DEPARTMENTS OF LABOR, HEALTH AND HUMAN 

SERVICES, EDUCATION, AND RELATED AGENCIES 

APPROPRIATIONS FOR 2009 

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND 

HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES 

DAVID R. OBEY, Wisconsin, Chairman 

NITA M. LOWEY, New York 

ROSA L. DELAURO, Connecticut 

JESSE L. JACKSON, JR., Illinois 

PATRICK J. KENNEDY, Rhode Island 

LUCILLE ROYBAL-ALLARD, California 

BARBARA LEE, California 

TOM UDALL, New Mexico 

MICHAEL HONDA, California 

BETTY MCCOLLUM, Minnesota 

TIM RYAN, Ohio 

JAMES T. WALSH, New York 

RALPH REGULA, Ohio 

JOHN E. PETERSON, Pennsylvania 

DAVE WELDON, Florida 

MICHAEL K. SIMPSON, Idaho 

DENNIS R. REHBERG, Montana 

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking 

Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. 

CHERYL SMITH, SUE QUANTIUS, NICOLE KUNKO, 

TERI BERGMAN, CHARMAINE MERCER, and ANDRIA OLIVER, 

Subcommittee Staff 

PART 6 

Page 

Secretary of the Department of Labor ......................................................... 1 

Secretary of the Department of Health and Human Services ............... 191 

Health Issues and Opportunities at the National Institutes of 

Health, Centers for Disease Control and Prevention, Substance 

Abuse and Mental Health Services Administration, and Agency for 

Healthcare Research and Quality/Fiscal Year 2009 Budget 

Overview .......................................................................................................... 465 

Secretary of the Department of Education ................................................ 599 

Reducing the Disability Backlog at the Social Security 

Administration/Fiscal Year 2009 Budget Overview .............................. 695 

Printed for the use of the Committee on Appropriations 


hsrobinson on PROD1PC76 with HEARING
Part 6 


hsrobinson on PROD1PC76 with HEARING
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, 

AND RELATED AGENCIES APPROPRIATIONS FOR 2009 


hsrobinson on PROD1PC76 with HEARING

hsrobinson on PROD1PC76 with HEARING
DEPARTMENTS OF LABOR, HEALTH AND HUMAN 

SERVICES, EDUCATION, AND RELATED AGENCIES 

APPROPRIATIONS FOR 2009 

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND 

HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES 

DAVID R. OBEY, Wisconsin, Chairman 

NITA M. LOWEY, New York 

ROSA L. DELAURO, Connecticut 

JESSE L. JACKSON, JR., Illinois 

PATRICK J. KENNEDY, Rhode Island 

LUCILLE ROYBAL-ALLARD, California 

BARBARA LEE, California 

TOM UDALL, New Mexico 

MICHAEL HONDA, California 

BETTY MCCOLLUM, Minnesota 

TIM RYAN, Ohio 

JAMES T. WALSH, New York 

RALPH REGULA, Ohio 

JOHN E. PETERSON, Pennsylvania 

DAVE WELDON, Florida 

MICHAEL K. SIMPSON, Idaho 

DENNIS R. REHBERG, Montana 

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking 

Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. 

CHERYL SMITH, SUE QUANTIUS, NICOLE KUNKO, 

TERI BERGMAN, CHARMAINE MERCER, and ANDRIA OLIVER, 

Subcommittee Staff 

PART 6 

Page 

Secretary of the Department of Labor ......................................................... 1 

Secretary of the Department of Health and Human Services ............... 191 

Health Issues and Opportunities at the National Institutes of 

Health, Centers for Disease Control and Prevention, Substance 

Abuse and Mental Health Services Administration, and Agency for 

Healthcare Research and Quality/Fiscal Year 2009 Budget 

Overview .......................................................................................................... 465 

Secretary of the Department of Education ................................................ 599 

Reducing the Disability Backlog at the Social Security 

Administration/Fiscal Year 2009 Budget Overview .............................. 695 

Printed for the use of the Committee on Appropriations 

U.S. GOVERNMENT PRINTING OFFICE 

43–195 WASHINGTON : 2008 


hsrobinson on PROD1PC76 with HEARING
COMMITTEE ON APPROPRIATIONS 

DAVID R. OBEY, Wisconsin, Chairman 

JOHN P. MURTHA, Pennsylvania 

NORMAN D. DICKS, Washington 

ALAN B. MOLLOHAN, West Virginia 

MARCY KAPTUR, Ohio 

PETER J. VISCLOSKY, Indiana 

NITA M. LOWEY, New York 

JOSE ́ E. SERRANO, New York 

ROSA L. DELAURO, Connecticut 

JAMES P. MORAN, Virginia 

JOHN W. OLVER, Massachusetts 

ED PASTOR, Arizona 

DAVID E. PRICE, North Carolina 

CHET EDWARDS, Texas 

ROBERT E. ‘‘BUD’’ CRAMER, JR., Alabama 

PATRICK J. KENNEDY, Rhode Island 

MAURICE D. HINCHEY, New York 

LUCILLE ROYBAL-ALLARD, California 

SAM FARR, California 

JESSE L. JACKSON, JR., Illinois 

CAROLYN C. KILPATRICK, Michigan 

ALLEN BOYD, Florida 

CHAKA FATTAH, Pennsylvania 

STEVEN R. ROTHMAN, New Jersey 

SANFORD D. BISHOP, JR., Georgia 

MARION BERRY, Arkansas 

BARBARA LEE, California 

TOM UDALL, New Mexico 

ADAM SCHIFF, California 

MICHAEL HONDA, California 

BETTY MCCOLLUM, Minnesota 

STEVE ISRAEL, New York 

TIM RYAN, Ohio 

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland 

BEN CHANDLER, Kentucky 

DEBBIE WASSERMAN SCHULTZ, Florida 

CIRO RODRIGUEZ, Texas 

JERRY LEWIS, California 

C. W. BILL YOUNG, Florida 

RALPH REGULA, Ohio 

HAROLD ROGERS, Kentucky 

FRANK R. WOLF, Virginia 

JAMES T. WALSH, New York 

DAVID L. HOBSON, Ohio 

JOE KNOLLENBERG, Michigan 

JACK KINGSTON, Georgia 

RODNEY P. FRELINGHUYSEN, New Jersey 

TODD TIAHRT, Kansas 

ZACH WAMP, Tennessee 

TOM LATHAM, Iowa 

ROBERT B. ADERHOLT, Alabama 

JO ANN EMERSON, Missouri 

KAY GRANGER, Texas 

JOHN E. PETERSON, Pennsylvania 

VIRGIL H. GOODE, JR., Virginia 

RAY LAHOOD, Illinois 

DAVE WELDON, Florida 

MICHAEL K. SIMPSON, Idaho 

JOHN ABNEY CULBERSON, Texas 

MARK STEVEN KIRK, Illinois 

ANDER CRENSHAW, Florida 

DENNIS R. REHBERG, Montana 

JOHN R. CARTER, Texas 

RODNEY ALEXANDER, Louisiana 

KEN CALVERT, California 

JO BONNER, Alabama 

ROB NABORS, Clerk and Staff Director 

(II)


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(1) 

DEPARTMENTS OF LABOR, HEALTH AND 

HUMAN SERVICES, EDUCATION, AND RELATED AGENCIES APPROPRIATIONS FOR 

2009 

THURSDAY, MARCH 6, 2008. 

BUDGET REQUEST FOR THE DEPARTMENT OF LABOR 

FOR 2009 

WITNESS 

HON. ELAINE L. CHAO, SECRETARY, U.S. DEPARTMENT OF LABOR 

CHAIRMAN’S WELCOMING REMARKS

Mr. OBEY. Well, good morning, Madam Secretary. Today, the 

Committee will review the budget request for the Department of 

Labor for the coming fiscal year. 

Madam Secretary, let me say something before we begin. I think 

you are a very nice person and I respect the job you try to do, but 

I have very basic disagreements with some of the policies that you 

are pursuing. And I apologize ahead of time, but I am going to take 

a little more time than I normally do on opening a hearing to explain what my concerns are. 

First, I am troubled by a recent press article concerning some remarks attributed to you. According to those articles, in a February 

7th address to the Conservative Political Action Conference you 

cited several milestones for your tenure as Secretary of Labor. One 

of those milestones was reportedly that ‘‘the Department’s fiscal 

year 2009 budget is nearly 15 percent less than 10 years ago.’’ I, 

frankly, do not see that as an accomplishment, considering what 

has occurred over the past few years in this economy. 

There are 7.6 million unemployed Americans today, 26 percent 

more than was the case seven years ago. The number of people who 

have been unemployed for more than 27 weeks, long-term unemployed is now double the January 2000 level. That includes several 

members of my family, and I think many members of Congress can 

say the same thing. 

Under the last seven years we have lost 3.2 million manufacturing jobs. The service sector, which amounts to two-thirds of the 

U.S. economy, has contracted in January, for the first time in five 

years. New unemployment numbers are going to be released tomorrow. Nobody expects the news to be any better. 

Despite those economic conditions, which appear to be worsening—and those conditions, I would suggest, should tell us that 

we ought to be making greater investments to assist the unemVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00001 Fmt 6633 Sfmt 6633 E:\HR\OC\B195P2.XXX B195P2

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ployed and those at risk of losing their jobs—your budget cuts 

funding for programs run by the Department by $1.2 billion, or 10 

percent, below fiscal year 2008. 

In real terms, after accounting for inflation and population 

growth, which is the only way to measure the per capita impact on 

people, your budget is $5.3 billion, or 33 percent, below its 2001 

level. 

Over the past several weeks, this Subcommittee has been holding 

a number of hearings to try to achieve a clear understanding of the 

context in which these policy decisions are being made. One of the 

witnesses was Harold Meyerson, and I would like to read what he 

said. He said, ‘‘The benefits, pensions, and rising annual income 

that were the common, though by no means universal, experience 

of American workers a generation ago are now a thing of the past 

to all but the talented or, more precisely, the fortunate tenth. We 

are no longer a Nation of good jobs.’’

Jared Bernstein, another economist, told us that working families are working harder and smarter, but real incomes are down 

and poverty is up. 

Another economist, Harry Holzer, said the following: ‘‘The very 

low earnings and employment of millions of Americans generate 

high poverty rates and impose huge costs on the U.S. economy. 

Those presentations, I think, helped us to understand that the 

cost to society of not making these investments can be very, very 

high, and I would like to examine some of the consequences of your 

budget. 

STATE EMPLOYMENT SERVICES FUNDING

Under this Administration, funding for the State Employment 

Service has been cut by $93 million, or 9 percent, at the same time 

that the working age population has grown by 9 percent and unemployment has climbed by nearly 17 percent. Your fiscal year 2009 

budget proposes to eliminate Federal support. 

The Employment Service helps 13 million people by matching 

people who need jobs with employers who have available openings. 

The budgetary cost of the Employment Service may be $703 million 

a year, but the cost of not providing those services could be much 

higher in terms of lost wages to workers. 

TRAINING PROGRAMS FUNDING

Your budget makes more than $500 million in cuts in job training programs, including $173 million in cuts to youth training programs. When we consider the reduced lifetime earnings of a high 

school dropout, $187,000 per dropout, or I should say when we look 

at the additional costs to Government in social welfare benefits for 

people who drop out and the cost in terms of medical services, and 

in many cases incarceration, that $173 million cut to youth programs could wind up being very costly indeed over the next 20 

years. 

Your budget repeats last year’s proposal to slash part-time minimum wage community service job grants for 34,000 low-income 

senior citizens. That proposal would cut the program by $172 million, or 33 percent, below the fiscal year 2008 level. 


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It seems to me, Madam Secretary, that your Department is the 

agency that, above all others, has an obligation to try to reduce the 

gap in human potential that we have in this society between those 

who were born on third base and those who were not. We have a 

labor market that places a premium on skills and, yet, this budget 

squeezes programs that will help workers to develop those skills 

and makes inevitable the growth of the gap between the most welloff people in this society and other people who are struggling on 

the edges, trying to grab a piece of American hopes and dreams. 

So I am extremely disquieted by your agency’s budget and I am 

afraid that the tenor of my questions will reflect that this morning. 

Do not take it personally. You have got your job to do, but we have 

got our job to do too, and when we see priorities that I think are 

as misbegotten as these, I think we have got an obligation to address them. 

Mr. OBEY. Let me turn to Mr. Walsh for his comments before I 

ask you to make your statement. 

RANKING MEMBER’S WELCOMING REMARKS

Mr. WALSH. Thank you, Mr. Chairman. 

Madam Secretary, welcome. Good to have you back. 

Unless I am mistaken, you hold the distinction of being the longest serving member of the President’s cabinet. Congratulations to 

you and thank you for your service; confirmed just after the inauguration in 2001, so we thank you for that long and distinguished 

service. 

I said to you last year, I believe, it is a great time to be Secretary. I am not sure I can offer the same this year because of the 

downturn in the economy. But, you know, these economies are cyclical in nature and sometimes Federal policies impact on that and 

sometimes they do not. 

Even before the Budget Committee marks up the budget resolution, even before we hear testimony on the fiscal year 2009 request, 

already there are threats of vetoes and continuing resolutions. I 

fear the prospects of what will be delivered by this Congress are 

seemingly a muddle at this point. 

From my observation, Mr. Chairman, this bill has been subjected 

to political maneuvering from both parties for too long; from both 

parties, in both bodies, and at both ends of Pennsylvania Avenue. 

As the Nation endures another year of electoral politics and ultimately a transition to a new administration and new executive 

leadership, it is important to maintain some degree of institutional 

integrity across the Federal Government, and I believe the Congress can still do its part by providing funding for the continuity 

of these critical Labor programs. 

For all of its efforts in promoting employment opportunities and 

training services, the Department of Labor is often graded harshly 

on its monthly unemployment rate. Yet, according to statistics— and we have heard some statistics already and we will hear more— the average unemployment rate has steadily declined over multiple 

administrations, from a high of almost 10 percent back in the 

Carter years to its current rate of 4.9 percent today. Millions and 

millions of more Americans working today than then. So it is indeed good news. 


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Speaking of statistics, the Chairman talked a little bit about this 

year, this current unemployment rate versus 2001. At one point in 

2001, before the technology boom had burst, unemployment was 

fairly low. Within a year it increased by almost 1 percent. Part of 

that was because the technology boom burst and part of that was 

because of the attack on the United States on September 11th. But 

much like the recent housing market bubble burst, that bubble 

burst also, and it would be hard to lay blame on any individual for 

either of those; it was a sort of collective mess that we got ourselves into. 

But the unemployment rate, which hit about 5 percent in September of 2001, continued to go up after September 11, into 2002, 

2003, to about 6 percent, but it remained lower than the unemployment rate in the mid-1990s; and since that time it has been on a 

steady decline, ending in January of 2008 at 4.9 percent. 

Mr. Chairman, this request proposes $10,500,000,000 in discretionary authority for the Department of Labor, including 

$2,800,000,000 for high-quality job training and employment services; $238,000,000 for veterans transitioning to civilian life, many 

having served multiple tours of duty in Iraq and Afghanistan; and 

$2,700,000,000 to support unemployment insurance. 

It also proposes some things that will have to be debated. For example, a 14 percent reduction in WIA programs and the elimination of the Employee Services Grant to States, a reduction of 

$700,000,000 that was ostensibly taken to avoid a duplication of 

services. More realistically, it was taken to meet an arbitrary number given by OMB. 

This request is not perfect, but we need to recognize the historical efficacy of these programs and services in maintaining consistently low unemployment, as well as our competitive position in the 

global economy. 

Mr. Chairman, I look forward to working together with you on 

this request, on this budget, and with the Secretary, and I yield 

back. 

Mr. OBEY. Thank you, Mr. Walsh. 

Just one point before we begin. I think if you examine my opening comments, I specifically avoided trying to attach any blame to 

any specific administration for unemployment rates. Unemployment rates result from a variety of causes. I think rather than getting into a question of who shot John on unemployment, I think 

the most important issue is simply what we ought to be doing 

about the problem. 

Please proceed with whatever comments you would like to make. 

We will put your entire statement in the record. If you could summarize it in about 10 minutes, I would appreciate it. 

Secretary CHAO. Yes. 

SECRETARY’S OPENING STATEMENT

I have a statement for the record that I would appreciate if we 

can submit for the record, and I will just briefly summarize. 

Mr. Chairman, Ranking Member Walsh, and members of the 

Committee, I appreciate——

Mr. OBEY. Could you pull the mic a little closer, please? 


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Secretary CHAO. Mr. Chairman, Congressman Walsh, members 

of the Subcommittee, we appreciate the opportunity to present the 

Administration’s budget for fiscal year 2009 for the Department of 

Labor. The total request for the Department is $53,100,000,000, 

$10,500,000,000 is for discretionary spending. 

The Department’s fiscal year 2009 budget focuses on five overall 

priorities: protecting workers’ health and safety; protecting workers’ pay, benefits, long-term security, pensions; modernizing the 

temporary foreign labor certification programs; securing the employment rights of America’s veterans; and increasing the competitiveness of America’s workforce, of which you and I are both concerned. 

In fiscal year 2009, $1,400,000,000 is requested for the Department’s worker protection programs. This request includes 

$332,000,000 for Mine Safety and Health Administration and an 

FTE of 2,361. We are increasing funding for enforcement. And 

while there is a slight reduction over the fiscal year 2008 enacted 

level, this is due to the fact that last year’s fiscal year budget had 

a one-time expense, including the overtime and travel expenses associated with training new inspectors. This current request enables 

MSHA to continue implementing the Historic Mine Act and maintains our strong commitment to Mine Safety and Health. 

This request also includes $7,400,000 specifically targeted to support and train an additional 55 Mine Safety Enforcement personnel, which enable MSHA to complete 100 percent of the mandated mine inspections. This is in addition to the 273 enforcement 

personnel that were hired last year, last fiscal year. So the result 

is a new increase of 177 Mine Safety Enforcement personnel as of 

January 31st of this year, which brings the total number of coal enforcement personnel to its highest levels since 1994. 

The budget will support MSHA’s efforts to finalize rules on Belt 

Air and Mine Refuge Chambers, and to vigorously enforce increased monetary penalties. 

The fiscal year 2009 budget request also includes $501,700,000 

and 2,173 FTEs for OSHA. This is a 3 percent increase over the 

enacted level last year. 

The fiscal year 2009 budget request before this Committee for 

the Employment Standards Administration is for $468,700,000 and 

3,190 FTEs. The request for ESA includes $193,100,000 and 1,283 

FTEs for the Wage and Hour Division, and the request for Wage 

and Hour includes $5,100,000 to hire additional 75 inspectors. 

ESA also requests $89,000,000 and 585 FTEs for the Office of 

Federal Contract Compliance Programs (OFCCP) to protect workers from discrimination by Federal contractors and another 

$110,200,000 and 872 FTEs are requested for the Office of Worker’s Compensation Program. 

Let me note that the Department of Labor recently passed the 

$3,500,000,000 mark in compensation to Energy Employees Occupational Illness Compensation Program beneficiaries and initial decisions have been made in all of the 22,000 Part E cases that were 

transferred to the Department of Labor from the Department of 

Energy in 2004. 


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The ESA request also includes $58,300,000 and 369 FTEs for the 

Office of Labor Management Standards. This is the same amount 

of FTEs requested in fiscal year 2008. 

For the Employee Benefit Security Administration, the fiscal 

year 2009 request is $147,900,000, an increase of over 6 percent 

over the enacted level, and 867 FTEs. 

The Department is also committed to providing returning veterans with the support needed to make the transition back to the 

non-military workforce a smooth and successful one. So, for VETS, 

the fiscal year 2009 budget is $238,400,000 and 234 FTEs, and this 

is a 5 percent increase over the fiscal year 2008 enacted level. This 

will help vets maximize employment opportunities for veterans and 

protect their employment and re-employment rights. 

As you have alluded to, the United States is transitioning to a 

knowledge-based economy. New jobs are being created. In fact, 8.5 

million new jobs have been created since August of 2003. The majority of these new jobs require higher skills, more education, and, 

by definition, they are better paying jobs. Our Country’s worker 

training programs need to keep pace with these developments and 

ensure that workers have the relevant skills that they need to remain competitive and succeed in the new economy. 

It is noteworthy that each year States have carried forward over 

$1,200,000,000 to $1,700,000,000 in unspent Workforce Investment 

Act funds. Despite the legal authority to spend funds over three 

years, we believe that there is an urgent need for more worker 

training now. 

One way to make more effective the delivery of services to workers in need of training and retraining is the Administration’s proposal for career advancement accounts. Career Advancement Accounts would triple the number of workers that would be able to 

be trained via the workforce investment system. It would also ensure that workers receive relevant training that would actually enable them to get a real job. 

Too much of the funding these days is tied up in duplicative infrastructure, and reform is urgently needed to create a more effective training system that would truly meet the needs of our Nation’s workers and help our Nation remain competitive in a worldwide economy. The Administration looks forward to working with 

Congress to update and improve the Workforce Investment Act this 

year. 

Mr. Chairman, the mission of the Labor Department is indeed to 

create hope and opportunity, and the President’s fiscal year 2009 

budget provides the resources to accomplish this by promoting and 

protecting the health, safety, wages, and retirement security of 

America’s workers. It also allows us to build on record-setting results the Department has accomplished for workers over the past 

seven years, and we also need to ensure that workers are indeed 

trained effectively and that they are able to compete in accessing 

real jobs that are occurring and being developed in the economy. 

Thank you. 

[The information follows:] 


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WIA FUNDING

Mr. OBEY. Thank you. 

Mr. Walsh. 

Mr. WALSH. Thank you, Mr. Chairman. 

Madam Secretary, you just talked about the Workforce Investment Act funding rollover. Can you update the Committee on how 

much carryover exists within the WIA grant programs and explain 

why such balances appear to be necessary? 

Secretary CHAO. In the time that we have been here, first of all, 

I want to emphasize that people in the system are all caring professionals. We all care about the system. We all want to make sure 

that it is effective, that it is helping workers by providing relevant 

training that would actually allow them to access real jobs that are 

developing in our economy. 

In the past seven years, we have seen year after year carryover 

in unspent balances that total about $1,200,000,000 to 

$1,700,000,000 a year every single year. This year it is a little bit 

lower than that because of several other developments, and they 

range across the board. 

What happens a lot of times is the workforce investment systems 

throughout the States may contract for a training program, but 

those slots that they contract may not actually be used, so it would 

be claimed that the money is obligated because they contracted 400 

training slots, 800 training slots, but at the end of the year, whether those training slots are actually used is questionable. Many 

times it is not, so you have the unspent balances. But the system 

will claim—and we are working with them—that there are unspent 

balances because they are obligated, but there are two very different points of view about the money. 

Mr. WALSH. Last year, this Subcommittee voted for a 

$350,000,000 rescission in these funds. Ultimately, in conference, it 

was settled at $250,000,000. Can you explain the impact on these 

programs by that rescission? 

Secretary CHAO. Those were primarily taken out of—it was 

across the board. It was primarily taken out of ETA. And we have 

some very successful programs that have proven to be very effective, like the President’s High Growth Job Training program; the 

Community College Job Training program, which is a partnership 

with community colleges; and also the Workforce Innovation Regional Economic Development program. These are small 

amounts——

Mr. WALSH. Would you say there was a negative impact on this 

program? 

Secretary CHAO. We think so, yes. 

Mr. WALSH. Pardon? 

Secretary CHAO. We think so. 

Mr. WALSH. The budget proposes significant changes to this program this year: proposes a 14 percent cut, roughly $450,000,000 

from 2008 level; it proposes to consolidate WIA Adult Dislocated 

Worker, Youth Activities, and Employee Services Grant programs 

into a single $2,800,000,000 State grant; proposes to add 20 percent State match on CAA funds. 


ebenthall on PROD1PC60 with HEARING
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The CAA and State match requirement have been proposed in 

the past but denied by Congress. Why the drastic reduction in WIA 

programs? 

Secretary CHAO. We have had numerous years of discussion and 

disagreement about the separate funding for dislocated unemployed 

workers for adults, youth. Basically, the Administration’s workforce 

investment proposal would give governors much great flexibility in 

deciding how these funds are going to be used, and the rationale 

is the governors know best what is happening within their workforce investment system. 

Most of the money that goes out from the U.S. Department of 

Labor, as you well know, goes out on a formula basis, and having 

these separate funding streams puts all these programs in silos 

that makes it very, very difficult for these programs to work together at the grassroots level. So less than 5 percent of the money 

stays at the Federal level; all of the money goes down to the State 

level; the governors keep about 15 to 35 percent, depending on the 

program; and the rest goes into the grassroots municipalities and 

counties and cities. 

So sometimes there are developing situations in one district that 

there is a surplus of funds and other areas that are more unemployed workers and there are a lot of funds; and at the State level 

the governor, even, is unable to shift any of this around. So we are 

trying to enable the governors to have greater flexibility in deciding 

how these monies are to be used. 

There has been this discussion. It takes a long time for the system to respond. There is a lot of discussion, but I think that discussion is taking place and it is accelerating, and there is growing support for——

Mr. WALSH. Do governors and State legislatures generally support that concept? 

Secretary CHAO. Some. Not all governors, but most governors. 

There is also a partisan element, of course, to this. Sometimes I receive word that—you know, they will ask questions like why do we 

not have more flexibility. When I say, well, we have a proposal to 

that effect, so——

Mr. WALSH. Thank you. 

Thank you, Mr. Chairman. 

Mr. OBEY. Mr. Ryan. 

Mr. RYAN. Thank you, Mr. Chairman. 

WORKFORCE INVESTMENT ACT

Madam Secretary, thank you for being here. Your testimony does 

not mention the elimination of the Employment Service outside of 

the Career Advancement Account, and that was something that we 

noticed. 

This is, from my perspective, not the time to be eliminating this 

program that matches people who need employment with employers who have jobs to fill. I can tell you that in Ohio we need more 

of this, not less of this, and more job training resources, as well, 

to deal with the escalating unemployment rates and dislocations 

caused by foreign competition. We have been hearing a lot about 

this in the presidential race the last few weeks. 


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22 

Where, in your estimation, do you expect the 13 million participants served by the Employment Service to go for assistance? 

Secretary CHAO. I do not think we disagree on how we need to 

help workers. The issue is how should we do so and where does the 

money go. Our Country has seen a succession of worker training 

programs that have evolved over time, dating back to the 1960s. 

We had CETA, then we had JPTA, and then we had Workforce Investment Act. Every new act imposes a new infrastructure on the 

old, so that we have duplicative infrastructure that are not helping 

workers. If you go to most One-Stop career centers, on the right is 

Employment Services; on the left is Workforce Investment Act. 

Many times they try to talk to each other, but they cannot because 

they are operating in silos, and they do not work together and they 

do not talk to one another. Something is really wrong. 

Mr. RYAN. So where are these people going to go, the 13 million 

people that are being served by this program? I am not saying that 

we do not have bureaucratic problems——

Secretary CHAO. They will be served. They will be served 

through the Workforce Investment Act, which was passed in 1998. 

Mr. RYAN. Well, you are cutting that by $500,000,000. 

Secretary CHAO. Workforce Investment Act and Employment 

Services train 200,000 people. Our goal is to train 800,000. They 

will be able to go to the Workforce Investment Act. 

Mr. RYAN. So you are telling me and this Committee that the 13 

million people that are currently in this program are going to be 

able to go to—— Secretary CHAO. They are not served only by Employment Services; they are also served by the One-Stop career centers. 

Mr. RYAN. So they are going to be able to get the same services 

through WIA that you are cutting by $500,000,000? 

Secretary CHAO. Yes. That is the key. 

Mr. RYAN. That will be interesting. I mean, I cannot believe that. 

Secretary CHAO. I would be more than glad to have my people 

come and update—— Mr. RYAN. The WIA program now serves 900,000—— Secretary CHAO. That is why there are duplicative—what I am 

saying is there are duplicative infrastructures in place. That is a 

problem. 

Mr. RYAN. So the whole ES budget is a waste, last year, for example? 

Secretary CHAO. It is duplicative. 

Mr. RYAN. So it was wasted money spent, the whole thing? 

Secretary CHAO. You said that before. 

Mr. RYAN. I am asking. You are the one eliminating the program, 

not me. 

Secretary CHAO. We believe that—we share common goals. We 

are in a worldwide economy. We want——

Mr. RYAN. I am questioning that because of the way this budget 

looks. 

Secretary CHAO. Yes. Well, because there is duplicative—they are 

doing the same thing. We have a Workforce Investment Act that 

helps workers, that serves unemployed workers. This is a duplicative structure. 

Mr. RYAN. So the answer is yes. 


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Secretary CHAO. Yes. 

Mr. RYAN. All the money we put in ES last year was wasted 

money. 

WORKFORCE INVESTMENT

Secretary CHAO. Well, I would invite you to visit a Workforce Investment center, a One-Stop center. You will see Employment 

Services on one side; you will see Workforce Investment Act on the 

other. 

Mr. OBEY. Would the gentleman yield? 

Mr. RYAN. I would be happy to yield. 

Mr. OBEY. How can a program that serves 13 million annually 

be duplicative of a program that serves 900,000, even if the Workforce Investment system provides job matching services? Are not 

those services available to far fewer people than through the Employment Service? 

Secretary CHAO. We have the capacity to take them on. We have 

the capacity to serve them. That is the whole point. 

Mr. OBEY. You may have, but my point is they are not duplicative if you have only got 900,000 people in one program and 13 million in the other. 

Secretary CHAO. Those services can——

Mr. OBEY. That means that for 12 out of 13 people the services 

are not duplicative. 

Secretary CHAO. They can be provided with—there are three different levels of services, but, basically, when a person comes in and 

they ask for unemployment services, that is provided through WIA. 

That is what WIA was supposed to do. That is what it does. It has 

the capacity to do so. 

Mr. OBEY. I think the numbers speak for themselves. 

Thank you for yielding. 

Mr. RYAN. I think the numbers do—if they were duplicative, they 

were both doing the same thing, and you are going to move this 

group of 13 million people over into the WIA program, you would 

need additional resources to deal with those 13 million people. 

They are receiving a service anyway. 

We agree to disagree on that, and this Committee is going to do 

everything in our power to try to correct that. 

YOUTHBUILD PROGRAM

One question I have—because time is running—with the 

YouthBuild Program. I did see that it received a 15 percent cut, I 

believe. One of the issues with our young people who are trying to 

retrain is to get them prepared for the green collar jobs and the 

making sure the energy-efficiency and whatnot as they are building 

these new homes or refurbishing homes. 

Is there anything in your agenda long-term and in the budget 

this year to start moving this forward to help with maybe like a 

YouthBuild green-style program, where we are starting to get these 

kids and teach them the skills that they would need to put solar 

panels on houses to make sure that the houses are conserving as 

much energy as possible? 

I will let you answer that and yield back. 


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Secretary CHAO. YouthBuild was just moved over from HUD over 

to us, so we are in the process. I think the program works great. 

We anticipate continuing with the way it is. The green projects are 

not only popular and being considered in YouthBuild, but in other 

programs as well. 

Mr. RYAN. I would like to work with you on that. 

Secretary CHAO. Great. Thank you. 

Mr. OBEY. Mr. Peterson. 

WORKFORCE INVESTMENT CENTERS

Mr. PETERSON. This was not what I was going to talk about, but 

Representative Ryan’s question raises an issue that I have had 

many directors out there share with me. There is a problem with 

the system: we have all of these people housed together, which is 

good, but there is no common boss. You have State employees, you 

have Federal employees, and you have local employees; and there 

is no one who is boss over them all. And you will have, on one side, 

waiting lines where you are going to wait days to see a person, because they cannot see them all, and you have people over here balancing their personal checkbook or reading a magazine because 

they do not have a customer, and that is the problem with the system; it is not an efficient system. 

I do not know what your plan is to fix it, but I will tell you the 

directors in my district—and I have been there and I have talked 

to them on the phone—they have been frustrated for years: I am 

the manager, I am the top guy here, but I do not manage this person, this person, this person; they work for another agency—State, 

Federal, local. So moving them into one place was good, but we 

need to have a common manager who allows people to be crosstrained so that we do not have people sitting over here fiddling 

their thumbs while others are waiting in lines for days. 

Do you think that is a fair assessment. 

Secretary CHAO. I am sorry I get so hot. I am really passionate 

about this system. I love the system. I just want it to do—we who 

are in it have to challenge ourselves to do better, because there are 

people waiting for our services and they deserve better. 

Mr. PETERSON. Do you think that is a problem? 

Secretary CHAO. Yes, it is a problem. 

Mr. PETERSON. Yes. See, this is the problem: No one has been 

put in charge, so you have Federal union employees, State union 

employees, different bosses, different masters, and local employees, 

and no one who is really boss of them all. They are all providing 

different things for different people. You may have 20 customers 

today; I may not have anybody come in today, so I sit there waiting 

for the next person to come in. I may be busy tomorrow, but I am 

not busy today, but I cannot help you. 

We need to have a hearing on this, Chairman. We need to figure 

out how we make these centers a one-stop shop where everybody 

is skilled and cross-trained and we serve people efficiently. It is not 

an efficient system. 

Mr. OBEY. Would the gentleman yield? 

Mr. PETERSON. You bet. 

Mr. OBEY. I think that is something that is perfectly legitimate 

for the authorizing committee to consider, because I think the genVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00024 Fmt 6633 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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tleman probably has a good point. My concern, however, is that 

what essentially we are being told is we have two programs. We 

are eliminating the big one; we are cutting the remaining one by 

10 percent. And somehow that is going to solve the problem? That 

does not compute. 

Mr. PETERSON. Yes, but I think if we looked at it, we might see 

where, if you do have a lot of people sitting not efficient, then there 

is a lot of money there that is being wasted, and I think that is 

the case. I have had all the managers that manage them tell me, 

John, we need to put these programs somehow together so there 

is a common manager in charge for productivity, for serving the 

people, not just a portion of them. If we are going to put them all 

in one office, let’s make them work together. 

Does that make sense to you? 

Secretary CHAO. Yes, very much so. And so long as we are talking about reforms, which is what we have been trying—and I know 

this is not this Committee—one of the other reforms is these are 

supposed to be One-Stop centers. We also need the cooperation of 

other Departments to make sure that their services are also included within the WIA One-Stop center, so that people who go to 

these centers for help do not have to go to 16 or 17 different program offices to get the help that they are supposed to get. But that 

is another——

SKILL TRAINING

Mr. PETERSON. I want to talk about another issue. I think the 

growth of the economy in our country, one of its deterrents, I just 

have companies every day say that as we succeed, we are getting 

very high tech. Our manufacturing processing cost is very high 

tech. We have very sophisticated equipment; that is how we compete with cheap labor. It is the only way we can compete. But we 

do not have the people to run the machines; we do not have the 

people who know how to fix the machines, maintain the machines, 

because we are so far behind on the skill training. 

I guess do you find it frustrating that the Department of Education again wants to cut—what is the program? 

Secretary CHAO. Voc Ed. 

Mr. PETERSON. Yes, Voc Ed. But what was the member’s name 

that it was named after? Perkins, yes, Perkins. God, I can’t believe 

I did not think of Perkins. 

But these programs get cut, which are seed corn for my local vocational schools and for my—I do not have community colleges, but 

for community colleges where they have them. 

Secretary CHAO. Perhaps you should ask Margaret Spellings that 

question. 

Mr. PETERSON. Do you find it frustrating—you are in your final 

year, like me; we can say it like it is. They can only fire us. They 

cannot fire me. 

Secretary CHAO. I am very concerned about partnering with community colleges, and you and I have talked about that. 

Mr. PETERSON. Yes. 

Secretary CHAO. Especially community colleges in rural areas. 

That is why the Community College Job Training program was important, because we had hoped to set up partnerships with commuVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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nity colleges which offer such relevant curricula and they are so responsive to the changing economic needs within the community. So 

community college partnerships are good; we want to partner with 

them on that. 

Also, distance learning is another phenomena that is prompted 

by advances in technology that we hope will have great promise as 

well. 

Mr. PETERSON. See, the problem we have, though, is our system 

assumes that there is a training program in place and you are just 

going to help pay for it. In my district we do not have a community 

college. Most of the trades are taught by a few schools. They get 

$25,000 to $27,000 for a 14-month program, which is a compressed 

two-year program. So $3,000 two years in a row gives them $6,000. 

You know, another $20,000 needed, poor people cannot do that. 

I mean, the poorest among us who need this training, who can 

be skilled workers are froze out in Pennsylvania, they do not have 

a chance. That is a Pennsylvania problem, but I am sure there are 

other States that are like that, because I have 20 percent of Pennsylvania and there is not a community college within 75 miles of 

my district. So we just do not have that kind of training, we only 

have private schools; and very few of them, and many things you 

cannot be taught. 

Nobody teaches PLC repair in my district, and every company in 

my district has PLC computers running their machines. But nobody is trained in my district. We do not have anybody training 

auto mechanics within my district. Auto mechanics in my district 

for adults. 

We used to ship people over to Pittsburgh, house them to give 

them a skill after they lost their job. Pretty expensive. Then a lot 

of times they never came back because some company in Pittsburgh hired them once they had the skill. Real problem in rural 

areas like mine. But that is the problem, the system assumes you 

have training. Smart States do. Pennsylvania does not. 

Secretary CHAO. Thank you. 

Mr. PETERSON. Is my time up? 

Mr. OBEY. Thank you. We have a roll call going on, as you can 

see. What I would like to do is have Mr. Honda take his questioning yet. That would still give us five minutes to make the vote 

and then the rest of us can come back. 

My understanding is there will be two votes, this 15-minute vote 

followed by a 5-minute vote, and then the next votes will not come 

for probably an hour to two hours. 

Mr. Honda. 

Mr. HONDA. Thank you, Mr. Chairman. 

WIA RESCISSION

Welcome, Secretary Chao. In 2008, the omnibus appropriations 

negotiations during last year’s hearing, you and the President insisted on a rescission of about $335,000,000 in excess State grants, 

funds for Youth, Adults, and Dislocated Worker training programs 

under Title I of the Workforce Investment Act. This rescission has 

had a direct impact on my district, forcing the award-winning 

North Valley Job Training Consortium to close its doors every FriVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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day because they do not have enough funding resources to offer 

their services to my constituents. 

I guess the basic question is how do you defend a request to cut 

Training and Employment Services by 14 percent from last year 

and how do we keep these programs going with the increase in unemployment, increased need for these trainings? I heard you say 

there are duplications, but in that area I do not see that duplication, so perhaps you can tell me how we defend a cut. 

Also, maybe you can tell me where in my district these duplications are occurring. 

Secretary CHAO. I answered the Congressman, Ranking Member 

Walsh’s question wrong. I understand your question now. He was 

asking about—— Mr. OBEY. Could you pull the mic closer, please? 

Secretary CHAO. Sorry about that. 

You were also asking about the rescission. The rescission came 

through because of the overhang in balances. In the last seven 

years, there have been excess balances of about $1,200,000,000 to 

$1,700,000,000. Because of the rescissions, this year it is only about 

$875,000,000. This is a huge issue, and it will come up every year. 

The issue is we fund this huge Workforce Investment system and 

are we truly helping workers to train for the jobs of the 21st Century? And there is disagreement about that. 

So I do not know specifically what is happening in your district; 

I should, and I would be more than glad to send someone, if you 

would like, to talk with you about that. But there is duplication. 

Notwithstanding the talks that have been here, there has been disagreement about where the duplication occurs, how the system 

works——

Mr. HONDA. Madam Secretary, I understand duplication. I understand funding unfilled positions. It seems to me that if you folks 

know that those are occurring, then targeting those areas that 

have done that and making them expend, or carry over, or make 

some sort of adjustment rather than just cut across and say everybody suffers because some have not followed the rules, or some 

have displeased the Administration seems like it is a nice long 

swipe of one brush hitting good programs as well as those who are 

not. 

Secretary CHAO. Most of this is in formula funds, so basically the 

States could do whatever they want with it. It is formula funding. 

Mr. HONDA. So it is the States’ fault? 

Secretary CHAO. No, I am not—but there is this overhang. California has—I do not know what California——

Mr. HONDA. I guess I am just trying to argue for the programs 

that are successful——

Secretary CHAO. No, I understand. 

Mr. HONDA [continuing]. And watching their funds and then 

have to close down——

Mr. OBEY. Would the gentleman yield? 

Mr. HONDA. Yes. 

Mr. OBEY. You keep mentioning the overhang, but is it not true 

that a good number of States are not in fact returning prior year 

funds, but, in fact, they are returning this year’s operating money? 

Secretary CHAO. I do not think so, but you are——


ebenthall on PROD1PC60 with HEARING
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Mr. OBEY. I think so. 

Secretary CHAO. The overhang occurs. You are such an expert—

I will look into that for you, but that is not my understanding. 

Mr. OBEY. I mean, let me be clear. It is not just the Administration. The numbers are the Administration asked for $335 million 

in rescission. The bill that we sent to the President, which he 

voted, contained $245 million. The final bill that we sent to the 

President contained $250 million. So we reduced the magnitude of 

the cut in order to finance the amendment that Mr. Walsh and I 

were both interested in with respect to special education. So I 

think, to be fair, we need to recognize that both ends of the Avenue 

are a might responsible, with somewhat greater responsibility in 

the Administration’s hands because they pushed for the larger rescission. 

But I would ask you to check to see whether or not you do not 

in fact have States turning back present year money. 

Secretary CHAO. We did not have a choice about that. I understand that you are saying. 

Mr. OBEY. Is that it? All right, why do we not go vote and we 

will resume as soon as we get back. 

[Recess.] 

VETERANS’ TRAINING PROGRAMS

Mr. OBEY. Madam Secretary, I was trying to stall until another 

member got here who I thought wanted to ask some questions, but 

I am going to proceed with some of my own until they get here. 

You indicated in earlier discussion today that you were taking 

care of veterans’ training programs, and your budget does include 

an increase of $10,300,000 for Veterans’ Employment and Training 

Services. 

The largest component of that increase is for State grants that 

support disabled veterans’ outreach specialists and local veteran 

employment representatives. But, as I understand it, those veteran 

employment specialists work in the State Employment Service 

Agencies, the same agencies whose funding is being eliminated by 

the Administration’s budget. 

How does that make their job easier? 

Secretary CHAO. Well, as I mentioned, that is proposing an increase of $2 million. It is an increase of $2 million to the Homeless 

Vets and Reintegration program, $7 million for the TAP program 

to help veterans transition more effectively back into the workforce, 

and we also work with other agencies, as you mentioned. 

I am not aware. I shouldn’t say that. I am not familiar with the 

cuts in the other agencies you are mentioning. 

Mr. OBEY. No. My point is simply that you are talking about the 

increase that you are providing for these veterans’ employment 

folks, but if they work in the State Employment Service Agencies 

and you are eliminating the funding for that, how does that improve their working conditions? 

Secretary CHAO. Because we have vets’ representatives and coordinators in WIA. 

Mr. OBEY. Well, same question, WIA is a much smaller operation. 


ebenthall on PROD1PC60 with HEARING
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Secretary CHAO. WIA has the capacity to take on a lot of the employment services. 

Mr. OBEY. It may have the capacity, but right now the veterans 

people aren’t housed there to a large extent, to my knowledge. 

Secretary CHAO. They are also in WIA. We are trying to consolidate these two systems so that it is for ease of access for clients. 

Mr. OBEY. I understand, but if we are trying to gauge the effect 

of this system on veterans and the ease with which they have access and the opportunity they have for access, it seems to me that 

if you are shutting down the major offices in which they work, that 

is not exactly making things easier for veterans. That is my only 

point. 

NONCOMPETITIVE AWARDS

You heard a lot about earmarks. The President has given us the 

benefit of his wisdom on earmarks on many, many occasions, and 

yet the Administration conveniently forgets that earmarks are simply directed spending. 

In the congressional context, they are spending directed by the 

Congress, but the executive branch has the functional equivalent of 

earmarks many times over. They direct a lot of spending, and one 

area where you do that is the President’s High Growth Job Training program. 

As I understand it, over 85 percent of the 150 awards made the 

first 5 and a half years out of that initiative were made on a noncompetitive basis. Why isn’t every one of those awards on a noncompetitive basis, an earmark? 

Secretary CHAO. That was only for the first year to get the program going. That is all. 

Mr. OBEY. But I repeat the question. 

Secretary CHAO. Do I have to answer it? 

Mr. OBEY. Why isn’t that an earmark or do you agree that it is 

an Administration earmark? 

Secretary CHAO. I never thought of it that way. 

Mr. OBEY. That is the problem. The President apparently hasn’t 

either, and that is what has so many people, I think, on both sides 

of the aisle more than a little irritated with the President’s attitude 

on this. 

My understanding is that those non-competitive awards accounted for $258 million or 90 percent of the funds awarded, and 

it took language in the fiscal year 2007 and 2008 appropriation 

bills to ensure that this practice would end. 

The Inspector General, as I understand it, is following up with 

a second audit that will focus his findings, that matching requirements which were often used to justify sole source procurement 

were dropped in later grant modifications, potentially resulting in 

service levels below those intended in the original grants. 

Let me ask, why was it necessary to provide those grants on a 

non-competitive basis? 

Secretary CHAO. First of all, I believe those were only done in the 

first year to get the program started, and again the effort started 

because of an overall effort, overall initiative to try to get. 

Mr. OBEY. You are not saying that that money was only provided 

that way in one of the five and a half years, are you? 


ebenthall on PROD1PC60 with HEARING
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Secretary CHAO. They were not sole source the whole entire time. 

It was only in the beginning. 

Mr. OBEY. Well, no, not the last two years because we forbade 

it. 

Secretary CHAO. No. It was before that we did it. These were 

grants that were related to a program that highlighted what were 

the high growth industries in our Country that needed skilled 

workers. 

Mr. OBEY. You can put in the record what your understanding 

is. 

Secretary CHAO. Okay. 

Mr. OBEY. I will put in the record what my understanding is, but 

my question remains. Why was it necessary? 

Secretary CHAO. Do you have to go through it? 

Mr. OBEY. Why was it necessary to, in fact, earmark those funds 

whenever it was done? 

Secretary CHAO. They did have to go through the Procurement 

Review Board. 

Mr. OBEY. I mean what is sauce for the goose is sauce for the 

gander. 

Secretary CHAO. No, it is not. They also have to go through the 

Procurement Review Board. 

Mr. OBEY. Well, we have a review board too. It is called the Appropriations Committee. 

Secretary CHAO. Well, that is fine. 

Mr. OBEY. My question is why was it necessary to provide these 

contracts on a sole source or non-competitive basis? 

Secretary CHAO. Because the program was to find High Growth 

Job Training programs. Many of the training programs that are 

being offered right now are not relevant, and they don’t help workers. Unemployed dislocated workers get real jobs in the real economy. 

Mr. OBEY. What does that have to do with whether or not you 

had a competitive grant rather than a non-competitive grant? 

Secretary CHAO. These were started out with a very systematic 

program in which discussions were held with a wide range of employers. 

Mr. OBEY. My, isn’t it interesting that there is suddenly justifications that develop for directed spending when the Administration 

does it but not when the Congress does it. 

Secretary CHAO. Okay, that is fine. We will submit for the 

record. No. I am not going to defend this one. Okay? If you want 

it, we will work with you on it. 

Mr. OBEY. I think I made my point. 

Secretary CHAO. Yes. 

Mr. OBEY. Let me suspend the rest of my questions for now and 

turn to other members now that they are here. Where did we leave 

off? It was Mr. Honda. 

Mr. Simpson. 

Mr. SIMPSON. Thank you, Mr. Chairman. I don’t think you want 

to get into the argument with earmarks. Have you read the article 

this morning about the Memo Questions to Fairness of Bush Earmark Decisions? Kind of an interesting article. 

Mr. OBEY. Yes it is. 


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Mr. SIMPSON. Anyway, that has nothing to do with these hearings today for me. 

EMPLOYMENT PROGRAMS FOR VETERANS

Secretary Chao, I appreciate your being here today. Since this 

probably will be the last time you will appear before this Committee, I suspect, I want to thank you for your service to this Country over the past several years. 

You mentioned in your report on your accomplishments that you 

have implemented a number of new programs to assist America’s 

veterans. Having been Chairman of the Veterans’ Benefits Committee, I have always been very interested in what we do there 

after passing the Jobs for Veterans Act and stuff like that. How are 

we doing with our veterans in terms of their employment? 

Secretary CHAO. It is an absolute priority with us. We have made 

substantial progress in anticipating and educating and outreach 

with employers to ensure that they know what the reemployment 

and employment rights of veterans are. 

The Congress passed USERRA in 1994. Nothing was done about 

it until we came along and implemented, issued regulations which 

took quite a long time because they were very prescriptive, very detail-oriented relating to pension rights, employment rights, and 

that came out in 2004. Those regulations have gone a long way toward increasing employer awareness as to what their obligations 

are and in decreasing the complaints by veterans. 

Mr. SIMPSON. As the veterans start returning from Iraq, hopefully sooner rather than later, obviously there are going to be a lot 

of veterans that are going to be looking for jobs. 

Secretary CHAO. That is why we also, sorry. 

Mr. SIMPSON. What are we doing to anticipate those increased 

demands? 

Secretary CHAO. Yes, that is why we increased our support for 

the TAP program. These are counseling, job employment programs 

that are held overseas so that we don’t have to wait until the veterans come back or are separated from the service before they are 

informed as to what the options are and how they can utilize many 

of the services available to them. 

Mr. SIMPSON. We have officers or we have people overseas that 

are trying to match up employees so that veterans, when they are 

getting ready to be discharged from foreign locations, can access 

employment opportunities. 

Secretary CHAO. Yes. 

H2B VISA PROGRAM

Mr. SIMPSON. Another question that comes up consistently, at 

least over the last year or six months, whatever, is concern in 

Idaho and I think across the Nation by employers about their inability to hire employees under the H2B visa program and that we 

have a statutory cap on that. Congress hasn’t raised that statutory 

cap this year. 

Is the Administration doing anything to try to address that? 

Secretary CHAO. The President has asked the Department to 

work on reforming H2A, and that has come out. It is open for comments, and we encourage people to submit their comments. 


ebenthall on PROD1PC60 with HEARING
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That is a very important program. We want to encourage workers to come here legally, so they don’t have to live in the shadows. 

H2B is, as you mentioned, more driven legislatively. There is a 

statutory cap which the Administration can’t do very much about. 

Mr. SIMPSON. Have you recommended lifting that cap to a higher 

number? I mean I think the cap is something like 60 some odd 

thousand. 

Secretary CHAO. Sixty-six thousand, yes. 

Mr. SIMPSON. Sixty-six thousand for the entire Country. 

Secretary CHAO. It is used up very quickly. 

Mr. SIMPSON. Yes, by the middle of February probably. 

Secretary CHAO. Yes. 

Mr. SIMPSON. So, consequently, we have employers all across this 

country who are looking for H2B employees but the cap has already been met and Congress doesn’t seem willing to address that. 

Sometimes I think that it is time to put pressure on Congress to 

do a comprehensive reform package rather than what Congress 

wants to do, and that is secure the border and improve our visa 

programs and then deal with the rest of the problem. 

Secretary CHAO. The cap is statutorily driven. 

Mr. SIMPSON. That is the problem. 

CARRYOVER IN THE WORKFORCE TRAINING PROGRAM

Just one other question, you mentioned when Mr. Walsh was 

talking to you about the carryover in the workforce training program. You talked about this last year, and I can’t remember if we 

asked the same questions, but you said there was $1,200,000,000 

to $1,700,000,000 in unspent funds in the States. 

I didn’t get the idea whether you thought that was an excessive 

amount or not enough. I understand there is going to be carryover 

in the States. What is an appropriate level of that? 

Secretary CHAO. Well, we hope that it is used up and that it is 

used to help workers who need training and jobs, and the Workforce Investment Act has the capacity to provide those employment 

services as well as the training and core services that workers 

need. 

Mr. SIMPSON. But I am trying to get a sense of whether $1,700,000,000 or $1,200,000,000 is too much in funds out there 

that are unspent and should be spent on this program or whether 

that is a normal amount for carryover between the 50 States, I 

guess. 

Secretary CHAO. Every year, it is that same amount. So that does 

indicate excess capacity and that perhaps better utilization of the 

funds or better management of the funds is something that we 

should be looking at. 

Mr. SIMPSON. But that could be reduced some. 

Thank you. I appreciate it. 

Mr. OBEY. Thank you. 

Ms. McCollum. 

Ms. MCCOLLUM. Thank you, Mr. Chair. 

UNION ORGANIZING

Secretary Chao, I am here today to express my concern about 

your Minneapolis investigators’ treatment of several of my conVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00032 Fmt 6633 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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stituent building and construction unions regarding the filing of 

several of their LM–2 reports. These actions threaten to impair the 

fundamental rights to organize a union. 

These investigators of yours are insisting that the union submit 

on the public record, itemized and detailed reports of their confidential organizing-relating expenses on market recovery programs. Now it is my clear understanding that these unions have 

a legal right not to divulge such confidential information because 

it would impair their prospective organizing strategy. 

Your investigators have reported to the unions that they will be 

turning the matter over to the Solicitor of Labor to pursue litigation against these Minnesota unions. In preparation for such litigation, your investigators are visiting union offices and inquiring 

about unions’ organizing practices. 

Now I have done some looking around, and I am not aware of 

any other such similar harassing conduct towards unions in any 

other part of the United States. To me, this is unacceptable, and 

I am asking that you stop the harassment immediately. 

Your investigators have failed repeatedly to cite any provision of 

Federal Law or any case law to support their positions. 

I am aware of a concerted campaign against the legal protected 

market recovery programs by certain political organizations, and I 

hope that your investigators have not been unduly influenced by 

these organizations into twisting the law, into bullying unions in 

discussing their confidential—their confidential—organizing information since Federal law is very clear, explicitly clear, that they 

do not have to make such disclosures. 

I hope this is a mere oversight of the Department and that when 

your office has taken an opportunity to look into this, the investigators will stop this unfair treatment. 

I have a copy of the letter that I received from the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, the United States and Canada, for you, and I have 

one also for the record, Mr. Chair. 

With that, if you wish to make any comments, I am fine to hear 

it. Other than that, I expect that I will hear back from you shortly. 

Thank you. 

Secretary CHAO. We are all for transparency, and I will be more 

than glad to take a look at that. 

[The information follows:] 


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Mr. OBEY. Mr. Udall. 

Mr. UDALL. Thank you, Chairman Obey. 

EEOICPA PROGRAM

Secretary Chao, as you know, the EEOICPA program is particularly important to me. For two years, I have been working to preserve an archive of medical records at the Los Alamos Medical Center that are vitally important to hundreds of claimants, yet they 

are now slated for destruction. 

Through this two-year process, your Department has taken a 

pass at being involved in protecting these records even though the 

EEOICPA law stipulates that DOL must assist in obtaining DOE 

materials that are relevant to claims. Why have you been unwilling 

to assist in this process and will you commit today to helping to 

preserve these important documents? 

Secretary CHAO. I am surprised to hear that from you because 

EEOICPA is a program that we have been very concerned about. 

We have taken the lead and, in fact, I think we have worked very 

hard to be advocates of workers who have been adversely impacted 

by having worked in the Cold War uranium facilities. So I am disappointed to hear that if that is indeed true, and we will do everything we can to work with you on that. 

Mr. UDALL. I think it is true that your Department, much better 

than some of the other agencies, has worked on some of these 

claims but in this particular case, this is a group of records from 

many years at the Los Alamos Medical Center, and they apply to 

many, many claimants. The records are slated for destruction, and 

probably these claimants will not have claims if that happens. 

Secretary CHAO. Is that Department of Labor or is that Department of Energy? 

Mr. UDALL. It is Department of Labor. 

Secretary CHAO. Okay. I will take a look at it. 

Mr. UDALL. EEOICPA is your program. 

Secretary CHAO. No. It is joint. No. We work with the Department. 

Mr. UDALL. Well, I know. Yes. 

Secretary CHAO. We are the face to the public, unfortunately. 

Mr. UDALL. But you have. For example, look at the situation you 

normally would exercise. Last year, when a Colorado vendor was 

required to produce evidence related to beryllium, you issued subpoenas. You asked for records. You went out and were very aggressive. 

This is the same circumstance. You have a depository of records 

with a medical center. The medical center is saying they are going 

to destroy the records. 

Secretary CHAO. I am just trying to figure out where these documents are, so I can find them. I just want to make sure, and we 

can work with you on that. 

Mr. UDALL. Yes, yes, yes. They are in Los Alamos. They are in 

Los Alamos. 

Secretary CHAO. I need to find out where they are. Who has possession of them? 

Mr. UDALL. The Los Alamos Medical Center has possession of 

the records. 


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Secretary CHAO. Okay. That is probably Energy then. 

Mr. UDALL. They apply to a number of claimants that either are 

to file with your Agency or have filed with your Agency. 

Secretary CHAO. If it is with another department, Congressman, 

we may need your help. 

Mr. UDALL. Okay. 

Secretary CHAO. Because if it is HHS or if it is Energy, we want 

to preserve those records. 

Mr. UDALL. You have subpoena power. You have subpoena power 

for records and people that bring things in and find out what is 

going on. 

Secretary CHAO. Okay. 

NATIVE AMERICAN PROGRAM

Mr. UDALL. Secondly, I just want to ask about your budget cuts for Native American programs to the tune of about $8,000,000, assistance that goes to the largest single impoverished group in the 

Nation and cuts 3,000 participants who could otherwise have benefits from gaining important work and an important job and skillbased training. In my district, we have thousands of Native Americans who benefit from this program and who use it to better their 

lives and improve their communities. 

Last year, Congress refused your proposed cut in funding, and 

this year I think many others will strongly support a funding level 

that reflects the true need. 

In your budget in brief, you state that one of your goals for the 

Native American program is to emphasize training and talent development in high growth and high demand occupations. Can you 

expand on that goal? Which specific industries or occupations are 

you targeting? 

Secretary CHAO. Our Country is currently experiencing a skills 

gap. The majority of the new jobs that are being created these days 

require higher skills and more education. So we are trying to target 

more of our training resources to help workers get the training that 

is required, that they need to access good paying jobs in these high 

growth industries. So it is a much more targeted approach. 

I remember well our discussion last year about the Native Americans, and I remember what you say. Unfortunately, we are going 

to disagree on that because the Administration’s policy is not to 

have separate funding streams. In fact, this is a subject of great 

disagreement here. 

We would like to consolidate all the funding streams so that the 

governors and the States get greater flexibility in deploying these 

funds. So I am afraid my answer to you will be the same as last 

year, that we are going to disagree on that issue with the Native 

American funding. The funding will be consolidated and it will be 

gotten through the WIA One-Stop centers. 

Mr. UDALL. If, just as you said, higher skills and more education, 

this is the population that needs it the most. You don’t have any 

problem sending it to a governor that that may not be in his priority. I mean this is a pre-existing situation that has a relationship, and it is targeted to a community that has some real need. 

You are just saying we don’t care. We just want to ship it back 

to the State. 


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Secretary CHAO. No. 

Mr. UDALL. Plus, we want to give them less money, I assume too, 

to do the job. 

Secretary CHAO. I am not anxious to disagree with you. 

Mr. UDALL. Well, let me just ask you, are you proposing when 

you shift all these monies back to the States, are you going to give 

them more money and flexibility? 

Secretary CHAO. We would. We can’t do that because it is legislatively driven. That is part of the Workforce Investment Act reauthorization that the Administration has been working on. So, currently, it is on a formula basis. 

What we are proposing is a consolidation of the Employment 

Services and Workforce Investment Programs because we believe 

that is a more effective way to provide training dollars for the dislocated unemployed workers. 

Mr. UDALL. Well, it just seems to me that these programs have 

grown up over time because there is a need there, programs like 

YouthBuild and many of the others, this Native American program. 

I think you are disregarding the input of Congress saying these 

programs are important. You have been through the process several times. You proposed these cuts. 

Secretary CHAO. Yes. 

Mr. UDALL. We don’t put them in. I mean we don’t ratify them. 

So it seems like there should be another approach here. 

Thank you very much, Mr. Chairman. 

JOB CORPS

Mr. OBEY. Mr. Jackson. 

Mr. JACKSON. Thank you, Mr. Chairman. 

Secretary Chao, welcome back to the Subcommittee. Thank you 

for your testimony. 

I apologize for being a bit tardy. We have a number of hearings 

taking place at the same time. 

I would like to ask a couple of questions regarding the Job Corps. 

Included in the fiscal year 2007 and 2008 appropriations bills was 

statutory language prohibiting the Department of Labor from reducing student training slots below 44,491, the number of slots the 

Department operated in the program in year 2006 according to fiscal year 2007 budget requests. 

Yet, currently, the Department is operating only 43,459 training 

slots in Job Corps. That is over 1,000 slots less, an equivalent to 

closing 3 Job Corps centers. In fact, one Job Corps center in Cherokee, North Carolina has been closed for one year. 

Can you explain why the Department has proceeded with reducing the overall capacity of Job Corps despite a statutory requirement prohibiting these actions, Madam Secretary? 

Secretary CHAO. About 4,000 of these slots go unused, so these 

are not at full capacity. We are distributing them around. They are 

not used, number one. 

Number two, the particular Job Corps that you mentioned, North 

Carolina, we hope that we would actually get your assistance on 

that because the National Director of the Job Corps closed down 

that facility because of safety concerns. It was not hygienic. It was 


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not a good place. We would not want to put our Job Corps students 

in that facility. 

You know who the operator is, and I am not anxious to name 

them. But we are working with our sister agencies to try to open 

that up as quickly as we can, but that is not an issue about money. 

It is an issue about safety. 

We saw mold in the ceilings. We saw paint peeling from the ceilings. It was dirty. It was not well maintained. That is a Job Corps 

facility that needed to be shut down, needed to be refurbished, and 

we are in the process of opening it up but only with the assurance 

that the students will be okay to enroll there. 

Mr. JACKSON. I appreciate the answer. 

I just want to make sure for the record that to answer my first 

question, there are insufficient number of applicants for the Job 

Corps to actually satisfy the statutory requirement of the 44,491 

slots. Is that your answer, Madam Secretary? 

Secretary CHAO. There are about 4,000 slots that go unused, yes. 

Mr. JACKSON. It is estimated that three out of five American 

youth leave school without the skills they need to succeed or work 

in higher education. According to a recent study conducted by the 

University of New Mexico, leaving these youth behind costs our 

economy about $24,000,000,000 and does not allow our youth to 

reach their full potential. Further, our Nation is entering an economic downturn. 

I am wondering in these difficult economic times, considering the 

disadvantaged and disconnected youth. I would imagine that 

amongst them is a tremendous amount of uncertainty. 

When national studies, dropout statistics in communities across 

the Nation and visits to many of our congressional districts make 

evident that youth are in need of the Job Corps services, I am wondering if you could expand upon this, why the Administration cut 

the number of training slots by that 4,000, given what at least 

many of us perceive in our districts as a tremendous need for Job 

Corps. 

At a time when the Nation is facing a possible recession, why 

would you reduce funding for a program that provides America’s 

young people, critical vocational training and job placement services and activities in the middle of an economic downturn? 

I yield back the balance of my time, and I would appreciate your 

answer, Madam Secretary. 

Secretary CHAO. I think we all agree that education and skills 

training are very, very important for today’s workers and for young 

people, they need to be encouraged to stay, obviously, in school. If 

they can’t stay in school, Job Corps is one alternative. YouthBuild 

is another. 

But we do have, again, 4,000 slots that are not being used. It is 

not a matter of marketing. It is a matter of takeup rates. There is 

an excess, so that is why the budget was cut. 

Mr. OBEY. Thank you. 

Mr. Regula. 

GIVING YOUNG PEOPLE A SECOND CHANCE

Mr. REGULA. Thank you, Mr. Chairman. 

Happy to see you, Ms. Secretary. 


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Just a couple questions. One-Stop Career Centers are very effective in our area as you know. 

Secretary CHAO. Yes. 

Mr. REGULA. I see that you have given them a fairly good number in this budget. 

I would be interested in the success of your programs aside from 

the One-Stops that give young people a second chance, those who 

get GEDs, who decided after they have dropped out that they need 

to go back and get a skill, and they discover that the marketplace 

requires that. Have you had good success in getting development 

of programs that will provide what I call a second change for people? 

Secretary CHAO. We do. Our whole Department’s efforts, in fact, 

focused on helping workers and giving them a second chance, and 

so we have all these different programs that do offer to do that. 

We did have a robust discussion about workforce investment. We 

have many other programs for young people as well. So that is 

what the whole focus of the Department is. 

The issue was how to do this effectively because the majority of 

the new jobs that are being created require higher skills, more education. So we cannot continue to train the same way as we used 

to. We need to gather our resources, focus them on training and 

make sure that this training is demand-driven and that people who 

receive this training, who have invested a great deal of their time 

in training programs will actually get jobs when they graduate. 

Mr. REGULA. Do you have programs that let young people know 

that there is this second chance opportunity? 

Secretary CHAO. Job Corps is very, very active in marketing, and 

we have a whole marketing team out there, yes. 

VOLUNTARY PROTECTION PROGRAM

Mr. REGULA. The Voluntary Protection Program—people in my 

area have been very enthused about it. Has it worked well to keep 

people safe and healthy in their workplace? I think this is an important program. 

Secretary CHAO. VPP is not a substitute for enforcement. Enforcement is important. We, in fact, have one of the most effective 

enforcement programs as you can see by the injuries and other statistics about worker safety, but enforcement should be coupled with 

outreach, with education so that all stakeholders within an organization understand the culture, the prevailing culture must have as 

its core value that safety is number one. 

And so, injury and illness rates with VPP companies are actually 

much lower than the norm, the average. 

Mr. REGULA. So you are achieving a measure of success then if 

they are lower? 

Secretary CHAO. Yes. 

MARKETING

Mr. REGULA. Lastly, one of the growing phenomenons, the P–16 

concept whereby colleges, universities, et cetera will go into a high 

school and offer courses with a twofold objective. One is to give the 

students something they can start and maybe transfer in as sophomores in the college program, having gotten it in the senior year 


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of high school, but I think equally important is to let young people 

in schools know there is an alternative to going out in the marketplace and not going on to getting higher education. I am talking 

about higher education in the sense of technical institutes, community colleges and so on. 

Does the Department of Labor get involved in any great extent 

in encouraging these kinds of programs? 

Secretary CHAO. We do. One of the things that the ETA focuses 

on, that the workforce investment system focuses on, the One-Stop 

Career Centers focus on is outreach and to let people know about 

the tremendous array of programs that can help dislocated and unemployed workers. 

Mr. REGULA. I don’t think often times students realize the opportunities that exist out there. So marketing has to be part of your 

mission, and you mentioned that in your comments. 

Secretary CHAO. Talking with high schools students, talking with 

students about the fast growth industries of the future and where 

these jobs are going to be coming, where the jobs will be created 

is a routine part, not routine in terms of not important, but it is 

a regular part of the responsibility of the Workforce Investment Act 

professionals. 

Mr. REGULA. Thank you, Mr. Chairman. 

Ms. Lee? No. 

Ms. Roybal-Allard. 

JOB CORPS PROJECT IN LOS ANGELES

Ms. ROYBAL-ALLARD. Madam Secretary, as you may know, the 

Job Corps building in downtown Los Angeles has been deemed seismically unsafe. The YWCA of Greater Los Angeles has been working very closely with the Department of Labor for years on plans 

to build a brand new and safe Job Corps building, and they are 

now ready to begin construction. 

However, the project cannot move forward without a lease agreement from the Department of Labor. The YWCA has assured me 

that they are anxious and ready to negotiate with the Department 

and to come to a mutually acceptable agreement in order to move 

forward. 

Now your Administration was instrumental in initiating this 

project, and I thank you for that. It also means that you understand the importance of this project to the community as well as 

to Job Corps and to your Department. 

Your staff has indicated that the lease negotiations will receive 

expedited consideration. Can you tell me if, in fact, the process will 

be expedited and specifically how long you anticipate the approval 

process will take? 

Secretary CHAO. Congresswoman, I know you are concerned 

about it, and we are focused on this. Unfortunately, and we could 

use your help on this, there is disagreement about what the going 

market rate is. 

In the first phase, YWCA wants like $4,000,000 whereas we 

value, not we, the Job Corps professionals who do this real estate 

type of transaction, they feel that the first portion is only worth 

$1,500,000. 

Ms. ROYBAL-ALLARD. I think they understand that. 


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Secretary CHAO. Okay. 

Ms. ROYBAL-ALLARD. I think they understand there is a difference of opinion. 

Secretary CHAO. Right. 

Ms. ROYBAL-ALLARD. Let’s get together and meet and resolve it 

so we can go forward because the longer the delay the costlier the 

project and so on. 

Secretary CHAO. Okay. Right. 

Ms. ROYBAL-ALLARD. So if you could commit to having that meeting, we would appreciate it. 

Secretary CHAO. Sure, absolutely. 

HEALTHCARE WORKERS’ PROTECTION AGAINST PANDEMIC FLU

Ms. ROYBAL-ALLARD. Okay. Thank you. 

It has been over two years since a number of labor organizations 

petitioned OSHA for an Emergency Temporary Standard to protect 

healthcare workers against pandemic flu. In addition, an explanatory statement in the fiscal year 2008 omnibus appropriations bill 

requested within 30 days of enactment a report detailing the 

timeline for developing and issuing this standard. 

The report is overdue. We have not received it, and meanwhile 

the lack of report is risking a workforce crisis because we have an 

unenforceable standard for hospitals in place. We should have an 

order to protect nurses and other healthcare providers. 

When will OSHA issue an enforceable standard on healthcare 

workers’ protection and why has your Department ignored the instructions in the omnibus bill to present this within 30 days of the 

President signing the bill? 

Secretary CHAO. If it is within 30 days and we missed a deadline, 

I will ask about that. 

On the issue of the Emergency Temporary Standard, that is very, 

very prescriptively, well, there are certain standards that must be 

met. It was in the judgement of the attorneys within the Department that issuing a standard because even though we are concerned about this issue, that it is not meet the imminent danger 

standard that is required to issue an Emergency Temporary Standard. 

But we remain very concerned about this issue. We have put up 

on the web site and engaged in all sorts of outreach efforts and 

education efforts on the need to be very vigilant about pandemic 

flu. 

Ms. ROYBAL-ALLARD. Well, obviously, there is disagreement with 

the healthcare profession but nevertheless, regardless of the difference of opinion, Congress did direct that a timeline be submitted. 

Secretary CHAO. Yes. If it is late, I am sorry about that. I was 

not aware of that. 

Ms. ROYBAL-ALLARD. Okay. 

THE ROLE OF UNIONS

Finally, the Bureau of Labor Statistics’ most recent survey of 

union membership shows that 15.4 million American workers belong to a union. That is 12 percent of employed wage and salary 

workers. 


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BLS data also shows that full-time wage and salary workers who 

are union members had a median usual weekly earning of $833 

compared with a median salary of $642 for wage and salary workers who were represented by unions. 

In our overview hearing, we heard how deunionization of the 

workforce has contributed to the growing wage inequality that we 

are seeing in the economy. The issue is quite simple: union jobs 

often mean better jobs and better wages. 

Protecting those jobs and preparing for job seekers to qualify for 

them is an important component of a valid workforce strategy. Yet, 

when you talk about unions, it is never about these positive aspects 

of unionization. 

Can you discuss the role of unions in providing access to familysustaining wages and what your Department does to support 

unionized workers, including partnerships to train workers for the 

highly paid jobs that the unionized segment of various sectors provides, whether it be healthcare, hospitality, manufacturing or construction? 

Secretary CHAO. We work with organized labor on ensuring 

health and safety at the workplace. We have the largest number 

of health and safety partnerships with organized labor of any Administration. 

We also have training partnerships with them through Job 

Corps, through subcontracting some of our training. 

Ms. ROYBAL-ALLARD. I understand, but my question is a little bit 

more specific. Actually, I am asking for you to discuss the role of 

unions in providing access to family-sustaining wages. That would 

be the first part of the question, if you could answer that. 

Secretary CHAO. We are going to disagree on this. The skills gap 

is what is contributing to the wage gap. It is not an issue of income 

disparity in our view but rather that the majority, increasingly, the 

new jobs that are being created require higher skills and more education and because of the skills gap, that is why we have an income 

gap. 

So what we have to do is to help workers get the training that 

they need, which goes back to all of our previous discussions, so 

that they can develop career paths in these high growth job training industries. 

Ms. ROYBAL-ALLARD. Are you disagreeing then with the findings 

that union jobs provide better wages? 

Secretary CHAO. No, I am not. No. 

Ms. ROYBAL-ALLARD. Also, let me just end with saying you keep 

going back to the need for training. But, as my other colleagues 

have pointed out, the very training programs that workers need to 

receive that training, you are cutting. 

Secretary CHAO. Well, doesn’t that speak to the effectiveness of 

the current training program? Shouldn’t we all be looking at how 

effective are these dollars that we are giving to this training system? 

We need to do better. We need to do things differently, and we 

need to reform the system. 

Mr. OBEY. Ms. Lee. 

Ms. LEE. Thank you, Mr. Chairman. 


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I apologize, Madam Secretary, for running in and out, but like 

most members we have had several meetings today. But, good to 

see you. 

Thank you, Mr. Chairman, for this hearing. 

Let me just ask you a couple questions, one with regard to the 

authorization for the funding for Green Jobs. Is that an initiative 

that you support and, if so, what is the Administration’s plan for 

investment and growth in this area and what are you doing to ensure that there is a skilled workforce for the green jobs effort in 

our country? 

PLAN TO ADDRESS DISPARITY RATES IN UNEMPLOYMENT

Secondly, let me ask you with regard to what I asked you last 

year. First of all, let me just reiterate the fact that unemployment 

rates: the national unemployment rate, 4.9 percent; African American community, almost double, 9.2 percent; Hispanic-Latino community, 6.3 percent; Asian-Pacific American community, 3.2 percent. 

Last year, we included language in the omnibus bill that requested you to look at the continuing disparity rates in unemployment for these communities of color, minority groups, and to report 

to the House and Senate Committees on Appropriations by March 

1st a specific plan to address this problem. So I want ask you if 

you have addressed this issue in your plan. 

Secretary CHAO. We do, yes, but the plan is not ready. 

Ms. LEE. Pardon? 

Secretary CHAO. Yes. 

Ms. LEE. You have? When is the plan going to be ready? I think 

the date was March 1st. 

Secretary CHAO. It was. We had hoped to get it ready for this 

hearing. Apparently, it is not out yet. 

Ms. LEE. And so, what happened? When will it be ready? 

Secretary CHAO. It is not my Department. 

Ms. LEE. Pardon? 

Secretary CHAO. It is not in our Department. 

Ms. LEE. What department is it in? 

Secretary CHAO. It has to go through clearance. 

Ms. LEE. Clearance, okay. So do we have an anticipated date? 

Secretary CHAO. We are pushing for it. 

Ms. LEE. Next 30 days maybe? 

Secretary CHAO. I sure hope so. We are going to push for it. 

Ms. LEE. Okay. 

Secretary CHAO. You are asking for me to push for it? 

Ms. LEE. Well, yes. It was due on March 1st. 

Secretary CHAO. Yes, right. 

Ms. LEE. Okay, thank you. 

Then the third question I just want to ask you—the State of 

California is pursuing Fed Ex for unemployment insurance payments, having determined that the company has misclassified some 

workers. In December of 2000, the IRS announced it would impose 

a $319,000,000 fine on Fed Ex for misclassifying its Fed Ex ground 

drivers as independent contractors, and that represents just the 

violations for 2002. 


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So I want to see if DOL has followed up to determine whether 

any of these drivers have been denied overtime or other labor 

rights and benefits. 

Secretary CHAO. I will look into it. I mean it is part of what we 

usually do and if something, if unfair practices have occurred, we 

need to do something about it. 

Ms. LEE. Could you kindly tell us how you would follow up and 

how we would? 

Secretary CHAO. If you give us the information, if the Department is not looking at it already, we will look into it. 

Ms. LEE. Okay, so you will look. 

Secretary CHAO. Yes. 

Ms. LEE. Thank you very much. 

GREEN JOBS INITIATIVE

On the Green Jobs Initiative, in terms of funding for training? 

Secretary CHAO. Yes, Mr. Ryan was also interested in that, in 

that issue. We are working with the Energy Department because 

of the Energy Act. There is a provision for Green Jobs there, so 

there is a lot. We are currently discussing with them on how to collaborate on setting more of an emphasis on training workers for 

Green Jobs. 

Ms. LEE. Okay, but let me ask you because I haven’t seen this 

in the budget. Are we funding the Green Jobs Initiative in this 

budget or not? 

Secretary CHAO. No. We don’t have the appropriate funds. No. 

Ms. LEE. We are not. Do you know why not since this is something that we know in this industry creates jobs? 

Secretary CHAO. Yes, we thought so, but the answer I was given 

was that we were working with the Energy Department. We can 

take another look since you asked. 

Ms. LEE. This is the Department of Labor, right, and you do 

want to create jobs, right? 

Secretary CHAO. But we do. We do also, again, go into partnerships with many other departments on the other issues that come 

up. 

Ms. LEE. Yes, but I don’t feel and see a sense of urgency within 

your Department. Given this economic recession we are in, you 

would think. 

Secretary CHAO. There is a sense of urgency. We just differ on 

how to do it. 

Ms. LEE. Well, then, how do you think we should do it? 

Secretary CHAO. We have to consolidate. We want to have the career advancement accounts so that we can train more workers, so 

we can focus more dollars on training workers. That is our vision. 

FUNDING FOR WORKFORCE TRAINING

Ms. LEE. Okay. Now, speaking of training, in the budget—again 

you can correct me if I am wrong—youth training funds for States 

and localities are reduced to $841,000,000. It seems like that is a 

9 percent cut. 

Dislocated worker training funds available to States and localities reduced 6.5 percent below fiscal year 2008 level. 


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Adult training funds that support State and local services that 

provide the One-Stop Career Centers, they are reduced by about 

17.4 percent. No funds provided for the first quarter. 

So, if we are talking about job training and we all recognize that 

is extremely important, why in the world would we see such significant cuts in these programs? 

Secretary CHAO. Because our workforce investment proposal proposes consolidation, and it proposes consolidation of the current 

system which is duplicative and which does the same things. 

Ms. LEE. You are saying everyone is going to get trained. All of 

our workers will be trained. 

Secretary CHAO. There is a better way train through workforce. 

Ms. LEE. The way you are talking about consolidating, that we 

are not going to lose any training possibilities for Americans. 

Secretary CHAO. WIA has the capacity which is why you are seeing, in part, the excess balances. WIA has the capacity. We have 

a duplicative training system, a duplicative employment services 

system. 

New programs are added on. The old ones are not reformed. So 

we have excess. We have this duplicative system. 

Ms. LEE. So no fewer people will be cut from training programs 

by consolidating? 

Secretary CHAO. We hope to increase training of workers from 

200,000 to 800,000. Right now, all we train are 200,000 in a vast 

system of this size. 

Ms. LEE. Okay. So consolidating will help increase the training 

opportunities for more people. 

Secretary CHAO. Because it will give more dollars toward the 

training. 

Ms. LEE. Yes, okay. Thank you, Madam Secretary. 

NON-COMPETITIVE GRANTS

Mr. OBEY. Madam Secretary, I want to return to the issue of the 

High Growth Job Training program. You suggested that these noncompetitive grants were provided only in one year. That is not 

what the Inspector General says. So let me walk through what my 

understanding is of the Inspector General’s report. 

His report indicates that over 85 percent of the 150 awards made 

under the first 5 and half years of this initiative were made on a 

non-competitive basis, that those noncompetitive awards amounted 

to $258 million or 90 percent of the funds awarded, and that it took 

language in the 2007 and 2008 appropriations bills to ensure that 

that practice would end. 

So let me repeat. Of the 150 awards that CRS looked at, spanning fiscal year 2001 through the first half of 2006, only 23 were 

awarded on a competitive basis. According to the report, they were 

in response to a competition in late 2004. 

So, as I read that, in 5 and a half years, only 1 competition was 

held and the remaining 127 grants were awarded on a non-competitive basis. That is not a one-year startup, as I read it. 

Secretary CHAO. We disagreed with the Inspector General, and 

we have conveyed our reasoning. 

The initial distribution of these grants were sole source, but that 

was, again as I mentioned, to bring the high growth sectors which 


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were not included in WIA into WIA so that the system can be responsive in training workers for real jobs that were developing in 

the real economy. We were training people in the same old, same 

old for jobs that may not exist. 

Mr. OBEY. That is beside the point. 

The question is whether your statement was accurate or whether 

mine was accurate. That is the question. 

Secretary CHAO. I believe mine is, but we will go back. 

Mr. OBEY. I think you need to because the Inspector General 

states clearly—states clearly—that that’s not the case. 

Secretary CHAO. We sometimes disagree. Well, we sometimes disagree. 

IMPROVING PROCUREMENT INTEGRITY

Mr. OBEY. The Inspector General also included the challenge of 

improving procurement integrity in his report. He indicated that 

the Department’s acquisition authority exceeded $1.7 billion and 

included over 8,800 acquisition actions in fiscal year 2006. 

The report from the IG indicates that for several years, he has 

recommended that the Department of Labor separate program and 

procurement responsibilities to ensure program integrity. 

Why haven’t you taken steps to address the Inspector General’s 

recommendations? 

Secretary CHAO. The Inspector General would like to put the procurement in the Office of the Secretary which we believe would be 

a terrible move, with all due respect to the Inspector General. 

Job Corps is a prime example. Job Corps was mandated by Congress to be moved out of the Employment Training Administration, 

so that was done so. In deference to the Inspector General, we 

moved the procurement out of Job Corps and put it into the Office 

of Management and Administration. That has been a move that 

has been very difficult for Job Corps and for Job Corps contractors. 

Mr. OBEY. Well, the IG report concludes, ‘‘Until procurement and 

programmatic responsibilities are properly separated and effective 

controls are put in place, the Department will be at risk for wasteful and abusive procurement practices.’’

Secretary CHAO. We have great deference to the Inspector General. 

Mr. OBEY. I can tell. 

Secretary CHAO. There are going to be future Secretaries of 

Labor that are going to have to deal with this issue, and I have 

no problem moving it out and implementing this recommendation 

because my tenure is leaving. My tenure is shortening. But it is not 

a good move to move it into the Office of the Secretary. 

Mr. OBEY. I can tell you don’t agree. All right. 

Secretary CHAO. Because Job Corps, we already see in Job Corps, 

some of the implications. 

JOSEPH A. HOLMES SAFETY ASSOCIATION

Mr. OBEY. Well, the President’s budget for the Mine Safety and 

Health Administration includes a provision that allows the Secretary to recognize the Joseph A. Holmes Safety Association as a 

principal safety association. This provision was first included in the 


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Labor-H Bill about seven years ago at the request of a member of 

the Appropriations Committee. 

Information supplied to this Subcommittee indicates that the Joseph A. Holmes Safety Association receives non-competitive contracts each year, presumably using this language as justification 

for sole source procurement. The funding is small, but it is also 

supplemented by official participation of MSHA personnel in the 

work of the organization. 

The Administration, as I understand it, is requesting that we 

continue this provision in the fiscal year 2009 bill even though we 

have heard repeatedly that there are no earmarks in the President’s budget. Can you tell me why the designation of this organization is not an earmark? 

Secretary CHAO. I am not familiar personally with this organization, although I do know. I do seem to remember that this is a 

longstanding practice that goes back several decades. I believe to 

the MSHA Act. 

Mr. OBEY. It goes back seven years. 

Secretary CHAO. No, no, it doesn’t. 

Mr. OBEY. The question is why is this not considered an earmark? 

The President says he is against earmarks. He said he doesn’t 

have any earmarks in his bill. Why isn’t this considered an earmark? 

Secretary CHAO. I guess it is a matter of definitions. 

Mr. OBEY. You betcha. That is our point. 

ERGONOMIC STANDARDS

Let me turn to OSHA. Among the milestones in your CPAC address was a reduction in the number of regulations during your 

tenure. I would like to take a look at how that milestone was 

achieved. 

OSHA has missed all of the deadlines for developing standards 

that it had set out in its own regulatory agendas over the past 

seven years except for those imposed by a court. 

For some hazards, your Department has balked at issuing standards at all, denying petitions for emergency rulemaking in the 

cases involving diacetyl which has caused lung disease and, as you 

know, even death among popcorn manufacturing workers. 

Your Department continues to drag its feet on issuance of guidelines to replace the ergonomic standards that the Bush Administration had repealed in 2001. 

In our health overview hearing in February, Dr. Paul Leigh told 

us that the annual cost of occupational injuries, illness and fatalities is over $160 billion. A significant portion of those injuries are 

musculoskeletal disorders. In fact, BLS found that those types of 

injuries accounted for 30 percent of all reported lost time injuries 

and that those cases resulted in a longer period away from work, 

resulting in greater impact to employers in lost productivity. 

When the ergonomic standards were repealed, the Administration promised to develop voluntary guidelines on an industry by industry basis. 

Nearly six years later, not much has happened. Only three voluntary industry guidelines for poultry processing, retail stores and 


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nursing homes of the 16 recommended by your handpicked advisory group have been issued. In this past year, one additional draft 

guideline for shipyards was published. 

If the government wants to prevent one of the leading causes of 

workplace injuries and illness, wouldn’t it make sense to pay a 

whole lot more attention to ergonomic standards that are responsible for nearly one third of workplace injuries? 

Secretary CHAO. It was on a bipartisan basis that the Congress 

turned back the last Administration’s ergonomic standards. We 

said that we would come out with standards and, as I mentioned, 

we have. 

On the issue of regulations, when we first came——

Mr. OBEY. Excuse me for interrupting. You can define it bipartisan if you want. I wouldn’t. But even if you do, I don’t care if it 

was bipartisan or totally partisan. It was wrong. 

The Administration hasn’t done diddly to deal with the problems. 

Secretary CHAO. Okay. The Congressional Review Act forbids 

doing the exact same thing as the regulation, that was overturned, 

required. 

Mr. OBEY. Well, but where were you in developing the promised 

alternative over the last six years? 

Secretary CHAO. We have. As I mentioned, we have come up with 

standards. We have done outreach, education. 

Most of all, injuries have actually fallen. The record of injuries 

has actually fallen. 

Mr. OBEY. Well, if you are talking about four of the sixteen and 

you look at that as a badge of honor. 

I just think that the ergonomics area is a spectacular example 

of where this Administration has ignored its responsibilities both 

to employees and employers. You do the economy no favor when 

you allow these kinds of problems to continue and allow OSHA to 

continue to drag its feet to developing new standards on this or 

anything else. 

Go ahead if you want to comment. 

Secretary CHAO. On the issue of regulations, when we first came 

in, there were 140 regulations. There are currently about 80 regulations which we are working on. 

In whittling down the backlog of regulations, we wanted to focus 

on what could be doable. There were many regulations on the backlog which were there for nearly a decade. So it was more of a concerted effort to focus on what could be done and not to give the regulated community, be they nonprofit or for profit, an unrealistic 

view as to what was going to be accomplished. 

Mr. OBEY. Well, the fact is in my view the Agency has dragged 

its feet. OSHA has dragged its feet for years in developing these 

standards. I think a lot of people are experiencing a lot of problems 

because of it, and I think OSHA has failed in its responsibility to 

avoid that. 

Those are all the questions that we have time for. 

Mr. Udall, did you have any other questions before we break? 

Mr. UDALL. [Remarks off microphone.] 

Mr. OBEY. Thank you for coming. 

Secretary CHAO. Thank you. 


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(191) 

WEDNESDAY, FEBRUARY 27, 2008. 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

BUDGET FOR 2009 

WITNESS 

HON. MICHAEL O. LEAVITT, SECRETARY 

Mr. OBEY. Well, good morning, everyone. 

Mr. Secretary, as I said several times before this year, this Subcommittee has jurisdiction over a lot of programs, many of which 

are aimed at helping people who start out in life a little behind the 

starting line or even a lot behind the starting line, and they are 

also meant to help a lot of people who fall out of the race along 

the way, to get them back on track. 

Before Franklin Roosevelt, the government pretty much let people alone, and they were on their own. With Roosevelt and the New 

Deal, we began to build a series of initiatives that tried to make 

quite clear this was a caring society. 

When Dwight Eisenhower took over, as the quote behind me 

notes, Eisenhower decided not to try to repeal those initiatives, and 

so we have sort of had a bipartisan consensus for years on the obligation of the government to do more than stand by and view with 

alarm when people are getting tossed around on the wild seas of 

life. 

Last week, this Subcommittee held several overview hearings to 

talk about the context in which these decisions are being made, 

and we had another hearing yesterday on that subject. 

Example: Between 2004 and 2005 alone, real after tax income 

jumped by an average of 180,000 bucks for the top 1 percent of 

households but increased by only about $200 for low income households. That, I think, paints a clear picture that we are continuing 

to have what has been a two decade long or more widening of the 

gap between the most well off in this society and many, many others. 

Some of these programs are meant to try to help narrow that 

gap, and others are simply meant to deal with the consequences of 

that gap. We have often talked about, well, we talk every year 

about the cost of doing certain things, the cost of adding money for 

NIH or the cost of adding funding for student aid and the like, but 

we do not focus, in my view, enough on the cost of not doing those 

things. So we have been trying to cover both sides. 

I am very concerned about what this budget does, given the context in which it is being presented because the budget that you are 

presenting today freezes funding for biomedical science, it spends 

$475 million less than last year on critical public health promotion 

and disease prevention programs, cuts funding for health care 

quality outcomes and effectiveness research below last year’s level, 


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192 

and in real dollar terms those cuts are even more severe than they 

appear. I appreciate the $27 million increase for community health centers, but that increase is less than the rate of inflation and does 

not go very far to help the 40 million plus people who do not have 

health insurance. 

The proposal to terminate health professions training programs, 

I think you will find that there are people on both sides of the aisle 

in this Committee who have considerable doubts about the wisdom 

of that. 

And so, basically, at the least I am concerned about the inadequacy of a number of recommendations, certainly not just in your 

Department. We had a good deal of discussion yesterday on education about the failure of Congress over a good period of time and 

the failure of Presidents of both parties to adequately fund Special 

Education, for instance. 

I just want to make one comment before we begin. Last year was 

very frustrating, and I said the same thing to the Education Secretary yesterday. Last year was very frustrating to me because I 

am used to the kind of politics in which you have the two parties. 

When issues divide on partisan lines, I am used to the kind of politics in which people define their differences and fight like hell 

about them but then resolve them, and usually that resolution 

means that you have to have compromise on both sides. 

We did not get much of that compromise from the Administration 

last year. In fact, Mr. Nussle specifically warned me that we would 

not find anyone in the Administration interested in compromising 

on last year’s budget, and that certainly proved to be an accurate 

description. 

This year, we face a little different situation because, as you 

know, this is the last budget that this Administration will present, 

and we will have two choices. We can either allow this year to turn 

into a wasted eight months where we go through the motions of debating each other about your priorities and ours and, in the end, 

get nowhere in terms of a compromise or we can recognize that we 

have different philosophies but also recognize for the good of the 

order we need to cut to the chase and make those compromises and 

get a move on. 

I would much prefer to do that than to reach an impasse, but it 

is really pretty much up to the Administration to decide how they 

want this to go. I am perfectly willing to sit down and compromise 

on virtually any item in this bill, but if we get clear signals from 

the Administration that that is not the path they want to go on, 

then we have no choice but to simply wait and deal with the incoming President who we expect will be flexible. 

So I would simply ask you for whatever it is worth, and I know 

that these decisions are made by OMB a lot more than they are 

made by the agencies, but in the end you are a lot closer to the 

needs of these programs and the people who are served by them 

than OMB is. 

So, for whatever it is worth, I hope that you and the Secretary 

of Education and the Secretary of Labor will take back the message 

that it would be good if we could work things out because if we do 

not, then the Administration will simply be a bystander and we 


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will have to make these decisions with benefit of input from whomever succeeds the President. 

As I say, I prefer to work it out, but I will play it flat or play 

it round, however the Administration wants to go with it. 

So, with that, let me turn to Mr. Walsh and see what comments 

he has before we hear your testimony. 

Mr. WALSH. Thank you, Mr. Chairman. Thank you for holding 

this hearing today. 

Mr. Secretary, welcome. Nice to see you. 

The Committee, the Appropriations Committee has responsibility 

for spending, discretionary spending. Most of this Subcommittee’s 

jurisdiction is mandatory spending which we have very little control over, but those mandatory programs are putting a tremendous 

burden on our ability to meet the needs of the Country through discretionary means. 

I am not sure how that is resolved, but the growth that is occurring in mandatory programs at the same time we have had a tremendous buildup in our defense spending is really squeezing nondefense discretionary spending. All across the responsibilities of the 

Appropriations Committee—infrastructure, education, health care 

research and other areas that are of great concern to the American 

public—are being squeezed by both defense spending and entitlement programs. 

Both of those areas, I am sure, are going to be very closely looked 

this year and in the next Congress. So I would be interested in 

hearing any thoughts you have on entitlement spending which 

comes within your purview. 

Just a thought, the Medicaid program, as it was established, requires that States pay a portion of those costs. Certain States, 

southern States primarily, benefit substantially from the Federal 

largess. The Federal Government spends a much higher proportion 

of the Medicaid bill in Alabama, Mississippi, Tennessee and other 

southern States whereas some of the other States like mine, New 

York, we pay dollar for dollar what the Federal government pays. 

In New York, that dollar comes 50 percent from the State Government and 50 percent from county government. So there is a tremendous burden put on the local taxpayers to pay for a program, 

the Medicaid program, for which they have no control. 

I understand part of your approach is to shift costs from the Federal Government to the State. In my State, that creates a tremendous and onerous burden on county property taxpayers who have 

enough problems of their own. So it is a real cause for concern, this 

shifting of costs from the Federal Government to State and then to 

local, and I would like to explore that with you a little bit in the 

Q&A. 

Again, thank you. 

Thank you, Mr. Chairman. I yield back. 

Mr. OBEY. Why don’t you proceed? We will put your statement 

in the record. Why don’t you summarize it, and we will get to the 

questions? 


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SECRETARY’S STATEMENT

Secretary LEAVITT. All right. I do not think I will follow my prepared statement. If you will submit it in the record, I will feel good 

about that. 

Mr. Chairman, let me just say I have been in the budget business a long time, as have you. Most of my experience came in a 

much smaller pond. As you know, I was a governor for 11 years, 

and it was my duty to be the voice and to make all of the decisions. 

I am now in a much different role. I have a substantially larger 

budget and a much bigger pond, but my role is a little different. 

I want to express that in the context that I understand your 

statement and understand the spirit with which it is given. The 

Administration feels very strongly about the need to balance the 

budget by 2012, and I think it is a voice that has to be represented 

in this discussion. 

There is a need for the voice of the Hubert Humphrey quote behind you. I think there is no one in this room who does not understand that and believe that. I do. I take that responsibility very 

carefully. I also feel the need to keep the discipline that is necessary to keep government in the right place. 

So you will see in this budget an effort to balance the budget and 

to maintain the sustainability of the programs that so many people 

depend on. 

I will tell you I am deeply worried about Medicare. This budget 

contains $183,000,000,000 in reductions in the growth rate. It reduces it from 7.2 to 5 percent growth. I do not relish in bringing 

the list of things that would accomplish that. I know the realities 

of it. 

I bring it as a warning, not to you—you know it—but to state 

it publicly and resoundingly that we have to do something about 

this. Whether it is this year or another year, someone is going to 

have to deal with this. 

My testimony represents a view that simply dealing with it by 

using the same old Government-regulated price-setting mechanism 

is going to be so uncomfortable, it is likely it will never be done, 

and the better way is to change the philosophy of the system and 

begin to see it rationalize itself in a way that I believe makes more 

sense. I will not go into a lot of detail. 

I am anxious to have the conversation about Medicaid. I ran 

Medicaid programs for many years as a governor. I have now overseen them as the Secretary of Health and Human Services. I have 

great respect for the partnership that exists between the States 

and the Federal Government. 

I recognize some inequities that have historically been built into 

it. In the recent months, we have proposed a series of changes to 

Medicaid that, frankly, represents disputes in the partnership between States and the Federal Government. 

To be honest, and I understand this mentality as well as anybody 

in the room, States have hired consultants who, on a contingency 

fee basis, have found ways to go in and find any hint, any whiff 

of ambiguity and then have driven a wedge in there on a contingency fee basis where they have absolutely no incentive to do anything but push and push and push and push and push. 


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Well, somebody needs to push back because many of the things 

that are being done here are simply not fair. They are not in the 

spirit of what is being done, and yet they are represented to be 

some kind of pushing things off onto the States when in reality we 

are trying to find the balance in this partnership. So I hope we do 

get a chance to talk about that. 

My job is to try to find the right place and right now, absent the 

capacity to push back a little bit on what is being done, we are 

being taken advantage of. That means that there is money going 

to one thing that really ought to be going to another. 

So, Mr. Chairman, I am prepared to have this conversation in a 

very thoughtful way. I appreciate the spirit in which you have addressed it, and I hope to do the same. 

[The information follows:] 


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Mr. OBEY. What I am going to do because I understand that she 

has to leave, I am going to yield my time initially to Ms. Lee because she has to get to another hearing. Then I will go to you, Jim, 

if that is all right. 

Mr. WALSH. That is fine. 

Mr. OBEY. Thanks. 

Ms. LEE. Thank you, Mr. Chairman. Thank you very much. 

Good morning, Mr. Secretary. 

Secretary LEAVITT. Good morning. 

CENTERS OF EXCELLENCE

Ms. LEE. Well, let me just say first of all, after listening to the 

testimony yesterday from the Secretary of Education and now hearing your testimony, it is clear that what is being actually cut are 

initiatives and programs to help those most in need, for example, 

low income individuals, people of color, communities of color. Here, 

we are seeing in essence, with your budget, somewhat of the same 

type of priorities in terms of who wins and who loses. 

When you look at racial and ethnic disparities, for example, and 

I do not believe in your written testimony you mention the need 

or the requirement, I think, of our Federal Government to address 

the huge racial and ethnic disparities. But once again, we see the 

proposal to zero out these programs that would help actually reduce these disparities which lead to shorter life spans, of course, 

sicker individuals who happen to be Latino, Asian Pacific American 

or black. 

You, again, zeroed out the Minorities Center of Excellence. The 

scholarships for disadvantaged students are zeroed out, eliminating 

support, I believe, for over 8,000 under-represented minority students. The Healthcare Opportunities program is also zeroed out. 

So I do not know how eliminating over 8,000 scholarships for minority health students really helps us get to where we want to get 

in terms of a healthy population and in terms of closing these disparities. Also, why in the world would most programs that actually 

try and do something about racial and ethnic disparities be really 

level-funded at the most or cut at worst? 

I do not understand quite, again, what the assumptions are 

about the American people, who wins, who loses and why we do not 

address these disparities in any way. We need more funding if we 

are going to make sure that there does become equal opportunity 

in healthcare for all. So I would just like you to respond to that. 

Secretary LEAVITT. Ms. Lee, I am not exactly sure what you are 

referencing with respect to 8,000 minority scholarships, but I would 

like to just give you. 

Ms. LEE. The Health Centers Opportunity program. 

Secretary LEAVITT. The number, 8,000, does not resonate with 

me. Maybe I could give you. 

Ms. LEE. That is about how many, I think, minority students are 

benefitting from that. 

Secretary LEAVITT. Let me check that. I cannot validate it or affirm it. 

My task was to contribute to the balancing of this budget. 

Ms. LEE. I understand. 


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Secretary LEAVITT. What that means is that I am faced with taking good and noble causes and trying to weigh which ones of those 

makes sense to continue and which ones, in those conditions, do 

not. It might be helpful for you to know the criteria that I instructed HHS staff to use. 

I told them I wanted to go back and emphasize services as opposed to infrastructure. 

I told them I wanted to take programs that were one time funding and look at those as opposed to continuing programs. 

I told them I wanted to look at grant activity where the task had 

been completed and not necessarily reaffirm those. 

I told them I wanted to propose places that I could see in HHS 

which is a very big place. There are a lot of places that we deal 

with an issue in multiple places, and I wanted to find ways to consolidate those. 

So, in many cases, what looks like it may have been a reduction, 

I may have chosen to do that because we were dealing with that 

in other places. 

When Mr. Kennedy comes, I hope we get a chance to talk about 

mental health. The Federal Government contributes about 45 percent of all the mental health that goes into. 

Ms. LEE. Sure, Mr. Secretary, before my time is up, and I appreciate your explanation with regard to balancing the budget and 

having to make tough choices. 

But I think what I am saying is we all recognize that budgets 

are moral documents. This budget does reflect certain priorities as 

you balanced it in terms of who is going to lose. The losers again, 

once again, just as yesterday we saw, are low income individuals, 

poor individuals and people of color, and that is a shame and disgrace in this year of 2008. 

Thank you, Mr. Chairman. 

Mr. OBEY. Mr. Walsh. 

MEDICAID

Mr. WALSH. Thank you, Mr. Chairman. 

Mr. Secretary, let’s talk a little bit about those Medicaid regulations that we spoke of. You mentioned that some of the things that 

the States are doing I think you said are not fair. Could you sort 

of explain what the rationale is for the regulations that you promulgated? 

Apparently, there is about $13,000,000,000 in savings over 5 

years. Why those and what do you think the impact will be on the 

States? 

The obvious impact on Medicaid would be a reduction in spending. 

Secretary LEAVITT. Without going through all of the specifics of 

the rule. 

Mr. WALSH. Just generally talk about it. 

Secretary LEAVITT. Well, as I indicated, there is this partnership 

we have with the States, and it is to serve the same people. We 

serve the same people, and so we have entered into this partnership. We pay part. They pay part. We match their funding. 

What the States do on a regular basis is they will hire consultants and the consultants, who get paid a contingency fee on areas 


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where they can optimize the funding, they will go through and look 

for any place where they believe they can justify paying for programs that are completely outside Medicaid. 

Mr. WALSH. So they are looking for more applications for Medicaid funding for these specific States that we would then be required to co-pay. 

Secretary LEAVITT. That is exactly right. 

I mean an example is they will take someone in a school whose 

job is 90 percent—I am pulling that number out of the air—but 90 

percent school tasks. They will give them another duty which is to 

look after a child that might not have health insurance, and then 

we will pay the entire salary. 

Now that is not fair. If they want us to pay 10 percent of it, okay, 

but not 90 percent of it. 

We end up paying for school buses. We end up building buildings. There are States where we are funding with Medicaid, programs in three different departments, none of which have anything 

to do with healthcare, but they are able to stretch this over. Unless 

I push back, then they just keep doing it because they get paid a 

contingency fee. 

Mr. WALSH. We saw in the S-CHIP debate that States can liberalize or expand the coverage that is provided not only to kids but 

to the kids’ parents and others, and yet the Administration, the 

Federal Government, has allowed them to do that when it was not 

intended for that purpose. 

So how do we get our arms around Medicaid benefits and determine is there a one size fits all for the States? 

To go even further, again back to the New York State view, if 

we are paying a dollar for dollar, whatever the Fed puts up a dollar 

for what New York State puts up a dollar for and the counties have 

to pay 50 cents of that dollar for the State, it is a huge unfunded 

mandate on the counties that they have absolutely no control over. 

The Medicaid budget in my home county and almost every county in upstate New York is the largest, far and away the largest portion of the budget, and that falls right on the property tax payer. 

That is one of the reasons why taxes, property taxes, are so high 

in New York State because the counties pay a disproportionate 

share of that Medicaid bill. 

Secretary LEAVITT. It seems to me there are two issues here. One 

is the global fairness of the FMAP and whether it is fair for one 

State to have a different FMAP than another. That is a matter of 

statute and something that the Congress has dealt with for a long 

time, and it does not fall at my level of discretion. 

However, the second issue, the State has a relationship with the 

county. As I tell the governors, I hope if your counties are treating 

you the way that I have felt the Medicaid program has been treated, that you would do the same thing I am doing and try to close 

down where people are using it for inappropriate things. 

I am just looking for some way to focus Medicaid and its limited 

resources on health issues, not becoming the means by which you 

can fund every other program in State Government. 

Mr. WALSH. What would you cut out? I mean again in the universe of Medicaid spending, what are we paying for now that we 

should not be paying for? 


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Secretary LEAVITT. Well, listen, I mentioned case management. 

We have several rules. We have people that are calling case management things that have nothing to do with medicine. 

Also, people have found very innovative ways to finance their 

match. For example, we give public hospitals a little higher payment. There are a lot of States that are taking that little higher 

payment, and they are putting it into their general fund, and then 

they are using our money to pay their match. It is just a cycle. 

That is not being fair. That is not being a real partner. So we 

just want them to put up real money. If we are going to be matching it, it ought to be real money. 

That is the kind of thing I am talking about. 

Mr. WALSH. Thank you. 

Thank you, Mr. Chairman. 

Mr. OBEY. Ms. Roybal-Allard. 

STOP ACT

Ms. ROYBAL-ALLARD. Secretary Leavitt, in December of 2006, 

Congress unanimously passed the STOP Act. It was a bill to address the public health crisis of underage drinking in this Country. 

The bill and its funding in fiscal year 2008 represented a historical 

bipartisan and bicameral collaboration that brought together all 

the members of the public health community and the alcohol beverage industry, all of whom agreed that the programs and grants 

that were included in the STOP Act were the best Federal response 

to the crisis of underage drinking. 

Given the major scope of the underage drinking problem in this 

Country and the strong bipartisan support for the STOP Act, why 

does your budget request propose to actually zero out the STOP Act 

programs just as they are getting started? 

For example, the Community Enhancement Grants under the 

STOP Act were authorized as four-year grants, the first of which 

will be funded this year. So how do you justify cutting these grants 

to communities just one year into that four-year funding cycle? 

Secretary LEAVITT. This is an example where we found we were 

serving a very legitimate need in many different ways, and we 

opted, as a means of being able to get closer to a balanced budget, 

to offer communities a means of being helped in alternative ways. 

They can apply for grants in other ways, and we have made that 

known to them. 

I acknowledge this is an important priority, but this is one where 

we chose to acknowledge that in many different ways we were serving the same need. 

Ms. ROYBAL-ALLARD. Well, with all due respect, the reason we 

were finally able to bring this, in some ways, unusual coalition of 

healthcare providers and the alcohol beverage industry together is 

because those programs and what you had in place were not working. 

What the STOP Act actually does is coordinate all the various activities that are being done by the Federal Government by creating 

an interagency coordinating committee. The Surgeon General himself has said that the Federal Government should fund and actively 

support the STOP program because this is a different approach 


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that everyone agrees is going to be much more effective than what 

has been done already. 

It is very, very disappointing. This is a serious crisis in our 

Country with our children, something that has been worked on for 

seven years. These groups were not together in the beginning and 

finally came together and in agreement as to the STOP Act and its 

provisions were the best way to address the underage problem in 

this Country. 

So it is very disappointing to see that this program is basically 

eliminated by the lack of funding. 

NURSING

On another issue, we are currently facing a dire shortage of 

nurses in our Nation’s hospitals and medical clinics. During the 

1970s nursing shortage, Congress appropriated a significant increase in funding for nursing schools and students to help meet 

that demand. 

However, in this nursing shortage crisis, the President’s 2009 

budget proposal calls for a reduction of 30 percent in Title VIII 

funding which is a $46,200,000 decrease in 2008. Why would the 

Administration so significantly cut Title VIII funding when the programs have been a proven solution to past nursing shortages? 

Secretary LEAVITT. This is a budget proposal that we have introduced several times now because we fundamentally believe that we 

ought to be focused on providing services as opposed to providing 

infrastructure, but I would like to take up the cause of nurse training for just a moment with you. 

I, like you, am concerned about it. I think we are going about it 

the wrong way. 

I think we need to begin to focus on new models of nurse training. We need to be investing in ways and means by which we can 

utilize the hospitals and utilize the medical training and facilities 

we have to begin to nurture more and more nurses. We are starting to see models, alternative models like this develop. 

You could fill up all the nursing schools in America and increase 

substantially their capacity, and we still would not be meeting the 

need that you have eloquently spoken of. We have to change the 

model, in my view, and begin to focus on competencies and competency-related education as opposed to simply the way we do it 

now. 

But that is a subject for a different day. I know you have other 

things you want to mention. 

Ms. ROYBAL-ALLARD. I would just like to point out, Mr. Secretary, that you will not be able to provide services unless you have 

the nurses and the health professionals to provide those services. 

So it is important and should be one of the first steps is to be able 

to have educated nurses in the system so that you can move towards providing what you are calling the infrastructure and the 

services. 

You cannot have one without the other. And so, by not investing 

in these programs, you are really undermining your very goal of 

providing services which are badly needed. 

I have another question in regards to the Advanced Education 

Nursing program. Again, in light of this nursing shortage and the 


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great need for more primary care providers, again what is the rationale for eliminating the Advanced Education Nursing program 

that each year helps prepare almost 14,000 graduate nursing students to serve as nursing faculty and advanced practice nurses in 

rural, urban and under-served areas? 

[The information follows:] 

NURSING

Secretary LEAVITT. The President’s budget directs resources to nursing programs 

that provide direct patient care in areas where nurses are critically needed through 

scholarship and loan repayment programs, including an increase of $16 million for 

basic nursing programs, including the Nurse Loan Repayment and Scholarship Program, Nursing Workforce Diversity, Nurse Faculty Loan Program, and Nurse Education, Practice, and Retention. Programs for advanced practice nurses may be assumed by surces other than the Federal government, such as, State and local governments, foundations, private sector endowments, and health care organizations. 

Secretary LEAVITT. That specific program, I am not sure I have. 

That is one I am probably going to need to respond to you in writing on. It is at a level of granularity I am not able to respond today 

at this table. 

We are going to be adding funding for 800 nurses in a different 

part of the budget, but on that specific program, Congresswoman, 

I think I will need to respond to you. I do not have a response. 

Ms. ROYBAL-ALLARD. All right, but that is an important program 

because it is a program that focuses on nurses who are willing to 

work in under-served areas. That is very, very critical, given the 

health problems in many of our under-served and minority communities that just do not have enough professionals working in those 

areas. 

Mr. OBEY. The gentlewoman’s time is expired. 

Mr. Simpson. 

BUDGET SUBMISSION TO OMB

Mr. SIMPSON. Thank you, Mr. Chairman. 

Welcome, Secretary Leavitt. It is good to have you here today. 

I have several questions I am going to submit for the record because there are too many to talk about, and some things I will ask 

you about this afternoon at the budget hearing since I am on that 

Committee also. 

You mentioned balancing the budget and the need to participate 

with the rest of the Federal agencies. I think everybody agrees 

with that. Could you tell me what your original request was to 

OMB? 

Secretary LEAVITT. Well, as you know, our budget process works 

like any other budget process where we line up our needs, we line 

up our wants, and we line up our aspirations, and then we begin 

to whittle those down. 

Mr. SIMPSON. Were any needs whittled away? 

Secretary LEAVITT. Well, that is the way budget-making works. 

Mr. SIMPSON. I know. I have done it for years. 

Secretary LEAVITT. You have to then balance it against different 

priorities. The same thing in my Department. 

Mr. SIMPSON. The reason I asked this, though, is because you 

have to work with OMB. We do not, essentially. 


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We look at what the needs are and stuff. OMB might be a participant in that. It might not be a participant in that. But we are not 

constrained, quite frankly, by OMB like you are. 

OMB, quite frankly, sets policy without knowing what they are 

doing. So I have asked every agency what their original request 

was to OMB because I want to know what you thought was appropriate to start with, even realizing that you were not going to get 

it all, because that might be relevant to the Committee in how we 

make our decisions on what we think is appropriate. 

Secretary LEAVITT. I understand. Congressman, I am here to defend the President’s budget. There are parts of it that I might have 

changed. 

Mr. SIMPSON. That is fine. I am just asking what you originally 

requested. 

Secretary LEAVITT. Well, my job here is to defend the President’s 

request. 

Mr. SIMPSON. Will you get me a copy of what you originally requested? 

Secretary LEAVITT. You would have to get that from OMB. 

Mr. SIMPSON. See, Mr. Chairman, that bill that I talked about is 

a good one. 

Mr. OBEY. If the gentleman would yield. 

Mr. SIMPSON. I would certainly yield. 

Mr. OBEY. I mean for years with various administrations, we 

have gone through these arguments. With all due respect, this 

Committee has a right to know what the professional experts in 

the agencies thought would be necessary before the political judgments intervene on the part of OMB. 

Mr. SIMPSON. That is exactly my point, and that is why I have 

been asking the question because I want to know when we make 

decisions on how we are going to appropriate money. It may be 

more than you requested. It may be less than you requested. I 

would like to know what the professionals wanted. 

Mr. OBEY. The Administration has a perfect right to make any 

changes it wants in the agency budgets but, for God’s sake, this is 

not classified material. This is not national security information. 

People have a right to know what the President is being asked to 

provide. 

The President gives us lectures about transparency, I would like 

to see a little transparency in the executive branch. 

DENTAL HEALTH

Mr. SIMPSON. I agree, and I will start my five minutes over 

again. Let me ask you a couple of specific questions. 

In your fiscal year 2009 highlights, you address the unmet needs 

for dental care, and I appreciate that. The President added 

$11,000,000 to hire 214 dentists—being a former dentist in the real 

world, that is important to me—through the National Health Service Corps and this is more than has been done before. 

However, you eliminated $19,000,000 for dental programs for 

training and State projects. What was your rationale for cutting 

the $19,000,000 for dental training programs? 


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Secretary LEAVITT. Well, again, we have tried. There are a lot of 

places in this budget that touch on dentistry, and we took each program. I had gone through a series of the way we prioritize them. 

In some ways, we felt one program was actually delivering services and the other one might be building infrastructure, and we 

wanted to emphasize limited funds on actually delivering services. 

Mr. SIMPSON. Is that what it was, building infrastructure? 

Secretary LEAVITT. In fact, we were. In most cases, it was. 

Mr. SIMPSON. The Committee increased funding in the fiscal year 

2008 budget for the Dental Health Improvement Act from 

$2,000,000 to $5,000,000. The $2,000,000 covered grants to 18 

State projects. Originally, 36 States applied for the funding. 

Could you tell the Committee how your Department plans to disburse the new grant money? 

[The information follows:] 

DENTAL HEALTH

Secretary Leavitt: HRSA is preparing a new competition for the FY 2008 appropriation of $3 million for Grants to States to Support Oral Health Workforce Activities. This competition will be open to all States, including those that applied in FY 

2006 and were not funded. The funding opportunity is planned for release by the 

end of April and the awards will be made prior to the end of FY 2008. 

Secretary LEAVITT. Yes, we can respond in your written questions. We will be happy to respond. 

Mr. SIMPSON. Okay. 

Last year, the Committee designated $10,000,000 for the General 

Practice and Pediatric Dental Residencies programs under Title VII 

health professionals. Can you tell the Committee how many applicants there were and how many requests were approved and how 

many were funded? 

[The information follows:] 

DENTAL HEALTH

Secretary Leavitt: In FY 2007, 40 grant applications were received for the general 

practice dentistry and pediatric dental residency programs. Of those applicants, 34 

were approved for funding and 28 were funded. The dental residency training grant 

awards totaled $10,272,394. 

Secretary LEAVITT. We will be happy to respond. That is not a 

level of information that I have. 

BONE MARROW DONOR PROGRAM

Mr. SIMPSON. Okay. 

One other question, on January 17th, the other members of the 

Idaho delegation and I sent HRSA a letter regarding recent 

changes to the rules governing the National Bone Marrow program. 

Part of those rules are to significantly increase the minority registration requirements. 

While recruitment and minority participation are important 

goals, I am concerned that the new rules do not take into account 

the demographic reality of States such as Idaho and Utah and put 

programs such as the one operating in Idaho at risk of closure. 

Would you be willing to work with me to provide the needed flexibility to accommodate the demographics of all States and regions 

including my own State of Idaho? 


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Secretary LEAVITT. Your request has been made known to me 

previously and understanding the demographic realities of Idaho, 

yes, we would. 

Mr. SIMPSON. I appreciate that, and I look forward to talking to 

you this afternoon in the Budget Committee about the changes in 

philosophy to the system rather than the Band-Aids we seem to 

have been putting on the Medicare and Medicaid system over the 

years, which is one of my biggest frustrations. 

Secretary LEAVITT. Thank you. 

Mr. SIMPSON. I appreciate it. Thank you. 

Mr. OBEY. Mr. Kennedy. 

MEDICAID

Mr. KENNEDY. Thank you, Mr. Chairman. 

Welcome, Mr. Secretary. 

Rhode Island is probably not unlike a lot of States with a huge 

deficit it is facing. We have an over $435,000,000 deficit. It does 

not sound like a lot, but it is a lot in a small State like mine. 

The governor has proposed saving more than $66,000,000 by reducing Medicaid spending, largely by diverting seniors and disabled adults from nursing homes. The governor says one would not 

be forced from a nursing home or prevented from entering one, but 

he needs to divert more than 690 seniors, 300 youths from child 

welfare services and dozens of developmentally disabled people to 

less expensive programs to meet the budget targets. 

The Department of Human Services Director, Gary Alexander, 

said the $66,700,000 is predicated in part on reducing overall number of Medicaid patients in private nursing homes next year by 

690. That assumes 125 leave voluntarily, 565 are diverted to other 

services such as home care. The average number today, 6,500. 

The budget also cuts eligibility for the State subsidized 

healthcare program, Rite Care, for parents with incomes above 185 

percent of Federal poverty level which is $32,000 for a family of 3 

to 133 percent, $23,000 for a family of 3. An estimated 7,396 adults 

would be affected. 

The governor also wants to cut the school breakfast program entirely, eliminating State funds for the program, thinking that the 

Federal Government will somehow come in and operate the program without State subsidies. How that will be done, I do not 

know. 

The eligibility for the State’s welfare program known as the 

Family Independence Program will also be cut by two years as well 

as huge, substantial cuts in Head Start, Rhode Island Meals on 

Wheels, Crossroads Rhode Island, Rhode Island Community Food 

Bank. 

The point I am making is: Has the President of the United 

States coordinated with my governor, Governor Carcieri—both of 

them talk quite frequently—about the cumulative impact of the 

budgets that the President is proposing and Governor Carcieri is 

proposing? 

Has there been any connection? Because if you are looking at 

your budget on top of what we are doing in Rhode Island, there is 

a disconnect. 


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Secretary LEAVITT. Well, you read a long list of things there. 

There are some where they would undoubtedly come to HHS and 

say, here are some impacts we are having. Can you help us with 

this or do we have an authority to do that? 

Mr. KENNEDY. Right. Right. 

Secretary LEAVITT. One, for example, is in the area of diverting 

people from nursing homes. We see that as a positive, and we 

would be anxious to cooperate in seeing that occur. We would like 

to see people cared for where they want to be, in a way they would 

like to be. Frankly, it is less expensive and people like it. 

So, to the extent that we are cooperating on programs where we 

have overlapping jurisdiction, the answer would be yes. In terms 

of coordinating the development of our budget, no. 

Mr. KENNEDY. But you cut administration on aging. I mean you 

cut administration on aging. You cut the kinds of programs that 

are going to help us be able to do these things. Of course, these 

other programs that are being eliminated are not going to make 

these problems easier. 

All I am saying is I do not know to what extent there has been 

any Federal coordination from Washington with these States. 

These are all difficult. Some of these States are going to be in a 

really particularly difficult time. 

Is there any connection between you and your respective counterpart at our State level in terms of the cumulative impact between 

what this is offering and what is going on at the State level? 

Secretary LEAVITT. I hear regularly from States as to the impact 

that the Federal budget, one way or the other, will have on their 

budgets. 

Mr. KENNEDY. Yes. 

Secretary LEAVITT. Obviously, they do their budget. We do ours. 

Sometimes what they do has an impact on us as well. For example, we mentioned earlier changes that States have made in Medicaid where, frankly, we have pushed back because they have an 

impact on our budget. 

Mr. KENNEDY. Yes. 

Secretary LEAVITT. We have seen situations where we do things 

that they push back, and so there is a push and pull. It happens, 

but we do our budget independently. I am sure that the effect is, 

at times, cumulative. 

Mr. KENNEDY. We are all serving the same people. 

Secretary LEAVITT. We are. 

MENTAL HEALTH

Mr. KENNEDY. I just get concerned. One of the things that I want 

us to look obviously more at is the holistic view of this and not in 

a stovepipe mentality that this is a Federal program and this is a 

State program. It is how we are working together. 

One of the things this year obviously is—I know you mentioned 

before I came about mental health programs—that this year we get 

a better sense of all mental health research under HHS. 

A lot of the mental health research that is going on is going on 

at the VA now because of traumatic brain injury and because of 

post traumatic stress disorder. A lot of it is going on in DOD because of the obvious interest that the Department of Defense has 


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for those same reasons. A lot of it is going on in other agencies as 

well. 

We are really interested in making sure, even with NIH. There 

is a whole plethora of brain and nervous-related research that goes 

on that is not coordinated with NIH. 

So would you be willing to work with us to try to coordinate the 

existing research that goes on within the Federal Government 

under HHS so that we can get it to the FDA and professionalize 

more FDA in terms of brain/nervous system research so that this 

brain and mental health related research can get out to the public 

in a more expedited way? 

We found that with all the dollars that we are spending right 

now approximately $6,000,000,000 through the NIH and over an 

additional $3,500,000,000 through other agencies. It is really not 

being organized, and the one hand does not often know what the 

other is doing. We find that for an additional $200,000,000 we can 

coordinate it. 

If we professionalize the FDA more, we would better be able to 

get that out to the public maybe through some SBIR efforts as well. 

We would love to work with you on that. 

Secretary LEAVITT. I am a big believer, first of all, that government is way too siloed. That is true inside HHS as well as throughout the broad government. 

I would argue that the better place to coordinate it might be 

NIH, not FDA, but nevertheless I am certainly in agreement and 

willing to be a participant in better coordination. 

Mr. KENNEDY. Okay, great. 

Well, I appreciate the increases in drug courts and mental health 

courts. Obviously, I am distressed about the overall cuts in substance abuse prevention and funding services and mental health 

prevention, SAMHSA, but I know we will look forward to working 

with you to rectify some of those cuts. 

Secretary LEAVITT. Thank you. 

Mr. OBEY. Mr. Weldon. 

Let me explain to the Committee, we have this vote going on. 

What I would like to do is to get through Mr. Weldon’s five minutes 

of questions and then break to go vote. 

Mr. WELDON. Thank you, Mr. Chairman. 

Secretary Leavitt, it is a pleasure to see you again. 

Secretary LEAVITT. Thank you. 

AUTISM

Mr. WELDON. I want to commend you for your service. You have 

a tough job. I am not sure how many opportunities I will have to 

see you between now and when I leave. I am retiring at the end 

of this year. 

I did want to bring up a budget issue related to your agency, and 

that is the vaccine/autism connection question. I appreciate the 

concern that you have expressed about this issue and the time you 

have taken to meet with me in the past. 

I do not know if your staff has brought it to your attention. We 

had a lot of discussion in the Committee about the mercury issue 

and should we mandate the mercury getting out, but there was a 


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case that was settled in the vaccine claim court. Are you aware of 

it? 

Secretary LEAVITT. I am aware of that. 

Mr. WELDON. It involved a claim that a mercury-containing vaccine was the cause of the autism. Your legal counsel, using appropriate legal language, said, ‘‘concluded that compensation is appropriate.’’ I think that is about as far as they went in the commentary, but 

the thing that caught my interest is one of the doctors who was involved with the case. 

Just so members of the Committee know, it was a little girl, 

again with regressive autism. The parents claim she was fine. She 

got her shots, became autistic, and the claim was that the mercury 

was responsible and a settlement, a lifetime settlement now. The 

Federal Government is going to be paying for this kid’s care. 

But one of the doctors involved claimed it was this mitochondrial 

disorder. Do you know about that part? 

Secretary LEAVITT. I know sketchy details about the suit and 

about the litigation and the fact that it was settled. 

Mr. WELDON. Okay. Well, let me tell you what caught my attention about the case. This Dr. Zimmerman published in the Journal 

of Child Neurology, a respected journal, that their research shows 

that 38 percent of kids with autism have 1 marker for this condition, 47 percent have a second marker. 

As I understand it, all these doctors taking care of these autistic 

kids now are going back and testing these kids for this 

mitochondrial disorder. 

If this pans out, granted, this has to be validated and there has 

to be a lot more research on it, but if it pans out, just my back of 

the envelope estimation is we have 500,000 kids with autism today 

in America. If you just assume an average payout to care for the 

child over the course of its life of a million dollars, it could be a 

$500,000,000,000 claim against HHS, hopefully not in one year, 

Mr. Chairman. 

What really, I guess, kind of forced me to bring this up today, 

and I realize this is not going to be perhaps your problem to deal 

with. It will be whoever follows you. Did you see this ad in the 

USA Today yesterday, a full page ad? 

Secretary LEAVITT. I did not. I did not. 

Mr. WELDON. One of the guys who helped fund it was Jim 

Carrey of all people, you know, the guy who played the Grinch in 

that movie. But, basically, they are indicting the vaccine program 

as the cause. 

Over the last 10 years, I have had just dozens and dozens and 

dozens of parents say to me: My kid was normal. My kid got the 

vaccines. My kid became autistic. 

A lot of the professionals in the pediatric community have been 

just pooh-poohing it and pooh-poohing it. 

This is, in my opinion, a huge issue from two aspects for HHS 

and for CDC and for the medical profession and the pediatric profession. Obviously, if something like this is ultimately determined 

to be true, there are huge financial consequences for the government, but as well it undermines the integrity of our vaccine program, and these vaccines do save lives. 


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Now I know you have responded and NIH has responded, and 

the amount of research dollars has increased significantly. I just 

wanted you to be aware of some of the details of this. I do not expect you to respond to what I am saying. 

And I just wanted to bring it up before the Committee that this 

could, if this is ultimately shown to be true and the complaints of 

thousands of parents for the last 10 years ultimately are shown to 

be valid, it could have huge, gigantic implications for budget and 

as well for the public confidence and integrity in our medical profession and in our vaccine program. Obviously, whoever follows in 

your footsteps could end up having to deal with this. 

Secretary LEAVITT. Mr. Chairman, may I just respond briefly? 

I hear those voices. No one can hear them and not feel compassion, and yet the finest scientific minds we have in this government 

at CDC continue to tell me that the basis, scientifically, is not 

there. 

So I hear the voices. I respond to them, but I think it is important in the context of what you said to recognize that there is another side to this story and it will undoubtedly play out in lots of 

ways over the course of time. 

Mr. OBEY. I would suggest we go vote. 

[Recess.] 

Mr. OBEY. The Committee will come to order. 

Mr. Secretary, we have lost the inmates. [Laughter.] 

Mr. PETERSON. We have lost the inmates. One inmate is here. 

Mr. OBEY. Let’s see. Who is it? 

All right, Mr. Udall. 

RURAL HEALTH

Mr. UDALL. Thank you, Mr. Chairman. 

Mr. Secretary, thank you so much for being here today, and we 

really appreciate your service. 

You are from the West. You were governor of Utah for 11 years. 

You are familiar with some of the challenges that western States 

with rural populations face in delivering quality and affordable 

healthcare, and you are aware of the access problems residents of 

the West have. 

Yet, again, you come to us with a budget that absolutely decimates programs for rural healthcare. It also is yet again a series 

of classic unfortunate robbing Peter to pay Paul scenarios. It is 

more of the same bad ideas that have been rejected time and time 

again, and yet here we are. 

I want to ask you specifically about the rural healthcare programs and Title VII in particular. As you know, Mr. Secretary, 

when you have rural areas and they are under-served, it is very, 

very difficult to get physicians and nurses and other healthcare 

professionals out into those areas. 

When I look at your budget here—National Health Service 

Corps, health professions, Title VII non-nursing—I mean that is 

completely eliminated. Title VII non-nursing goes completely eliminated and a cut to national service health care. Could you explain 

to me what you are thinking about there and putting on your western hat here if you can? 


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Secretary LEAVITT. Thank you. I am proud of being a westerner, 

and I do, as a result, have some sensitivity on rural health. 

I would like to recognize and remember that in 2003 Medicare 

Modernization Act, we added $25,000,000,000 that we believe will 

raise the level generally in those areas. I would also like to ask you 

to recognize that we have added in this budget 800 new nurses and 

200 new doctors, and many of those will be focused in under-served 

areas. 

I would also point out that some of the programs that we have 

de-emphasized, we de-emphasized because they were not particularly effective. Only 35 percent of the individuals trained and supported in some cases, in some of our programs, went into medically 

under-served areas. We did not think they were working, so we 

have tried to emphasize other programs to meet the need you have 

spoken of. 

Mr. UDALL. Mr. Secretary, I must say that I find that explanation unconvincing, and the reason is the provisions in the MMA 

were never meant to replace the HHS Rural Healthcare Grant programs. 

The MMA was about preserving access and helping providers 

keep their doors open. The MMA even reauthorized the Rural Hospital Flexibility program which is eliminated by your budget. The 

MMA provisions also have all expired and Congress has yet to extend them. 

The HHS grant programs are meant to improve healthcare quality and innovation in rural areas. Even with the benefit of the 

MMA, many rural providers still struggle with costs. The proposed 

cuts only roll back the clock on rural healthcare. 

I think you are going to see some bipartisan opposition on this 

basis. 

Once again, back to Title VII, the Administration has maintained 

its reason for not funding them is they are ineffective. This Committee has restored some of the funding because we know they are 

important programs. 

Could you tell the Committee when the Department seeks grant 

applicants for these funds, the nurses, the doctors that are going 

into rural areas, do you get more approved requests than you can 

fund? 

[The information follows:] 

RURAL HEALTH

Secretary Leavitt: Appropriations received for Titles VII and VIII programs must 

first be utilized to fund non-competing continuations and then the remaining funds 

are used to support new applications. On average, 34% of approved applications are 

funded. 

Secretary LEAVITT. I do not know at this table today whether 

that is true or not. I will respond to you in writing if you would 

like, but I am not able to respond. 

Mr. UDALL. Do you have anybody with you? 

I mean I would be amazed if we did not get a lot more. You just 

do not know? 

Secretary LEAVITT. You have stumped the panel. 


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COMMUNITY HEALTH CENTERS

Mr. UDALL. Oh, with all those health experts out there, hard to 

believe that. 

Let me see how I am doing on time here. 

Could you talk to me about the community health centers and 

what you are intending to do there, Secretary Leavitt? 

Secretary LEAVITT. Well, as you know, the President set a goal 

to have 1,200 new or expanded health centers. We have now met 

that. 

We continue to move forward. We are focusing on areas that 

have low income, particularly in low income communities. 

Mr. UDALL. Is this going to take away from existing centers? 

Secretary LEAVITT. No. We intend to expand the number. We 

have actually met that goal. In the last fall, we hit the 1,200th new 

or expanded center. 

We have intended to try to use them to serve broader populations including, in some cases in urban areas, Indian health 

needs in this budget. We see community health centers as continuing to be a very important part of the way we serve underserved populations. 

Mr. UDALL. Great. Thank you very much, and I hope maybe to 

ask you about some of the Native American issues in another 

round. 

Thank you, Mr. Chairman. 

Mr. OBEY. Mr. Peterson. 

Mr. PETERSON. Thank you, Secretary. Welcome to the Committee 

and thank you for your service. 

Secretary LEAVITT. Thank you. 

MEDPAC

Mr. PETERSON. I guess my predecessor here just teed up the 

issue. I am from rural. I represent the second most rural district 

east of the Mississippi. I have 17 hospitals in my rural district. 

I guess when I came to Washington, I had chaired health at the 

State level for a decade and worked on the issues for 19 years as 

House and Senate member. I guess I was just stunned at the lack 

of attention to rural. I mean between 28 and 30 percent of our 

Medicare/Medicaid recipients are in rural. 

So I guess the first issue I would like to ask you is I know you 

do not appoint them, but how do we get a fair representation of 

people from rural on MedPAC? 

The deck is stacked. We are used to that. Urban/suburban health 

interests always dominate. 

When I first became House member in the Pennsylvania Legislature, the hospital association and I became good friends and it was 

because I had been on a hospital board and health issues were important. But I soon learned that my rural hospitals had a different 

message than the State association had because they are rural and 

the State associations are driven by suburban/urban because of volume numbers and dues they pay. I understand how it works. 

But the process here of having it fair, I mean 30 percent of 

America is rural. We have maybe one member on MedPAC that 


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really understands rural. Some say you might give credit of one 

and a half or two but one for sure that really does. 

We ought to have five people on MedPAC that understand rural 

healthcare when they make their decisions, that they are not all 

urban/suburban slanted decisions. 

Could you help us with that? Can you play a role in that? You 

come from a lot of rural area. 

Secretary LEAVITT. I wish I had advice for you today on the 

MedPAC appointment process. I do not. I think it is a split between 

a number of different sources. 

Mr. PETERSON. Well, GAO recommends them. We do not approve 

them. 

Secretary LEAVITT. I have a vague understanding of this, but I 

believe that there are those that are nominated from a number of 

different sources, and the belief must have been that if you have 

people nominating from a number of different sources, you will get 

a more balanced view. 

I do not know the dynamics, and I do not know why there have 

not been as many rural members as you believe, but I am sympathetic to your view. 

Let me just make one other point—and that is something we 

have not focused as much as I think we should when it comes to 

rural health—is the positive impact that Medicare Advantage has 

had. 

We are seeing a lot of people who are signing up for Medicare 

Advantage being in rural areas and particularly those who are in 

under-served populations and minority communities, and they are 

doing it because they have an easier opportunity and a better 

chance to get a physician. We are seeing fewer problems in that 

area under those who are enrolled in Medicare Advantage. 

MEDICARE ADVANTAGE

Mr. PETERSON. Well, yes, it has helped in part of my district, but 

I have counties that do not have a shot at that too. I have areas 

that that has not penetrated. 

I was just told we have 20,000 Medicare recipients, but I am sure 

we have more that do not have that option. You do not have that 

option where I live, to be part of Medicare Advantage. 

But I guess the part in your budget, and we just heard a little 

bit about it, whether it is rural outreach, rural flex, rural access 

to emergency, rural community facilities, CSGB, the rural issues, 

and I have found this across other budget lines. 

I mean for some reason this Administration’s OMB does not appreciate rural. They are small programs, and they like to cut small 

programs. They just whack them. But these programs, you know 

we get measurably less for the same treatment. 

I had a member of Congress my first year here tell me, oh, John, 

I am from rural too, but we need to close rural hospitals to save 

money. 

And I said, how are you going to save money because when you 

close a rural center or hospital, they matriculate to an urban center 

who gets paid 30, 40 or 50 percent more for the same procedure? 

So nobody saves any money. 


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The constituents are disadvantaged. They are further from home, 

and that is not a part of the healing process when you are 150 

miles from home in an urban area. It is a crazy system. 

I have been in business all my life. When we go to Wal-Mart or 

Target, the big store, we expect to pay the bottom price. When we 

got to the little stores, we expect to pay more. 

Well, healthcare is the only place where it is inverted where the 

little guy gets paid less. He still has to have MRI services and CAT 

scan services and all these other diagnostic tools. He does not get 

to use them as often to pay for them, but we pay him measurably 

less. That is the only business in America that gets the short end 

of the stick right off the bat. 

Then we have these little grants that we do to try to help rural 

hospitals recruit doctors, help them be competitive, and we eliminate them. How does that happen? 

Secretary LEAVITT. If you are complaining about the differential 

pricing, and you should, I am with you. I think the system we use 

in setting prices in Medicare is antiquated, wrong, illogical and ineffective, and I think the fact that your statement points out. We 

subsidize the wrong things, and we overpay things we should not. 

It is because there is no market sensitivity, and we have a pricesetting model. How else can you justify the wide variance between 

one State, one region, one county? You can take counties in particular areas and see 10 miles from another place, they get paid a 

lot more for the same procedure. 

Mr. PETERSON. Suburban/urban MSA. 

Secretary LEAVITT. I cannot justify that system. I would change 

that system if I had the sole power to do so. 

Mr. PETERSON. Have you ever proposed that to Congress? 

Secretary LEAVITT. We have had a lengthy conversation. Yes, I 

mean it has been proposed many times. 

Mr. PETERSON. But how do you rationalize cutting? 

You have admitted. You have agreed with me. It is inequitable. 

But these outreach grants, flexibility grants, these help the little 

guys kind of keep it together, and you take away the little support 

system we have because we know they are not paid fairly. 

Secretary LEAVITT. Well, Congressman, we could go through each 

and I could give you my justification. We have done the best we 

can to be sensitive to the need and balance the budget. 

Mr. OBEY. The gentleman’s time is expired. 

Mr. PETERSON. I will take a dollar cut in rural for every dollar 

cut urban gets, but that does not happen. 

Mr. OBEY. Mr. Jackson. 

TITLE VII HEALTH PROFESSIONS

Mr. JACKSON. Thank you, Mr. Chairman. 

Secretary Leavitt, welcome back to this Subcommittee and thank 

you for your testimony and for your service to the Nation. 

With that said, Mr. Secretary, I cannot tell you how disappointed 

I am in this budget. 

In your written testimony, you say throughout the entirety of 

this Administration’s two terms, the President has sought to increase access to affordable healthcare, protect our Nation against 


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health threats, advance medical research and ‘‘serve the needs of 

our most vulnerable citizens.’’ Yet, your budget says the exact opposite because it eliminates all 

funding for Title VII health professions programs. 

Again, according to your written testimony, I assume you are 

going to justify eliminating funding for these programs by saying, 

we have identified under-performing, inefficient or duplicative programs and redirected our resources to programs that provide a 

greater benefit for our tax dollars. 

Your written testimony leaves me with a couple of questions. If 

under-performance, inefficiency or duplication is the justification 

for eliminating Title VII funding, number one, what program or 

programs have you identified that provide a greater benefit for our 

tax dollars and accomplish what Title VII actually does? 

Secondly, if under-performance and inefficiency are reasons to 

terminate programs, then why do we continue to not only ask for 

funds for abstinence only education but ask for increases when 

study after study shows that abstinence only education does not 

work? 

Who in the Administration has determined that Title VII health 

professions is under-performing, inefficient or duplicative? 

I hope you do not say OMB because when my constituents need 

healthcare advice, they do not go to H&R Block and request it. 

Five years ago, the National Academy of Sciences, the Institute 

of Medicine wrote a report called Unequal Treatment Confronting 

Racial and Ethnic Disparities in Healthcare at the insistence of 

this Committee so that this Committee might have a path for funding programs that could close profound gaps that exist in our society. We needed a road map. 

To end ethnic and racial disparities in healthcare, the report 

stated we must, one, increase the proportion of under-represented 

U.S. racial or ethnic minorities among health professionals. To the 

extent largely permissible, affirmative action and other efforts are 

needed to increase the proportion of under-represented U.S. racial 

and ethnic minorities among health professionals. 

So the recommendation of the M.D.s and the Ph.D.s, not the 

bean counters, is to increase the diversity of health professions, exactly what Title VII does. 

From your perspective, Mr. Secretary, what do you propose funding that does exactly what Title VII does? 

Secretary LEAVITT. We are proposing the funding of 800 new 

nurses and 200 new dentists as a very good example. 

We believe that comprehensive abstinence sex education is, in 

fact, effective. I know you disagree. 

I suspect we would disagree on many of the decisions we have 

made, but nevertheless they are our judgments and we put them 

forward as our budget. 

Mr. JACKSON. Mr. Secretary, I have a report prepared 15 months 

ago by two M.D.s from your Health Resources and Services Administration, from HRSA. This report, in essence prepared by your Department, says: 

‘‘One, under-represented minority health professionals, particularly physicians, disproportionately serve minority and other medically under-served populations; 


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Two, minority patients tend to receive better interpersonal care 

from practitioners of their own race or ethnicity, particularly in primary care and mental health settings; and 

Three, non-English speaking patients experience better interpersonal care, greater medical comprehension and greater likelihood of keeping follow-up appointments when they see a language 

concordant practitioner.’’

Your report goes on to say, these findings indicate the greater 

health professions diversity will likely lead to improved public 

health by increasing access to care for under-served populations 

and by increasing opportunities for minority patients to see practitioners with whom they share a common race, ethnicity or language. 

Race, ethnicity and language concordance, which is associated 

with better patient-practitioner relationships and communication, 

may increase patients’ likelihood of receiving and accepting appropriate medical care. 

Mr. Secretary, your agency’s October, 2006 study makes a pretty 

strong case for support of programs which contribute to workforce 

diversity such as COE and the HCOP program. The Administration’s budget again contradicts the recommendations of the M.D.s 

in this report and other science-based evidence which I have presented to the Subcommittee in the past. 

Mr. Secretary, is ending healthcare disparities really a priority 

for this Administration and, if so, why should we listen to the people at OMB over the M.Ds and the Ph.Ds who are recommending 

a completely different strategy? 

Secretary LEAVITT. Well, again, I will point to the 800 new 

nurses and 200 new dentists, and I will make clear that we are 

making it a priority and believe, as you have suggested, what the 

report reflects. We need to focus and target those areas, and we 

think that is what we are doing here. 

Mr. JACKSON. Mr. Chairman, I plan to offer amendments in Subcommittee and at full Committee that will restore Title VII to current funding levels, and I would ask the support of the Committee 

in offering those amendments at the appropriate time and, if necessary, I plan to make my case regarding Title VII on the floor. 

Thank you, Mr. Chairman. 

Mr. OBEY. Ms. McCollum. 

HEAD START

Ms. MCCOLLUM. Thank you, Mr. Chair. 

Secretary Leavitt, you have been asked about workforce a lot, 

and I want to talk about the future workforce, the children of this 

Country. I was, to say the least, very disappointed in the Administration’s budget proposal in its approaches to services for children. 

To remain competitive in a global economy, we need our children 

to be not just educated but well educated. We need them to be safe, 

and we need them to be healthy. 

Your budget flat funds maternal/child health in Healthy Start. It 

eliminates newborn hearing screening which is a very popular 

thing. It gets eliminated all the time. We know that if early detection for hearing loss is found, it makes all the difference in a child’s 


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ability to communicate and cuts down the special education costs, 

saves so much money for the Federal Government at the other end. 

You flat fund childcare and welfare programs at a time where 

families are struggling with rising fuel oil and food prices. 

Head Start gets a small increase. You were a governor. You 

know how many kids you had on your waiting list for Head Start, 

and I do not see us moving forward to really eliminate the waiting 

list for Head Start under this program. 

Now if you believe in investing and if you know in that investment you are going to have a return on your dollars, it would seem 

very shortsighted to me not to focus on and fund these children’s 

services because we know scientific information is out there that 

there is significant improvements in their life and their health. 

So I do not know how we can expect to compete as a Country 

if we as a Country are not doing what is in our capability to make 

all children succeed. So can you tell me what is your rationale for 

flat funding programs? 

I want to point out something I do in my district. President Bush 

and I came to the Hill at the same time. He was in the White 

House, and I was in Longworth. 

But I can figure out math pretty good. If I have a program and 

it is cut, zeroed out, everybody comes in and scrambles. We fund 

it at 75 percent. Zeroed out the next year. Everybody comes in and 

scrambles at 75 percent. Zeroed out again. 

So this flat funding and these cuts are more than just this year. 

This has been going on for a long time. 

Can you tell me what your proposal is to do about the children 

in this Country who continue to be on a waiting list? 

Secretary LEAVITT. Congresswoman, again, let me indicate I 

agree many of the proposals you have referenced have been proposals we have made several years concurring because we do not 

believe that they are an effective or efficient way to serve those 

populations. 

You talked about children’s health. I will remind you that the 

President’s budget has a nearly $20,000,000,000 increase for SCHIP which will increase the number of children that are being 

covered. We believe that it is consistent with our view. 

Ms. MCCOLLUM. Sir, I asked you. Let’s just stick with Head Start 

then because you just said Head Start is a program that did not 

work. 

Secretary LEAVITT. No, I did not say Head Start. No, I did not. 

Ms. MCCOLLUM. You said we cut programs that did not work. 

That is why I am giving you an opportunity to go back. 

Secretary LEAVITT. What you said earlier was we did fund Head 

Start with a slight increase, and then you listed a number of programs that we did not. 

What I suggested to you was there are a number of programs 

that we have year after year proposed that they either be reduced 

or eliminated. 

We have done that this year on the basis of whether they were 

providing direct services as opposed to infrastructure, whether it 

was one-time funding that may have existed. We looked at grant 

activity that, in fact, had been completed. We looked for programs 

where we were serving the same need in different places. 


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Many of the programs that you have referenced, and you have 

given me a long list, fall into each of those categories. 

We also looked for places where, well, I think I have mentioned 

the fact that many of the programs you have talked about, we fund 

in different ways. 

Ms. MCCOLLUM. Well, sir, Head Start, the dollars that you have 

in this budget for Head Start will not even serve the current number of children we are serving, let alone address the waiting list. 

Secretary LEAVITT. I do not think that is correct. We will fund, 

in fact, those that are there, and we will add to it. This budget accomplishes that. It does not take care of the entire waiting list, I 

acknowledge, but it does in fact cover more children. 

Ms. MCCOLLUM. How much is the increase for Head Start? 

Secretary LEAVITT. One hundred and forty-nine million dollars. 

Ms. MCCOLLUM. One hundred and forty-nine million, does that 

cover transportation costs that the Head Start centers are going to 

have to absorb? 

Secretary LEAVITT. Well, it is $149,000,000 more money. It is an 

additional appropriation. I suspect it will be different in every case. 

Every Head Start program will manage their program according to 

their priorities. 

Ms. MCCOLLUM. Secretary Leavitt, I would very much appreciate 

if you would break out for me how this current budget takes in account all the inflationary increases that we know are out there so 

that I know, at a minimum, no children will be removed from the 

Head Start rolls. 

Secretary LEAVITT. I do not represent that we are covering inflation for every program. 

I am, however, representing that we are adding additional dollars to the Head Start program that by our calculation will not only 

cover existing children but a small population increase of others. 

Ms. MCCOLLUM. Mr. Chairman, if we are not covering inflation 

for programs, how can programs be expected to serve the same 

numbers? 

Mr. OBEY. Well, all I would say is that it has long been my point 

that if you do not adjust for both inflation and population growth, 

then you in fact have a real per capita reduction in services in any 

program that does not do that. 

Ms. MCCOLLUM. Thank you, Mr. Chair. 

Mr. OBEY. Very belatedly, Mr. Rehberg. I am sorry. 

LIHEAP

Mr. REHBERG. Mr. Chairman, that was Archie on your shoulder, 

saying, do not forget me. 

Secretary Leavitt, I find myself in the unique position with the 

untimely retirement of Mr. Peterson of taking up the banner of 

natural gas. I hope I can get your charts to present to this Committee in particular because this Congress has a difficult time recognizing the connection between American energy and low income 

energy assistance. 

While we limit our access to our own supply and the very people, 

the majority of the people that are both voting and on the East and 

the West Coast that are exacerbating the problem are usually the 

ones that are stepping forward and saying, what about our poor 


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that cannot afford their home heating because of the price of energy? 

The solution is American energy. We have natural gas off both 

our east shore and west shore that is inaccessible. Enough being 

said to that because I know this Administration is recognizing that. 

But in this budget then, the low income energy assistance, you have brought a budget forward that is at least $800,000,000 less 

for low income energy assistance than in the last budget. Is that 

in anticipation that Congress is going to come to their senses and 

open up new sources of energy because the price of energy is going 

up? 

Or, is it a recognition that we will always backfill with emergency dollars and so Congress will do the right thing and appropriate the money to help the low income? 

Or, is it just you are using the money to balance the budget and 

Congress, you figure the problem out? 

Secretary LEAVITT. Well, Congressman, without respect to making a statement on energy policy which is not in my portfolio. 

Mr. REHBERG. But you certainly understand the issue. 

Secretary LEAVITT. I certainly do, and I thought your words were 

eloquent on that matter. 

We do have a commitment under LIHEAP to help those who 

have high energy bills and who cannot afford them, and we meet 

that. The Administration has long demonstrated a willingness to 

appropriate more money when it was needed. 

We estimated what we thought would be needed this year and 

put it in the budget. If it turns out we need more, then the Administration obviously would step up and support whatever was necessary to meet that obligation. 

Mr. REHBERG. I guess I do not understand how the Administration can take the position that it is anticipated to be less costly 

than the prior year based upon a 7 percent increase in natural gas 

prices, 50 cents per gallon in propane. Just the cost of the energy 

alone is going to force additional revenues necessary. 

Secretary LEAVITT. If it turns out that is the case, then we will 

be happy to cooperate in solving that problem. 

Mr. REHBERG. Okay. 

One of the things that happens to us and you having been a governor and me being in the executive branch at one time as well, 

we tend to point fingers somewhere else other than ourselves. So 

we have a governor in Montana that is pointing a finger at you, 

saying, you did not get our low income energy money out to Montana soon enough. 

As we do the research, it looks as if you did it on a timely basis, 

but they did not get it out in a timely way. There is somehow a 

lack of a sense of urgency within the State of Montana to distribute 

the funds. 

And so, I guess my question is do you, within the Administration, 

have a mechanism that requires States to get the money out to the 

people that need it in a timely fashion so that we do not have all 

the finger-pointing because a sense of urgency does matter when 

people are cold? 

Secretary LEAVITT. We allocate on as timely a basis as we know, 

or know how to, the money when it is needed. 


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Mr. REHBERG. But do you require then the States to turn it 

around? 

Secretary LEAVITT. The States essentially act from that point forward on their own timetables. 

Mr. REHBERG. Could there be or should there be some kind of a 

mechanism within our appropriation or maybe an authorization requiring the States to have a rapid turnaround because you can see 

the problem? 

It happens with bureaucracies. They sit on the money or they 

have their own thing they have to go through. At a time of emergency, which is what I assume low income energy assistance is supposed to be about, should not there be some kind of a mechanism 

requiring States to turn the money around faster? 

Secretary LEAVITT. Again, the federalist in me will come out here 

and suggest that I think we are probably better off maintaining a 

limited role of the Federal Government and allowing those who are 

closest to the problem. Now, if they do not respond, then their voters ought to hold them accountable, but our job is—— Mr. REHBERG. But they are blaming you. 

Secretary LEAVITT. Well, there is nothing new about that. I have 

come to understand that that is part of this job, but another part 

of the job is to make certain people have LIHEAP funds when they 

need it. We will do our best to meet that demand. 

COMMUNITY PHARMACIES

Mr. REHBERG. The second question then having to do with the 

community pharmacies, and thank you for the community health 

centers. They are working very efficiently and effectively in Montana. 

Mr. Peterson, I have 67 hospitals in my district. So I certainly 

know what rural health is all about. 

The rural pharmacies are having difficulty because of the reimbursement time in the Medicare Part D. Is there something going 

on within your Administration to speed up the time difficulties in 

the reimbursement? 

Secretary LEAVITT. Well, we have made clear to the payers or to 

the plans that they need to meet their contractual obligations, and 

if they do not meet their contractual obligations, then we are prepared to use the force of Federal law to assure that they do. 

However, the problem with the pharmacy, between the pharmacies and the plans is that they have negotiated contracts, and 

the pharmacies and the plans need to work out different reimbursements if, in fact, that is not meeting the need of rural pharmacies. 

Mr. REHBERG. Unfortunately, part of the problem is that the 

plans do not necessarily have to negotiate fairly with the small 

rural pharmacies, and so they are at a negotiating disadvantage. 

So it would be nice if you had the ability to require the plans, if 

they file electronically, to do it in a much more timely fashion. 

Mr. OBEY. The gentleman’s time is expired. 

Mr. Honda. 

Mr. HONDA. Thank you, Mr. Chairman. 

Welcome, Secretary Leavitt. 

Secretary LEAVITT. Thank you. 


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TUBERCULOSIS

Mr. HONDA. Under the CDC budget justification, you indicate 

that there is a decline of TB cases in the United States. However, 

you have a designation called the CDC Metropolitan Area for Special Attention relative to TB, and that is where Baltimore, San 

Francisco and New York City have a funding level of about $10,000 

per case of TB. 

Santa Clara County, however, has only $4,000 per case. In California, we represent probably the largest incidents, well, 20 percent 

of the Nation’s TB cases, and Santa Clara County has the largest 

incidents of that. What do we have to do in order to have the same 

funding level as the other three cities or how do we become a CDC 

Metropolitan Area for Special Attention relative to TB? 

[The information follows:] 

TUBERCULOSIS

Secretary Leavitt: The number of TB cases in the U.S. has declined by almost 

50% since 1992, due to the successful implementation of effective TB prevention and 

control strategies. CDC publishes TB surveillance data by state as well as metropolitan statistical area (MSAs) with populations greater than 500,000. In California, 

the following MSAs have the highest number of cases of TB in 2006 (in descending 

order): Los Angeles, San Francisco, San Diego, and Santa Clara. Only a few large 

cities in the United States receive direct funding from CDC for TB control. Most 

large cities in the United States receive federal funds from allocations made to them 

by the States. In addition to allocating federal funds to local governments, the 

States (primarily public health departments) provide vital support to TB related activities including: surveillance, training, outbreak response, and medical consultation. 

At percent, CDC allocates 35% of its TB grant funds based on current case numbers and other factors complicating the treatment of those cases. As a result of the 

TB formula, CDC increased funds allocated to the State of California by slightly 

over one million dollars (adjusted for a Congressional rescission) in FY 2008. In 

turn, it is our understanding that the state of California distributed its funding 

using a formula that was determined by the State. 

Secretary LEAVITT. I do not know the answer to that. I would be 

happy to respond to you in writing as to what the formula is, but 

sitting at this table today I do not know the answer. 

Mr. HONDA. Sure, okay. It might be helpful also if you would direct us to an individual that we can work with also. 

Secretary LEAVITT. Thank you. 

HEPATITIS

Mr. HONDA. In the area of hepatitis, the Division of Viral Hepatitis has essentially been flat funded for the past four years, and 

it has been stated before that flat funding is essentially a passive 

cut, if you will, in budgets. 

It was stated that the acute hepatitis cases have decreased, but 

the number of chronic cases continues to grow. In the area of Hep 

B, that is about 100 times more which is 100 times more infectious 

than HIV. In some communities such as Asian American communities, Hep B has high incidents. 

I was concerned that those who do not receive treatment will essentially end up with cirrhosis of the liver or liver cancer. In light 

of those costs to our Country both in human costs and real costs, 

I would like to just indicate that and urge CDC to look at it again 

and find ways to increase the funding at least in those areas. 


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I understand that you are trying to meet what we call fiscal responsibility, but I think that given the ways we have been spending money in the last few years, we might be able to find ways to 

sort of get a bit more money in that area. 

Secretary LEAVITT. I was, earlier this week, visiting some homeless shelters, and I spent time on a van that is in part paid for, 

in major part paid for by programs you have spoken of where we 

go out into communities and seek out those who might be suffering. 

I was told by a physician who operated the van that hepatitis is 

one of the most common things they are seeing and while it is not 

necessarily increasing, they see it on a regular basis. 

So your words resonate with me. I understand what you are saying. 

Mr. HONDA. Yes. That might be Hep C. 

Focusing just on Hep B which affects a population of about 12 

million, that is Asian Americans in this Country, and these are not 

homeless folks but people who travel a lot or people who do not 

know that they are carriers. 

We know that there are ways to treat it if we can find it in time. 

Having community programs like health fairs where we can test 

folks, we might be able to prevent a greater cost in the future in 

terms of the chronic forms of Hep B. 

Secretary LEAVITT. Well, thank you for informing me. 

Mr. HONDA. Perhaps you folks can look at that and maybe work 

with our community. Thank you. 

Thank you, Mr. Chairman. 

Mr. OBEY. Mrs. Lowey. 

SKIN CANCER

Mrs. LOWEY. Thank you and welcome, Mr. Secretary. The absence of many of us have nothing to do with the interest of this 

hearing but other responsibilities at other committees. I am delighted to have a chance to have a conversation with you about a 

few key issues that have been concerning me. 

You know that over one million in the United States are diagnosed with skin cancer each year, and the cancer is preventable 

with the proper use of sunscreen. But what we have seen in many 

of these studies is people who lather themselves with sunscreen. If 

it does not protect against the appropriate UV rays, it does not do 

them any good, and they are the ones that are getting melanoma 

and other kinds of cancers. 

Unfortunately, as you know, there are no standards for how 

much protection sunscreens must provide against the ultraviolet 

rays that cause skin cancer. I introduced legislation last year requiring the FDA to create such standards and HHS to conduct a 

public awareness campaign about the dangers of overexposure to 

the sun and ways to protect oneself. 

Last August, in response to my legislation, the FDA proposed 

new standards that will better inform consumers of the level of protection that a product offers against skin cancer-causing rays. 

Now I understand that FDA is not under the jurisdiction of the 

Committee, but I would expect that you would be working with 

Commissioner von Eschenbach on this issue. So, first of all, I would 


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like to know when the final rule on sunscreen regulations will be 

issued. 

You probably know that the last time this scenario took place 

was 1999, and there was never a final rule. It sat on the shelf for 

years and was never fully implemented. I understand this time 

that there is similar pressure from some manufacturers to indefinitely delay the rule yet again, which is beyond me. 

I cannot understand it because there are products that exist. 

Why, when you go in to buy sunscreen, there currently is a seal 

of the American Cancer Society, and all it means is they contributed to this effort. It has nothing to do with validating the product. 

So I would like you to commit to me today that this will not happen again. It is outrageous that we do not have specific guidelines 

that are mandated and that the industry should be able to prevent 

this from becoming final. 

Number one, I would like you to do that, and I would like you 

to commit to implementing a public awareness campaign on sun 

safety and skin cancer prevention at HHS. 

Secretary LEAVITT. Congresswoman, those both seem to be rational requests, and I will respond with respect to information on 

the rule. I am aware that there are, in fact, campaigns that are 

done at HHS. Interestingly enough, when I was at EPA we had a 

campaign on skin cancer related to the rays. 

So I will check on both and get back to you. I do not have solutions today. I do not have a response for you today. 

Mrs. LOWEY. Well, I would just respectfully suggest that we need 

you to make it clear that one million deaths from skin cancer is unacceptable and that they have to move and get this rule final. Actually, the rule is a pretty good one compared to 1999. Because of all 

the additional information, we are making progress. 

So I would hope that you would make it very clear that it is unacceptable to let this sit on the shelf while people are dying from 

skin cancer. 

Secretary LEAVITT. I have a scar right across my nose that is a 

very good reminder of all of that. Thank you. 

Mrs. LOWEY. I thank you, and I would appreciate your getting 

back to me. 

AUTISM

Another issue that is astonishing to me, to see the growth of autism. I go to the march every year in my district. There are tens 

of thousands of people who have autism in their families, and the 

Federal Government has recently increased its commitment to autism research, diagnosis and tracking. 

However, there continues to be a great need for information on 

effective treatments, interventions, services. I hear from families. 

They will go from one place to another, all day long, with their 

youngster to try and get the treatment that they need, and they 

have difficulty finding trusted sources of information. They are 

overwhelmed, frankly. 

So I would like to know what activities, if any, already underway 

at HHS are there to assist families with autistic children and is the 

Department collecting best practices or models created at the State 


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level when it comes to resources for families with autistic children 

that can be used at the Federal level? 

Secretary LEAVITT. Much of that work is going on at the Centers 

for Disease Control and Prevention. 

About three or four weeks ago, I met with the board that we 

have assembled of experts around the country in every discipline, 

representing every perspective, to begin helping us allocate the 

money that Congress has appropriated for this purpose. I expect we 

will see a well-coordinated effort flow from their efforts, one that 

will have been informed by all perspectives as intended in the legislation. 

Mrs. LOWEY. I thank you very much, and I am hoping we can 

get this information out as soon as possible because parents are 

just desperate. 

And, I thank you, Mr. Chairman. 

UNIVERSAL HEALTHCARE

Mr. OBEY. Thank you. 

Mr. Secretary, at the beginning, you responded to our concerns 

about the tightness of this budget by saying that the Administration had to take seriously its fiscal responsibilities. 

Let me simply say, I hope you will forgive me if I take that response or at least that rationale with a grain of salt because this 

is an Administration which does not mind providing $51 billion in 

tax cuts this year for people who make a million bucks a year or 

more. They do not mind asking Congress for an extra $170 billion 

for the misbegotten War in Iraq. Then they try to reclaim the mantle of fiscal responsibility by cutting $18 billion out of items on the 

domestic side of the ledger that we just appropriated last December. 

It seems to me that something considerably different than fiscal 

responsibility is at work here, but we can disagree about that. 

Let me talk about the future. In my view, the next President is 

very likely to pursue passage of a universal healthcare bill. Let’s 

assume that they do, and let’s assume that it is based on an essentially private delivery system. 

It seems to me that what this Committee needs to be looking at 

is the question of which programs under our jurisdiction need to 

be beefed up in order to prepare for the eventuality of universal 

health coverage. You have to beef up certain aspects of the system, 

and yet it seems to me that a number of programs that the Administration is cutting are some of the very programs that we will need 

to, in fact, buttress if we are to meet the new world with universal 

health coverage. Yet, you are recommending nurse training reduction, $46 million; health professions training, $194 million reduction; National 

Health Service Corps reduced by $2 million. 

We have already heard a lot of talk about rural health. We have 

the children’s hospital GME program terminated. 

We have the NIH budget essentially frozen. We have outcomes research cut by $9 million. 

Am I reading it wrong? Are these programs not programs that 

are going to have to be expanded in order for us to prepare ourselves for our obligations if we have universal coverage? 


ebenthall on PROD1PC60 with HEARING
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Secretary LEAVITT. Mr. Chairman, you and I had a brief conversation, and I have welcomed an opportunity to talk about this. 

I think one of the things we can agree on is that there is a widely 

held aspiration for every American to have health insurance. I 

think we could also agree that there are two philosophies on how 

to approach that. One has a different role for government than another. 

However, there are some things that I believe are common in 

those two visions and I believe that is the place where the Committee would be well intended or well directed to begin focusing on. 

One of them is in the area of how we can provide more cost and 

quality information for those who use the system. If, in fact, consumers were provided with that information, I believe we could 

begin to focus more on value and that many of the inefficiencies 

that I currently believe are in our system could then begin to be 

found. 

I do not find us to be particularly skilled or accurate as a society 

in being able to use government as the means of being able to 

eliminate the areas where there is inefficiency. I do believe if consumers had that information, if we organized our system, whether 

it was a universal system as you advocate or whether it was a 

more private system, that we would start to see. 

Mr. OBEY. No, no, no. No, no, no. I mean do not equate universal 

with public. That is a game that is often played when we talk 

about universal coverage. We are not talking about going to the Canadian system. 

We are talking about having everybody covered. You can do that 

under private approach just as much as you can do it under public 

approach. 

So do not set up that false dichotomy, please. 

Secretary LEAVITT. Well, then let me pursue. I am heartened by 

those words. I can see a vision where quite clearly we could achieve 

every American having access to an affordable basic plan in a relatively short period of time. 

OUTCOMES RESEARCH

Mr. OBEY. But here is my point: Let’s skip a lot of these other 

programs. Let’s take something as neutral as outcomes research. 

We are spending a hell of a lot of money in this country on medicine that is not the right medicine and is not the most effective 

way to deliver treatment for specific diseases. 

Shouldn’t we be greatly beefing up outcomes research so if we 

are facing universal coverage with higher bills, we have ways to reduce those bills? 

Secretary LEAVITT. There are three places that I would recommend you look seriously at funding in a way that would make 

a difference. The first is in electronic medical records because I 

think at the hub of that, at the hub of effectiveness research you 

will find the need to collect information on what works and what 

does not. 

The second area would be in measuring and developing measurable quality standards so that we know what we are measuring 

against when we measure, when we try to find effectiveness. 


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The third would be making a more rational system of measuring 

cost where we are beginning to group cost into buckets of care that 

are meaningful to people both as consumers and as institutions. 

If we were to invest in those three things, our capacity to measure effectiveness would be enhanced dramatically. Right now, our 

capacity to measure effectiveness is impaired by our inability to 

gather information in a way that can be used in meaningful research. 

Mr. OBEY. Okay. Let me move on. 

A lot of people in this country are getting increasingly terrified 

of the prospect of going to a hospital simply because of infection 

rates. What are you doing to see that the hospitals really get serious about this because, as you know, the performance level varies 

widely and some hospitals are incredibly careless in that regard? 

Secretary LEAVITT. I would go back to the same response. We 

need to figure out who they are, and we need to expose them. 

When people understand which hospital in fact they go to that has 

more risk, they are going to avoid it and the hospital will change. 

Mr. OBEY. What are you doing to try to intensify hospitals’ attention to the problem? 

Secretary LEAVITT. The first thing we are doing is gathering information, and we are publishing and providing information on 

hospital-borne diseases as fast as we can gather it. People deserve 

to know which hospital it is. 

NIH

Mr. OBEY. Absolutely. Absolutely. 

NIH, I have never had anybody come up to me and say, Obey, 

why don’t you get your act together and cut cancer research, and 

yet over the last two years the NIH budget that you are recommending will have cut roughly 600 grants out of the NIH budget. 

Why is that a responsible action? 

Secretary LEAVITT. Not every grant at NIH shows the promise in 

the third and fourth and fifth year that it does in the first year. 

Mr. OBEY. The success rate for grants has been incredibly diminished over the last decade. 

Secretary LEAVITT. We have been working at NIH with the available resources to prioritize those, and we continue to see a steady 

stream of new investigators. 

Mr. OBEY. But you mentioned fiscal responsibility. It seems to 

me that we have a responsibility to make the investments necessary to reduce future costs. That is a savings too. It just does not 

happen to occur in this election cycle, but it is nonetheless important. 

Secretary LEAVITT. I do not disagree with that. 

Mr. OBEY. If you let me give you an example, if you take Lou 

Gehrig’s disease, it is estimated we spend about 43 million bucks 

nationally on research on that disease. My understanding is you 

have about 30,000 people in this country who have the problem. If 

you measure the cost of that on an annual basis, you are probably 

looking at seven to eight billion dollars. 

Now, admittedly, we are far away from finding ways to treat or 

cure that disease, but you can take any disease you want to name 

and carry it out. We will be spending a huge amount of money over 


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the next 10 years to deal with that disease. Doesn’t it just make 

good sense from a fiscal standpoint to be upping significantly our 

research budget for NIH? 

Secretary LEAVITT. Prevention in any form is the best and most 

efficient way, and you will get no argument from me. 

When you look at, however, where the money for research is 

going, when you look at where the money in States is going from 

public health, when you look at where money is going away from 

education, it is because we are paying higher healthcare costs. It 

all goes back to the need for us to begin to constrain the cost of 

healthcare. 

Now, does that mean adopting Medicare reductions in the growth 

rate? Well, I mentioned earlier I have a lot of skepticism about that 

system. 

What I do believe can happen is if we begin to create a system 

where people have access to information and we have comparative 

effectiveness information, where we have some way for people to 

know whether they are getting their money’s worth, we will see the 

quality go up and the costs go down. 

Mr. OBEY. I think that is just fine. 

Secretary LEAVITT. And we can put more money in NIH and cure 

more diseases. It is the inefficiency of this system that is driving 

the problem you are mentioning. 

Mr. OBEY. With all due respect, let me grant that what you say 

is partially true. But at the same time, within the budget this year, 

if you take a look at the budget broadly, the Administration has 

chosen to conclude that tax cuts for millionaires are more important than added research for medical problems. 

I know that is not your decision to make, but I think the question is much more broad than simply inefficiencies in healthcare. 

Secretary LEAVITT. But I do think it is related in that the Administration believes that what is vital to having the money to fund 

any of this is a vibrant economy, and they believe that by having 

money in the economy and leaving it in the hands of people who 

use it to generate wealth and enterprise, that it stimulates more 

jobs and more taxes and, hence, the ability to do it. 

LIHEAP

Mr. OBEY. I do not happen to believe in the trickle-down theology, but we can have that debate another time. 

LIHEAP, you know we can talk all we want about how that program is targeted between one State and another, but the fact is you 

have a 22 percent reduction in that program in your budget request. That is really at the 2001 level. You have had energy prices 

go up by 65 percent during that time. 

I have people in my State. It was 38 below zero three weekends 

ago. Two weekends ago, it was 26 below zero, and I am not talking 

chill factor. I have people in my district with bills, heating bills, of 

four and five thousand bucks. 

Now there is a moratorium on the fuel company shutting off the 

supply until April, but then that moratorium expires. Where in hell 

are these people going to find the help to pay that kind of heating 

bill if they are making 15 or 18 grand a year? 


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How can I, with a straight face, say, it is perfectly reasonable to 

give $51 billion in tax cuts to millionaires but cut this program by 

22 percent? 

Secretary LEAVITT. It is probably not just a tax policy issue. It 

might be an energy policy issue too. 

Mr. OBEY. Absolutely. We are paying the price because since 

Jimmy Carter walked out of the White House no President has 

been worth a plug nickel in terms of energy policy in either party 

in my view. 

Secretary LEAVITT. I have a lot of opinions. It is not in my portfolio. So, maybe over lunch, we can talk about that. I would very 

much, Mr. Chairman. 

Mr. OBEY. This is so bad, I would rather do it over a drink rather 

than lunch. [Laughter.] 

Secretary LEAVITT. Mr. Chairman, I would, however, like to have 

some time a very serious conversation. 

When we talk about our healthcare system, we really do not have 

a healthcare system. What we have is a big, unwieldy healthcare 

sector. There is nothing in it that would approximate a system, and 

we have to get serious about creating an economic system out of 

healthcare. 

Mr. OBEY. I absolutely agree with that, and that is why I think 

that Medicare reform has to come in the context of overall 

healthcare reform in the Country. 

Secretary LEAVITT. Amen to that and both of them need to begin 

to be more sensitive to real value. 

The budget I presented to you today is a pro forma based on a 

spreadsheet. The system itself does not allow us to start talking 

about reform. This is not reform. It is a budget. We have to have 

a serious conversation about reform. 

Mr. OBEY. I understand, but again that is above my pay grade 

and yours. 

Secretary LEAVITT. It is certainly in our avenue of interest. 

Mr. OBEY. Our responsibility is for the moment to deal this year 

with this set of programs in the Subcommittee, and so let me simply close by saying what I said in the beginning. 

We are not going to buy this kind of cuts in the low income heating assistance program. We are not going to buy the elimination of 

vocational education. We are not going to buy the elimination of 

the SEOG student aid program. We are not going to buy the kind 

of deep reductions in health professions training that this budget 

contains, and I honestly do not think that the Administration expects us to. 

So I hope that recognizing that we can sit down with the Administration and work out a reasonable compromise between where 

you want to go with your budget and where we think we ought to 

go. 

Secretary LEAVITT. Thank you. 

Mr. OBEY. It would be nice if we did something besides shake our 

fingers at each other for the next eight months. It would be nice 

if we could actually get something done. 

Thank you. We appreciate your coming. 


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(465) 

WEDNESDAY, MARCH 5, 2008. 

HEALTH ISSUES AND OPPORTUNITIES 

WITNESSES 

ELIAS A. ZERHOUNI, M.D., DIRECTOR, NATIONAL INSTITUTES OF 

HEALTH 

JULIE L. GERBERDING, M.D., M.P.H., DIRECTOR, CENTERS FOR DISEASE CONTROL AND PREVENTION, U.S. DEPARTMENT OF HEALTH 

AND HUMAN SERVICES 

TERRY L. CLINE, PH.D., ADMINISTRATOR, SUBSTANCE ABUSE AND 

MENTAL HEALTH SERVICES ADMINISTRATION, U.S. DEPARTMENT 

OF HEALTH AND HUMAN SERVICES 

CAROLYN CLANCY, M.D., DIRECTOR, AGENCY FOR HEALTHCARE RESEARCH AND QUALITY 

Mr. OBEY. Well, good afternoon, everyone. 

This morning, we held a very interesting hearing. We had a variety of panelists talking to us about what this Committee should be 

doing by way of strengthening programs within the jurisdiction of 

this Subcommittee to prepare for what I believe to be the reality 

that the next President is going to have no choice but to deal with 

the issue of universal health coverage. It would be kind of nice if 

we were ready for that, and it would be kind of nice if we were 

spending money on things that actually worked especially since a 

lot of that money is going to be the taxpayers’. 

We also talked about the fact that so often in appropriations 

hearings we talk in dollar terms rather than human terms, and 

when we do talk in dollar terms we usually talk in terms of what 

it costs to do A, B or C or D in any given field. But what we also 

need to do is to balance that off by asking what does it cost us not 

to do certain things. And so, that is what I would hope our witnesses could focus on and remind us of today. 

For instance, doctors, when we had the meeting in the Speaker’s 

office earlier this year, I used the example of Lou Gehrig’s disease. 

We know that the Country spends a little over $40 million, it has 

been estimated, to try to understand that disease. But we have, 

what, 30,000 people who are afflicted with that disease, and it costs 

us many times that amount in lost wages, in medical treatment, 

et cetera, et cetera. 

So I think we would be more inclined to invest more money in 

some of these research efforts, in some of the public health efforts 

and a number of other areas if we gave as much attention to what 

it costs us not to proceed as it does to proceed. 

I think my attitude toward the Administration’s healthcare budget this year is well known. I have minimum high regard for it, to 

put it politely. Nonetheless, the budget is here. 

The Administration has submitted a budget that freezes all funding for biomedical science, spends $475 million less than last year 


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on critical public health promotion and disease prevention programs at CDC, cuts funding for healthcare outcomes and effectiveness research below last year’s level, and cuts funding for substance abuse and mental health treatment and prevention activities. 

I think we need to face squarely what these programs cost us, 

but I also think we need to face squarely what the consequence of 

inadequate attention to these problems winds up being for the 

Country, and that is what I hope we can cover today. So I will 

happy to call upon the witnesses for whatever comments they want 

to make after I have asked Mr. Walsh for whatever comments he 

might have. 

Mr. WALSH. Mr. Chairman, we have a lot of witnesses before us. 

I think I will just allow them to go ahead and proceed and hopefully have some questions afterward. But thank you for holding 

this hearing, and we welcome the witnesses. 

OPENING STATEMENT

Mr. OBEY. All right. We have with us Dr. Elias Zerhouni, Director of the National Institutes of Health; Dr. Julie Gerberding, Director, Centers for Disease Control and Prevention; Dr. Terry 

Cline, Administrator, Substance Abuse and Mental Health Services 

Administration; and Dr. Carolyn Clancy, Director of the Agency for 

Healthcare Research and Quality. 

Dr. Zerhouni, why don’t we begin with you? Did you bring your 

musical instrument? 

Dr. ZERHOUNI. Thank you, Mr. Chairman. 

Mr. OBEY. You are not going to answer that question? [Laughter.] 

Dr. ZERHOUNI. I am sorry. 

Mr. OBEY. You didn’t bring it? 

Dr. ZERHOUNI. I was trying to avoid answering it because I think 

that instrument would be the focus of attention instead of the NIH. 

I thought it was a great opportunity to come in front of you and 

members of the Committee to explain, the overall strategy of the 

NIH and focus my comments on the highlights of the testimony we 

have submitted for the record. I’ve identified four essential points 

that I think need to be understood to see where medicine and discovery and healthcare need to go over the next few years. 

The first point I would like to make is the investment of the 

American people in the NIH has paid dividends that are difficult 

to overstate. The reduction in mortality of heart disease alone by 

70 percent and stroke by 70 percent has allowed an economic return that is much greater than the spending that we incurred in 

terms of researching heart disease. 

I think we have made progress on many fronts to the point 

where acute diseases that were short-term and lethal in the past 

are no longer the main challenge. The main challenge has become 

chronic diseases, and chronic diseases represent 75 percent of our 

expenditures. 

It is clear that this rise of cost in healthcare is unsustainable. 

No one today believes that there is a straightforward strategy to 

sustain these costs over time. No one believes that what we have 


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done in the past and the strategies we have followed in the past 

are going to be effective in the future. 

As Einstein said, a bad scientist is a scientist who keeps trying 

the same thing, hoping for different results. We have to change our 

strategies. 

The challenge in front of us, obviously, is that in the past, a certain paradigm of healthcare was to strike the disease once it had 

struck the patient—waiting for the disease to really appear before 

we did anything. This sort of late reactive episodic type of care is 

no longer what will be needed in the future to manage chronic diseases. 

We will have to be more proactive and this is what we call the 

new era, whereby the research we do enables us to understand disease at its beginning before it strikes the patient. We call this the 

four Ps of modern medicine. 

We need to be more predictive. We need to find the markers, 

whether it be genetic markers or other markers that identify the 

risk of an individual. 

We need to understand the environment. 

We need to understand how to prevent disease. In many cases, 

we may not be able to do so but we need to continue our efforts 

to find ways of delaying the onset of the disease or reducing its 

complications and continue to do the research needed to alleviate 

the suffering of millions of patients who currently suffer from these 

diseases. 

So the landscape of disease has changed. Our strategies have to 

change, and those strategies have to be a lot more proactive, more 

prospective than they have been in the past. 

The NIH will continue to do the research we do today but also 

expand into new areas of science, areas of science that will allow 

us to understand not just at the atomic level or molecular level but 

also at the cellular level, the tissue level, the organ level, the mind 

and body level, all of the components that lead one from a healthy 

life, healthy status to an unhealthy status. Therefore, the scope of 

our research has grown. 

Last but not least, I would like to say that life sciences are going 

to be the critical challenge of this century for any nation, just like 

physical sciences were in the past century. Those who develop the 

knowledge to overcome the challenge of rising healthcare costs and 

find a way of not just improving how they deliver care but what 

care is being delivered are going to be the nations that will sustain 

their competitiveness. 

This will require us to focus, which is my last point, on the next 

generation of scientists. Nothing keeps me awake at night more 

than the fate of early career scientists who get discouraged from 

entering science at a time when the Nation needs more scientists, 

more engineers from all walks of science to be able to meet those 

challenges. 

Our budget reflects these priorities. We try to maintain a number of investigator-initiated grants. We try to create programs that 

encourage early career scientists to remain in science to the greatest extent possible. 


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Those are the comments I wanted to make to highlight the priorities that the Agency has at this point. I will relinquish the rest 

of my time for questions. 

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Mr. OBEY. Dr. Gerberding. 

OPENING STATEMENT

Dr. GERBERDING. Thank you very much. It is a real honor to be 

here and to have a chance to appear with my colleagues. I am sure 

I am going to learn a lot more from this hearing than I will contribute, and I am very grateful for that. 

I would like to pick up where Dr. Zerhouni left off and talk a little bit about how health happens. 

There are three questions that plague us at CDC. One is why, 

if we are the Nation that spends the most on health, aren’t we the 

healthiest Nation? We are actually 37th in the world according to 

the WHO. Why might our children have shorter lifespans than 

their parents and, fundamentally, why is obesity becoming a national security concern in the United States? 

I think those are all three reflections of the fact that we just simply do not have the value in our health system that we need, and 

part of that has to do with, again, fundamentally rethinking about 

how health happens. 

So if I can have my slides, I want to just start with the traditional healthcare delivery system, starting with the discovery 

phase at the NIH and CDC and elsewhere, moving to patients 

through translation, bench to bedside, then translation into evidence-based practice guidelines, something my colleague Dr. 

Clancy knows a lot about, and from there really being translated 

into widespread clinical practice so that everybody can benefit and, 

finally, we hope, the fourth level of translation into achieving the 

kinds of true health outcomes and benefits to all people. 

The problem in our Country right now is that this last element 

is particularly blocked. People are worried about access and cost in 

care. It doesn’t matter if you read the New England Journal or 

whether you are Republican or Democrat, this is a major concern 

for people everywhere, and we know that we have major problems 

in these areas. 

But even if we alleviated these problems, we would still not necessarily have the health that we want because the health in our 

Country has more to do with things that happen outside of the doctor’s office than it does with thing that happen inside of the doctor’s office. That is where the public health system comes in, and 

that is why the investments that we make there are so very, very 

important. 

So we think that there is a comparable highway to health that 

is not one that is receiving the attention that it deserves, but one 

that is equally, if not more, important in getting us to a healthy 

Nation. 

It starts again with research. That gets translated to people in 

communities and schools and the workplace. From there, we develop public health practice guidelines, evidence-based practices, 

the things we know work. Then we need to translate those into 

widespread uptake so that health departments in communities everywhere can benefit from them. Finally, then, we see that health, 

as we measure it in a holistic way in our society, ultimately will 

be achieved. 


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Both of these highways have to be functional, and investments 

in both of these areas contribute to people’s health and, I think, ultimately to our ability to be one of the healthiest nations in the 

world, a status that we do not currently enjoy. 

There are lots of things that we know work and lots of things we 

can talk about scaling up, ways we can put health and policies beyond the policies in this Committee, health in agriculture, health 

in transportation policies, health in commerce policies. 

I think there is also a very important need to market what we 

know works and to get it diffused and disseminated and taken up 

widely, using some of the new technologies that we have at our disposal today so that people everywhere can benefit. 

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Mr. OBEY. Dr. Cline. 

Dr. CLINE. Mr. Chairman, members of the Subcommittee, thank 

you very much for the opportunity to be here today. I would like 

to request that my written testimony be submitted for the record. 

During my tenure as SAMHSA Administrator, I have had the 

benefit of traveling across the Country and seeing the amazing results of SAMHSA-funded work. I have seen men and women reunited with their children after conquering addiction. I have seen 

people who are managing their mental illnesses and getting jobs 

and reclaiming their lives and becoming contributing members of 

our society. 

At SAMHSA, helping more people have that opportunity to 

achieve these same results is a focus of work. We have also been 

working to move upstream to prevent many of these conditions 

from occurring in the first place by emphasizing the public health 

approach to well being, and I think this is a theme that you will 

see throughout the afternoon. 

I learned the value of taking that public health approach as a 

freshly minted psychologist on the streets of Cambridge and Somerville and Boston, Massachusetts. My first professional job was 

providing home-based therapy to families who were living in low 

income housing developments in those areas. 

So, as I walked to my appointments everyday, I would walk by 

many other families who I knew needed help as much as the family 

I was going to see, but I simply didn’t have the time to work with 

the other families. I was only able to offer that therapy one family 

at a time. 

So, walking by 15 families that I knew were in need to reach 

that one family just didn’t seem like the right thing to do. It certainly wasn’t right to do that then. It is not right to do that today. 

Something significant needs to change. 

I remember thinking that there had to be a better way to deliver 

services. There had to be a better way to reach more people in need 

of mental health and substance abuse services in our Country. 

I thought of the opportunities with those families to intervene 

earlier. I thought of those opportunities to actually prevent many 

of the problems that they were experiencing from occurring at all. 

That experience is why I believe so strongly that we need to adopt 

a public health approach in our overall work that we do. 

The public health approach really involves us moving upstream 

while continuing the work that we are doing downstream. So while 

we continue to rescue those drowning individuals, we also need to 

move upstream and prevent to keep individuals from falling in the 

river in the first place. 

The public health approach, as you know, recognizes that behavioral health is inextricably linked to overall health, and the integration of these is valuable and necessary. That is why I am so 

passionately convinced that mental illness and substance use disorders should be and must be treated with the same urgency as 

other health conditions. 

One way to accomplish this goal of service integration is to 

strengthen the relationship with primary care providers. Primary 

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havioral health services to the people where they are and not wait 

until people are in crisis. 

By encouraging healthcare professionals to identify at-risk populations and to intervene early in their lives, we can significantly reduce the burden of substance abuse and mental illness among 

Americans and our social institutions. 

There are several models of primary healthcare and behavioral 

healthcare integration. One particularly useful model focuses on 

behavioral health screening through primary care. So I would like 

to talk just briefly about that. 

For example, through one grant program that focuses on substance abuse, SAMHSA is implementing screening, brief intervention, referral and treatment services in trauma centers, emergency 

rooms, community clinics, federally-qualified health centers and 

school clinics. These programs provide screening strategies for 

intervention before the individual needs those more extensive or 

more specialized services. 

So far, our grantees have screened over 545,465 individuals 

across our country. Of those screened, 22.9 percent of those individuals required a brief intervention, brief treatment or referral to a 

specialty treatment. 

At six months post-intake, 74 percent of those individuals reported lowering their drug or alcohol consumption after 1 or more 

brief interventions. So, of those individuals, 48 percent reported no 

substance use at all. 

Through technology and training, we must continue to keep 

working to bring new knowledge, treatments, preventive strategies 

developed by our research institutes to daily community-based 

practice. We have never, ever before known so much about the prevention and treatment of mental illness and substance use disorders. Now we need to actually do what we know. 

Mr. Chairman, members of the Subcommittee, I am optimistic. I 

look forward to the day when mental illness and substance use is 

treated with the same urgency as other illnesses. 

I look forward to the day when a public health model ensures 

that preventing illness is as much a priority as treating illnesses 

in this Country, and I look forward to the day when we have policies and systems in place that will build resilience and facilitate recovery. Then, and only then, will we have a truly rich and healthy 

Nation. 

I would like to thank you for the opportunity to be here today, 

and I look forward to answering any questions you may have. 

Thank you. 

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Mr. OBEY. Thank you. 

We are halfway into a vote on the House floor. So I think we had 

best recess at this point, go over and vote and then come right 

back. We will then hear from Dr. Clancy. 

[Recess.] 

Mr. OBEY. Dr. Clancy. 

AHRQ’S MISSION

Dr. CLANCY. Mr. Chairman, members of the Committee, I am 

honored to be here today. 

As you may know, AHRQ’s mission is to improve the quality, 

safety, efficiency and effectiveness of healthcare for all Americans 

as shown on this slide. So our mission is driven by the needs of 

people who use the research: patients, clinicians, health system 

leaders and policy-makers. 

A major focus for us is translating findings of our research into 

practice and policy, and to that end we work very closely with the 

organizations directed by my colleagues here. We also work as a 

science partner to CMS and have had the opportunity to collaborate with the VA and the Department of Defense as well. 

The next slide just demonstrates that while our research agenda 

is broad and spans promoting healthcare information technology to 

reducing medical errors to supporting comparative effectiveness to 

enhancing Americans’ healthcare quality that they get right now. 

This map just shows that we have a broad geographic reach. 

COMPARATIVE EFFECTIVENESS RESEARCH

Today, I would like to highlight first for the Committee our work 

in the area of comparative effectiveness research which has been 

the subject of a great deal of interest recently. 

Under the MMA, AHRQ was authorized to conduct and support 

research with a focus on outcomes, comparative clinical effectiveness and appropriateness of pharmaceuticals, devices and 

healthcare services. The focus of this research is based on the top 

10 conditions that are common and costly for those whose 

healthcare is funded by Medicare, Medicaid and S-CHIP programs. 

The list of priority conditions shown in the written statement was 

developed with substantial input from the public and private stakeholders. 

Since 2005, we have released 14 comparative effectiveness reviews. These reviews range from diagnostic evaluation of technologies for abnormal breast cancer screening to comparative effectiveness of drugs for depression to treatments for prostate cancer. 

As one example, one review found that drugs can be as effective 

as surgery for management of gastroesophageal reflux disease, better known as heartburn. This turns out to be one of the most common health conditions in older Americans and results in 

$10,000,000,000 annually in direct healthcare costs. 

Among the other topics are treatments for localized prostate cancer, a decision that many men and their providers are facing every 

day, as well as examining the benefits and harms of all oral medications for patients with Type 2 Diabetes. 

We place a great deal of value in ensuring that our work is credible and scientifically sound, and we have made investments to 


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make sure that the methods and processes for performing comparative effectiveness research are of the highest quality. 

We are very excited that our comparative effectiveness research 

is now being increasingly used by the Consumers Union in their 

Best Buy Drugs project and in other reports on health treatments. 

The National Business Group on Health is also making this research available to employers and their employees. 

I think that you are all aware how excited the CBO has been 

about the possibility for comparative effectiveness research to give 

us better evidence about which treatments work for which patients. 

Their report further suggests that this research can help reduce 

healthcare spending and improve quality and value. 

The bottom line, actually, is that doing the right thing for the 

right patient at the right time, using comparative effectiveness research to improve the quality of healthcare will enhance the value 

of our investments in healthcare. 

I want to thank you and the Committee for allowing us to double our investment this year from $15,000,000 to $30,000,000. We expect to double the number of reviews and technical briefs and so 

forth. 

HEALTH INFORMATION TECHNOLOGY

But it is very important to recognize that simply better research 

is not necessarily going to translate into better value. We have to 

be anticipating up front how this information will be used and how 

it can be immediately available to clinicians and patients when 

they are confronting tough decisions right now. 

So that is why the research investments that we have made in 

the use of health IT to improve healthcare right now are particularly important. They will allow health information technology and 

electronic medical records to gather better information to do future 

reviews and to also serve as a platform for putting that information 

into the hands of clinicians and patients now. 

Technologically, we know how to do this. When I logged on to 

Amazon not too long ago, they helpfully reminded me that Bruce 

Springsteen had a new CD out and they did not tell me that 

Britney Spears had any new work for me to be interested in. 

Technology is not the hard part. The hard part is having good 

content that clinicians and patients need today. We know that 

health IT is not a magic bullet. 

PATIENT SAFETY

I wanted to also just highlight for you some very important work 

we did in patient safety to give you a sense of the successes we 

have had. We supported a project at Johns Hopkins University 

which worked with all the hospitals in Michigan to implement a 

very simple checklist to reduce serious infections for patients in 

ICUs. Many of these hospitals were actually able to reduce that infection rate to zero. 

I heard a healthcare leader, not too long ago, refer to this as one 

of the most important developments in a generation. What he 

meant by that was when he and his colleagues were providing ICU 

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sive care. Now this study was able to show that, in fact, they are 

almost totally avoidable and in some cases can be eliminated altogether. 

I wanted to also mention that very recently in the New England 

Journal, there was a terrific article called Eulogy for a Quality 

Measure. The title comes from the fact that it has now become 

such routine practice to give patients who have had a heart attack 

a drug called a beta blocker which reduces subsequent mortality. 

It happens so routinely now, which has not always been the case, 

that we no longer have to track it in quality report cards. 

This is a success story and suggests that measurement and public reporting is a good idea. That is the good news. 

The slightly less good news is the people actually did the landmark trial 25 years ago when I was a resident, and I think we can 

and have to move much, much faster to translate the investments 

that the taxpayers have made in scientific research into the 

healthcare that people get right now. I think investments in our essential programs will be pivotal to actually making that translation 

happen. 

Thank you very much. 

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NIH BUDGET

Mr. OBEY. Thank you. 

Let me try to ask four quick questions. 

Doctor Zerhouni, I have said before that I have never had anybody come up to me in my district and say, Obey, why don’t you 

guys get your act together and cut cancer research, and yet that 

is what the previous Congress and the President did. For two 

years, we actually reduced the number of research grants down at 

NIH. 

This year, you have a freeze. You have indicated that that means 

that we will lose about 6,000 scientists. Why should the Country 

give a damn? 

Dr. ZERHOUNI. I believe if you look at the impact of the below 

inflation budget, we need to understand that the capacity of our 

Country to react to both its current problems and its future problems will depend on a trained, committed, talented scientific workforce. 

Seventy to eighty percent of our expenditures, depending on 

what you do, is related to people, trained scientists. It takes about 

20 years to train a scientist, and it costs about $100,000 a year. 

Every time we can’t sustain our purchasing power, it hits scientists primarily and especially early career scientists. This is the 

concern that I expressed when I said that at the end of the day, 

all of this impacts people. 

This isn’t just dollars. This is an investment in people, the people 

who know how to deliver better healthcare and the people who will 

deliver the new healthcare of the future. 

GENES AND ENVIRONMENT

Mr. OBEY. One more question, there is a lot of focus on molecular 

biology, a lot of focus on genetic predisposition to certain diseases, 

and I understand that. 

But I guess one of the principal critiques of medical research in 

this Country on the part of some would simply be that while we 

invest a whole lot to try to understand that end of the equation, 

we are not doing nearly enough to figure out what the environmental triggers for some of these problems are. What would your 

response be? 

Dr. ZERHOUNI. I think there is truth to the fact that we need a 

multi-pronged approach. I think your genes are only half of the 

reasons why you suffer from a disease. The environment is just as 

important. 

The fact is we have environmental measures we feel at NIH are 

good at a population level, but they are not good at the individual 

level. The medicine we are talking about is going to have to be personalized to your own genetic risk factor and to your own environment. This is why the NIH launched the Genes and Environment 

Initiative two years ago to look at the ten most common diseases 

and develop new measures of environmental exposures at the individual level. 

So I agree that we need to do better in measuring both the environmental factors as well as your natural predisposition or risk 

profile. Both have to come together. 


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HOSPITAL INFECTIONS

Mr. OBEY. Dr. Clancy and Dr. Gerberding, as you know, the old 

maxim in healthcare is first do no harm, and yet a lot of people 

run into harm accidentally when they go to a hospital. I would like 

to ask both of you, what do you think can be done to send a message to every hospital in America that we are dead serious about 

their getting dead serious about doing some of the basic things that 

are necessary to reduce those unacceptable infection rates? 

Dr. GERBERDING. I will start. First, let me thank you for asking 

the question because this has been my career. Hospital infections 

is where I started and why I came to CDC in the first place. 

I think the one thing we know for sure is that if you measure 

this problem and you require it to be reported either within the 

hospital or outside of the hospital, that it will improve. 

In our reporting system that we have operated for more than 3 

decades, we have seen a 50 percent reduction in these infections in 

the hospitals that participate and in other hospitals in Pittsburgh 

and Michigan where the problem has been accurately measured by 

people who know what they are doing. We can achieve dramatic reductions in these kind of preventable patient safety issues. 

But if you ignore the problem or you take a name-shame-blame 

approach to it, it stays underground and it is only until something 

tragic crops up like the case of hepatitis C virus in Nevada right 

now that is related to an egregious medical error, that it really 

comes to the light and the public understands what the true hazards really are. 

So we need to measure it. We need to do the science to identify 

the interventions that work, and then we need to market those 

interventions as widely as we can and hold systems accountable for 

making sure that they are properly executed. 

MRSA

Dr. CLANCY. Just to build on that, let me say that this year we 

have the opportunity, thanks to this Committee, to invest an additional $5,000,000 squarely focused on hospital-acquired infections 

with a specific focus on the methicillin-resisitant staphylococcus 

avreus (MRSA) and we will be also looking for other sources of 

what is happening in nursing homes and so forth. 

This is very practical research, and a big focus of this research 

is actually going to be making sure that the conduct of the work 

is done in healthcare settings in such a way as that it becomes part 

of core practice. 

You know in the hospital, if you are in the operating room and 

you don’t wash your hands or do the correct sterile technique, virtually everyone is empowered to tell you to stop. It doesn’t matter 

how powerful a surgeon you are, whatever. The show stops then. 

You walk through those swinging doors out to the rest of the hospital and it is something like the wild west, and I think that is the 

approach we need for infections. 

If you asked patients who have been harmed by medical care, 

what they want, they want three things. They want an apology. 

They want to know what is going to happen to them. Is this a permanent injury or will I get better? And, they also want to know 


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that the institution is doing everything it can to make sure this 

doesn’t happen again to someone else next week, which happens all 

too often right now. 

PATIENT SAFETY ORGANIZATIONS

I am very pleased that we have out for public comment the regulation from the Patient Safety and Quality Improvement Act so 

that by the end of this year we will have the opportunity for hospitals, physicians and many others to work with patient safety organizations. They won’t get more money for this, but it will remove 

the fear of liability from this equation because doctors agree with 

the three things patients want, but they are very worried about 

any information generated as a result of measuring and tracking 

that will be used against them. 

I will also say that CMS will implement, as you know, next year 

a plan to not pay for some types of harms done to patients, and 

I would say that has a lot of people’s attention very squarely. 

ACCESS TO HEALTHCARE

Mr. OBEY. One last question, the same question we asked this 

morning, if you take a look at all the programs over which this 

Subcommittee has jurisdiction, what are the three or four programs 

that you think we should most emphasize in order to increase access to healthcare? 

This morning’s panel indicated that outside of doing basic medical research which is the most basic of all preventive actions, they 

suggested that we needed more funds into outcomes research, into 

State risk pools, into community health centers and in professional 

training, all to get us ready for the day when we do have universal 

healthcare. 

What would your response be to that question, whomever? 

Dr. ZERHOUNI. I think there are several factors that you will 

need to address to improve access to healthcare. 

If you look at the statistics, I think my colleague was mentioning 

statistics in terms of how much we pay and what we receive in 

terms of healthcare, levels of healthcare and performance. We do 

spend quite a bit more than equivalent countries. If you look at our 

expenditures relative to Germany, we spend 50 percent more than 

Germans, and it is hard to see where you would have a public 

health general population advantage. 

We do have better acute care and top-notch facilities that provide 

care that could not be achieved elsewhere. 

So, first is cost. Access is proportional to cost. If it is too costly, 

people cannot access care. 

The second is, in my view, to take into account the fact that medicine has to move from curative large facilities to a much more preemptive participatory type of medicine where community implementation of appropriate programs is going to be key to maintaining the health of the population. 

I think this shift to more dispersed facilities with modern technologies including health information technologies, with easy access to patients and communities and participatory approaches is 

the key to making sure that at the end of the day, you don’t end 


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up with an emergency room that is overwhelmed with problems 

that shouldn’t be in the emergency room in the first place. 

A three-pronged approach which finds ways to reduce costs and 

redistribute where healthcare is provided. At the end of the day, 

understand that it is not just how we improve delivery, but managing what is being delivered. 

PUBLIC HEALTH APPROACH

Dr. CLINE. Just to add a couple of clarifications to those points, 

one would be really in shifting the incentives that we see in our 

systems and moving those incentives to the front end in our 

healthcare system in places where we know that people are beginning to struggle with their illnesses. We see very effective programs that are able to screen and provide very brief interventions 

for individuals at the front end of their illness cycle, and we know 

that the outcomes are very impressive. 

So I would encourage, again, a realignment of those incentives 

away from the sole focus on the very, very acute level of care where 

someone is in crisis or in the emergency room but moving that to 

the front end, moving services where we find people in their natural elements. It may be school clinics. It may be other places 

where people are congregating on a regular basis. 

For people with mental illness and people with substance abuse 

and addictions, we know that when we don’t provide that service 

up-front, eventually they will bump into our systems. Huge costs 

associated with that are borne by the public at large. So we need 

to shift those incentives to the front end. 

ACCESS TO CARE AND QUALITY

Dr. CLANCY. When I think about what is under the jurisdiction 

of this Committee, I think the key question is access to what? 

Right now, what we are seeing as a result of the annual reports 

we submit to the Congress every year on quality is healthcare quality goes up every year 1 to 2 percent, a very small amount. The 

spending keeps going up in the ballpark of 7 to 8 percent. So we 

have a big disconnect. 

Ultimately, to expand access, we have to make sure that we are 

getting the return that we want. So I think additional investments 

in research that help us identify what the highest value services 

and how do we provide them most efficiently is definitely going to 

be part of the foundation that we will need in thinking about getting to universal access to care. 

Dr. GERBERDING. I would agree with Dr. Zerhouni that access is 

more than cost, although you have to allow for the cost to be affordable. 

It is also about awareness. Many people right now have technical 

access to care, but they don’t avail themselves of the services because they are not aware of what they need or they are distracted 

by other priorities in their life. 

Some don’t have the ability. I learned this in the AIDS clinic a 

long time ago. We had care for our AIDS patients, but many could 

simply not get on the bus and get there, or they were a mother 

with children and they didn’t have child care or many other things 


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that mitigated their ability to come in and get their anti-retroviral 

drugs. 

So true access has to embrace those broad issues. 

Having said that, from the Committee’s perspective, I would also 

hope that we would be talking about access to health and not just 

healthcare delivery. In that light, thinking about what can the 

labor and education parts of the Committee do to encourage or 

incentivize or, through a policy mechanism, ensure that health can 

happen in the workplace or in our schools or in other community 

settings. 

Health isn’t just about what happens in the healthcare delivery 

system, and there are lots of ideas that we have about policy mechanisms to create environments that are healthier for people or motivate people to be able to access health services in other contexts. 

Mr. OBEY. Thank you. 

Mr. WALSH. Thank you, Mr. Chairman. 

Today, on the floor of the House, we are debating a bill that 

would require health insurance providers to provide for parity between physical health insurance and mental health, which is a 

good thing. There are obvious issues within that universe, that 

equation, that are difficult, but it is a goal. It is a worthy goal, and 

I think most of us support it. 

This is not analogous, but I am looking at the budget before me: 

National Institutes of Health, $29,000,000,000; CDC, 

$6,000,000,000; community health centers, $2,000,000,000; 

SAMHSA program level, $3,300,000,000. We are not spending anywhere near what we are spending on physical health through government services. 

I note that in every one of these categories the Administration 

has proposed a cut: 6 percent in the program level, 14 percent in 

mental health block grants, 2 percent in substance abuse treatment, 18 percent in substance abuse prevention, and there is also 

a proposed cut in homeless programs. We all know that most homeless people have a substance abuse problem of some sort. 

You made a very compelling statement at the beginning of this 

testimony, Dr. Cline, about walking past 15 families to get to 1. 

You are going to be walking past 17 or 18 families at this rate to 

get to that 1. Would you care to comment on the disparities here? 

SUBSTANCE ABUSE AND MENTAL HEALTH HEALTHCARE NEEDS

Dr. CLINE. Thank you for the opportunity. 

Today, in our country, we have 23.6 million people who are in 

need of substance abuse treatment and currently about 2.5 million 

individuals who are receiving treatment at a specialty clinic. 

When we look at mental health and the need on the mental 

health side, we have about——

Mr. OBEY. Would you repeat that number? 

Dr. CLINE. Twenty-three million, six hundred thousand who are 

in need and two million, five hundred thousand who are actually 

receiving treatment from a specialty clinic. 

On the mental health side, we have about 24.9 million individuals who are in need of services and about half of those individuals 

are receiving treatment. 


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One of the findings that came out of the President’s New Freedom Commission on Mental Health was that our system basically 

is fundamentally broken. We need to completely transform our system. It is not about adding a few more programs here, adding a few 

more programs there. We need to radically transform the way 

these services are delivered. 

As someone who grew up in this system as a psychologist, I can 

tell you, there was a time when we were very, very much on the 

margins of the healthcare system, if involved at all. We were certainly on the margins of the public health system, very much isolated, very much on our own. 

There may be developmental reasons that took place in terms of 

the field finding its own identity and putting its feet on the ground 

as a discipline. However, that has come at a significant cost, being 

isolated and marginalized from the rest of the system. 

So what we are proposing is that integration, that cross-fertilization take place wherever possible because we have paid an incredible cost by being at the edges of the system. 

And, as a result of that, in the majority of States that you will 

visit and the majority of programs that you will visit, we are not 

talking about a healthcare system, we are not talking about a behavioral health care system. We are really talking about a crisis 

management system that is entirely reactive. You need to be very, 

very ill to be eligible for most services in most States. 

The equivalent, if you were in the healthcare system—I have 

used this example before—would be that you would go to your primary care physician, and complain about having pains in your arm 

and shortness of breath and dizziness and profuse sweating. The 

doctor would tell you to come back after you had a heart attack. 

That is what we have done in the mental health and in the substance abuse system. Wait until you are incredibly ill before you 

are eligible for those services. 

So we need that fundamental shift to be able to move to the front 

end, to completely transform. Tweaking it around the edges simply 

will not get us there. The gap is so huge at this stage. 

Mr. WALSH. Do you have a proposal? 

MENTAL HEALTH PROMOTION AND PREVENTION

Dr. CLINE. Well, that proposal is to focus on early intervention. 

As part of our budget proposal, we are proposing an increase to the 

Children’s Mental Health Services Program. 

We just recently directed a report to Congress that is focused on 

promotion and prevention in mental health, strengthening resiliency, strengthening parenting and enhancing resiliency. Those 

were concepts that were alien to this field only five or ten years 

ago, the idea of prevention and promotion in mental health. 

So we are moving radically in that area, but again it takes that 

complete transformation. 

One of the things that has taken place, again as a result of the 

President’s New Freedom Commission on Mental Health, is a Federal executive steering committee which is made up of representatives across nine different cabinet levels in the Federal Government, where all of those representatives of the agencies are coming 


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together with a specific focus on behavioral health as it affects all 

of these different areas and looking at those areas. 

Mr. WALSH. If I could because time is limited, those are all worthy goals, but you can’t get there, going backwards on your funding. It is pretty simple. 

Just one thought, at our veterans hospital in Syracuse, there is 

an agreement between the hospital and the psychiatric community 

that everyone who goes for any level of treatment will get a holistic 

examination, physical and mental health. 

It is unusual, it is unique, and it is a pilot program. But I think 

it will be very interesting to see what is determined by that program, and it may have applications for the broader society. 

Thank you. 

Dr. CLINE. Sounds like a wonderful program. Thank you. 

Mr. OBEY. Thank you. 

Just to back up what Mr. Walsh is talking about, mental health treatment and prevention, cut $127 million, substance abuse prevention cut by $36 million. That is like scoring a home run by 

going to third base first. It doesn’t work very often that I have 

seen. 

Who is next? 

VACCINE FOR CHILDREN

Ms. ROYBAL-ALLARD. Dr. Gerberding, the Vaccines for Children 

program has been admittedly successful and, for the most part, 

childhood immunization rates in the United States are enviably 

high. However, CDC recently released new data on immunization 

rates showing that adults continue to be woefully under-vaccinated. 

Given the fact that approximately 50,000 adults die from vaccine-preventable diseases each year, in your opinion, what are the 

major barriers to adult immunization? 

Dr. GERBERDING. There are several different barriers, and I 

should mention in the same breath adolescent immunization which 

is also extremely challenging, now that we have these wonderful 

new vaccines for adolescents, but we don’t have the kind of structured system for delivering them. 

One barrier, obviously, is that patients don’t have a uniform 

medical record and don’t understand when and how many and how 

often their vaccines should be delivered. So one is a patient barrier. 

A second is a system barrier where absent appropriate health information records that travel with the patient from point to point. 

It is impossible to really keep track of who has been vaccinated 

when vaccines are due or what vaccines are needed. 

There are also issues around access to care and cost, co-payments 

and so on and so forth. We are seeing with the influenza vaccine, 

where we have an excellent reimbursement rate for Medicare patients and an excellent system for delivering it, that we still have 

individual barriers for people just deciding they don’t want to get 

their vaccine for whatever reason even when they know they 

should have it and they have access to it. 

So a lot of work needs to be done in this area to really achieve 

the promise. 

We monitor influenza vaccine because it is the easiest to keep 

track of, but when we really assess adult vaccines across the board, 


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it is a missed opportunity to really save lives and save hospitalization. So it needs to be a higher priority. 

Ms. ROYBAL-ALLARD. Given the success of the Vaccines for Children program, what are your thoughts of having a Vaccines for 

Adults program that would give poor and uninsured American 

adults access to lifesaving vaccines? 

Dr. GERBERDING. Well, I think we need systems that not just deliver a vaccine here and there, but actually track and monitor people over the course of the many places where they receive health 

services. 

So I actually think one of the major missing pieces to accomplish 

what you are suggesting is a health information record or at least 

a vaccine record. This record may start when you are zero years 

old but stays with you throughout your lifetime so that wherever 

you are, you know what you need and anyone can easily identify 

that. 

We have adults with many points of contact with the system, but 

you may not recognize that this would also be a good time to give 

you your tetanus shot or your flu shot or your pneumococcal vaccine or whatever else it is that you need. We just have too many 

missed places because providers can’t put their hands on the information that would tickle them to know what they need to do. 

Ms. ROYBAL-ALLARD. Well, given a recent survey that has shown 

that few Americans really know what it is that they need, what 

would your thoughts be about having an adult immunization media 

campaign to raise awareness? 

Dr. GERBERDING. I would love it. I would absolutely be thrilled 

to be able to do that. 

I think it is a well-known fact at any age group that vaccines are 

cost-saving, not just cost-effective but cost-saving. It is one of the 

best investments we can make in health and to have the capacity 

to really create an exciting campaign, a full court press in a comprehensive and holistic way, would just be terrific. 

UNDERINSURED CHILDREN

Ms. ROYBAL-ALLARD. Just one more question on immunization, 

as we discussed, the children’s vaccine program has had remarkable success, providing uninsured and underinsured children with 

lifesaving vaccines at no cost. 

However, there is a problem because while uninsured children 

can get these vaccines in multiple locations, underinsured children 

can only get these vaccines at federally-qualified health centers. 

This limitation has made it very difficult and sometimes impossible 

for many underinsured children to get vaccines. 

Should we not be opening it up so they can get their vaccines at 

any public health clinic? 

Dr. GERBERDING. Absolutely, and we have tried to promote some 

changes in the language that allows underinsured children to have 

this kind of access, but we also got clarification from Congress that 

the intent of Congress in their existing legislation was to allow us 

to declare public health departments and similar entities as federally-qualified venues so that we could deliver these vaccines to 

these children in these environments. 


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So we are seeing more States now take advantage of this interpretation, and we are trying to promote all of them to do this so 

that these underinsured kids are no longer missed in the system. 

It is a critical gap, and it needs to be solved. 

Ms. ROYBAL-ALLARD. So do States need to be made more aware 

then about this possibility? That is what we need to do about that? 

Dr. GERBERDING. Yes. Exactly, and we have worked with the Association of State and Territorial Health Officials, ASTHO, to try 

to get the word out. 

We have been working with Congressman Waxman on this to 

make sure that we were not misunderstanding congressional intent, but we got a strong clarification that the intent was that we 

would be able to provide these through federally-qualified health 

facilities that weren’t previously designated that way. 

Ms. ROYBAL-ALLARD. Thank you. 

Mr. OBEY. Mr. Regula. 

BUILDING AND FACILITIES

Mr. REGULA. Dr. Gerberding, I am particularly interested in the 

way you have invested a great deal of taxpayer dollars in the improvement of the CDC facilities in Atlanta. Please share with us 

the status of facility construction on the campus and how these improvements are improving CDC service to people. 

Dr. GERBERDING. Thank you for asking the question. 

As you know, my predecessors for many years engaged in a 

buildings and facilities improvement planning process at CDC, and 

we were able to accelerate a 10 year plan into a 5 year plan. 

We are not done yet with the master plan, but we have made 

such extraordinary progress that I don’t think you would recognize 

the CDC from your last visit. I know the Committee has visited the 

CDC a while back, and it would be unrecognizable to you today. It 

is a beautiful campus. 

Our laboratories are now safe. They are modern. They are wellequipped. We have more to go in terms of getting them all rehabilitated, but it is a tremendous asset. 

I would also say in the interest of the concern about climate 

change and sustainability, that our laboratories are LEED certified, meaning we built them to the standards of a sustainable and 

responsible citizen so that they conserve water and electricity and 

have excellent staircases and so on and so forth. We are very fortunate to have made progress. 

It is very difficult now, candidly, because the campus looks so 

good that people think they are done. Unfortunately, we still have 

people working in some labs that are not ready. They are still not 

modernized. 

We have a number of people scattered all over the City of Atlanta, not to mention some real old facilities that NIOSH is occupying in Cincinnati and Pittsburgh as well. So I am not trying to 

focus entirely on buildings and facilities, but I can’t recruit the best 

talent if I can’t put them in safe and modern laboratories just like 

Dr. Zerhouni has those similar concerns. 

We are very grateful for the progress. It is just so exciting, but 

it is also challenging to try to communicate that we need to get the 

job finished and we are not quite there yet. 


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I will say one of the challenges that has occurred is that new 

buildings may be efficient and effective, but they are not necessarily inexpensive to run and operate. Now that we own more 

buildings, we have to be sure to be able to keep up their maintenance so that we don’t end up where we started with buildings that 

are poorly maintained and in need of more expensive repairs. We 

do have some unmet needs in terms of maintenance and repair. 

EMERGENCY PREPAREDNESS

Mr. REGULA. Infectious diseases of animals and plants are one of 

the leading causes of economic loss to producers in the U.S. and 

Ohio. In the U.S., animal and plant diseases annually cost producers $17,500,000,000 and $30,000,000,000 respectively, and we 

have similar losses in Ohio. 

The NIH has developed a model to construct regional BSL–3 laboratories throughout the United States to assist CDC and State 

health departments in the research and management of infectious 

disease outbreaks in the human population. Unfortunately, a similar model for dealing with threats of infectious diseases to animals 

or plants is not yet developed on the national level. 

In the event of a national crisis such as an avian flu pandemic, 

will current Federal laboratories have sufficient personnel and infrastructure to address the threat, and how are you working with 

USDA on these threats? 

Dr. GERBERDING. We have been working very hard on pandemic 

preparedness, and laboratory capability is obviously an issue domestically and a much bigger issue internationally. In the United 

States, our preparedness plan, which we are exercising too, allows 

us to scale and get the kind of throughput we need in the early 

phases of a pandemic. 

Once a pandemic has arrived, you don’t need to necessarily test 

every patient because you can assume that they have the pandemic 

strain. So early on at the beginning is the time when you need the 

rapidly accessible diagnostics. We believe our laboratory response 

network has made extraordinary progress and is up to that challenge. 

But what we don’t have is a point of care rapid test so that if 

you come into the emergency room, we can tell right away if it is 

the pandemic strain. We can tell you have flu, but we can’t tell if 

it is the pandemic strain at that level of specificity. So there is 

work going on in the industry to try to develop better diagnostic 

tests. 

In terms of our interaction with USDA, interactions can always 

improve, but we have an extraordinarily good intersection. We actually have one of the senior USDA scientists housed at CDC, who 

works in our emergency operations center when we are involved in 

any number of these animal-human disease outbreaks, like SARS 

or monkey pox or whatever. 

We share scientific expertise in Atlanta through the University 

of Georgia. In Fort Collins, Colorado, we work side by side with 

Colorado State in their USDA facilities there. So we have tried to 

position our programs in locations where there is a natural connection. 


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Also, the head of our new National Center for Zoonotic Diseases 

is a former dean of the Michigan State University School of Veterinary Medicine, and he has created a huge network. We just had 

a whole bunch of veterinary students at CDC to get interested in 

public health veterinary medicine. So we are trying to build those 

bridges at every layer of the organization. 

Mr. OBEY. Before I call on Ms. Lee, let me simply say that Mr. 

Walsh demonstrated one inconsistency in the Administration’s 

budget request a minute ago. 

I think Mr. Regula has demonstrated another one because you 

have talked to us about the needs for buildings and facilities. The 

Administration has zero budgeted that this year. Last year, they 

provided $20,000,000. We provided $55,000,000. 

If I can tell one story, a very well-known American businessman 

from Atlanta came into my office a few months ago, asking me to 

please approve a large increase for CDC buildings. He was a fellow 

who had contributed $125,000 to the President’s campaign. 

And so, I asked him. I said, why are you talking to me? Why 

aren’t you talking to Karl Rove? 

His response was I already talked to Karl, and Karl said, oh, 

don’t worry about budgets. They are just a game. 

So what we hear today is the result when these issues are treated as though it is just a game. 

Ms. Lee. 

HIV/AIDS PREVENTION PROGRAMS

Ms. LEE. Thank you very much, Mr. Chairman. 

Good afternoon. I want to thank all of our panelists again for 

being here. I can’t believe a year has passed. 

I want to specifically ask Dr. Zerhouni and Dr. Gerberding a couple of questions with regard to the HIV–AIDS prevention programs 

that CDC funds based on the behavioral research that is conducted 

by NIH. 

Recently, I think CDC released a report called Updated Compendium of Evidence-Based Interventions that are considered, I believe, the best interventions for HIV prevention programs. 

Now my understanding, and you can clarify this for me, is that 

there were no abstinence programs, not a single one included in 

that list. If that is the case, I would like you to say something 

about that. If it is not the case, then I would like to find out what 

is in that. 

Also, it included 49 evidence-based interventions, yet only 4 were 

newly identified for the MSM community who account for about 50 

percent of the new infections. None of the interventions were primarily focused on black MSMs and none focused on Latino MSMs, 

which are two groups disproportionately affected by HIV and AIDS. 

Let me just read something that the report says: ‘‘Some of the 

populations hardest hit by the HIV–AIDS epidemic or at greatest 

risk of infection or transmission were not represented. These populations include African American, Hispanic and other MSM of color, 

young MSM, particularly young African American and Hispanic 

MSM, substance-using MSM, transgender persons, HIV-positive intravenous drug users and rural populations.’’


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So let me just ask you what accounts for the lack of approved 

interventions for the MSM community and what are you doing 

really to address this and also for transgender persons, HIV-positive IV drug users and rural populations? 

Then, secondly, how are we ever going to address prevention in 

the United States if we don’t have approved interventions based on 

the research for communities that are most impacted by this disease and how are your priorities established? 

Then I just want to ask Dr. Gerberding about the testing, the 

HIV–AIDS testing that CDC has mounted in communities of color 

and how that is going and is it moving fast enough for us, given 

the rates of infection that we are unfortunately witnessing again. 

Dr. ZERHOUNI. Well, thank you for the questions. 

From the standpoint of the NIH, as you know, our budget for 

HIV–AIDS research is almost 10 percent of the NIH budget. About 

one-third of it is related to prevention, and we are completely 

aware of the greater risk of transmission in the populations that 

you have indicated. 

I will have to go on the record and check our facts because I 

know that our strategy for HIV–AIDS research based on prevention, vaccine development and new therapies has a high focus and 

priority on the populations that you refer to. 

The prevention issues for the programs that you mentioned are 

attached. 

[The information follows:] 


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Dr. ZERHOUNI. But our commitment is in line with our colleagues 

at CDC and is where the research on effective prevention measures 

adapted to the appropriate environment of the individual needs to 

be focused. 

Ms. LEE. Please do because I don’t believe this report took into 

consideration those populations that I mentioned. 

Dr. ZERHOUNI. Right. I am a little surprised at that because, 

frankly, I know for a fact. 

Ms. LEE. Also, the abstinence-only programs in this report, I 

didn’t find any that were identified as best prevention interventions. 

Dr. ZERHOUNI. I am sure that Dr. Gerberding has more knowledge of that, but I will check into that and let you know about it. 

Ms. LEE. Thank you. 

Dr. GERBERDING. With respect to the testing program, for those 

who aren’t familiar, we recognize that in America men who have 

sex with men and particularly African American men who have sex 

with men is the fastest growing population in terms of HIV infection. Sadly, the epidemic is going in the wrong direction in that 

population as I know you know. 

I do want to say that among injection drug users, among children 

and among women, we have lowering incidence rates. So we are 

seeing progress in some populations, but this one truly stands out 

as an area that needs urgent attention. 

A year ago, we convened the national opinion leaders from a variety of sectors including basketball and sports and everything, entertainment and faith-based groups to try to create a coalition of 

community advocates around awareness that this is a problem in 

the African American community and advocacy for people to reach 

out and get tested and kind of de-stigmatize the problem. 

So we estimate in the last year we were testing about a million 

people and that we were detecting somewhere between twelve and 

twenty thousand infections that otherwise would have gone missed. 

Now, testing is very helpful to the individual in terms of treatment, but testing is also an important intervention for prevention 

because we know when people know they are infected, they are less 

likely to infect somebody else. So this testing is part people need 

care but also part people need awareness so that they protect others. 

I think this is our first year, and I can’t really say the return on 

the investment at this point, but I am really optimistic that if we 

can continue and hopefully scale this, we will see a difference. 

That goes part and parcel with our routine testing program now 

which is finally 27 years into the epidemic, getting an HIV test is 

a routine part of medical care if you come into the health system 

in more and more States. It is not true in every state yet because 

some still haven’t finalized their regulatory changes needed to 

make that happen, but it is now a routine practice for people who 

are in the age group of people at risk to get an HIV test or opt out 

of it. 

It does not require the elaborate, in some cases, time-consuming 

and somewhat invasive informed consent process that was a barrier to getting tested in these settings before. 

Mr. OBEY. Mr. Lewis. 


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NIH PRIORITY PROCESS

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

I am tempted to immediately pursue the discussion that Ms. Lee 

is raising regarding HIV. But before going to that let me mention 

it was, for a short time, my privilege to chair this Committee as 

Mr. Obey has that privilege presently. Until I had that job, I never 

had a chance to come to this Subcommittee for I had never served 

on it. 

It is one of the most magnificent areas to work around here that 

I have experienced in public affairs, no small part because of that 

which NIH is about and those people who serve with you, Dr. 

Zerhouni. It really is a privilege to be associated with people who 

are doing the work that you are doing. 

My Chairman wrung his hands a while ago about the fact that 

there is not enough money to go around and probably if you really 

want to deal with the whole world, there never will be. For example, when we were talking about the CDC building last year in conference because we had other priorities, it was the House who 

pushed back against the Senate’s desire to increase the building 

and facilities fund as I recall. 

Setting that aside, Dr. Zerhouni, you and I have talked a lot 

about my concern that there is not enough money to go around and 

thereby a need to rethink the way we spend money and readjust 

priorities from time to time, rather than just responding in responding to somebody who got a flow of funding last year and assuming that person ought to be the first one in line next year. 

You have done a lot regarding those concerns with the common 

fund and the roadmap initiatives, but still the process whereby 

money flows to individuals or grants has not significantly changed. 

So I would like to have an update on where you think we are going 

in connection with that. 

Dr. ZERHOUNI. This is an excellent question in terms of understanding the systems of research and what we do when the priorities, as we just heard from our sister agencies, change. 

How does the NIH adapt to that? It cannot adapt overnight to 

a new paradigm. It has to move in a rational way towards the opportunities. In fact, we have over the past four years. 

I can show you the areas of NIH funding that have had to decrease because of the priority setting process. For example, clinical 

trials, we have reduced our commitment to clinical trials by almost 

$500,000,000. Why? Because we believe that you need to also focus 

on what we call translational research. 

We have also launched a program called the Clinical and 

Translational Science Initiative because we have found that scientists who come up with great ideas and the ability of the industry to develop new therapies, but in the middle, there is a need to 

prove that what is discovered in a lab is going to work in the 

human population. 

We have rearranged our portfolio. If you look at our portfolio, we 

still favor fundamental research because it is the route to fundamental progress. 

But at the same time, I think, as you mentioned, the Roadmap, 

the Common Fund. If you look at a number of trans-institute iniVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00539 Fmt 6601 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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tiatives today, there is the blueprint for neuroscience research 

which really relates to both mental health as well as behavioral research. The diabetes programs are now integrated across their dimensions in terms of heart disease impact as well as other consequences of diabetes. 

I think we have made progress, and I would like to thank Congress for reauthorizing the NIH through the NIH Reform Act of 

2006, which I think is going in the direction of what you and I 

talked about: How do you better coordinate both within this Agency 

as well as within our agencies within HHS? 

Mr. LEWIS. Thank you. I just wanted to make sure you didn’t 

think I had forgotten about my interest in that. 

But back to my colleague from Northern California, Ms. Lee, it 

was 1972 or 1973—in the VA–HUD Subcommittee where Lou 

Stokes and I worked so closely together, that I was involved in providing the very first funding for research in an arena known as 

AIDS at a time when almost nobody knew what it was about. 

If we work together in a fashion that suggests that none of these 

major issues have anything to do with partisan politics but rather 

solving human problems, I think we can make real progress. 

I must say that you will be intrigued, Dr. Gerberding, with the 

fact that a couple of years ago I had a visit in the Capitol from a 

guy by the name of Bono, and Dr. Gerberding and I had recently 

talked about problems in Africa. 

Bono was going to see the President the next day, and his reason 

was to go and talk about HIV and AIDS in Africa. I suggested as 

he had the conversation, that HIV/AIDS was the highest priority, 

but there was another challenge we might do something about in 

the village called malaria. 

A day and a half later, Bono is meeting with the President. He 

had two things to talk to him about, and both were impacted because of our addressing real human problems, recognizing that dollars can make a difference, but they really make a difference if we 

work together rather than fight with each other. 

So thank you for that, Mr. Chairman. 

Mr. OBEY. Thank you. 

Let me simply say with respect to CDC buildings, last year, the President asked for $20 million. 

Mr. LEWIS. I didn’t want to sidetrack. 

BUILDING AND FACILITIES

Mr. OBEY. We gave him $147 million bucks in the bill that he 

vetoed. 

We then came back after that veto and provided $55 million 

which, as I figure, is almost triple what the Administration requested. We did that even though the President insisted that we 

not have a dime above his requested level in the overall appropriations bill. 

So I would say given the Administration’s resistance, we did 

pretty well by CDC buildings last year. 

Dr. GERBERDING. May I just say that I think Congress has really 

been very supportive of CDC’s buildings and facilities for the five 

years that we have been building them, and we know that. We also 

started in a pretty dreadful place. So it is important to remember 


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that when you are out of the Beltway, sometimes you are out of 

sight and out of mind, and we kind of had a lot of catching up to 

do. 

Mr. LEWIS. The desperate condition took place over maybe 20 or 

more years. Presidents come and go, and parties come and go. 

Human problems are constant. 

Mr. OBEY. And sometimes those problems are magnified by what 

humans do. 

Okay, is Mr. Udall here or did he leave? 

All right, Ms. McCollum. 

Ms. MCCOLLUM. Thank you. 

I will kind of build on the conversation here, Dr. Zerhouni. You 

talked about efforts, research versus the increase in healthcare 

costs, and how that is a tension, that it is a race that we are in. 

I believe that health research is our best hope for not only decreasing costs but for improving the quality of people’s lives. So it 

troubles me when I see the budget and I see things flat funded, especially with what we know of what is going on currently with even 

the fuel prices to heat the buildings you are in. There is inflation. 

And so, if you don’t start counting in for inflation and the funding we know could always be increased. There is more to work on 

than you have time to work on and than the Congress will be able 

to fund right now. But then you add the flat funding and what you 

really have is a cut, in my opinion, a cut. 

So I have had a lot of constituents in my office over the past several weeks and over the past several years, making the case for 

greater investment. Now, with flat funding and with what is going, 

what we are actually seeing is a cut in this budget. 

I believe that you think we should be putting more into research. 

Do you have any idea? Did you have any conversations? As to when 

the Administration was making its proposals to you, what kind of 

dialogue takes place? 

I would be curious in that because, Dr. Gerberding, in your testimony too, you talked about obesity and CDC plays a great role in 

keeping America healthy. I have been impressed by the Agency’s 

attitude towards solving problems and doing things. 

But I don’t really see how we move forward on curing and prevention childhood obesity when we have cuts to school health programs, where we have the children so much, to put it as a former 

teacher, as a captive audience to be working with and finding out 

what kind of interventions work. 

We also know, from what happened with smoking, children go 

back home and reinforce the message back home with parents and 

grandparents and that as well. 

When I see these kinds of cuts and flat funding, I really wonder 

how you are going to be able to achieve, one, the goals that the 

American people have asked you to achieve and, two, your own 

goals. If you don’t have the funding to accomplish what you know 

you can accomplish in one year, how can you build on that to really 

make the goals and objectives come true for a healthy America? 

If you would both kind of tell me the conversations that get put 

in place. I don’t mean to be disrespectful. I am just trying to understand this because there is going to be a new Administration, 

whether it is Democratic or Republican the next time around. 


ebenthall on PROD1PC60 with HEARING
542 

Enlighten me. What are some of the conversations that you have 

with the Administration when you put together these budgets? 

Dr. ZERHOUNI. Well, the Chairman referred to my musical instrument playing, there are days where I would rather play that 

instrument than engage in that forceful dialogue, I can tell you. 

Clearly, I think these are very difficult times. In my whole career, I have never had to manage a stretch of very, very difficult 

priority-setting, in a sense that would maximize the dollars that we 

have. Obviously, we could do more with more. 

But I think it is important to realize that the most important 

dialogue that we can have is to stress the fact that historically, we 

are at the flexion point whereby the costs are going, as you heard, 

at 6 or 7 percent by my colleague, Terry Cline, and yet GDP, the 

gross domestic product, is not growing at the same rate. 

Something has to be done. I don’t believe that you can do it without a systemic view that includes educational issues. I don’t believe 

we can change health behaviors without an intervention very early 

in the school years. We have shown this over and over again. 

The dialogue is very forceful. Obviously, I believe that these 

times require you to make priority decisions and priority calls. At 

the end of the day we are also in need, in my view, to truly address 

the challenges in front of us. That will require a transformation, 

a transformation through discovery of the entire concept that we 

have currently of healthcare in this country. 

Dr. GERBERDING. I would stipulate at the table are all agency 

heads, and there is probably not an agency head at HHS or across 

the government that couldn’t think of really good things to do with 

resources if we had them. 

We think if you invest in CDC, you get results. People care about 

those results, and we sure care about them. But we also know that 

the time and environment that we are operating in is a very challenging time from a budget perspective, and we can’t have everything we wish we could have. 

CDC has a unique situation, in a sense, because we have two 

major portfolios. 

Mr. OBEY. Could I ask you a favor? 

We have a problem. We have four votes coming. That is going to 

blow away the rest of this hearing, and I would like to give each 

member of the Subcommittee who hasn’t talked at least a couple 

of minutes to ask questions. So could I ask you to respond further 

for the record and call on Dr. Weldon? 

Dr. GERBERDING. Perfect. 

Mr. OBEY. If you could limit yourself to about three minutes, 

then we all will get there in time to vote. Mrs. Lowey hasn’t asked 

a question yet either. 

MITOCHONDRIAL RESEARCH

Mr. WELDON. Mr. Chairman, I will make every attempt to be 

quick. 

I want to thank all the witnesses, and certainly it is a pleasure 

to see you back here again. I thank you for all your hard work. 

I just had a couple of quick questions, and it may be necessary 

to respond later. 


ebenthall on PROD1PC60 with HEARING
543 

We had the Secretary in last week. I mentioned to him about a 

case of a girl who the vaccine court had settled that her autism 

was caused by the injections and that she had an underlying defect 

in oxidated phosphorylation, a mitochondrial disorder. 

I called one of the pediatric neurologists that was involved with 

the case, a fellow by the name of Zimmerman at Kennedy Kreeger. 

He was speculating that somewhere, maybe in the 10 to 20 percent 

of these autism cases, it may be possible that they have maybe not 

a mitochondrial disorder but mitochondrial disfunction. 

But he said something to me that was really interesting. He said, 

this is kind of an unusual hypothesis and it is out of the mainstream of what NIH is funding. 

Dr. Zerhouni, are you aware of this at all? Has anybody brought 

it to your attention? Does CDC know about it, and is it something 

that we can get some investigative funds looking at if we get good 

grant proposals in? 

Dr. ZERHOUNI. I would say a direct connection between a vaccine 

and a mitochondrial disease that affected the child to developing an 

autism spectrum disorder is a pretty unique set of events. 

However, we just had a symposium in January about the issue 

of mitochondrial disease. There are over 40 conditions that can affect, in fact, metabolism in humans that could then tip them over, 

not just in the case of vaccination, but where the fundamental energy-generating organ now, called a mitochondrion, can play a role 

in many diseases. 

We are looking at that in the context of diabetes, heart disease 

and obesity. 

Yes, we knew that mitochondrial disease is an important topic. 

I was not aware of this particular connection, and we are looking 

into that. 

Mr. WELDON. Yes, the vaccine court settled it, and one of the clinicians involved is investigating this, whether there may be some 

kind of a link. So I am glad what I hear you saying is it is an area 

of research you are pursuing. 

My other quick question, I sent you a letter, Dr. Gerberding, on 

the MRSA issue. I don’t know if you staff brought that to your attention. 

I thought it was very interesting, very concerning. Particularly, 

obviously what caught my attention is I trained in that town and, 

as I recall, you had done as well. Certainly, I commend CDC for 

doing the research. 

Were you going to be able to get back to me on the letter that 

I sent? 

Dr. GERBERDING. [Remarks off microphone.] Obviously, I have 

been caught up. 

Mr. WELDON. Right. 

Dr. GERBERDING. [Remarks off microphone.] So I haven’t responded to you directly, but yes, I saw your letter and read it myself. We have had a conversation about the appropriate response. 

But I also am pleased to be able to tell you we are doing a lot 

of things about the MRSA problem. So I can update you on that 

when you have time. 

Mr. WELDON. Yes, I figured you probably were. 

Thank you, Mr. Chairman. 


ebenthall on PROD1PC60 with HEARING
544 

I thank the witnesses. 

Mr. OBEY. Mr. Ryan. 

Mr. RYAN. Thank you, Mr. Chairman. 

I just want to make a quick statement. First, I would like to just 

kind of back up what my colleagues have said with regard to the 

budget. I mean we see this behavior all the time on the ground 

back in our districts, of what the need is, as you see it every day. 

This is clearly inadequate, and we all know that. To the extent that 

we can fix it, we are going to try to fix it. 

I just would like to make one statement and, Dr. Cline, we have 

had conversations about this. 

I feel like when we talk about a lot of these issues of public 

health, mental health, that it gets back, especially a lot of the stuff 

we watch on TV. It gets back to how American citizens deal with 

the level of stress that they have to deal with every single day and 

how that affects their behavior, how they deal with each other as 

kids in a classroom, how they react by grabbing a gun and ending 

up killing people. There is a variety of these issues. 

I am just going to make a statement and submit some questions 

for the record, but I think if we want to get to the root of a lot of 

these issues: health, physical or mental. 

I think we have to figure out how to teach our society and our 

citizens how to deal with the stress that they are put under every 

day, economic, how they pay for healthcare, what kind of job they 

are going to have, how their kids are going to go to college. These 

are all things that day after day after day affect their physical 

health and their mental health and if we don’t figure out how to 

deal with a lot of those issues. 

Some are policy, but some are habits that they can get into them, 

and we are going to need your help to do that. 

I am going to yield the rest of my time to my friend, Mrs. Lowey. 

ANTI-DEPRESSANTS

Mrs. LOWEY. Thank you very much to my colleague. Actually, it 

is a great segue to my question which I will express very briefly. 

I don’t know. You probably didn’t see the New York Journal 

News on February 27, 2008, but you probably read about the New 

England Journal of Medicine study which was cited in that article. 

This is really for Dr. Cline and Dr. Gerberding, if you could respond. I don’t know if we will have time today. 

It was questioning the effectiveness in widespread prescription of 

anti-depressants, particularly to women and children. Parents in 

my district say many students in their children’s school have been 

prescribed anti-depressants for behavior problems, that everyone is 

ADD. 

It is on record that there is supposed to be a 40 percent increase 

in bipolar—I don’t know if you call it a disease—and bipolar children. However, according to the psychiatrists I have spoken to in 

the district, this is impossible. 

So I am very concerned about that. Are you familiar with the 

New England Journal and Medicine cited in this article? 

Can you comment on research related to the over-prescription of 

anti-depressants and other drugs to children? And, you probably 

have about two minutes to address this issue. 


ebenthall on PROD1PC60 with HEARING
545 

So the bottom line is in talking to parents, PTA meetings that 

I attend, the use of anti-depressants among kids is so widespread. 

Give them Zoloft. Give them this. Give them Prozac. Could you 

comment? 

Dr. CLINE. Certainly, and we would be happy to send you some 

information based on the data that we have accessible. I don’t 

know. Dr. Clancy, I am sure you have some as well. 

One of the things we know very, very clearly is that 

antidepressants prescribed appropriately and for the appropriate 

diagnosis can be very, very effective. It can indeed be lifesaving for 

individuals. 

Part of the concern that we see at times is when something like 

that comes out is that then we see kind of a backlash, and we see 

under-prescribing that can take place as a result. There has been 

some concern about spikes in suicide as a result of the pendulum 

swinging so far the other direction. 

So it is a complicated issue, and I want to make sure that we 

have enough information that is provided to you that is more comprehensive. It is a very complicated issue. I appreciate the question 

very much. 

[The information follows:] 

Mrs. Lowey: Can you comment on research related to the over-prescription of 

antidepressants and other drugs to children? 

Dr. Cline: Certainly, and we would be happy to send you some information based 

on the data that we have accessible. (See attachment) 

ANTI-DEPRESSANTS

SAMHSA appreciates the opportunity to comment on recent articles regarding 

rates of prescription of anti-depressants, particularly rates of prescription to women 

and children, and whether growth in the rates at which anti-depressants are prescribed should be a source of concern. 

It should be noted that the Food and Drug Administration, the Centers for Disease Control and Prevention, the National Institutes of Health, and the Agency for 

Healthcare Research and Quality all have key Federal responsibilities in this area 

and can most authoritatively comment on the appropriate uses of specific medications, off-label use of medications, and trends in drug usage. 

According to noted experts in child and adolescent mental health, standards for 

medication management for children are a challenging issue for the field because 

relatively few randomized controlled studies have been conducted. As a result, medication choices are frequently based on the experience of the individual practitioner 

or on standards of care for adults. At the same time, prescription medications are 

considered to be an important tool for many families and practitioners. 

Within the Substance Abuse and Mental Health Services Administration, our 

mental health service programs are designed to promote evidence-based practices 

that may include a combination of clinical therapy and supportive community services. In clinical practice, it is common for medication treatments to be combined 

with psychosocial strategies. 

A key principle for SAMHSA is to ensure family-driven care in which families are 

active and informed consumers of services. Because the family plays a major role 

in the social and emotional development of children, family-focused interventions 

have long been a part of child and adolescent mental health treatment and it is critical that families play an active role in reviewing the potential benefits and side effects of medications in close partnership with mental health service providers. 

Mrs. LOWEY. I would appreciate that information. 

I would also like to know, Dr. Cline, what kind of information is 

shared with parents, principals, teachers and the correct advice 

that they perhaps could give to parents. Maybe go see the doctor, 

don’t ask me. But I would appreciate that. 

Thank you very much. 


ebenthall on PROD1PC60 with HEARING
546 

Dr. CLANCY. If I could just add, this is an area where we plan 

to be making some investments in comparative effectiveness research, particularly focused around ADHD, so that parents understand what are the benefits and harms of treatment and that they 

can get this information in language and ways that they can understand. 

Mrs. LOWEY. Are you aware of the New England Journal of Medicine study? 

Dr. CLANCY. Yes. 

[The information follows:] 

Mrs. LOWEY: I would like to know what kind of information is shared with parents, principals, teachers ad the correct advice that they perhaps could give to parents. Are you aware of the New England Journal of Medicine study? Could you just 

make a quick comment on that? 

Dr. CLANCY: Yes, I think it would easier if I did it for the record so that I have 

a chance to review it. I have read the abstract but not the full study. (See attachment) 

CLINICAL TRIALS

This study highlights the impact of publication bias, where studies with positive 

findings are more likely to get published in peer reviewed medical journals that 

those with negative findings. Registering clinical trials with ClinicalTrials.gov helps 

to identify studies that are on-going or completed and allow researchers to learn 

which study findings have not been published. Clinicians and patients depend on 

syntheses of existing literature to guide diagnostic and treatment decisions, so minimizing the number of studies that remain unpublished in incredibly important. 

AHRQ’s Effective Health Care program examines the effectiveness and comparative effectiveness of diagnostic and therapeutic interventions for high priority areas, 

and relies on syntheses of existing studies and other sources of information. A high 

priority for our work in minimizing bias, emphasizing the importance of transparency in all phases of our work, and a strong focus on improving methods of synthesizing and documenting research to provide the most accurate scientific information possible. We approach the manufacturers of drugs and devices that are the subject of our comparative effectiveness reviews to submit any study findings that are 

not represented in the published literature to ensure we have the true denominator 

of studies available. 

In regard to the effectiveness of anti-depressants, AHRQ has published a comparative effectiveness review that includes a translation for clinicians caring for patients with depression and for patients who suffer from depression. The guide for 

clinicians can be found at: http://effectivehealthcare.ahrq.gov/health 

Info.cfm?infotype=sg&DocID=9&ProcessID=7 and the guide for patients can be 

found at: http://effectivehealthcare.ahrq.gov/healthInfo.cfm?infotype= 

sg&DocID=10&ProcessID=7 To research many different groups of patients, the patient guide is available on the Web, in print, in audio versions, and soon in Spanish. 

Mrs. LOWEY. Thank you very much. 

Mr. OBEY. Thank you. 

Let me simply say if you can serve in this institution and not require antidepressants, it is a miracle. [Laughter.] 

Mr. WALSH. Mr. Chairman, you are going to have to speak for 

yourself on that. Oh, I did just announce I am retiring. [Laughter.] 

Mr. OBEY. Well, that was your first mistake and our loss. 

Let me simply thank all the witnesses today. We appreciate your 

service and your being here. 

The Committee will resume at 10:00 tomorrow with the Secretary of Labor. 


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(599) 

TUESDAY, FEBRUARY 26, 2008. 

HEARING ON THE PRESIDENT’S EDUCATION BUDGET 

FOR 2009 

SECRETARY OF EDUCATION 

WITNESSES 

HON. MARGARET SPELLINGS, SECRETARY OF EDUCATION 

THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE 

CHAIRMAN’S OPENING REMARKS

Mr. OBEY. The Committee will come to order. 

This morning, we will be hearing from the Secretary of Education who will be outlining the President’s requested budget for 

education for the coming fiscal year and, undoubtedly, we will hear 

a lot of discussion about the cost of meeting our obligations in the 

area of education. This afternoon, we will hear from a second panel 

which will focus on the cost of not providing our obligations to education. 

Madam Secretary, we welcome you here. Unless some future 

President has some plans for you of which I am not aware, this is 

your last appearance before the Subcommittee on a regular bill. 

Secretary SPELLINGS. I am assuming that it is. [Laughter.] 

Mr. OBEY. Let me simply say this. I think it is fair to say we 

have had a good number of disagreements with the Administration 

on education policy as well as education budgeting, but nonetheless 

I simply want to say that you are obviously a person of ability and 

dedication. I appreciate the service that you have given to the 

country, and I hope that we can make this coming year a productive one. I think we have a problem, and I hope we can overcome 

it. 

If we take a look at the President’s budget from last year, across 

the board on domestic funding, he essentially, with a few exceptions here and there, he essentially presented a budget to us which 

was a freeze. This year, what he has done is to send a budget to 

us on the domestic side which cuts about $18 billion out of accounts 

that the Congress just approved a few months ago. 

The bill that was passed last year was an extremely tight bill 

which caused consternation, I think it is safe to say, on both sides 

of the aisle. In fact, we had 51 Republicans voting with Democrats 

to override the President’s veto on the Labor-H Bill because the 

President’s budget was seen as being so tight. 

This year, the situation is considerably more grim because it isn’t 

just a freeze. It represents a determination and makes some very 

deep cuts in a lot of programs in and outside of education. 

We are going to have a choice to make this year, and we are essentially, in the Congress and in this Committee, going to have two 


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options. The first option is to try to reach a compromise with the 

Administration on its budget recommendations. That would be my 

preferred route. 

The kind of politics I believe in practicing dictates that we first 

define our differences and we can have at each other on those differences, and then we are supposed to try to resolve those differences. It is hard to do if one side or the other is stuck in a my 

way or no way approach to things. 

So I think we have two choices. We can try to work with the Administration and hope that the President will show some flexibility 

in both his policy prescriptions and his numbers. If he does, fine. 

We can find agreement, and we can try to pass the bill through 

both houses. 

If he chooses, as he did last year, to simply say, sorry, not going 

to compromise on the numbers, then there is very little incentive 

for this Committee to do anything except say, well, the President 

has dealt himself out of the game and we will simply have to wait 

for a new President who is more flexible in order to deal with the 

problems. 

Those are the two choices open to us, and it is going to be largely 

up to the Administration which path we wind up following. I hope 

it is the former because I think there is important work that we 

can still do if we work together. Example: No Child Left Behind, 

it has come under a lot of criticism. 

FUNDING LEVEL FOR NO CHILD LEFT BEHIND

I voted for it. I voted for it for two reasons: number one, because 

I thought that we needed to try to focus on strengthening standards for all kids and, secondly, because I thought it was the President’s first domestic initiative out of the box and because of that 

I thought he was entitled to the benefit of the doubt, but it was 

also based on my assumption we would stick reasonably closely to 

the budget numbers that were provided in that legislation. 

Now I have been around here a long time. I don’t expect every 

authorization bill to be fully funded. In fact, I would not support 

that in many instances. But I do think that we had a right to expect that if we were going to require all of the things that were required of State and local people under that legislation, that we 

stick fairly closely to the implied commitment on the financial front 

that was represented by that bill. 

For the first year the President did that, but then in succeeding 

years the increases that he asked for, for education, each year were 

about half of the increase of the previous year. As a result, we are 

left far behind in terms of our financial commitments. 

So I would hope that we can see considerable flexibility on the 

President’s part, and if we can, we ought to be able to reach reasonable agreement. If we can’t, then it turns this year into a waste. 

We have a choice as to whether this year is going to be eight 

months of wasted time or eight months of trying to tie up a lot of 

loose ends and getting some constructive things done. 

I think which of those paths the Congress has to take is going 

to be largely determined by the other end of the avenue, and I hope 

that we are met with a willingness to compromise that we did not 

see last year. Last year, when I talked to Budget Director Nussle 


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and told him we were looking for ways to compromise, he told me 

that he could find nobody in the White House who had the slightest interest in compromising. That is not going to be a way to use 

our time very productively this year. 

So let me simply stop at that point and call on Mr. Walsh for his 

comments before I invite you to make your statement. 

Mr. Walsh. 

EDUCATED WORKFORCE AND LONG-TERM COMPETITIVENESS

Mr. WALSH. Thank you, Mr. Chairman. 

Madam Secretary, welcome. I would like to echo the comments 

of the Chairman regarding your abilities and your character. I 

think you have done a great job as Secretary, and I appreciate the 

effort that you have put into it and the thoughtful approach that 

you have taken. 

I think we all agree that a well-educated workforce is critical to 

our long-term competitiveness as a Nation and that quality education must begin early in the home and in our elementary schools. 

The budget you have sent us makes choices, some of which I 

think are good choices, others I will question, but nonetheless it 

makes choices and sets priorities, and I commend you for that. 

I will tell you I agree with the choice to provide yet another increase for elementary and secondary education. While the Federal 

Government contributes less than 10 percent of funding for education in this country, I think the investment we make at the Federal level is very important, particularly for schools that serve lowincome children. I subscribe, though, to the view that public education should be the purview of the local communities, supported 

by local taxes as best they can. 

I am also very pleased to see that you have requested a significant increase for special education programs. I would like to ask 

you a little bit more about that as we go forward. But, as you 

know, these are critical funds that school districts use to help kids 

with learning disabilities and that has been a priority of this Subcommittee historically. 

So I look forward to your testimony, and I yield back, Mr. Chairman. 

OPENING STATEMENT OF SECRETARY SPELLINGS

Mr. OBEY. Madam Secretary, why don’t you summarize your 

statement, and we will put your full statement in the record? 

Secretary SPELLINGS. Thank you, Mr. Chairman, and thank you, 

members. I, too, am pleased to be back visiting before you. 

FEDERAL ROLE IN EDUCATION

As you said, Mr. Walsh, all of us agree that in today’s competitive world, developing human capital is a top priority. We also 

know that we have limited resources to invest and that our primary role at the Federal level has always been to serve our neediest students, such as those from low-income families, those with 

disabilities and those learning English as a second language. Accordingly, we must ensure that taxpayer dollars are allocated in 

the most effective and efficient ways. 


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PRIORITY INVESTMENTS IN FEDERAL EDUCATION BUDGET

Since becoming Secretary, I have traveled the country, discussing 

No Child Left Behind and its implementation and gaining insights 

on ways to strengthen and improve this law. Everywhere I go, I 

have been talking with educators and policymakers who are deservedly proud that student achievement is rising under No Child 

Left Behind and that gaps between poor and minority students are 

closing. 

In addition, they all share common challenges. First, educators 

need proven strategies to strengthen instruction, especially in reading. Second, they need resources to help students and schools improve. Finally, they need help to make college more accessible and 

affordable for students of every background and income level. 

These are the priority investments in the President’s budget request. 

READING FIRST

First, instruction: One thing we know for sure is that we will not 

be successful in education until every child can read. Reading 

opens the door to every other subject and is a critical foundation 

for all learning. That is why I am pleased that the President’s 

budget restores funding for the Reading First program to $1 billion, 

the level you supported for 5 years. 

In response to concerns raised about the Department’s initial 

management of the Reading First program, I adopted every recommendation my inspector general issued in September, 2006. 

Shortly thereafter, I put in place new leadership to oversee this 

program and enhanced guidance on how it should be administered. 

I implemented a new system to strengthen the peer review process 

and took further steps to prevent conflicts of interest. 

Reading First builds on more than 20 years of independent research funded by this Congress and conducted by the National Institutes of Health. If ever a program was rooted in science and research, this is it. 

The 60 percent cut to the 2008 appropriation for Reading First 

is hurting our elementary schools. It is one of the top concerns I 

have heard in every State I visit, and I urge you to support the 

President’s request to restore funding so that over one and a half 

million students can once again benefit from this program. 

STUDENT, TEACHER AND SCHOOL IMPROVEMENT PROGRAMS

Second, struggling students and schools: I am sure you have 

heard concerns, like I have, raised that No Child Left Behind labels 

too many schools as failing. In actuality, no part of this law ever 

uses the word, failing. 

What No Child Left Behind has done is to help identify about 

2,300 out of 100,000 schools nationwide that have missed annual 

targets for 5 or more years. The fact that just 2 percent of schools 

are chronic under-performers does not seem overstated, particularly when we consider that only half our minority students graduate from high school on time. 


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To help educators improve struggling schools, our budget provides nearly $5 million in school improvement grants. It raises 

Title I funding for high-poverty schools by $406 million. 

It more than doubles the size of the Teacher Incentive Fund by 

providing $2 million to attract our most effective teachers to work 

in our neediest schools and reward them for results, and it provides 

additional funds for students who need extra help, including an increase of nearly $5 billion for students with disabilities and an increase of $3 million for those with limited English skills. 

PELL GRANTS FOR KIDS PROGRAM

In addition, as we triage low-performing schools, we must also 

offer lifelines for families. That is why the President called for a 

new Pell Grants for Kids program in his State of the Union address. This program offers $300 million in scholarships to enable 

poor students in struggling schools to transfer to a new school of 

their choice. This program begins to answer one of parents’ most 

vexing questions: If I have given my public school every chance to 

meet my child’s needs but it hasn’t, what options do I now have? 

ACCESSIBLE AND AFFORDABLE HIGHER EDUCATION

Third, higher education: All of us know that making a college 

education more affordable is a real concern for students and families. So I am pleased that our budget raises the Pell Grant award 

to $4,800 this year, the largest amount ever. 

I am proud that this issue has strong bipartisan consensus, but 

as we work to reauthorize the Higher Education Act, we must remember that more money is not the only answer to questions of access and affordability. We must also curb the dramatic rise of tuition costs and streamline the financial aid process. 

ELIMINATIONS BASED ON OMB PART PROCESS

Finally, focusing on these priorities has required that we make 

tough choices just like you must do every year. And, accordingly, 

using the Office of Management and Budget’s PART process, we 

have redirected funding away from programs that are ineffective, 

duplicative and small in scale, and we have eliminated earmarks 

in keeping with the President’s government-wide call. 

In closing, especially because as you said, Mr. Chairman, this 

may be my last opportunity to appear before you, I want to thank 

all of you for your commitment to improving our schools. Mr. 

Chairman, by choosing to lead this Subcommittee in addition to the 

full Committee, you have shown dedication that benefits all of us 

under your jurisdiction. 

In my experience, education has been an issue that unites people 

of every race and background from both sides of the aisle, especially as our global economy places greater demands on our schools. 

Not only are many of us parents, but we also realize that even as 

administrations come and go, schools remain open and educators 

and policy makers all over this country and in this body remain 

committed to extending opportunity to every corner of our Nation. 

I look forward to working with you to support them in that essential work. 


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Thank you, Mr. Chairman. I would be happy to answer your 

questions. 

[The prepared statement and biography of Secretary of Education, Margaret Spelling follow:] 


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FEDERAL SHARE OF SPECIAL EDUCATION APPE

Mr. OBEY. Mr. Walsh. 

Mr. WALSH. Thank you, Mr. Chairman. 

Madam Secretary, last year, we, this Subcommittee, moved 

money from a workforce training program, unexpended funds, into 

the IDEA fund. It was a fairly popular decision, tough call, but a 

fairly popular decision, and it was in the neighborhood of $300 plus 

million. Even with the increase that was requested by the Administration, adding that to it, we only went from 17 percent of our commitment to about 17.2 percent of our commitment. 

The Administration this year is requesting an additional $337 

million for Special Education State grants. It is a very substantial 

amount of money, and yet we are still just holding even. As you 

know, Congress’s commitment initially in authorization was to provide 40 percent of the cost. 

This is a high priority for all communities, but can you explain 

why we just can’t ever seem to catch that goal? 

Even with these substantial increases, why? Is it the cost of 

teaching kids with disabilities? Is it the number of kids being listed? Is it a lack of commitment on the part of Congress to meet this 

goal? 

Secretary SPELLINGS. Well, Congressman, I think you are right. 

A couple of things: Yes, average per pupil expenditure costs of 

educating special education students certainly have gone up as 

have identification and diagnoses costs of such students. We now 

have 13 or 14 percent of our students nationally who are diagnosed. We have gotten more sophisticated. We have gotten better 

at it. 

And, as young babies who previously were not saved are now living and being educated and living fruitful lives, more of those kids, 

of course, are in our public schools. I think that is one of the reasons that we find getting that Federal share of APPE up so vexing. 

SPECIAL EDUCATION AND NO CHILD LEFT BEHIND

I do think one of the things from a policy perspective that has 

been very useful is with No Child Left Behind, as you know, those 

students are subject to the accountability features there as well. It 

has provided us some opportunity to be much smarter about how 

we assess and remediate and intervene with those learners, and it 

has built a lot of demand to build better practice, better science 

and better interventions for those kids because we are holding our 

schools accountable. 

AUTHORIZED FEDERAL SHARE OF APPE

But, again, as you rightly said, more kids, higher costs make it 

harder for us to continue to move the needle. 

Mr. WALSH. This is such a challenge. Do we abandon this goal 

of providing 40 percent? 

After 20 plus years, we are still not even at half of our commitment. Is there some way to get a quantum leap in how we deal 

with kids with learning disabilities? 

We are continually criticized. The Federal Government is criticized for not providing enough resources for these kids because of 


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this commitment that we made. Is it still realistic to think we can 

cover 40 percent of the cost? 

Is it not an unfunded mandate when we tell school districts to 

do these things? 

I just think we have a very praiseworthy goal, but we never seem 

to attain it, and I think it bedevils us. 

Secretary SPELLINGS. Yes. As you rightly observed in your opening statement, we are a 9 percent investor in education from the 

Federal level overall, and so that 40 percent commitment in IDEA 

is clearly well beyond that. 

EFFECTIVENESS OF SPECIAL ED DIAGNOSIS/INTERVENTION

A couple of things I would say: One is we have gotten, I think, 

much more effective with respect to diagnosing and intervening 

and correcting special ed kids who are there because they had an 

undiagnosed and uncorrected reading difficulty. That is one of the 

things that has proven very effective about Reading First, to make 

sure that the kids who are diagnosed as special ed are the ones 

that actually ought to be there and served in that way. 

Secondly, as I said, No Child Left Behind has done a great deal 

to build demand for better, more effective and, frankly, more efficient ways to serve those youngsters. When we had this ‘‘put the 

money out, hope for the best’’ kind of approach, I think the science 

around our best practices was more limited. 

We are starting to see better assessments, better response to 

intervention, better techniques around how to meet those learners. 

Theoretically, as that improves, costs will modulate. 

TEACHING CHILDREN WITH DISABILITIES

Mr. WALSH. Just one last thought on that and then I will yield 

back my time. I think one of the problems is teachers in many 

school districts are not prepared to teach kids with learning disabilities. Kids learn differently. 

I don’t know how you do that because everybody is different. Everybody has different abilities. Every child learns, well, not every 

child learns in a different way, but some kids learn in different 

ways. 

Is there a way to get at the teacher aspect of this also? 

Secretary SPELLINGS. Absolutely. I think, frankly, one of the pioneering parts of teacher education or of education policy has been 

the special ed community. They have been leaders. They are the 

people who first used the brain research, the reading research most 

effectively, and some of our best prepared teachers, frankly, come 

out of that sector. 

I think in the general education programs, we have a lot to learn 

from them. Again, I think this focus on raising achievement levels 

of every kid to grade level and so forth has really built more demand for that, and certainly that is what our educators are calling 

for. 

Mr. WALSH. Thank you for your indulgence, Mr. Chairman. 

Mr. OBEY. Thank you. 

Ms. McCollum. 

Ms. MCCOLLUM. Thank you, Mr. Chair. 


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PROPOSED CUTS IN EDUCATION PROGRAMS

Secretary Spellings, once again in my opinion and I think the 

facts bear this, the Administration has proposed a budget that 

doesn’t come near meeting the stated policy goals of improving student achievement, of meeting what was promised in No Child Left 

Behind or improving global competitiveness. 

It recommends cuts. It eliminates programs that Congress has 

rejected time and time again where we know, as Chairman Obey 

pointed out, where there are clear differences and the Administration has continued to ignore Congress’s differences on these. 

EDUCATION FINANCE ISSUES IN THE STATES

School districts in Minnesota and all around the country are facing incredible financial challenges. What this means back home are 

levies on property tax payers, senior citizens, working poor over 

and over and over again, and many States, including Minnesota, 

are now facing a deficit. 

In my school districts, there is no more fat to cut. We have all 

seen the facts. Forty percent of school districts across the country 

are cutting music, social studies, physical education and even 

lunch. Minnesota and other States are considering to opt out of No 

Child Left Behind because of the broken funding promises. 

The President’s budget cuts. It underfunds the very things that 

children need to be successful. 

Your reply back in the budget is if States want to make up for 

these cuts in some areas, and I will use drug-free schools for an 

example, school districts can just take the funding from a different 

source. But, as I have pointed out, we have cut to the bone. 

Since this budget is inadequate across the board, I want to know 

what the Department’s suggestion is to make up for cuts in special 

education. It does go down. 

I have read that school districts are spending more on special 

education than they are on general education in some cases because of rising costs, the flat funding for Title I while the number 

of students grows and the challenges faced by the districts increase, the cuts to the after-school programs—I already mentioned 

safe and drug-free schools—and the elimination of counseling and 

mentoring. 

To make up for the lost funding, what should they do? 

Do I tell them to cut teachers, cut curriculum, to continue to increase taxes on local property payers or should we tell students 

and families in our districts they can get by with what will be the 

new quality public education, underfunded, cuts, less opportunity? 

Now I want to make it clear. I am for accountability, and I have 

worked on that as a State legislator as well as here in Congress, 

but it is clear to me that there is some very serious analysis that 

has to be done about the effects of these programs and what they 

are having on our schools. 

COSTS AND GAINS OF EDUCATION ACCOUNTABILITY

So I have a couple of questions: How much are we spending nationally, and I mean how much are the Federal, State and local 

governments spending on testing for No Child Left Behind? 


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How many hours, individually and collectively, are we using of 

our students’ time to take the test for No Child Left Behind? 

Are we getting enough results from the expenditures of this 

money and this time to justify the expense for the results we are 

seeing? 

Does the Department have any analysis of what schools are giving up when they are shifting resources to testing? 

What are the effects that dwindling resources have on the longterm success of our students? 

I want to move past the rhetoric. I want to bring everyone to the 

table. I want to put together a plan for public education that moves 

our country forward and prepares the next generation to be globally competitive. 

I have an addendum to my prepared statements. You mention 

that only 2 percent of the school districts, I believe, are not making 

adequate yearly progress. Yet, I have submitted both in this Committee and in the Policy Committee a report from Minnesota State 

Auditor Jim Nobles, a nonpartisan number cruncher. He says, by 

2016, Minnesota schools in general, all Minnesota schools, will not 

be meeting adequate yearly progress. 

So I have some doubt to how you came up with the statement 

that you used for the 2 percent, Madam. 

Thank you. 

GROWTH-BASED ACCOUNTABILITY MODELS

Secretary SPELLINGS. Thank you, Congresswoman. Lots of issues 

to tackle there. Let me begin with the issues related to No Child 

Left Behind and the last point you made. In your State, there are 

7 schools in restructuring. Seventy percent today make the No 

Child Left Behind targets. 

One of the things that is going on as you all work here in the 

appropriations process is our look at reauthorizing No Child Left 

Behind under Chairman Miller’s committee. One of the things that 

would mitigate against—I mean I assume his assumption is that 

the same pace of identification that we have had would continue 

in the future—is for us to start to look at a growth model, a valueadded approach for us to look at ways to potentially be fairer in 

establishing accountability for our schools. 

I have given waivers to nine States to start to look at that method and have recently made that opportunity available to every 

State nationally. So what I am trying to say is we met the need 

for a new approach. 

Ms. MCCOLLUM. Is there money in the budget, in the President’s 

budget for developing this new growth model for the States? 

Secretary SPELLINGS. This is largely about State data systems, 

yes, and we have additional funds for States to develop methods, 

data system methods to track that progress over time. So, yes, and 

I will get to the specific dollar amounts with respect to that last 

point. 

Ms. MCCOLLUM. And you had to cut something to do that, okay. 

NO CHILD LEFT BEHIND TESTING COSTS

Secretary SPELLINGS. On testing, we spend about $400 million at 

the Federal level on assessments. What is required under this law 


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is that States test one time a year in reading and math and they 

report that information in a disaggregated way. 

To the extent that States or local school districts go beyond that 

and assess at benchmark points throughout the school year, that 

is certainly within their purview, but it is not required by No Child 

Left Behind. 

Ms. MCCOLLUM. My question was just for the funding for No 

Child Left Behind, how much is it costing States and school districts to fund No Child Left Behind testing? 

Secretary SPELLINGS. The full cost of assessment under No Child 

Left Behind is about $400 million and is paid for as part of this 

Act, the full cost. 

Now, as I said, to the extent that others go beyond and put additional assessments in or additional subjects, then that is certainly 

their prerogative, and I would have no way of knowing what those 

costs are. 

Finally, I would just say that with respect to your issue of narrowing curricula and so forth, the Federal role as part of No Child 

Left Behind is around grade level achievement in reading and 

math, and that has been the focal point of this law because this 

was certainly a bipartisan agreement that those were the gateway 

skills necessary to be effective in science or social studies or whatever. And so, that is kind of our discreet, yet vigorous, role around 

issues of reading and math. 

In conclusion, I would say that one of the things that you need 

to know—because I know we have, obviously, these perennial discussions about adequacy of resources—is that funding is up 63 percent in Title I since the President took over and there is a 41 percent increase in NCLB funding. Those are all the programs that go 

under the NCLB rubric. That has absolutely kept pace with increases in expenditures at the State and local level. 

So, to the extent that, pardon me. 

Mr. OBEY. Finish your sentence. 

Secretary SPELLINGS. I was just going to say, to the extent that 

costs are up at the State and local level, we have certainly accommodated those increases at the Federal level as well. 

Mr. OBEY. Mr. Rehberg. 

Mr. REHBERG. Thank you, Mr. Chairman. 

IMPACT OF BUDGET REQUEST ON NATIVE AMERICAN STUDENTS

One of the problems that I have is that while I supported No 

Child Left Behind and we can claim a lot of success or use it as 

a way of claiming success, the difficulty I see is in matching the 

dollars that we spend at the Federal level for the kids that are 

identified under No Child Left Behind as having the problems. 

As I go through the President’s budget again, much the same as 

my criticism of the last budget that the President presented to this 

Subcommittee, it is the cumulative effect of what it does to my Native American population. It isn’t usually one tax that gets a business or one regulation. It is the cumulative effect of all the taxes 

and all the regulations. 

When you have schools with students that are having difficulty 

and then the President brings in the budget once again that sorely 

underfunds Impact Aid, especially the construction programs, zeros 


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out for any increase, rural education, slight increase in IDEA, 

TRIO, zero percent increase, tribal colleges, cutting of $23 million, 

it is the cumulative effect of all of that that we just don’t see the 

support coming out of No Child Left Behind. 

You can say it does. You can put all the platitudes on it that you 

want, but the tribal schools in my State and the tribal colleges in 

my State will tell you that this Administration doesn’t get it. 

So, aside from hanging on to the No Child Left Behind, how can 

you defend the budget that is impacting the tribal schools within 

the State of Montana? 

Secretary SPELLINGS. Well, as I said, Congressman, the approach 

of the Administration has been to make a priority of programs that 

are large in nature and that have a lot of latitude around them: 

IDEA, Title I. 

Mr. REHBERG. Large in nature? I thought No Child Left Behind 

was about the individual child. 

Secretary SPELLINGS. It is. 

Mr. REHBERG. Cumulatively, you are affecting those individual 

children by either not increasing the funding within those particular programs or cutting in the case of the tribal colleges. So I 

don’t get it. 

AUTHORIZED FEDERAL SHARE OF SPECIAL ED APPE

And, what I really don’t get is, this Administration convinced us 

to pass No Child Left Behind in 2001, and IDEA was reauthorized 

in 2005, and the 40 percent figure was still in it. If they didn’t intend to fulfill the commitment, then why did they come in and support a reauthorization level of 40 percent. Why didn’t we just zero 

it out then? 

Secretary SPELLINGS. As I said, the approach of the Administration has been to prefer programs that are large in nature and have 

a lot of latitude for States and local districts—IDEA, Title I, Reading First and the like—over programs that are small in nature and 

small in scale, and that, with respect to the PART process, OMB’s 

performance review, have been ineffective. And so, there is a lot of 

latitude around those larger programs. 

All of the increases in these larger programs can be used on Native Americans kids, rural kids and so forth, and that provides 

more local control, preferred over particular silos of individual programs. 

EFFECT OF IMPACT AID PROGRAM CUTS

Mr. REHBERG. But with Impact Aid, we have no ability. We have 

no tax structure because it is federally-owned property or triballyowned property. There just is not the ability to replace that based 

upon the local taxing authority. 

And so, when you don’t show a commitment there, you are just 

undercutting any of the successes that you might have seen in No 

Child Left Behind. It shows a fundamental either misunderstanding or contempt for those of us who have large Federal properties or tribal properties within our State to continually hang on 

thinking, well, No Child Left Behind will come in and fill the void. 

It just doesn’t. 


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I don’t know what you guys are smoking over there, but it ain’t 

working. It just isn’t working, and so maybe a new Administration 

with new leadership will get it because it is just really frustrating 

to see our tribal schools falling further behind while No Child Left 

Behind is supposed to be the answer. It isn’t working. 

Hence, I voted to override the President’s veto and will continue 

to do it again as a Republican. 

Secretary SPELLINGS. All right. [Laughter.] 

Mr. OBEY. Ms. Lee. 

Ms. LEE. Thank you, Mr. Chairman. 

Good morning, Madam Secretary. Let me ask you a couple of 

questions. 

UPWARD BOUND EVALUATION

First of all, as you know, for nearly a year the Congressional 

Black Caucus has been concerned about this evaluation study or 

this evaluation that was really basically flawed and that some students in a control group—this has to do with Upward Bound— would never again be able to participate in Upward Bound. And so, 

last year in the appropriations bill, we included language that really barred funding for this study. 

Lo and behold, we found that the study was continuing anyway, 

and we wrote you a letter. Subsequent to that, we received a copy 

of a letter to Upward Bound grantees, indicating that now it would 

be best to terminate the evaluation. 

So I just want to clarify what happened. Why did you continue 

with this. 

You knew what the intent was of Congress to stop this, and it 

took a letter by several of us to write to you to be able to get a 

response. I still don’t know if the grantees have received that response yet. This was a copy of a letter. 

So that is the first question. 

Secretary SPELLINGS. They have. 

Ms. LEE. They have? 

Secretary SPELLINGS. They have been notified that the evaluation has ceased. 

I would just say that this is the only program under the jurisdiction of the Department of Education that has a prohibition against 

evaluation. As a former State policy person where we invested 

State resources around Upward Bound and programs like that, not 

having the ability to make the case on behalf of effective programs 

I think is going to ultimately hurt. 

Ms. LEE. Sure, but it was not being against the evaluation. It 

was the design of the evaluation and the discriminatory nature of 

the evaluation, and so that was the problem. 

Secretary SPELLINGS. It has been canceled, and grantees have 

been notified. 

Ms. LEE. Thank you. 

BUDGET CUTS IN EDUCATION PROGRAMS

The second question I have has to do with this budget, and I just 

want to get your assumptions as it relates to especially low-income 

children, poor children and minority children and youth based on 

this budget. 


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I just want to mention a couple of the programs that have been 

cut: The 21st Century Community Learning Centers, that is afterschool centers, down 26 percent. Safe and Drug-Free Schools State 

Grants, down, well, that is zeroed out. Mentoring programs, zeroed 

out. School counselors, zeroed out. Vocational education, zeroed out. 

Supplemental Education Opportunity Grants, zeroed out. Hispanicserving institutions, down 20 percent. Historically black colleges, 

down 35 percent. 

I mean what is going on as it relates to the commitment to educate children who don’t have a lot of money, children who come 

from families who live in low-income communities, children who 

are minority and poor? 

These cuts directly impact their educational ability, their ability 

to learn and to move forward and to develop the type of life that 

we want them all to develop in terms of the skills and knowledge, 

and so it is really cutting their educational opportunities. 

We see problems all over the country now in school safety, violence on campuses. But mentoring, school counselors, safe and 

drug-free schools, those are certainly initiatives that help identify 

early on problems, children who need some intervention before incidents of violence break out. 

I have to ask you, what do you all think over there? What is your 

rationale for all this? 

EDUCATION PROGRAMS PROPOSED FOR ELIMINATION

Secretary SPELLINGS. There are 47 programs that are cut from 

the Department of Education budget. Twenty-seven of them are 

small in nature, $25 million or less, and have been rated ineffective 

by the PART process and/or are so small in scale that it is hard 

to get critical mass around them. 

Ms. LEE. So school counselors are ineffective? 

EDUCATION PROGRAMS PROPOSED FOR INCREASES

Secretary SPELLINGS. In favor of, Congresswoman, investments 

in other programs like a giant Pell increase, and increases for Title 

I, IDEA, Reading First and programs that have a lot of latitude 

and flexibility for local school districts. Certainly Title I funds can 

be used for school counselors and those sorts of things. 

Ms. LEE. Yes, they can be used, but they are not designated to 

be used for school counselors, mentoring programs, safe and drugfree schools. 

You are saying now that if schools decide they want to use funds 

for these programs, they can. But if they don’t, given the minimal 

resources and the choices that schools have to make, why in the 

world would we put the squeeze on them like that? 

BUDGET TRADEOFFS MADE FAVORING LARGER PROGRAMS

Secretary SPELLINGS. Well, as I said, a couple of answers are, 

one, the programs are found to be largely ineffective by virtue of 

the OMB performance review process and, secondly, they are so 

small in nature that it is hard to get critical mass around those 

sorts of activities. 


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You mentioned safe and drug-free schools. There is a preference 

toward statewide activities, and this is certainly what we saw in 

the aftermath of Virginia Tech, that can be more strategic, more 

effective because they are looked at in the context of State laws 

and so forth. 

Ms. LEE. And Hispanic-serving institutions, historically black colleges cuts? 

Secretary SPELLINGS. With a very large and substantial increase 

in the Pell grant. As I said, tradeoffs have been made with a preference toward large programs. 

Ms. LEE. Thank you, Mr. Chairman. 

Mr. OBEY. Mr. Regula. 

Mr. REGULA. Thank you, Mr. Chairman. 

I appreciate the good job you have done, Ms. Secretary. 

Mr. Chairman, I want to submit a number of questions for the 

record, but I will have a few here. 

CONNECTION BETWEEN READING FIRST AND SPECIAL ED

I appreciate the fact that you made the point that Reading First 

is tied to special ed. I think we overlook the connection. The failure 

of one creates the problem in the other, and you are right on. 

TEACHER INCENTIVE FUND

A couple things: Teacher Incentive Fund, what is the experience 

thus far of getting money to support teachers who are willing to go 

into very challenging situations in low income neighborhoods where 

it is so important to have that good teacher? Does this program 

help that to happen? 

Secretary SPELLINGS. Absolutely, it does, Mr. Congressman, and 

thank you for your help in obtaining those resources. 

There is almost $100 million invested in a series of pilot programs, about 34 grants around the country. They are sometimes 

statewide efforts, such as Ohio is looking at urban school districts, 

rural communities, to find ways to get our best teachers doing our 

most challenging work. 

We often do just the opposite in education. Our most experienced, most credentialed people are in our least challenging settings. 

As you know, the program also focuses on principals in addition 

to teachers. 

We believe that this practice is just being developed around the 

country, and that is why the President’s request is to double that 

program to $200 million so we can do more of that. We are just 

learning the best approaches, and I would be glad to share that 

with you as it is developed. 

Mr. REGULA. Well, I am glad to see you recognized that with the 

increase, and it also leads to my second question. What is happening on the dropout rate? 

ADDRESSING THE DROPOUT PROBLEM

One of the things that has really concerned me is the percentage 

nationwide of students that drop out, and I think part of it goes 

back to a failure to learn to read and perform. This dropout deciVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00619 Fmt 6601 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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sion stems from first, second, third, fourth grade, and that is the 

reason we need to encourage these good teachers to go into those 

situations. 

Are we making any progress in reducing the number of dropouts, 

a terrible waste of human capital? 

Secretary SPELLINGS. Not enough is the short answer. Certainly 

there are places and States that are working on that, more customizing of education around those needs as well as helping struggling 

students, who have been left behind previously, catch up in basic 

skills like reading. 

Really, our kids drop out for two reasons. One, they are unprepared to be successful in high school, as you mentioned. That is 

why we need to have a Striving Readers Program that can take 

some of this reading focus to our middle and high schools. 

ADVANCED PLACEMENT PROGRAM

But also, it is often because kids don’t see enough rigor or relevance in their high school, no reason to show up, and that is why 

the President has called for expanding the Advanced Placement 

program that can provide opportunities for kids to get additional 

training particularly in our inner city schools where we often ration 

rigor away from those communities currently. 

Mr. REGULA. Well, I want to say those work because in my community the colleges are putting their faculty members in the high 

schools in order to inspire these kids to think about going on because a lot of them don’t get much incentive otherwise to go beyond 

the high school. 

Secretary SPELLINGS. Exactly. 

Mr. REGULA. I think that program offers great possibilities in the 

dropout situation, and it has worked there. I think it is part of the 

P16 program which started in Georgia, which to me has a lot of 

pluses to make communities aware of this need. 

TWO-YEAR COLLEGES

You don’t talk about the 2-year colleges. We always think when 

we say college we think 4 years, and yet there are so-called junior 

colleges that offer an Associate’s degree and a skill that they can 

take to the marketplace after 2 years. 

Secretary SPELLINGS. Right, community colleges. 

Mr. REGULA. Or, if they discover that they have an aptitude and 

desire for a 4-year diploma, they can move on. 

Do you think we do enough to support and incentivize these 2- 

year programs that are growing in popularity? 

Secretary SPELLINGS. They are growing in popularity, and they 

are very attainable and usually the most cost-effective option for 

students. That is why about 35 percent of our Pell recipients attend 

community colleges. 

Mr. REGULA. That is interesting, yes. 

Secretary SPELLINGS. They do work-related education that is 

very much related to the workforce, as you know, and I think that 

is developing around the country. 

In places like Florida and North Carolina, they have done a lot 

of common course numbering and dual enrollment so that kids are 

getting a high school diploma simultaneously with an associate’s 


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degree and the like, but the primary Federal investment in our 

community colleges, of course, is around the Pell Grant where 

many of those students attend. 

Mr. REGULA. In our community, a technical institute which is 

just half of the community college, if you will—it is strictly an Associate’s degree—has gone from zero to nine thousand in a relatively short time because people get on the bus and get there. If 

a company moves out, they can go and get a new skill and so on. 

Secretary SPELLINGS. Exactly. 

Mr. REGULA. I am glad to hear that we are moving on that. 

Thank you, Mr. Chairman. 

Mr. OBEY. Ms. Roybal-Allard. 

DECREASES IN PROGRAMS SERVING LATINO STUDENTS

Ms. ROYBAL-ALLARD. Madame Secretary, as you know, the 

Latino population is the largest and fastest growing ethnic group 

in the United States. In 2003, Latino children accounted for 18.5 

percent of our Nation’s total public school population. 

As these numbers continue to grow, our country will increasingly 

look to Latino children to be a major part of our Nation’s next generation of teachers, doctors, health care providers and entrepreneurs, and this is going to be a difficult task to achieve considering that Latino and other minority students are more likely to 

attend impoverished schools, demonstrate lower performance in 

core academic subjects and have a higher dropout rate than their 

white peers. 

Now, the President’s budget touts its $30 million increase to the English Acquisition Program and its $23 million increase to the Migrant Education Program. The fact is, however, that a mere $30 

million increase for English Language Acquisition does not keep 

pace with ELL enrollment, which has nearly doubled over the past 

15 years. Nor will a $23 million increase to Migrant Education 

begin to make up for the cuts that have been made to the program 

since No Child Left Behind became law. Consistently low funding 

for this program has also made it impossible to implement the Migrant Student Record Transfer System which is an essential tool 

for tracking severely at-risk and mobile migrant students. 

Equally alarming is that the President’s budget also dis-invests 

in other programs serving Hispanic and minority students that are 

critical to ensuring our country has an educated workforce that can 

compete in our highly technological and global economy. 

For example, the President cuts $66 million from Even Start, a 

family literacy program that serves many Hispanic families. It cuts 

$18.8 million from Hispanic-Serving Institutions, which are the 

principal enrollers of Hispanic college students. The President 

freezes funding for the very successful HEP and CAMP programs 

which help migrant students graduate from high school and go on 

to college, and he cuts $38.9 million from the Parental Information 

and Resource Centers, even though these centers provide a majority of Hispanic families with resources about college access. 

Can you please explain the rationale behind cutting so many valuable programs especially designed to serve this extremely vulnerable population? 

Secretary SPELLINGS. Congresswoman, thank you. 


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As you rightly noted, there are increases in some of those programs like the migrant program, of course, Title I and other things 

that certainly serve Hispanic students. 

Again, based on the performance review process that OMB has 

established, we look at programs that are small in nature. We look 

at all programs and whether they are effective or not. The programs that are recommended for reduction or elimination are those 

that have been found to be ineffective with preference being given 

to larger-scale programs like Title I, IDEA, reading, Title II for 

teacher development and so forth, so that those kids can be on 

grade level by 2014, as No Child Left Behind calls for them to be. 

I would also say just as a matter of policy—and I know you are 

aware that this is all being debated in Chairman Miller’s Committee as we speak—that No Child Left Behind has done more to 

focus attention and resources and accountability around the needs 

of Hispanic learners than anything that I am aware of in the last 

25 years I have been involved in this, and I think it is to the good 

of Hispanic kids. 

We are just beginning to develop the right interventions, the 

right strategies and that, in my mind, is because of this intensity 

of focus that has been developed because of this law. 

Ms. ROYBAL-ALLARD. Madam Secretary, let me just point out 

that the fact of the matter is that the President has created a Title 

I shortfall of over $65 billion during his time in office and a near 

$406 million increase is hardly impressive nor is it going to do the 

job that we need to do in order to educate our children. 

That is certainly true when it comes to the programs that are important to Hispanic students. As we heard last year in expert testimony, unless that population is properly educated, this country is 

going to be in trouble because Hispanic students are going to be 

or should be an important part of our workforce. 

Secretary SPELLINGS. Absolutely. Absolutely. 

Ms. ROYBAL-ALLARD. I am afraid that this budget certainly does 

not recognize not only the important role that this next generation 

of Latinos and other minority students will play but the role our 

children will play in general. 

Mr. OBEY. Thank you. 

Mr. Simpson. 

Mr. SIMPSON. Thank you, Mr. Chairman. 

INCREASED FOCUS ON PUBLIC EDUCATION FROM NCLB

Welcome, Secretary Spellings. I agree with you. No Child Left 

Behind has done more to focus attention on education not only of 

Hispanic kids but of all kids than probably anything that has been 

done in years. That doesn’t mean that it is perfect. 

Secretary SPELLINGS. I agree. 

Mr. SIMPSON. There are things that need to be changed in the 

reauthorization, and I know you are working with the appropriate 

committees on reauthorization. 

Sometimes I don’t think the President gets enough credit for 

really focusing attention, whether you agree with it or not, with focusing attention on education and the need to improve quality of 

education. 


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BUDGET REQUEST TO OMB

Let me ask you a couple of questions. First, what was your original request to OMB for your budget this year? 

Secretary SPELLINGS. I don’t know off the top of my head. As you 

know and I am sure are well aware, there is a lot of ‘‘toing’’ and 

‘‘froing’’ between the Department and OMB as we settle on a final 

number. 

Mr. SIMPSON. But I assume you put together the original request 

as to what you think is necessary to move the Department and 

move education forward. 

Secretary SPELLINGS. Yes, sir. 

Mr. SIMPSON. Then it gets whittled down as things go back and 

forth. 

Secretary SPELLINGS. In the context of other priorities and other 

competing agencies and so forth, yes. 

Mr. SIMPSON. You don’t know what the original request was at 

least? 

Secretary SPELLINGS. Well, I certainly can find out. I don’t know 

off the top of my head. 

Mr. SIMPSON. Could you get that information for us? 

Mr. SKELLY. We can provide that, Mr. Simpson. 

Mr. SIMPSON. I would appreciate it. I would like to see that. 

CAREER AND TECHNICAL EDUCATION

One of the other things that bothers me a little bit, as you know, 

we have the Idaho National Laboratory in Idaho. 

Secretary SPELLINGS. Yes. 

Mr. SIMPSON. As I talk to companies, nuclear companies and so 

forth, the one thing they say that is going to hold back the advancement of nuclear energy and so forth in this country is the 

lack of technical skills of welders, electricians, those types of individuals, because we aren’t training them, and you have eliminated 

the career and technical education part in your budget. 

Secretary SPELLINGS. As you know and as I have said, we look 

at programs and whether they are effective or not. One of the 

things that we were encouraged about is more alignment with rigorous academic skills and so forth in our vocational education programs, but we have yet to see that. That is why, again, we focus 

on investments that are effective, Title I and others, in favor over 

those that have proved to be ineffective to date. 

MATH AND SCIENCE EDUCATION AND TEACHER TRAINING

Mr. SIMPSON. What are you going to do to meet those demands 

that are going to be coming up? 

Secretary SPELLINGS. Well, the President has called for expansion of the Advanced Placement Program to provide more rigor in 

math and science and other subjects in our high schools. 

He has appointed, and actually they will soon conclude their 

work, a math panel to look at the best research, the most effective 

practices that can be shared with educators about how we can be 

better in that area. 

Obviously, we need to focus on teachers. As you are well aware, 

many of our teachers, particularly in math and science fields in the 


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elementary and middle school levels, are not sufficiently rooted in 

those areas to be effective, and so there is a major focus, obviously 

in Title II, for professional development. 

But, frankly, we have seen good gains on No Child Left Behind 

in the math arena that have really outpaced reading. So there are 

really some signs for encouraging feelings because of the increases 

that we have seen so far. 

NARROWED CURRICULUM FOCUS

Mr. SIMPSON. One of the things that concerns me, quite frankly, 

and I agree with the emphasis on math and science. We need to 

do that, but I think we are leaving other parts of education behind 

by doing that. 

You are seeing programs dropped in schools. I think the arts are 

important in schools, but you are seeing more and more of those 

dropped, and less emphasis on those programs as money is diverted into math and science and other things. We need a wellrounded education, not just a math and science geek, if you know 

what I mean. 

TEACHER RECRUITMENT

The other thing that really concerns me is if you look at the 

number of teachers in this country that are aging and could qualify 

for retirement or will retire within the next 10 years. What are we 

doing to replace those teachers and make becoming an educator an 

important choice when someone goes to college? 

You have to have a quality teacher at the front of that classroom. 

That is not the profession that a lot of students are choosing when 

they go to college now. 

COLLEGE COST REDUCTION ACT AND TEACHER TRAINING

Secretary SPELLINGS. You all, as part of the CCRA last year, took 

some steps to provide additional loan forgiveness for teachers or 

prospective teachers who want to enter the profession. We are in 

the rule-writing process and adressing that to, obviously, try to recruit and retain more people into this profession. 

Also, obviously, support for Teach for America and Troops-toTeachers, other programs like that provide resources to get folks, 

effective folks into our classrooms. 

EDUCATION CURRICULUM—FEDERAL ROLE

With respect to this narrowing of the curriculum thing, I think 

obviously our attention and what we all look at in education, is 

what is the Federal role as a 9 percent investor in this enterprise. 

What is the point of entry? For 40 years, it has been around our 

Nation’s poor kids. 

Mr. SIMPSON. Nine percent participant in terms of funds, but 

what percent in terms of direction, rules and regulations? 

Secretary SPELLINGS. It is around reading and math, getting kids 

on grade level by 2014. We don’t have a giant title program centered around arts and science, arts or other programs. 

So I would say this is a necessary but not sufficient first step. 

This is a shared partnership with States and localities, and I think 


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they are adapting with our focus on achievement for everybody in 

the context of the other things they want and should do. 

PELL GRANTS FOR KIDS

Mr. SIMPSON. Let me ask you one question as time runs out, 

quickly. The Pell Grants for Kids program, that you have proposed, 

a cute name for a voucher program for parents that want to send 

their children to some other school if they have a failing school, 

theoretically. What are you doing for those failing schools and the 

students we leave behind in those schools? 

It is a very small percentage of parents that are going to choose 

to send their student to another school. What are we doing for the 

resources for that school that we left behind? 

SCHOOL IMPROVEMENT FUNDS

Secretary SPELLINGS. Asking for $500 million in additional school 

improvement funds to, as I said, to triage some of those schools. 

One of the things that we are debating, again as a matter of policy, are ways to make distinctions across the accountability spectrum between those chronic under-performers, 5 or more years of 

not making it, and those in-range schools. And so, additional resources ought to be spent on those that are nearing that sort of 

condition. 

However, those kids who have been in those schools and on those 

campuses for 5 or more years need a lifeline to a different, better 

opportunity. I was encouraged that Congressman Emanuel is about 

to introduce something that is that notion for charter schools, so 

that kids can take resources with them to charter schools outside 

their district. 

Mr. OBEY. Mr. Honda. 

Mr. HONDA. Thank you, Mr. Chairman. 

Welcome, Secretary Spellings. I appreciate your being here. 

INCONSISTENCY IN EDUCATION FUNDING PRIORITIES

I guess you wouldn’t argue the fact that public education in this 

country is critical in terms of having a good, strong democracy. 

Secretary SPELLINGS. Absolutely. 

Mr. HONDA. You probably wouldn’t argue the fact that having a 

strong public education in this country is akin to a good national 

security policy too. 

But your written testimony is very confusing to me because you 

say that it is a push ahead budget, yet there are astonishing increases in different programs. So if that is the case, then there 

must be astonishing cuts in other programs. 

You just mentioned that you have cut something like 27 programs that are $25 million or less because they were duplicative 

or they didn’t prove to be successful. The question I have regarding 

that is you established a program where you took some money out 

of a teacher improvement program that was larger and more flexible and successful. You took $100 million out, and you created, 

what did you call it, a Teacher Incentive Program? 

Secretary SPELLINGS. Teacher Incentive Fund. 


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Mr. HONDA. Yes, and you created a smaller program that hasn’t 

been tested. How does that match the comments that you are making when you cut close to $625 million out of smaller programs? 

Secretary SPELLINGS. Well, clearly, those are resources that are 

developed around teachers and teacher needs. As Mr. Regula—— Mr. HONDA. Excuse me, but the money out of the program from 

which you took has the same direction and same mission, it seems 

to me. And so, it sounds like you have a reason for cutting programs, but then you create other programs that seem to fit the 

same characteristics. 

You cut ESEA funds for elementary. You put it as secondary. I 

don’t know how you sustain a good district-wide program when you 

take money here, and you put it back up over here, and then you 

leave the lower grades where a lot of that work is needed and expect any kind of growth for those students. 

Then the minority-serving institutions, higher education institutions, you cut them by 27 percent. You said, but we provide. I assume you are saying you provide an equal amount of money for 

Pell grants, but the Pell grants are for students and that money 

goes back into the institutions. But institutions need the money 

just to maintain their functionality. 

It just feels like you are setting up a system that is going to be, 

at best, nonfunctional or is going to have a difficult time trying to 

meet its goals. 

The other thing is I guess the $300 million Pell Grant for Kids 

scholarship, that in itself, the way you describe it, is really money 

for people to escape a situation. I am not sure what that really addresses. It is not really a lot of funds for those students who are 

Latinos. I would like to see the numbers for how the demographic 

breaks down in terms of the types of kids that are leaving. 

There is a lot of inconsistency in your budget, and I think that 

the amount of money that you cut out of programs, the 27 programs, amounts to about $625 million which is about the same 

amount of money that was put into other programs. 

ACADEMIC COMPETITIVENESS AND SMART GRANTS PROGRAM

There is a program you were responsible for that you talked 

about, the Smart Program, something like that. 

Secretary SPELLINGS. AC/SMART grants, the Pell enhancement 

or advanced placement program. 

Mr. HONDA. Right, and that has something like $960 million in 

it? 

Secretary SPELLINGS. Yes. 

Mr. HONDA. How much did you return back to the budget? 

Secretary SPELLINGS. Six hundred and fifty million dollars. 

Mr. HONDA. So, essentially, a good proportion of that money was 

never touched. 

Secretary SPELLINGS. Because we didn’t have enough kids who 

were qualified. 

Mr. HONDA. You didn’t have enough kids who qualified? 

Secretary SPELLINGS. That is correct. 

Mr. HONDA. Well, did you have a system that was well designed 

so that people knew that it was available? 

This was supposed to be on top of Pell grants also? 


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Secretary SPELLINGS. It is. It is on top of Pell grants. 

Every State has certified. The law calls for them to certify in conjunction with me a rigorous course of study that makes them eligible for this additional financial aid. 

The first year it was enacted it was about an $800 million program. By virtue of these various State programs, who they identified, who had taken those, the kids who had taken those programs, 

we spent about $450 million of those resources. 

Mr. HONDA. And then this time, you spent even less than that. 

Secretary SPELLINGS. Based on the kids who are taking these 

programs. It shows us the need to continue to work on our high 

schools. I grant you that, absolutely. 

Mr. HONDA. It is interesting to me. 

Mr. OBEY. The gentleman’s time is expired. 

Mr. HONDA. Thank you. 

Mr. OBEY. Mr. Peterson. 

Mr. PETERSON. Good morning. Secretary Spellings, I would like 

to thank you for your public service. 

Secretary SPELLINGS. Thank you, Congressman. 

NO CHILD LEFT BEHIND FOCUS ON EDUCATION

Mr. PETERSON. I think the Bush Administration’s introduction of 

the concept of No Child Left Behind has probably been one of the 

best academic debates in this country and hopefully will continue 

to be because we shouldn’t leave anyone behind. We shouldn’t even 

think about it. 

CAREER AND TECHNICAL EDUCATION

But I will say, yesterday the House passed a resolution honoring 

the goals of Career and Technical Education Month. I want to tell 

you in my view, and I have been on this Committee throughout the 

Bush Administration, those that are technically gifted in America 

do not have equal access or opportunity to an education as those 

who are academically gifted. 

Ninety percent of the companies in this country employ people 

who are trying to stay here, trying to compete here and not move 

offshore, are screaming for skilled workers. Your budget, year after 

year, puts a zero priority on technology education. 

Fifty percent of the kids that attend my schools and the teachers 

I talked to in the classrooms I visit, don’t know what academics 

are. They don’t know what the word means. They are attending 

school. They come from poor families. They are struggling. Nobody 

is telling them that they need to get a good education and they 

need to go to college. 

But our whole program is about those who are going to college. 

I am all for them, but half the kids that are attending our schools 

don’t know even the possibility of a college education in rural 

America. They are just attending school. 

A lot of them are technically gifted. They are born with the skills 

to take things apart, fix things, and it is amazing to watch how 

technically gifted some kids are, but this Administration doesn’t 

value that. 


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RELEVANCE OF ACADEMICS SEEN THROUGH TECHNICAL EDUCATION

Those are the people that run our factories. Those are the people 

that make things work. I have seen a lot of kids. When you put 

highly modern, technical classrooms in a school, the poorest among 

us get excited, and then academics become relative to them when 

they learn how to do something. 

I will never forget when I was in a computer classroom to repair 

computers. It was a very poor school in my district, and I had gotten them some funding and they put in a computer repair program. 

The kids that were in there, and I asked the class, how many of 

you have a computer at home? Seventy percent of them didn’t have 

a computer at home. They were poor kids, but they were excited 

because this one kid said to me and I will give his exact words. 

He said, I tore this sucker apart. Those were the words he used. 

I put in a new motherboard, and I put in this, and I plugged it in, 

and it worked. 

Computers are going to be relevant in the rest of his life, just repairing a computer. Information now is important to him. 

This Administration has just written that all off as a waste of 

money, as a waste of time. Folks, that is the engine that will drive 

this country economically. We are not short of academic people to 

run things. We are short of people to do things. 

The cars of today have 50 to 100 computers in them. When I was 

growing up, you learned to be a mechanic in the backyard because 

you were poor and you were always working on your dad’s car. 

That was how you became a mechanic. 

Not today. You have to go to a certified school. It needs to start 

in high school, not at college level. 

PLC, what is a PLC? A program logic controller, it is a computer 

that runs a machine in our manufacturing plants. I have 20 counties. I don’t have a school that teaches how to repair a PLC, a program logic controller, a computer that runs a machine. We have to 

bring in technicians from out of the area because we don’t teach 

them. 

I talk to every growing company in my district. Their number 

one problem is skilled workers because they are only growing because they have invested heavily in modern machinery. It takes 

skilled people to run it, not academicians. 

But when young poor people, specifically, get skilled training so 

they can accomplish something, then the academics become relevant to them. 

I think you have it backwards. The dropout rate in the cities 

would be a lot less if they had skilled training there for the kids 

who can do things with their hands. 

Over half of Americans shouldn’t be academicians. Twenty-three 

percent need a college education, theoretically. More than that is 

better. But our whole focus, your whole focus is on academics, and 

you have thrown the baby out with the bath water by continually 

de-funding technology education. 

I would be interested to hear your thoughts. 


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ACADEMICS AN ESSENTIAL PREREQUISITE TO TECHNICAL EDUCATION

Secretary SPELLINGS. I would grant you that there is absolutely 

an emphasis on grade-level achievement in reading and math as 

the absolute necessary requisites to be successful in a modern manufacturing plant or in any kind of endeavor, technical or otherwise. 

It is not a skill. Basic literacy is not a skill that is only for the college-going, and we are a long way from doing that. 

In fact, these new technologies that you describe require virtually 

algebraic knowledge and experience to work in those sorts of arenas. An ability to read and cipher on grade level is an absolute prerequisite to success in that and every other endeavor. 

Mr. PETERSON. But when the Federal Government abandons 

technology education like you have, we won’t have technology in 

the schools. 

We don’t fund the majority of our schools, but the Federal Government has always been the leader of what we ought to be doing. 

We are the idea, and then the States partner with our money. To 

get our money, they do what we think they ought to do. That is 

what they do. 

We give them a little bit of money to lead them down the road, 

and you are saying technical education is not important because 

you don’t fund it. 

Secretary SPELLINGS. We have spent more than $30 billion 

through the E-rate tax. 

Mr. PETERSON. That is not appropriated money. That doesn’t 

count. You can’t get by with that. I am sorry. 

Technical education has not been a priority of the Bush Administration, and it just astounds me. 

Mr. OBEY. The gentleman’s time is expired. 

Mr. Jackson. 

Mr. JACKSON. Thank you, Mr. Chairman. 

Secretary Spellings, thank you for your service to the Nation. 

FEDERAL ROLE IN EDUCATION

Let me first begin by saying my attitude and disposition about 

this budget is not too far from what I heard Mr. Peterson say, and 

I want to begin with a little context. 

I heard one of my colleagues say, what is the appropriate role of 

the Federal Government in education, and I want to put all my 

cards on the table for my colleagues, both on the Republican and 

on the Democratic side of the aisle and certainly for you, Madam 

Secretary. 

I believe our role as a Committee and as elected officials is to 

build a more perfect union amongst the States. 

CLOSING THE EDUCATION ACHIEVEMENT GAP BETWEEN STATES

It is the States, from my historical perspective, that have created 

the separate and unequal education system. 

It is poor children and their families. It is African Americans and 

their families. It is Latinos and their families. It is the disabled 

and their families. It is young women and their families who petitioned their government to close the gap that exists between the 

States and their opportunity in our public education system. 


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It is not the Federal Government that has maintained that separate and unequal system. I could go back through our Nation’s very 

troubled history on this question. We have even sought the intervention of the Federal courts to try and close gaps between certain 

sides of town and other sides of town, to close the profound gaps 

that exist in education. 

As the Secretary of Education, I see your role—and maybe I am 

getting this wrong, Mr. Chairman—as the primary champion for 

the Federal Government in closing the gaps in the States. 

We don’t need a States Righter, someone coming to us or even 

members of this Committee, arguing that the Federal Government 

should have a limited role and the States are doing a good job. 

They are not doing a good job. They are separate and they are unequal. 

In fact, this Committee actually funds a number of studies that 

actually rank the States, and every year that we serve on this 

Committee we hear who is doing the best job, number one all the 

way down to number 50. So there are 49 States every year that are 

not quite in the number 1 position. 

And so, the American people petition their government through 

our Committee, through this budget and through this appropriations process to close the gap in the States so that all of our children, whether they are in Idaho, Massachusetts, whether they are 

in the southern part of the United States, the western, the northeastern part of the United States, to close the gaps that exist from 

access to quality, to books, to size of classrooms to teacher quality 

to teacher training to access. You name it. 

So in the final analysis, if we are not interested in building a 

more perfect union amongst the States, we ought to just say that 

because this budget does not reflect in some of the cuts and some 

of these programs do not reflect that we are trying to close the gaps 

that exist in the States. 

If we are the Committee of last resort to giving all of the American children an equal opportunity in the States, then yes, we have 

to fund the technical assistance programs that Mr. Peterson is 

talking about. We have to fund the career opportunity programs 

that I am talking about and the GEAR UP programs and the TRIO 

programs because the States don’t have comparable programs that 

can give children an equal opportunity to participate in the Nation’s education system. 

So let me first start with my premise even though I recognize 

that my time will expire before I even get to the questions because 

once I lay out the premise, once I lay out the premise, then this 

is a bunch of garbage. 

I don’t mean to say that the staff has not put in significant work, 

but the premise is wrong, that there should be some limited role 

of the Federal Government when we are the body of last resort to 

give children in our Nation’s public education system some opportunity in the States. 

The great tragedy of this Committee is that we rank the States, 

the best State versus the other 49 States that need to catch up to 

the best State every year, and then we come back and talk about 

whose State is number one and whose State is number 50 with 


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Mississippi usually being consistently number 50 and then my 

State, 19, 20 or whatever it is. 

Then I come here, arguing for more resources to close the gap between my State and the number one State only to be told through 

some budget process or through some President’s budget request 

that there is never enough money to close the gap for the children 

during the educational life of my constituents in the course of a 

given process. 

VOUCHER PROGRAMS

So, with that said, I have questions about the proposed Pell 

Grants for Kids program. The President is once again requesting 

$300 million for a school voucher program tied to No Child Left Behind despite Congress’ repeated rejection of the idea. 

Why does this Administration continue to attempt to funnel Federal tax dollars to private schools with no pretense of requiring 

those schools to adhere to the very same public accountability 

standards by which our public schools continue to be judged? 

Lastly, oh, my time is expired. 

Mr. OBEY. You can take 20 seconds. 

Mr. JACKSON. I appreciate that. I will yield my 20 seconds to the 

Secretary for the answer, and I will submit the rest of my questions. [Laughter.] 

I will submit the rest of my questions for the record, Mr. Chairman. 

Mr. OBEY. We will run a slow clock on you, Ms. Spellings. 

FOCUS OF EDUCATION IS ON EVERY CHILD

Secretary SPELLINGS. All right. Thank you, Congressman. 

I can assure you I am the primary champion for leveling that 

playing field. That has been the 40-year role of the Department of 

Education in the Federal Government. Title I, IDEA, these programs were created on behalf of poor and minority kids, and that 

has been the expectation. 

Six years ago, when we passed No Child Left Behind, we said to 

ourselves: We are for real. We mean it. We are going to hold the 

schools accountable for at least grade-level achievement by 2014 for 

every one of those kids by disaggregating data. 

And, I can assure you there is discomfort in the States in many 

places because of that focus on every single child. I don’t dispute 

that at all, and it has been powerful. 

ADEQUACY OF EDUCATION RESOURCES

With respect to resources, as you know, this is a perennial discussion between all of us. Funding is up 63 percent in Title I and 

No Child Left Behind since the President took office. Is it enough? 

We will continue to debate that, obviously, but I can assure you 

disaggregation of data has done more to attend to the needs of poor 

and minority kids than any policy we have ever put in place. 

Mr. OBEY. Mr. Ryan. 

Mr. RYAN. Thank you, Mr. Chairman. 

Budgets, as my colleague from Connecticut suggests a lot, Ms. 

DeLauro, reflect our values. I think from the looks of what you 


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have submitted here and what the Administration has submitted 

here, I think we have clearly a set of different values as to where 

we should put our money. 

I think in some instances when you say we are cutting these programs of $25 million or less or some of these programs, Advanced 

Placement, the mentoring, that don’t have a lot of money in them 

and then somehow suggest that they are not working and if you 

think that $50 million is somehow going to provide enough money 

to have a successful mentoring program in the United States of 

America, given all the challenges that we have, I think is an unfair 

assessment of what is going on here because there is just not 

enough money in there for it to be successful. 

So I don’t think it is an adequate representation of whether or 

not the program would succeed. The question should be would it 

be a successful program if it was adequately funded. 

So I just want to join my colleagues here to say I don’t think this 

reflects the values of the Committee and, as we did last year, I 

think there is going to be a lot of changes made here. 

TECHNICAL EDUCATION AND 21ST CENTURY AFTER-SCHOOL PROGRAMS

I want to add one comment to enjoin Mr. Peterson and Mr. Simpson on the career and technical side, critical in northeast Ohio, old 

manufacturing. We are looking for new things to do. Energy is a 

major component of that. Getting these kids engaged in the learning process, that is the trick. You learn to love learning, and then 

you will be fine regardless of where you end up. 

And so, with that, I have just a couple of quick questions. One 

is the 21st Century Learning Opportunities. Mr. Regula mentioned 

dropouts, and I think your comment was that yes, of course, you 

were against it. This is an after-school program. This is one of the 

key programs I think that would prevent kids from dropping out. 

My question is this: We have in a couple of our schools locally, 

in Warren, Ohio, Warren Harding has a great robotics program, 

just phenomenal. I mean you want to talk about lighting kids up 

and getting them interested in learning. You throw a bunch of stuff 

on the floor and tell them to put it together, and all of a sudden 

they are engaged in the learning process, what Mr. Peterson was 

saying earlier. 

My question is in this 21st Century Learning Opportunities, although there is a cut of $300 million, is that something that a robotics program, a local robotics program could access and be a part 

of? 

Secretary SPELLINGS. Potentially, yes, Congressman. We also 

have a kind of programmatic change to make this program look 

more like the supplemental service program where parents take 

that amount of resource and spend it where they like. And so, 

clearly, programs of multiple different approaches and designs are 

eligible for this sort of funding. 

Mr. RYAN. You would say the robotics program would fit into 

this? 

Secretary SPELLINGS. I would have to, obviously, know more 

about the program and whether it meets the other requirements 

and so forth but potentially, yes. 


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Mr. RYAN. Okay. Well, they compete in the national first robotics 

competition. 

ENVIRONMENTALLY-FRIENDLY, ENERGY EFFICIENT SCHOOLS

Lastly, as I am sure time is winding down here, one of the issues 

we have in Ohio, as I am sure a lot of other States are having, they 

either secured or got a lot of money from the tobacco settlements 

and they put that money into the schools. 

One of the issues is the schools, not only the new schools but the 

older schools. They are not really environmentally friendly. They 

are not really energy efficient. They don’t have the best and latest 

technology for conserving energy. 

I know there are some Youth Build green programs that are just 

starting to pop up around the country. Is there anything that you 

are doing to try to help these schools save money energy-wise, use 

the school as a laboratory in a sense where, as the school is updating and becoming more energy efficient, that is actually a kind of 

laboratory for these kids to learn about alternative energy? 

Are you doing anything along those lines? 

Secretary SPELLINGS. Actually, my colleague, Sam Bodman at the 

Department of Energy and I have partnered together on some of 

that sort of thing, although the programs themselves are in the jurisdiction of the Department of Energy and are not under our budget. But there are some new models for energy-efficient construction 

and they are all over the country now. I know you are aware of 

that, but that is all under the jurisdiction of the Department of Energy. 

EDUCATIONAL VALUE DERIVED FROM ENERGY EFFICIENT SCHOOLS

Mr. RYAN. Okay. I just want to suggest the more we can make 

these schools into laboratories and places where these kids, where 

everything that is going on around them is teaching them something or trying to stimulate them in some way, the better. 

At Oberlin College, they have an environmental science building 

that has been carbon neutral for years now, but the carpeting is 

recycled. The lights go on only when the motion sensor goes off. 

The heat and the cooling is regulated by the number of bodies that 

are in the room, all of these things. 

I don’t even want to say this, but they recycle the toilet water 

into a fauna system. I wish you would gavel me down right now, 

Mr. Chairman, before I get too into this. [Laughter.] 

Mr. RYAN. But the whole building is a laboratory for this kind 

of 21st Century education. 

The more we can do that, especially in the communities, as Mr. 

Peterson suggested, that aren’t used to the technology, aren’t used 

to these kinds of things, I think the better off we are going to be. 

We only have 300 million people in the country. We need them all 

on the field, playing for us. 

So I appreciate your coming. 

Secretary SPELLINGS. Thank you. 

Mr. OBEY. Mr. Udall. 

Mr. UDALL. Thank you, Mr. Chairman. 

Thank you, Secretary Spellings for being here. 


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GEAR UP AND TRIO PROGRAMS

On the GEAR UP program and the TRIO programs, I have seen 

these firsthand in the communities across my congressional district 

and seen how good they are in terms of tutoring, in terms of mentoring, the college scholarship part, but it just seems that there is 

a disconnect here with the Administration because in recent years 

the discretionary funding for these programs has declined significantly in both nominal and real terms. 

Is it that you don’t believe these programs are effective or where 

are you coming from on this? 

Secretary SPELLINGS. They are flat-funded in the President’s 

budget. They are not reduced. 

Mr. UDALL. Yes. Yes, I know they are flat-funded. 

Did you believe there? 

IMPORTANCE OF COLLEGE AWARENESS AND PREPAREDNESS PROGRAMS

Secretary SPELLINGS. Well, I certainly do believe that high school 

college awareness programs are something that we need and these 

connections between postsecondary education and higher education 

are critical. 

I would say that as we look at reauthorizing No Child Left Behind and collaborate with the authorizing committee about what 

the policies and what approaches, what accountabilities, and what 

our policy points of emphasis should be as part of the reauthorization on high school, that we ought to align our philosophy and the 

program resources we invest, including TRIO and GEAR UP and 

other things, around that philosophy. 

It is right before us at the moment. 

Mr. UDALL. The philosophy, as I understand it, is to encourage 

at-risk students to graduate from high school and prepare for college, and that is what you have been saying here, that the focus 

of the Federal Government has been to do that. That is where we 

target the money. 

And, yet, you flat-fund these programs. What is going on there? 

Secretary SPELLINGS. Well, I think the question is: Are those the 

most effective and efficient ways to do it and are they in keeping 

with whatever policy we will embrace as part of a reauthorized No 

Child Left Behind? 

Are we going to ask our schools to expand rigor? Are we going 

to ask them to focus on reading? What are the other things that 

are before us, which is why the President has recommended flatfunding those programs until we determine where we go next as 

a matter of policy. 

Mr. UDALL. Thank you. 

INDIAN EDUCATION AND TRIBAL COLLEGE FUNDING

I want to agree with Congressman Rehberg from Montana earlier 

where he talked about Indian education and Indian funding and 

tribal colleges. 

I see, talking about Hispanic-serving institutions, tribally-controlled colleges, we have a cut in there of $139 million, 27.2 percent 

below last year’s level. That doesn’t make any sense to me. I note 

that funding for Indian education programs is flat at $119 million. 


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Are you aware of the challenges that our tribes face? 

Flat funding is simply standing still, which is nowhere enough 

to make the progress we need to against the challenges. Could you 

comment on that? 

Secretary SPELLINGS. Yes, sir. As part of the appropriations bill 

last year, there are mandatory funding streams that support those 

institutions, and so we believe that these programs are adequately 

funded through those other funding mechanisms on the mandatory 

side. 

Mr. UDALL. Are you aware that most of these tribes have a very, 

very young population that is a growing population? 

This young cohort that is moving through needs significant help 

in terms of these kinds of programs, and it is the one place where 

young Native Americans and African Americans and Hispanics can 

learn from each other and then go on and be very productive. So 

do you believe these are effective, good programs and should be expanded and moved forward? 

Secretary SPELLINGS. As I said, they are funded on the mandatory side and are part of the President’s budget in that regard. So 

I mean, yes, I think value can be had from some of those programs. 

Mr. UDALL. Well, let me just say from my perspective that I really believe that the President’s budget on education is so lacking 

when it really comes to supporting the needs that are out there. 

I hope. Mr. Simpson asked for what your original request was. 

I sure hope your original request was a lot more aggressive than 

what we see in this budget. 

Then let me just note finally that mandatory increases only 

apply to tribally-controlled colleges, not Indian education. So, with 

that, if you want to make any further comment, that is fine. 

Secretary SPELLINGS. I would just say I certainly will provide 

that letter, but that was before we had a final budget. So I would 

just want that to be looked at in the context of where we ended 

up versus where we thought we were ending up last summer when 

we were beginning the negotiations with OMB. 

Mr. OBEY. Ms. DeLauro. 

Ms. DELAURO. Thank you very much, Mr. Chairman. 

Welcome, Madam Secretary. I apologize for being late, but there 

are all kinds of hearings going on. 

Secretary SPELLINGS. Yes, I bet there are. 

VOUCHER PROGRAMS

Ms. DELAURO. First, let me just correct the record, and I haven’t 

had an opportunity to talk with him—he usually speaks for himself 

and does it very well—but Congressman Emanuel is not introducing a voucher program nor would he take money from public 

schools to utilize those funds in private schools. As for the many 

years that I know him and where he stands on public education 

and in support of public education, I think it is a little bit of a 

mischaracterization and a little bit of innuendo about what direction Mr. Emanuel is going in. 

FEDERAL EDUCATION BUDGET PRIORITIES

Let me further state that you can say and you can write down 

that education is a priority. You can go to schools, and you can 


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take pictures with youngsters and talk about how much you care 

about their education and their future. Something that my colleague from Wisconsin, the Chair of this Subcommittee and the full 

Committee, has been known to state in the past, is that you can 

pose for holy pictures. 

Quite frankly, the photographs and the budgets that we have 

seen in the last several years from the Administration with regard 

to education are, in essence, posing for holy pictures. In the parlance of today and with regard to the British comment about this, 

‘‘it is all fur coat and no knickers’’ is what we have here. 

And, when you begin to go down the list, I say this with annoyance. I say it with anger, and I say it as a kid whose family would 

have not been able to get her to school but for the work that they 

did and the opportunity from the Federal Government to make it 

a reality. So I can sit in this chair, and I have the opportunity to 

look at public policy and try and do something about it. 

We have a role, and that is where fundamentally the problem 

comes with this Administration and, I believe, more and more with 

Democrats and Republicans as was pointed out by Mr. Peterson. 

We have a role. We, government, have a role to engage in issues 

that make opportunity real for people, and education is the single 

biggest opportunity that we can make real for people in this Nation. It is their road to success, and that is what it is about. 

Watch what Mr. Eisenhower said here, and you look at it, and 

you understand who we are and what we are about. 

I will just say to you flat out, over the last several years—and 

you can get annoyed at me. I am glad this is the last budget on 

education. I am glad because what we have seen day in and day 

out, year after year, is posing for holy pictures. No Child Left Behind, you can talk about $63 billion, 63 percent. The facts, it is all in the facts: $86 billion shortfall for this program. 

Mr. Peterson’s comment, why? You tell me why. 

Help me to understand why if we are talking about competitiveness and increased need for high school employees. I went to my 

chamber of commerce in the Valley this week. They are crying for 

skilled people. 

Why do you take a Perkins program and you just throw it out 

the door? 

Why do you want to take an after school program and turn it 

into a voucher program? 

Why is there no understanding of the essence of the Federal role 

in education and its ability to turn people’s lives around? 

Answer me on the programs: the shortfall on No Child Left Behind, the Perkins grant, vouchering the program for after school 

programs, eliminating 50 programs. How do you come here and tell 

us that education is a priority? 

Secretary SPELLINGS. Well, as I said before you arrived, Congresswoman, the philosophy of the Administration has been to emphasize larger-scale programs like Title I, IDEA, Reading First and 

so forth over——

Ms. DELAURO. IDEA. IDEA? And you do travel around. 

I don’t know any special education teacher in this country that 

believes that what you have done to and what you are doing to 


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IDEA represents Mr. Ryan’s comments about our values and how 

we want to try to educate children with disabilities. We are hurting 

those children. 

I am not a special ed teacher. I am not, but I have listened to 

enough of them to know that your policies on IDEA and special ed 

are failures. 

Mr. OBEY. The gentlelady’s time is expired. 

Mrs. Lowey. 

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

Madam Secretary, welcome. I apologize with my colleagues, but 

we are all being pulled to different hearings today, but I am very 

pleased to have the opportunity to focus on two issues that I don’t 

think have been addressed by my colleagues. 

FEDERAL FINANCIAL AID CALCULATION FORMULA

As you well know, a student applying for Federal financial aid 

must complete the Free Application for Federal Student Aid form 

in order to determine how much his or her family will have to contribute towards tuition. Unfortunately, in many cases, families are 

expected to contribute much higher amounts than they can reasonably afford. 

This is, in large part, due to the flawed formula used by the Federal Government which has not been significantly altered to reflect 

the changes in family spending patterns or the dramatic increase 

for necessary items such as health care in recent years. Even more 

shocking, the Federal Government does not take into consideration 

that some regions of the country, like New York, have higher costs 

of living. 

So that means that a family in my congressional district, spending most of its income on housing or other necessities, may find 

that their expected family contribution is difficult or impossible to 

meet, leaving them with enormous gaps in their ability to pay for 

college. 

EXPECTED FAMILY CONTRIBUTION FORMULA

If you can, explain to me why the Federal Government doesn’t 

update its formula for calculating expected family contribution to 

better reflect the spending patterns of today’s families and to take 

into account that some areas have a significantly higher cost of living and do you believe that it is fair to essentially penalize families 

who live in high cost regions of the country by not considering 

those additional expenses when calculating their expected family 

contribution? 

By the way, and I am not going to get into the subprime crisis 

during this hearing, but there are those who have done a really important job on this. Their studies have shown that the majority of 

the money that families are spending is for mortgages and for 

health care. 

So they don’t have anything left. They are not going out to buy 

fancy refrigerators. They are not going out to buy TVs. It is all 

going to health care and to pay their mortgage, and this is what 

is happening in my district. 

Why can’t we realistically look at what a family is spending their 

money on and do something about the cost of living adjustment? 


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HIGHER EDUCATION ACT REAUTHORIZATION

Secretary SPELLINGS. Congresswoman, some of those changes 

were made as part of the College Cost Reduction Act which was recently enacted. As I know you know, the HEA is being reauthorized 

or discussions about reauthorization are going on now, and that is 

frankly in conference and nearing completion. So some of that is 

absolutely in the mix. 

Mrs. LOWEY. And you have been advocating for cost of living adjustments? 

Secretary SPELLINGS. Because, obviously, this gets down to sort 

of distributional type of politics, we in the Administration have not 

engaged as much on that as we have on the need for simplifying 

financial aid and to make sure that every one of our kids gets as 

much Federal aid as they can get before they turn to private 

sources. I think that is one of the things that is very important. 

As you know, it is a highly complex and confusing system for 

families because of the 16 different programs. I am sure you have 

heard how difficult it is to even apply for financial aid. We are 

working to make sure that every kid gets all the financial aid due 

them and that we do that in a simple way as well as looking at 

legitimate cost differences around the country, as you all have prescribed for us under the CCRA. 

21ST CENTURY COMMUNITY LEARNING CENTERS

Mrs. LOWEY. Well, I won’t pursue that because we have limited 

time, but I want to mention another issue that I think you have 

to take direct responsibility for, and it was referenced by my colleague. Not only does the President’s budget cut funding for after 

school by $281 million, it radically restructures the program into 

a voucher type scholarship initiative. 

Last year, when you came before the Committee, I informed you 

personally that the Port Chester-Rye School District—this is just 

one example—has just been notified that they will not be able to 

access additional 21st Century funds for its program. This is just 

one school that has been impacted by years of inadequate funding 

with the exception of the increase provided by this Committee last 

year under the leadership of Chairman Obey. 

By one estimate, the President’s proposal would close 10,000 21st 

Century Community Learning Centers. 

If you could explain to me, how many students will be unable to 

access services with this level of funding, how many States would 

be unable to award new grants, and then if you could give me an 

idea of what I should tell these families, the educators, community 

leaders in my district that are in jeopardy for losing these programs? 

According to the After School Alliance—my time is up, but if you 

could respond very briefly. 

I don’t understand this. This is such a good program. It makes 

such sense. I can’t understand how you could actually in good conscience even think of cutting it. 

Secretary SPELLINGS. The reason that the programmatic change 

is made is to align it with what we have done in No Child Left Behind, and that is the supplemental services, the tutoring that is a 


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feature of No Child Left Behind and that is based on a kid and his 

or her ability to select a variety of providers, or a family, a parent. 

This would make the after-school program look more like that 

which we do in Title I of No Child Left Behind. 

With respect to the cut, as I have said, there are priorities in this 

budget that the President has established and other accommodations, reductions have been made to accommodate the priorities. 

Mrs. LOWEY. So after-school programs are not a priority, I guess, 

to this Administration. 

Let me just say, because my time is up, simplification is not the 

same as realistically looking at costs. It is my understanding, 

CCRA does not address this issue in the way that I am talking 

about to really look at costs. What it does is simplify the form. 

So I do hope, Mr. Chairman, that we can continue talking about 

those two issues. But I am particularly distressed not just about 

the COLA but the fact that in a community like Port Chester, New 

York or Rye Town, New York, where I would say 85 percent of the 

people have two parents working and these after-school programs 

are absolutely critical in helping kids not only do their math and 

their English, their just basic, basic studies. 

I think it is an embarrassment that the President should think 

it is not a priority. 

Thank you very much. 

Mr. OBEY. Thank you. 

CONTEXT FOR REVIEWING EDUCATION BUDGET REQUEST

Madam Secretary, I just want to make, I think, three observations. 

First of all, when we look at your budget request, I think we 

have to look at it in context. Here is the context that I see: 

The President is asking us, according to Secretary Gates, to pro- vide an extra $170 billion for the misguided and misbegotten War 

in Iraq. The budget also allows $51 billion in tax cuts this year to 

be provided to people who make over a million bucks a year. The 

President is then recommending on the domestic side of the ledger 

that we cut $18 billion from program levels that we just approved 

in December for the previous fiscal year. 

So he is asking us to spend almost 10 times as much in new 

money in Iraq as he is trying to cut out of domestic funding. 

That decision comes in this context: Annual after tax income for 

the top 1 percent of Americans grew by 228 percent or $745,000 

per household between 1979 and 2005 while annual after tax income for the bottom 20 percent grew just 6 percent or $900 over 

that 26-year period—900 bucks gain over 26 years. 

So the rich got richer while the poor have been scraping by, and 

the same is really pretty much true of the middle class. That is the 

context in which we are considering these programs. 

GEAR UP AND TRIO PROGRAM BUDGET REQUESTS

Now most of these programs are aimed not at that top 1 percent 

but at the bottom 40 percent of people in this society. You mentioned that you had flat funded TRIO and GEAR UP. The problem 

is that since 2002 those programs, as I understand it, are serving 

about 450,000 fewer students. 


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Your own budget submission, this document, says that TRIO, for 

instance, is moderately effective. It doesn’t say it is ineffective. It 

says it is moderately effective. That is better than adequate. It is 

certainly better than ineffective. 

Yet, if you take a look at your budget which lays out on page 53, 

on the budget summary, number of student aid awards, there is a 

cut of 558,000 awards from 2008 to 2009 as I read it. 

And, yet, we face the fact. One of the witnesses who will testify 

this afternoon says this: Only about half of the college graduates 

from the bottom 40 percent of the income distribution go to college 

within a year after graduation from high school compared to about 

80 percent of those from the most affluent families. 

So it seems to me that your budget contributes to the 20-some 

year trend in this country of widening the gap between the top 

dogs in the society and those on the bottom half of the totem pole. 

Now Ms. DeLauro—and, God, I love her—she made the comment 

that education is the door-opener for opportunity. 

TITLE I, ESEA

Your statement on the front page makes the claim that this Administration has generously supported key priorities that we believe are improving student achievement. You talk about how much 

more is in your budget in 2009 than was the case a few years ago 

for Title I, for Special Education, for Pell Grants, and you point out 

that your discretionary request for education is $17 billion more 

than 2001. 

Well, that may be true, but I think before you leave the impression that the Administration was in support of that, I think we 

need to look at the facts. Title I, it has increased by 59 percent 

since 2001. 

But if the Congress had approved the President’s request for 

Title I, $502 million less would have been provided and when inflation and population growth are taken into account, the President’s 

proposed 2009 Title I level falls more than $650 million or 4.4 percent below the 2004 level. 

SPECIAL EDUCATION

You talk about IDEA. We have had a number of comments on 

it. Nobody on the Subcommittee has worked harder than Mr. 

Walsh to try to increase that funding. 

You talk about how much it has increased over the years, but if 

the Congress had approved the President’s request for IDEA Part 

B, $637 million less would have been provided than was actually 

provided. 

EDUCATION DISCRETIONARY APPROPRIATIONS

If you take a look at discretionary appropriations for education 

in total, yes, they have increased by $16.4 billion or 38 percent 

since 2001. But if Congress had approved the President’s budget 

request for the Department, $15.3 billion less would have been provided. That means Congress provided $15 billion of the $17 billion 

that you are taking credit for. 


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NO CHILD LEFT BEHIND

With respect to No Child Left Behind, I feel snookered on that 

program because I voted for it with the assumption that the Administration would make a good faith effort to meet the financial 

commitments that were implied in that authorization. I didn’t expect full funding, but I certainly expected a reasonable effort. 

Instead, after the first year, where I will fully admit the President stuck to the deal, since then the Administration has been in 

a rapid race against living up to the commitments of No Child Left 

Behind. 

So if the Congress winds up not continuing that program, I think 

the Administration is going to have to look in the mirror when they 

ask the question why. Because you have walked away from your 

own program, and you have made it possible for people to attack 

that program for legitimate and illegitimate reasons. 

But the driving force behind the anger and resentment that I 

hear about No Child Left Behind in my area is because of the lack 

of financial commitment on the part of the Administration. You 

have to recognize that whenever you flat fund a program, that 

means that the local and the State governments are being forced 

to pick up the cost. 

You are really shifting costs back to the State and to your local 

school districts every time you flat fund a program because you are 

not allowing for inflation. You are not allowing for population 

growth. So the per capita assistance that is being provided in real 

dollar terms to people is steadily declining. That is not what I call 

a priority when programs are being treated like that. 

READING FIRST

Then lastly, my last bone to pick is with the letter that you sent 

out to Chief State School Officers with charts, complaining about 

the fact that this Committee had cut Reading First and informing 

them what damage was going to occur to local districts because of 

those cuts. 

Your letter didn’t point out that the Department’s own actions on 

Reading First caused the reduction in those funds in the first place, 

and it certainly fails to point out the other increases that this Committee provided for other programs. You know why Reading First 

was cut deeply by this Committee. 

The President lectures Congress on earmarks that we make, and 

yet an earmark is nothing but directed spending. It is a decision 

by the Congress to direct a specific number of dollars from Point 

A to Point B or from Program A to Program B or from Community 

A to Community B. That is all an earmark is. 

Every time your Department makes a choice about which community is going to get funded, which school district is going to get 

funded under Reading First, that too is directed spending. 

The Inspector General had some not very nice things to say 

about the way that program was managed or I should say mismanaged by the contractor. He had some not very nice things to 

say about the lack of protection against conflict of interest in that 

program. 


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People talk about conflict of interest in the case of some members 

who have asked for earmarks, and they make a Federal case, and 

they attack virtually every member of Congress because a few idiots on Capitol Hill asked for funding which benefitted them personally. 

Yet, if you take a look at what the IG said, it said that the Department still has not established controls to ensure that the Department does not promote curriculum or create the appearance 

that the Department is endorsing certain products. The IG found 

that Department officials deleted references in the 2002 guidance 

for the Reading First program to early intervention and reading remediation materials that could have been construed to permit such 

programs as Reading Recovery in the program which the Department opposed on Success for All and Reading Recovery. 

Now those are two programs that have generally good reputations, and they have been validated as effective. Yet, they are still 

not seen as appropriate for Reading First in many States, and the 

Department has done nothing to change that. 

So, if you are going to tell school districts that the big, bad Congress cut this wonderful, peachy program, then I think you ought 

to tell them why. I think you ought to understand that, just as the 

President has a right to criticize faulty earmarks on Capitol Hill, 

we have a right to criticize the mismanagement of programs that 

have effectively produced the same effect on the executive end of 

Pennsylvania Avenue. So I would appreciate if that message would 

be delivered. 

EDUCATION FUNDING NEEDS TO BE COLLABORATIVE PROCESS

Lastly, having gotten that off my chest, I still want to come back 

to the point I made in the beginning. This year will either be a 

waste or it will be constructive, and that will be determined by 

whether or not both ends of the avenue are willing to make compromises. 

If the President has sent down his education budget and says, 

thou shalt not raise my number one dime, as he said so many 

times over, then you can’t deal with people who won’t deal. 

Let me put it bluntly. I can put together a deal with anybody if 

the other party wants to deal, but I am not about to waste the time 

of this Committee or this Congress or anybody in the country who 

is watching with a needless 8-month squabble over numbers if the 

President simply intends to stick by his original budget, not change 

a dollar amount, not change a comma. 

What I would appreciate is if you will take back to the White 

House and to OMB a simple question: Do they want to work things 

out or do they want us to wait until a new President is in office 

who will act like an adult when it comes to negotiating? 

That is very simply where I am coming from, and we will find 

out over time, I assume, where the White House is coming from. 

I hope they are coming from the right direction. 

Now, if you want to comment, be my guest. 

Secretary SPELLINGS. So noted, Mr. Chairman. Again, as you 

mentioned, all the various things you observed, the President did 

finally sign those previous budgets. I hope that that represents a 


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willingness to work with you, and I hope that that will be the case 

this year as well. 

I will certainly carry your messages to my colleagues at the 

White House and OMB. 

Mr. OBEY. Okay. Thank you. 

Secretary SPELLINGS. Thank you. 

Mr. OBEY. Mr. Walsh, do you have anything else? 

Mr. WALSH. At the risk of pulling a scab off a wound, I would 

just like to make a point. 

FEDERAL CONTRIBUTION FOR SPECIAL EDUCATION APPE

Ms. DeLauro, who is not here to defend herself, made the point 

that the Administration is at fault on IDEA. That may be, but the 

fact of the matter is that when Congress implemented this law 

they pledged 40 percent reimbursement to the school districts and 

for a dozen years at least, under a Democratic majority, they never 

exceeded 9 percent of that commitment or one-fourth of that commitment. 

When we became the majority, we got it up. We doubled that to 

approximately 18 percent. 

There is credit to be given, I think, to the Democratic Party for 

implementing this idea and guilt to be assigned for not meeting 

that commitment. We did our level best to increase that amount, 

and we did, and we could be criticized for not getting it higher. 

But I think to hang this all on the Administration is absolutely 

unfair. We are the body that has the power of the purse, not the 

Administration. 

There is a game played by every Administration, and that is they 

fund their priorities and they cut ours. Clintons did it, and the 

Bushes have done it. 

Clinton, singular, I should say. I should not be prospective. 

[Laughter.] 

Mr. WALSH. It is a game. It is part of the process. It is not the 

most delightful part of the process, but it is part of the process. 

If blame is going to be given and credit is going to be given, we 

should share it equally on not meeting that commitment to our 

school districts and to those kids with disabilities. 

Mr. OBEY. Well, let me just simply say I agree with the gentleman that, with respect to IDEA, the actions of both parties have 

been deficient, but we are dealing with the now. 

The fact is that this Committee tried to make a substantial increase in IDEA last year. The effort to do so was vetoed by the Administration and the Administration’s request this year does nothing to increase the Federal share of funding IDEA, which I regret. 

That is one program. 

But there is no doubt if you take a look at the whole range of 

programs funded by this bill. The Administration, on many occasions, we have had to drag them kicking and screaming into accepting higher numbers. I think that is a fair statement. 

But I do want to disagree with one thing the gentleman said. It 

may be seen as a game, but it is not a game with me, and I just 

want to tell one story to illustrate what I mean. 

About six months ago, a fellow came into my office from Atlanta. 

He owns one of the largest chain store operations in the country. 


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He was also $125,000 contributor to George Bush in the last campaign. 

He came into my office, asking that I approve an increase of close to $100 million above the Administration’s request for buildings at 

the Centers for Disease Control in Atlanta, a worthy cause because 

a lot of those buildings are in bad shape. 

I tried to explain to him that given all of the other shortfalls in 

the Administration’s budget, that there was no way we could reach 

the number that he was asking for. 

Then I said, look, why are you here seeing me? Why don’t you 

simply go down and talk to the White House? I said, why don’t you 

go talk to Karl Rove? 

He said, oh, I already did that. But when I went in, Karl said, 

oh, don’t worry about budgets. They are just a game. 

No. I don’t regard them as a game. 

COMPROMISE NEEDED IN BUDGET PROCESS

True, games are played by everybody on Capitol Hill. There is a 

lot of role playing. Some of that is constructive, and some of it is 

destructive. But in the end, after all the games are played, we 

ought to be able to put aside our kitty toys and our tinker toys and 

make some compromises for the good of the order. 

Mr. WALSH. Yes, absolutely. 

Mr. OBEY. And that is what was absent last year. Last year, the 

Administration said, our way or no way. 

Now they had their way last year. This year we got a safety 

valve. So if the Administration doesn’t want to deal, if they don’t 

want to compromise, if they don’t like that word, then we are simply in a waiting game and we will deal with a President who does. 

I hope that we can deal with this one because it would be good 

if we finished our work, so we didn’t leave leftovers for the next 

President to handle. That would be very nice if we could get it done 

that way. 

Thank you for coming, and I look forward to working with you. 

Thanks, Jim. 

[The following questions were submitted to be answered for the 

Record:] 


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(695) 

THURSDAY, FEBRUARY 28, 2008. 

REDUCING THE DISABILITY BACKLOG AT THE SOCIAL 

SECURITY ADMINISTRATION/FY 2009 BUDGET OVERVIEW 

WITNESSES 

MICHAEL ASTRUE, COMMISSIONER, SOCIAL SECURITY ADMINISTRATION 

PATRICK O’CARROLL, INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION, OFFICE OF THE INSPECTOR GENERAL 

RICHARD E. WARSINSKEY, IMMEDIATE PAST PRESIDENT, NATIONAL 

COUNSEL OF SOCIAL SECURITY MANAGEMENT ASSOCIATIONS 

MARTY FORD, CO-CHAIR, CONSORTIUM FOR CITIZENS WITH DISABILITIES SOCIAL SECURITY TASK FORCE 

RONALD G. BERNOSKI, PRESIDENT, ASSOCIATION OF ADMINISTRATIVE LAW JUDGES 

INTRODUCTION OF WITNESS

Mr. OBEY. Good morning, everyone. Sorry to be late; we had one 

of those quaint things called caucuses, and once in a while something is actually accomplished in them. 

This morning we are going to be discussing the Social Security 

Administration and the case backlog that seems to be plaguing that 

Agency. The backlog, I should stipulate at the beginning, is not the 

fault of the Agency; it is the fault of the policy makers who have 

allowed it to develop and continue. 

We have been holding a number of hearings in this Subcommittee to not just hear from Administration witnesses about 

the money it is that they are asking, and not just to hear from people about the cost of providing whatever the Administration is asking. We have also been holding some hearings to try to highlight 

the cost of not providing funding for a number of activities. 

The programs administered by the Social Security Administration touch the lives of every American. Benefits are distributed to 

almost 60 million people and they are equivalent to approximately 

20 percent of Federal spending and 5 percent of the Nation’s gross 

domestic product. And, yet, the waiting times to receive benefits 

under the disability program are far too long. Americans who have 

been out of work as a result of their disability for over a year have 

to wait, on average, another year and seven months to receive the 

benefits that they are entitled to under the social contract of disability insurance that we have developed in this Country. That can 

have profound impacts on the families of those affected. 

Until this past year, Congress did not provide the appropriations 

needed to keep SSA funded at adequate levels to ensure that the 

benefits that it receives are administered in a timely fashion. In 

fiscal year 2008, for the first time since 1992, over 15 years, we 


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provided the SSA with the President’s funding request. In fact, we provided $150 million more. 

For fiscal year 2009, the Administration proposes an additional $582 million. Even with these additional resources, it is my understanding that the average processing time for disability hearing decisions in fiscal year 2009 will decline by only 29 days, from 535 

to 506 days, nearly 17 months. In fiscal year 2000, the processing 

time was approximately 300 days. 

At the end of the fiscal year, over 680,000 hearings will be pending and will take another five years, until 2013, before the backlog 

is reduced to the 400,000 level that I understand SSA deems optimal. 

Services to the public that have been declining will, at best, be 

maintained at already reduced levels. Since the beginning of fiscal 

year 2006, 17 field offices have closed and merged, and services to 

the public have suffered from the combined impact of staffing reductions and lack of funding for overtime. 

There is a lot more that I could say. I just want to make clear 

we are not here today to talk about who shot John. We are simply 

here to talk about what the problem is, what the nature of the 

problem is, how adequate the resources are that are being proposed 

to deal with it, and what resources we would have to provide to actually begin to reduce these backlogs to manageable proportions 

and, I would hope, eventually come close to eliminating them. 

So we are going to hear from the Commissioner today and then, 

as I understand it, after the first round we will be hearing from 

a second panel to comment on the situation from the outside. 

Before we ask the Commissioner to testify, let me ask Mr. Walsh 

if he has any comments. 

INTRODUCTION OF WITNESS CONTINUED

Mr. WALSH. Thank you very much, Mr. Chairman, for holding 

this hearing. It is a very important topic that affects tens of millions of Americans. 

Welcome, Commissioner Astrue, this morning. 

We have before us an issue that affects the health and retirement security of millions of Americans. We have all said before 

that Social Security is a sacred trust between the Federal Government and our Nation’s seniors. That trust must be upheld and continued. 

Today there are nearly 57 million Americans receiving Social Security benefits, and with the over-65 population expected to increase nearly 60 percent over the next two decades, myself included, ensuring the solvency of Social Security for future generations must remain at the top of our priority list. 

Mr. Commissioner, your budget request appears to be focused on 

three specific areas: begin to eliminate the disability backlog, increase staff productivity and efficiency, and increase investment 

technology. 

I don’t intend to minimize my interest in your testimony, but I, 

like all my colleagues in the Congress, am very concerned at what 

has happened with Social Security disability and how quickly it 

has happened. It is not simply the fact that the backlog has grown 

to 750,000 cases, which is a very large figure, although I am told 


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that the actual backlog is closer to 350,000 to 400,000 cases are 

normally in the system because of the normal ebb and flow of 

cases. 

But I am concerned at what I see when I look at the root of the 

problem: insufficient or appropriate staffing, grossly disparate productivity across the field in hearing offices, an inefficient and dated 

technology infrastructure, and apparent institutional problems 

within each phase of the disability determination process. And with 

those deficiencies, the Social Security Administration plans to distribute nearly $110 billion in disability benefits to 9 million beneficiaries. This is a stunning number. 

Within those numbers, I am told by staff, $1 billion from the 

trust fund will go directly to trial lawyers. I am also told that an 

average judge adjudicates roughly 500 cases per year. What about 

judges who consistently perform under that standard? Conversely, 

what policies are in place to control those judges whose pay rates 

are considered excessive? 

One example that was given to me, a judge who has paid over 

8,000 cases in four years. That is a 98 percent pay rate. With an 

average cost of $250,000 per claim, that amounts to $2 billion. 

Judges that pay too many claims should be held accountable, as 

well, for the impact of their excessive determinations on the trust 

fund. 

Additionally, you have proposed that part of the problem in resolving the backlog is hiring more administrative law judges. Well, 

that is great, but if you don’t staff them up, how can they do their 

job? You have judges doing the clerical work and not getting anywhere near the number of cases done. And I am told also that this 

backlog will not be filled by hiring these additional judges; that 

there has been so much of a reduction because of retirements and 

otherwise that this will not really fill the backlog. And the staff 

hiring that is required is not going to be met for these additional 

judges. 

So there is a lot to cover. I look forward to your testimony and 

that from the second panel. 

And, Mr. Chairman, again, thank you for holding this hearing, 

and I yield back whatever time I have. 

Mr. OBEY. Thank you. 

Mr. Commissioner, why don’t you proceed to summarize your 

statement, and we will place the entire statement in the record? 

OPENING STATEMENT

Mr. ASTRUE. Thank you, Mr. Chairman. Before I begin, let me 

say it is an honor to be back before the Subcommittee for the first 

time in 15 years. I want to express my sincere appreciation to all 

of you on behalf not only of our employees, but, more importantly, 

the people we serve, for the efforts that all of you made last year 

to secure additional funding for the Agency. We greatly appreciate 

it. 

Fiscal year 2008 should be a watershed year for SSA. For the 

first time in 15 years, as you mentioned, Mr. Chairman, Congress 

has appropriated not only the President’s budget request, but an 

additional $148 million to address Social Security’s disability backVerDate Aug 31 2005 14:49 Sep 09, 2008 Jkt 043195 PO 00000 Frm 00697 Fmt 6601 Sfmt 6602 E:\HR\OC\B195P2.XXX B195P2

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log with the plan that we laid out in detail last May before the 

Senate Finance Committee. 

On behalf of the American public, I am very grateful for this support and want to assure you that your decision to support this 

backlog plan is going to make a big difference in the coming years. 

Due to the aging of baby boomers, SSA is now facing an avalanche of retirement and disability claims at the same time that it 

must address large backlogs due to years of increasing workloads 

and limited resources. Over the past few years, as Social Security 

offices lost staff in dramatic fashion, waiting times increased, lines 

grew longer, and busy rates in our field offices deteriorated. Without sustained adequate funding, the situation will only worsen. 

Furthermore, we must reduce the disability backlogs which have 

dramatically and unacceptably damaged many applicants’ lives. It 

is a moral imperative to reduce these backlogs, which have simply 

just caused too much heartache for disabled Americans. 

With the additional funding provided by Congress, SSA will 

begin to implement all the key features of our hearing backlog reduction plan. We will build a firm foundation for the future with 

automation improvements, fast-track reviews, Administrative Law 

Judge hiring, and other initiatives so that we can significantly reduce waiting times while also improving accuracy. 

While fiscal year 2008 will allow us to make significant inroads, 

sustained adequate funding is critical so that we can continue to 

make the progress that you wish us to make. 

Over the next 10 years, SSA’s traditional workloads will increase 

substantially: retirement claims by over 40 percent and initial disability claims by nearly 10 percent. The first of over 80 million 

baby boomers has already applied for retirement benefits. Baby 

boomers are also applying for disability benefits in far greater 

numbers than previous generations. 

At the same time that SSA faces increasing workloads, the Agency must also address non-traditional workloads, such as the Medicare prescription drug program and immigration. 

Year after year SSA commits to and achieves annual productivity 

improvements. Although the budget assumes a 2 percent increase 

in productivity for 2008 and 2009, as it has for many years, productivity alone cannot offset the increase in our workloads. 

Furthermore, inflationary growth and mandatory costs—such as 

rent, guards, employee salaries, and benefits—have more than offset increases in SSA’s budget in recent years, leaving the Agency 

with even fewer resources to address our critical workloads. SSA 

currently requires over a $400 million increase each year simply to 

keep up with increases in fixed costs. 

The 2009 President’s Budget will enable SSA to build upon the 

accomplishments for fiscal year 2008 and continue to make 

progress. At $10,460,000,000 for SSA’s administrative expenses, 

the President’s Budget provides a nearly $600 million, or 6 percent, 

increase over fiscal year 2008. SSA’s administrative budget includes $10,327,000,000 for the Limitation on Administrative Expenses account, $98 million for the Office of the Inspector General, 

and $35 million for research. 


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OPENING STATEMENT CONTINUED

At this funding level, we expect to make substantial progress 

with our hearings backlog reduction plan by processing 85,000 

more hearings in fiscal year 2009 compared to fiscal year 2008, ultimately reducing the number of hearings pending from over 

750,000 to 683,000 in one year. We will be able to reduce the initial 

disability claim pending level to the lowest level in 10 years, below 

500,000 for the first time since 1999. 

Finally, the fiscal year 2009 budget will put us in a better position to handle the onslaught of work we are confronting due to the 

aging of baby boomers. We plan to process over 400,000 additional 

retirement claims in fiscal year 2009 as compared to fiscal year 

2007, enabling SSA to keep up with the influx of baby boomer 

claims. 

SSA’s budget provides the necessary resources to begin to halt 

the decline in customer service by preventing further staffing losses 

and investing in needed technology. However, SSA will not be able 

to process all of its less visible work, generally work that is done 

after an individual is approved for benefits. This budget is a fiscally reasonable and responsible approach, recognizing that the effects of limited resources cannot be undone in one year. A multiyear effort is necessary to eliminate our backlogs and our other 

issues. 

Thank you for this opportunity to present our budget request and 

to share with you our intentions with regard to the backlog. I ask 

for your support and welcome any questions you might have. 

[The prepared statement and biography of Commissioner Astrue 

follow:] 


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HEARINGS BACKLOG REDUCTION PLAN

Mr. OBEY. Thank you. 

Mr. Walsh. 

Mr. WALSH. Thank you, Mr. Chairman. 

Let me begin by referring to the document that you posted on 

your website, Plan to Reduce the Hearings Backlog, et cetera. I am 

particularly interested in the conclusion, which says the Administration’s plan to dramatically reduce the number of hearings pending, and basically you say it is an issue of adequate funding and, 

two, greater flexibility in utilization of the appropriations. 

Is the only way to right this ship by putting more money into 

this budget? 

Mr. ASTRUE. No, Mr. Chairman. In fact, we have to accept that 

we need to do things significantly differently if we have any hope 

of dealing with these issues. We have put in a number of reform 

efforts to improve productivity. We are going to need improved productivity across the board in order to meet the expectations. 

ALJ productivity is up. It is a great credit to the ALJ corps. At 

a time when the number of ALJs has been dropping dramatically, 

they did increase their productivity from about 2.1 dispositions per 

day to 2.3. As the number of ALJs has gone down, the backlogs are 

not worse than we feared they would be a year ago. 

One of the things you need to understand about the system right 

now is that we are running two inadequate support systems. We 

have an antiquated paper system that we have put a priority on 

getting rid of. That timetable has been moved up; it should be substantially gone by the end of the year. Our new electronic system 

is going to be an improvement. However, it still has issues; it still 

has need for improvement. 

I really face three difficulties. One is we had a disability backlog 

that was increasing at about 75,000 cases a year. If you take out 

an anomalous year of the Medicare transfer cases, there was an increase of about 75,000 cases a year in total pending. The staffing 

was going down dramatically. Until the end of last December, during my whole time as Commissioner, we have been on a continuing 

resolution with contracting resources. 

We also had a number of difficulties with the plan that the previous Commissioner implemented to try to deal with issues in disability. A number of things were not only not working, but were 

actually aggravating the problem. We had to spend most of the 

first four months figuring out what was working that we could accelerate, instead of following the 10-year rollout plan, and we have 

done that with some things like Quick Disability Determinations. 

We now have computer models at the front end that pull out 

some of the cases that should be close to automatic, and we are 

now deciding those cases in eight days. It is about one percent of 

the cases nationwide now. That is going to increase until next summer and should peak at about three percent of the cases, and then 

we are going to slowly increase that until we hit the limits of the 

model. We don’t really know what the limit of the model is. 

We have historically neglected the rare diseases and conditions. 

Although no one disease and condition adds up to a lot of the workload, they are a disproportionately high percentage of the cases 


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that go off track and actually aggravate the backlog, while also creating heartache for people. We are also moving to a system of presumptive disability for those diseases and conditions where we 

know, by nature of the disease or condition, that the person is 

never going to be able to work. Then we don’t have to go through 

the rest of the five-step process. 

PRODUCTIVITY AND ACCOUNTABILITY OF ADMINISTRATIVE LAW

JUDGES

Mr. WALSH. If I could interrupt, because it is kind of a long answer. 

Mr. ASTRUE. Sorry. 

Mr. WALSH. It is a complex problem, but this strikes me as very 

similar to the situation the Veterans Administration has had over 

the years in the backlog of disability claims, and they implemented 

a number of different strategies. I think Tiger teams was the term 

that one or two of the secretaries used. 

Would it make sense to restructure the process, beginning with 

the judges themselves and their staffing requirements, and reordering the workload and division of labor within those—— Mr. ASTRUE. We are looking at those. We don’t assume the status 

quo. One of the things that we are trying to do, for instance, is try 

to come up with more robust systems at the first level of review 

that might mean that the second level of review becomes extraneous at some point. But we are not there yet. We are experimenting with Administrative Law Judges actually having their 

own staff. Part of the problem now in a number of the hearing offices, in my opinion, is that there is no ultimate accountability. I 

am not allowed, by statute, to discipline for productivity unless 

there is an absolute extreme case, as part of the legacy of the 

1980s. 

They also don’t manage their own staff, and a lot of the Administrative Law Judges are frustrated by that. The union doesn’t believe that it needs to manage its own judges, but ultimately, my 

view is, if you are going to move these cases——

Mr. WALSH. Say again, the union doesn’t——

Mr. ASTRUE. Doesn’t believe that the judges should manage their 

own staff. 

Mr. WALSH. Oh. 

Mr. ASTRUE. They are testifying later, and you can ask them 

about that. 

Mr. WALSH. Okay. 

Mr. ASTRUE. My view is that it is at least a debatable proposition 

that we could get substantially greater productivity if we ended all 

the finger-pointing in the hearing offices between the paralegals, 

the senior attorney advisors, and the ALJs, and simply ran much 

more on a model that most Federal and State courts run now. We 

are testing that now. We don’t have enough data yet to tell you 

whether that will be a significant improvement or not. 

Mr. WALSH. We are out of time, so I am going to have to cut you 

off. 

Mr. ASTRUE. I apologize for being long-winded, Mr. Walsh. 

Mr. WALSH. Thank you, Mr. Chairman. 

Mr. OBEY. Sure. 


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ADMINISTRATIVE LAW JUDGE STAFFING

Ms. McCollum. 

Ms. MCCOLLUM. Thank you, Mr. Chair, and thank you for having 

this hearing. It is unfortunate that we are having this hearing, but 

I can’t tell you the frustration I have every week in my congressional office when I sit down and talk to one of my outstanding 

staff people who spends a lot of time working on this very issue. 

And I will tell you why it is so important to me. This is what I hear 

from my constituents when things aren’t going right. I will just 

paraphrase some of their words. 

They go broke because they don’t have health insurance because 

Medicaid doesn’t begin until 24 months after receiving Social Security benefits and the COBRA only last so long. They can’t pay medical bills and they are on disability. 

They have had homes foreclosed or started to go through foreclosure because they can’t pay the mortgage. They are evicted from 

apartments. And I have had to intervene and just really explain to 

people that the Federal Government has taken too long to take 

care of things. But we have actually had some success with landlords helping us out, but then they are not getting paid either. 

Lack of food. More visits to food shelters. 

Can’t pay for transportation. Sometimes that means they have to 

let their car go because they can’t keep even minimal repairs up 

on a car. 

Get behind in utilities. 

Rack up debt on their credit cards trying to make all those other 

things happen. 

Go to family members on a regular basis, depleting their funds 

as well, having to beg for help. 

Their medical problems worsen. Some of them start becoming depressed, which makes their medical problems even worse. 

And I have even had a few die while waiting for a decision. 

So I appreciate what you said about trying to scale up and that. 

I don’t think it is enough, but I would like to just ask, out of the 

150 or so judges that is bantered around, typically, support staff—

my understanding—would be three to four? 

Mr. ASTRUE. It is actually higher on my watch. I will have to 

double-check the numbers because it depends a little bit on the 

time period when you count, but support staff has actually increased on my watch. We got about—

Ms. MCCOLLUM. No, my question was out of the 150 judges that 

are going to be put on—and as Congressman Walsh put out, some 

of them are just going to be filling retirements, so you don’t need 

any more staff, because you are really not increasing the number 

of judges, are you? 

Mr. ASTRUE. Actually, we are, very substantially. We made 144 

offers. They are staggered; they started this week. I think——

Ms. MCCOLLUM. How many FTE positions and judges are currently not filled? 

Mr. ASTRUE. There is no definition of not filled. It depends on 

whether you count judges actually deciding cases or judges on 

duty——

Ms. MCCOLLUM. Do you have enough judges? 


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Mr. ASTRUE. We don’t. 

Ms. MCCOLLUM. Okay, so how many FTEs are not filled? 

Mr. ASTRUE. What we have——

Ms. MCCOLLUM. If you were going to really take care of this 

backlog and clear it up in a year and a half, how many judges 

would you need? 

Mr. ASTRUE. What we are aiming for and what we have said in 

previous testimony is for this year we are aiming for 1,175 judges 

actually deciding cases. That is up from just over 1,000 now. 

ADMINISTRATIVE LAW JUDGE STAFFING CONTINUED

Ms. MCCOLLUM. I am trying to get to the bottom line here. How 

many retirements do you have in the year you are replacing the 

judges? 

Mr. ASTRUE. Let me answer the previous question a little bit. 

What I testified before is that we think the minimum we need on 

an ongoing basis—and this might be a little low—is about 1,250. 

This budget takes us to about 1,175. But that is probably as much 

as we can absorb and train in one year. The fiscal year 2009 budget would take us up to that 1,250. And although there has been 

misinformation floating around about inadequate support staff, 

that is simply not true. The Office of Disability and Adjudicative 

Review budget under our plans is going over 8,000 this year, for 

the first time in many years. We hired support staff with the supplemental to the continuing resolution last March——

Ms. MCCOLLUM. What is your retirement rate for your support 

staff in the next couple of years? Do you know that? Could you get 

it to us? 

Mr. ASTRUE. I will have to supply that for the record. 

[The information follows:] 

ATTRITION RATE FOR ADMINISTRATIVE LAW JUDGE SUPPORT STAFF

The attrition rate for ALJ support staff was approximately 6 percent in FY 2007. 

CHICAGO REGION WAIT TIMES

Ms. MCCOLLUM. Because that is the other thing, as you lose expertise. 

Mr. Chair, I am just going to put some numbers into the record 

here. In the Chicago region, which we are part of: Title 2 Social Security disability, 81.1 days; Title 16, 87.8 days; hearings—this is 

just Minneapolis recipients—2,302; dispositions, 1,778; pending, 

10,335; averaging processing time, 541 days for Minneapolis. 

And as I know my time is running out, Mr. Chair, I just want 

to end with a quote. And I won’t mention the constituent’s name, 

I will paraphrase what he shared with me. He has cerebral palsy 

and diabetes. He had a stroke. He has been unable to work. He has 

no health coverage and provides a home for his deaf mother. He 

had to take out early withdrawals from his IRA, incurring a 10 percent penalty because he was not declared disabled by Social Security. 

Mr. Chair, I am glad you are having this hearing, and we need 

to fix this problem. Thank you. 

Mr. OBEY. Thank you. 


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DISABILITY WATERFALL

Dr. Weldon. 

Mr. WELDON. Thank you, Mr. Chairman. It is a subject of personal interest that we are discussing today. When I practiced medicine prior to my election, I would get, obviously, involved in a lot 

of these things and some of them were very clear cut—massive 

stroke, renal failure—and there would usually be quick determinations. 

I just want to clarify a couple things about this backlog. All of 

the people in the appeal process have had a denial from Social Security Administration staff at the State office levels, correct? 

Mr. ASTRUE. Most of them have——

Mr. WELDON. I am talking about people who applied in the obvious cases with a clear disability have gotten their disability determination. So these are for all the people that have been denied the 

claim that they qualify, correct? 

Mr. ASTRUE. Yes. Depending on the State, they have either had 

one or two denials by the time they get into the Federal system; 

you are correct. 

Mr. WELDON. Okay. Now, the average Administrative Law Judge 

sees about, I don’t know, 600 of these cases a year and——

Mr. ASTRUE. Actually, less than that. 

Mr. WELDON. Less than that? And ultimately makes a determination that they qualify for disability in about two-thirds of the 

cases, is that correct? 

Mr. ASTRUE. I think the most recent is about 62 percent of the 

cases, yes. 

Mr. WELDON. Okay. Now, to me, from my perspective, you know, 

the question I have is—from my perspective, if I am a lawyer advertising on TV for disability claims and you have got a system 

where two-thirds of the people who get denied, you are going to get 

them a disability benefit, doesn’t that create an incentive for more 

appeals to the process? I mean, are you looking at that component 

of it, that we have basically created an industry to appeal these 

claims? 

And as I also understand it, even in front of the Administrative 

Law Judge, after there is a denial, if there are new developments 

in a case, typically, the doctor makes a new diagnosis or something 

like that, there is a second appeal or there can be a third appeal, 

is that correct? 

Mr. ASTRUE. That is substantially correct. There are several key 

points here. One of the things—and I appreciate the opportunity to 

clarify—that we get criticism on, but I don’t think people are looking at the waterfall correctly, is that we get about 2.5 million applications a year. It is the largest system of justice in the world. We 

allow, up front, a little under 1 million cases. A little over 1 million 

people do not appeal. 

What you see in the hearings and appeals process is a little over 

half a million people. That is about 20 percent of the overall cases. 

They are, by definition, the close calls. The reason the allowance 

rate has gone up from more of a historic rate of about 50 percent 

is because the backlog has increased. It is quite reasonable—it is 

a sign, actually, the system is working the way it is supposed to 


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that the allowance rate goes up because we have an open-ended 

system. There is no lock-down as in a traditional legal appeal—— Mr. WELDON. Final denial. 

Mr. ASTRUE. Right. A number of the people that we see have diseases or conditions that are progressively debilitating, and they 

don’t qualify up front, but they are in the process for a long time 

and at some point do. The ALJs are not restricted to the evidence 

that the State saw, so they are free to say, okay, you are now disabled. 

The other thing that happens, too, is there is a face-to-face hearing at the ALJ level. There is often key evidence that is brought 

out at that hearing that was not available earlier. The claimants 

are more likely to be represented at that point, which is often helpful to them. In fact, one of the things—— Mr. WELDON. Well, I am not opposed to an appeal process. I am 

just trying to get a little bit of perspective here, because I get the 

same kind of cases the gentlelady from Minnesota was talking 

about coming to my office, where it seems like there should have 

been a determination. I am just trying to look at the other side of 

this. Are we feeding a monster, I guess, is what I am trying to say. 

Now, I had one other question, because I am going to run out of 

time too. 

Mr. ASTRUE. Okay. 

DISCIPLINE OF ADMINISTRATIVE LAW JUDGES

Mr. WELDON. And the gentleman from New York mentioned this. 

A particular judge who sees, in a community, two or three—who 

runs through two or three times the number that every other judge 

does and he has a 98 percent approval rate. So if I am a lawyer 

advertising on TV to appeal Social Security cases for that jurisdiction, I have got a 98 percent chance. And my question for you is 

do you have any tools to basically evaluate the judges and discipline the judges? And I think you said this in your opening comments, you really can’t do anything. 

Mr. ASTRUE. No. 

Mr. WELDON. You have to be egregious? 

Mr. ASTRUE. Part of the long-term price for the disability wars 

in the 1980s is that Congress made a decision to tie the Commissioner’s hands with regard to those issues in the name of the independence of the ALJs. I think there is an argument that that was 

an overreaction because——

Mr. WELDON. So there is nothing that you can do to this one particular judge who is running through thousands more cases than 

other judges and awarding 98 percent of the cases? 

Mr. ASTRUE. No. As a practical matter, even for gross misconduct—and we have much more of that than I would like to 

see—there are special rules for the judges, and they stay on full 

pay while we pursue cases at the Merit Systems Protection Board, 

which has a track record of just slapping them on the wrist. We 

have got some egregious cases of fraud against the government, violence against women, and the judges basically get a paid vacation 

while we take the case to the MSPB. 

We have stood up much more, in my opinion, than any Commissioner in a long, long time to say these things aren’t acceptable, but 


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I would urge you to take a look at that process. I am not allowed 

to volunteer names and specific examples, but I think you ought to 

look at that as part of your oversight responsibility and decide 

whether you are comfortable with judges who have pled guilty to 

prostitution, who have struck women, who have defrauded the Federal Government by collecting two Federal salaries at the same 

time. 

Again, most of the ALJs are wonderful, well-intentioned people. 

They are frustrated with our systems and support. I don’t blame 

them. Most of them are trying their best and are good people, but 

we have bad apples, and they also tend to be the people that are 

corrosive in the workplace and don’t produce cases. 

We have judges that do 2,000 cases in a year. We have, I believe, 

one judge that hasn’t done a case in seven years. We had a judge 

that did 40 last year. If I come up with a proposal unilaterally, I 

get hit with I am compromising the independence of the judges. I 

am telling you the facts. I think it is a problem and I would encourage you to take a look at it. 

Mr. WELDON. Thank you. 

SSA’S ADMINISTRATIVE BUDGET

Mr. OBEY. Ms. Lee. 

Ms. LEE. Thank you, Mr. Chairman. 

Good morning. 

Mr. ASTRUE. Good morning. 

Ms. LEE. Let me ask you about your administrative budget. 

Mr. ASTRUE. Yes. 

Ms. LEE. It is my understanding that about $100,000,000 will be 

cut from that. Is that accurate or not? 

Mr. ASTRUE. I don’t think so. No, this is a 6 percent increase over 

FY 2008—and, among the domestic agencies, as far as I know, this 

is one of the best increases. 

CALIFORNIA FIELD OFFICE CLOSINGS

Ms. LEE. Okay. Then let me ask you about the administrative 

costs, though, as it relates to closing of offices and where we would 

identify that in the budget. 

Mr. ASTRUE. Yes. 

Ms. LEE. It is my understanding—and I know in California, and 

I would just like to ask you about the office closing there, that you 

do plan to close some offices. Secondly, I want to ask you about the 

use of technology and, of course, the Internet, which we all agree 

with in terms of upgrading and making sure that we are in the 

21st century. 

Mr. ASTRUE. Right. 

Ms. LEE. But we do have a huge digital divide still in our country, especially with seniors and with the disabled community. So as 

you move toward closing offices, I know you are talking about relying more on technology, so how do you propose to make sure, first 

of all, that this works and that it makes sense. 

Mr. ASTRUE. Sure. 

Ms. LEE. And I know for a fact that now—I know in California 

and in my area, you know, seniors and the disabled have to travel 

50 to 100 miles in many parts of the country also. 


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Mr. ASTRUE. Right. 

Ms. LEE. So how does this make sense for the population of people that need offices close to where they are and need to be able 

to access staff to help them out? 

Mr. ASTRUE. Multiple great questions there, and if I don’t answer 

them all fully, come back to me. I am going to do my best. 

There is some misinformation about the field office situation. The 

Agency, for 30 to 40 years, has had a very similar process for doing 

a limited number of consolidations and closings as leases come up. 

Generally, it is to get a small amount of efficiency because we don’t 

have the budget to increase the number of field offices to try to 

move some resources into rapidly expanding parts of the country. 

The number of field offices in the last decade has stayed approximately the same; it has gone from about 1,287 to 1,261. 

There is nothing dramatic happening in terms of the field. There 

has been a slight drift down. And we may have a few smaller; we 

may stay level. 

That is not as much of an issue as the fact that it doesn’t do any 

good to have a field office if the lights are on and there aren’t any 

employees there. This is a problem that we have in a number of 

offices. The continuing resolution and the fact that we couldn’t hire 

staff to put people in some of these offices was a factor in deciding 

to consolidate and close a few of them last year. 

In general, we need to do much more in terms of technology in 

order to take some of the burden off of people in the field. No one 

wants to substitute for those important, complicated, intimate conversations that the staff has to have with the public, but right now 

they are doing a lot of routine work, and we are moving very fast 

to try to automate that as quickly as possible. 

Right now, when attorneys file appeals, even though the system 

is substantially electronic, they send a piece of paper that goes into 

the field office, and the field office staff has to input it in order to 

get it into the system. And, if they are overloaded, that can add six 

weeks of delay for the claimant, which is bad, and it also distracts 

the field office staff from the things they ought to be doing. 

We have got the system coming in place now so attorneys can file 

online, and at some point we may look at mandating it, because 

that is a huge deadweight burden on people. 

Our online electronic forms are just not satisfactory; they were 

put up very quickly eight years ago and they are not sufficiently 

user-friendly. We had a peak of up to about 10 percent of the people using them and then we stopped. So we have got a whole overhaul going. It is going to happen in two parts. We will be about 

halfway there in September; the rest will come in——

On the technological divide, there are some urban legends out 

there that aren’t true, even within our Agency. You have a terrific 

Regional Commissioner out in San Francisco, I believe in your district, who is experimenting with some things that are very important in that regard because there is a myth that, for instance, filing 

online can’t benefit SSI applicants, and, in fact, we——

[CLERK’S NOTE.—Later corrected to ‘‘are working with the homeless through advocacy groups to begin their SSI application online.’’] 


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Since those social workers often find it difficult to actually get 

the applicants into the field office, it turns out to be not only an 

efficiency for us, but a blessing for the applicants because they are 

much more likely to get the benefits that they are qualified for 

promptly since the people who are trying to help them can file online. 

CALIFORNIA FIELD OFFICE CLOSINGS CONTINUED

Ms. LEE. And do you plan to close more offices in California? 

Mr. ASTRUE. I don’t believe that we have very much. We have 

a small number of consolidations and closings at any point. I actually don’t find out unless there is essentially community and political opposition. Actually, you find out before I do. My understanding is there are about six that are under review for some sort 

of consolidation or closing now, but we will submit for the record. 

[The information follows:] 

CALIFORNIA FIELD OFFICE CLOSINGS

There is only one office currently under consideration for closing in California. 

DISABILITY WATERFALL

Ms. LEE. Thank you very much, Mr. Chairman. 

Mr. OBEY. Mr. Commissioner, let me ask you just four or five 

questions, and then we are going to have to move on to the next 

panel before we get devoured by roll calls on the House floor. 

Mr. ASTRUE. Sure. 

Mr. OBEY. My understanding is that, initially, 65 percent of applicants for disability are denied. Is that right? 

Mr. ASTRUE. That is approximately right, yes. 

Mr. OBEY. At the end of the process, what does that number turn 

into? 

Mr. ASTRUE. That affects a little under a million people who get 

the benefits—— Mr. OBEY. I want to know what is the percentage in the end that 

are denied. 

Mr. ASTRUE. About 85 percent of the decisions hold from the 

State level, so the overall percentage would be around 40 percent. 

We will provide you with a precise number for the record. 

Mr. OBEY. Clarify that for me. So you are saying that initially 

65 percent of people are denied. 

Mr. ASTRUE. Right. 

Mr. OBEY. And you are saying eventually that——

Mr. ASTRUE. Subtract about 5 percent. So if you are talking 

about denials—I like to think in terms of allowances rather than 

denials, but if you do it the other way around, I think it is about 

60 percent. Yes, about 60 percent. 

Mr. OBEY. So you are saying that only 5 percent of those cases 

see their outcomes change? 

Mr. ASTRUE. One of the frustrations that we have with the system is there is a certain percentage of people that shouldn’t be applying in the first place, and they are there either because private 

insurance companies or States require them to file with us——

Mr. OBEY. I understand, but I don’t have time for elaboration. 

Mr. ASTRUE. Sorry. 


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Mr. OBEY. I just want to know the bottom-line answer. 

Mr. ASTRUE. I think that your bottom-line answer is approximately 60 percent. 

HEARINGS PROCESSING TIME

Mr. OBEY. I understand that your request will result in processing time being cut by 29 days. 

Mr. ASTRUE. That is a very rough number. We are actually 

ahead of schedule now. 

Mr. OBEY. What do you consider to be an optimal processing time 

and when will you reach it? 

Mr. ASTRUE. That is a very fine question. Right now, the Agency—and it is a rough number—assumes about 270 days. I think it 

is an open question whether we can do better than that, but we do 

need to be——

Mr. OBEY. Just give me a bottom-line response. What do you 

think the optimal response time would be? 

Mr. ASTRUE. I think it is somewhere between 180 and 270. 

Mr. OBEY. And when do you think we will get there? 

Mr. ASTRUE. Using the 270, right now we are on track, assuming 

that we get the appropriations that we request through 2013. 

COMMISSIONER’S BUDGET

Mr. OBEY. In the law, as you know, you are required to prepare 

an annual budget that is submitted to Congress without revision. 

Mr. ASTRUE. Yes. 

Mr. OBEY. And that budget proposed an additional $100 million 

for administrative resources. 

Mr. ASTRUE. Yes. 

Mr. OBEY. That is $100 million above the President or $100 million above base? 

Mr. ASTRUE. I think it was a little less than $100 million. Seventy-six million, Mr. Chairman. 

Mr. OBEY. Can you detail for us what you will do with those resources? 

Mr. ASTRUE. With——

Mr. OBEY. If you had them. 

Mr. ASTRUE. Well, the $76 million included two differences. One 

is I erroneously assumed that we would be doing the same number 

of CDRs as in the past, and OMB was more flexible about that. We 

will give you detailed information about that. So the only real difference is about $20 million in the technology budget. 

Mr. OBEY. So you are saying that the only thing that would have 

happened if you had gotten the extra money that you requested initially would be on the technology front? 

Mr. ASTRUE. There is a marginal difference on the technology 

side, yes. 

Mr. OBEY. That is all? 

Mr. ASTRUE. Yes, I think that is right. 

HEARINGS AND APPEALS REGULATION CRITICISM

Mr. OBEY. We have already had some comments. Let me simply 

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committee, but a lot of the stakeholders in the Congress and out 

are concerned with your proposals for changing the process, and I 

wonder whether, given the criticism that you have heard from 

sources so far, you have changed in any way what your plans are 

likely to be. 

Mr. ASTRUE. If I correctly understand what I think you are alluding to, we took some criticism about a couple—we have about a 

100-item hearings and appeals regulation, where two or three of 

the items took substantial criticism. We have already indicated to 

the Congress that we are going to step back from those, and we 

have been working pretty collegially with the advocate community. 

I think that the vast majority of what we are going to do, pretty 

much everything we are intending to do, seems to be the consensus 

and non-controversial at this point. 

Mr. OBEY. Let me interrupt my question because Mr. Rehberg is 

here. 

Mr. REHBERG. [Remarks made off microphone.] 

Mr. OBEY. Why did he do that? [Laughter.] 

VOICE. I always do differently than he does. 

Mr. REHBERG. So I will not re-plow the old field. Thank you. 

Mr. OBEY. Well, that is the first time. [Laughter.] 

We do get along on this Subcommittee once in a while, don’t we? 

I am anxious to get to the next panel. We are only going to have 

about 35 minutes, I think, before we have some roll calls. 

Let me simply say you expressed concern about what the Congress had done as a result of what happened in the 1980s. 

Mr. ASTRUE. Yes, I did. 

INDEPENDENCE OF ADMINISTRATIVE LAW JUDGES

Mr. OBEY. I was on this Subcommittee in the 1980s and I remember those days, and in those days there was a very distinct atmosphere which sent the message that there was great pressure 

being applied from the top to try to push people into denial of 

claims. And what it reminded me of was the old comment that Ray 

Bliss said many years ago. 

Ray Bliss, many years ago, under the Eisenhower Administration, was the party chairman, and he said once, to a number of people in his party’s caucus, he said, boys, you don’t have to vote 

against that stuff, we can just administer it to death. And that is 

what was going on in the 1980s. 

Mr. ASTRUE. Mr. Chairman——

Mr. OBEY. The Congress didn’t legislate the kind of shrinkage of 

rights that wound up being provided——

Mr. ASTRUE. And, Mr. Chairman, I am not disagreeing with you 

on that, so let me clarify because I was also part of the cleanup 

in the late 1980s. 

I agree that there should be substantial independence of ALJs, 

but in the Agency we have a number of policies that had the absolute best intentions when they went in and over time had unintended consequences. I do think that the statute, which makes it 

difficult to take prompt action, hinders us when basically an ALJ 

has stopped working, assaults a colleague, or assaults someone 

else. I just think that we need to go back and revisit the statute. 

Mr. OBEY. I understand——


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Mr. ASTRUE. I am not suggesting that we reopen that, Mr. Chairman. We are on the same wavelength on that. 

Mr. OBEY. I understand. My point is simply that regardless of 

what happens, the pendulum swings from one direction to the 

other. 

Mr. ASTRUE. Yes, that is right. 

Mr. OBEY. You wind up, you hope you reach a happy medium, 

but you are often veering off in one direction or the other. I just 

wanted the record to be clear about what the problem was and why 

the actions were taken at that time. 

Mr. ASTRUE. I think we are in agreement, Mr. Chairman. I am 

not arguing with what was done and why at the time. I supported 

those types of things at the time. All I am saying is I think it may 

be over-broad now and the edges of it ought to be revisited. 

Mr. OBEY. Is there anything else you would like to say before we 

move on to the next panel? 

Mr. ASTRUE. Mr. Chairman, I am listening to you and all the advocates about the frustration that they have about the process, and 

the only thing I want to say is I share that, too. I had been out 

of government a long time. I came back specifically to try to fix 

this, and it has been a difficult and frustrating year. I think every 

year is going to be difficult and frustrating, but I don’t think that 

I have any more important use of my time than to try to make this 

situation better, which is what I am trying to do. 

Mr. OBEY. Okay. 

Any other member of the Committee have any questions? 

Mr. OBEY. All right, Mr. Commissioner, thank you very much. 

Mr. ASTRUE. Thank you. 

INTRODUCTION OF WITNESSES

Mr. OBEY. We have asked that the Commissioner arrange for 

several Agency officials to remain available for questions, as we 

hear from the next panel. 

The next panel—and I would ask them to come to the table at 

this time. First of all, Inspector General Patrick O’Carroll, has 

been serving in that capacity since November 2004, after having 

served in other positions in the SSA OIG organization, including 

Assistant IG for Investigations and Assistant IG for Internal Affairs. 

Rick Warsinskey is Immediate Past President of the National 

Council of Social Security Management Associations. He has been 

District Manager of the Downtown Cleveland Social Security Field 

Office for nearly 13 years. 

Marty Ford is Co-Chair of the Consortium for Citizens with Disabilities Social Security Task Force. She has over two decades of 

experience on Federal public policy issues affecting people with disabilities. 

Ronald Bernoski, Administrative Law Judge who has been hearing Social Security disability cases in someplace called Milwaukee, 

Wisconsin for 25 years. Judge Bernoski serves as the President of 

the Association of Administrative Law Judges. 

If you are ready, why don’t we begin with Mr. O’Carroll? And let 

me simply ask you to summarize your statements. We will put your 

full statements in the record. 


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Mr. O’CARROLL. Good morning, Chairman Obey, Congressman 

Walsh, and members of the Subcommittee. I thank the Subcommittee for this invitation to testify today. Like the Subcommittee, my office is committed to doing all it can to confront the 

many challenges that SSA faces. 

QUANTIFYING THE DISABILITY BACKLOG

Of all the challenges SSA faces in administering the world’s largest social insurance program, none is greater than the backlog of 

disability claims. SSA’s most recent data indicates that the current 

number of cases awaiting a hearing decision is over 750,000, leading to an average waiting time of 499 days. The waiting time for 

appeals is unacceptable. 

BALANCING SERVICE AND STEWARDSHIP

From the time of the OIG’s inception in 1995, we have sought to 

help SSA strike the balance between service and stewardship. Action must be taken to reduce and then eliminate the lengthy delays 

faced by disability applicants without compromising the integrity of 

the system. 

AUDIT: INITIAL CLAIM PROCESSING

As we all know, providing additional funding and resources to 

SSA creates an obligation to use those funds wisely. In 2004, we 

conducted an audit entitled Disability Determination Services 

Claim Processing Performance. We discovered that poor performing 

offices experienced the most attrition, had the lowest examiner-tostaff ratio, and purchased the most consultive examinations. 

AUDIT: HEARING OFFICE BEST PRACTICES

Of course, the disability backlog occurs primarily in the hearing 

and appeals phase, rather than the initial determination process. 

In 2004, we released another audit entitled Best Practices in the 

Highest Producing Hearing Offices. We found that SSA issued a 

list of 24 best practices to hearing offices in 1993, but then issued 

191 best practices in 2002 and then, in 2003, they issued another 

list of 271 best practices. The sheer number made it difficult for 

hearing offices to determine which to implement, and some were 

even contradictory. We recommended that SSA revert to a shorter, 

clearer list of best practices. 

AUDIT: HEARING OFFICE STAFFING

Next, in 2005, we issued an audit report entitled The Effects of 

Staffing on Hearing Office Performance. We found that during the 

five previous years the number of dispositions per ALJ had improved, from 2.03 to 2.4 cases. Yet, the timeliness had declined, 

from 316 days to 391 days. We also found that the national average 

staffing ratio was 4.7 staff per ALJ. However, office staffing ranged 

from a national low of 3 per ALJ to a high of 18.5 to an ALJ. 

AUDIT: ADMINISTRATIVE LAW JUDGE CASELOAD PERFORMANCE

Sixty-three percent of the offices with a ratio below the national 

average had disposition rates below the average. Our most recent 


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review in this area examines ALJ caseload performance. We found 

wide variations in ALJ performance among hearing offices, ranging 

from 40 to 1,805 dispositions per year. We noted that if the performance of ALJs at the low end of the spectrum continues, it will 

have a negative effect on the disability backlog. 

We further surmised that the lack of any formal performance accountability is a key reason for this inconsistency. So we recommended that SSA establish standards, examine offices where 

ALJs have high productivity, identify offices where ALJs have low 

productivity, issue best practices, and then take corrective actions. 

AUDIT: JUDGE AND HEARING OFFICE PERFORMANCE

At the request of Chairman McNulty and Ranking Member Johnson from the SSA Subcommittee, we are conducting a review of Administrative Law Judge and hearing office performance. We are examining performance factors, ODAR management tools, and initiatives aimed at increasing ALJ productivity. We expect to complete 

this work in June. 

AUDIT: HEARING OFFICE TECHNOLOGY

On another front, we looked at technical support for the hearing 

operation. In 2006, we examined the Case Processing Management 

System, or CPMS, to assess its ability to improve workload management at hearing offices. We found that ODAR management did 

not always use CPMS reports in their caseload management, particularly with respect to stagnant cases. 

In 2007, we conducted an audit of management’s use of workload 

status reports at hearing offices. We found that more than 50 percent of the cases were not being tracked at all, including hundreds 

of thousands of unworked cases. Most recently, we have initiated 

a review involving the timeliness of medical evidence submitted to 

the hearing offices. 

CONTINUING DISABILITY REVIEWS

Finally, there is no more important aspect of stewardship than 

the continuing disability reviews, the process by which SSA learns 

that beneficiaries’ disabling conditions may no longer preclude 

them from working. I applaud the Subcommittee’s support of these 

reviews and encourage your continued support of stewardship. 

Thank you. I will be happy to answer questions. 

[The prepared statement and biography of Inspector General 

O’Carroll follow:] 


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Mr. OBEY. Thank you. 

Mr. Warsinskey. 

Mr. WARSINSKEY. Chairman Obey and members of the Subcommittee, my name is Richard Warsinskey, and I represent the 

National Council of Social Security Management Associations. 

Chairman, let me say that many of the remarks you made at the 

very beginning I concur with. I think you were right on the mark. 

I also coordinate the activities of the Social Security SSA Advocacy Group and I have been a manager of a Social Security office 

in Downtown Cleveland for 13 years. 

I am pleased to have this opportunity to submit this testimony. 

We are appreciative of the fact that Congress appropriated $150,000,000 more for SSA in fiscal year 2008 than the President 

recommended. Even with this additional funding, we are very concerned about SSA’s ability to provide a good level of service to the 

American public. Why? 

First, the hearings backlog projection remains at 682,000 hearings in fiscal year 2009, well over the 312,000 hearings that were 

pending at the beginning of this decade. Over 400,000 of these 

hearings will eventually be approved. Hearings processing times 

are projected to be still in the 500 day range in fiscal year 2009, 

which continues to be an unconscionable amount of time to wait. 

The delays will continue to wreak havoc on the lives of thousands 

of individual Americans and their families. People will die waiting 

for an answer from Social Security. 

Second, the Office of Disability Operations, which handles the 

back end of disability cases, has about 750,000 actions pending. 

The average amount of time it takes for a benefit authorizer to 

process a case they are assigned is 401 days. For a claims authorizer it is 484 days. 

Third, the field office telephone service is deplorable. I repeat, deplorable. Over 50 percent of the 60 million-plus callers that try to 

contact Social Security offices receive a busy signal. 

Fourth, visitors to field offices are at record levels and waiting 

times are climbing, while we are seeing increasing numbers of baby 

boomers filing for disability or retirement benefits and needing our 

assistance. The combined pressures of increasing numbers of visitors and telephone calls can be seen in a recent statement by a 

field office manager: We are juggling the impossible. The employers 

are dedicated and proud of their service to the public. The shortage 

of staff makes it harder to get done what needs to be done in an 

accurate and timely manner. We have all but given up on answering the phones because there is no one to do it. 

Fifth, a significantly fewer number of medical continuing disability reviews and SSI re-determinations are being reviewed, costing taxpayers billions of dollars. 

Sixth, staffing in SSA field offices, payment centers, and DDSs 

continues to drop. The agency staffing is at its lowest level since 

1972, before we took responsibility for the SSI program. SSA staff 

retirements are accelerating due to a retirement wave within the 

agency itself. It takes a number of years for new staff members to 

be fully trained to handle the wide range of responsibilities. 

A field office assistant manager recently described this challenge: 

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ductions in staff due to retirement, promotions, and transfers. The 

best people, those with institutional knowledge, needed to keep this 

boat afloat, have been leaving and will continue to leave. 

We certainly support at least the President’s level of 

$10,327,000,000 funding for SSA for fiscal year 2009. But to really 

address the challenges in SSA, we believe there needs to be a reserve fund of no less than $240,000,000 established for program integrity workloads, plus an additional $200,000,000 to $250,000,000 

in funding above the President’s level. This increased level of funding would begin to immediately address the areas where SSA services need to be improved. 

We realize that this is a significant increase in funding, but truly 

believe it is the level of funding necessary to begin to address the 

growing challenges facing SSA. We believe the American public demands and deserves to receive good and timely service for the tax 

dollars they have paid to receive Social Security. 

Mr. Chairman, I thank you for this opportunity to appear before 

the Subcommittee. 

[The information follows:] 


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Mr. OBEY. Thank you. 

Ms. Ford. 

Ms. FORD. Thank you, Chairman Obey, Ranking Member Walsh 

and members of the Subcommittee. Thank you for this opportunity 

to testify. 

Social Security and SSI benefits as well as Medicare and Medicaid coverage are the means of survival for millions of people with 

severe disabilities. They rely on SSA to promptly and fairly adjudicate their claims for disability benefits. 

However, as you are aware from your own constituent services 

staff, delays and backlogs have reached intolerable levels. When a 

decision is appealed, individuals and their families can wait years 

for a hearing, wait again for a decision and then wait again for actual payment of benefits. 

In the meantime, their lives are unraveling. Families are torn 

apart. Homes are lost. Medical conditions deteriorate. Financial security crumbles, and many individuals die before a decision is 

made. The media has reported on this extensively. 

Other key services, such as action on a lost check or having earnings promptly recorded, have also diminished. Some local field offices have been threatened with closure and, despite dramatically 

increased workloads, staffing levels throughout the Agency are at 

their lowest since SSI payments began. 

The primary reason for the increasing disability backlogs is that 

SSA has not received adequate funding for many years. The Agency does not have the resources to address its current workload or 

to face the retirement and disability applications from baby 

boomers along with the retirement of its own baby boomer workforce. While the system is clearly in crisis, without adequate appropriation, service will deteriorate even more. 

The President’s request for fiscal year 2009 is encouraging but 

does not go far enough for SSA to provide its mandated services at 

a level expected by the American public. 

To meet its responsibilities, we believe that SSA needs at least 

$11,000,000,000 for the fiscal year 2009 administrative budget. 

This should allow the Agency to significantly reduce the backlog as 

well as keep local offices open, provide telephone service to the 

public and maintain the integrity of the programs by performing 

more continuing disability reviews and SSI redeterminations. 

We also recommend that SSA’s administrative budget be removed from discretionary spending limits. The cost of running SSA 

is driven by its ever increasing workload. Most of the administrative costs are borne by the trust fund. Other important programs 

in the Labor HHS Appropriations Bill should not be impacted by 

the ever growing cost of administering Social Security. 

Management issues will not be resolved solely with additional 

funding. SSA must continue to streamline and operate more efficiently. The Agency has already begun technological and other improvements in its business processes in numerous areas. We expect 

that these initiatives will assist in restoring the Agency’s abilities 

to meet the needs of applicants and beneficiaries. 

My written testimony includes recommendations for additional 

improvement. This includes improved development of evidence earlier in the process by doing a number of things including providing 


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more assistance to the claimant at the application stage, having 

the State DDS obtain necessary and relevant evidence, improving 

reimbursement rates to providers, giving better explanations to 

physicians and other sources about what evidence is needed, giving 

more guidance and training to adjudicators, improving the use of 

the current ways to expedite cases and improving the overall quality of consultative examiners or examinations. 

While there may be additional ways to improve decisionmaking 

from the adjudicators’ perspective, such initiatives must be tempered by how the process would affect the claimants and beneficiaries for whom the system exists, those who need the program 

and meet the criteria. 

People who find they cannot work at a sustained and substantial 

level due to disability are faced with a host of personal, family and 

financial circumstances that will impact how effectively they can 

maneuver the very complex disability determination system. Many 

will not be able to address the requirements for proving eligibility 

without substantial assistance. 

SSA must continue and improve its well-established role in ensuring that an individual’s claim is fully developed before a decision is made and must ensure that its rules reflect this administrative responsibility. 

We urge Congress to provide SSA with the resources necessary 

to carry out its mandated responsibilities and to substantially improve its service to the public. 

Thank you for this opportunity. 

[The information follows:] 


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Mr. OBEY. Let me explain what is happening. These votes have 

come earlier than we had expected, and they will probably take 

close to 40 minutes by the time everything is done, and they are 

the last votes of the week so everybody is going to be running to 

the airports. So you are going to get off easy, I think, in terms of 

not having to answer any questions. 

I would like to get Mr. Bernoski’s statement in yet if we can and 

if we have time for a couple questions before we have to go vote, 

we will slip them in. If not, you will get off early and easy, and 

let me thank you for coming. 

Now, go ahead, Mr. Bernoski. 

Mr. BERNOSKI. Mr. Chairman, thank you for inviting us to testify 

before this Subcommittee today. 

Our organization represents the administrative law judges in the 

Social Security Administration, and we deal with the problems of 

the Social Security case backlog in our hearing offices on a daily 

basis, and it troubles us to see the American people waiting long 

periods of time for hearings on their claims. 

Mr. Chairman, our judges have been working hard, and we have 

been rendering case dispositions in record numbers. For example, 

last year, we issued dispositions in over 550,000 cases for an average of over 40 cases a month per judge. 

This is important to us because we are concerned with the long 

delays, but at the same time we must take enough time to provide 

a full and fair hearing to both the claimant and the government. 

It is important to the taxpayer that the proper claims are paid. 

It should be noted that a study was done by the Agency in 1994 

which concluded that if a judge devoted about 3 to 7 hours to a 

case, the judge would produce between 25 to 55 cases a month. We 

do not believe that 7 hours is too long to spend on a claim that may 

cost the trust fund $250,000. As the evidence shows, we are working well within the top end of that range. 

As we know, the funding is the life blood of programs in both the 

public and private sectors, and in the case of Social Security, it has 

been underfunded for the past years. The lack of funding has had 

a profound impact on the Agency, and it has been unable to hire 

sufficient staff and administrative law judges to handle the increasing number of disability claims that have been filed with our hearing offices. 

In addition to hiring new support staff, we have made suggestions to the Agency to address this staff crisis by other means and 

to supplement the crisis. By example, we have suggested that the 

Agency recall retired administrative law judges from the existing 

OPM Senior Judge Register. These judges are trained and do not 

need a learning period to become productive for the Agency, and 

they also cost the Agency less money in salary. 

Secondly, we suggest that the Agency employ retired Social Security workers on a contract basis. These retired employees are familiar with the work of the Agency and require little training. 

And, third, we suggest that the Agency hire law school students 

as interns to help in decision-writing which remains a major weakness in our program. 

However, I must emphasize that hiring judges without staff is 

not sufficient. Each judge requires, as the Commissioner indicated, 


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about four to five staff persons for assistance in support in hearing 

and deciding cases, and the Agency has not been replacing our staff 

on a one-on-one ratio as we have been losing them. 

In the recent past, the Agency has attempted to shift some of the 

clerical work to judges, and this is counterproductive because it 

uses expensive employees to do clerical work which slows down the 

productivity of the judge and is very costly for the government. 

Recently, we have noticed a definite tendency of the Agency to 

attempt to shift the blame for the disability backlog to the judges. 

In this regard, we note a December 2007 GAO report that stated 

that the backlogs have been a problem with the Social Security Administration for many years and that the contributing factors to 

the backlog include: one, an increase in applications; two, a loss of 

key personnel including administrative law judges; and, three, 

management weaknesses which is evidenced by the many failed reform initiatives that we had for the past 20 years or so. 

In fact, in a recent disability roundtable hosted by our association, it was the consensus of the panel which included the Comptroller General of the United States, Mr. Walker, that no single 

group in the Agency is responsible for this backlog. 

Now we are of the opinion that some basic or systemic reform is 

needed for the Social Security process, and these include adopting 

rules of practice and procedure for our judges. 

Another is having the claimants’ attorneys be brought into the 

process and serve as officers of the court. There is a tremendous 

pool of talent here that is available that the Agency should take 

advantage of. 

And, third, by adding what we call a Social Security counsel to 

the process. This person would have many of the same responsibilities as the reviewing official had in SDI, and that was implemented by the former Commissioner Barnhart. 

The objective is to create a system that pays the appropriate 

claim as early in the process as possible and only having the most 

difficult cases move on to hearing. That would address the issue 

raised by Representative McCollum earlier in the hearing, and also 

the Commissioner alluded to that also. 

The goal is to reduce both processing times and the backlog. We 

can no longer afford to hear 90 percent of our cases and bring those 

to a full hearing. The cases that should be paid should be handled 

quicker in the process and to move our process along more smoothly. 

Now this reform will cost some money, of course, because we 

have a very large system. We are the largest. Probably one of the 

largest governmental systems in the world is housed within the Social Security Administration. But, ultimately, it will have an impact, a beneficial impact on the American people. 

Mr. Chairman, in closing, I just say that the Social Security disability program has significant systemic problems which need correction. We also need more funding for judges and staff. However, 

the systemic problems need separate legislation, and money alone 

is not enough. 

We look forward to assisting Congress and this Committee in 

working on these changes. 


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As a matter on the systemic changes, we had prepared a paper 

in December of last year, a 24-page paper which we have disseminated as part of our roundtable and have given to the Social Security Subcommittees. I am not going to offer it as part of the record 

because it is 24 pages, but I will give it to you for your information. 

I apologize for not making copies for other members of the Committee, but quite frankly I forgot, and I will send copies in the mail 

to everyone else on the Committee. 

[The information follows:] 


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Mr. OBEY. All right. Thank you. 

We have about six minutes before the clock expires. 

Because Mr. Ryan hasn’t asked any questions yet, let me just 

yield to him to see if he has a question he would like to ask. 

Mr. RYAN. I appreciate it, Mr. Chairman. I just have one comment. 

Mr. Warsinskey is from the great State of Ohio and from Cleveland, and he is the office that we work with. I just want to say 

what a phenomenal job you do. 

Mr. WARSINSKEY. Thank you. 

Mr. RYAN. We know you are in very difficult circumstances but 

a total class operation. You guys are truly professionals, and we 

know how hard it is because we are part of the front line of defense 

there in the Congressional offices, but we appreciate it and thank 

you very much for your service. 

Mr. WARSINSKEY. Thank you. 

Mr. OBEY. Mr. Walsh. 

Mr. WALSH. Mr. Chairman, given what you said regarding the 

schedule, I am going to yield whatever time I have back, but I 

would just like to ask that Judge Bernoski’s report be allowed to 

be entered into the record of the hearing. 

Mr. OBEY. Sure. 

Mr. WALSH. I thank you very much. 

Thank you, witnesses, all. 

Mr. OBEY. I have six or seven basic questions which I had wanted to get in. We will just have to get them to you, and you can respond in writing. If you would do that, please, I would appreciate 

it. 

I apologize for the truncated nature of the hearing. We had to 

push it along in order to try to get everybody on the record. I appreciate your taking the time, and I appreciate the work you do. 

Mr. BERNOSKI. Mr. Chairman, the Commissioner also raised several points if we could respond to in our written comments with relationship to the electronic file, the disciplining of judges and our 

relationship to the staff and our policy with staff. 

Mr. OBEY. I would be happy to see that. 

Mr. BERNOSKI. Okay. Thank you very much. 

Mr. OBEY. Okay. Thank you very much. 


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(i) 

W I T N E S S E S 

Page 

Astrue, Michael ........................................................................................................ 695 

Bernoski, R. G .......................................................................................................... 695 

Chao, Hon. E. L ....................................................................................................... 1 

Clancy, Carolyn ........................................................................................................ 465 

Cline, T. L ................................................................................................................ 465

Ford, Marty .............................................................................................................. 695 

Gerberding, J. L ....................................................................................................... 465 

Leavitt, Hon. M. O ................................................................................................... 191 

O’Carroll, Patrick ..................................................................................................... 695 

Skelly, T. P ............................................................................................................... 599

Spellings, Hon. Margaret ........................................................................................ 599 

Warsinskey, R. E ..................................................................................................... 695 

Zerhouni, E. A .......................................................................................................... 465 


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I N D E X 

DOL Secretary of Labor 

Page 

Acceptable Level of Carryover Funds .................................................................... 183 

American Time Use Survey and FY 2009 Budget ................................................ 144 

Carryover in the Workforce Training Program ..................................................... 32 

Characteristics of WIA Program Participants ................................................... 114–116 

Claims Affected by Revisions to NIOSH Scientific Methodology ......................... 173 

Combustible Dust Standard ................................................................................ 137–138 

Community-Based Job Training Grants............................................................. 177–178 

Contract FTE ........................................................................................................... 100 

Contracting ............................................................................................... 52–99, 108–108 

Cuts in Training and Employment Services ......................................................... 177 

DEEOICP Claims Process Audit ............................................................................ 173 

Determination of Farmworker Wages................................ 148–149, 159–160, 179–181 

EEOICPA: 

Final Bulletins............................................................................................... 172–173 

Ombudsman................................................................................................... 167–170 

Part E Definition of ‘‘Toxic Substance’’ ........................................................... 175 

Program ............................................................................................................. 38–39 

Employment Programs for Veteran ....................................................................... 31 

Employment Training ............................................................................................. 151 

Ergonomic Standards............................................................................................... 50–51 

Farmworker Housing........................................................................... 158–159, 178–179 

Federal Lawsuits Challenging Denial of EEOICPA Benefits .............................. 176 

Funding for Workforce Training ............................................................................. 47–48 

Giving Young People a Second Chance .................................................................. 41–42 

Green Jobs Initiative ............................................................................................... 47 

H2B Visa Program ................................................................................................... 31–32 

Healthcare Workers and Pandemic Flu ............................................................. 186–187 

Healthcare Workers’ Protection against Pandemic Flu ........................................ 44 

High Growth Job Training Initiative.................................................................. 184–186 

Improving Procurement Integrity .......................................................................... 49 

Job Corps .................................................................................................................. 40–41 

Backlog of Unfunded Building Maintenance and Repair Needs ............... 116–117 

Construction Needs....................................................................................... 163–166 

Project in Los Angeles ...................................................................................... 43–44 

Staff Compensation....................................................................................... 162–163 

Student Training Slots ................................................................................. 161–162 

Joseph A. Homes Safety Association ...................................................................... 49–50 

List of Diseases with No Casual Link to Toxic Exposure .................................... 175 

Marketing.................................................................................................................. 42–43 

Migrant and Seasonal Farmworkers .................................................................. 183–184 

MSHA Staffing ..................................................................................................... 140–141 

Native American Program....................................................................................... 39–40 


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iv 

Non-Competitive Awards......................................................................................... 29–31 

Non-Competitive Grants.......................................................................................... 48–49 

OLMS Restitution Orders.................................................................................... 118–137 

Occupational Safety and Health Administration (OSHA): 

Follow up on Ergonomic Hazard Alert Letters........................................... 139–140 

Referrals for Criminal Prosecution.............................................. 141–142, 182–183 

Report on Status of Key Rules............................................................................. 138 

Participation of Migrant and Seasonal Farmworkers in WIA Training Programs ................................................................................................................. 152–154 

Payment of Benefits under EEOICPA Part E ................................................... 173–174 

Plan to Address Disparity Rates in Unemployment ............................................. 46–47 

Presumptive Disease Lists .................................................................................. 175–176 

Program Year 2004 Lapsed WIA Funds by State.............................................. 111–114 

Proposed Changes to the H–2A Program........................................... 150–151, 160–161 

Proposed H–2A Regulations................................................................ 144–148, 154–158 

Role of Unions, The.................................................................................................. 44–46 

Secretary’s Opening Statement................................................................................. 4–19 

Site Exposure Matrices ........................................................................................... 172 

Site Exposure Matrix ........................................................................................... 174–175 

Skill Training............................................................................................................ 25–26 

Special Exposure Cohort...................................................................................... 170–172 

Staffing Request for ESA’s Office of Labor Management Standards............... 188–189 

Staffing Request for ESA’s Wage and Hour Division ........................................... 187 

Standard Setting for Combustible Dust and Diacetyl....................... 143–144, 181–182 

State Employment Services Funding ..................................................................... 2 

Training Programs Funding........................................................................................ 2–3 

Union Organizing ..................................................................................................... 32–38 

Veterans’ Training Programs .................................................................................. 28–29 

Voluntary Protection Program ................................................................................ 42 

Welcoming Remarks: 

Chairman’s............................................................................................................. 1–2 

Ranking Member’s ................................................................................................ 3–4 

Workforce Investment ............................................................................................. 23 

Workforce Investment Act (WIA)............................................................................ 21–23 

Adult Carryover Balance for PY 2007 by State.......................................... 108–110 

Carryover Funds ............................................................................................... 111 

Funding.............................................................................................................. 20–21 

Rescission........................................................................................................... 26–28 

Workforce Investment Centers................................................................................ 24–25 

YouthBuild Program ................................................................................................ 23–24 

Department of Health and Human Services 

Secretary Leavitt 

February 27, 2008 Hearing 

Anthrax Vaccine and Strategic National Stockpile .............................................. 455 

Autism................................................................................................................... 216, 231 

Avian Flu .................................................................................................................. 459

Bone Marrow Donor Program ................................................................................. 213 

Budget Submission to OMB .................................................................................... 211 

CDC: 

Funding ............................................................................................................. 442 

Sleep Disorders ................................................................................................. 444 

Tuberculosis Funding ....................................................................................... 444 


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v 

CDC—Continued 

Viral Hepatitis Funding ................................................................................... 445 

Centers of Excellence ............................................................................................... 206 

Children’s Hospital GME ........................................................................................ 429 

Community Health Centers ................................................................................ 220, 440 

Community Pharmacies .......................................................................................... 228 

Contracts .................................................................................................................. 237

Dental Health............................................................................................... 212, 213, 454 

FDA Hiring ............................................................................................................... 447 

Flu Vaccine ............................................................................................................... 461 

Head Start ................................................................................................................ 224 

Hepatitis ................................................................................................................... 229 

Infant Mortality ....................................................................................................... 434 

LIHEAP................................................................................................................. 226, 235

Medicaid........................................................................................................ 207, 214, 452 

Medicare Advantage ................................................................................................ 221 

Medicare Part D ................................................................................................... 447, 452 

Medicare Part D and Dual Eligibles ...................................................................... 430 

MEDPAC .................................................................................................................. 220 

Mental Health .......................................................................................................... 215 

National Health Service Corps ............................................................................... 441 

NIH ........................................................................................................................... 234 

NIH Open Access ..................................................................................................... 454 

Nursing ..................................................................................................................... 210 

Outcomes Research .................................................................................................. 233 

Pandemic Influenza ............................................................................................. 456, 458 

Rural Health......................................................................................................... 218, 440 

Secretary’s Oral Statement ..................................................................................... 194 

Secretary’s Written Statement ............................................................................... 196 

Skin Cancer .............................................................................................................. 230 

STOP Act .................................................................................................................. 209 

Strategic National Stockpile ................................................................................... 461 

Title VII Health Professions................................................................................ 222, 454 

Title VII Health Programs .................................................................................. 440, 445 

Tuberculosis ............................................................................................................. 229 

Unaccompanied Alien Children .............................................................................. 438 

Universal Healthcare .............................................................................................. 232 

National Institutes of Health 

Centers for Disease Control and Prevention 

Substance Abuse and Mental Health Services Administration 

Agency for Healthcare Research and Quality 

March 5, 2008 

Access to Care and Quality ..................................................................................... 527 

Access to Healthcare ................................................................................................ 526 

Agency for Healthcare Research and Policy .......................................................... 513 

American Indian/Alaska Native ............................................................................. 592 

Anti-Depressants ..................................................................................................... 544 

Behavioral Research in the NIH ............................................................................ 572 

Budget Cuts ............................................................................................................. 547 

Building and Facilities ............................................................................................ 540 


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vi 

Cerebral Cavernous Malformations ....................................................................... 591 

Clinical Trials .......................................................................................................... 546 

Comparative Effectiveness Research.................................................................. 513, 517 

Cost Savings and HIV ............................................................................................. 534 

Diabetes .................................................................................................................... 586 

Emergency Preparedness ........................................................................................ 533 

Flu Vaccine ............................................................................................................... 597 

Genes and Environment .......................................................................................... 524 

Health Care .............................................................................................................. 587 

Health Disparities ................................................................................................... 552 

Health Information Technology .......................................................................... 514, 518 

HIV/AIDS: 

CDC HIV Testing Recommendations .............................................................. 582 

CDC Spending on MSM HIV Prevention Programs ...................................... 581 

CDC’s Heightened Response to HIV/AIDS Among African-Americans Initiative ............................................................................................................. 580 

Coordination with Ryan White HIV/AIDS Programs .................................... 583 

Prevention Programs ........................................................................................ 534 

Status of Testing Initiative .............................................................................. 583 

Hospital Infections ................................................................................................... 525 

Improving Quality of Health Care ......................................................................... 593 

Infant Mortality and Racial Disparities ................................................................ 560 

Injury Prevention and Control ............................................................................... 565 

Improving Quality of Health Care ......................................................................... 593 

Mental Health Promotion and Prevention ............................................................ 529 

Methicillin-Resistant Staphylococcus Aureus (MRSA) ......................................... 525 

Minority Fellowship Program ............................................................................. 559, 589 

Mitochondrial Research ........................................................................................... 542 

Mortality Data Among Public Mental Health Patients ........................................ 567 

National Birth Defects Prevention Study .............................................................. 562 

National Child Traumatic Stress Initiative (NCTSI) ........................................... 551 

National Strategy on Pandemic Influenza ............................................................. 595 

NIH Behavioral Research for HIV Prevention .................................................. 536, 576 

NIH Budget .............................................................................................................. 524 

NIH Priority Process ............................................................................................... 539 

Opening Statements: 

Dr. Carolyn Clancy, AHRQ .............................................................................. 516 

Dr. Elias A. Zerhouni, NIH.......................................................................... 466, 469 

Dr. Julie Gerberding, CDC .............................................................................. 484 

Dr. Terry Cline, SAMHSA ............................................................................... 500 

Pancreatic Cancer .................................................................................................... 569 

Pandemic Influenza ................................................................................................. 549 

Patient Safety....................................................................................................... 514, 519 

Patient Safety Organizations .................................................................................. 526 

Programs: 

Building and Facilities ................................................................................. 532, 540 

CDC’s Division for Heart Disease and Stroke ................................................ 548 

Diabetes ............................................................................................................. 586 

Emerging Preparedness ................................................................................... 533 

Health Care ....................................................................................................... 587 

Public Health Approach .......................................................................................... 527 

Public Health Effects of Climate Change .............................................................. 563 

Racial and Ethnic Approaches to Community Health (REACH) ......................... 556 

Status of Testing Initiative ..................................................................................... 583 

Substance Abuse and Mental Health Healthcare Needs ...................................... 528 


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vii 

Underinsured Children ........................................................................................... 531 

Vaccine for Children ................................................................................................ 530 

Value in Health Care .............................................................................................. 520 

Viral Hepatitis ......................................................................................................... 593 

WiseWoman .............................................................................................................. 548 

Women and Stroke .................................................................................................. 573 

Secretary of Education 

21st Century Community Learning Centers............................. 608, 618, 638, 639, 682 

21st Century Learning Opportunities Program ................................ 608, 632, 683, 684 

2-Year Colleges ........................................................................................................ 620 

Academic Competitiveness and SMART Grants Program (ACG/ 

SMART)............................................................................................................. 626, 627 

Achievement Gap (See also NCLB Accountability) ........................................... 629–631 

Adjunct Teacher Corps ............................................................................................ 607 

Advanced Placement and International Baccalaureate Programs.......... 607, 620, 623, 

684 

After-School Programs (See also 21st Century Learning)........ 628, 629, 632, 682–684 

America Competes Act......................................................................................... 678, 679 

American Competitiveness Initiative ..................................................................... 607 

American Diploma Project ...................................................................................... 679 

Annual Yearly Progress (See NCLB AYP) 

Biography of Secretary of Education, Margaret Spellings ................................... 610 

Budget Request to OMB .......................................................................................... 623 

Building on Results: NCLB Reauthorization Blueprint ....................................... 677 

Business-Building Career Opportunities for Individuals with Disabilities ........ 693 

Career and Technical Education ........................................ 623, 627–629, 632, 678, 679 

Chairman’s Opening Remarks ................................................................................ 599 

Charter School Program .......................................................................................... 681 

Children Served by Special Education Programs.............................................. 687–689 

College Preparedness Programs (See GEAR UP; TRIO) 

Common Origination and Disbursement Contract ............................................... 648 

Contract Awards Made Without Full, Open Competition: FYs 2005–

2007 ................................................................................................................... 671, 672

Contract FTE ........................................................................................................... 673 

Curriculum: Federal Role and Focus ..................................................................... 624 

Disability Employment 101: Two Guides on Hiring the Disabled ................... 693, 694 

Dropout Problem .................................................................................................. 619, 620 

Early Intervention for Children with Disabilities ............................................. 685, 686 

Education Discretionary Appropriations ............................................................... 640 

Education Finance Issues ....................................................................................... 613 

Education Resources ............................................................................................ 631, 632 

English Language Acquisition .................................................................... 601, 603, 621 

Environmentally Friendly, Energy Efficient Schools ............................................ 633 

E-Rate Tax ............................................................................................................... 629 

Even Start ................................................................................................................ 621 

Federal Role In Education .................................................................. 601, 612, 624, 629 

Federal Share of Special Education APPE........................ 611, 616, 643, 644, 687–689 

Federal Student Aid ................................................................................................ 648 

Financial Aid Calculation Formula ........................................................................ 637 

From Neurons to Neighborhoods, National Academy of Sciences Report ........... 685 

Full-Time Employment (FTE) of the Department (See also Contract FTE) ....... 645 

FY 2009 Budget Request ............................ 602, 605–609, 617, 618, 625, 631, 635–637 

FY 2009 Proposed Budget Program Cuts .................................. 613, 616, 617, 621, 622 


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viii 

FY 2009 Proposed Budget Program Eliminations..................................... 603–605, 618 

FY 2009 Proposed Budget Program Increases ...................................................... 618 

GEAR UP Program.............................................................................. 630, 634, 639, 640 

Global Competitiveness ....................................................................................... 601, 678 

Grants for Infants and Families Program ......................................................... 686, 689 

Grants for Infants and Toddlers Program ............................................................. 686 

Grants to States (Special Education)......................................... 605, 611, 686, 687, 691 

Growth-Based NCLB Accountability Models ......................................................... 614 

Higher Education ................................................................................................. 603, 638 

Hispanic Students ................................................................................................ 621, 622 

Hispanic-Serving Institutions ............................................................................. 618, 621 

Historically Black Colleges and Universities ........................................................ 618 

IDEA Appropriation ................................................................................................ 690 

IDEA Programs (See Special Education) 

IDEA Reauthorization ............................................................................................. 616 

Impact Aid ............................................................................................................ 615, 616 

Income Growth ......................................................................................................... 639 

Indian Education and Tribal College Funding.................................. 615, 616, 634, 635 

Low-Income Families. .............................................................................................. 601 

Math and Science Education and Teacher Training................................. 607, 623, 624 

Math Now ............................................................................................................. 607, 684 

Mentoring Program ................................................................................................. 618 

Migrant and Seasonal Farmworkers Program ...................................................... 692 

Migrant Education ................................................................................................... 621 

National Assessment of Vocational Education ...................................................... 679 

Native American Students (See Indian Education) 

NCLB Accountability......... 602, 606, 607, 611, 613–615, 622, 627, 631, 676–678, 680, 

684 

NCLB AYP: Growth-Model Pilot; Differentiated Accountability.............. 606, 677–678 

NCLB Funding/Costs .................................................................. 600, 614, 615, 641, 676 

NCLB Reauthorization ........................................................................ 606, 677–678, 681 

NCLB Waivers ......................................................................................................... 614 

No Child Left Behind (See NCLB) 

Non-Competed Contract Awards in FYs 2000–2007................................. 648, 651–670 

Non-Competed Contracts Awards, by Operating Division, FYs 2000–

2007.................................................................................................................... 649–650 

OMB PART Review ................................................................................................. 616 

Outside Contracts, Annual Obligations for FYs 2000–2007 ............................. 645–647 

Pell Grant Program ..................................................................... 603, 605, 608, 627, 640 

Pell Grants for Kids Program..................................... 603, 608, 625, 626, 679–681, 685 

Prepared Statement of Secretary Spellings ........................................................... 601 

Preschool Grant Program (Special Education) .................................................. 686, 688 

Private School Accountability ..................................................................... 608, 680, 685 

Projects with Industry ............................................................................................. 693 

Reading and Math ................................................................................................... 602 

Reading First ....................................................................... 602, 607, 616, 619, 641, 642 

Rehabilitation Act (See Title I State Vocational Rehabilitation) 

Safe and Drug-Free Schools ................................................................................ 618, 619 

School Choice Programs (See also Voucher Programs)..................... 606, 607, 681, 682 

School Counselors .................................................................................................... 618 

School Improvement Grants............................................... 602, 603, 606, 607, 625, 681 

School Restructuring ............................................................................................... 607 

Special Education Per Pupil Expenditures/Costs.............................. 611, 616, 687–689 

Special Education................................ 601, 603, 611, 612, 619, 631, 640, 643, 684–690 

Student Aid (See also Pell Grant; Financial Aid; ACG/SMART) ......................... 637 


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Supplemental School Services..................................................................... 606, 618, 638 

Supported Employment Program........................................................................ 691, 692 

Teacher and Principal Education/Development ........................ 602, 612, 619, 622, 624 

Teacher Incentive Fund ...................................................................... 603, 607, 619, 625 

Teacher Recruitment ............................................................................................... 624 

Teaching Children with Disabilities (See also Special Education) .......... 612, 685, 686 

Technical Education (See Career, Technical Education) 

Title I State Vocational Rehabilitation Grants ......................................... 691, 692, 693 

Title I, ESEA, Grants to LEAs .......... 605, 606, 615, 622, 631, 640, 681, 682, 684, 691 

Tribal Schools............................................................................................... 616, 634, 635 

TRIO Programs.................................................................................... 630, 634, 639, 640 

Underperforming Schools ........................................................................................ 681 

Unsolicited Grant Awards in FYs 2005–2007.................................................... 673–675 

Upward Bound Evaluation ..................................................................................... 617 

Vocational Rehabilitation .................................................................................... 601, 692 

Voucher Programs ............................................................... 631, 635, 679, 682–683, 685 

Youth Build Green Programs ................................................................................. 633 

Social Security Administration 

Administrative Budget......................................................................................... 728, 798 

Administrative Law Judge: 

Accountability................................................................................................ 723, 816 

Application Process .......................................................................................... 815 

Attrition Rate for Support Staff ...................................................................... 725 

Discipline ........................................................................................................... 727 

Full-Time Equivalents and Administrative Law Judges .............................. 805 

Ideal Ratio of Support Staff to Administrative Law Judges ......................... 816 

Independence .................................................................................................... 732 

Productivity ................................................................................................... 723, 804 

Productivity and Accountability ...................................................................... 723 

Staffing .............................................................................................................. 724 

Support Staff......................................................................................... 725, 803, 816 

Approval/Denial Rates................................................................................. 726, 730, 802 

Biography: Michael J. Astrue, Commissioner ....................................................... 721 

California Field Office Closings .............................................................................. 728 

Chicago Region Wait Times .................................................................................... 725 

Commissioner’s Budget........................................................................................ 731, 800 

Disability Determination Services Attrition Rate ................................................. 801 

Disability Waterfall (Approval/Denial Rates) ............................................ 726, 730, 802 

Electronic Services Complement Field Offices ...................................................... 814 

Eliminating Fraudulent ‘‘Gaming’’ of the Disability System ............................... 817 

‘‘Favorable Evidence’’ Regulation ........................................................................... 816 

Field Office Consolidation ................................................................................... 728, 810 

Hearings: 

Backlog .............................................................................................................. 815 

Backlog Reduction Plan ................................................................................... 722 

Government Counsel ........................................................................................ 804 

Optimal Hearings Processing Time ................................................................ 799 

Processing Time ............................................................................................ 731, 799 

Reducing the Hearings Backlog ...................................................................... 798 

Hearings and Appeals Regulation Criticism .................................................. 731 

Introduction of Witness ........................................................................................... 695 

New Mexico Field Offices, Status of ....................................................................... 814 

Other Work and Services in Support of the Public ............................................... 800 


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Replacement of Lost or Stolen Checks ................................................................... 805 

Statements: 

Commissioner’s Full Statement for the Record ............................................. 700 

Commissioner’s Opening Statement ............................................................... 697 

Limitation on Administrative Expenses ......................................................... 717 

Office of the Inspector General ........................................................................ 720 

Payments to Social Security Trust Funds ...................................................... 710 

Supplemental Security Income ........................................................................ 712 

Web Site Access for the Visually Impaired ........................................................... 807 

Witnesses .................................................................................................................. 695

Social Security Administration 

Inspector General 

Attrition Rates in Disability Determination Offices ............................................. 819 

Audit: Administrative Law Judge Caseload Performance .................................... 734 

Audit: Hearing Office Best Practices ..................................................................... 734 

Audit: Hearing Office Staffing ................................................................................ 734 

Audit: Hearing Office Technology .......................................................................... 735 

Audit: Initial Claim Processing .............................................................................. 734 

Audit: Judge and Hearing Office Performance ..................................................... 735 

Balancing Service and Stewardship ....................................................................... 734 

Biography: Patrick P. O’Carroll, Jr., Inspector General ....................................... 745 

Continuing Disability Reviews ............................................................................... 735 

Disability Waterfall (Approval/Denial Rates) ........................................................ 819 

Improving e-Dib ....................................................................................................... 822 

Introduction of Witnesses ....................................................................................... 733 

Processing Time Improvements .............................................................................. 819 

Quantifying the Disability Backlog ........................................................................ 734 

Quick Disability Determination Process ................................................................ 820 

Regional Disparities among Administrative Law Judge Caseloads .................... 818 

Statements: 

Inspector General’s Full Statement for the Record ....................................... 736 

Inspector General’s Opening Statement ......................................................... 734 

Support Staff for Administrative Law Judges ...................................................... 818 

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wwoods2 on PRODPC68 with HEARING