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91–966—PDF 2004

S. HRG. 108–395

NOMINATIONS OF MICHAEL O’GRADY,

JENNIFER YOUNG, AND BRADLEY G. BELT

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON THE

NOMINATIONS OF

MICHAEL O’GRADY, TO BE ASSISTANT SECRETARY FOR PLANNING AND

EVALUATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES; JENNIFER YOUNG, TO BE ASSISTANT SECRETARY FOR LEGISLATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES; BRADLEY G. BELT,

TO BE A MEMBER OF THE SOCIAL SECURITY ADVISORY BOARD

NOVEMBER 4, 2003

(

Printed for the use of the Committee on Finance

COMMITTEE ON FINANCE

CHARLES E. GRASSLEY, Iowa, Chairman

ORRIN G. HATCH, Utah

DON NICKLES, Oklahoma

TRENT LOTT, Mississippi

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

CRAIG THOMAS, Wyoming

RICK SANTORUM, Pennsylvania

BILL FRIST, Tennessee

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MAX BAUCUS, Montana

JOHN D. ROCKEFELLER IV, West Virginia

TOM DASCHLE, South Dakota

JOHN BREAUX, Louisiana

KENT CONRAD, North Dakota

BOB GRAHAM, Florida

JAMES M. JEFFORDS (I), Vermont

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

KOLAN DAVIS, Staff Director and Chief Counsel

JEFF FORBES, Democratic Staff Director

(II)

(III)

C O N T E N T S

OPENING STATEMENTS

Page

Grassley, Hon. Charles E., a U.S. Senator from Iowa, chairman, Committee

on Finance ............................................................................................................ 1

Baucus, Hon. Max, a U.S. Senator from Montana ................................................ 9

ADMINISTRATION NOMINEES

Belt, Bradley G., nominee to be Member of the Social Security Advisory

Board, Social Security Administration ............................................................... 4

Young, Jennifer, nominee to be Assistant Secretary for Legislation, Department of Health and Human Services ................................................................. 5

O’Grady, Michael, nominee to be Assistant Secretary for Planning and Evaluation, Department of Health and Human Services ......................................... 7

CONGRESSIONAL WITNESSES

Voinovich, Hon. George, a U.S. Senator from Ohio .............................................. 2

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:

Opening statement ........................................................................................... 9

Belt, Bradley G.:

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 17

Biographical ...................................................................................................... 19

Bunning, Hon. Jim:

Prepared statement .......................................................................................... 27

Grassley, Hon. Charles E.:

Opening statement ........................................................................................... 1

O’Grady, Michael:

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 28

Responses to questions for the record ............................................................. 30

Biographical ...................................................................................................... 33

Voinovich, Hon. George:

Testimony .......................................................................................................... 2

Young, Jennifer:

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 42

Responses to questions for the record ............................................................. 42

Biographical ...................................................................................................... 44

(1)

NOMINATIONS OF MICHAEL O’GRADY, TO BE

ASSISTANT SECRETARY FOR PLANNING

AND EVALUATION, DEPARTMENT OF

HEALTH AND HUMAN SERVICES; JENNIFER

YOUNG, TO BE ASSISTANT SECRETARY FOR

LEGISLATION, DEPARTMENT OF HEALTH

AND HUMAN SERVICES; BRADLEY G. BELT,

TO BE A MEMBER OF THE SOCIAL SECURITY ADVISORY BOARD

TUESDAY, NOVEMBER 4, 2003

U.S. SENATE,

COMMITTEE ON FINANCE,

Washington, DC.

The hearing was convened, pursuant to notice, at 10:04 a.m., in

room 215, Dirksen Senate Office Building, Hon. Charles E. Grassley (chairman of the committee) presiding.

Also present: Senators Nickles and Baucus.

OPENING STATEMENT OF HON. CHARLES E. GRASSLEY, A U.S.

SENATOR FROM IOWA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. Good morning, everybody. It is my pleasure to

welcome the distinguished nominees who have come before the

Senate Finance Committee today. This morning we consider the

President’s nomination of Mr. Michael O’Grady to be Assistant Secretary for Planning and Evaluation at HHS; Ms. Jennifer Young to

be Assistant Secretary for Legislation at HHS; and Mr. Bradley G.

Belt, to be a Member of the Social Security Advisory Board.

Both Michael O’Grady and Jennifer Young, the nominees to the

positions in the Department of Health and Human Services, are

well-known to most of us, since both served for some years on the

professional staff of this committee.

Mr. O’Grady has worked in other Congressional staff capacities

as well, and Ms. Young has had good experience in health policy

positions outside the Congress. Based on their experience, I think

that both are well-qualified for the positions to which the President

has nominated them.

Mr. O’Grady and Ms. Young, as former professional staff on this

committee, I know you both realize how important the help and assistance of the professional staff in your department can be to us

here in the Congress as we develop legislation.

2

Our third nominee is Mr. Bradley Belt. He brings to us today a

retirement security background which encompasses both the Social

Security program and private pensions. His experiences in both the

private and public sectors are sure to bring a wealth of knowledge

to the Advisory Board, should he be confirmed today. So, I congratulate all of you.

I will call upon my colleague, Senator Voinovich, to introduce

whoever he wants to introduce at this point.

STATEMENT OF HON. GEORGE VOINOVICH, A U.S. SENATOR

FROM OHIO

Senator VOINOVICH. Thank you, Mr. Chairman. It is a great

pleasure to introduce to the committee—as you mentioned, she

probably does not need an introduction to the committee—President Bush’s nominee for the position of Assistant Secretary of

Health and Human Services for Legislation, Ms. Jennifer

Baxendell Young of Alexandria, Virginia, and formerly of Bellevue,

Ohio.

Jennifer, I want to, first, thank you for your willingness to serve

your country in this demanding position. I am delighted that you

have continued your commitment to the call of public service.

As members of this committee know, Jennifer currently serves as

Acting Assistant Secretary for Legislation at the Department of

Health and Human Services. Before becoming the Assistant Secretary on July 23 of this year, Ms. Young served as the Deputy Assistant Secretary for Health Legislation.

However, I have known Jennifer long before her ascendancy into

HHS. In fact, I have had the pleasure of watching her grow and

mature for most of her public career, all the way to this hearing

room. Jennifer started her career in public service while still a student at Georgetown University with Congressman Paul Gillmor

from Ohio’s Fifth Congressional District.

After a stint with Congressman Gillmor, she migrated across to

the Capital to the Hall of States to work for my Washington office

during my tenure as Governor of Ohio. It was there I came to know

Jennifer in her service to me in Washington, as well as in Columbus. Jennifer proved to be nothing short of a stellar part of my

team.

In the early 1990’s, Ohio, with the rest of the Nation, faced concerns regarding the uninsured. Bringing the best and brightest I

had together, we were determined to reduce the number of uninsured in the State and do it through the State’s 1115 waiver for

Medicaid.

Jennifer was handed this responsibility and came through remarkably. She was handed a program as complex and convoluted

as Medicaid and tasked with a goal that I am sure, at first, seemed

difficult, to say the least. But through her intellect and her ability

to navigate Washington, Ohio moved forward with its waiver and

reduced the number of uninsured in our State.

Additionally, Jennifer was also a key part of my Families and

Children First initiative. This initiative was one of the top priorities of my administration. The initiative brought several State

agencies together and broke down barriers between State departVerDate 11-MAY-2000 12:03 Apr 06, 2004 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 91966.NOM SFINANC2 PsN: SFINANC2
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ments to serve low-income children and families in a comprehensive and efficient manner.

Jennifer again played a crucial role in making sure that the

health and well-being of Ohio’s youngest residents were taken care

of. With efforts like Jennifer’s, Ohio became one of the Nation’s

leaders in early childhood development.

After working her tenure with me in Ohio, Jennifer left to come

back to Washington, joining the National Governors Association as

Director of Health Legislation. I am pretty sure that the folks at

NGA saw how well she handled Medicaid and wanted to bring her

back to Washington.

In this capacity, Jennifer led the Governors’ efforts to pass the

CHIP program. She then left NGA to work for then-Chairman Roth

in this very committee, handling Medicaid and the States’ Children’s Health Insurance Program.

She later returned to the House of Representatives, where she

was primarily responsible for Medicare issues before the House

Ways and Means Committee under the chairmanship of Bill Thomas. It was there that she helped lay the groundwork for the current

prescription drug bill.

As Congress sits on the cusp of adding a prescription drug benefit to Medicare—we hope, we hope, we hope, we hope—I can think

of few individuals more experienced or qualified to assist my friend,

Secretary Thompson, at HHS than Jennifer Baxendell Young. She

is an outstanding professional, and our country is very fortunate

indeed to have her service.

Mr. Chairman, I look forward to working with Jennifer, and I

thank you for holding this confirmation hearing this morning.

The CHAIRMAN. She is lucky to have a very strong Senator like

you say such nice words about her. I presume we ought to move

to her confirmation right now.

Senator VOINOVICH. Amen and hallelujah!

The CHAIRMAN. All right. Thank you very much, Senator

Voinovich.

Senator VOINOVICH. Thank you.

The CHAIRMAN. Would the three nominees please come to the

table? First of all, do any of you have family members that you

would like to introduce to the committee?

Mr. BELT. Yes, we do, Mr. Chairman.

The CHAIRMAN. Go ahead, Mr. Belt.

Mr. BELT. Thank you, Mr. Chairman. I would like to introduce

my family, my wife Laura, and my two daughters, Madeline and

Natalie, who are hiding there in the back of the chamber.

The CHAIRMAN. All right. Thank you very much.

Ms. YOUNG. My husband is in some kind of trouble. He was supposed to be here, but no sign of him. If he were here, I am sure

he would say thank you.

The CHAIRMAN. All right. Mr. O’Grady?

Mr. O’GRADY. Yes. I would like to introduce my wife, Sharon

Natanblut, and our three children, Jordana, Alana, and Jake. And

our children told me that they were very pleased to be here today,

and I, for one, believe it has nothing to do with the fact that they

are missing school. [Laughter.]

The CHAIRMAN. All right. Thank you very much.

4

Now we would proceed to any statements that each of you would

like to make, starting with Mr. Belt, then Ms. Young, then Mr.

O’Grady.

Oh. Wait a minute for Senator Nickles.

Senator NICKLES. Mr. Chairman, I just wanted to drop in for a

second and say it is my pleasure to encourage the committee to

confirm Jennifer Young to be Assistant Secretary on Legislation for

HHS.

I have had the pleasure of knowing her and working with her

more hours than we care the last couple of months on Medicare.

But she has done an outstanding job representing the administration.

She is very knowledgeable, as knowledgeable as anyone on some

very difficult, critical issues. She has always been willing to work

with members on this committee and others in Congress to try to

see if we can make positive changes. I compliment the President

for her nomination and I look forward to her confirmation.

The CHAIRMAN. Thank you, Senator Nickles.

Proceed, Mr. Belt.

STATEMENT OF BRADLEY G. BELT, TO BE MEMBER OF THE

SOCIAL SECURITY ADVISORY BOARD

Mr. BELT. Thank you, Mr. Chairman, Senator Nickles, and members of the committee. I am honored to be here today as the nominee of the President to be a member of the Social Security Advisory

Board.

It is a particular privilege to appear before this committee, as I

have had the good fortune during my career in both the public and

private sectors, including my tenures as Senate staffer, as counsel

to the Senate Banking Committee just upstairs, to work with many

members and staff of this committee on a variety of issues.

It is also personally gratifying, as I have had a longstanding interest in a program area that is an integral part of the social and

economic fabric of our Nation.

In particular, I would note that I served as a member and executive director of the Bipartisan Commission on National Retirement

Policy, which spent nearly 2 years examining a range of issues related to the structure and solvency of the Social Security and private pension systems. One of the distinguished members of this

committee, Senator Breaux, served as a Congressional co-chair of

that commission.

If I am confirmed, I would very much look forward to working

with the dedicated members and staff of the Advisory Board to fulfill its important mission of providing independent and objective

advice to the Congress, the administration, and the Commissioner

of Social Security on Social Security and Supplemental Security Income policy.

I note that we are celebrating a birthday of sorts. It was about

10 years ago this month that this committee reported out legislation establishing the Social Security Administration as an independent Federal agency. That same measure which was ultimately

enacted and signed into law also created as separate bipartisan advisory board.

5

The merits of this approach have been borne out by the important contributions the board has made since that time in fulfilling

its statutory responsibilities. While much good work has been done,

much more can yet be done.

The fact that OASDI and SSI programs touch the lives of the

vast majority of Americans dictates that we continue to look for

ways to strengthen and improve programs that represent a vital

component in our Nation’s economic security.

It is significant that 50 million beneficiaries and 150 million contributors have every right to expect that these programs be administered efficiently, fairly, and compassionately.

We have the obligation to future generations of Americans that

the system will be able to provide them with the protection it

promises against the day of their retirement and against the risks

of disability or untimely death.

The coming months and years are clearly going to see critical decisions being made concerning Social Security and significant attempts to deal with both issues of administrative reforms and

broader policy matters.

Mr. Chairman, it would be an honor and a privilege to have the

opportunity to be part of the effort to address these and other important issues facing Congress, the President, and the Social Security Administration.

If confirmed, I would look forward to the challenge of helping to

execute the important mission that this committee and the Congress have given to the Advisory Board. So, I would like to thank

you for finding the time to hold this hearing at what, as a former

Senate staffer, I know is an extraordinarily busy time.

I would be happy to answer any questions you may have, and I

would respectfully request that my full statement be entered into

the record. Thank you, Mr. Chairman.

The CHAIRMAN. Your whole statement, and everybody else’s

whole statement, will be entered into the record, if you want to

summarize.

[The prepared statement of Mr. Belt appears in the appendix.]

The CHAIRMAN. Ms. Young?

STATEMENT OF JENNIFER YOUNG, TO BE ASSISTANT SECRETARY FOR LEGISLATION, DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Ms. YOUNG. Thank you, sir. I did want to thank you for taking

the time to hold the hearing during this incredibly busy time. I

know how hectic your schedule is right now, so I am particularly

gratefully for you making the time to talk to us today.

It is a huge honor for me to be nominated by the President, and

a great privilege to be afforded the opportunity, if confirmed, to

serve as the Assistant Secretary for Legislation at the Department

of Health and Human Services. It is particularly special for me to

testify before this committee.

My time here continues to stand out as one of the most rewarding professional experiences of my career. I think the tradition that

this committee has of close bipartisan collaboration, working toward important public policy goals is really something that I am

very honored to have been a part of.

6

I also view the committee with a real degree of fondness, because

while working here I met my husband. I am a little less fond right

now since he could not make it to the hearing. [Laughter.] But I

trust I will work through that.

Within HHS, the Assistant Secretary for Legislation serves as a

senior advisor to the Secretary on all legislative matters. If confirmed, it would be my primary responsibility to work with you in

this committee, and other committees in support of the administration’s Health and Human Services agenda.

My role would essentially be to serve as your liaison to the department, and I would pledge to make certain that you receive

from us whatever assistance you need, be it technical assistance on

legislative priorities, to ensuring that your oversight requests are

promptly attended to and your constituent needs are met.

Since my early years as a health staffer, I have worked on health

care at both the State and Federal level. One of the real highlights

of my career was working with Governor Voinovich on the implementation of the Medicaid program, which really helped make concrete to me the enormous impact the programs that we all on here

can have on people’s lives on a direct level.

Working for Ways and Means and Senate Finance, I know the

importance of seeking advice and counsel from members on decisions and policies that the administration contemplates. I know

that close collaboration between the administration and Congress

is essential to moving any legislation forward.

I am very lucky to have excellent working relationships with

many of the Senators and staffers on this committee on both sides

of the aisle, and I look forward to continuing that, if confirmed.

I know we all share a commitment to ensuring the health and

well-being of the American people. Much of that agenda is accomplished through the programs administered by the Department of

Health and Human Services.

Medicare and Temporary Assistance for Needy Families serve

our Nation’s seniors and low-income populations and continue to be

at the top of this committee’s agenda, and we are very fortunate

to be able to work with you to advance that agenda.

President Bush and Secretary Thompson are dedicated to ensuring that all of our programs are run efficiently and effectively so

that we can provide the best possible benefits and coverage to our

most vulnerable populations, and the oversight role that your committee has played certainly helps us keep on that track to achieving that goal.

I am very proud and honored by the opportunity to serve the

President and our Nation, and I would like to especially thank Secretary Thompson for his steadfast leadership and his confidence in

me to serve in this capacity. If confirmed, I will do my best to carry

out the duties and obligations entrusted to me with dedication, enthusiasm, and compassion.

I thank you for the privilege of appearing before you today, and

I of course would be pleased to answer any questions. Thank you,

sir.

The CHAIRMAN. Thank you, Ms. Young.

[The prepared statement of Ms. Young appears in the appendix.]

The CHAIRMAN. Now, Mr. O’Grady?

7

STATEMENT OF MICHAEL O’GRADY, TO BE ASSISTANT SECRETARY FOR PLANNING AND EVALUATION, DEPARTMENT

OF HEALTH AND HUMAN SERVICES

Mr. O’GRADY. Good morning, Mr. Chairman. Thank you for the

opportunity to appear before you today. I appreciate the committee

taking the time to hold this hearing. I know the committee has

many pressing commitments.

I have submitted a formal statement for the record, which I will

not read. I would like to highlight a few points from my written

testimony.

My career, spanning more than 20 years, has been dedicated to

providing policymakers with the most reliable, unbiased, highestquality research and analysis available. Most of this work has been

done for the U.S. Congress.

I have learned a tremendous amount about working within the

political process to achieve consensus and sound reform. My Congressional experience began at the Congressional Research Service,

where I spent more than a decade assisting Congressional committees and individual members in the analysis and development of

legislative proposals. I am very grateful for that opportunity.

I learned two essential lessons at CRS that have served me well

over the years. First, is the absolute necessity of providing policymakers with the most accurate and unbiased research. Such research is the foundation on which good policy is created.

Second, is the recognition that even the most sophisticated and

rigorous research is useless unless it can be communicated in a

straightforward manner that truly informs the policy discussion.

I further developed and expanded these skills at three Congressional committees established to advise Congress on Medicare policy: the Physician Payment Review Commission, the Medicare Payment Advisory Committee, and the Bipartisan Commission for the

Future of Medicare.

At the Bipartisan Commission, I had the great opportunity to

work with Senator Breaux, Senator Frist, and Senator Rockefeller.

Here, I experienced first-hand the challenges of attempting to forge

a policy and political compromise in an extremely controversial and

complex area. It was a daunting challenge.

During the 106th Congress, I had the honor of working for Chairman Bill Roth on the health staff of the Finance Committee. I

served as a senior policy advisor to Chairman Roth on issues involving long-term Medicare restructuring, the Medicare+Choice

program, public/private plan competition, the design of Medicare

prescription drug benefits, and Medicare’s long-term financial viability.

My experience has not been limited to government. I worked for

2 years at the Health Policy think tank, Project Hope. This experience helped me better understand the dynamics of outside groups

that provide research and recommendations to the government.

I think my tenure there better prepared me to work with outside

organizations to ensure that the government gets the highest value

from the research community.

Most recently, I served as the Senior Health Economist at the

Joint Economic Committee. I had the pleasure of advising Senator

Bennett on evolving issues of the uninsured, upward pressure on

8

health care spending, and the significant challenges and opportunities of emerging health care technologies.

The net effect of these experiences is a strong set of skills in the

political, policy, and research worlds. I am both ready and excited

about the opportunity to bring this knowledge and experience to

the position of Assistant Secretary for Planning and Evaluation.

If the committee sees fit to confirm my nomination, I will do everything in my power to enhance the capabilities of the office of the

Assistant Secretary of Planning and Evaluation, to improve the

quality of the analysis and research available, to inform the decisions of the Secretary of the Department of Health and Human

Services, the White House, and the Congress.

Finally, I want to add that my two decades of professional experience are matched by my three decades of living with juvenile

onset diabetes. As a result, I have probably interacted with the

health care system far more extensively than the average person

my age.

I only mention this because this experience has sensitized me to

the hard choices that patients face on a daily basis, the difficulties

of sorting through their real treatment options, and the high personal, emotional, and financial costs of dealing with long-term,

chronic illness.

I am excited professionally and personally about the opportunity,

if confirmed, to work with all the members of the committee, and

indeed your staffs, to address the compelling issues confronting the

American people today. Thank you.

[The prepared statement of Mr. O’Grady appears in the appendix.]

The CHAIRMAN. Thank you all very much.

There are three questions that are traditionally asked of every

nominee.

I will ask this to all of you, and then I will ask you to answer

separately.

First, is there anything you are aware of in your background that

might present a conflict of interest with the duties of the office to

which you have been nominated? Mr. Belt?

Mr. BELT. No, Mr. Chairman.

The CHAIRMAN. Ms. Young?

Ms. YOUNG. No, sir.

The CHAIRMAN. Mr. O’Grady?

Mr. O’GRADY. No, sir.

The CHAIRMAN. Do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably

discharging the responsibilities of the office to which you have been

nominated? Mr. Belt?

Mr. BELT. No, Mr. Chairman.

Ms. YOUNG. No, sir.

Mr. O’GRADY. No, sir.

The CHAIRMAN. Third, do you agree without reservation to respond to any reasonable summons to appear and testify before any

duly-constituted committee of Congress, if you are confirmed?

Mr. BELT. Yes, Mr. Chairman.

Ms. YOUNG. Yes, sir.

Mr. O’GRADY. Yes, sir.

9

The CHAIRMAN. I am going to call on Senator Baucus. If you

would like to make an opening statement and ask any questions

at this point, you can do that.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA

Senator BAUCUS. Thank you very much, Mr. Chairman. Just a

couple of words.

First, I congratulate each of the nominees. I think the most noble

human endeavor is service. It is service to family, church, to

friends, community. It is service. I commend all three of you for

taking time off to serve. I know you each do in your various private

capacities, family, friends and so forth, but here you are taking the

big plunge into public service.

I just, again, thank all of you very, very much on behalf of a lot

of American people who probably do not know, probably will never

know you, but for whom you work very, very hard. I thank you for

all that.

Mr. Chairman, the nominees before us, I understand, have credentials and experience and bring extensive background and

knowledge directly related to their positions and have an interesting array of experiences that will no doubt strengthen their

abilities.

Michael O’Grady brings a wealth of policy experience to his job

as Policy Analyst at CRS, and more recently a member of the staff

for Senator Roth, the former chairman of this committee. It is always a pleasure to welcome back former staff members, and particularly you, Mr. O’Grady. We look forward to working with you.

I would ask that you focus on a specific concern, though, as the

new head of ASPE. Traditionally, ASPE has been a highly-regarded

sponsor and originator of non-partisan social policy research and

analysis that has made significant contributions to policy debates.

I have strong concerns about the direction of ASPE as taken

under this administration. I am troubled to learn that it has become more political than policy. I believe this shift had something

to do with the low staff morale there. I look forward to hearing

from you, Mr. O’Grady, what you plan to do about that, because

I think it is becoming a problem.

Jennifer Young is also no stranger to this committee. Jennifer

also served on Senator Roth’s Finance Committee team, in addition

to stints on Ways and Means and the National Governors Association. We welcome you back, Jennifer, as well.

Ms. YOUNG. Thank you, sir.

Senator BAUCUS. Ms. Young has thorough knowledge of the

issues that we are working on and she has served in the acting capacity of this job for the past 5 months. As such, she has played

a central role in the Medicare conference negotiations. So, I have

had the opportunity to work with her on almost a daily basis. It

seems like we have been in that room forever. You have added, not

detracted, and we do appreciate that.

Ms. YOUNG. Thank you, sir.

Senator BAUCUS. Finally, Bradley Belt has been appointed to

serve in the important role of Member of the Social Security Advisory Board created in 1994 that made the Social Security AdminisVerDate 11-MAY-2000 12:03 Apr 06, 2004 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 91966.NOM SFINANC2 PsN: SFINANC2
10

tration an independent agency. The Social Security Advisory Board

has produced many excellent reports about all aspects of Social Security. My staff and I found these reports to be quite valuable.

Mr. Belt has experience in this area. He gained it by serving as

executive director of the National Commission on Retirement. Mr.

Belt also has vast experience working in other areas of public policy. For example, he has served as senior vice president of the Center for Strategic and International Studies.

The Social Security Advisory Board has already issued a number

of outstanding reports about the problems facing the disability portions of Social Security and Supplemental Security Income programs.

While I am concerned about all of these, I am especially concerned about the long periods of time that many applicants must

wait before approval of disability benefits.

I want to just tell you, sir, that I have a person working for me

in Montana on disability, who went out of her way to go all around

the State and visit different offices to try to find out what in the

world is going on here, why is the backlog so long.

She came back with some very good recommendations, which she

has passed on to the Social Security Administration. You and I

might, Mr. Belt, kind of follow up on that because it is a problem.

The backlog is very embarrassing, it is so long.

Social Security Commissioner Barnhart is intent on fixing these,

I know. Toward that end, she recently unveiled a new service delivery plan for these two programs. It is my understanding that the

Social Security Advisory Board will be analyzing them.

I believe that the Finance Committee needs to have a hearing on

this plan early next year, Mr. Chairman, and I hope we can schedule that at an early, appropriate time. I urge Mr. Belt to plunge

into this, even before he is confirmed, let alone after.

I look forward to hearing your testimony, all of you. I know I can

speak for the Chairman in saying that it is very much our intention to, on a bipartisan basis, work very closely with you. We are

all a team. We can get more accomplished the more we exercise

that approach.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you.

Mr. O’Grady, I would like to get your commitment that I and

other members of the committee can look to you and your department for your technical support and counsel as we go forward on

major, and often complicated, issues that involve the department.

To me, as the Ranking Member just said, cooperation is the backbone to everything we do.

Could I have that commitment?

Mr. O’GRADY. Yes, sir.

The CHAIRMAN. Thank you.

Ms. Young, a critically aspect of my work is maintaining oversight of HHS, its operations, and activities. I have some specific

concerns with respect to getting the department’s cooperation. In

that regard, ensuring that I receive prompt and complete responses

to my letters or letters from anybody on the committee is important.

11

In that regard, do you commit to ensuring that I would be provided prompt and complete information each and every time I request it?

Ms. YOUNG. Absolutely, sir.

The CHAIRMAN. Also, Ms. Young, I utilize the General Accounting Office from time to time to examine issues at your department.

Over the past year or so, I have noticed that the General Accounting Office is having more difficulty gathering information from the

department.

Do you commit to ensuring that the General Accounting Office

gets what it needs promptly? In fact, I have asked that the General

Accounting Office report to me in the event that they notice delay

tactics being used by the department.

Do we have an understanding? I do not want to have to chase

the HHS down to help the GAO do its work, which I have found

very essential for this committee doing its work.

Ms. YOUNG. Yes.

The CHAIRMAN. Then, lastly, not really a question, but I did want

to get this on your radar screen. October 17, 2003, I sent a letter

to the Secretary regarding a proposed regulation that would allow

drug companies participating in the Medicaid drug rebate program

to destroy documents after a 3-year period.

In that letter, I noted that such a regulation would adversely affect the False Claims Act, and whistleblowers, generally. I am presently awaiting a response to that letter.

In any event, I wanted to take this opportunity to state for the

record and to see your assurances that any actions contemplated

by the department always consider the impact that that action,

regulation, guidance, or anything like that can have on the False

Claims Act and on whistleblowers.

There is way too much fraud, waste and abuse in Medicare and

Medicaid systems and I want to ensure that the False Claims Act

is never weakened by the HHS, and I hope you can help us with

that.

Ms. YOUNG. I will do my best, sir. I will follow up immediately

on the substance of the letter you mentioned.

The CHAIRMAN. All right.

Then on October 29, which was just very recently, Senator Baucus and I sent a letter to the White House regarding the importance of getting a new HHS Inspector General nominated and confirmed.

Do you share my commitment in ensuring that HHS gets an Inspector General in the near future? And what actions can you take

to ensure that happens in the near future? It has been 8 months

now since I believe the Inspector General announced his resignation.

Ms. YOUNG. I have not been directly involved with the search for

a new IG nominee. It is my understanding that we did have someone extremely close to sending up a name to you, and then he

asked that his name be withdrawn for family reasons.

He was another Federal employee and he is retiring from government service. So, he has withdrawn from consideration and we are

resuming the search with all due speed, and hope to have a name

up to you shortly, sir.

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The CHAIRMAN. And I want to compliment you on the answers

to my questions, because that sort of cooperative attitude is what

Senator Baucus was referring to. If we can have it, things will go

very, very smoothly. Thank you.

Mr. Belt, as you know, the Social Security Advisory Board was

created in 1994 to advise Congress and the President on matters

related to Social Security and Supplemental Security Income programs.

Based on your knowledge of the board’s activities, what do you

believe are the most important issues that have to be addressed?

Mr. BELT. Mr. Chairman, and this directly goes to the comment

that was made by the Ranking Member, Senator Baucus. A particular focus of the Advisory Board’s work right now, as I understand it, is examination of the administration of the Disability Insurance program, which has been beset by a number of problems,

as Senator Baucus noted.

Commissioner Barnhart has issued a set of policy recommendations and it is my understanding that the Advisory Board will

begin to review those recommendations.

I certainly intend to dive into that, to use the phrase Senator

Baucus did, and I would certainly represent to you and to him that,

at a personal level, I would be delighted to meet with you and your

staffs at your convenience to address those and related issues.

Obviously, the Advisory Board has a broader mandate as well

and it has begun to look at some of the bigger policy questions regarding the structure and solvency of the Advisory Board. Of

course, we would look forward to working with this committee and

the staff on those matters as well.

The CHAIRMAN. Senator Baucus?

Senator BAUCUS. Yes, a few questions of Mr. O’Grady. As I indicated in my statement, I have some questions about the use of

ASPE and how the use of the offices changed.

I just want to express my displeasure with the direction that this

once-respected agency has taken. It has really been transformed

from an analytic policy shop to a political spin operation, which I

find most disturbing.

I say that because all of us who run for public office and who

serve—it sounds kind of corny, but it is true—really want to do the

right thing, want to do the best job we can, and we want to have

the facts.

It is hard enough around here to make judgments because there

are so many issues to address, and usually not enough time to go

into the depth that we would like to go into to know, are we making the right decision or not.

It is disconcerting, to say the least, when there has been an office

that has historically produced good stuff. By that, I mean just solid,

factual, analytical material to help not only the Congress, but certainly the administration and the whole country to make good decisions.

I am sort of a believer in the old John Locke marketplace of ideas

concept. That is, the more people have more ideas about how to

solve a certain problem, the more likely it is they are going to come

up with a pretty good one. But it has got to be honest. It has got

to be in good faith, that is, the information.

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On the other hand, an office—ASPE, for example—that no longer

performs that function, but rather puts a political spin on things,

it is disconcerting and disappointing.

And I know it is not your fault, because you are not there. But

it is becoming your responsibility. You will certainly be there. I

would just like to engage in a little honest-to-goodness dialogue

with you as to why all this has happened, and what can be done

about it, and how do we get back on track.

Mr. O’GRADY. All right. Good question, good point. I heard the

same sort of concerns from the outside community and from the

outside research and analytic community.

What I have done prior to appointment, is I have met with both

political appointees, the senior civil servants, some of the civil servants who have left ASPE in recent years, to try and get a feel for

exactly what was at the core of both a concern and how it affected

morale, and to get things on course in terms of the most rigorous

analysis that could be done, unbiased, nonpartisan.

I also went out and I sought the advice of the top management

at CRS, GAO, and MEDPAC just to get their feel for, in terms of,

how do you balance, how do you bring your staff along, how do you

really get the best work out of folks to make sure that everything

is sort of as straight as you would like.

They were very helpful in terms of giving advice on how to make

sure different steps could be taken to make suer that the process

ran along as smoothly as possible.

Part of what I have tried to do, I have been down as a consultant

for a few weeks now and I have tried to make it quite clear, just

the point you have made, that what the shop is about is to do good,

straightforward analysis, let the science lead us, and to keep it as

even-handed as possible.

The civil servants are certainly there to do the data, do the research, make sure that it is straightforward. If there is policy development that is being done for the administration otherwise, that

is fine, and that is what political appointees do, but that the research going into that process is just as you described.

Senator BAUCUS. What happened? Why the decline?

Mr. O’GRADY. As you said, I was not there. From what I have

been able to determine at this point, is that at the last year or two

of the Clinton administration there was a little bit of a blurring of

the lines between what the senior civil servants were doing and

what the political appointees were doing.

That led to a situation of a certain amount of distrust when a

new administration comes in. That then led to a situation where

work was disrupted in terms of the way it normally went about,

and that situation led to a certain amount of work either being

done totally by the political appointees themselves or being done

totally separately.

Now, in terms of thinking about how to fix that and how to get

that back online, part of that is sending a strong signal that the

type of work that is appropriate out of an agency like ASPE is the

sort of unbiased, do-it-straight-by-the-book sort of analysis that we

have expected. It is the sort of work I did for decades at CRS. It

is the sort of work that I did at MEDPAC. It is exactly along the

lines you are talking about.

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Senator BAUCUS. Have you talked to anybody in the administration about this problem? That is, either Secretary Thompson, or

anybody else in the administration?

Mr. O’GRADY. Only in terms of the idea of what the expectations

were for me coming in, was that I was to make sure that it was

done in as straightforward and as analytic a process as possible.

Senator BAUCUS. But is there anybody in the current administration, in your judgment, without naming names, or any intent for

this operation to be more political than it should be?

Mr. O’GRADY. I have not received any kind of indication from

anyone that they want me to tilt things in any particular direction.

It is just, give the decision-makers the information they need.

Senator BAUCUS. Right. When was the Web site shut down?

What date?

Mr. O’GRADY. I do not believe the Web site was shut down.

Senator BAUCUS. I am sorry?

Mr. O’GRADY. I was not aware that the Web site was shut down.

Senator BAUCUS. I correct that. It is research not being proposed

on the Web site.

Mr. O’GRADY. I am not aware that research has been kept off the

Web site. At this point, the Web site certainly needs a lot of work.

It seems to need work that has nothing to do with partisan one

way or the other.

It certainly is not state-of-the-art or easy for anyone to approach.

But, certainly, I am more than happy to check and make sure that

the Web site is as up to date as possible and that research is put

on it as soon as it is ready.

Senator BAUCUS. All right.

Could you give us a report on how ASPE’s research budget has

been used in each of the last several years?

Mr. O’GRADY. The research budget has moved around, to a certain degree, between the different major components of ASPE. Part

of that has to do with the legislative agenda and as proposals are

coming up.

Part of it also had to do with, as people have left, there has not

been as much work done in health policy. There has been much

more in support of TANF and some of the other human services

programs.

Senator BAUCUS. Could you get it, please, for the record?

Mr. O’GRADY. Oh, certainly. I will certainly get that.

Senator BAUCUS. For each year.

Mr. O’GRADY. Certainly.

Senator BAUCUS. All right.

Also, the use of the Web site.

Mr. O’GRADY. Certainly.

Senator BAUCUS. What has the staff turnover been in the last

year or two? In the past 2 years, what has the staff turnover been?

Mr. O’GRADY. I am not sure, but I certainly can check that out

and give you more specifics. There has been more turnover in

health policy than any other parts of ASPE.

Senator BAUCUS. My understanding is that 20 out of 30 have left

in the past 2 years. Does that sound right?

Mr. O’GRADY. That sounds high, but I will certainly verify it.

Senator BAUCUS. All right.

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I have no further questions. I just urge you strongly to check on

this.

Mr. O’GRADY. Yes. Just, if you would do me a favor. If this comes

up again, contact me or have your staff contact me.

Senator BAUCUS. In that vein, knowing that you will lend a helping hand, that is, if things are getting out of whack, there are always ways to skin a cat.

Mr. O’GRADY. Right.

Senator BAUCUS. There are always ways for you to tell us. There

is always a way if you want some help.

Mr. O’GRADY. Thank you.

Senator BAUCUS. You are welcome.

The CHAIRMAN. Thank you.

Mrs. Young, your husband is here. Would you like to introduce

him?

Ms. YOUNG. This is J.T. Young. Thank you, sir.

The CHAIRMAN. Welcome.

There are no further questions. I might remind you of a couple

of things to facilitate your nomination being approved by the Senate.

Number one is, as I have indicated in some of my questions, you

said that you would get answers to us if we have questions pending. A lot of members hold up nominations because they are not

getting responses from various departments.

The other thing is, I do not know if I will have any written questions or not, but there might be members who are not here that

would have. So, we would like to have you get those back to us

very quickly.

Congratulations to all of you.

Senator BAUCUS. I want to congratulate you, too, and urge you

to go for it.

Ms. YOUNG. Thank you, sir.

Mr. BELT. Thank you.

Mr. O’GRADY. Thank you.

The CHAIRMAN. The hearing is adjourned.

[Whereupon, at 11:44 a.m., the hearing was concluded.]

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RESPONSES TO QUESTIONS FOR THE RECORD

Question 1. Why is the public unable to access ASPE sponsored-research results

on the HHS website any longer? To my knowledge, they have always been made

available in the past. Do you support making ASPE-sponsored research available to

the public? If not, why not?

Answer. I have personally spoken to the ASPE Webmaster and he is unaware of

any problems with access to ASPE reports currently or in the past, but he is double

checking to make sure. I strongly support making ASPE sponsored research available on the web, as the web provides a powerful means of disseminating new research and analysis.

Question 2. A recent ASPE report concluded that there is a malpractice ‘‘litigation

crisis.’’ Evidence for this conclusion was limited, and largely based upon 27 anecVerDate 11-MAY-2000 12:03 Apr 06, 2004 Jkt 000000 PO 00000 Frm 00034 Fmt 6601 Sfmt 6621 91966.NOM SFINANC2 PsN: SFINANC2
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dotal examples of physicians and hospitals claiming to close their practice or limit

services due to unaffordable malpractice premiums. In your opinion, does this report

contain the kind of rigorous analysis that you would expect the agency to produce

under your leadership?

Answer. I believe this question refers to the report titled ‘‘Addressing the New

Health Care Crisis: Reforming the Medical Litigation System to Improve the Quality of Health Care’’ issued by ASPE on March 3, 2003. ASPE staff examined and

synthesized peer reviewed research and evaluation publications, Congressional testimony, actuarial analyses, national and state data sources including the Medical Liability Monitor, National Practitioners Databank, State Departments of Insurance,

the Institute of Medicine, and data available from the National Association of Insurance Commissioners. The anecdotes the question mentions were used to provide examples of the general and abstract data in the report and were used to demonstrate

the real-world effect litigation is having on doctors’ practices and on Americans’ access to health care.

However, ASPE’s experience was similar to other researchers attempting to shed

light on this important issue. I, and the ASPE researchers who wrote the report,

concur that the data on this subject are not as complete as the analytic community

would like. In fact, ASPE is in the process of conducting several studies to develop

more rigorous data: One project is examining the functions, structure and outcomes

of State Medical Boards (SMB) activities regarding the discipline or counseling of

physicians. A second project is examining issues in nursing home liability.

If confirmed, I will ensure that ASPE continues its efforts to improve both the

quality of the data and the rigor of the research on this important issue.

Question 3(a) and 3(b). Two examples of ASPE-funded reports that have not been

published on the ASPE website are (1) a report on the distribution of Disproportionate Share Hospital payments under Medicare and Medicaid and with an analysis of alternative allocation policies would improve the distribution of funds to safety net hospitals; an (2) supporting reports for the independent evaluations of the

State Children’s Health Insurance Program. Why have these reports not been placed

on the HHS website? If confirmed, will you restore the policy of making ASPE-funded research available and accessible to the public and the policy research community?

Answer 3(a). After lengthy discussion with the ASPE staff involved, I can find no

reason why the study on Disproportionate Share Hospitals has not been placed on

the web site, other than as an administrative oversight. I have recommended it be

placed on the web site. If confirmed, I will ensure that it is placed on the web site.

Answer 3(b). I have explored the status of SCHIP evaluation and can report the

following to the Committee: On February 26, 2003, ASPE released the Interim Report to Congress. The interim report is on the ASPE website. The final SCHIP report, with supporting reports, is behind schedule, but has a planned completion date

of Spring 2004. Once the final report has been reviewed and met quality standards,

I can see no reason why it should not join the interim report on the ASPE web site.

I strongly support making ASPE sponsored research available on the web.

In addition to the Committee’s written questions, Ranking Member Baucus raised

several specific questions during the hearing. The first question focused on the use

of the website. That question is answered my response to the first written question.

The second question focused on how the ASPE research budget has been distributed over in recent years. ASPE spending and planned spending is detailed below

for FY2002 and FY2003 by office within ASPE and categorized by ‘‘policy research’’,

‘‘evaluation projects’’, and ‘‘interagency transfers’’.

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As I mentioned during the hearing, spending will shift depending on the particular issues currently or soon to be under policy discussion and the type of research needed, e.g., surveys, field hearings or modeling. Given this consideration,

if confirmed, my judgment would be to direct future spending more into the health

policy research area.

Senator Baucus’ third question focused on attrition at ASPE. He had the impression that 20 out of 30 career civil servants had left ASPE within the last year or

two. ASPE has about 100 full-time employees at any particular time. In FY 2002,

17 employees left ASPE, 12 new employees were hired. In FY 2003, 11 employees

left ASPE, five new employees were hired. As a percentage of the ASPE workforce,

these numbers are significantly lower than the estimates that generated Senator

Baucus’ concern. Still, if confirmed, a first priority would be to strengthen the staff

in certain essential areas, such as health policy.

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RESPONSES TO QUESTIONS FOR THE RECORD

Question 1. What is the Administration’s position on merging the Medicare trust

funds into a single unified fund? And would the Administration support placing a

cap or limit on Medicare spending in any way?

Answer. The President is committed to preserving the Medicare entitlement for

current retirees and for future generations. The Administration is working with conferees to develop a mechanism that will encourage Congress to address the instability in long-term program funding of Medicare that is a problem for the current

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program. The proposal would not include a cap on general revenue contributions to

the program. Instead, it would require trustees to monitor the level of general revenue transfers into the program.

Question 2. What is the Administration’s view on premium support? Does the Administration support the premium support proposal in the House-passed Medicare

bill? And if not, what changes to the House policy would the Administration propose?

Answer. The Administration believes that all Medicare beneficiaries should be

able to choose between receiving their Medicare benefits through the traditional program or through private plans, and we would support competition between the various options. However, the Administration believes that the premiums of low- income populations, current retirees, and those nearing retirement age should not be

affected by this competition.

Question 3. The Administration has suggested that Congress create a ‘‘stabilization fund’’ to attract and retain regional PPOs—up to $20 billion to be spent over

the next 10 years. Can you elaborate on the Administration’s rationale for this proposal?

Answer. The Administration believes that a stabilization fund will help ensure

that Medicare beneficiaries across America will have the same kinds of choices

among health care options as federal employees enjoy today.

Question 4. In its State of Administration Policy (SAP) on the Senate-passed prescription drug bill, the Administration expressed concern regarding the Senate’s fallback provisions. Would you please elaborate on the Administration’s concerns? Don’t

you agree that having a strong fallback provision is critical to ensuring that seniors

in Montana and other rural states receive prescription drug coverage?

Answer. The Administration is committed to ensuring that all beneficiaries have

access to prescription drug coverage. We have been concerned that the existence of

the so-called ‘‘hard fallback,’’ through which the federal government would assume

100% of the risk of the costs of providing a prescription drug benefit, would serve

as a disincentive for private plans willing to bear risk to participate in the new market, thus limiting choices for beneficiaries.

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