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44–862 PDF 2008

S. HRG. 110–656

REDUCING UNEMPLOYMENT AND INCREASING

BUSINESS OPPORTUNITIES FOR VETERANS

ROUNDTABLE

BEFORE THE

COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

MAY 14, 2008

Printed for the use of the Committee on Small Business and Entrepreneurship

(

Available via the World Wide Web: http://www.access.gpo/gov/congress/senate

(II)

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

JOHN F. KERRY, Massachusetts, Chairman

CARL LEVIN, Michigan

TOM HARKIN, Iowa

JOSEPH I. LIEBERMAN, Connecticut

MARY LANDRIEU, Louisiana

MARIA CANTWELL, Washington

EVAN BAYH, Indiana

MARK PRYOR, Arkansas

BENJAMIN L. CARDIN, Maryland

JON TESTER, Montana

OLYMPIA J. SNOWE, Maine,

CHRISTOPHER S. BOND, Missouri

NORMAN COLEMAN, Minnesota

DAVID VITTER, Louisiana

ELIZABETH DOLE, North Carolina

JOHN THUNE, South Dakota

BOB CORKER, Tennessee

MICHAEL B. ENZI, Wyoming

JOHNNY ISAKSON, Georgia

NAOMI BAUM, Democratic Staff Director

WALLACE HSUEH, Republican Staff Director

(III)

CONTENTS

Page

OPENING STATEMENTS

Kerry, Hon. John F., Chairman, Committee on Small Business and Entrepreneurship, and a United States Senator from Massachusetts ........................... 1

ROUNDTABLE PARTICIPANTS

Brown, Justin Legislative Associate, National Legislative Service, Veterans

of Foreign Wars, Washington, DC

Conley, Coreena, site director, Veterans Business Outreach Center, Sacramento, CA

Dever, Col. Chip MA ARNG, small business owner, Systems Kinetics Integration, Marstons Mills, MA

Elmore, William D., Associate Administrator, Office of Veteran Business Development, U.S. Small Business Administration, Washington, DC

Hardy, Capt. G. Mark, USN president, National Security Corporation, Baltimore, MD

Heavey, Patrick, executive director, St. Louis Veterans Business Resource

Center, St. Louis, MO

Klerman, Jacob A., principal asociate and Abt fellow Abt Associates, Cambridge, MA

Levine, William president, WL Concepts and Production, Inc., Uniondale,

NY

McWilliam, John, Deputy Assistant Secretary, Veterans’ Employment and

Training Service, U.S. Department of Labor, Washington, DC

Rooney, Roderick, self-employed constable, Boston, MA

St. John, Bruce, Intergovernmental Affairs Officer, Center for Veterans Enterprise, U.S. Department of Veterans Affairs, Washington, DC

Sharpe, Joseph, deputy director, National Economic Commission, The American Legion, Washington, DC

Weidman, Rick, executive director for policy and Government affairs, Vietnam

Veterans of America, Silver Spring, MD

Winkler, Dr. John D., Principal Deputy Assistant Secretary of Defense for

Reserve Affairs, U.S. Department of Defense, Washington, DC

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Brown, Justin

Response to written questions from Senator Snowe ...................................... 45

Dever, Col. Chip MA ARNG

Prepared statement .......................................................................................... 50

Elmore, William D.

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

Response to written questions from Senator Snowe ...................................... 45

Hardy, Capt. G. Mark

Prepared statement .......................................................................................... 64

Kerry, Hon. John F.

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

Klerman, Jacob A.

Prepared statement ..........................................................................................

Response to written questions from Senator Snowe ...................................... 45

Levine, William

Prepared statement .......................................................................................... 66

Page

IV

McWilliam, John

Response to written questions from Senator Snowe ...................................... 46

St. John, Bruce

Response to written questions from Senator Snowe ...................................... 47

Sharpe, Joseph

Response to written questions from Senator Snowe ...................................... 47

Snowe, Hon. Olympia J.

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

Post-hearing questions posed to the following roundtable participants

and subsequent responses:

Brown, Justin ............................................................................................ 45

Elmore, William D. .................................................................................... 45

Klerman, Jacob A. ..................................................................................... 45

McWilliam, John ....................................................................................... 46

St. John, Bruce .......................................................................................... 47

Sharpe, Joseph .......................................................................................... 47

Winkler, Dr. John D. ................................................................................. 48

Winkler, Dr. John D.

Response to written questions from Senator Snowe ...................................... 48

COMMENTS FOR THE RECORD

Federick, Curtis, vice president, Royal Linen Service, Flint, MI ........................ 71

Frigy, Dustin, director, Procurement Technical Assistant Center, Genesee

Regional Chamber of Commerce, Flint, MI ....................................................... 72

Ledwick, Michael W., CFLE, Clio, MI ................................................................... 73

Lopucki, Carol, State director, Michigan Small Business & Technology Development Centers, Grand Rapids, MI .................................................................... 74

McMurray, president, Commercial Weather Services, Inc., Grand Blanc, MI ... 75

U.S. Department of Labor, Veterans Employment and Training Service .......... 76

(1)

REDUCING UNEMPLOYMENT AND INCREASING BUSINESS OPPORTUNITIES FOR

VETERANS

WEDNESDAY, MAY 14, 2008

UNITED STATES SENATE,

COMMITTEE ON SMALL BUSINESS AND

ENTREPRENEURSHIP,

Washington, DC.

The Roundtable met, pursuant to notice, at 10:15 a.m., in room

SR–428A, Russell Senate Office Building, the Honorable John F.

Kerry (Chairman of the Committee) presiding.

Present: Senator Kerry.

Staff present: Karen Radermacher and Matt Walker.

OPENING STATEMENT OF THE HONORABLE JOHN F. KERRY,

CHAIRMAN, SENATE COMMITTEE ON SMALL BUSINESS AND

ENTREPRENEURSHIP, AND A UNITED STATES SENATOR

FROM MASSACHUSETTS

Chairman KERRY. Well, good morning, everybody. We will officially come to order, though you are an unbelievably orderly group

already. Thank you for that.

Thank you very much for being here, everyone, and I apologize

that we are starting a little late. But I got overscheduled this

morning, and I think this is my fourth event. We were starting

early today.

But this is a very important one. First of all, I just want to thank

you all for coming to talk about veterans issues within the business

context, and small business particularly.

This is an official roundtable of the Senate Committee on Small

Business and Entrepreneurship, and we have found these to be

particularly helpful in helping the Committee to develop legislation

and develop a record for that legislation. It tends to be a little less

formal than the standard hearing but, frankly, I think far more

productive in a lot of ways because we can have some give and

take, back and forth. Just remember that it is all on the record,

and therefore, if you can help our reporter by identifying yourself

as you begin to speak, it goes a long way toward helping the record

to be clear about who is saying what when.

The record is made a formal part of the records of the Committee, and it helps to inform both the staff and other colleagues

who cannot necessarily be here to know how to approach these

issues and what to do.

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There are currently 231⁄2 million veterans living in the country

today, including more than 4.4 million now who have left the military since 1990. As servicemembers transition from serving the Nation to reentering civilian life, the economic benefits and opportunities that are provided by the Federal Government become very important, even more important in the field of entrepreneurship and

business ownership. As the Chairman of this Committee, I have

been serious since day one about trying to address the problems

that confront a lot of our reservists and National Guard members

who wish to start a small business, or many of who already are a

small business owner. And we find that the repeated deployments

to Iraq and Afghanistan have taken a real toll on some of those

small business folks, some of whom literally have had to shutter

their doors because they were a sole proprietor or others, in many

cases, were small enough that their absence made a profound impact on the ability of that business to survive.

There is a lot happening here in Congress; I am pleased to report. Last week, the Veterans’ Affairs Committee held a hearing on

Senate bill 22, which, many of you know, is the Post-9/11 Veterans

Educational Assistance Act of 2007, better known by its common

moniker, the new GI bill, which I am co-sponsor of and many of

us are supportive of in trying to pass.

I am also working on legislation to help prevent veterans,

servicemembers, active duty and otherwise, from having their

homes foreclosed. This has been a particular problem for some. So

we are trying to temporarily extend the period that a lender has

to wait before the foreclosure proceedings can go forward. It is currently 3 months. We want to extend it to 9 months after a serviceperson returns from service. And we want to suspend the increases

in mortgage rates so that there is a freeze on those mortgage rates

at 6 percent for 1 year after the serviceperson ends their service.

These provisions, I am pleased to say, we did succeed in getting

into the Foreclosure Prevention Act, but as you know, we have run

into problems in getting the Foreclosure Act itself passed.

I am also working to push legislation that Senator Smith and I

introduced last year, and that is the Active Duty Military Tax Relief Act, which includes a provision that would provide a tax credit

to small businesses who pay their employees who are called up for

active duty—i.e., pay the salary differential. Many small business

folks get paid less, obviously, when they are called up to active

duty, and if they have a fixed mortgage and all the other expenses

of a family, that can become particularly onerous. So we want to

encourage people to be able to pay that difference, and it is a great

act of patriotism and of conscience for people who do that. But we

want to encourage it and make it easier.

Senators Grassley and Baucus introduced the Defenders of Freedom Act, which included a provision similar to the provision that

I had originally put in, and I am pleased that they did that. Different versions of this bill have passed the House and the Senate.

Hopefully we are going to get final action on this in the near future, and all of you here can be helpful in helping us to get that.

When I became Chairman of the Committee last year, the first

thing I did was call a hearing on veteran small business issues, focusing on the shortcomings of the Federal Government in addressVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
3

ing the needs of veterans, as well as offering some possible solutions.

At that hearing, I made a promise to you that we would put together legislation to address the concerns that we heard. And I am

proud to say that, working with Ranking Member Senator Snowe,

we were able to pass that legislation through Congress, and the

Military Reservist and Veteran Small Business Reauthorization

and Opportunity Act of 2008 was signed into law on February 14

of this year.

That could not have happened without the hard work and support of many of you who are here, so I thank you for that and recognize that, unfortunately, there still are many challenges that face

our veterans and reservists.

So the roundtable today will begin by looking at the issues that

veterans and reservists face when trying to find civilian employment, including starting a small business. Jason Klerman from Abt

is going to tell us about a survey commissioned by the Veterans

Administration, released last September, which showed that 18

percent of veterans were unemployed 1 to 3 years after leaving the

military. In addition, of veterans finding employment, 25 percent

were earning less than $22,000 a year. And another survey of veterans released by military.com in November found that 81 percent

of returning military veterans didn’t feel fully prepared to enter the

workforce, and 61 percent of employers say they do not understand

how the qualifications gained in military service translate to the civilian world.

I must say to you, I am saddened by that figure and disturbed

by that figure because the leadership skills and discipline and patience, as well as the hierarchical knowledge that people learn in

working in military organizations, all of these kinds of things are

enormously advantageous to the private sector and to the normal

workforce. And so those statistics really bother me, and I look forward to learning more about what is behind them and what can

be done to combat them.

The second part of today’s discussion is going to focus on the solutions to the kinds of problems we identified. We are going to try

to find a way to solve them.

We have with us today Federal agencies, veteran service organizations, and veteran and reservist small business owners. I am confident that there are going to be a lot of ideas at this table about

how to proceed.

Last, the roundtable is going to focus on veteran small business

centers and how effectively they are currently serving veterans.

Coreena Conley will speak about the work of her center in California, and Pat Heavey will tell us about his work in St. Louis. We

also have three clients from the centers who can talk about the impact of the centers on their lives. Our Committee has heard from

many veterans about the importance of these small business centers. There are some who argue that similar services are provided

by the Small Business Development Centers and other organizations. So we need to work through that tension and understand

what the distinctions are, what the add-ons, plus-ups are, if you

will, of the veteran-dedicated centers. And I look forward to a productive and helpful discussion here about the role of those centers.

4

I know there is no clear consensus in the veteran community

about what a veteran small business program ought to look like.

It is always hard to get consensus in the veteran community, anyway, period; I have learned through the years. But we ought to try

to see if we cannot narrow that down here today and let’s figure

out what really is the best deal. It is very hard folks, if we cannot

get a consensus in the veterans community for what best serves

the veterans. Believe me, it is tough to get it among my colleagues.

So help us here today in order to do that.

The general way we work here is to just take your name placard

like this and put it up so that the Chair can see it, and that way

you get called on appropriately as we proceed along. And the other

thing I forewarn you, this is my schedule today, if you just want

to get a sense of what I am working with. It is a four-pager today.

And so I am not able to be here the whole time. We have a Foreign

Relations Committee hearing. I also have a Commerce Subcommittee and a Finance Committee meeting all at the same time,

and I have got to bounce between them, which is why we put this

record together.

But we have able staff who run this very effectively, and as I

said before, this has proven to be a terrific way to get our staffs

all on the same page and working effectively. So do not let the fact

that the Senator is not here, or a Senator is not here at a particular moment deter you from creating this record, because this

will produce legislative effort, I promise you. And it is the best

records that we get out of the Committee. I think it is the best format that we work with.

So if you keep answers concise and everybody drives toward the

same goal here, this will be a productive morning. And again, I

thank you on behalf of the entire Committee for taking the time

to come.

Do you guys want to make any comment as you start?

Ms. RADERMACHER. I do not.

Mr. WALKER. If I could just briefly——

Chairman KERRY. On behalf of Senator Snowe, do you want

to——

Mr. WALKER. Sure. Thank you very much. I appreciate that.

Chairman KERRY. Please.

Mr. WALKER. Thank you very much, and I appreciate that.

Chairman KERRY. Are the mics on? Somehow I do not hear the

normal sound here. They are? OK. Good.

Mr. WALKER. Thank you very much, and I appreciate that. I

would just like to say thank you on behalf of Senator Snowe to the

participants for what you do today, but not only what you do today,

but for what you do each and every day on behalf of veterans. You

do it all without regard to yourself, and she is very appreciative of

that.

In addition, we would like to thank Senator Kerry for the work

that Senator Snowe and he have done on a bipartisan basis. This

is truly an issue that both the Republicans and the Democrats have

worked together on, bipartisan as well as bicameral in our efforts

with the House of Representatives, to get passed the military reservist/veteran entrepreneurship legislation that we worked on.

This included provisions that Senator Snowe had in both the 109th

5

Congress and the 110th in four different bills, and Senator Kerry

as well, and so we thank them for working on a bipartisan basis

on these issues that are truly of importance to veterans.

As we are here today, we specifically want to look at the issues,

as the Senator discussed, on veterans employment. Senator Snowe

has some very serious and significant concerns about veterans employment, and that is something that I hope that we can flesh out

through our discussions.

Again, thank you for your time. I am going to stop there to defer

back to the Chair, but we thank you.

Chairman KERRY. Matt, thank you very much. I did not introduce Matt Walker, who is the senior staffer for the Republicans,

the minority on this side, and Karen Radermacher for those of us

on our side. But it is completely without that sense, I hope you will

understand. Everything we do on this Committee, I must say we

have done in a totally bipartisan way. And it is fun to do it. It

makes it worthwhile.

Mr. Klerman, why don’t you lead off? Lay out sort of what the

picture is here and let’s rock and roll.

Mr. KLERMAN. Good morning, Senator Kerry. My name is Jacob

Klerman. I am a senior principal associate at Abt Associates in

Cambridge, Massachusetts. I want to emphasize, looking around

the room, since several of the people that have funded my research

are here, that I am going to speak today in a private capacity, not

for anybody who funded my research or for Abt Associates.

With that introduction, I want to say four things to sort of set

some research evidence for the discussion this morning.

The first thing I want to say has to do with today’s veterans and

the experience of active-duty veterans as they leave service. The

place we want to start is to remember that today the military is

enlisting the very cream of the non-college-bound youth of America

today. They come in with high aptitude. Almost all of them are

high school graduates. While they are in the military, they get a

set of skills that are exactly the skills that employers claim that

they are looking for. They get the ability to follow instructions.

They get the ability—experience following instructions, to work in

teams, to have small leadership skills, and they often get skills

that have direct transference to the private sector.

And then when they leave, they enter the job market, and as the

Senator said, there is work that we have done, work that other researchers have done that suggests that when they first enter the

job market, many veterans have some difficulties. When we think

about that, I think the place to start is to remember that entering

the labor market, whenever one does that, is a challenge. It is a

challenge for high school graduates when they leave high school. It

is going to be a challenge to those who have essentially no high

school—no private job market experience, and they are going to go

out and try and work, enter the job market. And while our veterans, when they spend time in the service, have considerable job

market experience, they do not have connections with employers.

And so we would expect when veterans first enter the job market,

like new high school graduates, they will have some churning in

the job market if they go forward.

6

As the Senator quoted, earlier work that we did at Abt Associates suggests that in the first year or two after they leave active

duty, about 18 percent of veterans are not employed at that time.

It is important to remember, however, that that statistic includes

a number of people who are in school or doing other things. That

is exactly what we would expect them to do. We gave them GI bill

benefits and the like when they were in the service, and so that

would not be considered to be a significant problem.

Nevertheless, it is true our work and the work, for example, of

several people in the Department of Labor suggests that veterans

have unemployment rates that are considerably higher than the

general population. But they are not considerably higher than their

young counterparts, and we know that over time, as those veterans

grow older, that any gaps that there are between the experiences

of veterans and non-veterans, where originally veterans had higher

unemployment rates, close quickly.

So I think that for our first order, we want to think for the individual veteran about these problems as being transitory. That is

not to say it is not worthwhile for all of us to think about ways

to help young veterans to make that transition go more quickly,

but at least as of right now, there is no evidence there is a real

problem in the intermediate term. That is the situation for activeduty veterans.

The situation for reservists is slightly different. The Senator

mentioned issues about reservists. So the issue for reservists is

that most reservists had jobs before they were called to active duty,

and they are guaranteed by law the right to go back to those jobs

after they return from active duty. That is USERRA, Uniformed

Services Employment and Reemployment Rights Act. So inasmuch

as that legislation is working well, we would expect veterans/reservists to have similar earnings who had jobs, who were employed,

as opposed to self-employed, before and after they come back. And

the available evidence suggests that for the most part, most reservists come back, and their earnings are relatively similar after they

come back compared to before they left. And in fact, the work that

we did for Dr. Winkler, who is here for Reserve Affairs, suggests

that while they are on active duty, most reservists actually have

an increase in their income properly computed. It is not true about

all of them. There are a significant number that show losses. But

most reservists actually have more. Now, we would expect that because they get special pays. They have significant hardships being

overseas, being literally in harm’s way. But in a literal financial

sense, most reservists should not be having trouble paying their

mortgages because they have higher earnings.

There are some reservists who have lower earnings than they

had before, especially the ones that had better-paying jobs, and it

is worth noting in terms of the perspective of this Committee that

the prevalence of those things is actually slightly higher among

self-employed reservists than it is among reservists who had jobs.

And we are in the process of looking at the question of what happens when self-employed reservists come back, because they are

not protected by USERRA because in the end they are the employers, and those big employer protections do not apply. We do not

have results on that right now. We hope to have results on that

7

for you soon in the intermediate future. That is my second point.

That was active duty and reserve.

The third point I want to make is that presumably we are here

partially because the Nation and reserve—veterans are in a different place than they were, say, 10 years ago. We are now engaged in a major war. We have people fighting on the front lines.

We have more attention to the situation of the service. And we are

all concerned that the situation will be worse in terms of their

labor market experiences.

So I want to tell you that as of now, I do not think there is any

strong evidence that labor market experiences for veterans have

gotten worse when they are coming back, either active duty or reservists. But I want to say that we need to be careful about that.

There have been a series of recent studies that have noted that a

significant number of people who are serving overseas are suffering

some form of difficulties—post-traumatic stress disorder or traumatic brain injury—and there is some evidence that those problems

are associated with poor labor market outcomes when people come

back. And it is worth studying whether or not in the future those

are an issue.

The preliminary work that I have seen so far suggests that that

is not a problem, but that work is still very early, and we need to

keep an eye on that, because obviously the situation for veterans

today is very different than 10 years ago, because today we actually have a large number of veterans that are serving in combat

situations and are having the stresses that come from that position, and we want to be careful that that does not mean they are

having significantly worse outcomes. There is no evidence of that

so far.

And then the fourth point I want to make is a warning for this

Committee—‘‘warning’’ is too strong, but a cautionary tale. Senator

Kerry pointed out that we did a set of focus groups for employers,

and we talked to the employers. We got a whole bunch of relatively

negative perceptions about veterans. In particular, we heard concerns that veterans are mentally unstable. And as we talk today

about the problems that veterans are having, we all want to be

careful not to make that a self-fulfilling prophesy. To some extent,

all the employers in the Nation are listening to the types of things

we are saying, and while it is true that some veterans are having

difficulty, it is not true of most of them, and we do not want to

overstate that situation so that employers have a negative perception and are, therefore, more reluctant to hire our veterans.

Thank you, Senator Kerry.

Chairman KERRY. Let me follow up on that for a minute. I was

just listening. As we sit here, you talked a fair amount about sort

of a preliminary set of findings, preliminary here, preliminary

there. What do we know—I am trying to crystallize out of what you

have just told us. Give us the short and sweet of how you would

summarize where the focus ought to be. You are not sure of what

happens to a certain reservist level here or the differentials. It is

hard to wrap your hands around that a little bit. What do we know

well enough to say this is priority number one that we have got to

address?

8

Mr. KLERMAN. We know that young veterans have higher unemployment rates than their non-veteran counterparts. There is no

doubt about that. We know that that gap closes over time so we

have reason to believe that that will be a relatively short-term phenomenon. But all the services and the Department of Labor and

the Department of Veterans Affairs have a variety of programs to

try and ease that——

Chairman KERRY. But do we know why? Is there a lack of a sort

of connecting flow as they are separated from the service and then

go out in the sector? Are they just decompressing and are they

going through PTSD issues? I mean, is there a—can we hang our

hat on something?

Mr. KLERMAN. I do not think there is any reason to think it is

anything other than the fact that it takes a while to settle into the

civilian labor market, that all new labor market entrants spend a

lot of time finding the right job for them, and that implies some

amount of time out of the labor force and some amount of time

finding a job that pays enough that it pays you for your skills. And

that process always takes a long time, and at least so far, I have

not seen any evidence that it is much worse for veterans than it

is for any other new job market entrant—a high school graduate

or a woman who is coming back to the labor force after she was

away raising her children. There may be significant problems, but

I have not seen the evidence.

Chairman KERRY. That is for folks who are kind of going through

a normal separation after a period of active duty, et cetera. Does

that include reservists?

Mr. KLERMAN. Yes. The same thing is true for reservists. In fact,

the evidence suggests that reservists come back in faster. If they

had jobs before, they are guaranteed the right to go back to that

job later, and there are procedures in place that say if your employer does not offer you your job back, call this number because

we want to know about it. There are procedures the Department

of Labor runs for guaranteeing those rights. The number of complaints is relatively small, but there are complaints, and they do

get acted on, as I understand it. I think there is someone here from

Labor who can speak to that.

Chairman KERRY. Well, we will come back to that probably in a

moment.

Mr. McWilliam.

Mr. MCWILLIAM. Sir, I am John McWilliam from the Department

of Labor. I just wanted to expand a little bit on Mr. Klerman’s discussion of the young veterans returning to the employment sector.

Chairman KERRY. Before you do, there is one other question I

forgot and that I wanted to ask. You talked about the quality levels

and the graduate of high school, et cetera. But it is a fact that to

meet recruiting quotas in the last months or year or so, there has

been an increasing waiver of many of those requirements. Has that

impact been felt?

Mr. KLERMAN. Well, the longer version of my statement said

something about that, and I did not get a chance. There is no doubt

that there have been declines in the, quote-unquote, quality of the

people that are coming to the military as the Department of Defense has tried to expand the number of people who were being reVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
9

cruited, and the fraction of people who are coming in with lower

test scores, were not high school graduates, who have some form

of waiver for often a previous—often low-level or moderate-level

criminal conviction has gone up.

There are two things to say about that. The rates still are—the

quality remains quite high over historical standards, and even if

that was a significant issue, it would not be the veterans that we

are seeing now, because those issues for the most part have only

been observed in the last year or two. Those people would not be

cycling off until 2 or 3 years from now. So even if that is an issue,

it does not explain the data we are looking at today. We may have

a problem with that in a year or two.

Chairman KERRY. All right.

Mr. McWilliam, thank you.

Mr. MCWILLIAM. Thank you, Mr. Chairman. I just wanted to expand a little bit about the young veterans returning to the civilian

workforce from the military. The research that we have done has

showed that they have a very high unemployment rate immediately following separation, 32 percent. However, it steadily decreases as they go long away from being in the military. By 39

weeks, it approaches that of the general population. It is, therefore,

our belief that—and our emphasis has been on the Transition Assistance Program and assisting people——

Chairman KERRY. General population by a national statistic or

general population by a local or State statistic?

Mr. MCWILLIAM. By the general one, sir, on the current population survey that the Bureau of Labor Statistics puts out on a

monthly basis. And so it approaches it at the 39th week. Mr.

Klerman mentioned that it does take a long time, and anecdotally,

people tell us it takes a while to adjust themselves. There, of

course, is the financial safety net that they have for UCX, Unemployment Compensation for Ex-servicemembers, which generally

lasts 26 weeks and provides that ability for people to move into the

civilian workforce area. And as I said, the emphasis, we believe,

should be on the Transition Assistance Program. The Department

of Defense has signed up to achieve a goal of 85 percent of

transitioning servicemembers attending the 21⁄2-day workshop that

we present at all military installations from a current 60 percent.

Chairman KERRY. Mr. Weidman. Rick. You had your card up,

and then you put it down. You yielded. It is a very effective maneuver here.

[Laughter.]

Chairman KERRY. Go ahead.

Mr. WEIDMAN. Good morning, Senator, and thank you very

much, Mr. Chairman, for the opportunity to be here today. I am

interested in Mr. Klerman’s study and Mr. McWilliam’s profession

of how well the system is working, and that is not our perception,

particularly having to do with the DVOP/LVER Program.

Chairman KERRY. DVOP and LVER being?

Mr. WEIDMAN. Disabled Veteran Outreach Program and the

Local Veterans Employment Representative Program. Essentially,

they are the veteran staff in the local one-stops. Most of the money

that goes to United States Department of Labor Veterans Employment and Training Service is channeled to the States, to the workVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
10

force development agencies in the 53 jurisdictions that actually do

the workforce preparation, or reputedly do so.

There is no accountability in this system. The Jobs for Veterans

Act, which was enacted in 2002, was essentially a tradeoff. DVA

never went along with that bill, particularly with part-time

DVOPs. Having run at the time the second largest DVOP/LVER

Program in the country, with the full backing of Governor Cuomo

and the State legislature on a bipartisan basis and all the VSOs,

I can tell you how difficult it is to keep managers from misusing

the veteran staff in those local job service offices when they are

overrun with people because they do not have enough general staff.

And that is still the case today.

The Jobs for Veterans Act shifted to something that perhaps

made some great deal of sense, and I was part of the thinking at

the time, although we objected to many of the particulars in the

Jobs for Veterans Act, that we would switch from proscriptive behaviors to measuring results. And so the tradeoff was supposedly

giving the workforce development agencies more latitude in return

for much more rigorous accountability. Does anybody get a job

here? And is it at a higher level? And for veterans. And particularly for disabled veterans and special disabled veterans, those

with 30 percent or more.

And, in fact, the latitude was given to the workforce development

agencies almost immediately, and I believe it is still pending and

still has not been published, all of the regulations that have to do

with the accountability portion of it, 6 years later. And that is

being done now, I understand, only because the legislation was

passed last year that required them to publish the regulations to

implement the 2002 law. This does not impress us.

One of the biggest problems in Government throughout, whether

it be all of the fine legislation that you have had a significant and

leading role in for veteran entrepreneurs, when it comes to Federal

procurement, the problem is in the accountability about what actually happens out there and does anything bad happen if people do

not do the right thing and do not obey the law, and does anything

good happen if they do a heck of a job. And it is that lack of accountability that we feel that it is struggling. It had led DVA to

the point where we believe that when it comes to the DVOP/LVER

Program, there are only two responsible options without betraying

the young people coming home. One is to Federalize all the DVOPs

and LVERs and put them under the direct control of the VETS and

the State directors and assistant directors and not keep them just

processing people into one-stops, but them wherever the vets are

and where the employers are. The job listings for disabled vets over

the last 20 years of my talking to DVOPs all around this country

comes right back to the same thing. The DVOPs will say that for

disabled vets, they develop—almost every one of them——

Chairman KERRY. Is the reporter getting all these acronyms? Are

you OK with that?

Mr. WEIDMAN. I am sorry. For the veteran staffer, for a special

disabled vet, meaning 30 percent or more, that they develop the job

around the individual, and then they go work with an employer to

create that job. It is very labor intensive, no pun intended, and it

is not a high-gross game. And so we need to get away from that

11

and understand what can we do for the high-risk veterans and especially for those who are service-connected disabled who are coming home today so that they do not wind up like a lot of our guys

25 years down the line with a resume that looks like Swiss cheese.

And a job is the key to the readjustment process. It is really the

nexus of the readjustment process. And everything else ought to be

aimed toward that flash point of obtaining and sustaining meaningful employment, and currently the aspects of the system, some

run by the VA, some run by Labor, do not work very well.

In regard to USERRA, I will just offer a very brief comment that

I offered last week at the Veterans’ Affairs Committee hearing that

Senator Akaka and Senator Burr held in regard to USERRA. And

there was a law, we said, well, we do not object to this, and it is—

possibly toughening up the law will do some effect, but maybe after

all the things we have done over the last 25 years, what the young

people still tell me—and I spend a lot of time with young people,

from Walter Reed and from other hospitals—is that they do not

even bother—I am talking about the Guard and reservists—because they hear it takes up to 2 years and most of them do not get

satisfaction, and that it is justice delayed is justice denied. If it

does not happen quick, it does not matter. He or she——

Chairman KERRY. So how do you pull them in? How would you

pull them in? What is your way to make sure——

Mr. WEIDMAN. Well, I think maybe we ought to rethink our approach. A very small percentage of the employers in this country

are paying the economic cost of this war, in other words, because

they have Guard and reservists working for them. Let’s give them

a tax break, one. And, two, let’s take some of that WIA money and

make it available to employers, particularly small employers, not

only to train their replacement for the individual who gets activated into the Guard and Reserves, but also for the individual who

comes home after the deployment who oftentimes, after 15 months

away, has to be retrained. So let’s focus on that because right now

some few large corporations are making a mint on this war. Maybe

it is time for another Harry Truman style hearing. But the small

guys are paying.

Chairman KERRY. Right, but are those reservists and guardsmen

the people who are—are they the ones who are really being

dropped through the cracks, in your judgment? Or is it a more

chronic problem for the person who winds up with that Swiss

cheese resume that you have talked about who is really somebody

who may not have the training, did not have a solid job necessarily,

or does not know where they are going? You know, I am not thinking about the employed person, but the person who was not necessarily already employed in the civilian sector who is coming out

for the first time to look for the job and so forth?

Mr. WEIDMAN. Well, the experience of those employers—employers who have hired Guard and reservists and veterans once are

more likely to do it again. But if that returnee is a young person

that went out of high school directly into the Reserves and National Guard, which often happens, and then comes home, they are

in that category, just as the separating active duty folks. They have

a high school diploma and have never been in the job market.

12

The same veteran-friendly employer is reluctant at this point to

hire more, and we have talked about this, and you heard testimony

a year ago January——

Chairman KERRY. Because of the cost to the company.

Mr. WEIDMAN. Because they are going to take care of the people

they have.

Chairman KERRY. Right.

Mr. WEIDMAN. But they are not going to extend more, and Mr.

Klerman talked about the attitude of many employers. It is a great

danger, and it was a great danger with Vietnam veterans, that you

had to fight so hard to get the neuropsychiatric and readjustment

counseling services that it made it difficult for people to get a job.

But at the same time, in order to get and keep that job, you need

those supportive services for many combat vets.

So I am not sure what the solution is, but one thing that would

be a good watch word, if I may suggest, is—our good friend Max

Cleland, a former Member of this Committee, had a great phrase

for it: ‘‘strong at the broken places.’’ People who—combat vets are

strong at the broken places if they get the care they need to help

make them as whole again as humanly possible, both

neuropsychiatrically as well as physiologically. And I will stack

that combat vet up against the kid who hung around and never

served their country in the military any doggone day as being the

person I would bet on to be the best employee.

Chairman KERRY. Yes, well, I do not disagree with that at all.

The question is how to get these connections, how to make it attractive for that employer to actually do that, which is what we are

talking about here, which is good.

Mr. Elmore, do you want to pick up? And then we will go to Mr.

Rooney from there.

Mr. ELMORE. Yes, sir.

Chairman KERRY. I am going to have to dog out of here in a

minute, but——

Mr. ELMORE. And thank you for having this today. I think a couple of points really for Mr. Klerman. I found his report very interesting, and I am still digesting much of what is in there. But there

are a couple of points that I wanted to make in the context of the

question about the quality of the recruits. I think DOD recognizes

this, and perhaps Dr. Winkler might want to address this later.

We have been working with the Department of the Army for

about 4 years now on the development of what is called the Army

Advantage Fund, and that fund, in fact, is going to support the creation of future homeownership and future entrepreneurs of Army

recruits. And they have to be in the 50th percentile or higher to

be eligible for that program. So DOD is also taking these steps to

try to recruit high-quality recruits, and I applaud them for that.

A couple of points, though, that I wanted to make about the report. One of his primary recommendations was this lack of network

amongst servicemembers coming home, and I think that is critically important, and I think that is important in the small business

side as well, because entrepreneurship is a lonely profession, and

if you do not have an ability to link up with others who are entrepreneurs and you do not have family support, the prospect for success can suffer. So I would like to have a little more exploration

13

of how we get around and get to this development of the kind of

support networks that are more typically available for those who

do not serve.

Second is there is other evidence in some other reports that talks

about rural self-employment, and there has really been a pretty

dramatic increase in self-employment in rural communities. It is

about 240 percent over the last 40 years. But at the same time,

self-employment income is only about half of those who have regular jobs in the regular civilian marketplace. And given that many

of our Reserve and Guard members are from rural areas, I think

that is an area that certainly I am trying to push my program

focus increasingly toward. How do we get out and affect opportunity in the rural areas, especially as we continue utilizing Reserve and Guard?

Thank you.

Chairman KERRY. Well, that is interesting. Does the SBA have

a—I mean, is it targeting that in some specific way?

Mr. ELMORE. Given the experience that we have had with the

Patriot Express Loan and I think the initial really pretty good success on that, we do have a new Rural Express Loan Program that

is targeted out to the rural areas. And I know in the work that I

have done with our Small Business Development Centers, for example, with my district office outreach initiative as well, we continue to push out to engage Reserve and Guard, whether they are

rural or urban, and through that trying to bring them in touch

with the services and resources we do have available in the hopes

that that will be——

Chairman KERRY. When do you begin that? When do you initiate

that? Is there some awareness at separation that this is available

to people?

Mr. ELMORE. Yes, I think—one of the other points in his study

is that a significant number of Reserve and Guard and active

servicemembers begin to think about that transition before they get

to TAP. I think it was 30 percent, if my memory is correct, pretty

close to that, begin their job search prior to separation. So I think

it is not just TAP. In that sense, it is really almost pre-TAP. You

know, how—we certainly do not want to encourage people to get

out. But at the same time, we want to make sure those who have

made that decision that they are not going to continue to serve,

whether it is because their enlistment is up or retirement, that

they know about and have access to the services and information

available from all of us here at the table and others. So that is the

direction that we are trying to move.

Chairman KERRY. Mr. Rooney.

Mr. ROONEY. Thank you, Senator. My name is Roderick Rooney.

I am a citizen, and I am speaking in that capacity. I am a special

veteran, disabled vet, an entrepreneur. I suffered dealing with

some of the programs in the Northeast Veterans Center. They

closed. I have a master’s degree. I am a WIA, the one-stop centers,

but there is nothing that was out there—I was out of work for 2

years. There is nothing out there for a person who has, a veteran

who has some skill sets, some training, some tangible—have a resume that does not have gaps. There is plenty of programs for individuals with PTSD or who are homeless or some of these issues,

14

but most of—from my journey—and I audited, Rick, you know, onestops. From my journey it is only—there is a lot of information, you

know, from Veteran Express or Career to Success, all the buzz

words and new-fangled attempts to disseminate information. But it

is just that—information.

What I found from the individual service centers that were specializing in veterans, they had that—they understood simplified.

They understood esprit de corps. So when you walked in, you felt—

you got—what I needed most was someone to give me some hope,

because you get rejection and rejection and rejection. And to have

some skill sets and still getting all these rejections, like even if you

do a Federal job—and I am on the special list—the manager gets

to choose from that, which list he picks from. And if you are not

on that list that he chooses from, you still do not get that special

preference. That is a flaw.

Chairman KERRY. Interesting dilemma. Go ahead.

Mr. ROONEY. But, in general, it is—I was reading some report,

and it had a lot of repetitiveness in the communities that specialize

in veterans services. I think that is not so because for a person who

is in the local area, when you go to the one-stops, something like

that, that is the big mountain on the hill. The one that is in your

community, you kind of know and are familiar with, and the individuals that work there are familiar with you. And the service centers reps—there is only one. He may have like 25, 30 veterans. You

get to see him maybe once every 2 weeks, and he is just giving you

information that is on the Internet. You know, I live on the Internet. I am originally a New Yorker, so I just—you know, I am on

the phone, Internet, everything. But it is no information that I

could not find myself. And I found that the services that are out

there from Department of Labor and all those agencies is general

information. No one shakes hands anymore. At my former job was

a fellow who also could not find a job. So maybe I was not that

good at it, right? But no one goes and shakes hands and looks

someone in the eye and builds that relationship of trust, giving the

veteran a chance or saying, ‘‘I have this perfect person for you.

Let’s give him a shot,’’ and coach them in the job and follow up

with them. Instead of having a referral, have a linkage. My hand

is still on this individual. It is not like that when you go to, I guess,

the larger agencies. And this is like—the ones at the smaller agencies, when I went in, they gave me a free seat for grant writing.

You know, I could barely pay for gas to even go from Boston to

Lawrence, you know, but I did. And I was out of work for—I got

a 6–month contract job with the State of Massachusetts as a contract monitor. But that is the most I can squeeze out in 2 years

from unemployment. And if you go to the SBA or SCORE, you have

to be pretty much polished when you get there.

You know, if you are a young veteran, a returning vet, you do

not have that polish like that. You are still plowing and you are

still readjusting, and you have to have a polished business plan

that is, you know, good to go through the—I mean, they have got

representatives there and experts there to help you muddle

through to get it to the level of if the banks will give you a loan.

But to go through that process is a big turn-off, and it is not even

really—you know, if you knew, especially if you are young and comVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
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ing home, you know, that is like going to college. I have got to put

math down. I have got to put my thoughts on paper. It is a fighting

task, and so it is just missing the mark, just from my——

Chairman KERRY. Well, that is a very important—that is a very

eloquent and important statement. I think it is helpful, and it

needs to be fleshed out a little bit here as we go forward, sort of

what is the reality versus the policy or the concept. And I think

if we can flesh that—I have got to go down to this other hearing

for a minute, but I know, Dr. Winkler, you have had your card up

for a moment, so I am going to leave it in the hands of Karen and

Matt, if I can. But this is good. Keep fleshing this out a little bit,

and I think there is a lot more yet to be added to it. We have a

lot of experts at the table. Have we made you a Red Sox fan yet?

Mr. ROONEY. No way. No way.

Chairman KERRY. You just lost my sympathy.

[Laughter.]

Mr. WINKLER. Good morning. I am John Winkler, Principal Deputy Assistant Secretary of Defense for Reserve Affairs, and I am

very grateful to have this chance to come and talk about this issue.

The issue of veterans’ employment and unemployment is important to the Department of Defense, and Reserve Affairs, in particular, as far as guardsmen and reservists are concerned. We have

a role to play in many ways in assisting guardsmen and reservists

and understanding the source causes of problems that people may

face with their employers. We also are responsible for the National

Commission for Employer Support of the Guard and Reserve,

which is the front line for the Department and the employer community dealing with issues.

And so we have been really thinking hard and looking hard at

this issue from our perspective for a couple of years, and I think

the general point I want to make in response to points that have

come up so far along the way is while there is no doubt there are

problems out there with respect to individuals and veterans getting

jobs, keeping jobs, finding jobs, and so on—we certainly admit that

and understand that. However, from a perspective of public policy,

what we have really put our effort into is in really nailing down

the facts, trying to understand empirically what is going on so we

can target our efforts or respond to your initiatives in terms of targeting them toward the populations or the problems that take precedence over others. As Senator Kerry says, first find the drivers

and then prioritize among them.

But one thing I want to offer today then is just a few facts as

context for the discussion. Again, yielding that you will no doubt

be able to find somebody whose personal experience may contradict

what I am about to say, these still are the facts as we understand

them from surveys, through research, and so on and so forth.

The first point I want to put out for us is at least speaking to

the Guard and Reserve community, you know, what is their employment status and to what degree are they facing difficulties

when they come back from deployment and getting jobs and so

forth? So the first fact coming from the June 2006 Status of Forces

surveys that the Department conducts shows that looking at that

point in time, 76 percent of Guard and Reserve members were employed when they were activated at that point. And of that 76 perVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
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cent, 79 percent returned to the same employer and 19 percent returned and found a different employer. Do the math: 98 percent of

those guardsmen and reservists who were employed prior to activation came back and were able to successfully find a job.

So the problem now turns to the 2 percent. What is going on

with the 2 percent who had a job, came back, did not return to

work? What the surveys, again, tell us is that there are reasons for

that. Some people decided they did not really like their previous job

and they wanted to leave it. Some of them are taking advantage,

properly, of educational benefits they have earned and have decided they wanted to upscale and they go to school. Some of them

say simply they want to take a break.

Now, that then brings us to the Unemployment Compensation

for Servicemembers Program which Mr. McWilliam mentioned earlier. Recall that guardsmen and reservists who serve 90 days or

more on active duty are entitled to up to 6 months of unemployment compensation. There is some evidence that the word is getting out, and that, in fact, the guardsmen and reservists who are

eligible for unemployment compensation for ex-servicemembers are

appropriately utilizing their entitlement. That is supported by the

notion that they are taking a break, changing course.

So the first conclusion I draw from that is that at least some of

what you may observe overall in terms of unemployment among

veterans is driven by that segment of the veterans, the guardsmen

and reservists, who are utilizing unemployment compensation for

servicemembers and are doing so, in effect, to provide them with

a transition as they sort out where they are, where they were, and

where they want to go. So I think that is part of it. The implication

of that for me from a public policy perspective may then be that

if people are taking time to readjust and to chart their futures, are

we supporting them in the best way to help them make their decisions and make good contacts, and that might be one dimension of

this that would be important, too.

The other thing is the issue of those reservists coming back and

who are facing issues with USERRA and so forth. And, again, no

doubt there are people who have had problems, but, again, what

the basic situation appears to be—let’s look at June 2005 to March

2007: 246,200 guardsmen and reservists de-activated. Cases that

ultimately rose to the level of a USERRA violation, less than 2,000,

1⁄10 of 1 percent of the de-activated population. One-tenth of 1 percent.

Now, again, will some people say, ‘‘I didn’t want to bother, I

didn’t think I could get any recourse to that’’? Yes. But how much

bigger would one-tenth of 1 percent grow based on that?

One indication of that would be, again, going back to our National Commission for Employer Support of the Guard and Reserve

ombudsman activities, we have hotlines. We are actively working

in the fields to talk with employers, talk with guardsmen and reservists who may have difficulty. We are fielding over 13,000 calls

a month lately and resolving most of them. So there is certainly at

least some people who are at least making the effort and are getting relief and don’t rise to the level of a USERRA violation.

Again, then, kind of a conclusion I would draw from that, if you

are trying to prioritize the problem list here, the veteran commuVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
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nity who were previously employed and returning to work would

not necessarily be the first population in most need. It might well

be others, such as disabled vets, such as people entering the workforce for the first time. And, in turn, I would say going forward,

one useful thing to continue to do is to segment this population and

really understand which individuals are most in need.

Thank you.

Mr. WALKER. I am here to mostly listen versus to talk myself and

to speak, but I did have a quick follow-up question for you. The report made one note which was that one of the suggestions was rebranding the military to potential employers.

Now, I am sad to say, as a member of the Guard and reserve myself, that many members that I have talked to have actually told

me—and this is very, very disconcerting—that they have actually

questioned whether or not when they apply to employers, whether

they should include their military service on their resume because

of fears of how that could react. And I am wondering, have you

been doing anything to sort of rebrand these members to potential

employers to talk about their skill sets, what benefits they have,

what value they can bring to the civilian world?

Mr. WINKLER. Yes, and, again, John Winkler, Reserve Affairs.

We hear this, we appreciate it, we understand this. We talk with

employers, we talk with the guardsmen and reservists to understand the degree to which this is potentially an issue.

But I have to say, again, there are anecdotes and there are experiences, and then there is other evidence and experiences. And I

can only really address this in a very preliminary way right now

because the study we are supporting is still finishing its final

stages. But we have been conducting an employer economic impact

survey looking at impacts on employers and costs that are imposed

on them when their employees are called up for military service.

And the findings initially provide a very strong counterpoint, which

is, when asked about—these employers asked about their experience with reservists, they are very, very positive. In fact, they rate

them as equal or better than non-military members across various

dimensions related to their job effectiveness.

So there are employers out there who appreciate this. Perhaps it

is true. We can continue to communicate the value of military service. But, again, anecdotally, we understand that employers appreciate the fact that they are getting workforce members that are

drug free, that are on time, that are focused, that can work in

teams, and these kinds of attributes I think are ones we can continue to emphasize.

Ms. RADERMACHER. Mr. Dever, you have had your placard up for

a while. Would you like to comment?

Mr. DEVER. Sure. I am very pleased to be here, and thanks to

Joan and yourself for making things so that I could be here today.

I didn’t think when I came here this morning that immediately

USERRA would jump to the front of what it was that I wanted to

say to people here.

First, let me say I am a member of the community. I am a service-disabled veteran. I am a small business owner. I am a small

business owner because, after coming back from Iraq, I went

through a period of unemployment. And the way I became emVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
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ployed was through the assistance of the Veteran Business Outreach Centers. I went through the legislation. I think it is a wonderful thing and want to encourage that more be done along those

lines, because my experience was a positive one. I know that the

Business Center that I work with, Louis Celli, Louis is always

busy, which tells me that there are a lot of people utilizing his

services, a lot of people who need his services. And as I said, at a

very difficult time for me, Louis was the contact point that made

me getting myself stood back up and back to work possible.

I will try to go very quickly and hit a couple things.

USERRA is there, and I will tell you an anecdote that I find

very, very disturbing, and I can tell you—you know, and go with

Mr. McWilliam through the specifics of the case. However, due to

the nature of the injuries, the illness, and the problems that returning reservists and National Guard soldiers are having, there

are some things in there that then preclude them from being able

to use the things that are immediately available to them.

I have TBI. I didn’t know I had TBI until I had been back for

nearly 18 months. At that point, my recourse under USERRA had

expired. I had no recourse. That needs to be changed, because I

will tell you, yes, it may be 2 percent today and it may be 2 percent

at 60 or 90 days. It is not 2 percent at 18 months, I don’t believe.

And I think if somebody looks at that particular data set, they will

find that there are other issues. And, again, it is because of the nature of the conflict and the nature of the injuries that people are

sustaining.

A couple of people mentioned taxes and mentioned the tax incentives that are given to employers when Guard and Reserve soldiers

leave to go onto active duty. I will tell you that as an employer,

and in a previous capacity working as chief financial officer/general

manager, you know, and basically at the nexus of the hiring process, that from the standpoint of a company, yes, recognizing the

sacrifice that the company makes by providing that soldier, airmen,

whatever it might be, to the Reserve component to go and serve the

country is absolutely important, and taking care of that incremental wage difference. But what I would also say is that maybe

more important in my mind, I think more important is that on the

2nd of June I am going to hire a gentleman to work for me. He

is a service-disabled veteran. He is transitioning from one career

to another, a career police officer, and now needs to go into something different because his disability precludes him from continuing

on as a law enforcement officer. It sure would be great if I could

get some kind of tax break, because I am putting him, you know,

back to work and putting him into a new career path, not just a

job but a career path that will, you know, sustain him for many

years to come. And I think that kind of a tax incentive might get

some of the people who are maybe on the fence or who have gone

over to the other side.

The anecdotal evidence about people saying that they have concerns about putting their military record service on their resume,

I will tell you, again, anecdotally, I applied for 148 jobs in 8

months. How do you know that? Because I have every single one

of them, and I did not know it was 148 until I looked at it last

night in anticipation of coming to talk about it today. Every single

19

one of those, you know, loud and clear declares that not only have

I served, but that I continue to serve because I am still an active

member of the Army National Guard, meaning that, you know,

could I deploy again or could I be called again? Most certainly. And

I would say that I am happy that I am self-employed and that I

do not have to float resumes any longer. But I can certainly understand in the larger community how a lot of reservists have come

to the point where they don’t know whether it is an advantage or

a disadvantage.

I certainly believe—-personally, if someone were to ask me, I

would say that it was absolutely a disadvantage for me to be listing

those things, and particularly to say that I was still an active member because I choose and want to continue to serve.

I have made some other notes, and I will cut myself off here, and

let some other folks talk, and give those back to you afterwards.

Thank you.

Ms. RADERMACHER. Thank you.

Mr. WALKER. I just had a very quick comment for Mr.

McWilliam, and that was Senator Snowe’s home State actually has

the second highest per capita existence of veterans of any State in

the Nation. One in every 10 people in the State of Maine is a veteran, so it is an issue that is very, very deep to her heart.

The person who runs the DVOP and LVER Program in the State

of Maine is Paul Luce, a phenomenal individual who recently returned from Afghanistan, does a phenomenal job with veterans.

Even when he was over there, he was hitting up soldiers before

even returning about how he can help them find jobs. So, to that

extent, I want to mention that I feel that the program was very

successful, at least in her home State.

But I wanted to briefly mention that a very big concern to my

boss is the fact there has been an 11-percent drop in funding in

real dollars to the program from 2001 through 2008. And when you

figure in for inflation, that is a 25-percent cut. Some of the problems that we are talking about within the program I think can be

directly attributed to the fact that when we are talking about a 25–

percent cut in funding to those programs at a time when certainly

our soldiers need this the most, as we are hearing here today, I am

curious to hear your thoughts on that. Are you asking for additional funds? Will you ask for additional funds? Why has there

been the cut? Not to put you on the spot, but I am just trying to

figure out where things are at, and if you have any thoughts on

if there is more money that is needed for the program or what else

could be done.

Mr. MCWILLIAM. Well, it is a very good point, and I appreciate

your comments about the program in the State. I met the Sergeant

Major. He is a very dynamic person. He just took over the program

I believe about when he deployed or while he was there, and we

have seen real major changes in his leadership of the DVOPs and

the LVERs in the State since I was up there in November and

talked to him and everything.

The problem between the States, comparing 2001 to 2008, is that

the new law, the Jobs for Veterans Act, changed the funding formula and the way the funds are allocated to the States. And it

made some major changes in States, and there were a lot of States

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who saw a decrease in funds available because of the funding formula.

The funding formula is based on the number of veterans looking

for employment in your State divided by the number of veterans

in the United States looking for employment. And so it shifts every

year. There is a change every year to it. I will have to look and

talk to you specifically about how much in Maine was caused by

the change in the funding formula.

The appropriation itself has increased slightly each year. Our

2009 recommendation shows an increase of about $7 million for the

program. But I will have to get back to you on the specifics.

Mr. WALKER. Thank you. I appreciate that.

Ms. RADERMACHER. We do have a couple of other people who

wish to talk: Mr. Levine, Pat Heavey, Rick Weidman, Justin

Brown. We do want to move along. We have been talking about

this a little bit as we have been going along, some of the solutions

and also following up on our hearing from last time. We are going

to focus on that here, and then after a few minutes, actually probably about 10 or 15 minutes, we do want to take a short break and

then start talking about vet centers, ideally leaving enough time to

have a full conversation about that as well.

But I do want to go to—Mr. Levine, you have had your card up,

and I would like to give you a chance to comment as well.

Mr. LEVINE. I would like to indulge the Committee and our

guests for a brief statement. Ms. Radermacher, Mr. Walker, members of the Committee, my name is Bill Levine of W.L. Concepts

and Production, New York.

Ms. RADERMACHER. Mr. Levine, just to check, is this about—if it

is in regard to the Veterans Business Outreach Centers——

Mr. LEVINE. Yes.

Ms. RADERMACHER. We are going to talk about that more in

depth right after the break.

Mr. LEVINE. Do you want me to hold then?

Ms. RADERMACHER. It is probably best, if you do not mind. If you

would like to comment on some——

Mr. LEVINE. It is down. Not a problem.

Ms. RADERMACHER [continuing]. Of the more recent comments,

absolutely. But we will focus after the break——

Mr. LEVINE. I will wait. Thank you.

Ms. RADERMACHER. Who else? Did you want to comment on what

we have been discussing?

Mr. BROWN. First off, I would like to thank both of your bosses

for supporting S. 22, as well as some other legislation, your bosses’

legislation on home foreclosures and caps, and that is all very good

and we thank you.

However, I would like to address Mr. Klerman, and I guess I am

surprised how you suggested that our recruitment standards are

maintaining a quality level. All of the information I have seen and

research that I have seen done suggests that we are at our lowest

recruitment standards in a period of about 15 to 20 years. The

worst recruitment standards we have had was following the introduction of the all-volunteer force from about 1973 to about 1985,

when we introduced the original GI bill.

21

We know that this era of veteran, from 1973 to about 1980, were

four times more likely to be homeless than their non-veteran counterparts. So I am cautious in saying that, you know, we are maintaining the same recruitment standards, and I believe that we need

to be very careful about the recruitment standards and the veterans we are allowing in the military. We do not want the military

to once again become an employer of last resort.

In consideration of that as well—I think today we have broadly

been talking about veterans in two capacities, one being veterans

in general and employment issues and reservists. I think that there

is not a one-size-fits-all, if you will, to look at these solutions. And

a person that is separated from the military as an enlisted veteran

is going to need different transitional tools than somebody that departed as an officer, and similar with reservists as well.

It is the belief of the VFW that the best transitional tool we have

for the majority of these people separating, which is the enlisted

veteran, in our current state, I mean, they are typically only doing

one tour, is a robust educational GI bill. We believe that this is

going to allow them to further their education and thereby more

easily transfer into the workforce.

No offense to Mr. McWilliam, my personal experience with DOL’s

programs and the majority of my counterparts and fellow Iraq and

Afghanistan veterans are not using the DVOP/LVER Program, and

that has been my experience as well with the Officer Corps that

have done one or two—well, I don’t know how you phrase it, but

if they are mid-grade level officers and they have gotten out, they

are typically also not using the DVOP/LVER Program.

So, with that, I just kind of wanted to put that forth, and I appreciate everything you guys are doing. Thank you.

Ms. RADERMACHER. Thank you very much for those comments.

I do a little bit want to change the focus of the conversation to

kind of thinking about things that we can actually do to address

some of the things that have been raised. I am going to throw out

one question. I see we have more people who would like to comment, and I will give everyone a chance to do so.

One of the things that I kind of want to raise, just based on what

I have heard here today, and that is what I have heard repeatedly

about disabled veterans and the issues of PTSD and TBI and some

of the other injuries. You know, we have heard about segmenting

the population to figure out exactly what individuals need, and I

think that is an important point. And I was wondering if anyone

had any comments there, what is needed or necessary.

Mr. HARDY. I will pass.

Ms. RADERMACHER. You will pass that round.

Who else? Do you guys still want to—well, I was just mentioning

that one of the issues that seems to have come up is what about

individuals who are leaving the military who have a disability,

whether it is PTSD or TBI or some form of injury, and how does

that affect their employment and what can we do about it as well.

So a couple different people, and I did not see who put up—but,

actually, I think either—did you have your—actually, if you would

like to go ahead, I think you had your placard up first.

Mr. HARDY. OK. I did not want to directly address the TBI, but

something that might be germane. My name is G. Mark Hardy. I

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am an entrepreneur and also captain in the Navy Reserve. And so

I don’t want to talk about my situation so much as it is possibly

representative of many other guardsmen and reservists.

Since 9/11, I served over 1,000 days on active duty. None of those

have been in the capacity of mobilization for the Global War on

Terror, and as a result, what we find out is that none of the protections that would come under things such as USERRA or some of

the benefits that are often offered to individuals who are mobilized

under these capabilities would apply to me.

As a small businessman and as an entrepreneur, if I were an employee, I could come back and USERRA would protect my job. But

because I am an entrepreneur, my clients are not bound by

USERRA. Often, many entrepreneurs come back to nothing.

And so without the right type of orders, it is a difficult situation.

As a Navy officer, we are not put in combat roles as often as our

Army brethren, and as a result, many Army vets experience things

differently than Navy or Air Force, who are put in backfill positions

or support positions, so that they are not necessarily in the line of

fire, which is perhaps a good thing, but also what it means is that

in the flexibility administratively to create the orders, we often bypass the mobilization process entirely to get administrative expediency, but the net result is that a whole class of reservists and

guardsmen are denied a lot of the benefits the way that the law

is written. And here is potentially the reason why.

If you look at the Commission for the National Guard and Reserve, their report that came out earlier this year, Item 22, Recommendation 22, identifies 29 types of duty statuses that a reservist or guardsman could hold; 28 of those 29 are not qualified for

some of the benefits that are specified in the legislation, such as

the Military Reservist and Veteran Small Business Reauthorization

Act. So I would encourage taking a close look at how we define eligible veterans, because you may find that they are individuals who

have served honorably, continue to serve honorably, share a disproportionate burden economically as a result of their voluntary

participation, and yet are afforded none of those legal provisions

because we are focusing on those who have been mobilized through

this particular process. And, of course, for the disabled veterans

that come back, they need, you know, special consideration. I absolutely have no concern or no grudge against that. I think it is wonderful. But I think we are leaving a whole class of folks out.

That would be my input on that.

Ms. RADERMACHER. I do think that is a really interesting point

and one that I have not heard actually made that often, so I think

it is an important thing to add to the discussion.

Just for our sake, you mentioned that you are a reservist/small

business owner. Is there any thoughts that you would like to add

about other things that would be helpful for you as you have served

the Nation repeatedly over the last few years and continue to run

a small business? Are there any things that would be helpful to you

or——

Mr. HARDY. I would think so, and thanks for asking the question,

because right now, again, looking through the legislation, it provides—it makes it easier for me to get access to loans. But I don’t

need access to cheap money. I have already built a business. I can

23

access funds. What I need is access to opportunity, and we have

structures that are already well in place. For example, the Small

Business Administration has an 8(a) Program which will support

culturally disadvantages and socioeconomically disadvantaged businesses.

Well, I can think of no greater disadvantage than to be gone all

the time serving your Nation, and yet because of my genetics,

which I have no choice of, I don’t fit in any of those categories that

would describe me as potentially disadvantaged.

So one thought may be to take a look at programs such as 8(a)

and to extent the eligibility under title 13 to include returning veterans to allow for—and, again, it is a part-time program. It does

not exist indefinitely. It has certain eligibility criteria. But it would

require no new bureaucracy or it would require no new structures,

simply a change in a line of the law which then would permit SBA

to provide that type of meaningful assistance, and not only have access to opportunity, which currently all I have access to is potentially loans.

Ms. RADERMACHER. OK. That makes sense. It makes a lot of

sense.

I was just informed actually that, Bill Elmore, you are going to

be leaving, you have to leave early today. And we do have a couple

questions that we wanted to ask beforehand. And so actually if you

guys can remember, we would like to hear from all of you. Before

he leaves, we do want to follow up on some of what is happening

with the bill. Did you have a specific question that you wanted to

start——

Mr. WALKER. Well, actually, Bill, if you wouldn’t mind, just more

so for the benefit—we have heard a little bit about what is being

done in terms of the status and implementation, but for the benefit

of the people that are sitting around the table, if you could just

quickly give an idea of where things are at in terms of implementing the legislation, we would appreciate that.

Mr. ELMORE. Yes, sir. Thank you.

There is a number of the parts of that legislation that we are actively implementing, but probably the easiest and the most

straightforward was the permanency of the old Advisory Committee on Veterans Business Affairs. That has now been rechartered. We have scheduled the first meeting. It is going to be in

June, and we are actually actively recruiting new members as well

because some of the members are reaching their expiration dates

in June. So we are doing that now.

The SBDC Program is going to be announcing very soon grant

opportunities for SBDCs under that part of the law. So I think you

are aware of that, but that is coming, and I would expect within

the next 30 to 60 days you will see that grant announcement out

on the street and for SBDCs to compete.

The DOL–TAP part, we had already provided a number of materials to DOL. We have pulled those materials back, and we are now

updating some of those materials for part of the TAP manual. And

we are also in discussion with DOL about—and with DOD, but we

are starting with DOL because they basically run the TAP Program

itself—to try to update the materials there and make sure that

those materials are available at every TAP seminar in the country,

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and that is about 4,000 seminars. So you know I have five centers.

It is kind of hard for five centers to get to all 4,000 of those seminars. So we are working with DOL, and will with DOD, to get that

done.

We have changed the Vet Business Outreach Center Program announcement, and, Coreena, this will be the first time you have

probably heard this. One of our five centers expires this year. They

are in their fifth year. So that program is going to be recompeted

for one center, and that announcement will likely be out in the

next 30 days, and have now included the authority in there for

them to be able to do the grants or the contracts or subcontracts

out for other organizations to participate in TAP. So we have taken

that step.

I know there is a number of things that I am missing here.

We have already put up a mock—or basically a startup website

on how to promote MREIDL more efficiently and more effectively

to reservists. We have not gone to DOD with that yet, but we have

put it up internally, and we are still working—actually, I was

working on that this morning on some of the banners and things

that will go into that.

We are working on the regulations for the changes to the

MREIDL Program itself. We will be extending not only—there will

be this pre-activation program. We also will do the reprioritization

so that those loans will be the ones that are processed first. And

we are also in discussion—other regs have not come out yet, so

please do not hold me to this in final form, but at this point, we

believe that the extension on the timeframe to apply will be equal

to the time that someone has been activated. So we are working

on those regs now, but as you know, the regulatory process, I cannot just pronounce that as done. There is still a ways to go with

those kinds of things.

There is a number of other steps in here that I am sure if I took

the time to read my list—you know, we have met with GAO on one

of the reports. We are working internally to identify what we think

the cost will be so that in future budget requests we can come back

to you and say here is the amount of funds we would need to implement the new loan program, here is the amount of funds we

would need to do the study, here is the new funds that we would

need to expand the Veterans Business Outreach Center Program,

those kinds of things. So we are working actively on all of those.

Mr. WALKER. I just want a quick follow-up on this one.

Mr. ELMORE. Yes, sir.

Mr. WALKER. One of the things that was extremely important for

my boss—and it was from the hearing that was held back in January—is that she heard that there is a lot that is being done by everyone to help veterans, but that there seemed to be people going

in different directions. And she called for the creation of the Interagency Task Force, and it is something that is really near and dear

to her heart because she thinks this is needed to coordinate and

leverage what is being done. And I specifically wanted to bring this

up before you left, but as well as others in the room are still here—

SBA, DOD is here, VA is here, VSOs are here. She wants this to

be implemented soon, but she also wants it to be truly effective.

This is not some interagency task force that is just out there for

25

the sake of saying that there was one. So all the people in this

room, I really encourage you to work together, because this is a tremendous opportunity to really speak to your agencies and tell them

that from her perspective she is going to hold people accountable

to do this, to stand straight and make sure that they are working

together so that we are coordinating and leveraging what can be

done.

Mr. ELMORE. I can tell you that we are actively working on that

as well at the highest levels of not only SBA but inside the administration to identify how to put this thing together properly and to

make sure that we have a level of participation that the law I

think envisions. So we are working on that as well. It is not a piece

that I manage in that sense because we have to do some coordination across other agencies.

Ms. RADERMACHER. I just want to follow up a little bit about the

Military Reservist and Economic Injury Disaster Loan Program.

First of all, is there a sense of when we might see the regulations

for the changes?

Mr. ELMORE. You know, I cannot give you an explicit timeframe,

also because we have to go through this whole regulatory process.

I can tell you that we are, in fact, drafting the regs and we are

drafting the changes to the SOPs and those kinds of things internally to implement that. We don’t think there is any real significant cost association, so it is really a paper process. You know, in

fact, some of the things that—you know, the prioritization of the

loan applications, we were already doing informally. We simply had

not put it in the regs. So some of that stuff is already in play. Certainly we have had a lot of work going forward with Dr. Winkler’s

office, with ESGR, and many others in the promotion of MREIDL

and trying to put that information out in front of Reserve and

Guard members and their employers.

So, you know, we can get back to you, I think, with a timeframe,

but I will have to go back to our disaster office and ask them specifically where they are at in the process.

Ms. RADERMACHER. OK. The other question I wanted to ask

about is I am glad to hear that you are increasing efforts to get

the word out about the MREIDLs. But the question—I have been

reading a lot of news stories about the Patriot Express Loan and

the number of loans that have been approved since—I think it was

June 13th when it was rolled out.

Mr. ELMORE. Yes.

Ms. RADERMACHER. And it is something like over 1,000 for something like over $100 million. And then when I compare that to

what has happened with the MREIDLs—and I think it is about

290 loans for about $26,000 or so, and I recognize that they do

apply to different people. However, I just had another conversation

with someone before the roundtable, a reservist/small business

owner who actually again said to me, he was, like, you know, ‘‘I

really wish we had something like a loan that would apply to reservist/small business owners who are affected by deployment.’’

And I was, like, ‘‘Well, there is.’’ I mean, it is out there.

And so I guess I am not understanding why SBA is managing

to get the word out about Patriot Express, yet it seems that far

fewer people know about this other program that is far older.

26

Mr. ELMORE. You know, they are all good questions, and those

are the same questions we wrestle with internally. We know we approve about 60 percent of the applications that we receive, which

is higher than our regular disaster portfolio. So we are pleased that

we are able to help make this thing fit.

I think what you run into—and the law helps change this—part

of it was the timeframe. You could not make application until you

got activated. After you got activated, you are not going to make

application if your activation notice was a very short timeframe. So

you are not going to make application likely until you get home.

If there has been significant damage to the business, the idea of

entering into additional debt to support that business, you know,

that is a real challenge. And you know this as well, we are also

constrained in that we cannot approve loans unless the customer,

the potential customer, can show an ability to pay it back.

So I think there have been a number of things that have tended

to push against additional debt for those that really suffer the significant damage.

The other problem is—and it is a real problem, and John and I

have worked on this now for a long time—there is no one simple

way to identify those that are affected. So how do we identify

amongst that million two or million eight reservists out there those

that are self-employed, those that are activated, those that may

suffer damage, or those that have been damaged? We all recognize

there is damage, but it is a significant minority of those self-employed reservists, and there has been no one way to identify them.

And that continues to be a real challenge for us.

Ms. RADERMACHER. OK.

Mr. WALKER. Sorry, and I want to apologize to everyone for doing

this because I want to just quickly go into something that we actually have earmarked for later to discuss. But on the Veterans Business Centers, both VBOCs and VBRCs, I do want to ask you, because you do have a flight and it is important that before you leave

we get the SBA’s position, particularly from you.

Mr. ELMORE. Yes, sir.

Mr. WALKER. As someone that specializes in this issue within the

SBA, and that is why I apologize for deviating, but I want to catch

you on record here.

There have been discussions about the benefit of Veterans Business Centers, and both of our bosses are clear in our strong support

for that and why they support it. And one of the issues that people

brought up is the question of is there duplication, and the question

is: Are they duplicative of Women Business Centers, SBDCs, other

entities that are out there? And we clearly think that it is not. We

know that it is not. We realize that there is specialization, that

they have a different network, that they have special skill sets. We

understand that, but I want to hear from your perspective your

thoughts on that, particularly as someone from the SBA that works

with people both in SBDCs, WBCs, VBOCs.

Mr. ELMORE. I do not believe they are duplicative. I think if you

look at the reach that SBA has, given our size especially, you

know, we assist in some sense or another around 1 million,

11⁄2million, up to 2 million entrepreneurs a year. There are 25 to

26 million entrepreneurs in America, so clearly we do not reach,

27

even with all of our programs, all the entrepreneurs. And you layer

that with veterans and reservists and those that have been activated and those that have gone away and come back, I do not think

there is any way that they are duplicative. I do not think there is

a single system in America that can reach every Reserve/Guard

veteran.

I can tell you as well that if you will look at—and it is anecdotal,

and we have not done research to demonstrate this. But I will pick

Florida for an example because they are not here. That is one my

five centers, one of the original centers. Twenty percent of the

SBDC customers in Florida are veterans, but yet only about 10.5

percent of the adults in Florida are veterans. So if you look at the

percent of veteran participation in all of our programs across the

agency, it comes nowhere near that 20-percent level. Now, I do not know why, but we have now invested $150,000 a

year into the Florida SBDC as an adjunct. It is not the SBDC. It

is a program that is associated with SBDC. Make that clear. But

I think that relationship of having a veteran focus, whether it is

inside that system or outside the system, like California, and working with the SBDC—or St. Louis or Boston or any of the others—

shows that there is value in knowing the common language, the

common history, the common background, the common experience,

and the common issues and the common resources available to anybody that has worn the uniform. Those that have not simply do not

know those things.

So you accelerate the engagement, and I think you said it, sir.

Having somebody look you in the eye—a veteran is not afraid to

look another veteran in the eye. Sometimes there are others in the

world of human services—and I have been doing this for 35 years.

I have only been a Fed for 8. In the world of human services, there

is a number of people I dealt with would never look me in the eye,

and almost to a person, they never wore the uniform. So there is

always great value.

You know, if you don’t mind me rambling on here a second, because I think this is really important. We have the Vet Center Program at the VA, which is, I think, one of the most important and

incredibly effective programs VA has. Before the Vet Centers were

created, there were mental health services all across America. But

yet we created the Vet Center Program because there was great

value in bringing that commonality of experience to the table to

make sure that those men and women could get the services they

needed and get on with their life and succeed.

Everywhere you look across the Federal sector, we have veteranspecific program activity like the GI bill, like the Home Loan Program, because it makes sense. It works. So how—back to, I think,

the final point. I believe that a veteran-specific approach through

our centers and in concert with SBDC and SCORE and others is

not only more cost-effective, but I believe it is more service-effective, because the first time a vet walks in the door, they are going

to get an answer. It may not be the answer they want to hear, and

I expect my friends would say the same. But they are going to get

an answer. That is not always the case in the broader human service delivery system in America that does not know about what it

means to wear the uniform.

28

Thank you.

Ms. RADERMACHER. Thank you very much for that.

I would like to start talking about Vet Centers. I did promise

that I would also break. Due to time, if we do not need it, I would

like to skip it. But if anyone would like a very short break to run

out, we can do that at this time.

OK. Let’s take a quick break. If you can be back maybe in 5 minutes.

[Recess.]

Ms. RADERMACHER. All right. Let’s go ahead and get started.

Matt will be back in 1 second.

I would like to start this next portion, and this will be talking

about Veterans Small Business Centers. Ideally, I would like to

start by actually giving Mr. Heavey and Mrs. Conley an opportunity to talk about what it is that they do. If you would like to

start?

Ms. CONLEY. Absolutely. My name is Coreena Conley, and I am

the Director for the Veterans Business Outreach Center, which is

a statewide business and economic development initiative. I serve

the State of California and also the State of Nevada. We have a

sub-center in Nevada.

The core mission of our program is to be able to advance the

growth and commercial competitiveness of veteran-owned small

business enterprises through education and services focusing on

business development, technology deployment, and e-commerce.

And how we effectuate those services are in three forms of—three

capacities. We provide free one-to-one business consulting services

for veterans, reservists, and Guard members, and there are initiatives to either start a business infrastructure and/or expand an existing endeavor.

We also offer a plethora of educational workshops series, and we

host 1- to 3-day conferences which has an emphasis on Government

contracting, both on a Federal level, a State level, with prime contracting capabilities. We also have a component of financing which

has an emphasis with the Patriot Express Loan Program and franchise capabilities as well.

Our center is located and co-housed through the Vietnam Veterans of California. We are actually a division of them. And the

other component of the services that we offer is transitional housing. We also have clinical psychologists and counselors that provide

services with post-traumatic stress disorder. And that is based out

of our California facility. We have about four housing facilities

throughout northern California.

Our center has collaborated with numerous agencies throughout

the State of California and Nevada, both on a Federal level, a State

level, and a local municipality level, allowing us to be able to provide these consulting services to the veterans small business sector,

and not allowing us to duplicate our efforts with agencies such as

the Small Business Development Center’s Service Corps of Retired

Executives.

So what our organization has done is we have entered into cooperative agreements with the Small Business Development Centers

throughout the State of California and Nevada and the Service

Corps of Retired Executives and Women Business Enterprises. So

29

we are the point of contact, our California center is, for any veteran

that is looking to receive any form of business consulting services.

They will refer that client to our office so we can help do a needs

analysis to either help them start that business infrastructure and/

or expand that endeavor, or if it is an exit strategy due to today’s

current state of economy.

Just to give you an example of the amount of clients that we

serve—and what you have to realize is that we operate this Statewide initiative on a nominal budget. Our budget is $150,000 each

year. For contract period last year, from 10/01 of 2006 to 9/30 of

2007, between our training and our conference activities, we served

over 24,940 clients. We did over 101 training activities. On our oneto-one consulting hours, we provided over 1,040 consulting hours

and served over 425 veterans, reservists, and Guard members. And

what you need to take into consideration is some of these individuals were actually serving overseas at this time. So they had a

business infrastructure in place, and they were very concerned

about the operational infrastructure and the survival mode when

they came back home. The spouse was usually left behind to manage it, and they had no expertise in that industry sector. So what

we did is we stepped in, did a needs analysis, and either put together an exit strategy or bootstrapped them until they returned.

The prior year, in 10/1 of 2005 to 9/30 of 2006, our program was

beginning to expand and grow. And if you take a look at these

numbers, you can truly see how the increase in demand with the

reservist and Guard members is truly at the forefront of our military people returning home.

In 2005 and 2006 contract period, in our training and conference

attendees, we served over 14,000 veterans, reservists, and Guard

members. At that point in time, we facilitated only 36 training activities. We provided 886.8 consulting hours and served 313 clients.

In this new contract period from 10/1 of 2007 to 3/31 of 2008, we

have actually provided for training and conference attendees

18,702 veterans throughout California and Nevada. We provided 39

training and conferences. We provided 565.5 consulting hours and

served over 261 clients. So you can actually see how the demand

and the increase is fluctuating due to our current economic state.

In California, too, we have an economic downturn in the construction industry, and from that downfall, we have had a lot of

construction companies come in to be able to put together a feasibility study in order to have the business survive.

So that is when we partner with the California State Department

of General Services for the DVBE initiative due to Public Law 106–

50, where they do a 3-percent set-aside contracting capabilities for

all service-disabled veterans with a preference. So a prime contracting agency will get the main aware, and they will subcontract

out to the DVBE to be able to fulfill those contracting capabilities,

and those forms of services to the disabled veteran business community is what is strapping them through on a contracting level.

And to give you an example of some of the agencies that we work

with, because the earlier question that you talked about was duplicating services, we work, obviously, with local universities and

community college districts. We work with the Small Business Administration, with all six district offices throughout the State of

30

California, and the main district office and area office in Nevada.

And we work with GSA, DGS, the Federal Technology Centers,

PTACs, SBDC, SCORE, BA, U.S. Corps of Engineers. We work

with all prime contracting agencies for the 3-percent set-aside contracting capabilities for the Disabled Veteran Business Enterprises.

We work with the California DVB Alliance. We worked with each

one of the California DVB Alliance networks, the Elite SDVOB network, California Department of Veteran Affairs, the Women’s Business Centers, all the VFWs, the Chambers of Commerce, the military bases throughout California and Nevada. We also partner with

EDD, so if a veteran comes in or a reservist comes in and at this

point and venue they are not sure if they want to be self-employed

or if they want to receive an employment capability, we have EDD

that comes into our facility twice a week, which they will sit down

with them, and they will teach them how to either put together a

viable resume and to help them search for employment capabilities

as well. We also work with one-stop centers and the Center for

International Trade for businesses that are in the manufacturing

assistance programs as well.

So that is in a nutshell what we do.

Ms. RADERMACHER. Great. Actually, thank you very much.

Ms. CONLEY. You are welcome.

Ms. RADERMACHER. Pat, if you would also like to——

Mr. HEAVEY. Thank you. Good afternoon. My name is Pat

Heavey, and I am the founder and executive director of the St.

Louis Veterans Business Resource Center, which is operated by the

Veterans Advocacy Foundation. We opened our doors in June of

2004. We were the first of these to open, and we were a pilot.

My own background, which goes back to about 1971 with this

stuff—I helped to put together the first Vietnam veterans self-help

center in the country, and I sure know your boss real well because

he did the first—was that these agencies are—these operations

would best thrive if they were integrated with the community. So

we are on a community-based organization model. That is what we

do.

We serve St. Louis and about a 150-mile radius therefrom. We

also serve about 400 clients a year via the Internet and they are

everywhere. They are all over the place.

We have two other centers. One is in Boston, and one is in Flint,

Michigan. The three centers together in fiscal year 2006 counseled

and trained about 6,000 veterans—6,088. I have some numbers

here for you that I can just leave with you. But we also took on

the task of raising private funds, and in my case, I took it on with

a passion, and I put together a board of directors of 30 veterans,

successful veteran business people, who serve yet another function

with us. They are a board, and they help us raise funds. But, more

importantly, they are all successful business people. Hence, they

are all mentors in our mentoring program.

And there is a third thing that comes into play here that folks

who are familiar with the private business world certainly know,

and that is that contacts are invaluable. We have some contacts.

Our board has many, many, many more. And we fully utilize our

board members for that sort of thing.

31

Case in point, Ray Hill. Ray Hill’s American Pilsner Beer. Ray

came in to see us about a year ago. He had a business plan, and

it was in pretty good shape, and he had worked on his beer for 6

or 7 years, testing it on his friends, including me. And he had a

very fine formula down. He came in to see us as a client. Ray was

in the Air Force; then he worked for the Department of Agriculture

for a while. And we were able to introduce him through that network to the owner of the largest supermarket chain in Missouri,

Scott Schnuck being the owner. And he, of course, was interested

to some degree, particularly after he met Ray, and he began to put

his beer on their shelves.

Two months later, Anheuser-Busch walked in the door because

if you live in St. Louis, you know that Anheuser-Busch monitors

everything about the drink industry all the time. And they saw this

out on the shelves. Ray walked out with a deal, 51 percent for him,

49 percent for Anheuser- Busch. And that had largely to do with

this private network of individuals helping him out.

I was very impressed by Mr. Dever’s story because I have heard

it a few times, and Mr. Rooney’s tale. We deal with our clients in

the same way as I used to deal with individual clients in an MBA

consulting practice. I am an MBA type. We first assess where they

are, and approximately two-thirds of the people who come through

our doors go right back out our doors with instructions that maybe

they should get a job. We are interested in not culling out, but including in those businesses and those situations with a high possibility of success. We aim toward that.

My center has now been open 4 years. In that period of time, we

have raised private funds approximately equal to the Government

funds that we have been allocated. And as a matter of fact, in this

year of short funding for us, that is why our doors are open still,

is because we raised those funds for that purpose.

And we have also put together some unique programs. One is

called the Bootstrap Loan Program. A Bootstrap Loan works like

this: You take a series of classes from us, and right now we are

using Kaufmann, which is the industry standard, pretty much.

When you complete that, you may submit a business plan. If your

business plan is chosen by a committee selected from my board, we

will give you a $5,000 grant, bootstrap, to get you going, and you

are eligible for a micro loan of up to $5,000. Now, that is not a lot

of money, but $10,000 helps a lot of smaller businesses to get

going.

It is important to note that those funds do not come from the

Federal Government. They come from the community. We raise

those bootstrap funds from people like Emerson Electric, AnheuserBusch, those kinds of companies. The micro loan funds, even more

astonishingly, came from my board members’ pockets. They formed

an LLC to do this, and everybody kicked in five grand, and that

was our micro loan fund.

We are concerned at all times about the total veteran. I have

worked, as I say, with vets since the early 1970s, and that is a long

time, and that makes me pretty old. But it gives our clients the advantage of when they come in our door, we may not be able to help

them, but we know who to refer them to, and we know what indiVerDate 11-MAY-2000 11:40 Dec 17, 2008 Jkt 044862 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\44862.TXT DianeA PsN: DianeA
32

vidual at that place to refer them to. And we often see them back

after they have had help from other agencies.

When we were talking about the Guard and Reserve, we attend

all of the TAP training that happens in our area. We have an hourand-a-half session in there where we talk about self-employment,

so that is the Air Force base and—Fort Leonard Wood and Whiteman Air Force Base. And from that pool, we pull quite a few clients. The important thing—and I am sure you would agree with

this. The important thing to realize is that because the guy walks

in the door today does not mean that 6 months from now he will

walk out with a business. He may have a 3-year process to get to

there. He may have a 6-day process to get to there if he comes in

with a shiny, well-thought-out business plan.

What we do know for sure is that in fiscal years 2006 and 2007,

we created 161 new businesses, and those new businesses employ

an average of three people apiece. And since many of them are sole

proprietorships, some of them are somewhat larger. The largest one

is probably 45 or 50 employees right now at that point.

We put a lot of the impetus and the emphasis upon the local

community to support their veterans, and we call upon our community’s veterans to support our clients. There is a camaraderie that

exists there that is very hard to duplicate, and we figured this out

back in the 1970s when we did the Veterans Service Centers of

Southwest Illinois. We had five locations, and we were open for 7

years. This was back in the golden days of the Comprehensive Employment and Training Act, CETA. And there was plenty of money

around with CETA.

We learned a lot of things there, but one of the things that we

learned is that veterans deal particularly well with other veterans

in these settings, and it is because we have a common culture and

we have a common background. All of us at some point in our lives

got on a bus in the middle of the night, drove out to some God forsaken place, had the bus unloaded by bald-headed maniacs in

funny hats, and found out that we were suddenly in a whole new

universe. That is a binding experience. That is the kind of thing

that you do remember 30 years later, for sure.

In conclusion—and I am not going to hold you up a big long time

here—we have worked out a method of integrating Federal dollars—which were not big enough to do anything with. I stand in

awe at the amount of work that you do for $150,000. I stand in

awe, because it costs me almost twice that much to do that, nearly.

We have found a way to integrate local resources, local experts,

local folks into our process, so the fact that we have only three people on our staff, including me, is greatly magnified by the fact that

we have ranks of volunteers who are willing to come in and counsel

with folks.

For instance, we have lots of people who wanted to join janitorial

services, wanted to do janitorial services. There are all kinds of

franchises out there to do janitorial services. Most of them are kind

of questionable in terms of their economic terms. So we take those

folks, and we get them together into like a little coffee group, and

then we ask Tom Bolt to come down and talk to them about the

janitorial business. Tom Bolt employs 750 people in his service. He

is willing to share everything he knows because these folks are not

33

really going to be competitors to him. They are probably going to

be feeders to him at some point in time as these jobs get larger

than they can handle.

We have had 3 years of consistent funding. That has now pretty

much come to an end, and I do not want to talk about that side

of it because we are working hard with a lot of people to solve that.

But our goal is and has always been to deliver veteran-to-veteran

services in a consistent manner that gives people a path of progress

to follow. And I deal personally with about half of our clients myself and would not give up that opportunity for all the money in

the world.

That is it.

Ms. RADERMACHER. Thanks so much, Pat.

Mr. HEAVEY. Pretty extemporaneous. I am sorry. You were so

prepared.

Ms. RADERMACHER. We are going a bit over. I know that I told

people 12. I would, if people are willing, like to continue the discussion for a little bit, possibly be done by 12:30. That being said, I

recognize that there are some people who do need to leave. I was

told that Dr. Winkler needed to leave. I did want to ask you one

more question before you left, and then I also wanted to give those

clients who had worked with the centers a chance to speak as well,

as well as giving everyone a chance to comment before we close.

This was actually in follow-up to the hearing from last time, and

I recognize that you were not there. One of the things that was

mentioned is that the DOD was working on a data base that would

list all the employers of Reserve and Guard. Is that now completed?

Mr. WINKLER. Well, yes, you are referring to our civilian employer information data base, which is now mandatory that each

guardsman and reservist enter information on their employer. We

reached our effective objectives around a year ago in terms of

populating that data base, and now our challenge is to keep it current. But it is live and running.

Ms. RADERMACHER. Great. And just to ask, is that something—

because the other part—and I again recognize you were not at that

conversation—was that SBA wanted to reach out to reservists

ahead of time, especially reservist small business owners, to let

them know what was available. Is that something that is an option,

or is there——

Mr. WINKLER. We actually intended the data base to be used for

outreach purposes, and it is the source of the statistics that we frequently cite now, for example, the 9 percent of guardsmen and reservists who are self-employed, 18 percent work for small businesses with 100 or less employees.

Bill is not here. Bill has been talking more directly with our people about how to do that, but in principle, that is doable.

We do have, obviously, some privacy concerns. If we are reaching

out to the employer, it needs to be sort of independent of the employee.

Ms. RADERMACHER. OK. Well, thank you very much for being

here.

I did want to continue to talk about vet centers, and also we do

have some individuals here who actually did get help from some of

34

the Veterans Small Business Centers, and I wanted to give them

a chance to comment, if they would like to.

Mr. ROONEY. My name is Roderick Rooney. I am from AAA Constable Services, a small business in Boston, Mass. But as I explained earlier, I was unemployed for 2 years. I couldn’t get help

from the service centers. Voc. rehab. paid for my master’s, and they

couldn’t get me a job. I had more contacts than they did, because

they had data bases that they would lean on. And that is just another information, and so you get bombarded with information. But

the pressing of the flesh and going and developing a relationship

with employers is never done. I ran a workforce development agency and training development classes, and we came up with a curriculum with the input of employers, asking what they wanted

from employees, and we implemented it through the curriculum, so

we have that relationship.

I haven’t found in my journey for 2 years, I haven’t found any

relationship like that. The service reps are into the one-stops or the

SBA levels, unless you had a polished, you know, business plan.

Sometimes Maslow’s theory is you have got to eat first, and you

might not want to work on that business plan, as much as you

should, you know, to get it polished enough to get considered for

even a micro loan.

But with that said, those agencies have had just information

which I pretty much found on my own, through USAJobs or whatever. You know, I had access. But what helped me was the service—the Northeast Veterans Service Center, which I was—I live in

Boston, and I had to go all the way up in Lawrence to even find

that type of service because there was nothing—there was nothing

for me to—there was no place that would give me the individual

one-on- one—not holding my hand, but that one-on-one. I walked

in the door. Louis Celli, he just—he gave me a free seat through

a grant I guess they had from—they worked out, to take a grantwriting course that everyone else had to pay. Employers paid the

employees, too. And I was sitting with persons from MIT and all

that, and meanwhile I am still woozy from all these—he said he’s

got 188 resumes out. I must have sent at least 500. You know, I

have been on 30 to 50, you know, interviews. I am a professional

interviewer now, you know?

But I found out when I did get help, it was—when I was with

the DVOPs and all that, I got my own jobs, and I still would call

them and told them I did and let them at least get the credit, you

know. But what I didn’t get from them was I needed that vitamin

of my spirit, and that is what I got from the Veterans Service Center. I needed it, and it was unconditional esprit de corps. He understood me. He understood me, man enough, he understood me and

worried about—I am a single, I have sole—my son, I have full custody, 16-year-old, and so he understood that stress of, you know,

still trying to make it through and getting the gas money to come

to there. I was on unemployment, but unemployment, you are still

like at the poverty level, you know, and it doesn’t address your true

needs. You know, and I did the hard work to try to educate myself

and be a productive citizen and serve my country. But when Mr.

Ritchie opened the door for me and allowed me have that seat for

that 5- or 10-day course, it was—then he offered me other avenues

35

for me to do tangible things instead of just floating resumes and

waiting for the letter, another rejection, another rejection. You

know, or go to this interview and hoping, hoping. I had tangible

paths to follow, and he provided that unconditionally. He even took

me out for—he didn’t know me. He took me out and bought me a

sandwich. He didn’t have to do that. And not trying to make light

of the work that, you know, the larger agencies are doing, the Government agencies are doing, but that serves a particular individual.

And if you don’t have that—you know, if you are not homeless or

substance abuse or PTSD, or severe handicaps, we get, like the

gentleman was saying about the Navy, the ones who don’t get that

full service, we get lost if you have a degree, because you employ

them. But I didn’t go to school to get a master’s or working at

Mickey D’s, even though you could be a manager, I guess, in there.

But I would like to own a Mickey D’s. How do I do that? You know,

and so I started a constable business and certified and bonded. But

when it was time for me to try to get information for the next level,

how to get Federal—how to get more money, that is when the service center closed where I was at with Mr. Celli. I didn’t know where

to go, and Maslow’s theory still is always in effect. You have got

to eat, shelter, you know, safety. I still have got to be an example

to my son and other people’s sons.

So it just gave me the path to follow, something tangible that I

could grasp and some measurement that I could be measured by

because we need to be measured and felt that we are making a difference. And we don’t have that now.

Ms. RADERMACHER. Well, thanks, Mr. Rooney.

Mr. Levine, I see that yours is up as well. And did you want to

speak or did your placard just fall over?

Mr. DEVER. I keep putting it up, and it keeps falling over.

Ms. RADERMACHER. Oh, OK. So we will go to Mr. Levine, and

then we will go to you next. And, actually, just because we are

starting to run short on time, if people can try to hit the highlights

of what they would like to say, I would like to give both of you a

chance to speak, and then anyone else who would like to chime in,

I would like to give them a chance as well.

Mr. LEVINE. Ms. Radermacher, Mr. Walker, and Committee

Members and guests, before I begin, I am going to take a little bit

of a different approach.

First of all, I want to thank the likes of Ms. Conley and also Mr.

Elmore, because if it wasn’t for people like him, I wouldn’t be the

success I am. And, you know, we all could say that we want different things out of committees, but I could tell you my experience

has been one that has just been outstanding. And to all those

who—Mr. Heavey types, I guess want to say from the bottom of my

heart thank you, because I would not be where I am today if it

wasn’t for organizations that are out there for veterans.

I prepared a few-second issue and just some statement on the

SBDC and VBOP Program from New York, and I would like to just

read it. It is brief. I will not bore you, I promise you. And I will

make my time quick.

The Veteran’s Business Outreach Program, the VBOP—one of

four original pilot programs in the U.S.—was funded through the

SBA’s Office of Veterans’ Business Development Center and

36

launched in September 1999. This highly successful program will

complete its 9th year in September 2008. The VBOP Program provides targeted business counseling and training directed toward

veterans with a priority for service-related disabilities. The program consists of a Statewide Coordinator on Long Island and a

VBOP dedicated Business Adviser at Centers—VBOC—collocated

with the Farmingdale Small Business Development Center, the Albany Small Business Development Center, and the Buffalo Small

Business Development Center.

This program includes business counseling, research, and training to assist veteran startups and existing veteran-owned businesses to obtain long-time and long-term success. I truly know only

one of the four VBOP Programs, the one in New York, but my

SBDC adviser, retired naval Captain John Narciso, networks with

all of the programs, and he speaks highly of them and I respect his

judgment.

I just want to stop while I am reading and tell you that I could

look into Captain John Narciso’s eyes, and he could look into my

eyes, and there is nothing like that except if you are dealing with

a parent. And I want you guys, everybody here, to know how important it is to maintain these programs. I am a success, and I am

sure that there are going to be other people. We just have to keep

nourishing that ground and bringing up the people that serve this

country.

In New York, before I speak about my experience with the

SBDC, it assists over 100 vets each month, plus 10 disabled vets,

with one-on-one business advisement. Over the last 4 years, 40 of

those vets a month were impacted by jobs saved or created. That

is batting almost 400 percent, guaranteed to be in the Cooperstown

Hall of Fame.

These vets accessed capital, usually with an SBA guarantee, at

a rate of almost $1.5 million each month or an investment of

$35,000 per job. That is nothing, gentlemen and ladies. I think this

is important because giving owners and workers appropriate levels

of capital increases their productivity and ensures that we can compete in the domestic and global economies,

That is my statement. You can all have a copy of it.

On a personal note, I just want to give you a brief story on my

business and how John helped me. This program, fortunately, came

into existence 2 years before I ever needed services from the Veterans Outreach Program. I am a Vietnam vet, was successful working for a firm for many, many years. Unfortunately, with the business downturn, my business went—the one I worked for, actually,

went out of business. This was the first time in my life that I was

ever in need of some sort of support with unemployment. I went

to New York State, and they had a program called the SEAP Program, which is a self-employment program. I am not sure if any

other States have it, but basically instead of giving you unemployment benefits, they gave you the same benefits, but in that time

you had to start your own business.

With that, I did not realize I was getting a business partner—

the Veterans Outreach Program. I was whisked away into a special

room with John, and John says, ‘‘I am now your new boss.’’

37

John worked with me in one room of my home at 9 o’clock at

night, at 8 o’clock in the morning, because I was going to be something that he was going to be proud of, Long Island was going to

be proud of. My business now is 8 years old. We have won numerous awards in New York State, and I could say it—and I do not

mean to bore everybody, but if it was not for the help from the Veterans Outreach Programs, you would not be seeing a success story

like the one I had.

Again, I want to thank this Committee for inviting me. I want

to thank all of you who do whatever you can for veterans, because

without your help, Lord knows where we would be. And this country must respect our veterans and put them up on a level that they

should deserve.

Thank you for your time, and any questions or anything, I would

be delighted to answer.

Ms. RADERMACHER. Thanks so much, and thanks so much for

sharing what your experience has been. Very helpful.

Mr. Dever.

Mr. DEVER. Just one of the things that you spoke to, Mr. Heavey,

that, you know, particularly struck home with me. Before I spent

time in Iraq, I never spent a lot of time thinking about electricity

and distribution grids and, you know, a number of other things

that we take for granted here. And I kind of wanted to make an

analogy of what some of the discussion talked about, and in particular, you know, an overlapping of services and that, you know,

there are many organizations that are in not the same business but

the same kind of business and that type of thing.

What I will tell you is that, sure, you could look at it that way.

The way that I would look at it is that the SBA, the VA, Department of Labor, you know, they are on the main power grid. They

are generating a tremendous amount of, let’s call it, electricity from

the standpoint of they are the big transmission lines in the system.

Now, what I discovered while I was in Iraq is that although the

transmission system is of great and tremendous importance and, in

particular, I have had a lot of involvement in doing an awful lot

of things that facilitated making sure that, you know, high

amounts of hundreds and thousands of kilowatts of electricity were

available on those grid systems, if you did not have the transformers to step down the electricity off of the transmission line into

the local neighborhood, the local neighborhood had no electricity.

So the fact that, you know, we took Iraq to electrical levels that

it had not seen before the war during the time that I was there

and, as I said, had the privilege of being able to influence some of

these things, local communities did not have service. The Veterans

Business Outreach Centers are those types of things where you

take, you know, the things that—you know, making an approach

to the VA or making an approach to the SBA or the Department

of Labor or whatever, you know, there is not the access there.

Yes, there is the capacity there, and that is where the electricity

is. But in order to be able to tap into it, you need to be able to have

those step-downs, you know, that bring it into the local community.

And without that, there are an awful lot of things generated, but

the access is not there for individuals like myself and, you know,

Mr. Rooney, as he said. And it is very important.

38

Those things cost a lot less than, you know, the efforts that we

did. I saw lots and lots of money spent on those things, and when

we figured out part of the problems, again, it was on the order of

tens of thousands and small hundreds of thousands of dollars making big differences, because we put transformers in place and we

were able to get electricity into small communities where it was

needed.

And I would tell you that I will take from this, you know, an aspiration of I hope that in the next 2 to 3 years, I pay enough Federal income taxes that you are completely paid for, because for the

return on $150,000, a small investment like that, based on—you

know, as Mr. Heavey said, you know, putting people to work and

putting people back to work so that they can, you know, pay taxes

and keep the cycle going, I think these veterans centers, if you did

an analysis and I would say if the centers do not ask for it now,

if you would ask for people to voluntarily give back the information, you know, about what it is that they are making, what it is

that they are paying back in, you know, State, Federal, and local

taxes, Federal taxes, and things like that, I am happy to give that

information to Louis if it helps, you know, people say, hey, these

things are making an impact at the local level.

Thank you.

Ms. RADERMACHER. That is great. Actually, any information that

people would like to submit for the record, like the data that you

mentioned, we would love it. The record is open for another 2

weeks, and any information is helpful to the work of the Committee.

Before I ask anyone else, could you in maybe 30 seconds say kind

of what the role of the Veterans Small Business Center played in

helping you start your business?

Mr. DEVER. I was not planning at the point in time where I went

back into business for myself. I had been in business back in 2000–

2001. The army afforded me the opportunity to go to the Army War

College, so I stopped working for myself. I went there, I came back,

and then I deployed and went to Iraq.

I just could not find a job, so when the last job thing that I had

fell through, I picked up the phone, I called Louis, and I said, you

know, I need to do this and I need to do this now because I have

an opportunity to put my first contract in place, you know, as a

self-employed small business owner. And, you know, we put the

things in place. I got my tax ID number, and, you know, the other

parts of it. But it was really, you know, again, a very critical timing issue.

I looked back, I actually had Louis’ name and contact information from January of 2006, and it was actually, I think, June of

2007 when Louis and I first started corresponding directly, and

then in December, because it was just about the first of December

when, you know, the last job opportunity that I had fell through

that I said, you know, enough is enough, as Mr. Rooney said, you

know, bills to pay and things to do. And it facilitated that process

because I was in a very short time window to exploit what was

available to me, and with Louis’ help and the center’s help, I was

able to do that and not miss that opportunity.

Ms. RADERMACHER. Great. Thank you so much.

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Mr. DEVER. Took more than 30 seconds. Sorry.

Ms. RADERMACHER. Well, thank you. It was helpful.

Would anyone else like to make a comment. Oh, I apologize. I

didn’t see your placard. If we could keep it short since we are trying to wrap up, but go ahead.

Mr. ST. JOHN. My name is Bruce St. John. I am with the VA

Center for Veterans Enterprise. A couple of times in the hearing,

the word ‘‘duplication’’ has come up, and I would say that an alternate word might be ‘‘overlap.’’

There are a number of organizations that the Federal Government has created—Small Business Development Centers, Veterans

Business Resource Centers, Procurement Technical Assistance Centers, the Center for Veterans Enterprise, the Veterans Business Resource Centers, and I have forgotten probably some others. So what

exists today is a veteran has the ability to get pretty much all the

advice, information, and access to the Federal marketplace at a relatively low cost. If these did not exist, the cost of paying lawyers,

accountants, you know, conference planners, things like that, would

be much higher and would be a big barrier to many people.

So I think in our experience and in our opinion, these organizations are a very cost-effective and valuable resource for the veteran

community and for the small business entrepreneur to get the advice, the assistance, the support that they need, and so that they

can decide and figure out the pathway to whatever success is for

them.

And so I would just, you know, propose that an alternate word

to ‘‘duplication’’ is ‘‘overlap.’’

Mr. WALKER. But just to be clear, because I want to make sure

that we are clear on this, particularly in regards to who you represent, you do see that there is a very profound need for these organizations and what they do that goes above and beyond what is

being done by the other organizations, correct?

Mr. ST. JOHN. I think each of the organizations is valuable, and

you have 2 million veterans; you have 2,000-some-odd SBDCs; you

have 5 VBOCs. Different veterans will go to the same place and decide it works or does not work. We get—people call us, and they

have been one place, and they did not like it. Other entrepreneurs

went there and loved it, you know.

So what has happened is we, the Federal Government, have provided a number of avenues whereby each person can find the pathway that leads to success for them. And for some, they find a job.

We know that. Some, they find a job. Some, they become entrepreneurs.

So, yes, I agree, you know, they are all valuable, and some of the

numbers—I was over here dividing. I mean, this is cents on the

dollars of what you would have to pay lawyers, accountants, and

training organizations to get, you know, the approximate equivalent. So, yes.

Mr. WALKER. Thank you.

Ms. RADERMACHER. We actually are going to wrap up. We so appreciate all of you for coming. I feel like there has been a lot of

really valuable information and testimony that has been presented.

Personally, I wish we could continue the conversation since I still

have a lot of questions and things that I would like to know. But

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we are going to wrap up, so thank you all very, very much for coming. Please send any additional information. The record is open for

2 weeks, and we would be happy to include that.

[Whereupon, at 12:33 p.m., the roundtable was concluded.]

(41)

APPENDIX MATERIAL SUBMITTED

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RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

JUSTIN BROWN

Question. Would you support a national network of veterans business centers

whether they are Veterans Business Outreach Centers (VBOCs), Veterans Business

Resource Centers (VBRCs) or some combination of both types of centers?

Answer. On behalf of the 2.3 million members of the Veterans of Foreign Wars

of the United States and our Auxiliaries, I would like to thank you and your Committee for this question and the opportunity to participate in your roundtable discussion. Small business and entrepreneurship are issues of great importance to our

members, and the entire veteran population.

The Veterans of Foreign Wars (VFW) is highly supportive of expanding veterans’

small business and entrepreneurial resources. The VFW is aware of the great work

veteran business centers have been conducting and would like to see these programs

replicated and expanded to cover a greater geographic area and a larger population

of veterans.

The VFW believes that proactive veterans’ programs such as career training, education and the veteran small business centers are the best way of ensuring our veterans enjoy a high quality of life after having served their country. If we give veterans the tools and the opportunity to succeed they will do so.

In consideration of recent developments, the VFW believes SBA would be the best

Department to have oversight of an expansion of veterans’ business resources. As

this Committee is well aware, the Veterans Corporation (TVC) was supposed to fund

Veterans Business Resource Centers under its umbrella and failed to do so at sufficient levels. We believe that TVC has lacked legitimate oversight and would like to

see its funds redirected toward expanding veterans small business programs via the

SBA, similar to that of the women’s’ business centers.

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

WILLIAM D. ELMORE

Question. Would you support a national network of veterans business centers

whether they are Veterans Business Outreach Centers (VBOCs), Veterans Business

Resource Centers (VBRCs) or some combination of both types of centers?

Answer. Currently, the Small Business Administration (SBA) supports veterans

and other critically important audiences through its national network of business

and technical assistance programs. This includes business counseling services provided for current and prospective business owners through 1,000 Small Business

Development Centers (SBDCs), 114 Women’s Business Centers and over 10,000

SCORE volunteers located across the country.

Employment training and career development assistance for veterans is also provided by both the Department of Veterans Affairs and Department of Labor.

In addition, veterans may also utilize SBA’s procurement specialists and large

portfolio of loan programs, including two specifically for Veterans, the Patriot Express Loan Program and the Military Reservist Economic Injury Disaster Loan program (MREIDL).

Given this wide variety of programs and services, we do not believe that a separate national network of veterans’ business centers would be the most efficient way

of delivering services. Rather, we believe that full and aggressive utilization of the

existing extensive network of SBA, VA, and Labor programs would be more effective.

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

JACOB A. KLERMAN

Question. How can we find ways to re-brand recently separated service-members

and make them more attractive to potential employers?

Answer. Abt Associates’ study for the Department of Veterans Affairs did not include a detailed analysis of rebranding strategies. Our interviews suggested positive

and negative perceptions of veterans as employees. On the positive side, veterans

were perceived as reliable, disciplined, mature, team players, having integrity, with

a strong work ethic, and leadership and project management skills. On the negative

side, veterans were perceived as rigid and inflexible, only good at taking orders, but

lacking creativity, higher education, business and financial skills, and specific business knowledge. Potential employers also expressed concern about the effects of

combat and Post Traumatic Stress Disorder (PTSD).

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As rebranding strategy would want to emphasize the positive factors and correct

mis-perceived negative factors. The standard approaches to rebranding would involve public service announcement (on TV, the radio, and in newspapers; emphasizing the good qualities of veterans and their recent public service), targeted outreach to appropriate employers (e.g., DVA booths at meetings and conferences with

representation from major potential employers), partnerships with selected temporary help agencies that now serve as an important entry path into the labor market, and targeted outreach to potential franchisers (for those seeking to start small

businesses using a franchise).

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO JOHN

MCWILLIAM

Question 1. I am informed that in my home state of Maine, funding for the Disabled Veterans Outreach Program (DVOP) and for the Local Veterans Employment

Representatives (LVER) Program has dropped from $940,000 in fiscal year 2001 to

$837,000 in fiscal year 2008. This represents an 11 percent drop in real dollars and

when you adjust for inflation it’s a 25 percent cut. At a time when our returning

veterans need the best assistance we can offer, it is unconscionable that we would

slash funding to give them the training and help they need to get a job. Why have

the cuts been made to these vital programs?

Answer. In fiscal year 2003, Maine was funded $1,040,832 for the Jobs for Veterans State Grant (JVSG). This grant comprises the Disabled Veterans Outreach

Program (DVOP) and for the Local Veterans Employment Representatives (LVER)

Program. In fiscal year 2009, it is estimated that the funding will be $858,000.

The decrease in the funding for the state of Maine is attributable to the change

in the statutory funding formula. Please see the response to Question 2.

Question 2. During the Roundtable, you mentioned that DVOP and LVER funds

are allocated through a specific funding formula. Can you explain that funding formula in detail, and why this funding formula has led to decreased funds for my

home state of Maine?

Answer. Under the law in effect prior to fiscal year 2003, the DVOP and LVER

programs were allocated to the states using a staffing formula. Generally, the DVOP

program was based upon the number of veterans living in the state, and the LVER

allocation was based upon the number of LVER positions in the state as of January

1, 1987.

In November 2002, the passage of the Jobs for Veterans Act (PL 107–288) (JVA)

changed the manner in which funds were allocated. The JVA stipulated that the

amount of funding available to each State would reflect the ratio of the total number of veterans residing in the State who are seeking employment to the total number of veterans seeking employment in all States.

The Department of Labor implemented this requirement by publishing regulations in 2005. These regulations are at 20 CFR Part 1001 and specify that the funding formula will be based upon the 3 year average of the Current Population Survey

(CPS) and the 3 year average of the Local Area Unemployment Statistics (LAUS).

The relative allocation of funding to States is developed based on a combination

of the ratio of the general unemployment level in each State compared with the unemployment level in all States using LAUS data, and the ratio of the number of

veterans in the civilian labor force in the State as compared to the number of veterans in the civilian labor force in all states using the CPS data.

The formula was phased-in over a 2-year period beginning in fiscal year 2004. The

result was that states with low numbers of veterans residing in the State who are

seeking employment would receive less funding under the new formula. The chart

below indicates the funding amounts and the statistics used to determine the funding provided to Maine since the passage of the Jobs for Veterans Act.

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Jobs for Veterans State Grants for Maine

Total

funding

allocation

Change

from previous year

3-year

average

LAUS

Percentage

of national

total

3-year

average

CPS

Percentage

of national

total

3-year

average

distribution

FY 2009** ......... $858,000 3% 33,190 0.46% 84,333 0.66% 0.56%

FY 2008 ............. $831,000 2% 32,784 0.43% 87,000 0.66% 0.55%

FY 2007 ............. $813,000 4% 33,823 0.41% 89,000 0.66% 0.54%

FY2006 ............... $784,000 1% 32,341 0.38% 88,000 0.64% 0.51%

FY 2005* ........... $777,000 -7% 30,562 0.38% 88,000 0.64% 0.51%

FY 2004* ........... $838,000 -20% 26,966 0.39% 87,667 0.61% 0.50%

FY2003 ............... $1,040,832 .................... .................... .................... .................... .................... ....................

* Phase in period for new funding formula.

** Estimate.

Question 3. Do you believe the DVOP and LVER programs receive sufficient funding? Please explain why or why not.

Answer. The funding level for the Veterans’ Employment Training Service (VETS)

allows the agency to carryout its statutorily mandated functions, while emphasizing

the highest priority programs. We recognize that, as a result of the new funding formula, many smaller states and those with fewer veterans have received less funding. However, we believe that the increased emphasis on priority of service for veterans in the One-Stop Career Centers, in conjunction with the existing DVOP and

LVER programs, allows the states sufficient resources and the flexibility to provide

the full range of employment services to those veterans. In addition, since the beginning of the Global War on Terror, VETS has placed additional emphasis on the

Transition Assistance Program (TAP) in order to better prepare service members to

make a smooth, seamless transition to from the military to civilian employment, and

on the provision of intensive employment services for the severely injured and

wounded. In sum, we believe the funding level requested in the President’s fiscal

year 2009 budget is appropriate and meets our mission requirements.

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

BRUCE ST. JOHN

Question 1. Does the US Department of Veterans Affairs agree that there is a specific need for Veteran Business Outreach Centers (VBOCs) and Veteran Business

Resource Centers (VBRCs) because of the targeted services that they provide, or

does the Department believe that veterans are adequately served through general

business assistance and counseling programs, such as Small Business Development

Centers (SBDCs)? Please provide a detailed explanation for your answer.

Answer. The small business development centers (SBDC) identified in Public Law

108–183 as the service provider for small business courses are eligible for funding

support through the G.I. Bill. The Association of Small Business Development Centers (ASBDC) is a well-established national network comprised of academic and

business professionals who specialize in small business matters. The ASBDC requires continuing education for its center counselors and provides regular communications to keep field personnel apprised of changing legislation and regulations.

The veterans corporation partnered with the SBDCs to provide FastTRAC training

on its behalf. Given its statutory footprint, its national presence, its unsurpassed

professionalism and historical relationship with the Small Business Administration,

veterans are well-served by interactions with SBDC.

Question 2. Would you support a national network of veterans business centers

whether they are Veterans Business Outreach Centers (VBOCs), Veterans Business

Resource Centers (VBRCs) or some combination of both types of centers?

Answer. The Department of Veterans Affairs encourages consideration of expanding funding to the SDBCs and increasing the number of SBDCs that are also procurement technical assistance centers (PTAC), funded by the Defense Logistics

Agency. The SBDCs are identified in Public Law 110–186 as eligible for grant funding from the Small Business Administration to deliver counseling to veterans. We

further encourage expanding funds for the Association of Procurement Technical Assistance Centers. Our experience with the PTACs is that they provide exceptional

value to business owners seeking Federal prime and subcontract opportunities.

Owners are well-served by both the SBDCs and the PTACs.

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RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

JOSEPH SHARPE

Question. Would you support a national network of veterans business centers

whether they are Veterans Business Outreach Centers (VBOCs), Veterans Business

Resource Centers (VBRCs) or some combination of both types of centers?

Answer. The American Legion strongly supports increased funding of the Small

Business Administration’s Office of Veterans’ Business Development to provide enhanced outreach and community based assistance to veterans and self employed

members of the Reserves and National Guard.

Additionally, The American Legion supports allowing the Office of Veteran Business Development to enter into contracts, grants, and cooperative agreements to further its outreach goals. The Office of Veterans’ Business Development must be authorized to develop a nationwide community-based service delivery system specifically for veterans and members of Reserve components of the United States military.

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. OLYMPIA J. SNOWE TO

DR. JOHN D. WINKLER

Question 1. How can we find ways to re-brand recently separated service-members

and make them more attractive to potential employers?

Answer. One of the most undervalued assets of American life is the repeated ability of the American military to recruit the nation’s young people and over the course

of a career, prepare a valuable pool of leaders who become the key contributors to

America’s civil society. Mayors, city managers, police officers, teachers, health care

professionals, school board members, and the full range of non-governmental practitioners started their careers as military Service members.

In our work with employers, we’ve found that there is an extreme demand for

highly trained and skilled men and women. The qualifications of Veterans that

made them valuable and dependable assets while protecting our country are the

same qualifications that are in demand by prospective employers: they are educated

and highly trained individuals who are flexible, diverse leaders and team members

and who are proven to perform well under pressure.

There have been some barriers to creating a pipeline to connect those with military experience to the needs of the civilian community. The Department of Labor’s

(DOL) Advisory Committee on Veterans’ Employment, Training and Employer Outreach (ACVETEO) which is made up of major employers, veteran service organizations, the Department of Defense, DOL, the Department of Veterans Affairs and the

Small Business Administration, among others, is making suggestions to assisting

veterans and employers. The ACVETEO is devoted to improving the means of connecting our separating Service members with the employers who need them, while

recognizing that technology available today can assist in this effort.

The Department thinks the new 24/7 tools, one of which is TurboTAP, will be a

means that Service members can use to identify employer needs and employers can

use to reach out to Service members.

Question 2. The Department of Defense has recently altered some of its recruiting

guidelines to allow recruits who would not have been considered qualified to join

the armed forces. The vast majority of these recruits will eventually leave the armed

forces to seek employment, most within the next few years. Does the Department

recognize that these recruits may have greater difficulty in finding employment

than previously separated servicemembers? If so, has the Department made any

plans to prepare for these servicemembers for re-entry into civilian service?

Answer. The Department’s enlistment standards have not been altered. They have

remained the same since 1990, when those standards were first established. The Department’s recruit quality benchmarks require 60% of the fiscal year non-prior service accessions to score at or above average and no more than 4% score below the

31st percentile on the enlistment aptitude test, and 90% of those accessions to be

high school diploma graduates.

As stated in the response to the question on ‘‘re-branding’’ recently separated

Service members, the Department of Labor’s (DOL) Advisory Committee on Veterans’ Employment, Training and Employer Outreach (ACVETEO), which is made

up of major employers, veteran service organizations, DoD, DOL, the Department

of Veterans Affairs and the Small Business Administration, among others, is devoted to improving the means of connecting our separating Service members with

the employers who need them. They continue to explore ways to assist veterans in

transitioning to civilian employment and connect with employers. The ACVETEO

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also recognizes that technology available today provides tools—such as TurboTAP—

that veterans’ can use at their convenience (24/7) to help them tailor a plan specific

to their skills and interests.

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