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20–145 PDF 2005

IS UNCLE SAM STILL PASSING THE BUCK? THE

BURDEN OF UNFUNDED MANDATES ON STATE,

COUNTY, AND CITY GOVERNMENTS

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MARCH 8, 2005

Serial No. 109–6

Printed for the use of the Committee on Government Reform

(

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

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

GINNY BROWN-WAITE, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

(III)

C O N T E N T S

Page

Hearing held on March 8, 2005 .............................................................................. 1

Statement of:

Graham, John D., Ph.D., Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget; and Douglas HoltzEakin, Director, Congressional Budget Office ............................................ 16

Graham, John D. ....................................................................................... 16

Holtz-Eakin, Douglas ................................................................................ 24

Kyle, Angelo, president, National Association of Counties; Gerry

Connolly, chairman, Fairfax County Board of Supervisors; John

Hurson, president, National Conference of State Legislatures; and Mick

Cornett, mayor, Oklahoma City, OK ........................................................... 50

Connolly, Gerry ......................................................................................... 58

Cornett, Mick ............................................................................................. 75

Hurson, John ............................................................................................. 60

Kyle, Angelo ............................................................................................... 50

Letters, statements, etc., submitted for the record by:

Cornett, Mick, mayor, Oklahoma City, OK, prepared statement of ............. 77

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 95

Davis, Chairman Tom, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 4

Graham, John D., Ph.D., Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget, prepared statement

of ..................................................................................................................... 18

Holtz-Eakin, Douglas, Director, Congressional Budget Office, prepared

statement of ................................................................................................... 26

Hurson, John, president, National Conference of State Legislatures:

Information concerning Federal mandates relief .................................... 61

Prepared statement of ............................................................................... 67

Kyle, Angelo, president, National Association of Counties, prepared statement of ........................................................................................................... 52

Norton, Hon. Eleanor Holmes, a Representative in Congress from the

District of Columbia, prepared statement of .............................................. 98

Waxman, Hon. Henry A., a Representative in Congress from the State

of California:

Letter dated February 7, 2005 ................................................................. 8

Prepared statement of ............................................................................... 11

(1)

IS UNCLE SAM STILL PASSING THE BUCK?

THE BURDEN OF UNFUNDED MANDATES ON

STATE, COUNTY, AND CITY GOVERNMENTS

TUESDAY, MARCH 8, 2005

HOUSE OF REPRESENTATIVES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 2 p.m., in room 2157,

Rayburn House Office Building, Hon. Tom Davis (chairman of the

committee) presiding.

Present: Representatives Davis, Shays, Mica, Duncan, Turner,

Westmoreland, Foxx, Waxman, Van Hollen, and Norton.

Staff present: David Marin, deputy staff director/communications

director; Jim Moore, counsel; Robert Borden, counsel/parliamentarian; Rob White, press secretary; Drew Crockett, deputy director

of communications; Brian Stout, professional staff member; Teresa

Austin, chief clerk; Sarah D’Orsie, deputy clerk; Corinne

Zaccagnini, chief information officer; Kristin Amerling, minority

deputy chief counsel; Michelle Ash, minority senior legislative

counsel; Krisa Boyd, minority counsel; Earley Green, minority chief

clerk; and Jean Gosa, minority assistant clerk.

Mr. DAVIS. This meeting will come to order.

I want to welcome everybody to today’s hearing on the burden of

Federal mandates on State, county, and city governments. This

hearing will provide a look back at the Unfunded Mandates Reform

Act of 1995—we call it UMRA—a decade after its passage, and

begin this committee’s work to determine how best to fulfill the

promise of UMRA and strengthen the partnership among all levels

of Government. The reports, surveys and testimony provided by our

witnesses today are going to provide us with a good starting point

in this discussion. As we begin, let me say that this issue is of particular importance to me.

As a former county official, I have personally experienced the

strain that is often times placed on our localities by overly prescriptive and burdensome mandates from the Federal Government.

Over the last decade, Congress and the rest of the Federal Government have rightfully worked to transfer power out of Washington, DC, down to State and local governments, who can more effectively and efficiently administer many governmental programs.

Rooted in the belief that all issues not national in scope are most

appropriately and effectively addressed at the levels of government

that are closest to the people, UMRA was designed to restore balance to the Federal system. The law accomplishes this goal through

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ensuring informed decisions by the Congress and the executive

branch about the effects of Federal mandates on other levels of government, as well as the private sector.

While many of the requirements placed on States and localities

by the Federal Government are necessary, we need to be reasonable in their application. We also need to view the unfunded mandates issue through a post-September 11 prism, understanding that

a lot has changed over the last 4 years. A 21st century homeland

security mission requires unprecedented coordination, not only in

terms of planning and information management sharing, but also

in the dedication of resources. Looking at the world after September 11, it is clear that not every Federal mandate—whether or not

it is 100 percent funded—is a bad idea. Citizens expect all governments to take necessary actions to provide for their safety and security, and all governments must share in the costs.

There is no denying States and localities are the backbone of our

Nation. They deliver an overwhelming majority of government

services, and are primarily responsible for the issues most important to our citizens—from crime prevention to education to transportation to economic development, to name just a few. If the Federal Government is not responsible in the imposition of Federal

mandates, we will be heaping additional costs on our State and

local governments that will inevitably displace and replace worthy

and important State and local programs. It is basically a transfer,

if you will, from the Federal income tax, which is progressive, to

local property taxes, which are very, very regressive.

There have been signs that UMRA is working. According to CBO,

the number of bills containing intergovernmental mandates decreased by one-third between 1996 and 2002. In addition, the GAO

has found that only three proposed intergovernmental mandates,

as defined by UMRA, with annual costs exceeding the thresholds,

that have become law, an increase in the minimum wage in 1996,

a change in Federal funding for food stamps in 1997, and an adjustment in premiums for prescription drug coverage in 2003.

Despite the improvements made in the last decade, disagreements between the various levels of government on the definition,

the size and the scope of Federal mandates continues and are detrimental to the inter-governmental coordination and cooperation

that UMRA was meant to foster. The situation is all the more problematic when the Federal Government is running deficits, eliciting

complaints that we are simply shifting tax increases to lower levels

of government.

It has become clear to this committee that, while UMRA has

been a significant step in the right direction, it has not proven to

be a ‘‘silver bullet.’’ Indeed, many have begun to express concern

that UMRA is not an effective tool in preventing the imposition of

unfunded mandates as a result of exclusions in coverage and various loopholes in the law that exists. The fact is, Congress would

exempt itself from the laws of gravity if it could. [Laughter.]

Questions and challenges remain, and it is our hope to begin the

process of answering some of them today. Our new Subcommittee

on Federalism and the Census, ably chaired by Chairman Mike

Turner, a former mayor of Dayton, OH, will delve deeper into this

topic in the coming months in the hopes of providing proposals to

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strengthen UMRA. We are fortunate to have him on this committee. I look forward to working with him as the subcommittee’s

chairman on this and other issues as we move forward in the 109th

Congress.

We have two panels today, with extensive experience working on

this important issue, and I look forward to their testimony. I want

to especially thank NACo, the National Association of Counties, for

their work in putting together a snapshot of the costs of Federal

mandates, at our request, which is only a beginning, but it helps

to bring home the importance of examining this issue carefully. For instance, it is estimated that the $40 billion cost estimate reported in the survey only accounts for approximately 5 percent of

actual costs stemming from Federal mandates. Imagine if all the

counties who responded only provided 5 percent of their federally

mandated costs, the $40 billion estimate could rapidly climb to as

much as $800 billion, a crippling burden.

I am also particularly pleased that Gerry Connolly, who is the

chairman of the Board of Supervisors from Fairfax County, my

home county, was able to join us today. I look forward to Gerry’s

testimony and continuing to work with them on these important

issues.

[The prepared statement of Chairman Tom Davis follows:]

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Mr. DAVIS. I would now like to recognize the distinguished ranking member, Mr. Waxman, for an opening statement.

Mr. WAXMAN. Thank you very much, Mr. Chairman.

This year is the 10th anniversary of the passage of the Unfunded

Mandates Reform Act [UMRA]. And it is amazing what a difference

10 years can make.

Ten years ago, the Republicans had just taken control of the Congress, and we were debating the Contract with America. One of the

fundamental planks of the contract was the idea that Washington

should respect States’ rights.

In this committee, we heard speech after speech about how State

and local governments were closer to the people and should have

the freedom to design their own solutions to local problems. There

was a lot of merit in those speeches. In our Federal system, State

and local governments have enormous responsibilities. And our system of government depends on vibrant State and local institutions.

Yet now, just 10 years later, all this seems to be forgotten. Now

that Republican leaders are entrenched in the White House and

Congress, deference to States has been replaced with a ‘‘Washington knows best’’ mentality.

Congress has passed environmental laws curbing the authority of

States to regulate major sources of local pollution. The House has

repeatedly passed energy legislation that strips States of authority

over their coastlines, the siting of power lines, and hydropower

projects. Just last month, the Congress passed legislation that told

State courts that they could no longer hear certain types of class

actions.

The track record on budget issues is the same. We push responsibilities on the States and then we cut funding. The President’s

latest budget is particularly bad for State and local governments.

Important programs such as Medicaid and Community Block

Grants are facing major cuts.

The topic of today’s hearing is unfunded mandates, and these too

are growing. The No Child Left Behind Act is one prominent example. It imposes new mandates on States, but the President’s budget

does not provide adequate funding. As a result, State legislatures

now are considering opting out of the No Child Left Behind program, including the State legislature in the chairman’s home State

of Virginia.

Just last month, the House passed the REAL ID Act. This law

preempts State authority to determine who should get drivers’ licenses. It also imposes new Federal standards for the issuance of

drivers’ licenses. The National Governors Association and the Association of Motor Vehicle Administrators recently wrote, ‘‘The cost of

implementing such standards and verification procedures for the

220 million drivers’ licenses issued by States represents a massive

unfunded Federal mandate.’’

The Congress also is forcing costs onto the local governments in

more creative ways. One example is MTBE, which oil companies

use as an additive to gasoline. When MTBE leaks from tanks, it

contaminates water supplies. Local governments have successfully

sued the oil companies to pay for the clean-up costs. Yet House Republicans leaders want to pass legislation that would protect the oil

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companies and shift clean-up costs to the local taxpayers by preempting these lawsuits.

Local government organizations, many of whom are represented

here today, recently wrote to Members of Congress stating, ‘‘The liability waiver amounts to a massive unfunded mandate on local

governments and ratepayers.’’ And I would like to enter that letter

into the record at this time.

Mr. DAVIS. Without objection, the letter will be entered into the

record.

[The information referred to follows:]

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Mr. WAXMAN. I want to be clear that there are times when Federal standards are important. Air pollution is a good example.

What happens in Las Vegas may stay in Las Vegas, but what is

emitted in Ohio certainly does not stay in Ohio. Uniform Federal

standards are essential to set a level playing field to protect residents in downwind States.

Good judgment is needed, as well as healthy respect for the prerogatives of States. And too often, this is exactly what seems to be

missing in Washington. Just because one party in Washington controls the Government and has the power to impose its will does not

make it right.

I look forward to the hearing today on unfunded mandates. I

thank the witnesses for coming and I look forward to their testimony.

[The prepared statement of Hon. Henry A. Waxman follows:]

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Mr. DAVIS. Thank you very much. I turn for an opening statement to the gentleman, the chairman of the subcommittee, the gentleman from Ohio, Mr. Turner.

Mr. TURNER. Thank you, Mr. Chairman.

Chairman Davis, I would like to thank you for reviving what has

been and continues to be an important subject, the issue of unfunded Federal mandates. As a former mayor, I lived with the impact of Federal mandates and, yes, from a purely financial standpoint, they were a burden. However, I also recognize that mandates

do serve a purpose. And although there is a cost associated with

these mandates, there is likely a corresponding benefit as well. The

question usually comes down to, does the cost of the mandate outweigh the benefit, and if so, what can we do to reduce the burden

on our local and State governments?

This is an issue of jurisdiction, and protecting the authority and

control of State and local governments. In addition to the tax burden that these mandates represent, State and local governments

face reduced resources for basic services, community priorities and

economic development initiatives. At the root of the unfunded mandate debate is the fact that the ultimate responsible party is the

taxpayer. Whether those taxes are paid to the State, the city or the

Federal Government matters little. What matters to that individual taxpayer is that they can identify the government ultimately

making the decision to tax and hold them responsible for that decision.

On this 10th anniversary of the Unfunded Mandates Reform Act

of 1995, it is fitting that we again ask ourselves what we do when

the Federal Government passes along mandates and how we can

lessen that burden.

Chairman Davis, in organizing the Federalism and the Census

Subcommittee, has charged us with working to improve communication between State and local stakeholders so that these issues

are better understood on the Federal level.

Mr. Chairman, thank you for your leadership, and the opportunity to keep this issue in the forefront.

Mr. DAVIS. Thank you very much.

Any other Members wish to make opening statements?

Thank you. Then Members will have 7 days to submit opening

statements for the record.

On our first panel we have Dr. John Graham, the Administrator

of the Office of Information and Regulatory Affairs [OIRA], within

the office of OMB, charged with reviewing agency regulations containing Federal mandates. Joining Dr. Graham is the Director of

the Congressional Budget Office, Mr. Douglas Holtz-Eakin, whose

office plays a vital role, under Title I of UMRA, in assessing Federal mandates contained in legislation being considered by congressional committees.

As you know, it is our policy to swear you in before you testify.

If you would rise with me and raise your right hands.

[Witnesses sworn.]

Mr. DAVIS. Thank you very much for being with us today. Your

entire statement and reports are in the record.

Dr. Graham, we will start with you, and thank you for being

with us.

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STATEMENTS OF JOHN D. GRAHAM, Ph.D., ADMINISTRATOR,

OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET; AND DOUGLAS HOLTZEAKIN, DIRECTOR, CONGRESSIONAL BUDGET OFFICE

STATEMENT OF JOHN D. GRAHAM

Mr. GRAHAM. Thank you, Mr. Chairman and members of the

committee.

No topic is more worthy of continued discussion and dialog than

the topic of unfunded mandates.

Let me just summarize my testimony briefly so we can get to the

questions and dialog, and summarize it by reminding us, conceptually, what are the options available to us when we face a potential unfunded mandate.

One option is to rescind or to block the unfunded mandate. Rescind it if it is currently in place or block it if it is about to be imposed. And conceptually, that is certainly a possibility.

However, we need to keep in mind that some of these unfunded

mandates are rooted in the laws that Congress has passed, and

those may be difficult to remove. Or, in some cases, we may have

unfunded mandates that have such a strong justification that we

want to move forward and enforce those, even if they are not fully

funded. An example would be civil rights laws, where the Federal

Government takes a stance that certain expenditures will be taken,

and the Federal Government does not necessarily provide funds for

those.

A second conceptual solution would be to fund the unfunded

mandate at the Federal level. And as you can imagine, that particular solution draws the attention of the Office of Management

and Budget and other Federal policymakers concerned about the

deficit and Federal spending. But it is, conceptually, definitely one

of the options that has to be considered, and it needs to be part

of the dialog.

Option three, fund the unfunded mandate at the State and local

level or in the private sector. And while some of us in the Federal

Government may like this outcome, you will hear plenty of discussion this afternoon about people who are having difficulty with that

approach to this problem. But, conceptually, it is one of the possibilities, it has to be considered.

A fourth option is to modify the unfunded mandate, to reduce its

costs, to make it more flexible, or to provide some arrangement so

that it is a more practical approach to addressing public need. This

particular approach, modify the unfunded mandate, is one that we

at the Office of Management and Budget frequently engage in

when we deal with Federal agencies that are developing regulations. We ask questions like: Is there a less costly way to achieve

this public objective? Have you analyzed the costs of the alternative

ways of addressing this public objective, and at a minimum, made

sure that this information is available?

So each of these four are possibilities for addressing concerns

about unfunded mandates.

My staff has looked back over the last 10 years to try to learn

what has, in fact, changed in the way the Federal Government reviews regulations as a result of the Unfunded Mandates Act. And

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it turns out, if you look at Title II of the act carefully, which is the

analytic requirements for regulations, we would argue that the Executive order requirements that were already in place at the time,

put into effect by President Clinton, actually mirror pretty closely

what was put in the statute. So, from a standpoint of analytic requirements, it is not obvious to us that a lot changed as a result

of the Unfunded Mandates Act.

However, we do believe the consultation, requirements that there

be consultation by the Federal regulators with State and local authorities before they impose unfunded mandates, has been a subject of more attention, and we at OMB are trying to give that consultation requirement more life as we review regulations.

We certainly agree with the general principles of the Unfunded

Mandates Act, that cost and benefit information about regulations

should be made available to regulators and the public, and used

whenever possible in the development of regulations.

So, in summary, it is an excellent topic for a discussion. None of

the answers are particularly easy. The one that we have found, in

practice, the most constructive is option four in the four I gave you,

which is find ways to achieve the goals of the mandate in a less

costly way.

Thank you very much.

[The prepared statement of Mr. Graham follows:]

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Mr. DAVIS. Thank you very much.

Mr. Holtz-Eakin, thank you for being with us.

STATEMENT OF DOUGLAS HOLTZ-EAKIN

Mr. HOLTZ-EAKIN. Chairman Davis, Mr. Waxman, members of

the committee, the Congressional Budget Office is pleased to be

able to be here today. We have submitted testimony for the record

and as well recently released a report on our activities during the

year 2004 under UMRA. That report is the larger document out of

which my comments will be drawn.

Since 1996, Congress has attempted to recognize the costs of

mandates as imposed on State and local governments and on the

private sector in the course of the budget process. In the testimony

that we have provided to you and in the screens, what I thought

I would do is begin first by reviewing some of the key facts out of

those reports.

CBO has over the course of the 9-years reviewed over 5,000 bills

as a part of this process. There are slightly more in the way of reviews on inter-governmental and private sector mandates, but in

total there is a large experience in the operation of UMRA.

Next slide. Among the key features that comes out is that relatively few bills actually have mandates. Over 85 percent contain

no mandate whatsoever. About 10 percent of bills on both the private sector and the inter-governmental side, have a mandate which

lies below the threshold as specified in the law. $15 million for

inter-governmental mandates, $100 million for the private sector

originally, those are indexed for inflation. And somewhere between

1 and 3 percent of the mandates exceeded the threshold, had bills,

had mandates that exceeded the threshold.

Next slide. To our eye at least, there has been relatively little

trend through time. In both the costs of inter-governmental mandates, those which do and do not exceed the threshold, and also—

next slide—in the private sector, performance since 1996 has been

pretty uniform Congress by Congress, a relatively small fraction

take this feature. And finally, if one looks at the actual experience

of bills with substantial mandates, very few are enacted. Only five

bills with substantial inter-governmental mandates have been enacted. Twenty-six private sector mandates have been enacted, reflecting the relatively low threshold for private sector mandate.

This performance reflects the design of UMRA under which a

mandate occurs when there is an enforceable duty to compel or prohibit an action when there is a new condition or reduction in financial aid and if no flexibility is given to offset that reduction in a

mandatory program, or if there is a reduction in funding for an existing mandate. And very importantly, some things are not considered mandates. There are specific exclusions for activities in the

area of national security, constitutional rights, such as voting, and

in parts of the Social Security system.

And also, a mandate cannot exist under UMRA if it is a condition of Federal aid. A grant program of that type is quite common.

Where Congress goes next in considering the recognition of the

costs of mandates and the budget process will be a topic of great

interest. One possibility would be to simply clarify some of the

issues in UMRA which the CBO has struggled with over the years.

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For example, is the extension of an existing mandate a mandate in

and of itself, and does the threshold apply to new costs or total

costs under that mandate? Or alternatively, are indirect costs imposed by a mandate appropriate for calculation in contributing toward the threshold?

Alternatively, it is possibly to extend UMRA either by modifying

the thresholds in some way so as to include or exclude more bills.

To alter the legislative features of UMRA, increase points of order,

impose a point of order for private sector mandates, have a higher

threshold for overriding a point of order, and an inter-governmental mandate.

Or finally, it would be possibly to extend the scope of mandates

by limiting the exclusions or otherwise redefining a mandate under

UMRA. In any event, the CBO has been pleased to work with this

committee and the Congress in general in the pursuit of the recognition of these costs, and I look forward to your questions.

[NOTE.—The CBO Report entitled, ‘‘March 2005, A Review of

CBO’s Activities in 2004 Under the Unfunded Mandates Reform

Act,’’ may be found in committee files.]

[The prepared statement of Mr. Holtz-Eakin follows:]

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Mr. DAVIS. Thank you very much.

I am going to start the questioning with Mrs. Foxx.

Mrs. FOXX. Thank you very much, Mr. Chairman.

Dr. Graham, we appreciate your testimony very much. I know

you are trying to add value to our work.

Could you tell us what is a common problem you are encountering in working to ensure that the regulations are complied with?

What is the biggest obstacle?

Mr. GRAHAM. I think the biggest obstacle we see in addressing

the issues around unfunded mandates quite frankly are the actual

requirements in statute that Congress has placed on the executive

branch with regard to unfunded mandates. And we have to keep

in mind that the laws that underpin these unfunded mandates extend back many years, sometimes decades. A lot of them were developed without a clear consideration of how the consequences of

them would be financed.

So if the thrust of your question is, what is the biggest problem

we commonly face when we are dealing with an agency around

what is argued to be an unfunded mandate, it is that we have a

law, a statute passed by Congress which is basically forcing an

agency to move in a direction that creates that unfunded mandate.

There is not necessarily a lot of discretion in the executive branch

to handle that.

Where there is discretion to handle it, and oftentimes there is

such discretion, we work very hard at OMB with the agencies to

try to find ways to reduce the cost of the unfunded mandate while

maintaining whatever the public objective is, whether it be civil

rights, public health, environment, worker safety or whatever.

Mrs. FOXX. Mr. Chairman, could I do a followup?

Mr. DAVIS. Sure. You can go until your red light is on.

Mrs. FOXX. Have you made any recommendations on ways that

those requirements could be modified? Or do you see that as your

responsibility?

Mr. GRAHAM. I don’t think that we have, and quite frankly, we

are very well burdened at OMB just making sure that we keep

track for each of these 500 rulemakings a year that we review that

agencies are in fact addressing their obligations under the Unfunded Mandates Act and the Executive order. So we have been in

the trenches, working hard just making sure that we’re trying to

get compliance with what we currently have out there.

Mrs. FOXX. One more question, then. Could you, without our creating another agency, which I don’t think anybody really wants to

do, is there a way that we could deal with that with the problem

that you brought up, the requirements themselves, other than

doing it on a case by case basis? Is there any other vehicle for taking care of that problem that you know of?

Mr. GRAHAM. I think there are two aspects of the problem. One

is the legislative creation of unfunded mandates by the U.S. Congress and the President, because presumably the President signs

these laws into enactment. And I think frankly, my colleague Dr.

Holtz-Eakin from CBO probably knows better than I do the actual

ways in which the Unfunded Mandates Act is actually informing

the Congress and how it addresses those issues.

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Within the executive branch, in areas where we have discretion

in this area, I think one of the things that Congress can do that’s

very constructive is actually have oversight hearings on specific

regulations that involve an unfunded mandate and ask Federal

agencies and OMB if you will, what exactly they did in the course

of that rulemaking to cushion and keep to a minimum the cost burden of that regulation while still achieving their objective. I think

the process of doing that oversight would, I think, offer insight into

how to move forward.

Mr. DAVIS. Thank you very much.

Mr. Waxman.

Mr. WAXMAN. The administration, Dr. Graham, claims that it

deeply cares about and is concerned about unfunded mandates. But

as my opening statement indicated, I do not think it is being supported by the administration’s actions, and the energy bill is a good

example. The President and Vice President have urged we pass the

energy bill.

But I want to talk about one of the provisions mentioned in my

opening statement. There is this fuel additive MTBE, it has contaminated groundwater and surface water throughout the Nation.

There are internal documents in the oil industry that indicated

that in the 1980’s, they knew that there was a serious problem

MTBE would pose for the Nation’s water supplies. They knew

about the difficulty communities would face in cleaning up MTBE.

Yet each year they ramped up its use, and by 1990, the industry

admits it was using more than 80,000 barrels of MTBE each and

every day. Now communities are facing this contamination problem

and the cost of cleaning it up, which could cost $29 billion or more

in the coming years. The energy bill proposes a solution. But it is

a very troubling one. They said, let’s protect the oil industry and

protect it from having to be responsible.

I indicated, I had a letter opposing this provision from the National League of Cities, the U.S. Conference of Mayors, the National Association of Counties, National Association of Towns and

Townships, and many water groups. They say this is a massive unfunded mandate on local governments and ratepayers, while oil

companies like Exxon Mobile are announcing record setting profits,

legislation is pending to shift the cost from the oil companies to the

local governments.

So my question for you is, has the administration been silent on

this provision, which is a massive unfunded mandate? Does the administration support shifting $29 billion or more in cleanup costs

from the oil companies to local governments and ratepayers?

Mr. GRAHAM. As usual, you offer a provocative question. Let me

start by saying, there are plenty of unfunded mandates out there.

They are the responsibility of both Republican and Democratic administrations. I’m going to go right to your example.

Mr. WAXMAN. No, no, I want an answer. I only have 5 minutes.

I want an answer to my question. My question is, what is the administration’s position on this particular provision, not that there

are other problems in the world.

Mr. GRAHAM. Our position would be that you have given a good

example of a mandate by the Congress that was imposed on the executive branch in the Clean Air Act Amendments of 1990. You

39

have then argued that it has turned out to be an unfunded mandate. But it’s a good example of one that is congressionally imposed.

Mr. WAXMAN. You’re wrong, because I was involved in that Clean

Air Act.

Mr. GRAHAM. It was well known at the time that the most cost

effective solution to the mandate was in fact MTBE.

Mr. WAXMAN. We have a problem right now. MTBE is being used

around the country. It’s contaminated ground water. If you left the

law alone, then there would have to be, as in my own city of Santa

Monica, the oil companies helping to clean up. If this energy bill

is adopted, that would all be shifted.

What is your position on that provision in the energy bill?

Mr. GRAHAM. I would have to get you a written answer to that,

frankly, because I don’t know exactly what the position is. But I

do know it’s a good illustration of my general point, the topic of

this hearing, which is that congressionally imposed unfunded mandates are a serious problem.

Mr. WAXMAN. Yes, but this is going to be a congressionally funded, unfunded mandate imposed upon the country if the administration supports it, which to me, the rhetoric about opposing unfunded

mandates sounds great, but disappointing, however, when you are

presented with a very concrete example, and the administration

won’t give us its opposition to it. That’s a lot of money involved.

Now, Dr. Graham, I think everyone agrees that Federal mandates are crucial in setting minimal protections for the health of

our citizens. We have the Clean Air Act, we have drinking water

laws, Superfund, they have strong, strong public support because

no matter where you live in this country, you ought to be able to

breathe clean air and drink safe water. But the administration is

presiding over a weakening of a lot of these public health and environmental protections. Your office has had a key role in the process.

Specifically, I want to ask you about how EPA has failed to carry

out its obligation of the Clean Air Act to control emissions from

toxic mercury. Widespread mercury pollution is a serious threat to

our children’s health and development. Every year 600,000 babies

are born in the United States with mercury in their blood above

the levels considered safe. EPA is under a court order to approve

the deadline to issue a regulation next week to reduce mercury

emissions from coal-fired power plants, which are the largest remaining source of mercury emissions in the United States.

Yet EPA’s mercury rulemaking today is a travesty of environmental regulation. Just a few weeks ago the Inspector General for

EPA issued a scathing report on EPA’s mercury rule, saying the resulting weak rule would minimize clean-up costs for the utility industry but sacrifice benefits for public health.

Dr. Graham, even today, we have a report from the Government

Accountability Office that finds that EPA distorted an analysis of

its mercury proposal in order to make it appear more effective than

it is. My question to you is, did your office urge EPA to analyze

any mercury control option more stringent than the administration’s preferred option?

40

Mr. GRAHAM. Yes, indeed, we did, sir. And in fact a 70 percent

reduction in mercury emissions over the next 15 years would represent a very substantial environmental accomplishment. And also

an unfunded mandate.

Mr. WAXMAN. Did you look at an analysis that would have been

less controversial than the one that has been proposed, that might

have been more stringent in reducing mercury emission levels?

Mr. GRAHAM. Yes, I think that was your previous question, which

is yes.

Mr. WAXMAN. Would you provide that for us?

Mr. GRAHAM. As soon as the rulemaking is completed, certainly,

sir.

Mr. WAXMAN. Will you ensure that EPA corrects its analysis

prior to issuing the final rule?

Mr. GRAHAM. Pardon?

Mr. WAXMAN. Will you ensure that EPA corrects its analysis

prior to issuing the final rule?

Mr. GRAHAM. We are in fact engaged in the process of reviewing

that final rule right now. We are working as hard as we can.

Mr. WAXMAN. If a corrected analysis supports stronger mercury

regulation, will you work to ensure the EPA modifies its proposals

accordingly before it is finalized?

Mr. GRAHAM. That is our standard job, and we are doing it on

mercury, sir.

Mr. WAXMAN. OK. Thank you, Mr. Chairman.

Mr. DAVIS. Thank you very much.

Mr. Westmoreland.

Mr. WESTMORELAND. Thank you, Mr. Chairman.

Dr. Graham, could you tell me how clean air would have to be

before some people would be happy with how clean air needs to be?

I mean, I think if you ask everybody in this room who wanted to

breathe clean air, I think everybody would raise their hand, or who

wanted to drink clean water. I certainly want to drink clean water,

I would raise my hand.

But how clean is clean? In Georgia you could drink two liters of

our water at a level that they say is bad for you, you could drink

two liters a day for 65 years and you would have a better chance

of getting struck by lightning than you would of dying from that

water. So when you look at the Clean Air Act, or the Clean Water

or whatever, is there a cost benefit analysis that’s run on it as to

how many lives that we’re saving trying to get our air to a certain

point or our water to a certain point, versus doing other things that

may save more lives?

Mr. GRAHAM. The premise of your question, I share the logic behind. We do at OMB insist that agencies provide even for environmental regulations a cost and benefit justification for the particular

proposal that they are making.

I think it’s oftentimes easy to forge the dramatic progress this

country has made over the last 30 or 50 years, both in clean air

and in clean water and the continuing progress that is occurring.

So I think when you hear the crisis kinds of stories, you have to

keep in mind what the actual data say, about what the trend lines

are in this country.

41

There are of course serious public health problems in this country that may even be more serious than some of these environmental issues. You know the administration has bene trying to

draw attention to concerns about obesity in this country and its impact on premature death and disease and cost in the health care

sector. That’s a concrete example of the need to provide that comparative analysis.

Mr. WESTMORELAND. Mr. Chairman, could I have one other question, please?.

Mr. DAVIS. You can keep going until your light turns red. You

have 5 minutes.

Mr. WESTMORELAND. Thank you. Dr. Graham, you state that the

inter-governmental consultation should take place as early as possible, even before the issuance of a proposed rule, and that these

consultations should be integrated explicitly into the rulemaking

process of some of these agencies. Do we need as a Congress to put

these into statute, these guidelines into statute?

Mr. GRAHAM. I think we already have that in statute, I believe,

the requirement for consultation. Though I guess I would have to

double check and make sure I stated that correctly. I guess I don’t

see any evidence yet that there has been widespread non-compliance with the consultation requirement. But if in the process of developing the record of these hearings we do find substantial evidence of that, then either we at OMB need to do our jobs better

or we need to consider some form of codification of those guidelines.

Mr. WESTMORELAND. Thank you, sir.

Mr. DAVIS. Thank you very much.

Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Mr. Chairman, thank you, gentlemen, for your testimony.

I just want to pick up on a point that Mr. Waxman mentioned

in his opening statement with respect to some of the education programs, which although they don’t come under the strict definition

of these unfunded mandates, I think if you talk to people in the

States, and I know we’re going to have testimony from people representing local jurisdictions and State jurisdictions, and certainly

as someone who came from a State legislature, you look at these

as mandates from the Federal Government. Specifically, No Child

Left Behind, the IDEA special education legislation.

In both cases, I think the Federal Government, on balance, had

the right policy, especially with IDEA, ensuring that every child,

regardless of his or her disabilities, gets a good education. At the

time, with that law as well as No Child Left Behind, the Federal

Government made certain commitments.

We talked about what the significance and authorization level is

or is not, but I would say that especially with respect to those two

programs, the commitments that the Federal Government made, 40

percent funding with respect to special education, and the authorized levels that went back and forth through quite a bit of negotiations between the Congress and the White House were considered

by many to be a commitment and obligation made by the Federal

Government that is not being met. The most recent budget submitted by the White House with respect to No Child Left Behind is

42

$12 billion underfunded. Special education is nowhere near the 40

percent commitment that we have made.

When you review these obligations, do you make any assessment

as to what impact, whether they should be somehow discussed

within the overall umbrella of unfunded mandates or just say,

that’s kind of too bad and you’re on your own?

Mr. GRAHAM. We look hard at the question of the appropriate

Federal funding role. Just to get some facts on the table, the actual

fiscal year 2006 budget request from the President represents a 46

percent increase for No Child Left Behind programs, compared to

2001. With the money targeted particularly at those programs,

with the greatest promise for improving student achievements,

such as Title I, Reading First, and the President’s High School

Intervention Initiative.

Specifically, the total request for No Child Left Behind programs in 2006 is $25.3 billion, an increase of nearly $1 billion or 4 percent

over the 2005 level, and nearly $8 billion, or 45 percent over the

2001 level. Now, whether by some people’s definition that’s fully

funded or not funded enough, let there be no mistake about where

the President is on this subject of expansion in Federal support for

No Child Left Behind.

Mr. VAN HOLLEN. Well, I guess the question is whether the additional funds match the mandates and obligations that were placed

on the States. At the time that those decisions were made, the policy committees, Education and the Workforce Committee in the

House, the other committees in the Senate and the President in negotiations with the Congress determined that in order to meet the

requirements, expectations within No Child Left Behind, the full

authorized level would be the amount that people set out as the appropriate amount.

So while there is no doubt there have been increases in funding

under the No Child Left Behind bill, the issue when you are discussing unfunded mandates is whether or not the amounts provided are sufficient to match the obligations placed on the States.

Clearly there is a big gap between what the White House budget

has in it and the amount that the Congress, that was in the bill

signed by the White House originally.

I think you will have testimony later, and I don’t want to belabor

this point, but we are hearing from our constituents who have a

much broader definition of unfunded mandates than is suggested

in this particular analysis. Those are the unfunded mandates that

people are having to struggle with every day at the State and local

level. I just think it’s important that when we put together our

budgets and establish our priorities here in Congress, we do a better job of meeting the promises that we made at the time that we

undertook these obligations, imposed these obligations on the

State.

Thank you, Mr. Chairman.

Mr. DAVIS. Thank you very much.

The gentleman from Tennessee.

Mr. DUNCAN. Thank you, Mr. Chairman.

Dr. Graham, I was first elected in 1988. Every year, once a year,

our Governor for those first 6 or 7 years was a real fine man, Governor McWhorter, a Democrat. He would always start out every

43

meeting, he would say, please, no more unfunded mandates. And

I would sit there and I would think, well, it’s your party that’s putting all these things on.

Then Speaker Gingrich came in, and he wanted our first hearings in all our committees to be on unfunded mandates, because he

wanted this to be a real Republican emphasis. What I’m wondering

about, Government, of course, the Federal Government keeps growing and growing and growing and it seems that the rules and regulations and red tape just keep growing.

The National Conference of State Legislatures has gotten us

some, they’ve got three laws that they consider examples of continued unfunded mandates, the American Job Creation Act of 2004,

the Individuals with Disabilities Education Act, the Medicare Prescription Drug Improvement and Modernization Act. What I’m

wondering, I’m sorry, I just got here just a few minutes ago, and

I didn’t get to hear your testimony and your answer to previous

questions, but are we making any progress on these things? You

were just asked about the No Child Left Behind law.

Well, the Democrats always complain about the funding on that.

What they don’t say is, President Bush has given more money than

any president in history, far more, for instance, than President

Clinton and so forth. But the fact is, it’s such a political thing, if

we Republicans said we were going to spend half the Federal budget on education, they’d have to top us. But I do read that some

States are wanting to pull out of the No Child Left Behind thing,

not because so much of the funding but just because of all the mandates and requirements.

Are you working on that, or what’s your response to those States

that say it is too burdensome? And are we making progress in

other areas on this?

Mr. GRAHAM. I can provide you for the record a variety of detailed ways in which the administration has worked to make the

requirements of the No Child Left Behind law more flexible, to

leave room for State and local governments to make cost effective

choices on a local basis.

The one thing I want to make very clear is, the suggestion that

the authorized level for a funding program is necessarily the definition of the mandate about whether it’s funded is a very new idea

as far as I am concerned. I don’t know that there is any, there are

very few Federal programs that are literally appropriated at exactly the level they are authorized at. If we are going to call every

one of those an unfunded mandate, we’d better get CBO into action

and figure out exactly what we have done to the Federal deficit by

pulling all these programs up to their authorized level.

The commitment of the President to funding No Child Left Behind is pretty darned clear on the numbers I gave to you. So I

think there shouldn’t be any question about that.

Mr. DUNCAN. What I was getting at, though, getting away from

the issue of funding, and you’re exactly right, there is hardly any

program that is ever funded to the authorized level. But are we

working to try to make sure that these requirements under the No

Child Left Behind Law and these other laws are not unduly burdensome? Because that was supposed to be the goal of the unVerDate 11-MAY-2000 10:29 Apr 04, 2005 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 D:\DOCS\20145.TXT HGOVREF1 PsN: HGOVREF1
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funded mandates effort in the first place. Do you think we are

making progress in that regard?

Mr. GRAHAM. We are making progress on that. There is, with the

Department of Education, a process of negotiated rulemaking,

where the various stakeholders that include the State and local

representatives work with the legislation as passed and the discretion that’s available to it, to achieve the most sensible regulation.

So there is progress in that direction. And at the same time, we

have been expanding Federal support to make it financially more

viable to implement those programs. More flexibility and Federal

funding make it a more practical approach.

Mr. DUNCAN. All right, thank you very much.

Mr. DAVIS. Thank you very much.

Mr. Turner.

Mr. TURNER. Thank you, Mr. Chairman.

Our chairman, in working with the National Association of Counties, has taken a lead in trying to get examples of unfunded mandates and a quantification of their impact. As you read the report

that we have in the record and listen to the testimony that is going

to follow, they have given us a snapshot of several areas in which

an unfunded mandate has been identified and its actual costs, or

the experiences that these counties are having as a result of that

unfunded mandate.

I was wondering to what extent OMB or CBO, in retrospect,

looks at the issues of the actual expenditures that local and State

governments have when an unfunded mandate is identified, both

in items that occurred prior to UMRA, whether or not the annual

increase of those mandates exceeds our threshold expectation,

whether or not the actual numbers exceed the threshold estimates

that we have, because in some instances where you identified the

threshold, it’s below the number an action can be taken.

The actual experience may be different. Do you look then as to

whether or not the actual experience really does fall under the

threshold, and also in the areas of the amount of funding. And in

part of the testimony you discuss the issue of doing a benefits analysis of a mandate. To what extent retrospectively do we go back

and figure out the actual costs that are being expended and whether or not that changes the picture of the cost benefit analysis?

Mr. GRAHAM. I think you asked an excellent question. That is,

even if we analyze and project the costs or benefits of these unfunded mandates before they are enacted, what do we actually

learn over time about how much they actually cost and what their

actual benefits are. I regret to report to you that there are probably

over 20,000 Federal regulations, new Federal regulations that have

been adopted since 1980 in this country. Most of them have never

been looked at to determine what their actual costs were and what

their actual benefits were.

There is a small literature in this area that is developing. What

it finds is in some cases the costs of regulation proved to be less

than expected, but in other cases, they proved to be more than expected. We don’t yet have concrete evidence of a pattern across all

these regulations that we could give you that would give you a simple result.

45

Mr. HOLTZ-EAKIN. CBO concentrates under UMRA looking at the

prospective costs of mandates and as a result, has no formal responsibility to go back and re-examine the cost of existing mandates. To do so would change dramatically the character of our responsibilities from identifying costs in the budget process to being

more of a regulatory budget. It would be quite an undertaking.

Nevertheless, there are circumstances in which the ongoing review of responsibilities does give us indications that things didn’t

turn out the way we expected. We always try to learn from the experience of previous analyses, and some examples jump to mind.

For example, no one anticipated the costs of HIPA to be what they

turned out to be. And by staying in consultation with the State and

local governments, we have leaned a great deal about the cost of

that mandate over time. That informs our future analyses, but is

not brought into the process in any formal way.

Mr. TURNER. One of the issues that Mr. Waxman raised touches

on the area of economic competitiveness, which is not necessarily

an issue that was laid out in the Unfunded Mandates Act. Does

OMB undertake any effort in looking at these to measure or consider what the impact might be on local communities and their economic competitiveness?

Mr. GRAHAM. I don’t recall there being any formal requirement

in either Executive order or in statute that we review regulations

for their impact on the competitiveness of a community or an industry or the country as a whole. There is an economic analysis requirement, and cost impact requirement. But it is not focused specifically on the competitiveness question, so you raise a good point.

Mr. TURNER. Thank you. Thank you, Mr. Chairman.

Mr. DAVIS. Thank you very much.

Mr. Holtz-Eakin, I want to commend you and the CBO for the

way you handle and administer UMRA. It’s clear to me you’re not

only complying with the letter of the law, you’re sincerely working

to give Congress a product that assists in our decisionmaking.

Director, in your statement you report that between 1996 and

2004, CBO found 617 legislative proposals containing inter-governmental mandates and 732 proposals containing private sector mandates. The vast majority of these mandates fell beneath the threshold set in UMRA. In spite of this fact, has CBO looked at the aggregate effect of all these mandates?

Mr. HOLTZ-EAKIN. No, we have never undertaken an aggregation

exercise, which again would translate this into more of a regulatory

budget kind of exercise.

Mr. DAVIS. I wonder if you could go back and have somebody look

at these and see what the cumulative effect is. We set a threshold,

but I don’t think anybody anticipated hundreds of proposals flying

under the radar screen that when accumulated could be worse than

two or three giant mandates.

Mr. HOLTZ-EAKIN. As a matter of doing the arithmetic, I think

that’s probably an insurmountable task. In many cases, we don’t

know the exact dollar figure of the mandate. It’s either clearly well

above the threshold, or clearly well below. The time necessary to

identify the particular dollar figure didn’t merit it under the circumstance. We didn’t really have that in the records.

46

Mr. DAVIS. You also pointed out that hundreds of bills impose requirements on inter-governmental partners as a condition for receiving grant money. It’s kind of a new unfunded mandate. Is there

an aggregate of the cost of these requirements to State and local

governments?

Mr. HOLTZ-EAKIN. The CBO hasn’t put that together. I know a

variety of the interested parties have put together aggregates.

One of the real difficulties there is trying to examine the history

and imagine what would have happened in the absence of this legislation, would the State governments themselves, for example, undertake some policy. So trying to figure out the incremental cost of

the mandate per se is difficult in looking back.

Mr. DAVIS. In your statement, you give us a working definition

of what an unfunded mandate that would be covered under UMRA

would look like. I’m looking for a practical example of how CBO decides to call a proposal a covered mandate. For example, let me

give you two essentially voluntary acts: No Child Left Behind,

which I think a lot of my legislators think is an unfunded mandate;

and the driver’s license requirement in H.R. 10 last year, which

came from this committee. Neither act required a specific State action. Yet one is covered under UMRA and the other one isn’t.

Mr. HOLTZ-EAKIN. With respect to the No Child Left Behind,

that’s clearly a condition of Federal aid, and as a result is not a

mandate under the definition by UMRA. The driver’s license issue

is one where the Federal Government essentially has made it impossible for States to continue under the status quo their own programs of licensing and provide a widely usable driver’s license. It

would be the case, for example, that driver’s license would not

allow you to get onto an airplane, you would not be able to use it

to get a passport.

Mr. DAVIS. But you could use the driver’s license to drive. Fundamentally that’s what driver’s licenses are for.

Mr. HOLTZ-EAKIN. But effectively as a means of identification, it

would no longer be widely acceptable. The enactment of those provisions made it impossible for the States to continue voluntarily

with the status quo and have their program continue in its current

form.

Mr. DAVIS. I thought a driver’s license is to be a driver’s license.

I guess if you want to call it driver’s license and i.d., that would

be different.

Mr. HOLTZ-EAKIN. In both H.R. 10 and then more recently in

H.R. 418, it was focusing on identification.

Mr. DAVIS. OK. I obviously disagree with you on that, but at

least I understand your thinking.

Has OIRA considered scoring agencies’ rulemaking processes

based on their ability to comply with the mandate in UMRA to

analyze alternative rules and select the least costly, most cost effective or least burdensome one?

Mr. HOLTZ-EAKIN. A good question on that. The current Executive order that governs OIRA’s rulemakings has language similar

to the Unfunded Mandates Act. We already score agencies on their

compliance and regulatory analysis with the Executive order requirements. So while technically we may not score agencies exactly

47

on the Unfunded Mandates Act language, we score them something

very similar in Executive Order 12866.

Mr. DAVIS. OK, thank you very much. Mr. Waxman, I will yield,

I’ve got time. I know you had one more question.

Mr. WAXMAN. Yes, Mr. Chairman. I find this all very interesting

to find out what is and is not an unfunded mandate. I guess whenever we tell State and local governments we have an offer you can’t

refuse, it’s going to cost you money, I think they look at it as an

unfunded mandate.

I want to go back to this MTBE issue, because it’s an issue that’s

now pending before the Congress. I think it’s important to look at

this issue, because what we have now is a very high cost that’s

going to be imposed by somebody because of the dangers of use of

this chemical additive. Dr. Graham lashed out and said this was

a congressionally mandated provision that MTBE use. I think the

record would show otherwise. I don’t think that’s an accurate statement. I know he’s taken that position, the API, American Petroleum Institute, took that position as well.

But I have correspondence that I want to make a part of the

record with API in 2000. API provided data that shows the oil industry was ramping up its use of MTBE prior to the 1990 amendments. From 1986 to 1990 the oil industry was increasing its use

of MTBE on average by more than 2.6 million barrels per year. So

before even Congress came to the Clean Air Act amendments or

even considered the idea of reformulated gasoline requirements,

MTBE was increased in use to the point where the oil industry was

using 84,000 to 100,000 barrels every day in the United States by

the time the act was even adopted.

If you look at the, according to the API, prior to passage of the

1990 amendments, the oil industry was using some 40 percent of

the amount of MTBE that would ultimately be used in 1990. Republicans have acknowledged that Congress never mandated

MTBE use. I also want to put in the record a memo from the Oversight and Investigations Subcommittee from 1995, beginning on the

bottom of page 8, the memo discusses at some length how the

Clean Air does not mandate any specific fuel additive. The memo

states: ‘‘A major aspect of the debate on the 1990 Clean Air Amendments was the issue of fuel neutrality. In essence, since various

fuels and fuel constituents compete for the RFG and alternative

fuels market, an effort was made to avoid dictating any particular

fuel choice. On this matter, the May 17th, 1900 report of the Committee on Energy and Commerce on H.R. 3030 could not have been

more clear.’’

Dr. Graham, I say this because I’m disappointed you decided to

repeat the oil industry argument today that Congress mandated.

Congress mandated a fuel neutral provision.

But that really has nothing to do with anything, because the oil

companies are using MTBE. We have a problem with the cost of

cleaning up the MTBE. The reality is going to be who should pay

for that cost. What I want to know is, is the administration going

to oppose this imposition on the State and local governments and

ratepayers in order to protect the oil companies.

That to me, no matter how you slice it, is an unfunded mandate

and in order to live up the rhetoric of not wanting unfunded manVerDate 11-MAY-2000 10:29 Apr 04, 2005 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 D:\DOCS\20145.TXT HGOVREF1 PsN: HGOVREF1
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dates and recognize that this is something that we shouldn’t impose on local governments, I would hope the administration would

be wiling to put its position where it’s rhetoric is and not just side

with the oil companies. You said you don’t even know if the administration has a position on this issue. It’s a huge amount of money.

I hope we can get an administration position. And I hope they’ll

propose it. I know you support the energy bill, but this position

should not be supported by the administration.

I look forward to hearing from you further on this.

Mr. GRAHAM. Just to clarify, if it’s true that MTBE use was going

to increase even without the Clean Air Act requirements, which

was the thrust of the first half of what you just presented——

Mr. WAXMAN. That’s right.

Mr. GRAHAM [continuing]. Then how is it an unfunded mandate?

It would have happened anyway without the Clean Air Act.

Mr. WAXMAN. But the unfunded mandate is what is now in the

energy bill, which would say that the oil companies are no longer

going to be responsible for——

Mr. GRAHAM. But what I’m saying is, if you take the view that

the Clean Air Act requirements didn’t stimulate MTBEs——

Mr. WAXMAN. Oh, it stimulated it.

Mr. GRAHAM. Oh, so we are in agreement then that the Clean

Air Act was a substantial factor in stimulating the growth of

MTBEs——

Mr. WAXMAN. It stimulated a growth of what we already had——

Mr. GRAHAM. Then we’re much closer than I thought we were.

Mr. WAXMAN [continuing]. It would have happened anyway, but

the reality now——

Mr. GRAHAM. Because if it’s going to happen anyway, it’s not an

unfunded mandate by the Federal Government.

Mr. WAXMAN. That’s not the unfunded mandate. The unfunded

mandate would be if you excuse the oil companies and make the

local governments have to pay for the cost, rather than have the

oil companies stand in litigation now and take on those costs.

Mr. GRAHAM. I think that’s more of a liability question, not a

mandate question.

Mr. WAXMAN. Well, it’s a mandate if you excuse them from liability. That’s where——

Mr. GRAHAM. I think we understand each other.

Mr. DAVIS. Thank you. I might add, if the energy bill comes to

the floor, you could raise a point of order at that point under

UMRA and you could force a separate vote under the House rules,

Mr. Waxman.

Mr. WAXMAN. Let me ask——

Mr. HOLTZ-EAKIN. Yes, sir, under UMRA it would be an unfunded mandate. There would be a point of order against it on the

floor.

Mr. WAXMAN. And that could be waived by the rule adopted by

the House?

Mr. DAVIS. No, it probably could not.

Mr. HOLTZ-EAKIN. Under 418, there was a point of order raised

against the rule itself, which was lost on the vote.

Mr. DAVIS. You get a separate vote. You are guaranteed a separate vote on that issue.

49

Mr. HOLTZ-EAKIN. Yes, a separate vote.

Mr. WAXMAN. Well, I hope State and local governments will realize that and come in and press against this as they have in this

letter that I read. But I would hope that the administration would

not leave them holding the buck for the costs which has resulted

from the oil industry turning to MTBE as opposed to any other alternative that they might have chosen in cleaning up the gasoline.

Mr. DAVIS. I want to thank this panel. It has been very, very

helpful. We appreciate the work that you have done. I will dismiss

you now, and we will take a 5-minute recess as we get our second

panel on. Thank you very much.

[Recess.]

Mr. DAVIS. We are ready for our second panel. This is comprised

of representatives from State, county and city governance. We have

Angelo Kyle, who is the county board chairman from Lake County,

IL, working his way up. Nice to see you, met him on Sunday. We

also have Mayor Mick Cornett of Oklahoma City, OK, here on behalf of the U.S. Conference of Mayors. Thank you very much, we

look forward to your testimony. Mr. Van Hollen, do you have someone you want to introduce on this panel?

Mr. VAN HOLLEN. Yes, thank you. I would like to introduce John

Hurson, who is a friend and colleague. We actually ran for the

Maryland State Legislature together in the same year, back in

1990. Since then, John was the majority leader in the Maryland

House of Delegates. He now chairs the Health and Government Operations Committee and is doing a terrific job as president of the

National Conference of State Legislators.

Mr. DAVIS. He didn’t serve with Mr. Dennis, too, did he, on our

staff? Did he serve with Mr. Dennis?

Mr. VAN HOLLEN. Mr. Dennis, council member Dennis was just

before, Senator Dennis was there just before we were.

Mr. DAVIS. OK, good, not corrupted, that’s great. [Laughter.]

Mr. VAN HOLLEN. But he did a great job, too.

Mr. DAVIS. Thank you very much.

I am also pleased to introduce someone I alluded to in my opening remarks, the chairman of our county board in Fairfax County,

Gerry Connolly. I have always noted with pride that when I was

chairman of the county board, Fairfax County was selected the best

financially managed county in the country. I was proud of that for

years, and now under Mr. Connolly they have obtained the same

thing. So I no longer have sole ownership of that.

Gerry, thank you for being here on behalf of NACo. I know that

Gerry Hyland, our Mount Vernon supervisor, had hoped to be with

us today and his mother has passed away. I hope you will send him

all the best wishes from all of us as well. I’m going to start, Mr.

Kyle, with you. We will swear everybody in, and then we will go

straight down. I think you know the rules. You try to keep it to

5 minutes as best you can. Rise with me and raise your right

hands.

[Witnesses sworn.]

Mr. DAVIS. Mr. Kyle, you are on.

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STATEMENTS OF ANGELO KYLE, PRESIDENT, NATIONAL ASSOCIATION OF COUNTIES; GERRY CONNOLLY, CHAIRMAN,

FAIRFAX COUNTY BOARD OF SUPERVISORS; JOHN HURSON,

PRESIDENT, NATIONAL CONFERENCE OF STATE LEGISLATURES; AND MICK CORNETT, MAYOR, OKLAHOMA CITY, OK

STATEMENT OF ANGELO KYLE

Mr. KYLE. Thank you, Chairman Davis. Again, we appreciate you

making your presentation at our legislative conference just a while

ago. To Ranking Member Waxman, also to Congressman Turner,

we had an opportunity to testify before his subcommittee on the

CDBG block grant. To other members of the Committee on Government Reform, I would like to thank you for this opportunity to participate in the hearing this afternoon. My name is Angelo Kyle,

Commissioner of Lake County, that great county in Illinois. I am

also proud to serve as president of the National Association of

Counties.

As you know, county governments play a vital and growing role

in the lives of America’s families, bringing crucial services to communities from rural America to our suburbs and central cities. Too

often, county governments are viewed as just another interest

group in Washington. We are not an interest group. We are elected

representatives of the people, serving our role in a partnership

with States and the Federal Government.

Too often, the Federal Government decides that it knows best

how to handle issues in our communities and dictates a one size

fits all approach. County officials resent decisions being taken out

of our hands and being made instead by others hundreds and even

thousands of miles away in Washington, DC, especially when we

have to pay for it.

A decade ago, you and other Members of Congress agreed that

the Federal Government should not enact mandates without paying

for them. You responded to the outcry from State and local elected

officials who were fed up with unfunded Federal mandates by enacting the Unfunded Mandates Reform Act of 1995. Mr. Chairman,

you should be proud of your role as a lead sponsor in enacting the

Unfunded Mandates Reform Act. The tools that UMRA provides for

estimating and highlighting the costs of mandates have largely

worked as they were intended.

We have also found that the unfunded mandate point of order is

in effect a deterrent. Passage of the Unfunded Mandate Reform Act

was a landmark achievement in the history of federalism. But it is

not a comprehensive or perfect solution to the problem of unfunded

mandates. The Federal Government continues to impose mandates

on State and local governments and many of our counties report

that the burden is increasing. Counties continue to struggle with

mandates that were adopted prior to the passage of the Unfunded

Mandates Reform Act, such as the Clean Air Act and the Clean

Water Act.

Phase 2 storm water regulations increasingly require counties to

monitor and treat runoff from construction sites, car washes and

other sources of groundwater pollution. Within the last year, new

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tion. Regulatory mandates such as these have become more strict

and expensive to implement over time, especially for counties with

fewer resources.

Another expensive mandate facing counties is the Help America

Vote Act. The voters of my county, my county clerk and the U.S.

Justice Department will all tell you that Lake County is required

to comply with HAVA. Not so, according to UMRA. HAVA is not

considered a mandate because it enforces a constitutional right.

Mr. Chairman, I believe that every individual has a right to vote

and to have that vote counted. I do not agree that those costs are

irrelevant within the Federal legislative process. The exclusions for

certain kinds of legislation do a great disservice to the transparency in Government and to State, counties and cities throughout the Nation.

Another huge unfunded mandate on counties is uncompensated

health care. When a patient enters the hospital, the Federal Government dictates many of the decisions that will be made about his

treatment, the services his doctor will perform, the hospital facilities he will use and the products the pharmacist will supply. From

the Emergency Medical Treatment and Active Labor Act to eligibility for Medicaid, the Federal Government dictates much of the

who, what, when, where and why of providing health care services.

Counties shoulder an enormous burden of cost for uncompensated

health care. The Federal Government has not only failed to step

forward and take responsibility for the plight of the uninsured, it

has persisted in shifting the costs to counties.

The answer to the spiraling costs of health care at the Federal

Government is not to cut costs at the expense of shifting them onto

counties and other local governments, but to engage with us in a

process of identifying changes that we can all make together to improve the Nation’s health care delivery system.

The message that I want to leave with you is not that counties

are unwilling to provide these needed services, but if the Federal

Government believes that it knows best how to provide clean water

supplies or run county elections or manage county hospitals, then

it should at least pay for the mandates that it passes on to county

officials. Mr. Chairman, the Nation’s county officials look forward

to working with you to explore options for strengthening UMRA.

We believe that the best approach is to build on its success, and

by expanding the current process for attaching cost estimates to

proposed mandates.

We also believe that it is time to strengthen the enforcement

power of point of order. In so doing, we must find a way in the appropriations process to enforce the creed, no money, no mandate.

Mr. Chairman, that concludes my testimony. I want to thank you

for the opportunity to share the views of the National Association

of Counties on this important issue and look forward to any questions that you and other members of the committee might have.

Thank you.

[The prepared statement of Mr. Kyle follows:]

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Mr. DAVIS. Thank you very much.

Mr. Connolly, thanks for being with us.

STATEMENT OF GERRY CONNOLLY

Mr. CONNOLLY. Thank you, Mr. Chairman, and I want to thank

you for your gracious welcome today. I also want to say a special

hello to Chris Van Hollen, with whom I worked in the U.S. Senate

a number of years ago. Great to see Chris up at the dais.

My name is Gerry Connolly, and I serve as both the chairman

of the Fairfax County Board of Supervisors, and as the president

of the Virginia Association of Counties, which of course is an active

member in NACo. I want to thank you, Mr. Chairman, for the opportunity to participate today and to testify on the burden of unfunded Federal mandates. On behalf of the county officials

throughout Virginia in particular, I want to thank you, Mr. Davis,

for your commitment to conduct oversight hearings on the Unfunded Mandates Reform Act.

We also want to applaud your decision to create a new Subcommittee on Federalism and the Census, and particularly your selection of Congressman Michael Turner as its new chairman. We

know that he brings much to the role, given his experience as the

former mayor of Dayton, OH, like yourself, somebody with a lot of

experience in local government who would appreciate the impacts

of congressional legislation on local government.

The advisory commission on Inter-Governmental Relations issued

a report in 1994, noting that the full cost of federally induced State

and local expenditures is unknown in part, because no Government

agency or individual has developed a comprehensive tabulation of

such costs. Two years later, the commission was disbanded and its

information about the lack of comprehensive information on the

cost of unfunded mandates is still true today.

I want to say that I think Congressman Waxman put his finger

on the definition of unfunded mandates from the point of view of

State and local entities. Anything you make us do that you don’t

fully fund is an unfunded mandate. Anything that is cost offloaded,

either by the State or by the Federal Government, on local government, is an unfunded mandate.

The Congressional Budget Office and Federal agencies only estimate the anticipated costs of certain individual mandates. No entity is responsible for reviewing those costs after they’ve been imposed. Whether you recreate the advisory commission on inter-governmental relations or assign the duty to an existing or new agency, we would respectfully suggest that conducting comprehensive

research on unfunded mandates be among the eventual proposals

for strengthening UMRA.

Hundreds of Federal laws impose mandates on State and local

government. State and local government take different approaches

to comply and their expenses may vary widely from month to

month and year to year. Once Federal mandates are issued, however, they are accepted as a cost of doing business and become

marbled throughout the county or local budget.

However, despite these challenges, NACo agreed last month to

conduct a rapid response survey of its members on the cost of 10

selected Federal mandates for the consideration of this committee.

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I ask that a copy, Mr. Chairman, of NACo’s full report be included

in the record of this hearing.

Mr. DAVIS. Without objection, so ordered.

Mr. CONNOLLY. I thank you, sir.

I would like to provide a few examples of the responses we received. Marion County, FL, for example, reported a 1-year cost of

more than $59 million from mandates related to the Clean Water

Act alone. Given the size of the county population, that’s the equivalent of $990.54 tax burden on the typical family of four in that

county. In Brevard County, FL, they reported an annual cost associated with the Safe Drinking Water Act, cost taxpayers of that

county $418.51 per family of four per year. In Hillsborough County, FL, they spent a total of $73.08 per family of four to comply with the Americans with Disabilities Act. In

Chester County, PA, they spent more than $8 million of local tax

revenues on HAVA compliance that Mr. Kyle just referred to, in

fiscal year 2004, or $71.79 per family of four. In Kitsap County,

WA, they expect to spend $40.23 per family of four in fiscal year

2005 for planning and mitigation related to the Endangered Species Act.

In Gaston County, NC, Mrs. Foxx, they expect to spend $18.03

per family of four to comply with the Health Insurance Portability

and Accountability Act in fiscal year 2005. In Lee County, FL, they

expect to spend an amazing $315.52 per person, or $1,262.06 per

family of four, in uncompensated health care costs in fiscal year

2005. Several counties reported multi-million dollar gaps over the

3-year period.

In Kern County, CA a taxpaying family of four is responsible for an unbelievable $252.42 over 3 years for the costs of incarcerating

criminal illegal aliens not reimbursed by the State criminal alien

assistance program. While the problem of illegal immigration is

generally associated with border counties, residents of Douglas

County, NE, pay the equivalent of $75.68 per family of four between fiscal year 2003 and fiscal year 2004 and that problem is

only growing.

NACo did not survey the cost of education mandates, because

counties in most States are not responsible for funding education.

However, the burden of Federal unfunded mandates contained in

the No Child Left Behind Act is going to leave local governments

the most behind in paying the cost.

My county, as you know, Mr. Chairman, having been chairman

of Fairfax County, does have responsibility for funding education.

We have spent, so far, $132 million over the last 4 or 5 years in

implementing No Child Left Behind, and we have received exactly

$9 million from the Federal Government to offset those costs. This

amount is likely to double or even triple as benchmarks rise and

sanctions increase with respect to full compliance.

Counties participating in the NACo survey were only able to provide costs for an average of about six mandates per county. As you

noted, Mr. Chairman, NACo projects that if these costs are typical

of other counties, the nationwide costs to counties for just these six

would be $40 billion. That’s a very conservative estimate.

Fairfax County, for example, has spent more than $540 million

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mately 21 percent of the county’s general fund. The Federal Government only reimbursed our county part of that amount, leaving

our taxpayers a net bill of $395 million, or 73 percent of the full

cost. In particular, our county spent $21 million for mandates in

public safety, $72 million in human services, $47 million in employee administration for including FICA and retirement mandates, $125 million related to Metrobus and Metrorail, $72 million

for mandates related to wastewater operations, $13.7 million for

Clean Air Act compliance, $3.3 million for Resource Conservation

and Recovery Act, $2.5 million for ADA and over $1 million for

HIPA. Only 5 percent of these costs are captured in the NACo report.

If this is true of other counties’ responses to NACo, as you indicated, Mr. Chairman, the full cost to counties across the country

could approach $800 billion. Needless to say, the fiscal condition of

counties would be worsened if Congress added to this burden by

adopting any of the several mandates currently being considered in

the 109th Congress. We hope that while you work with NACo to

identify and pursue improvements to the Unfunded Mandates Reform Act, the committee will also work to oppose creating new unfunded mandates for counties in this Congress.

That concludes my testimony, Mr. Chairman, and thank you for

this opportunity to be with you today.

[NOTE.—The National Association of Counties report entitled,

‘‘Unfunded Mandates: A Snapshot Survey, March 2005,’’ may be

found in committee files.]

Mr. DAVIS. Thank you very much.

Delegate Hurson, thank you for being with us.

STATEMENT OF JOHN HURSON

Mr. HURSON. Thank you very much.

Chairman Davis, Ranking Member Waxman, my Congressman

and former Maryland legislative colleague, Mr. Van Hollen, distinguished members of the Government Reform Committee, I’m John

Hurson, president of the National Conference of State Legislatures

and a member of the Maryland House of Delegates. I appear before

you on behalf of NCSL, a bipartisan organization representing the

50 State legislatures, the 7,000 plus members of those legislatures,

and the legislatures of our Nation’s commonwealths, territories,

possessions and the District of Columbia.

Thank you for the opportunity to testify before you today about

the Unfunded Mandates Reform Act of 1995. And thank you, Mr.

Chairman, for your efforts and the leadership that helped UMRA

become a reality a decade ago.

My presentation today will highlight the effectiveness and the

limitations of UMRA, the impact of those limitations on State

budgets and the need for substantive and technical changes to

UMRA. I would like to request that a copy of NCSL’s March 8,

2005 mandate monitor and NCSL’s Federal mandate relief policy

be submitted for the record.

Mr. DAVIS. Without objection, so ordered.

[NOTE.—The Mandate Monitor, Vol. 2, Issue 1: March 8, 2005,

may be found in committee files.]

[The information referred to follows:]

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Mr. HURSON. Thank you.

NCSL applauds the success of UMRA and the work of the Congressional Budget Office in particular in bringing attention to the

fiscal effects of Federal legislation on State and local governments,

improving Federal accountability and enhancing consultation.

CBO’s recent report identifying but five provisions in law that

crossed UMRA’s threshold, speaks loudly for its effectiveness. And

the hundreds of fiscal analyses completed by CBO show a commitment to carry out the spirit and the letter of the law.

Both of these facts, however, mask some of the statute’s shortcomings that NCSL urges you to address. UMRA is limited. As a

result, much is slipping under UMRA’s radar and intensifying pressures on State budgets. NCSL has identified a $51 billion cost shift

in Federal funding to States for fiscal years 2004 and 2005 collectively, 5 percent of States’ general revenue funds annually. The

cost shift continues and will most likely grow by 20 percent in fiscal year 2006, if Congress adopts the President’s budget. This increase to a potential $30 billion doesn’t take into account the adoption of proposed changes in Federal Medicaid spending.

Mr. Chairman, legislators view mandates more expansively than

UMRA’s definition. We believe there are mandates when the Federal Government establishes a new condition of grant and aid, reduces the Federal match rate on administrative funds available

without a reduction in requirements, extends or expands existing

or expiring mandates, compels coverage of certain populations

under a current program without providing full or adequate funding for this coverage, or creates an unfunded national expectation.

To illustrate our concerns, I’d like to provide you with examples

of provisions contained in three bills enacted during the 108th Congress that were not considered inter-governmental mandates under

UMRA, but did create significant cost shifts to the States. Legislators look at the provision in the American Jobs Creation Act and

see an unfunded mandate. They see an excise tax on vaccines as

increasing their costs for Medicaid. UMRA doesn’t call it a mandate, because it’s an indirect cost and not a direct cost.

Legislators view IDEA, which was reauthorized last year, as one

of the biggest unfunded mandates of all time. UMRA, though, said

IDEA is a grant condition. So States really don’t have to participate. They don’t, but they do. Any State that refuses to participate

in IDEA would almost certainly be sued for violating civil rights.

Legislators consider the requirements to conduct eligibility determinations for the low income subsidy for Medicare Part D to be a

mandate. In particular because it’s a condition of participation in

the Medicaid program. UMRA says it’s a mandate only if States

lack the flexibility to offset the costs with reduction somewhere

else. Well, maybe they do, but given State budgets, we really don’t

have that flexibility.

We seek your support to strengthen UMRA. This hearing is an

excellent start. We suggest that members of this committee sit

down with legislators, counties, courts and city officials and other

elected officials to develop broader protections under UMRA to

States and localities against these cost shifts. Specifically, NCSL

encourage the Federal Government to examine the definitions, revisit how it treats entitlement and mandatory spending, establish

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greater executive branch consultation, and consider developing a

look-back process.

Mr. Chairman, in closing, I would like to add that NCSL remains

steadfast in its resolve to work with Federal policymakers to reduce the Federal deficit and to maintain critical programs. Controlling the deficit is a daunting task, involving difficult choices, many

of which involve our inter-governmental partnerships. We recognize

that the pressure for mandatory Federal spending and restrictions

on the growth of discretionary spending promote a tendency to seek

the accomplishment of national goals through Federal mandates on

State and local governments.

However, NCSL is encouraged that many Federal lawmakers, including yourselves, have recognized the difficulties posed by these

cost shifts to States, and we look forward to working with you on

these important issues. I thank you for this opportunity to testify

and I would be happy to answer any questions.

[The prepared statement of Mr. Hurson follows:]

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Mr. DAVIS. Thank you very much.

Mayor Cornett, thank you for being with us.

STATEMENT OF MICK CORNETT

Mayor CORNETT. Thank you, Mr. Chairman, members of the committee. I appreciate the opportunity to be here today to speak to

you. I am Mick Cornett, I am the mayor of Oklahoma City, the

29th largest city in the United States. I am here on behalf of mayors across the country at the requests of the U.S. Conference of

Mayors. I serve on the Urban Economic Policy Committee for the

U.S. Conference of Mayors.

The message I want to leave with members of this committee

today is that we wholeheartedly support UMRA. The good news is

that Members of Congress, as well as the public and the press, are

being notified about mandates before a vote takes place. Most importantly, we believe they act to establish a mechanism for holding

members more accountable for how they vote on unfunded mandates.

Unfortunately, there are still some loopholes in the act that are

allowing some mandates to move unchecked through the legislative

process. The Federal Government is also finding more creative

ways to shift the cost of Federal programs to State and local governments. We are in favor of strengthening UMRA to close up the

loopholes and shut down these Federal cost shifts.

Mr. Chairman, I have been notified by members of the Conference staff of the critical leadership role that you played in the

passage of UMRA. I understand you were the chairman of the

board of Fairfax County, you were one of the key leaders of the National Association of Counties Unfunded Mandates Task Force,

which played an important role in urging the passage of this legislation. I also understand that as a newly elected Member of Congress in 1995, you were one of the key co-sponsors of UMRA. On

behalf of the Nation’s mayors, I not only commend you for your

past leadership but also for your continued commitment and outstanding support for State and local governments in the fight

against unfunded mandates.

Mr. Chairman, it is easy to understand why so many in Washington can get hooked on sponsoring unfunded mandates. It’s a

way of addressing national problems, but it offers them the best of

both worlds. Congress can take credit for solving the problems and

then send the bill to State and local governments. They never have

to face the angry voters, as we do, to explain why there is a need

to cut services or increase taxes to offset the cost of the mandates.

Let me take some time to share a couple of examples of how

these mandates are directly affecting Oklahoma City and my citizens. In our efforts to provide safer water, citizens often do not perceive the benefits of our capital improvements. They only see the

added burden of the higher utility bills. Before I continue, I want

to point out that as manger of a nationally acclaimed publicly

owned water supply system, Oklahoma City does support public

health protection that is based on sound science.

Nevertheless, when the cost of passing new Federal mandates

are included in our utility rates, the economic rates are greater on

the low and moderate income customers. In 1996, when Congress

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passed additional amendments to the Safe Drinking Water Act, the

process the EPA uses to develop drinking water standards accelerated, but no Federal money was sent to assist us in implementing

these new regulations.

Although Oklahoma City is blessed with one of the best raw

water supplies in the Nation, it still must make substantial

changes to its treatment processes, to remove an additional 25 to

35 percent of total organic carbon. Oklahoma City is now constructing over $10 million in improvements to its water treatment plants

and will require an additional $1.5 million annually in operating

costs, just to meet the newest regulations for total organic carbon

removal.

Another Federal mandate the mayors feel strongly about is the

Individuals with Disabilities Education Act, which was authorized

in 2004. A commitment was made in the reauthorization to create

a glide path to fully fund IDEA by 2011. However, including the

President’s increase for fiscal year 2006 in his proposed budget, appropriations for IDEA would still be $3.6 billion below what the reauthorization calls for in the glide path. This is a good example of

not an unfunded mandate, but an underfunded mandate.

In closing, Mr. Chairman, we believe we have made a lot of

progress with UMRA. However, we believe the law needs to be

strengthened to capture those mandates that are falling through

the cracks and other Federal actions that continue to impose huge

financial burdens on State and local governments. Mr. Chairman,

members of the committee, cities across the United States are hurting. Let me give you an example. Our personnel costs, and remember, as a city government, we are largely driven by personnel costs,

our personnel costs are rising at the rate of about 6 percent a year.

There is no way that our sales tax and property taxes are going

to increase to cover that amount.

As a result, we are forced to lower expectations, forced to lower

the services that we deliver. This year, in our 2006 budget, we are

going to lower our services to our citizens 11⁄2 percent. And this is

a good year. We are in an economic boom time right now in Oklahoma City, but we cannot keep up as long as we have unfunded

and underfunded mandates and at the same time, continual erosion of our tax base.

I understand we are at the bottom of the food chain a lot of times

when it comes to funding. But cities across the United States

should not feel compelled to hire lawyers and lobbyists to protect

themselves from their own legislatures at the State level and their

own legislatures at the Federal level. That is what is happening.

I appreciate the opportunity you have given me to address the

committee on UMRA. I look forward to working with you on other

inter-governmental relationships at the State level and the Federal

level. I have great respect for the work that you all accomplish here

in Washington. Thank you for having me here today.

[The prepared statement of Mayor Cornett follows:]

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Mr. DAVIS. Thank you very much, thank all of you very, very

much.

Mr. Connolly, let me start with you. I think in the prepared testi- mony we note that Fairfax County spent $540 million to comply

with Federal mandates, $148 million reimbursement. Basically

that means a $395 million deficit in terms of what the Federal

Government is forcing you to do.

Now, maybe the county would have chosen to do some of these

things, maybe they would not have. But these are priorities set

from Washington that we tell you you have to pay for. What does

$395 million, how many cents of that is a tax rate?

Mr. CONNOLLY. If we divide that by 17.9, this year, that would

be——

Mr. DAVIS. I won’t ask you to do that.

Mr. CONNOLLY [continuing]. That would be about 20 cents on our

tax rate.

Mr. DAVIS. So that’s a pretty good—and the tax rate is going

down to what this year?

Mr. CONNOLLY. It will go down to at least $1.03 from $1.13.

Mr. DAVIS. So that’s almost 20 percent?

Mr. CONNOLLY. Very significant.

Mr. DAVIS. And in local jurisdictions in Virginia, and I don’t

know what it’s like in Oklahoma City or Maryland, or Lake County, IL, property tax is basically it for you. You don’t have a lot of

options, do you?

Mr. CONNOLLY. No, sir, the only source of revenue that we outright control is the real estate tax rate. All other sources are

capped or controlled outright by the State of Virginia.

Mr. DAVIS. What’s the story in Illinois, Mr. Kyle? Is it similar?

Mr. KYLE. Yes. We also have tax caps in the State of Illinois, Mr.

Chairman.

Mayor CORNETT. Mr. Chairman, most of our money comes from

sales tax in the State of Oklahoma. That’s how municipalities are

largely funded.

Mr. DAVIS. So basically you’re moving it from a progressive income tax that the Federal Government paid for to a much more regressive taxation at the local level, which is sales taxes and property taxes, which everybody—similar situation in Maryland?

Mr. HURSON. Yes, it is. We have a fairly progressive income tax

structure in Maryland. But at the same time, moving all these

costs down to the States, to a situation where we have balanced

budget requirements in most of the States, it means that $1 that

we’re spending on this is going to be taken away from some other

program somewhere else.

Mr. DAVIS. OK, thank you very much. I think that puts it in perspective, what we’re talking about. I know when I was in local government, we always tended to just put on the bill the Federal Government sent us as just an additional bill, I’m not suggesting you

do that. [Laughter.]

But it does bring home. What is the problem with State mandates, Mr. Connolly?

Mr. CONNOLLY. I am so glad you asked, Congressman Davis.

[Laughter.]

Mr. DAVIS. This was not rehearsed, by the way.

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Mr. CONNOLLY. I would say that the State mandates, for our

county including education, would actually exceed the Federal burden. We think that if a State paid its bills or lifted its mandates,

we could probably reduce our tax rate another 20 cents or so.

Mr. DAVIS. So if 20 percent of your budget is dictated but unfunded from the Federal Government, another 20—that makes you

basically a tax collector.

Mr. CONNOLLY. Yes, in many ways, that’s right. [Laughter.]

I can give you even one little example, and I know with respect

to Federal incarceration, it does apply to States sometimes. But in

the Commonwealth of Virginia, for example, in Fairfax County, for

us to incarcerate a prisoner costs $125 a day. And once someone

is convicted of a State crime, the State takes its time about picking

that prisoner up and taking them to a State penal institution, and

meanwhile the State only reimburses us $14 a day. That’s called

an outright unfunded mandate.

Mr. DAVIS. Pretty good deal.

Mr. Kyle, let me ask, one of the problems with UMRA is that it

allows for death by 1,000 cuts. If you are underneath the review

threshold, you can have an unfunded mandate, hundreds of them

that go down to State and local governments, but they don’t total

enough, any one by itself, to be subject to the review that we would

get under the act.

Should we look at the threshold? Should the law require a review

of the compounding cost of multiple mandates on State and local

governments?

Mr. KYLE. Yes, most definitely, Mr. Chairman. And to also piggyback on what Mr. Connolly was saying, we reflect some of that also

with the Medicaid program through States, where we are required—in Lake County, IL, we run Winchester House, which is

primarily a senior facility, a nursing home if you will. With the

various cuts in Medicaid, the difference in the funding that Medicaid provides is quite inadequate in what we are able to provide as

far as quality health care. So there is a major gap in those services.

However, we are required by law to provide adequate quality

health care and medical services to those individuals. So there is

a great gap of difference between the appropriations and the budgeted amount.

Mr. DAVIS. Mr. Hurson, let me ask you a question, and you can

include your answer to that. Medicaid is just killing the Virginia

budget, it’s forcing them to force more unfunded mandates on the

States as they pay for this, which is probably the largest—it’s partially funded, but as you know, the impact on State government,

what’s happening in Maryland with that?

Mr. HURSON. Medicaid is the Pac-Man of State budgets. It is the

thing that is absolutely eating away at every State budget. It is in

many States now becoming the largest expense, even over education. A lot that is driving that is mandates from the Federal Government. It is not a program, people act like it’s a partnership that

we can choose to participate in. Not any more. Medicaid is for

many States the sole thing that takes care of many of our uninsured.

So Medicaid is a major expense at the State level. With requirements that we recently got in the Medicare Part D program to fund

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a lot of the eligibility determinations for Medicare Part D, that is

in and of itself a huge expense for States, that is again an unfunded mandate.

Just to respond quickly to your other question, I would applaud

the chairman’s call for OMB to really aggregate all of those unfunded mandates that never meet the threshold. Because altogether, they cause enormous impacts upon the States. I think

that’s an excellent suggestion to try to aggregate all the ones that

don’t reach up to the threshold, because they have impacts nonetheless, even though they don’t pass the threshold.

Mr. DAVIS. Thank you. There was in fact in the Medicare Part

C and D that we—there was a huge clawback provision. I don’t

think Members were even aware of it. I appreciate your raising

that.

Mr. HURSON. Right. The clawback provision is the first of its

kind, where the States are actually going to be paying for Federal

programs.

Mr. DAVIS. It’s how we hold the costs down and look tough to our

Members trying to sell it.

Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Mr. Chairman. Thank you all for

your testimony. I also want to welcome my old friend Gerry

Connolly. As he said, we worked many years together on the Senate Foreign Relations Committee staff. Now he’s doing a great job

over in Fairfax County.

Let me just ask a question of Mr. Hurson, actually Chairman

Davis asked a question regarding Medicaid. My question was, as

you probably know, the President has a proposal that is in formation that would essentially result in a $45 billion reduction over 10

years in Medicaid payments to the States. You referenced that in

your testimony.

Just taking our State of Maryland as an example, what impact

would that have on Maryland budget, the decisions that have to be

made in the Maryland legislature?

Mr. HURSON. It’s going to have a huge effect, Congressman. Just

to give you a small example, one of the things that’s in the President’s proposal is that they would start limiting what are called

sort of indirect governmental transfers. We are facing in our State,

in order just to keep our budget balanced, a massive cut in nursing

home funding. One of the proposals that’s been put on the table by

folks prior to the President’s proposal was for us to do a provider

tax, which 30 other States actually do.

Well, let me tell you, we’ve taken it off the table as a way to

solve this problem, because frankly, because of the President’s

budget cuts. We see that direction of cutting back on Medicaid a

direct impact upon States, where we are going to have to fill in the

gaps. We can’t leave people who are at 45 percent of the Federal

poverty level on eligibility in our State in the streets.

We are going to have to find a way to pay for that out of State

dollars.

Mr. VAN HOLLEN. Right. Given the fact, I don’t know what the

exact percentage is, but a great amount of the Medicaid budget, as

we know, goes to people who are in nursing homes, in some cases

people who spend down in order to become eligible for Medicaid.

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There has been discussion, clearly from the State perspective, I can

understand this, about whether or not some of that spending more

properly belongs in the Federal Medicare program. Could you comment on that from a policy point of view, not just as cost shifting

point of view?

Mr. HURSON. I think the States and the Federal Government at

some point have to renegotiate our partnership on health care. Part

of that renegotiation is going to be Medicare and Medicaid. But

frankly, most of the elderly costs in this country are in the final

stages of life, which often are taking place in nursing homes. The

theory behind Medicare was that would be a Federal responsibility.

Frankly, we all know that in fact, that has shifted to a Medicaid

program, where people spend down and now it is frankly a State

and Federal partnership. If we are ever going to solve the problem

on the elderly in nursing homes, we are going to have to figure out

a new relationship between the Federal and State governments.

That is just inevitable.

Mr. VAN HOLLEN. Thank you, and thank you, Mr. Chairman. I’m

going to apologize, I’m already late to a meeting. Thank you all for

your testimony.

Mr. TURNER [presiding]. Thank you, Mr. Van Hollen. We appreciate all your testimony today on this important issue and the insight that you bring to the issue of unfunded mandates.

One of the things we discussed with the last panel was the issue

that under UMRA, there of course are estimates as to whether an

action meets the threshold and/or whether or not an action would

result in moneys that assist in the implementation. But I’m fascinated with the comparison of the actual experience and the estimates. We have the National Associations of Counties’ estimation

of what the financial impacts are.

And I’m wondering two things. One, do State and local governments have the ability to, on a retrospective basis, quantify the

costs associated with complying with the mandates that would be

useful information on the Federal level. And two, at this point, do

you have a mechanism with which to share that information other

than obviously issuing the reports and coming to Congress, is there

in the process a—we had the CBO statement of, well, this information is helpful to us as we estimate the future mandates. But are

you really consulted, is there an opportunity for you to use information that you learn when a mandate’s cost are actually being

quantified, so that it will help you in the process in the future.

Mr. KYLE. Thank you, Mr. Chairman. The National Association

of Counties selected 30 counties from among those who responded

as being representative of an entire Nation demographically, regionally as well as by population. These counties responded to an

average of 6 out of 10 mandates which were listed in the survey.

Their responses totaled over $1.5 billion, or $137 per person.

Projecting the per capita figure across the entire Nation results

in a figure which comes to $40 billion. Since this figure is based

on an average of only six mandates per county, the actual costs

could very well be a lot higher.

Mr. CONNOLLY. Mr. Turner, if I may, as we entered into the

record, the snapshot survey which was generated by your committee, in collaboration with NACo, I would hope working with your

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new subcommittee we and other local governments could perhaps

be more systematic at collecting data comprehensively about the

cost of unfunded mandates. That is going to contribute to the dialog, hopefully, in this body, and in our State legislatures, about the

impact of well-intentioned but unfunded mandates on our local taxpayers. Because when the cost burden is shifted, inevitably it filters down to the local government, because at the local government, we don’t have a choice. We have to provide the services, we

have to meet the mandates.

As Mayor Cornett indicated, we either have to then offset that

by cutting other services or raising taxes, neither of which is very

palatable to our constituents or to us as policymakers.

Mr. HURSON. Mr. Chairman, you will find on page 5 of our Mandate Monitor a listing of our estimate of what these unfunded mandates have done in terms of the $51 billion figure that we indicated. It’s our sense as an organization that CBO works very well

with groups like ours to do some estimates on what these mandates cost. And the collaborative process with CBO is working well

in terms of that process.

Obviously, that could be enhanced with an equal amount of cooperation with OMB. I think that’s something that would be beneficial if we could work cooperatively with CBO and OMB to try to

create a three-way discussion, if you will, about where these mandates are leading us and what their impacts are going to be. We

do our best in trying to estimate it and CBO has been very helpful.

Mayor CORNETT. We have not actually conducted a study to determine the total cost of the mandates. It’s obviously in the billions

of dollars. There is little consistency, when you talk about city governments, what’s unfunded, what’s funded. Sometimes I think

some of these matching programs almost become mandates by the

time they get to us and our citizens imply to us that they definitely

want us to fund it, they don’t want to leave money on the table.

My colleague, Mayor Daley of Chicago, is currently starting a

grassroots campaign to try to determine a lot of these numbers

that we can come up with and perhaps provide a more comprehensive figure for you in the future.

Mr. TURNER. I appreciate your efforts to clarify these, because

having served as a mayor, one of the things I’m aware of is that

the actual application can be much different than the science of estimating. Also when you get into the process of judicial interpretation of the requirements and how they are imposed, and what ultimately you are required to do. So it’s important for us to continue

the discussion not only in the process that we currently have, but

in the look-back as to how they are being applied to your individual

communities.

Ms. Norton.

Ms. NORTON. Thank you very much, Mr. Chairman.

Obviously everyone up here represents the same people you do,

and we are inherently sympathetic with your testimony. I am more

sympathetic than most, because my city has all of the unfunded

mandates that you are talking about and then a colossal one. The

District of Columbia is a city that is treated as a State. So the Federal Government claims to be our ‘‘State’’ when it wants to be, but

in fact makes us pay for State fundings that would send all of you

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under if you had to pay for the State roads and the State costs, for

example, of special education, imagine where you would be left.

So obviously I’m very much in sympathy with what you’re saying, indeed, I have put into the record a statement indicating that

when you have the peculiar unfunded mandates that we have as

a city-state plus the unfunded mandates that we’ve heard about

today there is a huge problem. To the credit of the chairman of this

committee, and every member of the House of this region who are

co-sponsoring a bill to correct the structural imbalance that the

District of Columbia labors under because of the unfunded mandate that comes from being a State costs, in hearing your testimony, I can’t help but believe I’m hearing you talk back to the Federal Government or at least to our statute, like ships passing in the

night.

I think it begins with the UMRA having over-promised. I remember it, I was in Congress when with great fanfare the Contract on

America came forward and said, this is the end, we are here now,

this is the end of unfunded mandates. Never has a piece of legislation been passed with more tongues in cheeks than this legislation

was. We are here, to the credit of the chairman, to discuss what

can be done about it.

I have a question about what can be done about it. Because I’m

really very doubtful about what can be done about it. All of you

and your predecessors have testified that UMRA has done the most

to bring these costs to the attention of us all. Hey, really? I don’t

think that it’s mattered that these costs were brought to the attention of us all, if that’s what it was meant to do, because I haven’t

seen a lot of response, if that was the point of the legislation.

There seems to be a problem at two levels. I have a question

about where you think the problem is most serious. One has to do

with testimony that law is essentially observed in the breach, that

we don’t even do what we say we would do under the law. The

other seems to be a difference between States and local governments on the definition of an unfunded mandate. This is very, very

dangerous.

I could see State and local governments actually opposing entire

Federal laws that they really are for because they know it would

be in the best interest of their people to have it. I can see people

saying, let’s say we were enacting the Safe Drinking Water Act for

the first time saying, oh, no, we don’t want it. Whatever happens,

let the chips fall where they may, we know that we are going to

get all these costs as a result of it. Somehow or the other, we have

to come to an understanding.

Mayor Cornett, in your testimony for example, you very honestly

bring forward what the GAO has found. The GAO is considered by

Members of Congress a very reliable and objective source. You cite

that the GAO found that only, that of the bills passed in 2001 and

2002, only five contained costly mandates. And all of these were,

the report found that only 5 contained, of the 377 statutes, only 5

contained costly mandates, and all of these were mandates imposed

on the private sector. If the chairman was here, I would ask him

where is the private sector, because they really have something to

complain about, according to the GAO, apparently.

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Then they found that in 1996 to 2000, there were 18 costly mandates that the Congressional Budget Office had identified as costly

mandates. Two were imposed on State and local governments and

16 on the private sector. Well, you see, I’m confused, when I see

the GAO saying this, and even in Mr. Cornett’s testimony he goes

on to complain about unfunded mandates after citing the GAO

findings, are we dealing here with, as I began this question, two

ships sailing through the night, that essentially this law does not

work because it is not dealing with what you are talking about? Do

you accept, in other words, the GAO evaluation that if you look at

what the law says, literally, maybe so, but if you look at where the

costs really are, we need some change in the law?

Mayor CORNETT. Ms. Norton, I think part of the answer is in the

environmental issues, it seems to me that the Federal Government

tries to take a cookie cutter approach and pretend that every city’s

water supply and the source of every city’s water supply is similar

or exact. And it’s not. It forces cities like Oklahoma City, which has

a very good water supply, to put in regulations that shouldn’t be

necessary. Those costs are directly attributed on to our citizens.

I think that’s an example of the type of governmental control

that is best left to the local government, because they can deal with

their specific water needs.

Ms. NORTON. You seem to be making an argument against Federal regulation of water. That’s what I fear here. Because I’m not

sure you really mean that. I understand what you mean about unfunded mandates. But I’m not sure you would mean that if regulations were required that would make the water for pregnant

women safe, for example, that shouldn’t be done.

I’m trying to figure out, given what the GAO says, and their

word isn’t gospel, but given what they say, I’m trying to figure out

whether we need to look at a more realistic definition of an unfunded mandate, given the experience we have had with the law

or whether you believe that even given the law as it stands, the

Congress is imposing on you unfunded mandates.

Mr. CONNOLLY. Ms. Norton, if I may, I take your point. I think

UMRA was a good start, because we at least got, in a big way, really, the camel’s nose under the tent in the discussion about what

about the unfunded mandate here. I think the dilemma is one of

intentions versus impacts. Let’s stipulate that the intentions are almost always noble, the goals are very desirable. But the analysis

feeding those intentions in the legislative process about impacts,

what will it cost and who will bear those costs unfortunately is far

less perfected than are the intentions.

I think if we can move in an evolutionary way, using UMRA as

a baseline and as a start to tighten up a sense of obligation for

those who propose with good intentions, all right, but where is your

analysis on the impacts, so that we understand what the State of

Maryland, the State of Virginia, the State of Oklahoma, the State

of Illinois, would have to bear in their localities in order to implement this, and what is our obligation as the Federal Government

if we are going to require those noble standards, regulatory intent,

whatever it may be. I think that would be a major step in the right

direction.

But I think UMRA is a good base from which to build.

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Ms. NORTON. So you see us, just to summarize, we started, the

first round was to get the costs up front. The second round, or to

be using that information to at least close some of the loopholes or

narrow the law somewhat, so we see how much of that works, all

in an evolutionary way.

Mr. HURSON. I think you put your finger on it. It’s the issue of

definitions. It’s the issue of what is defined as a mandate. That is

really the second phase of trying to really move UMRA, I think, in

the right direction. This is really about, on so many levels, environment, health care, transportation, the relationship and the partnership between the Federal Government and the State and local governments. Understanding the contract and the partnership between us means understanding the definitions. That’s where I

think UMRA needs improvement. That is, what is a mandate, what

is an unfunded mandate, and understanding—and you said it—

definitions is key to that.

Mr. CONNOLLY. Ms. Norton, if I may, I want to go back to Mr.

Waxman’s definition of an unfunded mandate. While I agree with

Mr. Hurson that’s important, I don’t know that it’s rocket science.

If there is a new standard, a new regulation or a new metric that

I have to meet that you, the Federal Government, require of me,

and you don’t fully fund the implementation of that, as far as I am

concerned the delta between what you fund and what I have to

fund is an unfunded mandate.

Mr. KYLE. Also if I might add, Congresswoman Norton, the dilemma, as you so eloquently put it, the loophole that we find here

is that most of these mandates were enacted prior to UMRA. The

Help America Vote Act, for example, enforces a Constitutional

right, so it falls under an explicit exclusion from the definition of

a mandate under UMRA. That’s the dilemma that we find ourselves in.

Ms. NORTON. I understand what you’re saying, given where we

are, how dissatisfied you are with the law, it seems to me to go ex

post facto, back in fact, to catch up might be impossible. If we could

get some tightening going forward, it seems to me we would be

making some progress.

Mayor CORNETT. If there is a change in legislation or regulation,

if it’s your idea, you pay for it, if it’s our idea, we pay for it.

[Laughter.]

Ms. NORTON. With that, I really ought to go, Mr. Chairman.

[Laughter.]

Mr. DAVIS [presiding]. Mr. Shays.

Mr. SHAYS. Thank you, Mr. Chairman. Just one question. When

the executive branch comes in and tells us they are reaching out

to State, local, county and local governments for rulemaking issues,

I wonder if you can share with us instances in which you are aware

where agencies are reaching out to State and local governments to

consult in early stages of drafting the rules? Can you give me an

example or two of where this is happening?

Mr. DAVIS. Would the gentleman yield? Are you asking basically

if they have been consulted, or maybe your groups, maybe you can

have a minute to confer with groups and see if in fact the executive

branch is reaching out.

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Mr. SHAYS. So if you don’t have an answer now, we would like

one for the record.

Mr. KYLE. I can say on behalf of the National Association of

Counties, for the most part we have not been consulted in these

areas.

Mr. DAVIS. If you’re not consulted, you end up paying for it.

Mr. KYLE. Correct.

Mr. DAVIS. If you’re not in the room, that’s where it ends up

going.

Mr. HURSON. On behalf of the State legislatures, I would say

that in terms of homeland security, we have had an excellent relationship with that department in terms of them reaching out, in

terms of rulemaking. We have had a fairly good situation with

DHS and with EPA, at least this is what the staff is telling me,

not reaching out to me down in Annapolis, but they are reaching

out to the staff here in Washington.

Mr. CONNOLLY. Mr. Shays, I would agree, especially in the homeland security relationship that has, there has been a lot of consultation in part because Congress was wise enough to create a national capital region coordinator who has facilitated a lot of input

from us in the National Capital Region. But you know, in other

areas, frankly, the relationship is one of regulation, here are the

regulations you must comply with. I don’t think that the mentality

is always very cognizant of, and here are the costs that go along

with that regulation. That is your problem. I think that is kind of

the mentality that all too often occurs.

If we could shift that mentality, in what your committee is about

today, if we could shift that mentality so that there actually is the

requirement of the cognizance of the costs, I was saying earlier, I

think the game here is intention versus impact. We can stipulate

the attorney is almost always noble and good, but the impacts can

be quite severe. You are asking local taxpayers all too often to bear

that burden of your good intentions.

As the Mayor pointed out, if it’s your idea, you pay for it, and

if it’s our idea we’ll pay for it.

Mr. SHAYS. Thank you, Mr. Chairman.

Mayor CORNETT. The EPA has some level of communication with

the U.S. Conference of Mayors, and mayors in general. We don’t

feel like it is enough, we feel like it should be a higher level of communication.

Mr. SHAYS. Thank you.

Mr. DAVIS. Thank you. All that will be part of it as we move to

the next stage. This will not be our last hearing on this. I think

Mr. Turner has expressed a willingness to try to pursue this at the

subcommittee level, and we will at the State level.

This has been very helpful to us and we appreciate all of you

coming forward with your testimony today and answering our questions on behalf of each of you and your organizations. We thank

you.

Does anybody want to add anything?

Mr. CONNOLLY. Thank you for your leadership, Mr. Davis, in this

issue.

Mayor CORNETT. I would also like to thank you, Mr. Davis. The

only thing I would add is that these costs are really filtering down

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to our citizens in some very basic services that are not being provided at the level they need to be provided. Thank you for your

time.

Mr. DAVIS. Thank you very much. Hearing is adjourned.

[Whereupon, at 4:10 p.m., the committee was adjourned.]

[The prepared statements of Hon. Elijah E. Cummings and Hon.

Eleanor Holmes Norton and additional information submitted for

the hearing record follow:]

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