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68–301—PDF 2010

S. HRG. 111–1080 

NOMINATIONS OF MICHAEL C. CAMUN ̃EZ, 

CHARLES P. BLAHOUS III, 

AND ROBERT D. REISCHAUER 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

ON THE

NOMINATIONS OF 

MICHAEL C. CAMUN ̃ EZ, TO BE AN ASSISTANT SECRETARY OF COMMERCE, DEPARTMENT OF COMMERCE; CHARLES P. BLAHOUS III, TO 

BE A MEMBER OF THE BOARD OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE TRUST FUND, THE FEDERAL SUPPLEMENTARY 

MEDICAL INSURANCE TRUST FUND, THE FEDERAL OLD-AGE AND 

SURVIVORS INSURANCE TRUST FUND, AND THE FEDERAL DISABILITY 

INSURANCE TRUST FUND; AND ROBERT D. REISCHAUER, TO BE A 

MEMBER OF THE BOARD OF TRUSTEES OF THE FEDERAL HOSPITAL 

INSURANCE TRUST FUND, THE FEDERAL SUPPLEMENTARY MEDICAL 

INSURANCE TRUST FUND, THE FEDERAL OLD-AGE AND SURVIVORS 

INSURANCE TRUST FUND, AND THE FEDERAL DISABILITY INSURANCE 

TRUST FUND 

JULY 29, 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 STATEMENTS 

Page 

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

on Finance ............................................................................................................ 2 

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 3 

Conrad, Hon. Kent, a U.S. Senator from North Dakota ...................................... 4 

CONGRESSIONAL WITNESS 

Gregg, Hon. Judd, a U.S. Senator from New Hampshire .................................... 4 

ADMINISTRATION NOMINEES 

Camun ̃ ez, Michael C., nominated to be an Assistant Secretary of Commerce, 

Department of Commerce, Washington, DC ...................................................... 6 

Blahous, Dr. Charles P., III, nominated to be a Member of the Board of 

Trustees of the Federal Hospital Insurance Trust Fund, the Federal Supplementary Medical Insurance Trust Fund, the Federal Old-Age and Survivors 

Insurance Trust Fund, and the Federal Disability Insurance Trust Fund, 

Washington, DC ................................................................................................... 8 

Reischauer, Dr. Robert D., nominated to be a Member of the Board of Trustees of the Federal Hospital Insurance Trust Fund, the Federal Supplementary Medical Insurance Trust Fund, the Federal Old-Age and Survivors 

Insurance Trust Fund, and the Federal Disability Insurance Trust Fund, 

Washington, DC ................................................................................................... 10 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 2 

Prepared statement .......................................................................................... 21 

Blahous, Dr. Charles P., III: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 23 

Biographical information ................................................................................. 25 

Responses to questions from committee members ......................................... 37 

Camun ̃ ez, Michael C.: 

Testimony .......................................................................................................... 6 

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

Biographical information ................................................................................. 45 

Responses to questions from committee members ......................................... 55 

Conrad, Hon. Kent: 

Opening statement ........................................................................................... 4 

Grassley, Hon. Chuck: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 61 

Gregg, Hon. Judd: 

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

Reischauer, Dr. Robert D.: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 63 

Biographical information ................................................................................. 66 

Responses to questions from committee members ......................................... 77 

(III) 

(1) 

NOMINATIONS OF MICHAEL C. CAMUN ̃ EZ, 

TO BE AN ASSISTANT SECRETARY OF 

COMMERCE, DEPARTMENT OF COMMERCE; 

CHARLES P. BLAHOUS III, TO BE A 

MEMBER OF THE BOARD OF TRUSTEES OF 

THE FEDERAL HOSPITAL INSURANCE TRUST 

FUND, THE FEDERAL SUPPLEMENTARY 

MEDICAL INSURANCE TRUST FUND, 

THE FEDERAL OLD-AGE AND SURVIVORS 

INSURANCE TRUST FUND, AND THE 

FEDERAL DISABILITY INSURANCE TRUST 

FUND; AND ROBERT D. REISCHAUER, 

TO BE A MEMBER OF THE BOARD OF 

TRUSTEES OF THE FEDERAL HOSPITAL 

INSURANCE TRUST FUND, THE FEDERAL 

SUPPLEMENTARY MEDICAL INSURANCE 

TRUST FUND, THE FEDERAL OLD-AGE 

AND SURVIVORS INSURANCE TRUST 

FUND, AND THE FEDERAL DISABILITY 

INSURANCE TRUST FUND 

THURSDAY, JULY 29, 2010 

U.S. SENATE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 10:16 a.m., in 

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

(chairman of the committee) presiding. 

Present: Senators Conrad, Grassley, Bunning, and Roberts. 

Also present: Democratic Staff: Bill Dauster, Deputy Staff Director and General Counsel; Alan Cohen, Senior Budget Analyst; Tom 

Klouda, Professional Staff Member, Social Security; Mary Baker, 

Detailee; and Ayesha Khanna, International Trade Counsel. Republican Staff: Stephen Schaefer, Chief International Trade Counsel; Nick Wyatt, Tax and Nomination Professional Staff Member; 

and Steve Robinson, Chief Social Security Advisor. 

2 

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

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The hearing will come to order. 

The distinguished former Senator and former chairman of this 

committee, the Senator from Kentucky, Henry Clay, said that, 

‘‘Government is a trust, and the officers of the government are 

trustees; and both the trust and the trustees are created for the 

benefit of the people.’’ 

The three witnesses before the Finance Committee today have 

been nominated by President Obama to fulfill two goals. First, they 

must earn the trust of the American people, and, second, they must 

strive to benefit those people they serve. 

Our first witness is Michael Camun ̃ ez. President Obama nominated Mr. Camun ̃ ez to be the Assistant Secretary of Commerce for 

Market Access and Compliance. 

Welcome, Mr. Camun ̃ ez. 

Mr. Camun ̃ ez, you have spent years working on behalf of American individuals, communities, and businesses. During the Clinton 

administration, you worked for the office that helped establish 

AmeriCorps. Not only did you serve our country by helping to implement this program, but you cleared a path so hundreds of thousands could serve. 

As a partner in a large law firm, you spent many years advising 

American and other companies on how to do business in foreign 

countries, and resolving international disputes, and you most recently served as a senior adviser to President Obama. 

Now, you have a new task before you. You must earn the trust 

of the American people anew. You must work with American companies to remove foreign barriers to U.S. trade and investment. 

You must be vigilant in enforcing the trade obligations undertaken 

by our trading partners. 

You must strive to create new jobs by implementing the President’s National Export Initiative and increasing U.S. exports. And 

you must assure that the NEI achieves real, measurable results. 

That is why I asked Commerce, USDA, and USTR for a report 

every 6 months on the results of the NEI, and I look forward to 

receiving the first report this September. 

Your burden is large, but so are the potential benefits to American businesses and workers. 

Our second and third witnesses are Charles Blahous and Robert 

Reischauer. President Obama has nominated them to be public 

trustees on the boards of trustees for the Social Security and Medicare Trust Funds. 

On August 14, our Nation will celebrate the 75th anniversary of 

the Social Security Act. This year, the Social Security Trust Funds 

will pay out more than $700 billion to retired workers and their dependents, disabled workers and their dependents, and survivors of 

deceased workers. 

Social Security has been a critical program. It has provided economic security to generations of Americans. In fact, were there no 

Social Security enacted, about one-half of all seniors would today 

be living in poverty. 

It is a true cornerstone of the American economy. The Office of 

the Public Trustees has been vacant since the release of the 2007 

3 

trustees’ report on May 1, 2007. So it is important that we act expeditiously on these nominations. 

Both of these nominees are very familiar to this committee. Dr. 

Blahous was a staffer for Senator Judd Gregg and Senator Alan 

Simpson in the late 1980s and 1990s. Dr. Reischauer was a former 

director of the Congressional Budget Office from 1989 to 1995. 

I must say, this committee has dealt extensively with the Congressional Budget Office. 

Dr. Blahous and Dr. Reischauer, both of you have spent years 

working for the public interest, but you too have new tasks before 

you, and you too must earn the public’s trust anew. 

As public trustees, you will be responsible only to the public. You 

play an important role in the development of the annual trustees’ 

reports for Social Security and Medicare. These reports tell the 

public the financial condition of the Social Security and Medicare 

trust funds. 

In carrying out these tasks, you carry large burdens, but the potential benefits are crucial, obviously, for the American people. 

I would like to welcome all three of you. I look forward to hearing from each of you as we proceed with this hearing, and I wish 

you the very, very best luck. It just seems that every year, times 

are a little more difficult than the preceding year, and problems 

are a little more complex than the preceding year. 

I will not say that you are all adding new meaning to the term 

‘‘masochism,’’ but I am saying that you sure have a lot of work cut 

out for yourselves, and I compliment you in your willingness to 

take on these very difficult jobs. 

We will begin with you, Mr. Camun ̃ ez. 

Excuse me. Senator Grassley? 

OPENING STATEMENT OF HON. CHUCK GRASSLEY, 

A U.S. SENATOR FROM IOWA 

Senator GRASSLEY. I am not going to repeat what I have in my 

statement that Senator Baucus has said about each of your qualifications to serve in the positions you have been appointed to. I 

would make a couple of comments other than that, though, and one 

would be on the position of public trustees being created in 1983 

to provide greater public accountability to the annual Social Security and Medicare trustees’ report. 

This position is intended to bring new ideas and fresh perspective about economic and demographic assumptions and methods 

used in the trustees’ report. The credibility of the public trustees 

requires their active and independent involvement throughout the 

process of producing these annual reports. The knowledge and experience of both nominees deserve the full consideration of this 

committee as we determine their ability to fully and effectively participate in the process. 

Then one other point I will make. There is another issue that 

will be discussed in this hearing, and that issue goes to the value 

nominees who appear before the committee and members of this 

committee place on the provision of true, accurate, and complete information to the committee by presidential nominees. 

A situation arose and was disclosed to the full committee yesterday, where it appears that contradictory information was provided 

4 

by an individual on the committee questionnaire versus what the 

nominee told bipartisan committee staff during a meeting that is 

routine for all nominees. 

The decision to disclose this issue to the full committee was a bipartisan decision made by both the chairman and this Senator. I 

cannot speak for the chairman or any other members, but I plan 

to explore this issue in questions of the nominee. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

Senator Gregg, let me ask you your schedule. It is your choice. 

You can introduce your nominee now or—— 

Senator GREGG. I would appreciate that, Mr. Chairman. 

The CHAIRMAN. Whatever you want to do. 

STATEMENT OF HON. JUDD GREGG, 

A U.S. SENATOR FROM NEW HAMPSHIRE 

Senator GREGG. Thank you, Mr. Chairman. I appreciate the courtesy of the committee and the ranking member. 

I am here today to speak on behalf of Chuck Blahous, but I also 

want to join with the chairman in expressing my appreciation for 

the extraordinary efforts of Dr. Reischauer in his years of service 

to the country as the head of the CBO. 

And I cannot think of two nominees who are better, stronger, 

and more capable to take on the job of the public trustee of the Social Security Trust than these two individuals. They are both 

uniquely talented, and I congratulate the President for his decision 

in choosing these two individuals. 

I just wanted to speak briefly about Chuck Blahous. I had the 

chance to work with him. He was in charge of my staff, relative to 

legislative activities, for many years. He, while working for me, 

wrote this book—he alleged he worked for me while he wrote this 

book, ‘‘Reforming Social Security,’’ which is an excellent book that 

gets into the depths of Social Security. 

He has been a Social Security expert, or expert on the process 

of the system of how we try to improve Social Security, for many, 

many years, and he has been an extraordinarily constructive player 

here in the Senate, especially on that issue, both when he worked 

for Alan Simpson and when he worked for myself. 

I think that we are getting an incredibly talented individual 

here—two talented individuals in Robert Reischauer and in Chuck 

Blahous, and we are very fortunate to have these type of people 

being willing to serve. 

I thank the committee for its courtesy, and I thank the chairman 

for your courtesy. 

The CHAIRMAN. Thank you very much. 

Senator Conrad, do you want to introduce—— 

Senator CONRAD. Please, if I could. 

The CHAIRMAN. Yes. 

OPENING STATEMENT OF HON. KENT CONRAD, 

A U.S. SENATOR FROM NORTH DAKOTA 

Senator CONRAD. I thank the chairman very much. I thank Senator Gregg for being here for Chuck. Senator Gregg and I have a 

close working relationship on the Budget Committee, and I share 

5 

his high regard for both of these nominees. They really are exceptional, both of them. 

I am here to introduce Bob Reischauer and to strongly support 

his nomination to be one of the two public trustees of the Social 

Security and Medicare Trust Funds. He is absolutely an outstanding selection for this position. 

I think the members of this committee know very well that he 

is one of the Nation’s leading experts on Social Security and Medicare. Few know more about these programs and their importance 

to the American people than Bob does. And few people know more 

about the steps that will be needed to ensure that Social Security 

and Medicare remain strong and viable for future generations. 

Bob Reischauer is someone who not only understands the most 

detailed elements of these programs, but, just as important, he understands how they affect real people. 

Bob’s resume is extraordinarily impressive. He is currently serving as president of the highly respected Urban Institute. He also 

served as a senior fellow in the economic studies program at the 

Brookings Institution. 

We remember Bob in his service as head of the CBO, and in that 

position, he served with great distinction. He headed CBO from 

1989 to 1995. He is widely recognized as one of the best directors 

of CBO ever. 

During the health care reform debate of the 1990s, he was willing to make the tough calls and tell the tough truths, even when 

it was not popular and even when it was not comfortable to do so. 

He exemplified CBO’s high standard of independence that remains 

strong today. 

He holds an undergraduate degree from Harvard, and a Ph.D. in 

economics and a master’s in international affairs from Columbia. 

He has written extensively on the Federal budget, health care reform, Social Security, and Medicare. He served as vice chair of the 

Medicare Payment Advisory Commission and as chair of the National Academy of Social Insurance’s project on restructuring Medicare for the long term. 

Simply put, I do not think there is anyone better qualified to 

serve as a public trustee of Social Security and Medicare than Bob 

Reischauer. I strongly support his nomination and urge the committee and the Senate to act expeditiously on his nomination. 

And, if the chairman would just permit, I would just like to say 

I also have high regard for Chuck Blahous, who has served with 

distinction with both Senator Gregg and Senator Simpson. 

He enjoys a stellar reputation among our staffs, as does Bob 

Reischauer. We are very fortunate, as Senator Gregg said, to have 

people of this character and this quality willing to serve in these 

very demanding positions. 

I thank the chair and thank the committee. 

The CHAIRMAN. Thank you, Senator. I think we all agree that 

these are stellar people, but now that you have spoken, their standards have been raised a little higher. So we expect even more from 

the nominees. 

I will begin first with Michael Camun ̃ ez. Why don’t you begin 

first? 

6 

Michael has been nominated for Assistant Secretary of Commerce for Market Access Compliance. 

STATEMENT OF MICHAEL C. CAMUN ̃ EZ, NOMINATED TO BE AN 

ASSISTANT SECRETARY OF COMMERCE, DEPARTMENT OF 

COMMERCE, WASHINGTON, DC 

Mr. CAMUN ̃ EZ. Thank you, Chairman Baucus, Ranking Member 

Grassley, and members of the committee. It is a distinct privilege 

to be here with you today as President Obama’s nominee to be the 

Assistant Secretary of Commerce for Market Access and Compliance. 

I am deeply grateful for the privilege I have had to serve the 

President these last 20 months at the White House, and I am honored and humbled by the confidence that he has again placed in 

me. 

I would also like to thank both Commerce Secretary Gary Locke 

and Under Secretary Francisco Sanchez for their leadership and 

support of my nomination. 

I have never felt more excited about the opportunity to serve my 

country than I do today. My passion for public service was instilled 

in me by my late mother, Mary Agnes, who, as a single parent, 

raised me to believe in myself, have a heart for others, and a desire 

to serve my community and my country. I want to thank her publicly for her love and her extraordinary example. 

I also want to thank other members of my family, including, 

above all, my partner of 11 years, Steven Means, who is here with 

me today, for his tireless support and encouragement and acknowledging the tremendous blessing that he has been in my life. 

I have many others, Senators, to recognize for their love and support, including my family and friends back home in California and 

my many friends and colleagues who are here with me today. 

There are too many to name, but I would like to express to them 

all that I am extremely grateful for their support and encouragement. 

Senators, if I am confirmed, I will have the great privilege of 

leading the talented men and women who comprise the Market Access and Compliance Division of the Department of Commerce. 

MAC, as it is known, plays a mission-critical role in supporting 

the Department’s work in at least two respects. First, it is the chief 

advocate for U.S. companies and businesses abroad that encounter 

barriers to trade that keep them from competing fully and fairly in 

international markets. Second, MAC ensures that our trading partners meet their obligations and commitments under an array of bilateral and multilateral trade agreements and protocols that govern the flow of commerce internationally. 

As the President has said, realizing the benefits of free trade 

means enforcing those agreements so our trading partners play by 

the rules. 

If confirmed, Senators, I will be guided by three basic priorities 

in my leadership of MAC. First, I will ensure that MAC’s work is 

prioritized and focused to support the goals of the President’s National Export Initiative, which he launched in his State of the 

Union Address this past January. If confirmed, I will work to ensure that MAC’s efforts are strategically focused to identify, adVerDate Nov 24 2008 19:11 Oct 19, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 R:\DOCS\68301.000 TIMD
7 

dress, and resolve those non-tariff barriers in existing and emerging markets that will increase U.S. exports and, by extension, U.S. 

jobs. 

Second, if confirmed, I will ensure that MAC will help lead the 

effort to expand U.S. market share in targeted priority jurisdictions, like China, Brazil, and India, and, equally important, in 

other key emerging markets. Specifically, if confirmed as assistant 

secretary, I will co-chair the Next Tier Countries Working Group 

that is part of the NEI that will lead and develop new commercial 

engagement strategies for six priority emerging markets that have 

the greatest promise for increased U.S. exports, especially in highgrowth sectors. 

Third, if confirmed, I will work to deepen and expand MAC’s efforts to facilitate dialogue and collaboration with the private sector 

to ensure that MAC is a critical ally in advancing U.S. commercial 

interests abroad. I will also ensure that MAC works hard to address the unique needs of small and medium-sized enterprises, 

since small business, as you know, is a major driver of economic 

growth and is, to date, severely underrepresented among U.S. exporters. 

Because the economic and strategic challenges the country faces 

are great, MAC’s agenda must be multidimensional and interdisciplinary, working closely in an integrated fashion within the 

Department of Commerce and across numerous Federal agencies 

with shared responsibilities. 

I feel especially motivated to tackle this important challenge, in 

part, because I have spent a good part of my professional career 

working with and representing U.S. companies on similar issues 

and challenges. 

As a partner in a leading international law firm, I have counseled companies on an array of issues, including especially the 

challenges and risks of doing business abroad in foreign markets. 

In addition, as a special assistant to the President and later, 

most recently, as special counsel to the President, I have had the 

great privilege of working with many of the leaders who, if I am 

confirmed, will be my partners in addressing these myriad issues 

on behalf of the United States. 

In conclusion, Mr. Chairman, I would like to thank you and this 

committee for the opportunity to be here today and for the great 

privilege of being considered by this body for this important position of trust and responsibility. 

If confirmed, I look forward to working closely with you and your 

staff to restore the American economy and rebuild American jobs 

by aggressively promoting a balanced and reinvigorated trade 

agenda. 

Thank you very much. 

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

The CHAIRMAN. Dr. Blahous? 

8 

STATEMENT OF DR. CHARLES P. BLAHOUS III, NOMINATED TO 

BE A MEMBER OF THE BOARD OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE TRUST FUND, THE FEDERAL 

SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND, THE 

FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST 

FUND, AND THE FEDERAL DISABILITY INSURANCE TRUST 

FUND, WASHINGTON, DC 

Dr. BLAHOUS. Thank you, Mr. Chairman, Senator Grassley, and 

members of the committee. Thank you for the very kind introduction and the very warm welcome. 

Obviously, I am tremendously honored to be here, nominated to 

serve as one of the two public trustees of the Social Security and 

Medicare programs. 

As you noted, Mr. Chairman, in my personal case, this proceeding is especially humbling, because I served here in the Senate 

as staff for 11 years, most recently with Senator Gregg—before 

him, with Senator Simpson—and there were times when I was on 

that side of that dais facing this way. I certainly never imagined 

that one day I would be facing the committee from this side of the 

table and in this context. So this is very humbling, indeed. 

I would like to begin by thanking Senator Gregg for the very 

warm words of introduction and for his support throughout my professional career. I learned a tremendous amount from Senator 

Gregg over the years. I think it is fair to say that I would not be 

sitting here today if it were not for his tutelage and the example 

that he provided in public service. 

I would like to thank President Obama, as well, for the great 

honor of placing my nomination before the Senate. I also want to 

thank the Minority Leader, Senator McConnell, for the trust he 

placed in me in putting my name forward for consideration for this 

position. 

Finally, but certainly not least, I would like to thank my wife, 

Jill, and my daughter, Juliana. Unfortunately, they could not be 

here today, but they are with me in spirit, and they have given me 

constant support and have sacrificed a lot for my career in public 

service, and I have been very fortunate and very blessed to always 

have my family with me with each new challenge. 

Mr. Chairman, the Social Security and Medicare programs are 

perhaps the most important domestic programs the Federal Government has ever established. As you noted in your introduction, 

they are vital to the economic security of millions of Americans 

today and in the future, and the trustees play an indispensable 

role, in my view, in equipping the Congress and the administration 

with the information that policymakers require to enable these 

vital programs to function as they desire. 

I have been given many opportunities over the years—as staff, 

first in the Senate and, later, staff within the White House—to 

learn a lot more about how these important programs function and 

the fiscal challenges facing them. 

I staffed Senator Simpson in his work with the Kerrey-Danforth 

Commission on Entitlement and Tax Reform. Later, I staffed Senator Gregg when he co-chaired the National Commission on Retirement Policy. And in 2001, I served President Bush as the Executive 

Director of his bipartisan Social Security Commission. 

9 

All together, this means I suffered through three bipartisan commissions in less than a decade. But the experiences were very fruitful. They certainly provided me with many opportunities to gain a 

deeper understanding of the finances of these programs, and I also 

feel that they gave me very important experience and practice in 

working with the combined analyses and insights of wonderful 

teams of bipartisan and nonpartisan scorekeepers and analysts; 

and, in particular, I have been very fortunate over the years to 

learn a lot from the very able nonpartisan staff who served in the 

Social Security Administration. 

Mr. Chairman, as you indicated in your remarks, the trustees’ 

primary role is to provide the best available fiscal information and, 

thus, provide for the appropriate accountability to the public, and 

to policymakers as well. 

These trustees’ positions were created as part of the comprehensive Social Security Amendments of 1983. And, if you go back and 

read what people said at the time, there were frequent references 

made to this need for external review of the projections. 

Basically, there was a recommendation from the Greenspan 

Commission, later followed by the Congress, to establish these positions to provide for the appropriate external bipartisan review of 

the finances. 

Now, obviously, forecasting is an imperfect science. None of us 

has a crystal ball. But I do believe that the trustees’ work to date 

has been consistent with these ideals of accountability and objectivity, and it has operated within the finer traditions of public service. 

Were I to receive the honor of being confirmed by the Senate, the 

process would be joined by someone who is a long-time believer in 

its propriety and its importance and quality. 

Every year, the trustees make projections that are based on a variety of assumptions—assumptions having to do with trends in fertility, longevity, worker productivity, price inflation, real wage 

growth, all with different variables that bear upon the Social Security and Medicare projections—and public confidence in these projections rests, in large part, on whether these projections and assumptions are regarded as reasonable and objective. 

To assist them in achieving this ideal, the trustees have traditionally drawn from a broad variety of expert sources—first and 

foremost, the offices of the Social Security Actuary and the CMS 

Medicare Actuary. There are periodic technical panels that have 

been convened by the Social Security Advisory Board to advise the 

trustees on assumptions and methods, and there is also a process 

of a fairly routine ad hoc consultation with analysts at other 

scorekeeping agencies, such as the Congressional Budget Office. 

Now, obviously, no such process can claim perfection, and there 

is no basis for claiming that the projections are perfect. But my observations over the years have given me a very enduring abiding 

respect for the ethic by which the trustees’ work has always been 

conducted. 

The projection methodology should, obviously, be subject to continual review and improvement and refinement, and certainly criticism and debate. But I believe the ethic of the process has served 

10 

the public very well and that it reflects enormous credit upon Congress for having established it. 

If I were confirmed, I would look forward to contributing, to the 

best of my ability, to the trustees’ process and to maintaining public confidence in these vital reviews of Social Security and Medicare 

finances. 

Thank you, Mr. Chairman. 

[The prepared statement of Dr. Blahous appears in the appendix.] 

The CHAIRMAN. Thank you very much. 

Dr. Reischauer? 

STATEMENT OF DR. ROBERT D. REISCHAUER, NOMINATED TO 

BE A MEMBER OF THE BOARD OF TRUSTEES OF THE FEDERAL HOSPITAL INSURANCE TRUST FUND, THE FEDERAL 

SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND, THE 

FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST 

FUND, AND THE FEDERAL DISABILITY INSURANCE TRUST 

FUND, WASHINGTON, DC 

Dr. REISCHAUER. Mr. Chairman, Senator Grassley, members of 

the committee—— 

The CHAIRMAN. It is a little weak there, Bob. I do not know if 

you have it on. 

Dr. REISCHAUER. The light is on. 

The CHAIRMAN. Now I can hear you, too. Thank you. 

Dr. REISCHAUER. Mr. Chairman, Senator Grassley, members of 

the committee, I am honored to have been nominated by the President to be one of the two public trustees, and I appreciate your 

willingness to review my qualifications for that position. 

I also want to thank Senator Conrad, as well as the chairman 

and the ranking member for the kind words at the beginning of 

this hearing. 

As you know only too well, Social Security and Medicare are vital 

elements of the Nation’s social and economic fabric, providing essential financial support and access to medical care to millions of 

people. 

Not surprisingly, these programs are very popular, representing, 

as they do, components of an intergenerational compact that binds 

together those of different ages, economic circumstances, and social 

situations. Social Security and Medicare are also two of the government’s largest programs, and so they are very important to the 

economy, and they loom large in our Federal budget. 

Given their importance, it is critical that the financial and operational integrity of Social Security and Medicare be unimpeachable. 

It is also essential that the public retains trust in these programs 

and their continuity and has a balanced understanding of the challenges that lie ahead. 

While little recognized, the public trustees bear important fiduciary responsibilities for the two programs. On behalf of the public, 

the two trustees must help assure that the methods, assumptions, 

and data used to estimate the short, intermediate, and long-term 

financial and operational positions of the programs are objective 

and the best possible. 

11 

Trustees also have an obligation to help communicate in a balanced and intelligible way to the average program participant the 

current status and the future prospects for these programs. 

Let me just review some aspects of my professional experience 

that bear on my suitability for these responsibilities. I have spent 

the last 4 decades as an economist and a policy analyst, focused on 

social policy, the Federal budget, and health care. Much of my research, writing, and speaking has dealt with the Social Security 

and Medicare programs. 

With Henry Aaron, I wrote a book called ‘‘Countdown to Reform’’ 

back in the late 1990s. That was revised in 2001. And, during the 

efforts to reform Social Security in the late 1990s, I participated in 

numerous forums and was invited to meet with many members of 

Congress and committees to discuss various options. 

In January of 1999, I was one of the two resource experts that 

was invited to participate in the Blair House Social Security Summit meeting between the President and the congressional leadership. 

I am a founding member of the National Academy of Social Insurance, which is an organization that promotes understanding of 

Social Security and Medicare and other social insurance programs 

and how they contribute to economic security and a vibrant economy. 

As Senator Conrad mentioned, I served 9 years as the Chair of 

the National Academy’s Restructuring Medicare for the Long-Term 

project. I am a member of the Institute of Medicine and have 

served on four of its panels. 

I served for 9 years on the Medicare Payment Advisory Commission, 7 of those as the Vice Chair, and I was a member of the Medicare Competitive Pricing Advisory Committee, which Congress 

chartered to explore ways that competitive bidding might be used 

to set Medicare payments to private plans. 

My entire professional career, including my years as Director of 

CBO and president of the Urban Institute, has been dedicated to 

providing policymakers, the public, and the media with objective, 

high quality, nonpartisan analysis on options for dealing with the 

challenges facing the Nation, including those facing Social Security 

and Medicare. 

I realize that the position of public trustee does not involve policymaking nor advising, but as this review indicates, I am intimately familiar with the technical detail of these two programs and 

how they fit into the larger policy picture. 

Thus, I have the ability, I think, to carry out the fiduciary, methodological, and technical responsibilities of a public trustee and, if 

confirmed, will carry out these duties with the seriousness they demand. 

Thank you. 

[The prepared statement of Dr. Reischauer appears in the appendix.] 

The CHAIRMAN. Thank you, Dr. Reischauer. 

I have three standard questions which I am obligated to ask all 

nominees, and I will ask all three, then I will just go down the row 

here and have each of you indicate your answer. 

12 

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. Camun ̃ ez? 

Mr. CAMUN ̃ EZ. No, sir. 

Dr. BLAHOUS. No, sir. 

Dr. REISCHAUER. No. 

The CHAIRMAN. Thank you. Second, 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. CAMUN ̃ EZ. No, sir. 

Dr. BLAHOUS. No, sir. 

Dr. REISCHAUER. No. 

The CHAIRMAN. Thank you. 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. CAMUN ̃ EZ. Yes, sir. 

Dr. BLAHOUS. Yes. 

Dr. REISCHAUER. Yes. 

The CHAIRMAN. I forgot to ask. Do any of you want to introduce 

family? Mr. Camun ̃ ez, do you have family here with you? 

Mr. CAMUN ̃ EZ. I do, Senator, and I appreciate that opportunity. 

The CHAIRMAN. Introduce them, please. 

Mr. CAMUN ̃ EZ. I will. I am joined today, actually, by my partner 

of 11 years, Steven Means, who is here with me, and I have a lot 

of extended family in the room, including Nancy Rubin and others 

who are too many to name. But I appreciate the opportunity to acknowledge them. And I know that, after the fact, there will be 

many members of my family in California who were not able to be 

here, including my younger sister, Melissa, and brother-in-law, Jordan, and others, my niece, Mila, whom I want to acknowledge and 

thank publicly for their love and support, and I know they wish 

they could be here. And I appreciate the opportunity to publicly 

thank them and acknowledge them, Senator. 

The CHAIRMAN. You bet. 

Dr. Blahous, you mentioned your family is not here, but I give 

you the opportunity to say anything more about them, if you want. 

Dr. BLAHOUS. Well, I have been very fortunate to be supported 

by a wonderful family, my parents, my sisters, certainly, my wife 

and daughter, and I appreciate the opportunity to thank them publicly. 

The CHAIRMAN. You bet. 

Dr. Reischauer? 

Dr. REISCHAUER. My family is thousands of miles away at this 

point, but as anybody working on Capitol Hill, as I did, knows, a 

lot of one’s success depends on a very understanding family, which 

I have had. 

The CHAIRMAN. First, a couple of questions for you, Mr. 

Camun ̃ ez. I appreciated your statement that you are going to make 

sure that MAC plays a key role in working with small and 

medium-sized American business. 

13 

Could you expand on that just a little bit? What do you have in 

mind? 

Mr. CAMUN ̃ EZ. Well, Senator, thank you. First of all, I want to 

express that, coming from California, where small business is a 

major driver of the California economy, which, as you know, is one 

of the largest—if it were an independent economy, it would be one 

of the largest economies on the planet—I have a keen appreciation 

for how important small business is to the U.S. economic recovery. 

When you consider the fact that only 1 percent of companies generally are exporting, and, of those, a very tiny percentage are small 

and medium-sized enterprises, there is enormous opportunity to 

grow the economy through small business exports. 

It is a major priority for the International Trade Administration, 

of which MAC is a part, and for the Foreign Commercial Service. 

One of the things that I would like to do, if I am confirmed, Senator, is follow the lead that Ambassador Kirk set over at the U.S. 

Trade Rep’s office and do an assessment of what resources we do 

have and that we are deploying to support small and mediumsized enterprises. 

As you undoubtedly know, there will be an important SME ministerial as part of the APEC conference in Big Sky, MT. If I am 

confirmed, I will have the privilege of co-chairing that, convening 

in your home State. 

And through forums like that and other opportunities, through 

bilateral exchanges and multilateral dialogues, I want to make 

sure that we are always looking out for the interests of small business. 

I also think it is important that we understand that oftentimes 

small business does not have the same resources that large corporations do, and this is especially important in the area of innovation and the protection of intellectual property rights. 

So I want to continue to encourage and pursue initiatives in 

Market Access and Compliance and ITA generally that help small 

businesses understand how to protect their intellectual property so 

that they can compete on a level playing field abroad. 

There are many other things to be done, Senator, but those are 

a few of the initiatives I would like to pursue, if confirmed. 

The CHAIRMAN. I appreciate that. Small business just does not 

get the support generally that I think it deserves, and I urge you 

to be even more aggressive than you otherwise might be to help in 

that regard. 

Mr. CAMUN ̃ EZ. Will do, Senator. 

The CHAIRMAN. Second, I have asked Secretary Locke, Secretary 

Vilsack, and Ambassador Kirk to come up with measurable results 

in achieving the President’s objective of doubling exports in the 

next 5 years. They said they would do that. 

As I mentioned in my comments, the first report is due in September. So you can help your boss by helping him get that data. 

Mr. CAMUN ̃ EZ. If confirmed, Senator, I look forward to that. 

The CHAIRMAN. So we can stay on track. 

Let me ask the other two of you here. What do you see your role 

as public trustees—how does that differ from the roles the other 

trustees have who are not public trustees? I would like to ask each 

of you if you see any difference. 

14 

Dr. BLAHOUS. Well, I would just say I think there are certainly 

some duties that all the trustees have in common. It is a collective 

responsibility of the trustees to review the assumptions that the 

Social Security and Medicare actuaries have put together and generally determine whether or not they believe them to be the most 

reasonable, most objective assumptions that could be used in putting together the reports. 

I do think there is a bit of a distinction with the public trustees 

simply because of the history of the trustee’s positions. The public 

trustees, I think, bear an additional responsibility to the public in 

a number of respects. 

One is, they are basically the outside pair of eyes. The reason 

they were added in 1983 was largely because there had been a concern about whether or not the projections in any way were being 

shaded or reflective of the near-term needs of elected officials. 

In the 1970s and 1980s, there had been a couple of times when 

projections for the program had unraveled relatively quickly, because they were perceived as being too rosy after the fact. And one 

of the things that happened with the 1983 reforms is, they said, 

let us put the program on a long-term footing, on a stable longterm footing, but also have an extra pair of eyes looking at these 

projections and making sure that they really are the best available 

projections. 

The CHAIRMAN. Dr. Reischauer, do you have a comment on that 

question? 

Dr. REISCHAUER. I regard this as an objective perspective provided by two individuals who are not part and parcel of the administration. We also will serve as conduits for individuals at universities who might not have ties with the actuary’s office or with the 

other trustees to feed in suggestions. 

There are official advisory commissions which try to gather this 

kind of information, but they are not always capable of absorbing 

the breadth of views that are out there. 

I think several of you mentioned that it is important for the public to have trust in these programs and in the integrity of the estimates that are being provided, and the public trustees can help in 

that process. 

The CHAIRMAN. My time has expired here, but I’d like to make 

one observation. With our Nation’s large deficits, publicly held deficits, and with the establishment of the Deficit Commission, many 

people think that the answer to reducing the deficits is not only in 

the revenue side, but on the spending side and entitlement side, 

and you are going to be called on, I am sure, many, many times 

to provide at least analysis of various different alternative ways to 

address that. 

I appreciate that you are not supposed to be in a policy position 

or advisory position, but you are certainly both extremely knowledgeable of those programs, and I suspect that we will be talking 

to each other in many, many ways. 

I am a member of that commission, and it is daunting as to how 

we are going to get our deficits under control in a way that does 

not stifle economic growth, in a way that does not impede our coming out of this recession right now, too. 

So, thank you for your service. 

15 

Senator Grassley? 

Senator GRASSLEY. Dr. Reischauer, the Senate Finance Committee has a statement of information requested of nominees. One 

of the questions we ask is, ‘‘Have you paid all Federal, State, local, 

and other taxes when due (including extensions) for each of the 

past 10 years? If not, provide detail.’’ 

Part of your response to this question reads, ‘‘In 2009, I discovered that, due to an oversight by me, I failed to report rent income 

from a farm my wife and I purchased in Canada in 2004. I filed 

amended Federal and State returns for 2004 through 2008 and 

paid the tax due. Although I believe that the various expenses associated with ownership of the farm actually exceeded the rental 

income in each of those 3 years, I chose not to calculate these expenses when I filed my amended returns.’’ 

During a meeting with the Finance Committee bipartisan nominations staff, you apparently stated that the decision not to report 

this farm income in the first place was deliberate. Furthermore, 

you apparently stated that you regretted informing the White 

House of this situation, as the White House then encouraged you 

to file the amended tax returns to report the farm income. 

Is your statement on the nominee questionnaire inaccurate, or 

are the comments you made to the bipartisan committee staff inaccurate, or is there another explanation for the discrepancy? 

Dr. REISCHAUER. This whole issue was completely—I did not face 

this issue until I was asked by the White House to consider this 

position and I raised this with them. 

I, at that point, had—this was a very complicated situation in 

the sense that, in 2004 I bought this farm, which was adjacent to 

my parents-in-law’s cottage. The Province of Prince Edward Island 

has very strict limits on land ownership, and part of the deal for 

having us able to buy more than 5 acres of land—this is 100 

acres—was that the land be kept in agricultural or natural production. 

There was an informal agreement between the previous owner 

and the land farmer to grow soybeans and potatoes on the land. I 

had sort of no perception of this at all and had no idea when I 

bought the land whether this was going to continue or not. 

As I said, this is a very informal economy up there. It is the kind 

of situation in which the individual leasing the land hands my wife 

a check in the supermarket line, which she deposits in a Canadian 

bank. 

I do my taxes. I take out Turbo Tax. I look at what I did last 

year and do it—never even thought about this until this issue came 

up. And the White House, appropriately, suggested that I should 

take account of this. 

To give you some idea of what is involved here, in the last year 

that this arrangement—I have ceased to do this—existed, I received $800 Canadian for leasing the land. The agricultural equipment goes down a common driveway and ruins it in the spring, and 

I have to pay for road repair, which cost me $1,260 that year. 

I have to have the fields that are fallow Bush Hogged, and that 

costs $300 or $400. And I have the forest trimmed around these 

fields and some fence repairs. So my guess is the costs associated 

with doing this are 2 to 3 times what the income is. 

16 

When I was having this discussion, I thought it is not really appropriate to have—and this is a mistake on my part—appropriate 

to have my U.S. taxes reduced because of this basically summer 

home. 

But as I said, as the Senator pointed out, I subsequently amended my tax returns. I chose not to take any of the expenses that 

were associated with this and paid it as if there were no expenses. 

Senator GRASSLEY. Here is what I will do. I was going to have 

a lot of other questions, but I am going to review what you just told 

us and the extent to which my questions have not all been answered, I will ask for answers in writing. 

Dr. REISCHAUER. I will be glad to answer them. 

Senator GRASSLEY. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Bunning? 

Senator BUNNING. Thank you. 

Dr. Reischauer, let me get this straight. You have a Ph.D. in economics, correct? You were director of the Congressional Budget Office from 1989 to 1995. You want a job where you would be a trustee for trillions in debt obligations that are financed by payroll 

taxes. That is the current job that you have been nominated for. 

Did you not understand your basic responsibility under the law 

to report income on all of your tax returns? 

Dr. REISCHAUER. I certainly understand the obligation, Senator. 

Senator BUNNING. You claim you thought you did not have to report the income because you had expenses that would cancel out 

your tax liability or generate a loss. But how would you know this 

for certain without writing down the income you earned on the tax 

return, adding up the expenses, and deducting them? 

Did you just guess at the totals? 

Dr. REISCHAUER. No. We are talking about three or four elements 

here, and I just went through them. 

Senator BUNNING. Yes, but how did you come about not knowing 

exactly what you had as income and what you had as expenses? I 

mean, I do not have a Ph.D., and I am responsible. So I give it to 

somebody who knows what the heck they are doing with taxes. 

Dr. REISCHAUER. Well, as I said, this—I did not think about this 

until a year ago in the spring, number one. Number two, when I 

did, at that point, it is not hard to add $400 and $200 and $1,200 

and figure out—— 

Senator BUNNING. I understand. 

Mr. REISCHAUER [continuing]. whether they are greater than 

$800, the sum is greater than $800. 

Senator BUNNING. Then you did not keep an accurate record of 

all expenses connected with renting out the farm. And would you 

be willing to share those records, if you have any, with the committee? 

Dr. REISCHAUER. This is rural Canada and—— 

Senator BUNNING. No, no, no. You—you are the person responsible, not rural Canada. 

Dr. REISCHAUER. No. What I was going to say is virtually all of 

these transactions occur between me or my wife, and lobster fishermen—— 

Senator BUNNING. Sir, did you file—— 

Mr. REISCHAUER [continuing]. Who work for cash. 

17 

Senator BUNNING. Did you file a U.S. tax return—— 

Dr. REISCHAUER. Yes. 

Senator BUNNING [continuing]. In those years? 

Dr. REISCHAUER. Yes. 

Senator BUNNING. All right. That is what I wanted to find out. 

If you truly thought that you did not have to report the rental income, then why did you believe you had to inform the White House 

about your failure to report it? 

Dr. REISCHAUER. The White House, I think, is careful under all 

administrations to ask questions about all sorts of aspects of one’s 

financial and other interactions, and we were going through hundreds of questions, and this one came up. 

Senator BUNNING. All right. Then why did you tell the Finance 

Committee staff in your meeting with them that you were sorry 

you told the White House about your failure to report the income? 

Dr. REISCHAUER. Well, I do not recall my exact words in that 

sense. 

Senator BUNNING. Well, they have it recorded. I would not 

be—— 

Dr. REISCHAUER. No, no. I am not—— 

Senator BUNNING. I would not be asking unless there was a bipartisan staff report. 

Dr. REISCHAUER. Well, once again, if I had put together the full 

expenses and income and filed that way, I would have gotten a refund. 

Senator BUNNING. That is fine. 

Dr. REISCHAUER. Well, no, excuse me. This takes a whole lot of 

time to do. It is very complicated. 

Senator BUNNING. Every American has to do it. 

Dr. REISCHAUER. I do it. 

Senator BUNNING. But you did not do it. 

Dr. REISCHAUER. I admit that I did not do it, and I should have 

done it, but what I am saying is I spent the better part of several 

days— 

Senator BUNNING. I have one more question, and I want to get 

it in, because it is very important. On your questionnaire, you describe your failure to report your income as an oversight that you 

did not discover until 2009. But in your discussions with the committee staff, you described it as a deliberate choice you made when 

you filled out your tax returns. Those are your words. 

Did anyone connected with the White House coach you to describe your failure to file as an oversight on your questionnaire instead of a deliberate choice to not report the income? 

Dr. REISCHAUER. I have not discussed this after the very beginning with anybody in the White House. 

Senator BUNNING. Well, I am sure you understand that, if you 

knowingly gave false or incomplete information on your questionnaire, you could be guilty of perjury. Did anyone connected with 

the White House coach you to change your story back to the original version in the questionnaire rather than the version you told 

the committee staff? 

Dr. REISCHAUER. No. 

Senator BUNNING. Did you fail to report the income because you 

did not want to go through the extra work of deducting the exVerDate Nov 24 2008 19:11 Oct 19, 2011 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 R:\DOCS\68301.000 TIMD
18 

penses and figuring out the loss? And if so, can we expect, in your 

new job, you will choose to neglect other Federal duties because 

they are too much work? 

Dr. REISCHAUER. No, I would not. 

Senator BUNNING. Thank you. 

The CHAIRMAN. Senator Roberts? 

Senator ROBERTS. How are you feeling there now, sort of like a 

porcupine during that amorous period with another porcupine or 

something? I do not know. 

Chairman Baucus, Senator Grassley, I thank you for holding this 

hearing to review the pending nominations, and this is a great illustration, just demonstrated, of why the vetting process by the 

Senate committees plays a very critical role in the review of individuals nominated to serve the public. 

And thank you all for your statements, and all very articulate 

and extremely pertinent, in my personal view. As has been very obvious here, we have discussed or we have had meaningful dialogue 

of Dr. Reischauer’s discrepancies that have arose during review of 

his tax records. 

And my colleagues have asked him or will ask in writing the relevant questions to better understand the misrepresentation that 

was uncovered during the vetting process. 

I have to say that I do appreciate your attendance, number one, 

Dr. Reischauer, and your candor, number two. And I appreciate the 

statements by Senator Conrad and Senator Gregg. 

It occurs to me that you are like every farmer whom I have ever 

talked to, whom I am privileged to represent, in that you are complaining about the fact that you lost 3 times as much money as you 

brought in. That is just part of being a farmer. So, welcome to agriculture. 

I also want to let you know that your earlier work, when you ran 

the CBO in fine fashion—and we were discussing an earlier attempt at so-called health care reform. We had public hearings, and 

one was in Kansas City. We got Bob Dole to come to Kansas City. 

Even got Senator Clinton to come to Kansas City. Then we went 

way out to Ulysses, KS. There was a place that held 1,000 people, 

and we had 2,000 people in attendance, along with a lot of doctors 

and a lot of health care people in the rural health care delivery system out there, and instead of saying, ‘‘giddy-up,’’ they said, ‘‘whoa,’’ 

and it was a very good hearing. 

And one cowboy stood up—one rancher stood up and said, ‘‘Wait 

a minute.’’ He says, ‘‘If we are going to do all this, who is going 

to pay for it, and how do I get care from Wyoming,’’ which was one 

of the areas that they thought would be the center, ‘‘when I am 

from Kansas?’’ et cetera, et cetera. 

And then he quoted you. So you do have a fan in a cowboy somewhere in Ulysses, KS, America. And it is not easy to sit here today 

to respond to the questions that are asked, but here you are, and 

here are the other nominees, as well. But that is not always the 

case with nominees. 

Mr. Chairman, it was my expectation—we talked about this— 

that this committee would be routinely granted the same courtesy 

of a hearing in regard to Dr. Donald Berwick. That has been talked 

about a lot. I do think it is germane. And his recent appointment 

19 

to head the Centers for Medicare and Medicaid Services—what he 

does affects you. 

As administrator, he will be in charge of implementing the most 

sweeping changes to our Nation’s health care system ever. CMS is 

charged with finding nearly half a trillion dollars in cuts, as required through the health care reform bill. I do not know how we 

are going to do that, but then that is up to him and up to us to 

try to have appropriate oversight. 

And all that we know about Dr. Berwick is from his public statements. The one in particular that has received a lot of attention, 

he expressed his, quote, ‘‘love’’—he fell in love with the British national health care system. 

I know a lot of things I could fall in love with, but that would 

probably be the last one. At any rate, it is a system which rations 

care to patients in order to contain costs. And wouldn’t you know 

that David Cameron is now indicating that they are going to move 

away from that. 

They have 150 so-called units that control whether you get in the 

hospital, what kind of care you have, and when you get out, if you 

get out, and et cetera, et cetera. And he wants to restore that 

decision-making back to patients and doctors. I thought that was 

a rather unique statement. 

So it is incumbent on us, I think, to know more about what his 

views are, and we need to know how Dr. Berwick will implement 

the major changes. 

And here we have a situation that is very unique. It is a paradox 

of enormous irony. What is happening is that other Senators are 

asking these pertinent questions on the floor of the Senate as opposed to us asking the questions here in the committee. 

And I would quote Dr. Barrasso in his second opinion commentary. He said, ‘‘I found it interesting that, for somebody at a 

nonprofit charitable organization, that the benefit of health care 

from retirement until death, along with his salary that he earned, 

his compensation in 2008’’—I am talking about Dr. Berwick, not 

any of you—‘‘was $2.3 million,’’ at a nonprofit charitable organization. I think it is reasonable for people to ask the question, ‘‘Where 

does the $12 million in contributions come from? Where are the 

grants? How did it come in? What impact are those people going 

to have?’’ 

Dr. Berwick has said that he would recuse himself in regards to 

any contribution made from any other health care organization 

that contributed to his nonprofit. 

What I know, and it is not very much what I know, that is quite 

a number of people involved in health care today, and I do not 

know if he would have to recuse himself on virtually every question 

that would come up. 

I also know that Senator Grassley, who is not here and he cannot 

respond to this, and the chairman is not here, for obvious reasons—and so, consequently, Senator Grassley is composing a letter 

to Dr. Berwick, with Dr. Berwick’s approval, to get in contact with 

his CFO and know and learn of who contributed to his nonprofit, 

which is a considerable amount of money, and then we can determine from that where we go. 

20 

But we are not going to do it in this committee. And yet, that 

was our constitutional responsibility. So I guess we are going to do 

it from the floor with Dr. Barrasso and other Senators. 

That is not the way to do this. I am not trying to rock the boat. 

I am trying to stay in it and at least say that the boat ought to 

be directed in some fashion to determine how on earth we are 

going to answer these questions. 

I know the chairman has been kind enough to tell me that he 

is going to have Dr. Berwick up to explain how on earth he is going 

to cut half a trillion dollars out of CMS and still run it and how 

he is going to enforce it, and you are going to be interested in his 

testimony, as well. 

But the point is that that will, in turn, become his confirmation 

hearing for some of us who want to have these questions answered. 

And then we really will not get into the issue at hand unless we 

schedule about three hearings, and we ought to do that before we 

leave for this session of Congress. Maybe we will do it in a lame 

duck. 

I am not happy with this at all, and I think we have avoided the 

constitutional responsibility on Dr. Berwick, which, in fact, determines—what he says is going to determine on how you figure out 

your job responsibilities. 

Thank you for being here. And I am about 2 minutes and 30 seconds over time, but that is about average for me. 

I yield back. Are you the chairman now? 

Senator BUNNING [presiding]. Well, I am ahead of you, that is all 

I know. 

Senator ROBERTS. Well, I know that, but I do not know. It appears you’re the man. 

Senator BUNNING. Well, we have a vote coming up on the floor 

of the U.S. Senate. So I would suggest that we recess until the vote 

is held, and we will be back. 

Thank you. 

The CHAIRMAN [presiding]. Thanks to all the witnesses very, very 

much. I was briefed on what happened when I was out, which 

clearly is some indication of some of the challenges that we face 

going forward, especially health care. 

I will continue to work with you, and I know the committee will. 

And if there is any way you need assistance from us, we are willing 

to provide it, because this is all teamwork, obviously, helping establish a strong Social Security Administration, as well as Medicare 

Trust Fund. And your work, too, Mr. Camun ̃ ez, at Commerce is 

critically important. 

So thank you very, very much for your desire to serve. I think 

the most noble human endeavor is service, and you clearly want to 

serve, and I thank you for it. 

The committee is adjourned. 

[Whereupon, at 11:15 a.m., the hearing was concluded.] 

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68301064.eps