meeting of the committee will come to order the first item of business is the postal naming measures and resolutions h r twenty seven seventy eight introduced by represented nita lowey which designates the facility of the united states postal service located at three quaker ridge road in newer shell new york as the robert merrill postal station h r thirty one zero six introduced by representative baron hill which designates the facility of the united states postal service located at eight o five main ferdinand indiana as the staff sergeant david l nord post office h rest five four four introduced by represent todd tiahrt which expresses sympathy and pledges of support of the house of representatives of the people of the united states for the victims of the devastating thunderstorms that caused severe flooding in twenty counties in eastern kansas beginning on june twenty sixth two thousand and seven and h r s five hundred four introduced by resident barbara lee which supports the goals  ideals of national passport month these are worthy measures i urge my colleagues to support them and recognize mr davis thank you mr chairman we've reviewed the two postal maimings in the two resolutions we're about to consider today we find them to meet the requirements the committee and they are satisfactory and i would urge members to support these bills and resolutions any further discussion of these items and without objection will take them in block  those in favor of all of these measures will say i oppose no the eyes appear to have it the ayes have it and the committee reports those bills out  we are going to now go to h r seven thirty three sponsored by eleanor congressman eleanor holmes norton and ranking member tom davis the chair calls up this bill and without objection of will be considered as read also without objection any amendments or any votes today will be rolled to the end of the of the meeting this would allow the district to enact its own local budget without congressional involvement yes  ok well we will will accommodate the needs of members under current law the district of columbia cannot spend any local or federal funds until its annual appropriation from the federal government has been enact passage of this bill would assist the district in improving its management of its finances agencies and services and it would help the mayor and the council of the district of columbia better manage and run the city currently the district of columbia must submit its budget through the federal appropriations process unfortunately this process often extends past the start of the fiscal year for example the average delay for enactment of an appropriations bill for the district of columbia has been three months past the start of the fiscal year at times the delay has even been longer delays in funding affect important city programs including planned improvements in foster care public schools and improved compensation police and firefighters in addition to delays due to the uncertainty of the federal appropriations process are taken into account by bond rating agencies this measure would not affect the authority congress has over the d c budget based on the district clause in the constitution congress will still be able to pass a d c budget law and send it to the president during the federal workforce postal service and district of columbia subcommittee markup of h r seven thirty three in june congresswoman norton offered and the subcom approved a technical amendment that restored the d c city council's authority to review million dollar and multimillion and multi year contracts additionally the amendment would permit the office of the district of columbia auditor to continue its operations the substitute amendment that will be introduced today reflects this change the bill helps ensure that the district enjoy the same kind of autonomy with respect to its financial operations that other cities have and i i'm honored to co sponsor h r seven thirty three with delegate eleanor holmes norton let me try to put this bill in context back in one thousand nine hundred five when i became chairman of the district of columbia subcommittee which was at least at that point the least sought after subcommittee assignment in the house the nation's capital faced a spending and management crisis of epic epic proportions congress in passing the bipartisan control board legislation that i sponsored it wouldn't be an organ bark on a critically important journey to address these crisis but with patience and perseverance the congressional creative control board had its intended effect and eventually worked itself out of a job much needed fiscal discipline was instilled into the city's budget process the district's return the private financial markets helped to produce more credible numbers and better performance we then moved to the next level in one thousand nine hundred seven with passage of the national capital revitalization self government improvement act the economic recovery the nation's capital which is continue to pace ever since has benefited the entire washington region there is no doubt in my mind that we're married to continue our progress by enacting h r seven thirty three the district called the budget autonomy act which would enable the city to just implement its own budget based on locally generated funds away every other city in united states does it in no way changes nor could it change the district because the constitution which established and maintains congressional legislative authority but it does address really the unfair delays in service delivery caused by the present congressional appropriations process too often the city's been held hostage to totally unrelated disputes so a dispute in the federal budget that holds up federal spending also holds up the city's own budget meanwhile the city schools it safety and the entire range of city services have had suspended this congress dawdled and delayed arguing about other things undisputed testimony at the public hearing from the city's chief financial officer emphasized that the wall street bond rating establishing revenue estimates on those occasions when local budget approval is tied up in congress as the old saying goes when elephants fight the grass suffers and a lot of district grassland has suffered as a result of the archaic budget process now required the city sometimes had to be part of a continuing resolution it was subject to unrelated presidential vetoes of on a bus or minibus appropriation bills the bottom line is district should not be held hostage by needless delays in the congressional budget process that cost the city money any federal money coming to the city would be delayed that is fine that's federal dollars it's part of appropriations but the city's own dollars that it raises for its own services get delayed because the city's budget is subject to congressional approval these appropriations utilizing the next fiscal year when the fiscal year begins short of voting rights budget autonomy is the most important change congress could make for the district and i urge my colleagues thank you thank you mr davis i want to recognize the chairman of the subcommittee that reported this bill congressman danny davis thank you very much chairman chairman i'm pleased to inform you that the subcommittee on the federal workforce postal service and the district of columbia markup on june twenty first two thousand and seven seven thirty three the district of columbia budget autonomy act of two thousand and seven was approved and sent to full committee for consideration h r seven thirty three introduced by delegate eleanor holmes norton and oversight and government reform committee ranking member tom davis to allow the district to enact budget without congressional oversight columbia chief of police here and this is they get about five hundred million dollars in direct appropriations in the total of all the appropriations they get and grants and other things as close to two billion dollars and money is fungible and so all those four specific programs the d c government does have federal monies coming to it and it's a seat of government of the united states and therefore we ought to have some say in what goes on around this place we had the mayor and the chief of police here i have had four of my staff members mugged one stabbed four or five times when somebody came up a drainpipe and attacked them  and across the river where i live you can have a gun in your house to protect yourself here in d c you can't even have in your house the way she got away from this guy was hit him in the head with a pan and when i talk to the d c chief of police the mayor there adamantly oppose people law abiding citizens having a gun in their home to protect themselves or even having mace and i think that a government like that that won't even listen to the safety concerns of their people needs to be held more accountable than we have been holding them the other thing i'm very concerned about is according the information i have that would allow the d c to enact its own local budget without an annual congressional oversight and it's going to eliminate all federally imposed mandates including those related to abortion and needle exchanges and those of us who are very strongly supportive of the right to life position and don't believe we ought to have an evil needle exchanges for drug addicts i don't see how we in good conscience can support this and i would just submit to the chairman and to the rest of the committee if this goes to the floor in the in the state it's in right now i believe they'll be a huge debate about it and i think it's very problematic that this thing will pass pass the congress so i would just say to my colleagues i know there's an amendment that's going to be proposed on the abortion issue i don't get into close the needle exchange issues but i think those two things ought to be addressed by the committee and the amendment passes and as i said once before and i'll say it again the people of this city who live here and my staff members and everybody lives in this in this room to live here ought to have the right to protect themselves in their home and we need to send a  message if you don't have a permit to carry a gun that's ok but they ought to be able to have a permit to have a gun in their home and have mason their home so that like this young lady who works for me won't be stabbed four times by somebody that she's up a drainpipe and comes to an open window that's about four inches open but in addition i've had my chief of staff mugged twice i've had a lot of friends with bob michael the former minority leader in the house was mugged outside his house and so the crime rate in this city is almost the highest in the nation if it isn't the highest and people have the right to protect themselves at least in their own home and the city of washington will not allow that the chief of police is opposed to that the mayors oppose that and they need to realize that this is not the  prohibitions gentlemen he said but if we don't get our job done by october first this legislation says the city's budget would go into effect what we're trying to remedy in this particular case is congress's inability to act in a timely manner and the effect that it's had in this city i know some of these riders will be discussed today as we move through it and i know before these are issues we're going to have to give careful consideration to but the real injustice that we're trying to affect is when congress can't pass the appropriation bill that has the city's own budget and the city's budget can't go into effect it is frozen and hurts the schools it hurts the bond rating it hurts their ability to provide police and fire and that's we're trying so i hope the  work with us as we move this through so that we can thank you if i might reclaim my time real quickly let me just say that i have no problem with allowing the city of go ahead and pass their own budget citizenship and i want to lay his concern because as it turns out he will have many opportunities to take another stab at us article one section eight remains in force the congress can come in at any point and change any law in the district of columbia and if the gentleman wishes to in fact control crime from the hill we'd be glad to have your suggestions but we really think that that is the essence of at because i know how that must feel i know because so many of my constituents are the primary recipients i do want to say that the gentleman's would be relieved to know that five million dollars abo five hundred million dollars in remains over here every year out of a budget of five billion dollars we get a little bit of money for some state function functions carried by the cities of that that's one stab at it not to mention the fact that that's a part of the appropriation process that will be there even when we have control over our own local budgets because those are not local funds not to mention the fact that you will have many opportunities  on almost anything passing if it is remain to try to stop the district from doing things the awesome article one section eight authority ought to ought to say to the gentleman and especially the appropriation process that you'll have countless opportunities for example we were able to get some of the riders removed from our appropriation process guess what we didn't get and didn't ask for the removal of the abortion rider because we knew we couldn't get it that's been on our procreation since the district has had home rule riders of that kind the have find their place unfortunately in the congress is no need it seems to me to to punish the district through this budget autonomy bill in that way i want to thank the republican appropriators who have moved us with precursors of today's bill mid year budget autonomy imagine not only do we ways raise five point three five that's a billion dollars in the district of columbia more than some states but the money that came in between the time of the appropriation and mid year we had to come back and say master of al all in the congress can we spend our own money that we have just brought in from our own taxpayers appreciate that mr lewis and the other republican appropriators chained to that also have gotten our appropriation out on time at next year's level and all this does is to complete that that process i want to indicate just what it will do to the congress and to the disk for the congress and the district of columbia because our budget has to come here with all the uncertainty that our process here involves the city's bond rating has extra interest added to it that district of columbia taxpayers have to pay it becomes very difficult to make accurate revenue forecast and the budget process has produced camp with operational problems the congress has never taken responsibility for and have put upon the district even though they come precisely out of the budget process the delays and the end appearance in the budget process the benefits to the congress are could be  also sizable because our budget sometimes consumes time on the floor sometimes has consumed time back and forth such that people got disgusted with the fact they had to keep coming to vote on d c s appropriations almost impossible to run a big city when your budget has to come here the budget process here does not coincide with the school year so the school year starts without the budget process being approved and school books are delayed and all that goes along with the delays yet the congress will say hey d c how come your schools aren't run better than they are that that's one salient example finally let me say mr chairman that you know for sure you are a colony in the most  descriptive sense of that term when you have to go to the king to spend money that is locally raised that is the one thing the framers were s about the constitution makes many many that are old matters as remain to the congress but one thing the framers wanted to make sure of is that in your own jurisdiction you had total control the very essence of self government is control over the money you raised without having to ask anybody anybody whether you can spend well without objection the amendment will be considered and the gentleman from ohio is recognized to explain his amendment i thank the chairman i support the concept of autonomy i think it makes sense i sat next subcommittee when we heard from the mayor we heard from folks about just the practical concerns they have the practical concerns that the sponsor the bills laid out in the ranking members laid out and i also understand that as as the ranking member as also articulate here day four for the committee that discussed colombia the federal city congress still has oversight i understand all that but the practical concerns are true they're there they're real and we should recognize that and that's why the bill i think makes sense but there are some issues that i think are of such paramount importan we should make sure that we don't allow taxpayer dollars wherever they derive to be used for those purposes and in the congressman from indiana has pointed this out so mind them it's real simple and it's consistent with with what we do all throughout the federal law with various appropriation riders that it would have been talked about briefly here this morning my name it says we're not going to allow any dollars to be used to promote provide counsel for the taking of innocent unborn life real simple the typical exceptions are in there for for physical health of the mother rape incest exceptions but this is just one of those issues that i believe is so important we should add that that precaution in into this legislation and that's why i bring the amendment to the committee i think it's just of that as i said of that importance that it should be included in the legislation i would also point out just a practical concern i think there are many members many members of the congress who will be much more likely as as congressman burton pointed out his comments much more likely to support this legislation if we can add this language when it goes to the to the full floor and so with that mr chairman i would reserve the balance what time will the gentleman yield to me and be what you can preserve your balance balance your time but i do want to point out that there is a flaw in your amendment in that section four fifty nine says notwithstanding any other provision of law no fun shall be obligated just told us that that phrase notwithstanding any other provision of law would mean that we're led legislating outside the jurisdiction of this committee if you struck the words not withstanding on the other provision of  law and started with no funds then there would be no germane this issue and i wonder if the gentleman would want to ask unanimous consent to make that change so that mr mentality in order i'd be i'd be happy to ask support your amendment i understand but i don't think you ought to be stopped from offering this amendment when if this amendment falls on a point of order you can simply then reintroduce it so i think we ought to get right to the and hope that we can do that now ordinarily second degree amendment should be in writing at the desk but mr davis is asking that th second degree amendment be permitted and i think he is now reducing it to writing without objection we'll consider his amendment as a second degree amendment striking the words notwithstanding other any other provision of mema to the amendment let me this is where this is always where we get to the nub of these districts have dealt with these through the years district budget autonomy is very important for this city the city now has the largest surplus of any city in the country budgeted with the discipline put on by the control board which this committee wrote but i want to note a couple things we always recognize that there are riders on the district though to take on a larger political life of their own than just affecting the city and the provision of the gentleman says none of the funds appropriated into this actual be expended for any nine almost as long as the home rule act itself charlie wilson a democrat from texas was chairman the d c appropriations committee at that time this was done under julian dixon when he became chairman the district appropriation committee in other words this limitation has been in effect for as long as anyone here has been in office except for maybe mr weissman i think it's reasonable to support this language being added to permanent law if that's the price we pay for budget autonomy i've talked to a i will vote for the bill with the members adopted or not i think the overriding issue here is budget autonomy but i want to put this in the appropriate context where we all have different positions on this issue this is an issue that  carries a lot of saliency with the electorate on both sides of this and voting these up or down i understand the political ramifications we're going to have to deal with this issue though if we want this bill to go through before it gets the floor and if this goes down i'm going to ask the general a to work with us on this and other issues as it moves to the floor so we can get this in a passable state and i very much appreciate the gentleman's view on this and the support of this but i also very much appreciate ms norton view on this and i want to make this law and i want to put it in the appropriate context so we don't get so polarized over one issue we lose sight of the bigger picture that would like to speak a very strongly in support of the underlying bill and budget autonomy and independence for the district of columbia and congratulate both the ranking member and the distinguished representative from the district of columbia for their hard work on it but i am very much opposed to this amendment and it should be up to the taxpayers and the voters how to determine how its funds should be spent this amendment flies in the face of what we're trying to accomplish in giving autonomy now we know that federal for medicaid abortions are a lot now and it has passed the congress but if we come in and start dictating to the district of columbia other social issues this flies into the face of the of the whole purpose of the underlying bill and i posed the gentleman from ohio as amendment which would congress's funding ban on abortion care for low income women in the district of columbia the underlying bill would allow the district to determine its own budget without congressional interference and we should not start with the exceptions today this amendment would usurp the authority of the district while denying access to services that many women cannot afford women who are unable to afford these services may have to wait additional days or weeks before they can find the funds resulting in increased health care risk that could harm a poor women but aside from the merits of the issue is the underlying point that it should be up to the voters and the taxpayers to determine this issue and other issues in how its funds should be spent and i would like to you know mari my remaining time to the gentlewoman from the district of columbia she would like to speak on this ok i yield back the balance of my time  raised a point that is appropriate i have a lot of things i was going to say about this but i think it's going to be dealt with we can deal with it here we can deal with it on the floor and many of us might support the underlying bill understand that there are many members who are not pro choice who on matters even involving choice do support the district of columbia because of the very essence of what self government beans in the united states and you know we are sick and tired of self government being ok for everybody except those of us in the district of columbia all of you know that throughout the united states although money may not be spent from that all fun on abortions that countless jurisdictions use their own money for abortions for poor women in the district of perpetuity we've not been able to do that what makes this amendment so gratuitous jim is the existing language that the ranking member spoke of which is in the appropriation bill this very year with the democrats in charge our budget and in that way we had hoped to avoid just this kind of discussion it's to pile on on abortion knowing that it will never be a problem in this congress because it never has been and if i may indicate before i came to congress there was a delegate here for twenty years this was in the language his balls want to use with the democrats control what are you afraid of you are afraid of self government for six hundred fifty thousand americans and our intruding in our lives with a double standard that we will fight and always fight just the way you would fight and always would fight this mr chairman is a perfect example of why there should be budget autonomy in the district of columbia not because of choice because there's nothing we can do about that and article one section eight or already leaves you countless ways to do something about it but what it points up is the reason that people want this budget over here it is important for you to know that in the seventeen years that i have been in congress i can recall not one number not one decimal in the d c budget has been changed and the only changes in the d c budget have been illogical this has been a vehicle for members to hiring on the district of columbia their ideological concerns take them back to your jurisdiction that's what the framers wanted you to do not impose them on other people this is the kind of of of use of the federal government that we would decry in other jurisdictions i don't i'm not sure what will happen on the floor but i can alert you that on a home rule basis on many issues we have been able to convince people to take the principled position that one is what is home rule for one what is self government for one the self government for all and i assure you that we will fight it on the floor we will fight it is long as you try to impose on us restrictions you would never continence on yourselves i yield back the balance of my time academic one it is one specifically addressed in the constitution and specifically in a separation of powers the fact is though unlike other communities where cities were created by the they are residents the federal district is a creation of the constitution of the united states and as the constitution dictates we may have the authority to delegate authority but we do not have the right to delegate responsibility like it or not this is a federal district that was created for the purpose of serving the american people as a jurisdictional control with the jurisdictional control of that federal body and for somebody to say that this is like any other city i know not one other city mentioned here except in reference to where the constitution was drafted that specifically this miss a pallet is not a miss a palette in traditional sense it is a federal reserve set aside to serve the american people and we can delegate this authority but not the responsibility and everything that happens in this town good or bad under the constitution is the direct responsibility of the congress united states this is not new york this is not san diego those communities were not created for and among the federal districts and so i'd have to say sincerely to say what the debate in the eight hundred fifty s as certain elected official said congress you can try to justify things going into the city that are wrong and immoral but you bear the responsibility here that you do not bear anywhere else and i support this amendment as somebody who has supported choice but how many times those of us who are pro choice says government should stay out of this issue and then of saying the government should pay for it government has to finance it and if somebody has provided family planning services to poor needy women in my district as a county supervisor i know that there are ways to do this without having government fingerprints all over it and in the federal district we need to make sure we draw a very bright line between the issue of abortion and public involvement our government involvement and this is this man's amendment draws that bright line and reflects i think a position of the majority the american people that have government is going to stay out of the issues and stay out of the issue don't throw a public funds  and again i as i know the gentle lady from the district is very passionate about it i'm sure if i was in her position on that i would say that but i still have to say the federal district is not just a city it is the reserve for the american people as a federal jurisdiction and it still remains that until the constitution is changed we cannot delegate the responsibility to what happens within this district and i yield back mr chairman chair which is a recognized himself i don't look at the district of columbia as a reserve reservation where we allow those people to live but we have the right to dictate to them what ought to go on in their government and in their own affairs we delegated that authority we do have the right i guess under the constitution to take that away we could run it like one occupied district but the whole thrust of policy has been let the dishes of columbia run its own affairs like we do other states and cities it's not that it's not a state some people would argue we ought to make it a state but it's not a state so we look to destry confirm the a make its own decisions with this amendment and the other members are going to be offered today we're telling them you can make your own decisions on your own funds but you can't do this you can't do this you can't do this you can't do that mainly there's social the social issues but they don't have to be the social issues save the district of columbia you can't decide to have more police we think you ought to give guns to people and the government ought to pay for those guns we could do that but think about that what an intrusion it is on the rights of the people of the district of columbia to make their own government decisions for themselves and for their own people now if we're talking much federal dollars that's something else we could tell them very clearly don't use your any federal dollars that we give you for abortion or going control er or needle exchange but if they decide to use their own funds we are allow them to do that the way we do any other city any other state that they are allowed to do now what the gentleman from california mr bell breyer argued is we have the power to tell them what to do well sometimes the wisest thing to do is to recognise that when you allow an area to be autonomous even if you have the power to stop that you don't use that power we do have the power to control them completely but let's not use that power and so therefore i would argue i don't i don't i i'm i'm pro abortion that's not to say i favor abortion on demand i'm pro choice because i don't think a government ought to tell people what to do but if government wants to provide for that choice to be decided by poor women by helping them pay for that service that's their business i may or may not want to be for that if i were a city council member of the district of columbia but even if you don't agree on choice you should if you back this bill let the district of columbia make its governmental decisions for itself now i just know where this is going to lead because where they are going to tell them they can have needle exchange even though needle exchange does help stop the spread of hiv aids because it's a social issue it's a social right or even with this bill which gives this power to the district of columbia the congress still could come in and annex something to say that they can't provide their own funds for a boy i would fight that out but i don't think it ought to be in this bill and by giving by not having it in this bill i don't think we're giving up governmental control but we're limiting our ability to use the  power that we have because power if it's used to tell people what to do in their own autonomous affairs is too intrusive so i oppose the amendment i would urge my colleagues oppose t to recognize any other members who wish to be heard on the amendment if if not we're ready for the question on the amendment all those in favor of the jordan amendment say i all those opposed say no  if not then mr ice is recognized for the purpose of offering an amendment as your members at the desk i believe it is clerk will report the amendment of the amendment will be considered as read the chair reserves a point of order recognizes the gentleman from california  mr chairman i might note that notwithstanding other provisions of law was stricken from this one is that you have a current amendment good german quoting quoting one of the more thank you that in their own law i think you said in your own home would be an abuse of power mr chairman the district of columbia in violation of the intent clear intent of the second amendment stops people from having a simple firearm shotgun pistol whatever under any circumstances in their own home for self defense my amendment is fully different than the previous amendment in every way that was argued so i would hope that that if there is opposition that it would be new opposition because in fact the district of columbia is no different and i by the way supported and mr norton will remember i supported c voting rights and i supported the concept that we should try to grant to the district within the limits of the constitution everything we could to be as as much a peer to the states as possible but with rights comes responsibility mr chairman and in fact it is clear that none of the fifty states believes it has a right to outright ban the ownership and possession of all firearms period even for one's own personal protection therefore unlike the other one which is somehow in contradiction this one is solidly enshrined within the second amendment and it only to recognize that unless we make some change to the law of the land that the district of columbia cannot simply do as a federal sub an a t as other states for that matter although there delineated differently we cannot simply choose to circumvent the clear intention of the constitution because no matter how you read or nuance the second amendment the right of a people to keep and bear arms if outright banned which it is in the district would would be excessive now i did something you'll notice the language is somewhat similar to  what's called the d c gun ban legislation what i did though is i stripped it considerably and i made it as as very narrow as possible this my amendment does not allow for for example sporting you can't have sporting you can't go shoot birds in the park it is designed to be very simple and i'll read briefly just a small excerpt and that is it prohibits the district of columbia from constructively prohibiting burdening the ability of a person not prohibited from possessing firearms under federal law from acquiring possessing in their home or their business or using for self protection or other lawful purposes any firearm neither prohibited by federal law no subject to the national firearms act this is much narrower than any other possible provision it is designed mr chairman strictly to say that you are not above the constitution and so where the last amendment was argued as somehow doing to d c what wasn't done in other places and i might remind some of my colleagues i have voted for the district of columbia to have as much autonomy as possible i have voted for the district of columbia consistently be able to spend their own money but when it comes to our prohibition we the federal government's prohibition from limiting people's right to keep and bear arms we cannot simply turned a blind eye as a disco columbia does so and so with that mr chairman i urge the passage of this very narrow amendment  bill he voted for the pride bill he voted he's going to vote for this bill and there really is no difference there's no difference i say to my good friend because essentially what you're trying to do is to put your own personal idiology on the people of the district of the notion that this is this is a federal colony as as one of my good friends on the other side said and as the as the ranking member tried to correct that sense it's in the constitution what do you  want whatever we give you well that's how it was until nine hundred seventy four and to the credit of a republican president and a democratic congress that was changed it's not whatever you give us it's the fact that we have not changed article one section eight but relied upon the congress to in fact understand that there are no citizens in the united states who should be treated unequally to the greatest extent possible it is your duty to treat us not as sub equal human beings but as as equal human beings this and i say to my good friend from california is the inevitable n r a amendment just like my my friend from ohio authored the  an amendment and nobody who understands what how the d c had how the d c appropriation has been used over the years would would anything but expect these amendments to come forward knowing that it's contrary to what the citizens of the district of columbia in their own local jurisdiction desire you and the gentleman before you have taken to your logical issues on which democrats and republicans disagree and where there is profound disagreement by the people of the district of columbia and said we don't care about that we care about what we believe and not withstanding what you believe even in the united of america we're going to force you to force you to do what we believe in the local jurisdiction with the gentle lady you i will not yield sir you've got what you want this the matter is now in the supreme court of the united states all wrong you have all your you on the other side that the second amendment requires that the d c law be in fact obliterated well guess what with the judges appointed by members of your party that's a fair way to do it a contrary a position that is exactly the position that as head for fifty years was overturned at the court of appeals level and now on appeal is the very issue that is in your amendments are making your as redundant and gratuitous as the amendment before it the minute before what was was gratuitous because even democrats have put a ban on abortion in the current bill and yours is even more gratuitous because only the supreme court can decide the very point you have made here that somehow the district of columbia is in violation of the second amendment finally mr was a chairman may i say that most of these guns come from jurisdictions to its credit marilyn and the district had a joint press conference their governor our mayor just two days ago and the governor of virginia has come forward and said he'd like to have a joint press conference i'm at what they are saying is those guns don't come from the district of columbia the count shows that imagine we are a high crime city a magine what the city would be time first of all i support entirely what mr issa said and the conclusions on second amendment i had my staff checked and to our knowledge this is the only city in america that has this kind of restriction on owning and having firearms in their home but the gentle lady from washington made my point the criminals are getting the guns when i first got off the plane and i came to washington my first day here i was in a cab and i was coming to the capital and i said the cab driver said what's it like car and pulled a thirty eight out and he said but i can get you one in about fifteen minutes now the problem is this that's the problem is this the criminals have guns the law abiding citizens in their home can't protect themselves it's insane my staff person couldn't even stop a guy who was attacking her with a knife except to hit him with a pan because she couldn't even have mason her house criminal we don't want him to have guns but he's got a but the law abiding citizen who's in their home wanting to protect themselves in this criminal break cannot do it and the criminals know it one of the reasons you have the highest crime rate in america here is because the criminals know there is no defense for the law abiding citizen if they break into their home and so they attack in their homes they kill people women disappear in this town like crazy and there is no defense what they have to do is rely upon the law enforcement and the law enforcement obviously is not that effective so i just like to say to my colleague from washington i voted for your bill to allow representation by this the city of washington and that was a tough for me but the one thing that i've been concerned about for a long long time is the safety of the people who live in this town and they do they right now they do not have any way to protect themselves in their home and the criminals have all the access to guns they want to do is recognize that the district of columbia is not above the constitution elevate the district of columbia to the highest level possible under the constitution that i had which was to give the d c a vote then i only expect them to act like the fifty other states when it comes to let me let me just ask i mean doesn't that mean the court is going to determine if the gun ban is constitutional or not correct well the court the court already determined that it will be assuming the supreme court grants or at the court will decide if this says the city follows the law i've got no problem with that at all i think any member would if this on the other hand goes beyond that i think it's going to be more divisive and i'm just trying to figure out what the one were likely to be accepted by the gentle lady from washington i would be more than happy to expedite that one because that's the last failed back position but it's the one that the line that i can convey cannot cross that in fact well a law is is under suspicion by the supreme court it shouldn't people should not be denied their constant with writing when you know gentleman's time has expired mr towns are seeking recognition i'd like i just i'd like to see if we can move along very quickly because we're going to have to respond to votes and come back and i just want to just clear up some of the gentleman from indiana indicated that washington d c was the only city that's not accurate new york city's largest city in the united states also has a ban so i just want to let him know that that's not accurate mr isay as i understand you have three amendments on the subject and they're different in degree and you want to roll call on all three this is your first choice one and you have a second choice when you have a third choice one could we proceed to have all three of the voted on separately before us and i don't do that but i would i would ask consent request in sequence and the gentleman is recognized to say what he's thinking of doing and if you could do it in a couple of minutes i will do it in one minute mr chairman mr chairman the second amendment of  this further strike sit down to where it limits strikes the language for using for other legal purposes thus narrowing this simply totally to for self protection in one's home or business period and strikes out any hypothetical other or lawful purposes the third one retains that last provision and then further says until such time as the sea supreme is the ice with three bites of the apple these three amendments will vote on them he wants a roll call vote will proceed when we vote on the roll call votes to vote on each one of these he's hoping members will vote for the first of not the first and second if not the second the third i would urge all members to vote against all three this is not the law of the land until the supreme court tells us it is at the second amendment means that you cannot have any legal regulation of firearms i think that there is there will have to have that determined so far the court the latest court has said d c s law is going to be unconstitutional is unconstitutional supreme court will have to further rule on it i think it's premature to adopt any of these meeting of the committee will come to order it's apparent to me that on this bill that we're going to have to have a lot of discussions to talk about as we move to the floor what power d c will have where there will be limited powers and therefore i'm going to put the build aside and we will have discussions and see if we can then we knew that legislation all of as best i can tell all are for the underlying proposal and controversies we have about social issues and and they're not going to go away so we're going to have to discuss them further see if we can work that let me move to another item a business that i think will be less controversial of course i could be wrong and that's h r three twelve the civilian service recognition act of two thousand and seven let me make an opening statement before i call develop this would authorize the presentation of the u s flag at the funerals of civilian federal employees fighting in the support of government operations who have died in combat zones in the course of their duties representative peers working with the staff of the committees on oversight and armed services has agreed to a substitute amendment to this his bill the substitute language being offered by ranking member tom davis would establish a separate and distinct funeral on his protocol for civilians and under the substitute amendment the head of an executive agency may provide upon request a detail at the funeral of a civilian employee to fold and present the united states flag to the employees next of kin i recognize ambers if they wish to make an opening statement otherwise certainly opening statements will be part of the record as chairman steve davis let me just say i want to thank you for bringing this up  to commend representative for introducing this important legislation under current law to members of the armed forces who die in combat zones in places such as iraq and afghanistan are presented with us flags and other funeral arrangements in honor their service to country h r twelve would provide a similar service to those brave men and women of our civilian workforce that serve alongside members of armed force as in combat zones we have federal employees serving in various parts of the world working alongside our armed forces in combat zones to create infrastructure and t foster democracy the work being done by these employees is vital to our national security and deserves the respect of our nation and these dedicated civil service die and of course their work for our country that they deserve but i think  similar services i intend to offer substitute amendment that we have worked out with representative peers and the armed services committee at the appropriate time and i would urge its adoption first of all let me ask unanimous consent that  chair calls h r three one two before the committee without objection the reading of that bill will be waived and the bill will be open to amendment at any point that option open i think it's it's it's a meritorious idea and i said i want to keep that open for discussion with you and i think i would be with that we're doing to honor his memory we have before us the substitute amendment any discussion if not will proceed to a vote all those in favor of the amendment the nature of a substitute say i i pose no the ayes have it the amendments agree to either further amendments two three one t if not let's proceed to vote to report the bill out with the usual instructions all those in favor of the that motion will say i oppose no the ayes have it and the motions agree to our next legislation i we have a different district of columbia bill h r ten fifty for the district of columbia legislative autonomy act of two thousand and seven and i think this is less of a controversial than the previous one so i'd like to call that bill up for consideration and have it by unanimous consent considered is read it open to amend it at any point this bill sponsored by congresswoman norton it would amend the district of columbia home rule act to eliminate the congressional review of newly passed district laws and have them go into effect immediately or whenever the d c council in marriage determine is necessary passage of this bill will help the married d c council to better manage the city's needs and priorities currently after the district of columbia passes a law it must sit for thirty or sixty days before becoming effective unfortunately with recesses adjournments of congress important local legislation idles this these pieces of legislation passed by the d c council and signed by the mayor affect the choir of life of district citizens as well as visitors to the district a district is often forced to pass emergency legislation on issues that are not emergencies emergency legislation allows a city to get out from under the current congressional hold congress retains its control over the district of columbia based on the district clause of the constitution passage of this measure does not affect the ability of congress to pass a d c specific law and send it to the president what the bill does do is provide for reasonable and deserved autonomy regarding the local governance march and expressing some concerns about the need for the legislation unlike the history involving the d c budget the present system for reviewing d c legislation has not been unnecessarily burdensome to the district or congress as a committee with authorizing jurisdiction over the district not to mention the entire congress's responsibility over the district pursuant to district was the constitution we do have a role to play in the legislative matters pertaining to the nation's capital particularly when it comes to protecting the federal government's interests or congress interests the present system in fact provides a mechanism to promote regional cooperation and to address the complex relationship between the city and federal government this bill dub legislative autonomy would not just shorten but a limb an eight the congressional review period i'm well aware of the work required to keep track of the layover provisions in section six twenty two of the home rule act but unlike the local budget affirmative congressional approval of local legislation is not required in the form of an act of congress to the contrary it takes literally an act of congress known as a resolution of disapproval to prevent local actions from going forward and there is a very short time frame for such an action in fact since the home rule act was enacted in one thousand nine hundred seventy three only three enactments have been adversely affected congress out of over four thousand pieces of legislation submitted for review the federal interest in nation's capital has been exercised in a non intrusive and effective way i appreciate the district not remain concerned that this legislation attempts to address a problem that really doesn't exist in doing so it removes what c r s calls a backstop their navels congress to fulfill its responsibility having said that i'm prepared to support an amendment by mr marchant in the nature of compromise and common to shorten the period the current period mister rather than have opening statements because it looks like we're going to have votes on the floor of the another five or ten minutes and we want to get two bills out i will recognize anybody if you feel compelled to speak at this point but maybe we can move the only amendment we know about on this bill if you wish to offer at this time you recognize for that purpose the clerk will report the amended amendment to h r ten fifty four offered by mr marchant without objection will be considered as offer this amendment as a gesture to allow congress to retain what i believe to be the intent and the end what i believe will accomplish the same thing but allow the amendment would reduce the congressional review period of newly passed district laws it would reduce the review period from thirty days to fifteen days for general law and sixty to thirty for laws involving criminal offenses and penalties and for amendments to the whole new charter it would reduce the review period from thirty five to thirty days i realize that this is not as far as many want to go but i do believe that it is a good gesture and because of the new new technology the internet and the ability to communicate quickly that this will still allow congress to have to reserve its rights and exercise its  prerogatives my members offers a middle ground and i would like to say that i would appreciate if it was given serious consideration bill until a number of days i want to assure and must say for the record that far more has been involved in a real sense is the more troublesome than budget autonomy because at least that gets over with the district is required to an act every last time or most laws three times because of the legislative day requirement would be general counsel of the counsel testified that it puts he gave an example a recent example of changing the d c code changing one word the word handicap to disability because it was in the criminal code of the takes a longer number of days congress adjourned and so they had to start all over again all the legislative days understand what this means we're talking about criminal laws that in fact are not final because the congress hasn't waited long enough because the congress does not affirmative act on this but what is most degrading about the lead legislative layover period is that congress no longer uses it congress requires pardon me the against three enactments in more than thirty years because it's too troublesome for the congress to put a resolution through the house and that and through the senate which is what would be required if you used this part of the move lag so the congress take shortcuts if it wants to overturn a law of the district it tries to do so through the appropriation process leaving the districts to go through this le as it was called even though congress itself has walked away from that way to overturn legislation that's why this particular affront to the district wasting that time costing the money the funds of the district of columbia just to keep our laws standing while the congress lets time wait in order for the bills to become final that's why really coming more than halfway on this to try to meet some of the objections from the district the reality is the city when they pass a bill will pass an emergency basis and will come back and pass  it over the long term so it will take effect as well so that they don't lose immediate provisions for the most part but i would like to ask unanimous consent to amend mr maher chance and then i have amendment that the desk to take it from fifteen to ten days i think that is about all i can i believe we have to keep it rational leash on this i hope that mr marchant there would be take this one last sacrifice to try to make this work he has gone more than half way and i would ask  sections on both sections i thought that's what the gentleman said thank you the the amendment before us is now is there any further discussion of the amendment before us if not let's proceed to a vote on that amendment all those in favor the member will say i oppose no the ayes have it in the amendment in the nature of a subsidy is agreed to the vote now it comes on voting sending the bill to its on the committee with the usual instructions and the staff of course is empowered to make technical changes all those in favor of reporting the bill say i i oppose no the i's have it and the amendment and the motion is agreed to from virginia so we can make sure there's no misunderstanding i think that technical clarification is all i'm being when using the same number of days in all instances chairman mr chairman for what purpose is it my understanding is what we passed was to change the fifteen to ten and we would have to this would be a technical correction we just need but the bottom bottom was thirty what they were asking for clarification we have one last bill that i hope we can do as quickly as expeditiously as forthrightly as we did the previous one that bill is the  r nine to eight improving government accountability act and i will put a statement in the record with without objection and i would assume that mr davis will put his statement in the record as not be happy to this is a bill that's been worked through and is there a unified amendment i have an amendment i hope i think we're agreed on i have an amendment what this does is it keeps in place the current removal process for the thirty four smaller agencies who are not confirmed by the senate which require the agency had to notify congress in writings with the reasons for approval that would keep in place the language in h r nine twenty providing additional insulation for the cabinet level agency one to eight is considered as read and it is open for amendment at any point and i think to proceed the best way mister cooper you have a substitute amendment i mean that mr davis's amendment would apply  by mr cooper will be considered as red gentleman can quickly explain it it just allows thirty days advance notice before an i g one of these agencies is terminated that's what we heard about in the hearings it seems to be an excellent idea not appreciate working with the gentleman on this accommodation i think that solves all our problems so it should be easy good government legislation mr davis is one of the ideas if you it is let's vote first of all on on the second degree amendment all those by mr cooper all those in favor say amended to the from the committee with the usual instructions all those in favor of that amendment will say i i i oppose no the ayes have it and the motion is agreed to that  we will not make any further we will report the bill from the committee but the chairman will not transmit it until all ambiguities are resolved ok that concludes our business for today we stand a welcome ranking member marchant members of the subcommittee hearing witnesses and all those in attendance much like the federal pay here in the subcommittee held on today's hearing to get an overview of insurance and retirement  i look forward to working with the office of personnel management and employee groups over the recess cradle to independent legislation can be introduced in the march fourteenth introduced to allow employees of federally qualified health centers to obtain health coverage under the federal employee health benefits program it is my hope that this and these hearings will help me to get a better sense of what changes if any need to be made to the current system as we discussed the status of the federal employees pension and health care i believe we also must be mindful of the financial impact th changes to federal employee benefits could have on the federal budget i trust the experts will keep this perspective in mind as we discuss any potential changes to improve health and retirement benefits of federal employees look forward to hearing from all the dollar in the private sector or do we need people do we need people coming out of college do we mean expectations and people in the private sector is fighting tooth and nail  to get the difference between what is expected of us today and what was expected when i was a kid growing up in this town and a government job was considered a good job it was considered a good job in no small part because its benefits were superior to the benefits of the private sector at that time to make up for lower pay when the private sector is still for t going to the government with the retirement of the baby boom we had this artificial windfall of some of the most talented people in the you know who try to government they came to government in part because of the era in which they grew up this is the era of the great movements the era of government service but also because there were so many of them there were enough of them to go around well they produce fewer children  employer pays to eighty percent and we have not gotten to first base on that meanwhile the other side on tax cuts for the rich and on invading another country and one wonders if we will get there in time  if you were to ask me the single most important thing we could do to catch up i think i would focus on health benefit because that's where most americans feel most dubious today health benefits go up board standing that we don't have the kinds of funds that we should have that should be available to us looking cross the board as what we will have to do just to be a competitive employer in the twenty first century and looking at it simply add that our ability to attract and highly capable employees really will depend on obviously we can't compete with the private sector in terms of dollar for dollar on salary and while we deal with many of the same subjects here in the congress many of our regulatory agencies deal with the same this government and it's frustrating time when you see how how much progress industry has made especially over the last fifty years things that we never even dreamed about and yet we are century model and so we got to be able to attract bright competent innovative people to help us with the regulatory side of government and we need to be able to track the best and brightest employees are who are dedicated and i think the way we can close the gap in some respects given the fact that we can't compete on a wage basis or a salary basis is the benefits that we might be able to employ and and to give to our employees we could we could be a kinder gentler government to our workers and encourage them and appreciate them and that's the way we'll bring people on board because i think there really is a it is a goodness in the american people to serve their government i see it at the v a every day they're not making as much money the nurses the therapists the docs over the v a but they take their reward in large part from the good that they are doing for our servicemen and you can go across every single agency in our government and see people doing the same thing and we need to reward that and i think this is a great hearing it's a great way to i think a ninth term in the u s house of representatives after a distinguished career of local public policy decision making he was elected to the house of representatives he congressman lantos my good friend the i really appreciate your holding this hearing on the retirement benefits available to federal employees i'm proud to represent more than forty thousand  who serve our it is federal civil servants as well as sixty thousand federal retirees in my district protecting the strength and the integrity of the federal workforce and the quality of life of all be the sheriff has obviously an approach appropriate priority during the past several years we worked with the office of personnel management who is well represented here by its director linda spray and they she's been very helpful with us i want to thank her as well as the labor organizations who are also represented here today representing millions of federal employees and retirees as well represented as well what we're doing is introducing legislation that will fix an inequity in the current annuity computations within the federal retirement system but a decade ago congress amended the civil service retirement system for workers with part time service some part time employees were switching to full time work for the last three years in order to receive their high three annual average salaries by doing so they receive the same amount of retirement i know that nobody as those who worked their entire career full tried so they were gaming the retirement system by switching to full time only at the very end of their careers that forced the congress to create the current methodology for determining part time retirement benefits today a part time salary is assigned by its full time equivalent salary and then the benefit is pro rated by the proportion of a full time career that a part time employee actually works the new law is intended to allow want to play to receive a high three salary during a period of part time service therefore encouraging part time service at the end of a career this often happens when a senior level worker cuts back on his or her hours the disproportionate share of these workers appears to be women who leave the federal service to care for others and their family unfortunately but there are two major problems with the implementation of this new law first the law didn't specify that the calculation of full time equivalent salary would apply to all part time service before and after the implementation of the law the result of this omission is the retirement benefits are calculated in parts one part based on retirement law for pre one thousand nine hundred six work and another part based on retirement law for post ninety eight nine hundred eighty six work it also has another adverse consequence as a result of these two different annuity calculations there's a financial disincentive for federal employees to take part time work at the end of their careers recruitment retirement annuity calculations are sometimes hundreds of dollars less because employees have taken part time work during the late stages of their career which is a problem for us because we're trying to keep these very experienced people who may not want to work full time but they will lend their expertise particularly transitioning to younger employees for various responsibilities now the subcommittee's members heads are probably spending over this because it's difficult to grasp how these annuity calculations occur but you can imagine what it's like for retiree the toll that there's two different calculations how much did you work for a eighty six post eighty six i much was a part time how much was full time it's an overly complex formula that has led to some serious how the full time equivalent pay is to be applied it will provide simplified annuity computation in cases involving part time service for all c s r s employees and doing so this proposal will effectively eliminate the adverse effect of part time service performed late in an employee's career this change of the law can help stem the wave of retirement the federal government faces imminently it's been well documented and this subcommittee knows all too well that over the next decade as the baby boom generation nears retirement age of o p m has shown us that we're going to have a crisis in manpower approximately sixty percent of the government's one point six million white collar employees and ninety percent of its federal executives will be eligible for retirement over the next decade since a leading factor that influences the retention of senior personnel is a worker's retirement package i'm optimistic that fixing this part time inequity can provide some help to address this impending work shortage over the past several sessions of congress we've submitted this proposal to change the retirement calculation of not only future retirees but for current retirees that may have suffered a reduction in pension benefits as a result of part time work we would have preferred that legislation that may ultimately gain favor in this subcommittee contain a retroactive component for the current retirees but i recognize that such a provision would weaken the bill's chances of success applying the annuity calculation retroactively could significantly exacerbate the debt that the c s r s retirement fund already faces ultimately that debt will be passed on to the federal employee retirement system the first system as the last  employees retire at some point congress is going to have to either increase taxes a limit benefits so it's as important as it is to write the inequity of the current part time calculation we don't want to add to the burdens of the next generation now i understand that dropping the retroactive provision may lose some support from the federal retirees that are experiencing this retirement inequity but i do think that the only way that this legislation moves forward is with bipartisan cooperation and coordination the changes that we've offered as an amendment reflect this effort a perfect bill should not be the downfall of a good one mr chairman and ranking member and mrs norton and mr lynch i want to thank you for the opportunity to be heard you know an orchid striving this hearing part time service and help agencies retain qualified federal employees nearing read retirement so i do ask for your support it's important you know it has the this legislation could affect up to six hundred thousand current federal employees thirty percent of the federal workforce now of course that figure decreases over time as c s r s employees move over to firs it'll cost about eighteen million over a five year period but it time it's a big deal it really affects their quality of life and so there is very strong support among all those organizations and individuals representing the federal workforce and its retirees pay it had been the amount of pay and that's why people were switching to who would work part time throughout their career switching to full time for the last three years and then getting as much as people who would work full time their entire career that's why the congress fixed it but then they had two different calculations and it as it actually penalize people who went to part time so we're trying to make it more consistent now and we do we have a proactive proportionate calculation now that makes it does it the same way they do it in the professional standards and that's happening all across government i think by by putting real value on the service the part time service program that provides for one key services over four thousand law firms nationwide thank you very much along with you come and it is the custom of  members of the subcommittee thank you for inviting me back again for the second time this week to discuss in this case federal employee benefits federal government has long been recognized as a leader in employer sponsored benefits and that helps us to maintain a competitive advantage both when we're recruiting and retaining top talent to work for our country the office of personnel management has primary sponsibility with respect to these programs and with respect to your topic today we can report that based on the most recent federal human capital survey we are largely meeting expectations with respect to benefits  variety of categories ratings have increased ratings of employee satisfaction and this is been recognized in the private sector as well the gallup organization has done surveys recently as last fall that indicate that one of the attract doors of the workforce to federal employment is our benefit programs just to put the size of these in perspective let me comment that we run the world's largest health single employer sponsored health insurance program we run a retirement system that has nearly three quarters of a trillion dollars in assets and we've paid out benefits from our major programs totaling about ninety two billion dollars over ninety one billion dollars just in one year so these are major major programs the description of our activities with respect to each of these programs is in my written statement so i will just touch on a few highlights and then spend more time with our legislative initiatives with respect to retirement as you've heard the service plan is a the older of the two plans there about six hundred fifty thousand employees covered by and over two million covered by the first plan with the impending retirement wave it's important that o p m be able to service all of the retirees and new retirees with most accuracy and timeliness that we can so as you know we've been working on a retirement systems modernization project that will transform our processing from a paper based system that relies on one hundred fifty thousand paper records that could start in this room and end and go all the way up i ninety five to baltimore and come back to this room again so converting from that type of system to a cutting edge data the our electronic system will help to ensure that we can give federal employees the type of service they deserve when it comes to their retirement we are on target to roll that out in february of zero eight and we appreciate the support particularly this subcommittee in as we move forward in that effort our life insurance program again the nation's largest group life insurance program covers over four million federal employees and many of their family members in fiscal zero six approximately ninety thousand claims were paid under a life insurance program and two point three billion dollars disbursed health insurance benefits the federal program again the largest single employer sponsored health insurance program in the world we have over two hundred  eighty four plan choices from approximately one hundred thirty private sector plans we negotiate with each of those programs and to provide those plan choices across the country they feature the full range of options h m o s high deductible plans for service plans and those choices and that commitment to choice is a hallmark of the federal program one of the very very important features of fact that employees are able to carry that coverage into retirement and unlike many of their counterparts in the private sector they retain the full subsidy that's something we look at we look at competitors and i can tell you that the private sector has backed off in many cases from maintaining that subsidy level from the employer into retirement but we have continued that so in effect we've improved our position by continuing it whereas other employers have backed away from it we've done a good job we believe in maintaining premium rates and and last year for this year that were in zero seven those rates only went up by one point eight percent with increase in eleven years we saw over the past five years rate increases that were lower than the average for the industry and there are some who would say well that's because we released research reserves are determined the level reserve is determined by the insurers and they are the ones that came to us had an effect that represented an overpayment by employees and so it's entirely fair to give that back in the way of a smaller premium increase we're doing a lot in the way of making medical records accessible to the manse health information technology that will live allow for better care we've also work to have our carriers our health plans bright information about quality of the providers as well as cost through web sites and that's something we're continuing to do in two thousand and six we publish new regulations still out o p m the office of the inspector general the right to audit provider contracts including pursue prescription benefits management companies and i know you're going to be hearing a report from inspector general macfarlane about their success which has been substantial and that helps us to maintain a rate of over ninety nine percent accuracy in the payment of the federal health plan benefit payments and we appreciate the work of the inspector general our federal long term care program was authorized in two thousand by the congress and we again have the largest group insurance program of its type in the country last year as you know we added dental and vision we had we currently have four hundred thousand enrollment in the dental program and more than three hundred thousand in vision and those enrollments are indicative of the interest people have in maintaining good care before bad things happen by those regular checkups are able to afford stall things that otherwise might progress to a more serious stage so it's very important to have participation the one area that i believe we have a shortcoming in our health program is short term disability people today in our programs have to cobble together a combination of sick leave other paid leave donated leave to support times when they were too sick or hurt to work for longer periods of time that includes maternity i know there's a great deal of interest by my members in dealing with this address and addressing it and that's something that we all share how we come to what the right answer for that is is something we look forward to working with you on but we acknowledge and believe candidly that it is something that needs to be dealt with because it's an important area and programs exist there's no need to have to cobble something together our legislative proposal our most important one that i highly is the part time employment proposal i'm happy to hear mr lynch mentioned the experience he had with retaining the services of a very valued employee this proposal along with the ones that  we've successfully worked on with congressman moran would allow us to address the need for part time service of our employees in his case the one you heard was about keeping people before they retire in this case that with this would allow us to bring back a new a chance without a penalty to them so that they could work be paid for their work still get their annuity which by the way is not double dipping it's two different streams of service but would allow us to have their services to train new employees that's valued services mr lynch has indicated and so that is our major one there are other improvements that we have suggested and that i'd be happy to answer any questions on inspector general's audit and investigative efforts in helping to safeguard the benefits of the federal government employees and retirees waste fraud and abuse if i may mediately behind me instead of the group chief who oversees the audit of the p b s and amy parker is a special agent on the metro investigation  of personnel management ministers benefits from its trust funds for all federal employees and retirees participating in the civil service chairman's system the federal employees retirement system but employees health benefits program and the federal employees group life insurance program these programs cover over eight million current and retired federal civilian employees including eligible family members and disperse approximately ninety one billion annually in the program trust funds the majority of our auditing and enforcement activities are spent in protecting these trust funds particularly the federal employees health benefits program since fiscal year one nine hundred ninety seven these activities have produced over three hundred  inform you of one of our recently concluded investigations we participated in an eight year investigation of medco health solutions incorporated medco the largest pharmacy benefit manager in the united states this was a joint investigation with the u s attorney's office for the eastern district of pennsylvania as well as the offices of inspector general at the department of health and human services and the department of contacted contracted with the f d a b p to provide mail order prescription drugs to federal employees retirees and they're eligible family members insured under the blue cross blue shield association federal employees program and other at the age b p plans the joint investigation concluded that medco falsely reported their turn around work performance agreement under the efi h p p carrier contracts may dispense prescriptions without properly performing drug utilization reviews that protect the patient they falsified paper or electronic records relating to the dispensing process the improperly used pharmacy technicians and other non pharmacists personnel to perform functions with which legally must be performed by a pharmacist or under a pharmacist direct supervision they build a government for prescriptions that were never filled ordered the mail prescriptions to patien less and not they mailed prescriptions to patients with less than the number of pills prescribed to charge for the full amount they made false statements to patients at their mail order prescriptions had not been received when in fact the prescription had been received and then cancelled in order to appear to meet contractually required turnaround times they favored merck drugs over the other manufactures drugs in switching programs even when the merck drugs were more expensive and they made false statements to united states during the investigation and that goes illegal conduct during the investigation medco in the united states government agreed to a permanent injunction against several practices this consent decree which did not resolve the issue of restitution and monetary damages was entered into in april of two thousand and fo in october of two thousand and six the federal government and medco entered into a settlement agreement to resolve the alleged false claims act violations totaling one hundred fifty five million of this amount one hundred thirty seven million related directly to the f e h p p the remainder involved other federal programs including medicare as a result of the settlement the s c h p p trust fund received ninety seven million in restitution in addition forty million in multiple damages associated with the false claims were returned to the us treasury this amount represents the largest single single recovery by our office because of the growing importance of drug benefits to the health of effi h p p enrollees and the financial integrity of the trust fund we pursued additional oversight due to the substantial impact medco and other  monitoring the corporate integrity agreement with medco we felt this was the best and most efficient way to protect b p in part because the outstanding program the h h s has developed to implement and monitor corporate integrity agreements this is not the first p b m that our office has investigated for allegedly defrauding the f b i agent b p our office in can in coordination with the h s h h s or i g and the u s attorney's office for the eastern district of pennsylvania conducted a six year joint investigation of the p b m advance p c s that administered prescription drug benefits for some of the f d a b p plans and medicare plus choice organizations this case was resolved statement described a detail of two of our longest and most complex healthcare fraud cases that not only affected the health and well being of federal employees retirees and their families but also allowed the s c h b p to recover hundred fifty one million dollars we continue to investigate a great number of complex at the h p p health care fraud cases and involve billions of dollars the efforts of our investigators and auditors are critical in preventing waste fraud and abuse within o p m programs for example results of our past p b m audits have highlighted that much remains to be done to improve oversight and controls regarding p b s participating in the f in this regard we are working with o p m to identify methods to ensure that the f d a p p derives the safest and best possible pharmaceutical services at a fair price we feel very strongly that our rigorous ongoing oversight of organizations participating in the f d a b p provides a sentinel effect that helps reduce erroneous and fraudulent payments in the thirty two billion dollars a year federal health program a special note is the positive and cooperated relationship between our office and o p m leadership in pursuit of trust fund integrity i would be glad to answer any questions that you have thank you very much  statement the t s p is a voluntary savings and investment plan that allows federal and postal employees and members of the uniformed services to accumulate savings for their retirement currently has approximately three point eight billion individual accounts and the first savings fund has now grown to over two hundred twenty four billion in assets participants may invest in any or all five of the core investment funds and the five life cycle fund t s p administrative expenses are borne by the participants not the taxpayer the fors participation rate stands at eighty five point eight percent for c s r s employees about sixty nine percent and for the uniformed services after only five years of availability now stands at twenty five point six percent the t s p is administered by the federal retirement investment board which was established as an independent federal agency or approximately seventy employees of that agency with input from the executive director story employees thrift advisory council board staff participants and the beneficiaries this produce share responsibility gives the board members and the agency a unique status within government first also requires that the secretary of labor to establish a program compliance audits that it mandates that the board contract with a private accounting firm to conduct an annual audit and it also authorizes the fifteen member employee through the visor council the council includes representatives of the major federal and postal unions other employee organizations and the uniformed services the agency has always enjoyed an extraordinarily cooperate cooperative relationship with the office of personnel management by law o p m has statutory responsibility for the overall retirement education with the federal workforce and the training of retirement counselors as federal employee agencies the board is the entity that ensures the efficient delivery of benefits and services the plan participants are located in the executive executive branch but are not part of the integration to t s p as a participant directed plan each participant decides how to invest the funds in his or her accounts the t s p funds now include treasury securities corporate bonds the entire u s stock market and stocks of developed countries in europe australia and the far east and august of zero five the t s b introduced life cycle on the l funds which are invested in various combinations of the five statutory funds participants benefit from having professionally designed asset allocation models that are appropriate for their particular investment horizon we are pleased with the reception of the l funds as of june were five hundred fifteen thousand t s p participants the united states with almost two trillion dollars in assets under management although we invite proposals from all qualified providers only those asset management companies capable of efficiently handling our very large cash flows to satisfy the minimum qualifications required we know that there are many excellent vendors who would like to perform services for the t s p but are unable to satisfy the extraordinary demands which the operation of our size requires in this regard mr chairman you and others have expressed interest on behalf of smaller companies we appreciate that interest and do all that we can to fashion our p s to achieve the broadest possible competition consistent with the fiduciary duty to act solely in the interest of participants by law have provided compound annual returns net of expenses of six point six percent seven point three percent eleven point nine percent ten percent and nine percent respectively for county year zero six the net plan administrative expenses for point zero three percent what this means is that the two thousand and six net investment return to participants was reduced by approximately thirty cents for every thousand dollars of account balance these costs compare very favorably with a typical private sector for one  many improvements made by congress during the plant's twenty year history kept pace with the best features of four one k plans offered by private sector employers however neither participant expectation no the congress stand still when congress passed the pension protection act last august we carefully examined it for potential t s p improvements the board members recently voted to seek statutory authority to institute automatic enrollment and to make default investments in the age appropriate hel both of these changes which private sector plans are encouraged to make under the pension protection act will improve the t s p our own survey of t s p protist which found that only three percent of respondents were dissatisfied nevertheless found strong support for these two changes we hope that the congress will favorably consider these proposals the board members for the decided at the june meeting the more cap more carefully examine the possibility of establishing a roth feature for the t s p and to revisit this issue within two years the board also continues to pursue administrative program enhanced including improvements to guard against the constant threat of computer fraud earlier this year we were placed our four digit pin number with an eight character alphanumeric password  website later this year we will replace our current social security number identifier with a computer generated account number in closing i'd like to thank you in the members of the subcommittee for your interest in the t s p and all benefits provided the federal employees since coming to the agency last year i gained an enormous appreciation for how well this program meets the needs of employees and i remain committed to moving forward together with the congress the administration the council o p m the employing agencies and others to continue the blue cross blue shield system the blue the blues represent over half of our membership in the federal health plan so there is a very strong brand identity so i think that my expectation would be that we would have minimal enrollment in those types of plans today until it's available through the blue cross blue shield because the primary or the first level of decision making is to associate yourself with the brand but adding it and allowing that capability for the blue cross blue shield system we think is important because we think that a plan of our type the largest offered in the world by a single employer should have a full range of choice and we think that only offering it and very limited circumstances where it's available to doesn't provide the full range of choice ultimately we will deal with the experience but we think that the population across the system of the blues all of the three options that would be available will still be substantial in all three thank you very much to program could you explain yes medco actually has been is under contract i believe or will be by directly with the blue cross  shield not with us directly now indirectly that means some services will be provided by them to people who are enrolled in the blue cross blue shield system but we have not directly contracted with medco there i visited with the inspector general mcfarland i learned that the blue cross blue shield had engaged in a contract with them because i had the same concern that i think you're expressing there are number of safeguards in place the senior management team has the list is the short term disability benefit to include maternity i as i say that is not a benefit that we provide today a company we have found that companies of two hundred employees or more eighty percent of the time offer a short term disability insurance program we do not and i think it's disgraceful so that would be my number one issue to attack the with respect to the participation issue again with high deductible plans i think that there are circumstances where that works and is appropriate i think there are other people where that's not a good option and but i think that it's important to offer it and so that we are state of the art we have not sent a proposal transmitter proposal to to the congress yet about that we're still trying to craft the right proposal to send to you and i know that there are several proposals here interest we'd like to work together with you cost balancing cost with the man if it is obviously a concern and one thing we can offer for sure though is our negotiating power and getting a good rate and certainly the well i i don't want to speak for the administration i think that we would all need to you know because it's relative just come to our attention we have to review and then we will do that thank you very much and i will go to  you you stated that the increase in the premium was one point eight this year but that is was a result of a overpayment from the previous year that was a contributing factor but not the only factor there are a number of things that have helped us to control costs in the plan and that was a factor would have been higher had that not been the case than the rate of increase was it would have been a little over six percent increase which still would have been pretty favorable increase explain to me the issue about the three thousand dollars or exclude and i'm happy to have you know i have some way to get back to you on that march and i don't want to give you an incomplete answer and i need a little help with you've answered the other question what would your top priority b proposal that we have that would allow us to have the benefit of the knowledge and experience of who want to come back and help train that next generation and i know that there's been overwhelming support for the polls show over eighty percent of thousand potential positions turning over due to retirement as congressman moran said this is just a drop in the bucket in filling that and it actually helps people to come in and learn from the masters and be able to be and then they go on in the new veterans preference and work with our but with respect to disabled veterans particularly we have stablished over the past two years programs on site at walter reed at brooke army medical center and will be starting one of fort collins at the three medical facilities there for the armed services to counsel them on jobs in the federal government or in writing resumes on interviewing we have people that we staff on site i've been to brooke army medical center i've been to the center for the intrepid to visit those wounded warriors they're terrific people and we want them yesterday i just filmed a video to be played for the navy it was but we we want these people there is a place for them d would have had the effect of reducing the premiums somewhat overall and of course of helping to keep up with the growing prices of  drugs in the first place but the federal government chose not to participate and therefore to have an effect at least on premiums which as you have just testified you do not intend to same people who you've raised i think i've heard four questions in there one are about our participation and the affordability one about the medicare subsidy what about would we raise the subsidy to seventy two percent and i just want to elaborate if i may a little on that so you have a complete answer with respect to participation eighty five percent of the people who are eligible to participate another percent have spouses in the through who may get their coverage another nine percent get have coverage elsewhere probably from a prior employer so there's really only two percent who are not covered one way or the other but ninety percent almost are covered through the participation is high with respect to the competitiveness of the plan we believe that it is competitive we believe when we look at other employers what we see is that they have fortune five hundred employees paper hundred percent i do not know of many who play one hundred percent i know in the experience we've looked at this particularly in retirement that they are decreasing the share of the were in fact this without going from seventy two percent to the eighty percent of people like me one might nevertheless have at least a marginal effect particularly on keeping certain employees already here  such such as the benefit that some employers have again of the caliber of the federal government that would say a kid doesn't age out to twenty two was saying that it's twenty six so that  anything you are devolving benefit so the point that you can have anything you want to as a group if you pay for it is a group and you thought about even around the margins of how you might in fact improve benefits if you can in of cost and what is the right place to invest we do not you must be saying something different than we do but we do know that we have is a barrier to retaining or hiring people people see this in our first of all your point is well taken auditing p b m contract has proven to be a great challenge in addition to the normal delays in requesting data from the carriers audit overall our p b m audits revealed that the major issue was not contract compliance but rather the weaknesses found within the contracts themselves and some of the specifics we've encountered are the five that i mentioned first the p b m contract directly with the insurance carriers and not with o p m therefore o p m has limited control over the terms of these contracts especially related to pricing and fees carriers paper carriers pay p b m based on a negotiated rate which may have no relationship to the actual price paid for the drugs therefore we cannot determine accurately the amount of profit made on federal business nor can we determine if the price is fair and reasonable contracts are complex and the specific pricing terms are difficult to understand o p m should require full disclosure from the p b m regarding pricing terms including rebates generated from the  p carrier negotiates the terms pricing methods rebates administrative fees etc as it's contract with the p b m therefore there is no consistency among these contracts and finally little incentive for the carriers to negotiate the best price for the pharmacy services since o p m reimburses them for all costs charged by the p b s now as far as the potential solutions to this i speak in the singular but for the great majority of my comments i'm referring to the cooperative venture with the program office at o p m and our office and to that end the first suggestion would be the possibility of changing the language in the federal employees health benefits acquisition regulations to include large providers as subcontractors second to assess the benefits and risks and i emphasize the risk of carving out pharmacy benefits and having o p m contract directly with the p b m's for these services and benefits finally reimbursed p b m's based on the actual cost of the drugs dispensed id has identified many areas that require change in the current contract language and or areas that require greater oversight we are still currently analyzing the contracts and the process of admi see that that has been steadily increasing and pacific two to the younger and lower paid employees the challenge there is is first to get them participating in the plan and that then secondly to get them to speeding higher  rates we have seen over the years that participation among most age groups is fairly stable but we have seen some slight increases of participation among the younger and lower paid were very pleased to see that they contributing at a lower rate than the this is an issue which is received a bit of press lately and it's one that i've been doing a bit of homework on since i joined the board about a year and a half ago i gather that over the years there have been many proposals to divest  political considerations should not be used in the t s p certainly we shouldn't be using participant money for those goals and that's a position which i agree with and the board agrees with what we can't do is there is no particular social or political goal that everybody's going to agree with so you'd end up with a hodgepodge of multiple different goals and that would really cause significant problems especially when we work in a passive management index  funds are designed to cover a broad sector and in this case you'd be trying to pluck out certain security sector a significant problems as well as cost and finally i'd say that the the promise that was made to t s p participants was convention in august of two thousand and six margaret baptist of mount pleasant south carolina is the first woman to be elected president of the national association of retired federal employees and the first spouse of a federal retire to hold a position the former president of the south carolina  national association of retired federal federation thank you all so much for being here it is the custom of this committee to swear in witnesses in the affirmative of course you know your entire statement will be included in the record if you would summarize in five minutes  thank you very much chairman davis ranking member march and i appreciate the opportunity to speak with you today about the federal employee benefit in retirement programs the question you asked are we meeting expectations is a relevant and important one for all federal employees it is difficult to say that we are meeting expectations when every day federal employees are asked to do more with less and face an often hostile administration that does not seem to value the way work done by federal employees every day we appreciate those members of congress like yourself mr chairman who put substantial time and effort into improving working conditions for federal employees n t e u is actively working on a number of these proposals first increasing the coverage for dependents and at the h b to age twenty five thank you very much for your draft legislation mr chairman young adults are the fastest growing age group among the uninsured and while the current law does provide health insurance until age twenty two twenty two year olds are seldom in a position to obtain health insurance themselves several states have enacted legislation to avert this health crisis because young adults are healthier than older adults it is possible that adding more of them to a pool of health care participants may even lower the average cost for group insurance since that time it has become clear that many who would take advantage of time off to care for a baby have not because they were unable to forego their income a benefit that you cannot take advantage of is not much of a benefit most industrialized nations already provide paid family leave mr chairman we will do all we can to help an actor draft legislation making this a reality we have been fortunate in the one hundred tenth congress to have many issues advanced by n t e u that were introduced as legislation and in most cases with bipartisan support these include premium conversion to allow federal and military retirees to use pretax dollars to pay for their health insurance premiums recapture credit allowing individuals to return to the government service after receiving a refund of their retirement contributions to recapture credit for the service covered by that refund annuity and part time service correcting the glitch in the one law the change that formula that congressman moran spoke to do is supportive of that change but we are concerned about the elimination of the retroactivity clause and we will work with this committee and with mr moran on that issue pension offset and when falling when elimination changing the social security provisions that prevents federal retirees from receiving the full social security benefits to which they are entitled cost of health insurance where there has been some discussion today already continues to be very concerned about the escalating cost of health insurance for federal employees and we ask for your help in persuading the office of personnel management to pursue two items that could lower health benefits premiums for federal workers first which was talked about earlier the medicare drug subsidy if o p m had applied for the dru subsidy to which it is entitled under medicare it would have lowered the average two thousand and six premium by two point six percent we need a legislative measure to require o p m to apply for that subsidy second negotiating the drug prices o p m negotiates with carriers for the best overall health care package but the carriers negotiate for the best drug prices we would like to see o p m negotiate for the drug prices to try to bring those costs down in addition we're working to achieve passage of h r twelve fifty six introduced by congressman hoyer and wolf which would increase the level of government contributions under arrest from seventy two percent to eighty percent federal employees are paying a constantly increasing share of their paycheck for health insurance premiums for their families often at the same time watching their coverage decline since two thousand and one premiums have risen by fifty percent had the o p m not dipped into the reserve fund for the current year federal participants would have realized increases as we heard from director springer of over six percent premium is more affordable is a priority for and finally mr chairman or to the federal retirement thrift savings plan congress established t s p investment policy bypassing the federal employees retirement system act which wisely left the management of the fund to the thrift investment board the only group that has a fiduciary responsibility to the fund investors they take it seriously and that fund is a great success we believe that they should take the lead in deciding on new investments in the future thank you very much and i would be happy to answer any questions  much thank you mr chairman and members of the subcommittee for the opportunity to testify today federal employee benefits need to be considered in the context of overall compensation the shortcomings in federal salaries make it increasingly difficult for federal employees to afford the cost of fully participating and all the benefit programs made available to them through o p m the list the benefits available to federal employees sounds impressive the new list of new benefits sounds pretty impressive too until you realize the new benefits are all employee pays all but this approach is just the logical conclusion of the attitude o p m currently has towards all federal employee benefits this attitude is that benefits should be made available to federal employees for purchase that is they should not be paid for by the employer they should they seem to think that at most the employer should negotiate a group discount this is been the case with long term care insurance as well as the newest benefits for vision and dental insurance of g strongly opposes o p m surprise until major national health care reform isn't acted we believe that it's our to financial coverage generously enough so that every federal employee and retiree and all their dependents have comprehensive and affordable coverage this means financing at the rate of at least eighty percent so that even the lowest rated federal employees can afford coverage for themselves and their families we also believe that dental and vision coverage are fundamental components of health care and it is a disgrace the federal government has carved out these two categories of coverage into separate employee pays all plans comprehensive dental and vision belong in a standard benefits package that should be required of all for being in the federal employee health benefit program and should be subsidized at the same rate as other health care services in two thousand o p m initiated a long term care insurance as a first employer pays all benefit or pseudo benefit then came the bush administration and this time the employer pays all insurance lobby it was applied to health care benefits previously considered part of a comprehensive package and subsidized at the same rate as other health care services although the plans that provide vision the dental benefits have not yet dropped this coverage and raleigh's are bracing for this eventuality as coverage of the services is not included in the statutory requirements for benefit g opposes the carve out a dental and vision coverage in the strongest possible terms both dental and vision care are fundamental to good health and to the ability to function in any work environment earlier this year we became aware not only of tragic consequences that happen at say a lack of access to dental care but also how closely dental illness is linked of the real onus is in march a twelve year old boy from prince george's county maryland died from an infection that started in an abscess to the infection spread to the boy's brain and for the want of dental care a completely preventable death was not prevented corrected vision and healthy gums are not cosmetic elective this is not about tenet contact lenses or bleach tea this is about health care a f g urges congress to add language to chapter eighty nine of title five to make vision and dental coverage mandatory categories for the better all employee health benefit plans o p m has carried out the bush administration's health care policy by shifting calls to enrollees and trying to persuade them to replace traditional insurance with health savings accounts in addition the administration has each year included in its budget proposals policies that would require employees to pay more or receive l worse it has promoted carbon out benefits currently subsidized by the government and offering them on an employee pays basis none of these policies is consistent with an effort to recruit the next generation of federal employees or to maintain morale and commitment among those on board a f g or just congress to resist the administration's efforts on do a generation's progress and establish the federal government as a fair employer and provide decent benefits sufficient to provide economic security to its employees and retirees this concludes my statement i would be glad to take any questions or thank you very much  mr chairman i am pleased to present nops views on the federal retirement benefits programs which is so crucial to the economic and health care security of our federal employees retiring and survive a member's primary legislative objective is to preserve the retirement and insurance benefits we as part of the total compensation packages of career is in federal service clearly it is  essential that federal service attract and retain the highest caliber room ploys as new challenges put new pressures on the federal budget but it also is imperative that the federal government continue to on its commitments to its workers and retirees among those commitments is the federal employees health benefits program a program cited by many policy experts as a model group health insurance plan and i cannot pass up this opportunity to thank congressman tom davis and the majority of the members of this subcommittee for the introduction and support of h r eleven ten the knockback bill to extend to retirees the tax benefit of premium that by working together we could move this legislation out of the ways and means committee to was an act meant in this congress the office of personnel management does a good job of negotiating premiums for the f d a b p but we concerned that a one billion dollars payment which could be used to lower cost is left on the table the two thousand and three medicare law provided all employees including employers including the government subsidy if they provide drug coverage as generous as medicare unfortunately the administration has decided to forgo this payment on behalf of f d a b p enrollees a recent g a o report found the premium growth in one of the largest efi h p p plans with many older enrolled rowley's could have been three point five to four percent lower in two thousand and six had the payment been accessed and it could have reduced overall  p premiums for the year by more than two percent we cannot understand why the administration failed to apply for the subsidy to which they did not originally object in addition knox is concerned that offering he savings accounts could undermine the f d a b p g a o data has strengthened our belief that healthier wealthier in rome leigh's tend to be attracted to h s ways because as low health care users they can be rewarded with an spend balances at the end of each year less healthy enrollees avoid them and are more likely to stay in traditional comprehensive plans forcing these plans to raise premiums cut benefits or both is have had minimal effect on comprehensive plans because if you have joined them the administration's two thousand and eight budget could jumpstart enroll meant an h s a is if blue cross blue shield is prescription drugs the greatest cost driver in f e h b p are a problem in search of a solution f c h p p plan should be allowed to buy prescription drugs for enrollees at the discounts provided through the federal supply schedule this was considered as a pilot project but the pharmaceutical industry refused to participate new congressional support for allowing medicare to directly negotiate drug prices makes it got a long way in providing peace of mind to the loved ones of federal retirees i know because i am a survivor in new york and when my husband elected a survivor annuity the most he could provide was fifty five percent and exchange for an eight point five percent reduction in his own retirement noffs believes a federal employee should be able to elect the highest survivor amount if they pay the additional actuarial cost to make this a reality we ask you to support a budget neutral proposal allowing retiring employees to elect additional amounts in five percent increments up to a maximum seventy five percent unfortunately se retiree's who work part time toward the end of their careers do not receive the full amount of the annuity they and because of the application of a nine hundred eighty six law current interpretation discourages many from working part time at the end of their careers and can result in annuity is being reduced by twenty percent president bush's two thousand and eight budget proposed using full time equivalent salary to calculate the annuities a future retirees who work time but current retirees are left out of this plan for that reason not had supported representative jim moran's bell twenty seven eighty but we were disappointed to hear from him today that retiree's will be excluded from the part time remedy and his amended bill on the other hand we are pleased that retiree's are being sought by agencies who want to rehire them we believe retirees human capital we stand ready to work with you and the administration to ensure that our retirement programs remain competitive innovative and a model of thank you thank you very much well in my testimony actually a number of us have mentioned the drug subsidy i mean from a cost perspective that is the complaint that i hear all the time from enroll in the plan and there seems to be such a missed opportunity here that i don't employees and the retiree's had a program that required all of the participants in the federal employee health benefit plan all the companies and covered like it eighty percent contribution and we had hoped right up to the last minute that that would happen even in the end when the when it was clear there would be no contribution by the government supported plans because we believe that they were important to federal employees in that they would be taken joining and human services in the office of the assistant secretary for management and budget responsible for budgetary legislative and regulatory activity in the medicare program thank you so  hundred ninety eight today about three fourths of federal employees are covered by fors this figure rises each year as employees under the old c s r s retire first was established by the federal employees retirement system act hundred six and it consists of three elements social security and defined benefit pension called the first basic annuity and the thrift savings plan before nine hundred eighty four federal employees were not covered by social security they were covered instead by the c s r s which congress created in one nine hundred twenty because social security needed greater cash contributions to remain solvent in one thousand nine hundred three congress required social security coverage for all new federal employees hired in one thousand nine hundred four or later congress recognized that social security provided some of the same benefits as c s r s and that covering workers under both plans would require payroll deductions of more than thirteen percent of pay therefore congress directed the development of a new retirement system with social security as the base but also including a defined benefit pension and a savings plan the result of this was the first act of one hundred eighty six federal employees are fully vested in the first basic annuity after five years of service the minimum retirement age which was fifty five for workers before born before nine hundred forty eight will increase over time to fifty seven for workers born in one nine hundred seventy or later this year a worker with thirty years of service can retire at age fifty five and ten mine workers with twenty to twenty nine years of service can retire at sixty and workers with five to nineteen years of service can retire at sixty two the furze basic annuity pays a pension equal to one percent of the average of the three highest consecutive years of pay so for a worker retiring at fifty five  thirty years of service this annuity is equal to thirty percent of his or her high three pay fors also pays a supplement until age sixty two which is equal to the amount of the social security benefit that the worker earned while employed by the federal government to supplement ends at sixty two a guard lists of whether the employee applies for social security at that age the legislative history of the firs actuals the congress wish to enroll no employees and social security to provide a benefit that in total was comparable to that under c s r s and to make the first plan similar to the retirement plans of large employers in the private sector and establish a stablish in the firs congress provided federal employees the opportunity to save for retirement on a tax deferred basis through the thrift savings plan or t s p the thrift plan is similar to for a one k plans provided by many companies in the private sector this year employees under age fifty can contribute up to fifteen thousand five hundred dollars to the t s p employees fifty and older can contribute an additional five thousand dollars these contributions are pretax and investment earnings grow tax free until the money is withdrawn the government contributes an amount equal to one percent of pay to the t s p for all employees in addition employees covered by for receive a one hundred percent match on the first three percent of pay they contribute and a fifty percent match on the next two percent contributed for total employer contribution of five percent of pay currently eighty six percent of employees covered by the firs contribute to the t s p and the thrift board has submitted a bill to congress to make an rollman in the t s p automatic for new federal employees the pension benefits provided to federal employees compare favor to those provided in the private sector under fors employees participate in social security they are covered by a defined benefit pension and they can save pretax through the t s p this combination of benefits has become rare in the private sector the department of labor reports that only fifty one percent of workers in the private sector participated in employer sponsored retirement plan of any kind in two thousand and six and just twenty percent of private sector workers were covered by defined benefit plans that provide a guaranteed retirement income the labor department estimates that only twelve percent of private sector workers participated in both a defined benefit exists in the private i think that's an accurate characterization and the reason for that is that in the private sector since the early eighty's there's been a strong trend away from the traditional defined benefit pension in favor for a one k plan what that means is if you looked at the statistics and nine hundred eighty you would have seen about the same percentage of workers in the private sector in a plan as are in a plan today about half but in one thousand nine hundred eighty virtually all of them would have been in a traditional pension today only one worker in five in the private sector is participating in  traditional pension and a number of those perhaps as many a quarter have been frozen in one respect or another meaning either no new benefits or crewing or new workers are not allowed into the plan if you if you isolate on say the the five hundred largest companies in the s and p or four fortune five hundred you will still see majority roughly two thirds that offer a defined benefit pension but it's still sector does a better job than the public so i can't answer for sure why that perception might exist but  i was one of the earlier witnesses said today the difference is very easy for people to measure the difference in benefits is more complicated particularly with younger workers as the director of the t s p mentioned today they have lower participation rates and lower contribution rates they are going up which is a good thing but it's very difficult to get younger workers in particular to focus on the importance of saving for retirement or to understand the value of a defined benefit pension so i think when when people are comparing between the private sector and the public sector they have a much clearer idea about differences in pay and  private sector i'm not sure i would say that more companies in the private sector about a quarter of the say fortune five hundred have gone to automatic enrollment for a one k plans and i think most observers expect that trend to at plan is a plus the interesting thing is in a defined benefit plan the traditional pension as a worker you don't do anything you're on the payroll you're in the plan you may not even be aware of it that's one reason i was saying before it's difficult for workers to compare retirement benefits because they're not quite sure of the value of those benefits in a defined contribution plan since you're getting a sort of a quarterly statement of how much is in your account it's much easier to see how you're doing the inertia in the past has been that newer workers and lower paid workers were reluctant to give up take home to put money into the plan for the government or the for o k plan in the private sector with automatic enrollment the default is six months or whatever the start date is a certain percentage is going to be put into your account now of course you have to offer them the option to say i don't want to do that but studies real world experiments in companies have shown once once people are automatically enrolled ninety percent ninety five percent of them stay in  of years i mean i've talked to a lot of federal employees about retirement issues and many of them are not aware at all that they are covered by a traditional pension in addition to the thrift savings plan and the one thing  long time ago prior to nine hundred eighty four members of congress like every other federal employee we're in the civil service retirement system and that system was actually created before social security all members of congress pay social security taxes i've seen the email i've seen it many many times and we do have a report about retirement benefits for members of congress that explains very clearly that they pay the same social security taxes as every other has been very stable for for many years right around sixty one and currently retirees under the civil service retirement system get an average pension of about twenty five hundred a month work out to thirty thousand a year and under the first the average pension is about nine hundred and the reason that number is so much lower that there are two reasons one is that the first pension is smaller because those workers are also covered by social security so their combined benefit done diligent and got a lot of late evening work