[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
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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.
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\1\ Rule X.
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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\
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\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\
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\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).
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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\
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\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\
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\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.
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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\
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\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).
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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).
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\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).
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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)
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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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)
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* Denotes report accompanied by additional, dissenting, minority,
separate, or supplemental views.
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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\
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\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\
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\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\
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\20\ HHS website--What We Do, http://www.hhs.gov/about/
profile.html.
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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.
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\21\ Fiscal Year 1999 Omnibus Spending, Public Law 105-277.
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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.
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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.
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\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.
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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.
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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\
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\26\ THE CHCDP was initiated through the National Defense
Authorization Act for Fiscal Year 1995.
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Ornish Lifestyle Modification Program.\27\
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\27\ The Ornish Lifestyle Demonstration Program was initiated
through the Omnibus Spending Bill of Fiscal Year 1999.
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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\
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\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\
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\29\ Alternative Medicine: Expanding Medical Horizons, NIH-
Publication 94-066, December 1994, pp. 163-165.
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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\
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\30\ A Critical Review of EDTA Chelation Therapy in the Treatment
of Occlusive Atherosclerotic Vascular Disease, ISBN-0-9668200-0-2, p.
105.
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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\
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\31\ NHLBI Fiscal Year 1998 Factbook, p. 9.
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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\
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\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.
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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.
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\35\ Doctors of Osteopathy.
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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.
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\36\ http://www.fsmb.org/consumer.htm.
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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:
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\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
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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\
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\39\ http://cancernet.nci.nih.gov/clinpdq/pif/Prostate--cancer--
Patient.html.
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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\
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\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.
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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.
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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\
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\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.
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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\
---------------------------------------------------------------------------
\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\
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\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\
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\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.
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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\
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\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\
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\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.
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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.
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\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.
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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\
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\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.
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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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