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68–182—PDF 2010

S. HRG. 111–1073 

NOMINATIONS OF JOSHUA GOTBAUM 

AND RICHARD SORIAN 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

ON THE

NOMINATIONS OF 

JOSHUA GOTBAUM, TO BE DIRECTOR OF THE PENSION BENEFIT GUARANTY CORPORATION; AND RICHARD SORIAN, TO BE ASSISTANT SECRETARY FOR PUBLIC AFFAIRS, DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

MAY 26, 2010 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

(II) 

C O N T E N T S 

OPENING STATEMENT 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

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

ADMINISTRATION NOMINEES 

Sorian, Richard, nominated to be Assistant Secretary for Public Affairs, Department of Health and Human Services, Washington, DC ............................ 3 

Gotbaum, Hon. Joshua, nominated to be Director of the Pension Benefit 

Guaranty Corporation, Washington, DC ............................................................ 5 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

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

Prepared statement .......................................................................................... 13 

Gotbaum, Hon. Joshua: 

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

Prepared statement .......................................................................................... 15 

Biographical information ................................................................................. 18 

Grassley, Hon. Chuck: 

Prepared statement .......................................................................................... 26 

Letter from Senator Grassley to Hon. Vincent K. Snowbarger, dated 

May 11, 2010 ................................................................................................. 28 

List of inaccuracies and omissions in the CMS brochure entitled ‘‘Medicare and the New Health Care Law—What it Means for You’’ ................ 30 

Sorian, Richard: 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 34 

Biographical information ................................................................................. 37 

(III) 

(1) 

NOMINATIONS OF JOSHUA GOTBAUM, 

TO BE DIRECTOR OF THE PENSION BENEFIT 

GUARANTY CORPORATION; AND RICHARD 

SORIAN, TO BE ASSISTANT SECRETARY 

FOR PUBLIC AFFAIRS, DEPARTMENT 

OF HEALTH AND HUMAN SERVICES 

WEDNESDAY, MAY 26, 2010 

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 10:09 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senator Grassley. 

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; Ayesha Khanna, International Trade 

Counsel; Liz Fowler, Senior Counsel to the Chairman and Chief 

Health Counsel; and Rory Murphy, International Trade Analyst. 

Republican Staff: Mark Hayes, Health Policy Director and Chief 

Health Counsel; Michael Park, Health Policy Counsel; Sue Walden, 

Health Policy Counsel; and Nick Wyatt, Tax and Nomination Professional Staff Member. 

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

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The hearing will come to order. 

Congressman Horace Mann cautioned, ‘‘More will sometimes be 

demanded of you than is reasonable. Bear it meekly, and exhaust 

your time and strength in performing your duties.’’ 

Mr. Sorian, Mr. Gotbaum, these are unreasonably demanding 

times, and yet your Nation calls upon you to exhaust your time and 

strength to perform new duties. 

Mr. Sorian, you enter the Department of Health and Human 

Services when it is implementing landmark health care reform. Mr. 

Gotbaum, you will direct the Pension Benefit Guaranty Corporation when millions of Americans have seen their pension plan 

funds depleted by the economic downturn. The tasks that confront 

you both will demand much. This committee asks you to dedicate 

your time and strength to perform your tasks well. 

Mr. Sorian, President Obama has nominated you to be Assistant 

Secretary of Public Affairs at the Department of Health and 

Human Services. At HHS, you will be responsible for helping 

2 

Americans navigate the benefits of the new health care reform legislation. You will serve as the point person on the public affairs 

matters for the Department. Among these matters will be web and 

new media and broadcast communications. 

You are well-suited for the job. Your work with the National 

Committee for Quality Assurance and the Center for Studying 

Health System Change has given you a solid grounding. I also note 

your experience as the editor of a national health care trade journal, and you have authored three books. 

Your job will be to help explain the health care reform bill. Note, 

I said explain, I did not say sell. What is needed is an honest explanation of what is in the bill and what is not. Information needs 

to come from a reliable source, it needs to come in plain English, 

and it needs to come without jargon, without spin. 

HHS can be that trusted source. In your new role, you will direct 

public information from HHS. You will also direct a special outreach division to get the word out, not just about health reform, 

but also about pandemic events and public health emergencies. You 

are an excellent choice for the job, and I look forward to working 

with you. 

Mr. Gotbaum, as Director of the Pension Benefit Guaranty Corporation, you will be responsible for protecting the pensions and 

livelihoods of millions of Americans. As Americans recover from 

this economic crisis, your task becomes even more important. The 

PBGC staff has played an important and much-appreciated role in 

developing part of the jobs legislation that Congress is considering 

this week. This legislation would provide relief to defined benefit 

plans in light of the economic stress facing many employers. We 

appreciate the technical support from PBGC and from the staff in 

developing this relief. 

But we would also very much have appreciated the administration’s views on the policy issues that we are facing. We look forward to having a Senate-confirmed PBGC Director soon to give us 

those views. 

In particular, the PBGC will help us to address an issue facing 

certain multi-employer pension plans. In these plans, existing employers are paying into multi-employer plans to fund retirees and 

soon-to-be retirees of employers that are no longer in business. If 

we do not act, this burden threatens to bankrupt many large plans 

and employers that fund them. Mr. Gotbaum, we look forward to 

your counsel as we tackle this thorny problem. 

Your experience has prepared you well. You spent years in the 

private sector helping manage and advise American companies and 

nonprofits. You led Hawaiian Airlines through a successful bankruptcy, and you managed the September 11 fund. You are an excellent choice for the job. I look forward to working with you in the 

months to come. 

Today we also hope to consider the nomination of Sherry Glied 

to be Assistant Secretary for Planning and Evaluation at HHS. In 

this position, Dr. Glied will make important policy and planning 

decisions, and she must do so based on sound information in a 

manner that most benefits the American people. If we can obtain 

a quorum of Senators present, we will interrupt the hearing to report out Dr. Glied’s nomination. 

3 

So I urge you all to dedicate yourselves to the tasks at hand. I 

urge you to meet the demands of the positions to which you have 

been nominated, and I urge you to serve America and Americans 

with exhaustive time and strength. 

Today’s panel begins with Richard Sorian, who has been nominated to be Assistant Secretary for Public Affairs at Health and 

Human Services and, as indicated earlier, Josh Gotbaum, nominated to be Director of the Pension Benefit Guaranty Corporation. 

Thank you both for coming. 

As is our usual practice, your full prepared statements will be included in the record. I urge you to cut your statements down to 

about 5 minutes. So, let us begin with you, Mr. Sorian. 

But before you begin, why don’t you introduce any friends, relatives who may be here with you. 

Mr. SORIAN. Thank you, Mr. Chairman. It is a pleasure to be 

here. I would like to introduce my brother, who has come down 

from New York for this hearing. 

The CHAIRMAN. Sure. 

Mr. SORIAN. My brother, Steven. 

The CHAIRMAN. Could you stand, Steve, so we can see you? You 

look like brothers. [Laughter.] 

Mr. SORIAN. We are told that a lot. 

The CHAIRMAN. That is great. I will bet you are very proud. 

Mr. SORIAN. Yes. I am proud of him. [Laughter.] 

We will see about the other way around. 

The CHAIRMAN. Right. Right. All right. Why don’t you proceed? 

STATEMENT OF RICHARD SORIAN, NOMINATED TO BE ASSISTANT SECRETARY FOR PUBLIC AFFAIRS, DEPARTMENT OF 

HEALTH AND HUMAN SERVICES, WASHINGTON, DC 

Mr. SORIAN. Chairman Baucus, I appreciate your generous remarks, and I really pick up on your theme that this is a very important time in our Nation’s history. It is not often that a department like HHS gets an opportunity to implement a landmark piece 

of legislation like the Affordable Care Act that you and your colleagues have so carefully crafted, and I look forward to being able 

to work on that, if I am confirmed by the Senate. 

I also want to thank Senator Grassley and the other members of 

the committee for their kindness in preparation for this hearing. It 

is an honor to be here. It is not often that a working journalist 

winds up on the other side of the press table in this committee, but 

my original career was as a working journalist covering health care 

policy, so usually I was back there. 

I am very grateful to President Obama and Secretary Sebelius 

for providing me with the opportunity to serve the American people 

at this time. HHS really is the people’s department. It serves so 

many different purposes, that it really touches the lives of almost 

every American in one way or another. It is a place that I will be 

honored to serve, if confirmed. 

Every day you walk into the building down on Independence Avenue, you get to see the words of Senator Humphrey that really 

crystallize the mission of the Department when he said, ‘‘The moral 

test of government is how government treats those who are at the 

dawn of life, our children; those who are in the twilight of life, our 

4 

elderly; and those who are in the shadows of life, the sick, the 

needy, and the handicapped.’’ You do not need much more inspiration to go to work every day and get the job done. 

As you mentioned, the Assistant Secretary for Public Affairs 

serves as the Secretary’s principal counsel on public affairs and 

conducts national public affairs programs, provides centralized 

leadership for the Department and its many agencies and divisions, 

and also administers the Freedom of Information Act and the Privacy Act. So, very important parts of the Department are located 

there. 

I believe that my career has prepared me for these challenges. 

As I mentioned, I began my career as a working journalist, covering health care policy here in Washington and around the country. I then served, from 1993 to 1998, in the Department as a senior advisor to Secretary Donna Shalala on a number of different 

issues, including health care and health care quality improvement. 

I spent time as a researcher studying health care policy, and particularly the best way to communicate complicated health care policy questions to the public and to the people who have to implement those policies. As you mentioned, I was honored to serve at 

the National Committee for Quality Assurance and pursue their 

mission to improve the quality of health care. 

Clearly, if I am confirmed, the major priority for the Department 

will also be the major priority for the Public Affairs division, and 

that is implementing and explaining the Affordable Care Act to the 

American people. The laws that you wrote must be implemented in 

a manner that fulfills the intent and the needs of the people for 

whom they are written. While Public Affairs does not develop or set 

policy, it plays a critical role in translating those policies to the 

public and to the Nation as a whole. 

I think our Nation’s recent experience with the H1N1 flu epidemic reinforces the importance of quick, accurate, and clear communication on complex issues. The ability of the government to 

pull together information and translate it into accessible language 

for the American people really helped to change what could have 

been a very damaging pandemic in this country. 

Today, millions of Americans who are eligible for programs like 

Medicaid and CHIP are not enrolled, and this committee has 

talked quite a bit about that. Many of them do not know they are 

eligible for these benefits. We do not want to repeat that with the 

Affordable Care Act. These benefits are real and valuable to these 

people, so communicating to them what their rights and their responsibilities are under the Act is vital so that they know how to 

access their rights, how to apply for and obtain benefits, and how 

to live up to the responsibilities that they have under the Act. 

Fortunately, we have a number of good, solid examples of how 

to do that, reaching back as early as the beginning of the Medicare 

program, but also as recently as the Medicare Modernization Act, 

the Children’s Health Insurance Program, and the Balanced Budget Act. All of these were complex, multi-faceted pieces of legislation 

that required very clear and concise translation for the public. 

We have many more tools available to us now to communicate, 

and I think that is a very valuable thing. But we have to worry 

about too much noise. If you throw information at the public in too 

5 

many different ways from too many different directions, you can 

confuse people, so I think one of our jobs is going to be to make 

sure that we use the right vehicles for the right audiences. 

If I am confirmed, I look forward to working with this committee, 

with the members of the Senate and the House, in any way that 

I can to advance these important programs. 

Thank you again, Mr. Chairman. 

The CHAIRMAN. Thank you, Mr. Sorian. 

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

The CHAIRMAN. Mr. Gotbaum, what family do you have here? We 

are very honored to meet them. 

Mr. GOTBAUM. Thank you, Mr. Chairman. I am joined by my 

wife, Joyce. 

The CHAIRMAN. Joyce. Great. Good. 

Mr. GOTBAUM. Thank you. 

The CHAIRMAN. Thank you. So you are just as proud of Joyce as 

Mr. Sorian is of his brother? [Laughter.] 

Mr. GOTBAUM. Yes. Actually, I would say, sir, since Joyce was 

willing to take me, and I suspect that Mr. Sorian’s brother had no 

say in that matter, I am even more grateful. [Laughter.] 

The CHAIRMAN. Right. Right. Well, that is right. Very well said. 

All right. Why don’t you proceed, Mr. Gotbaum? 

STATEMENT OF HON. JOSHUA GOTBAUM, NOMINATED TO BE 

DIRECTOR OF THE PENSION BENEFIT GUARANTY CORPORATION, WASHINGTON, DC 

Mr. GOTBAUM. Thank you. Mr. Chairman, Senator Grassley, 

thank you very much for considering my nomination. 

We all know the PBGC is going through very hard times. Its finances are entirely out of balance. Its service, despite improvements, continues to disappoint some. Its benefit levels frustrate 

others. And, frankly, the behavior of its previous Director called 

into question many of the agency’s actions, even some that, done 

properly, would have been perfectly all right. 

Yet, despite all these hard times, despite the deficits, despite the 

previous actions, despite the history, the PBGC is needed more 

than ever. As you noted, Mr. Chairman, more than 40 million 

Americans rely on pensions that are guaranteed by the Pension 

Benefit Guaranty Corporation. I would like to summarize how I 

might help. I am not an industry expert. 

What I am is a problem-solver and a manager. I work to bring 

people together, to take difficult issues and face them head on, and 

to find solutions that are always compromises, that people can live 

with. 

I have worked throughout the Federal Government—in five Cabinet agencies and the White House; I worked briefly in the Senate 

for Senator Hart—not only on policy, but also on government procurement, on government regulation, and on maintaining government’s financial integrity. 

I have worked across agency lines and I have worked with the 

Congress, and I have done so on problems as diverse as disaster 

relief, housing, and counter-terrorism. Outside the government, I 

have been a financial advisor to both businesses and unions, workVerDate Nov 24 2008 17:31 Sep 29, 2011 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 R:\DOCS\68182.000 TIMD
6 

ing through hard times, developing compromises, developing solutions, et cetera. 

You mentioned my experience at the September 11 fund, and I 

want to note that the thing that I am proudest of about that effort 

was that, by working with dozens of other nonprofits and finding 

ways to work together, we helped more than 100,000 people begin 

to rebuild their lives. And—and I understand this is quite important to this committee and to the agency—we did so in a way that 

set new standards for public accountability. 

Since then, I have continued to work in distressed situations. Hawaiian Airlines was very controversial, but we found a way out 

that strengthened the airline, that gave the creditors 100 cents on 

the dollar, that gave the stockholders gains instead of losses, that 

gave labor contracts raises—and our pension plan was not terminated. 

So having said that the modus operandi that I would bring to the 

agency is to try to work and develop consensuses, I think it is also 

important to say to you, since I am asking for your confirmation 

and your support, that there are some basic principles that I would 

follow. One is that retirement security is essential, that defined 

benefit plans in particular, which for many people are a better way 

of achieving it, have to be preserved. Also, the PBGC cannot choose 

between meeting the professional standards of industry and the 

highest standards of government; it has to do both. The PBGC 

ought to provide its services with a sense of compassion. 

We have to address the critical issues facing the PBGC and facing pensions—funding relief, investment policy, and the deficit—directly and realistically, and working with the Congress and the 

other stakeholders is essential to doing so. This is not something 

that the agency can, should, or would do alone. 

You have entrusted the PBGC with very important responsibilities: protecting pensions of more than 40 million people and being 

an advocate for retirement security, and I look forward to being 

able to provide the views and advice that you have asked for, Mr. 

Chairman. 

But one thing we should recognize is that there is no universally 

accepted plan for advancing this mission, and there is no universally accepted plan for dealing with the issues that the agency 

faces. What is clear is that the agency cannot do any of them alone, 

because the fact is that almost none of the factors that affects the 

fate of the PBGC is controlled by the PBGC. 

Plan sponsors decide what benefits to offer, what investments to 

make, and when to terminate. The Congress determines PBGC’s 

benefits, premiums, and budget. The board determines the investment policy, and the markets then determine what the returns will 

be on that investment policy, so reaching these agreements is going 

to require the engagement of the Congress, of the administration, 

and all the other stakeholders. It will require a combination of both 

principles and practicality, and, if you confirm me, I would be honored to help. 

Thank you very much for this opportunity. I very much appreciate that you were willing to consider this nomination, and I look 

forward to engaging and answering your questions. 

The CHAIRMAN. Thank you very, very much. 

7 

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

The CHAIRMAN. Senator Grassley? 

Senator GRASSLEY. I will put my statement in the record. 

The CHAIRMAN. All right. Fine. Good. 

[The prepared statement of Senator Grassley appears in the appendix.] 

The CHAIRMAN. I have three standard questions that we ask of 

all witnesses, and I will ask them of both of you right now. 

Is there anything that 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. Gotbaum? 

Mr. GOTBAUM. No. 

The CHAIRMAN. Mr. Sorian? 

Mr. SORIAN. 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. GOTBAUM. No. 

Mr. SORIAN. No. 

The CHAIRMAN. 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. GOTBAUM. Absolutely. 

Mr. SORIAN. Yes, sir. 

The CHAIRMAN. Thank you. 

I will start with you, Mr. Sorian. If confirmed, you will be required to explain some pretty thorny and difficult parts of health 

care reform. One of these issues is the individual responsibility requirements. That is something that raises eyebrows, to say the 

least, and questions. It is certainly a necessary part of health care 

reform if health care reform is going to work. That is, if all of us 

in America have shared responsibility, we are all in this together. 

If you could, please tell me some of your thoughts about how the 

Department might address what these individual responsibility requirements are and what they are not. 

Mr. SORIAN. Certainly, Mr. Chairman. I think that it is important to communicate an act of this size in its pieces, but then also 

connect the dots for the American people. So for most Americans, 

there are going to be some significant benefits, but there are connected to those benefits responsibilities. 

So I think you need to explain both of them to people so that 

they understand that, on the one hand, they will be eligible for, 

and can receive, some important protections and affordability for 

health insurance, but in return they are going to need to obtain 

coverage by a certain date specified in the law, and that these two 

pieces together really provide a safety net for all Americans. 

I think you need to provide that information in a variety of ways. 

You cannot just communicate in the old-fashioned way of, put out 

a press release, put out something to the newspapers, and think 

that everybody is going to hear that information. We have a lot of 

different ways to communicate, and we need to, at the core, communicate in a clear, concise, and accurate manner so that the peoVerDate Nov 24 2008 17:31 Sep 29, 2011 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 R:\DOCS\68182.000 TIMD
8 

ple who get that information can understand the pieces of the legislation that affect them. Then we have to reach people where they 

live, reach people where they work, where they gather. Different 

forms of communication work better for different populations. 

Some people prefer print—I am still one of those—some people 

prefer the web, others turn to radio for a lot of information, television news, and a variety of other forms of communication. So we 

need to identify multiple ways to make sure that we reach all the 

different people in a way that is clear and understandable to them, 

not just in terms of different languages, which obviously is important, but in different approaches and different media. 

The CHAIRMAN. But what are some of the new ways that are 

more effective now than might have been the case maybe 3, 4, 5, 

6 years ago? When you think about this, well, this is exciting. I 

have a new idea, I have several thoughts here about how to appropriately, properly, communicate with the American public generally 

about not just the individual mandate, but just about health care 

reform more generally. 

Mr. SORIAN. Well, I think it again depends on the audience you 

are trying to reach. If you are trying to reach younger, working 

age, or even college age and younger than that, putting it in print 

form, they are never going to see it. They go through their mail in 

front of the garbage can and most of it goes right into the trash. 

So you need to look at the web, look at the variety of ways. Blogs 

are a very effective way, webcasts are an extremely effective way. 

Young people who will not watch the news, except maybe the Daily 

Show, will watch a webcast on their laptops, on their iPods, all 

those kinds of things that they are much more attuned to and trust 

as ways to get information, so you need to use the web in a variety 

of ways. But you cannot forget the old-fashioned approaches to information for their parents. 

So, if you are trying to reach young people, you do it electronically. You do it in a variety of ways that reach them through various devices that they all carry around. But you want their parents 

to also know what their children, whatever age they might be, 

what rights and responsibilities they have, because they are the 

ones who are going to remember to remind their kids, did you sign 

up for this program, do you know that you are eligible for that program, did you get your flu shots, things of that sort. So you never 

want to do it just one way, but you think about the population you 

are trying to reach, and you tailor it to that. 

The CHAIRMAN. But how can you assure us that you are going 

to be straightforward and not, as I said earlier, try to sell it, but 

rather explain? 

Mr. SORIAN. Sure. Well, when I think about how I go about 

things, I always go back, the way many people do, to my original 

training. So my original training was as a journalist. That was 

really my first love of professional life. So I think of myself, if you 

will pardon the expression, as a Dragnet kind of guy: ‘‘Just the 

facts.’’ 

Provide the information, make it clear, make it concise, but just 

the facts, and let people take those facts, absorb them, ask questions, and then have a continuous loop. One of the nice things 

about the web is, you can get feedback rather quickly. If people are 

9 

not understanding what you are saying or have a lot more questions, you get them really quickly, and you then are able to turn 

it around and start answering more questions, but also fix the communication that you may not have gotten exactly right the first 

time. 

The CHAIRMAN. Thank you. I will have more questions for you, 

Mr. Gotbaum, but right now I will turn to Senator Grassley. 

Senator GRASSLEY. Thank you very much. 

Mr. Sorian, you are responsible for communicating Department 

activities to the public, including fully informing Medicare beneficiaries of the effects the enacted law will have on them. You especially would have a critical role in an administration that claims 

to have an agenda of transparency and open government, so I have 

questions to get a sense of your commitment to these responsibilities. 

The first question is, do you believe that the Department has the 

duty to inform the public of the effect that recently passed laws 

have on the public? 

Mr. SORIAN. Yes, sir. 

Senator GRASSLEY. And as part of this duty, do you believe that 

this entails fully informing the public? 

Mr. SORIAN. Yes, sir. 

Senator GRASSLEY. Do you agree that communications to the 

public should not conflict or disregard objective findings made by 

other Department officials, like Medicare’s Chief Actuary, as an example? 

Mr. SORIAN. Yes. 

Senator GRASSLEY. Do you agree that these communications to 

the public should not be limited only to information that is politically advantageous to the administration? 

Mr. SORIAN. Yes, sir. 

Senator GRASSLEY. Do you agree that these communications to 

the public should not be misleading? 

Mr. SORIAN. Yes. 

Senator GRASSLEY. And, if confirmed, do you commit that the Department communications to the public will be for the purpose of 

fully informing the public and not for propaganda purposes? 

Mr. SORIAN. Absolutely, sir. 

Senator GRASSLEY. Thank you. 

I have questions for both in regard to congressional oversight, 

both Mr. Sorian and Mr. Gotbaum. Oversight of the Department of 

Health and Human Services and PBGC programs and activities requires the review of documents and interviews with agency officials 

and other employees to inform our work. In furtherance of our 

oversight responsibilities, we often, in Congress, ask the Government Accountability Office to evaluate HHS and PBGC programs 

and activities. In addition, we may ask HHS and PBGC’s Office of 

Inspector General to follow up on complaints regarding specific 

agencies and/or programs. So, questions to both of you: would you 

commit to working with Congress, GAO, and the HHS and PBGC 

OIGs in a timely and constructive manner to address the oversight 

and other needs of Congress, and will you encourage others to do 

so? 

Mr. GOTBAUM. Yes. 

10 

Mr. SORIAN. Yes. 

Senator GRASSLEY. Thank you. 

For Mr. Gotbaum: would you please describe the carried interest 

your ethics agreement states that you will continue to hold in Blue 

Wolf Capital Advisors? What holdings of Blue Wolf factor into the 

value of your carried interest, and how will you ensure that holding 

this carried interest will not create a conflict of interest with the 

position of Director of PBGC? 

Mr. GOTBAUM. Sure. Glad to do so, Senator. This came about because Blue Wolf Capital, an organization that I met and talked 

with, wanted to hire me as a consultant and did not have money 

to pay a high daily rate. So what they said is, ‘‘If you will come 

and work with us for a period of time, since we are just starting 

out, we will pay you with a piece of the equity interest in the fund, 

when we raise a fund, if we raise a fund, if the fund is successful.’’ 

I trusted them and thought they would be successful, so I agreed 

to do so. 

As a result, I have a small percentage of the interest they have 

in what is called Blue Wolf Capital Fund II. So if, as, and when 

that fund makes sufficient money that the carry is paid out, I will 

be paid a small percentage interest of that. Obviously that raises 

all sorts of ethical questions. 

Before I even agreed to be nominated, we met with the Office of 

Government Ethics and said, ‘‘How would you like to proceed with 

this?’’ What I would propose is that all of those investments be 

known to the counsel’s office, the ethics official, and the PBGC, 

who can then consult with the Office of Government Ethics. And 

if, as, and when those raise any conflict with my duties, if I am 

confirmed, then I will do whatever it takes, whether it is recusal, 

or disposal, or whatever. 

Senator GRASSLEY. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Mr. Gotbaum, as I am sure you know, in 2009, many employers 

attempted to use an alternative method to calculate variable premiums as an option that employers can choose in making contributions. But apparently last year, many inadvertently failed to check 

a certain box. We have received many letters from companies saying that the PBGC determination precluding employers from using 

that alternative method was unfair because it was an oversight, 

some describe it as a foot fault. 

If you look at all the rest of the form, at least many are led to 

the conclusion that that was just an oversight. Our staffs have 

looked at it on both sides of the aisle, and that is our conclusion, 

that the PBGC was overreaching a bit to prevent those employers 

from utilizing that alternative method even though a certain box 

was not checked. Frankly, I would hope this would be resolved before you are confirmed. You probably would, too. 

Mr. GOTBAUM. Yes, sir. I do hope so. 

The CHAIRMAN. But if it is not, I am just asking you to commit 

to examine this issue pretty closely and really do what is right. 

Mr. GOTBAUM. Yes, sir. If this is not resolved before I am confirmed, of course I will. 

11 

The CHAIRMAN. I mentioned in my prepared remarks that many 

multi-employer pension plans have absorbed funding obligations of 

contributing companies that might go bankrupt. You have a little 

experience with bankruptcy, I understand. Clearly, this has the potential of subjecting many healthy employers in multi-employer 

plans to a lot of financial exposure. You are thinking about this. 

What are we going to do about these multi-employer plans? 

Mr. GOTBAUM. Senator, this is a very hard one, and it is one with 

which I do not yet have direct experience. If you confirm me, obviously it is going to be one of the important, urgent issues. 

Let me talk for a minute, at least, about what the interests are 

and why I am not sure there is a formula to do so. 

The CHAIRMAN. Sure. That would be helpful. 

Mr. GOTBAUM. Multi-employer plans are an undeniably good 

thing because they permit employees to get a measure of portability and to get a quality of pension administration that a single 

employer would not be able to provide. 

The issue comes when some of the employers do well and some 

of the employers do not do well, and what do you do and how do 

you reconcile that? What has happened, unfortunately, is that, as 

some employers in an industry have failed and withdrawn, the 

other employers are saying, ‘‘Do I want to stick around and be responsible for obligations of people who are not my own employees?’’ 

So what has been in place is a series of arrangements and agreements by which some employers leave; however, those agreements 

are: (A) imperfect, and (B) insufficient. 

So what I think is going to have to happen is, we are going to 

have to revisit this. Whether it gets revisited at the legislative congressional level or whether it gets revisited on a plan-by-plan, caseby-case basis, I am not knowledgeable enough to give you even an 

opinion, although, if you confirm me, I promise to develop one fast 

and come back. But it is a thorny, large problem, and it is a problem that involves very substantial economic interests. My guess is 

that what it will involve is a series of compromises, at least caseby-case and perhaps legislative. 

The CHAIRMAN. I appreciate that. If confirmed, I do encourage 

you to give this a lot of thought on a proactive basis, because this 

is a problem that is festering. Like a lot of festering problems, the 

more we think about it earlier, the more likely the solution will be 

a little bit easier. 

Could you please share your thoughts, too, about the various savings and pension programs that exist. The defined benefit plans are 

not as popular as they once were because companies moved to defined contribution. And there is a lot of talk about how American 

savings rates are pretty low in comparison with other countries. I 

would appreciate your thoughts generally about what you might be 

able to do at the PBGC to help develop policy and encourage Americans to have enough retirement and savings, plus Social Security, 

when they retire. 

Mr. GOTBAUM. Thank you, Mr. Chairman. This is obviously an 

important question. I am going to give you my reactions now. I 

hope, if you confirm me and I get the benefit of the very talented 

PBGC staff, to give you a more articulate and more thoughtful response than now. 

12 

It seems to me that part of the challenges of these defined benefit pension plans are that we have made employers nervous about 

offering them. They are afraid they will get stuck with obligations 

that they did not count on. We have also not been very clear about 

the benefits of those plans. 

The fact is, and this relates to the questions you asked Mr. 

Sorian, that retirement security, although not quite as complicated 

as health care, is very complicated. As a result, I think part of the 

way we get people to value their pensions, support their pensions, 

and agree to save is, in fact, the same kind of patient explanation 

of a complicated situation that Mr. Sorian and his colleagues, and 

frankly this committee, faces in explaining the health care area. 

So one, we need to make sure that sponsors are comfortable offering plans. Two, we need to make sure that people understand 

the benefits of them. Third, we need to make sure that it is as easy 

as possible for people to make a savings choice, because, if we create, for whatever good reason, a series of procedural hurdles for 

people to do something that is complicated, whose consequences are 

years away, then a lot of people just will not do it. 

The CHAIRMAN. Yes. Well, those are good thoughts. It is clearly 

a challenge this country is facing. 

Mr. GOTBAUM. Yes. 

The CHAIRMAN. I just wish you the very best. It reminds me of 

the Horace Mann quote at the beginning of my statement. It is almost an unreasonable request, but that is why we are here. That 

is why all of us are in public service. 

Mr. GOTBAUM. Yes, sir. 

The CHAIRMAN. And I just thank you both for offering yourselves 

to serve our country. 

I also thank your families for participating, because this is a 

joint effort. It is never alone. But I wish you the very, very best 

as you proceed. 

I noted earlier that if we could get a quorum we would vote to 

confirm Sherry Glied to be Assistant Secretary for Planning and 

Evaluation. We are unable, obviously, to get a quorum, so we will 

take up her nomination and hope to confirm her off the Senate 

floor at the first vote. 

So, thank you very much. Again, thank you for your willingness 

to serve. I wish you very, very good luck. 

The committee stands adjourned. 

[Whereupon, at 10:47 a.m., the hearing was concluded.] 

(13) 

A P P E N D I X 

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