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89–037 PDF 2004

S. Hrg. 108–260

NOMINATION OF JOEL D. KAPLAN

HEARING

BEFORE THE

COMMITTEE ON 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON THE

NOMINATION OF JOEL D. KAPLAN, TO BE DEPUTY DIRECTOR, OFFICE 

OF MANAGEMENT AND BUDGET

JULY 29, 2003

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

ARLEN SPECTER, Pennsylvania 

ROBERT F. BENNETT, Utah 

PETER G. FITZGERALD, Illinois 

JOHN E. SUNUNU, New Hampshire 

RICHARD C. SHELBY, Alabama 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

RICHARD J. DURBIN, Illinois 

THOMAS R. CARPER, Deleware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

MICHAEL D. BOPP, Staff Director and Counsel 

JOHANNA L. HARDY, Senior Counsel 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel 

SUSAN E. PROPPER, Minority Counsel 

JENNIFER E. HAMILTON, Minority Research Assistant 

AMY B. NEWHOUSE, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Collins ................................................................................................. 1 

Senator Lautenberg .......................................................................................... 2

Senator Coleman .............................................................................................. 7

Senator Akaka .................................................................................................. 11

WITNESS 

TUESDAY, JULY 29, 2003

Joel D. Kaplan, Deputy Director, Office of Management and Budget 

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

Biographical and professional information requested of nominees .............. 17

Pre-hearing questionnaire and responses for the Record ............................. 24

Post-hearing questions and responses for the Record from: 

Senator Collins .............................................................................................. 94

Senator Lautenberg ...................................................................................... 95

Senator Lieberman ....................................................................................... 105

Senator Akaka ............................................................................................... 109

(1)

NOMINATION OF JOEL D. KAPLAN 

TUESDAY, JULY 29, 2003

U.S. SENATE, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 10:52 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Susan M. Collins, 

Chairman of the Committee, presiding. 

Present: Senators Collins, Coleman, Akaka, and Lautenberg. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. The Committee will be in order. 

Today the Committee on Governmental Affairs is holding a hearing to consider the nomination of Joel Kaplan to be the Deputy Director of the Office of Management and Budget, a key position 

within the Federal Government. 

The Office of Management and Budget has many significant and 

cross-cutting responsibilities for the Executive Branch. Critical to 

the position we are examining today, OMB provides the President 

with recommendations in formulating his budget and oversees the 

administration of the budget once the appropriations bills become 

law. 

As Deputy Director of the Office of Management and Budget, if 

confirmed, Mr. Kaplan will have many responsibilities, but probably one of the most important will be helping the President build 

a Federal budget that is fiscally responsible and responsive to the 

needs of the American people. This will be a difficult job in a time 

of spending imperatives and revenue constraints. 

Earlier this month, the Office of Management and Budget released the mid-session review of the budget which did not paint a 

rosy picture. The Federal deficit is now estimated to be $455 billion 

for fiscal year 2003, compared to $304 billion that OMB had predicted in February of this year. In addition, the deficit for fiscal 

year 2004 is projected to be $475 billion. 

Although the dramatic turnaround from surplus to deficit in the 

span of 2 years is troubling, it is important to bear in mind that 

economic and technical factors, much more so than tax cuts and 

spending increases combined, are the single biggest cause of our 

fiscal woes. It is important to remember also that these deficit projections are just that, projections. They are not set in stone, nor are 

they guaranteed. Indeed, if there is any certainty, it is that they 

will change. In the time that I have been in the Senate, never once 

have the projections of either OMB or the CBO, the Congressional 

2

Budget Office, regardless of whose administration it is or who is in 

charge of Congress, proved to be accurate. 

We must now look forward and find ways to bring fiscal restraint 

to the government and show the American taxpayers that the Federal Government can operate within a budget and work effectively. 

In his Fiscal Year 2004 Budget, the President proposed several 

budget enforcement mechanisms, including biennial budgeting, 

automatic continuing resolutions and the extension of the pay-asyou-go provisions. Additionally, several Senators have introduced 

legislation this year that would put enforcement mechanisms in 

place. We must examine these options to determine whether or not 

they are the proper tools to help bring accountability to the Federal 

budget, but nothing can really replace good old-fashioned budget 

responsibility. 

As I mentioned, Mr. Kaplan’s job will not be an easy one. His 

background as an artillery officer in the Marine Corps is undoubtedly useful training for the many battles ahead. Implementing a 

Federal budget is never easy, but with strong guidance from the 

Office of Management and Budget, under the leadership of Director 

Bolten, and with the addition of Mr. Kaplan, I am confident that 

we will move in the right direction. 

Mr. Kaplan will face many challenges if confirmed. I am very 

pleased he has agreed to the President’s request that he serve in 

this position because I have concluded that he possesses the background, intelligence and experience needed to be a successful OMB 

Deputy Director; that is, assuming all goes well at this hearing 

today. 

So I want to thank the witness for being with us today, and I 

would now like to yield to Senator Lautenberg for any comments 

that he might have. 

OPENING STATEMENT OF SENATOR LAUTENBERG 

Senator LAUTENBERG. Welcome, Mr. Kaplan. I am not accustomed to calling people as young as you ‘‘mister,’’ but I am going 

to observe the protocol here. 

And I want to join you, Madam Chairman, in welcoming the 

President’s nominee to be Deputy Director of OMB to the Committee this morning. Mr. Kaplan is obviously an unusual young 

man, sterling academic credentials and having clerked on the 

Fourth Circuit Court and for Supreme Court Justice Antonin 

Scalia, who has New Jersey roots, I do not know if you remember. 

Apparently, you have served in the Marine Corps. Was that on 

active duty? 

Mr. KAPLAN. Yes, Senator, it was. 

Senator LAUTENBERG. Four years’ worth? 

Mr. KAPLAN. Just under 4 years, Senator. 

Senator LAUTENBERG. Well, having said all of those nice things, 

I am concerned about the nomination, and I will tell you why. Because as bright as you obviously are, I do not see anything in your 

experience, prior business or government work experience, for helping you prepare for this post. And it is, as everyone knows, the No. 

2 position at the Office of Management and Budget—the agency 

charged with preparing the President’s budget request and overVerDate 0ct 09 2002 08:09 Feb 10, 2004 Jkt 089037 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\89037.TXT SAFFAIRS PsN: PHOGAN
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seeing the administration’s procurement, financial management, 

information technology and regulatory policies. 

Now, aside from the question of that experience, there is another 

matter that warrants some discussion. It is no secret that you were 

in Florida to work for the Bush-Cheney campaign during the recount that followed the 2000 election. 

One aspect of that sorry moment that I still find troubling is that 

on the Wednesday before Thanksgiving, there was a court-ordered 

manual recount being conducted in the Miami, Dade County building. I am not telling you anything new, obviously. When the Canvassing Board attempted to move the recount up to the 19th floor, 

where the tabulating machines were, a group of protestors spontaneously assembled and caused enough commotion and fear that the 

Canvassing Board was intimidated enough to call the recount off. 

It was never resumed. 

That group, we discovered later, did not really consist of irate 

local Republican voters, as was portrayed, it was largely a group 

of Republican staffers flown down by the campaign to Florida. The 

group intimidated, physically accosted county workers and Democratic campaign staff. They did everything they could to disrupt the 

recount, and they succeeded. We are not rehashing who is President. President George W. Bush is President, period. So that is not 

where we are at. But mobs are not supposed to rule in this country, 

but on that day one did. 

And then in the pre-hearing interviews with staff, you indicated 

that you were not part of the mob, that you were in the tabulating 

room on the 19th floor as an official Republican observer, and there 

is no reason to doubt that. But also there was an acknowledgment 

that you knew several of the people who were in the mob. 

And I am curious to know why, when the Canvassing Board 

asked people from both parties to help calm things down, that you 

did not stand up, with your education, your skills, you did not kind 

of stick your head out the door and say to these friends—you say 

that you knew a lot of people—‘‘Do not worry. We have our observers. Everything is above board.’’

And I think Mr. Kaplan also called the affair the ‘‘Brooks Brothers’’ riot. It seems to suggest there was some kind of whimsy about 

the episode, and there was not anything funny about a mob trying 

to prevent people from counting votes, whether the people in the 

mob are wearing brown shirts or button-down shirts. 

So I look forward to hearing Mr. Kaplan’s opening statement and 

your version of what happened that day. 

I thank you, Madam Chairman, for conducting this hearing. 

Chairman COLLINS. Thank you, Senator Lautenberg. 

I want to point out that Mr. Kaplan currently is serving as Special Assistant to the President in the Office of the Chief of Staff. 

We have talked about his Marine experience and his clerkships. He 

has filed responses to a biographical and financial questionnaire, 

answered pre-hearing questions submitted by the Committee, answered questions in a Committee staff interview and had his financial statements reviewed by the Office of Government Ethics. 

Without objection, this information will be made part of the hearing record, with the exception of the financial data which are on 

file and available for public inspection in the Committee’s office. 

4

Mr. Kaplan, our Committee rules require that all nominees give 

their testimony under oath, so I would ask that you stand and 

raise your right hand. 

Do you swear the testimony you will give to the Committee will 

be the truth, the whole truth, and nothing but the truth, so help 

you, God? 

Mr. KAPLAN. I do. 

Chairman COLLINS. You may be seated. 

Mr. KAPLAN. Thank you, Madam Chairman. 

Chairman COLLINS. Mr. Kaplan, do you have any family members that you would like to introduce to the Committee before you 

proceed with your written statement? 

Mr. KAPLAN. If I may, Madam Chairman. 

I would like to introduce my mother, Rosalind Kaplan, my sister 

Sharon Chabot, my niece Jessica Chabot, who have all come down 

from Massachusetts to be here with me today. I would also like to 

introduce Lee Sax, who is a former assistant secretary of the Treasury in the Clinton Administration and is here to show strong bipartisan support for my nomination and also because he is my cousin. 

[Laughter.] 

Chairman COLLINS. That may have undercut his credibility just 

a little bit. 

Mr. KAPLAN. He has told me that several times, Madam Chairman. 

Chairman COLLINS. Thank you. You may proceed with your 

statement. 

TESTIMONY OF JOEL D. KAPLAN, TO BE DEPUTY DIRECTOR, 

OFFICE OF MANAGEMENT AND BUDGET 

Mr. KAPLAN. Thank you, Madam Chairman and Senator Lautenberg. I appreciate the opportunity to be here this morning and am 

deeply honored to come before you as the President’s nominee to 

be Deputy Director of the Office of Management and Budget. 

I would like to take this opportunity to express my gratitude to 

the President for nominating me to this position and also to Director Bolten for his confidence in me. If confirmed, I will work tirelessly to meet their high standards and their expectations. 

Since the start of the administration, I have had an opportunity 

to work with many officials at the Office of Management and Budget and throughout the Executive Branch on the development and 

implementation of administration policy. Through that experience, 

I gained a tremendous appreciation for both OMB’s important role 

in that process and for the dedication and skill of the professionals 

who work there. 

The budget of the Federal Government represents the judgment 

of Congress and the President about how much of the people’s 

money to spend and for what purposes. The President’s priorities, 

which are reflected in his budget submission, are winning the war 

on terror, protecting the homeland, and strengthening the economy. 

If confirmed, I will work faithfully to ensure that we fund those 

priorities, while at the same time setting a course that moves our 

Nation’s budget back towards balance. 

The other important role OMB plays, which I know is of particular interest to the Members of this Committee, is improving the 

5

management of the Executive Branch. The President and his administration share your commitment, Madam Chairman, to giving 

the American people the well-functioning and efficient government 

they deserve and to energizing and empowering the thousands of 

hardworking Federal employees who come to work and serve their 

country every day. 

This Committee has shown great leadership in this area and, if 

confirmed, I look forward to working with you to make progress on 

the President’s Management Agenda and your management priorities. In fulfilling these important responsibilities, Madam Chairman, I will work diligently to make sure that OMB’s relationship 

with this Committee, and with the Congress, is an open and productive one. 

Thank you again for the opportunity to appear this morning, and 

I will look forward to answering your questions. Thank you. 

Chairman COLLINS. Mr. Kaplan, I am going to start with the 

three standard questions we ask all nominees, and then I am going 

to defer to Senator Lautenberg for his questions so that he can 

keep a previous commitment. 

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

which might present a conflict of interest with the duties of the office to which you have been nominated? 

Mr. KAPLAN. No, Madam Chairman. 

Chairman COLLINS. Second, do you know of anything personal or 

otherwise that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you have 

been nominated? 

Mr. KAPLAN. No, Madam Chairman. 

Chairman COLLINS. And, third, do you agree, without reservation, to respond to any reasonable summons to appear and testify 

before any duly constituted committee of Congress if you are confirmed? 

Mr. KAPLAN. Yes, I do, Madam Chairman. 

Chairman COLLINS. Senator Lautenberg. 

Senator LAUTENBERG. Thank you very much, Madam Chairman. 

Mr. Kaplan, I will try to be brief because you heard the couple 

of concerns that I raised. 

I want to talk about what you think the scope of your responsibilities within OMB might be and what do you bring, by way of 

experience, to the job that would prepare you for this? 

Mr. KAPLAN. Sure, Senator. The scope of the responsibilities of 

the office, as the Chairman described them, are quite broad and I 

think important ones. The two primary responsibilities have to do 

with helping to design, propose, and then implement the President’s budget. And as I mentioned briefly in the opening statement, 

helping to improve the management of the Executive Branch. 

As to the first primary responsibility, I have spent the last several years working in the Office of the Chief of Staff, directly involved in designing, coordinating and overseeing the implementation of administration policy. In that capacity, I participated 

throughout the process with many officials at the Office of Management and Budget and throughout the Executive Branch in determining how those policy initiatives of the President fit into the 

President’s priorities, as reflected in the President’s budget. 

6

I have participated in numerous discussions and reviews of the 

budget at every stage in the budget process from the review of the 

agencies’ submissions, which typically takes place in September, 

through the OMB’s pass-back of those requests, to ensure that the 

President’s priorities and policies are properly reflected in the 

agency budgets, through to the preparation and presentation of the 

President’s budget and review of that document, and through the 

administration’s efforts to work with the Congress in the budget 

process, and then, later in the year, through the appropriations 

process. 

So I think I have had, Senator, a good experience working in this 

administration. I am quite familiar with most, if not all, of the significant officials in the agencies that I will be charged with working 

with, and certainly in OMB as well and, for that matter, with the 

officials in the White House, who I have worked very closely with 

over the last several years. 

In fact, it is because of these relationships and because of the 

work I have done with those officials that I believe the President, 

his senior advisers and Director Bolten have developed the confidence in me that I do have the qualifications and the abilities to 

execute these responsibilities. 

Senator LAUTENBERG. Because I have a commitment to the 

Chairman that I am going to wrap up very quickly, so I do not 

want to interrupt your testimony, but I do want to just move along. 

And that is the experience that you just presented for us to review 

is mostly on the budget side of things. It is the Office of Management and Budget. It is really an arm of the chief executive that is 

involved with the management side of things. 

Do you think you have had any experience in that area that 

would enable you to move into this job and participate in a full 

fashion? 

Mr. KAPLAN. I do, Senator. I think I have had two particularly 

relevant experiences; the first that the Chairman mentioned in her 

remarks was my experience—and you did as well, Senator—was 

my experience as an officer in the Marine Corps. 

Senator LAUTENBERG. Platoon leader. 

Mr. KAPLAN. Platoon leader and then an executive officer. 

Senator LAUTENBERG. How many people in the platoon? 

Mr. KAPLAN. Forty-five in the platoon, 150 in a battery, of which 

I was the executive officer. 

Senator LAUTENBERG. They are quite different because here, regardless of whether you are in the majority party or not, it is awful 

hard to command people to do things, as you have probably seen 

already, but if you would, just give me a word of comment about 

my review of those what I call kind of dark days for everybody. 

Again, we are not discussing outcome. The outcome is what it was 

and what it is. 

But why you, with all of the training that you have had in the 

law, and the skills, the academic background that you bring, and 

I am sure accompanying that is a fairly deep conscience—I would 

bet that your family has produced that kind of an awareness in 

you—why did you not say, hey, let’s cut this out? 

7

You knew what was happening. I am not saying that you participated, but why did you not object so that people would hear your 

voice? 

Mr. KAPLAN. Senator, my role in all of the proceedings in the recount up until that point, and in Miami Dade on that date, was as 

an observer/representative of the Bush-Cheney campaign to ensure 

that the activities of the Canvassing Board were properly viewed 

by our campaign. The Democrats had representatives there, as 

well—to register any objections and to take note of the process. 

That is what I was there to do, and that was my intention in attempting to get into the room, where I was permitted and invited 

to be. I was not in charge of the people who were congregated outside. 

Senator LAUTENBERG. I understand. But I know enough about 

you, from reading about you, seeing your family here and the pride 

that they share and that we will share in your life thus far as an 

upstanding young person, but I bet anything that you would never 

walk by an attack in the street, where someone was being victimized or intimidated and let it pass. Your training as a Marine 

would not permit it, and I served 3 years in the Army during the 

war, and I know I could not do it, and I do not believe that you 

are of any different character. But it was disappointing that even 

though you were officially an observer, you were there as a responsible human being and that you were not disturbed in any way by 

the things that were going on. 

Mr. KAPLAN. Respectfully, Senator, I certainly hope that I would 

do what you described if I were to come upon a scene like the one 

you described. What I saw before I went into the room was a group 

of people protesting, and I didn’t see anything that suggested any 

violence or any violent activity preparing to take place. 

Senator LAUTENBERG. Thank you very much, Madam Chairman. 

Thank you, Mr. Kaplan. 

Chairman COLLINS. Senator Coleman, I have not yet questioned 

the witness because I deferred to Senator Lautenberg, who was 

under a time constraint. If you are under a similar time constraint, 

I would be happy to yield to you for your questions first. 

OPENING STATEMENT OF SENATOR COLEMAN 

Senator COLEMAN. Madam Chairman, I will defer to my Chairman, and then would love to follow up a little bit on just the last 

line of questioning. And being an ex-protestor myself, by the way, 

I would love to explore, but I defer to my Chairman. 

Chairman COLLINS. Thank you. 

Mr. Kaplan, before I do go to my questions, I just want to clarify 

one issue, and that is were you a participant in the demonstration 

that Senator Lautenberg mentioned this morning? 

Mr. KAPLAN. Madam Chairman, I was present while there was 

protesting taking place. My responsibilities and role was to go into 

the room and be an official observer. So, while I was there, I was 

not, to my recollection, a participant, as I think Senator Lautenberg envisions. 

Chairman COLLINS. Thank you. That is a helpful clarification. 

I am going to ask you questions in three areas. First, I want to 

talk to you about the budget deficit; second, I want to talk about 

8

certain procedural reforms that the President has proposed; and, 

third, I want to talk to you about funding for some specific programs. Even though I know you are not responsible right now for 

preparing the budget, you will be assisting in that regard going forward, and I want to make sure that you are aware of certain programs that I think are of high priority. 

First of all, on the budget deficit, as I mentioned in my opening 

remarks, OMB has significantly revised the budget deficit upward 

from its February estimation. It is $150 billion more than OMB estimated in February of this year, and it is so for very good reasons; 

the cost of the war, the cost of homeland security, and most of all, 

the decline in the economy has meant that revenues are far lower 

than anticipated. 

For that reason, OMB Director Bolten has stated that these levels of deficits are ‘‘manageable’’ if we continue pro-growth economic 

policies and exercise serious spending discipline. 

I would also note that the deficit, as a percentage of GDP, remains at a manageable level. But how long can the Federal Government continue to run so-called manageable deficits before we 

start seeing an impact on the economy, on interest rates, on our 

ability to function in a healthy economy? 

Mr. KAPLAN. Thanks, Madam Chairman, for that question. 

I think you have asked the right question which is, with the deficits that we are currently running, which I think, as you correctly 

note, although large in nominal terms, are not by any means deficits that are, as a percentage of GDP, beyond what we have seen 

even in recent years. 

It is difficult to say how long deficits of this magnitude could be 

sustained before there would be an impact on interest rates. I 

think what is important to note, as Director Bolten did when discussing the mid-session review, is that we have not seen the impact 

on interest rates that we’d be concerned about so far, but it is, as 

he said, a legitimate subject of concern, and it is important that we 

exercise and continue the types of economic policies and fiscal restraint that will allow us to bring the deficit into a declining trajectory and back towards balance. 

The projections that were released at the time of the mid-session 

review do show, Madam Chairman, as you know, that by 2006 the 

deficit, as a percentage of GDP, will be half of what it is projected 

to be this year, and I believe it is that budget path that Director 

Bolten was discussing in terms of its manageability. But it is important that we continue these policies and that the Congress work 

with the administration to exercise the fiscal restraint that will put 

us on that path. 

Chairman COLLINS. The President has proposed that there be an 

automatic continuing resolution, and in many ways, that is a very 

appealing concept because, when Congress does not finish its work 

by the start of the fiscal year, there is always a battle to get a continuing resolution passed. 

Of course, ideally, we ought to finish all of the appropriations 

bills before October 1st. However, in the President’s proposal, the 

automatic continuing resolution would be funded at either the 

President’s proposed budget level or the prior fiscal year’s level, 

whichever is smaller. 

9

That concerns me because the President may have zeroed out 

programs that Congress will restore almost certainly. That happens every single year. And it seems to me that we are tilting the 

balance of power toward the Executive Branch if, rather than funding at the previous year’s level, a figure that has gone through 

Congress and been signed into law, we use the President’s proposed 

budget if it is a lower figure. Could you comment on that? 

Mr. KAPLAN. Yes, Madam Chairman. That is the President’s proposal. I understand the concern that you raise, and were the Congress to take action on the President’s proposal, I would look forward, if confirmed, to working with you, to minimize any of the 

concerns that you have along those lines. 

All of the President’s proposals, reflected in his budget submission that deal with reforms of the budget process, are designed to 

help the administration and Congress put in place the type of discipline, Madam Chairman, that you spoke of. Discipline that will 

be necessary if we are to reduce these deficits and to get back on 

a path towards balance. I think, that is the intent of the automatic 

continuing resolution proposal, as well as the others in the President’s submission. 

Chairman COLLINS. Let me give you an example of one such program which the President’s budget, for both fiscal years 2003 and 

2004, would be zeroed out that I can virtually predict will be restored by Congress, and that is the Rural and Small School 

Achievement Act. This is an education program that I worked very 

hard on a bipartisan manner to incorporate into the No Child Left 

Behind Act legislation, which I was pleased to support and helped 

to draft. 

Part of ensuring our commitment to Leave No Child Behind is 

to make sure that we leave no child of rural America behind. The 

Rural and Small School Achievement Act, which is the first of the 

rural education programs, has delivered needed money and flexibility to small rural school districts. We crafted this legislation to 

respond to a problem in which small school systems receive very 

small funding streams from numerous Federal programs, none of 

which is sufficient to really accomplish any goal. So we allowed this 

money to be combined into one block grant program, essentially, 

under the rural education program and then used for whatever is 

the greatest need of that district. 

Of the 4,700 eligible school districts nationwide this year, 4,028 

applied and received funding. I think that shows just how well received this program was. The State of Maine has received $1.9 million under this program, and it has made a real difference in the 

lives of children attending rural small schools. 

Let me give you an example. For Fiscal Year 2003, the Bradley 

School Department in Penobscot County, Maine, which has 104 

students in the whole department, is slated to receive about 

$21,000 through the rural education program. The previous year, 

Bradley’s entire non-Title I Federal allocation totalled only about 

$4,400. So now the total Federal money going to Bradley in Fiscal 

Year 2003 will be more than $25,000. That is enough in Bradley, 

Maine, to hire a reading specialist, to update computer systems or 

provide for extended day learning opportunities, and that is typical. 

10

I could give you many other examples of school systems in Maine 

that have been able to use that small pot of money to make a real 

difference, and this does give them the flexibility. 

So I want to express to you my disappointment that the administration has zeroed out a program that is so in keeping with the 

principles of flexibility that the administration has embraced, and 

I realize you were not involved or at least I do not think you were 

involved in that decision—if you were, I would not tell me that, if 

I were you. [Laughter.] 

But I would urge you to take a look at the funding for that program and also to think about it in the context of the continuing 

resolution proposal, where a program that almost certainly will be 

restored has been zeroed out. And I would ask for your comments. 

Mr. KAPLAN. I certainly will, Madam Chairman, consider, if confirmed, everything that you have just said. I appreciate, as I know 

the people of rural Maine do, your support for providing the resources that they need to those rural districts. 

The President’s proposal for No Child Left Behind was to provide, as you know, large, flexible amounts in grants to the States 

so that they would have the ability to take care of the specific concerns and the specific circumstances of their State. 

Again, I will, if confirmed, look forward to working with you on 

the particular program that you have described. Of course, if Congress sees fit to fund the program, I will work diligently to make 

sure it is implemented according to Congress’ direction. 

Chairman COLLINS. Thank you. Senator Coleman. 

Senator COLEMAN. Thank you, Madam Chairman. 

I would just briefly follow up on my distinguished colleague from 

New Jersey’s questions about protest. It kind of caught my interest. 

I really protested in the sixties, and here I am in the U.S. Senate. It is kind of part of my life. But just reflecting on Florida, and 

the Chairman I know asked that question, but I just want to clarify, you were an official observer of a campaign; is that correct? 

Mr. KAPLAN. That’s right, Senator. 

Senator COLEMAN. And you were not there to organize, plan or 

participate in protests. 

Mr. KAPLAN. That’s right, Senator. 

Senator COLEMAN. And I must say, Madam Chairman, I do not 

look at those as the dark days. It is part of American democracy. 

Things get difficult, and we come back stronger than ever. So I just 

have a different reflection on that, but appreciate and understand 

your position. 

Senator Lautenberg also asked or raised a question about experience, noting that you have tremendous experience on the budget 

side. Let me explore, though, on the management side, if I can. 

Give me some of your reflections on what OMB can do to help 

agencies better manage the Federal Government. What are your 

thoughts on that? 

Mr. KAPLAN. As you know, Senator, shortly after the President 

came into office, the Office of Management and Budget designed 

the President’s Management Agenda, which focused on five particularly problematic areas in managing the Federal Government that 

were cross-cutting across the agencies. 

11

OMB’s role is to work with Congress and others who watch these 

things to identify what the major management challenges are to 

the Executive Branch and to focus the attention of the agencies on 

those challenges, which the administration has done with the 

President’s Management Agenda and with the design of the scorecard. The scorecard is intended to highlight the progress or lack 

thereof on occasion, of agencies and to incentivize them to take action to address these longstanding problems of government. 

OMB, because of its central role, also has the ability to work 

with the agencies to share with them the best practices that other 

agencies of government have developed in addressing these challenges in their agency. So I think it is a critical role. 

The President recently nominated, and the Senate confirmed, 

Clay Johnson to be the Deputy Director for Management. I know 

he is as enthusiastic as the Members of this Committee are and, 

if confirmed, I will work very hard with Deputy Director Johnson 

and with Director Bolten to try to implement the President’s Management Agenda and the other significant management challenges 

that the Committee is interested in. 

Senator COLEMAN. Thank you. I would just follow up a comment 

about experience, and I often reflect on my own experience. I talk 

about being at the bottom of the political food chain being a mayor. 

Your experience working in the Marine Corps, platoon leader, executive officer, you were dealing with people on a one-to-one basis, 

and I take it responsible for making sure things get done. 

Mr. KAPLAN. Yes, Senator. That’s correct. 

Senator COLEMAN. I think that is very good experience, by the 

way, and I would hope that you bring that same mentality, working now with your commanding officer, Josh Bolten, and the President, to make sure things get done. 

I will just raise, however, one issue, and it was your last comment in regard to the Chairman’s comment about a particular program. Many of us get involved in discussions with OMB about programs. I am involved right now in a discussion about sugar, and 

your comments were that you will work hard to implement the will 

of Congress. I hope you reflect on that and take that to heart. We 

sometimes have some different perspectives, as part of the legislative body, on this beautiful democracy and balance. I think it is important that OMB understands it has responsibilities regarding the 

budget, and see it as a whole and look at the bottom line. We do, 

and I want to take you at your word that you will work hard to 

implement the will of Congress in some of these programs. That is 

what we get elected to do, and I think that is part of the job. 

Mr. KAPLAN. I will, Senator. Thank you. 

Senator COLEMAN. With that, no further questions, Madam 

Chairman. 

Chairman COLLINS. Thank you, Senator. Senator Akaka. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you very much, Madam Chairman. I join 

you in welcoming our nominee today. In the interest of time, I ask 

that my statement be included in the record. 

Chairman COLLINS. Without objection. 

[The prepared opening statement of Senator Akaka follows:]

12

PREPARED OPENING STATEMENT OF SENATOR AKAKA 

Thank you very much Madam Chairman. I join you in welcoming our nominee 

today. 

At the nomination hearing of OMB Director Bolten last month, I noted that it is 

a President’s prerogative to implement management proposals such as the President’s Management Agenda. We must ensure, however, that these management proposals are an improvement. 

The success of any management policy requires recruiting and retaining the right 

people with the right skills. OMB should foster government’s ability to retain current Federal workers and attract those considering Federal service. I am concerned 

that the administration’s contracting out policies may do just the opposite. Just last 

week, I participated in two hearings which raised concerns over the costs of implementing the administration’s competitive sourcing initiative. 

As the Ranking Member of the Senate Subcommittee on National Parks, I believe 

that the cost of conducting public private competitions may have serious consequences for visitor services and seasonal operations. But, the Parks Service is not 

alone. Government wide, managers are working to find creative ways to implement 

the administration’s contracting out policies. In fact, there is currently no reliable 

estimate of the government wide cost of the administration’s outsourcing proposals. 

I believe the administration can do more to promote an employee-friendly work 

environment. Management proposals should be discussed with Federal employees, 

not handed down as orders. There have been actions that have sparked alarm and 

distrust among Federal employees who are concerned for their jobs. We should respect and value the government’s most critical asset—its workforce. 

Mr. Kaplan, if you are confirmed as Deputy Director of OMB, I look forward to 

working with you to ensure that Federal agencies have adequate resources and personnel to fulfill their missions. I hope you will make it your priority that sufficient 

resources are made available to agencies to enhance the government’s efforts to recruit, retain, and manage the Federal workforce. 

Mr. Kaplan, I look forward to your testimony.

Senator AKAKA. Mr. Kaplan, in response to one of my questions 

at Director Bolten’s nomination hearing, he said that OMB should 

ensure that Federal agencies have the resources to compete effectively in public-private competitions, including resources training. 

I have a keen interest in workforce and training. 

If confirmed, how would you ensure that resources are made 

available for training Federal workers to conduct public-private 

competitions? 

Mr. KAPLAN. Senator, if confirmed, I think what we would do at 

OMB is to sit down with each agency, on an individual agency-byagency basis, and look at what their needs are, look at what their 

capacity is, look at what their mission is and try to figure out in 

the budget process what they need in order to accomplish the mission that they have set out for themselves in this area and that the 

administration has worked out with them. 

As we enter into the 2005 budget process, I will commit to you, 

Senator, if confirmed, to very closely follow those developments and 

to work with the individual agencies to make sure that they have 

the resources they need to do what is expected of them and what 

they expect of themselves. 

Senator AKAKA. Thank you. We are looking forward to working 

with you, too. 

Last week, Angela Styles, the Administrator for Federal Procurement Policy, testified before this Committee that OMB will work 

with agencies to establish agency-specific plans for contracting out 

Federal jobs. Yet, we know that many agencies lack the funds to 

effectively participate in these public-private competitions. 

13

As Deputy Director of OMB, how will you work to ensure that 

the President’s budget includes sufficient resources to support 

these plans? 

Mr. KAPLAN. Senator, if I may, I think I will give you roughly 

the same answer that I did on the last question, which is that I 

will work very closely with the agencies, as those plans are being 

developed for 2005 and beyond, to look at them in light of the resources that each agency has because, as you point out, Senator, 

they do come to the table with different resources, with different 

abilities and capacity, and we will work with them, and I know Administrator Styles will as well, on making sure that they have the 

resources they need. 

Senator AKAKA. The President’s Management Agenda includes 

several government-wide management initiatives. However, there 

are management challenges not addressed in the management 

agenda, such as contract management, which has been on GAO’s 

high-risk list for 13 years. 

My question to you is how will you ensure that the President’s 

budget request addresses management challenges, such as contract 

management and also other areas not in the President’s Management Agenda? 

Mr. KAPLAN. Yes, Senator. I don’t want to suggest that the President’s Management Agenda represents all of the challenges that 

the government agencies face in managing their agencies. As you 

point out, GAO has done a lot of work, as has this Committee, in 

identifying other very significant challenges that agencies face 

across the government. 

I know that Deputy Director Johnson has already sat down with 

GAO and is going through the list of concerns on GAO’s high-risk 

list and trying to design initiatives, and programs, and approaches 

to dealing with those problems. I expect, if confirmed, that I will 

work closely with Deputy Director Johnson and with Director 

Bolten to make sure that we are addressing those concerns and are 

dedicating the resources we need to address them. 

Senator AKAKA. You have stated that the primary management 

tool of the administration is the Program Administration Rating 

Tool, known as PART. The Government Performance and Results 

Act, which is known as GPRA, requires that agencies develop performance plans and also report on their performance. Could you explain how PART and GPRA differ and how one enhances the other? 

Mr. KAPLAN. I can, Senator, or at least I can try. The act, as I 

understand it, was designed to require agencies to put together 

performance plans that reflect their overall goals and objectives. 

PART, which has been designed and implemented as part of the 

President’s Budget and Performance Integration Initiative, is designed to look at individual agency programs, starting with 20 percent of those programs last year, adding an additional 20 percent 

this year and 20 percent every year moving forward, to make sure 

that we’re asking the right questions about each of those programs, 

to measure those programs and to be able to determine whether 

they are doing what Congress wanted them to do in authorizing 

them and appropriating the funds for them. 

And the idea is that once we can measure how successful those 

programs are, we will have information to evaluate them and make 

14

further budget decisions and will be able to share that information 

obviously with Congress to help inform your decisions about what 

programs you want to authorize and appropriate funds for going 

forward. 

So my understanding is that PART is intended to complement 

and essentially meet the goals and requirements of the act, even 

if the form is not specifically what was contemplated and described 

there. So it is supposed to, as I understand it, meet Congress’ intention and this Committee’s intention in working on the act. 

Senator AKAKA. During your pre-hearing interview, you stated 

that you will work with the Deputy Director of Management to 

maintain OMB’s strong commitment to improve management policies and practices across the Federal Government. 

Do you believe that the full requirements of the Chief Financial 

Officers Act of 1990 and the Klinger-Cohen Act will be extended to 

the Department of Homeland Security? As Deputy Director, how 

will you ensure that this occurs? 

Mr. KAPLAN. Senator, my understanding, specifically with regard 

to the requirements of the CFO Act, is that OMB will require DHS 

to conform to the substantive requirements of the act. With respect 

to Klinger-Cohen, I know that OMB is working very closely with 

the Department of Homeland Security to review its information 

technology plans. The specifics of the act I cannot speak to, Senator, but I will certainly look into it and can get back to you, if that 

is alright, Senator. 

Senator AKAKA. Thank you very much, Madam Chairman. 

Chairman COLLINS. Thank you, Senator Akaka. 

Mr. Kaplan, I want to follow up on an issue that Senator Akaka 

raised that is of great concern to me as well. I was pleased last 

week when Administrator Styles announced that OMB had abandoned its government-wide goals for competing commercial positions in the Executive Branch because I always felt that having a 

government-wide goal was an arbitrary approach to what should be 

a worthwhile system of reducing costs and improving performance 

in the Executive Branch. Individual agency goals, it is my understanding, still remain. 

What assurances can you give us that those will not be subject 

to the same kinds of problems that afflicted the government-wide 

goal? In other words, would it not be better to, instead of a goal 

applied to each agency, use a cost reduction or a performance 

measure, rather than an arbitrary percentage? 

Mr. KAPLAN. Madam Chairman, I think cost reduction and performance-based measures are worth looking at. As you have described, this is an initiative that, as I understand it, has evolved 

considerably from the way it was initially proposed in 2001, in 

large part because of the very legitimate concerns that Members of 

this Committee have raised and other Members of Congress. 

And I know Director Bolten, for one, heard in his confirmation 

process loud and clear the Committee’s concerns and is committed 

to trying very hard to address those concerns, beginning with the 

report that he sent up last Thursday. 

As to the specific agency plans that are described in that report, 

I don’t believe they are arbitrary. In fact, in response to the Congress’ concerns, OMB has worked very closely with the agencies to 

15

ensure they are not arbitrary, but rather that they are the result 

of considered research and sound analysis, where OMB sits down 

with the agency, discusses their workforce, the particular challenges they face, the other alternatives in the marketplace, whether they have the capacity to actually do competitions and what is 

a reasonable number for that agency based on their mission. 

So I think what OMB is trying to do here is to avoid the arbitrary goals or targets that were the subject of some considerable 

concern, and we are making real progress on that, and I will look 

forward, if confirmed, to continuing to work with you on that. 

Chairman COLLINS. I also want to follow up briefly on a comment 

made by my distinguished colleague from Minnesota, and that is 

to emphasize to you how important it is that OMB not only work 

with Congress, but also follows the will of Congress when it is expressed in law. 

And I am going to submit for the record the details of this because I do not expect you to have the answer, but this spring the 

Department of Agriculture, as I understand it, under the direction 

of OMB, diverted more than $150 million from four working land 

conservation programs to pay for the cost of administering the Conservation Reserve Program and the Wetlands Reserve Program. 

And that is troubling to me because, under the 2002 Farm bill, 

these costs were intended to be paid out of the Commodity Credit 

Corporation funds, as the result, the effect of the diversions is to 

deny funds for farmers who are seeking to participate in these conservation programs, which are already oversubscribed, and that 

has an impact on the EQIP program, the Environmental Quality 

Incentives Program, and others. 

And I will submit the details of that to you for the record, but 

that is indicative of the kind of action taken allegedly by OMB that 

is very frustrating to us. When we are crafting legislation and providing funding for specific programs, to then have money diverted 

from one program to another, thwarts the will of Congress. 

So I hope we can receive from you today a general pledge that 

you will try to ensure that does not happen, and when OMB feels 

the need to reprogram funding, that you will come to Congress, as 

is anticipated, for permission from the Appropriations Committee. 

Mr. KAPLAN. Madam Chairman, you can certainly receive that 

pledge from me today. 

Chairman COLLINS. Thank you. And my final question today concerns the Low-Income Heating Assistance Program. And the question that I want to pose to you is whether OMB looks at how funding streams go to programs and whether there are more efficient 

ways of funding programs that would allow us to stretch scarce 

Federal resources further. 

And the LIHEAP program is a perfect example of that. Every 

year there is a battle over the LIHEAP program, and the administration is very slow to release the money. The result is the money 

is always released at the height of the winter, when fuel costs, 

home-heating costs and natural gas costs, are the highest, and thus 

the money buys the least. 

Ideally, what you would want to do is double fund for 1 year the 

LIHEAP program so you could change the funding cycle so that the 

money would be received by States and community action agencies 

16

that administer the program in the summer when the costs are far 

lower. That way you can serve more people or you would at least 

be able to provide a greater benefit if people were able to use those 

funds to fill up their home heating oil tanks in the summer. 

But at the very least, if the administration would release the 

money promptly at the beginning of the fiscal year, rather than at 

the height of the winter, even that would be an improvement. 

Would you take a look not only at the LIHEAP program—I definitely want you to take a look at that—but also at other programs 

where, when the money is released, will make a difference in the 

number of clients we can serve and the amount of benefits that we 

can provide. 

Mr. KAPLAN. Madam Chairman, if confirmed, I will certainly look 

forward to looking at and considering these types of funding mechanisms and any other good ideas that will allow these programs to 

be managed more effectively. 

With respect to LIHEAP, in particular, I would want to reiterate 

something I think Director Bolten discussed with you, either in the 

hearing or outside of it. I know he shares your concerns about the 

administration not responding rapidly enough and is committed to 

making sure that those funds are released very rapidly, as needed. 

And with respect to the specific advanced funding proposal, I 

know that he promised to review it and, if confirmed, since I will 

be working for him, I know that I will be doing that as well. 

Chairman COLLINS. I thought it could not hurt to get a second 

commitment on this issue——

Mr. KAPLAN. Absolutely, Madam Chairman. 

Chairman COLLINS [continuing]. To emphasize its importance to 

me and to many other members. 

Senator Coleman, do you have any further questions? 

Senator COLEMAN. Thank you, Madam Chairman. I just want to, 

by the way, applaud your commitment and persistence on the 

LIHEAP program in getting that second commitment. I also represent a Northern border State and have the same concerns. So 

thank you, Madam Chairman, and I would just note that I look forward to supporting the confirmation of Mr. Kaplan. I think he is 

very well-qualified, and I think he will serve this country well. So 

I look forward to that happening. 

Mr. KAPLAN. Thank you, Senator. 

Chairman COLLINS. Thank you, Senator, and thank you for your 

participation in this hearing today. 

I want to thank Mr. Kaplan for appearing before the Committee, 

and also for his public service to date and to what I am sure will 

be an equally impressive career as the Deputy Director. 

We do hope to expedite the confirmation of your nomination. So, 

without objection, the record will be kept open until 5 p.m. today 

for the submission of any written questions or statements for the 

record. I would encourage you to reply to any additional questions 

as rapidly as possible so that we can expedite your nomination. 

Thank you for appearing today, and this hearing is now adjourned. 

[Whereupon, at 11:47 a.m., the Committee was adjourned.] 

(17)

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