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ANOTHER YEAR, ANOTHER BILLION HOURS: EVALUATING PAPERWORK EFFORTS IN THE FEDERAL GOVERNMENT

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY AFFAIRS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

JULY 18, 2006

Serial No. 109–256

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCMIDT, Ohio

BRIAN P. BILBRAY, California

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

LAWRENCE HALLORAN, Deputy Staff Director

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON REGULATORY AFFAIRS

CANDICE S. MILLER, Michigan, Chairman

CHRIS CANNON, Utah

MICHAEL R. TURNER, Ohio

LYNN A. WESTMORELAND, Georgia

JEAN SCHMIDT, Ohio

STEPHEN F. LYNCH, Massachusetts

WM. LACY CLAY, Missouri

CHRIS VAN HOLLEN, Maryland

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

ED SCHROCK, Staff Director

ROSARIO PALMIERI, Deputy Staff Director

BENJAMIN CHANCE, Clerk

KAREN LIGHTFOOT, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on July 18, 2006 ............................................................................... 1

Statement of:

Aitken, Steven D., Acting Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget; Beth Tucker, Director, Communications, Liaison and Disclosure, Small Business/Self-Employed Division, Internal Revenue Service; and Matthew Berry, Deputy

General Counsel, Federal Communications Commission .......................... 7

Aitken, Steven D. ...................................................................................... 7

Berry, Matthew ......................................................................................... 36

Tucker, Beth .............................................................................................. 19

Koontz, Linda D., Director of Information Management, Government Accountability Office; Andrew Langer, manager, Regulatory Policy, National Federation of Independent Business; and Robert Hayes, president, Medicare Rights Center ...................................................................... 56

Hayes, Robert ............................................................................................ 114

Koontz, Linda D. ....................................................................................... 56

Langer, Andrew ......................................................................................... 92

Letters, statements, etc., submitted for the record by:

Aitken, Steven D., Acting Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget, prepared statement

of ..................................................................................................................... 10

Berry, Matthew, Deputy General Counsel, Federal Communications Commission, prepared statement of .................................................................... 38

Koontz, Linda D., Director of Information Management, Government Accountability Office, prepared statement of ................................................. 59

Langer, Andrew, manager, Regulatory Policy, National Federation of

Independent Business, prepared statement of ........................................... 95

Miller, Hon. Candice S., a Representative in Congress from the State

of Michigan, prepared statement of ............................................................. 3

Tucker, Beth, Director, Communications, Liaison and Disclosure, Small

Business/Self-Employed Division, Internal Revenue Service, prepared

statement of ................................................................................................... 21

(1)

ANOTHER YEAR, ANOTHER BILLION HOURS:

EVALUATING PAPERWORK EFFORTS IN THE

FEDERAL GOVERNMENT

TUESDAY, JULY 18, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON REGULATORY AFFAIRS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:05 p.m., in room

2203, Rayburn House Office Building, Hon. Candice S. Miller

(chairman of the subcommittee) presiding.

Present: Representatives Miller, Schmidt, Lynch, and Waxman,

ex officio.

Staff present: Ed Schrock, staff director; Rosario Palmieri, deputy staff director; Benjamin Chance, clerk; Karen Lightfoot, senior

policy advisor and communications director; Brian Cohen, minority

senior investigator and policy advisor; Alexandra Teitz and Krista

Boyd, minority counsels; and Cecelia Morton, minority office manager.

Mr. LYNCH. I’m Stephen Lynch, ranking member here. This is

the season where we have multiple hearings going on at the same

time. It’s just the nature of the beast.

I did talk to Chairman Miller a little earlier today, and she said

she’d be along directly.

Right on time.

Mrs. MILLER. The subcommittee will come to order. I appreciate

you all being here today. Catch my breath, running up the stairs

here.

I certainly want to welcome everyone, those in the audience as

well, for coming to today’s hearing on paperwork reduction efforts

in the Federal Government.

Although we have established a very strong system and eliminated literally hundreds of millions of hours of unnecessary paperwork, we have also added billions of hours of paperwork burden

even faster. Since its passage in 1980, we have increased total governmentwide burden by over 400 percent, to 8.4 billion hours in fiscal year 2005.

Our record continues to be certainly less than satisfactory, and

in a time of increasing global competitiveness, the United States

must be the best place in the world to do business and to accomplish that we need to make sure we’re not tolerating collections of

information and burdens on businesses that are unnecessary.

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In 1995, we amended the act to include, among other items, a set

of certification requirements to force agencies to do the tough work

of justifying their information collections. These requirements

forced agencies to prove that they were avoiding duplication of information, that they were reducing burden on the public small entities, as well as writing their forms in plain English, a piece of legislation that Ranking Member Lynch and I have proudly introduced

together, and that the information that they were collecting was

really necessary to their programs.

The GAO has conducted a comprehensive study of agency certifications and found them wanting. Agencies were missing or provided partial support for 65 percent of the collections in GAO’s

sample. Most agencies are not fulfilling their requirements for public consultation either.

The watchdog for these agencies is the office that we created in

1980 within the Office of Management and Budget known as the

Office of Information Regulatory Affairs [OIRA]. OIRA reviews

each of these collections and can approve its use for up to 3 years.

The office has also had the responsibility of coordinating percentage reduction targets between agencies and reporting annually to

Congress on progress toward burden reduction.

OIRA’s annual budget—excuse me, their annual report is the Information Collection Budget [ICB], of the Federal Government,

which tracks our progress in paperwork reduction. The ICB is required to contain a summary of accomplishments and planned initiatives to reduce burden, a list of all violations of the PRA, a list

of any increases in burden, including the authority for each such

collection and a list of agencies that in the preceding year did not

reduce information collection burdens and recommendations to assist those agencies to reduce their information collection burdens.

The specific burden reduction targets of the 1995 PRA were not

accomplished. That act required a target for reducing governmentwide burden by 40 percent between 1996 and 2001. And if that

would have been achieved, total burden would have measured 4.6

billion hours in 2001 rather than 7.5 billion hours—I think we have

a reference chart attached at some point that would show that—

and we wouldn’t stand at 8.5 billion hours today. Any excessive

and unnecessary hours of burden we impose on individuals and

small business owners is less time they can spending being productive citizens, of growing their business or spending time with their

families.

Opportunities to amend the Paperwork Reduction Act to enhance

our ability to achieve these goals still lie ahead of us, but working

vigorously to implement the current provisions and accomplish reductions is certainly our obligation.

At this time I’d like to recognize Mr. Lynch for his opening statement.

[The prepared statement of Hon. Candice S. Miller follows:]

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Mr. LYNCH. Thank you, Chairman Miller. Welcome all. I want to

thank all of the panelists who are about to appear before us today

for their assistance in helping this committee with its work.

In spite of all the best efforts and the tough talk about reducing

paperwork, the report that has been assembled by the minority

staff, and that Mr. Waxman and I are releasing today, shows that

the reality is far different than our intentions.

Rather than reducing paperwork since 2000, under this current

administration we have required Americans to spend about 1 billion more hours each year filling out government paperwork than

they did in the year 2000. So it’s not even close.

The paperwork burden in 2005 was 8.4 billion hours, and it is

expected to rise again this year to a whopping 8.7 billion hours.

That adds up to about 39 hours for every adult living in the United

States.

On the other hand, there have been some, in my opinion, misguided efforts to roll back some very important environmental,

health and safety protections such as eliminating the filing requirement under the Toxics Release Inventory, which companies are required to disclose when they dump toxic chemicals into the environment. Some folks have worked at reducing that reporting requirement.

The dynamic will not work, however, because both EPA and the

Department of Labor each only account for about 2 percent, 2 percent of the total paperwork burden, while on the other hand, my

friends at the IRS are responsible for about 76 percent of government paperwork that the American people have to fill out each

year.

Much of the recent increase in paperwork has been driven by

laws proposed by the current administration and passed with the

active support of this current Congress, with the support of a Republican-led House and Senate, and I would suggest that one good

way to reduce the time spent on paperwork is to make the requirements easier to understand. And that’s where Chairman Miller and

I have tried to work for a plain-language, hopefully English requirement that agencies should focus on in making the information

they put out clear and understandable.

The 800-pound gorilla out there was the Medicare prescription

drug benefit that added enormous complexity and enormous burden in terms of the hourly requirement for complying with that

program. It is badly designed, and recently I just concluded my

16th hearing, town meeting, in my district, going from town to

town to try to explain this program. There is no end in sight. It’s

very confusing, and there are troublesome parts of it with inaccurate information being put out by various groups, including some

of the drug programs that are sponsoring the benefit. That’s costing

seniors far too much time and causing them too much frustration.

One thing is clear: that we have not lived up to our obligations

and our promises to reduce paperwork. Americans, especially all of

the small businesses across the country that are struggling just to

keep their businesses running, deserve better; and I think that’s

where the chairman and I are in total agreement.

Chairman Miller, I do ask unanimous consent to enter into the

hearing record a copy of the report prepared by the Government

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Reform Committee minority staff. It’s entitled ‘‘Government Paperwork Burdens Have Increased Substantially Under the Bush Administration.’’

Mrs. MILLER. Without objection, those will be entered into the

record.

Mr. LYNCH. Thank you, Chairman Miller.

Mrs. MILLER. OK. As we go to our first panel, if you could all

rise, please, and raise your right hands. Because we are an oversight committee, it is the practice of the committee to swear in all

of our witnesses.

[Witnesses sworn.]

Mrs. MILLER. Our first witness this afternoon is Dr. Steven

Aitken. He is Acting Administrator of the Office of Information

Regulatory Affairs at OMB. Prior to assuming his current position,

Mr. Aitken worked as Deputy General Counsel at OMB and was

an Assistant General Counsel at OMB as well. He has served a

total of 17 years at that agency.

Earlier in his career he also served the Department of Justice in

several positions. So we certainly appreciate your willingness to appear before the panel today and look forward to your testimony, sir.

STATEMENTS OF STEVEN D. AITKEN, ACTING ADMINISTRATOR, OFFICE OF INFORMATION AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET; BETH TUCKER, DIRECTOR, COMMUNICATIONS, LIAISON AND DISCLOSURE, SMALL BUSINESS/SELF-EMPLOYED DIVISION, INTERNAL REVENUE SERVICE; AND MATTHEW BERRY, DEPUTY

GENERAL COUNSEL, FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF STEVEN D. AITKEN

Mr. AITKEN. Thank you.

Chairman Miller, Ranking Member Lynch and distinguished

members——

Mr. LYNCH. I’m not sure if your mic is on.

Mr. AITKEN. Thank you.

Chairman Miller, Ranking Member Lynch and distinguished

members of the subcommittee, I am Steven Aitken, Acting Administrator of OIRA, an office within the Office of Management and

Budget. Thank you for inviting me to this hearing today and for

giving me the opportunity to testify on OMB’s annual report to

Congress under the Paperwork Reduction Act, which is the Information Collection Budget of the U.S. Government, and our efforts

to reduce paperwork burdens on the American people.

By way of background, as the chairman noted, I have worked at

OMB for 17 years, most recently serving as Deputy General Counsel before becoming Acting Administrator at the beginning of last

month. This is my first appearance before the subcommittee.

The Federal Government should not require or ask the public, individuals, businesses, organizations, State and local governments

and others to respond to Federal paperwork requirements that are

unnecessary, duplicative or unduly burdensome. Eliminating unnecessary, duplicative and unjustified paperwork burdens in existVerDate 11-MAY-2000 12:55 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCS\44770.TXT KATIE PsN: KATIE
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ing collections of information and preventing such burdens in new

collections is one of OIRA’s highest priorities.

This year’s Information Collection Budget [ICB], presents a picture of our efforts to balance the Federal Government’s need for information against the burden imposed on the public of gathering

that information. We are making progress in reducing the paperwork burden on individuals, small businesses and local and State

governments. As the ICB reports, of the 15 Cabinet departments,

12 achieved net reductions in burden resulting from discretionary

actions in fiscal year 2005. This is up from 10 departments in fiscal

year 2004.

I would like to offer two examples that are in the report. The Internal Revenue Service redesigned the Form 1041, which is the

U.S. income tax return for estates and trusts, to streamline the requirements and make it easier and quicker to understand and file.

This reduced taxpayer burden by 18.8 million hours.

And the Department of Agriculture collects information to ensure

that multifamily housing applicants meet program requirements

and repay loans. USDA consolidated 13 regulations into a single

regulation to reduce burden, assure quality housing for residents,

and improve customer service and improve the agency’s ability to

manage the loan portfolio. This reduced reporting burden by 1.28

million hours.

Although agencies made significant efforts to reduce paperwork,

the burden overall increased 441 million hours, of which 419 million, or about 95 percent, were due to the implementation of important new statutes. The two statutes that resulted in the largest increases in paperwork burden during fiscal year 2005 are, first, the

Medicare Prescription Drug Improvement and Modernization Act of

2003, which the ICB reports accounts for an increase in burden of

224 million hours in fiscal year 2005 and an expected additional

4.7 million hours in fiscal 2006.

This act established the important new Medicaid benefit of the

new voluntary prescription drug coverage. As of June 11, 2006,

38.2 million Medicare beneficiaries have comprehensive drug coverage.

The other statute is the CAN–SPAM Act, which accounts for an

increase in burden of 116 million hours. This statute regulates unsolicited commercial e-mail by requiring every unsolicited commercial e-mail to include information about how the recipient can have

the sender remove the recipient’s e-mail address from the sender’s

mailing list. This requirement that the sender of the e-mail include

this disclosure qualifies as a collection of information under the Paperwork Reduction Act, and therefore it is counted as burden.

I would like to note that with respect to the Medicare Modernization Act we have received information this morning from HHS that

suggests that the paperwork burden of this statute may be, in fact,

less than previously estimated and reported in the ICB. If that is

correct, it would be welcome news. Once we can verify a new estimate, we will communicate it to the subcommittee immediately.

Of the 441-million-hour total increase during fiscal year 2005,

the increase in burden due to actions within agency discretion was

180,000 hours. However, it is important to take into account the

benefits that are to be derived from each collection of information

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or, in the terminology of the Paperwork Reduction Act, the practical utility of the collection.

For example, the Federal Communications Commission issued

new regulations on truth in billing in order to make it easier for

the public to understand their telephone bills. This requirement resulted in an increase in burden on the telephone companies of 2.6

million hours.

The ICB also documents the successful efforts of OMB and Federal agencies to sharply reduce agency violations of the Paperwork

Act. As a result of the efforts of OMB and the agencies, the executive branch has completely eliminated the considerable backlog of

unapproved collections and has dramatically reduced the incidence

of new violations.

The ICB also includes a chapter that describes the new methodology that the IRS has begun using to estimate reporting burden

on individual taxpayers. The new methodology estimates taxpayer

burden more accurately by taking into account the remarkable increase in the use of computerized preparing-and-filing software.

Finally, in my written testimony I provide an update about

OMB’s new information system for the Paperwork Reduction Act,

which we are planning to activate next week. This new system will

make it easier for the public and Congress to obtain information

about OMB’s review of information collections, and the system will

enable OMB to track more accurately and efficiently the paperwork

burden that is imposed by the Federal Government.

This concludes my prepared statement. Thank you again for the

opportunity to testify in today’s hearing, and I would be happy to

answer any questions you may have.

Mrs. MILLER. Thank you very much. Appreciate that.

[The prepared statement of Mr. Aitken follows:]

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Mrs. MILLER. Beth Tucker is our next witness this morning. She

is the Director of Outreach, Communications and Disclosure, Small

Business/Self-Employed Division, at the IRS. In this position she

oversees numerous IRS service-wide programs including the governmental liaison and disclosure program office, which is responsible for ensuring the protection of taxpayer and employee confidentiality.

She began her career as a revenue agent in Dallas and since

then has held a variety of positions in the IRS.

And as my colleague has stated, the IRS is responsible for about

76 percent of the paperwork we’re going to be discussing here

today, so we appreciate very much your willingness to come before

the committee and look forward to your testimony, Ms. Tucker.

STATEMENT OF BETH TUCKER

Ms. TUCKER. Thank you.

Madam Chairman, Ranking Member Lynch and members of the

subcommittee, my name is Beth Tucker; and in addition to being

the Director of Communications, Liaison and Disclosure in the

Small Business/Self-Employed Division of IRS, I am also very

pleased to be the Acting Director of the Office of Taxpayer Burden

Reduction.

The IRS has a firm commitment to impose the least amount of

burden necessary for taxpayers to meet their tax obligations. The

IRS strategic plan is very clear in articulating this responsibility

and making it a goal of each and every IRS employee. But we face,

as you have mentioned, significant hurdles in our efforts to reduce

paperwork requirements and overall burden on taxpayers.

It probably will not shock you to learn that the first of these hurdles is the complexity of the Tax Code. We fully expect that absent

fundamental tax reform, the aggregate burden taxpayers face will,

in fact, continue to grow. A cornerstone of our tax system depends

upon each taxpayer’s voluntary self-assessment of their tax liability. However, increasing complexity hinders every American’s efforts to accurately assess their tax liability and may, in fact, serve

as a disincentive to comply with tax obligations.

The second hurdle we face is the systemic growth every year as

more individuals and businesses file returns.

The third hurdle is, of course, enactment of new legislation that

adds to or modifies existing tax laws.

While new tax legislation often provides many worthwhile benefits or incentives for taxpayers, the tradeoff is often additional complexity and increased burden. For example, the Katrina Emergency

Tax Relief Act of 2005 provided significant benefits to taxpayers

who desperately needed tax relief in the hurricane-ravaged region,

but it’s also required over 230 changes to 78 tax products and two

new tax forms.

Each year, all Federal agencies are required to report to OMB

the burden imposed by their paperwork requirement. Our estimated fiscal year 2006 burden is 6.65 billion hours. This compares

with 6.4 billion in 2005, for an increase of approximately 251 million hours. Reflected in this increase is the growth in the number

of new forms, as well as changes to existing forms dictated by 10

different pieces of legislation enacted in 2005.

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Madam Chairman, my written statement offers a detailed description of many of the steps we’re taking to reduce paperwork

and burden on taxpayers. However, I would also like to update you

on a few of our latest accomplishments.

First, we developed a new schedule K–1 for Form 1041, which is

used with estates and trusts. The new form provides streamlined

instructions for beneficiaries and should reduce approximately 4.27

million hours of burden for over 3.5 million taxpayers.

Second, on January 1, 2006, we began implementing the Form

944, annual filing of pay program. This change affects 950,000 taxpayers and allowed businesses with a total employment tax liability of less than $1,000 to file annually rather than quarterly.

Third, our Office of Taxpayer Burden Reduction led IRS efforts

to create a single automatic 6-month extension, thereby decreasing

the number of extension forms taxpayers must submit.

Madam Chairman, we recognize that a key factor in reducing

burden is communication with our stakeholders. We routinely seek

feedback from a variety of stakeholders including citizen, practitioner, industry groups and our colleagues in other government sectors.

As previously mentioned, we have also developed a new way of

estimating taxpayer burden. The new method is based on taxpayers’ reporting of the time they spend and the costs they incur

preparing and filing their income tax returns. According to the

model based on 2004 data, individual taxpayers on average spend

23.4 hours and $186 gathering information, preparing and submitting their tax returns.

In conclusion, it is important to know that the operating philosophy that Commissioner Mark Everson has instilled in the IRS is

that service plus enforcement equals compliance. Nowhere is that

more important than in burden reduction.

We have taken steps both in the area of prefiling of returns and

reducing the burden associated with compliance actions. We have

also attempted to shorten the duration of compliance activities

throughout initiatives such as the alternative dispute resolution

and our compliance assurance program.

Thank you, Madam Chairman, for the opportunity to appear

today, and I can assure you that burden reduction is everyone’s job

at the IRS. I look forward to answering any questions you may

have.

Mrs. MILLER. Thank you very much. We appreciate that. Some

very interesting statistics there.

[The prepared statement of Ms. Tucker follows:]

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Mrs. MILLER. Our next witness is Matthew Berry, Deputy General Counsel for the Federal Communications Commission. Mr.

Berry has recently served at the Department of Justice as Counselor to the Assistant Attorney General for the Office of Legal Policy, and before that he served as the Attorney Advisor in the Justice Department’s Office of Legal Counsel. We are certainly pleased

to have Mr. Berry with us today.

And the floor is yours.

STATEMENT OF MATTHEW BERRY

Mr. BERRY. Thank you. Madam Chairman, Ranking Member

Lynch and distinguished members of the subcommittee, I appreciate the opportunity to appear before you today to discuss the

FCC’s efforts to reduce the information collection burdens placed by

the Federal Government on the American people.

The Commission is continuously looking for ways to reduce unnecessary or duplicative paperwork burdens. For example, since

March 2005, the FCC has reduced its number of information collections by 36. In order to fulfill its statutory responsibilities, however, the FCC sometimes must impose information collection requirements.

In recent years, the FCC has instituted such collections to implement important statutory mandates such as improving consumers’

ability to make sense of their telephone bills, giving the public the

ability to block unwanted telemarketers’ calls and protecting citizens from unwanted commercial faxes.

OMB’s fiscal year 2006 information collection budget indicates

that the paperwork burden imposed by Commission regulations

grew from approximately 26 million to 145 million hours in fiscal

year 2005, or an increase of about 456 percent. The Commission

recognizes that this increase is a significant one; however, the overwhelming majority, over 97 percent, resulted from the Commission’s implementation of recently enacted statutes. Specifically, information collections associated with the CAN–SPAM Act accounted for most, or 115 million hours, of this increase.

Congress passed the CAN–SPAM Act to address unwanted electronic messages being sent by some businesses, and Congress specifically directed the FCC to deal with commercial messages that

are sent directly to an e-mail address for delivery to a subscriber’s

wireless device.

In deciding how best to fulfill its congressional mandate, the FCC

chose the option that it concluded would be both the most effective

in protecting citizens from receiving unwanted commercial messages on their wireless devices and would create the least amount

of paperwork for business.

Consistent with Congress’ direction, the Commission prohibited

businesses and others from sending mobile service commercial messages absent the recipients’ express prior authorization. In addition, because of the need for senders of these messages to distinguish between e-mail addresses associated with wireless devices

and other e-mail addresses, the FCC created a list of Internet domain names associated with commercial mobile services.

Those sending commercial messages are required to regularly

check that list and ensure that they do not send unsolicited mesVerDate 11-MAY-2000 12:55 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 C:\DOCS\44770.TXT KATIE PsN: KATIE
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sages to e-mail addresses using the domain names on the Commission’s list.

The Commission estimated that over 5 million businesses would

be burdened both by the rule requiring senders of commercial messages to obtain express prior authorization from recipients and the

requirement to check the Commission’s list of domain names associated with wireless devices.

It is important to note, however, that these rules only impose a

burden on businesses to the extent that they wish to send unsolicited commercial e-mail messages. If businesses do not send such

messages, the Commission’s regulations impose no paperwork burden on them whatsoever.

Moreover, the FCC realizes that the estimate of the burden

hours associated with our CAN–SPAM regulations may be far too

high because we may have significantly overstated the number of

businesses that would be burdened. In some situations, estimating

the paperwork burden associated with information collections is

more art than science. Here, the FCC made its best estimates

based on available information and guidance provide by OMB.

When the FCC seeks renewal of its CAN–SPAM information collections, it will use a new and more informed burden estimate, which

should be significantly lower than 115 million hours.

I also would like to briefly discuss one other new Commission

rulemaking triggered by congressional action that resulted in a significant increase in our overall information collection burden. Three

months ago the FCC adopted rules implementing the Junk Fax

Prevention Act of 2005. Consistent with the statute, the Commission’s rules require those sending unsolicited advertisements to fax

machines to provide notice and contact information to allow recipients to opt out of receiving unwanted facsimiles, and our rules that

businesses honor such opt-out requests.

I note that while the FCC’s initial burden estimate for these information collections, as reflected in the Information Collection

Budget, was almost 25 million hours annually, our final submission

to OMB revised that estimate downwards to just over 13 million

hours, or 12 million hours less.

I would like to close by sharing with the members of the subcommittee that the FCC takes its duties and responsibilities under

the Paperwork Reduction Act very seriously. By eliminating unnecessary information collections and carefully crafting new information collections, we seek to minimize the burdens placed on businesses and the general public.

Thank you for the opportunity to testify before you today, and I

would be pleased to answer any questions you may have.

[The prepared statement of Mr. Berry follows:]

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Mrs. MILLER. Thank you, Mr. Berry. I appreciate that. Since you

just finished, I think I’ll start my questioning right with you.

I was trying to take some notes when you were talking about

how you were estimating the burden for the CAN–SPAM Act, and

I guess—you mentioned perhaps it might be too high of an estimate and that you used OMB best information available to try to

interpolate what all of that meant.

Could you just try to educate me on how you actually do the construct of trying to understand what the burden requirement actually is? What kind of information did OMB give you? How do you

make such an estimate?

As an addendum to that, as well, if you are going to revise your

estimate, this committee would be very interested to hear and to

have that information when you do revise that estimate.

Mr. BERRY. First of all, we would happily provide you any revised estimate we have, and we do believe there will be a revision.

With respect to how we came up with the number, I would first

say that the Commission information collections generally impact

those entities in the communications business; and we have a much

better understanding of those businesses and compliance burdens

on those businesses than we do on all small businesses in America,

which is what the CAN–SPAM regulations potentially impact.

But we started with a number that we believe we got from the

Small Business Administration of 22.6 million businesses in the

United States. We then had to figure out what percentage of those

businesses would be impacted by our regulations.

This was the most difficult call we had to make, and to be honest, we did not really have good information with respect to how

many businesses in the United States would be sending commercial messages to wireless devices; and the best estimate that we

made, which I think again is probably too high, is that about onequarter of them, or 5.6 million, would be—seek to send these messages and comply with our rules. We then took that number, 5.6

million businesses and estimated that it would take each business

about 10 hours a year to obtain and process express authorizations

from individuals that wanted to receive the messages.

We then looked at how long it would take a typical business to

comply with our rules by looking at their e-mail list of people they

wanted to send e-mails to and compare it against the domain name

list that we provided that says the domain names that you can’t

send e-mail addresses to.

We estimated it would take about 5 hours to set up the system

for them to compare their e-mail list to our domain name list, and

that’s a one-time implementation burden; and then about 6 hours

on an annual basis to regularly purge their e-mail list of e-mail addresses that would appear on our domain list. And pursuant to our

rules, you have to basically do a purge once every 30 days because

once a domain name has been added to our list for 30 days, the

sender is responsible for not sending unsolicited e-mail messages to

it. So that’s how we went about doing the estimate.

I think, in hindsight—and we’re going to do an additional study,

but the 5.6 million figure for businesses impacted was probably significantly high, and I therefore think, and will share this informaVerDate 11-MAY-2000 12:55 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 C:\DOCS\44770.TXT KATIE PsN: KATIE
48

tion with you, that we’re going to end up revising the 115 million

hours estimate down.

Mrs. MILLER. That’s great. Anything that can go down is a positive trend.

Along those same lines, perhaps I could ask you how an agency

like yours interacts with OIRA as they try to assist you on burden

reduction and estimating and all those kinds of things. How does

that all work out? Do you have any comment on that?

Mr. BERRY. I think we have a very cooperative relationship with

OIRA. I could just walk you through the process that we follow at

the Commission.

Information collections initiate in our substantive bureaus and

offices. This one, for instance, on CAN–SPAM originated in the

Consumer and Governmental Affairs Bureau; they developed the

proposed information collection. And then it goes to our Office of

Managing Director, and they scrutinize it to make sure it complies

with the Paperwork Reduction Act and ensure there is adequate

support.

Once our Office of Managing Director signs off, we will send it

to OIRA to make sure they believe it complies with the Paperwork

Reduction Act. We have to provide a supporting statement and justification both for estimates and that we have tried not to have duplicative burdens or to reduce unnecessary burdens.

At that point, sometimes if we’ve done our work really well,

OIRA will sign off on it; other times it’s a more interactive process.

They’ll come back to us with questions, concerns and the like.

I think generally we have a very cooperative relationship with

them, and I think most of the time it’s very smooth because thankfully we’ve done our homework and made sure we comply with the

act.

Mrs. MILLER. Mr. Aitken, I know that you’re new to your position

there, but if I could ask you for your initial assessment or observation, do you think OIRA has adequate resources in order for you

to be able to accomplish your mission there? Is there anything you

want to share with the committee in regards to personnel or budgetary kinds of things or what we can do to assist you?

Mr. AITKEN. As you noted, Madam Chairman, I have just been

at OIRA for 6 weeks now, and that’s one of the issues I will look

at being Acting Administrator; but now I’m not prepared to make

any statements regarding that issue.

Mrs. MILLER. Perhaps a wise way to address that.

I have some additional questions, but I’ll wait until the second

round, and at this time recognize Mr. Lynch.

Mr. LYNCH. Mr. Aitken, you weren’t taking the Fifth, were you?

Let me start—and thank you, Madam Chair.

In your opening statement, you said Medicare Part D, and there

was a number that was offered, 224 million hours for Medicare

Part D. Now I know there are about 40 million seniors and handicapped Medicare-eligible folks that would be seeking to comply

with Part D, and it looks—just based on my numbers, 224 million,

it would appear that half of that is attributable to me explaining

Part D to my mother-in-law, who is a very bright woman and has

a very good grasp of financial and legal concepts.

49

But, seriously, how did you come up with—sort of the opposite

side of the question that the chairman asked Mr. Berry, how did

you come up with this, what did you do to pin it down do 224 million hours? Because just based on the confusion that’s out there on

this, I would have expected the number to be much higher.

Mr. AITKEN. Ranking Member Lynch, before turning to how that

would be estimated, I would just want to make two clarifications.

Mr. LYNCH. You don’t have to make it very complicated. Just

how many hours per person.

Mr. AITKEN. The lead agency for developing the initial estimate

of burden would be the agency that is engaging, or in the case

when they send a collection to OMB for review and approval, the

proposing agency. So in that case, it would be HHS and, specifically, the Center for Medicare and Medicaid Services.

So it’s that agency, as is the case with the FCC in the CAN–

SPAM Act, that has the primary responsibility for developing an

estimate, its best estimate, of what the burden will be based on its

experience with operating the program or its best guess with respect to a new program, on how much that burden will be for the

regulated entities and other members of the public. So in the case

of the Part D program, as in other collections, it would have been

the responsibility of the proposing agency to develop that estimate.

As I mentioned in my opening statement, we have heard from

HHS this morning that they believe that the estimate may have

been too large for the Part D program, which comprised a large

percentage of the burden for the Medicare Modernization Act. I believe that according the ICB, Part D was 212 million hours of the

total 224 million hours; and so HHS is currently reviewing that

and they are in the best position to determine what the appropriate

burden would be.

And as the FCC witness explained, when you’re implementing a

new program, you don’t have a lot of experience to go by, and so

it’s necessarily based on estimates and guesses of what the burden

will be. Under the Paperwork Reduction Act, an agency needs to

obtain OMB’s renewed approval at least once every 3 years, and

during that period an agency will be able to develop better estimates based on experience and also from input from the public during that time.

Mr. LYNCH. So in terms of my question, how did you come up

with 224 million? You’re saying HHS came up with that and you’re

just repeating that number?

Mr. AITKEN. HHS came up with that number. They then submitted it to OMB, along with its submission package, for our review

and approval—and I’m not intimately familiar with the details of

the package that HHS sent to us, and then our review of the package, but typically it’s the agency that’s proposing the collection.

Mr. LYNCH. I understand. You said that already. I’m just asking

you about your ability to vouch for the number, I guess.

Mr. AITKEN. Our number is based on the HHS number.

Mr. LYNCH. That’s fair enough.

Let me just ask Mr. Berry a followup on the chairman’s question.

The CAN–SPAM Act, do we have any best practices out there

that you could look at? It would seem to me that this would be

something that software could be enormously helpful with, right;

50

once that roster or that list is established, that it could just be a

matter of a function that eliminates any of those, rather than anything that’s very, very time-consuming for any individual.

I understand the burden that’s been estimated here, but also

there is another burden that we all go through, which is to delete

all that spam; that’s the other side of this. So if you’re not doing

that, if you’re not having a small group of people doing what you’re

requiring them to do under the act, you get a whole lot of us out

there, clicking away, trying to delete all that spam, and that would

just make you crazy after a little while.

But are there some prospective mechanisms or some ideas for

down the road where we could greatly reduce that and maybe have

that whole system automated so that we don’t have so much labor

for our small businesses, especially those that are engaged in that

type of activity?

Mr. BERRY. First of all, Ranking Member Lynch, I think that you

point out an important thing that I mentioned in my written testimony, which is, the unwanted messages that go to wireless devices

with respect to both businesses’ and individuals’ wireless devices

do, in many cases, impose real costs both in terms of time and expense on those businesses and individuals. So that burden is reduced by the CAN–SPAM Act.

But with respect to your specific question, I have been advised

that there are ways through—there’s software that can be use that

would take an e-mail list and would purge it of those addresses

that use domain names that are on the Commission’s list, so that

it can be done. You have to run that again once every month to

be sure you’re keeping up with the domain names on the Commission’s list. So technology can be an important part of the answer

here.

Also, we generally find at the Commission that the compliance

burden with respect to information collection goes down over time

as businesses and individuals become more familiar with the information collection. So I do think the longer these regulations are in

effect, you’re just going to see a natural decline in the hours burden

as well.

Mr. LYNCH. I will yield back at this point.

Mrs. MILLER. OK.

Mr. Aitken, I was listening to and am very interested in how you

actually did the construct, as well, in the Medicare prescription

drug benefit, and what that all meant. And I think it is difficult.

I know that the Congress is hoisting things on these agencies that

do require a lot more burden, paperwork, etc., not only on the

agencies but on the general public as well.

Sometimes—hopefully, when we do these—it’s difficult to go to

seniors that have never had prescription drug benefits, and now

there are over 32 million that do, and say, we really shouldn’t have

helped you with your prescription drugs because it’s a lot of paperwork burden on everybody.

So sometimes you have to think about what it is that government is all about, I suppose. I will just tell you in regards to also

trying to help explain to seniors a brand-new program for the first

time in 40 years, actually, it was great to have the help of senior

advocacy groups and AARP and other kinds of groups. I don’t know

51

if that goes into, again, the construct of how you try to understand

the paperwork reduction or the burden, additional burden, placed

on the beneficiaries of those kinds of things.

In my congressional district alone we have over 100,000 seniors

that have signed up at an average savings on prescription drugs

of about—well, this year, about $100 million. So sometimes we

have to look at those kinds of things as well.

As Mr. Berry was testifying about consumer protection, for instance, in the event it is more paperwork; but I think it’s a worthwhile thing for government to mandate that people can understand

what their phone bills are actually telling them and some of those

kinds of things.

But could you talk a little bit about—did any of the kinds of

things that were happening out in the field with, as I say, some

of these senior advocacy groups, or AARP, did that go into the

equation, are you aware of that, or how do you actually measure

those kind of things?

Mr. AITKEN. Madam Chairman, I’m not aware with respect to

the part D program whether HHS included that within their development of the burden estimates. We can look into that and provide

that information for the record.

Mrs. MILLER. I would be very interested to know that.

Ms. Tucker, as we talked about the IRS, it is interesting, you

hear some of these numbers that the compliance costs for Americans every year just to fill out their tax forms. I have heard way

over $200 billion, from $225 to $250 billion, who knows; but I think

as a result of those kinds of staggering numbers and every one of

us having personal experience trying to fill out our own tax forms

without the advantage of having a tax attorney, we do recognize—

that, I’m sure, is the impetus for a lot of debate under the dome

here about the flat tax, fair tax, etc.

But I was interested in one of the things that you mentioned,

and if you could flesh this out a bit for me, about how you attempted, your agency, to simplify or streamline the quarterly tax

payments for businesses. Obviously the government wants to get

their money as quickly as they can. And I think you mentioned

there were about a thousand businesses that were advantaged by

your new program.

What is the benchmark for a small business not to have to file

quarterly? Just seems like, having come from a small business

background and filling out those forms, what a relief it would have

been, even if we had to only do it twice a year.

Ms. TUCKER. Absolutely.

To kind of also reassure you, in our taxpayer burden reduction

program and the stakeholder liaison program that I manage, we do

go out and conduct forums with the small business communities.

And the frequency of touches on forums is one of the No. 1 things

we hear back, make my interaction with you—why they don’t want

to interact with IRS. It hurts our feelings a little bit, but believe

it or not, they are looking for less. Actually, on the 944, the tolerance is $1,000; it actually applies

to 950,000 small business owners. So, in other words, we looked at

what was the cutoff for small businesses that only had an employment tax reporting of $1,000 or less, and we said, well, why are

52

they having to go to the trouble of filing four times a year when

we could just annualize that to a one touch.

So we launched that in January 2006; we are in our first year

of operation. We are doing some quality control to see how it’s

going, talking our small business taxpayers. But the good news, I

think this one is a good example of how you can not only reduce

burden on the small business, but the reality is, that also reduces

burden on IRS because that’s three less submissions that we’re also

have having to use our resources on.

So we’ll be glad to share with you after we have our first full

year of operation and then what our next steps are as far as looking at other opportunities for similar burden reduction initiatives.

Mrs. MILLER. I’m sure the committee would be very, very interested in having that kind of information.

Does the IRS have the ability to just make those kinds of decisions? Do you require legislative——

Ms. TUCKER. A lot of our burden reduction initiatives we can do

through administrative provision or regulatory, but obviously a

good example—and let me share this one with you, because I do

think at some point we’ve talked to one of the committees—we’re

looking at an initiative right now on office in the home. That is a

form that frustrates and confounds millions of small business/selfemployed taxpayers where you go through multiple calculations.

And that’s one where we’re actually looking at, is there a possibility of a standard deduction to give you the option if you don’t want

to go through—almost like, for those of us that are familiar with

Schedule A, you can choose, do you want to itemize your home

mortgage interest or medical expenses, or you can choose the flat

deduction for your filing status.

So on that one, that is one that in talking with Treasury most

likely will require a legislative proposal.

So it really depends. There are literally hundreds of form and

regulatory adjustments we make in any given year without having

to go the legislative route.

Mrs. MILLER. Sometimes—well, it’s always scary when the government starts talking about tax reform, tax simplification, which

always ends up being more of a burden; at least that’s the way the

trend has always gone. It always seems, I think, that the customers, the end users of all of these things that conceptually sound

fine here in Washington, but the practical reality or application of

them out in a small business or individuals and that is sometimes

an unintended consequence from what we were looking for.

Does the IRS have a format where taxpayers can make the kinds

of suggestions that it’s always good to hear from them and then do

you actually listen to them? I would be interested in looking at how

you actually get a comment from an individual taxpayer or small

business owner and then what happens to it. Does it get filed in

the circular file?

Ms. TUCKER. You would actually be very interested to see a lot

of the suggestions, and in fact, we’d be very pleased to share those

with you.

A lot of taxpayers do correspond with us. We actually have a

form, and I’ll be glad to provide it to you, it’s Form 13285A, a very

scientific sounding form, but basically that’s what we use for taxVerDate 11-MAY-2000 12:55 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 C:\DOCS\44770.TXT KATIE PsN: KATIE
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payers or small businesses, or even industry groups can write their

suggestion down and send it to IRS.

Two months ago we did issue an updated release that went out

through all of our distribution networks, talking about how serious

IRS is about burden reduction and asking our stakeholders and

taxpayers to give us their ideas. Currently the process we use,

members of my staff do the initial vetting and then we assign those

out to the different functions within IRS to give us feedback and

suggestions.

Of course, the most popular burden reduction suggestion we are

getting from taxpayers is, I’d just as soon not pay any taxes; but

I think you would probably agree, that one is a little difficult for

our agency to administer.

Mrs. MILLER. Thank you very much.

Mr. Lynch.

Mr. LYNCH. Thank you.

Ms. Tucker, just following up, there were numbers in one of the

reports I read, it might have been the one that you provided, that

did give an estimate of the additional burden that was proximate

to the 2005 changes that we did in the AMT. We modified it a little

bit. So it was a number in here about what those modifications cost

us in terms of burden. I accept those as being fairly accurate.

The question I have, though, what about the encroachment issue

where you have millions more Americans that sort of march into—

they get captured; now they are subject to the AMT. What is that

doing to the burden that you’re seeing imposed upon taxpayers?

Ms. TUCKER. Obviously, the AMT calculation in and of itself generates lots of questions from the taxpayers and, in fact, the practitioners that are being paid to prepare their returns.

As far as things that IRS is doing, once you are checking to see,

does that apply to you, we have done a couple of things. This last

filing season we did an ATM calculator or tool on our Web site

where you could go in, and it would walk you through, do you need

to continue with the form.

The interesting thing, and I think it was mentioned in the earlier

testimony, we do have more and more taxpayers—not only individual taxpayers, small business taxpayers—that are using the commercial software. Even if they are not going to a paid return preparer, they are loading the software, coming on and using our freefile process. And that, in and of itself, seems to be changing the dynamic of return prep and what causes the burden on the forms because there is that automated calculator involved.

In fact, an interesting statistic, in 2005, roughly 88 percent of

taxpayers and return preparers combined were using some form of

commercial software to do automatic calculations.

Now, to get to your point, that doesn’t take the sting out of owing

the tax, but the use of the software we do believe assists in the

computations.

Mr. LYNCH. I guess the nature of my question was a little bit different.

The continual encroachment of the AMT capturing more and

more people each year—and I don’t expect you to just spit it out.

If you could get that information to us, I would like to see what

the impact of that is, because obviously we’re looking at giving

54

some relief to the alternative minimum tax, and that would be one

more argument that we could make.

Ms. TUCKER. Absolutely. We’d be glad to.

Mr. LYNCH. Thank you. I yield back.

Mrs. MILLER. Mr. Waxman.

Mr. WAXMAN. Thank you very much. Madam Chair, I want to

start by noting that in 2004 I asked my staff to examine what the

President had said on paperwork reduction and to compare it to

what actually has happened under his administration.

The resulting report showed that President Bush’s rhetoric about

reducing government paperwork was directly at odds with his actions. Now it’s 2 years later; the President is still talking about reducing government paperwork, and the amount of time that Americans are spending on government paperwork is still rising. In fact,

we’ve updated our report and found that government red tape has

exploded over the last 5 years.

The reality is that this year, according to the administration’s

own reports, Americans will spend over 1 billion more hours filling

out paperwork than when President Bush took office. The total

number of hours that will be spent this year on completing government paperwork is 8.7 billion. That’s an enormous number. What

it means is that the average American adult will spend almost 40

hours at home and at work completing government paperwork.

Our report shows the bulk of the paperwork increase is due to

changes in the law that were proposed by this administration and

were passed by Congress. The single biggest factor is the Medicare

prescription drug bill. The new drug program is so convoluted and

complicated that it is adding 10 hours of government red tape for

every person enrolled in the Medicare drug plan.

These enormous paperwork burdens were totally unnecessary.

When the drug bill was passed, the simplest thing we could have

done would have been to have the Medicare program run the benefit just as it runs Medicare Part A and Part B. That would have

saved seniors money, saved taxpayers money and greatly reduced

government red tape.

OMB, which is an important part of the Bush administration,

says that the Medicare drug benefit is adding 224 million hours of

paperwork burdens, but I suspect that the government’s official estimate of 224 million hours of paperwork, enormous though it is,

is probably low. OMB assumes the best-case scenario, not the

worst-case that millions of seniors have experienced.

I would like to ask you, Mr. Aitken from OIRA, to talk a little

bit about your estimates of the increased paperwork burden caused

by the new Medicare drug benefit. Your numbers show for HHS the

total agency-wide paperwork burden was about 277 million hours

per year before the Medicare prescription drug plan went into effect. Your numbers also show that the drug benefit will add over

229 million hours of paperwork by the end of this year, with almost

all of those hours falling under HHS.

This means that the drug benefit will nearly double the total

HHS paperwork burden; is that correct?

Mr. AITKEN. I would have to review the numbers in terms of the

base, but that is approximately the numbers in terms of the increase.

55

Mr. WAXMAN. It’s really truly an astonishing number. That

means that the drug benefit alone is causing more work for Americans than the rest of the Medicare program, Parts A and B, the entire Medicaid program and the agencies, like FDA, combined.

Because of the structure of the benefit, I can think of at least

three different groups who will be hit by the paperwork burden:

first, Medicare beneficiaries, who must take the time to sift

through all the complicated options; second, the private plans, who

must track enrollment and report to the Medicare program; and

third, the Medicare program itself, which must keep track of the

relationship between the plans and the beneficiaries.

Can you provide me with a sense of how the paperwork burden

is impacting each of these groups, and can you provide us with any

perspective on how Medicare Part D paperwork compares to the

paperwork burden for other parts of Medicare.

If you don’t have the answer off the top of your head, we’ll give

you an opportunity to provide it for the record. But do you have

anything to add now?

Mr. AITKEN. The one thing I would want to clarify, and I don’t

know the details in terms of the particular impact, but that the

burden of the 220 million burden increase was largely a one-time

ramp-up establishment of this very big, new program in the last 40

years. The estimate for fiscal year 2006 is, I believe, around 5 million, something like that; the ICB has the numbers. That reflects

more once the program is in place, what are the kinds of annual

burdens.

And so in terms of the HHS inventory, that one-time substantiation increase for fiscal year 2004 will not be representative of

the future years. In fact, it will go down much more so that it’s not

such a large increase over the long run.

Mr. WAXMAN. We hope that may be the case, but on the other

hand, when next year comes, people start all over again. They’ll

look at their plan, see whether their drugs are still going to be included in that plan, find out that they fell into the doughnut hole,

look for a plan that will help keep them out of that doughnut hole.

And they may well look for plans that have other drugs that come

on during the course of the year.

And the whole premise of the structure of this Medicare Part D

was that people will shop, and if they’re going to shop, that means

they are going to have to go through the process of evaluating the

plans. If they don’t shop, then it seems to me that it’s a clear renunciation of the whole philosophy, because I don’t see the market,

to start with, to hold down drug costs by comparing plans. But if

people give up on comparing plans, then there is no real argument

to make that the competition is going to pull down costs; and so

far, I don’t think the competition has brought down costs at all.

Do you want to comment on that?

Mr. AITKEN. Just briefly.

I believe that—and I would need to confirm and get back to the

subcommittee on this—that a significant portion of the first-year

burden in establishing this program fell also on the plans that provided the insurance to the seniors and that a substantial portion

of that burden would not be continuing burden, but would be a onetime need to establish systems and so forth.

56

Mr. WAXMAN. Thank you very much, Madam Chair.

Mrs. MILLER. Thank you. And I appreciate the questions. We

have had several rounds of questions, talked about the Medicare

Part D extensively.

It is interesting to note that premiums for the plan originally were anticipated to be $37 a month, and now we find, because of

the competition, the average premium is about $24 a month. So actually the marketplace is working as was anticipated. It’s going to

be a fantastic program particularly for low-income seniors as well.

With that, I’ll excuse the first panel. We certainly appreciate

your attendance today and your participation as well.

We’ll take a brief recess while we seat our second panel.

Call the committee back to order. If you could all please rise,

please.

[Witnesses sworn.]

Mrs. Miller. Thank you very much. Our first witness this afternoon—our next witness, I should say, of this panel is a very frequent visitor to our subcommittee and we welcome her back again

and that’s Linda Koontz. She’s the Director of Information Management at GAO. She is responsible for issues concerning the collection and the dissemination of government information. She also

has lead responsibility for information technology management

issues at various agencies, including Department of Veterans Affairs, Housing and Urban Development and the Social Security Administration as well. So Ms. Koontz, we welcome you back to the

subcommittee and look forward to your testimony, ma’am.

STATEMENTS OF LINDA D. KOONTZ, DIRECTOR OF INFORMATION MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE; ANDREW LANGER, MANAGER, REGULATORY POLICY,

NATIONAL FEDERATION OF INDEPENDENT BUSINESS; AND

ROBERT HAYES, PRESIDENT, MEDICARE RIGHTS CENTER

STATEMENT OF LINDA D. KOONTZ

Ms. KOONTZ. Thank you, Madam Chairman, and members of the

subcommittee. Thank you for inviting me here today to participate

in the subcommittee’s hearings on evaluating paperwork reduction

efforts in the Federal Government.

As you know, in its annual report on implementation of the Paperwork Reduction Act, OMB reports that paperwork burden grew

in fiscal 2005 and is expected to increase further in 2006. According to the estimates that OMB collected, the total burden imposed

by Federal information collections increased by 441 million hours

for a governmentwide total burden of 8.1 billion. This is an increase of about 5.5 percent from last year’s total. OMB reports that

nearly all this increase, about 95 percent, resulted from the implementation of new laws. The new law having the greatest impact on

burden was the one establishing voluntary prescription drug coverage under Medicare. Implementation of that law resulted in

about 224 million hours of additional burden. The rest of the increase came mostly from adjustments to the estimates. Adjustments are changes, for example, in estimation methods or the size

of the population responding to an information collection, which result from external factors rather than from deliberate Federal acVerDate 11-MAY-2000 12:55 Oct 16, 2008 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 C:\DOCS\44770.TXT KATIE PsN: KATIE
57

tion. All told, adjustments accounted for a net increase in the burden of about 19 million hours.

Looking ahead to fiscal year 2006, OMB expects an increase of

about 250 million hours because of the new model for estimating

burden being implemented by the IRS. According to OMB, this expected rise does not reflect any real changes on the burden on taxpayers but only in how IRS estimates it. IRS and OMB believe this

new statistical model will improve the accuracy and transparency

of future taxpayer burden estimates.

One means of reducing burden established in the PRA is the requirement for agency chief information officers to review and certify information collections to ensure that they impose minimum

burden and produce maximum utility. However, as we reported in

2005, the CIO reviews were not always rigorous. Our case study

showed that CIOs provide certifications despite missing or inadequate support from the program offices sponsoring the collections.

Numerous factors have contributed to these problems, including

weaknesses in OMB guidance and a lack of management support

and priority given by the agencies.

In our report we recommended that OMB strengthen its guidance and the four agencies we reviewed make changes to their

processes. OMB and the agencies have all taken action to partially

address these recommendations, but we believe more needs to be

done to establish the kind of rigorous review process that the Congress envisioned in drafting the PRA.

At agencies that have given their information collections increased priority, we have seen promising results. IRS and the Environmental Protection Agency have set up alternative processes to

specifically focus on reducing burden. These agencies’ missions involve numerous information collections and they have devoted significant resources to targeted burden reduction efforts involving extensive outreach to stakeholders. According to the two agencies,

these efforts have led to significant reductions in paperwork burden

on the public. This is in contrast to the CIO process which in our

case studies did not lead to reduced burden.

I think we all recognize that achieving true burden reduction is

a great challenge for the government. As we have seen both in this

year’s PRA report and over the years, the tendency is for burden

to rise unless we take active steps to reduce it. This is why we believe it’s important to look for new ways to achieve the goals of the

PRA.

In our 2005 report we suggested that Congress consider mandating pilot projects to target some collections for rigorous analysis

along the IRS and EPA approaches. I will note, however, while

these targeted approaches appear promising, they cannot be considered an easy or quick fix. Such an approach would likely be more

resource intensive than the current process and might not be warranted at all agencies that do not have the level of paperwork

issues that face IRS and similar agencies.

Further, the experience of EPA and IRS suggests that success requires top level executive commitment, extensive involvement and

program office staff with appropriate expertise and aggressive outreach to stakeholders.

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Madam Chairman, that conclusion my statement. I would be

happy to answer questions at the appropriate time.

[The prepared statement of Ms. Koontz follows:]

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Mrs. MILLER. Thank you very much. I appreciate that. Our next

witness is someone else that’s no stranger to our committee here,

and that is Andrew Langer. He is the manager of regulatory policy

for the NFIB, National Federation of Independent Business, and

his job is to protect the interests of small business in the face of

ever-increasing burden from the Federal regulatory agencies. And

we certainly appreciate your attendance here this afternoon, Mr.

Langer, and the floor is yours, sir.

STATEMENT OF ANDREW LANGER

Mr. LANGER. Thank you. Thank you, Madam Chair and Ranking

Member Lynch. It’s a pleasure to be here once again. It’s an honor,

in fact, to be invited to testify before you once again on the subject

of regulatory impacts on small business, specifically the burden

that small businesses face from Federal paperwork.

I have to tell you, I’ve been in Washington for over a decade now,

and like most people who have been in D.C. for a considerable

amount of time, I have developed a certain blase attitude toward

certain government reports. But every once in a while, something

comes across my desk that is patently astonishing, something that

simply takes my breath away. And so it was when I received the

information collection budget several weeks ago from the White

House. It, too, is fairly blase. And in fact, I think government reports have to be dispassioned no matter what information they

have are conveying, but one cannot be blase about the basic facts

being conveyed in this report.

It starts off with a simple enough precept. America’s paperwork

burden rose an unremarkable 51⁄2 percent last year. Unremarkable,

that is, until one realizes just what that is 51⁄2 percent of. It’s 5.5

of 8 billion hours. That’s right, 8 billion with a B. 51⁄2 percent or

1/20 of that, just about 1/20, is an astonishing 441 million hours.

When I see a number like that, especially on a Friday afternoon,

it sits with me for some time. I give it a lot of thought. And in this

particular instance I pulled out the calculator. You see, several

years ago, NFIB’s research foundation did a study on paperwork,

and after surveying small businesses we came to the conclusion

that paperwork costs Americans just around $49 an hour, about

$48.72 I think is the exact number. Some paperwork costs far

more, some costs far less. Obviously it depends on the length, the

complexity, the technical skills involved. But the average is around

$49 an hour. So just looking at the average cost, just looking at it

from the standpoint of these average costs at a macro level, paperwork cost Americans $410 billion last year. The increase alone was

$20 billion.

Now, in my view, dealing with abstract numbers just doesn’t

help. Without context, it’s hard to gauge numbers meaning. We can

talk about 200 million hours here, you know, 100 million hours

there, but really, let’s put them in context, and let’s put the costs

in context. It’s when we compare them to other things that we

spend money on, we can see just how huge these numbers are. I

had somebody in my office pull some of the numbers out of the

Federal budget, and the results are startling.

Let’s start with the low end of the spectrum, medical research.

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searching, that it’s a serious medical threat, serious health threat.

So worthy that the NIH’s Office of AIDS Research had a dedicated

budget of $2.9 billion. Again, you know, $410 billion here, $2.9 billion there. What about cancer? The entire budget of the National

Cancer Institute at the National Institutes of Health pales in comparison to what we spend on paperwork, a paltry 1.4 percent or

only $4 billion. Certainly though, Americans are spending far more

on our most pressing public policy issue, that being the war on terror. Sure they are, just not in comparison to what must be our

great public policy issue, making sure we fill out forms for the Federal Government.

The Department of Homeland Security’s spending in 2005 was

$40 billion. Americans spend 10 times more on paperwork. It’s defense in the end that costs more than paperwork but not by much.

DOD spent $475 billion in fiscal year 2005. Sadly, this is only 15

percent more than Americans spent on paperwork.

A system that hemorrhages resources on paperwork in this manner is doomed to collapse. One cannot—it cannot perpetuate itself,

and it will eventually run out of steam. And while I know that

some of my colleagues attempt to minimize this problem, even if

we were to agree that the problem is a quarter of what it is, a system that focuses $100 billion each year on paperwork is not doing

much better.

All the tools I have discussed previously in previous testimony to

this committee are important. Fully funding OIRA, making sure

that the Office of Advocacy remains secure, putting greater emphasis on reviewing regulations and the paperwork burden they impose, setting regulations that aren’t reviewed, all of these are essential tools in getting a hand on the problem.

But one of the things I haven’t touched on in the past is the role

that Congress plays. Legislation is driven by constituent demands

and is crafted in a fashion which can exacerbate this problem.

Every time Congress passes a law which is vague and overly complex, it hands Federal agencies the tools with which to do much

mischief. Vagueness gives us regulations where a dry land is magically transformed into navigable waters of the United States.

Vagueness changes the pickup truck used for local landscaping into

an interesting Federal motor carrier. Vagueness turns recycling

into toxic releases. If agencies are given laws with holes big

enough, they will drive trucks through them, holes that they will

backfill with enough paperwork Americans simply cannot undig

themselves.

I’d ask that as you consider how to deal with the agency’s propagation of paperwork that you would also take time to consider how

best to address Congress’ role.

I see my time is running out. I would like to reiterate that what

I had said in the past regarding the business gateway, NFIB still

firmly supports this issue, this program. It’s one we agree with our

colleagues on the left wholeheartedly about. We think that it’s a

great thing. I do want to caution, however, that technology is not

a panacea. We cannot make technologies mandatory. We have to

recognize that some businesses will not nor will they ever be tech

savvy.

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In fact, I recently learned that a number of NFIB’s members are

Amish, and we know that they are never going to be able to use

computers. So thank you very much. I look forward to taking questions from the committee.

[The prepared statement of Mr. Langer follows:]

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Mrs. MILLER. OK. Thank you very much. Our last witness today

is Robert Hayes. He is the president and general counsel of Medicare Rights Center. Mr. Hayes led the National and New York Coalitions for the Homeless from 1979 to 1989 and has practiced law

with firms in New York and Maine as well. He is a MacArthur

Foundation fellow and has received honorary degrees from 10 colleges and universities.

Mr. Hayes, we welcome you to the subcommittee today. We appreciate your attendance and look forward to your testimony, sir.

STATEMENT OF ROBERT HAYES

Mr. HAYES. Thank you, Chairwoman Miller. Mr. Lynch, good

afternoon. We at the Medicare Rights Center work each day with

older and disabled Americans to assist and navigate the Nation’s

health care system. This year much of our work has focused on

helping men and women, especially the frailest and poorest people

of Medicare, navigate the complex Part D prescription drug program. We appreciate the opportunity to share with the subcommittee how the design of this needlessly complex Federal program

causes far worse consequences than wasteful paperwork, although

that it does.

Paperwork reduction in the form of streamlined and straightforward health assistance programs do a lot more than save money.

They also can save lives. Those of you who were in Congress back

in 2003 know from personal experience that the Medicare Modernization Act that created the Part D drug benefit rejected the

consumer-friendly model of Medicare that has served older and disabled Americans so well for the past 40 years. Rather than creating

a Medicare drug benefit, the Congress appropriated massive subsidies to launch a new cottage industry of for-profit insurance companies that sell what prove to be for many people incomprehensible

benefit packages. The subsidies spawned a ‘‘wild West’’ marketplace. 1,400 different drug plans, most with varying deductibles, coinsurance, copayments, pharmacy networks and covered drugs

went to work. 1,400 plans went to work, marketing their way to

a largely unprepared consumer base of older and disabled men and

women. I think this committee understands better than most, complex is bad, and very complex is very bad. I cannot identify a more

complex public benefit program ever enacted by the U.S. Congress

than the Part D prescription drug program.

This committee could spend weeks trying to understand the multiple layers of regulation, paperwork and bureaucratic hurdles that

this Part D program has triggered. Millions of our parents and

grandparents have been forced to spend those weeks trying to figure it out, and the estimated Office of Management and Budget

that it takes 30 minutes to fill out a Part D application is unfortunately both laughable and irrelevant. Bottom line, even the

savviest Medicare consumers have been confounded by the complexity of this marketplace and by the inaccurate and conflicting

information available from both the administration and from the

drug plans.

Since last fall people with Medicare have been inundated with

marketing materials from drug plans that are at best incomplete

and at worst deceptive. At the request of Members of Congress, the

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Government Accountability Office evaluated the information hotlines operated by both the private drug plans as well as CMS. The

private drug plans got about one out of three calls right. CMS did

better. They only were wrong 33 out of 100 times.

Batting .334 would be good for a baseball player, but it’s disgraceful when you are being paid by American taxpayers to provide

a basic need to older Americans desperately trying to make the

right decision because your heart pills or your chemotherapy or

your diabetes medication depends on it.

The Extra Help Program, this is not a program administered by

CMS but by the Social Security Administration, also needs to be

looked at in terms of its undue complexity and paperwork. That’s

the program that is supposed to assist people with very low incomes, very few assets, be able to avoid some of the payments or

escape the doughnut hole.

Madam Chairman, you mentioned that this program, Part D,

should be a fantastic program for especially older Americans who

are poor, but three out of four Americans who are eligible to sign

up for this Extra Help Program, these are people in dire need of

assistance to help pay for their medicine, have not signed up. Why?

Take a look at the seven-page application Medicare’s most vulnerable men and women have to complete. It’s filled with intimidating

questions about bank accounts, life insurance policies, any kind of

support that’s again, being pored over by your neighbors and various living arrangements. I’d ask any member of this committee,

can you tell me what is the face value of your life insurance program? I can’t. But to qualify for this Extra Help Program, my 94-

year-old neighbor living in a nursing home has to answer that

question and do so accurately under pain of fine and/or imprisonment.

Bureaucratic disentitlement, complex programs that keep people

away from programs that Congress enacts and which folks desperately need, is not something new to the Medicare Part D program. Medicare Part D highlights this problem, bureaucratic

disentitlement, but it is nothing new. The Medicare savings programs which help low-income individuals pay their Medicare cost

sharing have been available for 20 years, but only about half of eligible very poor older Americans nationwide are enrolled. Medicaid,

now 40 years old, boasts similarly low enrollment rates.

There are simple fixes to this, and it may not be the administration that can do them without the support of the Congress. Thank

you.

Mrs. MILLER. Thank you very much. I appreciate those comments. I’m going to start with Ms. Koontz. You have been involved

in this process for a very long time and probably longer than you

would like to think about, I suppose. But I guess I’d just like to

ask you for your honest assessment of the PRA status, where you

think it is, and if you think that it adequately encourages agencies

to really minimize paperwork reduction. What do you really think

of where we are with this thing now?

Ms. KOONTZ. I think there’s a couple factors with the PRA. One

issue I would talk to are the burden reduction goals that were in

the PRA that went through 2001, it was 10 percent for a couple

of years and 5 percent for a few more years after that up until

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2001. I think it’s pretty clear that those kind of numbers, which

seemed rather arbitrary, don’t really work in terms of providing incentives for agencies, and I think what we were looking for is

maybe some—looking at some alternative ways, as we reported to

you in 2005, to reduce burdens, sort of along the lines of what IRS

is doing and what EPA are doing, and we’d like to see agencies be

setting concrete goals for data reduction and reporting those publicly and then being accountable for achieving them maybe in a variety of ways.

The current process relies a lot on the CIO review process within

agencies and also on OMB review. And frankly those processes,

they haven’t been fully implemented in compliance with the law for

one thing, and they just don’t result in burden reductions.

So I think there’s some opportunities to relook at some of the aspects of PRA and perhaps to improve them perhaps when it’s reauthorized.

Mrs. MILLER. Yeah. I was going to ask you what you think the

most important thing that this subcommittee can do as a result of

this hearing today. I mean, I do like to have some sort of action

plan at the end of these various hearings, not that we just forget

about everything that we’ve heard, but some of the things that you

just mentioned there, are there any others that you think, and

would they require—I don’t know, it’s a question for you and my

staff, I guess they would require legislation to enable the agencies

to really assist them in how we can. What is important for this

subcommittee to take away from your testimony today? How we

can improve the PRA?

Ms. KOONTZ. One of the things is that we did suggest in our 2005

report that Congress perhaps alter the PRA to establish some pilot

projects to look at alternative ways of reducing burden in the agencies. So that’s one thing that can be done through legislation and

that involves some of the other things I talked about, setting agency targets and the like.

Some of the other things that have been—about a year ago or 18

months ago, we had a forum on the PRA, looking ahead to reauthorization and we brought together a number of experts from both

the government and the private sector, and one of the things that

was mentioned in that particular forum that we haven’t—we

haven’t audited this, but there was a strong feeling too that perhaps there was a need for OMB to get out of the retail review process. Right now they’re required to review every single collection

that comes through. They had suggested well, you know, maybe we

could have more impact if we were to concentrate on more significant collections or some kind of different threshold and that. So

that’s something I think we’ve said in the past that you could consider, but again we haven’t really looked at all the ramifications of

that, but it was I think a responsible suggestion.

Mrs. MILLER. Mm-hmm. Yes. I appreciate that, and it’s interesting.

Mr. Langer, you mentioned that you didn’t have enough time in

your testimony to talk too much about the business gateway. I

think you said hopefully it was going to be ready in October. Could

you flush that out a little bit for the committee?

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Mr. LANGER. The business gateway program has been in the

works for some time. I came onboard at NFIB in 2002 and immediately was invited to a retreat that SBA and some others have put

together that were working on the first iterations of it. In essence,

the idea is down the road, a small business will be able to go online, type in a few pieces of identifying information, the industry

it’s in, number of employees, the location of the business because

obviously regulations sometimes change depending on locale, and

in theory the system spits out all the regulations that apply to the

business, will hopefully give them very simple, plain English compliance guides, and will offer up the opportunity to fill out forms

online or at least give them the forms that they need. The first

iteration, it was originally called the business compliance one-stop,

and it was hard to get the agencies, you know, onboard with that.

The second iteration, the business gateway’s a step in the right direction. They’re now moving to the next iteration of the business

gateway. I haven’t seen it yet, but it sounds promising from the

folks that I’ve talked to, and that’s supposed to roll out in early October.

I mean, the idea is we have already taken the first step, which

is to get that massive Code of Federal Regulations translated into

little bits and bytes and put onto the computer, but it’s an incredibly cumbersome tool to use, and no small business is going to use

it. It’s impossible for a small business to go online and figure out

what it is they need to comply with by going online with a searchable CFR. Yes, ask a small business owner what a CFR is, they’re

not going to know what you are talking about. The real heavy lifting of it is for all of the agencies to get involved, review the regulations and create those simple compliance guides. It’s been one of

the problems that we’ve had continuously with regulatory agencies

across the board, is getting them to do that.

One of the issues that I worked on, you know, in deference to the

ranking minority member, the TRI program was a prime example

where we worked very hard with EPA to get them to create simplified compliance guides, and there was a great deal of reluctance

to get them to do it. You know, if I could have gotten a simple, you

know, for specifically dealing with the lead TRI issue, getting a

simple reference table of contents where if you had a question, it

will tell you where to go, that was hard enough. The point is, it

will take leadership on the part of Congress to get agencies onboard fully with this program. To incentivize the approach they are

creating these simplified compliance guides. Once we get them online, then those businesses that aren’t on computers, the resources

are there already, they already will have been offered. The business gateway itself just makes it a much more easily searchable

way for them to find those resources, but we wholeheartedly support it. It’s one where, you know—unfortunately he’s not here

today, but Robert Schule from OMB, it’s one of those areas where

he and I agree wholeheartedly, it goes a long way because as we

talked about with Medicare here today, it’s not—while filling out

the forms is time consuming, it’s understanding the questions that

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gram. But we’re also interested in the myriad of other burdens

small businesses face as well. You know, you might talk about

something that might only represent 1 percent of a small business’s

burden, but that’s 1 percent. It’s certainly better off than we are

now. So——

Mrs. MILLER. Absolutely. That is an interesting concept. You

wonder how many small businesses are using technology to really—I mean, you are talking about sort of a one-stop shop or something that’s really putting all the information together for them, as

opposed to a guy that’s going online, he doesn’t even know what

information to be asking for. Maybe he’s just downloading forms.

I mean, how is that helping him?

Mr. LANGER. That’s one of the issues. EPA put out the next step

in terms of their Small Business Paperwork Reduction Act requirements. And they have everything you need in one place. I got the

link the other day, and it’s a massive webpage, but it’s all there,

but it’s really hard to search. You can do a—you know, if you know

anything about Internet Explorer, you can find things that’s on

there. For instance, I went on looking for dry cleaners because dry

cleaners are small businesses faced with some of the most cumbersome environmental regulations that are out there. And you can

find it. It’s not easily understandable, but it’s all there. It’s a good

step in the right direction. As headache inducing as the page looks,

it actually is very helpful.

Mrs. MILLER. Just one final question. What do you think is the—

I mean, obviously for a small business, dealing with the IRS is the

biggest part of their burden. That’s not inherent to small business,

to everybody. In addition to the IRS, what do you think small businesses would say is the biggest paperwork headache that they absolutely have?

Mr. LANGER. You can’t say—it depends on the——

Mrs. MILLER. What do they say?

Mr. LANGER. It depends on the business. I mean, we get calls

from members, you know, it can be the forms that are dealing with

the H–2B visa applications 1 week. The last couple of weeks it’s

been the FTC’s proposed regulations governing direct sales. Now,

NFIB probably doesn’t have a position on it, but I have been hearing from members, it will be a huge paperwork problem for them.

If you want to sell, say, Mary Kay cosmetics, and you want to buy

a kit, you’re going to have to have a waiting period. It will take

you longer to get the Mary Kay kit than it does a handgun in most

States, with huge amounts of paperwork that you have to fill out

and that whoever sells you the kit has to hold onto for years. This

is going to be a huge burden for a lot of folks we hear from a lot

of people out there. A lot of Department of Agriculture programs,

especially for small, unsophisticated farmers, are difficult to deal

with. We are hearing a lot about animal ID these days. But again,

we don’t have a position on that. We’re just hearing from members

on those things, but for every business, it really depends on the industry.

Obviously if you’re dealing with anything that has to do with

where you’re dealing with chemicals on a daily basis or any sort

of a chemical substance, you’re going to be dealing with OSHA and

EPA. Chances are if you’re transporting anything, you are going to

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deal with the Department of Transportation, and that’s another

issue, which is this duplication of regulation and duplication of paperwork where you have three different agencies that are asking

for largely the same information but in vastly different forms.

That’s a problem, and we don’t see a lot of cooperation between

agencies. There’s supposed to be a cooperation, and there isn’t a lot

of it. And I’m not sure where Congress’ role is in that. But if there’s

a way for Congress to be leaders on that, we’d certainly appreciate

it.

Mrs. MILLER. Thank you very much.

Mr. Lynch.

Mr. LYNCH. Mr. Hayes, you have been very patient there. Again,

to all the panelists here, I appreciate your willingness to help the

committee with this work. Mr. Hayes, I had asked earlier Mr.

Aitken if he could go over the estimate regarding Medicare Part D

and compliance, and it just seemed to me—first of all, we had to

remember that we’re going to spend $800 billion—almost $800 billion in the next 10 years. So apart from the paperwork burden,

there’s the $800 billion, and no one is suggesting that we don’t

spend money on a drug benefit, but did it have to be this one? Did

it have to be so complicated? And Mr. Aitken, you know, begged off

on the number itself, saying that it had been provided by HHS. But

you know, I’ve spent way too much time on this one program trying

to explain it to my constituents to think that number is valid. And

I’d like to get a sense—you’re the Executive Director of the Medicare Rights Center. What do you think about that estimate,

about—I think they’re saying a half-hour or something like that,

that was the estimate, a half-hour a person to figure this thing out

and to enroll?

Mr. HAYES. I mean, that has no basis in anything real, Mr.

Lynch. I think Mr. Langer probably put his finger on the issue

that, you know, maybe ultimately filling out an application form

may take 30 minutes for somebody in theory, but it can take really

weeks and weeks and weeks of study, going to meetings, reading

through Web sites, if anyone is to have even a fair chance to understand which particular application they want to fill out. So that’s

really the issue from the consumer perspective, you really could

have—to be honest—an infinite amount of time and still not be

able to have a fair chance in this marketplace to make an informed

choice, and I think that’s what has been so unfair about a market

system that the information is all in the hands of the sellers. The

buyers are pretty much shooting in the dark, and you know, to the

state now that the enrollment period’s over for most people, most

of our helping people is to try to explain, this is what you signed

up for, sir. Nobody told me, called to tell us, that there was a

doughnut hole in the plan they sold us. And guess what, now people are going to pharmacies and finding out that they have to pay

retail prices, which often they can’t afford, for the medicine their

doctors prescribed.

Mr. LYNCH. All right. Do you have a better number—any way of,

you know——

Mr. HAYES. No. I mean I have plenty of solutions of how to make

this, you know, unfair, inequitable, wasteful system more efficient,

and it’s probably called Medicare; that is, go back to what has

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worked pretty effectively. But I think—I mean, I know my organization and every other organization like mine has grown dramatically this year because there is such a massive need that’s going

largely unmet, but we keep trying to do more and more to help people, and I wish to God that I could go out of business, at least out

of this business, and I wish to God that the Federal Government

would spend more money getting medicine to people and less

money with bus tours trying to explain this thing to people.

Mr. LYNCH. Right. OK. Thank you. I yield back.

Mrs. MILLER. OK. We certainly want to thank all the witnesses

for your attendance here today, and we’ll look to continuing to

work with you to reduce the paperwork burden for every American

citizen. And with that, I’ll adjourn the meeting. Thank you very

much.

[Whereupon, at 3:35 p.m., the subcommittee was adjourned, subject to the call of the Chair.]

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