[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
MEMBERS' DAY
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, MARCH 4, 2005
__________
Serial No. 109-6
__________
Printed for the use of the Committee on the Budget
Available on the Internet: http://www.access.gpo.gov/congress/house/
house04.html
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COMMITTEE ON THE BUDGET
JIM NUSSLE, Iowa, Chairman
ROB PORTMAN, Ohio, JOHN M. SPRATT, Jr., South
Vice Chairman Carolina,
JIM RYUN, Kansas Ranking Minority Member
ANDER CRENSHAW, Florida DENNIS MOORE, Kansas
ADAM H. PUTNAM, Florida RICHARD E. NEAL, Massachusetts
ROGER F. WICKER, Mississippi ROSA L. DeLAURO, Connecticut
KENNY C. HULSHOF, Missouri CHET EDWARDS, Texas
JO BONNER, Alabama HAROLD E. FORD, Jr., Tennessee
SCOTT GARRETT, New Jersey LOIS CAPPS, California
J. GRESHAM BARRETT, South Carolina BRIAN BAIRD, Washington
THADDEUS G. McCOTTER, Michigan JIM COOPER, Tennessee
MARIO DIAZ-BALART, Florida ARTUR DAVIS, Alabama
JEB HENSARLING, Texas WILLIAM J. JEFFERSON, Louisiana
ILEANA ROS-LEHTINEN, Florida THOMAS H. ALLEN, Maine
DANIEL E. LUNGREN, California ED CASE, Hawaii
PETE SESSIONS, Texas CYNTHIA McKINNEY, Georgia
PAUL RYAN, Wisconsin HENRY CUELLAR, Texas
MICHAEL K. SIMPSON, Idaho ALLYSON Y. SCHWARTZ, Pennsylvania
JEB BRADLEY, New Hampshire RON KIND, Wisconsin
PATRICK T. McHENRY, North Carolina
CONNIE MACK, Florida
K. MICHAEL CONAWAY, Texas
Professional Staff
James T. Bates, Chief of Staff
Thomas S. Kahn, Minority Staff Director and Chief Counsel
C O N T E N T S
Page
Hearing held in Washington, DC, March 4, 2005.................... 1
Statement of:
Hon. Thomas E. Petri, a Repesentative in Congress from the
State of Wisconsin......................................... 24
Hon. Jim Gibbons, a Repesentative in Congress from the State
of Nevada.................................................. 28
Hon. Cathy McMorris, a Repesentative in Congress from the
State of Washington........................................ 32
Hon. Frank A. LoBiondo, a Repesentative in Congress from the
State of New Jersey........................................ 34
Hon. Shelley Berkley, a Repesentative in Congress from the
State of Nevada............................................ 39
Hon. Jeff Flake, a Repesentative in Congress from the State
of Arizona................................................. 43
Hon. C. L. ``Butch'' Otter, a Repesentative in Congress from
the State of Idaho......................................... 44
Hon. Rob Bishop, a Repesentative in Congress from the State
of Utah.................................................... 47
Hon. Chris Cannon, a Repesentative in Congress from the State
of Utah.................................................... 50
Hon. Jon C. Porter, a Repesentative in Congress from the
State of Nevada............................................ 54
Hon. Robert Simmons, a Repesentative in Congress from the
State of Connecticut....................................... 58
Hon. E. Clay Shaw, Jr., a Repesentative in Congress from the
State of Florida........................................... 65
Hon. Lane Evans, a Repesentative in Congress from the State
of Illinois................................................ 67
Ms. Berkley.................................................. 69
Hon. Stephanie Herseth, a Repesentative in Congress from the
State of South Dakota...................................... 73
Hon. Michael H. Michaud, a Repesentative in Congress from the
State of Maine............................................. 75
Hon. Madeleine Z. Bordallo, a Delegate in Congress from the
Territory of Guam.......................................... 80
Hon. Heather Wilson, a Repesentative in Congress from the
State of New Mexico........................................ 84
Hon. Brad Miller, a Repesentative in Congress from the State
of North Carolina.......................................... 90
Hon. Shelley Moore Capito, a Repesentative in Congress from
the State of West Virginia................................. 94
Hon. Robin Hayes, a Repesentative in Congress from the State
of North Carolina.......................................... 98
Hon. Maxine Waters, a Repesentative in Congress from the
State of California........................................ 102
Hon. Rush D. Holt, a Repesentative in Congress from the State
of New Jersey.............................................. 107
Hon. Randy Neugebauer, a Repesentative in Congress from the
State of Texas............................................. 112
Hon. Christopher Shays, a Repesentative in Congress from the
State of Connecticut....................................... 117
Hon. Diane E. Watson, a Repesentative in Congress from the
State of California........................................ 120
Hon. Linda T. Sanchez, a Repesentative in Congress from the
State of California........................................ 132
Hon. Timothy H. Bishop, a Repesentative in Congress from the
State of New York.......................................... 136
Hon. Barbara Lee, a Repesentative in Congress from the State
of California.............................................. 141
Prepared statements, letters, extraneous material submitted by:
Hon. Joe Baca, a Repesentative in Congress from the State of
California................................................. 1
Hon. Ginny Brown-Waite, a Repesentative in Congress from the
State of Florida........................................... 3
Hon. Julia Carson, a Repesentative in Congress from the State
of Indiana................................................. 3
Hon. Lincoln Davis, a Repesentative in Congress from the
State of Tennessee......................................... 5
Hon. Vernon J. Ehlers, a Repesentative in Congress from the
State of Michigan.......................................... 6
Hon. Louie Gohmert, a Repesentative in Congress from the
State of Texas............................................. 8
Hon. Peter T. King, a Repesentative in Congress from the
State of New York, along with Mrs. Kelly, Messrs. Walsh,
McHugh, Kuhl, Sweeney...................................... 9
Hon. Jim McDermott, a Repesentative in Congress from the
State of Washington........................................ 10
Hon. George Miller, a Repesentative in Congress from the
State of California........................................ 10
Hon. Collin C. Peterson, a Repesentative in Congress from the
State of Minnesota......................................... 11
Hon. Tom Price, a Repesentative in Congress from the State of
Georgia.................................................... 12
Hon. Bennie G. Thompson, a Repesentative in Congress from the
State of Mississippi....................................... 12
Hon. Jerry Weller, a Repesentative in Congress from the State
of Illinois................................................ 22
Hon. Frank R. Wolf, a Repesentative in Congress from the
State of Virginia.......................................... 23
Mr. Petri.................................................... 26
Mr. Gibbons.................................................. 30
Miss McMorris................................................ 33
Mr. LoBiondo................................................. 37
Ms. Berkley.................................................. 41
Mr. Flake.................................................... 43
Mr. Otter.................................................... 46
Mr. Bishop of Utah........................................... 49
Mr. Cannon................................................... 51
Mr. Porter................................................... 55
Mr. Simmons of Connecticut................................... 60
Mr. Shaw..................................................... 66
Mr. Evans.................................................... 68
Ms. Berkley.................................................. 71
Ms. Herseth.................................................. 74
Hon. Ted Strickland, a Repesentative in Congress from the
State of Ohio.............................................. 75
Mr. Michaud.................................................. 77
Ms. Bordallo................................................. 82
Mrs. Wilson.................................................. 86
Mr. Miller of North Carolina................................. 92
Mrs. Capito.................................................. 96
Mr. Hayes.................................................... 99
Ms. Waters................................................... 104
Mr. Holt..................................................... 109
Mr. Neugebauer............................................... 114
Mr. Shays.................................................... 119
Ms. Watson................................................... 122
Ms. Linda T. Sanchez of California........................... 134
Mr. Bishop of New York....................................... 138
Ms. Lee...................................................... 143
MEMBERS' DAY
----------
THURSDAY, MARCH 3, 2005
House of Representatives,
Committee on the Budget,
Washington, DC.
The committee met, pursuant to call, at 2:30 p.m., in room
210, Cannon House Office Building, Hon. Rob Portman presiding.
Members present: Representatives Portman, Conaway, McHenry,
Lungren, Cooper, Moore, Spratt, Cuellar, and Schwartz.
Mr. Portman. Good afternoon everyone, and welcome to the
Budget Committee Members' Day hearing. This is a hearing we
hold every year to hear from our colleagues. This hearing is
directed by the Budget Act, and its intent is to bring about a
forum in which Members can relay their priorities for their
district, for their State, and indeed for our country. We are
pleased to have a diverse group of Members from both sides of
the aisle, and we look forward to receiving their testimony.
[Prepared statements of Representatives Baca, Brown-Waite,
Carson, Davis of Tennessee, Ehlers, Gohmert, King of New York,
McDermott, Miller of California, Peterson of Minnesota, Price
of Georgia, Thompson of Mississippi, Weller, and Wolf follow:]
Prepared Statement of Hon. Joe Baca, a Representative in Congress From
the State of California
Chairman Nussle, Ranking Member Spratt, and Members of the
Committee on Budget, I am here today as the new Ranking Member of the
Agriculture Subcommittee on Departmental Operations, Oversight,
Nutrition, Dairy and Forestry to argue for significant changes to the
President's budget for fiscal year 2006.
There are many programs that will be adversely affected by this
budget, but as Ranking Member of the subcommittee with jurisdiction
over the Food Stamp Program--I am obliged to make the protection of
that program my top budget priority.
At best, this budget is harmful to core agriculture programs. At
worst, the political maneuverings that are taking place to shift cuts
from commodity programs to key anti-hunger initiatives like the Food
Stamp Program are unforgivable.
The Food Stamp Program is one of this nation's most successful
initiatives. Forty years ago, this country was plagued by malnutrition
and hunger, especially among children.
Senators Bob Dole and George McGovern responded by creating a
``vaccine'' against hunger in the form of a nationwide Food Stamp
Program. Put simply, food stamps keep America from experiencing the
kind of severe hunger we still see in much of the rest of the world.
In the United States, hunger and food insecurity affect 12.1
million households, nearly 35 million individuals (12.5 percent of all
Americans), and 13.1 million children.
It's true that many American families still struggle to pay their
bills and have enough money for the nutritious food they need. But
without Food Stamps even more families would struggle.
Mr. Chairman, this budget recommends structural changes that will
affect the way people qualify for the food stamp program, and these
changes will take food off the table for 300,000 American families.
Representatives Edwards, Hensarling, Cuellar, Sessions and Conway--
the changes to the food stamp program contained in the budget mean
that, according to some quick estimates, the State of Texas will lose
$7.8 million in food stamp payments in FY07. This is an average of
$243,250 per Congressional District.
Representatives Ryan and Kind--by rough estimates, the State of
Wisconsin will lose $905,000 in food stamp payments in FY07. This is an
average of $113,000 per Congressional District.
Representative McCotter--by rough estimate, the State of Michigan
will lose $7.4 million in food stamp payments in FY07. This is an
average of half a million per Congressional District.
While these are just quick estimates and the number will certainly
change, it is an indisputable fact that this budget will hurt working
class and poor families that depend on food stamps to put food on the
table. Please don't let efficiency be used as an excuse to endanger one
of our country's most effective programs to combat the symptoms of
poverty.
What's more, the Food Stamp Program works better and better each
year. The rate of mistaken payments has been declining for 6 years and
hit an all-time low last year.
This efficiency is due in part to the conversion from paper coupons
to debit cards, ordered by Congress in 1996. The new ``electronic
benefit'' system now in place nationwide means food stamps are more
efficient, more accountable, and user-friendly for consumers, grocers,
and the government.
Food stamps have also been crucial during our nation's ongoing
recovery from economic recession. Food stamps have been there for the
greater numbers of people who lost their jobs in recent years and are
earning less.
Now, nearly 24 million people receive an average of $86 in grocery
store credit each month to purchase food. These Federal dollars are
then quickly spent at grocery stores, where they support local economic
growth.
So, with all of this good news about Food Stamps, why are we
talking about cutting back one government program that's working on so
many levels? Cuts to such an important program don't make sense for
three key reasons:
First, cutting food stamps will not cut the deficit. Food Stamps
and the people who depend on them did not create the deficit. Food
stamp spending actually decreased in the late 1990's.
Overall, we've seen only about 1 percent average annual growth for
the cost of the Food Stamp program for the past 10 years and less than
2 percent average annual growth is projected for the next 10 years,
according to the CBO.
These modest increases are due to more people needing help during
hard times, and more eligible people connecting with food stamps. The
increases in food prices play an important part as well.
Second, the cut the President has proposed targets working people
with children--precisely those people who are not receiving welfare and
who are playing by the rules, but still can't afford to feed their
families.
Third, food stamps took an almost 20 percent hit in benefits for
families the last time budget reconciliation instructions came our way.
More than $28 billion was cut over 7 years, during welfare reform in
1995 and 1996.
Since that time--thanks to collaborative leadership from both
parties, from urban and rural members, and from Congress and the White
House--about one-third of those cuts have been restored. Thankfully,
Congress restored eligibility for immigrant children and legal
permanent residents in the 2002 Farm Bill.
But, the bulk of those cuts continue to squeeze families and force
them into the impossible choice each month of either paying the rent,
filling prescriptions, keeping the lights on, or buying food.
Food stamps work to help American children, families, and seniors
get the nutrition they need to learn, work hard, and stay healthy.
Put simply, the Food Stamp Program is government at its best.
Food stamps work to help boost food spending, which in turn helps
farmers, grocers, and the entire food industry. And, food stamps work
with minimal waste, fraud, and abuse.
I urge this Committee to reject cuts to our nation's #1 defense
against hunger. This is certainly a time of tough choices for our
nation, but taking food from families should not even be an option.
My message today is clear--any cuts, caps and other structural
changes to the Food Stamp program will be met with strongest
opposition.
U.S. Congress,
Washington, DC, March 2, 2005.
Hon. Steve Buyer,
Chairman, Committee on Veterans' Affairs, House of Representatives,
Washington, DC.
Dear Mr. Chairman: I submit this letter to express my concerns
regarding the Committee on Veterans' Affairs recently proposed Budget
Views and Estimates for FY 2006.
To be clear, there are several measures proposed by the Committee
that I wholeheartedly support. First, I commend the Committee's
endorsement of the Administration's proposal to eliminate co-pays for
VA-provided hospice care. I strongly agree with the Committee's
decision.
I am also pleased that the President's proposed increase for
prescription drug co-pays was rejected. The Committee aptly recognized
that a 100% increase in co-pays would be too steep an increase for
veterans. The Committee further rejected the President's proposed cuts
to VA sponsored long-term care in State nursing homes. VA reimbursement
has been essential to State nursing home maintenance, and consistently
costs less than VA run facilities. This is a valuable program that
deserves the Committee's continued support.
However, I cannot support the Committee's proposal for an
enrollment fee for Category 7 and 8 veterans. The new four-tiered
system will be a monetary barrier and unnecessary burden to quality
healthcare for veterans. Enrollment fees make VA care more expensive
without making it better. TRWARE recipients pay fees and are guaranteed
access to care, but veterans are being asked to pay enrollment with no
such promise. I fundamentally disagree with the position that we, as
policy makers, should be discouraging veterans from using the VA
system. At the private meeting we had, I suggested that if there is a
moderate enrollment fee for veterans, they should have improved access
in return.
I am also displeased with the Committee's decision to reject the
Administration's proposal for reimbursement of veterans' emergency care
from non-VA facilities. Reimbursement of emergency fees encourages
veterans to seek health care at the closest facility, so they are
treated immediately. If a veteran is eligible for VA care but is closer
to a non-VA hospital, reimbursement is a logical next step. Moreover,
reimbursement can be a life or death matter for many veterans who need
emergency care from a closer hospital but can only afford VA care.
Additionally, most ambulance protocols require that in an emergency
situation the patient must be taken to the nearest hospital. Hospital-
owned ambulances are further obligated under The Emergency Treatment
and Labor Act (EMTALA) to bring patients to the closest facility.
Veterans should not be penalized with financial burdens for situations
beyond their control. Unfortunately, the Committee did not include this
proposal in the Views and Estimates and I cannot agree with this
decision.
Finally, I am concerned that the Veterans' Committee ignored my
express disapproval of the proposed Views and Estimates. A Majority
view was submitted to the Budget Committee, despite the fact that my
colleagues and I had no opportunity to sign this proposal or even to
vote on it. My staff expressed in no uncertain language that I had no
intention of signing the proposal until I had seen the final version,
and they were told that the document would be ready for my perusal by
5:30 pm on Wednesday, January 23. Instead, my office was notified of
the finalized proposal for the first time in a Committee press release.
I ask that you note for the record my disapproval with these
specific points in the Budget Views and Estimates. I look forward to
working with the Committee in the future, but hope that deliberations
will be more inclusive.
Sincerely,
Ginny Brown-Waite,
Member of Congress.
Prepared Statement of Hon. Julia Carson, a Representative in Congress
From the State of Indiana
Thank you for the opportunity to address the Committee today in
support of restoring funding for Amtrak in the Budget Resolution for
Fiscal Year 2006. In recent years Amtrak has demonstrated its continued
value as a critical public resource unequivocally worthy of our Federal
funds.
The past 3 years have been among the most successful in Amtrak's
34-year history. Despite an overall downturn in the travel industry
that has resulted in financial disaster for our airlines, Amtrak has
been making great strides in efficiency while becoming an increasingly
popular choice for consumers. It remains a vital component of our
nation's infrastructure, providing an invaluable public service
unmatched by other means of transportation.
Amtrak offers mobility to Americans living in small communities and
areas without access to other transportation options, servicing 106
cities that have no local access to airports.
It provides transportation opportunities to low-income Americans
and people with disabilities across the country. About 42 percent of
Amtrak users come from households earning less than $50,000 per year.
An estimated 4 million Amtrak riders do not own cars and would be
stranded without Amtrak service.
Amtrak remains our most environmentally friendly form of long-
distance transportation. Passengers traveling by Amtrak save energy
that would otherwise be expended through air and road travel, lowering
fuel costs to consumers, reducing air pollution, and easing the strain
on our already dangerously overcrowded highways.
Since 2002, our rail system has gone through an exceptional period
of financial and operating stability. Amtrak has established new
accounting and financial reporting systems, trimmed mail and express
operations, truncated long-distance routes, and cut expenses, while
raising ridership and engaging in the large-scale repair and
restoration of an aged fleet. Last year the 640 employees of the Beech
Grove heavy maintenance facility in my district repaired and returned
to service 15 wrecked Superliners and locomotives, and completed
overhauls on 30 Superliners, 46 locomotives, 36 baggage cars, and 62
passenger cars.
Under the leadership of David Gunn, Amtrak employees continue to
contribute to the development of a necessary and increasingly viable
alternative to air and road travel. In the midst of an overall
depressed travel industry, and in a year where natural disasters in
Florida, California and elsewhere disrupted long-distance service,
Amtrak has succeeded in cutting expenses while bringing rail ridership
levels to an unprecedented 25 million passengers. When airlines were
grounded during the tragedy of September 11, 2001, it was Amtrak that
brought stranded Americans home to their families.
When Amtrak was established by an act of Congress in 1970 to take
over for the money-losing private passenger rail systems in America,
then-Secretary of Transportation John Volpe predicted that Amtrak could
turn a profit, but only if the Federal Government provided enough
capital to produce high-speed trains in profitable corridors. Yet
according to the Congressional Research Service, Amtrak's fastest
train, the Acela, averages 86 miles per hour in the New York to
Washington corridor, only 6 mph faster than the Metroliner train that
operated there before Amtrak's creation. Though we have known since its
inception that further investment is the only key to financial
independence, Congress has consistently declined to fund Amtrak at
levels that would allow future self-sufficiency.
At the same time, Congress has proven more than willing to support
other money-losing transportation sectors, both public and private.
Over Amtrak's 34-year history Congress has spent roughly $1.9 trillion
on airline and highway transportation subsidies, over 63 times the
approximately $29 billion it has allocated to Amtrak. Rail
transportation funds generally account for a mere 1.6 percent of the
yearly budget of the Department of Transportation. Every component of
our transportation infrastructure has required significant Federal
investment and each is dependent on the security and operational
support the Federal Government, but in contrast to our aviation and
highway systems, passenger rail has no specific dedicated fund for the
purposes of infrastructure development. This is a double standard that
neglects to take into consideration the disproportionate social,
environmental, and other benefits that rail transit provides to our
nation.
The Amtrak Reform Council and the Department of Transportation
Inspector General have recognized $1.5 billion as the funding level
required to keep Amtrak financially viable. To fund Amtrak below this
threshold would be reckless and irresponsible. Without proper financial
support, control of our railroads would be surrendered to a bankruptcy
trustee with legal responsibility to its creditors, not the American
public.
President David Gunn and the 22,000 employees of Amtrak continue to
overcome considerable obstacles to bring this public service to our
nation. I can think of no greater acknowledgement of their hard work
and service to the American public than to commit sufficient funding to
realize the full promise and potential of Amtrak. I thank the Committee
for this opportunity and ask for its support of this critical component
of our national infrastructure.
U.S. Congress,
Washington, DC, March 3, 2005.
Hon. Jim Nussle,
Chairman, Committee on the Budget, House of Representatives,
Washington, DC.
Hon. John Spratt, Jr.,
Ranking Member, Committee on the Budget, House of Representatives,
Washington, DC.
Dear Chairman Nussle and Ranking Member Spratt: I am writing out of
concern that the Administration's Fiscal Year 2006 Budget of the U.S.
Government cuts or eliminates several programs that are vital to my
rural constituency in Tennessee's Fourth Congressional District, as
well as rural areas throughout the United States.
I am extremely troubled by the Administration's proposal to
eliminate funding for the Edward Byrne Justice Assistance Grant (EBJAG)
in the Fiscal Year 2006 Budget. The production and abuse of
methamphetamine is a widespread problem in Tennessee and is quickly
becoming a major issue for America. The Drug Enforcement Administration
estimates for 2004 have Tennessee ranked third nationally for
methamphetamine arrests and seizures. Methamphetamine production and
abuse destroys lives, families, property, the surrounding environment,
and is an incredible burden on local communities and law enforcement
officials. Now is the time to fight this illicit drug, and all illegal
substances head-on with increased man power and funding. Drug task
forces in my district and state rely heavily on EBJAG to fight the
local war on drugs. Eliminating this grant program gives the criminals
an even greater advantage over our communities and law enforcement
offices. Such an elimination of this valuable grant program puts the
future of our children, families, and friends in grave danger. I
believe this is completely unacceptable and ask the House Budget
Committee to restore EBJAG funding to the FY'04 level of $659.1
million.
Additionally, rural America has come to depend on the State and
Local Homeland Security Grants to keep local and volunteer fire
departments, as well as local law enforcement offices, functioning at
full capacity. Without these grants many rural communities would not be
able to fully staff their fire and police departments or provide them
with updated equipment necessary to keep our communities safe. I was
very dismayed to see the President's budget propose to cut this grant
program by $420 million. Congress should not leave rural America
unprotected and unprepared for day to day emergencies or future
catastrophic attacks. It is my hope that the House Budget Committee
will realize the importance of these grants to rural America and
restore FY'06 funding for the State and Local Homeland Security Grants
to the FY'05 level of $3.985 billion.
Another primary concern is the Administration's proposal to move
the Community Development Block Grant (CDBG) program from the
Department of Housing and Urban Development (HUD) to the Department of
Commerce as part of the new ``Strengthening America's Communities''
(SAC) initiative. CDBG has been very beneficial in my district and in
over 3,000 rural communities as a part of HUD. In 2004 the town of
Oneida, TN received $500,000 from the state of Tennessee through CDBG
for water and sewer infrastructure development. Without these crucial
funds the officials in Oneida would be forced to both raise taxes and
utilities rates on an economically distressed community. Such a
scenario would be a job killer for the town and greatly impede future
economic development. That said, I request the House Budget Committee
leave CDBG as a part of HUD and fund the program at the FY'05 level of
$4.1 billion.
Veterans in my district are very apprehensive toward the proposed
cuts to veterans' benefits. The President's budget proposal calls for
Priority Group 7 and 8 veterans pay an annual enrollment fee of $250
and an increase in prescription drug co-payments from $7 to $15 as part
of their benefits. You may recall that the co-pay amount for these
veterans was recently increased from $2-$7 in 2000. The Department of
Veterans Affairs anticipates the new ``out-of-pocket costs'' will
result in 1.1 million veterans choosing to leave the system. I ask the
House Budget Committee to ignore this proposal, and additionally, to
restore funding for state grants for extended care facilities.
Finally, my constituents and I are concerned about several
eliminations in the Administration's proposed budget for education
programs. The cuts in vocational education are particularly harmful for
constituents in my district, many of whom are not able to attend
traditional 4 year institutions of higher learning. Vocational training
provides opportunities for employment in new and exciting fields that
can lead to rewarding careers. I am sure the House Budget Committee
will take a hard look at the Administration's proposal to eliminate
vocational education and investigate which programs are truly wasteful,
and which are truly necessary for ensuring rural Americans can continue
to be a part of our country's well trained workforce.
While I understand the necessity of paying back our deficit and
working toward a balanced budget, and commend the House Budget
Committee on its efforts, I think it is wrong to do so at the expense
of those who have defended our nation in times of war and those who
have had the hardest lot in life. Veterans and the good people who make
up rural America are not second class citizens, and they should not be
treated as such in the President's proposed Fiscal Year 2006 Budget of
the U.S. Government.
Sincerely,
Lincoln Davis,
Member of Congress.
Prepared Statement of Hon. Vernon J. Ehlers, a Representative in
Congress From the State of Michigan
Thank you, Mr. Chairman, for the opportunity to testify as the
Committee considers a FY 2006 Budget Resolution. I know the Committee
must weigh several pressing national priorities as you prepare the FY
2006 Budget Resolution, including the continuing war on terrorism,
facilitating economic stimulus, and maintaining fiscal responsibility.
Mr. Chairman, I very strongly support your determination to
carefully scrutinize all discretionary spending, including the proposed
increases in defense and homeland security funding, and to curb overall
spending in this year's Budget Resolution. The Committee faces many
difficult choices in order to balance these priorities, control the
deficit and perhaps review our considerable mandatory and discretionary
spending commitments within this year's austere budget environment.
In making these choices, we must not overlook the fact that
scientific research and development underpins our economic and national
security. Scientific research and development forms the foundation of
increased innovation, economic vitality and national security.
Scientific research is an investment that promises, and has
historically delivered, significant returns on that investment. For the
United States to remain a prosperous country, it must maintain its
technological leadership in the world. As you begin the budget process,
I strongly urge you to give high priority to scientific research and
development and math and science education.
For the past several years, research and development funding for
defense, weapons development and national security has increased while
other areas of Federal research and development, especially basic
research in the physical sciences, has remained flat or declined in
real terms. The President's FY 2006 request of $132.3 billion for
research and development continues this trend.
While our focus on immediate threats is certainly warranted, it is
necessary for us also to consider longer-term threats to our national
security. Basic research and science education are essential to
advances in medicine, military applications and continued economic
prosperity, including the development of cancer therapies, GPS- or
laser-guided missiles, and the Internet. The diversity of the basic
science research portfolio ensures discoveries that lay the foundation
for biomedical advances and defense. Researchers at NIH and DOD depend
on research and the human capital development that takes place at NSF
to fuel their on-going work to improving the health and safety of our
country. As a nation, we cannot afford to starve basic science research
and education and need to make sure that we balance our funding between
the medical and physical sciences. Historically, our investment in
physical science research has been slipping, and our overall national
investment in research and development is at a rate much slower when
compared to other growing economies. Furthermore, while appropriators
have often met the President's request for biomedical funding, Congress
has actually reduced the appropriated funds for physical sciences at
NSF in recent years, compared to the request.
With this in mind, I urge you to make the basic research components
of function 250 a top priority in the FY 2006 budget. I want to
particularly emphasize several basic science research and development
programs that deserve Congress' utmost attention: the National Science
Foundation, the National Institute of Standards and Technology, the
Department of Energy's Office of Science, the National Aeronautics and
Space Administration, and math and science education.
The National Science Foundation's FY 2006 budget request of $5.6
billion is a 2.4 percent increase over FY 2005 appropriations; however,
it is $2.9 billion below the authorized funding level necessary to
complete the commitment Congress made to double NSF funding in 2002. I
continue to support this doubling commitment, though I realize that in
this austere budget environment it may not be immediately possible to
fulfill this obligation. The increase is also tempered by the transfer
of funds for ice-breaking operations from the Coast Guard budget,
resulting in a corrected increase of 1.5 percent. Because NSF received
a 3.1 percent ($180 million) cut in FY05, the overall request level for
FY06 is approximately 1 percent below the FY04 level.
NSF is the only Federal agency dedicated solely to supporting basic
scientific research. NSF funding accounts for one-fifth of all Federal
support for basic research and 40 percent of physical science research
at academic institutions. Nearly 90 percent of these awards are made
through a competitive, merit-review process that ensures that excellent
and innovative research is being supported. Furthermore, NSF
consistently receives the highest rating from OMB for the efficiency
and excellence of its programs.
The Foundation is also the primary Federal supporter of science and
math education; it underwrites the development of the next generation
of scientists and engineers. I am particularly concerned about the
trend of the current budget request that reduces the Education and
Human Resources (EHR) budget at the Foundation by more than $104
million, or 12 percent. This dramatic decrease is unparalleled in other
parts of the Federal science and technology portfolio, and, indeed
other parts of the total budget. Decreasing awards in education, or
eliminating any new awards entirely, seems very shortsighted when we
are currently facing the challenge of adequately preparing our students
to enter science and technology fields. I have worked very hard to
maintain the Math and Science Partnership program at NSF, where grants
are awarded on a peer-reviewed basis that complements the strengths of
a research-based organization. The FY 2006 request for the Math and
Science Partnerships of $60 million will only allow continued funding
for the programs that were started in previous years, eliminating the
future of an incredibly important program to determine how our students
learn the subjects of math and science. I urge the Committee to provide
NSF with the highest possible budget allocation this year, including
the EHR budget.
Much of the technology we use every day can be tied to research
done by scientists at the National Institute of Standards and
Technology (NIST). For example, work at NIST's labs supports our
nation's efforts to improve cybersecurity, building safety, and voting
technology. NIST has a proven track record in research and development
on standards and measurement techniques that help U.S. industries
become more globally competitive and retain leadership in cutting-edge
technologies. The President's FY 2006 request of $426 million for
NIST's labs is a 12 percent increase over the levels enacted in FY
2005, and I appreciate that.
I am particularly pleased that the request includes $19 million in
funding for an Advanced Manufacturing research initiative. This
initiative is aimed at speeding the development of industrial
applications of nanotechnology and streamlining manufacturing
standards. It will help small and medium-sized manufacturers and has
goals very similar to the Manufacturing Technology Competitiveness Act
which I passed through the House last Congress.
However, I am very concerned about other manufacturing programs at
NIST. The President's FY 2006 budget request cuts the Manufacturing
Extension Partnership (MEP) program by over 50 percent to $46.8
million. I have worked very hard over the years to help my colleagues
in Congress understand that MEP is vital to retaining American
competitiveness and American jobs, and I believe they appreciate the
value of this program. Yet each budget cycle the Administration
proposes to significantly cut this program, which the Department of
Commerce itself recognized as a valuable program in a 2004 report on
manufacturing. Diminishing funding for MEP will devastate small and
medium-sized manufacturers and in the long run severely hurt our
competitive edge in the manufacturing sector. Furthermore, I continue
to support the Advanced Technology Program (ATP) and am disappointed
that the Administration has again included no funds for the program in
the budget request.
The Department of Energy's Office of Science funds 40 percent of
our nation's physical science research. Research in these areas has led
to many new economic and medical advancements including, among others,
new energy sources, the Internet, cell phones and laser surgery. To
maintain our economic, technical, and military pre-eminence, the
Federal Government must continue to support research in these areas.
The FY 2006 budget request for the Office of Science is $3.46 billion--
a decrease of almost 4 percent from the FY 2005 enacted level. I
respectfully request that the Committee provide the Office of Science
with a budget that reflects the critical role that it plays in
maintaining our economic and military pre-eminence.
The National Aeronautics and Space Administration (NASA) is an
agency in transition. In order to align the agency with the President's
challenge to travel to the moon and Mars, NASA has reorganized and
streamlined its structure. The proposed mission will be very costly and
will pose significant technical obstacles that will only be solved
through basic research. Although NASA's FY 2006 budget request of $16.5
billion includes an increase of 2.4 percent, more than 40 percent of
the budget will fund the return to flight of the Space Shuttle and the
International Space Station. Because of the reorganization at the
agency, it is difficult to compare from past years, but essentially,
NASA research and development would increase by 4.9 percent to $11.5
billion due to the funds freed up by the Space Shuttle's expected
return to flight in the current year. This overall increase comes at a
cost to basic scientific research at NASA. In order to shift resources
toward solar system exploration and research and development focused on
moon and Mars mission technologies, the budget request cuts aeronautics
research by 6 percent, in addition to steep cuts in environmental,
biological, and physical sciences research. Also absent from the budget
is funding for the proposed repair mission to the Hubble space
telescope, an instrument which has greatly enriched and expanded our
limits of scientific discovery.
Basic science and engineering research underpin all of NASA's major
accomplishments as well as many of the technologies you and I use
everyday. Furthermore, basic research at NASA will support the future
exploration endeavor; if we reduce basic research in the out-years, our
astronauts will be working with outdated technology. I urge you to
protect NASA's future by supporting its basic research accounts and
making the function 250 budget a significant concern.
I realize that the fate of many of the programs I have highlighted
in this testimony lies not with you, but with the appropriations
committee. While the budget does not spell out exact funding for these
programs, I believe that you can send a strong signal about their
importance to the appropriations committee by making basic research
funding in function 250 a top priority in the FY 2006 budget. Behind
your lead, I, along with many colleagues who also support science
funding, will fight for these programs throughout the budget process.
When faced with the difficult choices you must make this year, I urge
you to remember that we cannot afford to sacrifice the research and
education which current and future generations need to ensure their
economic prosperity and domestic security.
Thank you again for allowing me to testify.
Prepared Statement of Hon. Louie Gohmert, a Representative in Congress
From the State of Texas
Mr. Chairman, thank you for allowing me to submit a statement today
before you and the other Members of the Budget Committee about my views
on the fiscal year 2006 budget resolution.
As a fiscal conservative I am a strong proponent of a balanced
Federal budget. As you know, in fiscal year 1998, the Federal
Government began operating in a surplus environment for the first time
since 1969. Those surpluses continued through fiscal year 2001.
Unfortunately, due to an economic recession and necessary increases in
military/homeland security spending after the September 11, 2001
terrorist attacks, the Federal Government is now operating in a deficit
spending environment. I believe we need to work together to accomplish
a balanced budget again as soon as possible.
I would like to briefly highlight two areas of the budget that are
of serious concern: (1) the proposed cuts to and transfer of Community
Development Block Grant (CDBG) funding from the Department of Housing
and Urban Development (HUD) to the Commerce Department; and (2) the
lack of funding for 2,000 Border Patrol Agents to be hired this year as
required by Public Law 108-458.
While I am in favor of eliminating wasteful spending, there are a
number of domestic programs that are quite efficient and essential to
the livelihood of many low-income Americans that create opportunity and
advancement. The proposed budget would greatly reduce the amount of
CDBG program funding that have stimulated the economy and helped real
people. The proposed budget would cut the CDBG program--the bulk of the
community planning budget--by as much as 50 percent. Certain cities and
counties in my district will be particularly hard-hit by these cuts. A
few examples are: Rusk County, which received $327,660(Non-entitlement)
in fiscal year 2005, Marshall, which received $473,095 in fiscal year
2005, Nacogdoches County, which received $250,000(Non-entitlement) in
fiscal year 2005, and Lindale, which received $365,000(Non-
entitlement). These cities are making good use of this money to
energize and redevelop their cities and economy, and any significant
reduction of funds could result in economic disaster for cities
struggling to stay afloat.
Last year, Congress passed and the President signed the National
Intelligence Reform Act of 2004. This bill requires 10,000 new Border
Patrol Agents to be hired over 5 years. The budget provides enough
money for only 210 additional agents, falling dangerously short of the
2,000 agents that are required by law to be hired this year. While I
understand sacrifices must be made in order to achieve fiscal
responsibility, this is also not an area where Congress can cut
corners. I respectfully request that the will of Congress be honored
and full funding be restored.
We must fight to make permanent the tax relief measures that were
enacted in 2001 which, as you know, ensures a healthy national economy,
which, combined with spending restraint, will help alleviate our
national deficit. We should not jeopardize the future of our children
and grandchildren by either unwise spending or unwise cuts. It is true
cuts will need to be made; however, they should be made where they do
not devastate economies which also decreases tax revenues.
In conclusion, the best course to a balanced budget is through both
economic growth and spending discipline. This strategy will greatly
assist my constituents of the First District of Texas in stimulating
the economy, creating more jobs, and allowing Americans to keep more of
their own money. I look forward to working with you and the other
Members of the Budget Committee in ensuring that Congress moves toward
achieving a balanced budget while allocating sufficient funding levels
to meet our domestic and international needs in those programs that are
actually providing a healthy return on the Federal Government's
investment.
U.S. Congress,
Washington, DC, March 3, 2005.
Hon. Jim Nussle,
Chairman, Committee on the Budget, House of Representatives,
Washington, DC.
Chairman Nussle: As the Budget Committee prepares the House budget
resolution we are concerned by the proposed reductions to the Medicaid
program. We appreciate the opportunity to work with you to address our
concerns.
New York State's Medicaid program has over time developed to cover
a wider breath of individuals and ``optional'' services than most other
states. Our state serves a higher proportion of elderly and disabled
beneficiaries than other states on average. In fact, more than 25
percent of New York's Medicaid recipients are elderly or disabled,
accounting for nearly two-thirds of programmatic spending. Virtually
all of these individuals are also Medicare recipients. At the same
time, nearly half of New York's Medicaid recipients are children.
Despite the high number of Medicaid and Medicare beneficiaries in
New York, our state is home to approximately 3 million uninsured
individuals. New York's health care delivery system is strained, as
providers fulfill their mission to care for all. New York hospitals and
health systems alone provide $1.6 billion in uncompensated care a year.
For the sixth year in a row, over half of New York's hospitals have
lost money providing care to patients.
We agree that reform of the Medicaid program should be addressed
and recommend a deliberative policy driven discussion to develop
reforms. Medicaid is more than a budgetary issue. We support our
colleague Representative Heather Wilson (R-NM) in calling for the
establishment of a bipartisan commission to study the Medicaid program
and make informed recommendations for its reform.
We urge the Budget Committee to refrain from proposing cuts to
Medicaid spending at this time. We ask you further to protect Medicare
program funding, as the benefits of each program are increasingly
dependent upon the other. Additionally, we believe the new Medicare
prescription drug program we all worked to establish needs to be given
a chance to work.
Sincerely,
Peter T. King,
Member of Congress.
James T. Walsh,
Member of Congress.
John M. McHugh,
Member of Congress.
Sue W. Kelly,
Member of Congress.
John R. ``Randy'' Kuhl, Jr.,
Member of Congress.
John E. Sweeney,
Member of Congress.
Prepared Statement of Hon. Jim McDermott, a Representative in Congress
From the State of Washington
Members of the Budget Committee, as a former member of the
Committee, I have a special interest in the crafting of the budget
resolution. Today I would like to share with you some brief thoughts on
the Fiscal Year 2006 budget.
I guess the silver lining in all of this is that it seems that the
President is finally feeling political pressure to acknowledge the
Federal Government's ballooning deficit is a problem. Yet the
President's budget and his proposed solutions are a farce.
When President Bush was inaugurated in 2001, he inherited a $5.6
trillion surplus over 10 years (2002-2011), as projected by the
Congressional Budget Office (CBO). At that time, CBO projected a $430
billion surplus for Fiscal Year 2005. Since then, the fiscal health of
the Federal Government has rapidly and alarmingly deteriorated. Now
President Bush and his own accountants have projected a $427 billion
deficit for Fiscal Year 2005.
Not only is the $427 billion deficit a reversal of more than $850
billion from what CBO anticipated the Federal treasury would be holding
right now; the President's projection also severely underestimates the
actual deficit the government will run this year. The $427 billion
projection does not include the $82 billion President Bush recently
requested for Iraq, Afghanistan, and tsunami aid; it does not include
the nearly $2 trillion that extending his tax cuts will cost over the
next 10 years; it does not include the $754 billion that his Social
Security privatization plan would cost over the next 10 years; and it
assumes that Congress will go along with his draconian cuts in domestic
spending.
On the President's chopping block are more than 150 domestic
programs, including funding for first responders; health care for
children; the elderly and people with disabilities; small businesses
and manufacturers; vocational education; Amtrak; environmental
protection; and after-school programs. To raise revenue, he proposes to
raise healthcare co-payments for veterans, to raise electric rates in
the Northwest and other areas from wholesale to market rates, and to
drill in the Arctic National Wildlife Refuge. Out of a $2.57 trillion
budget, all of these mean-spirited domestic cuts and revenue
enhancements would save about a drop in the bucket.
To put the depth of the deficit problem in perspective, consider
this: Even if the President completely shut down all Federal Government
functions except for Social Security, Medicare, defense, and homeland
security, the government would still run a deficit of $75 billion, not
including the $82 billion for Iraq or the costs of extending the tax
cuts and privatizing Social Security.
It is essential that Congress exercise fiscal discipline during the
budget process. We all know the drastic consequences that long-term
deficits have on the economy, including rising interest rates, and
decreased capital investment and consumer spending. I urge this
Committee to take into account the debt-ridden state of the Federal
Government's finances, and to resist this President's misguided
proposals.
U.S. Congress,
Washington, DC, March 3, 2005.
Hon. Jim Nussle,
Chairman, Committee on the Budget, House of Representatives,
Washington, DC.
Hon. John Spratt, Jr.,
Ranking Member, Committee on the Budget, House of Representatives,
Washington, DC.
Dear Chairman Nussle and Ranking Member Spratt: Thank you for this
opportunity to submit testimony regarding the fiscal year 2006 budget
resolution. I am writing to urge you to restore funding to the Land and
Water Conservation Fund (LWCF). Reductions to LWCF would severely
impact American families and children that use close-to-home parks and
open spaces for recreation and physical activity. At a time, when we
have an obesity crisis, investing in recreation is an investment in
America's health. Furthermore, LWCF protects special places in our
national wildlife refuges, parks, and forests, and preserves spaces for
local communities.
The LWCF, established in 1964, is one of the greatest tools we have
to address the increasingly severe problem of loss of open space,
forests, and wildlife habitat by providing funding for acquisition of
lands. The state-side portion of the fund (terminated in the
Administration's budget recommendations) provides wide-ranging benefits
by meeting citizens' needs for recreation and physical activity. The
fund does so by acquiring land for recreation, developing new
recreation facilities, and enhancing existing facilities.
The results in 2004 certainly demonstrate the importance and need
for continuing and adequately funding the state-side LWCF:
572 local and state park and recreation areas were
enhanced with grants, and 420 of the sites benefited from entirely new
recreational facilities;
87 new parks and recreation areas were created, including
picnic areas, fitness trails, playing fields to accommodate youth
participation in baseball, basketball, football and soccer;
645 locations helped by LWCF encouraged active
participation to strengthen the health and vitality of Americans.
The President's budget request also woefully under-funds the
Federal acquisition program for our national wildlife refuges, parks,
forests, and monuments. The Natural Resources Inventory estimates 2.2
million acres are lost to development each year; once lost, these lands
can never be recovered. We must not lose our significant national
historical and cultural heritage.
When Congress created the Land and Water Conservation Fund, its
intent was to set aside $900 million in Federal funds for national and
state parks, forests, and wildlife areas. The funding supply for these
places was to have come from a portion of the proceeds of oil and gas
leasing on publicly owned areas offshore.
The U.S. Treasury continues to divert these funds toward other
Federal activities. At the very least, I urge the Budget Committee to
restore the state-side of LWCF to $100 million and to provide adequate
funds to purchase Federal projects as identified by the Department of
the Interior and Agriculture.
The Federal Government must honor the provisions of the Land and
Water Conservation Fund, and provide American families and children
with an investment in their future by providing an unparalleled
national portfolio of federal, state, and local parks and recreation
spaces that are safe and accessible for all Americans.
Sincerely,
George Miller,
Member of Congress.
Prepared Statement of Hon. Collin C. Peterson, a Representative in
Congress From the State of Minnesota
Chairman Nussle and Members of the Committee, thank you for holding
this hearing for Members to express their views on the Congressional
Budget Resolution for Fiscal Year 2006 that you will write in the
coming weeks.
I refer you to the Additional Views and accompanying letter from a
coalition of agriculture, resource and conservation and nutrition
interest groups that was submitted as part of the Committee on
Agriculture's Views and Estimates. I will draw from these Views as part
of my testimony.
First, I ask that your Committee recognize how fiscally sound the
2002 Farm Bill has been. Following the enactment of the 1996 Farm Bill,
Congress passed 4 years of ad hoc emergency assistance totaling $26
billion to support farmers when prices fell. The 2002 Farm Bill was
designed to remove the need for such assistance by structuring basic
farm programs so that they aid farmers when need actually arises, as
well as making important investments in conservation, nutrition, trade,
rural development and energy programs.
The first 3 years of the 2002 Farm Bill. 2002-04, cost an average
of $14 billion, which was 40 percent less than program and emergency
assistance provided in the last 3 years of the 1996 Farm bill (1999-
2001). Over the first 3 years, the 2002 Farm Bill has also cost $15
billion less than was originally estimated by the Congressional Budget
Office (CBO) at the time the Farm Bill was passed. The 2002 Farm Bill
is designed to only pay out the assistance required to meet those
levels of support set in the statute.
Farm Bill mandatory spending has, in fact, been reduced by $650
million in FY 2004 and $1.4 billion in FY 2005 by limitations placed on
conservation, rural development, research, trade and energy programs in
appropriations acts. The President's FY 2006 Budget has proposed
further reduction in these programs in addition to proposed changes to
commodity, crop insurance, forestry and nutrition programs.
Second, the United States is currently engaged in multilateral
trade negotiations that aspire to broadly open markets for U.S.
agricultural products. Because of relatively low U.S. tariffs on
agricultural goods, the greatest assets our negotiators have to offer
are our domestic support programs. If Congress preemptively cuts
domestic farm programs prior to the successful conclusion of the WTO
Doha Round, U.S. farmers are likely to receive lesser concessions on
market access and government support of competitors. That result could
leave world market prices lower than otherwise might occur and with a
commensurate increase in Federal spending under reduced levels of
domestic support.
Third, I must ask if spending reductions are even necessary for the
Agriculture Committee. The standard the President has set, cutting the
deficit in half from FY 2004 to FY 2009, has already been met according
to CBO's January 2005 Baseline Projections. These projections, which
assume no new legislation, show the deficit declining from $412 billion
in FY 2004 to $197 billion (excluding extension of the 2005 emergency
supplemental) projected for FY 2009.
Relative to the Administration's 2004 Budget estimate of a $521
billion deficit, CBO's 2009 projection is 24 percent below the
President's target of $260 billion. As a percent of GDP, CBO's January
2005 Baseline deficit falls by more than half, from 3.6 percent of GDP
in 2004 to 1.4 percent of GDP in 2009. By this standard, no cuts in the
Committee's jurisdiction are necessary.
Fourth, and most importantly, The Farm Security and Rural
Investment Act of 2002 is a contract with American agriculture that
provides the stability that investment and capital planning require.
Changes to the Farm Bill, such as those proposed in the President's
budget, would cause deep reductions in farmer income support, as much
as 48 percent as reported by Iowa State University for Iowa corn
growers. Most farmers operate on slim margins, and such changes would
erase profit margins for many producers.
Farm families rely on the Farm Bill to make plans and contractual
obligations for the future. Re-opening the Farm Bill's safety-net
provisions would create more uncertainty for farmers who must already
contend with market instability, unpredictable weather, and variable
supply costs. Interrupting U.S. farm policy at random prevents farmers
from being able to make long-term operation and investment decisions
and prudent risk management actions.
Congress should fulfill its contract with American agriculture and
its conservation, nutrition, and rural development interests; its
expiration in 2007 will be soon enough to review and consider changes.
Prepared Statement of Hon. Tom Price, a Representative in Congress From
the State of Georgia
Mr. Chairman, thank you very much for allowing me to submit this
testimony to the Budget Committee today. I completely favor the
Committee's efforts to balance the Federal budget.
Winning the global war on terrorism should be the highest priority
of the United States. Maintaining and advancing our military
capabilities is an essential goal for the protection of Americans at
home and abroad. The strength of our nation's military relies on
unparalleled, technologically advanced equipment.
Assuring our air superiority requires that we continue to support
the F/A-22 Raptor made by Lockheed Martin in Cobb County. It is the
most advanced fighter, and clearly no other fighter in the world can
match the F/A-22 for quality and speed. Without it, our nation's
defenses would soon be compromised. Yet, within the Defense Department,
advisors to the Secretary of Defense and the President inappropriately
recommend cutting $30 billion over the next 6 years from the F/A-22
program.
The F/A-22 is the necessary successor to the F-15. Over thirty
years ago the U.S. Air Force began looking at plans to replace the F-15
fighter, an aircraft that served our nation well. This process resulted
in requests for an Advanced Tactical Fighter in 1985, leading to the
selection and orders for the F/A-22.
The apparent reason for this recommended cut was the erroneous
perception that there were no threats to American security that would
render the F-15 unable to ensure air superiority. However, recent
studies reveal that the F-15 would lose 90 percent of the time during
encounters with the newest generation of aircraft currently under
development by potential enemies. With the F/A-22, however, we would
gain an era of dominance in the air against both ground and air-based
threats that would last well into the 21st century.
Finally, we all know that education and job training are vital
components to our workforce. Certainly, budget restraint and a sound
fiscal policy are important. I merely ask that any cuts to mandatory
spending programs under reconciliation be done in a responsible and
fair manner.
Prepared Statement of Hon. Bennie G. Thompson, a Representative in
Congress From the State of Mississippi
Thank you for affording me the opportunity to address the Budget
Committee on some of my concerns about the budget as the Ranking Member
of the House Committee on Homeland Security. As you prepare the budget
resolution for Fiscal Year (FY) 2006, I believe there will be a lot of
work to do to correct the security gaps created by the misplaced
spending priorities in the President's proposed budget.
For example, the budget fails to fulfill numerous commitments made
to the Border Patrol in the Intelligence Reform and Terrorism
Prevention Act (P.L. 108-458), which was just signed by the President
in December. The risk of terrorists crossing our southern border is one
of the prime security gaps now, and the Border Patrol is on the front
line of trying to correct the problem.
Below is my overall analysis of the funding shortages in the
budget, as well as specific areas where the budget is wholly
inadequate. I understand that the answer to securing the homeland
security cannot just be a ``blank check,'' but there are priorities
that we can focus on now to make America safer, protect our economy,
and prepare for the worst.
OVERALL SPENDING LEVELS
For FY 2006, the Department of Homeland Security (DHS) requests
$40.1 billion in total funding, representing a $48 million--or a one
tenth of 1 percent--increase relative to the FY 2005 level of $41.0
billion. After accounting for mandatory programs (such as the Coast
Guard retirement fund, and disaster relief programs) and certain fee-
funded accounts (such as those used by the Bureau of Immigration and
Customs Enforcement for portions of their activities), the DHS' total
discretionary request of $34.2 billion represents an increase of $2.2
billion, or 7 percent, increase above current year funding. The
majority of the $2.2 billion increase is due to a $3.00 increase in the
Aviation Security Passenger Fee, up to a total of a $5.00 increase per
trip, which is estimated to yield a $1.6 billion increase in revenues.
If all fee-funded programs are accounted for, DHS' net discretionary
request is $29.3 billion, representing a $343 million, or 1.2 percent
increase, above the current year level--less than the rate of
inflation.
I support additional resources for the DHS above current year
levels. However, rectifying critical homeland security gaps that
continue to exist throughout our nation will, in part, require
additional resources above what is requested in the President's FY 2006
Budget. For example, since the tragedy of September 11, our nation's
first responders still lack the resources they need to ensure they are
properly equipped and trained to protect our communities from a
terrorist attack; radiation portal monitors that can detect the
presence of a weapon of mass destruction are not yet installed at all
ports of entry and related sites; robust air cargo systems are not yet
deployed nationwide that can detect the presence of dangerous
materials, and physical security at our nation's ports is inadequate
relative to the security threats that exist.
While requested funds for FY 2006 will assist in closing these
security gaps, no less than an additional $6.1 billion above the FY
2006 President's request (not including the Coast Guard's project
Deepwater) will be necessary to ensure that our homeland is as safe as
it needs to be relative to the threats we face. If additional funds for
the acceleration of Project Deepwater are included, no less than $7.0
billion in additional resources is required.
THE ADMINISTRATION'S FISCAL POLICY AND HOMELAND SECURITY
While funding for homeland security has increased since the attacks
of 9/11, the issue is not whether such funding as risen--the issue is
whether sufficient resources have been devoted to homeland security
since 9/11 to ensure that we are as safe as we need to be. By this
standard, the Administration continues to fall short in its efforts to
protect the country. Although the threat of renewed terrorist violence
against our country is real--a fact confirmed a few weeks ago by CIA
Director Porter Goss in testimony before Congress--the President's
budget request for the Department of Homeland Security misses an
opportunity to chart a new course to protect our homeland. Instead of
tinkering at the margins, the Administration's budget should boldly
boost funding levels for key DHS programs to provide a greater level of
protection for Americans. The failure to do so places all of our
citizens in greater jeopardy.
In part, the Administration's misguided fiscal policies of the last
4 years have resulted in resources being channeled to the wrong
priorities and have frustrated efforts to devote greater funds to
homeland security. For example, last year the Administration provided
tax cuts to the wealthiest 1 percent of Americans (those earning more
than $1 million a year) totaling about $90 billion--three times the
amount of discretionary funding devoted to the Department of Homeland
Security. Such tax cuts come at a time when the Council on Foreign
Relations has estimated that our nation's first responders, alone,
require upwards of $100 billion to satisfy their critical needs.\1\ The
President's FY 2006 Budget proposes to continue its tax cut policies,
which will result, in part, in a projected deficit of $427 billion for
the current fiscal year--the third year in a row that the deficit will
reach a record level. While the Administration may take credit for
increasing the homeland security discretionary budget for next fiscal
year by 7 percent--or $2.2 billion--relative to the current year level,
we will spend that amount in about 2 weeks in Iraq. While we must keep
faith with our military personnel serving in harm's way overseas, we
must also keep faith with the men and women of the Homeland Security
Department as they serve on the front lines every day to protect us
against terrorist and other threats. We must ensure that they--and our
collective homeland security effort--receive the resources that are
urgently needed to ensure the United States is as safe as it needs to
be. We must get our priorities right.
FIRST RESPONDER GRANT PROGRAMS
Office of State and Local Government Coordination (OSLGC)
The President's fiscal year 2006 Budget request for OSLGC-
administered grants for our state and local first responders and
related homeland security needs totals $3.6 billion, representing a
$420 million--or nearly 11 percent--decrease from the amounts
appropriated by Congress for fiscal year 2005. The President's proposal
also seeks to increase the amount of discretionary grant funds to be
distributed based on threats and vulnerabilities. Specifically, the
President's Budget seeks to reduce the percentage guaranteed to each
state as part of the State Homeland Security Grant Program from 0.75
percent to 0.25 percent (the same percentage as currently guaranteed to
all U.S. territories). Such a proposal is consistent with legislation
supported by the Select Committee on Homeland Security, and enacted by
the House as part of H.R. 10, during the 108th Congress.
In aggregate, however, the proposed reductions for FY 2005 for
first responder funding, as compared to current year levels, are made
at a time when outside expert panels, such as one assembled by the
Council on Foreign Relations, note that our nation's first responders
still lack the training, equipment, and other support required to
ensure that they are full prepared to prevent or respond effectively to
any possible terrorist attack. While significant resources have been
devoted to first responders since September 11, there is a continuing
need to increase their preparedness. Despite Administration plans in
Homeland Security Presidential Directive 8 (HSPD-8) to tie the budget
request to an assessment of first responder needs, HSPD-8 was not
implemented in time for the budget submission, and funding levels
requested in the President's budget do not reflect the actual needs of
our nation's first responders. Given outstanding needs, I strongly
believe that FY 2006 resources for state and local grant programs
should be increased above levels proposed in the President's FY 2006
Budget by at least $2.9 billion as described below.
The President's fiscal year 2006 request for DHS state and local
grants proposes a number of changes to individual programs.
Specifically:
The President's FY 2006 Budget proposes to reduce funding
for the State Homeland Security Grant Program by nearly $300 million
below the current year level. Such a decrease comes as the result of
two actions: First, the FY 2006 requested level includes an $80 million
decrease relative to the current year level; second, the President's
budget stipulates that no less than 20 percent--which amounts to $204
million--of funds for the FY 2006 State Homeland Security Grant Program
must be allocated for ``terrorism prevention activities of law
enforcement.'' The latter adjustment is similar to the stipulation
placed on the Urban Area Security Initiative (see below), and is
intended to offset the impact to law enforcement by the President's
proposal to completely eliminate in FY 2006 the Law Enforcement
Terrorism Prevention Grant program. Taken together, both adjustments
will have the effect of reducing the amount of grant funding for
distribution to states and territories for non-law enforcement-specific
purposes by $284 million--a 26 percent decrease relative to the FY 2005
amount. For this reason, I support an increase in funding for the State
Homeland Security Grant Program to a level no lower than the FY 2005
enacted level of $1.1 billion.
The President's request also makes significant cuts to the
Assistance to Firefighters Grant Program (FIRE Grants). Specifically,
the President's Budget requests $500 million, representing a cut of
$215 million--or 30 percent--relative to the current year level. The
FIRE Grant program was created before September 11 by Congress in order
to meet basic, critical needs of the firefighting community, which a
December 2002 study by the U.S. Fire Administration and the National
Fire Protection Association found to be significant. Also, unlike the
enacted FY 2005 amount, the President's FY 2006 Budget does not include
any specific funding for the SAFER (Staffing for Adequate Fire and
Emergency Response) program to reach the goal of hiring 10,000 new fire
fighters and help communities attain 24-hour staffing to provide
increased protection against fire and related hazards. The SAFER Act
authorizes $7.7 billion over a 7-year period, to include $1 billion for
FY 2006. For these reasons, I support an increase in funding for the
FIRE grant program to a level no lower than the fully authorized amount
of $750 million. Consistent with congressional intent, an additional $1
billion is needed to support the goals of the SAFER Act.
The enhancement and acquisition of interoperable
communications systems remain a critical need for the first responder
community. However, the President's FY 2006 Budget requests no specific
funds for grants to enhance interoperability, and eliminates the
relatively modest $20 million for interoperability as part of DHS'
Technical Assistance Program (similarly, the President's FY 2006
request for the Justice Department proposes to eliminate $99 million
for COPS Interoperable Communications Technology Grants). Additional
funding to increase interoperability among our nation's first
responders is urgently needed. In June 1998, the Public Safety Wireless
Network program estimated that replacing communications systems
nationwide to achieve interoperability could cost as much as $18.3
billion.\2\ The Council on Foreign Relations has reported that, in
virtually every major city and county in the United States, no
interoperable communications system exists to support police, fire
departments, and response personnel at all levels of government during
a major emergency,\3\ and that a minimum, $6.8 billion over 5 years
would be necessary to ensure dependable, interoperable communications
for first responders.\4\ For these reasons, I support a dedicated down
payment of at least $500 million in FY 2006 for first responder
interoperability purposes.
The President's FY 2006 Budget proposes to eliminate the
Law Enforcement Terrorism Prevention Grants, currently funded at $400
million, as a separate grant program. Instead, grants to support
terrorism-related law enforcement efforts will be funded as part of the
State Homeland Security Grant program and the Urban Area Security
Initiative regional grant program. While the Democrats fully supports
the needs of law enforcement at the state and local level to prevent,
prepare for, and respond to a terrorist attack, we believe that law
enforcement officials should not have to compete for grant funds with--
and at the potential expense of--other first responder entities. For
this reason, I support funding for a dedicated Law Enforcement
Terrorism Prevention Grant program at a level no lower than $400
million.
The President's FY 2006 Budget also proposes to reduce
funding for the Emergency Management Performance Grant program by $10
million--or nearly 6 percent--relative to the current year level. A
March 2002 survey by the National Emergency Management Association
found that an additional 5,212 local emergency management positions are
needed, with 3,960, or 76 percent, of those positions being fulltime
directors needed to manage the programs. For this reason, I support
funding for the Emergency Management Performance Grant to a level no
lower than the enacted FY 2005 level of $180 million.
The President's FY 2006 Budget proposes to consolidate FY
2005 sector-specific grants for port security, rail and transit
security, trucking security, and intercity bus security into one $600
million Targeted Infrastructure Protection grant program for next
fiscal year. I have two concerns with the Administration's proposal:
First, this grant program would force many critical infrastructure
sectors to compete against one another for scarce resources, increasing
the likelihood that these sectors will receive less funding than last
year. On a related note, requesting the new Targeted Infrastructure
Protection program as part of DHS' Urban Area Security Initiative
raises the concern that funding for critical infrastructure
improvements will not be channeled to non-urban area environments.
Second, the Administration's $600 million request is woefully
inadequate, especially given that port and rail systems have billions
of dollars in funding needs. For example, to date, ports will receive
$715 million in security grant funding, yet this amount is $410 million
short of initial estimated needs and $4.7 billion short of the Coast
Guard's $5.4 billion overall estimate of what owners and operators of
port facilities believe will be needed to make themselves secure
against a terrorist attack. Similarly, outstanding public rail and
public transit needs total nearly $3 billion. I support grant programs
that take advantage of the sector-specific expertise that exists, or is
being developed, within the Department. Additionally, if the targeted
infrastructure program is enacted as requested, I believe that
additional resources for port and rail security totaling $1.6 billion
above the President's request for FY 2006 will be required.
The FY 2006 President's Budget--similar to last year's
proposal--includes no funding for the Metropolitan Medical Response
System (MMRS). The primary focus of the MMRS, which was conceived after
the 1995 terrorist release of sarin nerve gas in a Tokyo subway, is to
develop or enhance existing emergency preparedness systems to
effectively respond to a public health crisis, particularly an event
involving a weapon of mass destruction (including a so-called ``dirty
bomb'' which disperses harmful radiation). Through MMRS-sponsored
preparation and coordination, local law enforcement, fire, hazardous
material, emergency medical service, hospital, public health, and other
first responder personnel plan will be more effective in responding in
the first 48 hours to a public health crisis. Currently 125 municipal
authorities in 43 states benefit from the program. I am not convinced
that, consistent with the President's Budget, the goals of the MMRS
program will be better supported by other, less specific, terrorism
grant programs, and believes that the program should be funded at a
level no less than the current year amount of $30 million.
DEPARTMENTAL OPERATIONS
The FY 2006 President's Budget requests $665 for Department
Management and Operations, representing a $140 million--or 27 percent
increase--above the FY 2005 enacted level. The requested amount
includes nearly $50 million to support the establishment of a DHS
nationwide regional structure; $26 million for continued development of
the Department's headquarters in Washington, D.C., and $53 million for
DHS' human resource system initiative, dubbed ``MAX HR,'' which will
implement the Department's new personnel system that is slated to begin
implementation later this year. It should be noted that DHS' concept of
a future regional structure is not yet mature, nor has it been formally
approved by DHS leadership, thus calling into question whether funds
will be needed as requested in the President's budget. Regarding DHS'
new personnel system, I remain concerned that it will erode the
collective bargaining and employee appeal rights that have long
protected government employees against unfair or arbitrary management
practices, and replace the well-established civil service compensation
program with a new, untested ``pay for performance'' system. I will
continue to give close attention to this issue, and believes that the
$53 million in requested funds would be better allocated to rectify
specific homeland security gaps.
OFFICE OF THE INSPECTOR GENERAL
The FY 2006 President's Budget requests $83 million for the Office
of the Inspector General (OIG), representing barely a 1-percent
increase above the FY 2005 enacted level (less than the rate of
inflation). Requested resources will be used to support a staff of 540
employees, most of who will be engaged in audits, inspections, and
investigations of various Departmental programs and activities. Given
the vital importance of the Inspector General's office in probing and
identifying programmatic inefficiencies and general waste, fraud, and
abuse in a Department that encompasses over 180,000 employees for the
benefit of Congress and DHS' leadership, I am concerned that additional
resources may be needed above the level requested by the President to
fully support the OIG's work.
BORDER AND TRANSPORTATION SECURITY
Office of the Under Secretary for Border and Transportation Security;
United States Visitor and Immigrant Status Indicator Technology
(US-VISIT)
The President requests $390 million for the US-VISIT program for
next fiscal year, an increase of approximately $50 million above the
current year level. I continue to have concerns about the overall
development and long-term vision of the US-VISIT program. Additionally,
I remain concerned about the continued reliance of the US-VISIT system
on rapidly aging Immigration and Naturalization Service (INS) legacy
systems. I want to emphasize the need for continued oversight of the
program, especially in such areas as the total future cost of the
system, contractor performance, the effectiveness of US-VISIT as a
counterterrorism tool, and the program's impact on the free flow of
commerce at our nation's borders.
NEXUS/SENTRI
The FY 2006 Budget requests $21 million for the NEXUS and SENTRI
(Secure Electronic Network for Travelers Rapid Network) programs. Both
NEXUS and SENTRI are ``pre-enrollment'' frequent traveler screening
programs designed to expedite border crossings for those individuals
identified as posing a low risk of terrorism. I am concerned that the
$21 million allocated for NEXUS and SENTRI may be insufficient to
adequately fund enrollment centers in major population centers away
from the border and to provide necessary maintenance for the technology
used for the programs. Additionally, higher levels of funding may be
needed above the President's request to promote greater participation
in both programs, which would create the advantage of allowing border
inspectors to devote more time to screen travelers judged to be ``high
risk.'' For this reason, I will continue to exercise close oversight
over the performance of, and resource levels for, the NEXUS and SENTRI
programs.
OFFICE OF SCREENING COORDINATION AND OPERATIONS
The Department's FY 2006 proposal seeks to establish an Office of
Screening Coordination and Operations (SCO) to coordinate, consolidate,
and streamline various screening programs to facilitate both security
and travel. I look forward to assessing precisely how the SCO will
operate, DHS' rationale regarding which programs will be included as
part of the new office, and how those programs will be managed.
As part of this effort, the Department of Homeland Security
proposes to shift the US-VISIT program into this new office, along with
several other Transportation Security Administration (TSA) or Customs
and Border Protection (CBP) efforts. The Department seeks to exercise
its existing authority to collect fees next fiscal year totaling $321
million to fully recover the costs of the Secure Flight, Transportation
Worker Identification Credential, Hazardous Material Drivers' License
Endorsement, and the Alien Flight School Check programs. The new SCO
office, or other appropriate entity in DHS, will likely need additional
amounts made available for implementation of the new law enforcement
officer travel credential, as mandated by the Intelligence Reform and
Terrorism Prevention Act of 2004. Additionally, as part of the request
for the new SCO office, the FY 2006 President's budget seeks $81
million for the Secure Flight program. The Department of Homeland
Security Appropriations Act for 2005 (Public Law 108-334 Sec. 522)
prohibits TSA from deploying or implementing the Secure Flight program
until the system is certified to meet a number of requirements as set
forth by the Government Accountability Office (GAO). The GAO has not
yet issued a report on Secure Flight, but has commented to Minority
staff of the Homeland Security Committee that notable obstacles remain
before the program can proceed. Given GAO's report, I question whether
Secure Flight will be sufficiently developed by next fiscal year to
require all of the resources requested for it within the President's FY
2006 budget.
CUSTOMS AND BORDER PROTECTION (CBP)
Construction
The President's FY 2006 Budget requests $93.4 million to maintain
and construct CBP facilities nationwide. The President's budget makes
clear that the entire construction budget is for the Border Patrol and
not for our nation's ports-of-entry. While I support the infrastructure
needs of a rapidly growing Border Patrol, we are concerned that the
request will not meet the Border Patrol's current needs nor will it
meet the needs of the workforce authorized in the Intelligence Reform
and Terrorism Prevention Act of 2004. Additionally, providing border
security without inhibiting trade requires a substantial investment in
border infrastructure. This is especially true at our land ports of
entry. While the General Services Administration is responsible for
construction at our nation's ports of entry, CBP involvement is
critical as will be the new Office of Screening Coordination and
Operations. Layouts of inspection plazas, space limitations, limited
number of inspection booths and lanes all affect the flow of traffic.
Clogged borders with large traffic backups put pressure on inspectors
to cut corners, thus reducing overall levels of security. The need for
additional infrastructure investments is especially necessary given the
implementation of US-VISIT and various pre-enrollment programs to
separate high from low risk travelers. In a June, 2000 report, the
former U.S. Customs Service estimated that an additional $784 million
was needed to improve infrastructure and technology at our nation's
ports of entry. Given that this estimate was made before the attacks of
9/11, it did not take into account all of the current security-related
costs that are now needed. Additionally, it did not include the costs
of infrastructure needed to process travelers and goods leaving, as
opposed to entering, the country. I believe that at least at additional
$1 billion is urgently needed above the level requested by the
President for border construction needs.
CBP Personnel
The President's FY 2006 Budget requests $4.7 billion for CBP
salaries and expenses, an increase of $197 million above the current
year level to fund, in part, CBP personnel. Such personnel are critical
in our national effort to prevent terrorists from gaining entry to the
United States or using transportation and commercial supply chain
systems to help carry out a terrorist attack. I am concerned, however,
that several specific resource levels included in the FY 2006 Budget
will be insufficient:
Border Patrol: The Intelligence Reform and Terrorism
Prevention Act of 2004 authorized 2,000 additional Border Patrol
personnel annually for deployment along the U.S. northern and southern
border from FY 2006-2010. The President's FY 2006 Budget provides
funding for only 210--or 1,790 Border Patrol agents short of
Congressional intent. I understand that the 210 new agents will replace
those from the southern border who have been relocated to the northern
border. Resource levels included in the President's FY 2006 Budget will
also not result in the necessary Border Patrol personnel required to
reach levels authorized in the 2001 PATRIOT Act and the 2002 Enhanced
Border Security and Visa Entry Reform Act. Currently, DHS is 728 Border
Patrol agents short of the mandates in the latter two bills. If the 9/
11 bill authorization levels are taken into consideration, the
President's budget should fund 2,728 Border Patrol agents for FY 2006,
which would result in over 13,500 agents defending our nation's
borders. I believe that, at a minimum, an additional $87 million is
necessary above the President's request to satisfy the Border Patrol
level for next fiscal year included in the 9/11 reform bill. If all
congressional mandates are to be honored, an additional $135 million
would be needed above the President's request.
C-TPAT/CSI: The President's request includes an additional
$8 million to pay for supply chain security validations of companies
who participate in the Customs Trade Partnership Against Terrorism (C-
TPAT) program. I am concerned that the Administration's request may not
fix the personnel shortages associated with C-TPAT. C-TPAT membership
has nearly doubled over the last year while the level of supply chain
specialist has remained the same. This means that, without additional
personnel, security validations will take years to complete.
Simultaneously, lower than optimal personnel levels will allow
companies to receive the benefit of reduced security inspections
without ensuring they meet their security responsibilities. The FY 2006
Budget also includes funding for an additional 14 positions in support
of DHS' Container Security Initiative (CSI). While such an increase is
a positive development, and mindful of past resource increases, I am
concerned that it may not be sufficient to ensure effective
implementation of the CSI program. The amount of new CSI inspectors,
and their deployment schedule at overseas foreign ports, will need to
be monitored closely to ensure that, in light of the program's goals,
robust examination of cargo at foreign ports occurs before it travels
to the United States. I will work to ensure sufficient resources are
devoted to both programs.
Non-Intrusive Inspection Technology
The President's FY 2006 Budget requests $125 million for the
development, purchase, and installation of radiation portal monitors at
our nation's major border crossings. Such portals are a type of non-
intrusive inspection (NII) technology that can be used to detect the
presence of radiological materials that could comprise a weapon of mass
destruction. The $125 million would complete the installation of portal
monitors on the southern border and 10 percent of air cargo facilities
at international airports. Requested funds are in addition to the $279
million previously provided by Congress to install portals at our 22
largest sea ports, major northern border crossings, and international
mail facilities. However, even if FY 2006 requested funds for NII
technology are provided, I understand that CBP will still require an
additional $92 million above the President's request (for a total of
$496 million) to ensure that--consistent with its own plan--portal
monitors are installed at air cargo facilities, rail border crossings,
and smaller ports of entry. Additionally, no funds are requested in the
FY 2006 for handheld isotope identifiers which identify the type of
radiation present in a container, or additional VACIS machines which
use x-rays to provide an image of the contents of a shipping container.
I believe it is unacceptable for NII technology to be lacking at our
ports of entry and other critical infrastructure sites over 3 years
since September 11, and strongly supports additional resources of at
least $92 million above the FY 2006 request to correct this deficiency.
Immigration and Customs Enforcement
The President's FY 2006 Budget requests $4.4 billion for
Immigration and Customs Enforcement (ICE), representing a $519 million,
or 13 percent, increase above the FY 2005 amount. However, $94
million--or nearly 20 percent--of the increase is dedicated to existing
programs which are being shifted to ICE from other agencies. The
continuing financial management problems at ICE, along with the ongoing
baseline review of its budget, make it difficult to know with any
precision whether the requested amount for next fiscal year will be
adequate to support ICE's myriad missions. I remain concerned that
ICE's financial problems will not be fully resolved until FY 2007 at
the earliest, adversely effecting operations in the meantime. I will
continue to monitor ICE's financial health closely to ensure it has the
resources needed to perform its vital work.
ICE Inspectors
The Intelligence Reform and Terrorism Prevention Act of 2004
authorized 800 additional ICE investigators annually from FY 2006-2010
to investigate immigration violations. The President's FY 2006 Budget
provides funding for only 152 new investigators--or 648 investigators
short of Congressional intent. I estimate that an additional $61
million above the President's request would be needed to satisfy the FY
2006 personnel level included in the Intelligence Reform and Terrorism
Prevention Act of 2004.
Detention and Removal Operations (DRO)
For next fiscal year, the President's budget includes approximately
$1.7 billion for Detention and Removal Operations (DRO), including $90
million for additional bed space to incarcerate removable aliens.
According to the Department of Homeland Security, the requested $90
million translates to 1,920 new beds--6,080 beds short of the amount
included in the Intelligence Reform and Terrorism Prevention Act of
2004. I am concerned that DRO may not be able to accommodate its
current bed space needs; if additional funds are not provided in FY
2005 to correct this shortfall, much, if not all, of the proposed FY
2006 increase could be consumed by higher costs resulting in no new bed
space. If DRO receives sufficient additional funds in FY 2005 to meet
its current needs, then bringing the President's request up to the
levels authorized in the Intelligence Reform and Terrorism Prevention
Act of 2004 would require an additional $285 million above the level
requested by the President.
Federal Air Marshals
The President's FY 2006 Budget includes $689 million for the
Federal Air Marshal Service (FAMS) within the Bureau of Immigration and
Customs Enforcement, an increase of $25.9 million over the FY 2005
enacted level. I support increased resources for FAMS, but believe that
an additional $39.1 million is necessary for the Air Marshal Service to
retain and hire sufficient personnel to fully reach authorized levels
and ensure appropriate flight coverage.
TRANSPORTATION SECURITY ADMINISTRATION
The President's FY 2006 Budget includes $5.6 billion for the
Transportation Security Administration (TSA), representing a net
increase of $156 million over the current year level. The Department
requests that the majority of TSA's FY 2006 budget--$ 4.1 billion, or
nearly 75 percent--will be offset through the collection of passenger
security and air carrier fees. Nearly 85 percent of TSA's request
directly involves personnel and equipment costs for airport screening
of passengers and baggage, with an additional 14 percent supporting
aviation needs. Less than 1 percent of TSA's FY 2006 request is for
surface transportation security efforts.
Passenger Fee Increase
Of significant note in the President's FY 2006 Budget request is a
proposal to increase the aviation security fee placed on passenger
tickets by $3.00, to a maximum of $8.00. The Administration estimates
that this increase will provide TSA with an additional $1.6 billion in
revenue, for a total of $3.8 billion. Additionally, $350 million is
proposed in the budget to be paid to TSA by air carriers, which would
bring total fee-funded revenue to $4.1 billion--or 91 percent of the
cost of providing aviation security screening. I am concerned that an
increase in the fee levied on air tickets will have significant
detrimental effects on the aviation industry, potentially resulting in
the end of operations for multiple air carriers. More fundamentally, I
believe that the cost of providing for aviation security in the post 9/
11 environment should be financed primarily by the Federal Government,
as opposed to passing this cost on to consumers in the form of an
additional ``tax'' on airline tickets. I do not believe the President's
Budget proposal is acceptable, and maintain that additional Federal
funds, most likely in the form of discretionary appropriations, should
be devoted to TSA in lieu of the proposed passenger security fee
increase.
Aviation Screeners
I am concerned that the current legislative mandate to limit TSA
screeners to no more than 45,000 may be having a detrimental effect on
aviation security, given the resulting staffing imbalances and
shortfalls that exist at some of our nation's airports. I expect that
TSA will soon complete its study of the number of screeners that are
needed to fully implement security regulations at every airport,
consistent with the Intelligence Reform and Terrorism Prevention Act of
2004 and the Congress should provide the appropriate level of resources
needed to support the number of screeners determined necessary.
Private Aviation Screening
The President's FY 2006 Budget request continues funding for the
five airports involved in the Private Screening Program (PP5) but does
not include segregated funds for additional airports opting out of TSA
screening under the Screening Partnership Program (SPP). I understand
that TSA intends to fund screening costs for any SPP airports out of
funds requested for TSA screener airports, and approves of this
approach until more information is available on the number of SPP
airports.
Explosives Detection System (EDS)/Explosives Trace Detection (ETD)
Installation
The President's FY 2006 budget requests $367 million in
discretionary appropriations, to be complemented by $250 million form
the Aviation Security Capital Fund, for a total of $617 million for
EDS/ETD purchase, installation, and maintenance at airports nationwide.
This total is $33 million less than both the full amount made available
to TSA for the current year, and the fully authorized amount for EDS
installation as a result of the Intelligence Reform and Terrorism
Prevention Act of 2004. Of the total amount, $241 million will be
devoted to reimburse nine airports through eight Letters of Intent
(LOI) for EDS/ETD equipment at a 75 percent reimbursement level for
large airports. It should be noted that airports may require up to $4
billion to install in-line EDS technology to protect the traveling
public, and that additional resources above the level requested by the
President are urgently needed--in part to save money in the long run.
Regarding the nine airports that are currently covered by LOIs, the
Government Accountability Office has noted that, ``According to TSA's
analysis, in-line EDS systems would reduce by 78 percent the number of
TSA baggage screeners and supervisors required to screen checked
baggage at these nine airports, from 6,645 to 1,477.''\5\ For these
reasons, I recommend funding for EDS installation to a level no lower
than the fully authorized amount of $650 million.
Air Cargo Security
The President requests $40 million for air cargo security,
representing no change from the current year level and $160 million
less than the fully authorized amount in the Intelligence Reform and
Terrorism Prevention Act of 2004. I feel that such funding levels need
to be revisited, given persistent threats to aviation security. I
believe that TSA should take steps to ensure that 100 percent of air
cargo is inspected and that security verifications for all companies
participating in the ``known shipper'' program are completed. Given
that the proposed FY 2005 budget does not provide sufficient resources
for either of these goals, I strongly recommend funding for air cargo
security efforts at a level no lower than the fully authorized amount
of $200 million.
UNITED STATES COAST GUARD
The President's FY 2005 Budget requests $966 million for the
Integrated Deepwater program, a $242 million increase over the current
year level. The Deepwater program is designed to replace the Coast
Guard's antiquated fleet of cutters and aircraft. Many of these assets
are reaching the end of their service life and, as a result, suffer
major mechanical casualties. These casualties have hampered the Coast
Guard's ability to perform its vital homeland security and law
enforcement missions. The FY 2006 request will modestly accelerate
completion of the program from approximately 22 to 20 years. However, I
am concerned that completing the Deepwater program in 20 years is too
long to wait in light of the Coast Guard's significant homeland
security missions. I believe that the Deepwater program should be
accelerated to be completed in 10 years, and that an additional $926
million to the Coast Guard's budget above the level of the President's
request to achieve this objective. While this represents a large
increase, such an acceleration would not only outfit the Coast Guard
with a modern fleet of cutters and aircraft, but, as I understand it,
would also results in $4 billion in savings over the life of the
program.
SCIENCE AND TECHNOLOGY
The President's FY 2006 Budget requests $1.37 billion for the
Science and Technology Directorate of DHS. I am pleased that the
request reflects a consolidation throughout DHS of research and
development activities within the Directorate and expects that this
reprogramming will yield cost efficiencies and technology leveraging in
the coming years.
MAN-PORTABLE AIR DEFENSE (MANPAD) SYSTEMS
The Minority notes the increase in the President's FY 2006 Budget
request for the counter-MANPADs program to $110 million, an increase of
$49 million. The Minority recognizes that the program is entering more
costly development and testing stages, and--consistent with the
program's current mandate to protect the American public against MANPAD
systems--strongly urges the Department to provide to Congress an
operational feasibility study for counter-MANPADs technology.
AVIATION SECURITY-RELATED RESEARCH & DEVELOPMENT
The Minority notes that the Intelligence Reform and Terrorism
Prevention Act of 2004 authorizes $470 million for specific aviation
security-related research and development (R&D) programs, to include:
$100 million for air cargo research and development (R&D) work, $250
million for aviation portal monitors for the detection of biological,
radiological, chemical, and explosive materials, $100 million for R&D
efforts to support improved explosive detection systems, and $20
million to support the development of advanced biometric technology
applications for aviation security. Unfortunately, however, the
President's FY 2006 Budget only includes $52 million within DHS'
Science and Technology Directorate to fund these critical efforts--$418
short of amounts included in the 9/11 bill. Consistent with
congressional intent, I recommend an additional $418 million to fund
aviation security-related R&D efforts.
BIOLOGICAL COUNTERMEASURES AND AGRICULTURAL DEFENSE
The FY 2006 budget for the Department includes $362 million for
research, development, testing, and evaluation of several biological
countermeasures, including: support for threat awareness and risk
assessment of biothreats ($46 million); detection systems for
aerosolized bioagents ($109 million); automated sample collection
technologies ($82 million); and development of animal vaccines and
next-generation diagnostics for foreign animal diseases ($87 million).
The President's FY 2006 budget for the Department also includes $23
million to establish a new National Bio and Agrodefense Facility to
strengthen detection and response capabilities to the intentional
introduction of high consequence biological threats, such those
targeted against animal livestock or the nation's food supply. Total
funding for design and construction of the new Facility is estimated at
$451 million for FY 2006-2010. While I applaud the Administration's
recognition of the importance of detecting and preventing a bioterror
attack, it notes that the total amount of funding requested for
biological countermeasures is $35.4 million--or nearly 9 percent--below
the FY 2005 enacted level. I will continue to exercise close oversight
of the activities designed to boost capabilities to detect and respond
to an attack using biological pathogens, including those pathogens used
to attack crops or livestock, and recommends funding to a level no
lower than the FY 2005 amount of $375 million.
INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION
The FY 2006 President's Budget requests $873 million for the
Department's Information Analysis and Infrastructure Protection (IAIP)
Directorate, representing a $20.5 million, or 2 percent, decrease
relative to the current year level. Funds are requested for IAIP
Management and Administration, and Assessments and Evaluation.
ASSESSMENT & EVALUATIONS
The FY 2006 President's Budget requests $669 million for the
Assessment and Evaluations account, representing a $92 million--or 12
percent--decrease relative to the current year level. The overall
reduction is due, in part, to the transfer of $50 million for Buffer
Zone Protection Plans as part of the Administration's Targeted
Infrastructure Protection grant program within the Office of State and
Local Government Coordination, and $41.5 million to the DHS S&T
Directorate for critical infrastructure emerging technology pilot
projects. I note that an additional $6 million is requested for the
Department's cyber security activities above the current year level of
$67 million, which will aid in greater computer security preparedness
and response to cyber attacks and incidents. Additionally, I am pleased
with the $11 million requested for IAIP's National Biosurveillance
Integration System, designed to improve the Federal Government's
capability to rapidly identify and characterize a potential
bioterrorist attack through the integration of information from other
Federal agencies, such as the Department of Agriculture and the Centers
for Disease Control. Overall, however, I will continue to exercise
close scrutiny over the resource levels of the assessment and
evaluation efforts of IAIP given its critical functions, in part, to
complete a comprehensive National Critical Infrastructure Plan,
consistent with Homeland Security Presidential Directive 7, and the
creation of an associated national asset database.
MANAGEMENT AND ADMINISTRATION
The President's FY 2006 Budget requests $204 million for the
Management and Administration account of the Information Analysis and
Infrastructure Protection (IAIP) Directorate, representing a $72
million, or 55 percent, increase over the FY 2005 level. Increases
include $38 million for facilities enhancements to allow the IAIP
workforce to function in a secure work environment (this is in addition
to $26 million requested for enhancements to DHS' Homeland Security
Operations Center); $19 million for the Homeland Security Data Network,
and $11 million to hire 146 new information analysis, infrastructure
vulnerability analysis, and cyber security operations. I want to
emphasize the need for continued oversight in this important area of
the DHS budget.
ENDNOTES
1. Council on Foreign Relations, Report of an Independent Task
Force Sponsored by the Council on Foreign Relations, Emergency
Responders: Drastically Underfunded, Dangerously Unprepared (New York:
Council on Foreign Relations, June 2003), 2.
2. Public Safety Wireless Network, LMR Replacement Cost Study
Report (Washington: Public Safety Wireless Network, June 1998), 5.
3. Council on Foreign Relations, Report of an Independent Task
Force Sponsored by the Council on Foreign Relations, America Still
Unprepared, America Still in Danger (New York: Council on Foreign
Relations, 2002), 14.
4. Council on Foreign Relations, Report of an Independent Task
Force Sponsored by the Council on Foreign Relations, Emergency
Responders: Drastically Underfunded, Dangerously Unprepared (New York:
Council on Foreign Relations, June 2003), 33.
5. Government Accountability Office, ``Transportation Security:
Systematic Planning Needed to Optimize Resources,'' GAO-05-357T,
Tuesday, February 15, 2005, 9.
Prepared Statement of Hon. Jerry Weller, a Representative in Congress
From the State of Illinois
Mr. Chairman, thank you for the opportunity to submit my testimony
to the House Budget Committee regarding the President's proposed FY
2006 budget.
Mr. Chairman, our country continues to face challenges in the
industry and manufacturing fields. Jobs are being lost overseas and
many of our skilled worker will be retiring in the coming years leaving
a critical shortage of qualified domestic applicants who possess the
skills to operate in a multifaceted, technologically integrated
environment.
Illinois educators and businesses are concerned with the
President's FY 06 budget for education, and the proposed cuts to Career
and Technical Education (CTE) funded under the Carl Perkins Act. As the
Committee is well aware, this essential program has been zeroed out.
The approximately $1.3 billion program supports career and technical
education for high school and community college programs that lead to
employment in high tech and high demand occupations such as health
care, computer-related, manufacturing and business. Nationally, only 23
percent of careers require a BA/BS or above according to United States
Department of Labor (USDOL) data. Students in CTE programs are the
``pipeline'' for business, industry and labor's needed workers. The CTE
Federal budget leverages state dollars by its matching requirements, so
that Illinois will lose not only the Federal CTE funds, but the
corollary state funds as well. Federal education budget funds for
Career and Technical Education should be increased or at the very
minimum retained at current levels.
Research shows that Career and Technical Education (CTE)
complements other Federal education legislation, particularly the No
Child Left Behind Act goals for high school graduation and increased
academic achievement. In Illinois, 95 percent of CTE concentrators
graduate. Additionally, CTE reduces dropouts, promotes higher
attendance rates, and a recent Chicago Public School System study (Nov.
2004) shows that attendance rates, graduation rates and academic
achievement in Chicago Public Schools increased in direct proportion to
the number of CTE courses taken. National studies show 80 percent of
CTE students complete the same number and type of science and math
credits as their peers who take the academic program only. In math-
enhanced CTE programs, students score as well or better in geometry and
algebra 2; 60 percent of these go on to college (half of these in pre-
baccalaureate technical programs).
Career and technical education represents a necessary and
successful avenue for students to be prepared for the working world and
find meaningful employment. In Illinois, CTE program data shows that 60
percent of Illinois students took at least one CTE course and that 95
percent of students who complete two or more CTE courses graduate.
Finally, 52 percent of CTE students enroll in college after high
school. It should also be noted that 38 percent of community college
enrollments are CTE students.
Eliminating career and technical education funding will gravely
harm the ability of the United States to remain competitive in the
global market and will seriously hinder the success of students unable
to attend a traditional 4-year college or university.
I urge the Committee and the Congress to fully fund CTE programs
and continue our commitment to all forms of education.
Prepared Statement of Hon. Frank R. Wolf, a Representative in Congress
From the State of Virginia
Mr. Chairman, thank you for the opportunity to submit a statement
as the House Budget Committee meets to consider the House Budget
Resolution for fiscal year 2006.
I urge your support for pay parity between military and civilian
employees. There is no reason for either Congress of the Administration
to support adjusting military and civilian pay by different amounts. It
is only equitable that both military and civilian employees receive the
same pay increase this year recommended at 3.1 percent in the
President's budget.
As a former Federal employee, I am keenly aware of the invaluable
contributions Federal employees make to our country. As we make
decisions on the budget resolution, I believe we must ensure that our
Federal workforce is treated with fairness and respect.
The Pentagon stated in the proposed regulations for the new
National Security Personnel System that ``NSPS is essential to the
department's efforts to create an environment in which the total force,
uniformed personnel and civilians, think and operates as one cohesive
unit.'' What kind of message does it send to those civilians if they
receive disparate pay increases from their military colleagues?
A uniform pay increase is necessary to recruit and retain
professional employees at a time when many Federal employees are
eligible for retirement and new personnel systems are being
implemented. The Federal Government is the nation's largest employer.
We need to attract and retain the best and brightest for Federal
service. What kind of message does it send to the Federal workforce
about the jobs they do when we say fairness isn't a part of their pay
plan?
Since 9/11 it has become ever more vital to have a thriving civil
service. Now more than ever in our nation's history we must take action
that reflects the contributions both our civilian and military
employees are making--in the war on terrorism and as well as the daily
operations of the Federal Government in providing the services upon
which every American relies.
Federal employees are on the front lines of the war
against terror.
The first American to die in Afghanistan was a CIA agent
from my district.
Federal employees died in the terrorist attacks of
September 11.
Federal employees are in Iraq helping the Iraqi people to
build a free nation.
Throughout the world, America's civil servants are serving
our government and our people, often in dangerous locations.
How can we tell them we will not give them a fair and equitable pay
raise that recognizes their hard work, dedication, and sacrifice?
Closer to home, Federal employees are performing duties that
deserve recognition with a pay raise equal to that provided for the
military.
What do we tell the Federal employees who are cancer researchers at
NIH? My parents died of cancer. We all know of individuals and families
struck by cancer and other illnesses.
Don't we want to be able to recruit and keep researchers at places
like NIH to improve health care and save lives? Pay parity is essential
to allow places like NIH to be able to bring on board renown experts to
find cures and treatment for diseases which touch everyone.
What do we tell Federal employees who are FBI agents? When a child
is kidnaped, FBI agents are there to help find the missing child and
bring the kidnappers to justice.
What do we tell the Federal employees who work to answer questions
about Social Security benefits for our nation's seniors?
What do we tell border patrol agents, DEA agents, Federal prison
guards, U.S. embassy staff, nurses at veterans hospitals, space center
engineers, and the list goes on?
We are asking Federal employees to take on more and more
responsibility every day. They are on the ground in the war on
terrorism overseas and at home.
Immigration officials are working to keep those who wish us harm
out of our country. FBI agents are investigating terrorists' cells, and
TSA agents are screening passengers and baggage at airports. They are
all playing a vital role in keeping us safe and deserve to be treated
with respect and fairness.
Providing a pay raise for Federal employees that is equal to a pay
raise for military employees does not increase the budget. Agencies
manage pay increases through their regular budgets.
Congress has traditionally provided pay parity for America's
military and civilian Federal employees. We have a long tradition in
the Congress of recognizing the valuable contributions of our Federal
employees in both the military service and in the civil service by
providing fair and equitable pay adjustments. This is not the time to
shirk our duty to the civil service.
Mr. Portman. Welcome, Mr. Petri.
I would like to turn to Mr. Spratt to see if he has any
opening comments for this afternoon.
Mr. Spratt. Mr. Chairman, we look forward to the testimony
of all of our colleagues. And I might simply say the
temperature in the room should not be interpreted to mean we
are giving you a chilly reception.
Mr. Petri. You are cutting the heating bill a little?
Mr. Portman. Mr. Petri will give us some good input. To our
colleague, the floor is yours for 10 minutes.
STATEMENT OF THE HON. THOMAS E. PETRI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Mr. Petri. Thank you very much. And I am testifying on
behalf of the Transportation and Infrastructure Committee, and
I know I speak for my chairman, Don Young. Thank you for
extending him, me and the committee this courtesy.
Enactment of H.R. 3, the Transportation Equity Act (TEA): A
Legacy For Users, continues to be our committee's highest
legislative priority for the upcoming year. Recently the
committee unanimously approved its Views and Estimates for the
2006 budget, including a recommendation that highway safety,
motor carrier safety and transportation programs be funded at
$46.6 billion for 2006. This is slightly higher than the
administration's proposed funding level for 2006. But the
committee's 6-year reauthorization proposal recently introduced
as H.R. 3 is consistent with the administration's 6-year
proposed funding level of $283.9 billion. The bill that is
coming up next week we hope will be in line with the budget
submission from the administration.
Although the administration's proposal is not sufficient to
meet highway and transit investment needs as estimated by its
own Department of Transportation, our committee considers the
$283.9 billion level to be an adequate point at which to resume
deliberations on the surface transportation reauthorization
bill. So we have adopted this funding level for purposes of
House passage of H.R. 3 and request that the budget resolution
assume at least the H.R. 3 funding levels.
In addition, in order to preserve maximum flexibility in
conference, we ask that a contingency procedure for surface
transportation again be included in the budget resolution to
allow spending to be increased to the extent such spending is
offset by new receipts to the Highway Trust Fund. We remain
committed to ensuring that the Highway Trust Fund revenues are
adequate to meet investment needs and are made fully available
for their intended purposes. And toward that end, one of the
Transportation Committee's highest priorities is the
continuation of the firewalls and guaranteed funding levels
that were established in TEA 21, including the transit general
fund guarantee. We appreciate your continued cooperation on
these key components of the reauthorization effort.
In addition to the surface transportation issues I have
already discussed, I would like to highlight the committee's
recommendations regarding aviation funding. This year the
number of air travelers is expected to return to and surpass
the record high levels that were experienced prior to 9/11. In
2000, we saw one in every four commercial flights delayed,
canceled or diverted. Without improvements in the aviation
system capacity, airline delays will quickly return to the
levels experienced in 2000.
Under the President's budget, aviation capital programs
would receive $5.45 billion, $1.2 billion less than the $6.65
billion levels guaranteed by the Vision 100--Century of
Aviation Reauthorization Act. This proposed reduction is
extremely shortsighted and will only serve to accelerate the
impending crisis of congestion and delays in our Nation's
aviation system.
To ensure that our aviation system remains safe, reliable,
and efficient, we recommend that aviation capital programs be
funded at least at the $6.65 billion level guaranteed by Vision
100. The $1.2 billion shortfall between the President's budget
and the Vision 100 guaranteed level must be corrected in the
budget year 2006 Transportation-Treasury-HUD appropriations
bill, or the bill will be subject to the point of order that
protects the Vision 100 authorization level. Therefore, for
both substantive and procedural reasons, it is important that
the budget resolution assume full funding of the aviation
capital programs.
For more comprehensive information on the committee's
recommendations, I refer you to the Views and Estimates adopted
by the committee on February 16, 2005. These Views and
Estimates demonstrate that we are significantly underfunding
many of our transportation and infrastructure investments from
surface transportation, aviation, to ports, inland waterways,
clean water infrastructure, and public buildings. These needs
exceed the revenues available.
Underinvestment in our Nation's transportation
infrastructure needs is penny wise and pound foolish. Economic
growth depends on a transportation system that moves people and
goods efficiently. By allowing congestion to grow more and more
each year, we are putting our economy, global competitiveness
and our quality of life at risk.
While the costs may seem high, the costs of not meeting our
Nation's transportation needs is greater still. So I urge your
support for the Transportation and Infrastructure Committee's
recommendations as you develop the 2006 budget resolution and
ask unanimous consent that the full statement be included in
the record of your proceedings.
[The prepared statement of Thomas E. Petri follows:]
Prepared Statement of Hon. Thomas E. Petri, a Representative in
Congress From the State of Wisconsin
Thank you Chairman Nussle and Ranking Member Spratt for allowing me
to testify before you on behalf of the Transportation and
Infrastructure Committee.
Enactment of H.R. 3, the ``transportation equity act: a legacy for
users,'' continues to be the committee's highest legislative priority
for the upcoming year.
Chairman Young and I appreciate your assistance during last year's
surface transportation reauthorization process, and look forward to
continuing to work cooperatively with you as this process moves forward
again this year.
Recently, the Transportation and Infrastructure Committee
unanimously approved its views and estimates for the 2006 budget,
including a recommendation that highway, highway safety, motor carrier
safety and transit programs be funded at $46.6 billion in 2006.
While this is slightly higher than the administration's proposed
funding level for 2006, the committee's 6-year reauthorization
proposal--recently introduced as H.R. 3--is consistent with the
administration's 6-year proposed funding level of $283.9 billion.
Although the administration's proposal is not sufficient to meet
highway and transit investment needs as estimated by the department of
transportation, the committee considers the $283.9 billion level to be
an adequate point at which to resume deliberations on the surface
transportation reauthorization bill. Therefore, we have adopted this
funding level for purposes of house passage of H.R. 3, and request that
the budget resolution assume at least the H.R. 3 funding levels. In
addition, in order to preserve maximum flexibility in conference, we
ask that a contingency procedure for surface transportation again be
included in the budget resolution to allow spending to be increased to
the extent such spending is offset by new receipts to the highway trust
fund.
We remain committed to ensuring that highway trust fund revenues
are both adequate to meet highway and transit investment needs, and
made fully available for their intended purposes. Toward that end, one
of the transportation committee's highest priorities is the
continuation of the firewalls and guaranteed funding levels that were
established in TEA 21, including the transit general fund guarantee. We
appreciate your continued cooperation on these key components of the
reauthorization effort.
In addition to the surface transportation issues I have already
discussed, I would like to highlight the committee's recommendation
regarding aviation funding needs.
This year, the number of air travelers is expected to return to and
surpass the record-high levels that were experienced in 2000, when one
in every four commercial flights was delayed, cancelled, or diverted.
Without improvements in aviation system capacity, airline delays will
quickly return to the levels experienced in 2000.
Under the president's budget, aviation capital programs would
receive $5.45 billion, $1.2 billion or 18 percent less than the $6.65
billion level guaranteed by the vision 100--century of aviation
reauthorization act.
This proposed reduction is extremely shortsighted and will only
serve to accelerate the impending crisis of congestion and delays in
our nation's aviation system. To ensure that our aviation system
remains safe, reliable, efficient, and able to accommodate the
increased number of passengers anticipated in the near future, the
committee recommends that aviation capital programs be funded at least
at the $6.65 billion level guaranteed by vision 100.
The aviation funding guarantees are enforced through points of
order, most notably the ``capital priority'' point of order. This point
of order was intended to ensure that aviation capital needs are not
shortchanged in a budget process that tends to defer needed long-term
investments while focusing on meeting more immediate needs.
The $1.2 billion shortfall between the President's budget and the
vision 100 guaranteed level must be corrected in the FY 2006
Transportation-Treasury-HUD appropriations bill or the entire bill will
be subject to this point of order in both the House and the Senate.
Therefore, for both substantive and procedural reasons, it is important
that the budget resolution assume full funding of the aviation capital
programs.
I would also like to draw your attention to several other
transportation-related proposals in the President's budget that we
believe are either politically unsustainable or unwise. If these
proposals are assumed in the budget resolution, they will create a
major shortfall in the Appropriations Committee's 302(a) allocation.
For example, a $1.9 billion shortfall will be created if the budget
resolution assumes enactment of the administration's proposed increase
in the aviation security fee. For reasons detailed in the views and
estimates we submitted to you last week, we believe this fee increase
places an unfair burden on air travelers. In addition, we believe it
has little chance of enactment at this time, as U.S. Airlines enter
their fifth consecutive year of multi-billion dollar losses.
Just as unrealistic is the administration's proposal to zero out
Amtrak. Although Amtrak is a perennial favorite of budget cutters, its
funding has been consistently restored during the appropriations
process. This proposal has little chance of enactment. If the budget
resolution assumes liquidation of Amtrak, but Amtrak funds are
subsequently restored during the appropriations process, other
important programs will have to be cut significantly in order to make
up the difference.
In addition, the President's budget proposes to cut funding for the
clean water state revolving fund and the army corps of engineers. While
these proposals would produce smaller funding shortfalls, they are
still of significant concern to the transportation and infrastructure
committee.
For more comprehensive information on the committee's
recommendations, I refer you to the views and estimates adopted by the
committee on February 16, 2005. These views and estimates demonstrate
that we are significantly under-funding many of our transportation and
infrastructure investments, from surface transportation and aviation to
ports, inland waterways, clean water infrastructure, and public
buildings.
Under-investment in our nation's transportation and infrastructure
needs is penny-wise and pound-foolish. Economic growth depends on a
transportation system that moves people and goods efficiently. By
allowing congestion to grow more and more each year, we are putting our
economy, global competitiveness, and quality of life at risk.
While the cost of meeting our nation's transportation and
infrastructure investment needs may seem high, the cost of not meeting
them is greater still. I urge your support for the Transportation and
Infrastructure Committee's recommendations as you develop the 2006
budget resolution.
Mr. Portman. I thank our colleague from the Transportation
Committee, and I appreciate your testimony today and commend
you for the fact that you are patient and persistent in coming
back again with a highway bill that we will be able to take up
shortly in the House.
You indicated that the number will likely be the $283.9
billion that the President had indicated was acceptable. Is
that still your understanding, first of all, that that would be
your number, and, second, that the administration would be
amenable to that number?
Mr. Petri. Yes.
Mr. Portman. We appreciate the input on the aviation
capital programs. Are you going to make changes in the trust
fund in the process of this transportation bill?
Mr. Petri. No.
Mr. Portman. Again, thank you for testifying today before
us and giving us your input. We look forward to having your
full statement in the record.
Mr. Spratt, any questions?
Mr. Spratt. Mr. Petri, I don't have the information at my
disposal. It is my recollection that the President requested a
fairly substantial increase in fees to be applied to the
Transportation Security Administration,
Mr. Petri. I believe that is right. That is obviously in
another committee's jurisdiction.
Mr. Spratt. OK. Homeland Security?
Mr. Petri. Yes.
Mr. Spratt. Do you have any opinion, since aviation does
fall within your purview, do you have the opinion of what the
impact of those fees might be upon the commercial aviation
industry?
Mr. Petri. We know there are bankruptcies there. There are
significant tension issues. They have experienced significant
increases in ticket fees and other charges in the past few
years to fund at least security problems. So the impact cannot
be good.
Mr. Spratt. Thank you very much.
Mr. Portman. Mr. Conaway.
Mr. Conaway. No questions.
Mr. Portman. Thank you, Chairman Petri. We appreciate your
testimony.
And our next witness is Mr. Gibbons. Are you prepared?
Mr. Gibbons. I am indeed.
Mr. Portman. Move in the middle if you like. I know you had
initially thought you might be joined by Mr. Bishop and Ms.
McMorris. I assume they are not going to be joining you at the
outset?
Mr. Gibbons. Mr. Otter is here as well.
Mr. Portman. Do you want to join us at the table, Mr.
Otter?
And, Mr. Gibbons, we appreciate your testimony, and you
have 10 minutes.
STATEMENT OF THE HON. JIM GIBBONS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEVADA
Mr. Gibbons. Thank you, Mr. Chairman, and I will make my
comments fit within the time allotted there and would ask that
my full statement be admitted into the record.
Mr. Portman. Without objection.
Mr. Gibbons. Mr. Chairman, I first want to thank you and
the members of this committee for inviting us to testify today
about issues that directly affect many Western States, but,
most importantly, my home State of Nevada. And I understand the
challenges that you face in crafting the 2006 budget
resolution, and I am grateful that you have given us an
opportunity to be involved in that process.
First and foremost, let me speak on a matter of direct
importance to the State of Nevada. The President's budget
proposal to redirect revenue from Southern Nevada Public Lands
Management Act to the Federal Treasury is the issue at hand
here. I stand united with the entire Nevada delegation in
opposition to this proposal.
Revenues from the land sales in Nevada should stay in
Nevada, just as the Southern Nevada Public Lands Management Act
(SNPLMA) mandates and Congress intended when the act was
passed. The funding Nevada receives under the Southern Nevada
Public Lands Management Act is critically needed to support
Nevada's general education fund, conservation efforts, habitat
protection, and Lake Tahoe restoration. This revenue helps
address the challenges facing Nevada due to the development
that SNPLMA, the acronym we use, has allowed, such as the many
new schools that must be built and the protection of sensitive
lands near those new communities. This funding is even more
critical when you consider that over 91 percent of the State of
Nevada is owned and managed by the Federal Government and,
therefore, removed from any property tax rolls.
Additionally, Nevada faces Federal tax share burdens which
are unfairly high. For every dollar in Nevada taxes that goes
to Washington, DC, Nevada receives only 70 cents back to our
communities. The administration's proposal to divert the
revenue from SNPLMA to the Federal Treasury means Nevada would
be sending more money to Washington, DC. And getting even less
back. This de facto tax adds insult to injury by robbing Peter
to pay Paul with money generated by Nevadans in Nevada for
Nevada. Therefore, I respectfully request that the Southern
Nevada Public Lands Management Act funds remain in Nevada where
they belong.
I must also express my strong opposition to the President's
proposed funding levels for the Yucca Mountain nuclear waste
repository. I would be remiss not to address that issue. And I
realize that the United States needs to find a solution to the
nuclear waste problem, and I am committed to that goal;
however, Yucca Mountain is not the answer.
Every week that goes by, and with every dollar spent in an
attempt to make Yucca Mountain feasible, additional flaws that
would render the project unsuitable for licensing are exposed.
Scientific, public safety, health, and environmental concerns
surrounding the proposed waste repository are well documented.
The future of nuclear power should not rely on a hole in the
ground in the Nevada desert. Rather it should rely on sound
science and new, innovative technologies. For the good of our
entire Nation, the Budget Committee must reject the unnecessary
and wasteful $651 million budgeted for Yucca Mountain, and
under no circumstances should the funding for the project be
taken off budget or removed from the tight fiscal control of
Congress.
On a different topic, as Westerners, we have a very unique
relationship with the Federal Government. In Nevada, the
Federal Government owns about 65 million acres of land, which,
as I mentioned, equates to over 91 percent of the State.
Contrast that with the Chairman's home State of Iowa where
close to 300,000 acres are owned by the Federal Government,
equa less than 1 percent of Iowa's total land mass.
More often than not in the West, the Federal Government
isn't just our neighbor, it is the entire neighborhood. With
such a large Federal presence comes significant challenges,
especially in our rural communities. The Payment in Lieu of
Taxes Program (PILT) helps to compensate for the inability of
our rural communities to generate tax revenues for schools and
local infrastructure because of Federal land ownership. Since
Nevada cannot raise revenue from over 91 percent of our State,
PILT funding is vital, yet the program has never been
adequately funded.
The President's proposal to decrease PILT funding by $26
million will only exacerbate the current funding discrepancy,
and the burden to our rural communities grows even greater. I
find this disheartening and would encourage you to include full
funding of PILT in your fiscal 2006 budget report.
Another discouraging aspect of the proposed budget is $154
million earmark for land acquisition. In an era where we have
to dedicate more resources to battling the war on terror, it is
irresponsible, I believe, for the Federal Government to spend
more money on further land acquisition. Land management
agencies do not have enough money to manage the land they
currently have. Additional land acquisition places a greater
burden on the Federal agencies charged with management of these
lands as well as the communities that lose that tax base. Land
management agencies should focus on getting their Federal house
in order prior to expanding their reach. If, as a Congress, we
can get Federal land acquisition under control and fully fund
Payment in Lieu of Taxes, we will make sincere progress in
preventing a decrease in the quality of life in our rural
communities.
Mr. Chairman, I hope during the next few weeks you can
examine these important issues that negatively affect many
people in the Western United States. And I want to thank you
again for this opportunity to share my views, and I would yield
back the balance of my time.
Mr. Portman. Thank you, Chairman Gibbons, and we appreciate
your bringing these issues to our attention.
[The prepared statement of Jim Gibbons follows:]
Prepared Statement of Hon. Jim Gibbons, a Representative in Congress
From the State of Nevada
Mr. Chairman, I would like to first thank you and the members of
this committee for inviting me to testify today about issues that
directly impact my home state of Nevada. I understand the challenges
that you face in crafting the 2006 Budget resolution, and I am grateful
that you have given us the opportunity to be involved in that process.
First and foremost, let me speak on a matter of direct importance
to the state of Nevada. The President's Budget proposed to redirect
revenue from the Southern Nevada Public Lands Management Act (SNPLMA)
to the Federal treasury. I stand united with the entire Nevada
delegation in opposition to this proposal.
Revenues from land sales in Nevada should stay in Nevada, just as
SNPLMA mandates and as Congress intended. The funding Nevada receives
under SNPLMA is critically needed to support Nevada's general education
fund, conservation efforts, habitat protection, and Lake Tahoe
restoration. This revenue helps to address the challenges facing Nevada
due to the development SNPLMA has allowed-such as the many new schools
that must be built and the protection of sensitive lands near new
communities. This funding is even more critical when you consider that
over 91 percent of the state of Nevada is owned by the Federal
Government and thereby removed from any property tax rolls.
Additionally, Nevada's Federal tax share burden is unfairly high.
For every dollar in Nevada taxes that goes to Washington, DC, only 70
cents goes back to our communities. The administration's proposal to
divert revenue from SNPLMA to the Federal treasury means Nevada would
be sending more money to Washington, DC and getting even less back.
This defacto tax adds insult to injury by robbing Peter to pay Paul
with money generated by Nevadans, in Nevada, for Nevada. Therefore, I
respectfully request that SNPLMA funds remain in Nevada where they
belong.
I must also express my strong opposition to the President's
proposed funding levels for the Yucca Mountain nuclear waste repository
site. I realize that the United States needs to find a solution to the
nuclear waste problem * * * and I am committed to that goal. However,
Yucca Mountain is not the answer.
With every week that goes by and with every dollar spent in an
attempt to make Yucca mountain feasible, additional flaws that should
render the project unsuitable for licensing are exposed. The
scientific, public safety, health, and environmental concerns
surrounding the proposed waste repository are well-documented. The
future of nuclear power should not rely on a hole in the ground in the
Nevada desert; rather it should rely on sound science and new,
innovative technologies. For the good of our entire nation, the Budget
Committee must reject the unnecessary and wasteful $651 million
budgeted for Yucca Mountain. And under no circumstances should the
funding for the Yucca Mountain Project be taken off-budget or removed
from the tight fiscal control of Congress.
On a different topic, as westerners, we have a very unique
relationship with the Federal Government. In Nevada, the Federal
Government owns about 65 million acres of land, which as I mentioned
earlier, equates to over 91 percent of the state. Contrast that with
the Chairman's home state of Iowa, where close to 300,000 acres are
owned by the Federal Government--equaling less than 1 percent of Iowa's
total land mass.
More often than not, in the west, the Federal Government isn't just
our neighbor, it's the entire neighborhood. With such a large Federal
presence comes significant challenges, especially in our rural
communities. The PILT (Payment in Lieu of Taxes) program helps to
compensate for the inability of our rural communities to generate tax
revenue for schools and local infrastructure because of Federal land
ownership. Since Nevada cannot raise revenue from over 91 percent of
our state, PILT funding is vital * * * yet, the program has never been
adequately funded.
The President's proposal to decrease PILT funding by $26 million
will only exacerbate the current funding discrepancy and burden our
rural communities even more. I find this disheartening and would
encourage you to include full funding of PILT in your FY'06 budget
report.
Another discouraging aspect of the proposed Budget is the $154
million earmark for land acquisitions. In an era where we have to
dedicate more resources to battling the War on Terror, it is
irresponsible for the Federal Government to spend more money on further
land acquisition. Land management agencies do not have enough money to
manage the land they currently have. Additional land acquisition places
a greater burden on the Federal agencies charged with management of
these lands as well as the communities that lose that tax base. Land
management agencies should focus on getting the Federal house in order,
prior to expanding their reach. If as a Congress we can get Federal
land acquisition under control and fully fund PILT, we will make
sincere progress in preserving the quality of life in our rural
communities.
Mr. Chairman, I hope that during the next few weeks that you
carefully examine these important issues that negatively impact many
western states. Again, thank you for this opportunity to share my
views.
Mr. Portman. You mentioned that Iowa had only 300,000
acres. Ohio is probably similar.
Mr. Gibbons. It should be, I guess.
Mr. Portman. But probably a similar percentage, and these
are not issues many of us who are not in Western States deal
with everyday.
We appreciate the input on the Southern Nevada Public Lands
Management Act, but also on Yucca Mountain and the PILT issue,
which is one that most districts probably deal with in one way
or another, and then the issue of future land acquisition.
I would like to request at this point before we turn it
over to Mr. Spratt that Mr. Otter and Mr. Cannon have a chance
to make comments within the time frame. You were going to share
these 10 minutes. We have 3 minutes and 17 seconds remaining.
You and Mr. Otter have 10 minutes separately. So if you would
like to--Mr. Gibbons indicated you with were him on this
testimony, but do you have different issues?
Mr. Otter. No. I will use those 3 minutes that he didn't
and plus my own 10.
Mr. Portman. Why don't we do this. Let us turn it over to
Mr. Spratt and Mr. Conaway and see if they have questions for
Mr. Gibbons to allow him to leave, and then we will turn next
to Mr. Cannon and Mr. Otter, assuming this is on the same
general topic. And then we are going to go to Ms. Berkley and
Mr. LoBiondo.
Mr. Spratt, any questions?
Mr. Spratt. Mr. Gibbons, just two questions. First of all,
I listened carefully, but do you have anything to say about the
change in pricing by the Power Marketing Administration? Does
that affect Nevada?
Mr. Gibbons. I did not change that, but I will be happy to
look into that to see if there is an impact on the people of
the State of the Nevada, especially the rural communities that
are affected. But power marketing was not part of my comment.
Mr. Spratt. Secondly, what would you support in the way of
funding for Yucca Mountain?
Mr. Gibbons. Zero.
Mr. Spratt. That is a succinct answer. Thank you, sir.
Mr. Portman. Mr. Conaway.
Mr. Conaway. Mr. Gibbons, in Texas we have very little
Federal lands, but we have school lands that support the
educational process. You mentioned that the money from the land
sales supports education in Nevada. Can you give me a sense of
the percentage of that money?
Mr. Gibbons. Out of the Southern Nevada Public Lands
Management Act, 5 percent goes to the Permanent Education Trust
Fund in the State of Nevada; 10 percent goes for the Southern
Nevada Water Authority; and the balance, 85 percent, is given
to the Department of Interior budget to do with as they speak.
And we are talking about $1.6 billion from the sale of land in
the most recent years.
Mr. Conaway. This is the State department of interior or
U.S.?
Mr. Gibbons. U.S.
Mr. Conaway. I don't have any other questions.
Mr. Portman. Mr. McHenry.
Mr. McHenry. No.
Mr. Portman. Do you all have any comments you would like to
make? You have 1 minute and 14 seconds remaining.
STATEMENT OF THE HON. CATHY MCMORRIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WASHINGTON
Miss McMorris. Thank you, Mr. Chairman.
I am Cathy McMorris from Washington State and really
appreciate the time to share with you one concern. But first of
all, I am very supportive of the effort to cut the deficit in
half, and I appreciate we are going to have to be making some
very difficult decisions, but like everyone else who is here, I
have one issue that is especially concerning to Washington
State and the Pacific Northwest, and it is related to what
would amount to be significant rate increases for the
Bonneville Power Administration (BPA), and this is on top of
the fact that we had an energy crisis in early 2001.
We have lost a lot of jobs related to that impact. It
amounted to a 36 percent increase in retail electric rates,
increases during that time period, 1999 to 2002. And this would
basically mean that we would be facing similar rate increases
moving forward. During that time period, we lost 72,000 jobs.
We saw unemployment go up from 5 to 7 percent. We lost 10
aluminum smelters, and there are only 3 more that are partially
operating today. And I am very concerned that if we faced more
electric rate increases, that we would lose those aluminum
smelters. Without a doubt, it would have significant impacts on
our economy, and I also believe it would have significant
impacts on our tax revenues.
Another piece of this proposal is counting Bonneville's
third-party debt cap. The administration in its proposal is
raising the debt cap by $200 million, and there is a lot of
uncertainty as to what the impact of that would be, and the
fact that it would also impact BPA's ability to expand the
transmission system, mitigate for fish and wildlife, and
acquire cost-effective conservation and renewable resources.
I recognize that we have some difficult decisions. I
believe this part of the proposal would actually cost jobs and
stifle economic growth, and I ask for your consideration in
removing this part from the budget. Thank you.
[The information referred to follows:]
Prepared Statement of Hon. Cathy McMorris, a Representative in Congress
From the State of Washington
Thank you for the opportunity to come before you.
I am here today to talk about the Administration's proposal to
increase power rates in the Pacific Northwest.
The Pacific Northwest was hard hit by the Western electricity
crisis of 2001, the economic recession and the technology slump.
I would like to take a moment to give some examples of what this
increase will mean to the region should it be implemented.
The increase in retail electricity rates in the region between 1999
and 2002 was 36 percent--the same order of magnitude as the expected
impacts of the market-pricing proposal.
The region has been dramatically affected by the rising cost of
energy. For example:
Between 2000 and 2003, the region lost 72,000 jobs.
Unemployment rates increased from 5 percent to more than 7 percent.
In both 2002 and 2003, Oregon and Washington had the highest
unemployment rates in the nation with the exception of Alaska.
The region's ten aluminum smelters shut down. Only three aluminum
plants are partially operating today. Price increases caused by the
Administration's proposal would certainly push even those plants over
the edge, and a regional industry that recently provided half of the
U.S. aluminum production and one-tenth of the world production would be
gone.
Here is a summary of the effects of the increased Bonneville market
rates:
CHANGE IN REGIONAL ELECTRICITY COSTS
$1.4 billion increase in cost of power from Bonneville
$300 million increase in cost of power to residential and
small farm IOU customers
$1.7 billion total increase (spread over 3 years)
EFFECT ON REGIONAL ECONOMY
$1.3 billion dollar decrease in personal income
13,000 decrease in regional jobs
Additional effects on aluminum and other energy intensive
industry
Decreased income and jobs in other regions
EFFECT ON TAX REVENUES
$217 million dollar decrease in Federal personal income tax
revenues
Additional loss in Federal revenues corporate profits taxes
$59 million dollar decrease in state personal tax revenues
Additional loss in state revenues from corporate taxes
Another important component of the Administration's proposal is
counting Bonneville's third party debt toward the cap on its borrowing
authority. BPA's borrowing authority is raised by $200 million in the
proposal, but the effects of the redefinition of debt are unclear. If
BPA's ability to borrow is severely constrained, it will affect its
ability to carry out much needed maintenance and expansion of the
transmission system as well as fulfill its statutory responsibilities
to mitigate for fish and wildlife impacts and acquire cost effective
conservation and renewable resources.
I hope my testimony today demonstrates the negative effect this
will have on the Pacific Northwest. I urge you to consider these
examples. This proposal will cost jobs, cost consumers and stifle
economic growth. Our region's economy was built on inexpensive hydro
power from our dams and rivers. It is unfair to increase our region's
power rates. We need to preserve the natural resources that sustain the
economies of the Pacific Northwest.
Again, I thank the Chairman.
Mr. Portman. Thank you for your testimony. Mr. Spratt.
Mr. Spratt. I have none.
Mr. Portman. The Power Marketing Association issue is one
which will be looked at in the individual committees of
jurisdiction, and we appreciate your input today.
Mr. Conaway.
Mr. Conaway. With respect to the power problems, California
chose to not build capacity to generate. Can you shed us
Washington State's attitude toward additional power generation
capacity for electricity during that time frame? Are you buying
power from other places?
Miss McMorris. We have--the biggest challenges that are
facing Washington State relates to transmission and getting the
power after it is generated. We have had challenges in
Washington State in actually generating new power, too.
At the State level we have been trying to work through some
of the permitting issues, especially those that have caused us
some difficulty, but the biggest challenge is relating to
transmission issues, and this proposal would make it even more
difficult because BPA oversees the power transmission system.
Mr. Conaway. There is some sense of recognition that
additional generating capacity within the State would help?
Miss McMorris. Absolutely. And I would remind you that
Washington State has many hydroelectric dams. They are--it has
been the source of very low power rates in the past, and we
have worked very hard to protect those dams and make sure we
are generating electricity and adding to the system.
Mr. Portman. Thank you, Ms. McMorris.
Gentlemen, ladies, I am going to make a revision in our
timing here, and I won't make Mr. Otter and Mr. Cannon very
happy, but I am informed that Mr. LoBiondo was the next Member
in line by the staff. He has a plane to catch. And then Ms.
Berkley was next.
I was told by Mr. Gibbons that you all were together, so I
mistakenly thought you were going to testify with him. If you
two gentlemen would not mind being patient, we will let these
other Members--so if it is with the indulgence of the
committee, I would like to go in order of attendance here, and
that is Mr. LoBiondo, then Ms. Berkley, Mr. Cannon and Mr.
Otter together, and then Mr. Bishop. I know, Mr. Bishop, you
were to be part of the earlier group. If you would like to
testify at the end of the line, we would welcome your
testimony. But we will go to Mr. LoBiondo for 10 minutes.
STATEMENT OF THE HON. FRANK A. LOBIONDO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. LoBiondo. Mr. Chairman, thanks very much for your
consideration. I deeply appreciate it. I appreciate the
opportunity to testify today on the 2006 budget. I certainly
support the effort to reduce the deficit and move back to a
balanced budget; however, I think we must do so in a very
responsible way that fairly balances our priorities and
provides for improved homeland and economic security for our
country.
As the committee is aware, the President has requested an 8
percent increase in the overall Coast Guard budget. I chair the
Coast Guard and Maritime Subcommittee, and I just came from a
hearing where we were reviewing the Service's budget request,
and I can tell you that every penny of this modest increase is
desperately needed. The Service continues to be tasked with
doing more and more homeland security and homeland security
responsibilities while struggling to maintain what are
considered very traditional missions that have great
significance to our Nation, and as their operation tempo
continues to increase, and because of past increases, their
aging assets are rapidly failing. Our Dolphin helicopter
engines are literally failing in flight, and an alarming
percentage of the cutter fleet are suffering from broken
propulsion systems and breached hulls, a very serious condition
which not only has resulted in fiscal year 2004 of 742 patrol
days that were lost because of these asset failures, but, maybe
more importantly, they are putting the lives of our Coast Guard
men and women at serious risk.
Fortunately, the Deepwater program is working to replace
the Service's aging fleet of ships and aircraft with more
flexible assets able to meet the multimission challenges of
today. Unfortunately, funding for the program has been
insufficient to keep up with the original 20-year procurement
schedule. We have slipped significantly, and Deepwater needs to
be accelerated. Doing so would ensure that the Coast Guard is
able to respond to terrorist threats and to maintain a high
level of readiness to fulfill its other vital missions. And as
a recently released congressional report found, acceleration
will result in approximately $4 billion in overall savings to
the taxpayer. It is a win-win situation.
The Coast Guard has provided my subcommittee with $920
million in unfunded fiscal year 2006 priorities. Deepwater
accounts for $700 million of that. I respectfully request the
committee make every effort to at least--to accommodate the
administration's request for the Coast Guard, but urge the
committee to do more for the sake of our homeland security
efforts.
In addition to homeland security and other national
priorities is improving economic opportunity. A program now
under way is helping to accomplish this goal in my district and
across the country. As you know, empowerment zone initiatives
provide Federal assistance to support the comprehensive
revitalization of designated communities across the Nation.
In my district in Cumberland County, NJ, empowerment zone
is a collaborative revitalization effort among the communities
of Bridgeton, Millville, Vineland, and Port Norris. Cumberland
has committed nearly 100 percent of the $25 million that has
been made available by Housing and Urban Development so far.
Over 360 jobs have been created to date, with an additional
1,400 that we are just on the edge of being able to lock in on
over the next 12 to 18 months if the Federal funding source
continues. Over 166 housing units have been renovated and
rehabilitated, and there has been construction for areas in EZ
neighborhoods. A $4 million loan pool has been made available
to be reinvested back into targeted communities. And one of the
most telling features of this program and the positive
partnership it is is that these projects are leveraged by a
total of about $340 million in private, public and tax-exempt
bond funding. Put plainly, this Cumberland EZ zone has
leveraged nearly $12 in private investment for every $1 in
public funding, yielding great results. I think this is a
return that the Federal Government would love to see in a
number of different areas.
The administration proposes to consolidate empowerment zone
programs in 17 other economic development programs into the
Strengthening America's Communities Initiative. While Congress
has not seen the details of this proposal, I am very concerned
that the initiative may not be effective as the empowerment
zone program, and the success we have met in Cumberland County
and other areas will be lost, and we will slide back. So until
Congress has an opportunity to better review and consider the
administration's proposal, I urge the committee to continue to
accommodate full funding for empowerment zone.
Economic security is also dependent on providing our youth
with the skills they will need to be successful as they move
into the workforce. That is why I am very concerned the budget
proposes to eliminate Federal funding for vocational education.
The Perkins program is the only federally funded program for
students who pursue vocational and technical education at the
secondary and community college level. These institutions
strive to prepare students for employment in the higher-paying
skilled jobs of the future. The elimination of this funding
would cost New Jersey nearly $30 million in direct career and
technical assistance. Without these funds, vocational and
technical schools in my State would not be able to effectively
continue the professional development of their teaching core
and support staff. And in my part of the State, which is a
third of the State geographically, it is the rural part of the
State, we lag behind a lot of other indicators in north Jersey,
and because of infrastructure concerns and a lot of other
components, we have an unemployment rate that is nearly double
the rest of the State. We don't have the high-tech jobs that
come into my part of the district, so vocational education
takes on an added responsibility for kids who wouldn't have an
opportunity otherwise.
I was very pleased to see the administration's budget
include a request to increase the military death benefit from
$12,000 to $100,000, but I would like to see this program
expanded. Limiting the payout to only those killed on active
duty is arbitrary and wrong. The proposal should cover all of
our brave servicemembers who have made the ultimate sacrifice
to defend our freedom, be it on the battlefield or in training.
In my district we have lost five heroes in this war on
terrorism, and there is never enough money to honor the
sacrifice of these brave men and women and of their families.
I recognize we have significant budget restraints this
year, but I strongly believe we must find the necessary
resources to secure America's homeland and our economic future.
I thank you for this opportunity to present my views.
[The prepared statement of Frank A. LoBiondo follows:]
Prepared Statement of Hon. Frank A. LoBiondo, a Representative in
Congress From the State of New Jersey
Mr. Chairman, thank you for the opportunity to testify on my
priorities for the Fiscal Year 2006 Budget Resolution. I support the
effort to reduce the deficit and move back to a balanced budget.
However, we must do so in a responsible way that fairly balances our
priorities and provides for improved homeland and economic security for
our country.
As the Committee is well aware, the President requested an 8
percent increase in the overall Coast Guard Budget. I just came from
chairing a Coast Guard and Maritime Transportation Subcommittee hearing
on the service's budget request and I can tell you that every penny of
this modest increase is desperately needed. The service continues to be
tasked with more and more homeland security responsibilities, while
struggling to maintain their commitment to their traditional missions.
And as their operations tempo increases, their aging assets are rapidly
failing. Dolphin helicopter engines are literally failing in flight and
an alarming percentage of the cutter fleet is suffering from broken
propulsion systems and breached hulls. In fiscal year 2004, 742 patrol
days were lost because of asset failures.
Fortunately, the Deepwater program is working to replace the
service's aging fleet of ships and aircraft with more flexible assets
able to meet the multimission challenges of today. Unfortunately,
funding for the program has been insufficient to keep it to its
original 20 year procurement schedule. Deepwater needs to be
accelerated. Doing so would ensure the Coast Guard is able to respond
to terrorist threats and maintain a high level of readiness to fulfill
its other vital missions. And as a recently released Congressionally
mandated report found, acceleration will result in approximately $4
billion in overall savings to the taxpayer.
The Coast Guard has provided my subcommittee with $920 million in
unfunded fiscal year 2006 priorities. Deepwater accounts for $700
million of that. I respectfully request the Committee make every effort
to at the very least accommodate the Administration's request for the
Coast Guard, but I urge the Committee to do more.
In addition to homeland security, another national priority is
improving economic opportunity. A program now underway is helping to
accomplish this goal in my district and across the country. As you
know, the Empowerment Zone initiative provides Federal assistance to
support the comprehensive revitalization of designated communities
across the country. It is a 10 year program that targets Federal grants
to distressed communities for social services and community
redevelopment and provides tax and regulatory relief to attract and
retain businesses.
In my District, the Cumberland County Empowerment Zone is a
collaborative revitalization effort among the communities of Bridgeton,
Millville, Vineland and Port Norris. Cumberland has committed nearly
100 percent of the $25 million that has been made available by HUD so
far. Over 360 jobs have been created to date with an additional 1,400
anticipated over the next 18 months, if the Federal funding source
continues. Over 166 housing units have been renovated, rehabilitated,
constructed or purchased in EZ neighborhoods and a $4 million loan pool
is available to be reinvested back into the targeted communities.
Cumberland County has funded over 120 initiatives through the EZ
program. These projects are estimated to leverage a total of over $238
million in private, public and tax exempt bond financing. Put plainly,
the Cumberland EZ has leveraged nearly $12 in private investment for
every one dollar of public funding, a remarkable achievement that
demonstrates the success and promise of the Zone. The future success,
viability and sustainability of the Empowerment Zone and more
importantly, our communities, hinge on the ability to continue to
attract and leverage private investment. It is imperative the existing
Round II Empowerment Zones receive multi-year funding to facilitate the
implementation of the long term strategy plan as required by each Zone.
The administration proposes to consolidate the Empowerment Zone
program and 17 other economic development programs into the
Strengthening Americas Communities Initiative. While Congress has not
yet seen the details of the proposal, I am concerned the initiative may
not be as effective as the Empowerment Zone program and the success we
have met with in Cumberland County could be lost. Until Congress has an
opportunity to better review and consider the Administration's
proposal, I urge the committee to continue to accommodate full funding
for the Empowerment Zone program.
Economic security is also dependent of providing our youth with the
skills they will need to be successful as they move into the workforce.
That is why I am very concerned the budget proposes to eliminate
Federal funding for vocational education. The Perkins program is the
only federally funded program for students who pursue vocational and
technical education at the secondary and community college level. These
institutions strive to prepare students for employment in the higher
paying skilled jobs of the future. The elimination of this funding
would cost New Jersey nearly $28 million in direct career and technical
assistance. Without these funds, vocational and technical schools in my
state would not be able to replace equipment needed to keep up with
technology and workplace changes. They would not be able to implement
programs to meet the challenges of this century, nor would they be able
to effectively continue the professional development of their teaching
corps and support staff. All of this translates into reduced
opportunities for students as they move into the workforce. I urge the
Committee to support funding for this program.
The Administration's budget proposes to slow the growth of Medicaid
costs by $60 billion over the next 10 years. While I understand the
need, especially now, to look carefully at all programs to ensure that
they are being run cost effectively, I fear that cuts of this magnitude
could adversely effect needed health care services for some of our most
vulnerable citizens. We must remember that nearly 52 million children,
poor, disabled and elderly individuals rely on Medicaid for their
healthcare needs. Medicaid should be closely examined and policies
developed to reform the program so it can be sustained over the long
run.
I was very pleased to see the Administration's budget includes a
request to increase the military death benefit from $12,000 to
$100,000, but I would like to see the proposal expanded. Limiting the
payout to only those killed on active duty is arbitrary and wrong. The
proposal should cover all of our brave servicemembers who made the
ultimate sacrifice to defend our freedom, be it on the battlefield or
in training. New Jersey's Second District has lost five of it's sons in
Operation Enduring Freedom and Operation Iraqi Freedom. No amount of
money would is ever enough to honor the sacrifice of these and the rest
of our servicemembers , but this proposal is a step in the right
direction. I urge the Committee to accommodate an expanded proposal in
the budget resolution.
I want to take a moment to stress the important work the Army Corps
does to protect our coastal communities. As you know, the Army Corps
works with state and local coastal communities to replenish eroded
beaches and dunes to protect the residents and business owners from
hurricane and storm damage. Building these projects has a true economic
benefit for the Federal Government, as it reduces the amount we have to
pay in flood insurance claims and disaster relief when storms hit these
areas. Unfortunately, the administration has cut shore protection 60
percent below the FY05 enacted levels and placed a series of new and
arbitrary restrictions on funding for these projects. I strongly urge
the Committee to reject the administration's budget request for the
Army Corps shore protection program.
Finally, I respectfully request that as you prepare a new budget
resolution, you not include an assumption of revenues from drilling in
the Arctic National Wildlife Refuge. Revenue projections from drilling
in the refuge are entirely speculative. Oil companies are currently
focusing their investments on producing more oil from already developed
fields in Alaska and in exploring areas to the west of these fields in
the National Petroleum Reserve. As a result, it would be inappropriate
to assume these companies would bid on refuge leases. We should not
base our budget projects on such assumptions.
While I recognize that we have significant budget restraints this
year, I strongly believe we must find the necessary resources to secure
America's homeland and our economic future. I look forward to working
with you to develop a budget that reflects these goals.
Mr. Portman. Thank you, Mr. LoBiondo. We appreciate your
testimony, and with regard to all these issues, as you know,
the Budget Committee is eager to hear your input. Ultimately
these issues need to be resolved in your committee, at the
Appropriations Committee level.
And on the Coast Guard, I will ask you one question. The
President's budget has about a 3 percent increase for homeland
security. I don't know how much of that the Coast Guard would
benefit from. You indicated earlier it would be good to hold
the President's number. Are you pleased with the President's
policies and numbers and the budget on Coast Guard?
Mr. LoBiondo. I am very pleased with the President's
policies and numbers considering what some other areas are
suffering from, but the part I am trying to emphasize, while
people are saying, why are you worried, you have an 8 percent
increase there, we have to look at how their missions have been
increased.
Homeland security and maritime antiterrorism with port
security, we have only scratched the surface. The Coast Guard
is tasked to undertake making all of our ports safe. And the
maritime economy contributes about $750 billion to the gross
domestic product (GDP). If we had a terrorist incident at one
of our ports, it is likely to shut down all of our ports. The
consequences would be dramatic. So therefore, while Coast Guard
has an increase that we are pleased with, this is an absolute
minimum we can consider based on the fact we have expanded what
we are expecting them to do.
Mr. Portman. We appreciate your testimony on the enterprise
zones, vocational education, and finally the expansion of the
death benefit, and we look forward to working with you as this
budget process unfolds.
Mr. Spratt.
Mr. Spratt. I listened to your testimony and read it more
completely here, and I would encourage you to take a close look
at the Democratic resolution. I think you will find a lot of
accommodation of these points of view in the Democratic
resolution, probably more than in the Republican resolution. So
give us a fair shot. Empowerment zones, Coast Guard, vocational
education, I think we will have a lot of those places covered.
Thank you for testifying.
Mr. Portman. Mr. Conaway.
Mr. Conaway. No.
Mr. Portman. With that, we will turn to Ms. Berkley, and
thank you for your patience. You have 10 minutes. If you don't
use it all, we will not be disappointed.
STATEMENT OF THE HON. SHELLEY BERKLEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEVADA
Ms. Berkley. I would like to thank you, Chairman Portman,
and, of course, Ranking Member Spratt, for allowing me to share
my concerns regarding the administration's budget. There are
three issues that have a direct and negative impact on the
State of Nevada, and I would like to share those three issues
with you.
I would like to address a provision in the President's
budget that the people of southern Nevada overwhelmingly
oppose. The President has proposed taking 70 percent of the
funds from the Southern Nevada Public Lands Management Act
account to offset the deficit. This would deny Nevada at least
$700 million a year which would be used for conservation,
recreation, water, and education programs. I can assure you,
Mr. Chairman, the Nevada delegation stands united against this
proposal and will fight against this plan at every turn.
As Mr. Gibbons testified, almost 90 percent of the land in
Nevada is federally owned. The Southern Nevada Public Lands
Management Act is an innovative act that authorizes the
proceeds from land sales in Nevada to be used to build parks
and trails, acquire environmentally sensitive land, maintaining
the Clark County multispecies habitat conservation plan, and
improve the clarity of Lake Tahoe. Funds are also allocated for
water infrastructure, always a problem in the Nevada desert,
and education programs in the State of Nevada. The law has been
highly successful, and Nevada residents and millions of our
visitors have benefited from it.
The President should not be penalizing Nevada or seeking to
gut this program. Rather he should be applauding Senators
Ensign and Reid and former Senator Bryan for their ingenuity
and honor the intent of the law. Interior Secretary Norton said
during her many visits to the State of Nevada over the last
several months that this is an extremely innovative program
that should be used as an example for the rest of the Nation.
This proposal is going to take Nevada's money, which is used
for outstanding and important projects that would go unfunded,
and it would go into the general fund where it would disappear,
and nobody would benefit from this.
Second, I would like to address the President's proposal to
fund the proposed nuclear waste dump site at Yucca Mountain.
Multiple lawsuits have revealed that the proposed Yucca
Mountain repository will not protect the health and safety of
Americans. The Environmental Protection Agency blatantly
disregarded the findings of the National Academy of Sciences
that radiation levels will reach their peak levels--radiation
levels will reach their peak in 300,000 years, and instead the
EPA set up a 10,000-year radiation standard; the gap between
the science and the EPA standard, a mere 290,000 years.
The findings have established that the storage cannisters
that are proposed for Yucca Mountain will corrode. The study
did not say they may corrode; it said they will corrode and
release radioactive wastes into our groundwater, and there is
an enormous terrorist threat and risk created by this project
if waste is shipped across the Nation.
Despite the findings, the administration continues to push
recklessly ahead with the Yucca Mountain project. The
administration has proposed reclassifying contributions to the
Nuclear Waste Trust Fund as offsetting collections. Not only
does this budget gimmick funnel money to a project plagued with
problems, it also bypasses budgetary rules that have been put
in place to maintain the integrity of our appropriations
process. With rapidly growing deficits, Congress must ensure
that every dime of taxpayer money is spent responsibly. Given
the overwhelming needs in our Nation and the limited resources
at our disposal, it makes no sense to give special treatment to
the Yucca Mountain project at the expense of millions of
Americans' and our Nation's many pressing needs.
The President's budget also includes a provision that we
are deeply troubled by and that directly affects the gaming
industry. This provision requires gaming establishments to
intercept winnings from customers who owe child support. Now,
while I strongly support law enforcement's efforts to collect
payments from individuals who have failed to fulfill their
parental obligation, I oppose this provision. Under the
proposal, a customer whose winnings exceed the threshold for
filling out an Internal Revenue Service W2-G form would be
subject to the Federal records check in the Child Support
Federal Parent Locator Service. If the individual is listed in
the system, the gaming establishment would be required to
garnish the winnings.
This administration's proposal not only is very bad policy,
it creates unreasonable demands on the gaming industry and the
individual businesses, their employees, and sets alarming
precedents. It forces gaming establishments to pry into
sensitive personal information, creating obvious and serious
invasions of privacy concerns. Gaming establishments would
assume the investigatory and enforcement duties currently
entrusted to law enforcement and government agencies, and the
gaming establishments could be ultimately liable if any
employee mistakes or misuses the information.
Finally, it establishes a precedent of requiring private
businesses to directly apply the law to an individual. Should
banks check the court records of customers making deposits and
withdrawals? Must the car dealer invoke the same requirements
against their customers? The answer is clearly no.
The administration's proposal will open the door to
additional costly and unreasonable mandates on our business
community, and by singling out the gaming industry I think is a
huge mistake that starts us down a very slippery slope that we
don't wish to go down. While the goal of this provision is
laudable, the provision is imprudent and could lead to a myriad
of unintended consequences. I urge the committee to reject this
proposal. And I thank you for the opportunity that I have been
given to testify before the committee.
[The prepared statement of Shelley Berkley follows:]
Prepared Statement of Hon. Shelley Berkley, a Representative in
Congress From the State of Nevada
I would like to thank Chairman Nussle and Ranking Member Spratt for
allowing me to share my concerns regarding the Administration's Budget.
First, I would like to address a provision in the President's
budget that the people of southern Nevada overwhelmingly oppose. The
President has proposed taking seventy percent of the funds from the
Southern Nevada Public Lands Management Act account to offset the
deficit. This would deny Nevada at least $700 million a year, which
would be used for conservation, recreation, water and education
programs. I can assure you, Mr. Chairman, the Nevada delegation stands
united against this proposal and will fight against this plan at every
turn.
More than eighty percent of the land in Nevada is federally-owned.
The Southern Nevada Public Lands Management Act was an innovative law
that authorized the proceeds from land sales in Nevada to be used to
build parks and trails, acquire environmentally sensitive land,
maintain the Clark County Multi-Species Habitat Conservation Plan and
improve the clarity of Lake Tahoe. Funds are also allocated for water
infrastructure and education programs in the State of Nevada.
The law has been highly successful, and Nevada residents and
millions of visitors have benefited. The President should not penalize
Nevada or seek to gut the program. Rather, he should applaud Senators
Ensign, Reid and former Senator Bryan for their ingenuity, and honor
the intent of the law.
Second, I would like to address the President's proposal to fund
the proposed nuclear waste dump at Yucca Mountain. Multiple lawsuits
have revealed the proposed Yucca Mountain repository will not protect
the health and safety of Americans. The Environmental Protection Agency
blatantly disregarded the findings of the National Academy of Sciences
that radiation levels will reach their peak in 300,000 years, and
instead set a 10,000-year radiation standard. The gap between the
science and EPA's standard? A mere 290,000 years!
More findings have established that the storage canisters at Yucca
Mountain will corrode and release radioactive waste, and there are
enormous terrorist risks created by this project if waste is shipped
across the nation.
Despite these findings, the Administration continues to push
recklessly ahead with the Yucca Mountain Project. The Administration
has proposed reclassifying contributions to the Nuclear Waste Trust
Fund as offsetting collections.
Not only does this budget gimmick recklessly funnel money into a
project plagued with problems, it also bypasses budgetary rules that
have been put in place to maintain the integrity of our appropriations
process.
With rapidly growing deficits, Congress must ensure that every dime
of taxpayer money is spent responsibly. Given the overwhelming needs in
our nation and the limited resources at our disposal, it makes
absolutely no sense to give special treatment to the Yucca Mountain
project at the expense of millions of Americans and our nation's many
pressing needs.
The President's budget also includes a provision that directly
affects the gaming industry. This provision requires gaming
establishments to intercept winnings from customers who owe child
support.
While I strongly support law enforcement's efforts to collect
payments from individuals who have failed to fulfill their parental
obligations, I oppose this provision.
Under the proposal, a customer whose winnings exceed the threshold
for filling out an Internal Revenue Service W2-G form would be subject
to a Federal records check in the Child Support Federal Parent Locator
Service. If the individual is listed in the system, the gaming
establishment would be required to garnish the winnings.
This Administration's proposal is ill-conceived, creates
unreasonable demands on gaming businesses and their employees, and sets
alarming precedents.
It forces gaming establishments to pry into sensitive information,
creating serious invasion of privacy concerns. Gaming establishments
would assume the investigatory and enforcement duties currently
entrusted to law enforcement and government agencies, and the
establishments could be liable for any employee mistakes or misuse of
information.
Finally, it establishes the precedent of requiring a private
business to directly apply the law to an individual. Should banks check
the court records of all customers making deposits or withdrawals? Must
car dealers invoke the same requirements against their customers?
The answer is no, but the Administration's proposal will open the
door to additional costly and unreasonable mandates on our business
communities.
While the goal of the provision is laudable, the provision is
imprudent and could lead to a myriad of unintended consequences, and I
urge the Committee to reject this proposal.
Thank you for the opportunity to testify before the Committee.
Mr. Portman. Thank you, Ms. Berkley, and thank you for
giving us a lot of information in a short period of time. We
did hear earlier about the Southern Nevada Public Lands
Management Act, $700 million a year.
Ms. Berkley. You will be hearing it again.
Mr. Portman. It sounds like I may be. And it is an issue
that many of us in non-Western States would not be appreciating
as you have explained it, so we appreciate that.
Yucca Mountain, we appreciate your input on that; and
finally this additional burden on the gaming industry. Thank
you so much for your testimony.
Mr. Spratt.
Mr. Spratt. No questions.
Mr. Portman. Mr. Conaway.
Mr. Conaway. No.
Mr. Moore. No questions.
Mr. Portman. Thank you, Ms. Berkley.
To the patient gentleman from Utah and his colleague from
Idaho, I want to thank you for sticking with us and start the
clock.
Mr. Cannon. Could we make an adjustment? Mr. Flake has time
after us, and he has an airplane to catch. Could we put the
time together and let him start, and we will let other people
who need to go go more quickly, and stay within the parameters
of your time.
Mr. Portman. With the indulgence of the committee. Without
objection, we will do that. I want to commend you for your
generosity. Mr. Bishop, is that acceptable to you?
Mr. Bishop of Utah. Anything you say will be acceptable.
Mr. Portman. Your testimony will be received. With that,
Mr. Flake, welcome to the committee. The gentleman from
Arizona, we look forward to your testimony.
STATEMENT OF THE HON. JEFF FLAKE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF ARIZONA
Mr. Flake. I thank my patient colleagues. I will be brief.
I came before the committee last year to ask the same thing
I am going to ask this year, and the committee, I believe, did
the right thing in putting language in that reflected our
concerns. Our concern is every year the President has in his
budget additional funding for land acquisition, hundreds of
millions of dollars. When we use that, we create more Federal
land, which puts our cities and counties at a disadvantage in
terms of being able to fund schools and needed resources and
services.
We have a program called Payment in Lieu of Taxes that is
authorized at over $300 million and only funded at $200
million, actually a decrease from last year. What we are
advocating is taking land acquisition funding and applying it
to Payment in Lieu of Taxes. The committee did this last year,
reflected in language passed by the Budget Committee, and we
would urge you to do the same thing this year. When you get
more Federal land, it puts us in a deeper hole in terms of
Payment in Lieu of Taxes, and so we are really in a bind.
I noted just a few weeks ago, the administration had seen
the problem that we have here in the District of Columbia with
the Federal Government owning some so much excess land, and it
committed to sell off some of that land to get the District
government in a better financial position. We have that problem
in spades in the West: Arizona, with over half of its land
Federal; Nevada is that way, and Utah is even worse. It is
difficult for rural counties to make do.
And so we would ask again that we simply do the same thing
we did last year: Make further reductions in land acquisition,
apply that to PILT, and you would have additional money for
deficit reduction. We are not asking for additional resources
or money here; we are asking for less, far less, in Federal
land acquisition, a little more toward PILT, and apply the rest
to deficit reduction. I yield back.
[The prepared statement of Jeff Flake follows:]
Prepared Statement of Hon. Jeff Flake, a Representative in Congress
From the State of Arizona
Thank you for the chance to speak to you today on behalf of the
Congressional Western Caucus, where I serve as Vice-Chairman.
The Budget Committee has a number of tough choices to make in the
coming weeks. While I want to ensure that Western states have their
concerns addressed by this Committee, as a fiscal conservative, I am
not asking for something for nothing. Instead, I think we need to
reallocate current appropriations in a way that better serves
taxpayers.
Last year I talked to you about the need to fully fund the Payment-
in-Lieu-of-Taxes program (PILT) by reducing Federal land acquisition
funds. As you know, PILT funding goes to counties with high percentages
of Federal land.
Because counties cannot draw tax revenue from these Federal lands,
PILT funds provide the funding for schools, roads, and public safety
programs that normally would be paid for through local tax revenues.
Unfortunately, I am here to talk to you again this year about the
same funding issue. PILT is currently authorized at $340 million, yet
the President's budget only allocates $200 million for FY '06, a
reduction of $26.8 million from the current budget.
The Western Caucus firmly believes that this gap under funds the
government's obligation to compensate these communities for the land
held by the Federal Government.
At the same time, the President's budget continues to fund the
purchase of additional Federal lands despite its inability to
effectively manage the Federal lands that it currently administers. In
this year's budget, $154 million is provided for new Federal land
acquisition.
Last year, the Committee agreed that this inconsistency needed to
be resolved. In its discussion of PILT in its budget resolution, the
Committee said that the Federal budget could fully fund PILT, and that
further reductions should be made in Federal land acquisition spending.
I would ask that the Committee reaffirm its commitment to this
principle by including this report language again in its budget
resolution.
I continue to believe that we should fund PILT by reducing the
amount of money appropriated to the purchase of new Federal lands. If
we follow this Committee's own recommendations, we should significantly
reduce this funding level. By committing these savings to PILT, we
could fully fund the program and have money left over for deficit
reduction.
Another source of funds better spent on PILT are EPA discretionary
grants. The EPA has been widely and consistently criticized by the GAO,
OMB, and others for the way it spends more than $300 million every
year.
Often the funds from EPA simply free up other money that groups
receiving the grants then spend to try and defeat political candidates.
Subsidizing such political activity is not a wise use of tax dollars.
In summary, we in the Western Caucus are not asking for something
for nothing. We are advocating that this Committee take a hard look at
the money we spend, and allocate it more effectively to meet the
important needs of our communities rather than increase the already
inflated holdings of the Federal Government.
Again, I thank the Chairman.
Mr. Portman. Mr. Otter or Mr. Cannon.
Mr. Cannon. May we share time among ourselves? Is that
acceptable?
Mr. Portman. Mr. Flake, thank you for your testimony.
Start the clock, Mr. Otter or Mr. Cannon.
Mr. Cannon. Can we have the chart up here, both charts?
I think what Mr. Flake has said we are going to try and
reiterate. The picture here is worth 10 million words. You
recall that the States can't tax land that is owned by the
Federal Government, and that is why you have a Payment in Lieu
of Taxes.
So to set the discussion, let me read you a quote from
Ronald Reagan. I have a map, I wish everyone can see it. It is
a map of the United States. And land owned by the government is
in red, and the rest of the map is white. West of the
Mississippi River, your first glance of the map, you think the
whole thing is red, the government owns so much property. I
don't know any other place than the Soviet Union where the
government owns more land than ours does. And with that
context, let me turn the time over to Butch, and we will go
through several statements.
STATEMENT OF THE HON. C.L. ``BUTCH'' OTTER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF IDAHO
Mr. Otter. Thank you very much, Mr. Chairman, and thank
you, Mr. Cannon.
Mr. Chairman, at the risk of repeating what has already
been said, I would like to point out in the initial map that
you saw, that was not a Presidential election map. That was, in
fact, Federal ownership. And if you look at Idaho, Nevada,
Utah, New Mexico, quite a bit of California, you will see that
the tax base, which is white, is what supports our schools, it
supports our first responders. If there is a crime in that red
area, which is government land, police officers and sheriffs
from the white area have to go into the red area at the cost to
the tax base of the white area.
I think Mr. Flake said it best. We are getting $200 million
of Payment in Lieu of Taxes funds. Congress authorized $350
million. So we are getting $150 million less than was
authorized. We have never since that authorization received the
full funding of PILT. Obviously this was done for the purpose
of being able to defray the costs of the Federal lands within
the States.
Having said that, let me move on to a couple of other
concerns that I have. And I just would mention, too, before I
leave this whole lands issue, while we are being offered $26
million in the Interior budget for Payment in Lieu of Taxes,
the Federal Government agencies that can own land, the BLM, the
Forest Service, the Bureau of Reclamation and National Parks,
are getting $90 million to make that map even more red than it
is right now. And the redder that map is, the less we have as a
tax base.
I am very concerned about the administration's proposal to,
we have heard before, the Power Marketing Administration's
rates by 20 percent each year. What that means to the Pacific
Northwest is an increase in our power rates of about $480
million a year until we reach market price, which will then be
a total increase of $2.5 billion.
I would like to remind you that the economies of
Washington, Oregon, and Idaho, the Pacific Northwest as a
whole, rely heavily on value-added industries, that are driven
by the power we produce under our hydro projects.
Another area of concern for me is the administration's
proposal in protecting the American borders. During my time in
Congress, we have talked a lot about enhancing the national
security; however, our inability to control our borders leaves
our counties vulnerable to attack and promotes a blatant
disregard for our laws.
Over and over again we have heard how national security
requires communication, cooperation amongst all levels of law
enforcement right down to the county sheriff. I find it
particularly disturbing that the administration has completely
eliminated funding for the State Criminal Alien Assistance
Program. That is where we go and pick up an illegal alien and
put them in our jail with our police officers, who feed them
and take them until we are ready to turn them over to the INS
for shipment or to the Federal Government for shipment back to
the country from whence they came, or try them for the crime
that they committed. All of those costs and the money that we
used to get from the Federal Government have been eliminated
from the President's budget.
Mr. Chairman, just one more mention that I want to make,
and that is throughout the budget, I am alarmed at seeing where
we are actually increasing administrative budgets while at the
same time decreasing on the ground where we see the most good
being done by the expenditure of the dollars. For instance, a
constituent recently brought to my attention that the Small
Business Administration's administrative budget is being
increased in the President's budget by 20 percent this year,
while proposing grant funding for the actual on-the-ground
programs that are being cut, and that is really where we do the
best job for our economy and the future businesses that we have
in our economy. At the same time that we are cutting many
domestic programs that are important, we are increasing our
participation and our contributions to the betterment of
foreign countries.
Mr. Chairman, with that, I yield back the balance of my
time of my time.
[The prepared statement of C.L. ``Butch'' Otter follows:]
Prepared Statement of Hon. C. L. ``Butch'' Otter, a Representative in
Congress From the State of Idaho
Mr. Chairman, thank you for the opportunity to testify today. Let
me begin by stating my strong support for the principles of budget
discipline and fiscal responsibility. I represent a state where
balancing the budget is a constitutional requirement, and we understand
prioritizing needs and paying as we go. I applaud the President's
efforts to rein in spending and his realization that what we spend here
is not the government's money--it belongs to the individuals we serve.
With that said, I wish to express serious concerns with certain of
the President's budget priorities, specifically as they pertain to
meeting the legitimate obligations and commitments of government.
Mr. Chairman, I won't mince words. I am sorely disappointed with
the Administration's budget request for Payment in Lieu of Taxes, or
PILT. The authorized level for PILT funding is approximately $350
million, yet the Fiscal Year 06 request is for only $200 million. That
is $26.8 million less than was paid in Fiscal Year 05. In fact, the
$200 million represents the funding level from 2001.
Clearly, that does not rise to the level of commitment that my
constituents in Idaho or anyone in the West expect or deserve. We
should be increasing PILT, moving closer to fulfilling our obligation
to make local governments whole. Instead, we are moving in the wrong
direction.
Almost two-thirds of my state's land mass is controlled by the
Federal Government. Counties with high percentages of public lands have
little tax base to support such essential functions as police and fire
protection and the education of our children. It is simply unfair to
ask rural citizens whose livelihoods and lifestyles so often suffer as
the result of decisions by public land managers to fund the search-and-
rescue, waste disposal, and court costs for those who come to play on
those public lands. Congress realized this inequity and created PILT.
It is time Congress remembers the commitment it made to rural
communities and fully funds PILT.
I further suggest that the Federal Government seek to reduce its
financial impact on local communities by reducing land acquisitions. It
simply does not make sense for the Federal Government to continue
acquiring land when it cannot--or WILL not--take care of what it
already owns. If it really is in the best interest of the general
public for more land to be added to the Federal domain, then I believe
a similar amount of land should be removed from Federal management and
returned to local tax rolls.
I also am very concerned with the Administration's proposal to
increase Power Marketing Administration (PMA) rates by 20 percent each
year until reaching ``market rates.'' Although the rate increases are
described as ``gradual,'' the impact would be immediate and
devastating. To put a dollar figure to it, this proposal would cost the
Northwest $480 million next year and $2.5 billion over 3 years.
Such a drain on the region's resources will have a devastating
impact on job creation and economic development, and indeed on
businesses and communities large and small. The net result will be
robbing Peter to pay Paul--increasing the short-term revenue for the
Power Marketing Administration at the expense of the long-term economic
health and revenue-generating potential of municipalities, industries
and individuals throughout the Northwest.
Another area of concern for me in the Administration's budget
proposal is protection of America's borders. During my time in Congress
we have talked a lot about enhancing national security. However, our
inability to control our borders leaves our country vulnerable to
attack and promotes blatant disregard for our laws. Over and over again
we have heard how national security requires communication and
cooperation among all levels of law enforcement, right down to the
county sheriff. I find it particularly disturbing, then, that the
Administration again has completely eliminated funding for the State
Criminal Alien Assistance Program, or SCAAP.
Each year law enforcement agencies at the state and local level
incarcerate illegal aliens who have violated federal, state or local
laws. They do so at their own expense, often relying on local property
tax receipts to cover those costs. Through SCAPP they can be reimbursed
for these imposed expenses. Providing adequate funding for the program
helps ensure effective local law enforcement and fosters that ``team
spirit'' that we so desperately need to succeed in protecting our
national security. And yet, this successful program has been left
unnoticed in the Administration's budget over the past few years.
What bothers me so much, Mr. Chairman, is that while such critical
programs fall by the wayside in the name of fiscal responsibility, the
Administration continues to irresponsibly increase funding for foreign
aid. It is as though the right hand does not know what the left hand is
doing. For example, a constituent recently brought it to my attention
that the SBA's administrative budget has increased by 20 percent this
year while proposed grant funding for actual on-the-ground programs--
the ones that benefit our economy and the American people--is being
reduced. The budget proposal is rife with similar examples.
As it pertains to foreign aid, I am particularly concerned that we
continue offering financial assistance to countries with policies at
odds with America's national interests. While I support the
Administration's efforts in the Middle East, I am convinced that we
undermine our success by doling out foreign aid indiscriminately to
countries that actively work against us. How can we expect foreign
governments to act responsibly in the broader world community if our
own policy fails to hold them accountable even to us? The
administration is dramatically increasing funding for some foreign
assistance programs without evaluating their effectiveness or linking
those payments to behavior consistent with America's goals.
Thank you again, Mr. Chairman, for the opportunity to address these
critical issues of our government's responsibility to the people we
serve.
Mr. Cannon. I think Mr. Bishop would like to speak to the
effect of Payment of Lieu of Taxes and the failure to get
funding on our schools.
STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF UTAH
Mr. Bishop of Utah. Mr. Chairman, I assume you have the
handout that we presented, I would hope, because we have
pictures in there. The testimony will be riveting for you as
you read that.
When Utah became a State back in 1896, the enabling act
said the land, the red stuff, 67 percent of my State, would be
deeded to the Federal Government until such time as the Federal
Government shall, not if or might, but shall, dispose of the
lands, and the schools were supposed to get 5 percent of the
proceeds of that. It is historically typical of enabling acts
during that particular period of time. This concept we have
today that simply deals with the idea of recreational land-
owned funds to all of us is a fairly modern change in the
historical purpose for which that land was there.
If you could look at the pictures, and I am hoping you have
these. We brought them here.
Mr. Portman. Here they are.
Mr. Bishop of Utah. There are more pictures.
Let me have you turn to the first one, and I am going to go
through these quickly. Shows the percent change in projected
enrollment, which simply means those of us west of the Rocky
Mountains have all the kids. You guys don't. That presents the
problem. You can see the same thing if you look at the map of
the land there.
Go to the third one, with is pupil-per-teacher ratio, and
you find out those in the West have larger classes than those
of you in the East.
Percent change in expenditures per pupil. Those area where
education is growing slowest happens to be in the West. If you
want the bar graph right after it, our education funding is at
28 percent. Those east of the Rockies is growing at 57 percent.
There happens to be a common denominator in all of these
things. Go to the one that says Annual Property Taxes Lost to
Public Education. If that red property were able to be taxed,
my State would have $160 million more for the education budget
each year. I have two kids in high school. The Federal
Government is hurting my kids.
As you can see by all of these, the common denominator is
the West, where there is massive amount of Federal lands, do
not have as much money for education as the rest of the Nation
does, even though as you keep looking through these, you will
find out we have a higher tax burden and a higher commitment to
education. It is--the bottom line deals with the amount of land
that happens to be there.
We also have the problem, and I am glad the individual is
not here, but one of the constituents of a committee member
came to my State for recreation purposes on this public land.
Now, anyone in Utah knows that you don't go into the black box
area. He decided to go tubing in that area. Emery County had to
retrieve the body of one of your constituents, and it spent our
entire emergency funds for that one individual.
There are expenses incurred by Western States because of
Federal land that supposedly belongs to all of us. The PILT
issue goes right to the heart of this. If you look at the very
last picture, it shows you what we have been paying in PILT.
PILT is not welfare for the West. It is rent that is due by the
Federal Government so we can maintain services that every other
State has.
Actually there is one cute one you have to see. If you go
partway in the middle, it is called Land Ownership. If you
block out what you all own, you will see that the West is
almost totally blocked out, and you can compare it to what the
Federal Government owns in your particular States.
What we are asking for is the same thing. There needs to be
full funding of PILT. Our children are being harmed and our
citizens are being overtaxed because the Federal Government
will not allow us to develop our land. If you want to give us
the land back, we might work something out, but until that
time, there is rent that is due with PILT.
Secondly, as Representative Flake said, there is $154
million in additional funding for land acquisition. There is
too much. There has already been 5 million acres identified by
the BLM that needs to be eliminated, be vacated. And also there
is EPA funding--that last page of my testimony that needs to be
eliminated from the budget, looking at disposal lands that are
excess.
With that, Mr. Chairman, as the third Ranking Member, let
me say I am realizing I am the last as well, let me save
whatever time I have to Representative Cannon. I am done.
[The prepared statement of Rob Bishop follows:]
Prepared Statement of Hon. Rob Bishop, a Representative in Congress
From the State of Utah
Mr. Chairman, thank you for providing time to individual members to
testify on behalf of their priority issues before your committee. As a
member of the Congressional Western Caucus, I appreciate your past
interest in issues impacting the West. I am motivated to testify today
due to several inadequacies in the Administration's FY06 budget.
For decades, the American West has borne the burden of the Federal
Government's vast land holdings, resulting in less money available for
education, law enforcement, healthcare, emergency services, etc. As
I've looked through the Administration's FY06 budget, unfortunately I
do not see this burden on the West lessening--I see it increasing.
Payment in Lieu of Taxes or PILT was created to help offset the
tremendous cost to the counties from Federal ownership of lands. Sadly
the Administration has reduced by $26 million this year's PILT
allocation, referring to it as a non-priority in the budget--I am
offended.
The Federal Government owns over 65 percent of the land in my home
state of Utah. This disparity in ownership is the contributing factor
to Utah and the West's poor showing in annual expenditures on public
education when compared with the Eastern United States. Utah and most
Western states have tax rates that are equal to or greater than most
Eastern states. Additionally, Utah spends over 41 percent of its annual
budget on public education. However when it comes to per pupil
expenditures, we are close to the bottom. So what gives? Frankly, this
is attributable to the Federal Government ripping off the West each
year by under-funding PILT while still increasing its public lands
portfolio. This is demonstrated well in this year's budget as the
Federal Government's insatiable appetite to acquire more land is well
funded at $154 million.
Mr. Chairman, the Administration's budget priorities, when it comes
to public lands in the west, are perverse. I would argue their budget
priorities actually harm the children in my state by shortchanging
public education. By increasing Federal ownership of lands, they're
reducing the amount of taxable land and increasing the burdens on our
rural counties. I make no apologies when I say that, in effect, the
Federal Government has become an absentee slumlord--zealously and
unnecessarily holding onto ownership of public lands while squeezing
off financial assistance to nearly broke Western counties. Western
counties are increasingly finding themselves in the difficult situation
of determining which critical services to fund and still fulfill the
various Federal mandates placed upon them.
Some points to be made regarding PILT:
a. The proposed 2006 Budget only funds PILT at $200 million, a $26
million decrease from last year and more than $140 million short of the
fully authorized level.
b. The proposed FY 2006 budget ironically provides more than $154
million for new Federal land acquisition, which would create an
additional funding burden for the PILT program.
c. Over the past 10 years, the PILT program has always fallen short
of the authorized level averaging $155 million, while over the same
time period Federal land acquisitions funding has averaged more than
$347 million.
The Federal Government owns more than 670 million acres, almost
one-third of the land in the United States
As recently as April of 2004 the General Services Administration
identified more than 5 million acres of Federal lands as ``vacant''
with no Federal purpose.
As we consider the disparity in PILT funding and land acquisition
funding let us remember President Bush has talked of creating an
``Ownership Society.'' However, we live in a country where the Federal
Government is the largest possessor of wealth and property rather than
empowering our people with these gifts.
Absent a change in Administration policy, I encourage the following
to restore equity to rural western counties:
Fully fund PILT.
Cut Federal funds for land acquisition and transfer them
to PILT. The Federal Government should not be in the land acquisition
business.
Eliminate EPA discretionary grants. These are
controversial grants which should no longer be awarded.
Mr. Chairman, I am passionate about this issue. Again, I appreciate
the opportunity to testify before your committee. As you draw up the
parameters for the FY06 budget, I sincerely appreciate your favorable
consideration of the remarks and statements made by me and my
colleagues from the Congressional Western Caucus. With your help, we
can reign in the unnecessary spending on further land acquisition,
questionable Federal grants, and restore equity to the West. With that,
I yield back the balance of my time.
STATEMENT OF THE HON. CHRIS CANNON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF UTAH
Mr. Cannon. We will go ahead if you like, and I will be
quick. Just a couple of points on PILT. You can tell there is
some intensity here. The intensity is we are taxing our people
all over the West and spending less on education than anybody
else in the country. And the reason for that--and if you look
to the charts, you will see the compelling case. And the reason
for that is because of public lands. We have the Soviet-style
red block in the Western United States. People want to move to
rural parts of America. And so when I moved in my house 18
years ago, we had about 3,000 people in my little town and lots
of open spaces. Today there is no more open space after 15
years, and the town is about 15,000 people.
We have a problem or an opportunity in America where people
want to move to less urban areas. They want to have the
opportunities that high tech and broadband give them, and they
can do that today, and we need to make that attractive to them.
You can't do that when the tax burden is such that your schools
in these rural areas are underfunded and they have great
difficulty.
The fact is most people think, and I have heard many of our
Northeastern friends say, these public lands belong to all
Americans, and the answer is that is right. Pay the fee.
I just have to say that this is a vitally important issue.
There are other places for this money to come from, including
the land acquisition, which I think is about $154 million. We
don't need more land if we are not going to pay for it. And
secondly, you have the EPA discretionary grants that total
about $400 million.
If I might now shift gears to another issue, there is an
organization called the Administrative Conference of the United
States. It was the only program that was phased out in 1996, I
think ignorantly so. We had in my committee, the Committee on
Commercial and Administrative Law, a hearing at which both
Justice Scalia and Justice Breyer attended. Both of them were
remarkably supportive. I think this is the only time we got two
Justices this century in the House in a hearing. They pointed
out that this committee or this Conference has saved massive
amounts of money. In one case, in one issue with the Social
Security system, they saved $85 million.
This is a group that has been reauthorized last year to be
a group of judges, private lawyers, and government regulatory
lawyers who get together, people of high esteem like Justice
Scalia and Justice Breyer--I think Justice Scalia was the
Executive Director for a while--and they look at the system and
say, how can we make the system work better?
We are looking for $3.1 million to fund that. Let me
suggest that I don't think that we can spend that kind of money
better anywhere on earth. We need to be dealing with science
and how science is used in regulation.
We need to deal with the litigation that happens over
permits. This group came up with the negotiated regulation
process. We need them to come up with a negotiated permitting
process so that we get people's views while we are looking at
cutting timber, and not after the permit has been issued and
tying it up in litigation for years.
If we want to have healthy forest initiates, it is a
problem over the whole country. So we are hoping for that
addition to PILT, which I cannot overstate the intensity of
emotion on this issue for all the western Members. I chair the
Western Caucus. That is a very large number of western
Congressmen, and we are deeply concerned about that.
And in addition to that, all Americans in the Western
Caucus in particular would like to see the Administrative
Conference refunded. Now, it has been reauthorized. It needs to
be funded so that we can get the benefit of the wisdom that
those people give, by the way, for free. That $3.1 million is
the cost of administering it. These are wonderful attorneys who
contribute their time to that.
And with that, I yield.
[The prepared statement of Chris Cannon follows:]
Prepared Statement of Hon. Chris Cannon, a Representative in Congress
From the State of Utah
It is a pleasure to testify today before Chairman Nussle and the
House Budget Committee. I am testifying today to ask your support in
funding the recently enacted ``Federal Regulatory Improvement Act of
2004'' at the authorized level of $3.1 million in the FY'06 House
Budget Resolution as well as issue support for the full funding of
Payment In Lieu of Taxes (PILT).
The Federal Regulatory Improvement Act, (Public Law 108-401)
reauthorizes the Administrative Conference of the United States (ACUS).
ACUS was originally established in 1964 as the government's advisor on
administrative procedures, but was de-funded in 1996. Last year, the
House Judiciary Committee held hearings on whether ACUS needed to be
reauthorized. At two separate hearings, the Committee garnered
unanimous support from those testifying as well as the Members of the
Committee that the reconstituting of ACUS would inject efficiency and
fairness into the regulatory process. With the investment of $3.1
million ACUS would save, in some estimates, billions of dollars by
streamlining the regulatory agencies and their decisions.
Over the course of its 28-year existence, the Conference issued
more than 200 recommendations--some of which were government-wide and
others that were agency-specific. It issued a series of recommendations
eliminating a variety of technical impediments to the judicial review
of agency action and encouraging less costly consensual alternatives to
litigation. The fruits of these efforts include the enactment of the
Administrative Dispute Resolution Act in 1990, which established a
framework for the use of ADR.
In addition to this legislation, ACUS served as the key
implementing agency for the Negotiated Rulemaking Act, the Equal Access
to Justice Act, the Congressional Accountability Act, and the
Magnusson-Moss Warranty-Federal Trade Commission Improvement Act. The
Conference also made recommendations regarding implementation of the
Congressional Accountability Act. Further, ACUS served as a resource
for Members of Congress, Congressional Committees and the Executive
Branch.
With respect to specific agencies, the Conference, for example,
during the 1970's undertook an exhaustive study of the procedures of a
single agency--the Internal Revenue Service--which resulted in 72
proposals concerning the confidentiality of taxpayer information, IRS
settlement procedures, and the handling of citizen complaints, among
other matters. The IRS ultimately adopted 58 of these recommendations.
According to the Congressional Research Service, there are growing
patterns of evasion among agencies with respect to notice and comment
requirements. An increasing number of regulations are being
successfully challenged in the courts. An informal study by CRS
indicates that 51 percent of these rules were struck down by the
courts. Needless litigation hurts everyone--it slows the rulemaking
process, encourages agencies to try to circumvent public comment
requirements, and costs taxpayers millions of dollars.
Another serious area of concern is the need to have a coherent
approach among the agencies with respect to emerging issues and
technologies. These areas include issues dealing with privacy, national
security, public participation, the internet, and the Freedom of
Information Act. There are also concerns about the need to have peer
review and to have regulations based on sound science. Our people and
business communities depend upon Federal agencies to promote scientific
research and to develop science-based policies that protect the
nation's health and welfare. Integral to the Federal regulatory process
is the need to assess the safety, public health, and environmental
impact of proposed regulations. Regulations lacking sound scientific
support can present serious safety and health consequences as well as
cause private industry to incur unnecessary and burdensome expenses to
comply with such regulations.
Restoring the Conference would provide a cost-effective, yet highly
valuable solution to these problems. It is my hope that the Budget
Committee will support this request and move the government toward a
more efficient regulatory system.
Another issue of importance to me is sustaining a vibrant western
economy. This is a key priority for the Congressional Western Caucus of
which I am the Chair.
I commend the President for providing funding for the Healthy
Forests Initiative and Cooperative Conservation Programs.
However, I am deeply concerned about the Payment-in-Lieu-of-Taxes
program, or PILT, which provides payments to local counties that are
unable to draw tax revenue from Federal lands in their jurisdictions.
PILT payments help to fund essential services such as environmental
compliance, law enforcement, health care, education, firefighting, and
search and rescue operations.
Twelve western states have more than 25 percent of their land owned
by the Federal Government and four states are more than 60 percent
federally owned. This creates a huge strain on Western economies
because they do not have the same opportunity to earn tax revenues as
other states do.
The PILT program is intended to make up for that shortfall in tax
revenues however, over the past several years it has been grossly under
funded. Although the PILT program has been authorized at $340 million,
the President's budget only calls for $200 million in FY 2006. This is
a decrease of $27 million from last year's appropriated level and more
than 40 percent less than what is authorized.
Ironically, the President's budget provides more than $154 million
for new Federal land acquisition, which would create an additional
funding burden for the PILT program. If we can't make payments on the
land we already own, why are we proposing to acquire more land? It
seems to me, that the budget proposal submitted to Congress got this
one wrong.
Making up the shortfall in the PILT program can and must be
accomplished. I maintain that cutting Federal land acquisition funds as
well as EPA discretionary grants could easily fund the difference.
Every year the EPA makes more than $400 million in grants to
various non-profit and educational partners. However, over the last
decade, EPA's grants program has been best known for mismanagement.
One illustrative example is the fact that under EPA's management,
in FY 2004 more than $337 million in grants went to non-profits, some
to environmental organizations that spent more than $18 million in
political activities during the 2004 election cycle. Even worse, last
year, the EPA's Inspector General noted that one group's grant funding
allocated for work on projects under the Clean Air Act was spent by the
group's lobbying organization--in direct violation of the law.
Given the current economic climate and the considerable amount of
taxpayer dollars appropriated every year for the Environmental
Protection Agency and the Departments of Agriculture and Interior, we
must use utmost care to ensure that hardworking American dollars are
wisely spent.
This request for PILT is consistent with language in last year's
budget resolution where the Committee stated that the budget could
accommodate full funding of the PILT program and that further
reductions in Federal land acquisition should be made.
Again, I'd like to thank Chairman Nussle and the Committee for this
opportunity to testify.
Mr. Portman [presiding]. Why don't we break here for
questions for the group that just testified, and then we will
start with Mr. Porter, who has separate time.
First of all, gentlemen, we appreciate your testimony. And,
Mr. Cannon, you have explained the PILT issue well. You have
been a real leader on this over the years. Basically, Mr. Flake
and Mr. Otter's suggestions as well as yours, Mr. Cannon, on
constructively coming up with an offset, which is basically
consistent with your philosophy that we should not be putting
more pressure on the schools, taking out of the acquisitions to
fund the PILT adequately.
I know that Mr. Bishop is a former schoolteacher. I did not
know that he also specialized in analysis and probability and
statistics, but great charts. I mean this is a very impressive
presentation of the issue in a stark visual way.
The question I would have for you all with regard to the
Payment in Lieu of Taxes program is, if indeed it was funded to
the extent of its authorization, would that solve the problem
that you have laid out in your presentation?
Mr. Cannon. Let me just answer. There is never going to be
enough money for these rural areas, because they are deprived
of virtually everything by Federal ownership and Federal
regulations. If you look at that chart, you will see that the
Federal Government has committed in law many, many streams of
funds to these people. PILT is only one of these streams of
funds.
The full funding level of PILT is appropriated at this
point in time. But clearly more money has to come to pay the
costs imposed on those counties in the West. And frankly we
would just love to see them sold and get the percentage of
money that would come to the States when those lands are sold
or otherwise diminished in size, diminished in dominance, so if
they get sold the States get to tax them in addition to getting
a percentage of the sales.
So the issue is complicated. There are several streams of
funds that are directed. PILT, in our perception, is the first
thing that we need to do, and we just absolutely need to do
that one as a fix to the matter so that our counties can count
on the revenue stream in the future, then if they have more
money coming or more private land that is available to tax that
that is good and well.
Mr. Bishop of Utah. Mr. Chairman, if I could also add, as
far as the education component, if indeed the enabling acts
were honored and the amount of money from a disposal were given
to the States and/or they also had an ongoing revenue stream
from the amount of money that would be on the lowest of the tax
levels, you would see the disparity that is obvious between the
West and the East disappear.
Obviously there is never enough money to do everything you
want to do, but it would bring equity between those who are
non-Federal land States and those who are Federal land States
in the area of education if those two actions were taking
place.
Mr. Portman. Thank you, Mr. Cannon. I would like to turn to
Mr. Cueller for questions.
Mr. Cueller. I don't have any questions, but I do
appreciate it. I understand, I used to do with budget for the
State of Texas when I came to public education. I understand
the difficulties if you do not have that particular resource.
So I understand your argument. I agree with the arguments on
that. Thank you.
Mr. Portman. Mr. Conaway.
Mr. Conaway. No.
Mr. Portman. Gentlemen, thank you very much for your
testimony. We will now, in the order of which people came to
the hearing today, we will go to Mr. Porter. Mr. Porter, it
sounds like some of the issues you were planning to raise have
already been raised. You did have separate time on our
schedule. So you are entitled to it, and we look forward to
your testimony.
STATEMENT OF THE HON. JON C. PORTER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEVADA
Mr. Porter. Thank you, Mr. Chairman. I will concur with my
colleagues from the West, and I will save the committee's time
at this point on some of these issues. But I do agree with and
appreciate their presentation.
I support the President and this Congress looking for ways
to eliminate waste, fraud, and abuse. I think we can spend
hours talking about areas where Federal dollars are being
wasted, but we can save that for another time.
However, I do disagree with one of the proposals by the
White House that has to do with the funds that are being
received from the sale of public lands in Southern Nevada. My
colleagues, Mr. Gibbons and Mrs. Berkley, touched upon it
earlier.
According to the proposal, there may be a 70-percent
reduction in the funds under the Southern Nevada Public Lands
Management Act that will remain in Nevada. These are lands that
are sold in Nevada. These funds were brought together in a
collaborative effort by the Senate, both Democrats and
Republicans in the House of Representatives, and all of the
funds that are being appropriated and invested in our community
are approved by the Secretary of the Interior and signed off
based upon Federal standards and Federal laws.
And there is very little land left. This program has
certainly been an asset for the State of Nevada, and the value
of this land has increased substantially. That value has
increased because of the investments that we have made, as a
community and as a State, to improve our quality of life in
Nevada.
The funds for these projects are substantial--global--and
they impact every State in the Union. The funds from the sale
of public lands in Nevada are going to protecting Lake Tahoe,
which is a treasure for the country; Lake Mead, one of the
largest national recreation areas in the country; Red Rock
Canyon; Sloan Canyon; to make sure that we do things like
protect Indian artifacts and Indian history, and to the
implementation of the Endangered Species Act.
Yes, the funds are helping our community, but also helping
the country as a whole. Although we are a State of about 2.2
million people, we had about 40 million tourists last year, and
visitors explore into our community from all over the country
and world. Adding to that the fact, properties that are being
sold--in some cases up to 2,000 acres at a time--and are
creating communities the size of 70,000 or 80,000 new people a
year.
Think about that, Mr. Chairman, new communities of 70,000
to 80,000 new people a year.
With this growth comes major demands not only on our
infrastructure, but also on our public facilities that are
certainly a part of the Federal program. The fact that we are
using Federal dollars from the land sales is actually saving
the country money, because instead of us having to come to the
House and to the Senate to ask for funds for some of our
programs, for our natural historic resources that are federally
controlled, we are using dollars that are generated in Nevada
from the sale of lands in Nevada.
Mr. Chairman, I would ask that we find, and I know that our
delegation will be happy to find areas of waste, areas of abuse
where additional dollars may be available help this budget.
However, this is an area that we are being penalized for being
frugal.
We have spent our money wisely through the process that was
established through regulation and through enactment of this
House and the Senate, and I know that we also have additional
programs that are budgeted based on these funds for future
allocations. I would like to submit additional information, if
you do not mind, Mr. Chairman, after I conclude my presentation
so I can keep it brief.
Mr. Portman. Without objection.
Mr. Porter. I would also like to state that I remain
adamantly opposed to Yucca Mountain. We want to make sure, as
my colleagues have mentioned, that Congress retains control
over the budgetary process in the oversight of Yucca Mountain.
I know the question earlier was asked what we really wanted to
do with Yucca. We would like to close it down, but we also want
to make sure that Congress remains in constant oversight of the
project.
So, Mr. Chairman, that is a brief overview. I will be
submitting this information. But I think that this is a program
that is a model for the country and a model for Washington on
how funds are spent wisely to make sure that public facilities,
Federal facilities are taken care of, and maintained and
properties are protected in Nevada.
With that I say thank you, Mr. Chairman.
[The prepared statement of Jon C. Porter follows:]
Prepared Statement of Hon. Jon C. Porter, a Representative in Congress
From the State of Nevada
Mr. Chairman, I would like to take a few minutes to speak today
about issues of great concern to my constituents and me in Southern
Nevada.
First, I would like to state that I am fully supportive of this
Committee and President Bush in their efforts to reduce the Federal
deficit. I am in lock-step with all of you in making sure that our
taxpayers' dollars are used efficiently, and I am committed to helping
you all in this effort.
However, in pursuing this ideal, I believe that within the 2005
Budget was a grave error, which is why I am here speaking to the Budget
Committee today.
In 1998, Senator Richard Bryan and Congressman John Ensign crafted
a bipartisan and bicameral bill known as the Southern Nevada Public
Lands Management Act (SNPLMA). When SNPLMA was signed into law, its
intent was to allow for the disposal of public lands in Clark County,
Nevada, and to provide for the acquisition of environmentally sensitive
lands within the state. The money raised from these land sales is
divided between the State of Nevada's General Education Fund (5
percent), the Southern Nevada Water Authority (10 percent), and the
remaining 85 percent is dedicated to a Federal account for
environmental projects, such as development of parks and trails,
conservation initiatives, land acquisition, and a multi-species habitat
conservation plan in Clark County, Nevada.
Before going into how SNPLMA has benefited Southern Nevada, I want
to take a moment to explain how the funding mechanism under SNPLMA
works. Every year since being passed into law, local, state and the
Federal agencies work together to determine which projects, sales, and
acquisitions will occur. Once approved by all stakeholders, this list
of projects is sent to the Secretary of Interior for approval. All
funds generated from these projects and sales then go into a special
fund to be used for Federal purposes within Nevada, as specified within
the law.
The goal of SNPLMA is to protect and preserve Southern Nevada for
future generations. Since being signed into law, SNPLMA has been
amazingly beneficial in meeting Federal obligations in Clark County.
Funds generated from SNPLMA have helped pay for capital improvements at
Lake Mead National Recreation Area, Red Rock Canyon National
Conservation Area, Spring Mountain National Recreation Area, Lake
Tahoe, and other lands administered by the Department of Interior.
These funds have paid for the development of much-needed parks and
trails in this quickly-growing community, and SNPLMA funds have helped
in building and maintaining visitor facilities in some of the most
visited national parks and conservation areas in the nation. Further,
some of these funds have already been committed for long-term use, such
as $300 million going to Lake Tahoe over 10 years in order to help
preserve and protect Lake Tahoe for future generations.
In the President's budget proposal exists a provision that could
divert seventy percent of the funds generated under SNPLMA. As a Member
of Congress who represents many of the people and lands that have
benefited from SNPLMA, I am firmly opposed to this provision, because I
believe that since these funds were generated in Southern Nevada, they
should stay in Southern Nevada for federally beneficial projects.
Although no one in the 106th Congress could have imagined how
successful this program has been, Clark County has been able to use
these much-needed funds to improve and conserve our lands for both
locals and tourists alike. It was the Southern Nevada community that
helped to increase the economic value of these lands, and I believe
that Southern Nevadans should be able to help make sure that their
children's children can enjoy areas like Red Rock Canyon, the Spring
Mountains, Lake Mead, and Lake Tahoe someday. In other words, these
funds are self-generated, as opposed to being derived from taxpayers'
dollars, and do not add to the Federal deficit.
As a Congressman who represents a state with approximately ninety
percent Federal land, I am here to say that SNPLMA, through the sale of
Federal lands where revenue is dedicated to the Federal projects in
this area, helps to ``free up'' Federal dollars for other areas, such
as the Florida Everglades, Yosemite and Yellowstone National Parks, and
our Grand Canyon. This law also allows Southern Nevada to use SNPLMA,
as opposed to Federal, dollars to protect endangered or threatened
species. We simply do not need to rely as strongly on other Federal
funding sources to support all of the Federal lands we have in Southern
Nevada. This bill is smart for both Nevadans, and every single person
who uses our Federal parks and lands and enjoys its native species, as
it helps to ensure that our Federal lands and species throughout the
United States are protected.
It would be different if this bill was coming at the expense of the
American taxpayer. However, SNPLMA is fiscally responsible, and
environmentally friendly. Although I am in favor of reducing our
Federal deficit, I believe that these cuts should come at the expense
of wasteful programs, as opposed to SNPLMA.
Mr. Chairman, the entire delegation is united on this effort. I
respectfully ask you to consider the benefits of SNPLMA, and the
negative impacts this budget proposal will have, as we determine where
our Federal dollars will go next year.
Another section in the President's Budget that I am concerned with
is the so called ``deadbeat dads'' issue. This idea was first raised by
the Clinton administration in 1994 and again in 2000. The Bush
administration proposal would capture gaming winnings of non-custodial
parents who have not paid their child support. Each time an
individual's winnings triggered completion of an IRS W2G form,
employees of gaming establishments, including casinos, horse and dog
tracks, and locations where the lottery, jai alai and keno are played,
would be required to check a Federal database to determine if the
customer was delinquent in owing child support.
This ``deadbeat dads'' proposal has a commendable goal but uses
dubious tactics. First and foremost, no one condemns any effort to
avoid child support payments more than I do. But mandating the gaming
industry to garnish winnings from those listed in a government database
raises serious privacy questions. Additionally, the creation of what
would amount to a new Federal bureaucracy to process this information
would only seem to compound the potential for mistakes and misuse of
sensitive information. Instead we should provide the individual states
and localities with the resources they need to locate and penalize
those who are delinquent on their child support payments.
Mr. Chairman, I would like to thank the Committee for the time and
opportunity to allow me to speak on these issues that are so near and
dear to my constituents and me. I am happy to answer any questions.
Mr. Portman. Thank you, Mr. Porter. We appreciate your
leadership on the Yucca Mountain issues over the years, and
also your leadership now on looking at these public lands
issues, including the Southern Nevada Public Lands Management
Act. Thank you for your testimony today. Mr. Cuellar.
Mr. Cuellar. No questions.
Mr. Conaway. Mr. Porter, help me understand Yucca Mountain.
I am new to this process. What is Yucca Mountain other than
dirt?
Mr. Porter. Mr. Chairman, I am not sure where we should
begin here. Yucca Mountain, in a nutshell, is an area of
disposal proposed for Nevada for all high-level nuclear waste.
This waste is set to travel through your communities, and our
communities, to a site about 100 miles north of Las Vegas where
thousand and thousands of tons of high level nuclear waste to
be stored at a facility that the State of Nevada is adamantly
opposed to. But, unfortunately, there are a number of other
States that would like to send their waste into our community,
and we have been fighting, will continue to fight this. From a
States' rights perspective, we are adamantly opposed, but also
for safety reasons. It is an untested, unproven science;
facilities that are being built have yet to be tested. So it is
a major, major concern for us and has been for years, and we
are adamantly opposed and will continue to be.
Mr. Conaway. It is underground storage?
Mr. Porter. Yes.
Mr. Conaway. There is a similar one in Carlsbad.
Mr. Porter. We would like to send the rest of the waste to
Carlsbad. It is a different level of waste. These are spent
nuclear rods from power generation, but also military grade
nuclear waste. But we would love to send the balance of this
waste into Carlsbad, and I would work with you on this.
Mr. Conaway. We have a low level one planned in Texas. I
also understand that folks in Andrews see it as an economic
development issue. They see the other side of the coin, that
there is an opportunity here to grow jobs in Andrews, Texas,
using safe science, using science as best we know to dispose of
this stuff. But this is low level, an entirely different realm
of risks than what you are talking about.
Mr. Porter. Thank you for your question. This is a science
that is untested. Nevada is being used as that testing ground
for storage, and we are concerned for our children, and for our
families, with its transportation and burial. Thank you for
asking.
Mr. Portman. And again, Mr. Porter, your full statement
will be made part of the record. We have one final question
from Mr. Cuellar.
Mr. Cuellar. Mr. Porter, just a question on your testimony.
I just want to get your thoughts on the deadbeat dads. I think
you are saying we agree with the goal, it is just the way you
want or--I think you disagree with the system or the way it is
supposed to be collected. That is the privacy issue.
Are you saying that this is pretty much a State issue
instead of Federal issue, because I think we agree that we
ought to do something about the deadbeat dads that we have out
there. I just want to see if you can elaborate a little bit
more on the procedure you want to follow.
Mr. Porter. Thank you. It is in my backup testimony. I
appreciate your bringing it up. I think deadbeat dads should be
busted and we should use every available means to make sure
that they take care of their children and their families. It is
unacceptable that we have deadbeat parents whom are not taking
care of their responsibilities. Our concern is that the private
sector in this instance would be asked to be the law
enforcement agency.
I think that we should help and encourage local governments
who are the experts at law enforcement, and do everything we
can to encourage and to help them in the collection, whether it
be technology driven through the court system. But when you get
into the private sector, asking the private sector, again,
whether it is a car dealership or a resort in Nevada or a
resort in Ohio or Texas, it crosses into a whole other realm,
where we think that we should help law enforcement as a
Congress, we should help local government, but the private
sector getting into collection and into law enforcement I don't
think is an appropriate means. And then there is the privacy
issue. But I think, more importantly, it is the issue that we
should help local government do what they do best.
Mr. Portman. Thank you. Mr. Simmons, we look forward to
your testimony. You have 10 minutes.
STATEMENT OF THE HON. ROBERT SIMMONS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CONNECTICUT
Mr. Simmons. Thank you, Mr. Chairman, and I thank Mr.
Cuellar and Mr. Conaway for their attention and their interest
in participating in these hearings, and I commend them on their
endurance.
I come before you this afternoon as the new chairman of the
Subcommittee on Intelligence, Information Sharing and Terrorism
Risk Assessment of the new Homeland Security Committee, now an
``A'' level permanent committee of the House of
Representatives.
I would ask unanimous consent that my full testimony be
inserted into the record as read, and then I would like to
summarize it.
We all remember, Mr. Chairman, the events of 9/11,
especially those of us who were here in this Capitol on that
day, and we remember the terrible intelligence failures that
resulted in the loss of over 3,000 innocent lives.
The 9/11 Commission report detailed these failures in great
detail, and then called upon all of us to, ``create something
positive, an America that is safer, stronger and wiser.'' I
believe the creation of the Department of Homeland Security and
a permanent committee of Congress to oversee that department is
part of the effort to create something positive.
I also believe that intelligence reform is part of that
effort, and the subcommittee which I chair will try to oversee
the creation of an intelligence capability in the Department of
Homeland Security that makes us ``safer, stronger and wiser.''
We all have a common goal. We want our homeland and our
loved ones to be safe, but we also know that we can spend every
dollar in the budget, we can search every traveler, we can
inspect every shipping container and still fail to prevent
another attack.
The Chinese built the Great Wall at great expense, but it
failed to keep the Mongol hordes out of China. In the 1930s the
French built the Maginot Line at great expense to exclude the
Germans, but it also failed. So we have to be wise in our
choices.
And good intelligence gathering and good intelligence
sharing helps us to be wise. Before 9/11, we did not have the
capacity to connect the dots because our sharing and our
analysis and our reaction was inadequate. Since then we have
made a lot of progress toward integrating our intelligence
activities, sharing information, and focusing on the terrorist
threat. And that threat is very real. It was real 3 years ago.
It is real now.
Just last week the media reported on an intercepted
communication between Osama bin Laden and Abu Musab al-Zarqawi,
reiterating the desire of al-Qaeda to target the U.S. homeland,
and that report coincided with Homeland Security Deputy
Secretary Loy's testimony, ``al-Qaeda has considered using the
southwestern border to infiltrate the United States.'' I note
that two of our Members at the dais are from Texas, and that
infiltration is a real risk and a real danger to you and to
your people.
Good intelligence gives us the eyes and ears to see and
hear those who would do us harm, and at the same time good
intelligence allows us to preserve and protect the civil
liberties of our people.
Now, moving quickly to the budget requests for the
Information Analysis and Infrastructure Protection for fiscal
year 2006, $873 million has been requested by the President.
This represents a decrease of $20 million below the fiscal year
2005 levels, but a substantial number of the activities within
Information Analysis have increased. We simply have transfers
of some activities and consolidation for savings.
But my point is this: It is essential that the Congress
support the Department and support the administration in its
request and not make any cuts so that information analysis can
continue to expand its important work in this vital area.
We have requested and we support a request for an increase
of $12 million in the homeland security operations center. This
is the heart and soul of what we are trying to do in homeland
security. We have $5.5 million for information sharing and
collaboration. An additional $20 million for 173 full-time
equivalent employees is also requested.
Do you realize that they are not fully staffed? Do you
realize that our information analysis capabilities in the
Department of Homeland Security are lacking literally hundreds
of personnel and that when we identify people to hire it takes
upwards of a year and maybe longer to clear them?
This is a huge problem, and this is something that we have
to focus on very carefully. A lot of the offices downtown are
empty, and this is inadequate to the task that we have before
us.
We have also tried to spend the money smarter. The
Information Analysis budget transfers $53 million in buffer
zone protection plans to another agency to create a targeted
infrastructure protection grants program which will result in a
savings, and there are additional savings that we have been
able to achieve through consolidation.
My bottom line is, Mr. Chairman, and the message of this
testimony is that we have a new Homeland Security Committee,
with new subcommittees, which include the Subcommittee on
Intelligence. We are overseeing a new agency of government that
has been created to deal with the new security challenges of
terrorism in the American homeland. We think we are making
progress in this regard. We think the moneys that have been
requested are adequate, but we also know that we do not have
all of the answers at this point in time. As our oversight
activities continue throughout this spring and summer we have
to be flexible, we have to be creative. We have to be diligent,
because we may have to change course a little bit here and
there to meet the task, and we hope that this committee will
give us the resources that we need to perform this important
mission.
I thank you for your attention. I would be happy to answer
any questions.
[The prepared statement of Robert Simmons follows:]
Prepared Statement of Hon. Rob Simmons, a Representative in Congress
From the State of Connecticut
Chairman Nussle, Ranking Member Spratt, I thank you for allowing me
to testify on the President's Fiscal Year 2006 Budget Submission to
Congress.
As Chairman of the Homeland Security Committee's Subcommittee on
Intelligence, Information Sharing and Terrorism Risk Assessment, I will
focus on the Department of Homeland Security's intelligence and
information sharing capabilities.
We all remember the tragic events of September 11th when terrible
failures of our U.S. intelligence community resulted in the loss of
over 3,000 innocent lives. The 9/11 Commission outlined those failures
in great detail, and then called upon all of us to use that tragedy to
``create something positive--an America that is safer, stronger and
wiser.''
The creation of a new Department of Homeland Security, and a
permanent committee of Congress to oversee it, is part of that effort
to ``create something positive.'' Intelligence reform is also part of
that effort, and the new Subcommittee which I chair will try to oversee
the creation of an intelligence capability in the Department of
Homeland Security that makes us ``safer, stronger and wiser.''
We all want our homeland and our loved ones to be safe. We also
know that we can spend every dollar, search every traveler, inspect
every shipping container and still fail to prevent another terrorist
attack here at home.
The Chinese built the Great Wall of China at extraordinary expense
to keep out the Mongol hoards, and it failed. In the 1930's, the French
built the Maginot Line to exclude the Germans, and it failed. So we
have to be ``wise'' in our choices. Good intelligence gathering and
good intelligence sharing helps us to be wise.
Prior to 9/11, information was not being effectively shared,
analyzed and acted upon. Because of this we were unable to ``connect
the dots'' to prevent 9/11. Since then, we have made great progress
toward integrating our intelligence activities, sharing information and
focusing on the terrorist threat. It is vital that our activities and
capabilities in this area continue to improve. The cost of failure is
too high to consider.
The threat is real. Just last week the media reported on an
intercepted communication between Osama bin Laden and Abu Musab al-
Zarqawi reiterating the desire of al Qaeda to target the U.S. homeland.
This report coincides with the testimony of Homeland Security Deputy
Secretary, Admiral James Loy, that ``al Qaeda has considered using the
southwestern border to infiltrate the United States.'' And we know that
our enemies' ambitions do not stop there.
Good intelligence gives us ``the eyes and ears'' to see and hear
those who would do us harm. At the same time, good intelligence allows
us to preserve and protect the civil liberties of our people.
This being said, the President's Budget Request for the Information
Analysis and Infrastructure Protection in FY06 totals just over $873
million, a net decrease of $20.5 million below FY05 enacted levels.
While this includes substantial increases for certain activities within
the IAIP budget, it also involves the transfer of over $100 million out
of the IAIP Directorate due to Department-wide consolidation efforts.
In the coming weeks the Subcommittee will closely examine additional
changes for IAIP because of the importance of its mission. The
Subcommittee will pay particular attention to the intelligence and
information-sharing functions of IAIP as well as the Open-Source
Intelligence capabilities of the Department.
While we anticipate some changes to the IAIP budget, we believe
that these changes can be accomplished within the top-line DHS budget,
so we are not asking for an overall DHS increase at this time. But it
is essential that Congress support the Department in this area and not
make further cuts so IAIP can continue and expand its important work in
information analysis.
The DHS Information Analysis and Infrastructure Protection
Directorate (IAIP) has a unique role in the Federal Government. Not
only does it serve as the ``eyes and ears'' of the department, focusing
specifically on the threats and vulnerabilities of the U.S. homeland,
but it also establishes vital partnerships with state, local, tribal
and private sector authorities. To accomplish this task, the
President's budget requests:
A $12.9 million increase for the Homeland Security
Operations Center (HSOC), one of the major successes of the Department
to date. Enhancing this capability will strengthen information sharing
and coordination with Federal, state, local, and tribal partners as
well as with the private sector.
$5.5 million for the Information Sharing and Collaboration
program, which will help link together and coordinate information-
sharing between IAIP, DHS operational elements and their state and
local partners.
An increase of $20.5 million to support an additional 73
Full Time Equivalent (FTE) in IAIP. These new hires will directly
support the DHS statutory role of analyzing information and sharing
information, issuing warnings and sharing assessments with Federal,
state, local and private sector officials. It is vital that IAIP make
hiring additional personnel a priority.
A $19.4 million increase for the construction of the
Homeland Secure Data Network (HSDN), a secure, classified network for
information sharing and collaboration.
In addition to these increases, the DHS budget also strives to
spend smarter. For instance:
The IAIP budget transfers $53 million in Buffer Zone
Protection Plans to the Office of State and Local Government
Coordination and Preparedness (OSLGCP) to create a Targeted
Infrastructure Protection (TIP) Grants program. This will result in a
$3 million savings as a result of the consolidation in OSLGCP.
The IAIP budget also includes a $41.5 million decrease,
transferring the Emerging Pilot and Technology Application Pilots to
the Science and Technology Directorate as part of a broader DHS
consolidation of Science and Technology funding.
These are important first steps to save money through
consolidation. Over the course of this year, we can and will do more.
In closing, Mr. Chairman, it is important to reiterate that the
Intelligence Subcommittee of the Homeland Security Committee is engaged
in a new oversight role involving a new agency of government created to
deal with the new security challenges of terrorism in the American
homeland. We believe we are making progress in this vital mission. But
we also know that these new challenges will require that we be creative
and flexible in order to preserve and protect a free America that is
``safer, stronger and wiser.''
Thank you. I am happy to respond to your questions.
Mr. Portman. Thank you, Mr. Simmons, for your testimony,
and congratulations on your new chairmanship. Given your
background in intelligence, you are the right person for the
task and, as we can tell by your testimony today, you have a
good grasp of some of the challenges.
I would ask you as a general matter whether you are pleased
with the President's budget as to Homeland Security generally?
He has an increase in funding, as you know, and within that
makes priorities.
Obviously one of the priorities that you would like to see
is not as high on the priority list as it was in the 2005
budget, but can you give us a sense of what the overall budget
looks like from your perspective?
Mr. Simmons. I will leave it to Chairman Cox to make a
definitive statement. I have discussed this issue with him. We
believe that the gross numbers are adequate. As long as there
is an opportunity to move dollars around within those gross
numbers, we can be successful. The administration has been very
progressive in allowing increases in this budget. I think the
Defense budget is the only other one that has experienced those
increases.
So, again, we are not looking to spend a lot of money. That
is why I mentioned the Great Wall of China and the Maginot
Line. We are not looking to put a guard on every bridge. We are
trying to be smarter about this. But to be smarter, you have to
have good intelligence, and you will notice that the
intelligence budget in the DHS budget is only about 3 percent
of the total. About 3 percent of the total.
So it is my expectation that there may be some movement
within the gross budget to move some of those figures around as
we try to get our arms around the problem, as we try to get
people hired, as we try to get some of the components of these
22 agencies to work together better, even to sit together in
the same buildings, which at this point they do not, as we try
to conform some of the personnel systems, and this also is part
of the problem.
So the quick answer is, we think the gross numbers are
adequate. We would not like to see those reduced, but there may
be some movement within those gross numbers to meet the
requirements that we face.
Mr. Portman. Thank you. As you know, we will as a Congress
have the ability to reallocate even within a number that we
agree to, which is an aggregate number. I know you will be very
involved in that process.
Mr. Cuellar. Thank you, Mr. Chairman. Mr. Chairman, again,
congratulations on being a new chairman. I think it is--being
from Laredo,Texas, right on the border, I understand those
threats. I understand why it is so important to be wise or use
the smart ways, because you cannot put an agent in every block
or every bridge across. So it is very, very important that we
do this.
But I want to just talk about one, your last paragraph,
which is very important to me. That is, you are talking about
your subcommittee is going to be doing a new type of oversight,
and I think one of the things we need to do here in Congress is
have the legislative body provide that oversight on how the
agencies are working, whether they are spending the money
correctly, whether we ought to shift some of those dollars
around, have that flexibility, whether they are creating rules
or regulations that are too burdensome or not working. And that
is a role that we ought to play as Congressmen.
And my question to you is, what is your definition as the
new chairman of Congressional oversight, especially when you
talk about a new agency that just got created? I can understand
how difficult it is, but what is your definition of legislative
oversight?
Mr. Simmons. A good question. I would first of all say that
I had an experience as a staff director of the Senate
Intelligence Committee a number of years ago in the
establishing and the managing of Congressional oversight of the
intelligence community. It was particularly challenging because
the activities of the intelligence community were secret.
We have a somewhat similar task today. Certain activities
of the Department of Homeland Security must of necessity remain
secret so they can remain effective, and at the same time we
have an obligation that the people we represent in that
oversight process, and the people are represented by us, by the
Members of the Congress.
We have budget authority; in other words, we make budget
decisions. That is what you are doing here today, and in the
next few weeks, is what we do in our capacity as members of an
authorization committee. But we also have a responsibility to
get out in the field, to actually see who is working where and
what they are doing, to see how effective they are, to see if
these buildings are empty or if they are full, to see if people
are talking, and if their communications systems are working,
to see if they are connecting from a Federal level down to a
county level, because the task of homeland security no longer
involves just the Federal Government, it involves State
governments, it involves county and municipal governments, it
involves vertical and horizontal communication in a timely
fashion.
And I have already made plans for some of these trips. I
was in Mexico a week ago focusing on the cross border issues.
And in particular, lack of work, lack of jobs, population
pressures in Mexico are creating illegal methods of bringing
people into this country illegally, and those same networks are
available to the terrorists.
If somebody is willing to pay a ``coyote'' $10,000 to get
him into this country or maybe $20,000 or $30,000, they will
bring a terrorist into this country. So we have to look at
those networks and try to examine what the best way is to deal
with them.
It involves a partnership with the executive branch. But it
also involves a focus on our civil liberties. In doing all of
these things, we do not want to violate the liberties of our
citizens in the name of terrorism or homeland security. So it
is a balancing act as well.
It is a difficult challenge, but I think it is something
that we must do.
Mr. Cuellar. I thank you. It is refreshing to see that type
of definitional approach when it comes to legislative
oversight, because I really think, Mr. Chairman, that we need
to reassert that Congressional oversight at all levels, not
only in the budget but in the committees because, keep in mind
that we come and go, but some of institutional persons, the
agencies sometimes have a longer life than we do. And I think
it is very, very important that we provide that legislative
oversight. Thank you.
I know you know the border when you start using words like
coyote. Those are the terms and lingo that is used down there.
And the last thing, just to conclude on this, on the border
where I live in Laredo, there have been about 26 Americans that
have gone across and are missing, and we are starting to see
some of those killings on this side of the border. And I am
sure that Homeland Security, it will be your committee, or one
of your committees will start looking at that, because it is a
big problem. And I am worried about that overflow, because you
got the MS-13 and some of those violent gangs are coming over
the border, and we are starting to see them. I think just
yesterday three men were shot in the head right on the U.S.-
Mexico border. I am talking about on this side. So you are
starting to see that violence coming over, and Homeland
Security certainly needs to play a role in that.
Mr. Simmons. It may be that part of our oversight visit to
the borders may involve you and your district.
Mr. Portman. Thank you. Mr. Conaway.
Mr. Conaway. Thank you, Mr. Simmons, appreciate your
service and the background you bring to the tasks. Given the
risks that should an event happen, you know, God forbid, the
amount of criticism of all of us for having not spent immense
amounts more on trying to protect ourselves, there will be no
limit to that criticism.
So hearing you say that the top line budget as we
understand the risks, as we understand the plans for protecting
ourselves, that DHS should be able to function within that--and
I do agree that if we wait until the terrorists get to the Rio
Grande then we are sunk. And the role of intelligence gathering
worldwide and us then going after the bad guys where they are
hatching those plans, it is far better than waiting until they
wade the Rio Grande River and come into this country illegally.
With all of that said, you mentioned two things. One,
hundreds of jobs going unfilled, as well as the lengthy time it
takes for us to vet or clear from a security standpoint those
jobs. Could you speak to the length of time it takes? Is that
inordinate to protect ourselves and make sure that we do not
hire--and then also, having chaired a State regulatory agency
for 7\1/2\ years, I know the bureaucrats, when they have empty
slots they find someplace else to spend the money that was
allocated for those salaries. And it is spent on one-time
purchases during the timeframe that the slots are empty. That
is one thing, but if they spend that money on ongoing programs
and then come back to us and say, well, now I have got these
empty slots that were empty, I have not filled them, I need
more money to pay those folks, can you speak to us about how--
your sense of that happening with these empty slots?
Mr. Simmons. First of all, you have a very solid grasp of
bureaucratic politics. So I thank you for those insights. I
think they are quite correct. The fact is that we have a new
agency and a new mission, and something that Americans have
really not had to worry about for a long period of time. The
War of 1812 is the last time that we had enemy activity, here
in Washington, DC. So for approximately 180 years, the two
great oceans provided us with most of the security we needed.
Now we have to look inward, and this is a new challenge and a
new task. Cobbling together 22 organizations with different
sets of rules and regulations is not easy.
Standing up a new intelligence capability means you have to
get people, and the preexisting intelligence organizations of
course have their own people, many of whom are happy with where
they are. You can get some from other agencies, but you can't
fill all of your slots that way. Assuming you are hiring people
that are not cleared, the clearance process is taking upwards
to a year, which is not unusual, but we need to set priorities
to accelerate that. We do not want the clearance process to be
degraded. We simply want it to be facilitated or speeded up.
And I think that can be done. I have had some experience
with that over the last several years dealing with industrial
clearances for shipbuilders in my district. I think we can work
with OPM and with others to create those priorities. These are
some of the things that I have learned over the last 2 weeks as
the chairman, and these are some of the issues that I intend to
focus on. If you need additional answers to your questions, we
would be happy to submit them for the record.
Mr. Conaway. I appreciate your comment on the heads up on
understanding the bureaucratic--at the end of the year spend
all of the budget so you do not have to defend not having spent
that on your committee is on point.
Mr. Simmons. I an am very familiar with the issue. I am not
aware that that has taken place.
I am not making any accusations, but I have got a staff
member behind me who is taking notes on that. So we will
provide that for you.
Mr. Conaway. Thank you.
Mr. Portman. Thank you. Mr. Shaw, you are recognized for 10
minutes. Welcome to the committee.
STATEMENT OF THE HON. E. CLAY SHAW, JR., A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Shaw. Thank you, Mr. Chairman, and I shall not take the
full 10 minutes. I appreciate all of you on a get-away day that
are with us. So glad to be before you and the members of the
committee that are here.
I am here to talk about a subject that is near and dear to
my heart. That is the subject of cancer and finding a cure for
cancer. I am a lung cancer survivor. I might add here that
there is not many of us. Lung cancer is the leading cancer
killer among men and women. Lung cancer kills more people
annually than breast cancer, prostate and colorectal cancer
combined.
More than 50 percent of those newly diagnosed with lung
cancer are former smokers or have never smoked before. I may
say here that I haven't smoked for about 30 or 35 years, and
when they took out and removed the upper left lobe of my lung
the doctor said he could tell I was once a smoker. I think this
goes to show that the damage that you do perhaps as a young
person can certainly come back to haunt you in your adult life.
Overall, one in three women will be affected by cancer in
their lifetime and one in every two men. So you can look to
your left and to your right and you can find that somebody next
to you is going to have cancer if it is not you yourself.
The National Cancer Institute estimates that over 570,000
Americans will die from cancer this year. This equals 1,500
Americans per day, or over 1 per minute. We must work together
to turn these statistics around.
I formed, after my lung cancer, the 2015 Caucus with our
colleague Colin Peterson from Minnesota. Both Colin and I had
cancer operations during the same period of time over 2 years
ago. This 2015 Coalition, they are Members of Congress who
either are cancer survivors or have a close relative who
battled cancer.
As you may know, the National Institutes of Health has
established the goal of treating cancer as a manageable disease
by 2015. I think we can do better than that. I think we can
actually find a cure for cancer by 2015.
Congressman Peterson and I have written the President
asking for his strong leadership in finding a cure by 2015. I
am submitting a copy of the letter that I would appreciate and
ask that it be made a part of the record.
Cancer research scientists are poised to make great
breakthroughs in discovering a cure for cancer. Now is the time
for the United States to be fully committed to this roadmap of
discovery.
As you know, the President proposed $28.8 billion in
funding for NIH for fiscal year 2006. Of this, he has proposed
$4.8 billion in funding for the National Cancer Institute.
While I appreciate the President's continued commitment to the
NIH and NCI, I think now is the time to step up our Federal
resources.
As we develop the fiscal year 2006 budget resolution, I
hope you will give special consideration to NIH, to their
budget, and to NCI and join with me in finding a cure for
cancer by 2015.
Mr. Chairman, I can tell you there is no more frightening
words that you can hear than you have cancer. I will never
forget it. The doctor came out and he wouldn't even have eye
contact. It was like a jury coming back with a guilty verdict.
It is a frightening thing. But it is something that we can
cure.
My early diagnosis, and I might say that because of the
doctor insisting that I go have the necessary tests, is the
only reason I am here today. And we can solve this for all
Americans. It is time that we make this commitment, such as
Kennedy did with making the commitment to flying a man to the
Moon and bringing him home safely. We can find a cure for
cancer by 2015. We need to get started on that process and get
started now.
I thank you and I yield back.
[The prepared statement of E. Clay Shaw follows:]
Prepared Statement of Hon. E. Clay Shaw, Jr., a Representative in
Congress From the State of Florida
Chairman Nussle, Ranking Member Spratt and Members of the Budget
Committee, thank you for this opportunity to express my thoughts about
something very near and dear to my heart--finding a cure for cancer.
I am a lung cancer survivor. Lung cancer is the leading cancer
killer among men and women. Lung cancer kills more people annually than
breast, prostate and colorectal cancer combined. More than 50 percent
of those newly diagnosed with lung cancer are former smokers or have
never smoked before.
Overall, one in every three women will be affected by cancer in
their lifetime and one in every two men will be affected by cancer in
their lifetime. The National Cancer Institutes estimates that over
570,000 Americans will die from cancer this year--this equates to 1,500
Americans per day or more than one per minute.
We must work together to turn these statistics around.
I formed the 2015 Caucus, with our colleague Collin Peterson (D-
MN), as a forum for members who are either cancer survivors or have a
close relative who battled cancer. As you may know, the National
Institutes of Health has established the goal of treating cancer as a
manageable disease by 2015. I believe we can go one step further and
find a cure for cancer by 2015.
Congressman Peterson and I have written the President, asking for
his strong leadership in finding a cure by 2015. I am submitting a copy
of this letter for the record. Cancer research scientists are poised to
make a great breakthrough in discovering a cure for cancer. Now is the
time for the United States to be fully commitment to this road map of
discovery.
As you know, the President proposed $28.8 billion in funding for
the NIH for fiscal year 2006. Of this, he has proposed $4.8 billion in
funding for the National Cancer Institute. While I appreciate the
President's continued commitment to the NIH and NCI, I think now is the
time to step up our Federal resources.
As you develop the fiscal year 2006 budget resolution, I hope you
will give special consideration to NIH budget and join with me in
finding a cure for cancer by 2015. Thank you for your time.
Mr. Portman. Thank you, Mr. Shaw, for your personal
commitment to this issue. I remember vividly when that cancer
was discovered, and I remember you valiantly going through this
with Emily, and as is the case with ever Member present here
and anybody here in the audience, all of us have had a brush
with it through our families one way or the other, having lost
my mother and mother-in-law and having other family members
suffer through cancer, but as survivors I certainly understand
your commitment to this and we appreciate your specific
suggestion.
With that, Mr. Cuellar.
Mr. Cuellar. No questions, except it is important to have
somebody like you to talk about it. I think one of your last
statements here, it is not even high ranking officials like you
are immune. I think that is one of statements that you had. So
I appreciate your courage. I know it is very difficult. I have
known a lot of folks. This is one battle that we have to win,
Mr. Shaw. Thank you.
Mr. Shaw. If I could comment, Rob, on what you had to say
regarding family members. Emily lost her mother and her father
and her sister with cancer. We were watching her very closely.
And it came to me, which I have no known cancer in my family.
So nobody is immune. It is something we all need to watch very,
very carefully and have our checkups and do these things.
But I think it is incumbent upon us as Members of Congress
to do what we can to seek out, properly fund and find a cure
for this disease.
Mr. Conaway. No questions, Mr. Shaw, other than to just
comment that my first wife battled Leukemia for 4 years, but
lost.
Mr. Portman. Thank you for your testimony.
We now are pleased to have with us Mr. Evans. Lane, thank
you for being here. And you are joined, I understand, by Mr.
Michaud as well as Ms. Herseth. I appreciate your being here.
And welcome to the committee and to Congress.
Mr. Evans, you have 10 minutes to divide as you wish. Then
we will have an opportunity to ask you some questions as follow
up. Welcome to the committee and look forward to your
testimony.
STATEMENT OF THE HON. LANE EVANS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF ILLINOIS
Mr. Evans. Thank you, Mr. Chairman. The administration's
fiscal year 2006 budget resolution for the Department of
Veterans Affairs (VA) proposes flat-line funding that will
severely weaken the system. It fails to adequately fund
veterans health care and seeks to put the burden on veterans
themselves to make up the shortfall.
The administration's budget would force the VA to deny care
to thousands of additional veterans, cut programs for nurses
within the system, abandon even more veterans who need VA
nursing home care, and gut the successful programs of State
nursing homes.
This is all at the time that we are in war, at the height
of war. This is unconscionable.
For 2006, the administration has requested only one-half of
1 percent more than Congress appropriated for the VA in fiscal
year 2005. This will force the Department of Veterans Affairs
to sustain and even broaden the practice of rationing care to
veterans. What sort of message does it send to our returning
troops, to those who might be considering military service, and
you cannot get help when you need it--when you come back home?
Under the administration plan, without corrections, the VA
programs would receive only a 0.4 percent increase over the
funds appropriated for fiscal year 2005. This ignores the VA's
own testimony that it needs 14 percent annually to maintain a
current level of service. The bottom line is that this
administration's proposal is at least $3 billion short in the
health care funding just to keep the VA ship afloat. The way we
keep it afloat is not by forcing one veteran to fight against
the other, or by cutting critically needed professionals,
needed by all veterans, working together to solve those
problems.
I and my Democratic colleagues on the Veterans' Affairs
Committee would submit for your consideration the views that
represent, I believe, a realistic VA budget, based on our
veterans views.
Thank you, Mr. Chairman, and I yield to the gentleman from
Maine at this point.
[The prepared statement of Lane Evans follows:]
Prepared Statement of Hon. Lane Evans, a Representative in Congress
From the State of Illinois
Mr. Chairman and Ranking Member Spratt, the Administration's fiscal
year 2006 budget submission for the Department of Veterans Affairs
proposes flat-line funding that will severely weaken the system. It
fails to adequately fund veterans' health care and seeks to put the
burden on veterans themselves to make up the shortfall. The
Administration's budget would force VA to deny care to thousands of
additional veterans, cut thousands of nurses from the system, abandon
even more veterans who need VA nursing home care, and gut the
successful state nursing home program.
At any time, this would be wrong. At the height of a war, it is
unconscionable.
For fiscal year 2006, the Administration has requested only one-
half of 1-percent more than Congress appropriated for the VA in fiscal
year 2005. This will force the Department of Veterans Affairs to
sustain and even broaden a practice of rationing care to veterans. What
sort of message is that to send to returning troops, to those who might
be considering military service, and to all who have already honorably
served?
Under the Administration plan, without collections, VA medical
programs would receive only a 0.4 percent increase over the funds
appropriated for fiscal year 2005. This ignores VA's own testimony that
it needs 14 percent annually to maintain a current level of health
services.
The Administration's budget calls for a staff reduction of 2
percent in VA's medical care business line. That amounts to the removal
of more than 3,000 health care employees, mostly nurses, at a time when
there is, in fact, a nursing shortage in VA.
The bottom line is that the Administration's proposal is at least
$3 billion short in health care funding just to keep the VA ship
afloat. And the way to keep it afloat is not by forcing one veteran to
pay for another veteran's care or by cutting critically needed health
care professionals.
I and my Democratic colleagues on the Veterans' Affairs Committee
have submitted for your consideration views & estimates that represent
a realistic VA budget based on veterans' needs. Unlike the
Administration's budget proposal, it takes into account the impact of
thousands of returning troops from Iraq and Afghanistan who will need
health care, including mental health services and other types of
transition assistance.
For the third straight year, the President's budget recommends a
$250 annual enrollment fee for medical care for Priority 7 and Priority
8 veterans, and more than doubles the amount they pay for prescription
drugs. These are veterans whose conditions are not service-connected
and who have incomes above VA means-tested levels. According to the
Administration's own figures, this will result in driving 213,000
additional veterans out of the system.
But what is most appalling is the position of some that these
veterans, Priority 7s and 8s, are not deserving of VA care because they
are--and this is quite misleading--``higher income'' and might
therefore have other health care options. This group of veterans, in
fact, includes combat-decorated veterans and others who served
honorably and whose annual incomes exceed $25,000 (single) to $36,000
(four or more dependents). A significant number of them lack health
insurance (in 2001, 6.4 percent, but likely more as the number of
uninsured Americans continues to grow), and some are not eligible for
Medicare.
In the private sector these veterans are not going to receive the
veteran-sensitive, specialized treatment that VA can provide. Without
VA, some will fall through the health care cracks altogether. Moreover,
many in the veterans' affairs community have serious concerns that the
VA health care system may not remain a viable independent system
without these veterans as patients, so all veterans may be adversely
affected by such policies. The Administration's push to oust deserving
veterans from the system also endangers VA's other missions of
educating the Nation's health care professionals, conducting research
and serving as back-up to the Department of Defense in the event of
war.
As troops return home from Operation Iraqi Freedom and Operation
Enduring Freedom, VA will eventually become responsible for many of
their health care needs, particularly for those with injuries that may
last a lifetime. Many of these servicemembers will require ongoing
rehabilitative care for their injuries--both mental and physical. As of
December 2004, VA had treated 32,684 of the 210,000 veterans from these
deployments. We agree with the Independent Budget on the necessity of a
significant infusion of funds to ensure that veterans are able to
receive the best sustaining care available for their problems.
Recent studies have shown that a significant number of returning
troops (up to 17 percent or more) are demonstrating a need for post-
deployment mental health intervention. Troops' mental health issues
range from acute and transitory anxiety and readjustment disorders to
more chronic and severe problems, even psychoses. We believe VA must
stand ready to provide immediate relief to servicemembers who return
requiring its services. Experts indicate that immediate intervention
may be the surest remedy to preventing some long-term and chronic
disorders.
The President's budget also cuts $9 million from VA's renowned
medical and prosthetic research program, whose achievements have
benefited veterans and non-veterans alike. As advocates are quick to
point out, without appropriated research dollars, these programs fail
to draw competitively based funding from private and other government
sources. With continued cuts to its appropriated funding levels, the
system continues to be challenged to fund merit-reviewed projects that
could greatly benefit veterans and other Americans.
Mr. Chairman, we can and must do better for our veterans. We ask
you to give serious consideration to the views & estimates put forward
by those who join me on this panel today, and our other Democratic
colleagues on the Veterans' Affairs Committee.
Thank you.
Mr. Michaud. Thank you, Mr. Chairman. I have a couple of my
colleagues who actually have flight problems. I can yield to
them first. So without objection I yield to my colleagues.
STATEMENT OF THE HON. SHELLEY BERKLEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEVADA
Ms. Berkley. Thank you again for giving me the opportunity
to speak with you on an issue that is very important to me. I
am here today to express my disappointment that the
administration's budget does not, in my opinion, adequately
address the needs of those veterans who have served our Nation,
as well as current service members who will soon become
veterans.
As many people are aware, I represent the district that has
the fastest growing veterans population in the United States. I
have almost 200,000 in the southern Nevada area. I work very
closely with them. I am very well aware of their problems, and
I would like to share those problems with you and how this
budget does not help where it is needed the most.
First, the President's budget fails to recognize that more
than 30,000 veterans have remanded claims which have been
pending for years, and in some cases more than a decade. In
Nevada and across the country, veterans who appealed decisions
as long ago as 1994 still have not received a final decision on
their claims.
I strongly urge the Budget Committee to use the temporary
funding provided in the administration's budget to address the
remanded claims problem. And Nevada has the fourth highest
remand rate in the Nation. These veterans have been waiting
years to have their claims addressed.
In fiscal year 2004, veterans filed almost 200,000 more
disability rating claims than in fiscal year 2000. However, the
VA rating staff has not increased proportionately. As a result
the pending caseload of these claims has significantly
increased since President Bush took office. Permanent funding
is necessary for 113 additional employees so veterans can
receive accurate and timely decisions on their claims.
Second, additional funding must be authorized for the Board
of Veterans Appeals to prevent even longer delays in processing
appeals. In my home State of Nevada, the number of pending
appeals currently exceeds 1,200, which is up from 750 in the
year 2001. It is unconscionable that veterans who are appealing
decisions for benefits based on their service-connected
disabilities are required to wait years for a decision from
their own government.
Third, the President's budget is inadequate to continue the
investment in improving the Nation's memorials and cemeteries
that honor our veterans. I request additional funding to assure
progress on the national shrine commitment so those who have
paid the ultimate price can be laid to rest in dignified, well-
maintained surroundings, and I can tell you without fear of
contradiction when I was first running for office 7 years ago
and met with the veterans organizations in my community this
was the one thing they pointed out to me more than any other.
In addition, I would like to urge the committee to provide
funding in the administration's fiscal year 2006 budget to
construct a full-scale medical complex in Las Vegas. After
going through an exhaustive CARES study, holding hearings
across the United States, the administration has added $199
million for a full service VA medical complex in southern
Nevada.
We have, as I mentioned, the fastest growing veterans
population in the country. We have no hospital, no outpatient
clinic, no long-term care facility. The veterans in southern
Nevada are relying on a string of temporary clinics scattered
across the valley. There are times during the summer when it is
115 degrees. I have 80-year-old veterans standing in the heat
waiting for a shuttle to pick them up to take them to 1 of 10
locations. So if they have to go and see a doctor for high
blood pressure, they go to one facility. Then they have to get
back on the bus, on the shuttle, go to another building in
order to get a different service, and then they have to go
somewhere else to get their prescription medication taken care
of.
Almost 1,500 of southern Nevada veterans are sent to
neighboring States hundreds of miles away because the services
cannot be provided locally since we do not have a full service
VA hospital for our veterans. They usually go to southern
California. The problem with that is they tend to be older,
they tend to--obviously, if they need the care, they are not in
good physical shape, they have medical problems, and they are
away from their families. This is an extremely stressful time,
and we need to bring these facilities to southern Nevada where
the veterans are located. The burden that these veterans and
their families have because of the lack of facilities in Las
Vegas is mind boggling and very sad to observe.
The proposed hospital outpatient clinic and long-term care
facility, of which we have none, in Las Vegas will
significantly improve health care access for the almost 200,000
veterans in my community. That I would say is our number one
priority, and since it has already been approved in the budget
I ask you to look lovingly at that, and my veterans will thank
you very much for that, as we should be thanking them.
I appreciate your time and sincerely hope that we can work
together to ensure the highest quality of care and service for
our Nation's veterans. There is not a group of Americans that
deserves our care more than they do. Thank you very much.
[The prepared statement of Shelley Berkley follows:]
Prepared Statement of Hon. Shelley Berkley, a Representative in
Congress From the State of Nevada
Thank you, Mr. Chairman. I am here today to express my
disappointment that the Administration's budget does not adequately
address the needs of those veterans who have served our country, as
well as the current servicemembers who will soon become veterans.
I agree with the positions expressed in the Views and Estimates of
the Democratic Members of the Committee on Veterans' Affairs and today,
I would like to focus on areas where funding for the VA is desperately
needed.
First, the President's budget fails to recognize that more than
30,000 veterans have remanded claims, which have been pending for years
and in some cases more than a decade. Almost 75% of those who appealed
VA regional office decisions in FY 2004 had those decisions remanded or
reversed by the Board of Appeals. In Nevada, and across the country,
veterans who appealed decisions as long ago as 1994 still have not
received a final decision on their claim. I strongly urge the Budget
Committee to use the temporary funding provided in the Administration's
budget to address the remanded claims problem.
In FY 2004, veterans filed almost 200,000 more disability rating
claims than in FY 2000. The number of veterans filing these claims for
the first time has also increased by 83,000. However, VA rating staff
has not increased proportionately. As a result, the pending caseload of
these claims has increased from 278,334 when President Bush took office
to 340,020 as of February 19, 2005. I cannot stress enough that
permanent funding is necessary for the 113 additional employees so
veterans can receive accurate and timely decisions on their claims.
Second, I agree with the majority that additional funding must be
authorized for the Board of Veterans Appeals to prevent even longer
delays in processing appeals. Veterans who are appealing decisions to
the Board of Veterans Appeals can expect to see a dramatic increase in
time to resolve their appeals. Since President Bush took office in
2001, the number of pending appeals has increased from 87,291 to
152,948 as of February 19, 2004. My home state of Nevada is no
exception, with the number of pending appeals currently exceeding 1,200
from 750 in 2001. This cannot continue.
Third, the President's budget is inadequate to continue the
investment in improving the nation's memorials and cemeteries that
honor our veterans. I request additional funding to assure progress on
the national shrine commitment so those who have paid the ultimate
price can be laid to rest in dignified, well-maintained surroundings.
In addition, I urge the Committee to provide the funding in the
Administration's FY 2006 Budget to construct the full-scale medical
complex in Las Vegas. Southern Nevada has one of the fastest-growing
veterans' populations in the country and there is no hospital,
outpatient clinic, or long-term care facility in sight.
The veterans in Southern Nevada are relying on a string of
temporary clinics scattered across the Valley and my veterans are
forced to shuffle between the clinics for their various health care
needs. Hundreds of Southern Nevada veterans are sent to neighboring
states, hundreds of miles away from their homes, because the services
cannot be provided locally. This is an unfair burden on the veterans
and their families. The proposed hospital, outpatient clinic, and long-
term care facility in Las Vegas will significantly improve health care
access for the 160,000 veterans in my community.
I appreciate your time and sincerely hope that we will work
together to ensure the highest quality of care and service for our
nation's veterans.
U.S. Congress,
Washington, DC, February 28, 2005.
Hon. Jim Nussle,
Chairman, Committee on the Budget, House of Representatives,
Washington, DC.
Hon. John Spratt, Jr.,
Ranking Member, Committee on the Budget, House of Representatives,
Washington, DC.
Dear Chairman Nussle and Ranking Member Spratt: We are writing to
express our concern regarding a provision in the administration's FY
2006 budget for the Department of Health and Human Services that would
require gaming establishments to serve as Federal collection agents for
overdue child support payments. While we adamantly support the efforts
of state law enforcement agents to recover child support from parents
who do not fulfill their parental obligations, this provision is
imprudent and could lead to a myriad of unintended consequences.
Under the proposal, an individual whose legal winnings exceed the
threshold for filling out an Internal Revenue Service W2-G form would
be subject to a Federal records check. A civilian commercial casino
employee would be tasked with searching for the name of the winning
patron in the Child Support Federal Parent Locator Service to determine
whether the winner is delinquent in his or her child support payments.
Gaming establishments that fail to execute this function as mandated by
the Federal Government would be subject to strict penalties.
Most commercial casinos operate 24 hours a day, 7 days a week.
State law requires casinos to payout winnings when they are due and
without delay. Therefore, to implement this proposal, thousands of
gaming employees would need immediate access to accurate information at
all times. These civilian workers,with no law enforcement background,
would have access to sensitive, confidential information. Not only does
this raise serious invasion of privacy concerns, casinos also could be
liable for any employee misuse or mistakes.
Requiring a private business to directly apply the law to an
individual would set a dangerous precedent, as well. It could open the
door to requiring other cash handling industries to similarly assume
the burden of law enforcement duties. Should banks check the court
records of all customers making deposits or withdrawals? Must car
dealers invoke the same requirements against their customers? The
private sector should not be expected to bear the burden of costly and
unreasonable mandates, such as the one proposed by the administration.
In conclusion, the intended goal of this provision is laudable, but
it is the role of law enforcement to police decisions made in our court
systems. This provision singles out the gaming industry, creating
unreasonable demands on the employees of gaming establishments. We ask
you to reject this proposal and not include this or similar language in
the FY2006 Budget Resolution.
Thank you for your consideration.
Sincerely,
Shelley Berkley,
Member of Congress.
Jon. C. Porter,
Member of Congress.
Frank LoBiondo,
Member of Congress.
Jim Gibbons,
Member of Congress.
Bennie Thompson,
Member of Congress.
Carolyn Kilpatrick,
Member of Congress.
STATEMENT OF THE HON. STEPHANIE HERSETH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF SOUTH DAKOTA
Ms. Herseth. Thank you, Mr. Chairman, Mr. Conaway, and
thank you to my colleagues, Ranking Member Evans and Mr.
Michaud, for yielding time. Thank you for giving me the
opportunity to speak to you today.
As the ranking member of the Economic Opportunity
Subcommittee, I am here to share my concerns regarding the
President's fiscal year 2006 budget request and its impact on
VA programs that are intended to provide service members,
veterans and military families economic security and
advancement.
Today, perhaps more than any time in our recent history,
transition assistance, vocational rehabilitation and education
programs for veterans are in need of adequate and timely
funding. In my State of South Dakota, more than 2,500 National
Guard soldiers have served in support of Operations Noble
Eagle, Enduring Freedom and Iraqi Freedom. These returning
soldiers, along with service members from across the country,
deserve the best available service we can provide.
Unfortunately, the administration' budget does not reflect
the need nor adequately provide funding for many of the
valuable education, vocational rehabilitation and transition
services promised to our Nation's veterans.
I want to take this opportunity to highlight two areas of
particular concern for me and many of my colleagues on the
committee. First, the President's fiscal year 2006 budget
request would eliminate 14 full-time employee equivalents
FTEEs, in the VA's Education Service. We agree with the
majority on this budget issue in rejecting the administration's
funding level and recommend an increase in resources of $1.1
million to restore the projected FTEE cuts in VA's Education
Service.
Education claims are expected to increase due to more
veterans seeking to take advantage of Montgomery G.I. Bill
education benefits, as well as a new National Guard and Reserve
education program enacted last year as part of the National
Defense Authorization Act of 2005. Moreover, a number of senior
VA Education Service employees are eligible to retire in the
near future. Additional resources are needed to address the
expected increases in education claims and to hire new
employees.
The second area I would like to highlight is that the
President's fiscal year 2006 budget request provides no funding
for additional FTEE designated to provide direct vocational
rehabilitation and employment counseling services. Rather, the
President's budget simply reflects a redistribution of
management support personnel. Veterans applying for vocational
rehabilitation and employment services increased dramatically
over the last decade, roughly 75 percent increase. Demand for
this service will certainly and surely continue due to the many
injuries suffered by our troops serving in Iraq and
Afghanistan.
Former Secretary Anthony Principi established a task force
to review the vocational rehabilitation employment program,
VR&E, from top to bottom. The VR&E task force issued a
comprehensive report in May of last year. The report contained
102 recommendations to improve the VR&E program and reform it
to be responsive to 21st century needs of service connected
disabled veterans.
The task force recommended increasing full-time staff
positions in the VR&E program by approximately 200 FTEE,
including 27 FTEE in headquarters, 112 in the regional offices
to deliver direct services, 56 in the regional services for
contracting and purchasing, and 8 quality assurance staff.
Consistent with the VR&E task force report, we recommend an
increase of $5 million to provide for 57 additional FTEE, one
full-time staff position in each regional office.
Again, I want to thank you for providing me the opportunity
to speak today and encourage you to reconsider the President's
budget request and provide adequate funding for veterans
education, vocational rehabilitation, and transition programs.
Thank you and I yield back.
[The prepared statement of Stephanie Herseth follows:]
Prepared Statement of Hon. Stephanie Herseth, a Representative in
Congress From the State of South Dakota
Thank you for giving me the opportunity to speak today. As the
Ranking Member on the Economic Opportunity Subcommittee, I am here to
share my concerns regarding the President's Fiscal Year 2006 budget
request and its impact on VA programs that are intended to provide
servicemembers, veterans, and military families economic security and
advancement.
Today, perhaps more than any time in recent history, transition
assistance, vocational rehabilitation, and education programs for
veterans are in need of adequate and timely funding. In my state of
South Dakota more than 2500 National Guard soldiers have served in
support of operations Noble Eagle, Enduring Freedom, and Iraqi Freedom.
These returning soldiers, along with servicemembers from across the
country, deserve the best available service we can provide.
Unfortunately, the Administration's budget does not reflect the need
nor adequately provide funding for many of the valuable education,
vocational rehabilitation, and transition services promised to our
nation's veterans.
I want to take this opportunity to highlight two areas of concern
that I have. First, the President's FY06' budget request would
eliminate 14 Full Time Employee Equivalents (FTEE) in the VA's
Education Service. We agree with the majority on this budget issue and
reject the Administration's funding level and recommend an increase in
resources of $1.1 million to restore the projected FTEE cuts in VA's
Education Service. Education claims are expected to increase due to
more veterans seeking to take advantage of Montgomery G.I. Bill
education benefits, as well as the new Guard and Reserve education
program enacted last year as part of the National Defense Authorization
Act of 2005. Moreover, a number of senior VA Education Service
employees are eligible to retire in the near future. Additional
resources are needed to address the expected increases in education
claims and hire new employees.
The second area I would like to highlight is that the President's
FY06' budget request provides no funding for additional FTEE designated
to provide direct vocational rehabilitation and employment counseling
services. Rather, the President's budget simply reflects a
redistribution of ``management support'' personnel. Veterans applying
for vocational rehabilitation and employment services increased
dramatically over the last decade--roughly 75 percent increase. Demand
for this service will surely continue due to the many injuries suffered
by our troops serving in Iraq and Afghanistan. Former Secretary Anthony
J. Principi, established a task force to review the vocational
rehabilitation and employment program (VR&E) from ``top-to-bottom.''
The VR&E Task Force issued a comprehensive report in May of 2004. The
report contained 102 recommendations to improve the VR&E program and
reform it to be responsive to 21st Century needs of service-connected
disabled veterans. The Task Force recommended increasing full-time
staff positions in the VR&E program by approximately 200 FTEE;
including 27 FTEE in headquarters; 112 in the regional offices to
deliver direct services; 56 in the regional offices for contracting and
purchasing; and 8 quality assurance staff. Consistent with the VR&E
Task Force Report, we recommend an increase of $5 million to provide
for 57 additional FTEE--one full time staff position in each regional
office.
Again, I want to thank you for providing me with the opportunity to
speak today, and encourage you to reconsider the President's budget
request and provide adequate funding for veterans education, vocational
rehabilitation, and transition programs.
Mr. Evans. I would like to yield to the Congressman from
Maine for the remainder of our time.
STATEMENT OF THE HON. MICHAEL H. MICHAUD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MAINE
Mr. Michaud. Thank you very much, Ranking Member Evans.
Mr. Chairman, I was asked by a member of the Veterans'
Committee, Mr. Strickland, if he could submit prepared remarks
for the record.
Mr. Portman. Without objection.
[The prepared statement of Ted Strickland follows:]
Prepared Statement of Hon. Ted Strickland, a Representative in Congress
From the State of Ohio
Thank you for hearing the oversight perspective regarding VA's
unfounded claims of $4.34 billion in management efficiency-based
savings and the proposed addition of new fees and co-pays on veterans
seeking health care.
I would like to begin by thanking HVAC Chairman Buyer for boldly
stating in his views and estimates that VA has ``overestimated''
management efficiency savings. We fully agree. What we disagree on is
the amount of net savings, if any.
In the budget submissions for fiscal years 2005 and 2006, VA uses
only 79 words each year to account for claimed savings of about $1.2
billion and 1.8 billion, respectively. All too often, their stated
basis has never transpired, never been proven or has encountered
serious management problems. Other unstated management problems may
also offset claimed savings.
I have brought with me two IG reports to illustrate our point. This
is by no means a comprehensive list of VA management deficiencies.
The first is an Inspector General review of the CoreFLS system--
$249 million in government obligations for an automated management
system that was never deployed because ``VA Management of the CoreFLS
Project did not Protect the Interests of the Government'' and ``Senior
Leadership did not Respond Adequately to SPD [supply, processing, and
distribution] Warnings and did not Ensure Adequate Preparation for
CoreFLS Testing.'' This does not sound like management efficiency. It
did not sound like an efficiency to the Carnegie Mellon Independent
Technical Assessment Team contracted to review the CoreFLS failure and
which noted numerous technical and management related problems.
More recently, on February 16, 2005 the IG published a report
titled, ``Evaluation of VHA Sole-Source Contracts with Medical Schools
and Other Affiliated Institutions'' which indicates a myriad of
problems with general contracting, contract pricing, and conflicts of
interest.
One need only to go the VA IG website or review reports of the
Government Accountability Office for a more complete picture, a picture
that indicates a host of management problems at VA over the last 4
years--many are associated with a cost to the government--and the
taxpayer--because of VA management deficiencies. Nowhere in the budget
submissions do we see a substantiated accounting of either the net
losses or the net savings at VA. The two must be considered in balance.
The result must be proved before we allow ``just anybody's guess'' to
impact veterans' health care. For this reason, we must restore the
offsets to veterans' health care based on VA's claims of management
efficiencies until those efficiencies are proven and a net savings can
be determined.
Perhaps one indicator that the claimed magnitude of VA management
efficiencies is--as Mr. Buyer states, ``overestimated'', relates to
VA's strident interest in the last 4 years to impose fees and co-pays
on veterans.
VA recommendations for new fees and increased co-pays seem to pop
up in rough approximation to the unfounded efficiency claims. Why? If
all claims of management efficiency were real, would the fees and co-
pays be necessary?
VA has built a house of cards on efficiency claims that are without
substance, now they seek to correct for their management shortcomings
by levying fees and co-pays on our veterans. This is wrong. We will not
support it.
The newly proposed $250 enrollment fee is often compared by our new
Chairman to TriCare for Life. Differences abound. Veterans usually do
not have a choice of provider/physician at VA, family members are not
usually eligible, and there is no fee for TriCare for Life.
Of course there is a threshold for the new VA fees and increased
co-pays--in my District, someone making $26,000/yr is considered too
wealthy for the exemption.
Following VA's budget savings ``exaggeration'' with an injustice in
order to cover management deficiencies and balance the ledger is no way
to treat veterans in this time of war. We will accept an offset to
health care based on factual, provable net savings based on management
efficiencies. We will not accept burdening those who have served with
the cost associated with past management failures at VA.
I urge the Budget Committee to restore all claimed management
efficiency savings for FY 2003-FY2006 until net savings are proven.
Mr. Michaud. Thanks for the opportunity to appear before
your committee this afternoon. I agree with the remarks of
Ranking Member Evans regarding the inadequacy of the
administration's budget proposal. There is no doubt that there
is a growing strain on the VA. We will not truly overcome this
challenge with the policies that will decrease demand or ration
care because the demands represent the needs of real veterans
needing care.
Along with my colleagues here today, and along with the
veterans of this country, I believe we should reject the
proposed enrollment fees and increased copayments and provide
the necessary resources to meet the demands on VA. I would like
to draw your attention to the effects of the administration's
budget as it affected the long-term care option for our
veterans. The administration proposes to limit eligibility for
nursing home care to all of its venues and to the mostly
severely connected veterans.
That would be devastating. We do not believe that the VA
should abandon its long-term care responsibility in any of its
nursing care venues, particularly at a time when veterans'
demands for such services is increasing and is at its peak.
Congress seemed to share these concerns when it passed
Public Law 106-117, which required VA to maintain its in-house
nursing home capacity at the level of the fiscal year 1998, but
VA programs have continued to erode since that time. Rather
than take action to address this erosion, VA continues to
propose to do away with the requirement and find ways to reduce
its institutional long-term care capacity.
For example, the President's budget would revise the
eligibility requirement for the State veterans homes so that
the vast majority of veterans who reside in State veterans
homes would suddenly be ruled ineligible for per diem benefits.
The National Association of State Veterans Homes estimated that
in many States this change will eliminate VA per diem for at
least 80 percent of State home residents.
The impact would not only be felt by those who would no
longer qualify under this proposal, in fact this change would
jeopardize the future of State home systems all together. The
proposal will cost the State of Maine Veterans Homes $4.7
million per year. By excluding so many veterans it would have a
similar impact on the Iowa State Home, in Marshalltown and two
homes in South Carolina, and the State Veterans Homes all
across the country. I understand that 75 percent or more of the
State homes could go bankrupt under this plan. Indeed, it is
unclear what all of the impacts of such a plan would be, other
than to drastically decrease the current workload in funding
availability to State homes, thereby threatening the overall
ability to the existence of these homes.
To that end, the minority members of the committee are
recommending funding to restore the 1998 baseline of services
in VA nursing homes, and to enhance State home capability. Mr.
Chairman, I would ask that the proposals within the
administration budget, the proposals that would jeopardize the
care of thousands of aging veterans, be rejected, and that we
do not abandon our commitment to the long-term care of our
Nation's veterans.
Thank you very much, Mr. Chairman.
[The prepared statement of Michael H. Michaud follows:]
Prepared Statement of Hon. Michael H. Michaud, a Representative in
Congress From the State of California
Mr. Chairman, thank you for the opportunity to appear before your
committee.
I would like to associate myself with the statement made by Ranking
Member Evans regarding the inadequacy of the Administration's budget
proposal. We should not force those who have sacrificed so much for our
country to sacrifice again. There is no doubt that there is a growing
strain on the VA. We will not truly overcome this challenge with
policies that decrease demand or ration care--because that demand
represents the needs of real veterans needing real care. Along with my
colleagues here today, and along with the veterans of this country, I
believe we should reject the proposed enrollment fee and increased
copayments, and provide the necessary resources to meet the demand on
the VA.
I would now like to draw your attention to the devastating effects
the Administration's budget would have on long-term care options for
our veterans. The Administration proposes to limit eligibility for
nursing home care in all of its venues--VA--community--and state--to
only the most highly service-connected veterans and those with short-
term needs. We do not believe that the VA should abandon its long-term
care responsibilities in any of its nursing care venues, particularly
at a time when veterans' demand for such services--the demand of the
``greatest generation''--is at its peak.
Congress seemed to share this concern when it passed Public Law
106-117, which requires VA to maintain its in-house nursing home
capacity at the level that existed in fiscal year 1998. But VA's
programs have continued to erode since that time. Rather than take
actions to redress this erosion, VA continues to propose to do away
with the requirement and find ways to reduce its institutional long-
term care capacity.
For example, the President's budget would revise the eligibility
requirements for the State Veterans Homes so that the vast majority of
veterans who reside in State Veterans Homes would suddenly be ruled
ineligible for per diem benefits. The National Association of State
Veterans Homes estimates that in many states, this change will
eliminate VA per diems for at least 80 percent of State Home residents.
The impact would not only be felt by those who would no longer
qualify under this proposal. In fact, this change would jeopardize the
future of the State Homes system altogether. This proposal would cost
the Maine State Veterans Homes $4.7 million per year. By excluding so
many veterans, it would have a similar impact on the Iowa State Home in
Marshalltown, the two homes in South Carolina, and State Veterans Homes
across the country. I understand that 75 percent or more of the state
homes could go bankrupt under the plan. Indeed, it is unclear what all
of the impacts of such a plan would be, other than to drastically
decrease the current workload and funding available to state homes,
thereby threatening their overall ability to exist.
In contrast to the President's budget and VA's recent history, the
Federal Advisory Committee on the Future of VA Long-Term Care
recommended that VA should:
Maintain its bed capacity
Increase capacity in the state homes
And double or triple capacity in its non-institutional
long-term care settings.
To that end, the minority Members of the Committee are recommending
funding to restore the 1998 baseline of services in VA nursing homes
and to enhance state home capacity. Mr. Chairman, I ask that the
proposals within the Administration's budget--proposals that would
jeopardize the care of thousands of aging veterans--be rejected and
that we do not abandon our commitment to the long term care of our
nation's veterans.
Thank you Mr. Chairman.
Mr. Portman. Thank you, Mr. Michaud, we appreciate your
testimony. And Mr. Evans, thank you for your testimony.
I just want to correct the record, if I could. Ms. Herseth
said that she would urge this committee to reconsider the
President's request, and there was kind of an implicit
assumption in some of the testimony that this committee would
be deciding on what the veterans programs will be. That is not
the case.
This committee does establish the broad blueprint for our
budget. In the case of the veterans programs, of course, these
are both mandatory and discretionary, and we come up with two
numbers. One is on the discretionary side, which will be an
overall number. Within that the Congress, through its committee
process, the Appropriations Committee, which Mr. Evans works
with, would choose how to spend that money, both in terms of
its overall allocation to veterans or not, and then within the
veterans program, and the other case there is a broad number
for mandatory spending, and the same would apply. So Congress
controls the purse strings and we will have the ability to look
at all of those programs.
Second, I know you all know this, over the last 5 years
veterans health care has been increased by 42 percent. We do
have an increase, not adequate, for Mr. Evans' opinion and the
other Members who testified, but again that is something to
keep in mind. This is a tough year because we do have needs
that throughout our various communities are tough to meet.
VA, Mr. Evans, you said would like a 14 percent increase in
health care. That is a pretty steep increase to just do year
after year after year, and the question is, are there ways in
which we can reform the system to make it work better and not
have these double digit increases. The veterans in my community
are not happy with the care that they receive for the most
part. Some are and some aren't, but certainly our veterans
system is far from perfect.
But Congress as they look at this will look at the numbers,
but also at the substance and some of the reforms, ideas that
have been proposed to improve the health care and make it work
better for our veterans. Mr. Conaway.
Mr. Conaway. Thank you for your testimony. I appreciate it.
One is a comment anecdotally. A veteran from our community
from Odessa had a wrist injury, held over from Vietnam, and
needed to be taken care of. He was required to go to
Albuquerque, New Mexico for assessment and come home. He was
required to go back to Albuquerque for the surgery and go home
and then go back to Albuquerque--and this is an 8-hour trip--
for post-op care. There is no shortage of doctors in Odessa,
Texas who could have provided that service and he could have
stayed there. The commitments for veterans health care is
there. We are going to meet that.
What I would encourage the committee to look at is the idea
that, you know, the system was set up in 1950, late 40s, to
address the millions of World War II veterans at a time when
our medical system was much, much different than it is today,
and maybe there is a better way we can meet the needs of all
veterans that would be easier on them and cheaper.
I had another veteran, a Vietnam vet suffering from post-
traumatic stress syndrome, tell me at a town hall meeting last
Friday in Odessa, that he was transported from Odessa to
Temple, another 8-hour drive in an ambulance, for $2,300. And
when they got him ready for discharge, they gave him a $35
voucher for a bus ride home that got him halfway. A system that
works like that way is just nonsense.
I think we can keep these promises. And I have a father who
is a veteran of Korea and World War II and goes to a veterans
hospital for treatment of diabetes. And we want to keep those
promises to him. But I think we can do it better and cheaper.
It makes it easier on the veterans.
I am also a veteran. I am a beneficiary of the GI bill. So
I have some skin in the game as well.
One other thing, and I just appreciate you listening to
this. One of the other witnesses mentioned a caseload at VA for
determining disabilities and the appeals. Again, harkening back
to the 7 years I spent on a regulatory agency board in Texas,
we tracked opened cases from start to finish. And every year we
went from a legislative oversight board, with our little chart
in hand, that said here is somebody that we opened and somebody
we closed. Here is what we have pending, the average length of
time it took us to fix that. I would hope that the VA tracks
that and the committee is holding their feet to the fire. She
said years on determinations. That is awful, I mean, for the
lack of a phrase, that your committee doesn't hold their feet
to the fire to get the work done.
Thank you for your service. This is a tough environment. We
have veterans we are creating every day with problems. I am
going to go to Bethesda on Monday to visit with injured troops,
to look them in the eye and tell them thank you. We have to
keep promises, but we also can't break the bank as the Vice
Chairman said. We have had significant increases in VA funding
and we have to continue to work together to make sure we keep
those promises. Thank you for your testimony.
Mr. Evans. I believe we can work together to see what we
can do. For all of us who have rural counties in their
district, it is a tremendous problem for veterans to get a
ride, much less a reimbursement for the gas to get to VA
medical centers. So it is something I would like to work on.
And, you know, all these problems we bring up about the VA
is the reason veterans are doing so well. But by and large, we
are going to see an increase in the need for funding veterans
of the Persian Gulf wars, and there is an indication that the
current level of services should be extended. Most people think
we are slowing down the defense spending and slowing down
veterans spending and that we don't need them anymore. This one
time we need funding increases in both.
So thank you very much, and I appreciate you and the
Chairman's assistance.
Mr. Portman [presiding]. Thank you, Mr. Evans. Appreciate
you coming before us today and your longtime concern for our
veterans.
And, Mr. Michaud, thank you for your testimony.
Mr. Portman. Ms. Bordallo, thank you for your patience. I
see you over there and we appreciate you being here. We look
forward to your testimony. Any statement you have may be made
part of the record and you are welcome to testify up to 10
minutes.
STATEMENT OF THE HON. MADELEINE Z. BORDALLO, A DELEGATE IN
CONGRESS FROM THE TERRITORY OF GUAM
Ms. Bordallo. Thank, you Mr. Chairman, and members of the
House Budget Committee. I thank you very much for the
opportunity to testify today. There are several priorities for
Guam that I feel merit consideration for inclusion in the
Fiscal Year 2006 Budget Resolution. I respectfully request your
assistance with ensuring that the budget provide sufficient
overhead to cover the costs of these important programs and
initiatives.
There are four specific items, Mr. Chairman, that I would
like to discuss today very briefly.
The first item I wish to discuss involves the forgiving of
debts owed by the Government of Guam to the Department of
Agriculture's Rural Utility Service loan program. In enacting
Public Law 108-188, the reauthorization of the Compact of Free
Association between the United States, the Republic of the
Marshall Islands (RMI), and the Federated States of Micronesia
(FSM), Congress and the administration recognized the adverse
financial impact shouldered by the Government of Guam of
providing unreimbursed services to the citizens of these Freely
Associated States. Under the Compact of Free Association,
citizens of the RMI and the FSM may travel to the United States
and utilize any social services without having to pay taxes to
U.S. jurisdictions. And because of the geographic proximity,
many of the FAS migrants choose Guam as their destination.
In addition to increasing direct Federal assistance to Guam
and other U.S. jurisdictions in the Pacific region, the Compact
Reauthorization included provisions of a bill that I introduced
as the Compact-Impact Debt Reconciliation Act. This act granted
the administration authority to reimburse Guam for past
unreimbursed costs associated with the FAS migrants by
forgiving debts owed by the Government of Guam to the Federal
Government. Unfortunately, the administration has declined to
exercise its authority to provide such debt relief in fiscal
year 2005, citing the need for a congressional appropriation.
So I am requesting that Congress appropriate debt relief for
$105 million in outstanding RUS loans and respectfully request
that the Budget Committee provide sufficient head room to cover
this appropriation.
The second item, Mr. Chairman, I wish to discuss concerns
coordinating the payment of the Earned Income Credit in Guam
and the Virgin Islands. As you are aware, the tax codes of Guam
and the Virgin Islands mirror that of the Internal Revenue
Code, and we must provide our citizens with the same tax credit
as individuals receive in the 50 States and the District of
Columbia. However, the payment of refundable tax credits such
as the EIC constitutes an unfunded Federal mandate. The
refundable portion of this tax credit, which is the amount that
exceeds an individual taxpayer's total tax liability, is meant
to offset the impact of FICA taxes on low-income individuals.
While citizens of Guam and the Virgin Islands pay their FICA
taxes to the U.S. Treasury, the territorial treasuries are
tasked with covering the costs of the refundable portion of
this credit out of our local revenues.
Congresswoman Christensen of the Virgin Islands and I have,
over the years, proposed various solutions to this issue. On
different occasions, Senate Finance Chairman Grassley and House
Ways and Means Committee Chairman Thomas have engaged in
colloquies expressing their willingness to work with us to
resolve this matter, and we are hopeful for a consensus on a
resolution this year. The Joint Committee on Taxation scored my
most recent proposed legislation solution at $39 million for
fiscal year 2006. I respectfully request that the Budget
Committee include this figure in the 2006 budget resolution.
As my third item for discussion, I respectfully request
that the Budget Committee provide $8 million in head room for
additional Medicaid appropriations to Guam and the small
territories. Last year, I introduced a floor amendment to the
Departments of Labor, Health and Human Services, and Education
Appropriations Act for Fiscal Year 2005 that would have
increased Medicaid funding to Guam and the small territories
above current section 1108 funding limitations. Section 1108 of
the Social Security Act limits the amount of funding that the
territories may receive in Federal Medicaid matching grants. I
agreed to withdraw my amendment at the request of House Energy
and Commerce Chairman Barton upon learning of his interest to
work with me to address this matter through the program's
authorizing committee. I am pleased with the Chairman's
understanding of the adverse impact of section 1108 on the
territories and his willingness to help us identify additional
resources.
Last year, the House Government Reform Subcommittee on
Human Rights and Wellness held a hearing which highlighted
continuing health disparities in the territories, coupled with
disproportionately high rates of unemployment and low rates of
economic growth. Health care financing in the territories has
reached, Mr. Chairman, a state of crisis. In this week's
meeting of the Interagency Group on Insular Areas a couple of
days ago, which was chaired by the Secretary of the Interior,
Governors and Delegates of the small territories each
highlighted the extent of this crisis. With both the
administration and congressional leadership aware of the need
to provide additional Federal funding for health services in
the territories, I respectfully request that the Budget
Committee include $8 million to cover the cost of my proposed
increase in section 1108 limitation levels to help address this
issue.
Lastly, Mr. Chairman, I wish to raise the issue of Guam war
claims. It has been over 60 years since Guam was liberated from
the Imperial Japanese forces by the U.S. Armed Forces in World
War II. During 3 years of brutal occupation, the citizens of
Guam endured internment, personal injury, forced labor, rape,
and numerous other violations of human rights. Hundreds of
Chamorros, the indigenous people of Guam, were killed. Although
Congress passed the Guam Meritorious Claims Act of 1945 to
provide immediate relief to the people of Guam, the goal of the
act was not realized, due to the complete chaos of postwar Guam
and the inaccurate dissemination of information.
The Guam War Claims Review Commission was established under
Public Law 107-333 to determine whether there was parity in the
treatment of residents of Guam in the war claims process when
compared to other war claims programs afforded to other
similarly situated Americans. After an extensive review, the
War Review Commission found a lack of parity and recommended
additional compensation for eligible individuals. Legislation
to implement these recommendations will be introduced shortly
and I am hopeful for swift congressional consideration. The
Review Commission estimates, at minimum, a total of $126
million to be necessary to pay these claims. I respectfully
request that the Fiscal Year 2006 Budget Resolution account for
these costs.
Mr. Chairman, this would be the last group of U.S. citizens
that have not been recognized or compensated for war claims,
and we are looking at 60 years ago.
Mr. Chairman, I hope that members of the committee will be
on the lookout for fair treatment of the U.S. territories. And,
again, I thank you for this opportunity to present the
priorities of the citizens of Guam with respect to the Fiscal
Year 2006 Budget Resolution. Thank you.
[The prepared statement of Madeleine Bordallo follows:]
Prepared Statement of Hon. Madeleine Z. Bordallo, a Delegate in
Congress From the Territory of Guam
Chairman Nussle, Ranking Member Spratt, and members of the House
Budget Committee, thank you for the opportunity to testify today. There
are several priorities for Guam that I feel merit consideration for
inclusion in the Fiscal Year 2006 Budget Resolution. I respectfully
request your assistance with ensuring that the Fiscal Year 2006 Budget
provides sufficient overhead to cover the costs of these important
programs and initiatives. There are four specific items that I would
like to discuss today, and I look forward to working with you to ensure
their inclusion in the Budget Resolution. Included among these requests
are funding for Guam debt-relief, the Earned Income Credit in Guam and
the Virgin Islands, Medicaid reimbursement to the governments of Guam
and the small territories, and Guam War Claims.
GUAM DEBT RELIEF
The first item I wish to discuss involves the forgiving of debts
owed by the Government of Guam to the Department of Agriculture's Rural
Utilities Service (RUS) loan program. In enacting Public Law 108-188,
the Reauthorization of the Compact of Free Association between the
United States and the Republic of the Marshall Islands (RMI) and the
Federated States of Micronesia (FSM), Congress and the Administration
recognized the adverse financial impact shouldered by the Government of
Guam of providing unreimbursed services to citizens of these Freely
Associated States (FAS). Under the Compact of Free Association,
citizens of the RMI and FSM may travel to the United States and utilize
any social services without having to pay taxes to U.S. jurisdictions.
Because of geographic proximity, the preponderance of FAS migrants
chose Guam as their destination.
In addition to increasing direct Federal assistance to Guam and
other U.S. jurisdictions in the Pacific Region, the Compact
Reauthorization included provisions of a bill I introduced as the
Compact-Impact Debt Reconciliation Act. This Act granted the
Administration authority to reimburse Guam for past unreimbursed costs
associated with FAS migrants by forgiving debts owed by the Government
of Guam to the Federal Government. Unfortunately, the Administration
has declined to exercise its authority to provide such debt relief in
Fiscal Year 2005, citing the need for a Congressional appropriation. I
am requesting that Congress appropriate debt relief for $105 million in
outstanding RUS loans, and I respectfully request that the Budget
Committee provide sufficient head room to cover this appropriation.
EARNED INCOME CREDIT
The second item I wish to discuss concerns coordinating the payment
of the Earned Income Credit (EIC) in Guam and the Virgin Islands. As
you are aware, the tax codes of Guam and the Virgin Islands mirror that
of the Internal Revenue Code, and we must provide our citizens with the
same tax credits as individuals receive in the 50 States and the
District of Columbia. However, the payment of ``refundable'' tax
credits such as the EIC constitutes an unfunded Federal mandate. The
``refundable'' portion of this tax credit, which is the amount that
exceeds an individual taxpayer's total tax liability, is meant to
offset the impact of FICA taxes on low-income individuals. While
citizens of Guam and Virgin Islands pay their FICA taxes to the U.S.
Treasury, the territorial treasuries are tasked with covering the cost
of the ``refundable'' portion of this credit out of local revenues.
Congresswoman Christensen and I have, over the years, proposed
various solutions to this issue. On different occasions Senate Finance
Chairman Grassley and House Ways and Means Committee Chairman Thomas
have engaged in colloquies expressing their willingness to work with us
to resolve this matter, and we are hopeful for a consensus on a
resolution this year. The Joint Committee on Taxation scored my most
recent proposed legislative solution at $39 million for Fiscal Year
2006. I respectfully request that the Budget Committee include this
figure in the Fiscal Year 2006 Budget Resolution.
MEDICAID
As my third item for discussion, I respectfully request that the
Budget Committee provide $8 million in head room for additional
Medicaid appropriations to Guam and the small territories. Last year, I
introduced a floor amendment to the Departments of Labor, Health and
Human Services, and Education Appropriations Act for Fiscal Year 2005
that would have increased Medicaid funding to Guam and the small
territories above current Section 1108 funding limitations. Section
1108 of the Social Security Act limits the amount of funding that the
territories may receive in Federal Medicaid matching grants. I agreed
to withdraw my amendment at the request of House Energy and Commerce
Chairman Barton upon learning of his interest to work with me to
address this matter through the program's authorizing committee. I am
pleased with the Chairman's understanding of the adverse impact of
Section 1108 on the territories and his willingness to help us identify
additional resources.
Last year, the House Government Reform Subcommittee on Human Rights
and Wellness held a hearing which highlighted continuing health
disparities in the territories. Coupled with disproportionately high
rates of unemployment and low rates of economic growth, health care
financing in the territories has reached a state of crisis. In this
week's meeting of the Interagency Group on Insular Areas, which is
chaired by the Secretary of the Interior, Governors and Delegates of
the small territories each highlighted the extent of this crisis. With
both the Administration and Congressional leadership aware of the need
to provide additional Federal funding for health services in the
territories, I respectfully request that the Budget Committee include
$8 million to cover the cost of my proposed increase in Section 1108
limitation levels to help address this issue.
GUAM WAR CLAIMS
Lastly, I wish to raise the issue of Guam war claims. It has been
over 60 years since Guam was liberated from Imperial Japanese forces by
U.S. Armed Forces in World War II. During 3 years of brutal occupation,
the citizens of Guam endured internment, personal injury, forced labor
and numerous other violations of human rights. Hundreds of Chamorros,
the indigenous people of Guam, were killed. Although Congress passed
the Guam Meritorious Claims Act of 1945 to provide immediate relief to
the people of Guam, the goal of the Act was not realized due to the
chaos of post-war Guam and the inaccurate dissemination of information.
The Guam War Claims Review Commission was established under Public
Law 107-333 to determine whether there was parity in the treatment of
residents of Guam in the war claims process when compared to other war
claims programs afforded to other similarly situated Americans. After
an extensive review, the Review Commission found a lack of parity and
recommended additional compensation for eligible individuals.
Legislation to implement these recommendations will be introduced
shortly, and I am hopeful for swift Congressional consideration. The
Review Commission estimates, at minimum, a total of $126 million will
be necessary to pay these claims. I respectfully request that the
Fiscal Year 2006 Budget Resolution account for these costs.
Thank you for the opportunity to present the priorities of the
citizens of Guam with respect to the Fiscal Year 2006 Budget
Resolution. I look forward to working with members of the Committee to
ensure inclusion of these items in the Budget, and I look forward to
answering any questions you may have regarding these requests.
Mr. Portman. Thank you, Ms. Bordallo. We will think no less
of you for the fact you only took 8 minutes. Thank you.
Appreciate your testimony on the debt relief issues, earned
income tax credit and the Medicaid issues, as well as the Guam
war claims. Good education for us those of us on the committee
who don't deal with those issues day to day.
Mr. Conaway.
Mr. Conaway. I just had one question--historical, of
background--the compact that was signed that creates this
problem that you have got with the unreimbursed----
Ms. Bordallo. The debt relief.
Mr. Conaway. When did that start?
Ms. Bordallo. In the 108th.
Mr. Conaway. Four years ago. No other questions.
Mr. Portman. We are now pleased to have before the
committee Ms. Wilson from New Mexico. Ms. Wilson, you have 10
minutes for your testimony. And any written statement you have
will be made part of the record.
STATEMENT OF THE HON. HEATHER WILSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW MEXICO
Mrs. Wilson. Thank you Mr. Chairman. I appreciate your
putting my full statement in the record. What I would like to
do is summarize. I appreciate your patience for staying so long
on go-home day.
What I want to talk to the committee about is Medicaid. In
the President's budget there is about $60 million in reductions
in Medicaid spending over 10 years and new initiatives
amounting to about $16.5 billion, for a net reduction of $43.6
billion. A lot of the proposals for the reductions are what are
called ``program integrity.'' and I believe some, if not all,
of those proposals have merit, and they would make for
significant needed improvements in the Medicaid program. But I
believe that these ideas need to be evaluated as part of a
comprehensive effort to reform the Medicaid program and bring
it into line with 21st century medicine.
When you look at these ideas, even though they are
aggressive in many ways, they may not go far enough to reform
the program. Medicaid is set up to pay claims. It is not set up
to improve anyone's health. And real Medicaid reform goes far
beyond what has been proposed in the fiscal year 06 budget. But
there are some States who have used the matching Federal
structure of Medicaid to inappropriately draw down Federal
funds to pay for nonhealth expenses. The most obvious of these
is something called the intergovernmental transfer, where money
is moved into accounts to draw down Federal match, and then the
State or local money is moved back to another completely
nonhealth-related purpose.
There are legitimate and illegitimate intergovernmental
transfers. We need to make sure that we don't dry up the
ability of a county hospital's funds to be used as local match
for Medicaid when we try to end some of the more creative
financing schemes that State governments have participated in.
The administration estimates that they will save $10.9
billion in 10 years by restricting these intergovernmental
transfers. We have to accept and understand that that cost will
be shifted to the States and will result in reduced benefits or
reduced payments to health care providers and will have a
significant impact on low-income Americans.
There is another initiative in the budget on Medicaid that
deals with administrative costs, a proposed cap on the current
50 percent Federal match for administrative costs. Most of the
administrative costs that States use for Medicaid are used for
computer systems and to fight fraud, track quality, and collect
and disseminate data.
The Medicaid program has not done very well on fraud
recoveries compared to Medicare. And one of the reasons for
that is the way the program is set up and the way the
reimbursements are done. I am concerned that if we reduce
further the Federal match for Medicaid administrative costs, we
are going to see even fewer recoveries and less attention to
fraud, waste and abuse in Medicaid, which is all investigated
by the States. So we have to be very careful about the
unintended consequences of some of these so-called
administrative cost constraints. While the initiatives in the
President's budget may have merit, I don't think they
constitute Medicaid reform.
I chaired a task force in the 108th Congress on Medicaid,
and we looked at the entire program and we identified several
areas where Medicaid should be improved or modernized to bring
it up to date. It is increasingly clear to me that we need a
national strategy on long-term care. Thirty percent of the
costs of health care under Medicaid goes to seniors, and
seniors are only 16 percent of the people who are enrolled in
Medicaid; 7 out of 10 nursing home beds in this country are
paid for by Medicaid. And this is going to triple over the next
10 years, from about $50 billion in costs to $140 billion in
costs. We have a looming challenge on the horizon as baby
boomers retire, live longer, and more people are drawing down
Medicaid.
There are some proposals in the budget to strengthen
existing asset transfer rules, and I think that will probably
help. But I think more fundamental reforms and initiatives are
going to be needed to get private funding into the system and
relieve the burden on Medicaid.
We have 56 different systems for determining eligibility
for long-term care, and it is very difficult to do things like
reverse mortgages. We have some States that have partnerships
for long-term care insurance, but not enough of them. And all
of us know that there is a subspecialty of the bar that
specializes in qualifying mom and dad for Medicaid while you
protect your inheritance. We can't afford for middle- and
upper-income Americans to give away their assets so Medicaid
can pay for their nursing home care.
Medicaid is administered by the States with a joint State-
Federal funding mechanism that I think would make Rube Goldberg
proud. In fact, some days, I think it is only held together by
bailing wire and duct tape.
There are 47 different eligibility pathways for Medicaid in
the State of New Mexico. In most States, it is comparable.
Medicaid pays claims, but it doesn't pay to improve anybody's
health. In fact, we have had testimony in the Energy and
Commerce Committee and asked State Medicaid directors what do
you track to see whether you are improving the health status of
low-income individuals in your State. And they look at you like
you are from Mars.
Medicaid wasn't set up to improve anybody's health. We will
pay a hospital $28,000 to amputate the legs of a diabetic. That
is authorized under Medicaid. But you need a waiver from the
Federal program to teach a diabetic how to monitor their own
blood sugar.
This is a program that is in need of comprehensive reform.
It is a one-size-fits-all program. And we are now in a world of
health care that demands choices. I think that implementing
piecemeal changes, as we are really doing, and we do every year
in Medicaid, doesn't really allow us to do the reform that is
needed. And setting an arbitrary budget number lets budget
drive policy instead of the other way around. We have to get
our arms around this program for the long term.
About 10 days ago, I introduced legislation to create a
bipartisan commission on Medicaid to make recommendations for
improvements that would strengthen and modernize the program.
It already has the support of 97 of our colleagues in the House
and 22 in the Senate. There are 32 groups that have endorsed
the legislation, including the American Hospital Association,
the OB-GYNs, the National Association of Counties, and a whole
lot of others.
Even more than Medicare, Medicaid is an extremely
complicated program and we need a real concerted effort to
light the way toward substantial reform. Mr. Chairman, there
are 2,500 approved waivers to the Medicaid program. Any Federal
program that is given 2,500 exceptions to the rules needs to
take a hard look at changing the rules.
I would ask the Budget Committee to include funds in the
budget resolution for a bipartisan commission on Medicaid. We
are going to have to do some things in reconciliation this
year. You all have talked about it, and so have others. But we
need to stop doing this year by year and let policy drive the
budget and not the budget drive policy.
I thank you for your consideration of this request and I
would be happy to answer any questions.
[The prepared statement of Heather Wilson follows:]
Prepared Statement of Hon. Heather Wilson, a Representative in Congress
From the State of New Mexico
Thank you, Mr. Chairman, for allowing me to submit testimony on the
Fiscal Year 2006 Budget Resolution.
Mr. Chairman, I have some concerns about this budget in the area of
Medicaid. President Bush has submitted a budget proposal that would
reduce Federal Medicaid spending by $60.1 billion over 10 years. The
budget also proposes new initiatives that would increase Federal
Medicaid spending by $16.5 billion over 10 years, for a net reduction
of $43.6 billion.
To achieve these savings, the budget proposes specific initiatives
that the Administration calls ``program integrity.'' I believe some of
these proposals have merit and would make needed improvements to the
Medicaid program. But these proposals must be evaluated as part of
comprehensive reform and its overall impact on the Medicaid program. If
there are savings associated with implementing these proposals, the
savings should be reinvested in the Medicaid program to enhance
programs that will improve the health of those who depend on Medicaid.
I believe implementing these initiatives on their own may endanger the
ability of the program to provide access to services for the more than
50 million low-income children, pregnant women, elderly, and disabled
covered by Medicaid, including more than 420,000 people in New Mexico.
At the same time, this collection of ideas for change contained in
the budget may not go far enough to reform the program. Medicaid is set
up to pay claims, not to improve anyone's health. Real Medicaid reform
goes far beyond the proposals in this budget.
Some states have used the Federal matching structure of Medicaid to
inappropriately draw down Federal funds to pay for non-health expenses.
This is often done through complicated financing mechanisms that
require taxing or transferring dollars from counties, public providers,
or in some cases beneficiaries and then returning the funds to the
borrower. This allows states to avoid putting up their share while
still drawing Federal dollars. These techniques, however, are sometimes
used legitimately within the guidelines established in the Medicaid
statute and are a vital tool states use to fund health care for low-
income Medicaid patients. While fraudulent mechanisms that allow states
to use Federal Medicaid dollars inappropriately should be ended, a
distinction should be mode between legitimate and illegitimate
intergovernmental transfers. If a county hospital funds care for low-
income people eligible for Medicaid, a state should be able to use that
local contribution as part of its ``match,'' for example. While the
Administration estimates savings of $10.9 billion over 10 years by
restricting intergovernmental transfers, this cost will be shifted to
the states. States will not simply absorb this cost, but will take
actions to reduce eligibility, reduce benefits, or reduce payments to
health care providers. These decisions have consequences for those who
depend' on Medicaid.
Under another initiative, the Federal Government would cap the
funding states could receive for administrative costs. States use the
50 percent Federal administrative match to invest in computer systems
that identify and fight fraud, track quality, and collect and
disseminate data. Reducing the ability of states to prevent Medicaid
fraud and abuse and conduct outreach to eligible beneficiaries would
appear to be antithetical to the goals outlined in the President's
budget and may be ill-advised without further explanation and review.
While some of the initiatives in the President's budget may have
merit, they do not constitute Medicaid reform. I chaired a Medicaid
Task Force in the Energy and Commerce Committee during the 108th
Congress that comprehensively studied the challenges facing Medicaid.
We identified several areas where Medicaid should be improved and/or
modernized to bring the program in line with 21st Century medicine. It
is increasingly clear to me that we need a national strategy for long-
term care. While only, 16 percent of the people enrolled in Medicaid
are seniors, they account for 30 percent of the cost. Much of that cost
is spent on long-term care. Medicaid pays for more than seven out of
ten nursing home beds in this country. We are living longer and the
baby boom generation will put burdens on the system that Medicaid is
not designed to carry. Federal Medicaid spending for long-term care is
projected to nearly triple over the next 10 years, from $50 billion to
$140 billion. The growth in long-term care spending alone will take
away from Medicaid's ability to continue to provide health care
services to children, such as early periodic screening and development
tests. While enforcing and strengthening existing asset transfer rules
will help, more fundamental reforms and incentives will be needed to
get more private funding into the system and relieve the burden on
Medicaid.
A national strategy on long-term care will make it easier for
seniors to get reverse mortgages, promote long-term care insurance, and
make sure high quality care is available for low-income seniors by
expecting people who can afford to pay for themselves to do so.
There is a subgroup of the bar that specializes in qualifying Mom
and Dad for Medicaid while you protect your inheritance. We cannot
afford for middle- and upperincome Americans to give away their assets
so that Medicaid can pay for their care.
Medicaid is administered by the states with joint federal-state
financing mechanisms that would make Rube Goldberg proud. Many
eligibility pathways are tied to the old Aid to Families with Dependent
Children welfare program, which was replaced with the Temporary
Assistance to Needy Families Program nearly a decade ago. In New
Mexico, there are 47 different eligibility pathways for Medicaid.
Medicaid reimbursement to providers often lags significantly behind
Medicare and private insurers, leading to access problems for Medicaid
beneficiaries. Medicaid pays claims, but it doesn't pay to improve
anyone's health. States need a waiver from the Federal Government to
implement programs that teach people who to manage chronic disease, and
waivers can take more than 2 years to be approved. With very few
exceptions, Medicaid is an inflexible, one-size-fits-all program in a
world that demands choices.
We need real Medicaid reform that addresses these challenges.
Implementing piecemeal changes that allow us to meet an arbitrary
budget number is not real reform. In fact, addressing these issues now
through the budget process may inhibit our effort at making more
needed, fundamental reforms in the near future. I do not believe the
budget process should drive Medicaid reform or impede our ability to
improve it. Policy should drive the budget, not the other way around.
I have introduced legislation to create a Bipartisan Commission on
Medicaid to make recommendations for improvements that would strengthen
and modernize the program. The legislation outlines specific areas the
Commission would examine and directs the Commission to issue a report
to Congress, the President, and the public within 18 months. This
legislation, introduced less than 2 weeks ago, already has the support
of 97 of our colleagues in the House and 22 Senators. Thirty-two groups
have endorsed the legislation because they realize that any changes to
the Medicaid program have consequences for the populations served and
for the providers who administer the Medicaid program. (See addendum).
Even more than Medicare, Medicaid is a very complicated program. We
need a concerted effort to light the way to real reform. The commission
would provide the right forum to carefully deliberate needed policy
changes to ensure the long-term financial stability of the program
while maintaining Medicaid as a safety net program for low-income
children, pregnant women, elderly and disabled Americans.
Mr. Chairman, there are 2,500 approved waivers for the Federal
Medicaid program. In fact, the only reason this program is working at
all is because of these waivers. Any Federal program that has given
2,500 exceptions is overdue for fundamental reform to change the rules
and the program.
I respectfully request that the Budget Committee include $1.5
million in the FY 2006 Budget Resolution for the Bipartisan Commission
on Medicaid. Including funding for the Commission in the FY 2006 Budget
Resolution will ensure that the work of the Commission begins quickly
after its enactment so that Medicaid modernization efforts will not be
delayed.
Thank you, Mr. Chairman, for your consideration of this request and
I appreciate the opportunity to submit this testimony to your
committee.
Mr. Conaway [presiding]. Thank you for that testimony. I
think most of us share the common concern that the looming
issue with Medicaid and Medicare and how we continue to fund
that and meet those needs is one that is going to dwarf the
current efforts to retool Social Security. And you are serving
on the right committee, obviously, that is going to be the one
to look at the overall numbers.
I don't have any other questions other than to say good
luck with the efforts. And you are going to be on the leading
edge of what we have to face in the near future.
Mr. Portman. First I ought to thank you for your
willingness to take on this task and your passion for it. This
is a critical issue and I am going to go out on a big limb here
and tell you we would be happy to cosponsor your legislation.
I see one of my staff members looking up and saying, wait a
minute. You haven't asked us yet. In this case, I know it is
the right thing to do. I would like to be on the legislation. I
think short of a commission, it is difficult to see how we can
get at some of these underlying problems. And we have done this
with Internal Revenue Service and with Medicare, which was
somewhat successful. And I think this is an example of our
inability as Members of Congress year to year to make the
fundamental reforms that are needed to provide health care that
is appropriate to our poor citizens, rather than go through the
bureaucratic process of simply delivering a payment.
I am particularly interested in the issue of seniors. And I
know in my own State, there is an increasing reliance on
Medicaid. This is an effect the States feel as well, because in
Ohio the States pick up 40 percent of that. And I think that is
probably a leading issue that might get us to the point of
setting up a commission once we do that.
As you indicate there are so many other issues we need to
look at.
I have one simple question for you and this is premature
and has to do with reform. Do you feel that there is an
inherent conflict in the way in which the program is set up
because of the match that neither the Federal Government nor
the State government has an alignment of the responsibility for
the full payment of the program and thus the accountability
that would go with that?
Mrs. Wilson. I think there are fundamental problems with
the way we finance this program and it is not only in the
mechanisms between the States and the Feds, but it forces every
State official that is going after the marginal penny on the
dollar for Federal match. They are not thinking about the
patients.
In my previous life I was the Cabinet secretary for
children's programs in New Mexico. Here is an illustration,
just a story, but I think it tells something. Shortly before I
became the Cabinet secretary, we had a lot of kids in group
homes. If you are a teenager in foster care, you are not going
to have a family of your own until you have one yourself. Most
of us can't even stand our own teenagers, let alone one that is
abused and neglected. We figured out that, you know, if we
could get these group homes eligible as residential treatment
centers under Medicaid, we could draw down $0.75 on the dollar
in Federal match. Most of these kids have diagnoses,
medicalized them, added in behavioral health specialists and
psychiatrists and everything else. The costs went up, but for
the State, it was only $0.25 on the dollar. The general fund
cost to the State went down. We qualified all of these group
homes as residential treatment centers, gave every one of these
kids a label as mentally ill. You know the one thing they
didn't get? They didn't get parents.
What would you have done with that money to support a
foster family and give them the training and the support they
needed to take a troubled kid? We were doing the wrong thing
for the kid, and every one of those kids, because we were
following the Federal match.
And there are a thousand decisions like that that are made
every day in every State in this Nation and that is why we need
to change this program.
Mr. Portman. Good example. And I thank you for your ongoing
efforts and appreciate you being here today.
Mr. Conaway. Ms. Wilson, you mentioned waste, fraud and
abuse within the system. It is my understanding that States are
supposed to have units that--are they doing their job? Does
that need to be restructured as well?
Mrs. Wilson. I think it does. Even if you go to a 90
percent match, States are very reluctant to invest in computer
systems and information investigatory systems that go after
Medicaid fraud. And one of the reasons is that they don't get
much from the recovery until it is all over and then they only
get very little. And so the motivation isn't there as it is
under Medicare. So we don't have anywhere near the recoveries
for fraud and waste under Medicaid that we do under Medicare.
Mr. Conaway. We have been joined by Mr. Cooper.
Mr. Cooper. Nothing.
Mr. Conaway. Mrs. Wilson, thank you very much for your
passion on this issue. Like I said, you have been the center of
the storm on an issue that is going to face this Congress and
this Nation over the next several years.
Mr. Conaway. Mr. Miller is next on the list. Ten minutes.
Thank you for being here today.
STATEMENT OF THE HON. BRAD MILLER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NORTH CAROLINA
Mr. Miller of North Carolina. Thank you Mr. Chairman. Thank
you for this opportunity to address the priorities that I think
should be reflected in this year's budget to assure our Nation
a prosperous future.
My State faces a difficult economic transition. The
industries that North Carolinians have relied upon for their
livelihood--textiles, tobacco, furniture--have suffered one
layoff after another. Most of the plants that have closed will
never reopen. North Carolina has lost more than 190,000
manufacturing jobs in the last 4 years. And the textile
industry is bracing for more bad news shortly.
Mr. Chairman, those statistics on job loss are not just
economic statistics to me. I can close my eyes and see the
faces of workers who have lost their jobs and don't know how
they are going to support themselves or their families.
North Carolina's experience is hardly unique. The Nation
has suffered a net loss of 2.8 million manufacturing jobs in
the last 4 years. Those are jobs with decent wages and
benefits, jobs a family can build a future around. The current
administration now predicts our economy will slow for the next
generation and beyond to a growth rate of about half of what
our parents and grandparents experienced. And my generation in
particular needs to scale back our expectations of what life
will be like after we retire from the workforce.
Mr. Chairman, I refuse to accept that, though we have to do
better than the President's proposed budget. We can and should
be the most innovative and productive economy in the world. Our
great strength is the American people, the American worker, the
American entrepreneur and the American scientist. The proposed
budget cheats them all of the help they need and deserve.
First, our standard of living depends upon having the most
skilled workforce in the world. Chairman Alan Greenspan, in his
testimony last week to the Financial Services Committee,
stressed the need for both full education and on-the-job
training. But the proposed budget cuts $1.3 billion from
technical and vocational education programs, including all
funding for national and State grants, tech prep education
grants, and tech prep demonstration projects. The budget cuts
adult education, including adult literacy programs, by $370
million.
Mr. Chairman, to give you one example, Rockingham County in
my district has the highest percentage of the workforce in
manufacturing in the State. Forty-five percent of the adult
population of Rockingham County does not have a high school
diploma or GED. Folks went straight from high school to the
mill, like their parents did before them. It didn't matter if
they didn't have a high school diploma. Now they are middle
aged, my age, they have to find new work, and they have to go
back and get a GED to do it. Cutting $370 million from adult
literacy programs betrays those workers of what they need.
The budget eliminates funding for education and technology
programs, including the Education and Technology State Grants.
In North Carolina, the budget would mean $21 million less for
vocational education in the public schools and $12 million less
for job training programs for our community colleges.
Second, our economic future depends on our economy
remaining the world's most agile economy. The entrepreneurial
talent of Americans is astounding. Small businesses spot
economic niches, even new industries, remarkably quickly and
have made our economy the most vibrant economy in the world. We
count on small businesses to grow our economy. Half our gross
domestic product is generated by small business. Even more
important, small businesses create 75 percent of new jobs. But
even in the face of our current economic challenges, the
proposed budget would cut funding for small business programs
by 62 percent.
The $6.1 billion in cuts to programs that provide technical
assistance, incentives or capital to small business amounts to
only one-quarter of 1 percent of the overall 2006 budget. Those
cuts do very little to help the deficit and they stifle the
ability of new entrepreneurs to start and grow their own
businesses. Many of the programs cut have a proven track
record. Many of them make more money on return investment than
they cost. For example, the proposed budget once again would
raise fees for 7(a) loan program participants, making the
program less accessible and more costly. The microloan program
run through the Small Business Administration would be
eliminated. Programs that help small businesses access
technology, such as Community Technology Centers and Technology
Opportunities Program, receive no funding. Despite a record
deficit and trade deficit, the President's budget was proposed
cutting all funding for the U.S. Export Assistance Center which
helps small businesses sell their products in the global
marketplace. The budget would cut by 56.5 percent the funding
for the Manufacturing Extension Partnership (MEP) which helps
small businesses, primarily small manufacturers, adopt advanced
manufacturing technologies and business practices. In 2002
alone, North Carolina's MEP helped North Carolina companies
save $85.6 million, a critical competitive advantage in a
ruthless world economy.
Third, our future prosperity depends on remaining the most
innovative economy in the world. Our research universities are
the envy of the world, and our Nation has led the world in
developing new products and new production technologies from
research. But the proposed budget for research again fails to
even keep pace with the rate of inflation.
The Advanced Technology Program (ATP) is the only source of
``patient capital'' for many innovative small companies and has
helped many businesses cross the valley of death from an idea
in the lab to product in the marketplace, a difficult and
expensive journey. The proposed budget eliminates all funding
for the ATP.
Mr. Chairman, I hope this committee will look at the
economic challenges our economy and Nation faces and not accept
meekly that our Nation's economy will not lead the world in the
future as it has in the past. We can continue to lead the
world, but not with the priorities of this budget. Thank you
Mr. Chairman.
[The prepared statement of Brad Miller follows:]
Prepared Statement of Hon. Brad Miller, a Representative in Congress
From the State of North Carolina
Mr. Chairman, thank you for this opportunity to address the
priorities that I think should be reflected in this year's budget to
assure our nation a prosperous future.
My state faces a difficult economic transition. The industries that
North Carolinians have relied upon for their livelihood--textiles,
tobacco, furniture--have suffered one layoff after another. Most of the
plants that have closed will never reopen. North Carolina has lost more
than 190,000 manufacturing jobs in the last 4 years, and the textile
industry, in particular, is bracing for more bad news shortly.
North Carolina's experience is hardly unique. The nation has
suffered a net loss of 2.8 million manufacturing jobs in the last 4
years. Those are jobs with decent wages and benefits, jobs a family can
build a future around.
The current administration now predicts that our economy will slow
for the next generation and beyond to a growth rate of about half what
our parents and grandparents experienced, and that my generation, in
particular, needs to scale back our expectations of what life will be
like after we retire from the workforce.
Mr. Chairman, I refuse to accept that. But we have to do better
than the President's proposed budget.
We can and should be the most innovative and productive economy in
the world. Our great strength is the American people--the American
worker, the American entrepreneur, the American scientist. The proposed
budget cheats them all of the help they need and deserve.
First, our standard of living depends on having the most skilled
workforce in the world. Chairman Alan Greenspan, in his testimony to
the Financial Services Committee last week, stressed the need for both
formal education and on-the-job training.
But the proposed budget cuts $1.3 billion from technical and
vocational education programs, including all funding for national and
state grants, tech-prep education grants and tech-prep demonstration
programs.
The budget cuts adult education, including adult literacy programs,
by $370 million.
The budget eliminates funding for education and technology
programs, including the Education Technology State Grants.
In North Carolina, the budget would mean $21 million less for
vocation education in the public schools and $12 million less for job
training programs through our community colleges.
Second, our economic future depends on our economy remaining the
world's most agile economy.
The entrepreneurial talent of Americans is astounding. Small
businesses spot economic niches, even new industries, remarkably
quickly, and have made our economy the most vibrant economy in the
world. We count on small businesses to grow our economy. Half of the
American economy, our gross domestic product, is generated by small
businesses. Even more important, small businesses create 75 percent of
new jobs.
But even in the face of our current economic challenges, the Bush
budget proposal would cut funding for small business programs by 62
percent. The $6.1 billion in cuts to programs that provide technical
assistance, incentives, or capital to small businesses, amounts to only
one quarter of 1 percent of the overall 2006 budget. These cuts do
little to help the deficit, and they stifle the ability of new
entrepreneurs to start and grow their own business.
Many of the programs cut have a proven track record. Many of them
make more money in returned investment than they cost.
For example:
The purposed budget once again would raise fees for 7(a)
loan program participants, making the program less accessible and more
costly.
The Microloan program run through the Small Business
Administration would be eliminated.
Programs that help small businesses access technology such
as Community Technology Centers (CTC) and the Technology Opportunities
Program (TOP) receive no funding.
Despite a record trade deficit, the President's budget
purposes cuts all funding for U.S. Export Assistance Centers, which
help small businesses sell their products in the global marketplace.
The budget would cut by 56.5 percent the funding for the
Manufacturing Extension Partnership, which helps small businesses,
primarily small manufacturers, adopt advanced manufacturing
technologies and business practices. In 2002 alone, North Carolina's
MEP helped North Carolina companies save $85.6 million, a critical
competitive advantage in a ruthless world economy.
Third, our future prosperity depends on our remaining the most
innovative economy in the world. Our research universities are the envy
of the world, and our nation has led the world in developing new
products and new production technologies from research. But the
proposed budget for research again fails even to keep pace with the
rate of inflation.
The Advanced Technology Program is the only source of ``patient
capital'' for many innovative small companies, and has helped many
businesses cross the ``valley of death'' from idea in the lab to
product in the marketplace, a long and expensive journey. The proposed
budget eliminates funding for the ATP.
Mr. Chairman, I hope this committee will look at the economic
challenges our nation faces, and not accept meekly that our nation's
economy will not lead the world in the future as it has in the past. We
can continue to lead the world, but not with the priorities of this
budget.
Mr. Conaway. I appreciate those comments. Mr. Cooper, any
questions?
Mr. Cooper. I just would like to thank my friend from North
Carolina because I think he has gone the extra mile to not only
represent his constituents but protect his constituents,
because these budget cuts can and will be devastating to his
constituents and people like that around the country.
I think North Carolina is a great example of a State that
has done all it could locally to have an excellent education
system, but they need a little Federal help. And to abandon
vocational education, it is almost unthinkable. You wonder who
on Earth suggested this to the President, and hopefully cuts
will not remain in the final budget product. But North Carolina
is going through a very difficult transition, perhaps the most
difficult transition of any State, due to losses of tobacco,
textiles, and general manufacturing. My heart goes out to the
gentleman, but at least your constituents are well represented.
Mr. Miller of North Carolina. Thank you, Mr. Cooper. And
you know well how important our community college system is.
Mr. Cooper, like me, graduated from the University of North
Carolina, Chapel Hill. And although he is from Tennessee, I
think he knows my State pretty well and understands that we
were the leader in community colleges. And they are a
remarkable asset to our State. Something like one North
Carolina adult in six attends or is enrolled in a community
college course in any given year. That is a remarkable
statistic. Our State is remarkably dependent upon them.
I gave a statistic of 45 percent of the adult population in
Rockingham County not having a high school diploma or GED. But
for most of North Carolina's rural counties, the number is in
the high 30s, and the community colleges are where folks go to
get a GED. They go to workplaces where the employer will help
out by letting their employees take courses at their workplace.
They are a prize.
And cutting funding for adult education and cutting funding
vocational education really cheats the people of my State and
workers of my State of the help they need to create an economic
future for themselves as we face--North Carolina faces a very
difficult economic transition.
Mr. Conaway. We have some difficult choices ahead as the
authorizing committees and the appropriations committees deal
with the details and assess each one of the President's
recommendations. So thank you for your testimony today. Thank
you, sir. Appreciate you being here.
Mr. Conaway. We will turn to Ms. Capito.
STATEMENT OF THE HON. SHELLEY MOORE CAPITO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WEST VIRGINIA
Mrs. Capito. Thank you, Mr. Chairman and Mr. Cooper. Thank
you for the opportunity to testify before the committee. I
appreciate the opportunity to address items in the budget that
I feel are important to West Virginians.
I want to applaud the efforts of the President and the
Budget Committee as it moves through the effort to control
Federal spending. I think it is important to the Nation's long-
term financial health that we try to accomplish the President's
goal of cutting the deficit in half by fiscal year 2009.
I would like to address some areas of concern that I have
with the President's budget proposal. The budget proposes a New
Communities Initiative which combines 18 economic development
programs into a single program under the Department of
Commerce. The President's budget proposes $3.71 billion for the
new program, a significant decrease from the $5.31 billion the
18 programs combined received in last year's appropriation
cycle. I support efforts to become more efficient in the
Federal Economic Development programs, but I am concerned. I am
concerned, however, the funding cuts will do substantial harm
to economic development activities in areas like my rural
district that greatly needs these resources.
I was interested to hear the discussion of North Carolina,
who is in transition. If anybody knows the State of West
Virginia well, we want to get to the point where we can
transition. We have had always difficult economic problems.
Of grave concern to me is the shift of the Community
Development Block Grant (CDBG) program, which itself received
more than $4 billion last year from the Department of Housing
and Urban Development to the Department of Commerce. Community
development block grants provide the resources for economic
activities across West Virginia. Cities like Charleston and
Martinsburg in my district could see significant reductions of
economic development aid if we accept the reconfiguration of
the CDBG program. These cities have experienced cuts last year
in the CDBG money and further cuts could hinder the city's
ability to provide important services and bring jobs to the
communities. Rural areas such as West Virginia would be harmed
by the CDBG reductions. CDBG money provides funding to West
Virginia's Small Cities Grant program that sends development
aid to communities across the State. I know that smaller sums
of money to States like mine can do enormous and make enormous
progress. So any cut is felt in a very significant way.
Planning funds from the programs provide resources to
regional councils such as the Region VII Development Council
that helps match Federal, State, and local dollars with private
investment to bring jobs to Randolph, Upshur, Lewis, and
Braxton counties in my district. Some of these counties have
unemployment in the 13, 14 percent range. Funds for these
planning activities come not just from the CDBG program but
also from the Economic Development Administration, another
program consolidated under the Communities Initiative. Rural
enterprise communities like the Upper Kanawha Valley Enterprise
Community would also be at risk for funding reductions under
this proposal.
I ask the committee as you consider the President's
Communities Initiative to ensure that adequate money is
provided to continue to support funding at last year's level
for development activities in cities and regional planning
organizations.
I am also concerned, as my colleague from North Carolina,
with the proposed changes in high school education funding and
the vocational technical. The President's budget proposes $1.24
billion High School Intervention Initiative that consolidates
the funding for Perkins Vocational Education, the TRIO Upward
Bound, and TRIO Talent Search programs. These programs combined
received $1.925 billion last year. These programs are crucial
to the success of at-risk students and for those careers of
those who do not attend college. In West Virginia, we have one
of the lower college-going rates. These programs are essential
to not only the training but to the future of these young men
and women as they seek their futures. States should be held
accountable for student achievement certainly, but we must
ensure that school districts are given the resources to
succeed.
We owe a debt of gratitude to all the men and women who
have served in our Armed Forces. It is important we provide
those resources to care for our veterans, from the aging
members of the World War II generation to those who are
returning injured from the war against terror. While I am proud
that the budget for veterans health is 47 percent higher than
it was in 2001, this year's budget proposal increases funding
for veterans by less than one-half of 1 percent. I urge the
committee to provide sufficient resources to provide the
highest-quality health care for our veterans.
I want to commend the President for including $283.9
billion for the reauthorization of SAFETEA through 2009 in the
budget proposal. This funding level will provide the funds
necessary for crucial construction projects across this Nation.
Making U.S. Route 35 in my district a four-lane highway in
Putnam and Mason County is a crucial project that will benefit
from this reauthorization.
Medicaid and SCHIP programs are critical programs that
provide basic health care to low-income children and families.
Medicaid--and we have discussed this, Mrs. Wilson--Medicaid is
in a looming financial crisis for both the Federal and State
governments. It is important that as we work to reduce our
Federal deficits, we work with States to ensure that Medicaid
programs are adequately funded and that the burden of the
program is not shifted to the States.
I commend the administration for proposing Cover the Kids
Initiative that will provide $1 billion in grants to promote
SCHIP and ensure that parents whose children could benefit know
about this program. I ask that the committee provide the
resources for this new program.
I also want to say that the President's Community Health
Centers Initiative has done wonders for the State of West
Virginia in delivery and accessing quality of rural health
care. These centers, like the Minnie Hamilton Health Center in
Calhoun County in West Virginia, reduce the costs of health
care by cutting down unnecessary emergency room visits while
providing important preventive care. The proposed budget
recommends $2 billion for Community Health Centers, and I ask
that the committee fully fund the President's request.
In closing, thank you for the opportunity to appear before
the committee today for issues that I believe are important to
West Virginia. I look forward to working with the committee as
this budget resolution moves through our House.
[The prepared statement of Shelley Moore Capito follows:]
Prepared Statement of Hon. Shelley Moore Capito, a Representative in
Congress From the State of West Virginia
Mr. Chairman, Mr. Ranking Member, and Members of the Budget
Committee,
Thank you for the opportunity to testify before the committee. I
appreciate the opportunity to address items in the budget that are
important to West Virginians.
First, I applaud the efforts of the President and the Budget
Committee to control Federal spending. It is important to the nation's
long term financial health that we accomplish the President's goal of
cutting the deficit in half by Fiscal Year 2009. I am pleased that this
goal will be accomplished while extending the tax cuts we passed in
2001 and 2003 that have brought over 2 million jobs to our nation in
the past year.
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
I would like to address some areas of concern that I have with the
President's budget proposal. The budget proposes a new Communities'
initiative which combines 18 Economic Development programs into a
single program under the Department of Commerce. The President's budget
proposes $3.71 billion for the new program, a significant decrease from
$5.31 billion the 18 programs combined received in last year's
appropriations cycle.
I support efforts to bring more efficiency to Federal economic
development programs. I am concerned; however, the funding cuts will do
substantial harm to economic development activities in areas like my
rural district that greatly need these resources.
Of greatest concern is the shift of the Community Development Block
Grant program, which itself received more than $4 billion last year,
from the Department of Housing and Urban Development to the Department
of Commerce. Community Development Block Grants provide the resources
for economic activity across West Virginia.
Cities like Charleston and Martinsburg in my district could see
significant reductions in economic development aid if we accept the
reconfiguration of the CDBG program. These cities already experienced
cuts in CDBG money last year, and further cuts could hinder the cities'
ability to provide important services and bring jobs to the community.
Rural areas would also be harmed by CDBG reductions. CDBG money
provides funding to West Virginia's Small Cities Grant Program that
sends development aid to communities across the state. Planning funds
from the program provide resources to regional councils, such as the
Region VII Development Council that helps match federal, state, and
local dollars with private investment to bring jobs to Randolph,
Upshur, Lewis, and Braxton counties in my district. Funds for these
planning activities come not just from the CDBG program, but also from
the Economic Development Administration, another program consolidated
under the communities' initiative. Rural Enterprise Communities, like
the Upper Kanawha Valley Enterprise Community would also be at risk for
funding reductions under the proposal.
I ask the committee as you consider the President's Communities
Initiative to ensure that adequate money is provided to continue to
support funding at last year's level for development activities in
cities and regional planning organizations.
VOCATIONAL EDUCATION
I am also concerned with proposed changes in high school education
funding. The President's budget proposes a $1.24 billion high school
intervention initiative that consolidates the funding for Perkins
Vocational Education, TRIO Upward Bound, and TRIO Talent Search
programs. These programs combined received $1.925 billion last year.
These programs are crucial to the success of at-risk students and the
careers of those who do not attend college. States should be held
accountable for student achievement, but we must ensure that school
districts are given the resources to succeed.
VETERANS
We owe a debt of gratitude to all the men and women who have served
in our Armed Forces. It is important that we provide the resources to
care for our veterans--from the aging members of the World War Two
generation to those who are returning injured from the War against
Terror.
While I am proud that the budget for veteran's health care is 47
percent higher today than it was in 2001, this year's budget proposal
increases funding for veterans medical programs by less than half of 1
percent. I urge the committee to provide sufficient resources to
provide the highest quality healthcare for our veterans.
TRANSPORTATION
I want to commend the President for including $283.9 billion for
the reauthorization of SAFETEA through 2009 in the budget proposal.
This funding level will provide the funds necessary for crucial
construction projects across the nation. Making US Route 35 a four lane
highway in Putnam and Mason counties in my district is a crucial
project that will benefit from this reauthorization level. I urge the
committee to include at least the $283.9 billion proposed by the
President in the final budget resolution.
MEDICAID
Medicaid and SCHIP are critical programs that provide basic health
care to low income children and families. Medicaid is also a looming
financial crisis for both the Federal Government and for state
governments. It is important that as we work to reduce our Federal
deficit, we work with states to ensure that Medicaid programs are
adequately funded and that the burden of the program is not shifted to
the states.
I commend the administration for proposing the Cover the Kids
initiative that will provide up to $1 billion in grants to promote S-
CHIP and ensure that parents whose children could benefit from S-CHIP
know about the program. I ask that the committee provide resources for
this important new program.
I also commend the President on his Community Health Centers
Initiative that would open rural health centers in every low income
county that can support one. These centers, like the Minnie Hamilton
Health Center in Calhoun County, West Virginia, reduce the cost of
health care by cutting down on unnecessary emergency room visits, while
providing important preventative care. The proposed budget recommends
$2 billion for community health centers and I ask that the committee
fully fund the President's request.
CLOSING
Again, thank you for the opportunity to appear before the committee
today to present issues important to the people of West Virginia. I
look forward to continuing to work with the committee on a budget
resolution that reflects our national priorities.
Mr. Conaway. Mr. Cooper, do you have any questions?
Mr. Cooper. Just briefly, I would like to ask the
gentlelady from West Virginia, it is my understanding we could
save a lot of money in the CDBG program if we means-tested it.
In other words, if wealthy communities were no longer eligible
for benefits. And my guess is that means test would still
enable communities in West Virginia to receive the funds.
Mrs. Capito. Certainly in the State of West Virginia, we
welcome all means testing because, unfortunately, our means are
not in certain pockets. We do have some areas of growth. But
generally speaking, we are in the low-income areas. We are a
member of the Appalachian Regional Commission. All 55 counties
belong to that. Of that, over half of those counties were
considered economically distressed.
And I believe you bring up an excellent point. If we target
our resources to those who are more economically distressed for
whatever reason, historically or because of a loss of
manufacturing jobs in certain industries, it will create a
rising tide for all of our communities, and certainly those
that haven't been able to enjoy any of the economic growth that
has cascaded across the Nation in the last couple of decades.
Mr. Cooper. I would just encourage you to influence your
friends who serve on the committee, because it is usually a
party-line vote, and I don't know what they are going to do
with CDBG grants. But if you could persuade just two or three
of your fellow Republicans, we may be able to save a good bit
of this program. But it is going to take Republicans breaking
rank on this committee in order to do. I have only served 3
years on the committee and I never seen that happen. Good luck
in your efforts to persuade them to think independently on this
important issue.
Mr. Conaway. Thank you for your testimony. And I appreciate
that.
During the Presidents Day break, I had the opportunity to
visit a technical school and had it pointed out they used their
Perkins grant money to buy equipment that was training people
for $40,000- to $50,000-a-year jobs. So that was helpful to
understand how the money is used in a real way. Thank you for
your comments today.
Mr. Conaway. The Chair now recognizes Mr. Robin Hayes for
10 minutes.
STATEMENT OF THE HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NORTH CAROLINA
Mr. Hayes. Thank you, Chairman Conaway, and Ranking Member
Cooper. I would ask your permission and unanimous consent to
submit the complete statement for the record and highlight the
issues that I am sure you have heard before, if that would be
OK with the committee.
Mr. Conaway. Without objection.
Mr. Hayes. Thank you for the opportunity to testify today.
The Eighth District of North Carolina is vitally important to
me and others of us who serve. Obviously we are concerned with
veterans programs. They are the heroes of the present and past
battles. We want to make sure we sustain and increase the
services that we provide for veterans, and the President's
budget needs a little help there. We got a 2.7 percent increase
in discretionary funds. And we want to make sure we increase
veterans health care funding and other services and not have
anything other than that.
Everything in your power I would ask that you do to
adequately fund our Nation's veterans. Quality, affordable,
accessible health care service, are a critical priority.
The next item, Mr. Chairman, is impact aid. Impact aid for
our military communities such as Cumberland County and
surrounding counties at Fort Bragg is important to education
and local school systems in order to replace revenues that are
lost because of the very large, very important, much
appreciated military presence there. The President's budget
puts impact aid at level funding, which unfortunately in this
climate, because of the way that the program is structured. The
cost-of-living adjustment is triggered by the impact aid
formula, and school districts will receive less money. So I
would respectfully request a 3 percent increase in the impact
aid funding.
Another vitally important issue here to our constituents,
hopefully we would take money that has been proposed for
funding foreign aid and other operations that could not--we
need to do things at home before we spend that money abroad. So
I would ask the committee to do what they can in that regard.
The community college presence, our technical colleges,
those schools that provide retraining for jobs that we lost in
manufacturing and other areas are so vitally important. Perkins
funding. I would ask the committee do everything they can to
take care of Perkins programs and increase the ability for
people to be retrained and reenter the workforce. Economic
development and workforce education are so important in mine
and other districts.
Other important issues, the agriculture budget; cannot
stress enough how much our producer communities depend on a
strong agricultural economy. Based on present programming,
there has been a $16 billion savings compared to the March 2002
cost estimate. Farmers need to plan just like other businesses.
I would like to keep those programs intact because they are
working in an environment where internationally we are subject
to so many foreign subsidies and artificial tariff barriers. We
need to be sure our farmers can be competitive. A
disproportionate burden of debt reduction at the present seems
to be falling on the shoulders of our farmers.
Conservation initiatives, vitally important. They are doing
a great job in addressing the environmental issues in a
commonsense and in a very results-oriented way.
Community block grants, as Ms. Capito mentioned are
important to my rural district. I hope you will be able to find
a way to deal with that.
Mr. Chairman, thank you for the opportunity to testify
before your committee. I appreciate your consideration.
Everyone wants to cut the budget. There is no disagreement
there. It is just when you get into where the cuts come is
there some discussion. I appreciate your time and attention and
would be glad to answer any questions.
[The prepared statement of Robin Hayes follows:]
Prepared Statement of Hon. Robin Hayes, a Representative in Congress
From the State of North Carolina
Mr. Chairman, thank you for the opportunity of allowing me to
testify before the Committee today. There are several topics I would
like to highlight: funding for Veteran's health care, Impact Aid,
Department of Agriculture programs, and Community Development Block
Grants.
Mr. Chairman, our veterans are the heroes who helped define our
American heritage. They are living evidence that freedom is never free.
As we continue to sustain operations in support of the Global War on
Terrorism, it is imperative we send a strong signal to these active
duty forces that our nation will indeed care for them when they return
home.
As you know, the President's FY 2006 budget proposal totals $70.8
billion-$37.4 billion for mandatory programs and $33.4 in discretionary
programs. This represents a 2.7 percent increase in discretionary funds
over the enacted level of 2005. From 2001 to 2005, veterans health care
funding has increased 47 percent. As you and your committee begin
assembling the budget resolution for Fiscal Year 2006, I ask that you
do everything in your power to adequately fund programs for our
nation's veterans.
Providing quality, affordable, and accessible health care services
to our nations' veterans must be a priority. In my district in North
Carolina, we have been working on establishing a Community Based
Outpatient Clinic and must have the funds to do so. We must adequately
care for our nation's heroes. During this time when we are calling on
our military to do so much, it sends a strong message that we will take
care of them to adequately fund veterans programs.
As you craft the budget resolution for Fiscal Year 2006, there are
a many challenges to overcome. Funding the Global War on Terrorism,
reducing the deficit, providing for our men and women in uniform and
taking care of our domestic needs all must be priorities. In balancing
these priorities, I ask that you consider reducing the funding for
foreign operations. Sending hard-earned American taxpayer dollars
overseas to fund programs in other countries and international
organizations should not be a top priority when we must meet so many
needs here at home first. I urge you to increase funding for veterans
programs and fully fund our military requirements before allocating
money toward foreign programs.
To further support our nation's military; we must adequately fund
Impact Aid. This program began in 1950 when the Federal Government
acknowledged that it has a responsibility to reimburse local public
school districts for local tax revenue lost due to a Federal presence--
such as a military base. Impact Aid funds are sent directly to the
local school districts making Impact Aid one of the most efficient
programs that the Department of Education administers.
Students in the 8th District of North Carolina depend on this
funding, as do the teachers and administrators in the school systems
adjacent to Ft. Bragg. As you know, Cumberland County, NC is the proud
home Ft. Bragg, one of the largest military installations in the world.
Impact Aid literally funds the school system. It takes the place of
local tax revenue that otherwise would flow to the school system if
Uncle Sam wasn't the primary presence in the County.
This year the President's Budget proposal funds Impact Aid. In
tight budget times, this doesn't sound so bad. However, federally
impacted school systems know that level funding actually means a loss.
Due to a cost of living adjustment that is automatically triggered by
the Impact Aid formula, many school districts actually receive less
money in real dollars as a result of level funding for the program.
The House Impact Aid Coalition was formed in 1995 to promote and
improve the Impact Aid Program. Our coalition has grown from just
twelve Members of Congress in 1995, to its current membership of 129.
As a Coalition Co-Chair, I join my colleagues to support our goal to
increase funding for the Impact Aid Program to $1.281 billion, a 3
percent increase over last year's conference report funding level. At
this level, school systems would be able to maintain their vital
programs and Congress would affirm its commitment to the program.
Further helping strengthen our Nation's education system, many of
my constituents, college students and Community College Presidents,
have contacted me with their concerns regarding Perkins funding. The
Carl D. Perkins Vocational and Technical Education Act funding is vital
to my district, and to the entire North Carolina Community College
System. As Congress looks for ways to improve the Perkins program, I
urge this Committee to recognize that we must not compromise the
success of those that look to Community Colleges for workforce
training. We want our young people and those seeking retraining to be
prepared for the 21st Century workforce. By eliminating Perkins funding
altogether, I fear we would working against our own goal of helping
those institutions that are so vital to the economic development and
workforce education of my district.
Mr. Chairman, I also want to let you know that I have heard many
concerns from farmers in my district regarding the President's budget
proposal. My district is very rural and composed of many small to large
farms through out the region. I cannot stress to you enough how many
producers and communities depend upon a strong agricultural economy.
It is important to consider what U.S. farm policy has already
contributed to deficit reduction. U.S. farm policy for commodities has
already achieved $16 billion in savings compared to the March 2002 CBO
cost estimate. Meanwhile, mandatory funding for conservation, rural
development, trade promotion, research, renewable energy, and forestry
initiatives have all sustained cuts in the last 2 years totaling more
than $2 billion. The recently proposed cuts to U.S. farm policy, when
added to the mandatory savings already achieved, bring to rest a
disproportionate burden of deficit reduction on the shoulders of our
nation's producers and rural communities.
As you know, producers have made long-term business plans based
upon the programs currently available in the Farm Bill. Taking away or
altering these programs brings uncertainty to the farming assistance.
U.S. farm policy is also about our producers being competitive
globally when many countries all over the world already have much
higher price support systems than the U.S. Foreign subsidies and
tariffs are 5 and 6 times higher than our own. It is important that we
do not inadvertently make our farmers less competitive and hurt our
much-needed agricultural exports.
I would also like to stress my support for funding our agriculture
conservation initiatives. I've seen first hand how incentive based
conservation initiatives, such as EQIP and CRP, have been a major
success in rehabilitating wildlife and wildlife habitat and improving
air and water quality. I am hopeful that you will continue to support
farming programs that have a high rate of success and that are
extremely important to 8th District farmers.
Finally, Mr. Chairman I would like to address the proposed cuts in
funding to the Community Development Block Grant Program (CDBG's). The
CDBG program provides local municipalities the opportunity to create
jobs, build and improve much needed infrastructure, provide safe and
affordable housing and leverage considerable private sector investment
in communities.
In my district, which has been hit particularly hard by the loss of
textile and manufacturing businesses, the CDBG program has provided
over $13 million in assistance to help keep these towns on their feet.
CDBGs allow our local governments the flexibility to design
programs that are most effective to meet their specific needs. I urge
that the Committee make every effort to keep this important Program
funded at or above Fiscal Year 2005's level.
Mr. Chairman, thank you for the opportunity to testify before your
Committee about these important programs. I appreciate your
consideration and look forward to working with you on the Fiscal Year
2006 budget.
Mr. Conaway. Thank you, Mr. Hayes. Mr. Cooper.
Mr. Cooper. No.
Mr. Conaway. Several witnesses have talked about the impact
that reducing Community Development Block Grant moneys has. Is
there a way that we can quantify that? Any time you cut moneys,
everybody says that has a bad effect on programs. But it might
be helpful if there is some way we can say, given these grants,
you know, to fix things--in my community it is used for curbs
and gutters and sewers and infrastructure and those kinds of
things that, once it is done it is done. And if we didn't have
that money next year, we wouldn't do what we did this past
year. Is there some way we can look ahead and see what impact
these actual cuts will have instead of just saying that it is
going to have a bad impact?
Mr. Hayes. Absolutely. Those actions are underway. And at
the same time, folks back home, I say to them, best thing we
can do is cut your taxes. Don't send the money to Washington,
because by the time we take our portion out of it and what you
get back is not as good as if you kept it here. There are some
funds that are going to be increased in other areas that would
hopefully take some of that impact away and again give a
positive impact.
I think the idea of putting it in commerce is to use it for
economic development, infrastructure, and things like that that
is going to grow the economy and create more jobs, which is so
important.
Mr. Conaway. Thank you, sir. Appreciate your comments
today.
The gentlewoman, Ms. Waters. You are recognized.
STATEMENT OF THE HON. MAXINE WATERS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Waters. Thank you very much, Mr. Chairman. The
President's proposed funding year budget 2006 will create a
tremendous hardship on our Nation's low-income families, senior
citizens, disabled persons, veterans, those seeking to improve
their lives through education and job training.
As the ranking member of the Housing Subcommittee of the
Financial Services Committee, I am here to urge the committee
to reject the disastrous budget cuts and program transfers in
the U.S. Department of Housing and Urban Development (HUD)
budget that the administration has proposed. If the President's
budget were enacted, HUD would suffer a whopping 12 percent
budget cut, the largest of any Cabinet department.
As I said to HUD Secretary Jackson when he appeared before
the Financial Services Committee yesterday, I am very
disappointed by the huge budgets cuts and the massive program
transfers away from HUD that the administration has proposed in
its fiscal year 2006 budget. The HUD budget accelerates a 4-
year effort by the administration to dismantle critical HUD
programs, to make deep funding cuts in these programs and,
regretfully, to target these cuts to our most vulnerable low-
income families, seniors and disabled persons.
The proposed elimination of the Community Development Block
Grant and the 50 percent cut in the Disabled Housing funding
are just two of the most noteworthy examples. We have an
affordable housing crisis in much of this country. Just 2 weeks
ago, the Los Angeles Times reported that police had to disperse
a crowd of about 3,000 people vying for 150 low-income housing
applications in Hollywood, CA. When some people rushed the
line, a riot ensued.
You could find a similar scene in many, many communities.
As the National Low Income Housing Coalition regularly reports,
there is not a single metropolitan area where an extremely low-
income family can be assured of finding a modest two-bedroom
rental home that is affordable. There are literally millions of
people who are homeless.
Mr. Chairman, it is stunning to me at a time when the
administration seeks $82 billion in a supplemental
appropriation for Iraq, Secretary Jackson told us that HUD has
to prioritize by cutting affordable housing programs because
the Department's proposed budget will not permit these programs
to be funded.
The President's proposed budget would eviscerate CDGB to
States and localities, thereby resulting in a loss of
affordable housing investments of $1.16 billion; cut the
disabled housing budget by 50 percent; continue an assault on
the rental housing assistance safety net programs, that is
Section 8 and public housing; eliminate future funding for the
HOPE VI program; rescind $143 million in funding for 2005 HOPE
VI funding that was only appropriated a few months ago; and cut
funding for housing programs for Native Americans by 16
percent. Funding for critically needed capital repair of
housing units is cut another $252 million, and operating
assistance is cut by $17 million.
The overall fiscal year 2006 budget housing request is 9
percent below last year's level, and 30 percent below the level
when the administration took office after adjusting for
inflation. Home block grants and the Housing for People with
AIDS program, the HOPWA program, also cut. Even funding for
housing counseling and for fair housing enforcement would be
cut from the current funding levels.
All these programs play a vital role in providing safe,
decent, affordable housing for low-income families, and I am
hopeful that we can join together from both sides of the aisle
to keep from cutting these programs.
I want to really put my attention at CDBG, the costs. CDBG
is that block grant funding program that goes to the cities and
the States to be disseminated among some small towns, that is a
last-stand effort by the Federal Government to really give some
assistance to the cities with critical problems that their
budgets just won't meet.
I was pleased to hear you mention that in your area, the
cities and towns use this money for infrastructure. I, too,
have five cities in my district, and they are small cities.
Without CDBG they would not be able to support the needed
repairs to the infrastructure that are so desperately needed
all over the country. So it is not simply a matter of money
that is going to follow 101(c)3 nonprofit organizations that
are working with at-risk youth and with seniors and with other
very, very needed areas in our cities, it is about support for
these towns and cities that they could not get anyplace else.
No, Mr. Chairman, they just don't have the budgets.
This CDBG budget proposes to slashcommunity development by
$1.9 billion, a cut of 35 percent from the $5.6 billion level
at which these programs were funded in fiscal year 2005.
The President is also proposing a major reorganization of
community development programs under which nearly all of the
programs that comprise a community development fund, including
the Community Development Block Grant, would be moved out to
the Department of Commerce. Now, I don't know what this is all
about. When we talked with Secretary Jackson about this, they
talked about taking 18 programs and transferring them over to
Department of Commerce. I understand what the Department of
Commerce does, and I support economic development in a very,
very strong way, and there may be some programs like Section
108 Loan Guarantee Program that is maybe better situated, even
though, you know, this particular program is supported by the
CDBG funds that would be over in HUD. But these are moneys that
are used for the larger project developments in cities, like
the development of old towns and big industries that will
create a lot of jobs.
So maybe there is some way that something like that could
be worked out, but to have these other programs, what do you
do? Do you release all of the people in HUD and bring in new
people who have long years of experience? I mean, release the
people in Commerce, bring in people from HUD, you transfer
personnel, you train new personnel, you set up new departments?
I don't know how this is done. If you are saying that the
people who are there now were responsible for the Department of
Commerce programs will then somehow magically all of a sudden
know what to do with CDBG, I don't think so. So I don't
understand why that is being done.
Among the programs slated not to be funded under the
President's proposals are Brownfields, Empowerment Zones/
Enterprise Communities, and the Rural Housing and Economic
Development Program. Well, for those people who think that it
is important to have economic development in the cities so that
we won't continue forever to have to fund 501(c)(3)s because we
don't have the kind of businesses and programs that can
generate its own funding, it is a mistake to go into their
empowerment zones that were set up for economic development and
employment and all of a sudden get rid of them. We haven't
finished the work yet. The same thing with, well, Empowerment
Zones/Enterprise and economic development.
I won't bore you with the rest of this testimony. I know
you have been here for a long time, and you have still got
Members to go. I have submitted 50 copies as required by the
committee. I am very, very hopeful that we will all, Democrats
and Republicans alike, see the value in CDBG and HUD and not
allow it to be slashed in the way that is being proposed.
Thank you.
[The prepared statement of Maxine Waters follows:]
Prepared Statement of Hon. Maxine Waters, a Representative in Congress
From the State of California
Chairman Nussle, Ranking Member Spratt, Members of the Committee,
thank you for the opportunity to testify before you today.
Mr. Chairman, the President's proposed FY 2006 budget will create a
tremendous hardship on our nation's low-income families, senior
citizens, disabled persons, veterans, those seeking to improve their
lives through education and job training, and many other groups.
As the Ranking Member of the Housing Subcommittee of the Financial
Services Committee, I am here to urge this Committee to reject the
disastrous budget cuts and program transfers in the HUD budget that the
Administration has proposed. If the President's Budget were enacted,
HUD would suffer a 12 percent budget cut, the largest of any Cabinet
Department.
HUD BUDGET
Mr. Chairman, as I told HUD Secretary Jackson when he appeared
before the Financial Services Committee yesterday, I am very
disappointed by the huge budget cuts and the massive program transfers
away from HUD that the Administration has proposed in its FY 2006
Budget. The FY 2006 HUD budget accelerates a 4-year effort by the Bush
Administration to dismantle critical HUD programs, to make deep funding
cuts in these programs, and regretfully, to target these cuts to our
most vulnerable low-income families, seniors, and disabled persons. The
proposed elimination of the Community Development Block Grant Program,
and the 50 percent cut in disabled housing funding are just two of the
most noteworthy examples.
Mr. Chairman, we have an affordable housing crisis in much of this
country. Just 2 weeks ago, the Los Angeles Times reported that police
had to disperse a crowd of about 3,000 people vying for 150 low-income
housing applications in Hollywood, California, when some people rushed
the line and a riot ensued. You could find a similar scene in many,
many communities.
As the National Low Income Housing Coalition regularly reports,
there is not a single metropolitan area where an extremely low-income
family can be assured of finding a modest two bedroom rental home that
is affordable. Moreover, there are literally millions of people who are
homeless.
Mr. Chairman, it is stunning to me, at a time when the
Administration seeks almost $82 billion dollars in Supplemental
Appropriations, principally for the War in Iraq, Secretary Jackson
would tell us that HUD has to ``prioritize'', by cutting affordable
housing programs, because the Department's proposed budget will not
permit these programs to be funded.
The President's proposed budget would eviscerate CDBG flexible
block grants to states and localities thereby resulting in a loss of
affordable housing investments of $1.16 billion dollars; cut the
disabled housing budget by 50 percent; continue an assault on the
rental housing assistance safety net programs (Section 8 and public
housing); eliminate future funding for the HOPE VI program; rescind
$143 million dollars in FY 2005 HOPE VI funding that was only
appropriated a few months ago; and cut funding for housing programs for
Native Americans by 16 percent.
Funding for critically needed capital repair of public housing
units is cut another $252 million, and operating assistance is cut by
$17 million. The overall FY 2006 public housing request is 9 percent
below last year's level, and 30 percent below the level when the
Administration took office, after adjusting for inflation. HOME block
cuts and the Housing for People with AIDS program (HOPWA) also are cut.
Even funding for housing counseling and for fair housing enforcement
would be cut from their current funding levels! All these programs play
a vital role in providing safe, decent, affordable housing for low-
income families. We must not cut these programs.
The HUD budget will cut 50 percent of the funding for the Section
811 program for disabled housing. It is inexcusable for this program to
be cut, let alone singled out for a cut of this magnitude. The
Administration budget also proposes to turn Section 811 into a rental
assistance program only, ending the longstanding Federal role in
funding the cost of construction of new affordable housing for the
disabled.
CDBG
Now let me turn to CDBG. The Bush FY 2006 budget proposes to slash
community development funding by $1.9 billion dollars, a cut of 35
percent from the $5.6 billion dollar level at which these programs were
funded in FY 2005. The President also is proposing a major
reorganization of community development programs under which nearly all
of the programs that comprised the Community Development Fund,
including the Community Development Block Grant program (CDBG) would be
moved out of the Department of Housing and Urban Development (HUD) and
into the Commerce Department.
Among the programs slated not to be funded under the President's
proposal are Brownfields, Empowerment Zones/Enterprise Communities, and
the Rural Housing and Economic Development Program. The
Administration's proposal also eliminates Section 108 CDBG loans which
have successfully been used by localities to leverage private sector
capital for critical community development projects, and, thus, would
throw into jeopardy the funding stream, the collateral, for Section 108
CDBG loan guarantees already outstanding.
These cuts would have a devastating impact on housing, neighborhood
improvements, and social services for the elderly, the disabled,
families with children, and the homeless. You can't shoehorn $5.6
billion dollars in community development programs into a $3.71 billion
dollar economic development program without many people being hurt.
Mr. Chairman, as all of us know, CDBG funds are among the most
flexible Federal funds available to cities, states, and community-based
organizations. Funds can be used for a wide array of activities,
including housing rehabilitation (loans and grants to homeowners,
landlords, nonprofits, and developers), new housing construction,
downpayment assistance and other help for first-time homebuyers, lead-
based paint detection and removal, the purchase of land and buildings,
the construction or rehabilitation of ``public facilities'' such as
shelters for people experiencing homelessness or victims of domestic
violence, making buildings accessible to the elderly and disabled,
``public services'' such as job training, transportation, health care,
and child care (public services are capped at 15 percent of a
jurisdiction's CDBG funds), capacity building for non-profits,
rehabilitating commercial or industrial buildings, and loans or grants
to businesses.
The proposed CDBG cuts, if enacted, would have a devastating impact
on housing, neighborhood improvements, and social services for the
elderly, the disabled, families with children, and the homeless. The
proposed transfer of community development programs, while requiring
legislative action, is extremely ill-advised. The proposal also would
reorient CDBG away from its traditional HUD focus of affordable housing
and community development, to a Commerce Department whose focus is on
economic development, and which caters to business interests.
All of these community development programs play an important role
in helping local governments improve their neighborhoods. If the
proposed cuts were to be enacted, they would severely damage these
communities' efforts to improve safety in their neighborhoods, create
jobs, provide affordable housing and social services for their
residents, and create a huge funding hole that States and localities
cannot possibly fill.
Mr. Chairman, I am also very troubled by the effects that the cuts
to CDBG will have on affordable housing. Last year, $1.16 billion in
CDBG funds were used for housing, resulting in 112,000 homeowners
receiving funds for housing rehabilitation, 11,000 families receiving
assistance to become 1st-time homeowners, and 19,000 rental housing
units being rehabilitated. The proposed elimination of CDBG would
result in a $1.16 billion cut in affordable housing funding.
Finally, it appears that the Administration believes that community
development funding should only be available in communities with
poverty rates that exceed the average poverty rate. A proposal to limit
funding to only the most distressed communities would effectively
abandon efforts to help the millions of low-income persons living in
middle income and economically diverse communities. Instead of carrying
out the existing Federal policy objective of de-concentrating low-
income families, the proposal would further concentrate them in the
poorest communities, and potentially further stratify society along
economic and racial lines. CDBG funds should continue to be available
to serve poor people wherever they happen to reside.
CONCLUSION
Mr. Chairman, the President's misguided budget proposals do not
meet the needs of the American people. I urge you to reject the
President's proposals and substantially improve funding for affordable
housing and community development as you write the FY 2006 budget
resolution.
Mr. Conaway. Thank you, Ms. Waters.
Mr. Cooper, any questions or comments?
Mr. Cooper. I would just like to thank the gentlelady. You
do a terrific job not only representing your constituents, but
also your voice for the voiceless all across this great country
of ours.
I know I have heard a tremendous amount of concern over the
HUD cuts in my district. They can be devastating to folks. The
CDBG cuts are bad. There are lots of things that we need to
look at in this budget and correct, because there are some
terrible mistakes made in the President's budget. I thank the
gentlelady.
Ms. Waters. You are certainly welcome.
Mr. Conaway. Ms. Waters, thank you very much for coming
today. I appreciate your testimony.
Not to be argumentative, but I am a CPA, and I don't
automatically subscribe to budget increases in programs to
being our best interests. Conversely, I don't automatically
subscribe to the idea that budget cuts or reduced funding in
certain areas is bad.
You said every single program that you mentioned today was
getting cuts. You have very dire predictions as to what would
happen if those happen. We have tough choices to make. We have
limited resources to spread across an almost seemingly
unlimited need across this great country, and look forward to
working with you as we try to somehow try to reconcile between
those two. So thank you for coming this afternoon.
Ms. Waters. You are welcome, Mr. Chairman. Let me just say
as I close and I leave, one of the good things about CDBG is
the community is involved in the entire planning process as
mandated by Federal law. Not only do they have to put the
notices out so that the community comes together to go over and
review what the city is doing, they, too, have the opportunity
to suggest to the city where the money is best spent, and the
process is one of the best ones that I have ever seen for
planning. I am hopeful that we will take that into
consideration as we look at this.
Mr. Conaway. Thank you. I have got experience with my local
United Way over a long time and have seen the good that this
program does work and the good process that it has to go
through, the annual scrubbing and competition, in effect.
Ms. Waters. Yes.
Mr. Conaway. So that we do have the money spent on the most
important needs within the community.
Thank you very much for your testimony this afternoon.
Ms. Waters. Thank you.
Mr. Conaway. Mr. Holt from New Jersey. You are recognized
for 10 minutes.
STATEMENT OF THE HON. RUSH D. HOLT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Holt. Mr. Conaway, Mr. Cooper, thank you very much. I
appreciate the opportunity to be here today. I would certainly
concur in the remarks of Ms. Waters, Ms. Capito, Mr. Hayes, all
important points. No doubt all day today you have heard about
what we can do to meet the needs of the people of the United
States, whether we are talking about food on the table or
housing.
Let me tell you, if we are economically going to be able to
meet those needs, we must invest in innovation. It is the
engine that drives our economy. Science and technology
leadership must not be taken for granted. Excellence in science
and technology requires sustained, appropriately funded
research in a broad range of fields. This is not a luxury. It
is not welfare for people in lab coats. It is our future well-
being. It is the quality of life of Americans, maybe not this
year's research for next year's food on the table or next
year's housing, but in a very real way it is our future.
The President has proposed that the overall U.S. research
and development budget increase by about 0.6 percent in fiscal
year 2006 to $132.3 billion. Looked at one way, you would say
the Federal investment in research and development has been
increasing, but it is a little bit deceptive.
If we put aside the development part of the research and
development budget, and this is primarily for defense and
homeland security development projects, important as they are--
but if we put that aside, the Federal science and technology
budget, which would be the real research part, the proposed
spending would be about $60 billion, down by 1.5 percent from
2005 spending.
Now, if the U.S. standing in science and technology were
secure, we might be able to tolerate this, but our leadership
in science and technology is not secure. If we were concerned
about jobs going overseas or just meeting our needs here at
home, we must be the innovation leaders in the world. As it is,
other countries are spending significantly in science and
technology, in research and development. More and more of the
best patents are foreign, more and more of the best scientific
papers are written in other countries, more and more graduate
students are choosing to stay in their own countries or go to
other places other than United States universities for a first-
rate education.
Now, these unprecedented advances in worldwide science and
engineering are great news for the world and for humankind at
large. Scientists and engineers around the world no doubt will
be making important discoveries in innovation. But this is not
great news for the United States as a country. The United
States is at best treading water.
We can't do that forever. We are living off much of the
innovation that came from the 1960s and 1970s. We are overdue
for a real significant investment in research and development.
As a percentage of GDP, the funding for physical science
research has been in a 30-year decline.
Now, Mr. Conaway, Ms. Schwartz, as I would, or any other
Member of Congress, you would like to be introduced to the next
Rotary Club meeting as a future-oriented Member of Congress. It
can't be just words. If we don't actually make this investment
in science and technology and research and development, we
cannot call ourselves future-oriented.
Let me focus on the National Science Foundation (NSF). The
NSF isn't the only part of the Federal R&D effort that requires
more support, but it is key to our infrastructure. We have in
recent years doubled the funding for the National Institutes of
Health (NIH). We have made large increases in the last few
years, as I made reference to, in development in the Department
of Defense (DOD).
The NIH and the DOD research and development will not be
able to use these funds well if we don't make a concurrent
investment in the National Science Foundation. It is from the
National Science Foundation that the scientists are trained. It
is from the National Science Foundation that the
instrumentation and methodology is developed so that we can
actually get good results from our huge investments that we
have, I think, wisely made at NIH and in DOD.
In 2002, the President signed into law the NSF
Authorization Act that authorized a doubling in the budget of
the NSF by fiscal year 2007. We are not keeping at even one-
quarter of that rate. In other words, NSF is not on a doubling
path. If we don't put it back on a doubling path, we will be
squandering the many billions of dollars that we are putting
into NIH, DOD, and elsewhere.
This is just one example of the attention that I believe
this committee needs to devote to research and development.
There are other things. Let me just make brief mention of the
Hubble Space Telescope.
The Hubble Space Telescope is one of the most productive
scientific instruments in the world's history. Its best work is
perhaps yet to come. It is expanding our understanding of the
universe and where we are in the universe. Prematurely ending
its mission would be, well, a shame and a disgrace.
Another example I would point to is fusion energy research,
supported by the Department of Energy, Office of Science. The
administration proposes that we make severe cuts to the U.S.-
based research so that we can fund the International
Thermonuclear Experimental Reactor (ITER). This could be based
in Europe or Japan.
Now, I think supporting ITER is a good idea, but supporting
ITER must be in addition to, not instead of, a U.S.-based
program. If we don't invest in the United States, the United
States will not have the capacity to use the results in the
international reactor or to contribute significantly to the
international reactor or, what really counts, to be able to
develop fusion energy as a marketable energy source in years to
come.
A good science budget is within our reach. In the scheme of
things, we are talking about seed corn, which is a small
fraction of our harvest. A good budget for science can be
achieved. I recognize that there are immediate needs, social
needs, human needs, but the science is our future.
I hope I have made the case, I have tried to make it as
strongly as I can, that not to make a significant investment--
for example, not to put NSF on the funding doubling path that
we in Congress authorized just a few years ago--would be to put
the future and perhaps ourselves in jeopardy. Thank you.
[The prepared statement of Rush Holt follows:]
Prepared Statement of Hon. Rush D. Holt, a Representative in Congress
From the State of New Jersey
Mr. Chairman, thank you for the opportunity to testify today on
President Bush's Fiscal Year 2006 budget submission to Congress. I want
to use this opportunity to address Federal support for science.
Innovation is the engine that drives our economy. The United
States' leadership in science and technology is the basis of our global
economic and political leadership.
Our science and technology leadership must not be taken for
granted. Excellence in science and technology requires well conceived,
sustained, and appropriately funded research in a broad range of
fields. We need to advance our understanding of the structure of the
universe, of the laws governing matter and energy, of the properties of
materials, and of the building blocks of life. We need to develop new
and better ways to serve human needs with new materials, processes,
devices, and systems. To achieve this we need a very well conceived and
adequately funded budget for research.
President Bush has proposed that the overall U.S. Research and
Development budget increase by only 0.56 percent in FY 2006, to $132.3
billion. I am pleased that in recent years, including this year, the
Federal investment in R&D has been increasing. But this increase is
largely due to significant increases for weapons research and
development, for the creation of new homeland security R&D programs,
and for the now-complete campaign to double the National Institutes of
Health (NIH) budget. If we put aside the ``development'' part of the
R&D budget, which is primarily for defense and homeland security
development projects and which has grown to more than half of the R&D
budget, and look at the remaining part, called the ``Federal S&T
budget'', the proposed spending would be $60.8 billion, down 1.4
percent from FY2005 spending.
If the U.S. standing in science and technology were secure, a 1.4
percent cut in this time of tight budgets might be appropriate. If U.S.
science were in a secure position, we could rest on our laurels, make
some economies, and cut back a bit on science in order to make it a
tiny bit easier to cover the huge deficits that have been built up by
the current Bush administration.
But our leadership in science and technology is not secure. The
United States is still the world leader in science and technology, but
other countries are catching up. Other countries are significantly
increasing their spending on science and technology, and they are
getting results. More and more of the best patents are foreign. More
and more of the best scientific papers are written in other countries.
More and more of the world's best graduate students are choosing to
stay in their own countries for graduate school rather than coming to
the great universities of the United States, because their universities
increasingly provide a first-rate education.
These unprecedented advances in worldwide science and engineering
capacity are great news for the world. Scientists and engineers in
other countries will undoubtedly make important discoveries and
innovations, and they will build new industries that will benefit us
all.
While other countries have been surging ahead, the United States
has been treading water. Federal funding of basic research in
engineering and the physical sciences has experienced little to no
growth over the last thirty years. As a percentage of GDP, funding for
physical science research has been in a thirty year decline.
The United States absolutely cannot afford to lose its lead in
science. We have to innovate faster and better than anyone else, or we
will eventually be second-rate. In every generation since World War II,
there have been dire warnings that the United States is loosing its
economic and technological edge. Somehow we have always managed to
regain our leadership position. But if you look back, you can see that
each time, we have regained our edge because of research and innovation
that has received substantial Federal support.
Probably every Member of Congress would like to be introduced at
their next Rotary meeting as a future-oriented Member of Congress.
Science, technology, and education are the future of America.
Today I want to focus my recommendations on the budget for the
National Science Foundation (NSF). NSF is not the only part of the
Federal R&D effort that requires more support. But NSF is key to our
scientific infrastructure. If NSF is not strongly supported, U.S. basic
research is in trouble.
In 2002, President Bush signed into law the NSF Authorization Act
(P.L. 107-368). This authorized a doubling of the budget for the NSF by
FY 2007, to $9.8 billion, through annual 15 percent increases. In fact,
it has taken 4 years for NSF to receive an overall increase of 15
percent, from $4.8 billion in FY 2002 to the President's proposed $5.6
billion in FY 2006. We need to get back on track toward an NSF budget
of $10 billion. We can achieve this for NSF through annual 15 percent
increases over the next 4 years. For FY 2006, the NSF appropriation
should be $6.3 billion, a 15 percent increase over FY 2005.
There are other ways that the budget needs to be revised to support
science. An important example is the Hubble Space Telescope. Hubble is
one of the world's most productive scientific instruments. It has
expanded our understanding of the life and death of stars. It has shown
us the accelerating expansion of the universe and the existence of
black holes. It is the most successful science project in NASA history.
The President proposes to cancel servicing of the Hubble Space
Telescope, prematurely ending its mission. We need to restore this
funding.
Another example is fusion energy science, supported by the DOE
Office of Science. The Administration proposes that we make severe cuts
in U.S.-based research, so that we can fund the International
Thermonuclear Experimental Reactor (ITER) fusion project, which will be
based in Europe or Japan. We should definitely support and participate
in ITER. But to benefit the United States, supporting ITER must be in
addition to, not instead of, having a U.S.-based program. Otherwise the
United States will not have the capacity to develop fusion energy;
technology leadership will go to Europe and Japan.
This year marks the 100th anniversary of Einstein's first
revolutionary papers. Einstein's science transformed our understanding
of the physical world, from the sub-atomic structure of matter and
energy to the dynamics of the universe. The discoveries of Einstein and
many other scientists in the twentieth century have led to innovations
that have powered the U.S. economy. Now, in the twenty-first century,
we need to support basic science, to ensure that America has a strong
scientific foundation for the future.
Scientists are creative, disciplined, and work hard. As Members of
Congress, we too need to be creative and disciplined, to provide the
support necessary to enable U.S. scientists to make new and as yet
unimagined discoveries. A good budget for science is within our reach.
Yes, the United States has immediate needs that must be accommodated in
the overall budget. But science is our future, and it must be
appropriately supported.
Mr. Conaway. Mr. Holt, thank you for those comments.
Ms. Schwartz, do you have any comments for the gentleman
from New Jersey?
Ms. Schwartz. Thank you, Mr. Chairman.
Thank you, Mr. Holt. I just want to appreciate, certainly,
your own expertise as a scientist, that you would bring this to
our attention, and I think that you point out really very
correctly that we had already made a commitment, that Congress
had made a commitment--not me, I wasn't here at the time--but
that the Congress had made that commitment in 2002. It seems we
are reneging on that commitment.
You point out that these are--it is a difficult budget,
there isn't--there are choices to be made. There is certainly
the issue of priorities that have to be made.
My question to you really is to what degree do you think
this is isolated to an area? I mean, you are from New Jersey.
Obviously, you mentioned Mr. Einstein and some of the rich
scientific community in New Jersey. Being from the southeastern
part of Pennsylvania, I have been very involved in promoting
biotechnology as one of the advances that we ought to make our
investment in. But I understand as well we have to step back a
bit and really look at basic science and scientific research
that really leads people to consider it.
I wonder if you could speak at all about any particular
parts of the National Science Foundation funding that would be
dramatically hurt, that might hurt in particular either
geographic areas or scientific communities or populations you
think we are going to cut out. Will they cut funding for young
people and some of the National Science Foundation scholarships
that are provided and other things in particular?
Mr. Holt. Yes, Ms. Schwartz, thanks for the question. It
does appear that education might suffer disproportionately in
these budget cuts. But the point I want to make is this is not
isolated to any geographic area or to a subject area. It is the
source of our productivity and economic vitality in every State
in this country, really, in every town and village. Our
previous investment in science and technology over the decades
is why we are the global, economic, political and, I would say,
military leader. It makes possible our discussing CDBG and all
of the HUD programs and all of the other things we are talking
about here. We would not have a $12 trillion economy had it not
been for the investments in transistors, lasers, medical
technology, which came from basic research.
The National Science Foundation looks at new materials and
processes and devices and systems. It looks at information
technology and computer sciences, which are not applicable to
just one area, but all areas. We went through, over a 6-year
period, a doubling of the National Institutes of Health, up to
several tens of billions of dollars now, and I think that was
wise. There is a lot of good research coming out of that, but
we can't sustain that research unless we are producing the
scientists, the methodology, the instrumentation, that is used
for this NIH research, and much of that comes from the NSF.
That is why the decision was made to put NSF on a doubling
path.
Doubling NSF, by the way, would still make it only a small
fraction of the budget of NIH. We are not talking about, you
know, massive spending. Yes, it is billions of dollars, but it
is relatively small in the scheme of things.
Ms. Schwartz. OK. Just one last question, or almost a maybe
comment, is that it is both the really hard, serious dollars
that we need to do this research. But do you think it is also a
message that we don't care about science at a time when we, as
you point out, need to be really clear to our young people that
science matters, and also to our global competitors, if you
will, that science matters, that we will be making that
investment in science, because I think otherwise, as you point
out, they are already getting ahead--and while I am not sure
the sort of space race that we were engaged in many, many years
ago, but did compel a lot of young people to think about
science as a career, that I am not sure we are doing it, if we
are actually cutting science funding as you point out, a
National Science Foundation funding.
Do you think it is not just the hard dollars on the actual
science that gets done, but the message as well?
Mr. Holt. Well, Representative Schwartz, as you know, this
is a topic for a lengthy discussion at another time. But a
failing of our education system is that we have told 80 percent
of Americans that science is for scientists. Consequently, most
people think that spending at the National Science Foundation
is for scientists. No, it is for every man, woman and child in
America. Science is for all of us, not just the scientists.
Ms. Schwartz. OK. Thank you very much, Mr. Holt.
Mr. Conaway. Mr. Holt, thank you. I think it might help put
some additional meat on the bones for your arguments if you
would include in your presentation as an example the number of
engineers being produced by China today versus in America. I
know that is just one segment of the scientific community, but
it is a factor of, I think--I could be corrected on this, but I
think it is like eight times the number of engineers being
produced in China each year than in America, so that it has
dramatic ability not just on our dollars, but on our ability to
compete in the world.
So thank you for your testimony today. I appreciate that.
Mr. Holt. Thank you, Mr. Conaway.
Mr. Conaway. It is now my high pleasure to welcome my
neighboring Congressman from Lubbock, Texas, Mr. Randy
Neugebauer. Mr. Neugebauer, 10 minutes.
STATEMENT OF THE HON. RANDY NEUGEBAUER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Neugebauer. Thank you, Mr. Conaway and Ms. Schwartz,
for conducting these hearings.
Mr. Conaway. I was hoping you would say Mr. Chairman. I
would really like to hear that.
Mr. Neugebauer. Thank you, Mr. Chairman. In fact, I ask
unanimous consent to revise my remarks and make my written
remarks part of the record.
Mr. Conaway. Without objection, sir.
Mr. Neugebauer. Thank you, sir. I know you have heard a lot
of testimony, and the hour is drawing close to the evening, but
I wanted to make a few points.
I just finished about 13 or 14 town hall meetings all
throughout my district, and I think there is a consensus of the
people in the 19th District of Texas that $2.57 trillion is
enough to spend for our budget. In fact, they agree with me
when I say that Congress doesn't have an income problem, it has
a spending problem, and it is incumbent upon us, as Members of
Congress, to tackle this problem to begin to reduce these
deficits so that we do not leave our children and our
grandchildren with this huge debt.
As we look forward to our budget, I think one of the things
that I want to encourage you is that I think that the President
sent over a good target, $2.57 trillion. But you know if we can
do better than $2.57 trillion, then I think the taxpayers get
an extra dividend. So as we put this budget together, I don't
want us to work toward one mark, but work toward a budget that
is fiscally responsible and that spends American taxpayers'
money wisely.
If you recall, the President during his State of the Union
message said, you know, if we can't spend the American
taxpayers' money wisely, we shouldn't spend it at all. And I
think we all agree that that is exactly what we should be
doing.
One of the things that I think is important about this
budget process is that we make this budget document flexible,
so that our authorizing committees and our appropriation
committees can go and do the work that they have been
challenged to do. Let them go through the budget and look for
ways that we can save, look for programs to eliminate. The
President sent over a list of about 150 programs that he
believed that we could consolidate or eliminate. You know, I
call that a good start. So I think we should not just limit our
look to those 150 programs that the President sent over, but
certainly look at other programs.
We tend to focus, when we go through this budgetary
process--and last year we did reduce nondefense, nonhomeland
security discretionary spending, but that is such a small
portion of the budget that I think we have to look through the
entire budget document. And I think we have to look at
mandatory spending.
Mr. Chairman, I am going to quote you, as I heard you say
earlier in the week last week, that if you are going to go duck
hunting, that you have got to go where the ducks are. As I
think we go through this budget, I think that all mandatory
spending should be up for a look and not just some parts of
mandatory spending and the discretionary spending, because we
do know that the fastest-growing part of the budget where we
have seen the most increases is, in fact, in the mandatory side
of the budget.
As it is--we look at these programs, particularly we look
in the agricultural program, I know in the President's budget,
he pointed out that he wanted to look at taking some of the
cuts from the farm programs.
As you know, when you look at the total USDA budget, that
over 50 percent of that budget is mandatory spending on not
really farm-related expenditures, being nutritional programs. I
think if we are going to give a scrub to the USDA budget, the
agricultural budget, that we need to look through the entire
mandatory spending part of that.
One of the things that concerns me is that coming from the
small business world, I have watched government over the years
in making policies 1 year and changing the policy the next.
When you are out and making investments and taking risks and
borrowing money, that makes it very difficult for our small
business people. It makes it very difficult for farmers and
ranchers across America.
And so we, in 2002, we passed a farm bill. What we said to
the producers and--in America, you know, here is a multiyear
policy for farm programs in this country over the next 5 or 6
years. You know what those farmers and ranchers did? They went
out and they leased land. They went to their banker. They
showed him a 5- or 6-year business plan where they were going
to buy new machinery and equipment to be able to farm more
effectively and efficiently.
Quite honestly, what makes American producers to be able to
compete in this economy on an unlevel playing field when it
comes to trade is the fact that our farmers and ranchers have
developed a great deal of efficiency through technology and
productivity. The productivity has really come from getting
larger. So the family farm in my district that used to be a
half section or a section is now a family farm that is farming
4,000 or 5,000 acres of land, and it is through that efficiency
that they have been able to compete in a global economy where
they are competing with not really other producers in other
countries, but literally competing against those countries,
because those countries are subsidizing their producers at
larger rates than our current farm policy.
You know what else is good about the farm program is we did
a multiyear program, but we also put together a farm program
that is working. It was designed to be a safety net. In fact,
in the first 3 years, it really only cost us what we had
projected for 2 years, some $17 billion less than what we had
projected for those farm programs to cost.
So it is just not good policy to change the rules in the
middle of the stream. I think particularly for agriculture
right now it is important, because there are a lot of things
that are going on that we are doing on multiple fronts for our
producers in our country.
We are at the table right now with the WTO. What we have
said in that framework is we have asked those other countries
to put their subsidies and their tariffs on the table, and we
have agreed to do the same thing. I think it would be premature
for us to start taking some of our negotiating chips off of the
table from a policy standpoint until we have concluded those
negotiations.
Just today we got a ruling where Brazil won a ruling
against the United States, saying that the current farm policy
in America violates the WTO. All of us know that we are in
compliance with the WTO ruling, but, again, that is just
another one of those issues that we are going to have to
negotiate, and we are on the tail end of this farm--current
farm bill and on the beginning of a new farm bill. I think that
is the appropriate time for us to begin to address some of the
issues that are brought up about how we are going to provide a
safety net for producers in the future.
I feel very confident, and as I talked through with
producer groups all throughout my district, the agricultural
committee wants to be a player, they want to be a partner in
reducing this Federal deficit, but we have to do it in a smart
and wise way, a way that is a win/win for America. We have to
do it in a way that is fair to agriculture and fair to other
areas of our budget.
So I hope, Mr. Chairman, as we go through this budget
process, I am ready to roll up my sleeves and help bring this
number in, hopefully less than $2.57 trillion. I think that
would be a real plus. I think it is a doable thing, but I hope
as we do that, that we will make sure that we do it in a way
that we are making good policy for America while at the same
time trying to bring home a dividend of less spending for the
American people.
Thank you, and thanks for your time.
[The prepared statement of Randy Neugebauer follows:]
Prepared Statement of Hon. Randy Neugebauer, a Representative in
Congress From the State of Texas
Chairman Nussle and members of the House Budget Committee, thank
you for the opportunity to present my views on the 2006 Budget
Resolution.
I think many of us agree that a Federal budget of more than $2.5
trillion dollars provides enough resources for the government. As I
tell my constituents, we don't have an income problem here in
Washington; we have a spending problem. As you put together this year's
resolution, I ask that you keep our budget total at or below the total
recommended by President Bush.
Even with the recent economic growth and growth in revenues, we
continue to spend more than we take in. I commend the Committee's
effort last year to slow the increase in non-defense discretionary
spending, which we ultimately managed to keep to 1.4 percent. Holding
down or decreasing discretionary spending, however, is not going to be
enough to reduce the deficit when this spending is less than 20 percent
of the budget.
When meeting with constituents last week in my district, I used the
analogy that if you are going duck hunting, you go where the ducks are.
Well, if we are going to reduce the deficit, we have to go where the
spending is.
We are at war, so funding for defense and security must remain a
priority. However, there are certainly non-defense discretionary
programs that can be reduced, consolidated or eliminated, and we must
address mandatory spending in order to continue down the path toward
deficit elimination. When the rate of growth in mandatory programs far
exceeds the rate of growth in the economy, these programs simply are
not sustainable.
I encourage the Budget Committee to set reconciliation targets for
mandatory spending, and I also ask that you give the authorizing
committees full discretion to determine how we meet those targets. We
know this won't be an easy process, but it is our responsibility to
address the unsustainable spending growth in order to maintain
important programs and services for the future.
One area I want to address in a bit more detail with you is
agriculture. Mr. Chairman, my constituents and I appreciated your
remarks last month during a C-SPAN interview. I agree with you that we
need to look at all the mandatory spending within USDA, not just farm
programs, which comprise just one-half percent of the Federal budget.
The 19th district of Texas is heavily dependent on its agricultural
economy. Farmers, lenders and input providers have made investment
decisions based on a multi-year farm policy, which will be reauthorized
within the next 2 years. The 2002 Farm Bill has proven to be a very
effective safety net for our producers, providing support in times of
lower prices, and reducing support when it is not needed.
During the first 3 years of this policy, farm programs have cost
$14 billion less than the Congressional Budget Office predicted when
the legislation passed. Even though spending will increase somewhat
this year due to lower prices, total spending over the life of this
Farm Bill is still projected to be less than was predicted. Changing
the rules of the game now, and then again in 2 years, is not sound
policy.
Budget decisions we make in agriculture today will not only affect
the 2007 Farm Bill, but they will also affect our negotiating position
in the World Trade Organization. If we take all of our chips off the
table now, we will not have anything left to negotiate with as our
trade representatives continue efforts to open new markets and reduce
other barriers to U.S. products.
During meetings with constituents throughout my district last week,
farmers understood the importance of balancing the budget, and they are
willing to do their part to reduce the deficit. However, they do not
support agriculture bearing a disproportionate share of the burden.
Neither do I, Mr. Chairman.
As you write the House budget resolution, I ask that you fairly
distribute reconciliation instructions across areas of mandatory
spending, basing them on shares of the budget and contributions already
made to budget savings. I also ask that the budget does not restrict
flexibility of the authorizing committees in writing reconciliation
legislation.
Our constituents are looking to us to make responsible decisions
about the use of their hard-earned tax dollars. They are counting on us
to set the right priorities and follow thorough on past commitments.
Thank you for your work on the first step in our budget and spending
process. Mr. Chairman, I appreciate your efforts to ensure that our
most important needs are met and that deficit reduction is shared
proportionally.
Mr. Conaway. Thank you, Mr. Neugebauer. I appreciate those
comments.
The thing you did point out is the wisdom of this process
in that the Budget Committee simply sets, to use Chairman
Nussle's phrase, the fence around it, around this, the number
of dollars that we are going to spend, and the folks who know
that--the most about various programs you authorize, the
committees and the appropriation committees, will be charged
then with doing the heavy lifting of deciding how much that
money is spent and where. So I think there is great wisdom in
that.
Ms. Schwartz, do you have comments?
Ms. Schwartz. Thank you. Maybe just to ask you if you had
any additional suggestions for us, as we sit on the Budget
Committee, and while it is just parameters, you make a pretty
strong point that $2.5 trillion is plenty of money, that we
should look for additional programs to cut, additional spending
to cut.
Of course, this particular budget anticipates a certain
amount of deficit, adding a certain amount to the deficit of
$427 billion. You didn't mention that, whether you actually
have some concerns about that in addition, or whether you would
set that as a parameter to--and if you have any specific
suggestions about where we could cut another $400, $500 billion
from the budget, where you would cut in that spending, what
programs you would target, whether you would want that all to
come out of the health spending; you suggest the mandatory
program. So I assume you are talking about cutting some of the
health programs that are available to seniors or health
benefits available to--where would you cut?
Mr. Neugebauer. That is a very good point.
Ms. Schwartz. What would your suggestion be in terms of
additional hot spending cuts that you would want to make; what
other programs in addition to your support for cutting the 150
programs already? Inherent in your statement is to cut that,
but I assume you don't think we should be adding to the deficit
either. Many of us don't think we should be adding to the
deficit. But where would you cut?
Mr. Neugebauer. Well, thank you for that question.
First of all, I think the overall goal as to what would I
like to see the deficit be, I would like to see the deficit be
zero. I would like to see a surplus. But the way we are going
to eventually get there is for us to slow the rate of growth in
government down to the same rate of the growth in our economy.
Our economy is not growing at the same rate of government
spending, so you are never going to be able to fix the deficit
problem until you get the rate of growth in government spending
in line with the rate of growth in our economy.
What we have already seen is we have stimulated the economy
last year, and as you recall, we thought that the deficit was
going to be actually about $100 billion more than what it
actually was, and how did we do that? Well, we started growing
the economy at a very rapid rate, and I think the last figures
that came out just last week is we are growing our economy
right now at 3.8 percent. Unfortunately, the rate of growth in
the government has been in the 4 percent and nearly 5 percent
area.
Ms. Schwartz. So you don't have any hope that we might be
able to grow the economy. You feel like it is pretty strong.
Mr. Neugebauer. I think even Chairman Greenspan when he
comes up to the Hill would tell you that this is pretty strong
growth. So we were able to do that by leaving more taxpayers'
money in their hands. So when I said we don't have an income
problem, we have a spending problem, that is what I mean. I
don't think we need to do anything on the income side.
As it comes to programs, one of the first areas I think we
need to look at is tighten up the waste, fraud and abuse. For
example, one of the examples in the USDA budget is food stamps.
We know that USDA is now bragging that their waste, fraud and
abuse is now less than 10 percent, but I think at one time it
was 10, 11, or 12 percent.
Unfortunately in that budget, that is in real money so to
the extent possible, I think we have to look at it in the areas
of tightening up some of these programs.
We also have people that have been on these programs for a
number of years. The question is are their ways to be able to
transition these people into a work environment and get off of
some of these programs?
So I think as we go through all of the budgets, I think we
have to tighten up the strengths and say, you know, make sure
that we have deserving people on these programs, evaluate how
we are administering these programs, if there are ways to say
to those agencies, look, you know, an 8 percent or 9 percent
fraud rate in your budget is unacceptable. You are going to
have to get that number down by this amount, and the way we are
going to help you get there is we are going to cut your program
by about half of that fraud rate or three-fourths of that fraud
rate and really get serious about that.
I think the only way we are going to get there is to put
some fairly measured constraints in this budget process on
these agencies to make sure that if we are going to send those
dollars out, that we are sending them out to the people that
need them and serve them and not to folks that are just
maneuvering through the system.
Ms. Schwartz. Thank you.
Mr. Neugebauer. Thank you.
Mr. Lungren [presiding]. Thank you. Thank you very much,
Congressman Neugebauer. We appreciate it very much.
Mr. Neugebauer. Thank you.
Mr. Lungren. Next up is Congressman Christopher Shays, but
before----
Mr. Shays. Well----
Ms. Watson. I am waiting on someone.
Mr. Lungren. Before you do, if I could put one thing in the
record, I would ask unanimous consent that all Members of
Congress be allowed 7 days to submit statements for the record.
Without objection, so ordered.
Congressman Shays.
STATEMENT OF THE HON. CHRISTOPHER SHAYS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CONNECTICUT
Mr. Shays. Thank you, Mr. Chairman. I would like my full
statement to be submitted in the record, and would want to say
as a member of the Budget Committee for 12 years, I have deep
respect for the work that you and your Ranking Member and
others need to do to help get our country's financial house in
order, and I am grateful that I don't play the same role that I
used to. I am happy not to be on the committee. It is a tough
job, and happy to be working on other issues, but eager to help
you.
I do want to say that I do agree with the previous speaker
that ultimately the key is slowing the growth of spending so
that the budget grows close to the natural growth of revenue.
So if we are seeing a 4 percent growth in our economy, it is
one thing to see spending growth that way, but when you see
spending grow higher than that, it is not surprising that you
end up with deficits.
I want to speak to the fact that in this process of your
debating what to do, I think you have to look at both
discretionary and mandatory cuts, but I am particularly amazed,
frankly, that the administration has sought to consolidate a
number of grants into a block grant, particularly the CDBG
grant in HUD and the HHS Community Services Block Grant. In the
HUD, in the CDBG grant, it is $4.1 billion, and the Community
Service Block Grant used by our CAP agency is about $631
million.
Republicans established these programs, and the logic was
they would be there to allow for local communities to design
programs, not in one big cookie cutter designed by the Federal
Government, but designed by them. And our argument was give
them the capability to determine their needs in their local
community using a block grant program.
Regretfully my own party gives block grants a bad name,
because what we then do is we take 16 grants and put them into
one grant. We take $5.6 billion--or some said it is not $5.6
billion, it is $5.3 billion, whatever--and we combine it into a
program with $3.7 billion, and then we say, OK, now you have
the discretion. It just seems to me the way we are using block
grants is to disguise cuts and then say to someone else they
have to make these cuts.
So I just really hope that in the process of your debating
this issue that you don't take the programs that seem to me to
be so advantageous to particularly the urban areas and just
slash and not look at the whole host of areas throughout the
Federal budget, including our health care plans and so on that
we are--discussed earlier.
We are going to see growth in Medicare and Medicaid. The
question is should they be growing at the rate they are
growing. I will tell you when we were on the Budget Committee
in the late 1990s, we balanced the budget even sooner than the
President thought, but we balanced it by allowing for a 1
percent growth in entitlements. Then every year after that, our
budgets were growing off of a lower base, and we balanced the
budget doing that. It would be an amazing advantage if we
returned to that concept.
I also want to say this evening that whatever you do as a
Budget Committee, if you don't have budget enforcement as a
part of it, you simply aren't going to achieve what you need
to. Whatever you decide to have as your budget, you have got to
ultimately agree that it is going to be enforced. Without the
enforcement capability, we never would have balanced the budget
in the 1990s.
So I want you to look at the entire budget, mandatory as
well as discretionary spending; argue that you should look at
the mandatory and say to all recipients, you know, we are going
to have 1 year where we are not going to have growth, and then
say to them from then on, let it grow at the natural rate
again. But particularly of all the things to cut, I am
surprised that we would look at Community Development Block
Grants as one of the things to cut.
So I thank you for that opportunity to address you, and I
notice the full Ranking Member here, and I don't know why he is
such a glutton for punishment that he would come back at 6.
Thank you, Mr. Chairman.
[The prepared statement of Christopher Shays follows:]
Prepared Statement of Hon. Christopher Shays, a Representative in
Congress From the State of Connecticut
I appreciate the opportunity to testify before you today. As a
member of the Budget Committee for 12 years, I have deep respect for
the difficult work the Committee does.
The need for affordable and quality housing in Connecticut's Fourth
Congressional district cannot be overstated, and I am here to speak
with you about proposed cuts to some of our most effective block grant
programs. Specifically, Mr. Chairman, I request the Committee not
include in the Budget Resolution the proposal to cut funding for the
Community Development Block Grant (CDBG) and Community Services Block
Grant (CSBG) programs and to transfer them to the Department of
Commerce.
I fully support the Administration's goal of halving the deficit by
2009, but am deeply concerned some cuts to domestic spending will be to
the detriment of our urban areas. It is critical we not give our cities
the short end of the stick.
The President's Budget includes a proposal to consolidate 18
programs, including CDBG and CSBG, into a new program to be operated by
the Department of Commerce. Proposed funding for this consolidated
program would be 35 percent lower than the combined FY 2005
appropriated level for these 18 programs. The pro rata reduction for
CDBG alone would be $1.42 billion.
This funding reduction would have a significant negative impact on
the ability of states and localities to address local housing and
community development needs. Housing would be particularly hard hit.
Last year, $1.16 billion of CDBG funds were used for housing, resulting
in 112,000 homeowners receiving assistance to rehabilitate their homes,
11,000 families becoming first-time homebuyers, and 19,000 rental
housing units being rehabilitated.
I am also concerned that adoption of this proposal could eliminate
funding for communities in Connecticut's Fourth Congressional district
and around the state. Although the proposal does not include a detailed
funding formula for the new program, it states that it ``targets
resources only to communities that need assistance, based on poverty
and job loss,'' further noting that only ``38 percent of CDBG funds
currently go to States and communities with poverty rates that are
lower than the national average.'' A dramatic narrowing of funding
eligibility would jeopardize the ability of countless moderate and
higher-income communities, like those I represent, to create jobs and
affordable housing opportunities for lower income working families. The
jobs are an important part of the region's economic engine.
The CDBG program is based on the concept that local communities and
states can best determine priority community development needs and then
develop strategies and programs to address those needs. I couldn't
agree more. The proposed changes to CDBG would jeopardize the
flexibility and local control that are the hallmark of the program.
CDBG is a program that works, and I support fully funding it. I am
a member of the Financial Services Committee, which I expect will hold
hearings on the Administration's proposal as committee of jurisdiction.
I hope the budget resolution will not tie the hands of Financial
Services and other authorizing committees in considering the future of
this critical program.
Mr. Lungren. Thank you, Mr. Shays.
I think he came back because you and Congresswoman Watson
were here, and he was looking for the magic pills that we could
swallow so that we can get this deficit down.
I don't want to keep you too long, but just one quick
question. You said that we need to enforce the budget, whatever
we decide, specifically----
Mr. Shays. I believe in pay-go, and I believe that,
candidly, that pay-go should apply to the spending side and the
revenue side, the entitlement side, mandatory, and the
discretionary side. If our argument is that tax cuts are a good
thing, then let us pay for it with spending cuts somewhere
else. I think that is what we need to do.
Mr. Lungren. Mr. Spratt.
Mr. Spratt. Mr. Shays, I will state so I can tell you what
I told Representative LoBiondo earlier after I listened to his
testimony.
Mr. Shays. What is that?
Mr. Spratt. Asking for CDBG, Corps of Engineers, a number
of different things, I told him, take a good look at the
Democratic resolution when it comes forward because I think it
will cover a lot of the bases that are of concern to you.
Give us a chance, and we will do a double-edged pay-go. I
absolutely agree with you. It is effective. And no less a
person than Alan Greenspan sat that three times and said I was
a cynic, I was a skeptic to start with, but the budget process
rules made a difference in the 1990s, and this one in
particular should be extended.
Mr. Shays. Now that I am no longer vice chairman of the
Budget Committee, I have a little more flexibility, Mr. Spratt.
I intend to vote for pay-go that looks at both sides of the
equation.
Now, if you combine it with a lot of other things that I
don't like, you make it difficult, but if you provide us some
opportunities to isolate some of these votes, not only would it
be very hard to vote against, I would be frankly eager to
support them.
Thank you. Thank you very much.
Mr. Lungren. Thank you, Mr. Shays.
Congresswoman Watson, You have 10 minutes.
STATEMENT OF THE HON. DIANE E. WATSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Watson. Yes, and thank you very much. I, too, thank
you, appreciate that allotment of time, and I want to thank you
and the Members for permitting the testimony here today about
the same issue, Community Development Block Grant programs,
because I am deeply concerned about the cuts that the
President's budget imposes on a community--on community
development programs, particularly the Community Block Grant
Program, or CDBG, which I will refer to as that. I am further
troubled by the proposal to move a number of HUD programs,
including CDBG, to the Department of Commerce.
The Community Development Block Grant program is our
Nation's source of Federal funds for local community and
economic development. Unlike most of what comes out of
Washington, Community Development Block Grants permit local
community groups, as was said before, to design and carry out
programs tailored to the specific local needs of our
neighborhoods. For 30 years, the CDBG program has empowered
local groups to revitalize their communities and create
economic opportunities.
CDBG funds are at work in neighborhoods all across my
hometown of Los Angeles. For instance, in Hollywood, the Public
Health Foundation Enterprise's ``Aztecs Fire Fuels Crew''
trains ex-gang members how to become firefighters. In south Los
Angeles, the Unity Collaborative, an alliance of community-
based organizations, has worked to mediate peace agreements
between violent gangs in south Los Angeles, on the west side in
Watts and in Baldwin Village. Along the Crenshaw Corridor, the
Marlton Square Project is seeking to reinvigorate a decades-old
shopping center with new housing and retail development, and
the project will create jobs and offer more housing
opportunities.
The Los Angeles County Community Development Commission
uses CDBG funds to operate its business technology center,
California's largest business high-tech incubator, creating
high-tech jobs for an impoverished neighborhood. The BTC
currently serves 39 tenant and affiliate firms with high-tech
specialties.
CDBG is not a government hand-out; rather, it is one of the
most effective tools cities and neighborhoods have to fight
economic distress and to create jobs and to lead to creating
wealth. Part of what makes CDBG such a powerful tool is that
local governments have used CDBG funds effectively to leverage
private sector dollars.
Unfortunately, the President's budget for HUD effectively
eliminates the Community Development Block Grant Program. The
President's budget includes a proposal to consolidate 18
programs, including CDBG, into a new program to be administered
by the Department of Commerce. Proposed funding for this
consolidated program would be 35 percent lower than the
combined fiscal year 2005 appropriated level for these 18
programs. The pro rata reduction for CDBG alone would be $1.42
billion. But what is even more troubling is that this change is
being put forward before the relevant committees here in
Congress have a chance to hold hearings to judge the impact or
the efficacy of these changes.
For example, last year, $1.16 billion of CDBG funds were
used for housing, resulting in 112,000 homeowners receiving
assistance to rehabilitate their homes, 11,000 families
becoming first-time homebuyers and 19,000 rental housing units
being rehabilitated. But one might assume that after moving to
the Commerce Department, these funds would not be eligible for
use on housing. This would cripple local affordability housing
efforts at a time when housing prices are skyrocketing. In Los
Angeles, half of all families rent, and local fair market rents
already are out of reach for more than half of these renting
families.
Another cause for concern is the President's replacement of
CDBG's existing funding formula. The President's proposal notes
that CDBG funds currently go to many communities with lower
poverty rates, but simply because the community is not
overwhelmingly poor does not mean it is not home to poor
people. Changing the funding formula in the way suggested by
the proposal could kneecap the effort of moderate-income
communities to bring their poorer and excluded residents into
the economic mainstream.
While the President's goal of balancing the budget is
laudable, it is shortsighted to do it by cutting a program that
has been as successful as CDBG. As you draft the budget for
fiscal year 2006, I urge you to restore full funding for the
Community Development Block Grant programs and keep it at HUD.
So, again, Mr. Chairman and Members, I would like to thank
you so much for giving me this time, and I would like at this
particular point to yield to Ms. Sanchez.
I do have, Mr. Chairman, some supporting documents to be
included in the record, and I have a list of those, and I will
present it to staff.
Mr. Lungren. They will be included in the record.
[The prepared statement of Diane E. Watson follows:]
Prepared Statement of Hon. Diane E. Watson, a Representative in
Congress From the State of California
Thank you, Mr. Chairman, and members of the committee, for
permitting us to testify here today about the Community Development
Block Grant program. I am deeply concerned about the cuts the
President's budget imposes on community development programs,
particularly the Community Development Block Grant program, or CDBG. I
am further troubled by the President's proposal to move a number of HUD
programs, including CDBG, to the Department of Commerce.
The Community Development Block Grant program is our nation's
largest source of Federal funds for local community and economic
development. Unlike most of what comes out of Washington, Community
Development Block Grants, or ``CDBGs,'' permit local community groups
to design and carry out programs tailored to the specific local need of
our neighborhoods.
For thirty years, the CDBG program has empowered local groups to
revitalize their communities and create economic opportunity. CDBG
funds are at work in neighborhoods all across my hometown of Los
Angeles:
In Hollywood, the Public Health Foundation Enterprise's ``Aztecs
Fire Fuels Crew'' trains ex-gang members how to become firefighters.
In South Los Angeles, the Unity Collaborative, an alliance of
community-based organizations, has worked to mediate peace agreements
between violent gangs in South Los Angeles, on the Westside, in Watts,
and in Baldwin Village.
Along the Crenshaw Corridor, the Marlton Square project is seeking
to reinvigorate a decades-old shopping center with new housing and
retail development. The project will create jobs and improve local
housing opportunities.
The LA County Community Development Commission uses CDBG funds to
operate its Business Technology Center, California's largest high-tech
business incubator, creating high tech jobs for an impoverished
neighborhood. The BTC currently serves 39 tenant and affiliate firms
with high-tech specialties.
CDBG is not a government handout rather, it is one of the most
effective tools cities and neighborhoods have to fight economic
distress and create jobs and wealth. Part of what makes CDBG such a
powerful tool is that local governments have it used CDBG funds so
effectively to leverage private sector dollars.
Unfortunately, the President's budget for HUD effectively
eliminates the Community Development Block Grant program. The
President's budget includes a proposal to consolidate 18 programs,
including CDBG, into a new program to be administered by the Department
of Commerce. Proposed funding for this consolidated program would be 35
percent lower than the combined FY 2005 appropriated level for these 18
programs. The pro rata reduction for CDBG alone would be $1.42 billion.
But what is even more troubling is that this change is being put
forward before the relevant committees here in Congress have had a
chance to hold hearings to judge the impact or efficacy of these
changes. For example, last year, $1.16 billion of CDBG funds were used
for housing, resulting in 112,000 homeowners receiving assistance to
rehabilitate their homes, 11,000 families becoming first-time
homebuyers, and 19,000 rental housing units being rehabilitated. But
one might assume that, after moving to the Commerce Department, these
funds would not be eligible for use on housing. This would cripple
local affordable housing efforts at a time when housing prices are
skyrocketing. In Los Angeles, half of all families rent, and local fair
market rents already are out of reach for more than half of these
renting families.
Another cause for concern is the President's replacement of CDBG's
existing funding formula. The President's proposal notes that CDBG
funds currently go to many communities with lower poverty rates. But
simply because a community is not overwhelmingly poor does not mean it
is not home to poor people. Changing the funding formula in the ways
suggested by the President's proposal could kneecap the effort of
moderate income communities to bring their poorer and excluded
residents into the economic mainstream.
While the President's goal of balancing the budget is laudable, it
is short-sighted to do it by cutting a program as successful as CDBG.
As you draft the budget for FY2006, I urge you to restore full funding
for Community Development Block Grant program and keep it at HUD.
Thank you again, Mr. Chairman and members, and before I yield to
Ms. S nchez, I'd just like to ask that some supporting documents be
included in the record. I have here:
a letter from the Mayor of Los Angeles, Jim Hahn;
a one-pager from Los Angeles County on how these cuts will
impact them;
a resolution passed by the National League of Cities,
which represents 478 cities in California alone, opposing the community
development cuts;
testimony from Jim Hunt, a councilman and former mayor of
Clarksburg, West Virginia, who is currently in the leadership of the
League of Cities;
and testimony from Donald Plusquellic, the Mayor of Akron,
Ohio, and President of the United States Conference of Mayors, as well
as an additional statement from the Conference.
Thank you, and I yield to Ms. Sanchez.
ELIMINATION OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: IMPACT ON
33RD DISTRICT
The following are sample projects funded in the unincorporated
areas of the First, Second and Third Supervisorial Districts which
provide services to residents in the 33rd Congressional District:
Big Brothers Big Sisters of Greater Los Angeles--Mentor Outreach
Project: Provides funding for big and little sister matches and case
management services through an intensive outreach campaign to recruit
mentors; girls to be matched are at-risk for teenage pregnancy, gang
membership and drug/alcohol abuse.
Community Development Commission--Single Family Grant Program:
Provides funds for safety repairs to families, seniors and the disabled
for single-family residential units.
Foundation for the Junior Blind--Infant Family Project: Provides
home-based early intervention services for infants and toddlers from
birth to 3 years of age who are visually impaired and have multiple
disabilities.
Los Angeles County Department of Consumer Affairs--Homeowners Fraud
Prevention Project: Provides assistance to low- to moderate- income
homeowners from being victims of fraud in the purchase of a home, home
equity transactions including identity theft, and the purchase of
household goods and services.
Additionally, the participating city of Culver City received a FFY
2004 CDBG allocation to provide services to benefit the residents of
its city. Below are a sample of some of those projects:
City of Culver City
Citywide Curb Cut Project Phase III--Provides for the construction
of 40 curb cuts for disabled access, citywide.
Coordinator of Services to the Disabled--Provides funding for staff
support for programs, assistance and referral services to low- and
moderate-income, severely disabled residents.
Washington Boulevard Streetlight Replacement Project-- Provides for
the upgrade and installation of eight streetlights and the lighting
conduit systems in the city's Redevelopment Project Area.
Los Angeles Urban County Community Development Block Grant Program.
ELIMINATION OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: IMPACT ON
LOS ANGELES COUNTY
Background
The Community Development Block Grant (CDBG) program funds a broad
range of housing revitalization, community and economic development
activities, job creation, and public services, primarily for the
benefit of low- and moderate-income persons. Except for set-asides,
CDBG funds are allocated by formula to state and local governments.
Total CDBG funding was cut from $4.93 billion in FY 2004 to $4.85
billion in FY 2005 with formula grant funding decreasing from $4.33
billion to $4.11 billion. Total CDBG formula grant funding for state
and local governments in California fell from $555 million in FY 2004
to $526 million in FY 2005. The President's FY 2006 Budget proposes to
eliminate the CDBG program.
Impact on Los Angeles County
The President's proposal to eliminate the CDBG program would hurt
the County's economically disadvantaged residents, who are main
beneficiaries of CDBG-funded services. According to 2000 Census data,
17.9 percent of all Los Angeles County residents had incomes below the
poverty level, a far higher poverty rate than the 12.4 percent national
average. In fact, the County had more poor residents than any single
state, except for New York, Texas, and California.
In FY 2005, a combined total of $184.3 million in CDBG formula
grants have been allotted to local governments in Los Angeles County,
including $34.6 million to the County of Los Angeles, which operates
the nation's largest Urban County CDBG program. The County administers
CDBG funds for unincorporated areas and 48 of the 88 cities in Los
Angeles County.
Over the past 4 years, CDBG funds have assisted Los Angeles County
residents by:
Providing nearly 2 million units of services through
after-school and recreation programs to over 156,000 youth;
Providing over 800,000 services, including meals, case
management, and other needed services to over 67,000 seniors;
Rehabilitating close to 7,000 homes;
Developing almost 9,000 affordable housing units; and
Creating or preserving over 2,000 jobs.
Eliminating the CDBG program would result in the curtailment of
such needed services as well as the many community and economic
development projects and public infrastructure improvements that have
been funded by CDBG. In addition, its elimination could lead to
defaults on existing loans for community and economic development
projects that are being repaid using CDBG funds.
Resolution by the Board of Directors, League of California Cities
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
WHEREAS, for thirty years America's cities, including both large
and small cities in California, have used Community Development Block
Grant (CDBG) grants to create jobs, provide affordable housing,
eliminate blight and generate new economic investment; and
WHEREAS, CDBG funds have played a critical role in community and
economic development in California; and
WHEREAS, CDBG funds have been a powerful economic engine and a job
creator, allowing California cities to leverage private investment in
numerous business projects that create new employment opportunities and
attract equity investment; and
WHEREAS, CDBG funds represent a catalyst for creating more
affordable housing, helping cities to leverage the private investment
needed to build new rental housing units, revitalize single-family
homes. CDBG funds also allow additional homes to be hooked up to sewer
lines. All of these endeavors help to provide California families with
clean, decent, affordable housing; and
WHEREAS, the CDBG program offers a mechanism for building public
infrastructure, helping California cities to redesign roads, build
sewerage systems and other much-needed infrastructure improvements; and
WHEREAS, the CDBG program is helping California cities remove
blight, reduce drug trafficking and other crime, and thereby enhance
the quality of life in California; and
WHEREAS, the President has proposed a new ``Strengthening America's
Communities Initiative'' which combines 18 direct grant programs,
including CDBG, into one within the Economic Development Administration
(EDA); and
WHEREAS, at $3.71 billion, the new program (which combines 18
programs) is nearly $1 billion less the current CDBG program alone; and
WHEREAS, without proper funding for CDBG, we risk undermining the
economic well being of our communities, the future generations that
live there, and the nation as a whole.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
LEAGUE OF CALIFORNIA CITIES that we hereby request Congress to enact a
FY 2006 budget and appropriations package that funds CDBG formula
grants at no less than $4.355 billion, which is level with FY 2005
allocations; and
RESOLVED FURTHER, that Congress maintain the CDBG as a separate and
distinct program from other economic development programs that provides
a direct and flexible source of funding to local governments; and
RESOLVED FURTHER, that Congress maintain the current ``dual
formula'' system where 70 percent of CDBG funds go to entitlement
communities based on population; and
RESOLVED FURTHER, that we will send copies of this resolution to
all members of the California Congressional Delegation.
ADOPTED by the board of directors of the League of California
Cities this 28th day of February 2005.
Pat Eklund,
President and Council Member, Novato.
Chris McKenzie,
Executive Director.
Comments by Donald L. Plusquellic, Mayor of Akron, President, the U.S.
Conference of Mayors, to the House Subcommittee on Federalism, March 1,
2005
Good morning. Chairman Turner, I would like to thank you and the
members of the Subcommittee for inviting the Conference of Mayors to
share our thoughts on the Administration's proposal to eliminate the
Community Development Block Grant.
You were a strong leader within the Conference when you served as
Mayor of Dayton, and we appreciate your continued leadership now in
Congress.
I am also very pleased to be here with my local government
colleagues with whom we are united.
The Conference of Mayors is 100 percent opposed to the budget
proposal that would eliminate the CDBG program by merging it with 17
other programs, moving the function to the Commerce Department, and
cutting overall funding.
We stated this position when the proposal was first announced--an
announcement that came without prior consultation with us--and
unanimously reaffirmed this position during our Winter Leadership
Meeting this past weekend when we met with Dr. Sampson and told him
directly of our opposition.
CDBG has been successful for 30 years, and based on this success,
the nation's mayors urge Congress to continue the program's present
funding level of $4.7 billion and to keep it at the Department of
Housing and Urban Development.
Our written statement, submitted by both elected and appointed
officials, is replete with data which show clearly the outstanding
performance of CDBG over the past 30 years.
In 2004, using CDBG funds:
more than 78,000 jobs were created or maintained;
nearly 160,000 households received housing assistance, and
of that amount 11,000 become new homeowners;
9 million persons were served by new or reconstructed
public facilities and infrastructure;
13 million persons received assistance from CDBG-funded
public services; and
CDBG provided loans to businesses in distressed
neighborhoods, with more than a quarter of these loans made to minority
businesses.
These statistics and many more specific success stories are proudly
displayed on the HUD website I would note.
In my city * * * (if you want)
In your cities * * * (see attachment for cities)
Much has been said about OMB's rating of CDBG and the perceived
lack of performance outcome measures. Let me make two points on this
issue.
First, I know that national organizations representing appointed
officials worked for a year with OMB to develop a new performance
outcome measurement system. We are very disappointed that OMB turned
aside an agreed-upon framework of sound performance measures and
instead proposed the elimination of CDBG.
Second, I believe it is unfair to compare performance results
between programs like CDBG with much smaller programs like EDA at
Commerce. To me, this is like comparing the results of a doctor who
treats older, less healthy persons with a doctor who treats fairly
healthy young people.
Simply stated, CDBG is targeted at some of the toughest problems
our cities face, and some of the most distressed pockets of poverty and
blight.
I believe that the positive leveraging results mayors and local
leaders have demonstrated using CDBG should be credited not degraded.
OMB contends that 38 percent of the communities receiving CDBG have
less poverty than the national average, and that this statistic is
another reason for eliminating the program.
The implication from the misleading OMB statistic is that somehow
wealthy people are benefiting from CDBG. This is a gross distortion of
the truth.
The program's funds are targeted to those ``pockets of poverty'' or
places in a city or county where there is blight, housing needs, or
serious economic development needs.
In addition, positively addressing blight and distress helps
communities prevent the spread of these conditions to neighboring
areas.
Business leaders representing groups such as the Real Estate
Roundtable and International Council of Shopping Centers are standing
with us. These business leaders have said that CDBG is a cornerstone
for the type of public-private partnerships that have led to the
renaissance that has occurred in many of our cities in recent years.
As perhaps the most accountable elected officials in the nation,
mayors are always open to improving government performance and
providing better service to our constituents.
I want this subcommittee to know that once we secure a commitment
to fully fund CDBG at $4.7 billion and keep it at HUD, we would be
happy to discuss possible improvements to this highly-successful
program.
Thank you for this opportunity to testify and look forward to the
comments from my colleagues and to our discussion this morning.
Testimony of Hon. James C. Hunt, City Councilor, Clarksburg, WV, Vice
President, National League of Cities, Before House Government Reform
Committee, March 1, 2005
Chairman Turner, Ranking Member Clay and members of the
subcommittee, thank you for the opportunity to appear before you today
to discuss the Administration's proposed shift of Community Development
Block Grant (CDBG) program to the Department of Commerce. My name is
Jim Hunt. I am City Councilman and former Mayor of Clarksburg, West
Virginia and am appearing before you today as First Vice President of
the National League of Cities.
The National League of Cities, the nation's oldest and largest
organization for municipalities, represents 18,000 cities and towns and
over 140,000 local elected officials. Its mission is to strengthen and
promote cities as centers of opportunity, leadership, and governance,
and to serve as a national resource and advocate for the
municipal governments it represents. No matter the size of city,
programs like the Community Development Block Grant (CDBG) program have
played a critical role in rejuvenating distressed communities and
alleviating economic decline throughout our nation's cities.
CDBG has played a critical role in rejuvenating distressed
neighborhoods and alleviating economic decline in all types of
communities. It is one of the best and only tools currently available
to spur economic growth. However, CDBG is not just a jobs creator or
economic development incubator, it is also a catalyst for affordable
housing and new public infrastructure.
Take my city of Clarksburg, West Virginia, as an example. Using
CDBG grant funds, Clarksburg recently constructed a new water line that
serves the FBI's new Criminal Justice Information Services Division
building. The facility employs over 2,700 people in and around my
community.
This project also opened up hundreds of acres of land that are now
a hotbed of economic development activity. Before the project, these
properties were either blighted or idle because they had no reliable
access to water. Today, these lands generate jobs, spur economic
activity, and provide housing and green space. They also generate new
revenue for the city, the state, and ultimately, the Federal
Government.
This story is echoed in cities across America:
Tuscaloosa, Alabama used $2 million in CDBG funds to
renovate an area near the University of Alabama. The project helped
create more than 100 new jobs and retained many more.
Milwaukee, Wisconsin used the program to rehabilitate or
construct more than 700 affordable housing units--and help more than
250 low income, first-time home buyers live out the American dream.
Unfortunately, the Administration is proposing to eviscerate the
CDBG program by shifting its funding to a new and significantly smaller
program within the Department of Commerce. For reasons to be outlined
shortly, NLC urges you to reject the Administration's proposal and to
maintain CDBG as a distinct and separate program within the Department
of Housing and Urban Development (HUD).
A. The Administration's Strengthening America's Communities
Initiative (SAC) Would Not Serve the President's Goal of Supporting
Economic Development.
The Administration's Strengthening America's Communities Initiative
(SAC) will have a tremendous impact on the way the Federal Government
allocates community development funds. Unfortunately, it has offered
little in the way of details to the various stakeholders. Therefore, it
is difficult to quantify one's concerns without knowing the specifics.
However, based on the documents released by the Administration in
support of the proposal, local governments have these initial concerns
Specifically:
1. The proposal would drastically reduce community development
funding by roughly $2 billion--funding local governments will not be
able replace.
2. The proposal would significantly alter eligibility requirements
to the disadvantage of some low- and moderate- income communities.
3. The proposal would narrow the performance standards from that of
the current CDBG program to only economic criteria, a step that would
drastically reduce the flexibility and effectiveness of community
development moneys.
1. The Administration's SAC Program Would Drastically Reduce
Funding for Community Development Programs That Cannot Be Recovered.
The Administration's SAC proposal collapses 18 current programs,
whose combined fiscal year 2005 budgets total approximately $5.5
billion, into a single grant program funded at $3.7 billion. The
Administration's proposed budget for SAC grants represents a funding
cut of nearly 35 percent from what Congress allocated in fiscal year
2005 for all 18 programs. This cut disproportionately harms CDBG
funding because CDBG's fiscal year 2005 funding level of $4.7 billion
represents nearly 80 percent of the $5.5 billion of combined funding.
Moreover, the proposed $3.7 billion for SAC grants is $1 billion short
of CDBG's current funding level.
The Administration claims that it is seeking to ``retarget and
refocus'' these funds to create new program efficiencies. However, from
a practical standpoint, NLC questions whether moving the programs from
HUD, where administrative and professional infrastructures already
exist and function well, to the Department of Commerce will generate
any real savings because building the agency's capacity to administer
the programs alone would likely consume any cost savings derived from
consolidating these programs.
2. The Administration's New Eligibility Criteria Would Ignore the
Needs of Many Low- and Moderate--Income Communities.
The Office of Management and Budget claims that SAC will better
fund communities most in ``need of assistance'' by creating new
eligibility criteria around national job loss, unemployment, and
poverty rates. Too many communities, it says, receive funding that they
no longer need, even though many of these communities have poverty
rates below the national average.
The details are still unclear as to which communities will be
eligible for SAC grants, but it seems clear that they must, at the very
least, have poverty and job loss rates above the national average. If
this is so, then Administration has made the mistaken assumption that
impoverished neighborhoods no longer exist in communities ranking above
the national average on the poverty and job loss index. We at the local
level know however, that this is far from reality.
Using national averages to measure assistance needs ignores the
reality that our nation is comprised of local economic regions that are
unique. For example, the majority of families who earn below the
regional median household income in the greater Washington, D.C.--
Baltimore metropolitan area may earn more than the national poverty
rate, but they are just as much in need of assistance because the cost-
of-living in this region is significantly higher than the national
average.
Throughout West Virginia, when you travel to virtually every city,
from large to small, you don't have to drive very far to find the areas
of our cities and towns that have been forgotten; where poverty and
despair reign. This one-size-fits-all approach proposed by the
Administration will likely stifle the flexibility and effectiveness
currently found in CDBG. The result will be that many cities and towns
will still be forgotten and poverty and despair will continue to reign.
3. The Administration's Proposal Would Narrow Performance
Standards, Drastically Reducing the Flexibility and Effectiveness of
Community Development Moneys.
The Office of Management and Budget claims that programs like CDBG
have no measurable results. The Administration's proposal suggests new
performance standards like job creation, new business formation rates,
commercial development and private sector investment as tools to
determine whether communities receiving SAC funds are achieving results
and thus, their eligibility to retain funds or to earn bonus grants.
Unfortunately, measuring results by these criteria makes little
sense for communities that are chronically impoverished, have little to
offer in the way of resources, and are unlikely to show significant
progress over relatively short periods. In short, these communities are
being set up to fail.
For example, Clarksburg recently used a $250,000 CDBG grant to
demolish vacant and dilapidated buildings in certain neighborhoods
throughout our city. These structures were havens for crime, targets
for vandalism and fires, and an attractive nuisance for our children.
The city used the vacant lots created by the project to expand
businesses as well as create space for larger yards and garages for our
residents.
Unfortunately, it is very difficult to assess the impact of
removing a drug den from a neighborhood using economic criteria alone.
Moreover, it is difficult to assess economic impact in relation to this
type of project over a short period. Yet, the Administration's proposed
criteria would try to do just that. Closing down a drug den may not
immediately create job growth, spur new business formation, or
encourage new commercial and residential development. However, it will
immediately increase the quality-of-life of its neighbors. That is
measurable and is the foundational beginning for any plan to attract
new commercial and residential development in the future.
Since its creation in 1974, CDBG has had a three-pronged mission
to: (1) benefit low- and moderate-income individuals and households;
(2) eliminate slums and blight; and (3) address the urgent needs of
communities faced with a serious and immediate economic or health
threat. These goals have allowed local government broad latitude in how
it uses grant funds, and whether that use is for the creation of new
economic development opportunities, affordable housing, public
facilities, or services. Ultimately, these goals have given cities the
latitude to address ``urgent needs'' like eliminating drug dens and
other cancers on our communities--latitude not found with other
programs. It is because of CDBG's flexibility and autonomy of local
control that the CDBG program has become, from the local government
perspective, the most effective form of Federal assistance currently
available.
If the Congress alters the CDBG program as proposed, however, we in
West Virginia fear that the state's entitlement cities will be placed
in direct competition with non-entitlement cities as well as with
larger municipalities located across the nation. CDBG communities have
already faced reduced funds from the program. This problem does not
necessarily stem from huge cuts in CDBG funding. Instead, it is the
result of a continued and growing need. More simply put, more
communities have been competing for a static or slightly decreasing pot
of money. Now the Administration proposes to cut that scarce funding by
a total of nearly $1 billion ($2 billion if one includes the other 17
community development programs). This cut can only exacerbate the
problem and increase competition among localities. To say that the SAC
proposal is a compassionate attempt to bring more money to distressed
areas like those in West Virginia is to deny the reality that there
will be less funding for an ever-larger universe of need.
B. The CDBG Program Should Remain Flexible and Distinct from Other
Community Development and Economic Development Programs and Should Be
Level Funded for FY 2005.
The long-standing goal of community development has been to improve
the physical, economic, cultural and social conditions and
opportunities a community offers its residents. For this reason, NLC
urges the Congress to work with state and local governments as a full
partners in achieving this goal. Over the last 30 years, the CDBG
program has served as an excellent example of a successful Federal and
local community development partnership. For this reason, NLC will
continue to advocate in Congress for a fully-funded CDBG program at the
Department of Housing and Urban Development that is distinct and
separate from other economic and community development programs.
NLC will strongly support legislation that funds CDBG formula
grants at no less than $4.35 billion and the overall program at $4.7
billion. Moreover, NLC will support legislation that keeps the CDBG
program within the HUD account and provides a direct, flexible and
reliable source of funding to local government. Lastly, NLC will seek
to maintain the current ``dual formula'' system where at least 70
percent of CDBG formula funds go directly to cities.
Statement by U.S. Conference of Mayors; National Association of
Counties; National League of Cities; National Association of Local
Housing Finance Agencies; National Association for County Community and
Economic Development; National Community Development Association;
National Association of Housing and Redevelopment Officials; Council of
State Community Development Agencies to the House Subcommittee on
Federalism, March 1, 2005
The U.S. Conference of Mayors (USCM), National Association of
Counties (NACo), National League of Cities (NLC), National Association
of Local Housing Finance Agencies (NALHFA), National Association for
County Community and Economic Development (NACCED), National Community
Development Association (NCDA), National Association of Housing and
Redevelopment Officials (NAHRO), and the Council of State Community
Development Agencies (COSCDA) appreciate the opportunity to present
this statement to the House Subcommittee on Federalism and the Census.
We offer this testimony in strong support of the Community Development
Block Grant Program (CDBG) and in equally strong opposition to the
Administration's ``Strengthening America's Communities Initiative.''
The Administration's FY 2006 budget proposes the total elimination
of CDBG. In CDBG's place, the Administration is proposing the creation
of a smaller program within the Department of Commerce that will focus
solely on economic development. We strongly oppose this substantive
policy change for several reasons. First, CDBG is the nation's premier
community development program with a long record of success. Second,
the Department of Housing and Urban Development (HUD) and the
Department of Commerce each play an important role in an
intergovernmental partnership with respect to community and economic
development. These roles must be preserved. Overall there is no reason
to eliminate CDBG or create a new program within the Department of
Commerce to administer Federal community development funds.
CDBG was signed into law by President Gerald Ford in 1974. Now in
its 30th year, CDBG is arguably the Federal Government's most
successful domestic program. The CDBG program's success stems from its
utility i.e., providing cities, counties and states with flexibility to
address their unique affordable housing and neighborhood revitalization
needs. Based on HUD's most recent data, in FY 2004 alone the CDBG
program assisted over 23 million persons and households.
CDBG HAS POSITIVE IMPACT
HUD, OMB and grantees celebrated CDBG's anniversary last September
under the theme ``Performance Counts.'' This was entirely appropriate
because CDBG has been performing at a high level for 30 years, and it
continues to produce results. In fact, according to HUD, more than
78,000 jobs were created or retained by CDBG in FY 2004. In addition,
in FY 2004, 159,703 households received housing assistance from CDBG.
Of this amount 11,000 became new homeowners, 19,000 rental housing
units were rehabilitated and 112,000 owner occupied homes were
rehabilitated. In FY 2004, over 9 million persons were served by new or
reconstructed public facilities and infrastructure, including new or
improved roads, fire stations, libraries, water and sewer systems, and
centers for youth, seniors and persons with disabilities from CDBG
funds. In addition, more than 13 million persons received assistance
from CDBG-funded public services in FY 2004, including employment
training, child care, assistance to battered and abused spouses,
transportation services, crime awareness, and services for seniors, the
disabled, and youth. In addition, over time grantees provide CDBG-
funded loans to businesses located in distressed neighborhoods, with
minority businesses receiving approximately 25 percent of the loans.
CDBG has been achieving results like this throughout it history. An
analysis performed by Professor Stephen Fuller of George Mason
University in 2001 shows that over the first 25 years of the CDBG
program CDBG-funded projects created 2 million jobs and contributed
over $129 billion to the Gross Domestic Product (GDP).
EXAMPLES OF CDBG AT WORK
Consider the following examples of CDBG at work in the community.
These projects were all award winners at last September's 30th
Anniversary Celebration of the CDBG program.
The City of Jacksonville-Duval County, FL has invested more than
$20 million to revitalize the Royal Terrance neighborhood, one of its
oldest and poorest. The improvements included extensive drainage,
sewer, paving and curbs and gutter improvements. Since 1998, CDBG,
together with HOME funds, has been expended to rehabilitate the homes
of 72 low- and moderate-income residents. In addition, CDBG funded-
rehabilitation has resulted in 75 homes of low- and moderate-income
persons being hooked up to sewer lines. A $700,000 Section 108 loan
guarantee assisted with the rehabilitation of a 200-unit apartment
complex where all of the residents receive
Section-8 rent subsidies. A private investor contributed $4.5
million to the rehabilitation. CDBG funds also addressed part of the
rehabilitation of vacant buildings in the Royal Terrance neighborhood
that have now been converted into commercial facilities that house
businesses.
Los Angeles County used CDBG funds to develop its Business
Technology Center, the largest high-tech business incubator in
California. Opened in 1998, the BTC is a 40,000 square-foot facility in
a minority community that was developed with CDBG funds ($3.5 million)
and Economic Development Administration funds ($2 million). This is a
good example of the programs of the two agencies complementing each
other. Development of the facility removed a blighted structure,
provided an anchor to revitalize a commercial corridor, and used
technology to jump-start a disadvantaged community. Today, the BTC
serves 39 tenant and affiliate firms with specialties ranging from fuel
cells to biometric software to make DNA micro arrays more effective.
Over 45 percent of the BTC firms have received more than $65 million in
equity investment and created more than 475 jobs.
The City of Portland, Oregon's Rosemont project involved the
redevelopment of an eight-acre site to preserve the historic Villa St.
Rose School and Convent while creating a range of affordable
homeownership and rental housing opportunities. Completed in 2002,
Rosemont integrates several different housing types, provides a
spectrum of affordability, and includes much-needed community services.
There are 100 units of senior rental housing in the preserved and
expanded Villa St. Rose Convent building. There are 18 new family
rental units, 17 affordable homes for first-time homebuyers, 30 town
homes, several single-family homes for sale at market rate, and a Head
Start facility that will have five classrooms and administrative
offices. The City provided $3.9 million in permanent CDBG financing to
develop the senior housing, helped with the site planning, made street
and other public improvements, and provided homebuyer assistance.
Yuma, Arizona's historic Carver Park Neighborhood is a 22-block
area that is 73 percent Hispanic and has a high rate of unemployment
with nearly half of its residents living in poverty. The City
designated it a Neighborhood Revitalization Strategy Area under the
CDBG program in 2000. As a result, significant improvements and
additions have been made to the neighborhood's housing stock. Thirty-
six town homes and 89 units of new rental housing (constructed with
Low-Income Housing Tax Credits) have been built. An additional 40 units
of private single-family units have been added to the housing stock,
53-units have been rehabilitated, and two homes were reconstructed. HUD
also approved a Section 108 loan guaranteed for homeownership
activities. The neighborhood just celebrated the opening of the Dr.
Martin Luther King Neighborhood Community Center, a safe place for
youth to gather. The improvements made in this neighborhood demonstrate
the impressive leveraging of public and private funds and programs to
maximize CDBG funding. To date a total of $27.5 million in additional
investment has been leveraged for neighborhood revitalization from a
total CDBG investment of $4.1 million.
The City of Dayton, Ohio has focused its community development
efforts on eradicating blight from its neighborhoods and making large
abandoned commercial sites available for re-use and redevelopment in
order to create jobs. From 2000 to 2003, the city spent $3.8 million to
clear 61 acres of blighted commercial properties in order to make these
brownfields sites available for business re-use. Of the 61 acres, 10
have been developed for a new business incubator and the expansion of
Select Tool, a Dayton manufacturing firm that retained 55 jobs and will
create 100 new jobs. In addition to brownfields redevelopment, the City
spent over $600,000 for business loans and grants to 29 businesses,
resulting in the creation of over 56 jobs for low- and moderate-income
residents. In addition, from 2000 to 2003, the City spent over $350,000
in workforce development programs and partnered with such local
agencies as the home builder's association to equip under- and
unemployed residents in accessing living wage jobs. Over 800 low-
income residents were served through the City's workforce development
partners and 172 were placed in full-time, living wage jobs. Overall,
from 2000 to 2003, the City leveraged $61 million in additional private
and public funds for every CDBG dollar it allocated.
When disaster strikes, Congress usually turns to the CDBG program
to help provide relief as it did for Florida in the wake of last year's
devastating hurricane season. CDBG has also been an effective resource
in helping New York City rebuild after the September 11th tragedy. HUD
has provided New York with $3.483 billion in CDBG funds to be
administered by the Empire State Development Corporation (ESDC) and its
subsidiary the Lower Manhattan Development Corporation (LMDC). Of that
amount, $700 million has been committed to ESDC and $350 million to
LMDC for business retention/attraction and economic loss compensation.
An additional $305 million is being used by LMDC for a residential
incentive program, training assistance and administrative costs. The
process of designating the balance of the funds continues, and CDBG
will continue to play a critical role in the City's recovery.
The Self Help Virginia water and sewer program is able to bring
centralized water or sewer service (and often both) to remote,
undeserved, low-income rural communities where conventional
infrastructure financing (loans or grants) would not be economically
feasible. The program takes advantage of local volunteer labor to
provide water and sewer services where those services would be
difficult or unaffordable to provide through conventional needs,
particularly in the state's Appalachian counties. In the past 6 year's
the state has provided over $6.1 million in CDBG funds to assist 30
projects. Over 100 miles of pipe have been laid. Over 2,800 people now
have (or will soon have) reliable water and sewer service. The state
has further supported revitalization in these areas with housing
rehabilitation grants and other community development investments. The
state has stretched its dollars by combining CDBG funds with
Appalachian Regional Commission funds and local dollars. The state
estimates the cost savings from this program to be $10 million (a 62
percent reduction from the estimated ``retail cost'' of these projects
if they had been contracted out).
CDBG WORKS, WHY ELIMINATE IT?
CDBG is popular on both sides of the aisle, and the private sector
recognizes its value as well. Senator George Voinovich (R-OH) said
recently at the U.S. Conference of Mayors Winter Meeting that ``CDBG is
the finest Federal program ever to impact cities * * * [it] should be
increased, not decreased.'' The President of the Mortgage Bankers
Association of America, Michael Petrie, was quoted at the same meeting
as stating ``we need to work together to preserve funding for HUD
programs such as CDBG.'' Senator Christopher Bond, Chair of the Senate
HUD Appropriation's Subcommittee, and someone who has considerable
experience with CDBG as a former governor and as chair, was quoted in
the February 8th edition of the Washington Post as saying that the
proposal ``makes no sense.''
We are frankly puzzled that the Administration offered this
sweeping proposal. In late January, HUD Secretary Alfonso Jackson told
the Winter Meeting of the U.S. Conference of Mayors that the Bush
Administration is `` * * * committed to the CDBG program. He said that
CDBG `` * * *is a good program and the Administration is committed to
seeing that it meets its responsibilities.'' He said that the FY 2006
budget `` * * * would be fiscally conservative but it will allow you
[mayors] to carry out your responsibilities.'' What a remarkable turn
of events to see that the FY 2006 budget completely eliminates the CDBG
program.
The organizations represented by this testimony do not agree with
the poor rating the program received by the Office of Management and
Budget (OMB) as part of its Performance Assessment Rating Tools (PART)
process. Our analysis of the PART suggests that it is an inappropriate
measure of a block grant program's performance. Instead, it lends
itself to an assessment of categorical programs. As described above,
contrary to the results of this inappropriate rating tool, the program
does work well. Since its enactment in 1974, the program has been, and
continues to be, a critical affordable housing and neighborhood
revitalization tool for communities. While providing essential services
to citizens nationwide, CDBG also acts as an engine of economic growth.
It creates jobs and retains business, and it provides communities with
the tools to make needed infrastructure improvements, all with t a
focus on low- and moderate income persons and their neighborhoods.
The PART review of CDBG states that the program lacks performance
outcome measures. NCDA, NACCED, NAHRO, and COSCDA worked with OMB and
HUD for nearly a year on performance outcome measures for HUD's four
formula grant program: CDBG, HOME Investment Partnerships Program,
Emergency Shelter Grants (ESG) and Housing Opportunities for Persons
with AIDS (HOWPA). Through a consensus, the group has developed a
framework and specific outcome measures to evaluate the effectiveness
of these programs. OMB helped develop this and has signed off on the
framework and the outcome measures. HUD is in the process of
implementing it. We worked in good faith with OMB and HUD in developing
sound performance measures for CDBG; all parties supported the existing
program. Why suddenly has OMB shifted its support of the program? Why
did it develop a whole new ``Strengthening America's Communities''
(SAC) Initiative to replace CDBG when all parties agreed that CDBG had
great accomplishments that could now be reported through our newly
created Performance Measures system?
ADMINISTRATION'S ``STRENGTHENING AMERICA'S COMMUNITIES'' PROPOSAL
It has been reported that a ``Cross Cutting Working Group'' of
senior staff from Federal agencies recommended these changes and that
is the genesis of the Strengthening America's Communities Proposal.
This is patently untrue. That group met last year to develop common
outcome measures for certain Federal programs. The work of that group
was to collect information in a common way about programs that helped
communities. However, each of the Federal programs proposed to be
eliminated plays a different role, and each is still very much needed.
It is difficult for us to comment on the Administration's proposal
without knowing the full details. The Initiative is undefined and
unknown at this point. What is clear is that 18 programs that touch on
urban and rural economic development, at an FY 2005 funding level of
$5.5 billion, are proposed to be turned over to the Department of
Commerce and reemerge as a new program whose funding level is proposed
at $3.71 billion, a reduction of nearly $2 billion. We do not support
such an initiative. We do not support the elimination of the CDBG
program in any form nor do we support the transfer of its funding or
the funding of any other HUD program to the Department of Commerce.
With the creation of this Initiative, the Administration seems to
be suggesting that CDBG is only an economic development program. In FY
2004, 25 percent or $1+ billion in CDBG funds went to housing
activities--assistance to first-time homebuyers, and single- and multi-
family housing rehabilitation. Another 40 percent of the funds went to
support public infrastructure--water and sewer facilities, streets and
sidewalks, fire stations, and community centers, all in low- and
moderate-income neighborhoods.
It is also reasonable to question whether the Commerce Department
has the capacity to administer a multi-billion dollar program. Its
$257.4 million economic development grant and loan programs are dwarfed
by HUD's $4.7 billion CDBG program. HUD, together with its more than
1100 urban, suburban and rural CDBG grantees, constitutes an effective
infrastructure for program administration. State and local grantees are
intimately familiar with the CDBG statute and implementing regulations.
It begs the question, why not move Commerce's economic development
programs to HUD for it to administer?
Moreover, programs currently located within the Department of
Commerce's Economic Development Administration (EDA) portfolio already
address several of the issues contemplated by the new initiative. EDA's
grant and loan programs are utilized by local governments to stimulate
private sector job growth, ease sudden and severe economic distress and
promote long-term economic development planning. They are critical to
the nation's distressed areas across the country. EDA's programs were
reauthorized last year through FY 2008, a move strongly supported by
local governments. The severe impact created by the loss of these
important resources cannot be understated.
In addition, a major concern for us, and the communities we serve,
is the issue of repayment of Section 108 guaranteed loans. Section 108
is a component of CDBG and allows communities to fund large scale
projects pledging future CDBG allocations to repay these loans. Many
communities across the country have undertaken projects financed by
Section 108 guaranteed loans and depend on their CDBG allocations for
repayment. Without CDBG, these communities would be forced to repay
these loans with their own funds. This would put many communities at
risk of repayment and/or reduce already diminishing local general
revenues.
SUMMARY
In summary, we find this new proposal totally unacceptable, and we
are extremely disappointed that this tactic is being used as an excuse
to eliminate CDBG and cut much needed resources to communities. A key
priority of the Bush Administration is stimulating the domestic economy
by creating jobs and expanding homeownership, and that is exactly what
CDBG does. CDBG is good business and is the foundation of our nation's
communities.
The fact is, CDBG is working, and it will work even better once HUD
implements the new performance outcome measurement system. It needs to
remain at the Department of Housing and Urban Development and funded in
FY 2006 at a funding level of at least $4.7 billion, with no less than
$4.35 billion in formula funding. This funding level approximates the
FY 2004 funding level and the amount requested by the President in his
FY 2005 budget.
Mr. Lungren. Now, Ms. Sanchez.
STATEMENT OF THE HON. LINDA T. SANCHEZ, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Sanchez. Thank you. I would like to thank acting
Chairman Lungren and Ranking Member Spratt for allowing me to
speak today. I will talk about an issue today that transcends
community and party boundaries, and that is the possible
gutting of Community Development Block Grants in the
President's 2006 budget.
Community Development Block Grants, or CDBGs, can be used
for a seemingly endless variety of projects aimed at improving
the quality of life in needy areas around our country. Let me
share with you some stories and statistics from cities that
will be affected by CDBG cuts.
One of the cities that has expressed grave concern over the
loss of funding is the city of La Mirada in my district. The
mayor over there, Susan Tripp, took the time to explain to me
just how much her city would be injured with the potential
cuts.
The pride of the city of La Mirada is the Community Senior
Center, which was completed in 2001. More than $1.8 million of
the center's $3.2 million cost came from CDBG, or Community
Development Block Grants. That is more than half of the
funding. The Senior Center now serves as a hub where La
Mirada's large, elderly population benefits from computer
literacy classes, nutrition programs and health screenings.
Without CDBG funding, the construction could have been delayed
for years.
La Mirada also uses CDBG funning to enact a loan program
for needy families. The repayment of the principal and interest
is then put back into the loan system. There is more than $1
million circulating in the loan program, creating and
sustaining opportunity.
In the city of Whittier, which is also in my district, CDBG
moneys are used to fund the Salvation Army, the Interfaith Food
Center, the Southeast Area Social Services Funding Authority
and the Social Service Commission Scholarship Program. These
programs fund an emergency shelter, food for low-income
families, services for seniors, and recreational scholarships
for needy children. The total cost to do all of this in
Whittier with CDBG funds is less than $65,000. I honestly
cannot imagine a more efficient use of Federal money.
The final city that I would like to talk about is Long
Beach, CA. I believe the numbers speak for themselves on what
an impact CDBG has for the community. Long Beach received $10.6
million for fiscal year 2004-2005. That money was used to
remove 109,000 graffiti tags from more than 34,000 sites. It
was used to improve more than 1,200 housing units. It was used
to provide services for 23,000 homeless persons. I think most
impressively, CDBG funds were used to serve 95,031 youth with
after-school and weekend recreation activities.
I hope that these examples have helped demonstrate to the
committee here today that these funds play an enormous and
important role in the day-to-day survival and successes of our
cities.
I would like to close my testimony with a quote from a
local official: ``A key priority of this administration is
stimulating the domestic economy by creating jobs and expanding
home ownership. One of the best tools that mayors of cities
across America use to achieve these and other important goals
is the Community Development Block Grant program. At a time
when city budgets are severely challenged and have significant
community and economic development needs, this cut and
realignment will have a devastating impact on local
governments' ability to provide resources to those communities
and neighborhoods most in need.''
This quote eloquently captures the vital nature of CDBG
programs in our cities. Mr. Chairman, this quote did not come
from a Democratic colleague or anyone here in Washington. It is
from the mayor of Long Beach, CA, and vice president of the
U.S. Conference of Mayors, Beverly O'Neill, a local leader who
knows what the effect of these cuts would be.
Community Development Block Grants work, and they are
efficient. They are supported across the board by local
community leaders regardless of their party affiliation. I
strongly urge that CDBG funding be kept at the current level
and that it be kept as a separate and distinct program. I thank
you for your indulgence and yield back.
[The prepared statement of Linda T. Sanchez follows:]
Prepared Statement of Hon. Linda T. Sanchez, a Representative in
Congress From the State of California
I would like to thank Chairman Nussle and Ranking Member Spratt for
allowing us to speak today.
I'm going to talk today about an issue today that transcends
community and party boundaries--the possible gutting of Community
Development Block Grants in the President's 2006 Budget.
Community Development Block Grants can be used for a seemingly
endless variety of projects aimed at improving the quality of life in
needy areas around our country.
Let me share with you stories and statistics from cities that will
be affected by CDBG cuts.
One of the cities that has expressed great concern over the loss of
funding is the City of La Mirada. Mayor Susan Tripp took the time to
explain to me just how much her city would be injured.
The pride of La Mirada is the Community Senior Center, which was
completed in 2001. More than $1.8 million of the center's $3.2 million
cost came from Community Development Block Grants. That's more than
half.
The Senior Center now serves as a hub where La Mirada's large
elderly population benefits from computer literacy classes, nutrition
programs, and health screenings.
Without CDBG funding the construction could have been delayed for
years.
La Mirada also uses CDBG funding to enact a loan program for needy
families. The repayment of the principal and the interest is then put
back into the loan system.
There are more than 1 million dollars circulating in this loan
program--creating and sustaining opportunity.
In the City of Whittier, in my district, CDBG moneys are used to
fund the Salvation Army, the Interfaith Food Center, the Southeast Area
Social Services Funding Authority, and the Social Service Commission
Scholarship Program.
These programs fund an emergency shelter, food for low income
families, services for seniors, and recreational scholarships for needy
children.
The total cost to do all of this in Whittier with CDBG funds is
less than $65,000. I honestly can not imagine a more efficient use of
Federal money.
In the final city I would like to talk about, Long Beach,
California, I believe the numbers speak for themselves on what an
impact CDBG has for the community.
Long Beach received $10.6 million for Fiscal Year '04-05.
The money was used to remove 109,000 graffiti tags from more than
34,000 sites.
It was used to improve more than 1,200 housing units.
It was used to provide services for 23,000 homeless persons.
And, I think most impressively, CDBG funds were used to serve
95,031 youth with after school and weekend recreation activities.
I hope that I have helped demonstrate to the Committee here today
that these funds play an enormous and important role in the day to day
survival and success of our cities.
I would like to close with a quote from a local official:
``A key priority of this Administration is stimulating the domestic
economy by creating jobs and expanding home ownership. One of the best
tools that mayors of cities across America use to achieve these and
other important goals is the Community Development Block Grant
program,''
``At a time when city budgets are severely challenged and have
significant community and economic development needs, this cut and
realignment will have a devastating impact on local governments'
ability to provide resources to those communities and neighborhoods
most in need.''
This quote eloquently captures the vital nature of CDBG programs in
our cities.
Mr. Chairman, this quote did not come from a Democratic Colleague
or anyone here in Washington. It is from The Mayor of Long Beach,
California, and Vice -President of the U.S. Conference of Mayors,
Beverly O'Neill--a local leader who will feel the effects of these
cuts.
Mr. Chairman, Community Development Block Grants work and they are
efficient. They are supported across the board by local community
leaders regardless of party affiliation.
I strongly urge that CDBG funding be kept at the current level and
that it be kept as a separate and distinct program.
I thank the Committee for its time.
Mr. Lungren. Thank you for the testimony of both of you. I
don't know how timely it could have been, Congresswoman
Sanchez, but Beverly O'Neill is an old friend of the family. My
dad was a doctor of her family for years and years. I don't
know if you knew that and put that in at the very end to get
me, but you got me.
Ms. Watson. I just want you to know, Mr. Chairman, she
bears my family, my mother's maiden name, too, O'Neill, so I
feel like she is in the family as well.
Mr. Lungren. I know it is late, and I know people want to
get moving, but just let me ask the two of you one simple
question. That is we are charged with the responsibilities of
trying to bring down this deficit, trying to bring some
restraint in government, trying to give the appropriating and
authorizing committees as much flexibility as possible without
telling them exactly what to do, but without telling them what
targets to hit. If, in fact, we would not do what the President
wants to do with CDBG grants, where would you suggest we look
for that money in the area of HUD?
Ms. Watson. What I would suggest is that you don't look
here. I have participated in a press conference with my mayor,
Jimmy Hahn, I think you know Jimmy, and with agency directors
and the people who receive services from those agencies. We
have been able to improve in really a minor way the conditions
of life in our city by removing some homeless, by putting up
affordable housing.
I have been working with the city leadership on the Marlton
project for over 20 years now. I have worked with the former,
now deceased, Mayor Tom Bradley. We got our first project done.
There are two projects back to back, and this is the second
one. The proprietors of the shops in that area had been waiting
years and years and years to move out and to move on so we can
do 240 units of affordable housing and upscale and up-end shops
to be able to bring the revenues and cycle them through that
community.
So, you know, it is a matter of whose ox is being gored. I
would not want to say cut this program, but save ours, but what
I wanted to do is look at the programs that are really
effective in terms of the needs of our urban cities and then
look at other programs that are distant, removed and consider
those, because ours certainly has been effective in Los
Angeles.
Thank you, Mr. Chairman.
Ms. Sanchez. If I might respond briefly. I am mindful that
Congress has a very big task in trying to set a path of fiscal
responsibility and to try to spend moneys wisely, and I don't
pretend to be an expert. That is what this committee is charged
with doing. I do want to say that. But a huge cut, like the
cuts that are anticipated as a third of the funding of CDBG,
would be extraordinarily severe for a project that has so much
benefit to local communities and has the type of flexibility
that cities rely on to try to improve quality of life in each
of the local communities.
So although I can't say specifically where the money might
come from, I would advocate that perhaps if there are cuts that
need to be made, you look at making them in smaller increments
across the board in many different programs rather than gutting
one of, again, the most successful programs that cities have
for serving their local communities.
Mr. Lungren. I appreciate your comments. This goes back to
what Alan Greenspan said yesterday. He said he didn't want to
be in our shoes, because he knew that we had to make decisions
among values; that all of these programs are valuable. I am one
who believes that you can't get to where we want to go merely
by getting rid of waste, fraud and abuse, because, frankly, we
probably have to figure out which are more valuable given the
fact that probably all of them have value.
So I appreciate your representation of support for these
particular programs.
Mr. Spratt.
Mr. Spratt. Let me simply say that we will do everything we
possibly can to answer your concerns in the Democratic budget
resolution. I am a firm believer in the CDBG in my district,
which is mainly small towns and rural areas. This has been a
very, very, very effective Federal program. It stood the test
of time. While the other grants made were going, the CDBG has
lasted simply because people can point to demonstrable results
of the program, and I hope we can save it intact and fully
funded.
Mr. Lungren. Thank you very much, Ms. Watson and Ms.
Sanchez.
Now Congressman Bishop is recognized for 10 minutes.
STATEMENT OF THE HON. TIMOTHY H. BISHOP, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Bishop of New York. Thank you, Mr. Chairman. I want to
thank you and Ranking Member Spratt for this opportunity to
testify on the upcoming fiscal year 2006 budget. In my view,
the President's recent spending requests do not accurately
balance America's priorities, and I intend to touch on some of
the more problematic areas in the budget. I will also convey
some of the specific concerns that my constituents on Long
Island have with the proposed budget.
The administration's proposal forces working families, in
my view, to pay for short-sighted spending choices at the
Federal level in the form of a reduced return on their tax
dollars for government services, combined with higher State and
local taxes. The President's budget for fiscal year 2006
contains drastic cuts which he says are necessary to cut the
deficit in half in 5 years.
There are several things wrong with this claim, not the
least of which that it simply isn't true. The administration's
5-year budget projections omit such significant costs as the
continuing presence of our troops in Iraq and Afghanistan, the
enormous cost of privatizing Social Security as the President
proposes, and no corresponding growth in interest costs, even
though these activities would be funded entirely by additional
borrowing.
As a former college administrator, and as a member of the
House Committee on Education and the Workforce, I am keenly
sensitive to the needs of our students. The President's budget
reduces overall education funding by nearly 1 percent below
last year's level, which is a more pronounced decline when
compared to current authorized levels. In addition, the
administration's proposal cuts the overall education budget for
the first time in more than a decade and proposes to eliminate
funding for 48 programs such as vocational education, teacher
quality and training, TRIO and the Safe and Drug-Free Schools
Program.
I want to just focus on one part of the President's budget
that I find particularly troubling. The budget does a
disservice to both colleges and college students by calling for
the recall of the Federal share of institutions involving loan
funds for Perkins loans. These funds are made up of Federal
capital contribution, institutional matches and repaid Perkins
loans and up until now have been used to make new loans to
students from low- and middle-income families.
In 2004, colleges made over $1.2 billion in these types of
loans. They averaged $1,875; went to 673,000 needy college
students. The recall of the Federal share of Perkins loans will
amount to a recall of more than $7 billion over 10 years, with
$6 billion of the amount collected going toward deficit
reduction, not to the current practice of investing that money
back into Federal financial aid.
The President's tax cuts and deficit spending have pushed
us over the precipice of fiscal balance into a budget climate
that supports cutting back aid for disadvantaged students to
pay for misplaced priorities and tax cuts for people whose
children will never need a Perkins loan.
The President's proposal specifically targets my district
on Long Island by nearly eliminating funding for programs that
directly benefit the people I represent.
My district includes over 300 miles of shoreline, and the
local economies of Long Island depend on a clean, a hospitable
ocean environment and welcoming local waterways to spur tourism
throughout the region.
The integral relationship between coastal health and local
economies appears to have been overlooked during consideration
of many agency budget proposals. The administration
consistently supports the idea of regional partnerships between
the EPA and local governments, but even as Federal officials
are discussing those efforts the President's budget tells a
different story.
Regional programs designed to serve local areas are
eviscerated under the 2006 budget. The Long Island Sound study,
for example, which last year received nearly $7 million, is an
entirely regional program designed to clean up a long neglected
body of water bordering both New York and Connecticut. Under
the current budget, if enacted as is, the worthwhile regional
program would be gutted and only receive $477,000, a 94 percent
cut.
Similarly, the Fire Island to Montauk Point study will
allow the Army Corps of Engineers to complete a multiple decade
study of 83 miles of coastline in my district, allowing for a
comprehensive plan to alleviate environmental concerns and
guarantee the safe passage of commercial and recreational
fisherman.
Long Islanders are eagerly anticipating the economic and
quality of life benefits to finish this study, and the
President proposes no funding for its completion. There seems
to be no conceivable reason to eliminate funding for a 20-year
project that is only a year and a half from completion,
particularly when completion will only cost $1.7 million.
As we continue our military conflict overseas, we are
experiencing an increasing number of returning soldiers who are
maimed or incapacitated as a result of injuries sustained in
battle. Even as our current troops are in harm's way, the
proposed budget contains egregious cuts and taxes for the men
and women who came before the currently returning troops.
These members of the greatest generation now rely on a
health care system that is under attack by misguided budgeting.
As was the case in previous years, the President submitted a
budget calling for a $250 veterans health care tax and an
increase in prescription copayments of more than 100 percent.
Congress rightfully rejected those proposals over the last
few years, and I am hopeful that this will again be the case.
But there is now a new attack on the health of our older
veterans. Many providers of long-term care for veterans, most
notably State veterans homes, are faced with the sobering
prospect that their ability to provide care for deserving vets
will plummet by over 60 percent from the current year, forcing
veterans already in State veterans homes to find other options.
This is not a way to treat Americas heroes, and our
veterans deserve the care that they have earned. Let's just
reflect on this. We give millionaires 6-figure tax breaks and
we take away nursing home care for World War II veterans. I do
not see any how reasonable person can justify that.
I urge this committee to take a hard look at the issues I
have raised and to work to address the country's need for a
sound fiscal policy and the tendency to abandon positive
programs benefiting both the Nation and Long Island.
I thank the Chairman and I thank Ranking Member Spratt, and
I look forward to working with you as these issues move
forward. Thank you.
[The prepared statement of Timothy Bishop follows:]
Prepared Statement of Hon. Tomothy H. Bishop, a Representative in
Congress From the State of New York
I want to thank Chairman Nussle, Ranking Member Spratt and all of
the members of the Budget Committee for allowing me the opportunity to
testify on the upcoming fiscal year 2006 budget. During this time of
conflict in the world it is imperative to support America's operations
overseas, while making domestic spending choices that enhance the
greater good.
In my view, the President's recent spending requests do not
accurately balance America's priorities, and I intend to touch on some
of the more problematic proposals in the budget. I also will convey
some of the specific concerns that my constituents on Long Island have
with the proposed budget.
The administration's proposal forces working families to pay for
shortsighted spending choices at the Federal level in the form of a
reduced return on their tax dollars for government services, combined
with higher state and local taxes.
The President's budget for fiscal year 2006 contains drastic cuts,
which he justifies as necessary to cut the deficit in half in 5 years.
There are several things wrong with this claim, not the least of which
is that it is simply not true. The administration's 5-year budget
projections omit such significant costs as the continuing presence of
our troops in Iraq, the enormous costs of privatizing Social Security
as the president proposes, and no growth in interest costs, even though
these activities, as well as a great many others, would be funded
entirely by additional borrowing.
As a former college administrator, and a Member of the House
Committee on Education and the Workforce, I am keenly sensitive to the
needs of our students. The President's budget reduces overall education
funding by nearly 1 percent below last year's level, which is a more
pronounced decline when compared to current authorized levels. In
addition, the Administration's proposal cuts the overall education
budget for the first time in more than a decade and proposes to
eliminate funding for 48 programs such as vocational education, teacher
quality and training, TRIO and the Safe and Drug Free Schools program.
The President's budget does a disservice to both schools and
students by calling for the recall of the Federal share of
institutions' revolving loan funds for Perkins loans. The funds, which
are made up of Federal capital contributions, institutional matches,
and repaid Perkins loans, are used to make new loans to students from
low and middle-income families.
In 2004, colleges made $1.263 billion in loans, which averaged
$1,875 to 673,000 borrowers through the Perkins program. The recall of
the Federal share of Perkins loans will amount to more than $7 billion
over 10 years, with $6 billion of the amount collected going toward
deficit reduction, not to the current practice of investing that money
back into Federal financial aid. The President's tax cuts and deficit
spending have pushed us over the precipice of fiscal balance into a
budget climate that supports cutting back aid for disadvantaged
students to pay for misplaced priorities and tax cuts for the wealthy;
people whose children will never need a Perkins Loan.
The President's proposal specifically targets my district on Long
Island by nearly eliminating funding for programs that directly benefit
the people I represent. There are over 300 miles of shoreline in my
district and the local economies on Long Island depend on a clean,
hospitable ocean environment, and welcoming local waterways to spur
tourism throughout the region. The integral relationship between
coastal health and local economies appears to have been overlooked
during consideration of many agency budget proposals.
The Administration consistently supports the idea of regional
partnerships between the EPA and local governments, and as Federal
officials are discussing these efforts, the President's budget tells a
different story. Overtly regional programs, designed to serve local
areas, are eviscerated under the fiscal year 2006 budget proposal. The
Long Island Sound Study, which received nearly $7 million last year, is
an entirely regional program designed to clean up a long neglected body
of water bordering New York and Connecticut. If the current budget were
enacted as drafted, this worthwhile regional program would be gutted
and only receive $477,000.
The Fire Island to Montauk Point Study will allow the Army Corps of
Engineers to complete a multiple decade study of 83 miles of coastline
in my district, allowing for a comprehensive plan to alleviate
environmental concerns and guarantee the safe passage of commercial and
recreational fisherman. Long Islanders are eagerly anticipating the
economic and quality of life benefits to finish this study, and the
President proposed no funding for its completion. There seems to be no
conceivable reason to eliminate funding for a 20-year project that is
only a year and a half from completion, particularly when completion
will only cost $1.7 million.
As we continue our military conflicts overseas, we are experiencing
an increasing number of returning soldiers who are maimed or
incapacitated as a result of injuries sustained in battle. Even as our
current troops are in harm's way, The proposed budget contains
egregious cuts and taxes for the men and women who came before the
current returning troops. These members of the greatest generation now
rely on a health care system that is under attack by misguided
budgeting.
As was the case in previous years, the President submitted a budget
calling for a $250 veterans' health care tax and an increase in
prescription co-payments of more than 100 percent. Congress rightfully
rejected these proposals over the last few years and I am hopeful that
this will again be the case. There is now a new attack on the health of
our older veterans. Many providers of long-term care for veterans, most
notably state veterans' homes, are faced with the sobering prospect
that their ability to provide care for deserving vets will plummet by
over 60 percent from the current year, forcing veterans already in
state veterans' homes to find other options. This is not the way to
treat America's heroes, there is no expiration date for valor, and our
veterans deserve the care they have earned. Let's reflect on this: we
give millionaires six figure tax breaks and we take away nursing home
care from World War II veterans. No reasonable person could justify
this.
I urge this committee to take a hard look at the issues I have
raised, and work to address the country's need for sound fiscal policy
and the tendency to abandon positive programs benefiting Long Island
and the nation. Thank you Mr. Chairman and Ranking Member Spratt, I
look forward to working with you on these issues as we move forward.
Mr. Lungren [presiding]. Thank you, Congressman Bishop.
Something you said intrigued me to ask a question which is on
my mind. I think it is directed toward the comments you made,
and that is your discussion on education funds.
And it is my observation that no matter what the Federal
Government does by way of support for higher education, whether
it is grants, whether it is loans, et cetera, there is an
inexorable rise in tuition charged by institutions, both
private and public, that far exceeds anything else perhaps
except medical costs, and I have always been at a loss to
figure out why that is the case. Frankly, it doesn't matter, it
appears to me, in the budget whether we add more money or don't
add more money, the colleges just seem to charge more and more
and more for both private and public institutions.
I just wonder if you could give me a little----
Mr. Bishop of New York. I can give some--at least my own
insight on that. I was a senior administrator of a college, and
I was in fact responsible for maintaining and developing the
institutional budget where I was for about 20 years, and I
would make a couple of comments. One, increases in tuition at
State supported schools are largely the result of reduced State
appropriations to subvent the cost of the students who are at
those schools. At private schools, the increases roughly have
been about double the Consumer Price Index dating back to the
early 1980s, but they have pretty much tracked something called
the HEPI, the Higher Education Price Index, which is a market
basket of costs that are driven largely by wage costs, by
fringe benefit costs. About 60 percent to 70 percent of total
expenses at a private college are in salary and fringe.
The other costs that colleges encounter that rise at a rate
more rapid than the Consumer Price Index are keeping pace with
instructional technology, keeping pace with library resources.
And then for private colleges, a huge area of growth is
essentially discounted tuition. Colleges, particularly
unendowed colleges, take in tuition and then give it back in
the form of unfunded student aid, the consequence of which is
that student prices go up.
Mr. Lungren. Does it have anything to do with lower
classloads with faculty? I have at least observed that both at
private institutions and public institutions, other than our
community colleges, where I see faculty maintaining rather
heavy classloads.
Mr. Bishop of New York. Yes. An issue, particularly for the
more research-oriented institutions, is lower teaching loads
for the faculty, which is generally covered by adjunct
instruction as opposed to the hiring of more full-time faculty.
I think most, again most underendowed or unendowed private
colleges are at a 12-hour load, most community colleges are at
a 12- or 15-hour load, although the heavily endowed research
oriented institutions some have faculty teaching loads as low
as 6 hours.
Mr. Lungren. Thank you very much. Mr. Spratt.
Mr. Spratt. Mr. Bishop, Mr. Lungren and I both served here
with Carl Perkins, and in my State in particular technical
education has been a huge success. It has been the underpinning
for the industrial development that we have been able to
achieve in South Carolina as we move from an agrarian State to
an industrial State, and the Perkins loans have been an
integral part of financing all of that.
And for that little bit of money and the great good it
does, I simply cannot see requiring the repayment of the
Perkins fund loans. It is going to leave these schools with
nowhere to turn, at least in the short term.
Mr. Bishop of New York. And the thing that I find so
frustrating is I applaud the President's effort to increase or
proposal to increase the Pell Grant maximum by $100 a year for
5 years so it will go up by $500. But it is completely offset
by taking away Perkins loan funds, which averaged $1,800 per
student. We are giving with one hand and taking away rather
heavily with the other.
Mr. Spratt. Thanks for your testimony. It is clear that you
know of what you speak.
Mr. Lungren. Thank you very much.
Mr. Bishop of New York. Thank you.
Mr. Lungren. Now, we have Congresswoman Barbara Lee, who is
here for her 10 minutes of presentation. Thank you.
STATEMENT OF THE HON. BARBARA LEE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Ms. Lee. Thank you, Mr. Chairman. Good to see you. Thank
you, Ranking Member Spratt, for this opportunity to take the
time to listen and hopefully incorporate some of these ideas
into your budget deliberations.
How the President chooses priorities for his budget each
year really does define, our commitment as a Nation to what our
priorities are, and I believe unfortunately that this budget
falls way short of what our commitment should be. Especially in
a time of war, everyone agrees, myself included, that spending
on national security and defense is a priority. Yet the
President's fiscal 2006 budget in terms of homeland security,
for example, is cut by about 18.1 percent. So as a Member
representing one of the largest ports in the country it is
clear to me that, our national security priority funding list
should include at the top a significant increase, not a
decrease in port security funding.
However, the President's budget also eliminates the
Department of Homeland Security's Port Security Grant Program
by combining it with other transportation security programs.
This move I believe unwisely sets up a competition between
different types of transportation security priorities from
really the same pool of funds.
And at the same time that we discuss national security, we
must also include the importance of economic security for all
Americans. If our country is to be secure from within, our
citizens must not feel vulnerable, should feel secure, should
be strong within our own America, and unfortunately, I believe
that the President's budget underfunds critical programs that
ensure this economic security for all Americans in terms of
their access to affordable health, housing, education, and
other vital types of programs and issues and services.
I serve on the Housing and Community Opportunity
Subcommittee of the Financial Services Committee, and we heard
the budget presentation this week by the Secretary.
Consider the fact that in this budget, for example, the
Community Development Block Grant program is really eliminated.
Even though it is transferred into Commerce it is for the most
part gone. This program provides formula grants and other
financial assistance toward improving housing and economic
conditions in low and moderate income neighborhoods. In 2005
this represents crucial funding of about $4.6 billion. The
President's budget slashes by nearly, I think it is about 10
percent, $250 million funds for our local public housing
authorities, for capital repairs, improvements for housing
stock. Housing for the disabled, I was really quite shocked to
see that has been cut by 50 percent from 2005 levels. The
brownfields redevelopment programs which provide incentives for
hazardous site cleanup and redevelopment; that is eliminated.
I asked the Secretary during our hearing, what about the
disabled? What about senior citizens? What about children who
will be affected now because the lead grant programs have been
cut? Children will get sick as a result of this. And the
Secretary responded there just wasn't enough money and he had
to prioritize the budget he had.
And, of course, I was concerned because it didn't appear,
and I asked him if he fought for additional resources. And his
response was he had to prioritize within the deck he was dealt,
in essence.
The President's budget also does not go far enough in
funding HIV/AIDS programs, and we all know that the President
in his State of the Union speech mentioned the glaring
escalation in HIV/AIDS rates in the African American community,
especially with African American woman.
The Ryan White Care Act is underfunded by $500 million, and
this is just what it takes to keep people off the waiting list
for life-saving drugs, in terms of just the money that we would
need just to do that, and that does not even deal with
prevention and education. So we need $500 million just to get
people off of the waiting list.
The Minority Aids Initiative has been flat funded yet
again, no additional resources. Yet the problem is getting
greater. Essentially this is a cut, as each year more and more
people are infected, and again people of color, African
Americans primarily.
The President's budget even cuts funding, and again this
goes under the HUD budget, but the funding for people living
with AIDS. It is called HOPWA. That is cut this year by about 5
percent. Again, the Secretary said that it is about priorities.
Cuts like those to HOPWA really punish people, by making them
choose between their health care needs and their housing needs.
And, sadly, I think this overall budget is filled with
similarly unfair examples. And still the standard response to
anyone who questions the administration's priorities is that
there are not enough funds. As Secretary Alphonso Jackson said,
there are just not funds to ensure this economic security for
all Americans.
But I beg to differ. We can ensure that components of our
national security, including economic security, are fully
funded if we rein in the billions of dollars in waste, fraud
and abuse at the Defense Department.
In fact, and I reference this January 2005 GAO report. It
notes, and let me quote from that report. It said the lack of
adequate transparency and accountability across DOD major
business areas results in billions of dollars of wasted
resources annually.
The reports of waste, fraud and abuse at DOD are
staggering. Consider these two examples, for example. In 2003,
GAO uncovered that the Army lost track of 56 planes, 32 tanks,
36 Javelin missile command launch units. This represents more
than $1 trillion in taxpayer money.
In 2002, the GAO documented that the DOD database system
for tracking billing and financial operations is so duplicative
across the Department that it wastes about $18 billion
annually. The President could help reach the funding goals of
nearly all of our essential national and economic security
programs if only he began by eliminating unnecessary waste and
fraud in programs at DOD.
The Center For Defense Information estimates that the
President's budget could free up $41 billion by defunding cold
war era weapons systems like Missile Defense Initiative and the
B-2 bomber.
Mr. Chairman, Ranking Member, the President's budget I
believe erodes our economic security, it weakens our
communities, and it leaves our infrastructure crumbling. The
President's support of outdated weapons systems and wasteful
defense programs relegates economic security priorities really
to the back burner, and it should not be.
So I urge you to take into account these economic security
concerns as you work to develop a Congressional budget
resolution. I look forward to assisting you with this task, and
I thank you for your time.
[The prepared statement of Barbara Lee follows:]
Prepared Statement of Hon. Barbara Lee, a Representative in Congress
From the State of California
Chairman Nussle and Ranking Member Spratt, thank you for taking the
time to listen, and hopefully incorporate some of these ideas into your
budget deliberations.
How the President chooses priorities for his budget each year
defines our commitment as a nation to the issues. Unfortunately, the
President's FY06 budget falls short.
Especially at a time of war, everyone agrees that spending on
national security and defense is a priority. Yet, the President's
fiscal year 2006 (FY06) Department of Homeland Security budget is cut
by 18.1 percent.
As a Member representing one of the largest ports in the country,
it is clear to me that topping our national security priority list must
be significant increases in port security funding. However, the
President's budget eliminates the Department of Homeland Security's
Port Security Grant Program by combining it with other transportation
security programs. This move unwisely sets up a competition between
different types of transportation security priorities from the same
pool of funds.
At the same time, any discussion of national security for all
Americans must include the important component of economic security for
all Americans. Unfortunately, the President's budget underfunds
critical programs that ensure all Americans have access to affordable
housing, health care, education, and other vital services.
Consider the fact that the President's budget eliminates the
Community Development Block Grant (CSBG) program. This program provides
formula grants and other financial assistance toward improving housing
and economic conditions in low- and moderate-income neighborhoods. In
2005, this represents crucial funding of $4.6 billion. The President's
budget slashes by nearly 10 percent (or $252 million) funds for local
public housing authorities for capital repairs and improvements for
housing stock. Housing for the disabled is cut by 50 percent from the
2005 levels. The Brownfields Redevelopment programs, which provide
incentives for hazardous site clean-up and redevelopment is eliminated.
The President's budget also does not go far enough in funding
important HIV/AIDS programs. The Ryan White CARE Act is underfunded by
$500 million; and this just represents how much it would take to keep
people off the waiting list for live-saving drugs. The Minority AIDS
initiative has been flat funded yet again. Essentially, this is a cut
as each year more people of color are infected. The President's budget
even cuts funding for Housing for People with AIDS (HOPWA) by 5
percent. Mr. Chairman, cuts like those to HOPWA punish people by making
them choose between their health and housing. Sadly, this budget is
filled with similarly unfair examples.
Still, the standard response to anyone who questions the
administration's priorities is that there are not enough funds to
ensure economic security for all Americans.
Mr. Chairman, I beg to differ. We can help ensure that components
of our national security, including economic security, are fully funded
if we rein in the billions of dollars in waste, fraud, abuse at the
Department of Defense (DoD).
In fact, a January 2005 U.S. General Accounting Office (GAO) report
notes that 'the lack of adequate transparency and acoountability across
DoD's major business areas results in billions of dollars of wasted
resources annually.'"
The reports of waste, fraud, and abuse at the DoD are staggering.
Consider these two examples:
1. In 2003, the GAO uncovered that the Army lost track of 56
planes, 32 tanks, and 36 Javelin missile command launch units. This
represents more than $1 trillion in taxpayer money.
2. In 2002, the GAO documented that the DoD database system for
tracking billing and financial operations is so duplicative across the
Department, it wastes the DoD $18 billion annually.
The President could help reach the funding goals of nearly all the
essential national and economic security programs if only he began by
eliminating unnecessary programs at DoD. The Center for Defense
Information estimates that the President's budget could free up nearly
$41 billion by defunding Cold War era weapons systems like missile
defense initiatives and the B-2 bomber.
Mr. Chairman, the President's budget erodes our economic security,
weakens our communities, and leaves our infrastructure crumbling. The
President's support of outdated weapons systems and wasteful defense
programs relegates economic security priorities to the back burner.
I urge you, Mr. Chairman, to take into account economic security
concerns as you work to develop a congressional budget resolution. I
look forward to assisting you with this task. Thank you for your time.
Mr. Lungren. Thank you, Congresswoman Lee. I have asked
some others that in the categories where they have suggested we
should not cut, tell us where they would cut instead. And I
take it from your comments that instead of, for instance,
finding cuts to offset the ones suggested by the administration
in HUD for the CDBG program, you would suggest that we actually
can achieve savings in waste, fraud and abuse in the Department
of Defense and take care of the cuts that you object to in the
other departments. Is that correct?
Ms. Lee. That is exactly it, Mr. Chairman, and I think we
would be better for it as a country, and I would think we could
achieve some bipartisan support for it. I don't think the
American people want to see their tax dollars being wasted, and
that is what is going on. I think they would rather see real
economic and national security efforts being paid for.
Mr. Lungren. But you would also include Missile Defense
Initiative and B-2 bomber in that category, correct?
Ms. Lee. I would definitely include B-2 bomber. I
personally, there is a lot of debate about the effectiveness of
missile defense, but I certainly would include missile defense
in that category. But even if you do not include missile
defense, there is still billions of dollars in the waste,
fraud, and abuse.
Mr. Lungren. Mr. Spratt.
Mr. Spratt. Thank you for your testimony. I can assure you
we will take your concerns into account when we put together
the Democratic budget resolution.
Mr. Lungren. Thank you, Congresswoman Lee. And you being
the last member I see in attendance, the hearing is now
adjourned.
[Whereupon, at 6:50 p.m., the committee was adjourned.]