and agencies in the executive 
branch. These audits are intended to make Federal agencies more 
accountable for the taxpayer-provided money they spend, and 
will ultimately help curb unintended overpayments and unnoticed 
losses through the use of timely and accurate accounting.
7. ``Performance Budgeting: Initial Experiences Under the Results Act 
        in Linking Plans With Budgets,'' April 12, 1999, GAO/AIMD/GGD-
        99-67.
    a. Summary of subcommittee action.--(See section II.B.8.)
    b. Benefits.--Pursuant to a congressional request, the GAO 
examined performance budgeting in the Federal Government, 
focusing on the postponement of the performance budgeting pilot 
programs that are required by the Government Performance and 
Results Act of 1993 [GPRA] and the challenges confronting 
efforts to relate performance expectations and spending 
estimates. Full implementation of GPRA will create a more 
efficient and effective Federal Government with the potential 
of saving billions of taxpayer dollars.
8. ``National Archives: Preserving Electronic Records in an Era of 
        Rapidly Changing Technology,'' July 19, 1999, GAO/GGD-99-94.
    a. Summary of subcommittee action.--(See section II.B.9.)
    b. Benefits.--Many challenges confront the Federal 
Government as the Nation moves into the digital age. In 
response to a congressional request, the GAO examined the 
challenges that face the National Archives and Records 
Administration [NARA] and other Federal agencies in their 
effort to manage the rapidly increasing volume of electronic 
records. NARA has already begun revising its guidance to 
agencies to better protect electronic documents of historic 
value.
9. ``Unpaid Payroll Taxes: Billions in Delinquent Taxes and Penalty 
        Assessments Are Owed,'' August 2, 1999, GAO/AIMD/GGD-99-211.
    a. Summary of subcommittee action.--(See section 
II.B.4.c.(2).)
    b. Benefits.--Continuing oversight of financial management 
within the executive branch of Government has the potential of 
ultimately saving taxpayers billions of dollars once Federal 
agencies implement timely and accurate accounting procedures. 
In response to a congressional request, the GAO provided 
information on payroll taxes owed to the Federal Government and 
the associated trust fund recovery penalties assessed 
individuals responsible for the nonpayment of these taxes.
10. ``Acquisition Reform: GSA and VA Efforts to Improve Training of 
        Their Acquisition Workforces,'' February 18, 2000, GGD-00-66.
    a. Summary of subcommittee action.--The subcommittee 
requested the U.S. General Accounting Office to examine the 
training programs for the Federal acquisition workforce, 
focusing on whether: (1) the General Services Administration 
[GSA] and the Department of Veterans Affairs [VA] had assurance 
that their acquisition workforces met the training requirements 
defined by the Office of Federal Procurement Policy [OFPP] and 
whether contracting officers at one GSA and one VA field 
location met each agency's training requirements; (2) OFPP had 
taken action to ensure that civilian departments and agencies 
collected and maintained standardized acquisition workforce 
information, as required by the 1996 Clinger-Cohen Act; and (3) 
GSA and VA were taking actions to comply with Clinger-Cohen Act 
funding requirements.
    On March 16, 2000, the subcommittee convened a hearing to 
assess current issues related to Federal acquisition. The 
subcommittee learned that despite the impact of recent 
procurement reforms, significant challenges remain. The General 
Accounting Office [GAO] testified that a number of Federal 
procurement operations are at high risk of waste, fraud, and 
mismanagement.
    The GAO noted that both the GSA and VA have efforts under 
way to train their acquisition workforces. However, neither had 
assurance that all members of their acquisition workforces had 
received core training and continuing education, as required by 
OFPP's policy. In addition, neither agency had complete, 
readily accessible information on the overall extent to which 
their acquisition workforces had received required training. 
And, contrary to OFPP's policy, neither the GSA nor the VA had 
established core training requirements for some segments of 
their acquisition workforces--contracting officer 
representatives and contracting officer technical 
representatives who do not have authority to award contracts. 
By reviewing agency training records and documentation from 
GSA's Greater Southwest Regional Office and VA's medical center 
in Dallas, the GAO determined that 99 percent of GSA and 72 
percent of VA contracting officers at these two locations met 
core training requirements that each agency had established for 
such personnel, however, only about half of GSA's and VA's 
contracting officers at these locations who were to have 
continuing education requirements completed by December 1999 
had met those requirements by the due date, because agency 
officials cited conflicts in scheduling the training and a lack 
of awareness of training requirements. As well, the GAO found 
that the OFPP has not yet ensured that civilian departments and 
agencies were collecting and maintaining standardized 
information, including training data, on their acquisition 
workforces, as required by Clinger-Cohen. In September 1997, 
the OFPP tasked the Federal Acquisition Institute to work with 
departments and agencies and the Office of Personnel Management 
[OPM] to develop a governmentwide management information 
system, including specifications for the data elements to be 
captured, to assist departments and agencies in collecting and 
maintaining standardized data. But the system's development was 
significantly delayed because the Institute and OPM had not 
reached agreement on final system requirements and 
specifications. Moreover, the GAO found that neither the GSA 
nor the VA identified all the funds it planned to use for 
acquisition workforce training in its congressional budget 
justification documents as required by Clinger-Cohen. Clinger-
Cohen provides that agencies may not obligate funds 
specifically appropriated for acquisition workforce education 
and training under the act for any other purpose. The GAO 
review found that neither the GSA nor the VA specified a 
funding level for acquisition workforce education and training.
    b. Benefits.--As the Nation's largest purchaser of goods 
and services, the Federal Government stands poised to save 
taxpayers billions of dollars a year through efficient and 
cost-effective purchasing procedures. A number of laws are in 
place to ensure that Government agencies utilize these 
procedures, yet the GAO found that many Federal procurement 
operations remain at high-risk of waste, fraud, and 
mismanagement. Ongoing congressional oversight is needed to 
bring these programs into compliance with Federal laws, which 
will ultimately conserve millions of taxpayer dollars.
11. ``Competitive Contracting: Agencies Upheld Few Challenges and 
        Appeals Under the FAIR Act,'' September 29, 2000, GGD-NSIAD-00-
        244.
    a. Summary of subcommittee action.--As a result of an 
October 28, 1999, hearing, entitled ``The Federal Activities 
Inventory Reform Act of 1998: Is it Working?,'' the 
subcommittee requested the General Accounting Office to examine 
Federal agencies' handling of appeals and challenges within the 
broader context of the initial implementation of the Federal 
Activities Inventory Reform [FAIR] Act focusing on the 24 Chief 
Financial Officer [CFO] Act agencies' inventories and the 
number of challenges and appeals that interested parties filed; 
issues raised in challenges and appeals by interested parties 
and agencies' responses to them; and six agencies' plans for 
reviewing or using their inventories and how agencies could use 
information contained in the inventories to help ensure that 
activities are effectively aligned and efficiently performed.
    The GAO found that the 24 CFO Act agencies identified about 
900,000 full-time equivalent [FTE] positions in their 
inventories as performing commercial activities, but over one 
half were exempted from consideration for competition at the 
time that the inventories were compiled. These agencies 
received and responded to a total of 332 challenges and 96 
appeals to their 1999 FAIR Act inventories from interested 
parties. Of those submitted, 20 challenges and 3 appeals were 
successful. Private companies or industry representatives filed 
most of their 145 challenges and appeals at civilian agencies, 
while employees and labor unions filed most of their 283 
challenges and appeals at the Department of Defense [DOD]. 
Although the challenge and appeal process did not result in 
significant changes to agencies' inventories, the process 
served a broader purpose by identifying the need for greater 
clarity in agencies' inventories for use by both interested 
parties and agencies.
    b. Benefits.--The civilian agencies have begun to review 
their inventories to identify ways to improve their inventories 
or to use the information on them to make more informed 
management decisions. In contrast, the DOD has used its 
inventories of commercial activities to identify activities, 
currently performed by Federal personnel, for possible 
competition. The GAO concluded that it will require a sustained 
leadership effort by the Office of Management and Budget to 
help ensure that agencies review their inventories and identify 
opportunities for better using agency resources by subjecting 
activities to competition. In addition, inventories provide 
only a portion of the information that agency management could 
use in making decisions about how all of its activities are 
carried out and whether they are being performed in the most 
efficient and cost-effective manner.
12. ``Information Security: Controls over Software Changes at Federal 
        Agencies,'' May 4, 2000, AIMD-00-151R.
    a. Summary of subcommittee action.--As part of the 
subcommittee's ongoing effort to ensure that Government 
computer systems are adequately protected from unauthorized 
entries, the subcommittee requested the General Accounting 
Office [GAO] to examine software change controls at Federal 
agencies, focusing on: (1) whether key controls as described in 
documented policies and procedures regarding software change 
authorization, testing, and approval comply with Federal 
guidance; and (2) the extent to which agencies contracted for 
year 2000 remediation of mission-critical systems and the 
extent to which foreign nationals were involved in these 
efforts.
    The GAO found that controls over changes to software for 
Federal information systems were inadequate. Specifically, the 
GAO identified deficiencies in the control areas of formal 
policies and procedures, contract oversight, and background 
screening of personnel. In addition, the GAO found that 
formally documented policies and procedures did not exist or 
did not meet the requirements of Federal criteria. Moreover, 
GAO interviews at 16 agencies and their 128 components, found 
that contractor oversight was inadequate, especially when 
software change functions were completely contracted out. This 
is a concern because 1,980 (41 percent) of 4,785 mission-
critical Federal systems covered by the GAO's study involved 
the use of contractors for year 2000 remediation. Of equal 
concern, code or data associated with 319 of these systems were 
sent to contractor facilities, but agency officials could not 
readily determine how such code and data were protected during 
and after transit. Based on GAO interviews with agency 
officials and review of documented security policies and 
procedures, background screenings of personnel, including 
contractor staff and foreign nationals, who were involved in 
the software change process, were not a routine security 
control.
    b. Benefits.--As a result of this and other GAO reports, 
the subcommittee held a series of hearings on computer security 
at Federal departments and agencies during the 106th Congress. 
On September 11, 2000, the subcommittee issued the first 
comprehensive study on governmentwide computer security 
policies and programs, grading each of the 24 major Federal 
departments and agencies on their computer security efforts. 
Because of the Federal Government's increasing reliance on 
computer technology, It is imperative that Government systems 
are protected from increasingly sophisticated invasions by 
those seeking privileged information or seeking to disrupt 
Government services. Subcommittee hearings and resultant report 
cards (see Section II.B.13) focused agency attention on the 
need to implement computer security programs. Some, such as the 
Veterans Administration, have made recent strides to strengthen 
those programs.
13. ``Information Security: Serious and Widespread Weaknesses Persist 
        at Federal Agencies,'' September 6, 2000, AIMD-00-295.
    a. Summary of subcommittee action.--As a result of ongoing 
hearings, the subcommittee requested the General Accounting 
Office to review the Inspectors' General [IG] security audit 
findings for 24 Federal agencies. The subcommittee requested 
that the GAO focus on information security weaknesses 
identified in IG and GAO audit reports issued from July 1999 
through August 2000 and any findings that involved weaknesses 
and related risks at Federal departments and agencies.
    At a subcommittee hearing on September 11, 2000, the GAO 
reported that computer security efforts at Federal agencies 
continue to be fraught with weaknesses and, as a result, 
critical operations and assets continue to be at risk. As in 
1998, the GAO analysis identified significant weaknesses in 
each of the 24 agencies covered by its review. In fact, since 
July 1999, the range of weaknesses in individual agencies has 
broadened, at least in part because the scope of audits being 
performed is more comprehensive than in prior years. While 
these audits are providing a more complete picture of the 
security problems at Federal agencies, they also show that 
agencies have much work to do to ensure that their security 
programs are complete and effective. The identified weaknesses 
place a broad array of Federal operations and assets at risk of 
fraud, misuse, and disruption. Further, information security 
weaknesses place enormous amounts of confidential data, ranging 
from personal and tax data to proprietary business information, 
at risk of inappropriate disclosure.
    b. Benefits.--See above.
14. ``Year 2000 Computer Challenge: Lessons Learned Can Be Applied to 
        Other Management Challenges,'' September 12, 2000, AIMD-00-290.
    Summary of subcommittee action.--As a result of the 
subcommittee's extensive review of the Federal Government's 
efforts to update its critical computer systems for the year 
2000, the subcommittee requested the GAO to identify lessons 
the Federal Government had learned from year 2000 applicable to 
improving Federal information technology [IT] management; to 
identify lessons that individual agencies can apply to the 
management of future IT initiatives; and discuss how the 
momentum generated by the Government's year 2000 efforts can be 
sustained.
    The GAO found that the year 2000 challenge was met through 
the collaborative efforts of Congress, the administration, 
Federal agencies, State and local governments, and the private 
sector. Had any of these sectors failed to take the year 2000 
problem seriously, neglected to remediate computer systems, or 
failed to work together with partners on common issues, such as 
contingency planning, critical services could have been 
disrupted. Although the year 2000 crisis was finite, it led to 
the development of initiatives, processes, methodologies, and 
experiences that can assist in resolving ongoing management 
challenges. The year 2000 challenge demonstrated the value of 
sustained and effective bipartisan oversight by both the Senate 
and the House of Representatives. Leadership, commitment, and 
coordination by the Federal Government, which included periodic 
reporting and oversight of agency efforts, were major reasons 
for the Government's year 2000 success.
    The Federal Government implemented initiatives that helped 
ensure that necessary staff and financial resources would be 
available to agencies. Individual agencies also gleaned lessons 
from their year 2000 efforts that can be carried forward. 
Specific management practices that contributed to year 2000 
success included top-level management attention, risk analysis, 
project management, development of complete information systems 
inventories and strengthened configuration management, 
independent reviews by internal auditors and independent 
contractors, improved testing methods and procedures, and 
business continuity and contingency planning.
    b. Benefits.--By continuing and strengthening these 
practices in the future, Federal agencies are more likely to 
improve their overall IT management record, particularly in the 
areas of critical infrastructure protection and security, the 
effective use of technology, and large-scale IT investments.
15. ``Debt Collection: Treasury Faces Challenges in Implementing Its 
        Cross-Servicing Initiative,'' August 4, 2000, AIMD-00-234.
    a. Summary of subcommittee action.--As part of its ongoing 
oversight of Federal debt collection practices and as a result 
of a June 8, 2000, hearing entitled, ``Oversight of the 
Implementation of the Debt Collection Improvement Act,'' the 
subcommittee requested the General Accounting Office [GAO] to 
examine the challenges facing the Financial Management Service 
[FMS] in implementing the cross-servicing provision of the Debt 
Collection Improvement Act of 1996.
    The GAO found that as of September 30, 1999, about 89 
percent of the $59.2 billion in debts that are over 180 days 
delinquent were excluded from cross-servicing. However, the 
accuracy and completeness of amounts reported by agencies, 
including exclusions from cross-servicing, were not required to 
be, and were not, independently verified. The FMS reported that 
as of April 2000, about $3.7 billion of the approximately $6.4 
billion of eligible debt had been referred for cross-servicing. 
In addition, many of the eligible debts were not promptly 
referred by the agencies or simply not referred by certain 
agencies.
    In an effort to encourage debt referrals, the FMS requested 
written debt referral plans from 22 of the 24 Chief Financial 
Officer Act agencies. The plans were of limited use, however, 
because the FMS had no assurance that agencies had properly 
identified all non-tax debts that were eligible for cross-
servicing. In addition, many of the plans did not include debt 
amounts or timeframes for referral, and the FMS did not use the 
plans to closely monitor actual agency referrals. As the sole 
operator of a governmentwide cross-servicing debt collection 
center, the FMS had well-developed written standard operating 
procedures for its collectors and requirements for its private 
collection agency [PCA] contractors. But FMS staff and some of 
the PCAs did not always follow established procedures and 
requirements, and failed to use certain debt collection tools 
effectively.
    b. Benefits.--Improvements in the Federal Government's debt 
collection practices will provide a direct financial benefit 
for American taxpayers. To date, the program has collected 
nearly $2.4 billion in fiscal year 2000, including $1.3 billion 
in delinquent child support payments owed to States and $1.1 
billion in non-tax debt owed to the Federal Government.
16. ``Single Audit: Update on the Implementation of the Single Audit 
        Act Amendments of 1996,'' September 29, 2000, AIMD-00-923.
    a. Summary of subcommittee action.--As a result of the 
subcommittee's oversight of financial management within the 
departments and agencies of the executive branch, and, 
specifically, a May 13, 1999, oversight hearing on the Single 
Audit Act Amendments of 1966, the subcommittee requested the 
General Accounting Office to examine implementation of seven 
key amendments to the Single Audit Act of 1984.
    The GAO found that the intended objectives of the first two 
amendments have, for the most part, been accomplished. The 
legislation and subsequent implementation guidance issued by 
the Office of Management and Budget [OMB] resulted in uniform 
audit requirements for State and local governments and 
nonprofit organizations and raised, to a more cost-beneficial 
level, the dollar threshold for determining which recipients 
are subject to audit. Federal agencies, State and local 
governments, and nonprofit organizations that are recipients of 
Federal awards and their respective auditors are applying the 
audit guidance in meeting their single audit responsibilities, 
and actions by single audit stakeholders have laid the 
foundation for effective implementation of the next four 
amendments. Users of single audit reports can now obtain and 
analyze information on more than 27,000 annual reports more 
quickly than ever before using the Internet to access a single 
audit automated database established by the Bureau of the 
Census. Recipients have recently begun submitting their audit 
reports under the 9-month reporting deadline instead of the 
previous 13-month deadline. To date, there is not enough 
experience to evaluate the prospects for achieving the 
objective of the seventh amendment. The OMB received two pilot 
project proposals and approved one, a proposal by the 
Washington State Auditor to combine 200 separate audits of 
State educational organizations into one audit. More experience 
with pilot projects is needed before their use as an 
alternative method for streamlining and improving single audits 
can be evaluated.
    b. Benefits.--Full compliance with the Single Audit Act 
Amendments of 1996 will provide greater accountability by 
Federal grant and award recipients, and has the potential of 
providing a direct financial benefit to taxpayers.

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                     Hon. David McIntosh, Chairman

1. ``Regulatory Burden: Some Agencies' Claims Regarding Lack of 
        Rulemaking Discretion Have Merit,'' January 8, 1999, GAO/GGD-
        99-20.
    a. Summary.--The General Accounting Office [GAO] previously 
reported what officials from 15 private sector companies said 
were the most problematic Federal regulations for their 
businesses. The 125 concerns cited by these officials included: 
(a) the perceived high cost of regulatory compliance; (b) 
excessive paperwork; (c) unreasonable, unclear, and inflexible 
requirements; and, (d) severe penalties for noncompliance. GAO 
also obtained responses from the 19 Federal agencies that 
issued the regulations underlying the companies' concerns.
    This report examines agency assertions that some of the 125 
regulatory concerns were, at least in part, attributable to the 
underlying statutes. For each of the 27 concerns on which GAO 
focused, this report determines: (a) what amount of discretion 
the underlying statutes gave the rulemaking agencies in 
developing the regulatory requirements, (b) whether the 
regulatory requirements at issue were within the authority 
granted by the underlying statutes, and (c) whether the 
rulemaking agencies could have developed regulatory approaches 
that would have been less burdensome to the regulated entities 
while still meeting the underlying statutory requirements.
    b. Benefits.--This report aided the subcommittee in its 
regulatory oversight duties and its understanding of the amount 
of discretion given to agencies in developing regulations.
2. ``Regulatory Flexibility Act: Agencies' Interpretations of Review 
        Requirements Vary,'' April 2, 1999, GAO/GGD-99-55.
    a. Summary.--Section 610 of the Regulatory Flexibility Act 
of 1980 [RFA] requires Federal agencies to develop a plan for 
the review of their existing rules that will have a 
``significant economic impact on a substantial number of small 
entities.'' The purpose of these reviews is to decide whether 
the rules should continue unchanged or should be amended or 
rescinded to minimize their impact on small entities, which 
include small businesses and small governmental jurisdictions. 
Agencies are required to provide an annual Federal Register 
notice of rules they intend to review in the next 12 months. 
Several agencies have used the Unified Agenda of Federal 
Regulatory and Deregulatory Actions to publish these notices.
    This report updates GAO's earlier work on Section 610 of 
the FRA. With regard to the April 1998 and November 1998 
editions of the Unified Agenda of Federal Regulatory and 
Deregulatory Actions, this report determines: (a) how many 
agencies had no Agenda entries that were characterized as 
section 610 reviews, whether agencies are interpreting the 
review requirements consistently, and why some agencies that 
appeared subject to the requirements had no entries; (b) how 
many of the section 610 review entries in the Agenda appeared 
to meet the notification requirements in subsection 610(c); (c) 
if the section 610 review entries did not appear to meet the 
statutory requirements, why some agencies' entries were not 
characterized as section 610 reviews; and, (d) whether any 
Federal agencies had revised their plans for section 610 
reviews.
    b. Benefits.--This report aided the subcommittee in its 
understanding of agencies' compliance with the RFA and 
underscored the importance of further statutory protections for 
small businesses, such as H.R. 391, ``The Small Business PRA 
Amendments of 1999.''
3. ``Paperwork Reduction Act: Burden Increases and Unauthorized 
        Information Collections,'' April 15, 1999, GAO/T-GGD-99-78.
    a. Summary.--Estimates of Federal paperwork burden have 
risen dramatically since the Paperwork Reduction Act [PRA] was 
first enacted in 1980. Agency estimates have continued to 
increase since 1995, despite congressional expectations to the 
contrary. The increase in the government-wide paperwork 
estimate appears largely attributable to continued increases in 
the Internal Revenue Service's [IRS] paperwork requirements. 
However, IRS said that these increases are due to increased 
economic activity and new statutory requirements, i.e., factors 
beyond its control. Also, GAO believes that the Office of 
Management and Budget's [OMB's] Office of Information and 
Regulatory Affairs has not fully satisfied all of the 
responsibilities assigned to it by the PRA. Data provided by 
OMB to Congress indicates a troubling disregard by agencies for 
the requirement that they obtain OMB's approval before 
collecting information from the public. GAO estimates that the 
agencies have imposed at least $3 billion in unauthorized 
paperwork burden in recent years.
    b. Benefits.--GAO's testimony was useful in the 
subcommittee's continuing oversight of agency compliance with 
the PRA. It highlights a disappointing compliance record by the 
current administration.
4. ``Regulatory Accounting: Analysis of OMB's Reports on the Costs and 
        Benefits of Federal Regulation,'' April 20, 1999, GAO/GGD-99-
        59.
    a. Summary.--Issuing and enforcing regulations is a basic 
responsibility of government, but the costs that non-Federal 
entities pay to comply with Federal regulations are not 
accounted for in the Federal budget process. Some researchers 
have estimated those costs at hundreds of billions of dollars, 
and some estimates of aggregate benefits are even higher. 
Congress, deciding that it needed more information on 
regulatory costs and benefits, required OMB to submit 
successive annual reports to Congress providing: (1) estimates 
of the total annual costs and benefits of Federal regulatory 
programs; (2) estimates of the costs and benefits of each rule 
likely to have a $100 million annual effect on the economy in 
higher costs; (3) an assessment of the direct and indirect 
effects of Federal rules on the private sector, State and local 
governments, and the Federal Government; and, (4) 
recommendations to reform or eliminate any Federal program that 
is inefficient, ineffective, or not a sound use of taxpayer 
dollars. This report describes, for each of these four 
requirements, how OMB addressed the requirements in its 1997 
and 1998 reports to Congress and the views of noted economists 
on OMB's responses in these reports.
    b. Benefits.--This report was useful in the subcommittee's 
development of H.R. 1074, the ``Regulatory Right-to-Know Act of 
1999,'' and other regulatory reform legislative initiatives.
5. ``Regulatory Reform: Comments on S. 746--The Regulatory Improvement 
        Act of 1999,'' April 21, 1999, GAO/T-GGD/RCED-99-163.
    a. Summary.--S. 746, ``The Regulatory Improvement Act of 
1999,'' addresses many issues in regulatory management that 
have long been controversial. This statement focuses on GAO's 
past work in the following four areas: (1) the effectiveness of 
previous regulatory reform initiatives, (2) agencies' cost-
benefit analysis practices and the trigger for the analytical 
requirements, (3) the peer review of agencies' regulatory 
analyses, and (4) the transparency of the regulatory 
development and review process.
    b. Benefits.--This report was useful in the subcommittee's 
consideration and development of various regulatory reform 
bills.
6. ``Observations on the Environmental Protection Agency's Fiscal Year 
        2000 Performance Plan,'' July 20, 1999, GAO/RCED-99-237R.
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed the Environmental Protection Agency's [EPA's] fiscal 
year 2000 performance plan, which was submitted to Congress in 
response to the Government Performance and Results Act of 1993 
[GPRA], and focused on: (a) assessing the usefulness of EPA's 
plan for decisionmaking; and (b) identifying the degree of 
improvement in EPA's fiscal year 2000 performance plan 
represents over its fiscal year 1999 plan. GAO noted, among 
other things, that the plan: provides only limited confidence 
that the agency's performance information will be credible; 
shows little improvement from fiscal year 1999 in providing 
details on goals and strategies that cut across agency lines; 
and shows no substantial progress in better identifying data 
limitations.
    b. Benefits.--This report was useful in the subcommittee's 
continuing oversight of EPA and EPA's progress in identifying 
appropriate performance measures and improvements, especially 
for climate change programs and activities.
7. ``Managing for Results: Strengthening Regulatory Agencies' 
        Performance Management Practices,'' October 28, 1999, GAO/GGD-
        00-10.
    a. Summary.--GAO gathered information from 23 Federal and 
State organizations that are known for using or planning to use 
various useful practices to improve their performance 
management and measurement processes. These practices fall into 
the following five categories: (1) restructuring the 
organization's management approach to become more performance-
oriented; (2) establishing relationships outside of the 
organization to boost performance; (3) refining performance 
goals, measures, and targets to better translate activities 
into results; (4) strengthening analytical capabilities and 
techniques to better meet performance management information 
needs; and (5) assessing performance-based management efforts 
on a continuous basis to identify areas for improvement. GAO 
believes that the practices would be readily transferable to 
Federal financial institution regulatory agencies or other 
government agencies seeking to improve their implementation of 
GPRA.
    b. Benefits.--This report was useful in the subcommittee's 
continuing oversight of agency compliance with GPRA, including 
identification of appropriate outcome performance measures.
8. ``EPA Paperwork: Burden Estimate Increasing Despite Reduction 
        Claims,'' March 16, 2000, GAO/GGD-00-59.
    a. Summary.--EPA, like other Federal agencies, collects 
information from the public. EPA uses this information to help 
ensure compliance with its regulations, to evaluate the 
effectiveness of its programs, and to determine eligibility for 
program benefits. However, EPA's information collection efforts 
impose a substantial burden on the public, and small businesses 
contend that they are particularly affected by government 
paperwork. This report: (1) describes the general dimensions of 
EPA's paperwork requirements and the agency's progress toward 
reducing the burden that those requirements impose, (2) 
describes EPA's process for developing paperwork burden-hour 
estimates for its largest information collections as of 
September 1998 and gauges the credibility of those estimates, 
and (3) describes EPA's largest paperwork burden-hour 
reductions between September 1995 and September 1998 and gauges 
the credibility of those reductions. GAO also provides 
information on EPA's Reinventing Environmental Information 
Initiatives and the agency's new Office of Environmental 
Information.
    b. Benefits.--This report was useful in the subcommittee's 
continuing oversight of agency compliance with the PRA. It 
highlights a disappointing compliance record by EPA.
9. ``Paperwork Reduction Act: Burden Increases at IRS and Other 
        Agencies,'' April 12, 2000, GAO/T-GGD-00-114.
    a. Summary.--Although PRA of 1995 anticipated a 30-percent 
reduction in Federal paperwork between fiscal years 1995 and 
1999, preliminary data show that paperwork actually rose during 
that period. The increase is primarily due to the IRS. Federal 
agencies identified 710 violations of the PRA during fiscal 
year 1999--a decline from the 872 violations identified a year 
earlier. Problems in last year's data, however, make it unclear 
whether the number of violations is really going down. And even 
if the number of violations is going down, 710 violations is 
far too many, in GAO's view. GAO believes that OMB can do more 
to ensure that agencies do not use information collections 
without required OMB clearance. GAO also believes that other 
Federal agencies have a role to play in reducing the number of 
violations.
    b. Benefits.--GAO's testimony was useful in the 
subcommittee's continuing oversight of agency compliance with 
the PRA. It highlights a disappointing compliance record by the 
current administration.
10. ``Managing for Results: EPA Faces Challenges in Developing Results-
        Oriented Performance Goals and Measures,'' May 28, 2000, GAO/
        RCED-00-77.
    a. Summary.--For more than a decade, internal and external 
studies have called for EPA to ``manage for environmental 
results'' as a way to improve and better account for its 
performance. GPRA requires EPA and other Federal agencies to 
prepare performance plans containing annual performance goals 
and measures to help move them toward managing for results. 
These performance goals and measures are used to assess an 
agency's progress toward achieving the results expected from 
its major functions. GAO's report: (1) determines the extent to 
which EPA's fiscal year 2000 performance goals and measures 
focus on end outcomes, intermediate outcomes, or outputs; (2) 
identifies any challenges EPA faces in developing additional 
performance goals and measures that focus on end outcomes; and 
(3) describes the initiatives EPA is taking to address any 
identified challenges.
    b. Benefits.--This report was useful in the subcommittee's 
continuing oversight of EPA and EPA's implementation of GPRA, 
including identification of appropriate outcome performance 
measures.
11. ``Climate Change: Observations on EPA's March 2000 Climate Change 
        Report,'' June 5, 2000, RCED-00-166R.
    a. Summary.--Pursuant to a legislative requirement, GAO 
provided information on EPA's March 2000 climate change report, 
focusing on: (1) EPA's climate change programs for fiscal year 
2001; (2) the programs' goals, strategies, and procedures to 
verify and validate performance information; (3) EPA's 
justification for requested funding increases; and (4) how the 
programs are justified independently of the Kyoto protocol 
agreement.
    b. Benefits.--This report was useful in the subcommittee's 
continuing oversight of the administration's climate change 
programs, and its compliance with the Knollenberg provision 
that restricts funding for the implementation or preparation of 
the Kyoto protocol.
12. ``Regulatory Reform: Procedural and Analytical Requirements in 
        Federal Rulemaking,'' June 8, 2000, GAO/T-GGD/OGC-00-157.
    a. Summary.--In response to congressional concerns that 
agencies had not adequately considered the effects of their 
actions on regulated entities or worked to minimize any 
negative effects, GAO discusses its review of agency compliance 
with a number of procedural and analytical requirements in 
Federal rulemaking. GAO examined requirements contained in 
numerous statutes and Executive orders governing the rulemaking 
process, including the Administrative Procedures Act, RFA, the 
Unfunded Mandates Reform Act of 1995 [UMRA], and Executive 
Order No's. 12866 and 12612.
    GAO's evaluations yielded mixed results. In some cases GAO 
discovered inadequate data, methodologies, or assumptions. GAO 
also discovered instances of agency noncompliance with 
statutory requirements or Executive orders. While GAO's review 
established that agencies were acting properly in some cases, 
it is troubling to note the instances where this is not the 
case. Finally, GAO recommends that Congress consider assigning 
the responsibility of regulatory analysis to an organization 
outside of the executive branch due to the inherent bias of OMB 
and the agency proposing the regulation. While GAO recognizes 
its ability to perform such a function, it points out possible 
limitations due to: (1) the scope of the analysis contemplated; 
(2) the number of requests that it receives; (3) the time 
allotted to perform the reviews; and (4) the resources it is 
given to accomplish the tasks involved.
    b. Benefits.--GAO's testimony was useful in the 
subcommittee's continuing oversight on agency compliance with 
procedural and analytical requirements in Federal rulemaking 
and in the subcommittee's work in creating a congressional 
office of regulatory analysis, including H.R. 3521, H.R. 4744, 
and H.R. 4924.

Subcommittee on National Security, Veterans Affairs, and International 
                               Relations

                    Hon. Christopher Shays, Chairman

1. ``Defense Inventory: Improvements Needed to Prevent Excess Purchases 
        by the Air Force,'' November 1999 (GAO/NSIAD-00-5).
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed inventory the Air Force had on contract that was 
excess to current operating requirements.
    b. Benefits.--GAO noted that: (1) the Air Force did not 
always cancel purchases that exceeded current operating 
requirements; (2) the Air Force canceled contracts for $5.5 
million of the $162.4 million excess inventory that GAO 
reviewed, but it could have canceled more; (3) contracts for 
unnecessary items are not being canceled primarily because the 
Air Force process for canceling contracts takes a long time, 
during which costs are incurred for which the government is 
liable; (4) specifically, it takes 60 to 90 days to provide 
managers with the requirement information needed to make 
cancellation decisions; (5) also, the Air Force model provides 
for over 63 months of supply--more time than needed to order 
and receive items; (6) in addition, the model uses invalid 
requirements that reduce quantities to be canceled; (7) once a 
purchase is considered for cancellation, Air Force managers use 
a model to determine if the savings from canceling the contract 
would exceed the cost of reordering the items at a later date; 
(8) in several cases that GAO reviewed, the model indicated 
that it was not cost beneficial to cancel contracts for 
unneeded inventory items because of potential reprocurement 
costs; (9) however, the model is flawed because it does not 
consider parts recovered from retired weapon systems that are 
available to be reused; (10) as a result, the model understates 
the amount of purchases that could be canceled; and (11) in 
other cases, inaccurate records increased manager workloads by 
causing items to be unnecessarily reviewed.
2. ``Gulf War Illnesses: Management Actions Needed to Answer Basic 
        Research Questions,'' January 2000 (GAO/NSIAD-00-32).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on management actions needed to answer 
basic research questions about gulf war illnesses, focusing on 
the: (1) amount of money the Departments of Veterans' Affairs 
[VA], Defense [D0D], and Health and Human Services [HHS] spent 
on research and investigation of gulf War veterans' illnesses 
and health concerns in the fiscal years 1997 and 1998, 
including current and projected spending by the Office of the 
Special Assistant to the Deputy Secretary of Defense for Gulf 
War Illnesses; (2) productivity of this research spending, 
including the extent to which the Coordinating Board has 
determined that Federal research objectives have been 
satisfied, and the extent to which the research has resulted in 
peer-reviewed publications and the identification of the causes 
or successful treatments for gulf war veterans' illnesses; (3) 
extent of coordination between the Research Working Group of 
the Coordinating Board and the Office of the Special Assistant 
for Gulf War Illnesses; and (4) Office of the Special Assistant 
for Gulf War Illnesses' contract management.
    b. Benefits.--GAO noted that: (1) during fiscal years 1997-
1998, DOD, VA, and HHS spent more than $121 million on research 
and investigation of gulf war veterans' illnesses, with DOD 
spending more than $112 million of that total; (2) these funds 
supported a growing catalog of research and investigatory 
efforts intended to address both veterans' health concerns and 
their questions about hazards encountered in the conflict; (3) 
the Office of the Special Assistant to the Deputy Secretary of 
Defense for Gulf War Illnesses spent about $65.3 million in 
fiscal year 1997 and fiscal year 1998, with another $65.4 
million in spending planned for fiscal year 1999 and fiscal 
year 2000; (4) basic questions about the causes, course of 
development, and treatments of gulf war veterans' illnesses 
remain unanswered; (5) as of November 30, 1999, the Research 
Working Group of the Persian Gulf Veterans' Coordinating Board 
had not published an assessment of the extent to which the 
research program had answered the major questions it identified 
as research objectives in 1995, and no date had been set to 
publish such an assessment; (6) while federally sponsored 
studies have resulted in some descriptive information 
concerning veterans' symptoms, many basic questions remain; (7) 
although the question of causation is unresolved, VA has begun 
recruiting patients for trials of antibiotic and exercise-
behavioral treatments for a set of veterans' unexplained 
symptoms; (8) although the Office of the Special Assistant for 
Gulf War Illnesses expends more than half of the Federal funds 
supporting research and investigation into gulf war veterans' 
illnesses, its activities are not effectively coordinated with 
those of the Research Working Group; (9) the weak coordination 
between the group and the office increases the potential to 
miss opportunities to leverage ongoing and completed work by 
other agencies; (10) the office rapidly developed relationships 
with various contractors to support its mission; (11) however, 
two of the largest task orders were awarded improperly, and the 
office discouraged competition for another task order by 
specifying a preferred vendor; and (12) because the office is 
likely to continue to spend a significant part of its budget on 
support contracts, it needs to ensure that its contracts fully 
comply with applicable requirements.
3. ``Combating Terrorism: Need to Eliminate Duplicate Federal Weapons 
        of Mass Destruction Training,'' March 2000 (GAO/NSIAD-00-64).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the potential for duplicative weapons 
of mass destruction training, focusing on: (1) the principal 
Federal organizations that provide weapons of mass destruction 
training to first responders; (2) whether the training is well 
coordinated among Federal organizations; and (3) actions being 
taken to improve the Federal Government's role in weapons of 
mass destruction training.
    b. Benefits.--GAO noted that: (1) the Departments of 
Defense [DOD] and Justice [DOJ] and the Federal Emergency 
Management Agency [FEMA] are the principal Federal 
organizations that provide weapons of mass destruction training 
to first responders; (2) DOD provides this training through its 
Domestic Preparedness Program; (3) DOJ provides training 
primarily through its Metropolitan Firefighters and Emergency 
Medical Services Program; (4) both programs were authorized and 
funded by Congress and specifically developed to provide 
training in cities and counties primarily to individuals who 
would train others in their communities; (5) DOJ also provides 
training through the National Domestic Preparedness Consortium; 
(6) in 1998 Congress directed that DOJ use to the fullest 
extent possible the capabilities of the Consortium to achieve 
cost-effective weapons of mass destruction training; (7) FEMA 
provides weapons of mass destruction courses at its National 
Fire Academy and Emergency Management Institute in Maryland, 
and also provides related course materials to local and State 
organizations for their use in training first responders; (8) 
Federal training programs on weapons of mass destruction are 
not well coordinated, resulting in inefficiencies in the 
Federal effort and concerns in the first responder communities; 
(9) DOD, DOJ, and FEMA are providing similar awareness courses 
as part of their train-the-trainer programs; (10) DOD and DOJ 
plan to deliver their programs to individuals in the same 120 
cities; (11) State and local officials and representatives of 
various responder organizations express concerns about 
duplication and overlap among the two Federal training 
programs, courses offered by the Consortium, and other courses 
such as hazardous materials and other specialized training that 
first responders are required to complete; (12) officials were 
concerned that DOD and DOJ programs offered to cities and 
counties had bypassed the States' emergency management and 
training structures and that DOD and DOJ programs will not 
train responders in smaller communities; (13) the responders' 
concerns are consistent with the conclusions reached by a forum 
of over 200 State and local responders in August 1998 and a 
June 1999 Justice report; (14) more actions are needed to 
eliminate duplicative training and improve the efficiency of 
DOD and DOJ programs; and (15) in response to requests from the 
first responder community, DOJ has established the interagency 
National Domestic Preparedness Office, which will provide an 
interagency forum for coordinating Federal weapons of mass 
destruction assistance to State and local emergency responders.
4. ``Combating Terrorism: How Five Foreign Countries Are Organized to 
        Combat Terrorism,'' April 2000 (GAO/NSIAD-00-85).
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed five foreign countries' efforts to combat terrorism, 
focusing on: (1) how other governments are organized to combat 
terrorism; and (2) how they allocate their resources to combat 
terrorism.
    b. Benefits.--GAO noted that: (1) the countries generally 
have the majority of organizations used to combat terrorism 
under one lead government ministry; (2) however, because many 
other ministries are also involved, the countries have created 
interagency coordination bodies to coordinate both within and 
across ministries; (3) for example, while many countries 
generally have their intelligence and law enforcement 
organizations under their ministries of interior or equivalent, 
they also need to coordinate with their ministries of foreign 
affairs, defense, and health or emergency services; (4) the 
countries have clearly designated who is in charge during a 
terrorist incident--typically their national or local police; 
(5) the countries have national policies that emphasize 
prevention of terrorism; (6) to achieve their policies, the 
countries use a variety of strategies, including intelligence 
collection, police presence, and various security measures such 
as physical barriers at the entrances to public buildings; (7) 
these countries primarily use their general criminal laws 
(e.g., those for murder or arson) to prosecute terrorists; (8) 
the countries also have special terrorism-related laws that 
allow for special investigations or prosecution mechanisms and 
increased penalties; (9) the countries' executive branches 
provide the primary oversight of organizations involved in 
combating terrorism; (10) this oversight involves reviewing the 
programs and resources for effectiveness, efficiency, and 
legality; (11) the five countries GAO examined also had 
similarities in how they allocate resources to combat 
terrorism; (12) officials in the ministries involved said they 
make resource allocations based upon the likelihood of threats 
taking place, as determined by intelligence assessments; (13) 
while the officials GAO met with discussed resource levels in 
general, none of the five countries tracked overall spending on 
programs to combat terrorism; (14) such spending was imbedded 
in other accounts for broad organizational or functional areas 
such as law enforcement, intelligence, and defense; (15) 
officials in all countries told GAO that because of limited 
resources, they made funding decisions for programs to combat 
terrorism based on the likelihood of terrorist activity 
actually taking place, not the countries' overall vulnerability 
to terrorist attack; and (16) the officials said their 
countries maximize their existing capabilities to address a 
wide array of threats, including emerging threats, before they 
create new capabilities or programs.
5. ``Joint Strike Fighter Acquisition: Development Schedule Should Be 
        Changed to Reduce Risks,'' May 2000 (GAO/NSIAD-00-74).
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed the Department of Defense's [DOD] Joint Strike Fighter 
[JSF] Program, focusing on: (1) the program's acquisition 
strategy; and (2) whether the strategy is being implemented in 
a manner that will ensure that the acquisition strategy 
objectives will be achieved.
    b. Benefits.--GAO noted that: (1) the key objective of the 
JSF acquisition strategy is affordability--reducing the 
development, production, and ownership costs of the program 
relative to prior fighter aircraft programs; (2) DOD expects 
the JSF acquisition strategy to save nearly $18 billion (in 
fiscal year 1995 dollars) in development costs; (3) to achieve 
its affordability objective, the JSF program office has 
incorporated various DOD and commercial acquisition initiatives 
into the JSF acquisition strategy; (4) these initiatives 
include modifying the traditional weapons acquisition cycle, 
revising the requirements determination process, and developing 
critical technologies to a level where they represent low 
technical risk before the engineering and manufacturing 
contract is awarded; (5) the expectation is that incorporating 
these initiatives into the JSF acquisition strategy will result 
in a better match between the maturity of key technologies and 
the aircraft's requirements; (6) matching the requirements and 
the maturity of technology when a program enters engineering 
and manufacturing development is a critical determinant of a 
program's success; (7) once the development phase begins, a 
large, fixed investment in the form of human capital, 
facilities, and materials is sunk into the program and any 
significant changes will have a large, rippling effect on cost 
and schedule; (8) beginning the engineering and manufacturing 
development phase when critical technologies are at a low level 
of maturity serves to significantly increase program risk and 
the likelihood of schedule delays, which in turn result in 
increased program costs; (9) the JSF program office's 
implementation of its acquisition strategy will not ensure that 
the JSF program will enter the engineering and manufacturing 
development phase with low technical risk; (10) the aircraft 
being produced during the concept demonstration phase are not 
intended to demonstrate many of the technologies considered 
critical for achieving JSF program cost and performance 
requirements; (11) instead, many of these technologies--such as 
avionics, flight systems, manufacturing and producibility, 
propulsion, supportability, and weapons delivery system--will 
only be demonstrated in laboratory or ground-testing 
environments; and (12) therefore, these critical technologies 
will be at low levels of technical maturity when the 
engineering and manufacturing development contract is scheduled 
to be awarded.
6. ``VA and Defense Health Care: Evolving Health Care Systems Require 
        Rethinking of Resource Sharing Strategies,'' May 2000 (GAO/
        HEHS-00-52).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Department of Veterans Affairs' 
[VA] and Department of Defense's [DOD] shared health care 
resources, focusing on: (1) the benefits gained from sharing; 
(2) the extent to which VA and DOD are sharing health care 
resources; and (3) barriers and challenges VA and DOD face in 
their efforts to share health resources.
    b. Benefits.--GAO noted that: (1) as a provider of 
services, VA most frequently cited increased revenue as a 
benefit and DOD most often cited the opportunity to enhance 
staff proficiency; (2) VA and DOD providers also cited fuller 
utilization of staff and equipment as benefits; (3) as a 
receiver of services, VA cited improved beneficiary access and 
DOD cited reduced cost of services as benefits; (4) for fiscal 
year 1998, sharing activity occurred under 412, or about three-
quarters, of the existing local sharing agreements; (5) direct 
medical care accounted for about two-thirds of services 
exchanged--the remaining one-third included ancillary services, 
such as laboratory testing, and support services, such as 
laundry; (6) most of this activity occurred under a few 
agreements and at a few facilities, usually in locations where 
multiple DOD facilities were near VA hospitals or where DOD 
facilities provided specialized services; (7) overall, 75 
percent of direct medical care episodes occurred under just 12 
agreements for inpatient care, 19 agreements for outpatient 
care, and 12 agreements for ancillary care; (8) reimbursements 
for care provided under sharing agreements were similarly 
concentrated; (9) in fiscal year 1998, three-quarters of the 
$29 million in reimbursements for provided care was collected 
by only 26 of the 145 facilities participating in active 
agreements; (10) at the joint venture sites, where another $21 
million in services was exchanged, GAO found activity was 
concentrated at the two locations where VA and DOD integrated 
many hospital services and administrative processes; (11) 
specifically, almost 300,000 episodes of care were provided, 
and $3.2 million in cost avoidance was measured at these two 
locations; (12) two barriers identified most often by both VA 
and DOD are: (a) inconsistent reimbursement and budgeting 
policies; and (b) burdensome agreement approval processes; (13) 
a more recent barrier centers on DOD policies and guidance in 
implementing its managed care program; (14) a DOD legal opinion 
and subsequent policy in effect prohibits military treatment 
facilities from using existing sharing agreements with VA for 
direct medical care; (15) consequently, DOD's contracts with 
private health care companies may supersede the sharing of 
direct medical care between VA and DOD facilities; and (16) 
while the policy supports VA facilities' participation in the 
contractors' health care networks, the military Surgeons 
General and local VA and DOD officials told GAO that the policy 
is causing confusion over what services can be shared.
7. ``Occupational Safety and Health: Government Responses to Beryllium 
        Uses and Risks,'' May 2000 (GAO/OCG-00-6).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the health safety controls over the use 
of beryllium, focusing on: (1) beryllium's uses and risks; and 
(2) key events that illustrate the evolution of the Federal 
Government's response to risks posed by beryllium.
    b. Benefits.--GAO noted that: (1) lightness, strength, and 
other attributes have made beryllium useful in a wide array of 
products, such as aircraft, spacecraft, x-ray equipment, and 
nuclear weapons; (2) however, beryllium is considered 
hazardous; (3) health effects from high exposure to beryllium 
particles were first noted in the early 20th century; (4) 
beginning in the 1940's, scientists linked exposure to 
beryllium with an inflammatory lung condition now called 
chronic beryllium disease, which can be debilitating and, in 
some cases, fatal; (5) questions remain about the level of 
exposure that poses a risk and exactly how chronic beryllium 
disease develops; (6) in the 1950's, studies showed that 
beryllium caused cancer in laboratory animals; (7) national and 
international organizations now consider beryllium a human 
carcinogen; (8) the magnitude of the risk from current 
occupational exposure levels is not known, but may be minimal; 
(9) from the 1960's to the 1990's, Department of Defense [DOD], 
Department of Energy [DOE], and the Occupational Safety and 
Health Administration [OSHA] took a number of actions to assess 
and to respond to risks associated with exposure to beryllium; 
(10) agencies took steps to reduce risks from exposure to 
beryllium; (11) DOD discontinued testing beryllium in rocket 
fuel by 1970, due in part to concerns about meeting air quality 
requirements; (12) OSHA proposed a more stringent worker 
exposure standard for beryllium in 1975 based on evidence that 
it was carcinogenic in laboratory animals; (13) the proposal 
generated concerns about the technical feasibility of the 
proposal, impact on national security, and the scientific 
evidence supporting the proposed change; (14) according to OSHA 
officials, the agency discontinued its work on the proposal in 
the early 1980's in response to other regulatory priorities 
such as lead, electrical hazards, and occupational noise; (15) 
in 1998, the agency announced that it would develop a 
comprehensive standard for beryllium by 2001; (16) DOE improved 
working conditions at its facilities and implemented medical 
testing for its current and former workers during the 1980's 
and 1990's after new cases of chronic beryllium disease were 
identified during the 1980's; (17) in 1999, DOE issued a rule 
that established new worker safety controls, such increased use 
of respirators and assessing hazards associated with work 
tasks, for its facilities that use beryllium; and (18) DOE also 
proposed a compensation program for DOE workers affected by 
chronic beryllium disease, which has been introduced as 
legislation in Congress.
8. ``Army National Guard: Enhanced Brigade Readiness Improved but 
        Personnel and Workload Are Problems,'' June 2000 (GAO/NSIAD-00-
        114).
    a. Summary.--Pursuant to a congressional request, GAO 
examined the readiness of the Army National Guard's Enhanced 
Brigades, focusing on: (1) whether the brigades are meeting 
training and personnel readiness goals; (2) the key reasons for 
any continuing difficulties in meeting these goals; and (3) 
whether the Army has an effective system for assessing brigade 
readiness and the time required for the brigades to be ready 
for war.
    b. Benefits.--GAO noted that: (1) the brigades continue to 
have difficulty meeting training and personnel readiness goals; 
(2) only 3 of the 15 brigades reported that their platoons met 
training goals for certain mission-essential maneuver tasks and 
only 10 of the 24 mechanized battalions met gunnery standards; 
(3) on a more positive note, individual training has improved 
significantly; (4) since 1993-1994, completion rates for job 
training for all soldiers, and required and recommended 
leadership courses for officers and sergeants have improved by 
between 10-15 percentage points; (5) the key reasons for the 
brigades' continuing difficulties in meeting the readiness 
goals are: (a) personnel shortages; and (b) too much to do in 
the time available; (6) authorizations for full time support 
personnel, who help prepare training exercises and operate the 
brigades between weekend drills, have been cut from 90-100 
percent in the early 1990's to 55-64 percent; (7) officials 
told GAO that the brigades continue to have difficulty 
recruiting and retaining enough personnel to meet staffing 
goals due to the strong economy, less desire to join the 
military, high personnel attrition, and other problems; (8) at 
the same time, war plans and training guidance do little to 
focus or prioritize the broad and growing range of missions the 
brigades must be ready to perform; (9) consequently, the 
brigades find it difficult to narrow training to a predictable 
and realistic set of skills for the time available; (10) the 
Army does not have an effective system for assessing brigade 
readiness; (11) the current system relies primarily on the 
subjective view of commanders and does not require the use of 
objective criteria or established training goals in reporting 
unit readiness; (12) as a result, brigade estimates--that they 
would need 42 days or less of training to be ready for war once 
called to active duty--are unrealistically low; (13) 
experiences during the gulf war and a 1996 study by the RAND 
Corp. indicate that 70-80 days would be needed to prepare the 
brigades for deployment; (14) some brigade officials told GAO 
that they feel pressured to report they can be ready with 42 or 
less days of training to avoid low readiness ratings; (15) 
accurate assessments of readiness are further confused by 
inconsistencies between training guidance and actual war plans; 
(16) training guidance calls for the brigades to be trained and 
ready to deploy 90 days after they are called to active duty; 
and (17) however, war plans give some brigades considerably 
more time to be trained and moved to the war zones.
9. ``Defense Acquisitions: Recent F-22 Production Cost Estimates 
        Exceeded Congressional Limitation,'' August 2000 (GAO/NSIAD-00-
        178).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Air Force F-22 Raptor production 
cost estimate, focusing on: (1) the status of cost reduction 
plans, including some plans not yet implemented, and Air Force 
procedures for reporting on the plans; and (2) a comparison of 
the 1999 production cost estimates with the congressional cost 
limitation.
    b. Benefits.--GAO noted that: (1) about half of the $21 
billion in cost reductions identified by the F-22 contractors 
and program office have not yet been implemented; (2) however, 
the Air Force may not be able to achieve the expected results 
from some of the plans because they are beyond the Air Force's 
ability to control; (3) GAO reviewed 10 plans estimated to 
reduce costs by $6.8 billion; (4) GAO found that cost 
reductions for 4 of the plans, which accounted for $5.6 billion 
in potential cost reductions, may not be achievable because 
they were dependent on decisions or later determinations that 
must be made by the Office of the Secretary of Defense or 
Congress; (5) although the Air Force and its contractors have 
procedures to track the status of the production cost reduction 
plans, and the Air Force has reported quarterly to the Under 
Secretary of Defense concerning the total estimated cost of F-
22 production, the Air Force reports have not regularly 
included a summary of the status of production cost reduction 
plans; (6) both Office of the Secretary and Air Force cost 
estimators projected F-22 production costs that exceeded the 
congressional cost limitation of $39.8 billion in effect at 
that time; (7) in 1999, after considering the potential of all 
the cost reduction plans, the Air Force estimated F-22 
production cost at $40.8 billion, and the Office of the 
Secretary of Defense estimated production costs at $48.6 
billion; (8) in comparing the cost estimates, GAO found that: 
(a) although both estimates were based on the production of 339 
aircraft, the two estimating groups did not use the same 
estimating methods, nor did they make the same estimating 
assumptions; (b) the cost estimators did not make the same 
assumptions about which cost reduction plans were already 
implemented or about the cost reductions achievable from plans 
not yet implemented; (c) the Office of the Secretary's estimate 
of F-22 total production cost exceeded the Air Force's estimate 
by $7.8 billion, or 19 percent; (d) although Air Force cost 
estimators projected a total of $40.8 billion in production 
costs, the official Air Force cost position was $39.8 billion, 
the same as the congressional cost limitation; and (e) DOD 
officials noted that it will be some time before actual 
production cost trends emerge and before they will know whether 
the Air Force or the Secretary of Defense estimate is more 
realistic.
10. ``DOD Personnel: More Actions Needed to Address Backlog of Security 
        Clearance Reinvestigations,'' August 2000 (GAO/NSIAD-00-215).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Department of Defense's [DOD] 
estimates of its reinvestigation backlog, focusing on: (1) how 
DOD estimates the backlog; (2) the soundness of DOD's backlog 
estimates; and (3) DOD's plans to address the backlog problem.
    b. Benefits.--GAO noted that: (1) in the absence of a 
Department-wide database that can accurately measure the 
reinvestigation backlog, DOD estimates the backlog on an ad-hoc 
basis, using two primary methods--manual counts and statistical 
sampling; (2) using the counting method, the military services 
and Defense agencies ask security managers to review their 
personnel and count those overdue for a reinvestigation; (3) 
the counts are totaled to provide a DOD-wide backlog estimate; 
(4) using the sampling method, DOD makes a rough--and known to 
be inaccurate--estimate from existing personnel security 
databases; (5) it then selects a random sample of individuals 
from this estimate and surveys them to determine whether they 
are associated with DOD, require a security clearance, and are 
overdue for a reinvestigation; (6) DOD uses this information 
and statistical analysis to develop a refined and more accurate 
estimate; (7) DOD's two most recent estimates each used a 
different method and arrived at similar results--about one of 
every five individuals with a security clearance is overdue for 
a reinvestigation; (8) however, both estimates had 
methodological limitations, were 6 months old or older by the 
time they were reported, and excluded thousands of overdue 
reinvestigations because they used a restricted backlog 
definition; (9) using the counting method, DOD reported that 
the backlog totalled 505,786, however, the estimate's accuracy 
is questionable; (10) using the sampling method, a DOD 
contractor estimated the backlog to be between 451,757 and 
558,552, however the contractor did not verify certain data; 
(11) DOD recognizes that the reinvestigation backlog is a 
problem; (12) after not making progress in meeting an earlier 
goal to eliminate the backlog, the services and other Defense 
agencies, at the direction of the Deputy Secretary of Defense 
and the DOD Comptroller, have begun to formulate plans to 
eliminate the backlog by March 31, 2002; (13) DOD also plans to 
implement a new personnel security database in mid-2001; (14) 
among other things, the database is designed to include 
information that could allow real-time counts of overdue 
reinvestigations; and (15) however, DOD has not specified how 
it plans to ensure that future reinvestigation requests are 
submitted when they are due or use the information in the new 
personnel security database system to help manage the 
reinvestigation program.

                   Subcommittee on the Postal Service

                     Hon. John M. McHugh, Chairman

1. Year 2000 Computing Crisis: Challenges Still Facing the U.S. Postal 
        Service,'' February 23, 1999, T-AIMD-99-86.
    a. Summary.--Pursuant to a congressional request for 
testimony, GAO discussed the U.S. Postal Service's [USPS] 
conversion strategy for preparing for the year 2000 crisis, 
focusing on the Service's year 2000 planning documents and 
their year 2000 guidance and internal development standards. 
GAO noted that for USPS to ensure continuity of operations 
after the century date change, it must assess, remediate, and 
validate several interlocking components of its operating and 
support infrastructure. The Postal Service has 152 severe and 
critical business systems that it must assess, correct, and 
verify to ensure year 2000 compliance. It also owns 349 
important business systems--systems for which workarounds exist 
and whose failure will result in an inconvenience, but not 
significantly impact core business activities. In addition to 
business systems, USPS relies on a broad range of equipment to 
sort, deliver, and process mail. It has estimated that it has 
over 100,000 pieces of hardware and software to assess and 
correct when necessary, including mainframe computers, personal 
computers, networks, and operating systems. The USPS systems 
interface with computer systems belonging to Federal, State, 
and local governments and hundreds of private businesses. 
Because of these interdependencies, postal systems are also 
vulnerable to failure caused by incorrectly formatted data 
provided by other systems that are noncompliant. While USPS' 
progress in renovating its systems has picked up in recent 
months, USPS has lagged behind the Office of Management and 
Budget [OMB] and GAO's recommended milestones for assessment, 
renovation, and validation. As of the OMB validation deadline 
of January 1999, only 27 percent of its mission-critical 
systems had been validated. In December 1998, USPS reorganized 
its program management to better reflect year 2000 efforts in 
terms of its business operations; this new management approach 
offers the USPS an improved opportunity for linking business 
processes to year 2000 problems and solutions. Even with a 
stronger management structure now in place, there are 
substantial challenges still facing USPS. If they are not 
addressed adequately, these challenges will threaten the USPS' 
ability to deliver the mail on time next January.
    b. Benefits.--By continuing to monitor the Y2K problems, 
the GAO can keep Congress informed about the Postal Service's 
progress in readying its mission-critical systems for optimum 
performance during the change of the century.
2. ``U.S. Postal Service: Subcommittee Questions Concerning Year 2000 
        Challenges Facing the Service,'' April 23, 1999, AIMD-99-150R.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on challenges facing the U.S. Postal 
Service [USPS] in addressing the year 2000 problem.
    GAO noted that the Postal Service has been running behind 
the Office of Management and Budget's schedule for system 
renovation and still must address major issues to correct and 
test system and mail processing equipment, ensure the readiness 
of thousands of local facilities, and determine whether and 
when its key suppliers and interface partners will be year 2000 
compliant. The USPS has determined that its systems are 
susceptible to September 9, 1999, as well as 25 other special 
dates, and it is testing its critical systems to ensure that 
they can correctly handle these dates. USPS is pursuing a 
windowing approach to date conversion rather than expanding 
date fields from two to four characters. Under this approach, 
software is written to associate a fixed or sliding period of 
years with either the 20th or 21st centuries. USPS year 2000 
officials have advised GAO that windowing fixes will remain 
viable beyond the year 2048 for all but two systems, which will 
remain viable until the year 2019. Replacement schedules have 
already been developed for permanent fixes for these two 
systems. The Service has realized significant benefits from 
their year 2000 efforts including: the elimination of 
unnecessary software code; replacement of antiquated, locally 
developed software applications; and modernization of 
information technology equipment, including mainframe computer 
systems, mid-range computer systems, and desktop workstations. 
USPS' Inspector General is planning a year 2000 conversion 
contract examination as part of its continuing audits of year 
2000 issues within USPS. GAO reported that the Postal Service 
is following GAO's Business Continuity and Contingency Planning 
guide, which provides a conceptual framework for managing the 
risk of potential year 2000-induced disruptions to operations 
and incorporates best practices in contingency planning and 
disaster recovery. Contingency plans are not scheduled to be 
completed and tested until June 30, 1999, and continuity plans 
are not scheduled to be completed and tested until August 1999, 
and tested again in November 1999. This schedule will leave 
USPS with little room for slippage or for making adjustments to 
ensure that contingency and continuity plans are practical and 
cost effective. USPS' ability to control its suppliers is 
limited and it must rely on statements of assurance of year 
2000 compliance by its suppliers. Any critical suppliers 
assessed as non-compliant will be part of USPS' contingency 
planning activities.
    b. Benefits.--The continuing GAO report on Y2K readiness 
focuses on deficiencies of the Postal Service contingency plans 
since it is also the back up system for many other entities. 
The report also shows the progress that the USPS has made and 
the benefits that will endure long into the 21st century.
3. ``The Results Act: Observations on the Postal Service's Preliminary 
        Performance Plan for Fiscal Year 2000,'' April 30, 1999, GGD-
        99-72R.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Postal Service's Preliminary 
Performance Plan for fiscal year 2000. GAO noted that the 
Postal Service's preliminary performance plan for fiscal year 
2000 will be useful to decisionmakers in that it articulates 
well the Service's mission and performance goals and provides 
more measures to track intended performance. For example, the 
Service's preliminary performance plan for fiscal year 2000 
includes a discussion of the Service's mission that is 
consistent with the Service's 5-year Strategic Plan. The goals 
that respond to key challenges appear balanced and challenging. 
Continued development of performance measures target and track 
intended performance. As the Service develops its final 
performance plan for fiscal year 2000, it could enhance its 
usefulness by improving the linkage between performance goals, 
strategies, and resources, providing more complete baseline 
data on past performance, and by identifying the top goals for 
the year covered by the plan. For example, GAO believes that 
the plan could be more useful to decisionmakers if it clearly 
indicated how the Service's human capital will contribute to 
achieving performance goals, such as those that relate to 
improving timely mail delivery. GAO's review of the Service's 
preliminary performance plan for fiscal year 2000 represents 
GAO's assessment of a work in progress. It should be noted that 
unlike other Federal agencies, the Service is not required to 
submit its performance plan to the Office of Management and 
Budget [OMB) and is not subject to OMB's Circular A-11. The 
Service submitted its plan to Congress in February 1999 by 
filing its preliminary performance plan for fiscal year 2000 as 
part of the Service's annual Comprehensive Statement on Postal 
Operations. The Service's preliminary performance plan for 
fiscal year 2000 is provisional until resources have been 
allocated and the Board of Governors adopts the Service's 
budget. The Service plans to publish its final performance plan 
for fiscal year 2000 by September 30, 1999, after adoption by 
the Board of Governors, which is to include final decisions on 
resource allocations.
    b. Benefits.--GAO has included some valid suggestions in 
this report that will be of assistance to the Postal Service if 
and when they are incorporated in their future performance 
plans.
4. ``U.S. Postal Service: Status of Efforts to Protect Privacy of 
        Address Changes,'' July 30, 1999, GGD 99-102.
    a. Summary.--GAO updated its previous report on the U.S. 
Postal Service's National Change of Address [NCOA] program, 
focusing on the actions the Service has taken in response to 
GAO's 1996 report and assessed whether any additional actions 
are needed to strengthen the Service's oversight of the 
program. GAO noted that, as recommended, the Service has 
developed and implemented written procedures that addressed its 
NCOA program oversight and control responsibilities for using 
seed records to help detect the unauthorized disclosure of NCOA 
data by licensees, should it occur, and reviewing, responding 
to, and documenting NCOA-related complaints and inquiries from 
postal customers and NCOA-related proposed advertisements by 
licensees. However, procedures designed by the Service to 
ensure that it is alerted when mail is sent to seed record 
addresses were not working as intended; thus, the Service 
lacked assurance that the seeding process provided an effective 
program oversight mechanism. Additionally, even though required 
to do so by the licensing agreement or by prescribed program 
procedures, during the 1996 through 1998 period GAO examined, 
the Service did not always conduct the minimum number of 
licensee audits, including on-site audits or promptly reaudit 
licensees that failed initial audits. Furthermore, USPS did not 
promptly or always suspend or terminate licensees that failed 
successive audits. Also, the Service reported that it had 
performed more licensee audits than were documented in its 
audit files. However, even when GAO included these additional 
audits in its data, GAO determined that the Service did not 
perform all audits required. The Service has taken no action on 
GAO's recommendations that it explicitly state, in the 
acknowledgment form signed by customers of licensees, that NCOA 
program-linked data are not to be used to create or maintain 
new-movers lists. GAO continues to believe that more specific 
language in the acknowledgment form could help ensure that use 
of NCOA program-linked data is limited to the purposes for 
which they were collected.
    b. Benefits.--This GAO report documents the problems which 
some postal customers and private sector entities in the 
business of advertising by mail have brought to the attention 
of the subcommittee. GAO's findings are crucial to 
understanding the problems and the perceptions of both the 
Postal Service and the complaining parties.
5. ``Deceptive Mail: Consumers' Problems Appear Substantial,'' August 
        4, 1999, T-GGD-99-150.
    a. Summary.--In this testimony, pursuant to a congressional 
request, GAO discussed matters related to deceptive mail 
marketing practices, focusing on the extent and nature of 
consumers' problems with deceptive mail and the initiatives 
various Federal agencies and other organizations have made to 
address deceptive mail problems and educate consumers. GAO 
noted that examples of deceptive mail include sweepstakes, 
chain letters, cashiers check look-a-likes, work-at-home 
schemes, and fraudulent charity solicitations. Officials in 
various agencies and organizations said that comprehensive data 
on the full extent of consumers' deceptive mail problems were 
not available mainly because consumers often did not report 
their problems and no centralized database existed from which 
such data could be obtained. However, data GAO collected from 
various sources suggested that consumers were having 
substantial problems with deceptive mail. Based on a GAO 
sponsored November 1998 statistically generalized sample of the 
U.S. adult population, GAO estimates that about half of the 
adult population believed that within the preceding 6 months, 
they had received deceptive mailed sweepstakes material or 
cashier's check look-a-likes. Officials from the Federal Trade 
Commission [FTC], Postal Inspection Service, and State 
Attorneys General offices estimated that in fiscal year 1998, 
about 10,400 deceptive mail complaints led to or initiated 
about 100 law enforcement actions. For the period October 1, 
1997, through March 31, 1999, FTC received over 18,000 
deceptive mail complaints, of which about 2,700 reported 
consumer payments of about $4.9 million. The Postal Inspection 
Service received over 16,700 complaints on fraud and chain 
letters, of which about 3,000 reported consumer fraud losses of 
about $5.2 million. The Inspection Service also had over 1,800 
open investigative cases on deceptive mail during fiscal year 
1998. Various Federal agencies and other organizations have 
undertaken efforts to address consumers' deceptive mail 
problems and educate them about such problems. The FTC, for 
example, established a national toll-free hotline for receiving 
deceptive mail and other complaints. One joint effort was 
Project Mailbox, which involved such organizations as FTC, 
Postal Inspection Service, and various State Attorneys General. 
These organizations initiated over 200 law enforcement actions 
against companies and individuals that used the mail to 
allegedly defraud consumers.
    b. Benefits.--The information reported by the GAO in its 
testimony provided substantial evidence in the subcommittee's 
work in enhancing the protection of individuals, particularly 
senior citizens and those vulnerable to deceptive mailings.
6. U.S. Postal Service: Challenges to Sustaining Performance 
        Improvements Remain Formidable on the Brink of the 21st Century 
        (GAO/T-GGD-00-2, Oct. 21, 1999). Testimony 29 pp., plus 1 
        attachment (2 pp.).
    a. Summary.--Pursuant to a congressional request, GAO 
discussed the U.S. Postal Service's [USPS] financial position 
and delivery performance. GAO noted that (1) the USPS may be 
nearing the end of an era; (2) during the past 5 years, USPS 
has made notable improvements in its financial position and 
delivery performance; (3) USPS has recorded positive net income 
and has maintained or improved the overall delivery of certain 
specific classes of mail; (4) however, USPS expects declines in 
its core business in the coming years; (5) the growth of the 
Internet, electronic communications, and electronic commerce 
has the potential to substantially affect USPS' mail volume; 
(6) as a result, USPS may experience growing difficulty in 
maintaining its position in a dynamic communications and 
delivery environment; (7) these developments make it imperative 
for USPS to resolve four long-standing performance challenges 
which include: (a) maximizing performance; (b) managing 
employees; (c) maintaining financial viability; and (d) 
adapting to competition; (8) GAO is highlighting the need for 
USPS to take action to address long-standing issues related to 
the quality of data used in ratemaking and recommending that 
the Postmaster General report to congressional oversight 
subcommittees on the actions taken and planned in this area; 
(9) in recent years, USPS has progressed in addressing various 
challenges and is continuing to initiate significant changes 
that respond to the challenges; and (10) however, as long as 
USPS stands on the brink of the 21st century, time appears to 
be growing short for USPS to successfully address its 
challenges so that it can sustain and improve current 
performance levels and remain competitive in a rapidly changing 
communications environment.
    b. Benefits.--GAO's report contained an unbiased analysis 
of the challenges of the 21st century and the Postal Service's 
efforts to respond to challenges, both old and new. This 
information will help the Service position itself and preserve 
both revenue and market share in the new communications and 
delivery market.
7. Equal Employment Opportunity: The Postal Service Needs to Better 
        Ensure the Quality of EEO Complaint Data (GAO/GGD-99-167, Sept. 
        28, 1999). Letter Report, 8 pp.
    a. Summary.--In its limited analysis of the data that the 
Postal Service reported to the Equal Employment Opportunity 
[EEO] Commission, GAO found errors in the statistics underlying 
EEO complaints. GAO also found that required data on the issues 
raised in the complaints were not fully reported. These 
discrepancies were generally limited to statistical reports 
generated by the Postal Service's automated complaint 
information system. Because GAO examined only a limited portion 
of the reported data for obvious discrepancies and because the 
errors GAO identified were related to the data generated by an 
automated complaint information system put in place in 1995, 
GAO has concerns about the completeness, the accuracy, and the 
reliability of the data that it did not examine. GAO recommends 
that the Postal Service review its controls over the recording 
and the reporting of data that it submits to the EEO 
Commission.
8. U.S. Postal Service: Deficiencies Continue While Antelope Valley 
        Project Status Remains Uncertain (GAO/GGD-99-147, Aug. 31, 
        1999). Letter Report, 25 pp., plus 2 appendices (3 pp.).
    a. Summary.--The Postal Service has proposed relocating 
postal operations for the Antelope Valley from the Main Post 
Office in Mojave, CA, to a new facility in Lancaster, CA. A 
Member of Congress has raised concerns about whether the 
Service appropriately acquired land in Lancaster and properly 
considered project costs. This report evaluates whether the 
Postal Service followed its capital project approval process 
for the purchase of land in Lancaster. GAO also identifies the 
reasons for delays in the project and the effects of those 
delays on postal operations, project costs, and affected 
communities.
    b. Benefits.--The report provides an unbiased overview of 
the effects of Postal process on facilities and the impact of 
delays on communities that are anticipating the use and benefit 
of the facilities.
9. Deceptive Mail: Consumers' Problems Appear Substantial (GAO/T-GGD-
        99-150, Aug. 4, 1999). Testimony 19 pp., plus 2 attachments (5 
        pp.).
    a. Summary.--Information GAO collected from several sources 
suggests that consumers are having major problems with 
deceptive mail, which includes sweepstakes, chain letters, 
cashiers check look-alikes, work-at-home schemes, and 
fraudulent charity solicitations. About one in two adults 
believe that in the last 6 months they have received deceptive 
mailed sweepstakes material or cashier's check look-alikes, 
according to GAO estimates. The Federal Trade Commission [FTC], 
Postal Inspection Service, and the State attorneys general 
offices estimate that in fiscal year 1998 about 10,400 
deceptive mail complaints led to about 100 law enforcement 
actions. Between October 1997 and March 1999, FTC received more 
than 18,000 deceptive mail complaints, of which about 2,700 
involved consumer payments that totaled nearly $5 million. The 
Postal Service received more than 16,700 complaints, of which 
3,000 involved consumer fraud losses that totaled more than $5 
million. The Inspection Service also had more than 1,800 open 
investigations on deception mail in 1998. Various Federal 
agencies and other groups have undertaken efforts to address 
consumers' deceptive mail problems and educate them about these 
risks. For example, FTC established a national toll-free 
hotline for receiving deceptive mail and other complaints.
    b. Benefits.--GAO's documentation of deceptive mailing, 
along with its review of work done with other agencies working 
on the issue of deceptive mail complaints has benefited 
Congress in its enacting of legislation that will help abate 
this problem.
10. U.S. Postal Service: Status of Efforts to Protect Privacy of 
        Address Changes (GAO/GGD-99-102, July 30, 1999). Letter Report, 
        25 pp. plus 2 appendices (3 pp.).
    a. Summary.--The Postal Service's national change of 
address program is intended to improve the quality of addresses 
on mail by providing business mailers with accurate, properly 
formatted change-of-address data that are automation 
compatible. To do this, the Service collects change-of-address 
information reported by postal customers nationwide and sends 
corrected addresses through several private firms licensed to 
provide address correction services. A recent audit found that 
the program saved the Service nearly $1.2 billion in rehandling 
costs associated with forwarding mail in fiscal year 1998. GAO 
pointed out in a 1996 report that the program was operating 
without clearly delineated procedures and sufficient management 
attention to always prevent, detect, and correct the 
inappropriate release or use of change-of-address data. (See 
GAO/GGD-96-119, August 1996.) This report discusses the steps 
that the Service has taken in response to the 1996 report and 
whether any additional actions are needed to strengthen the 
Service's oversight of the program.
    b. Benefits.--The report helps to highlight the benefits of 
a sanitized address program which enables the Postal Service 
carry out its delivery mission more effectively and 
economically.
11. The Results Act: Observations on the Postal Service's Preliminary 
        Performance Plan for Fiscal Year 2000 (GAO/GGD-99-72R, Apr. 30, 
        1999). Correspondence, 10 pp. plus 3 enclosures (8 pp.).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Postal Service's preliminary 
performance plan for fiscal year 2000.
    GAO noted that: (1) the Postal Service's preliminary 
performance plan for fiscal year 2000 will be useful to 
decisionmakers in that it articulates well the Service's 
mission and performance goals and provides more measures to 
track intended performance; (2) for example, the Service's 
preliminary performance plan for fiscal year 2000 includes a 
discussion of the Service's mission that is consistent with the 
Service's 5-year strategic plan; goals that respond to key 
challenges and appear balanced and challenging; and continued 
development of performance measures and targets to track 
intended performance; (3) as the Service develops its final 
performance plan for fiscal year 2000, it could enhance its 
usefulness by improving the linkage between performance goals, 
strategies, and resources, providing more complete baseline 
data on past performance, and by identifying the top goals for 
the year covered by the plan; (4) for example, GAO believes 
that the plan could be more useful to decisionmakers if it 
clearly indicated how the Service's human capital will 
contribute to achieving performance goals, such as those that 
relate to improving timely mail delivery; (5) GAO's review of 
the Service's preliminary performance plan for fiscal year 2000 
represents GAO's assessment of a work in progress; (6) unlike 
other Federal agencies, the Service is not required to submit 
its performance plan to the Office of Management and Budget 
[OMB] and is not subject to OMB's Circular A-11; (7) the 
Service submitted its plan to Congress in February 1999 by 
filing its preliminary performance plan for fiscal year 2000 as 
part of the Service's annual comprehensive statement on postal 
operations; (8) the Service's preliminary performance plan for 
fiscal year 2000 is provisional until resources have been 
allocated and the Board of Governors adopts the Service's 
budget; and (9) the Service plans to publish its final 
performance plan for fiscal year 2000 by September 30, 1999, 
after adoption by the Board of Governors, which is to include 
final decisions on resource allocations.
    b. Benefits.--GAO's review of the Postal Service's 
performance plan gives Congress a better, concise, and unbiased 
review of where the strengths and weaknesses of the Postal 
Service's plans lie.
12. U.S. Postal Service: Subcommittee Questions Concerning Year 2000 
        Challenges Facing the Service (GAO/AIMD-99-150R, Apr. 23, 
        1999). Correspondence, 6 pp.
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the challenges facing the U.S. Postal 
Service [USPS] in addressing the year 2000 problem.
    GAO noted that: (1) USPS has been running behind the Office 
of Management and Budget's schedule for system renovation and 
still must address major issues to correct and test system and 
mail processing equipment, ensure the readiness of thousands of 
local facilities, and determine whether and when its key 
suppliers and interface partners will be year 2000 compliant; 
(2) USPS has determined that its systems are susceptible to 
September 9, 1999, as well as 25 other special dates, and it is 
testing its critical systems to ensure that they can correctly 
handle these dates; (3) USPS is pursuing a windowing approach 
to date conversion rather than expanding date fields from two 
to four characters; (4) under this approach, software is 
written to associate a fixed or sliding period of years with 
either the 20th or 21st centuries; (5) USPS year 2000 officials 
have advised GAO that windowing fixes will remain viable beyond 
the year 2048 for all but two systems, which will remain viable 
until the year 2019; (6) replacement schedules have already 
been developed for permanent fixes for these two systems; (7) 
USPS has realized significant benefits from their year 2000 
efforts; (8) these include the elimination of unnecessary 
software code; replacement of antiquated, locally developed 
software applications; and modernization of information 
technology equipment, including mainframe computer systems, 
mid-range computer systems, and desktop workstations; (9) USPS' 
Inspector General is planning a year 2000 conversion contract 
examination as part of its continuing audits of year 2000 
issues within USPS; (10) USPS is following GAO's Business 
Continuity and Contingency Planning guide, which provides a 
conceptual framework for managing the risk of potential year 
2000-induced disruptions to operations and incorporates best 
practices in contingency planning and disaster recovery; (11) 
contingency plans are not scheduled to be completed and tested 
until June 30, 1999, and continuity plans are not scheduled to 
be completed and tested until August 1999 and tested again in 
November 1999; (12) this schedule will leave USPS with little 
room for slippage or for making adjustments to ensure that 
contingency and continuity plans are practical and cost 
effective; (13) USPS' ability to control its suppliers is 
limited and it must rely on statements of assurance of year 
2000 compliance by its suppliers; and (14) any critical 
suppliers assessed as non-compliant will be part of USPS' 
contingency planning activities.
    b. Benefits.--It is crucial that the Postal Service is not 
plagued with Y2K disruptions. Many Federal and private agencies 
plan to use the Postal Service as their contingency plan. As 
the Postal Service is behind the OMB's schedule, it is 
particularly important that GAO monitor the situation for 
Congress and recommend contingency planning for the benefit of 
the Nation.
13. U.S. Postal Service: Diversity in High-Level EAS Positions (GAO/
        GGD-99-26, Feb. 26, 1999). Letter Report, 29 pp. plus 4 
        appendices (11 pp.).
    a. Summary.--This report discusses the promotion of women 
and minorities to high-level Executive and Administrative 
Schedule [EAS] management positions--EAS 17 and above--in the 
U.S. Postal Service. GAO provides (1) information about the 
overall extent to which women and minorities have been promoted 
or are represented in EAS 17 and above positions in the 
Service; (2) GAO's observations on the methodology used by a 
private contractors, Aguirre International, to study workforce 
diversity at the Service; (3) the status of the Service's 
efforts to address the recommendations in the Aguirre report; 
and (4) GAO's analysis of whether the Service could better 
capture and use data to achieve its diversity objectives.
    b. Benefits.--The Postal Service is one of the largest 
agencies with a substantially diverse employment base. Proper 
monitoring by the GAO, along with its analysis will provide for 
better data and objectives for promotions for women and 
minorities to higher level positions.
14. Year 2000 Computing Crisis: Challenges Still Facing the U.S. Postal 
        Service (GAO/T-AIMD-99-86, Feb. 23, 1999). Testimony, 7 pp.
    a. Summary.--Information technology is integral to every 
facet of postal operations--from sorting, processing, and 
distributing the mail; to dealing with customers; accounting 
for and managing cash flows; communicating with business 
partners and other government agencies; and modernizing its 
facilities. The Postal Service has been working hard to address 
its year 2000 problems and has recently revamped its management 
approach that, if successfully implemented, can provide 
significant support and oversight to its year 2000 efforts. 
However, the Service has been running somewhat behind the 
Office of Management and Budget's schedule for system 
renovation and must still address major issues to complete 
system and mail processing equipment correction and testing, 
ensure the readiness of hundreds of local facilities, and 
determine the ability of key suppliers and interface partners 
to be year 2000 ready. Moreover, the Service needs to complete 
the ``simulation'' testing of its business process areas as 
well as complete the development and testing of its business 
continuity and contingency plans. These challenges are further 
exacerbated by the fact that the Service expects a surge in 
workload beginning in September due to the holiday business 
rush, which typically requires greater management attention.
    b. Benefits.--This GAO testimony is useful in determining 
if the Postal Service will be ready for the anticipated 
problems which may arise during year 2000, particularly if the 
Postal Service is not prepared.
15. Major Management Challenges and Program Risks: U.S. Postal Service 
        (GAO/OCG-99-21, Jan. 1, 1999). Other Written Product, 42 pp.
    a. Summary.--This publication is part of GAO's performance 
and accountability series that provides a comprehensive 
assessment of government management, particularly the 
management challenges and program risks confronting Federal 
agencies. Using a ``performance-based management'' approach, 
this landmark set of reports focuses on the results of 
government programs--how they affect the American taxpayer--
rather than on the processes of government. This approach 
integrates thinking about organization, product and service 
delivery, use of technology, and human capital practices into 
every decision about the results that the government hopes to 
achieve. The series includes an overview volume discussing 
government-wide management issues and 20 individual reports on 
the challenges facing specific cabinet departments and 
independent agencies. The reports take advantage of the wealth 
of new information made possible by management reform 
legislation, including audited financial statements for major 
Federal agencies, mandated by the Chief Financial Officers Act, 
and strategic and performance plans required by the Government 
Performance and Results Act. In a companion volume to this 
series, GAO also updates its high-risk list of government 
operations and programs that are particularly vulnerable to 
waste, fraud, abuse, and mismanagement.
    b. Benefits.--This comprehensive study of the Postal 
Service assesses the information and operation utilized by 
government agencies.
16. U.S. Postal Service: Development and Inventory of New Products 
        (GAO/GGD-99-15, Nov. 24, 1998). Letter Report, 23 pp. plus 4 
        appendices (38 pp.).
    a. Summary.--The U.S. Postal Service has developed an array 
of new products in recent years, such as global priority mail, 
prepaid phone cards, and retail merchandise. Some Members of 
Congress contend that the Postal Service is unfairly expanding 
its product line to compete in nonpostal markets and have 
introduced legislation to curtail such activity. Some private 
sector companies have also raised concerns that the Postal 
Service could use its governmental status to an unfair 
advantage when introducing products that compete with private 
sector companies. This report (1) identifies the statutory and 
regulatory authorities and constraints covering all major 
groups of new products, (2) identifies the potential impact 
that H.R. 22 and the Postal Service's proposed reform 
legislation could have on new products, and (3) discusses the 
Postal Service Marketing Department's new product development 
process and determines, for three products, how closely that 
process was followed. GAO found that during fiscal years 1995, 
1996, and 1997, the Service marketed, or had under development, 
19 new products that had been publicly announced. Three of 
these new products involved strategic alliances with other 
businesses. As of July 1998, the Service had discontinued five 
of the new products and was considering discontinuing another. 
Total revenues and expenses for the 19 products from inception 
through fiscal year 1997 were $148.8 million and $233.5 
million, respectively. During the first three-quarters of 
fiscal year 1998, Service officials said that four of the 19 
new products had produced revenues that exceeded expenses. GAO 
notes that it may not be reasonable to expect all new products 
to become profitable in their early years, because new products 
generally take several years to become established and recoup 
their start-up costs.
    b. Benefits.--This GAO report has benefited the 
subcommittee in its effort to provide comprehensive reform of 
the Postal Service by ensuring that both the public and private 
sectors are able to compete on a level playing field.
17. U.S. Postal Service: Postal and Telecommunications Sector 
        Representation in International Organizations (GAO/GGD-99-6BR, 
        Oct. 29, 1998). Briefing Report, 47 pp. plus 4 appendices (7 
        pp.).
    b. Benefits.--This report provides information on two 
international organizations: the Universal Postal Union, which 
regulates international postal services, and the International 
Telecommunications Union, which coordinates global 
telecommunications networks and services among governments and 
the private sector. GAO compares the roles and the 
responsibilities of government and private-sector stakeholders 
in U.S. policy development and representation in international 
organizations for the postal and telecommunications sectors. 
Specifically, GAO compares the representation of the United 
States in the Universal Postal Union and in the International 
Telecommunications Union.
18. U.S. Postal Service: Challenges to Sustaining Performance 
        Improvements Remain Formidable on the Brink of the 21st Century 
        T-GGD-00-2, Oct. 21, 1999).
    a. Summary.--Pursuant to a congressional request, GAO 
discussed the U.S. Postal Service's [USPS] financial position 
and delivery performance. GAO noted that: (1) USPS may be 
nearing the end of an era; (2) during the past 5 years, USPS 
has made notable improvements in its financial position and 
delivery performance; (3) USPS has recorded positive net income 
and has maintained or improved the overall delivery of certain 
specific classes of mail; (4) however, USPS expects declines in 
its core business in the coming years; (5) the growth of the 
Internet, electronic communications, and electronic commerce 
has the potential to substantially affect USPS' mail volume; 
(6) as a result, USPS may experience growing difficulty in 
maintaining its position in a dynamic communications and 
delivery environment; (7) these developments make it imperative 
for USPS to resolve four long-standing performance challenges 
which include: (a) maximizing performance; (b) managing 
employees; (c) maintaining financial viability; and (d) 
adapting to competition; (8) GAO is highlighting the need for 
USPS to take action to address long-standing issues related to 
the quality of data used in ratemaking and recommending that 
the Postmaster General report to congressional oversight 
subcommittees on the actions taken and planned in this area; 
(9) in recent years, USPS has progressed in addressing various 
challenges and is continuing to initiate significant changes 
that respond to the challenges; and (10) however, as long as 
USPS stands on the brink of the 21st century, time appears to 
be growing short for USPS to successfully address its 
challenges so that it can sustain and improve current 
performance levels and remain competitive in a rapidly changing 
communications environment.
    b. Benefits.--GAO's report contained an unbiased analysis 
of the challenges of the 21st century and the Postal Service's 
efforts to respond to challenges, both new and old. This 
information will help the service position itself and preserve 
both revenue and market share in the new communication and 
delivery markets.
19. U.S. Postal Service: Changes Made to Improve Acceptance Controls 
        for Business Mail GGD-00-31, Nov. 9, 1999).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the Postal Service's acceptance 
controls for business mail, focusing on whether the Service had 
made the changes GAO recommended previously and whether those 
changes were working. GAO noted that: (1) the Service made 
changes to its controls over the acceptance of business mail; 
(2) those changes are generally along the lines that GAO 
recommended in 1996 and its controls overall appear to have 
improved; (3) however, the Service lacks information on how 
well its controls are working Service-wide and thus cannot 
ensure that it is collecting all the revenue due from its 
business mail operations; (4) since GAO's 1996 report, the 
Service has: (a) developed and implemented a risk-based 
approach for verifying the eligibility of high-risk customers 
to receive discounted postage rates; (b) made changes to its 
presort verification, supervisory review, and documentation 
requirements to help provide more assurance that these 
functions are performed; (c) changed its business mail 
acceptance-control procedures and training guidelines to help 
supervisors and staff perform their tasks properly and made key 
tools available to help them more accurately determine 
customers' eligibility for specific postage discounts; (d) 
developed information sources for managers to use in evaluating 
business mail acceptance controls, procedures, staffing, and 
training; and (e) incorporated reviews of its business mail 
operations into a Service-wide effort to protect revenue and 
obtain all compensation due for its services and products; (5) 
on the basis of GAO's evaluation of the Service's new business 
mail acceptance control process, discussions with Service 
officials, observations of acceptance procedures at eight 
business mail facilities, and review of Postal Inspection 
Service audit reports, GAO believes that the changes the 
Service made to its business mail procedures and operations 
help to prevent revenue losses; (6) however, GAO could not 
determine whether all of these changes are working Service-wide 
because data needed to make such a determination were not 
available; (7) neither the results of GAO's work or the work of 
the Inspection Service that GAO reviewed can be projected to 
the universe of Service business mail facilities; and (8) 
however, there is sufficient evidence that the Service has not 
fully addressed GAO's 1996 recommendations that it ensure that 
required supervisory reviews are performed and that it develop 
information for evaluating the adequacy of its business mail 
acceptance controls.
    b. Benefits.--This report will help the Postal Service 
refine its business mail operations, thereby improving 
efficiency and preserving the revenue generated in a class of 
mail that is large, lucrative and essential to the Service's 
bottom line.
20. Postal Issues: The Department of State's Implementation of Its 
        International Postal Responsibilities ( GGD-00-40, Jan. 31, 
        2000).
    a. Summary.--Pursuant to a congressional request, GAO 
reviewed how the Department of State has implemented its new 
responsibilities for U.S. policy regarding U.S. participation 
in the Universal Postal Union [UPU]. GAO noted that: (1) State 
faced difficult challenges in assuming its new UPU-related 
responsibilities less than a year before the UPU Congress met 
in August and September 1999 to update binding agreements 
governing international postal service; (2) State's performance 
in implementing these new responsibilities was uneven in that 
GAO found strengths in some areas and opportunities for 
improvement in other areas; (3) State made progress in its 
first year in providing stakeholders and the general public 
with relevant information on UPU matters and giving them an 
opportunity to offer input into U.S. policy concerning the UPU; 
(4) State coordinated with the U.S. Postal Service, other 
Federal agencies, and other nongovernmental stakeholders that 
were involved in UPU matters and included some of these 
stakeholders in the U.S. delegation to the UPU Congress; (5) 
stakeholders said that State was receptive to input and 
evenhanded in its consideration of views; (6) in addition, 
State clearly signaled changes to U.S. policy on issues related 
to UPU reform; (7) State officials said that the United States 
presented a different view and approach to the UPU with respect 
to raising issues of UPU reform that gave impetus to the UPU's 
decision to establish a process to consider reform issues; (8) 
several options exist for State to develop a more structured 
and open process for obtaining stakeholder input including 
insuring better and more advance notification of public 
meetings and more advance distribution of materials prior to 
these meetings; (9) some stakeholders have raised concerns 
about the potential burden on State of using a formalized 
process to handle UPU-related responsibilities as well as 
whether such a process would be beneficial; (10) in this 
regard, 10 of 19 Federal agencies that accounted for 90 percent 
of the Federal Advisory Committee Act [FACA] committees have 
reported that FACA requirements are more useful than 
burdensome; (11) representatives of Federal and on Federal 
organizations in the U.S. delegation to the UPU Congress said 
that staff turnover, combined with the limited time available 
before the UPU Congress, affected State's ability to fully 
understand the implications associated with various complex UPU 
policy issues; and (12) providing sufficient institutional 
continuity and expertise will be essential if State intends to 
play a leadership role in handling complex UPU issues and 
dealing with domestic and international stakeholders.
    b. Benefits.--The international postal and delivery market 
is worth billions of dollars and millions of jobs to the U.S. 
economy. In recent years this market has seen sweeping changes 
in the form of new communications technologies and 
comprehensive postal regulatory reform in industrialized 
nations. The effectiveness of the Department of State, the 
interrelationship between State and other agencies, and the 
quality of private operator's input will determine the success 
of U.S. international postal policy.
21. Postal Issues: The Department of State's International Postal 
        Responsibilities (T-GGD-00-63, Mar. 9, 2000).
    a. Summary.--Pursuant to a congressional request, GAO 
discusses how the Department of State has implemented its 
responsibilities for U.S. policy regarding U.S. participation 
in the Universal Postal Union [UPU]. GAO noted that: (1) State 
assumed primary responsibility for U.S. policy on UPU matters 
in October 1998 from the Postal Service; (2) State has made 
progress in implementing its UPU responsibilities by taking 
steps to consult with the Postal Service, other Federal 
agencies, postal users, private providers of international 
postal services, and the general public; (3) in addition, State 
clearly signaled changes in U.S. policy on issues related to 
UPU reform; (4) this progress was notable because State assumed 
its expanded responsibilities for the UPU less than a year 
before the UPU Congress met in August and September 1999 to 
update binding agreements governing international postal 
service; (5) while GAO recognizes the progress made by State in 
its first year of responsibility for UPU matters, GAO also 
identified opportunities for the Department to improve its 
process for developing U.S. policy on these matters and the 
institutional continuity and expertise of its staff working in 
this area; (6) GAO identified some shortcomings relating to the 
timing and notification for public meetings, and the 
distribution of documents discussed at these meetings, that may 
have limited the opportunities for stakeholders to provide 
meaningful input; (7) GAO also found that State's policy 
development process on UPU matters resulted in little public 
record of agency or stakeholder positions, which may make it 
difficult for Congress and others to fully understand the basis 
for U.S. policy positions; and (8) further, staff turnover made 
it more difficult for State to develop the institutional 
continuity and expertise to fulfill its leadership 
responsibilities.
    b. Benefits.--This report, in conjunction with the January 
31, 2000, product on the same topic, provides a candid and 
unbiased assessment of the Department of State's emerging role 
in developing international postal policy, and representation 
before the UPU. The GAO findings will be of assistance to all 
stakeholders as State develops its policymaking process in this 
area.
22. U.S. Postal Service: Diversity in the Postal Career Executive 
        Service (GGD-00-76, Mar. 30, 2000).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the representation of women and 
minorities in the U.S. Postal Service's Career Executive 
Service [PCES], focusing on: (1) the overall extent that women 
and minorities have been represented in the PCES, fiscal years 
1995 through 1999, and have been selected for positions in the 
PCES, particularly executive positions, in fiscal year 1999; 
and (2) efforts under way by the Service to promote diversity 
within the PCES. GAO noted that: (1) at the end of fiscal year 
1999, women and minorities represented about 35 percent of the 
PCES executive workforce compared to their representation of 
about 58 percent in the Service's overall workforce; (2) 
similarly, their representation among PCES executives for each 
specific women and minority Equal Employment Opportunity [EEO] 
category was lower than their representation in the 
corresponding EEO categories in the Service's overall 
workforce; (3) with respect to the 42 occupied officer 
positions below the Deputy Postmaster General, women and 
minorities held 13, or about 31 percent, as of the end of 
fiscal year 1999; (4) over the last 5 fiscal years women and 
minority representation among PCES executives has generally 
increased by about 4 percentage points; (5) most of this change 
occurred during the last 2 years of the period and was 
primarily accounted for by the increase in the representation 
of white women; (6) over the 5-year period, white women's 
representation has consistently increased while that of 
Hispanic, Asian, and American Indian women also generally 
increased after fiscal year 1997; (7) with regard to officers, 
over the 5-year period, women and minority representation 
increased by 6 percentage points; (8) regarding the career 
Senior Executive Service [SES], women and minority 
representation among the PCES executive workforce was somewhat 
higher than that in the career SES in the Federal workforce and 
much higher when compared to the civilian career SES workforce 
at Department of Defense; (9) finally, with respect to 
selections for PCES executive positions, in fiscal year 1999, 
women and minorities represented about 33 percent of PCES 
executives before the selections, and they were selected for 25 
of the 59 selections for executive positions; (10) also, women 
and minority representation as a group among the selections was 
the same as their representation in the PCES potential 
successor pool for all the positions; (11) outside hires 
accounted for 17 percent of all of the executive selections and 
24 percent of the 25 women and minority selections; (12) in 
November 1998, the Service required that its PCES merit 
performance evaluation process address diversity-related 
activities in individual executive performance objectives and 
that executives be accountable for the accomplishment of those 
objectives; (13) the Service also developed management training 
programs to help employees better manage their careers; and 
(14) another Service effort includes the establishment of a 
diversity oversight group, which is to oversee corporate 
diversity initiatives.
    b. Benefits.--This report provides valuable information to 
ensure that Postal Service is a place of opportunity for women 
and minorities. It will prove particularly valuable in efforts 
to eliminate the ``glass ceiling'' that may prevent such 
employees from becoming part of the organization's highest 
level of management.
23. Breast Cancer Research Stamp: Millions Raised for Research, but 
        Better Cost Recovery Criteria Needed (GGD-00-80, Apr. 28, 
        2000).
    a. Summary.--Pursuant to a legislative requirement, GAO 
provided information on the Postal Service's Breast Cancer 
Research Stamp, focusing on: (1) how the Service went about 
identifying and allocating the costs it incurred in developing 
and marketing the Breast Cancer Research Semipostal [BCRS] and 
the issues associated with effectiveness; (2) the statutory 
authorities and constraints associated with the Service's 
issuance of semipostals, in general, as a means of fundraising; 
and (3) the appropriateness of using the BCRS as a means of 
fundraising. GAO noted that: (1) on March 16, 2000, the Service 
reported that the bulk of its costs to develop and sell the 
BCRS through December 31, 1999, was $5.9 million; (2) according 
to the Service, almost all of these costs would have been 
incurred with any blockbuster commemorative stamp issue and 
have been recovered through the 33 cents that constitutes the 
first-class postage portion of the BCRS; (3) in a March report, 
the Postal Service Office of Inspector General [OIG] identified 
$836,000 in costs that it believed were attributable to the 
BCRS program and not previously identified by the Service; (4) 
after reviewing a draft of OIG's report, the Service agreed 
that $488,000 of these costs were incurred exclusively on 
behalf of the BCRS program, and included them in its reported 
$5.9 million in BCRS costs; (5) the Service and OIG had not, as 
of March 31, 2000, resolved their differences over the 
remaining +$348,000 in costs identified by OIG; (6) the Stamp 
Out Breast Cancer Act did not provide quantitative measures for 
evaluating the effectiveness of the BCRS as a fundraiser; (7) 
however, the act provided that the BCRS would be voluntary and 
convenient, and it would raise funds for breast cancer 
research; (8) to these ends, BCRS has been successful; (9) the 
BCRS had raised about $10 million for breast cancer research by 
the end of 1999 and is expected to raise more by the time sales 
are scheduled to conclude; (10) with respect to 
appropriateness, about 71 percent of adults responding to the 
public opinion survey GAO commissioned, and most of the key 
stakeholders GAO spoke with, believed that it is appropriate to 
use semipostals issued by the Service to raise funds for 
nonpostal purposes; (11) GAO does not believe that the Service 
has the authority to issue semipostals on its own volition 
without specific legislation authorizing it to do so; (12) 
although the act gave the Service the specific authority to 
issue the BCRS, it was silent with regard to the 
appropriateness of the Service issuing additional semipostals 
for other causes; (13) postal officials have stated that in the 
absence of statutory authority to issue semipostals, it is 
unclear whether selling such stamps would be consistent with 
the underlying statutory and regulatory authorities governing 
the Service; and (14) GAO does not interpret the Service's 
underlying statutory authority as authorizing it to establish 
postage rates and fees for a particular stamp at a level that 
exceeds its postage value for purposes of generating revenue 
for contributions to a charitable cause.
    b. Benefits.--The Breast Cancer Research Stamp report 
provided a wealth of the successes and setbacks of that 
program, and GAO's analysis of the scope of the Postal 
Service's legal authority to issue semipostals. These findings 
were an integral part of the debate leading to the passage of 
legislation authorizing future semipostals, and the data will 
aid the Postal Service in the management of future semipostal 
programs.
24. U.S. Postal Service: Diversity in District Management-Level 
        Positions (GGD-00-142, June 30, 2000).
    a. Summary.--Pursuant to a congressional request, GAO 
provided information on the representation of women and 
minorities in the Postal Service's [USPS] Executive and 
Administrative Schedule [EAS] management-level positions, 
focusing on: (1) statistical information on the representation 
of women and minorities in EAS levels 16 through 26 in USPS 
nationwide for fiscal year 1999; (2) the Chicago, IL, and 
Akron, OH, postal districts: (a) representation of women and 
minorities in EAS levels 16 through 26; (b) initiatives 
implemented to promote diversity; and (c) lessons identified by 
district officials that relate to increasing diversity; and (3) 
equal employment opportunity [EEO] concerns at the Youngstown, 
OH, postal site. GAO noted that: (1) at the end of fiscal year 
1999, women and minorities in USPS' districts represented a 
district average of about 49 percent of the EAS 16 through 26 
workforce; (2) the representation of women and minorities in 
EAS levels 16 through 26 in USPS' 83 districts ranged from 
about 22 percent to 95 percent; (3) in Chicago, women and 
minorities represented about 93 percent of the EAS 16 through 
26 workforce compared with their overall workforce 
representation of 92 percent; (4) in Akron, the representation 
of women and minorities in the district's EAS 16 through 26 
workforce was about 41 percent compared with their overall 
workforce representation of about 46 percent at the end of 
fiscal year 1999; (5) in Chicago, black men and women 
represented about 84 percent of the EAS 16 through 26 workforce 
in fiscal year 1999--white, Hispanic, Asian, and Native 
American men and women represented about 16 percent; (6) in 
Akron, white men and women represented about 81 percent of the 
EAS 16 through 26 workforce in fiscal year 1999--black, 
Hispanic, Asian, and Native American men and women represented 
about 19 percent; (7) both the Chicago and Akron district 
offices are using the Associate Supervisor Program [ASP] to 
increase the representation of women and minorities in EAS 
levels 16 through 26; (8) ASP has provided opportunities for a 
diverse group of employees from lower grade levels to be 
trained and eventually promoted into first-level supervisory 
positions; (9) to improve other aspects of diversity, both 
districts are using a national alternative dispute resolution 
program referred to as REDRESS (Resolve Employment Disputes, 
Reach Equitable Solutions Swiftly) to facilitate discussion 
between managers and employees on individual EEO complaint 
issues; (10) Chicago and Akron have also developed their own 
individual initiatives to promote appreciation for cultural 
differences; (11) according to district officials in Chicago 
and Akron: (a) management must demonstrate its commitment to 
diversity; (b) training and career development programs must be 
made available to provide opportunities for women and 
minorities to ascend to supervisory and management-level 
positions; and (c) an environment that encourages 
communications and cultural appreciation between management and 
employees must be established; (12) regarding the alleged EEO 
concerns at the Youngstown postal site, district records show 
that race and sex discrimination were most often cited as the 
bases for the complaints; and (13) management, union 
representatives, and employees had different opinions about the 
source of the problem.
    b. Benefits.--GAO's assessment of the Postal Service's 
successes and failures in including women and minorities in EAS 
management-level positions will help the Service in its 
continuing efforts to create and maintain an environment in 
which all employees have an opportunity to succeed.
         V. Prior Activities of Current or Continuing Interest

                       Subcommittee on the Census

                       Hon. Dan Miller, Chairman

    The subcommittee will continue its investigations and 
oversight work in the following areas within its jurisdiction:
1. The Accuracy and Coverage Evaluation [ACE].
    a. Summary.--Operational details of the ACE plan are being 
scrutinized, and concerns with its methodology, accuracy, 
legality, and potential for political manipulation persist.
2. Department of Commerce Regulation 15 CFR Part 101.
    a. Summary.--Department of Commerce Regulation 15 CFR Part 
101, Report of Tabulations of Population to States and 
Localities Pursuant to 13 U.S.C. Sec. 141(c) and Availability 
of Other Population Information directs the Director of the 
Bureau of the Census to make the final determination whether 
sampled data from the 2000 census is released for the purposes 
of redistricting or the allocation of Federal funds. The 
subcommittee and others, supported by analysis of the American 
Law Division of the Congressional Research Service [CRS], 
believe that this is a clear violation of the final 
decisionmaking authority and responsibility vested in the 
Commerce Secretary by the U.S. Congress under 13 U.S.C. 
Sec. 195. The regulation took effect on November 6, 2000.
3. The American Community Survey [ACS].
    a. Summary.--Currently in testing, the Census Bureau plans 
on implementing the ACS nationwide in 2003, subject to 
congressional approval and funding.
4. Continuing Census Operations.
    a. Summary.--There are decennial census operations that are 
still ongoing, as the Census Bureau is preparing census 2000 
apportionment and redistricting data for release by December 
31, 2000, and April 1, 2001, respectively. Additionally, inter-
censal surveys to determine economic, social, and demographic 
data for the Nation will continue to occur throughout the 
decade.
5. Review of Census 2000 Operations and Programs.
    a. Summary.--Decennial census operations such as the 
Accuracy and Coverage Evaluation, the paid advertising 
campaign, and the partnership program were used for the first 
time in census 2000. The success and cost effectiveness of 
these and other operations will be fully evaluated.
6. Americans Abroad.
    a. Summary.--Several Members of Congress have introduced 
legislation aimed at implementing a census of Americans 
residing overseas. While such a census did not occur as part of 
census 2000 decennial operations, the details of what is 
necessary to conduct such an operation in 2010 are being 
investigated.

                   Subcommittee on the Civil Service

                     Hon. Joe Scarborough, Chairman

    The subcommittee will continue its investigations and 
oversight work in the following areas within its jurisdiction:
    1. Monitoring the FEHBP/DOD demonstration project for 
military retirees.
    2. Monitoring OPM's administration of the FEHBP.
    3. Long-term care insurance program for Federal employees.
    4. Offering additional life insurance options to Federal 
employees.
    5. Accidental death and dismemberment insurance.
    6. Prescription drug costs in the FEHBP.

                Subcommittee on the District of Columbia

                     Hon. Thomas M. Davis, Chairman

    The subcommittee should continue its oversight of the 
following areas within its jurisdiction:
    1. Public safety.
    2. Economic development.
    3. Education.
    4. College access.
    5. District of Columbia Water and Sewer Authority.
    6. Washington Metropolitan Area Transit Authority.
    7. Efforts to re-open Pennsylvania Avenue.
    8. Receiverships.
    9. Fiscal stability.
    10. Health care.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, Chairman

    1. The Government Performance and Results Act.--The 
Government Performance and Results Act of 1993 seeks to improve 
the effectiveness, efficiency, and accountability of Federal 
programs by establishing a system for agencies to set goals for 
program performance and to measure results. The subcommittee 
will continue its oversight of the implementation of this act 
as performance reports are due for the first time from agencies 
by March 2000.
    2. Computer Security.--The subcommittee will continue its 
oversight of this ongoing issue. Federal agencies rely on 
computers and electronic data to perform functions that are 
essential to the national welfare and directly affect the lives 
of millions of individuals. The number of attacks on these 
vital systems continue to increase, both in terms of numbers 
and sophistication. The Federal Government must ensure that its 
computer systems and databanks are protected from these 
invasions.
    3. Federal Financial Management.--The subcommittee will 
continue a variety of oversight initiatives in the area of 
financial management. The Chief Financial Officers Act of 1990 
required agencies to audit revolving funds, trust funds and all 
funds that resembled commercial enterprises. The 1994 
Government Management Reform Act extended the CFO requirements 
to cover all agency resources, with agencywide audited 
financial statements due in March 1997, and Federal 
Governmentwide audited financial statements due in March 1998. 
The act is an important tool in improving the financial 
management of Federal departments and agencies. The 
subcommittee will continue its oversight of the financial 
management practices of Federal departments and agencies, which 
will include a review of individual agency audited financial 
statements in addition to an analysis of the consolidated 
governmentwide audited financial statement.
    4. Federal Acquisition Management.--The Federal Government 
procures more that $200 billion a year in goods and services to 
support its various missions. In recent years, a number of 
procurement reform laws have been enacted designed to 
streamline the acquisition process. These laws include the 
Federal Acquisition Streamlining Act, the Federal Acquisition 
Reform Act, the Information Technology Management Reform Act 
(also known as the Clinger-Cohen Act), and the Federal 
Activities Inventory Reform Act. The subcommittee will conduct 
oversight into whether these reform initiatives are assisting 
Federal agencies in accomplishing their missions in a more 
efficient and cost-effective manner. The subcommittee will also 
consider whether additional legislative initiatives are needed 
to improve the Federal acquisition process.
    5. Oversight of the U.S. Customs Service.--The subcommittee 
will continue its investigation into an imbalance in staffing 
by the U.S. Customs Service between the East and West Coasts. 
As part of this investigation, the subcommittee will review the 
Custom Service's progress in developing and implementing its 
resource allocation model.
    6. The Inspectors General Act.--The subcommittee will 
continue its investigation into operational issues surrounding 
the 1978 Inspector General Act. The subcommittee will focus on 
ways to make the Offices of Inspectors General more efficient 
and effective. The subcommittee will also continue its 
oversight into issues associated with the accountability and 
investigative practices of the Inspectors General.
    7. Federal Debt Collection.--The subcommittee will continue 
its oversight of the implementation of the Debt Collection 
Improvement Act of 1996. The subcommittee will also consider 
legislative amendments to the act with the goal of improving 
the collection rate of delinquent non-tax debts owed to the 
Federal Government.
    8. Federal Advisory Committee Act.--With the assistance of 
the General Accounting Office, the subcommittee will examine 
the current use of Federal advisory committees by the Federal 
Government. Hearings are anticipated.
    9. The Electronic Freedom of Information Act.--The 
subcommittee has jurisdiction over several governmentwide 
information laws, including the Freedom of Information Act, the 
Privacy Act, the Federal Advisory Committee Act, and the 
Government Sunshine Act.
    The subcommittee will conduct hearings on the Freedom of 
Information Act with particular emphasis on the role of 
electronic reporting in the timeliness of responses to Freedom 
of Information Act requests. In addition, the subcommittee will 
oversee implementation of the new provision in the OMB Circular 
A-110, extending the reach of the Freedom of Information Act to 
federally funded research data.
    10. Department of Labor Management Practices.--The 
subcommittee will continue its oversight of the management 
practices at the Department of Labor. In particular, oversight 
will be conducted of the Office of Workers' Compensation 
Programs and its adjudication of Federal injured workers 
claims.

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                     Hon. David McIntosh, Chairman

    The subcommittee will continue its investigations and 
oversight work in the following areas within its jurisdiction:
    1. Investigation of government-wide paperwork reduction 
initiatives and accomplishments and leadership in paperwork 
reduction by the Office of Management and Budget's Office of 
Information and Regulatory Affairs.
    2. Investigation of the Office of Management and Budget's 
Congressional Review Act guidance and agency compliance with 
the Congressional Review Act.
    3. Regulatory reform legislation.
    4. Investigation of the White House initiative on global 
climate change and the Kyoto protocol.

Subcommittee on National Security, Veterans Affairs, and International 
                               Relations

                    Hon. Christopher Shays, Chairman

    The subcommittee will continue investigations and oversight 
work in the following areas within its jurisdiction:
    1. The DOD anthrax vaccination program.
    2. Administration efforts to consolidate or bridge VA and 
DOD health care systems.
    3. VA implementation with fiscal year 1999 Omnibus 
Appropriations Act provisions regarding presumption of service-
connection for certain gulf war veterans' illnesses.
    4. Government-wide implementation and coordination of 
counter-terrorism programs.
    5. Results Act compliance status as Departments of Defense, 
State, Veterans Affairs, FEMA and NASA.
    6. Armed forces quality of life and other issues effecting 
recruiting and retention.
    7. VA/DOD/HHS joint management of research into causes and 
treatments of gulf war veterans illnesses.
    8. Management and scientific integrity of ongoing 
longitudinal research into the effects of exposure of agent 
orange.
    9. Status of U.S. participation in the Biological and Toxic 
Weapons Convention negotiations of an enforcement protocol by 
the Ad Hoc Working Group.
    10. Research, development and acquisition activities for 
chemical and biological defense equipment: masks, suits, 
detectors, decontamination equipment.
    11. VA initiatives to test and treat veterans at risk for 
Hepatitis C infection.
    12. Procurement processes being used to develop the Joint 
Strike Fighter [JSF] aircraft.
    13. Anti and counter terrorism planning and preparedness 
best practices used by cities and regions in Europe, Asia and 
the Middle East.
    14. DOD TriCare health system contracts, communications and 
program administration.
    15. Management and acquisition strategy of the DOD Joint 
Vaccine Acquisition Program [JVAP].
    16. DOD plans to upgrade computer capabilities and 
otherwise address a serious backlog of personal background 
investigations at the Defense Security Service.
    17. Military medical personnel training and specialties, 
and DOD methods to determine how medical readiness is matched 
to current threats and risks.
    18. VA and CDC management of pharmaceutical stockpiles to 
be used in the event of a WMD attack/event.
    19. Technology development and technology readiness 
measures in the National Missile Defense [NMD] program.
    20. CDC contract to purchase 40 million doses of smallpox 
vaccine.

                   Subcommittee on the Postal Service

                     Hon. John M. McHugh, Chairman

    The subcommittee will continue its investigations and 
oversight work in the following areas within its jurisdiction:
    Operation of the U.S. Postal Service.
    Reform of the Postal Service to meet the needs of the new 
millennium.
    The future of the Postal Service: can it compete with 
reorganized postal systems in the free world?
    The role of the Postal Service in the Universal Postal 
Union.
    Is there a need for the Postal Service to produce nonpostal 
products?
    The structure of the Board of Governors.
    Whether the Postal Service should continue its ability to 
regulate and compete with the entities it regulates.
    Labor management, sexual harassment, and discrimination in 
the workplace.
             VI. Projected Programs for the 107th Congress

                       Subcommittee on the Census

                       Hon. Dan Miller, Chairman

    In addition to ongoing oversight of all census programs and 
activities, the Subcommittee on the Census is planning on the 
following for the 107th Congress:
    1. Continued review and assessment of the technical merits 
of the accuracy and coverage evaluation [ACE], particularly in 
light of the Bureau's planned use of ACE for adjusting the 
census for redistricting purposes. This may prove not only 
scientifically unsound, but also illegal under the Constitution 
and public law.
    2. Closer examination of the long form issues and the 
Bureau's plan to replace the long form with the American 
Community Survey.
    3. Post-Decennial Census evaluations of all major phases of 
the census, particularly those that were new to the 2000 census 
(i.e., paid advertising, outreach and partnership with State, 
local, and private organizations and partnership with the 
Postal Service).
    4. Audit and evaluation of the budget of the Census Bureau.

   Subcommittee on Government Management, Information, and Technology

                      Hon. Stephen Horn, Chairman

    1. The Government Performance and Results Act.--The 
Government Performance and Results Act of 1993 seeks to improve 
the effectiveness, efficiency, and accountability of Federal 
programs by establishing a system for agencies to set goals for 
program performance and to measure results. The subcommittee 
will continue its oversight of the implementation of this act 
as performance reports are due for the first time from agencies 
by March 2000.
    2. Computer Security and Information Assurance.--Computer 
security is a daily challenge. The year 2000 technology 
challenge has exposed organizations to potential weaknesses in 
computer security management, principles, and practices. In 
1999, a series of computer viruses and reported Web site 
vandalism have illustrated how vulnerable computer systems and 
the data they hold are to outside attacks. Malicious hackers 
appear to be ubiquitous; security has become a round-the-clock 
challenge. The subcommittee will develop a framework to begin 
an in-depth review of computer security issues, including risk 
assessment, policies and related controls, awareness, and 
monitoring and evaluation.
    3. Federal Financial Management.--The subcommittee will 
continue a variety of oversight initiatives in the area of 
financial management. The Chief Financial Officers Act of 1990 
required agencies to audit revolving funds, trust funds and all 
funds that resembled commercial enterprises. The 1994 
Government Management Reform Act extended the CFO requirements 
to cover all agency resources, with agencywide audited 
financial statements due in March 1997, and Federal 
Governmentwide audited financial statements due in March 1998. 
The act is an important tool in improving the financial 
management of Federal departments and agencies. The 
subcommittee will continue its oversight of the financial 
management practices of Federal departments and agencies, which 
will include a review of individual agency audited financial 
statements in addition to an analysis of the consolidated 
governmentwide audited financial statement.
    4. Federal Acquisition Management.--The Federal Government 
procures more that $200 billion each year in goods and services 
to support its various missions. In recent years, a number of 
procurement reform laws have been enacted designed to 
streamline the acquisition process. These laws include the 
Federal Acquisition Streamlining Act, the Federal Acquisition 
Reform Act, the Information Technology Management Reform Act 
(also known as the Clinger-Cohen Act), and the Federal 
Activities Inventory Reform Act. The subcommittee will conduct 
oversight into whether these reform initiatives are assisting 
Federal agencies in accomplishing their missions in a more 
efficient and cost-effective manner. The subcommittee will also 
consider whether additional legislative initiatives are needed 
to improve the Federal acquisition process.
    5. Oversight of the U.S. Customs Service.--The subcommittee 
will continue its investigation into an imbalance in staffing 
by the U.S. Customs Service between the East and West Coasts. 
As part of this investigation, the subcommittee will review the 
Custom Service's progress in developing and implementing its 
resource allocation model.
    6. The Inspectors General Act.--The subcommittee will 
continue its investigation into operational issues surrounding 
the 1978 Inspector General Act. The subcommittee will focus on 
ways to make the Offices of Inspectors General more efficient 
and effective. The subcommittee will also continue its 
oversight into issues associated with the accountability and 
investigative practices of the Inspectors General.
    7. Federal Debt Collection.--The subcommittee will continue 
its oversight of the implementation of the Debt Collection 
Improvement Act of 1996. The subcommittee will also consider 
legislative amendments to the act with the goal of improving 
the collection rate of delinquent non-tax debts owed to the 
Federal Government.
    8. Federal Advisory Committee Act.--With the assistance of 
the General Accounting Office, the subcommittee will examine 
the current use of Federal advisory committees by the Federal 
Government. Hearings are anticipated.
    9. The Electronic Freedom of Information Act.--The 
subcommittee has jurisdiction over several governmentwide 
information laws, including the Freedom of Information Act, the 
Privacy Act, the Federal Advisory Committee Act, and the 
Government Sunshine Act.
    The subcommittee will conduct hearings on the Freedom of 
Information Act with particular emphasis on the role of 
electronic reporting in the timeliness of responses to Freedom 
of Information Act requests. In addition, the subcommittee will 
oversee implementation of the new provision in the OMB Circular 
A-110, extending the reach of the Freedom of Information Act to 
federally funded research data.
    10. Department of Labor Management Practices.--The 
subcommittee will continue its oversight of the management 
practices at the Department of Labor. In particular, oversight 
will be conducted of the Office of Workers' Compensation 
Programs and its adjudication of Federal injured workers 
claims.

   Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

                     Hon. David McIntosh, Chairman

    1. Investigation of government-wide paperwork reduction 
initiatives and accomplishments and leadership in paperwork 
reduction by the Office of Management and Budget's Office of 
Information and Regulatory Affairs.
    2. Investigation of the Office of Management and Budget's 
Congressional Review Act guidance and agency compliance with 
the Congressional Review Act, including agency use of non-
codified guidance documents.
    3. Additional regulatory reform legislation.
    4. Investigation of the White House initiative on global 
climate change and the Kyoto protocol.
               VII. Views of the Ranking Minority Member

                     Views of Hon. Henry A. Waxman

    This activities report is prepared by the committee's 
chairman and these minority views are submitted by the ranking 
minority member. Under the House rules, the report is not 
considered or voted on by the committee members. As a result, 
the report has not been approved by the committee and does not 
necessarily reflect the views of the committee.

                      I. Full Committee Activities

    The chairman's report on the full committee's activities in 
the 106th Congress contains numerous inaccuracies and 
omissions. Some of these are described below.

                   A. Campaign Finance Investigation

    The report discusses the testimony of several key figures 
in the campaign finance investigation, including Johnny Chung, 
John Huang, and Charlie Trie. The report is accurate in stating 
that these individuals acknowledged having personally 
participated in campaign finance illegalities. The report, 
however, fails to note that neither the testimony of these 
three individuals nor any of the other evidence received by the 
committee demonstrates that the President, Vice President, or 
any other senior Democratic Party or White House official was 
aware of or intentionally participated in any campaign finance 
illegalities. Further, contrary to the allegations made by the 
majority at the outset of the investigation, the evidence 
before the committee does not demonstrate that the White House 
was involved in ``selling or giving information to the Chinese 
in exchange for political contributions.'' \1\
---------------------------------------------------------------------------
    \1\ A minority staff report provides many additional examples of 
unsubstantiated allegations made by the majority. Minority Staff 
Report, House Government Reform Committee, ``Unsubstantiated 
Allegations of Wrongdoing Involving the Clinton Administration'' 
(October 2000).
---------------------------------------------------------------------------

                        B. E-Mail Investigation

    The report's description of the committee's investigation 
into White House e-mails contains several inaccuracies and 
omissions. The report fails to note that the committee found no 
evidence that the White House deliberately kept any e-mails 
from Federal or congressional investigators; in fact, in 1997 
the White House provided approximately 7,700 pages of e-mails 
to this committee on campaign finance matters alone. The report 
also fails to mention that the evidence received by the 
committee about alleged jail threats was inconclusive and 
contradictory. Nor is there any evidence to suggest that the 
Office of the Vice President deliberately attempted to archive 
its e-mails in a way that would evade subpoena compliance.
    The above points are discussed at greater length, along 
with a broader discussion of the e-mail investigation, in the 
minority views filed with the committee's e-mail report of 
December 4, 2000 (H. Rept. 106-1023).

             C. Investigation of the Department of Justice

    The report demonstrates an ongoing lack of perspective 
regarding the Justice Department. The report highlights trivial 
mistakes by the Justice Department, noting that a Justice 
Department official ``conceded'' that he had ``misspelled the 
name'' of a witness involved in a Justice investigation. At the 
same time, the report fails to include crucial information that 
conflicts with the majority's serious allegations about the 
Attorney General. Attempting to demonstrate that the Attorney 
General acted inappropriately in the campaign finance matter, 
the report focuses on memoranda by several individuals 
regarding the application of the Independent Counsel Act that 
took a view different from that of the Attorney General. The 
report fails to mention, however, that memoranda by several 
other individuals provided to the committee supported the 
Attorney General's position. The report also fails to note that 
numerous witnesses--including those who disagreed with the 
Attorney General's position--testified that disagreement over 
interpretation of the law is not unusual, that they believe the 
Attorney General reached her position in good faith, and that 
they believe she based her position on the facts and the law 
and not on political considerations.
    The report also asserts that the Justice Department gave 
``preferential treatment'' to the Vice President and President 
by giving them copies of their interview transcripts. The 
report fails to mention, however, that many other high-ranking 
officials--including several Republican officials--have been 
treated in exactly the same manner. For example, when Edwin 
Meese, the former Republican Attorney General, was investigated 
by an independent counsel, he was given a transcript of his 
deposition. When George Shultz, the former Republican Secretary 
of State, was interviewed by the Iran/Contra Independent 
Counsel, he was given a copy of a taped record of his session. 
When the House Ethics Committee interviewed former Speaker Newt 
Gingrich as part of its investigation into his ethical lapses, 
the committee provided him access to the transcripts. In fact, 
even this committee followed a similar procedure. When the 
committee interviewed the late former White House Counsel 
Charles Ruff in May 2000, the chairman gave Mr. Ruff a copy of 
the interview transcript. At the committee's July 20, 2000, 
hearing, the minority made the majority aware of this 
precedent, and introduced into the record letters by 
investigative counsel attesting to the fact that they used such 
similar procedures in previous investigations.
    The minority addressed the majority's inaccurate 
allegations regarding the Justice Department in detail in the 
minority views filed with the committee's December 13, 2000, 
report on the Justice Department (H. Rept. 106-1027).

                    D. Rebekah Poston Investigation

    The report states that Florida attorney Rebekah Poston was 
``involved in potentially illegal conduct,'' and that the 
``evidence showed that Ms. Poston . . . had hired private 
investigators who illegally obtained National Crime Information 
Center (NCIC) arrest record information.'' This assertion 
appears to be based on the premise that Ms. Poston instructed 
private investigators to break the law by accessing restricted 
information. No evidence received by the committee, however, 
demonstrated that Ms. Poston instructed private investigators 
to break the law or otherwise was ``involved in'' illegal 
conduct. In fact, the two private investigators hired by Ms. 
Poston testified to the committee that Ms. Poston did not ask 
them to break the law.
    The report also asserts that Ms. Poston received ``highly 
unusual favors'' from the Justice Department that resulted in 
her ``obtain[ing] the information she sought from the Justice 
Department.'' This statement concerns a decision by the Justice 
Department to confirm the lack of existence of records in 
response to a Freedom of Information Act request by Ms. Poston. 
The report fails to mention that this decision by the Justice 
Department to confirm the lack of records was legal, and the 
information provided to Ms. Poston was adverse to the interests 
of the client for whom Ms. Poston sought the information.\2\
---------------------------------------------------------------------------
    \2\ In the House Government Reform Committee's report entitled, 
``Janet Reno's Stewardship of the Justice Department: A Failure To 
Serve the Ends of Justice'' (Dec. 13, 2000) (H. Rept. 106-1027), the 
majority makes numerous inaccurate statements about the Poston matter. 
The minority views of that report discuss these inaccuracies. Ms. 
Poston's attorney, C. Boyden Gray, also took issue with the majority's 
report in a Dec. 11, 2000, letter to Chairman Dan Burton, which is 
attached as exhibit 1.
---------------------------------------------------------------------------

   E. Investigation of the President's Decision to Grant Clemency to 
                       Puerto Rican Nationalists

    The section of the report on the President's decision to 
grant clemency to individuals in two Puerto Rican groups, 
Fuerzas Armadas Liberacion Nacional Puertoriquena [FALN] and 
the Ejercito Popular Boricua (Los Macheteros), discusses the 
President's assertion of executive privilege over a small 
number of documents. The report states that this assertion of 
privilege made it ``impossible for the committee to come to any 
solid conclusions about the clemency.'' It fails to 
acknowledge, however, that this assertion of executive 
privilege was entirely justified. The Constitution entrusts the 
clemency power solely and exclusively to the President. The 
Presidential communications relating to clemency decisions 
clearly fall within the parameters of executive privilege as 
defined by the Supreme Court. As noted by the Washington Post, 
``if executive privilege does not cover the Puerto Rico flap, 
it does not meaningfully exist.'' \3\
---------------------------------------------------------------------------
    \3\ ``Executive Privilege--Again,'' Washington Post (Sept. 19, 
1999).
---------------------------------------------------------------------------

            F. James Prince/Rap-A-Lot Records Investigation

    The report unfairly and irresponsibly insinuates 
interference by the Vice President in the Drug Enforcement 
Administration's investigation of the James Prince/Rap-A-Lot 
Records matter. On November 4, 2000, the Dallas Morning News 
reported that the chairman said the Department of Justice is 
purposely interfering with the committee's investigation, 
charging that, ``Janet Reno is blocking, and I believe, 
obstructing justice for political reasons.'' Discussing Mr. 
Prince, Mr. Burton further stated, ``He gives a million to a 
church, the vice president goes to that church, and two days 
later, somebody [says they're] closing the case? Something's 
wrong. They're blocking us because I think they're afraid that 
this might be an embarrassment to the vice president.'' No 
evidence in the committee record, however, supports these 
allegations or demonstrates any interference or any wrongdoing 
whatsoever on the part of the Vice President in this matter. 
Nor does any evidence demonstrate inappropriate actions on the 
part of the Attorney General in this matter.
    The report also states that the Rap-A-Lot investigation was 
shut down in 1999, apparently as a result of political 
pressure. This conclusion ignores the clear testimony of Ernest 
Howard, the DEA Special Agent in Charge of the Houston Field 
Division. Mr. Howard testified that he never shut down the 
investigation. Rather, during the pendency of a DEA Office of 
Professional Responsibility investigation into allegations of 
misconduct by DEA agents working on the Rap-A-Lot 
investigation, he directed that all ``proactive investigation'' 
be suspended unless he or one of his Associate Special Agents 
in Charge gave special approval. The Deputy Administrator and 
Chief Inspector of the DEA testified that such action was not 
unusual and was fully consistent with DEA practice. The 
report's conclusion that the investigation was abruptly 
curtailed on account of political interference ignores all 
evidence inconsistent with its theory, including (1) Mr. 
Howard's explanation that he was expressing anger and 
frustration in his March 1999 e-mails and that he never 
actually terminated the Rap-A-Lot investigation; (2) Mr. 
Howard's explanation that he believed in August 1999 that the 
Rap-A-Lot investigation was at an unproductive stage and that 
there was little benefit in continuing proactive investigation; 
and (3) documentary evidence provided by Special Agent James 
Nims that fully supports Mr. Howard's recollection of events.

                  G. Dietary Supplements Investigation

    The report fails to include facts that contradict the 
majority's theories about the safety of certain dietary 
supplements. For example, in the description of the hearing 
entitled, ``How Accurate is the FDA's Monitoring of Supplements 
Like Ephedra,'' the report asserts that ``part of the problem 
with the ephedra issue was that a small number of companies 
marketed products specifically for purposes of abuse'' and that 
ephedra is dangerous primarily in high doses. The report 
ignores the testimony of Dr. Raymond Woosley, the chairman of 
the Department of Pharmacology at Georgetown University Medical 
Center, and a member of a Food and Drug Administration [FDA] 
advisory committee that reviewed the scientific evidence about 
ephedra accumulated by the FDA. On the basis of this review, 
Dr. Woosley concluded that, in fact, there was no safe dose 
level of ephedrine that could be recommended for use in dietary 
supplements.

                       H. Vaccines Investigation

    The report also fails to include facts that contradict its 
theories about the dangers of certain vaccines. In describing 
the committee's investigation into an alleged link between 
vaccines and autism, the report asserts that autism rates have 
seen a dramatic increase in the last two decades. The report 
does not mention the testimony of Dr. Coleen Boyle, an 
epidemiologist with the Centers for Disease Control and 
Prevention [CDC], who testified that autism rates may be going 
up simply because there have been changes in the definition of 
autism and improved recognition of autism that may have 
affected the number of diagnoses in recent years.
    The report also criticizes the Department of Health and 
Human Services for its position that there is no evidence of a 
link between autism and vaccines. The report fails to note, 
however, the fact that several expert panels convened by the 
British Government and the World Health Organization examined 
the theory that the Measles Mumps Rubella [MMR] vaccine can 
cause autism and concluded that there was no evidence of a 
link. Nor did the report mention Swedish and Finnish 
epidemiological studies that found no causal connection between 
autism and the MMR vaccine.
    The report describes an investigation into alleged 
conflicts of interest among members of FDA and CDC advisory 
committees that consider vaccines. The report claims to have 
identified a number of problems regarding conflicts of 
interest. However, the report fails to mention the testimony of 
Marilyn Glynn of the Office of Government Ethics [OGE] 
regarding the OGE's most recent reviews of the CDC's and FDA's 
conflict of interest programs. According to Ms. Glynn's 
testimony, OGE found that the FDA had a very good program that 
was operating quite well and that the CDC had a sound ethics 
program that could use greater staff resources.
    In its discussion of an investigation into an alleged 
association between vaccines containing a mercury-based 
preservative, thimerosal, and autism, the report ignores the 
testimony of the CDC that there is no evidence of an 
association between thimerosal in vaccines and autism. The 
report criticizes the FDA for not using its authority to remove 
thimerosal from the market, but it fails to mention that the 
FDA is working with industry to remove thimerosal from vaccines 
as quickly as possible and that the entire childhood 
immunization schedule is currently available without 
thimerosal.

                    I. Anthrax Vaccine Investigation

    Most minority committee members agreed with at least some 
findings presented in the report on the Department of Defense 
anthrax program prepared by the Subcommittee on National 
Security, Veterans Affairs, and International Relations (see 
Section II.G, the minority views on the activities of the 
subcommittee). However, the full committee chairman conducted 
his own investigation into the issue in a manner that omitted 
relevant facts and ignored significant expert findings.
    For example, at the March 9, 2000, committee meeting to 
consider the report on the Department of Defense anthrax 
program, Chairman Burton raised the case of Kevin Edwards. He 
displayed photographs of Mr. Edwards's bruised body and claimed 
that his illnesses were caused by the anthrax vaccine. But 
Chairman Burton failed to disclose that Mr. Edwards's case had 
been considered by the Anthrax Vaccine Expert Committee [AVEC]. 
AVEC provides an independent expert assessment of adverse 
events reported for the anthrax vaccine. AVEC's findings were 
fundamentally different from Chairman Burton's conclusions. The 
ranking member sent the chairman a letter to this effect on 
March 17, 2000, requesting that the hearing record be 
corrected.
    At the October 3, 2000, hearing, 10 witnesses were invited 
by the chairman to testify about illnesses caused by anthrax. 
But according to Major General Randall West, only one had a 
verified causative relation to the anthrax vaccine:

        What I would tell you sir is that of all the people 
        that were here today, there was only one person that 
        has a medical diagnosis that directly links it to the 
        vaccine, and that was only a portion of his medical 
        problems.

J. Investigation of ``National Problems, Local Solutions: Federalism at 
                    Work--Tax Reform in the States''

    This section of the report fails to point out that it is 
the strong economic growth under President Clinton--the longest 
peace time expansion in history--that has made the so-called 
``Republican'' tax cuts possible.

  K. Investigation of Reforms in the Department of Housing and Urban 
                           Development [HUD]

    The report repeats a hearing title that is demonstrably 
inaccurate: ``HUD Losing $1 Million Per Day: Promised Reforms 
Slow in Coming.'' Despite the title of the hearing, held on 
March 23, 1999, Federal Housing Commissioner William Apgar 
testified that the Mutual Mortgage Insurance Fund netted $1.55 
billion to the Federal Treasury in 1998. According to HUD 
estimates, that figure was projected to increase to $2.14 
billion in 1999 and to $2.48 billion in 2000. Commissioner 
Apgar testified that the $1 million per day figure, cited by 
the HUD Office of Inspector General and reported in the 
Washington Times, represented only the holding costs for 41,000 
properties in FHA's inventory. It did not take into account the 
proceeds from the sale of properties or the premiums from 
mortgage insurance. When these figures are included, the Mutual 
Mortgage Insurance Fund does not lose any money, much less $1 
million per day. Rather, it was a profit center that 
contributed to a reduction in the Federal account deficit.

   L. Investigation of ``Current Regulation of Federal Wetlands, in 
   Particular the Area Owned by Mr. John Pozsgai of Morrisville, PA''

    This section of the report contains erroneous conclusions 
that are not supported by the record. Private property rights 
are a key issue in Federal wetlands policy. However, it is not 
just the property rights of the developer that are at issue. 
The property rights of those who are negatively impacted by 
unnecessary development of wetlands also must be protected. The 
unnecessary development of wetlands can increase the likelihood 
of costly floods for the entire neighborhood. Also, property 
values and the public health are threatened by the loss of a 
natural water purifying system. And the public interest is 
harmed when wetlands are developed because an important 
ecosystem is destroyed and habitat for migratory birds and 
endangered plants and animals is lost. The report also fails to 
note that Mr. Pozsgai's punishment was the result of the fact 
that he continuously and willfully ignored court orders and 
notices to stop filling his wetlands until he obtained a 
permit.

   M. Investigation of Drug Trafficking through Cuba and Puerto Rico

    In the section discussing a January 3-4, 2000, field 
hearing on drug trafficking through Cuba and Puerto Rico, the 
report refers to the joint investigation by this committee and 
the International Relations Committee of a Colombian Government 
seizure of 7.2 tons of cocaine in Cartegena. The report states 
that ``the Committee firmly believes the drugs were ultimately 
destined for the United States, possibly through Mexico.'' This 
conclusion, apparently intended to compel a Presidential 
finding that Cuba is a major transshipment country for illicit 
drugs bound for the United States, is at odds with an all-
source U.S. Government interagency assessment, which could not 
determine with any degree of certainty the final destination of 
the drug shipment. At a committee hearing held November 17, 
1999, Assistant Secretary of State Rand Beers testified that 
``[w]hile we cannot state with absolute certainly where the 
shipment was ultimately destined, the preponderance of 
information indicates that it was destined for Spain.'' At the 
same hearing, the chief of international operations for the 
Drug Enforcement Agency [DEA] added that ``at this stage of the 
investigation, DEA has no evidence regarding the final 
destination of the cocaine-laden containers beyond Cuba. Our 
best assessment of all available information currently 
indicates that Spain was the most likely destination for the 
cocaine shipment after it reached Cuba.''

     N. Investigation of Russian Threats to United States Security

    In the section discussing a January 4, 2000, field hearing 
on Russian threats to United States security in the post cold 
war era, the report states that ``Stanislav Lunev [a former 
Soviet military intelligence colonel] gave compelling testimony 
about how the Soviet government asked him to find locations in 
the Washington, DC area to hide weapons of mass destruction.'' 
Mr. Lunev, however, never testified that he was asked to find 
locations specifically for weapons of mass destruction, nor did 
he confirm that such weapons were ever hidden in the United 
States.

                      II. Subcommittee Activities

                     A. Subcommittee on the Census

1. Investigations
    During the 106th Congress, the Subcommittee on the Census 
made repeated attempts to call into question the quality of the 
management of census operations. It is clear now that the 2000 
census was a management success. The public responded to the 
census call by reversing a 30-year decline in the mail-back 
response rate. At the same time, census offices opened on time 
and were staffed and ready to go to work when the mail-back 
period ended; and milestones were met or exceeded throughout 
the country. Where problems arose, swift action by the regional 
offices or from Washington got things back on course. 
Preliminary analysis of the 2000 apportionment numbers suggest 
that this census is closer to the expected total population 
than any previous census.
    The majority's report on the census 2000 includes a section 
called the ``Rushed Census'' which fails to accurately reflect 
the facts. In fact, the 2000 census is on track to be the 
fairest, most accurate census our Nation has ever conducted. 
The census to date is an operational success. Beginning with a 
mail-back response rate of 67 percent, reversing a decades-long 
decline, every major operation has been completed on or ahead 
of schedule and on budget. Early indications are that the count 
may well be the most complete in history. Any fair reading of 
the 2000 census would include an extended discussion of these 
successes, which the majority has neglected. However, even with 
these successes, it is impossible to eliminate the differential 
undercount without the use of modern scientific methods.
    A majority staff report in July 2000 on 16 local census 
offices was based on data supplied by the Census Bureau to the 
subcommittee, data which senior Bureau staff repeatedly 
emphasized to the subcommittee staff are easily misinterpreted. 
Those cautions were ignored, and the resulting staff report 
seriously misrepresented the quality of the census effort in 
the profiled offices. The staff report relied on national 
check-in summary data. The data was never intended to be 
analyzed in isolation or without a comprehensive understanding 
of the conditions within each local census office. The 
Inspector General of the Commerce Department conducted a review 
of the 16 local offices cited in the majority's staff report. 
Perhaps most tellingly, it recommended corrective action in 
only 2.\4\
---------------------------------------------------------------------------
    \4\ Letter from Inspector General Johnny Frazier to Representative 
Dan Miller (Oct. 18, 2000).
---------------------------------------------------------------------------
    Throughout the 106th Congress, the subcommittee also 
questioned the statistical methods proposed for the 2000 
census. While the results of that effort are not yet known, the 
operational success of the 2000 census forebodes operational 
success in the accuracy and coverage evaluation program.
    There is overwhelming support within the statistical 
community for the use of statistical methods to correct for the 
errors in the census. The most recent report from the National 
Academy of Sciences' panel on the census said, ``Change is not 
the enemy of an accurate and useful census; rather, not 
changing methods as the United States changes would inevitably 
result in a seriously degraded census.'' \5\ The President of 
the Population Association of America has said, ``The planned 
and tested statistical innovations [in the census] have the 
overwhelming support of members of the scientific community who 
have carefully reviewed and considered them. If their use is 
severely limited or prohibited, the 2000 Census planning 
precess will be obstructed, and the result could be a failed 
census.'' \6\ The planned use of statistical methods in the 
2000 census has also been endorsed by the General Accounting 
Office and the Department of Commerce Inspector General.
---------------------------------------------------------------------------
    \5\ Panel on Alternative Census Methodologies, Committee on 
National Statistics, National Research Council, ``Measuring a Changing 
Nation: Modern Methods for the 2000 Census'' (1999).
    \6\ Letter from Douglas S. Massey (June 1996).
---------------------------------------------------------------------------
    Commenting on the Census Bureau plan developed in response 
to the Supreme Court's January 25, 1999, decision, the National 
Academy of Sciences Panel to Review the 2000 Census wrote that 
it ``represents good, current practice in both sample design 
and post-stratification design, as well as in the 
interrelationships between them.'' \7\
---------------------------------------------------------------------------
    \7\ National Academy of Sciences, Committee on National Statistics, 
``Letter Report of the Panel on Census Requirements in Year 2000 and 
Beyond'' (May 3, 1999).
---------------------------------------------------------------------------
    In a subsequent letter, that panel said it ``commends the 
Census Bureau for the openness and thoroughness with which it 
has informed the professional community about the kinds of 
evaluations that it plans to conduct of the census and the 
A.C.E. data prior to March 2001.'' The panel further wrote, 
``The papers presented at the panel workshop provide evidence 
of the hard work and professional competence of Census Bureau 
staff in specifying a series of evaluations that can inform the 
adjustment decision.'' \8\
---------------------------------------------------------------------------
    \8\ National Academy of Sciences, Committee on National Statistics, 
``Letter Report of the Panel on Census Requirements in Year 2000 and 
Beyond'' (Nov. 9, 2000).
---------------------------------------------------------------------------
    The 1990 census had serious problems. The net undercount 
increased by 50 percent over 1980. The error level was over 10 
percent. There were 8.4 million people missed, 4.4 million 
people counted twice, and 13 million people counted in the 
wrong place. Despite these facts, the majority wants to block 
the use of statistical methods and rely on methods guaranteed 
to repeat the errors of the past. Throughout the 106th 
Congress, the majority failed to identify a single alternative 
that would correct for persons missed in the census, and even 
went so far as to consider introducing legislation to block the 
correction for persons counted twice. This would result in 
missing millions of people, and incorrectly counting millions 
of others twice. Turning history on its head, the majority has 
tried to portray the attempts to correct the 1990 census as a 
failure of statistical methods. In fact, the efforts to correct 
the 1990 census failed because political appointees in the 
Reagan administration forced the Census Bureau to reduce the 
sample size of the survey to correct for errors in the census. 
This political interference resulted in the inability of the 
survey to identify differences for small areas, which President 
Bush's Secretary of Commerce then cited as his reason for not 
using the survey to correct the census.
    While the operational successes of the 2000 census should 
be applauded, it goes without saying that it will not be 
perfect. As long as inequities remain in the census, we must 
continue to insist that the Census Bureau seek remedies to 
those inequities.
2. Laws within the Jurisdiction of the Committee
    As the majority report points out, on January 25, 1999, in 
Department of Commerce v. United States House of 
Representatives, 525 U.S. 316 (1999), the Supreme Court ruled 
by a narrow 5 to 4 majority that the use of statistical 
sampling in the census was prohibited by law (13 U.S.C. 195) 
for the purpose of apportioning seats in the House of 
Representatives among the States. Since the court decided the 
case on statutory grounds, it found no need to decide whether 
the Constitution also barred the use of modern statistical 
methods for purposes of congressional apportionment.
    However, the majority fails to mention that the court went 
on to affirm that the law requires the Secretary of Commerce to 
use modern statistical methods, where feasible, for all other 
purposes. Writing for the majority, Justice O'Connor stated 
that the 1976 amendments to Title 13 U.S.C. changed the 
provision in law from one that ``permitted the use of sampling 
for purposes other than apportionment into one that required 
that sampling be used for such purposes if `feasible.' '' 
Justices Rehnquist, Scalia, Kennedy, and Thomas joined Justice 
O'Connor. Furthermore, in dissenting opinions, Justices Breyer, 
Stevens, Souter, and Ginsburg expressed their belief that 
sampling should be allowed for both apportionment and 
nonapportionment purposes. Thus, all nine Justices supported 
the use of statistical methods for nonapportionment purposes.
    Therefore, the Census Bureau is now required, if feasible, 
to use statistical methods for purposes of allocating Federal 
funds and providing data to States for redistricting.
3. Legislation
    The majority's review of legislation during the 106th 
Congress omits any mention of the minority's position. Our 
views on the six bills which were reported by the full 
committee can be found more fully in the reports on them. Two 
deserve particular mention.
    H.R. 472, the ``Local Census Quality Check Act,'' would 
have added a new section to the Census Act to require a post 
census local review [PCLR] program very similar to the one 
conducted after the 1990 census. Dr. Barbara Bryant, Director 
of the Census Bureau during the Bush administration, testified 
before the Census Subcommittee that ``Postcensus local review 
in 1990 was a well intentioned, but ineffective, operation. . . 
. Rather than repeat postcensus local review, with its 
disappointing and minuscule results, the Census Bureau 
determined to find a way for local governments to more fully 
participate in the census.'' \9\ The majority's discussion also 
fails to mention the significant opposition the bill engendered 
from local elected officials around the country--the very 
people the PCLR program was designed to help. The 1990 program 
cost $9.6 million and added about 81,000 housing units (about 
0.08 percent) to the census rosters, and 30 percent of these 
units added were vacant. Because of those disappointing 
results, Congress passed, in 1994, the Address List Correction 
Act, sponsored by Representatives Sawyer (D-OH) and Ridge (R-
PA), amending Title 13 U.S.C. to create a pre-census local 
review process. This law allows the Census Bureau to share its 
address list with local government officials, and for the 
address list to be modified based on local government input.
---------------------------------------------------------------------------
    \9\ Testimony of Dr. Barbara Bryant before the Subcommittee on the 
Census (Feb. 11, 1999).
---------------------------------------------------------------------------
    H.R. 928, the ``2000 Census Mail Outreach Improvement 
Act,'' would have required either a blanket or targeted second 
mailing of the census questionnaire. Neither would be a good 
idea. The Census Bureau tested a blanket second mailing in a 
dress rehearsal and it didn't work. About 40 percent of the 
``second'' forms returned during the dress rehearsal were 
duplicates. If that rate had been repeated at the national 
level in 2000, there would have been over 11 million 
duplicates, which would have significantly delayed data 
processing operations and potentially introduced significant 
errors into the data. A National Academy of Sciences panel also 
advised that a blanket second mailing could reduce the accuracy 
of the census. A targeted second mailing would have delayed the 
beginning of nonresponse follow-up operations by at least a 
month. Experience and research indicate that the longer the 
delay between Census Day and the start of nonresponse follow-
up, the more inaccuracies are introduced to the census data.

                  B. Subcommittee on the Civil Service

    The minority has no additional views on this section of the 
report.

 C. Subcommittee on Criminal Justice, Drug Policy, and Human Resources

    The report fails to include pertinent facts and testimony 
in its descriptions of subcommittee hearings. For example, the 
report states that the subcommittee hearing on the 
applicability of the Privacy Act to the White House highlighted 
``past privacy abuses by the Clinton administration.'' What the 
majority characterizes as ``privacy abuses,'' however, were 
actually actions taken by the Executive Office of the President 
[EOP] based on the long-standing policy that the Privacy Act 
does not apply to the EOP. This policy, first articulated by 
then-Assistant Attorney General Antonin Scalia (now an 
Associate Supreme Court Justice) in April 1975, has been 
adopted by every administration since 1975, both Democratic and 
Republican.

              D. Subcommittee on the District of Columbia

    The minority has no additional views on this section of the 
report.

 E. Subcommittee on Government Management, Information, and Technology

1. Investigations
            a. ``Making the Federal Government Accountable: Enforcing 
                    the Mandate for Effective Financial Management''
    The activities report repeats conclusions drawn in two 
majority reports: House Report 106-170 and House Report 106-
802. Members of the minority agreed that much work remains to 
be done with regard to Federal financial accountability; 
however, the assignment of poor grades to agencies merely 
politicizes the process and does not take into account the 
different circumstances and successes the Federal Government 
has made to date. The position taken by members of the minority 
is explained in the minority views to the majority reports.
            b. ``Management Practices at the Office of Workers' 
                    Compensation Programs, U.S. Department of Labor''
    The activities report discusses the findings in House 
Report 106-1024. Minority members agreed with the 
recommendation that the Office of Workers' Compensation 
Programs [OWCP] improve its communications problems and improve 
its customer services. However, the majority report lacked 
balance, did not adequately acknowledge the progress the OWCP 
has made to date, and failed to sufficiently document many of 
its recommendations. The position taken by members of the 
minority is explained in the minority views to the majority 
report.
            c. ``How Vulnerable Are Federal Computers?''
    The activities report discusses the subcommittee's 
assignment of poor grades to agencies on the quality of their 
computer security policies. The assignment of grades, however, 
politicizes the process and does not take into account the 
special circumstances faced by the Federal Government and the 
successes the Federal Government has made to date. 
Additionally, the subjective format of the grading system 
could, in some cases, unfairly portray the significant efforts 
an agency has made to take corrective action. It should be 
noted that not all agency computer systems are critical to 
national security, and that Congress has not always provided 
adequate funding to agencies so that they might meet the 
requirements. Improving Federal computer security is a very 
complicated, timely, and costly process. While some agencies 
have been moving forward, it is clear that the Federal 
Government has a long way to go before an effective, 
comprehensive Federal computer security system is in place.
            d. Creating an Office of Management
    The activities report's conclusion that there is a need for 
a statutorily-mandated Office of Management within the 
executive branch is questionable. Office of Management and 
Budget [OMB] Director Jack Lew, in his April 7, 2000, testimony 
before the subcommittee, noted that ``In the real world, 
resource allocation and management are fundamentally 
interdependent. Given the complex systems that are necessary to 
address public problems, we must operate with the consideration 
of management and budget together, not apart. This reflects the 
realization that these two sets of concerns are in fact 
intertwined in actual operations.'' He further noted that OMB 
provides the President with the management expertise through 
OMB's Resource Management Offices [RMOs]. The Director stated 
that ``RMOs play a pivotal role in . . . management guidance to 
Federal agencies. Staff are experts in their program and policy 
areas and are responsible for . . . implementation of 
government-wide management initiatives. While each unit has its 
own focus, OMB . . . fulfills its responsibilities because of 
continuing collaboration among its offices and divisions.''
    Additionally, OMB already has a mechanism in place to 
address critical management challenges facing the Federal 
Government. In order to improve government management, each 
year the Director of OMB, after consulting with the President, 
the Vice President, and others in the administration, 
designates a series of Priority Management Objectives [PMOs]. 
Issues designated as PMOs receive coordinated, sustained, and 
intensive management attention. For example, in 1999 PMO No. 1 
was the year 2000 challenge. In 2000, PMO No. 1 was to use 
performance information to improve program management and make 
better budget decisions; improving financial management 
information was PMO No. 2.
     It is unclear whether creating a new management agency 
will improve government management or whether separating 
management functions from budget functions will backfire and 
result in less attention being placed on management reform at 
Federal agencies. Presidents can create organizations within 
the executive branch that focus on management reform. In 
addition, a number of high-level interagency working groups 
focused on improving government management have taken hold, 
such as the Chief Financial Officers Council and the Chief 
Information Officers Council. Alternative approaches to 
improving management should be encouraged and explored. An 
Office of Management is just one approach.
2. Legislation
    The Cyber Security Information Act of 2000, H.R. 4246, as 
discussed in the activities report, seeks to secure the 
disclosure and protected exchange of information related to 
cyber security between the public sector and the private 
sector. It is important to appreciate the need to protect our 
critical infrastructure and support the efforts being made to 
create public-private partnerships for the sharing of 
information. However, the Freedom of Information Act [FOIA] has 
worked extremely well over the last 25 years, ensuring public 
access to important information while protecting against 
specific harms that could result from certain disclosures. As 
currently drafted, FOIA provides protections for national 
security, trade secrets, and personal information. Overly broad 
new exemptions are unnecessary and could adversely impact the 
public's right to oversee important and far-reaching 
governmental functions. Any action by the subcommittee to 
provide information assurance to critical infrastructure 
industries should be carefully weighed against preserving the 
public's fundamental right to know.

  F. Subcommittee on National Economic Growth, Natural Resources, and 
                           Regulatory Affairs

1. Investigations
            a. Legal Effect of Agency Guidance Documents
    As described in detail in the minority views filed with the 
committee's October 26, 2000, report (H. Rept. 106-1009), some 
of the subcommittee's conclusions regarding the effect of 
agency guidance are not supported by the record. Both the 
regulated community and the public appreciate when agencies 
provide compliance assistance and quickly answer questions 
about the effect of statutes and regulations. In fact, Congress 
passed the Small Business Regulatory Enforcement Fairness Act 
in 1996 in part to mandate that agencies provide guidance to 
small businesses and answer questions asked by the public. Any 
recommendations for change to the guidance process should not 
discourage agencies from providing timely compliance 
assistance.
            b. Paperwork Reduction
    Many conclusions in this section of the report are 
controversial and are not supported by the record before the 
subcommittee. This section of the report relies heavily on 
General Accounting Office testimony regarding paperwork 
reduction provided on April 15, 1999, and April 12, 2000. 
However, the report fails to point out that GAO found that much 
of the paperwork increase was due to factors outside the 
control of the Office of Management and Budget [OMB] and the 
agencies. GAO testified that approximately 90 percent of the 
increase in the paperwork burden in fiscal year 1999 was 
attributable to the Internal Revenue Service [IRS]. Most of 
this increase was due to increased economic activity and 
implementation of tax cuts passed by Congress.
            c. Congressional Review Act
    The conclusions in this section of the report are 
controversial and not necessarily supported by the record 
before the subcommittee. There is a great deal of disagreement 
over which agency statements are covered by the Congressional 
Review Act [CRA]. Many experts believe that the CRA would be so 
burdensome as to be impractical if its requirements were 
interpreted broadly, as the subcommittee recommends.
            d. Global Climate Change
    This section of the report is full of erroneous conclusions 
that are contradicted by much of the evidence and testimony 
presented to the subcommittee. Many of the subcommittee's 
conclusions are based on studies sponsored by fossil fuel 
industries responsible for a significant amount of greenhouse 
gas emissions. Moreover, the record does not indicate that the 
administration has attempted backdoor implementation of the 
Kyoto protocol.
    Fundamentally, the majority has conducted committee 
activity on climate change as though it is unaware of the 
United Nations Framework Convention on Climate Change [UNFCCC] 
which was negotiated by President Bush and ratified by the 
United States Senate. In this international agreement, the 
United States committed to the objective of stabilizing 
greenhouse gas concentrations at a level that would prevent 
dangerous interference with the climate system. The UNFCCC 
includes a commitment to implement national policies to reduce 
greenhouse gas emissions.
    Regardless of the status of the Kyoto protocol, the United 
States has already agreed to reduce greenhouse gas emissions, 
and is obligated to do so. This fact reveals the falsehood of 
the majority's basic premise that no activity on climate change 
can be undertaken without effectively implementing the Kyoto 
protocol.
            e. Other Environmental Protection Agency [EPA] Initiatives
    This section of the report is controversial and not 
necessarily supported by the record before the subcommittee. 
The Tier II/Gasoline Sulfur rule establishes more protective 
tailpipe emissions standards for all passenger vehicles, 
including sport utility vehicles [SUVs], minivans, vans, and 
pick-up trucks. It closes a significant loophole by ensuring 
that SUVs and other light-duty trucks are subject to the same 
pollution standards as cars. It also lowers standards for 
sulfur in gasoline, which will ensure the effectiveness of low 
emission-control technologies in vehicles and reduce harmful 
air pollution. When the new tailpipe and sulfur standards are 
implemented, Americans will benefit from the clean-air 
equivalent of removing 164 million cars from the road. These 
new standards require passenger vehicles to be 77 percent to 95 
percent cleaner than those on the road today and reduce the 
sulfur content of gasoline by up to 90 percent. The rule is 
supported by the States, environmental groups, automakers, and 
oil companies.
    The report also fails to point out that EPA, courts, and 
powerplant owners themselves apparently disagree with the 
subcommittee's view that life extension projects, capacity 
expansion projects, and other modifications of powerplants 
should not subject a facility to new source review. Three major 
utilities have settled their enforcement actions with EPA and 
have agreed to modernize their powerplants and achieve major 
air pollution reductions.
            f. Department of Labor
    This section of the report which addresses the ``Baby UI'' 
and ergonomics rules is full of erroneous conclusions that are 
contradicted by much of the evidence presented to the 
subcommittee.
    The report fails to note that ergonomic injuries account 
for one third of all workplace injuries, costing American 
workers and businesses billions of dollars a year. The 
ergonomics rule is expected to save $2 for every $1 spent on 
compliance (estimates indicate annual benefits of $10 billion 
and annual costs of $4.9 billion).
    Furthermore, the subcommittee's investigation of the 
ergonomics rule was flawed. For instance, the majority took the 
unusual step of asking professors, graduate students, and other 
private individuals to gather, copy, and send documents that 
could have been more easily obtained directly from the 
Department of Labor. These requests for information employed an 
intimidating tone, causing the individuals to be concerned that 
they might need to hire legal counsel. In addition, the 
majority staff called Department of Labor staff at home to 
request information. And the majority levied personal attacks 
on public servants instead of focusing on the merits of the 
ergonomics proposal.
    The report also inaccurately states that the Department of 
Labor did not provide information which it had promised to 
deliver to the subcommittee before Congress adjourned. This 
information was provided.
    Moreover, in discussing a possible conflict of interest, 
the report fails to discuss applicable conflict-of-interest 
laws and government-wide ethics regulations. The staffer in 
question met and exceeded all of these legal requirements.
    Similarly, in its discussion of the Department of Labor's 
use of independent contractors, the report fails to mention the 
Department of Labor's Inspector General's Semiannual Report to 
Congress, which addressed the use of contractors in ergonomics 
rulemaking by the Occupational Safety and Health Administration 
[OSHA]. The report found:
          LOSHA has long used contractors to review 
        comments and testimony in other rulemakings;
          Lthere are quality controls and checks in 
        place to ensure that the contractors are not working 
        without OSHA oversight;
          Lcompetitive procedures were generally used 
        to select these contractors.\10\
---------------------------------------------------------------------------
    \10\ Department of Labor, Inspector General, ``Semiannual Report to 
the Congress,'' 65 (Apr. 1, 2000 to Sept. 30, 2000).
---------------------------------------------------------------------------
    Also, the report cites anonymous communications at length 
without confirming the allegations in those communications by 
independent subcommittee investigation. Thus, the report 
appears to give rumors the status of subcommittee findings.
            g. State Waiver Requests
    This section of the report recommends streamlining the 
waiver process. However, the Clinton administration has already 
recognized the importance of immediate review of State 
applications for waivers to grant requirements. Executive 
Orders 12875, 13083, and 13132 provide that each agency must 
``review its waiver application process and take appropriate 
steps to streamline that process'' and that ``[e]ach agency 
shall, to the fullest extent practicable and permitted by law, 
render a decision upon a complete application for a waiver 
within 120 days.''
            h. State Environmental Initiatives
    Although State environmental initiatives play a key role in 
targeting local priorities, it is also important to retain a 
strong Federal presence because Federal laws set a minimum 
standard of environmental protection, ensure Federal 
intervention when there is State inaction, establish a level 
playing field, and provide a framework for spreading successful 
technologies and programs.
    Without a minimum Federal standard, there could be a ``race 
to the bottom'' as States lower their standards in order to 
lure business. In fact, 19 State legislatures have passed laws 
that prevent the States from being any more stringent in any 
regulation than the Federal Government.
            i. Reformulated Gasoline Regulations and Midwest Gasoline 
                    Prices
    The reformulated gasoline [RFG] program has been a success 
in the Chicago/Milwaukee area. Monitors in Wisconsin indicate 
that, during the first year of the RFG program (1995), 
Milwaukee experienced a 50 percent reduction in volatile 
organic chemicals. Furthermore, since the introduction of RFG 5 
years ago, Milwaukee experienced a 50 percent reduction of 
benzene, a known human carcinogen, and a 40 percent reduction 
in carbon monoxide.
    The RFG requirements do not appear to have been the major 
factor contributing to the high price of RFG in the spring and 
summer of 2000 in the Chicago/Milwaukee area. Thirty percent of 
the Nation's gasoline consumption is cleaner-burning RFG. 
During the price hikes, the average price of RFG outside the 
Chicago/Milwaukee area was 2 cents lower than conventional 
gasoline.
    The Federal Trade Commission is investigating whether the 
price hikes were due to price fixing. Although the 
investigation is not complete, the price for RFG gas dropped 
precipitously once the FTC announced on June 15, 2000, that it 
would be investigating the industry's pricing practices. In 
addition, Public Citizen released figures on first quarter 
profits that showed that major oil companies had profit 
increases as high as 473 percent, 371 percent, and 257 percent 
over 1999 figures.
2. Legislation
            a. H.R. 391
    The minority's objections to the Small Business Paperwork 
Reduction Act Amendments of 1999 (H.R. 391) are described in 
detail in the minority views filed with the committee's 
February 5, 1999, report on this legislation (H. Rept. 106-8). 
The discussion of H.R. 391 in the activities report fails to 
accurately describe the legislation. H.R. 391 has been called 
``The Lawbreaker's Immunity Act'' because it prevents Federal 
agencies from levying fines even in cases where a business 
deliberately violates Federal law. According to the Department 
of Justice: ``[A]n automatic pass for first time offenders 
would give bad actors little reason to comply until caught. The 
bill will reward bad actors and those who would knowingly or in 
bad faith violate Federal information collection 
requirements.'' \11\
---------------------------------------------------------------------------
    \11\ Letter from Dennis Burke, Acting Assistant Attorney General, 
U.S. Department of Justice, to Chairman Dan Burton (Feb. 2, 1999).
---------------------------------------------------------------------------
    The civil penalty provisions of H.R. 391 do not address 
merely technical violations of paperwork requirements. They 
apply to all Federal reporting, recordkeeping, and disclosure 
requirements, including the failure to disclose important 
information to the public, such as warning consumers of the 
dangers of a product or prescription drug. Moreover, although 
the bill purports to address violations by ``small 
businesses,'' the definition of a ``small business concern'' 
includes many large businesses, including oil refineries with 
1,500 employees and pharmaceutical manufacturers with 750 
employees. The provisions also preempt State law.
    The range of adverse effects of H.R. 391 is extraordinarily 
broad. If enacted, it would undermine enforcement of nursing 
home standards, environmental and labor laws, and food safety 
regulations. It would also affect drug enforcement, illegal 
immigration, pension security, financial markets, highway 
safety, product safety, and more.
            b. H.R. 1074
    The minority's objections to the Regulatory Right-to-Know 
Act of 1999 (H.R. 1074) are described in detail in the minority 
views filed with the committee's June 7, 1999, report on this 
legislation (H. Rept. 106-108). The section of the activities 
report discussing H.R. 1074 fails to accurately describe this 
legislation. H.R. 1074 is a controversial bill requiring 
extensive accounting of the annual costs and benefits of 
regulations. H.R. 1074 would require, for the first time, cost/
benefit analyses for each agency, program, and program 
component, and extensive new impact analyses. When testifying 
in opposition to H.R. 1074, OMB explained that H.R. 1074 would 
require it ``to compile detailed data that they do not now 
have, and undertake analyses that they do not now conduct, 
using scarce staff and contract resources, regardless of any 
practical analytic need as part of the rulemaking process.'' 
\12\
---------------------------------------------------------------------------
    \12\ Testimony of G. Edward DeSeve, Deputy Director for Management, 
Office of Management and Budget, before the House Subcommittee on 
National Economic Growth, Natural Resources, and Regulatory Affairs 
(Mar. 24, 1999).
---------------------------------------------------------------------------
    H.R. 1074 would require analysis of the estimated 5,000 new 
rules promulgated each year and an analysis of the many rules 
already on the books. In addition, this information would need 
to be compiled in a number of different ways to show the costs 
and benefits of each agency, program, and program component. 
Thus, the cost of H.R. 1074 could be substantial.
    Further, because there are so many data gaps and 
methodological problems, the administration warns that 
``[a]ggregate estimates of the costs and benefits of regulation 
offer little guidance on how to improve the efficiency, 
effectiveness, or soundness of the existing body of 
regulations.'' \13\
---------------------------------------------------------------------------
    \13\ Office of Management and Budget, Office of Information and 
Regulatory Affairs, ``Report to Congress on the Costs and Benefits of 
Federal Regulations,'' 5 (1998).
---------------------------------------------------------------------------
    Professor Lisa Heinzerling, an expert on regulatory 
accounting, testified:

        It is ironic that H.R. 1074 is called the ``Regulatory 
        Right-to-Know Act.'' It is ironic because, if this bill 
        is passed, the public will likely know less rather than 
        more about Federal regulation. The bottom-line 
        estimates of costs and benefits required by this bill 
        hide moral and political judgments behind a mask of 
        technical expertise. The public is likely to mistake 
        the estimates' precision for accuracy and their 
        technicality for objectivity. In that case the numbers 
        generated as a result of this bill will be worse than 
        useless. They will threaten the very public awareness 
        the bill purports to embrace.\14\
---------------------------------------------------------------------------
    \14\ Testimony of Professor Lisa Heinzerling, Georgetown University 
Law Center, before the House Subcommittee on National Economic Growth, 
Natural Resources, and Regulatory Affairs (Mar. 24, 1999). Professor 
Sidney Shapiro, another expert on regulatory accounting, testified on 
the Senate version of H.R. 1074, stating ``the legislation is likely to 
mislead, rather than inform, the American public.'' Testimony of 
Professor Sidney Shapiro, School of Policy and Environmental Affairs, 
Indiana University, before the Senate Committee on Governmental Affairs 
(Apr. 22, 1999).

            c. H.R. 2221
    The Small Business, Family Farms, and Constitutional 
Protection Act (H.R. 2221) was not referred to this committee. 
Therefore, it is not clear why H.R. 2221 is discussed in the 
activities report. H.R. 2221 is based on the fundamental 
misunderstanding that any action to reduce greenhouse gas 
emissions is an effort to implement the Kyoto protocol.
            d. H.R. 2245
    The Federalism Act of 1999 (H.R. 2245), on its surface, 
resembles the Unfunded Mandate Reform Act [UMRA], which 
requires agencies to assess the impacts of Federal mandates on 
State and local governments. Some of the details of H.R. 2245, 
however, undermine the key compromises that made passage of 
UMRA possible, including UMRA's limitations on scope and 
judicial review. H.R. 2245 would also expand the number of 
impact statements that have to be prepared by a factor of 100--
from 50 major rules to over 5,000 total rules. H.R. 2245 was 
referred to the subcommittee, but never considered in mark-up. 
The subcommittee considered a substitute bill which was never 
considered by the full committee.
            e. H.R. 2376
    H.R. 2376 (untitled) was not referred to the subcommittee. 
However, the subcommittee did hold a joint hearing on this bill 
with the Subcommittee on Government Management, Information, 
and Technology. H.R. 2376 provides that agencies establish 
expedited procedures for granting waivers to States for Federal 
grant programs if another State has already been granted a 
similar waiver. Executive orders, however, already direct 
agencies to complete waiver requests in 120 days if possible. 
Expedition of a 120-day process could preclude adequate review, 
making granting waivers an automatic exercise.
            f. S. 1198 and Related Bills
    The report's discussion of the Truth in Regulating Act of 
2000 (S. 1198) contains numerous erroneous conclusions. The 
report's claim that, under S. 1198, the General Accounting 
Office would not retain its traditional role as auditor is 
patently wrong. The GAO is limited to reviewing the adequacy of 
the agency's analyses. GAO may not conduct its own analysis of 
the rule, alternatives, or any missing analyses. GAO may only 
review public data to the extent GAO needs to in order to audit 
the agency's work.
    The legislative history is clear. This committee did not 
consider S. 1198 or its companion bill, H.R. 4763, introduced 
by Representative Condit. Instead, it considered H.R. 4744 
which did not clearly establish that GAO was limited to 
auditing the agencies' work. For this reason, H.R. 4744 did not 
enjoy the same support that S. 1198 did. GAO expressed serious 
concerns about the scope of the analyses and public interest 
groups opposed the bill. A more detailed description of the 
problems with H.R. 4744 is provided in the minority views filed 
with the committee's July 20, 2000, report on this legislation 
(H. Rept. 106-772).
    During the committee's consideration of H.R. 4744, 
Representative Kucinich and Representative Waxman offered the 
text of S. 1198 as a substitute amendment. Representative 
Kucinich and Representative Waxman explained that one of the 
key purposes of the Senate language was to clarify that GAO 
would retain its traditional role as auditor and would not 
perform its own analyses. Unfortunately, the amendment was 
rejected by the committee on a party-line vote. However, H.R. 
4744 was never considered by the full House. Instead, S. 1198 
was passed by the House under suspension of the rules and later 
signed into law.\15\
---------------------------------------------------------------------------
    \15\ The House also considered and passed H.R. 4924 under 
suspension of the rules. H.R. 4924 is substantially similar to S. 1198 
and provides that GAO retain its traditional role of auditor. H.R. 4924 
was never considered by the Senate.
---------------------------------------------------------------------------

      G. Subcommittee on National Security, Veterans Affairs, and 
                        International Relations

    As described in detail in the minority views filed with the 
committee's April 3, 2000, report on the anthrax investigation 
(H. Rept. 106-556), members of the minority had several 
concerns about the anthrax vaccine program operated by the 
Department of Defense [DOD]. For that reason, we agreed with 
many of the report's findings. We agreed, for example, that the 
anthrax program was vulnerable to supply shortages and price 
increases. We also agreed that a reduced shot series 
potentially could bring down the number of adverse events 
experienced by service members. And we agreed with proposals to 
conduct further study on the safety of the vaccine. We 
submitted dissenting views, however, because we disagreed with 
the report's primary recommendations to suspend the program and 
reclassify the anthrax vaccine as ``experimental.''
    As mentioned in the minority views, Food and Drug 
Administration [FDA] officials testified on several occasions 
that they believe the vaccine is safe. In fact, the majority 
report itself stated that the vaccine ``may be as safe as many 
other approved products'' \16\ and ``can be considered 
nominally safe.'' \17\ In addition, in their appearances before 
the subcommittee and committee, officials from the General 
Accounting Office never stated that they believed the vaccine 
is unsafe. Instead, both the report and GAO argued that the 
vaccine's safety had not been demonstrated sufficiently. Unlike 
FDA officials, however, Members of Congress have little or no 
medical expertise. Without additional information, the minority 
found we were not in a position to overturn FDA's judgment.
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    \16\ House Committee on Government Reform, ``The Department of 
Defense Anthrax Vaccine Immunization Program: Unproven Force 
Protection,'' 106th Cong., 2d Sess., 3 (Apr. 3, 2000) (H. Rept. 106-
556).
    \17\ Id. at 34.
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    In addition, the report acknowledged that ``much of the 
information regarding the BW (biological weapons) capabilities 
and intentions of potential adversaries, and even allies, is 
classified.'' \18\ Yet members received no classified 
information at the full committee level, and the subcommittee 
had no closed hearings in which it could consider such 
information. As a result, the report's conclusions that ``the 
threat remains tactically limited and regional'' and that the 
program ``is designed to reach far beyond those at risk'' do 
not reflect DOD's full judgment about the actual extent of the 
threats involved.
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    \18\ Id. at 18.
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                 H. Subcommittee on the Postal Service

    The U.S. Postal Service is a highly successful Federal 
Government entity. For over 200 years it has provided the 
affordable delivery of letters across our country. It is 
remarkable that the men and women working for the Postal 
Service are able to deliver nearly 200 billion pieces of mail 
every year with so few problems. It is equally impressive that 
an overwhelming number of Americans are satisfied with the 
service they receive.
    To that end, on July 15, 1999, Ranking Member 
Representative Henry A. Waxman and Subcommittee on the Postal 
Service Ranking Member Representative Chaka Fattah sponsored 
and introduced legislation, H.R. 2535, the Postal Service 
Enhancement Act. This measure was cosponsored by members of the 
Subcommittee on the Postal Service, Representatives Danny K. 
Davis and Major Owens, and many other members of the Government 
Reform Committee. H.R. 2535 began from the premise that the 
U.S. Postal Service performs a valuable service that should be 
strengthened and enhanced, not subject to radical 
transformation proposed in majority bills, in particular H.R. 
22. H.R. 2535 makes three widely endorsed changes in the postal 
laws: (1) it provides the Postal Service with enhanced 
flexibilities in setting rates, while simultaneously ensuring 
that one class of mail does not subsidize another class of 
mail; (2) it establishes a commission to investigate and report 
on steps the Postal Service can take to improve the efficiency 
of mail delivery; and (3) it provides the Postal Rate 
Commission [PRC] with additional authorities to obtain 
information from the Postal Service.
    H.R. 2535 did not contain controversial proposals that were 
contained in H.R. 22, such as imposing arbitrary price caps on 
postal rates, privatizing postal services through the creation 
of a private law corporation, or allowing competition in the 
delivery of letters.
    The majority has alleged that a decline in mail volume 
would place $17 billion of postal revenue at risk and that the 
Postal Rate Commission [PRC] is a bottleneck in the 
classification and rate setting process. With regard to at-risk 
postal revenue, the PRC chairman, in a letter responding to 
Representative Fattah's request to review and analyze the 
matter, provided great insight into achieving a more accurate 
projection of mail volume and postal revenue.\19\ Further, the 
PRC chairman has by letter responded to complaints that the PRC 
is a bottleneck in the classification and rate setting 
process.\20\
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    \19\ Letter from Edward J. Gleiman to Representative Chaka Fattah 
(Jan. 10, 2000) (attached as exhibit 2).
    \20\ Letter from Edward J. Gleiman to Representative Chaka Fattah 
(June 30, 2000) (attached as exhibit 3).
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    As we contemplate postal legislation, we should support 
measures which will not dismantle the Postal Service. Instead, 
we should work to strengthen our postal system so that it 
continues to meet future efficiency needs, service demands and 
technological changes.
    [The exhibits referred to follow:]
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