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[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]

    FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2016

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FOURTEENTH CONGRESS

                              FIRST SESSION
                                _______

        SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT 
                             APPROPRIATIONS

                    ANDER CRENSHAW, Florida, Chairman

  TOM GRAVES, Georgia                 JOSE E. SERRANO, New York
  KEVIN YODER, Kansas                 MIKE QUIGLEY, Illinois 
  STEVE WOMACK, Arkansas              CHAKA FATTAH, Pennsylvania 
  JAIME HERRERA BEUTLER, Washington   SANFORD D. BISHOP, Jr., Georgia  
  MARK E. AMODEI, Nevada
  E. SCOTT RIGELL, Virginia

    NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mrs. Lowey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

                      Winnie Chang, Kelly Hitchcock,
                      Ariana Sarar, and Amy Cushing,
                            Subcommittee Staff
                                  _______

                                  PART 6

                                                                   Page
  Office of Management and Budget..............................       1
  General Services Administration..............................      55
  The Supreme Court............................................     107
  The Judiciary Budget.........................................     143

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    U.S. GOVERNMENT PUBLISHING OFFICE

  97-155                    WASHINGTON : 2015

                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
                   HAROLD ROGERS, Kentucky, Chairman

  RODNEY P. FRELINGHUYSEN, New Jersey     NITA M. LOWEY, New York
  ROBERT B. ADERHOLT, Alabama             MARCY KAPTUR, Ohio 
  KAY GRANGER, Texas                      PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho               JOSE E. SERRANO, New York
  JOHN ABNEY CULBERSON, Texas             ROSA L. DeLAURO, Connecticut
  ANDER CRENSHAW, Florida                 DAVID E. PRICE, North Carolina
  JOHN R. CARTER, Texas                   LUCILLE ROYBAL-ALLARD, California
  KEN CALVERT, California                 SAM FARR, California
  TOM COLE, Oklahoma                      CHAKA FATTAH, Pennsylvania              
  MARIO DIAZ-BALART, Florida              SANFORD D. BISHOP, Jr., Georgia
  CHARLES W. DENT, Pennsylvania           BARBARA LEE, California   
  TOM GRAVES, Georgia                     MICHAEL M. HONDA, California
  KEVIN YODER, Kansas                     BETTY McCOLLUM, Minnesota
  STEVE WOMACK, Arkansas                  STEVE ISRAEL, New York                                     
  JEFF FORTENBERRY, Nebraska              TIM RYAN, Ohio                                         
  THOMAS J. ROONEY, Florida               C. A. DUTCH RUPPERSBERGER, Maryland
  CHARLES J. FLEISCHMANN, Tennessee       DEBBIE WASSERMAN SCHULTZ, Florida  
  JAIME HERRERA BEUTLER, Washington       HENRY CUELLAR, Texas
  DAVID P. JOYCE, Ohio                    CHELLIE PINGREE, Maine       
  DAVID G. VALADAO, California            MIKE QUIGLEY, Illinois        
  ANDY HARRIS, Maryland                   DEREK KILMER, Washington    
  MARTHA ROBY, Alabama                           
  MARK E. AMODEI, Nevada                          
  CHRIS STEWART, Utah                                  
  E. SCOTT RIGELL, Virginia                            
  DAVID W. JOLLY, Florida                                     
  DAVID YOUNG, Iowa                          
  EVAN H. JENKINS, West Virginia                           
  STEVEN M. PALAZZO, Mississippi                       

                William E. Smith, Clerk and Staff Director

                                   (ii)

 
   FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR 2016

                              __________                      

                                            Monday, March 16, 2015.

                    OFFICE OF MANAGEMENT AND BUDGET

                                WITNESS

HON. SHAUN DONOVAN, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
    Mr. Crenshaw. Well, good afternoon, everyone. The hearing 
will come to order. I thank you all for being here.
    Director Donovan, we welcome you to the hearing today. We 
know that you have been pretty busy with the pending budget 
resolution. We appreciate the time you have given us to be here 
to give your testimony and answer any questions.
    And the first thing I want to do is say thank you for 
having the budget submitted on time. I think that is the first 
time since 2010 that has happened, so congratulations. And I 
hope that that bodes well for the upcoming budget season.
    Now, the OMB has a great responsibility of constructing a 
budget that reflects the President's vision for our Nation, and 
because of this responsibility, I believe that your agency has 
an even greater duty to be judicious and be deliberate with 
your own budget request.
    Today, I hope not only to have an informative discussion 
about your fiscal year 2016 appropriations request, but I hope 
that we can dive into some important policies and assumptions 
included in the President's overall request for fiscal year 
2016.
    Since 2010, this committee, under the leadership of the 
full committee chairman, Hal Rogers, has carefully worked to 
reduce discretionary spending by some $175 billion. However, in 
this same time period, we have seen mandatory outlays and net 
interest increase significantly. While we have made significant 
strides on the discretionary side of the ledger, our long-term 
economic and national security interests require continued 
deficit reduction and renewed efforts to reduce our national 
debt.
    And speaking of the debt, our statutory debt ceiling was 
reached yesterday, and the Treasury will once again take 
extraordinary measures to avoid default. But, at some point, 
these extraordinary measures become routine and ordinary. And I 
would caution the administration that this routine is not a 
comfortable one and remind you that S&P downgraded our 
country's credit rating in 2013, in part because of that. So we 
expect you to use your influence with the administration to 
keep the country from going over the fiscal cliff.
    The demographic changes underway in this country mean that 
the benefits of Social Security and Medicaid and Medicare 
enjoyed today are bills that are going to be paid by our 
children and their grandchildren tomorrow. And so, regrettably, 
the President's budget does not address the unavoidable 
question of how to distribute the economic costs of an aging 
population over generations. And to ensure the health of our 
economic future, we must rein in out-of-control spending on the 
mandatory side of the ledger. And I hope you can explain how 
the administration plans to address these looming challenges.
    The fiscal year 2016 budget request includes large 
increases for both your operating account and your IT account. 
Your operating request is a 6.2 percent increase over fiscal 
year 2015. And I think you should think about, at a time when 
our Nation needs to continue to exercise fiscal constraint and 
restraint, that OMB should think about leading by example.
    Now, you are also requesting a $15 million increase in your 
IT account. And I appreciate the strides the administration has 
made to improve the use of IT resources across the government, 
increase efficiency, reduce waste, and identify savings. And so 
I would like to hear more about your plan to improve the 
digital services and prevent the kind of failure we saw with 
the rollout of healthcare.gov.
    I would also like to discuss the role OMB plays in 
strengthening Federal cybersecurity. More and more, we are 
seeing threats to our national security via cyber attacks to 
our network and to our operating systems, so your role in 
guiding and coordinating cyber policy is increasingly 
important.
    In addition, OMB has a critical task of reviewing all 
Federal regulations to ensure that these proposed regulations 
keep pace with modern technology, promote the changing needs of 
society, and avoid duplicative and inconsistent policies.
    And, as you know, Senator Boozman, my counterpart in the 
Senate, sent you a letter recently on the Department of Labor's 
proposed fiduciary standard, because we believe the SEC should 
move first in any rulemaking in order to address the issues of 
duplication and any confusion that would surround different 
standards of care for broker-dealers and investment advisors. 
So we look forward to hearing from you on that timeline of the 
proposed rule--as well as public input.
    And, finally, let me say that the way that the 
administration works with the Corps of Engineers to pick these 
so-called new start projects is something that I am concerned 
about. Because, after three consecutive fiscal years with no 
new starts, the fiscal year 2014 omnibus allowed the Corps to 
initiate a limited number of new studies and new construction 
projects, but, unfortunately, the administration's 
mismanagement of the fiscal year 2014 funds led the need for 
this committee to include more stringent guidelines for fiscal 
year 2015 funds.
    And yet it looks to me like the administration has yet 
again disregarded the congressional recommendations and appears 
to have used their own budget metrics for choosing new start 
projects. And I will ask you a question later on this to shed 
some light on the criteria the administration used in the 
selection of the four new starts in the 2015 workplan as well 
as the new starts for 2016.
    So, again, let me thank you for being with us today. I look 
forward to hearing your testimony.
    And before that, let me turn now to Ranking Member Serrano 
for any questions or comments he might have.
    Mr. Serrano. Thank you, Chairman Crenshaw. I would like to 
join you in welcoming Shaun Donovan, Director of the Office of 
Management and Budget, to this hearing.
    OMB plays a unique role in preparing the President's budget 
and in making sure that agency budget requests are consistent 
with the President's priorities. In addition, OMB monitors the 
implementation of government programs by reviewing their 
performance; coordinates and reviews all significant Federal 
regulations; and oversees crosscutting, governmentwide issues 
like IT performance and procurement.
    In all of these areas, OMB improves the efficiency and 
effectiveness of the Federal Government as a whole. Because of 
this, your budget request, while somewhat small compared to 
other agencies under our jurisdiction, has a wide-ranging 
impact.
    Your request for fiscal year 2016 totals $97.4 million. 
This includes a relatively small increase of $5.7 million to 
help ensure you have the personnel and the tools necessary to 
meet these numerous responsibilities.
    The President's fiscal year 2016 budget, prepared with your 
counsel, creates a strategic plan that strengthens our economy 
and invests in working families by improving access to early 
and higher education as well as affordable health care, 
investing in our infrastructure, and partnering with local 
communities and business to create good-paying jobs and 
affordable housing. I commend OMB for your role in these 
efforts.
    Additionally, OMB plays a pivotal role in ensuring our 
Federal agencies and employees have the resources needed to do 
their jobs. Because of the sequester, Federal employees have 
had to shoulder a large portion of the budget cuts, and many 
Federal workers have sought better opportunities in the private 
sector. I am particularly pleased that the President's fiscal 
year 2016 budget seeks to end the sequester in order to fund 
strategic investments that strengthen our competitiveness in 
the global economy.
    I am also interested in hearing about the current progress 
being made on the implementation of the DATA Act and how this 
subcommittee can be of help in providing the resources 
necessary in order for OMB to effectively comply with the 
statute's reporting requirements.
    I hope we will have a chance to discuss all these issues in 
further detail today. Thank you for your service and for 
appearing before this subcommittee, and I look forward to 
hearing about your priorities for fiscal year 2016.
    Thank you.
    Mr. Crenshaw. Thank you.
    Director Donovan, you are recognized for your testimony. If 
you could keep that within a 5-minute range, that will give us 
plenty of time for questions. The floor is yours.
    Mr. Donovan. Thank you, Mr. Chairman, Ranking Member 
Serrano, members of the subcommittee. Thank you for the 
opportunity to present the President's 2016 budget request for 
the Office of Management and Budget.
    I want to first thank this subcommittee for its work on 
2015 appropriations. Over the last 2 years, you have provided 
OMB with resources to halt the furloughs and staffing losses 
that threatened our ability to meet our responsibilities at the 
high standards that Congress expects. Restoring capacity allows 
us to deliver more value for taxpayers through improved program 
management, smarter regulations, and more identified 
opportunities for savings.
    The bipartisan Murray-Ryan agreement allowed for critical 
investment in shared discretionary priorities, not just at OMB 
but across government, and contributed to stronger growth and 
job market gains. That is why the President will not accept a 
budget that locks in sequestration going forward and he will 
not accept a budget that severs the vital link between our 
national security and our economic security.
    Instead, the President has proposed a budget that builds on 
our economic and fiscal progress and ends sequestration, fully 
reversing it for domestic priorities in 2016, matched by equal 
dollar increases for defense. These investments are fully paid 
for with smart spending cuts, program integrity measures, and 
commonsense loophole closures.
    The President's request for OMB is $97.4 million, a 6 
percent increase over 2015. OMB plays a pivotal part in 
executing the President's management, regulatory, budget, and 
legislative agenda and ensuring that the Federal Government 
works at its best on behalf of those it serves.
    The request supports an additional 22 full-time 
equivalents, allowing us to deliver more value through improved 
program management, smarter regulations, and additional 
identified opportunities for efficiencies and budgetary 
savings. This includes dedicating resources to new statutory 
responsibilities and initiatives that provide critical returns 
to taxpayers and are key priorities for this subcommittee, such 
as DATA Act implementation, procurement reform, and our open-
data initiatives.
    With the request, OMB staffing would still remain roughly 8 
percent below 2010 levels.
    I would like to highlight one area of investment in support 
of the President's management agenda in particular: the need 
for smarter IT delivery and stronger cybersecurity across 
government.
    OMB is requesting $35 billion for information technology 
oversight and reform, or ITOR, to support the use of data, 
analytics, and digital services to improve the effectiveness 
and security of government systems.
    Since the inception of ITOR, agencies have reported $2\1/2\ 
billion in cost savings and avoidance resulting from OMB's 
enhanced oversight and reform efforts. OMB and ITOR resources 
support OMB's central coordinating role under FISMA to ensure 
agencies are effectively responding to cyber events. And, last 
year, ITOR was used to pilot the U.S. Digital Service, which 
has already saved the agencies millions of dollars and assisted 
with many of our toughest digital challenges.
    The 2016 request enhances oversight of agencies' 
cybersecurity preparedness and expands the central USDS team at 
OMB to support standing up digital service teams at 25 agencies 
across the government.
    Our efforts to help deliver a smarter, more innovative, and 
more accountable government extend to our regulatory 
responsibilities, as well. The administrationis committed to an 
approach to regulation that promises economic growth, 
competitiveness, and innovation while protecting the health, 
welfare, and safety of Americans.
    We continue to make significant progress on the 
retrospective review of existing regulations, eliminating and 
streamlining regulations to reduce burden and cost. Since 2010, 
agency retrospective reviews have detailed over 500 
initiatives, saving more than $20 billion in the near term. 
This work will continue to be a major focus for OMB.
    The responsibilities I have described here are in addition 
to the work with agencies to prepare and execute the Federal 
budget. And while some people think only about OMB's efforts on 
behalf of the President's budget, members of this subcommittee 
knows that OMB works with Congress every day to provide 
information and analysis and to respond to contingencies and 
unforeseen circumstances.
    I want to close by thanking you again for the opportunity 
to testify today. It is a particular honor for me to serve in 
this role given the critical role that OMB plays and the 
talented individuals who work there. Supporting OMB and the 
work we do to make government perform better for the American 
public will continue to be a smart and necessary investment, 
and I look forward to continuing to work closely with this 
subcommittee to that end.
    Thank you. I would be glad to take your questions.
    Mr. Crenshaw. Well, thank you.
    [The information follows:]
  
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    Mr. Crenshaw. Let me start the questions by asking--I 
mentioned in my opening statement about the Department of Labor 
and fiduciary standards. And you know that Senator Boozman and 
I wrote you a letter expressing our concerns. We think that 
there may be some unintended consequences with the rule that 
might harm low- and middle-income folks that are seeking 
financial advice regarding their retirement. And I know you are 
reviewing that proposed regulation. Let me ask you a couple of 
questions about that.
    Number one, how can you make sure that we are not going to 
duplicate or there are going to be inconsistent regulations 
with what the SEC already does?
    Number two, will there be an opportunity for the public to 
have input into these proposed rules?
    And, number three, just give us a timeline. Is there going 
to be adequate time--if there is going to be public input, can 
we be assured that there is going to be adequate time to listen 
to whatever that input is?
    Could you answer those three questions?
    Mr. Donovan. Sure. And, Mr. Chairman, as you know, when a 
rule is pending at OMB, I am limited to some extent on what I 
can say about the specifics of that rule.
    What I can say in response to your questions is that, first 
of all, Department of Labor has specific statutory 
responsibilities that are unique in this area. And so it is 
important that they move forward on rulemaking but to do it in 
a coordinated way. And, in fact, they have had extensive 
consultation with SEC, who has provided technical assistance in 
this process. And so they are coordinating closely.
    Second, we will ensure that there is a chance for input. As 
you know, there was an original proposed rule in 2010. There 
was significant input there, and there will be an opportunity 
for input again on this as the proposed rule is published and 
goes through the public comment process.
    On the timeline, I can't give you specifics about that at 
this point, but obviously we will work closely with you and 
this committee to make sure you stay apprised as we move 
forward.
    Mr. Crenshaw. Well, thank you. This subcommittee also 
oversees the SEC, and we will ask them the same kinds of 
questions. Because often times at the Federal level there are 
overlaps, duplications, inconsistencies. And it sounds to me 
like maybe they have started on the right foot to try to 
coordinate this, but we will monitor that as it goes on.
    Let me ask a broader question, just about your overall 
operating budget. In your 2015 budget, as I understand it, 
there is money that--you were going to hire 30 new folks by the 
end of this year. And in your 2016 request, there is money for 
another 22 new hires.
    And the question becomes, is that something you can absorb? 
I mean, in a 2-year period, you are going to hire 52 new people 
as well as replace the people that are working there now that 
might leave for whatever reason. Do you know the last time you 
hired 52 new employees in a 2-year period, and do you think 
that is something you can absorb effectively and efficiently?
    Mr. Donovan. Well, it is an important question. And, to be 
very specific, as we have been rebuilding from sequestration, 
thanks to the investments from this committee, we have actually 
hired about 100 people over the last 12 months. Now, a 
significant number of those actually account for attrition; 
there is natural turnover. But it gives you a sense that we 
certainly have the capacity and that we are very focused on 
moving forward to hire, given the resources this committee 
provides.
    And, in fact, since the so-called Cromnibus was passed in 
December, that has given us the certainty for this year, and we 
have further ramped up our efforts to try to bring on line the 
people that the budget you passed for 2015 allows us to hire.
    Mr. Crenshaw. Well, because I think you know as well as 
anyone that what they call the 302 allocation that we will 
receive, 302(b)s, we don't know exactly how much money that we 
will have available, but more than likely it is not going to be 
a whole lot more money than last year. It could be less than 1 
percent. We don't know that yet.
    But when you ask for a 6.2 percent increase, you must know 
that that stands out in these tough economic times. And maybe--
help me understand why OMB, as a model of efficiency, would 
need that kind of increase in today's world?
    Most of the members of this subcommittee--in fact, all the 
Members of Congress have had their office accounts reduced by 
about 15 percent over the last 2 years in an effort to lead by 
example. And so I would hope that that is something you 
consider, in terms of leading by example, as well.
    Tell us what you think about the fact that in these tough 
economic times you still need a 6.2 percent increase in your 
funding.
    Mr. Donovan. Well, let me try to break down a little bit 
what that 6 percent would go to.
    Almost half of that increase is things like cost-of-living 
increases, rent changes that we pay to GSA. So it really is 
just inflationary effects on our budget is about half of it.
    Most of the remainder is going to implement new 
responsibilities that we have. The DATA Act, in particular, is 
probably the largest of those--legislation, obviously, passed 
on a bipartisan basis last year that we worked very closely 
with Congress on and, we believe, can lead to some real 
improvements in the way we account for government spending 
across the Federal Government. But we are implementing that 
now, and it takes significant resources to do that.
    But there are others, like cybersecurity--recent 
legislation that was passed that increases OMB's authorities 
there--that are important that we carry forward; privacy; a few 
others, as well.
    A smaller share of the remainder is really going to 
continue to rebuild some of the capacity that was lost. And, 
again, that is, we think, important given the enormous effect 
that sequestration had on OMB.
    But, to be clear, we are not rebuilding the full capacity. 
We have made OMB more efficient. And we would still end up--
even if we got 100 percent of that increase that we have asked 
for, we would still end up 8 percent below the staffing level 
that we had in 2010. So we think we have been able to find ways 
to become more efficient.
    Just the last thing I would say on this is that OMB is not 
unique. The President has obviously proposed that we increase 
investment on the discretionary side. I think you said in your 
opening comments, as well, that--I think there is pretty broad 
recognition, the real challenges we have in the long-run fiscal 
picture are not on the discretionary side of our budget; they 
are on the mandatory side.
    And so the overall structure of our budget more than pays 
for any discretionary increases that we have by lifting 
sequestration. We, in fact, not only pay for it; we achieve 
$1.8 trillion in deficit reduction over 10 years overall, 
largely through changes on the mandatory side and on the tax 
side.
    Mr. Crenshaw. Well, thank you.
    And now I would like to recognize Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman.
    Director Donovan, you have made it clear that the President 
will not accept a budget that reverses our progress by locking 
in sequestration.
    What do you mean by that? Given your unique viewpoint on 
the entire Federal Government, what do you predict would be 
some of the severe and negative consequences if it gets locked 
in?
    Mr. Donovan. Well, first of all, as I mentioned earlier, 
OMB saw, both in its own budget and its own agency but also 
across government, perhaps better than any agency what the 
effects of sequestration were the first time around, whether it 
was the furloughs that we had to take at OMB but also at many 
other agencies, but, more importantly, tens of thousands of 
children who lost their access to early education, tens of 
thousands of veterans and others who were made homeless again 
by the cuts to programs for homelessness and housing vouchers, 
and a range of other areas, as well, cuts to research and 
development and other types of investments, education and 
training, that are critical to our economic growth going 
forward.
    And those are the same types of effects that we are 
concerned would happen if sequestration goes fully back into 
effect again in 2016, which is what would happen if we don't 
enact some sort of agreement like Murray-Ryan to lift those 
sequestration caps.
    Mr. Serrano. Well, my next question, you basically answered 
part of it, but, you know, we need you on the record on this.
    OMB did take a big hit--8 furlough days, more than anyone 
else. How does the $5.7 million increase or 6.2 percent over 
the fiscal year 2015 repair some of the damage that has been 
done?
    And that is our big concern, not--you know, because people 
are going to talk about growing the budget. But some of these 
situations are not growing the budget; they are just trying to 
get back to where you were a couple of years ago.
    How could we repair some of it?
    Mr. Donovan. Well, for an agency like OMB, where our single 
most important asset and the vast, vast majority of our budget 
goes toward is our people. They are our most important asset, 
where, obviously, our most important job is to provide the 
critical analysis and work that the government needs to 
function effectively and to save money where it can. And that 
is really driven, most of all, by our career staff.
    And we did see not only furloughs, but we saw a drop in 
staffing to the lowest level in many decades at OMB. Staff 
morale dropped. And so we would invest a very small amount in 
training and other things to get capacity back up.
    But the single most important thing is to restore at least 
some portion of the cuts in staffing that we saw. We are 
currently 12 percent below the level of staffing that we had in 
2010. And even if we got the full request that we have put 
forward, we would still be 8 percent below the staffing level 
that we had in 2010. So it restores a portion of but not the 
majority of those cuts.
    Mr. Serrano. Let me ask you a quick question on information 
technology. The information technology reform and oversight 
program that you implemented, I could go through the details 
of, you know, the success stories, and you could tell us about 
it very quickly, but my bigger question is: It seems to me that 
one of the first questions I heard asked when I got on 
Appropriations a long time ago was about how far the Federal 
Government was lagging in the whole IT area. Why are we still 
having this discussion? You would think by now--is it that 
whatever progress we made now has become old progress because 
it keeps changing? Or is it that we never made the progress?
    Mr. Donovan. Well, I think the good news here is that we 
have made progress with the investments that we have made. But 
I will also say there is still a significant distance to go.
    What we have seen is both the quality of the way government 
contracts and implements technology improving, whether it is 
just on the basics of acquiring software but also on 
cybersecurity. At the same time, we are seeing that costs are 
going down, really for the first time, that we have started to 
bend the cost curve, if you will, on implementing information 
technology. And this ITOR account has been particularly 
important in that way.
    Just one example. We do now a Portfolio Stat system, we 
call it, where we meet with every agency on a regular basis and 
go through every one of their significant IT investments and 
really examine are they on track or not. And that is done 
through a centralized team at OMB in our Chief Information 
Officer's office at OMB.
    We have achieved, at this point, about $2\1/2\ billion of 
savings just through those Portfolio Stat sessions. So it has 
been a very important step, I think, one of many steps, in 
starting to move toward a much more efficient and effective IT 
structure for government.
    Mr. Serrano. All right.
    Just very briefly, because my time is up--and you might 
have answered the question, but I need to hear it again. Is it 
that every time we make progress in this area it gets old and 
we have to catch up again? Or is it that we never really did 
everything we were supposed to do?
    Because it seems to me that at times there were folks out 
in the community who have better equipment than the Federal 
Government has sitting on their desk, you know, in their den or 
in the living room. Why is that happening, and how scary is 
that?
    Mr. Donovan. Well, certainly, in the cybersecurity area I 
think is the place that perhaps we ought to be most concerned 
about whether we are keeping up. And the truth is that the pace 
of change, if anything, has accelerated rather than slowing 
down, and, therefore, it constantly requires us to move 
forward, to put in place new technologies and new advances.
    And that is an area where we have proposed, in fact, across 
the entire Federal budget, a significant increase in focus and 
responsibilities, not only a 10 percent increase to about $14 
billion overall on cybersecurity, but also the creation that we 
just announced a few weeks ago of a new--we call it CTIC, Cyber 
Terror Information Center, that is really bringing together all 
of the intelligence that we have across the entire Federal 
Government to make sure that we are staying ahead of whatever 
attacks we may be seeing across both the private sector and the 
public sector.
    Mr. Serrano. Thank you.
    Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.
    Mr. Donovan, I appreciate you being here very much. And I 
just noted in your bio that ``Mr. Donovan has committed his 
life to public service focused on good government and smart 
investment,'' so we are starting out on common ground on that. 
So I appreciate your service.
    Mr. Donovan. Thank you.
    Mr. Rigell. I would like to understand more about what the 
President is proposing in this budget as it relates to cutting 
inefficient spending. I am really tossing you a softball here, 
but I really do want to understand the position of the 
administration on spending generally. I sought this office 
because of how troubled I am about our Nation's fiscal 
trajectory. Walk us through that, and let me see how convincing 
you are on this point.
    Mr. Donovan. Well, overall, the budget proposes more than 
100 different cuts, consolidations, efficiencies. Some of those 
are straight reductions or eliminations of programs, but we 
have also done a range of things in the budget--for example, 
where can we consolidate programs or even entire agencies, 
whether it is on food safety or a range of other areas? So I 
think we have taken a pretty comprehensive look at where we can 
find savings and consolidations that streamline government.
    I think, as we all know, what has been the single most 
important driver of our long-term fiscal challenges is really 
around, as the chairman said at the outset, the demographics 
that we are facing and, in particular, healthcare costs.
    Mr. Rigell. Right.
    Mr. Donovan. And that is an area where the budget is 
particularly focused. Not only have we seen the slowest growth 
in healthcare costs over the last 3 years that we have seen in 
50 years, but the budget goes farther. It includes, for 
example, $400 billion in additional reductions to Medicare and 
Medicaid as part of a broader strategy to try to make sure that 
we build on the improvements that we have seen in the growth of 
healthcare costs.
    The last thing I would just say is that--you know, we have 
talked about discretionary and mandatory spending. We also 
believe that we have to take a close look at wasteful spending 
in the Tax Code, as well. And so we have a broad range of areas 
where we are proposing to make changes to our Tax Code that not 
only have substantial savings going forward but also, frankly, 
would contribute to our economic growth. Because there are many 
places in the Tax Code that they not only aren't producing 
revenues, but they are adding to the inefficiency of our 
economic picture and with changes could actually encourage 
economic growth, as well.
    Mr. Rigell. Okay.
    I want to change the topic for a moment and then talk about 
sequestration. Lifting it, certainly to a great extent, if not 
entirely, particularly for me because of its impact on defense, 
is a priority.
    So I would like to understand, if we are not successful in 
that effort--and I am not conceding that we won't be, but walk 
through how sequestration would affect your budget at your 
office, the office that you are leading there.
    Mr. Donovan. Well, I am relatively new in this role. What I 
can tell you is the effect that sequestration had in 2013 meant 
that we had to furlough a substantial number of workers, we 
completely froze hiring. And it meant that OMB was unable to 
respond as quickly or as effectively as we should have been to 
a broad range of situations, whether it was government shutdown 
or a range of other situations.
    But I think the more immediate and important impacts of 
sequestration can be felt in our military communities. Don't 
take my word for it; the Joint Chiefs have spoken out, I think, 
very effectively over the last few weeks that our national 
security would be put at risk by a return to sequestration.
    Mr. Rigell. I share that view.
    Mr. Donovan. And, on the other side, I think the President 
has also made clear, as has Ash Carter and many others, that we 
can't protect our national security simply by investing in the 
defense budget. Just to take a few examples, veterans' care is 
on the so-called nondefense side of our budget. The Department 
of Homeland Security, which is critical to protecting the 
homeland, is on the so-called nondefense side of the budget.
    So, in many ways, even if you just focus on national 
security, the ability to protect the homeland depends on 
lifting sequester both for the Defense Department and the 
nondefense side of the budget.
    Mr. Rigell. Thank you for your testimony.
    I yield back. Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Quigley.
    Mr. Quigley. Thank you, Mr. Chairman.
    Thanks, Director, for being here today----
    Mr. Donovan. Thank you.
    Mr. Quigley [continuing]. And your work.
    O'Hare Airport, often the world's busiest airport, going 
back and forth I think with Atlanta, and O'Hare modernization, 
the result of which, while critical to the economic engine 
which is O'Hare, has brought in a whole new level of complaints 
and noise issues for my constituents.
    In the meantime, the FAA has done considerable work 
preparing to do a noise metric study, back to 65 DNL, 
established some 30 years ago--rather arbitrary, not based on 
any scientific data. A lot of new science out there is talking 
about the long-term health effects of prolonged exposure to 
such noise. But the FAA needs your help, quite frankly, to move 
forward for this multiyear study.
    Can you tell us where we are on that potential analysis?
    Mr. Donovan. Yeah. Congressman, first of all, let me 
apologize if there has been some delay in finalizing this 
study. We are actively engaged with the FAA in reviewing it, as 
we speak, and I am hopeful that we can bring it to conclusion 
quite quickly in the next few weeks.
    Mr. Quigley. Well, I appreciate that.
    So, for people watching at home know, it is not just that 
they are going to make planes quieter. It has nothing to do 
that, necessarily, off the top. What it can do, though, is 
increase the availability, the areas in which noise-proofing is 
required for houses and schools and businesses in our 
districts, reducing the noise significantly.
    Let me switch topics here--transparency in government. We 
have a bill that we have introduced that addresses this, but 
let me make it relevant to you. Right now, you require 
agencies--that they post their budgets and their justifications 
on their own Web sites within 2 weeks of submission, I believe. 
OMB has a lot of data on its central Web site right now, and I 
think you have made great strides in that area.
    Budget summaries and numbers are available in a central 
location, but the budget justifications, the critical ``why do 
they need this money'' portion of the budgets, is still 
scattered across hundreds of government Web sites. These 
justifications are often not available in any sort of a 
searchable, sortable format. Many are in formats, such as a 
PDF, that are hard for third parties to easily pull data from 
and information.
    I think it is important that we have some sort of central 
repository for this that places all agency budgets and their 
justifications in the common searchable, sortable, and machine-
readable format.
    Can you tell me a little bit about your office's efforts to 
get this kind of data in one place, in one accessible, usable 
format, if possible?
    Mr. Donovan. Sure. And I appreciate your focus on this 
because it is a very important subject that doesn't get enough 
attention, I think, in terms of the ability to make information 
available.
    For ourselves at OMB, we made a big effort this year to 
have, for the first time ever, all of the numbers associated 
with the budget available in a way that we made public. And, in 
fact, we had some very interesting--I don't know if I would 
call them apps, but outside companies, programmers, and others 
come in and use that in ways to make the, sort of, Federal 
budget understandable in a way that it had never been before. 
And we are quite excited by that possibility.
    So we are already starting to think--and this is a helpful 
suggestion--in terms of other places we might look and where 
you think would be most useful going forward for our next 
budget presentation. So we will take that as a suggestion that 
we could work with your office on and come back to you with 
some specifics about sharing the budget justifications more 
directly.
    I guess the other thing I would say is this is an area 
where the President has been particularly focused more broadly 
because there is so much government information that we aren't 
sharing as widely as we could. And, in fact, that information 
can be a huge economic advantage to the U.S. economy. If you 
think about weather data, for example, and the way that that 
has created whole industries in the United States, it really is 
an important part of our Open Government Initiative.
    We have put 75,000 data sets out into the public realm 
since the President came to office, and that number is 
accelerating with recent open government initiatives. And so 
this is an area where we would love to follow up and work with 
you more closely.
    Mr. Quigley. We appreciate that. And our office would be 
glad to work with you. Thank you.
    I yield back, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    I would like to now recognize Mr. Womack.
    Mr. Womack. Thank you very much, Mr. Chairman.
    And, Mr. Director----
    Mr. Donovan. Good to see you.
    Mr. Womack. And good luck to the Crimson.
    Mr. Donovan. Thank you.
    Mr. Womack. They have a tall order.
    Mr. Donovan. They do. They do.
    Mr. Womack. And should they be victorious, they most likely 
will meet up with my Razorbacks. Of course, we have to beat 
Wofford.
    The real winner----
    Mr. Donovan. So you are saying you are rooting for the 
Crimson, it sounds like?
    Mr. Womack. Well----
    Mr. Donovan. I think we might be the better choice, given 
the alternative.
    Mr. Womack. I am going to pass on that one.
    The real winner is my chairman down here, though, because 
that tournament is being played--that round is being played in 
his hometown. So the economy of Jacksonville, I think, is going 
to benefit greatly.
    I am glad Mr. Quigley brought up the issue of transparency. 
I want to talk about that for just a minute and probably for 
the time that I have.
    In 2009, there was a memorandum circulated regarding the 
President's position on transparency, and so I want to kind of 
delve into that a little bit and, maybe for my own benefit, 
understand. When the agencies across the spectrum submit their 
budget requests, you go through it, triage it, and then you 
send certain information back to the agencies. I understand 
those are called pass-backs; is that right?
    Can you walk me through the process real quickly on how 
that works; if I am an agency and I send you my budget, what I 
get back and how different it might be from what I submitted?
    Mr. Donovan. Well, typically, agencies are working over the 
summer to produce their initial budget proposals. We get those 
around Labor Day. And then we work--and it is a back-and-forth 
process. There is lots of interaction and meetings and 
discussion with the agencies.
    But then typically around Thanksgiving, we would so-called 
pass back to the agency a sort of marked up budget with our 
response, where we are obviously balancing, you know, funds we 
have available and different policy choices between agencies to 
make those decisions. And then there is a so-called appeal 
period where they would come back to us with any appeals they 
have of the pass-back.
    Mr. Womack. Well, back to the question of transparency, is 
that not a transparent process? In other words, can the public 
not track how this give-and-take is going between the agency 
and the OMB, back and forth? Is there some way that it could 
work better, to put a little bit more sunlight on it so that 
people can understand how the end game is actually being 
created here?
    Mr. Donovan. Yeah, I guess two things I would say on that. 
It is a very interactive process over a long period of time, so 
I am not--I would have to think about whether there were 
particular pieces or moments that would be most useful in the 
process.
    But I also--there is a longstanding tradition that, sort 
of, staff-level interactions, whether it is on the budget side, 
the regulatory side, agency decisionmaking, are not public to, 
sort of, protect the directness and the, sort of, productivity 
of those exchanges.
    So we do, obviously, make a lot of pieces public at the 
point that there are decisions made, but not all of the 
internal decisionmaking and back-and-forth is public. And I 
think I would have some concerns about making everything 
public, in the sense that it might hamper honest back-and-forth 
between the agencies and OMB at times.
    Mr. Womack. I know you are kind of new in this, but given 
the way this process works, the way you do your budget and the 
way we do ours--and we have a Budget Committee markup on 
Wednesday--and I do appreciate your testimony before the Budget 
Committee earlier--is there a better way to do this?
    And are you optimistic that we are going to be able to come 
to some kind of agreement? Because the numbers do not really 
match up all that well. I mean, we are still not in the same 
universe.
    Mr. Donovan. Yeah. Well, look, we are anxiously awaiting 
what I think we will see on Wednesday, both in the House and 
the Senate, the initial budget resolutions.
    And I guess I would say what makes me at least somewhat 
optimistic is that, on a bipartisan basis, Congress came 
together and passed Murray-Ryan, which is really the model that 
I think our budget builds on, which is to say recognizing that, 
as we have talked about earlier, sequestration is not allowing 
us to make the investments that we need to and that in fact 
discretionary spending is not the driver of our deficits in the 
mid to long term, that we ought to replace sequestration with 
smarter cuts and ways to raise revenue on the discretionary and 
the tax side, because those are really the places that are 
driving our deficits long-term.
    And I think what makes me hopeful is that there has been 
bipartisan agreement on that, and I think there has been 
bipartisan--many folks speaking out, as we just heard on this 
committee, on a bipartisan basis that we ought to look at 
changing sequestration and making the investments that we need 
to.
    Mr. Womack. Well, as they say, the devil is in the details, 
on how we solve the sequestration issue. I will just say this, 
and I have said it before in the Budget hearings, and I will 
say it again for the record here: that we are not going to 
appreciably change the trajectory of the course we are on right 
now unless and until we deal with the mandatory side of 
spending. And that is just--mathematically and actuarially, 
that is the truth.
    Our entire Congress, both sides of the aisle, and in a 
bicameral way, is going to have to recognize the true drivers. 
I have this one chart, Mr. Chairman, that I refer to a lot, and 
I will refer to it when I go home and have my meetings with my 
constituency. That piece in the red is the mandatory piece of 
spending. And you can see the downward pressure that is having 
on all of our discretionary spending.
    The issues before us right now have a lot less to do with 
discretionary spending than they do with the mandatory side.
    And, with that, I will get off my soapbox and yield back.
    Mr. Crenshaw. Thank you.
    Mr. Bishop.
    Mr. Bishop. Thank you very much, Mr. Chairman.
    Thank you, Mr. Donovan, for your appearance here.
    I would like for you to take just a couple of minutes to 
discuss an issue that is heavy on my heart. The House rules for 
the 114th Congress requires the CBO and the Joint Committee on 
Taxation to adopt dynamic scoring. There are some of us and 
many economists who believe that dynamic scoring relies on 
uncertain assumptions about certain policy changes.
    Can you just take a moment to talk about the downside and/
or the benefits, if you see any, of this change to dynamic 
scoring, particularly in the context of the critical analysis 
that CBO, the Joint Committee on Taxation and OMB have to 
employ in order to save the government money and to create 
efficiencies in government?
    Mr. Donovan. So I would really say two things about so-
called dynamic scoring. The first is--and I think the biggest 
concern that I would have is that it takes what are really 
very, very uncertain effects and uses those to score bills in a 
way that, frankly, I think, makes the budgeting process less 
accurate, less reliable, less precise.
    Just to give you one example, CBO at one point--and I would 
say, CBO does currently look at, kind of, dynamic effects and 
reports on those, and we think that is useful to have that 
additional analysis. But it doesn't actually use it to directly 
score the bills.
    When they did try to estimate the impact of a straight, 
across-the-board tax cut, there was such a broad range of 
potential impacts that it actually ranged from a negative 
impact to a positive impact. In other words, they couldn't even 
quite tell whether that straight, across-the-board change in 
taxes was going to help or hurt the economy on a macro basis.
    And I repeat that to sort of show the depth of the 
uncertainty of these effects. And we think, in that kind of 
context, it is not a good thing for budgeting to be building 
those directly in.
    The second thing I would say, and it really follows from 
the first, but that dynamic scoring is only looking, typically, 
at these effects on the tax side and not on the spending side. 
And so, for example, if education or investment in 
infrastructure or other things might have impacts on our long-
run economic growth, those are typically not considered or 
included, whereas a change on the tax side might be.
    So it tends, in the way it is usually implemented, to sort 
of tilt the playing field, if you will, towards tax-side 
changes and away from other critical investments that we need 
to make to help economic growth.
    Mr. Bishop. Thank you very much for your thoughts on that.
    Can you discuss the increased responsibilities that OMB has 
had as a result of the cuts in staffing that you have had since 
2010? What knowledge, experience, subject specialties are you 
most in need of as you hire new staff? Which program activities 
will the new staff be allocated to, and what kind of knowledge 
or technical gaps will there be?
    Do you have challenges recruiting and retaining employees? 
Do you have flexibility to adjust the salaries of starting 
employees at a higher pay rate? Can you provide recruitment and 
retention incentives like student-loan repayment, for example? 
Can you discuss also your diversity efforts in terms of the 
workforce in your agency?
    Mr. Donovan. So one of the critical things in OMB's request 
this year for fiscal year 2016 is our focus on information 
technology that I talked about before. And, in particular, the 
single biggest area that we are focused on is the 
implementation of the DATA Act, which is a new set of 
responsibilities for us. It, if implemented correctly and with 
the right resources, I think, has the potential to make 
government more transparent--where we spend our money, how we 
spend our money.
    The effectiveness of Federal spending can be significantly 
improved if we implement the DATA Act correctly, but it is a 
major undertaking. And so what we have proposed in the budget 
is additional staff. And, also, a million dollars out of the 
increase that we have proposed is for contracting to implement 
the DATA Act correctly.
    So that is the single most important of the new 
responsibilities, in terms of impact on OMB's budget. I would 
also point to, though, increased responsibilities and focus on 
cybersecurity as an area that is very, very important, as well 
as the effectiveness of our digital services.
    We have seen, actually--and this really goes to your point 
about attracting talent into government. We have been able to 
attract some remarkably talented engineers from Google and 
Facebook and a range of other leading-edge technology companies 
to come in for a couple years to government service. And they 
are already dramatically improving the quality of the service 
that we provide.
    Just to give you one small example, three engineers from 
the Digital Service went to work on the Veterans' Employment 
Service and their technology at the VA. Within 3 months, a cost 
of $175,000, they had done work that the VA had expected to 
spend $25 million on over many years.
    And that is just one small example of the way this kind of 
investment in the staff that really are at the leading edge of 
technology could help not only improve government service to 
our veterans and many others but also to reduce costs over the 
long term.
    Mr. Bishop. Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Graves.
    Mr. Graves. Thank you, Mr. Chairman.
    Director, good to see you.
    Mr. Donovan. Good to see you.
    Mr. Graves. Thanks for being with us today. You have a big 
task ahead of you, I know.
    I wanted to follow up on some of the chairman's comments in 
regards to the DOL fiduciary rule. I know he has been very 
active on this issue, and I wanted to share with you a little 
bit about my views on it and how it impacts constituents in my 
district.
    I come from a very modest district, not very affluent 
whatsoever. And this is a very important issue, I believe, to 
everyone but particularly in northwest Georgia.
    And it seems to me that the administration is somewhat 
talking out of both sides of its mouth. The President, in one 
aspect, is encouraging middle-income Americans to save for 
their future, which I wholeheartedly support and think that is 
a very good idea, and everyone should be saving for their 
future to take care of themselves and their family, but, at the 
same time, making it nearly impossible for them to do so by 
supporting this rule and making it impossible for small firms 
to assist low-income to middle-income families to save for 
their future.
    That creates a tremendous dilemma. In one aspect, you are 
punishing low- to middle-income earners and benefiting the 
wealthy. And that is not something that I think is being 
embraced whatsoever in my district.
    And so folks in my district, they need more than a computer 
interface to make their decisions. They really need face-to-
face interaction.
    So I guess for us and as a committee and a panel here, what 
commitment can you provide to us that will ensure that the 
DOL's fiduciary rule does not disproportionately harm low- to 
middle-income IRA holders and small businesses throughout the 
country?
    Mr. Donovan. Well, as I said earlier to the chairman, I am 
limited in the specifics that I can go into on the rule because 
it is pending at OMB at this point.
    Generally, what I can say is it is obviously very focused 
on achieving the right balance of making sure that consumers 
continue to have access to advice but also protecting them, 
frankly, from advice that would harm them and hurt their 
ability to save over the long run.
    As OMB does with all regulations, we will be looking very 
carefully at the cost-benefit analysis to make sure that there 
are significant benefits from the rule.
    And I would only ask that you look carefully at the rule as 
it comes out. I think you will see that we have learned a lot 
from the public input that we got on the 2010 proposal and that 
the rule, obviously, after we propose it, will be open for 
comment, and we will be listening to what the public has to 
say.
    Mr. Graves. Well, we will certainly look forward to that 
followup. And let me just suggest that I think it is really 
important that all consumers have the opportunity to have 
advice and that that shouldn't be limited nor taken away from 
them. And I think citizens have the ability to discern good 
advice versus bad advice and that limiting that option 
altogether, though, would be harmful to all consumers if they 
don't have ability to save for their futures.
    If I could follow up on one second point, just going back 
to a hearing you had previously--and I know Mr. Womack was a 
part of that, and other friends on the Budget Committee. And 
you were asked by one of the appropriators, as well, Mr. Cole, 
if OMB had done a full economic analysis of the proposed 
fiduciary rule.
    Where are you in that process of supplying the Budget 
Committee and maybe, to some extent, this committee with a full 
economic analysis of the rule?
    Mr. Donovan. So, again, I am not going to comment on the 
specifics of exactly where we are in the process. What I can 
say is that, as we publish the rule, as a rule for public 
comment, we will have significant analysis of the costs and 
benefits that we will make public.
    Mr. Graves. So you continue to maintain that there will be 
a full economic analysis of the proposed rule when the rule is 
submitted?
    Mr. Donovan. Like with any other rule, OMB is responsible 
for an economic analysis that includes costs and benefits that 
we make available and look forward to public comment on that.
    Mr. Graves. Okay.
    Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Yoder.
    Mr. Yoder. Thank you, Mr. Chairman.
    Director, thank you for your testimony today.
    Mr. Donovan. Thank you.
    Mr. Yoder. I do want to echo my colleague Mr. Graves, and 
Chairman--Mr. Crenshaw's comments regarding the fiduciary 
standards, and I hope that you will do all that you can to 
ensure that we do a cost-benefit analysis, that we ensure that 
small- and medium-sized advisors--this doesn't unnecessarily 
impact those folks locally who are trying to ensure that my 
constituents have every opportunity to invest and grow their 
retirement funds, that they don't lose those options, and we 
don't actually cut against the very purpose of the stated rule. 
So I just echo their comments and hope that you will know that 
many of us are concerned about the impact on regular folks at 
home and those advisors who are small folks in our districts.
    I wanted to also continue the conversation you were having 
with Mr. Womack regarding the budget projections, the 
administration's plans to cure long-term structural deficits, 
and what your thoughts may be on how we can work together to 
solve some of the great fiscal challenges plaguing Washington, 
D.C. And I think no matter what party you are in, certainly we 
have to be aware that our country is in a deep well when it 
comes to our national debt, and that it continues to grow. And 
I think only in Washington, D.C. would folks pat themselves on 
the back when the deficit is only a half a trillion dollars a 
year.
    We know it has been much higher than that. It was over one 
trillion, closer to one and a half trillion when I came into 
Congress and many of--Mr. Womack and many others in my class 
came into Congress. And so progress may be occurring, but we 
are certainly nowhere where we need to be, and it looks like it 
may get worse over the next years. CBO's most recent 10-year 
forecast projects the deficit will be more than $1 trillion 
again before 2025, and the national debt will be over $27.3 
trillion.
    I have asked repeatedly in meetings at home, and 
roundtables, and town halls, how many Americans or how many 
people in the room would like to see the deficit go to $27 
trillion. Strangely, not one hand goes up. And so the entire 
country doesn't like the direction we are taking fiscally in 
this country, and don't like the projections that are before 
us.
    And so I guess when looking at the President's budget 
submission and as we get ready to work on ours this week, what 
is the administration's position? Does their budget ever 
balance, and at what point--in what year does it balance?
    Mr. Donovan. So the aim that our budget had, which has been 
consistent throughout the President's term, is to meet two key 
fiscal tests. First, that we bring deficits below 3 percent of 
GDP, which is widely recognized as the right fiscal standard, 
and in fact, is well below the average of our deficits over the 
last 40 years. Our budget would do that in every one of the 10 
years of the window.
    Second, it takes what is currently, and you just referred 
to this, CBO shows debt increasing as a share of GDP, to 
stabilize that debt and start to bring it down over the 10-year 
window. Our budget achieves that goal as well. It is a total of 
about $1.8 trillion in savings, and it really does it through 
three key areas: healthcare savings, which is the single most 
important thing that we can do to drive down our deficits long 
term; second, looking for ways to change our tax code to lower 
our wasteful spending in our tax code; and, third, immigration 
reform. In fact, one of our big challenges, to go to the 
chairman's point at the outset, is our demographic challenge.
    We have over time more and more retirees per worker in the 
country, and immigration reform is one of the most important 
things we can do to start to rebalance those demographics. CBO 
says that immigration reform would save almost $1 trillion over 
20 years, and even more in the out years. And so those are the 
three key strategies we would pursue.
    Mr. Yoder. Well, and I appreciate the President submitting 
his budget on time and putting ideas on the table. I do think, 
and I agree with my colleague Mr. Womack, that the elephant in 
the room, or the issue that is being ignored continues to be 
the mandatory spending. And it doesn't just have an impact on 
the deficits as they continue to grow. And I notice you say in 
a quote just this week, ``The President's budget provides 
official projections for spending, revenues, deficit, and debt 
with the 10 years, reflecting the President's proposed 
policies, including ending sequestration, investing in growth 
opportunity, and reducing deficits and debt.'' And I think the 
deficits don't--they don't see a reduction in terms of GDP. I 
think you may be correct in terms of historic averages, but we 
continue to increase that debt nearing $25, $26, $27 trillion. 
So even with those sort of rosy projections, I do believe our 
deficits continue to grow.
    And so I think that is a bit of a misstatement. And it goes 
to the point that Mr. Womack is making regarding mandatory 
spending. It has an impact just not only on deficits as a whole 
and our debt as a whole, but it has an impact on where we 
invest. And I note that if you look to the 1960s, we were 
spending 32 cents out of every dollar on investments and only 
14 cents out of every dollar on entitlements. Yet when you get 
to 2030, that number, by some estimates, is 61 cents out of 
every Federal dollar. So I think whether you are a fiscal 
conservative and you are concerned about the debt and the 
interest payments that Americans will be paying, and by some 
estimates $1 trillion a year by the end of the next decade just 
in interest payments alone, we all should be concerned about 
that.
    But regardless, if you want to invest in education or 
transportation or research, that won't occur when that group of 
entitlement spending continues to grow at such a rapid rate. 
And so, I would look further in the questioning today and in 
the President's efforts to address that topic for your 
statements to really take that on because it is something that 
we are going to have to work on with both parties.
    Mr. Donovan. And let me--I think I was agreeing with you 
that mandatory spending is critical, and in fact healthcare 
costs and--and really making progress on healthcare costs is 
the single-most important piece of bringing down mandatory 
spending, and, in fact, I think the good news there is that 
over the last few years, because of the improvements that we 
have seen, partly due to the Affordable Care Act, CBO now 
projects we are going to spend over $200 billion less in 2020 
on Medicare and Medicaid than they thought just a few years 
ago. And so continuing to push in that direction, particularly 
on healthcare spending, is the single-most important thing we 
can do----
    Mr. Yoder. Well, I think we would all--Mr. Chairman, I will 
wrap up my questions here--I think we would all agree it 
continues to balloon in an out-of-control way that cannot be 
sustained. And so while we appreciate the President's 
submission, we have a long way to go, and in order to get 
relief on sequestration and in order to invest in other 
priorities, we are going to have to still continue to find ways 
to reduce our mandatory spending because it is going to impact 
everything we do in this town.
    And with that, Mr. Chairman, I will yield back.
    Mr. Crenshaw. Thank you. And, members, I think we have time 
for another question--round of questions if you have them, and 
I do. And I would like to start--I mentioned in my opening 
statement about the Corps of Engineers and how they do studies 
and we call them New Starts, and then your agency is tasked 
with choosing which New Starts to move forward with.
    And before you got where you are, there had been some 
series of mismanagement, in 2014, about which projects were 
meeting qualifications, what the standards were. And so this 
Appropriations Committee got involved in 2015 and put in what I 
would say are pretty reasonable goals and guidelines as to how 
you go about picking those projects that are eligible as New 
Starts. But it appeared that in 2015 you didn't really look at 
all the new guidelines that were put in place and kind of used 
your basic budget guidelines.
    So tell us how, like, for instance, in 2016 what kind of 
standards, guidelines, are you going to use in terms of picking 
New Starts?
    Mr. Donovan. So just to start, Mr. Chairman, this is an 
area where the Army Corps has lead responsibility. We provide 
oversight, as we do with most agencies around the Federal 
Government, but it really is the Army Corps' methodology and 
their decisionmaking. What they are using, and our 
understanding, and certainly we could follow up to discuss this 
further with you if youwould like, is that they did incorporate 
all of the requirements of the law from 2015 in their 
decisionmaking.
    What they have done is to, given the very limited number of 
starts for--pick the projects that provided the highest cost-
benefit return based on the methodology they used. And as I 
said, I think--from our perspective, they did incorporate the 
2015 requirements as they did those reviews.
    So at this point we don't have any plans to have a 
different methodology for 2016, but, again, we would be happy 
to follow up with you both to discuss this more broadly and 
also, as we talked about before, the specifics of how we could 
work with the Jacksonville Port to ensure that they have a 
project that has the potential to be more cost effective based 
on the way the Army Corps looks at it.
    Mr. Crenshaw. I just want to be sure--as you point out, 
there are a lot of ports around the country, including JAXPORT, 
which is my district in Jacksonville, Florida. They rely 
heavily on designation as a New Start. And I would encourage 
you all, maybe the Corps as well, to--the cost-benefit analysis 
is just one of the four or five criteria that were laid out in 
the omnibus last year, and want to encourage you to make sure 
you look at all of those criteria.
    And then also you mentioned the Jacksonville port. Do you, 
for instance, give recommendations? Do you give guidance to a 
port like that that didn't become eligible for a New Start, as 
a how they might better--as you look at the criteria maybe help 
them understand where they could do better under those 
guidelines?
    Mr. Donovan. We would be happy to do that. The Army Corps 
is the best sort of place to be able to give that kind of 
feedback, but we often will do that with the Army Corps to make 
sure that we understand places where it can--a project can 
improve in terms of its scoring in cost-benefit analysis.
    Mr. Crenshaw. Because that is why this committee set 
forward those guidelines, so that they would all be considered. 
And we just want to be sure that they are following through on 
what this Appropriations Committee has decided to do.
    Let me ask you--a lot of people have talked about IT. Mr. 
Serrano had a question on this, Mr. Bishop talked about it, and 
we have appropriated money so you can have the oversight and 
reforms. And by most accounts, the administration has done a 
pretty good job. You have had some successes, as I mentioned in 
my opening statement, and I was reading that maybe you can 
report savings or avoiding over almost $3 billion in IT costs.
    But I was reading also this analysis that was done by what 
they call the International Association of IT Asset Managers, 
and they found that Federal agencies spend about $36,000 per 
Federal employee to make sure that all this IT works well, and 
the private sector spends about $5,000 per employee. And in 
your request you have got $15 million. That will bring the 
total for IT up to $35 million. And that is a pretty big 
increase. It might be difficult for us to maybe provide you 
those funds.
    But it is clear that just spending more money, you would 
know, we all agree, just spending more money doesn't solve the 
problems. And you have talked a lot about the bright smart 
people you have coming, but if you look at the numbers, you are 
asking for 71 additional staff. That is a huge increase. I 
mean, you have got 41 people, as I understand it now, and so 
you add 71, you have had a 200 percent increase in the 
staffing.
    And I know you have responsibilities, but if you are 
finding these bright smart folks that can come in, then do you 
really need all that many people, if you can find bright smart 
people, that that might be better than having a whole lot of 
people that aren't as bright and smart as that handful that you 
are looking for. So tell us about that. Because that is a 
pretty big increase in--and I know you are doing better, but 
200 percent in one year, that is a lot--that is a big increase. 
Tell us about that.
    Mr. Donovan. Well, first of all, what I would say is I 
think it is very important to look at this in perspective of 
the over $80 billion that we spend a year in the Federal 
Government on IT, and frankly, the thousands and thousands of 
people who work on IT across the Federal Government.
    What we are talking about, because you are looking at it 
just as part of this sort of ITOR category, it is a substantial 
increase. We think it is justified because the early results 
from what we have been doing on ITOR have had real positive 
impacts and much bigger cost savings. I talked about this USDS 
example, $25 million in savings from $175,000 of time and 
investment spent by the team. So we actually think this can 
have a big, big impact on savings. And, in fact, we have 
already started to see, if you look at contracting costs, those 
costs start to come down, really, for the first time in more 
than a decade. And so I think we are making progress in those 
places.
    One of the things, frankly, that we have learned and that 
we are starting to implement on the IT side, that we have 
learned from the private sector, is the way that they manage 
their IT. And part of the problem, frankly, is that we act too 
much right now like many, many different agencies as opposed to 
one Federal Government. The number of licenses we have on 
particular software products, the way that we buy our hardware, 
whether it is, you know, laptops or desktops or hand-helds, we 
buy them often with multiple contracts across many agencies as 
opposed to a single Federal Government, where we can really get 
the economies of scale. And so one of the things that we are 
implementing with these new resources would be a significant 
expansion of what we call category management.
    It is a strategy that the private sector uses extensively. 
In fact, the U.K. Has recently put it into effect. They are 
already saving between 10 and 15 percent on their contracting 
costs in IT. And we think it is a very promising direction to 
go, to take what we are currently doing and expand it 
significantly. We would be happy to talk to you more about the 
specifics of that, but we really do think we have the potential 
to drive the way the Federal Government uses IT to a much 
better place much closer to the private sector with these 
investments.
    Mr. Crenshaw. Well, as I asked you earlier about the--on 
the operating side you want to hire 52 new people in this 2-
year span. Here you are going to hire 71 new people in 1 year. 
Is that possible? Can you go find 71 folks that--in a year that 
are going to do the things you need to do?
    Mr. Donovan. Well, the large majority of those would be 
through this digital service model, where they are coming in 
for 2 years. And what we have seen, frankly, and we have--we 
could show you a list of names at this point, the demand is--
surprised even us, and this is why we felt like we needed to 
jump on it. Because we have been able to do extensive 
recruiting, and to really get fantastic talent from tech 
companies, this felt like an opportunity to scale it up quickly 
because of the interest that we are seeing.
    Mr. Crenshaw. Thank you.
    Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman. In fiscal year 2015, 
the omnibus incorporated report language directed funds be made 
available for additional permanent staff within the Office of 
the Intellectual Property Enforcement Coordinator. This was 
done to address a concern that especially in periods such as 
the one we just experienced, when there is no confirmed head of 
the office in place, important work like coordinating voluntary 
efforts to reduce online copyright infringement goes by the 
wayside.
    What progress have you made in staffing up this office? 
This was a concern of this committee last year.
    Mr. Donovan. Well, I am very happy to report that Danny 
Marti, our coordinator, was confirmed by the Senate last week, 
and I don't actually have a start date for Danny. I don't know 
if anybody else does, but we are hoping he starts very quickly 
to be able to lead that office.
    We also do have included in our request for 2016 a very 
small number of staff for that office to be able to increase 
the focus that we have on privacy issues. Obviously, the work 
that we have both on infringement of intellectual property, but 
also protecting the privacy of that property is very, very 
important. And that is an area where we think we need to focus 
as well.
    Mr. Serrano. Now, are you getting a pushback from anywhere 
in private industry or any other place or in government itself, 
in order to carry this out? Because this is a very important 
task.
    Mr. Donovan. It is. And Congressman, as you know, there can 
be tensions in the steps that we take to protect Americans, 
whether it is on cybersecurity or in other areas, and 
authorities that may--law enforcement agencies may wish to 
pursue with our efforts to balance that with protection of 
privacy for American citizens, for our companies, and 
otherwise. And so this is an area where we are constantly 
looking at and making sure that--and this is one of the reasons 
why OMB's role is so important as we sort of--our classic role 
is to have oversight and sort of to balance the industry--the 
interests of agencies across the Federal Government. This is an 
area where we do have to sort of work through the potential 
conflicts that there may be between security and privacy at 
times.
    Mr. Serrano. Let me ask you a question that may not affect 
you at all, but maybe you could give the committee a sense of 
where this is going to play out or how it is going to play out.
    For over 50 years we have had this policy on Cuba which 
seems to be thawing now, and I certainly have been on the side 
of ending it totally. One of the issues that doesn't get any 
attention is the fact that for over 50 years people have been 
dancing in this country and singing songs, and other artwork 
has been looked at that has been put together in Cuba years 
ago, and not a penny because of the relationship in royalties, 
went to any Cuban artists or their estate or their relatives or 
whatever. Is that something government will be involved 
eventually if somebody lays a claim to that? Or is that the, 
you know, ASCAP and the Association of Songwriters and 
Composers? Because every time you hear Mambo Kings or whatever, 
watch it on TV, no one got a penny in Cuba for that money--or 
for that music.
    Mr. Donovan. You know, it is a fascinating question. I am a 
big fan of the Buena Vista Social Club and a range of other 
sort of rediscovery of Cuban music. But the truth is I honestly 
don't have a clear answer on that. What I would love to do is 
get back to you.
    More generally, I can say that a lot of our efforts on 
trade, for example, are focused on trying to make sure that 
there are enforceable protections for our intellectual property 
in other countries. And so I would definitely imagine that this 
will be a focus of our negotiations and discussions going 
forward, but I can't tell you specifically the effect on music. 
And I would be happy to ask my staff to follow up and figure it 
out and get back to you.
    Mr. Serrano. Sure. And the part I would like to know is 
really will government play a role--will our government play a 
role at all or will this be left over to the, you know, to the 
music associations and so on--because we are talking about a 
lot of money.
    Mr. Donovan. Yep.
    Mr. Serrano. A lot of money going into the Cuban economy, 
if you will. Anything new that you can tell me on that note?
    Mr. Donovan. March 23 Danny Marti will be starting as our 
intellectual property enforcement coordinator.
    Mr. Serrano. That is great.
    Mr. Donovan. Exciting news for us.
    Mr. Serrano. That is great.
    Let me just ask you a question. On OMB's retrospective 
regulatory review of look-backs has created a savings of more 
than $20 billion and calculated net benefits of $200 billion. 
Tell us more about this work, because this is an area where 
there are large numbers, and it seems like a small question, 
but the numbers indicate that it is a more important question 
than we would think.
    Mr. Donovan. Well, early on in the administration the 
President asked OMB, and specifically our Office of Information 
and Regulatory Affairs, OIRA, to work with agencies to take 
outdated or ineffective regulations, either take them off the 
books or change them so that we could save money for American 
consumers or businesses, State and local governments, and 
improve the way regulation works. And what we have seen out of 
that is about 500 different completed initiatives from agencies 
that, as you said, in the short run saves about $20 billion and 
over the longer run substantially more than that.
    Since I started last summer, we have redoubled our efforts 
on that. We have engaged with all the agencies across the 
Federal Government. We have also gone out to stakeholders and 
asked them the places where they think we could make the most 
progress on this regulatory look-back. And we are finding, 
whether it is things like improving the lives of truckers 
across the country by limiting their paperwork and the way that 
they have to report, to a range of other areas that in 
individual terms may not be huge things that will end up on the 
front page of newspapers, but when you look at them all 
together, they are having a real impact on the everyday lives 
of Americans.
    And I think this is something the President is very excited 
about, and we are going to--you will see more of this, 
literally, in the coming days. We will have more reports out 
from agencies on the next stage in this regulatory look-back to 
improve the way we regulate.
    Mr. Serrano. That is great.
    So Chairman, let me end by making more of a statement than 
a question, although I want you to keep it in mind, Mr. 
Director.
    But going back to Cuba again, another issue that is really 
important, in my understanding, and I have no documented proof, 
is that when we broke relations over 50 years ago, there were a 
couple hundred if not over 1,000 Cubans who went daily to work 
at Guantanamo base, and then they would come back into the 
other Cuba, if you will. Most of those people, or a lot of 
them, might be dead. Some may be alive. Some spouses may be 
alive. Something tells me these were Federal workers. 
Obviously, they worked for us. Something tells me not a penny 
of pension was ever paid, you know, and this is again another 
issue that as we begin to thaw out this relationship, so that 
we may have to pay attention to all of these things because 
there are a lot of dollars that was supposed to be in Cuba that 
are not there now. And I know a lot of people will oppose that, 
saying: Oh, no, no. Not a penny, but, you know, why do I 
suspect that not a single person got a pension from the Federal 
Government after we broke relations? Keep that in mind.
    Thank you.
    Mr. Crenshaw. I think there is a lot of unanswered 
questions about that whole issue, including the claims that a 
lot of folks have against the Government of Cuba.
    Mr. Serrano. Exactly.
    Mr. Crenshaw. So that will all, I am sure, get washed out.
    Mr. Womack, do you have any other questions?
    Mr. Womack. Just a couple of final things.
    First of all, Director, thank you again for your testimony 
today.
    I want to talk about the do-not-pay portal for just a 
moment, designed to reduce and eliminate improper payments--I 
think it is a great idea. Frankly, I am a little surprised that 
more people are not talking about it. I know it is low-hanging 
fruit, but I think it is a step in the right direction for the 
office.
    Regarding do not pay, I understand that it has not received 
guidance on contracting with third party private-sector 
businesses. Is there a reason that is taking so long?
    Mr. Donovan. To be honest, I am not--I can't answer that 
question directly. I would be happy to work with my team and--
--
    Mr. Womack. I would like to have----
    Mr. Donovan [continuing]. Get back to you, yep.
    [The information follows:]

    As a matter of copyright law, foreign songwriters whose music is 
played on over-the-air broadcasts in the United States, for example, 
are generally entitled to be paid for those performances. These 
payments may be collected by collective management organizations (CMOs) 
in the U.S., and with respect to foreign rights holders, those funds 
may be distributed via reciprocal arrangements with a foreign-based 
collective management society. We understand that there is at least one 
such group in Cuba. As a result of the present day embargo on Cuba, 
however, it is our understanding that U.S.-based CMOs may not be able 
to enter into reciprocal agreements with their Cuban counter-part(s), 
and vice-versa, and as a result, rights holders in both countries may 
face certain difficulties in effective licensing and royalty collection 
at the present time. As our relationship with Cuba evolves, and trade 
normalizes over time, we will need to review how the systems work and 
how best to support reciprocal arrangements for the effective licensing 
of music between the U.S. and Cuba.

    Mr. Womack. I would like to have that. And then finally, 
early in your testimony when discussing sequestration, and we 
all have our opinions about sequestration, but you made a 
comment that just kind of sticks with me. You said, and if I 
didn't understand this right please correct me, but you talked 
about how from a personnel standpoint the office became much 
more efficient, that you learned to practice some kind of 
efficiency. That is kind of what stuck in my head. And I assume 
that was regarding Federal agencies across the spectrum, or 
maybe it was just confined to OMB, I don't know.
    But if that is true, then how can we be so against a 
concept like the Budget Control Act that was designed to 
account for the raising of the debt ceiling and to cut dollar 
for dollar certain types of Federal spending? Why did it take 
sequestration to force the Federal Government to practice 
efficiency? As you know, I am an ex-mayor, and every day that I 
went to work as mayor I looked for ways to force the people 
that worked within the city's infrastructure, that I had 
jurisdiction over, to find a way to do the things that we were 
supposed to do and get the very best value for it.
    Now, I know the Federal Government is a much bigger entity 
than the city of Rogers, Arkansas, but why did it take 
sequestration to force the Federal Government to practice 
efficiency?
    Mr. Donovan. Well, I guess if I either said that or implied 
it through my comments, then it wasn't what I intended, because 
I think my view would be that the opposite is true, that the 
problem with sequestration was that----
    Mr. Womack. Well, you said that you learned through the 
sequester, that first year of sequestration, before Ryan-
Murray, that you learned--the Federal Government learned to be 
more efficient from a personnel standpoint.
    Mr. Donovan. I think over a number of years we have found 
places within OMB to be able to make adjustments and to be more 
efficient in certain areas. We have other areas where we have 
grown and we actually need to grow because we have greater 
responsibilities. I think the problem with sequestration is 
that it was these kind of mindless across-the-board cuts as 
opposed to smarter cuts.
    In really picking areas to focus on, that we should be 
growing, and other areas that we should be shrinking, and so 
the effects that we saw directly from sequestration really were 
to cut things that made sense to cut and cut things that didn't 
make sense to cut, and in fact, more of the latter rather than 
the former. And so I think the impacts that we saw--and I can 
certainly talk about it from the HUD point of view was, you 
know, veterans ending up back on the streets even though we 
knew that was going to cost us more money in the long run and a 
range of other things that really were both--had bad human 
consequences but also bad fiscal consequences.
    I think the right way to make cuts is to do it in a 
measured, thoughtful way that really, you know, takes out of 
the system inefficiencies. But the problem with sequestration 
is that it was not that kind of approach. It was kind of this 
across-the-board approach that really did hurt the government's 
ability to function effectively.
    Mr. Womack. Well, to that, we will agree. I am a big 
believer that the sequestration is a mindless approach, a lazy 
man's way to effect some kind of budgeting outcome when it 
should be a much more targeted, much more thoughtful, much more 
tactical approach to cutting spending.
    But I will say this at the risk of sounding like a broken 
record--I continue to say it over and over again--if we think 
that we are going to--if our goal is to convince the American 
public that we are going to achieve some kind of fiscal sanity, 
if you will, only on the discretionary side of the budget, the 
public is going to be terribly misled, we will woefully 
disappoint them, because it simply is not going to happen under 
the construct that we have today.
    And with that, Mr. Chairman----
    Mr. Donovan. We can agree on that as well.
    Mr. Womack. And I thank the director again for his 
testimony here today.
    Mr. Donovan. Thank you.
    Mr. Crenshaw. Thank you. And Mr. Serrano, I think, has no 
further questions. I don't have any further questions.
    So we want to thank you for taking the time to be here. 
Thank you for your testimony. And you have got a big job, and 
we wish you the best as we go through this appropriation season 
and the budgeting season, and again thank you for your service.
    This meeting is adjourned.
    
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                                           Tuesday, March 17, 2015.

                    GENERAL SERVICES ADMINISTRATION

                                WITNESS

DENISE TURNER ROTH, ACTING ADMINISTRATOR, GENERAL SERVICES 
    ADMINISTRATION
    Mr. Crenshaw. Well, this meeting will come to order. I want 
to welcome everyone. And just to let you-all know, this is a 
busy time for the appropriators. I just came from a Defense 
Appropriation Subcommittee hearing, which is still going on, 
and I imagine a lot of the members on both sides of the aisle 
are in the middle of other meetings, so they may be coming and 
going during our time together, but we will see.
    But I want to wish everybody a happy St. Patrick's Day. I 
think everybody is somewhat blinded by the green tie that my 
ranking member is wearing.
    Mr. Serrano. O'Serrano.
    Mr. Crenshaw. O'Serrano. Welcome everyone. I want to 
welcome Acting Administrator Roth to the hearing today. You 
have been on the job now for a little less than a month?
    Ms. Roth. Yes, yes.
    Mr. Crenshaw. But who is counting? We are happy to have you 
before the subcommittee today.
    Ms. Roth. Thank you, sir.
    Mr. Crenshaw. The General Services Administration is often 
referred to as the Federal Government's landlord, but the GSA's 
mission goes well beyond providing office space and managing 
property. Agencies across the Federal Government rely on GSA to 
assist in their procurement and their acquisition needs. They 
depend on the GSA to deliver effective and economical 
technological solutions, and in a time of shrinking budgets and 
scarce resources, we think your role is all the more important, 
and we on the committee expect you to be a leader in finding 
savings and driving efficiencies in your own budget.
    The subcommittee has pressed the GSA to make better use of 
its existing portfolio of buildings and shrink the Federal 
footprint through a reduction into GSA's inventory of leased 
and owned land. Now, you know, in the last several years, we 
have seen a reduction in staffing across the Federal 
Government, so it follows that we should see a reduction in 
space requirement. The 2015 omnibus provided you with $70 
million for space consolidation activities, and I look forward 
to hearing from you today on how you intend to use the funding 
to shrink the GSA building inventory, particularly in regard to 
the many vacant and underused buildings in your portfolio.
    Now, your 2016 request has an increase of 1.13 billion over 
fiscal year 2015 in the Federal buildings fund, and that is 
$560 million more than the rental payments that you receive. I 
understand you want to provide a level of service that your 
customers are paying for, but a 12 percent increase to 
construct new buildings and perform maintenance may be a little 
bit unrealistic in these difficult fiscal times. We have a 
responsibility to the American taxpayer to be judicious, and 
deliberate, and that is their tax dollars, and so we want to 
make sure that you only budget for the highest priority 
projects and not merely match your budget with the level of 
rent that you collect.
    Remember, the Federal Government is your customer, but your 
investor is the U.S. taxpayer, and your job is to be as good a 
steward of the taxpayer dollars as you can. This is the first 
time in many years that GSA has submitted a 5-year capital 
investment plan, and I think that is an important step forward 
in managing the portfolio in a more prudent and productive way. 
That will provide more transparency to stakeholders and 
taxpayers, and I am curious to learn about what additional 
benefit you believe is derived from requesting an advance 
appropriations of nearly $10 billion for fiscal year 2017.
    So once again, welcome to you, Acting Administrator Roth, 
appreciate your service, and look forward to your testimony. So 
now I would like to recognize the man in the green tie, Mr. 
Serrano for any opening statement he might like to make.
    Mr. Serrano. My tweak this morning, Mr. Chairman, was that 
growing up in New York, I learned one thing, that on this day, 
we are all Irish. So that is a big party down there as you know 
and everywhere else.
    Thank you, Mr. Chairman. I would like to join you in 
welcoming the Acting Administrator of the General Services 
Administration, Denise Turner Roth, before our subcommittee. 
With the recent departure of GSA Administrator Dan Tangherlini, 
the GSA is entering a time of transition, and Ms. Roth is 
leading the way.
    The GSA has undergone significant change in the past few 
years. Some in response to scandal, and some in response to the 
changing needs of the Federal Government. The budget request 
for the General Services Administration in fiscal year 2016 
attempts to continue these changes while providing some much-
needed investment in federally-owned facilities around the 
Nation. This year, GSA proposes significant new construction 
and repairs and alterations, including several significant 
repair projects in my hometown of New York. However, this new 
construction pales in comparison to the amount spent on the 
rental of space by the Federal Government. As many of you know, 
I have concerns about our efforts to ensure a better balance 
between leased and owned properties, so I hope to discuss this 
with you further today.
    However, GSA is not just asking for appropriations for this 
fiscal year. The request also asks for significant advance 
appropriations which this committee has found problematic in 
other areas in the past. Given the current climate here, I 
think it will be difficult to fulfill that request. I would 
also be interested in discussing with you the ongoing problems 
that the Puerto Rico Federal Courthouse project in San Juan has 
been experiencing with their renovation project. I know that 
there have been efforts to get the project back on line in 
terms of the timeframe and cost, but I remain troubled that 
this project has gotten so off track.
    Lastly, I would be remiss if I did not mention the specter 
of sequestration that is once again looming over us. GSA was 
badly hurt by sequestration last time, with significant 
construction and repair projects left languishing. This in turn 
hurt private sector job growth since many companies that 
otherwise would have contracted with the Federal Government 
were unable to do so.
    I hope that we can find a sequester solution that avoids 
these harsh problems and continues our economic growth. As I 
said last year, GSA is the Federal Government's landlord, 
architect, facilities manager, procurer, and supplier. In all 
of these diverse roles, GSA plays a critical role in ensuring 
government efficiency and effectiveness. I look forward to 
discussing how your fiscal 2016 budget accomplishes these 
goals, and I know you have all our answers gathered in this 
last month.
    Ms. Roth. Yes. Thank you.
    Mr. Serrano. Thank you. Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you. And so Acting General Services 
Administrator Roth----
    Ms. Roth. Yes.
    Mr. Crenshaw [continuing]. We look forward to hearing your 
testimony. If you could keep it in the range of 5 minutes. Your 
full testimony will be submitted for the record, but the floor 
is yours. Welcome.
    Ms. Roth. Thank you, sir. I appreciate being here. Good 
morning, Chairman Crenshaw, Ranking Member Serrano, and members 
of the committee. My name is Denise Turner Roth, and I am 
honored to be here today serving as the Acting Administrator of 
the U.S. General Services Administration. Over the past year, I 
helped implement many of the changes and reforms. We have 
refocused GSA on its core mission. We remain committed to 
delivering the best value in real estate, acquisition, and 
technology services to the government and the American people.
    In participation with you, I will remain dedicated to 
building on the progress GSA has made. While we are proud of 
our progress, GSA still faces significant challenges. For the 
past 5 fiscal years, the vital link between the rent GSA 
collects and the amount GSA can reinvest into our assets has 
been broken. To properly maintain the Nation's public buildings 
and to make critical infrastructure investments, we need to 
restore this balance.
    Today I would like to highlight GSA's efforts to provide 
greater transparency, efficiency, and savings through the 
commonsense investments proposed in GSA's fiscal year 2016 
budget request. We have developed a long-term plan for 
investment that outlines priorities for renovations and new 
construction, including courthouses and land ports of entry. 
These projects are spread across the Nation covering 32 states 
from Florida to Alaska. However, executing this plan is not 
possible without stable funding. GSA's fiscal year 2016 request 
allows us to start delivering on this long-term capital plan.
    In addition, we have a request for advanced funding of the 
Federal Buildings Fund for 2017. We are also requesting to 
invest $564 million from previous rent collections in support 
of our infrastructure priorities. In fiscal year 2016, GSA is 
particularly focused on upkeep and renovations in our existing 
inventory. Unfortunately, GSA's major repair and alterations 
accounts have also suffered from significant cuts over the past 
5 fiscal years. As a result, the backlog of repairs needed 
continues to grow while the cost and urgency of these repairs 
continue to increase.
    GSA is also requesting funds to deliver critical new 
investments. For instance, GSA is requesting $380 million as 
part of the enhanced plan for the DHS consolation at St. 
Elizabeth's. This funding will allow DHS to move out of costly 
leased space and into consolidated offices on the campus. GSA 
fiscal year 2016 and 2017 requests would allow us to meet DHS' 
mission, needs, and stay on track to complete the facility. 
This budget also requests more than $250 million for our 
appropriated accounts, as well as $13 million to begin 
preparing for the next presidential transition.
    While GSA seeks to make the investments vital to America's 
future, we also continue to focus on executing reforms to 
improve oversight, streamline administrative functions, 
strengthen accountability, and enhance transparency within our 
agency. Our inspector general--in partnership with our 
inspector general, we will continue to maintain our vigilance 
and take whatever actions are necessary.
    The men and women of GSA have made great progress in 
refocusing this agency on its important mission. The 
President's fiscal year 2016 budget request will allow GSA to 
continue our work and give our partners and the American people 
the services and support they need. I look forward to working 
with this committee to continue our progress.
    Thank you for the opportunity to appear before you today, 
and I am happy to answer your questions.
    [The information follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Crenshaw. Well, thank you very much, and let me start 
the questions with a question about the Federal Buildings Fund.
    You know, you talk about spending all the rent that you 
collect from Federal agencies, and you have got a long list of 
construction projects. In 2014 and 2015, we gave you a lot of 
money. Now in 2016, when you request 1.1 billion more than you 
received last year, and that is $564 million more than the 
rental payments you take in, that is a big, big increase. I 
want to find out how you prioritize projects--how do you decide 
which projects you want to do when you say we would like $1.1 
billion more than we got last year? What goes into your 
thinking when you prioritize projects that go on your list?
    Ms. Roth. In terms of our budget request overall, and as we 
talk today, I think you will hear this as a consistent theme. 
We are looking at our portfolio both in terms of what we are 
tasked to manage, both what the needs are today as well as what 
we look at going forward. And so we think that this budget 
request really represents where we are in terms of where the 
capital needs are and how we will manage going forward, and 
that also explains the 2017 advance appropriations request, 
because our effort and our focus is how are we making the best 
decisions today to help to manage them and plan for the 
portfolio going into the future.
    Certainly, our process in terms of how we decide what 
projects go on the list and how we prioritize them is based on 
a number of things, but not the least of which includes what 
the market conditions are, what the returns are on those 
potential investments, how ready the project is to go forward. 
And you mentioned consolidation, lease consolidation and the 
ability to reduce the cost we are paying in lease payments is 
something that is an important factor that we weigh as well.
    Mr. Crenshaw. Well, in 2014, you had an increase of $1 
billion. In 2015, it was another $1 billion for new 
construction repairs. How do you handle those large increases?
    Ms. Roth. I think that we have done a good job trying to be 
clear on what projects are coming forward and how we are 
utilizing those dollars to help with the portfolio that we are 
managing. So that projects that you are familiar with in terms 
of DHS, that has been important with the committee support for 
us to be able to move forward with. That effort is just an 
example, and certainly the list goes on. But in terms of how we 
use the funds, our focus is really working with the committee 
to understand what the funding levels are and ensuring that we 
use those funds to the best of our ability to manage the 
portfolio.
    Mr. Crenshaw. Do you kind of say this is our rental income, 
so we will just spend it all as opposed to saying what are our 
real priorities, and then, do you ever think about actually 
reducing rents? I mean, I want to be sure that it is not just 
``here is our money, so we will spend it'', as opposed to 
saying ``here are our priority projects and we will fund 
those'', and then we look at the rental income and maybe it is 
more, maybe it is less, and maybe there are things you can do 
there. Does that enter into your thinking?
    Ms. Roth. Well, the truth of the matter is the inventory 
and the portfolio itself of assets that we manage are 
extensive, and so there are probably more needs than we can 
fund in 1 year, and so the needs just continue to grow, either 
from past repair needs or needs that are coming forward. So it 
is not so much the, okay, we have this dollar level and so 
let's find projects until we meet to that level as much as here 
are all the needs, and ultimately having to meet those needs.
    I understand the committee has a job to do, and at the end 
of the day, what we are trying to bring forward is a full 
understanding of what the portfolio needs are, how we are 
trying to plan for those needs and where we are going and 
trying to be clear and transparent about if we receive dollars, 
how we are utilizing them and what the expectations are.
    Mr. Crenshaw. Gotcha. Thank you. Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman. As I mentioned in my 
statement, Ms. Roth, sequestration had devastating effects on 
GSA in 2013, and that specter looms over us once again. The 
President's budget assumed that Congress would deal with 
sequestration and continue to make investments to ensure the 
continued growth of our economy. If Members of Congress truly 
support construction jobs and seek economic benefits from 
Federal projects, then they need to look no further than GSA. 
What would be the effect on your agency if Congress does not 
turn off sequestration?
    Ms. Roth. Well, sequestration certainly has an impact on 
overall levels that are available for funding, and so when 
agencies' budgets have been reduced or compressed in terms of 
their funding levels, we see an impact in terms of the funding 
that they are able to either augment as a part of a project or 
be able to enter into projects.
    In the past, some of our efforts have helped or tried to 
help with these efforts such as our ability to help with 
furniture in IT within space, but ultimately, with all of the 
projects, as funding is--as the pressure created at the top, it 
definitely pushes down, and we feel that as a response.
    Mr. Serrano. And so you are telling me that you deal with 
it as it comes, but you don't--there is no panic right now at 
GSA that a continued sequestration would devastate, like some 
agencies feel would devastate them, because there are agencies 
that come before us, and tell us we can't take another year of 
sequestration.
    Ms. Roth. Well, and I think what we see is that, as 
agencies have that pressure, this space becomes less of a 
priority, and the reality is, with--as we get people into 
better space as well as consolidate leases, we do see true 
dollars in savings, and that is a return. So while we are 
basically responding to the needs as well as trying to manage 
our portfolio with our funds, but the funds that we receive, 
the Federal Buildings Fund itself is not necessarily compressed 
by sequestration, but the ability and activity levels of the 
other agencies does have an impact on the choices they make and 
in the work that we are doing.
    Mr. Serrano. Right. Let me ask you about the Puerto Rico 
courthouse that I mentioned before. GSA began work to modernize 
the Clemente Ruiz Nazario Courthouse in 2010. This project has 
been plagued with delays that have interrupted the day-to-day 
business at a busy Federal courthouse that is critical to the 
functioning of the criminal justice system in Puerto Rico.
    In October 2014, I wrote to the then-administrator 
highlighting my concerns with the management of this project. I 
received an agency response from Associate Administrator Lisa 
Austin, that frankly left me unsatisfied that GSA has a plan to 
move this project to fruition.
    Ms. Roth, what is the timeframe to finalize the scope of 
the project with the new contract? And let me make the 
statement I make at all hearings, and the chairman hears it all 
the time. No matter how much people tell us they treat them 
equally, the territories are treated differently. You know, in 
many cases they get what is left over in the Appropriations 
Committee, and it is always a battle. I hope GSA, which 
functions a little different than other agencies, doesn't get 
caught up in the same thing. These are American citizens living 
under the American flag with a Federal courthouse. Notice I 
didn't say a Puerto Rico courthouse, a Federal courthouse, 
which means it is part of the family, and sometimes it is just 
forgotten, Virgin Islands, Guam, Samoa, and all the rest.
    So while I ask for a question on the issue in general, 
specifically I always put in the fact that territories should 
be treated equally, notwithstanding the fact that they are not 
States. That is another issue. That is about voting in 
presidential elections. That is about Members of Congress. That 
is not about sharing from the American resources.
    Ms. Roth. Yes, sir. And our focus and intent is to treat 
all partners equally, and certainly we have tried to do that, 
and it has been unfortunate that we have had some of the 
challenges we have had with this project. I will tell you, even 
in the role as Deputy Administrator, I was aware of this 
project. We have a regular update with our buildings team in 
terms of some of the key priorities, and this is a project that 
is discussed frequently.
    I can tell you that it is being given the attention from 
our buildings commissioner on a regular basis, and we are 
keeping very close on understanding what the timelines are and 
the expectations with the current developer that is on the 
project, and making sure that the timelines are being met. I 
can definitely follow up with you and your staff regarding the 
phasing that we have today because I know that letter was from 
late last year, but I can assure you that this is a project 
that it is unfortunate that the timing--that the efforts did 
not work with the previous developer that we had in place, but 
I know that it is on a better track now.
    Mr. Serrano. Right. What I would like you to do, and I am 
not one who asks for commitments because I know that things 
change. Once you have a scope and an estimate of cost, is it 
possible to get a commitment from you from the agency to alert 
the subcommittee of the new requirements and cost, even if it 
is mid-budget cycle, you know. And also, finally, how much of 
the original appropriations for this project remains, or will 
GSA need to fund a new scope of the project with additional 
appropriations?
    Ms. Roth. Yes, sir. We will definitely follow up with an 
initial report, and then we can keep reporting back and 
updating that overall scope in terms of keeping you aware of 
what the timeline is and the turnaround expectations are.
    Mr. Serrano. All right. Thank you. Thank you, Mr. Chairman.
    Mr. Crenshaw. Mr. Bishop.
    Mr. Bishop. Thank you very much. Again, welcome, Ms. Roth. 
Let me just follow up on something that Mr. Serrano referred to 
earlier having to do with the safety and security of 
courthouses. In my district, the Federal courthouse in 
Columbus, Georgia has been ranked as one of the worst Federal 
courthouses with respect to security over the past several 
years and has not yet been approved for renovation due to 
funding constraints.
    In fiscal year 2015, $20 million was appropriated to fund 
the Judiciary Court Security Program, and in 2016, GSA is again 
requesting another $20 million to address the serious security 
deficiencies. I run into my local Federal judge frequently. He 
is very, very frustrated every time I see him, whether it is at 
the post office, the golf course, or in a restaurant. He is 
frustrated with the security concerns. So if you could just 
give us a little follow-up of how you are going to prioritize, 
I would appreciate it.
    But I do want to pursue another line of inquiry. Like the 
more than 90 agencies that are associated with the National 
Industries for the Blind, Georgia Industries for the Blind, 
which is headquartered and has two manufacturing locations in 
my district, works to provide employment opportunities for 
people who are blind. They manufacture and sell products and 
also provide services for the Federal Government through the 
AbilityOne Program. Over the past year or two, AbilityOne has 
experienced some challenges in its work with GSA.
    These challenges have become significant enough that last 
September, I helped lead a bipartisan letter signed by more 
than 60 of my House colleagues, which was sent to the former 
Administrator in which we asked several questions about markups 
on AbilityOne products, and whether or not GSA and its 
authorized dealers were complying with the law that Congress 
created 75 years ago, the Javits-Wagner-O'Day Act. There have 
been many exchanges back and forth between Congress and GSA, 
but I have two important questions I would like to ask you on 
behalf of my Georgia constituents who are blind.
    First, the GSA markups on AbilityOne products seem to have 
spiked over the last few years with some of the markups 
exceeding 100 percent to 200 percent or higher. It is my 
understanding that the markups have somewhat been reduced as 
you have closed down depots or warehouses and moved to a 
different delivery system, which we understood justified the 
increases in the markups. Now that they have been reduced, I 
would like to know when all of the imposed markups on 
AbilityOne products will finally be lowered to reasonable 
levels so that Federal agencies are once again paying a fair 
and reasonable price and more products are being sold and more 
jobs for the people who are blind are being created.
    And the second question is based on recent reporting by the 
GSA Inspector General where GSA authorized the vendors to 
continue to sell, in violation of Federal law and regulation, 
the commercial equivalents of AbilityOne or SKILCRAFT products, 
which are known as ``essentially the same'' products. The 
Inspector General has reported that the GSA has identified and 
tracks repeat offenders, but no contract language is present in 
the contracts that penalizes the firms for engaging in illegal 
practice.
    So as the new head of GSA, can you tell us what corrective 
actions you will take to halt the practice once and for all, 
and ensure that no more of your authorized dealers are selling 
ETS to Federal agency purchasers at a detriment to our 
AbilityOne constituents?
    Ms. Roth. Thank you, Congressman, for that question. Our 
relationship with AbilityOne and persons with disabilities is 
very important, and working with the small businesses in the 
industry that they help to develop is a very important 
relationship that we have. And we do serve on their commission 
as a part of that to really understand both how they interface 
with Federal Government and as well as the opportunity for how 
we can improve relationships with other agencies outside of 
GSA, so it is a very important relationship. We did achieve and 
are experiencing reductions in the markups as a result of the 
disclosures--the closures of the distribution centers, and that 
was something that was an important both consolidation effort 
for the organization as well as realignment of how we were 
delivering on our mission. But as I said, it is a very 
important relationship, so it is something that we keep and 
will continue to look at.
    In general, with our acquisition services, they are a fee-
for-service organization, and so the work that they do does 
have some level of markup, but I appreciate your point in terms 
of ensuring that it is not an extreme number and having extreme 
level and impact on the returns for those working with 
AbilityOne, for example, in this case.
    And also certainly with the contract language, if there is 
opportunity, I am not aware, as I sit here, the work that we 
have done thus far, but I can say for certain that we have been 
looking at our contracts in terms of how is the language 
situated so that we are managing and creating opportunities, 
and we will continue to look at that. But as you bring this up 
today, I will make sure that we take a specific look here. That 
I am informed about the specific look here.
    [The information follows:]

    GSA follows Judiciary preferences when selecting projects for the 
Judicial Capital Security program. The Judiciary identifies security 
deficiencies at court occupied facilities as part of their Asset 
Management Planning process and also through security evaluation site 
visits.
    After the Judiciary identifies locations with security 
deficiencies, a Capital Security Study that identifies possible 
solutions to address those security needs is then developed by the 
Judiciary in coordination with GSA and the U.S. Marshals Services.
    GSA provides feedback based on a review of the various alternatives 
developed in the studies for addressing the security deficiencies along 
with the preliminary cost estimates. The Judiciary determines the 
preferred security improvement plan resulting from the study for each 
location. The Judiciary then provides their order of priority of 
projects
    Within 30 days of the funding appropriated to GSA for the Capital 
Security Program in a given fiscal year, GSA submits a courthouse 
security spend plan, with an explanation for each project to the 
Appropriations committees in the House of Representatives and the U.S. 
Senate. After submitting the spend plans, GSA executes the prioritized 
projects after further development and refinement of the preferred 
concept within the constraints of the specific courthouses and the 
available funding.

    Mr. Bishop. We will give you an enforcement stick.
    Ms. Roth. Okay.
    Mr. Bishop. Thank you very much.
    Ms. Roth. Sure, sir
    Mr. Crenshaw. Mr. Amodei.
    Mr. Amodei. Thank you, Mr. Chairman.
    Madam Administrator, does your agency have a protocol in 
place or policy or anything else like that to notify Members of 
Congress when you are planning on doing something in their 
district? And let me tell you why I am asking. My district 
doesn't have a large GSA footprint, but I noticed in the old 
post office, the Federal building in the town I live in, there 
was significant, that I can see by driving by, was 
relandscaped, and so I am just curious as to how that process 
works to say we are going to Carson City, Nevada to a Federal 
building, not the post office; we are going to spend money on 
landscaping; here is how this rose to the top or whatever to be 
more familiar with that since that property has been discussed, 
at least informally, in the past, about whether there is a 
better footprint for the Federal Government, office space 
there, that sort of thing, and so that is the background.
    Is it possible to place a request for saying, hey, whenever 
you are doing something in District 2, not that we want to get 
into your business, but just in an informative sense say, hey, 
here is what we have got going in northern Nevada, just in case 
you have any questions or somebody asks you about it?
    Ms. Roth. Well, and first let me say I don't see it as 
getting in our business because I think that we have worked in 
very close partnership with the committee, and so I definitely 
operate on the level of more informed, everyone is better off. 
So the--we have regions, obviously, across the country, have 11 
regions, and we have the opportunity to understand what our 
priorities and work that is coming forward. And certainly we 
can have our regions, which will be closest to the activities 
that are coming forward work closely with your office as well 
as our congressional office.
    Mr. Amodei. That would be great. It is Region 9. If you can 
have somebody say here is what we have got on our radar scope 
for your particular district, and by the way, here is the 
background on what we did with respect to that Carson City 
property.
    Ms. Roth. Yes, sir.
    Mr. Amodei. That would be great. Also, last year, through 
the indulgence of the chairman and the committee members, and 
also a couple of the other committees, we put--we were able to 
put language in the appropriations bill that talked about a 
bias against resort cities. And you guys, to your credit, 
didn't have it in writing like the Department of Justice did, 
but nonetheless, our concern was not, hey, hold conferences and 
stuff like that at my district. It is please just make value to 
the taxpayer the thing. And so if the outfit had the word 
``resort'' in its name or it was, in fact, at a jurisdiction 
where gambling was legal or something like that, if you are 
holding a conference or doing something that it is like, hey, 
if the best value happens to be in Reno or Lake Tahoe or 
wherever, then please make it on the best value of the 
taxpayer.
    I want to thank the chairman, again, publicly for his 
indulgence and the committee members for their support of that. 
And I don't want to kick the dead horse about the Hawaii stuff, 
but it is my region, and the only reason I want to sensitize 
you to it is, is when something like that happens, I know that 
the human nature is we got to go find the most nondescript 
place we can find, and we got to do something just short of 
pitching tents, and so we go through all of these optics drills 
to make it look like you folks are being responsible with your 
money.
    And so when I see this, I cringe not because I don't like 
Ruth's Chris, although with my complexion, Hawaii is not a good 
place to be. But it sets us even farther back on trying to say, 
listen, if going to Lake Tahoe is the best value, then you 
should go there, because that is something then we will be able 
to say look what happened in Hawaii.
    So all I would say is, I would ask, first and foremost, I 
hope that we are making sure that to the extent that we do 
conferences, travel, that sort of stuff, that we are still 
looking for the best value to the taxpayer, wherever that is, 
and that we are renewing our efforts to avoid these appearances 
which set the whole hospitality industry back.
    Ms. Roth. Yes, sir, and I appreciate that. In terms of--let 
me just step back and say when I came on board in March of last 
year, it was primarily to focus on the reform activities that 
we have undertaken in the organization overall. And so 
certainly, the attendance to conferences as well as travel in 
general has been a part of that. And the approach that we have 
taken is trying to be clear on--to the organization of what the 
expectations are as well as what travel they are doing and why. 
Our real focus is ensuring that the travel and activity, 
whether it be for conference or otherwise mission related, that 
it is mission related and that we can tie it back to this 
activity means that we get this type of return for either the 
staff person or the work that they are responsible for.
    And to that end, we put in place travel plans that each of 
the office leads report up to, so we have a very structured 
process, and in part, it is to not appear nor have the sense of 
being selective in the work that we do. We want it to be very 
clear on here is what the expectation is, here is how it works 
throughout the process, and then be able to report that and be 
transparent on it.
    Certainly, I was certainly concerned the moment I saw the 
item and the headlines regarding the travel to Hawaii, and 
something that we are being sure of is was that travel a group 
session related to the mission and how can we reinsure that we 
are providing parameters of expectations of when people travel, 
how frequently they travel, things of that nature. But I 
appreciate your point, and we are sensitive to that point as 
well.
    Mr. Amodei. And I appreciate that, and I would just close 
with this, are you comfortable with the fact that whether the 
best value happens to be in New York, Florida, you know, 
wherever, that there are no discrimination policies presently 
in your travel policies that say you are not going to Reno, you 
are not going to Atlantic City, you are not going to Miami 
Beach, all that stuff where it is perceived as a resort thing, 
what I would like to know is your opinion is do we have any of 
those biases still in the agency or are we looking at what the 
cost is?
    Ms. Roth. Our concern is cost and mission related, as well 
as we do encourage our employees to look for alternatives that 
if it is better for the group to come together via video 
teleconferencing as opposed to travel, that is our priority. 
And I do talk about travel as I move around the organization, 
and I visited all of our regions, and so being clear on what 
the expectation is is something that we are asked about 
regularly, so I don't think there is a sense of a bias in the 
organization around certain locations, and we try to be clear--
--
    Mr. Amodei. Great.
    Ms. Roth [continuing]. With the staff on that when the 
question comes up, because, of course, it does come--you know, 
this item is in a certain location, is that okay? We want to 
encourage that everyone is making their decisions based on 
value, but as well as the mission and how we are--the return 
that we are going to get as an organization and whether there 
is alternatives to traveling overall.
    Mr. Amodei. Okay. Great. Thank you. Thank you, Mr. 
Chairman. Yield back.
    Mr. Crenshaw. Thank you. I want to ask you about 
consolidation. We reduced spending $175 billion, so that means 
you got a smaller work force and that ought to mean that you 
need less space for people to go to work. And recognizing that, 
in our omnibus bill, we put $70 million for you to work on 
consolidation, and we put in the omnibus bill that we said only 
spend this money if you are going to truly save money.
    Obviously, you got to spend money to consolidate things, 
but at the end of the day, you want to be saving money. And so, 
can you tell us what you have done so far with that $70 
million? How are you going to use that to do the consolidation, 
and can you point to true savings that are going to result from 
that?
    Ms. Roth. Yes, sir. And we will be sending a spend plan to 
you, I believe, later this week that will outline some of the 
projects that are in progress, but when--what we are able to 
look at, and as we look at consolidation opportunities, we are 
looking for getting the best value in terms of whether it is 
consolidating multiple agencies to one location, or if it is 
bringing in one sole tenant, but bringing in their other 
leases.
    And so we will be able to outline for you, both in terms of 
what those projects are, but as well as what lease reductions 
that will lead to and what annual savings we are expecting.
    Our efforts overall is just that in terms of as we identify 
what projects as well as identifying which projects makes sense 
for consolidation. It is getting the sense of will we find 
savings by consolidating, can we utilize existing properties, 
and what will be the cost tradeoff between upgrading these 
properties and moving these leases into the same location, but 
we will definitely send that to the----
    Mr. Crenshaw. So you will be able to tell us that this is 
how much space that you saved?
    Ms. Roth. Yes.
    Mr. Crenshaw. And give us a number it reduced, I mean, if 
that is the case. It would seem to me if you are going to 
reduce your spending on space, you are going to have less 
space, so you can say this is how much less space we have, this 
is how much money we are saving, and I hope it is more than $70 
million, because that is what you are going to spend to save 
the money.
    Ms. Roth. Save the money, yes, understood.
    Mr. Crenshaw. When we will get that report?
    Ms. Roth. The spend plan will be coming up later this week. 
It would be this week.
    Mr. Crenshaw. And then, all right, but this year, I think 
the request was for $200 million for consolidation.
    Ms. Roth. Yes.
    Mr. Crenshaw. Do you have a--do you put the spend plan in 
place before you ask for the money, or do you just ask for the 
money and then when the money comes, you say, well, let's write 
a plan to show how we are going to save money?
    Ms. Roth. So we look for projects that are pending or we 
understand from agencies they may be interested in going into a 
consolidated space. One of the things that are necessary, and 
we are seeing that with DHS, is that those agencies have to 
take the step of being aggressive with their square footage, 
for example, as an opportunity. With the steps of that nature, 
it allows for us to take enough space with DHS, we will get 
3,000 more people into that location. That is what we are 
looking for.
    So we get a sense, and we know, just throughout the year as 
we are working with agencies, which are ready to bring in 
leases, which have done the work to either have the policies 
internally, and there are a number of them, understanding that 
this is where the savings, the cost savings for much of them 
are coming from.
    Mr. Crenshaw. But you don't know if for example when we get 
that spend plan, will it give us a bottom line number. This 
is--we have $70 million, this is how we are going to spend it, 
and this is the space reduction.
    Ms. Roth. Yes, sir.
    Mr. Crenshaw. And then the $200 million, you don't have a 
plan yet. We are to assume that you are going to spend the 70 
million wisely and end up with an overall savings, and then if 
you ask for $200 million, you will give us a spend plan that 
says after we spend 200 million extra dollars, at the end of 
the day, we are going to save more than that, hopefully some 
great multiple of that. When do you write the plan? When do you 
write the plan how you are going to spend the $200 million that 
is going to save whatever?
    Ms. Roth. They happen in tangent. And I can tell you that 
we wouldn't come with the $200 million request if we hadn't 
seen successes that we have seen in recent years with other 
plans that we have on the table or the work that we have done. 
But yes, we will be able to tie both the square footage current 
usage with the proposed change in usage as well as this dollar 
savings from the savings of the lease, and we are always 
looking for the same level of return of investment that we are 
getting more out of it than we are having to put into it, 
because otherwise, it would not--
    Mr. Crenshaw. We look forward to hearing that. Let me 
change the subject. Let me ask you about the FBI building. Your 
predecessors have come before us, and that is a big, big 
undertaking. I mean, you are going to build 2.1 million square 
feet of office space out somewhere, and you are going to 
exchange the FBI building.
    Ms. Roth. Yes.
    Mr. Crenshaw. And that is very, very complicated. And one 
of the things I think the Inspector General said a couple of 
years ago, maybe in 2013, the IG didn't really see the kind of 
policies and procedures in place to really carry that out in an 
effective way. Where you are in that process? How did you 
decide, for instance, did you just say we are going to go out 
to the FBI building, we are going to exchange that, and somehow 
we are going to build 2.1 million square feet of office space 
somewhere. The concept is you will get enough money from the 
FBI building to get 2 million square feet of new space in 
exchange for building what has got to be for a whole lot of 
money.
    Now, for instance, when is the last time you had the FBI 
building appraised?
    Ms. Roth. So in terms of our approach overall to all of our 
portfolio, we are looking for where is the best opportunity. Do 
we have properties that are sitting that do not----
    Mr. Crenshaw. I know, but let's talk about the FBI 
building.
    Ms. Roth. Right. And so with the FBI building, in 
particular, it is not meeting the needs of the FBI currently, 
and so that is how, in part----
    Mr. Crenshaw. Do you have any idea how much it is worth?
    Ms. Roth. That is something that the market sets. Certainly 
we do appraisals of our properties, but considering the fact 
that we are in a competitive market right now where we don't 
want to show our hand, as it were, but this process----
    Mr. Crenshaw. But have you had it appraised?
    Ms. Roth. We have had it appraised.
    Mr. Crenshaw. Of late. You can't tell us what that is?
    Ms. Roth. I am not sure. The last appraisal was probably 
prior to 2013 or 2013 may have been the date, and I can 
certainly follow up with the committee. But let me just say 
overall, our effort and focus is that this process is going to 
really set the value for this building. We are in a--currently, 
in terms of--we are in phase 1, and we are having a selection 
of potential developers that we are narrowing down to 
currently. And from that process is really going to tell us the 
value of this property in terms of what the market is willing 
to bear and cover for it. We don't know if there will be a 
delta. We are--our hope is that it will not, but, of course, 
that is what we are looking for is to cover the cost of 
replacing that building.
    Mr. Crenshaw. So how did you decide you needed 2 million 
square feet? That is what you decided? That is what you need 
for FBI people?
    Ms. Roth. As we look at--as we work with our tenants as 
well as our partners, we look at what their needs are and get 
an understanding. In terms of the FBI, they are not able to 
fit--I think it was the number 52 percent of those who should 
be in headquarters are not able to fit there because of that 
location.
    Mr. Crenshaw. But you have an idea--you are in the process 
of picking, I think, three developers, right? Or you pick three 
sites, and you are going to pick a developer that is going to 
say--we could sell the property and use the money and go build 
a new building, or we can exchange it, but the concept is the 
same thing.
    Ms. Roth. Yes.
    Mr. Crenshaw. You say, look, we have got a really valuable 
piece of property, and we are going to end up with some new 
office space, brand new out somewhere else, but you want to 
hopefully make sure that you kind of get even-steven. In other 
words, you don't want to spend twice as much money as your 
building is worth to build a new building?
    Ms. Roth. Absolutely not.
    Mr. Crenshaw. So where are you in the process? You are 
farther along. I am very concerned that that is so complicated. 
I want to make sure, and I have told your predecessor, make 
sure you all have the ability in-house or get some people to 
figure it out because a lot of people would love to be involved 
in that deal.
    You know, in Great Britain, we sold our embassy. We are 
building a new embassy, and we sold the embassy for more than 
we are going to spend on the new building. That is a good deal.
    Ms. Roth. Yeah.
    Mr. Crenshaw. And so I hope at the end of the day, when you 
have this new facility out there somewhere, that you won't come 
to us and ask for some more money because it wasn't a great 
deal in terms of what the FBI building is worth. That is why I 
think it is important that you kind of keep up with the value 
of that vis-a-vis the value of what the new office is going to 
be.
    Ms. Roth. As well as us being transparent and open with the 
committee and members about the process as it is happening, so 
we have--we are in a process of narrowing down the developers, 
and this fall, I think, we might be in a place of actually 
being able to make an award, but we will continue to inform 
yourselves and staff about where the progress is and how it is 
coming forward. That is a concern of ours as well. We 
definitely want this project to have a return that is a good 
return so that we can go and do other good projects the same. 
This is an important project for us, and so we definitely take 
that in----
    Mr. Crenshaw. Keep us posted. That would be great.
    Ms. Roth. Yes, sir.
    Mr. Crenshaw. Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman.
    Mr. Crenshaw. Maybe--I didn't see Mr. Quigley come in.
    Mr. Quigley. Up to you.
    Mr. Serrano. Oh, no, no, no.
    Mr. Quigley. Whatever.
    Mr. Serrano. Go ahead.
    Mr. Quigley. Thank you, Mr. Chairman. Sorry I was at the 
sister subcommittee meeting, THUD, so glad to be here now.
    Ms. Roth, as you know, the Federal Government is the 
largest property owner in the world. Obviously many of these 
properties are underutilized, not utilized at all, while 
requiring a lot of maintenance and security expenses, for 
example. But last year, this subcommittee, the GSA was unable 
to state that it had an up-to-date accurate inventory for all 
its real property owned by the Federal Government. I was 
troubled that since then, we determined that GAO has updated 
its a high risk series for the sixth consecutive Congress, 
Federal real property management was on the list. So I guess 
the same question, does GSA have an up-to-date accurate 
inventory of all Federal real property owned by the Federal 
Government?
    Ms. Roth. Yes, sir, and thank you for that question. 
Obviously that is something that we have been working on quite 
a bit, and what we have been able to do is improve in terms of 
the data sets that we are asking agencies for and what they are 
reporting, and so as that gets better, then I think our data 
and reporting will get better. Certainly for GSA we have been 
able to provide that list, make it public, put it on a Web 
site, and that is what we want to be able to achieve with all 
of the Federal agencies, so we continue to work through that.
    Mr. Quigley. What is it going to take to get it all done?
    Ms. Roth. I think part of it is very much the quality of 
the data that is going in and understanding what assets each of 
the agencies actually are responsible for. Certainly there are 
many and numerous agencies throughout the Federal Government 
that are responsible and own agencies beyond--own property 
beyond GSA, and so it is working with them to help with the 
quality of their data and their reporting.
    Mr. Quigley. Do we know how many real property and land 
inventory databases exist in the Federal Government?
    Ms. Roth. As I sit here, I don't know databases, but I can 
certainly get back to the committee with that.
    Mr. Quigley. How difficult would it be to get it into one 
database some day?
    Ms. Roth. I will tell you that we--and especially in the 
past year that I have been here, we have been using technology 
quite a bit to help us improve in terms of our delivery of 
services to the American people and the public just in general, 
so I think that our technology understand--how we understand 
technology now and our ability to use that to help improve our 
database is much better than it has been in the past.
    Mr. Quigley. And the final part is once we--how are we 
doing improving getting rid of surplus property, in your mind?
    Ms. Roth. In terms of surplus property, I think that there 
is always room for improvement, but I think that some agencies 
are doing better than others. And again, it is part of 
understanding what their--what is in their portfolio as well as 
how to dispose of it and ensuring that they have the talent and 
skill set internally. We certainly are in due help when asked, 
but it is something that we continue to work on with agencies.
    Mr. Quigley. Final question. Is there anything we can do to 
encourage them more than we already are to get rid of the 
surplus properties?
    Ms. Roth. I think that the support of the committee has 
been important. One of the things that we do see in terms of 
portfolio managers is, is the reality, is their ability to be 
able to hold onto revenue or something of that nature that 
comes from the sale of property may be an incentive that they 
currently don't have.
    Mr. Quigley. Right.
    Ms. Roth. And--but there are a number of strategies such as 
that that might be of help, and we can certainly follow up and 
have a discussion with the staff regarding that.
    Mr. Quigley. Thank you. I yield back, Mr. Chairman.
    Mr. Crenshaw. I think that has been an ongoing concern that 
to manage all that property, that we have a list of it so we 
kind of know then and you can help us when you dispose of 
property, all those kind of things. So I appreciate it, Mr. 
Quigley. Let's go to Mr. Yoder.
    Mr. Yoder. Oh, sorry. How are you?
    Ms. Roth. Good, sir. Thank you.
    Mr. Yoder. Thank you for coming to our hearing today. Thank 
you, Mr. Chairman. I wanted to echo the sentiments of Mr. 
Quigley related to the real property issue. He and I both 
raised this issue in previous hearings. I raised it the last 
couple of years, and one of the things I can't answer for my 
constituents is what we own. My constituents can't go to a map 
and look at it and see what government owns in the Third 
District of Kansas, what property may be idle, what property 
may be--we overpaid for, and so it is a real disconnect between 
the assets the government owns and our constituents holding us 
accountable because we have no way to properly display to our 
constituents what we own. Congress doesn't know all the 
property our government owns.
    So I want to just reiterate some of the points that Mr. 
Quigley had and just engage in that dialogue a little further. 
You know, we don't know how many golf courses we own, for 
example, or how many parking garages we own or how many hotels 
we own, and so I am encouraged that since we brought this up a 
couple of years ago that the GSA has acknowledged this is a 
priority and is working towards resolution, and I appreciate 
your comments in that regard.
    I did note that we were able to make a nice Pinterest, I 
guess slide, that shows the budget request, so certainly I know 
where GSA is capable of using technology in a way that could 
help us understand what our requests are, can do the same thing 
for our property. Obviously it is a much bigger undertaking.
    Are you familiar with the letter that MAPPS sent to the 
administrator of the GSA in January of this year? MAPPS is the 
Management Association for Private Photogrammetric Surveyors.
    Ms. Roth. I apologize. I am not familiar with this specific 
letter.
    Mr. Yoder. Let me just tell you what the letter is. Maybe 
you will be familiar with it, and maybe you could respond. 
MAPPS has actually offered their private set of surveyors and 
mappers, they have actually offered to help the GSA categorize 
all their property. It says, ``MAPPS stands ready to assist GSA 
with the development of a current accurate geo-enabled 
inventory of all Federal real property assets. They would be 
pleased to work with your staff to discuss the available 
services, technology standards, and specifications that will 
meet GAO's expectation and comply with congressional 
instruction.''
    And so I would be interested to know if you have considered 
using outside private parties to help in this effort, 
particularly experts that have a history of being able to 
categorize large amounts of information like this?
    Ms. Roth. So at this point, just to step back, GSA has 
placed our properties on a map and have made that available, 
and so we do have that, and certainly we have the real property 
database that we report out, and the last one was from fiscal 
year 2013.
    With that being said, as I was commenting earlier, some 
agencies are further along than others in being able to both 
report on their data as well as to manage that. So to the 
extent that there are other external efforts that are 
available, we certainly are open to exploring what makes sense, 
and--but we continue to work with the Federal Real Property 
Council as well as OMB to really try and have heard the message 
that--of getting that list clean as well as made available.
    Mr. Yoder. But you would agree that if a constituent or 
even our office wanted to create a geolocation list of Federal 
property that is owned in the State of Kansas, that would be 
very difficult to do, given the resources made available by the 
GSA?
    Ms. Roth. Currently, in terms of the information that you 
are receiving that GSA collects from the other agencies, it 
doesn't give the full picture, and I understand that that is 
certainly what Congress wants, and that is something that we 
are trying to----
    Mr. Yoder. I would say it doesn't even give a partial 
amount of the picture. And if you look at the language that was 
added to the Appropriations Act passed last year, it says ``GSA 
is charged with compiling the Federal real property profile. 
Numerous studies have found that this profile contains a 
significant amount of inaccurate information. The committee is 
outraged that the Federal Government cannot provide an accurate 
accounting to the American people of all the property that it 
owns.
    ``The committee expects GSA to work with agencies across 
government to improve the data contained in this report and 
improve transparency to the American taxpayer. Within 90 days 
of the enactment of this Act, GSA shall report to the 
Appropriations Committee on steps taken to improve the quality 
of the profile.''
    Has the GSA reported to the committee as required by the 
Act?
    Ms. Roth. My understanding is that we have been reporting 
to the committee, but regardless of that, to your point, it is 
not quality data, and it is not allowing for that geospatial 
map that I think the committee is looking for. So our ability 
to continue to improve in that regard, and if there are private 
sector entities that could help with that, I do think that is 
something that we should explore. So just the point is, even--
whatever we are applying it today is not meeting our 
expectations nor yours, and we will continue to work on that.
    Mr. Yoder. I appreciate that response, and I would 
encourage you to make this a top priority. I would encourage 
you to look at third parties that have an expertise in this 
issue. I would encourage the GSA to respond to the letter to 
MAPPS if they haven't; and if they have, to provide the 
committee with a response to that letter. And to provide this 
service to the American people not only creates an opportunity 
for our constituents to have more engagement on what we are 
doing here, but it also would make our jobs--make us more 
capable of reducing the Federal real estate portfolio in a way 
that could save taxpayers money, reduce the debt, and we can't 
engage in that unless we have the information.
    So this is a critical first step to this committee being 
able to do its job, and for us being able to do our job to our 
constituents to give them the information that they need to 
hold us accountable.
    And with that, Mr. Chairman, I yield back. Thank you for 
your testimony.
    Mr. Crenshaw. Thank you. Let's go to Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman. Let me, before I go 
on to a question I had set to go, just back up something that 
the chairman said. We are concerned that what is happening with 
the FBI building, which is not described in detail in the 
budget request, and the concern is that it will diminish 
oversight of this project by this committee, and I join the 
chairman in that. And I would like to ask you, Ms. Roth, has 
GSA ever used its exchange authorities for a project this large 
before?
    Ms. Roth. This is among one of the largest projects. I am 
not sure that any other has met this level. But with that being 
said, and I understand at this stage, there isn't a role for 
the committee to play. However, we do think it is very 
important to have your buy-in and comfort with the project as 
well, so we will continue to inform the staff, as well as the 
committee, of the activities that are occurring and can have 
that, I think they are meeting regularly already, but that is 
an important role.
    Mr. Serrano. Just a correction, and I do it in a friendly 
way. There is always a role for the committee to play. And 
after all, we are the only committee that is in the 
Constitution, I think. Right? One of the few. There is a role 
for us to play.
    Ms. Roth. Absolutely. I apologize, sir.
    Mr. Serrano. It helps our relationships if we understand 
that. Also, just to give you a story, I remember a few years 
ago, we had an agency come before us and say don't give us any 
more money. We don't need any more money. And we had never 
heard that in my 40 years in government. It turned out to be 
the agency that wasn't watching Wall Street do what they were 
doing, and so we would like to have oversight. But let me get 
back to my favorite and most difficult subject because I don't 
understand it. The leasing versus the purchasing. You know, the 
American dream is to own, not to rent, so why would government 
be any different, and how much money do we spend on leasing? 
And I see that you have $5.5 billion in leasing of privately-
owned space. What are we doing to remedy that? And is your 
ultimate goal to bring leasing down, or is it the agency's 
ultimate goal? I am not going to put it on you. You have been 
there a month. But is the agency's ultimate goal to bring 
leasing down?
    To me, it is much better to know that that building belongs 
to us and that building belongs to us because once it belongs 
to you, you could always sell it to make money; and, you know, 
the folks on the other side believe that the best way to save 
money is by cutting the budget. I disagree. I think it is also 
by growing the budget to investments. And for us to be leasing, 
which is more costly than building, I just don't get it. So 
where are we headed in that?
    Ms. Roth. As we approach our portfolio----
    Mr. Serrano. Or is the committee not being paid attention 
to on that subject?
    Ms. Roth. No, sir. I regret every word of that. Absolutely. 
As we approach our portfolio, we are looking for certainly the 
best value for housing for the agencies that we are working 
with, but I think that you have seen GSA be more proactive year 
over year in terms of helping agencies see the value of both 
consolidating leases as well as us being very stringent in our 
efforts to improve on the assets that we have as well and make 
them available and being smarter about how we are utilizing 
them.
    So using the square footage of space in different ways, I 
think has been an important step as well. So at the end of the 
day, you know, data tells us that owning and having agencies 
and property that is owned is a better value overall. Sometimes 
that is not available, and that is the unfortunate part at 
times when that is the case, but we do have a preference in 
terms of own. It is just not always available. But what we have 
been working on is trying to reduce the cost of annual lease 
payments through improvement of owned facilities as well as 
consolidation efforts.
    Mr. Serrano. Right. A quick follow-up on that because I 
know there are some other folks that should be given a chance 
to ask questions. Maybe it is just one of those questions where 
you have to turnaround and ask somebody behind you, and I 
understand that. How did that mind set come into being? When 
did this start that we should be leasing rather than 
purchasing?
    Ms. Roth. I am not sure anyone behind me actually knows 
that either, but I don't know the answer to that. What I do 
know is as we are approaching our portfolio today, we have been 
very focused on where are our assets across the country because 
as you point out, it hasn't been profitable for us or creating 
a return on the investments that the American public is paying, 
and to your point in terms of the costs that we pay into the 
buildings that we are maintaining as such.
    So we do have a preference and a focus on how do we make 
the best value out of the properties we have use of today, and 
ensure that they can meet the needs of the workforce as we are 
planning for today and into the future.
    Mr. Serrano. Okay. Mr. Chairman, and my comment was just 
correct. It wasn't meant to question your respect for the 
committee.
    Ms. Roth. Thank you.
    Mr. Serrano. I have a feeling that people who have English 
as a second language, as I do, pay more attention to every word 
than native speakers. I will get off the hook that way.
    Ms. Roth. Thank you. Thank you, sir.
    Mr. Crenshaw. Thank you. Let's go to Ms. Herrera Beutler 
and then to Mr. Bishop and then to Mr. Womack.
    Ms. Herrera Beutler. Thank you very much, Mr. Chairman. I 
am on the OIG Web site, and I was hoping you could help me 
understand something. Is Federal Acquisition Service under your 
jurisdiction?
    Ms. Roth. Yes, ma'am.
    Ms. Herrera Beutler. Okay. So are you familiar with--it is 
dated March 13. It is from the Assistant Inspector General for 
Auditing, Office of Audits. It is titled to Commissioner Sharp 
with regard to major issues for multiple-award schedule pre-
award audits. Are you familiar with this?
    Ms. Roth. Just that it was coming out. We were expecting it 
last Thursday, and we have had some initial conversations about 
it.
    Ms. Herrera Beutler. I wanted to bring specifically for the 
record and to your attention, because I wasn't familiar with 
your overall budget, you are requesting flat funding. Correct?
    Ms. Roth. No, in terms of the Federal Acquisition Services, 
that is an area that is self-funded.
    Ms. Herrera Beutler. No, no. I am talking about your 
budget, GSA's, are you asking for a flat fund, or are you 
asking for an increase?
    Ms. Roth. GSA is asking for an increase in its budget over 
2015. The total budget request is for $10.6 billion, and it 
includes an increase over the rental payments that we actually 
bring in. We are also asking for about $9.9 billion for 2017.
    Ms. Herrera Beutler. Okay, which is a sizeable sum. This 
doesn't obviously address that whole thing, but there is a 
piece here that I think might be helpful in recouping some of 
that cost. I wanted to bring this to the attention of the 
chair. It just came out, so I don't think everybody has had a 
chance to go through it. But there are three or four main 
points that the IG has said for the past 3 years he has 
issued--how long have you been in this role? Probably not the 
last 3 years?
    Mr. Crenshaw. The last 3 weeks.
    Ms. Herrera Beutler. So this is not your last 3 years, but 
for the past 3 years, they have been issuing major issues 
memoranda, and I think he just felt that there were some 
recurring issues that needed to be addressed, and I wanted to 
make sure you were aware of them. Especially as you are asking 
for an increase in budget, this looks like a good area to dig 
into. When they were going through the acquisition audits, 
there were four main points he found. First was for over three-
quarters of the contracts that they audited, contractors 
provided the commercial sales practices disclosures that were 
not current, not accurate, and/or complete to support their 
prices. Half of the audit--another bullet point--half of the 
audited contractors supplied labor that did not meet the 
minimum educational or experience qualifications as required by 
GSA for contracts. And over a third of the audited contractors 
did not have adequate systems to accumulate and report 
scheduled sales, and many contractors improperly calculated 
their iostats for remittance to GSA. And then fourth point he 
has here is contracting offices are not fully achieving cost 
avoidances identified by the pre-award audit.
    So what he found was there is about, he goes through a few 
different numbers, but in the same year: We recommend the price 
and discount adjustments that, if realized, would allow for 
over $1.6 billion in cost avoidances and additionally over $2.7 
million in recoverable overcharges.
    To a scale of what you are asking, that is a fraction of 
what you are asking for in an increase, but I would argue, you 
know, the best part of $2 billion is worth going after. And so 
I guess I wanted to ask how much and how closely you worked 
with the IG to identify these areas where you can improve the 
system's flow with regard to who is doing what and recoup some 
of this money. I guess I want to get a feel for what kind of a 
priority it is for you to kind of walk--because I feel like 
they are doing the work of that. You just get to take their 
recommendations. Might as well take advantage of it.
    Ms. Roth. Right. I appreciate that question. The IG and the 
role of the IG and our partnership with them is very important 
to us, and we actually meet on a pretty regular basis, at 
minimum monthly, but frequently are in discussions, either 
directly or between staff regarding a number of items. So, yes, 
their role in terms of helping us evaluate and research the 
production of effort and how it is actually performing has been 
very valuable. This is, and as it was brought to my attention, 
and as Commissioner Sharp looked at the draft of what he was 
expecting to come out, we definitely had concerns, and there 
were some opportunities as you pointed out for work and 
improvement there. And I think that we need to take that more 
than under advisement, but actually apply a work plan to it, be 
clear about what the milestones are, and set about implementing 
those efforts.
    There have been some efforts that I know that they have 
started already. I am not fully aware of all of those pieces 
but this is something that we are taking very seriously. And to 
your point, it not only tells us about where cost savings are 
available, but also where potentially we are not meeting, or 
those we are working with aren't meeting our policies, and that 
is problematic.
    Ms. Herrera Beutler. Absolutely. Is it possible to ask as 
you put together--I don't know whose team is here, but as your 
team is putting together that work plan, that you could keep my 
office--I don't need to know step by step in detail. I just 
want to know as its moving, especially as you are coming back 
to us and the team is coming back to us asking us to increase 
your budget, I want to also make sure that we are recouping 
where we can and should be.
    Ms. Roth. Understood.
    Ms. Herrera Beutler. Thank you. I appreciate it, and 
welcome to the job.
    Mr. Crenshaw. Yeah. Actually in the real numbers, it is 
about $1 billion, $100 million in addition. And every year, 
like 2014 and 2015, it is about a $1 billion more. I think to 
her point is you wouldn't have to ask for an increase if you 
just recouped what was missing. But I am sure you are working 
on that. Mr. Bishop.
    Mr. Bishop. Thank you very much. Agriculture/agribusiness 
is the largest economic sector in the Georgia economy, and our 
State has lots of utilization and collaboration with USDA. It 
is my understanding that GSA is planning to transfer almost 300 
financial operations staff members to the Department of 
Agriculture. I would like to hear about when this transfer is 
to take place. Is it on schedule? Will the transfer of these 
personnel be permanent or temporary? What is the purpose of the 
transfer? How will the staff become assets to USDA? Will GSA 
experience any disruption in its operations, the functions that 
these current GSA people are now performing, and what are the 
end goals of the transfer in terms of efficiency to both GSA 
and USDA?
    Ms. Roth. Thank you, Congressman, for the question. The 
effort between GSA and USDA is really borne out of GSA's 
efforts to really focus in on its missions of infrastructure 
and technology and acquisition. What we found is that we had a 
financial services area, a line of business in which we were 
providing services for other agencies, but in reality, it was 
not the main part of our mission as an organization. USDA has 
had a very mature, financial services area within its 
organization, and so this move is actually taking the financial 
services team that has been working at GSA and transferring 
them to USDA. It is actually a move of people as well as 
technology. It will be effective March 22, and thus far, it is 
working well, and we are on time.
    With that being said, it is a large move. It is one that we 
need to continue to watch closer, but in terms of just overall, 
why we are doing this, it is a part of our effort to continue 
to focus on really what is the mission of GSA and get back to 
that mission.
    Mr. Bishop. And, of course, USDA has had challenges dealing 
with IT and the financial aspects of its mission also, and you 
have got staff that actually have skill sets to do that----
    Ms. Roth. That is right.
    Mr. Bishop [continuing]. That you are not fully utilizing.
    Ms. Roth. That is right. Ultimately, if we were going to 
continue with this effort, we needed to invest primarily in the 
IT segment as well as some level of staff potentially, and it 
just didn't fit with the mission of what we were doing, but 
these are a specialized team that will continue to work the 
same as they move over.
    Mr. Bishop. Will that result in a reduction of your budget?
    Ms. Roth. Yes, it has, and it is reflected in the budget.
    Mr. Bishop. So it is a permanent transfer of that division?
    Ms. Roth. Yes.
    Mr. Bishop. Thank you very much.
    Mr. Crenshaw. Mr. Womack.
    Mr. Womack. Thank you, Mr. Chairman. And Administrator 
Roth, thank you for being here. I want to talk for just a 
moment about the Green Building Certification System used by 
GSA. I know you have two options, Green Globes and LEED. Some 
in the construction material industry have expressed concern 
that their products, proven safe and efficient, used by 
millions of people around the U.S., are being precluded from 
LEED certification because they contain vinyl, plastic, or 
other materials that anti-chemical advocates deem harmful, when 
in fact, many of these materials have provided great advances 
in environmental performance, energy efficiency, and occupant 
safety. So as the GSA is undergoing a regular analysis of 
reestablishing its partnership with LEED--and I understand you 
do that every 5 years--can you tell me if you have received any 
comments from the public on the Federal register portal on this 
issue?
    Ms. Roth. My understanding is we do have comments that 
are--we are receiving comments now. I am not certain if we 
received comments on this particular item; however, I wouldn't 
be surprised if we were.
    Mr. Womack. If LEED were to go down this path, if we can 
agree--or at least I will maintain that they are on a path of 
overregulation and extreme environmental activism--do you 
anticipate that there could come a day when GSA would cease to 
accept the system as a valid Green Building Certification 
System?
    Ms. Roth. I think we have to continue to remain open to 
what is the best system to support the agencies, whether it is 
LEED or it is something else, and that is what our regular 
evaluations of that process is. So I think that we have to 
approach each process in terms of an evaluation of how it is 
working with fresh eyes.
    Mr. Womack. Do you have a personal thought on it?
    Ms. Roth. In terms of the LEED certifications, the work 
that I have been familiar with and the work that we have done 
at GSA has really focused on the energy savings, and so it 
hasn't really factored in as much the materials. So in terms of 
just overall, if there is a benefit that we are not getting, I 
want to see us get those benefits. And if there is a way to 
work with private sector to ensure that those are coming to the 
table, that is what I think is important.
    Mr. Womack. But if you could conclude, and I am not trying 
to speculate that that is a conclusion that you would come up 
with, but if one could reasonably conclude that this is a form 
of activism that is being used in a very prominent program, I 
am going to ask you again, do you consider extreme activism in 
the evaluation of these criteria?
    Ms. Roth. I think extreme activism and anything that is 
going to isolate out a group, whether it be this case with LEED 
in this example, or something else, is problematic. So that is 
not something that we are looking to have as part of the 
agency. We want to be able to understand that we are getting 
benefits in selling green-related activities, whether it is 
from the light bulbs to the roofs, and we want to get benefits 
out of that. So if there is extreme activity that is happening 
and it is not benefiting us, that is not something that we will 
support.
    Mr. Womack. Okay. I would like to thank you for including 
the John Paul Hammerschmidt Federal Building and the U.S. 
Courthouse in the list of priorities in fiscal year 2017, and 
would like to get some more details. I know my office would 
like to get more details on the proposed exterior and 
structural repairs for that facility, so if your organization 
could communicate back, that would be one that we would leave 
for the record.
    Finally, I want to talk about the FBI headquarters. I 
understand that the plan is to basically trade a new site well 
beyond the central city center for the present site, and it is 
my understanding that the RFP is for a smaller building. Is 
that right?
    Ms. Roth. The RFP at this time, I am not sure that that has 
been made clear. What we are at the place of is trying to get--
we are narrowing down a list of potential developers, and they 
are going to then turn around and give us a sense of what type 
of project----
    Mr. Womack. So let me ask you, what is driving the need for 
the relocation? And if it is related to the inefficiency, 
building problems or the present location, then help me, 
because I understand this new facility is going to be $1.5 
billion or something in that regard--the most liberal estimate 
of the value, as I hear it, of the present location, is around 
$500 million. So we are talking about a pretty sizeable 
difference here. What is driving the need to relocate?
    Ms. Roth. Well, the process itself is what is going to give 
us a sense of what the value we should expect to get out of the 
current FBI building, as well as the new location and the cost 
thereof. We will get a sense of the proposals that are brought 
forth. But in terms of the need that brought us to the table on 
this discussion, it really has been FBI's need of having a new 
facility. The facility that they are currently in is not 
meeting their needs. And that was----
    Mr. Womack. That doesn't help me. I am asking specifically. 
What do you mean it doesn't meet their needs? If you were 
telling me that it is not big enough, and they are going to 
have to have additional space, and they don't want to split a 
campus or something like that, I would understand that. But I 
see this is not a space issue. In fact, the new building is 
probably going to be smaller, but that aside, what is driving 
that need?
    Ms. Roth. Well, I mean part of it, at least according to 
our understanding with the FBI is 52 percent of the people who 
should be in the headquarters are not able to be there because 
of how the building is shaped and how it is designed 
internally. The future space could be smaller, but certainly we 
are using a utilization of the footprints of properties in 
different ways now than we were in the past, so we are finding 
ways in which we are putting more people into smaller square 
footage, so that is quite possible as well. But I think at this 
point, we are just at a place of where we are going to get back 
a sense of who are the potential developers to do this work, 
and then get a sense of what those plans would look like.
    Mr. Womack. Is it possible that they will keep the current 
location and will look at maybe a remodel or some other kind of 
a restructure process there, or is this a foregone conclusion 
that they are going to move?
    Ms. Roth. Well, in terms of their process, it took two 
paths in first identifying potential, narrowing down potential 
sites, and then separately potential developers; and then the 
sites would be married up with the developer. So the way it is 
set now is not to go into the same location.
    Ms. Herrera Beutler. Would the gentleman yield for a 
second?
    Mr. Womack. I would be happy to yield.
    Ms. Herrera Beutler. I am not following this line. I always 
ask this question, but why--was it because it structurally was 
deficient? Is it unsafe? Can it not be retrofitted to meet new 
technologies that are necessary? Just a simple why?
    Ms. Roth. I don't know specifically here. I can say that 
generally when we approach these jobs, it is a matter of 
understanding what is available for the property that is there, 
and so it is quite possible to look at a property and say that 
the costs of retrofitting it or the improvements that are 
necessary won't give us a good return in terms of building new 
or utilizing another space. That is how----
    Mr. Womack. Was it assumed that the present location, 
inadequate as the building is for the current needs of the 
FBI--we can stipulate to that--I am not sure I can, but for the 
sake of the argument--was it assumed that finding a location 
outside the primary city center area would be of economic value 
that they could build a new facility out there, give them what 
the FBI wants, the new building, and trade it for the value of 
the property where it currently is; and it would be an even 
trade, that that would drive some of that decision?
    Ms. Roth. Certainly there is a number of factors including 
the economics of it that go into putting forth these potential 
exchanges. We were saying earlier this would be the largest 
exchange of its nature, and so we will have a sense coming out 
of this process really what the market is willing to bear. But, 
yes, in terms of what we were looking for here overall is a new 
location for--well, a new building for FBI. The site process 
narrowed down the location, and that is what has us having to 
check around Maryland or Virginia versus the existing location.
    Mr. Womack. Mr. Chairman, I don't have a real good, warm 
and fuzzy feeling on this particular project.
    Mr. Crenshaw. Just so you will know before you got here, we 
had an extensive conversation about this because, for instance 
in London, we are selling this very, very valuable piece of 
property on Berkeley Square, which I hate to see us lose, but 
because of security issues, we are building a new embassy 
across the river. But we are selling the valuable piece of 
property in Berkeley Square for more than we are going to spend 
building a new building. And that is a good concept. And I had 
asked her earlier if the concept is that we have got this 
valuable piece of property downtown, and somebody can build a 
facility that houses everybody and is more modern, et cetera, 
et cetera, without having a big gap in between.
    I told her we really didn't want to hear her agency come 
back and say, well, you know, we are $1 billion short on the 
new building. So the concept is that it ought to be an even 
trade. As I said to her, I think it is very, very complicated, 
and I have asked over and over again, and she is going to tell 
us what the latest appraisal is, because I think you ought to 
be appraising that from time to time, and you ought to be 
assessing what the new one is going to cost. And then you can 
tell us more if it is going to be kind of, as I said, even 
Steven. That is a good concept. But just to build a new 
building and trade somebody for some valuable piece of property 
downtown, I don't want us to come out on the short end of that 
stick. So she is going to keep us aware of that.
    Mr. Womack. Prepare yourself.
    Mr. Crenshaw. Thank you for your concern. Yes.
    Ms. Herrera Beutler. This I am also positive is not under 
our jurisdiction, but who is talking about building the new 
facility for the Secret Service, the new White House for their 
training? Whose committee does that go to? They were going to 
make a proposal today. The Secret Service is requesting $8 
million or so to build a replica of the White House to better 
help them train. So it is obviously not you.
    Mr. Crenshaw. Probably Homeland. I would think it is 
Homeland.
    Mr. Serrano. A replica of the White House?
    Ms. Herrera Beutler. A replica of the White House so that 
they can train them.
    Mr. Serrano. They should just keep away from the fences.
    Ms. Herrera Beutler. You know, I was going to offer that, 
but that is not our committee.
    Mr. Crenshaw. And just in passing, there will be a day when 
the West Wing gets fixed up when whoever the President is 
doesn't mind moving out. So far, no one wants to move out. I 
think everybody has had a chance to ask. Let me just ask one 
last question. This gets into my original question in terms of 
priorities.
    Now, there is $160 million to buy the Red Cross Building 
that you would like. Now the State Department is in there, I 
know, and I think part of the concept is the State Department 
is going to have $155 million, and you got $160 million, and so 
you have got a $315 million building that you want to buy. I 
guess I am just curious, why is that a big priority? I mean, 
for instance, what if the State Department doesn't get--if they 
are going to buy half of it, what if they don't get their $155 
million? What if you don't get your full $160 million? Is that 
going to save money? Why is that up on your priority list?
    Ms. Roth. This would be a consolidation effort. DHS is 
currently in multiple leases across the city, and this would be 
an opportunity to consolidate their leases overall, so that is 
primarily what makes this a priority project. In terms of if we 
don't receive the funding, obviously plans will have to change 
and look at other alternatives, but ultimately, this is what 
brings the project to the table.
    Mr. Crenshaw. Is the State Department in there now?
    Ms. Roth. Yes, in part, yes.
    Mr. Crenshaw. And then some other people will go in there 
as well.
    Ms. Roth. Other State Department leases actually. They 
would be able to fold all of their leases in there.
    Mr. Crenshaw. That is like when I ask you what are we going 
to do with the $70 million in consolidation, you don't 
necessarily have to spend all that $70 million, but this is the 
kind of consolidation you are trying to bring about. You think 
if you spend $350 million, put everybody in there, at the end 
of the day we are going to save money?
    Ms. Roth. Yes, sir. Yes, sir. I want to say--Pat cautions 
me on this--but I am pretty sure that they are paying about $12 
million in leases annually across the city, and they will be 
able to go into this facility and reduce those leases. And so 
that is why we would look at an opportunity of that nature, 
just for example.
    Mr. Crenshaw. Thank you. I think unless anybody has any 
further questions, we want to thank you for being here today. 
You have got a tough job, especially for being here 3 weeks. 
And keep up the good work. Thank you so much. This meeting is 
adjourned.

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                                            Monday, March 23, 2015.

                           THE SUPREME COURT

                               WITNESSES

HON. STEPHEN G. BREYER, ASSOCIATE JUSTICE, SUPREME COURT OF THE UNITED 
    STATES
HON. ANTHONY M. KENNEDY, ASSOCIATE JUSTICE, SUPREME COURT OF THE UNITED 
    STATES
    Mr. Crenshaw. Well, this hearing will come to order.
    First of all, let me welcome Justice Breyer and Justice 
Kennedy. Thank you for being here today. I know both of you 
have testified before our subcommittee in times past, and we 
appreciate you coming back and being with us here again today. 
We all look forward to this time to have an exchange. Not often 
does the legislative branch and the judicial branch get to talk 
to each other. So we look forward to that.
    I think all of us know that a fair and impartial judiciary 
is very much a cornerstone to our democratic system of 
government. And so the fact that you are here today I think is 
important. I think the work that you do is obviously very, very 
important, and not only do you resolve disputes between 
individuals but also between the executive branch of the 
Federal Government as well as the legislative branch. And, to 
do that, you need the respect of the citizens, and I think you 
have that. I think you also give respect to the citizens and 
their view of what is right and what is fair. And that is 
important as well.
    So I think today's hearing is important because we do have 
a chance to talk to each other about issues that are important.
    Now, one of the things that I want to commend you all for 
is your work to try to help save money. Everybody knows that 
government needs money to provide services, but of late, we are 
trying to make sure that every task of government is completed 
more efficiently and more effectively than it ever has been 
before. Money is limited, and you are to be commended for the 
work that you have done to try to save the taxpayers' dollars. 
I noticed that your request this year, $88.2 million, is almost 
$1 million less than you requested last year. And I can tell 
you my fellow members up here don't see that happen very often 
when an agency comes in and asks for less money than they 
received the year before. So we thank you for that.
    I know you have done some cost containment initiatives 
dealing with technology, dealing with personnel, and it has 
paid off. And I know that there are some small increases, a 
part of that overall reduction, that are basically inflationary 
themselves.
    So, Justice Kennedy, Justice Breyer, we look forward to 
hearing from you about the resources that you need and any 
other comments you might have about the judiciary in general. 
And we are going to pledge to you to work as best we can to 
make sure that you have the resources necessary to carry out 
your constitutional responsibility. And, once again, thank you 
for the work you have done to try to save money and be 
efficient and effective.
    And, in closing, just let me say on a personal note, I am 
from Jacksonville, Florida, and we have something there called 
the Chester Bedell Inn of the Court. It was one of the first 
Inn of the Courts established in Florida. And every year they 
have a special occasion on Law Day, and I wanted to let you 
know that they will be requesting one of the members of the 
Supreme Court to come in 2016 to be there for that celebration 
in Jacksonville, Florida. So I hope you will be on the lookout 
for that invitation. I know they would love to have you there, 
and I would certainly welcome the honor to introduce you to 
Jacksonville, Florida.
    Mr. Womack. The chairman has no shame.
    Mr. Crenshaw. And that has nothing to do with your budget 
request. And so we look forward to hearing your testimony, but, 
first, let me turn to the acting ranking member, Mr. Bishop.
    Mr. Bishop. Thank you very much, Mr. Chairman.
    Ranking Member Serrano would very much have liked to have 
been here today. But he could not, and he sends his sincerest 
apologies. I am here in his place, and I would also like to 
warmly welcome you both, Justices Kennedy and Breyer, to our 
subcommittee.
    As has been said in the past years, this is one of the rare 
opportunities for our two branches of government to interact. 
Because of this, our questions sometimes range beyond strict 
appropriations issues. And, as our Nation's highest court, many 
of us look to you for important insights into issues affecting 
the Federal judiciary as a whole, which can be especially 
critical in such difficult and challenging budget times as we 
are experiencing.
    We have to be careful not to allow anything to affect the 
ability of our Federal judiciary to hear cases and to dispense 
justice in a fair and a timely manner. We have to be sure also 
to provide the Supreme Court, as both the final authority on 
our Constitution and the most visible symbol of our system of 
justice, with sufficient resources to undertake not just your 
judicial functions but your public information functions as 
well.
    So we look forward to your testimony and whatever we can do 
to make sure that we have a strong independent, well-funded 
judiciary, we want to do that.
    I yield back, Mr. Chairman.
    Mr. Crenshaw. Thank you, Mr. Bishop.
    And now let me recognize first Justice Kennedy for any 
remarks you might like to make. We will put your written 
statement in the record. And if you could keep your remarks in 
the neighborhood of 5 minutes, that will give us some time to 
ask questions. But, again, the floor is yours.
    Justice Kennedy. Thank you very much, Mr. Chairman, 
Congressman Bishop, Congressman Womack. Thank you for your 
welcome and your greeting to Justice Breyer and to me, and we 
bring our messages of greeting from our colleagues.
    With us today--I will just go in the order of where they 
are seated--are Jeff Minear, who is counselor to the President, 
and--or Counselor to the Chief Justice; and Kevin Cline, who is 
our budget and personnel director; and Pam Talkin, who is the 
Marshal of the Court; Scott Harris, who is the Clerk of the 
Court.
    And is Patricia here with you as well? We have Kathy Arberg 
and Patricia Estrada from our Public Information Office.
    As you indicated, Mr. Chairman, we are always very careful, 
very cautious, about budgetary expenditures. And, as you well 
know and as the committee well knows, the budget of the Supreme 
Court is just a small part of the budget for the courts as a 
whole. And the budget for the courts as a whole is a very small 
part of the United States budget.
    And in I think a day you will hear a presentation from 
Judge Julia Gibbons of the Sixth Circuit on the budget for the 
judiciary as a whole. And this is of immense importance. She 
does a marvelous job for the judiciary, and spends many, many 
days and weeks on this subject. And the budget for the Federal 
judiciary as a whole--it is important I think for the Congress 
to realize--is not just bar judges. There are 7,900 probation 
and pre-sentencing officers. And this is cost-effective because 
this keeps people on supervised release so that they are not in 
custody, and this is a huge cost saving. Quite without 
reference to the human factor, over the years in the Federal 
system, we have a very low recidivism rate for those who are on 
release. It is high if you look at it as one-third, but it is 
quite low compared to the States. So this is cost-effective.
    And the Federal courts as a whole, Mr. Chairman, are a 
tangible, palpable, visible, clear manifestation of our 
commitment to the Rule of Law. When people from foreign 
countries come, as judges often come, and they see the Federal 
judicial system, they admire it. They are inspired by it. And 
they go back to their countries and say that this is a nation 
that is committed to the Rule of Law. And law is part of the 
capital infrastructure. You can not have a free economic system 
without a functioning legal system. And so what you do is of 
immense importance, and we appreciate it.
    As to our own budget, as you indicated, Mr. Chairman, 
overall we have a decrease in our own court operations and 
expenditures. We have almost exactly a 1 percent--little over a 
1 percent increase--and that is for mandated increases for 
inflation and salary increases that are mandated. And over half 
of that we have absorbed by cost-cutting in the court. So we 
have absorbed over half of the mandated increases within the 
existing framework that we have.
    The Court is planning to have, in the year 2016, an 
electronic filing system so that all of the papers that are 
filed with the Court will be on electronic filing. We waited in 
part until the district courts and the circuit courts could get 
on that system so that we could then take it from them, but of 
course this also includes filings from State courts and from 
prisoners. We think this may require an increase in personnel 
by one or two people. We are not sure. The pro se petitions, of 
which there--I don't know, it is in your materials--probably in 
the area of 6,000 a year. These are usually handwritten, 
prisoner handwritten. When this is put on electronic--an 
electronic retrievable transmission--system, you will have a 
database from which scholars and analysts can look at the whole 
criminal system, both State and Federal, and make comparisons. 
How many--what are the percentage of cases where there is a 
complaint on inadequate assistance of counsel, or search and 
seizure, or a Batson violation. And so this will be a database 
that will give us considerable data for scholars so that we can 
study our system.
    We are, of course, prepared to answer questions about the 
specifics, but, once again, let me thank you for the honor of 
being here. My colleague Justice Breyer and I are pleased to 
answer your questions.
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    Mr. Crenshaw. Justice Breyer, you are recognized.
    Justice Breyer. I would simply reinforce what my colleague 
Justice Kennedy said and what you said, Mr. Chairman, and you 
are here. And I think that is a very good thing.
    So are we because I think our biggest problem is not 
necessarily the budget, but it is right similar to yours, which 
is how do you get the American people to understand what their 
institutions are about. And, in our case, we are not up in some 
heaven somewhere where we decree things from on high 
communicating directly with some mysterious source, that we are 
part of the Government of the United States.
    And you are actually interested in the mechanics of how we 
bring this about. Good. It means we are not totally off on our 
own. And try to explain to people what we do, as you then try 
to explain what you do, and you say, We are part of you, and, 
you know, you are part of us, and that is talking to the people 
of the United States.
    So I am glad to have even a little opportunity to talk 
about our institution and how it works, and I am glad you are 
interested. Thanks.
    Mr. Crenshaw. Well, thank you very much.
    Justice Kennedy. Mr. Chairman, I just might mention the 
Inns of Court, which you alluded to, was the idea of Chief 
Justice--former Chief Justice--Warren Burger. He loved all 
things English, and he wanted to replicate this structure in 
which judges and attorneys and law professors and law students 
have dinner twice a month and talk about common issues. And he 
did it with Judge Sherman Christensen of--the late Judge 
Christensen of Utah. And Cliff Wallace also assisted him, and 
it has been remarkable. It costs the government no money. And, 
in Jacksonville, Florida, and in Sacramento, California, in 
Boston, they have Inns of Court. And it has made a tremendous 
difference. People thought, oh, this is kind of an interesting 
idea. It has made a real palpable, tangible, visible difference 
in the civility that we have within our profession. It has been 
a remarkable, remarkable achievement. It was Warren Burger's 
idea.
    Mr. Crenshaw. That is great because it really is there to 
promote civility, to boost professionalism, and they are doing 
certainly a great job.
    As we begin the questions, I can't help but recall the last 
time you all were here, I asked you how the Court decides who 
they are going to send over to testify before us, and I think, 
Justice Kennedy, you replied it is based on merit. And so you 
are back again. Good job.
    Let me ask you, one of the things that I know there had 
been a lot of work being done on the building and grounds. And, 
over the last 10 years, I think this committee has spent or 
appropriated about $120 million to, for the first time since 
1935, do some upgrades, and so I just want to ask for a kind of 
an update on how all that work is done. The facade was redone, 
I guess north and south. Is that all complete? At one time, 
there was a big hole in the ground next door, but since I have 
been by of late, everything looks really nice. Can you just 
give us an update on all of the work that has been done? And is 
that completed and finished?
    Justice Kennedy. The $120 million appropriation for the 
project for refurbishing of the building is completed. We came 
in under budget. And the project has been closed and has been 
very, very successful.
    Incidentally, the original cost for that was--the original 
estimate was $170 million. And I talked with your predecessor 
when I got the message, and he said, I think we have got a 
problem. I said, I think it sounds too high to me. We hired our 
own architect and worked with him. And, in fact, my 
recollection is that he did most of his work pro bono. And from 
the architect that we hired--he was from the University of 
Virginia, taught architecture there--we got it down to 120, and 
the building came in under that.
    There were some contract claims. One of the problems was 
the windows. If you look at our windows on the court, there are 
these lovely windows. So to replace the windows, which we had 
to do, they measured. They measured the bottom for the width of 
the window, and then the height, but they didn't know that it 
is not a rectangle. It is a trapezoid. So the window at the top 
is slightly smaller, and that is to give it perspective. It was 
a brilliant architecture. And so that was about a $15 million 
mistake, which we were not going to pay for. But that is the 
kind of thing that comes up in the building.
    And it is finished. We had to replace all the wires, all 
the air conditioning. We had the air-conditioning system from 
1938, and when it broke, there was a fellow that was retired in 
West Virginia. We sent a police car to get him, you know, and 
we said we better fix this. And so that has been done.
    The facade is a different project. That is the--some of the 
marble was actually falling off. The time has not been kind to 
the marble on the building. And so we are still in progress. 
The entrance, the west side of the building, is finished, but 
the north and south and the east have yet to be done.
    Mr. Crenshaw. Gotcha. Let me ask you, and we will have 
time, I think, for a round of questions or two. The whole 
security issue. You know, the world is--seems to be getting 
more dangerous, whether it is internationally or whether it is 
domestically. And I know from time to time the Supreme Court 
hears controversial cases. And I know that you spend about $18 
million a year on security--primarily with the Supreme Court 
Police, and I just wanted you to tell us, is that adequate? 
And, for instance, if you hear a or are going to hear maybe a 
highly charged case, do you have to increase security during 
the time those hearings takes place?
    Just give us an overall view of how you see--because I was 
just in Jacksonville this morning with the folks in the Federal 
courthouse, and that is a concern to them in these difficult 
economic times to make sure we have adequate security for a lot 
of people that are in public service. But give us a little 
update on how--is that all being funded? Is that all being 
taken care of in terms of security?
    Justice Kennedy. It has been. A few years ago, we projected 
that we needed more than we ultimately asked for, but we are 
now satisfied that we have the right number.
    Yes, of course, in high-profile cases or when threat 
assessments are going up, we have increased security, but we 
can do it all within our existing staff.
    Mr. Crenshaw. Thank you.
    Mr. Bishop is recognized.
    Mr. Bishop. Thank you very much.
    When you were last here, we discussed the very real impact 
of sequestration. Unfortunately, we still need to discuss that. 
I think most people think of Federal grants and programs where 
you are able to dial back operations. But it is not the case 
with the Federal judiciary. Courts have a constitutional 
responsibility, and you cannot control the scope of your 
jurisdiction, and you have already undertaken strict cost-
cutting measures prior to sequestration.
    I know you can't answer for the entire judiciary, but what 
do you see as the continued effects of sequestration? What 
concerns do you have if sequestration is continued?
    Justice Kennedy. I have not heard the testimony for the 
other agencies that come before you, and maybe they all say 
that we are all unique; you can not have any sequester for us. 
So I do not want to just repeat the argument that you hear all 
the time.
    But a few things. Number one, we can not control our 
workload. It is controlled by forces and factors that are 
beyond our direction.
    Number two, we have a tradition, as the chairman indicated, 
of being very prudent and very cautious. With us, if there were 
cutbacks, it would mean delayed processing time of cases, and 
it could mean compromises in security. With the courts in 
general, it is much more significant. As I indicated, we have 
7,900 probation officers, and if they are laid off, that means 
more people are in prison at a greater cost. So sequestration 
actually works backwards.
    Justice Breyer. Yeah, I agree. At some point, you cut back 
enough and keep going, you will discover that, unfortunately in 
the United States, there are crimes. And people are arrested, 
and they are supposed to be tried. And you need a judge, and 
you need a jury, and you need a courtroom. And the alternative 
is not to have the trial. If you don't have the trial, the 
person has to be released, and there we are. And so there is a 
minimum. And if you go toward that minimum and beyond it, you 
will deprive the country of the services that basically are 
needed to run the Government of the United States in this area.
    Mr. Bishop. Thank you.
    I applaud the Court's ability to find savings in its 
budget. Your total fiscal year 2016 request for salaries and 
expenses and buildings and grounds does represent a 
discretionary decrease of 1.1 percent from fiscal year 2015. It 
looks like this is a combination of the construction work being 
completed and savings from nonrecurring costs that are 
associated with implementation of your new financial system.
    Are there program increases you are delaying but you still 
feel would be beneficial at some point?
    With regard to implementation of your new financial system, 
I understand you are leveraging resources from the executive 
branch and the Department of Interior, specifically in the area 
of payroll and financial tracking. I understand that this move 
has reduced your reliance on contract employees, and it seems 
to be a great step toward efficiency. Do you find that you are 
getting the same level or an improved level of service? Would 
you recommend this to other agencies that are looking to reduce 
their costs?
    Justice Kennedy. Well, I am not enough of an expert to 
recommend it to other agencies, but our staff tells us it is 
working very, very well. They like it. They like it better than 
the outside contractors, and it is much cheaper. We are in 
partnership with an agency in the Department of Interior, and 
it--which has some similarities to us, and it has been--it has 
been the source of--it has generated most of the savings that 
we have had over the last few years.
    Mr. Bishop. Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Justice Kennedy. Part of the question, Congressman Bishop, 
we are not holding back on anything other than we do have this 
projection that we may need two more people because of the 
electronic filing that we are going to put in place in 2016.
    Mr. Bishop. I must remark, thank you very much, Mr. 
Chairman, that the answers from our witnesses are so succinct 
and to the point and concise.
    Mr. Crenshaw. Yeah. We don't--not only do we not get people 
requesting less money; we don't get people that speak clearly 
and concisely. So congratulations on both fronts.
    Now I would like to recognize Mr. Womack.
    Mr. Womack. I wish they were all this way.
    Justices, once again, it is a great honor to have you 
before us. We always look forward to hearing your commentary. 
And I am specifically interested in the IT piece of what is 
going on at the Supreme Court. These technology changes are 
happening so fast, so fast that we get further and further 
behind, I think, in trying to keep up with what technology 
ought to be able to do for us. And so I am interested in 
knowing just how well the IT upgrades are going.
    In listening to your testimony, Justice Kennedy, I got to 
thinking about our friends over at the VA and the DOD. They are 
having such a difficult time coming up with a platform that can 
serve a very special group of people to our country, our 
veterans, and being able to get these two systems to talk to 
one another--do you encounter any of that kind of conflict 
within the judicial realm in dealing with matters of 
information technology?
    Justice Kennedy. My guess is, and Justice Breyer is much 
more--is more well versed in this than I am, my guess is that, 
by comparison with many other agencies, our problems are 
predictable. We know there is going to be a trial with a 
plaintiff and a defendant. We know there is going to be an 
appeal with an appellant and an appellee. We know there may be 
a petition with a petitioner and a respondent. So the universe 
of problems is rather well-known and rather predictable. We do 
not have to project for uncertainties to the extent--nearly to 
the extent that other agencies do--and our system, the legal 
system, lends itself very well to the electronic technology.
    Justice Breyer. In my own mind, I classify three different 
things this technology can do.
    One that you heard about, and that is the budgeting, for 
example, and things that are technological, and there they have 
made advances in getting together with other agencies.
    The second, which is coming along and is slower to develop, 
is the ability to file briefs and opinions and other things 
electronically, which is helpful to the lawyers and it is 
helpful to the public because they can get it instantaneously. 
Now, that takes some time, but I think it is going along 
satisfactorily. And I think that most of the other court 
systems, we have this already in many forms. So it can plug 
into ours without too much trouble.
    The third, which is a little more open-ended--and I put 
more weight on it--is, can we use our technology to inform the 
public about what we are doing, particularly through our Web 
site. And I was talking to people from SCOTUS Blog. I mean, 
they do the same kind of thing, and that is not so easy to do, 
and we put in a Web site, but the question is, will they use 
it. Will people find out? Will schoolchildren find out? Will 
some teacher say, Hey, I want to know about this case. I know 
how to do it. I get on the Web, and I tell my class. Fabulous, 
if we can do that. I got some figures, and we don't--it is hard 
to calculate what it is.
    We had, according to this, we have in a year 271,530,850 
hits, but I wasn't sure what that meant. I mean, is that a lot 
or a little? It sounds like a lot to me. It said 75 million a 
month, but how do you measure it? And then we tried to get some 
comparative figures. It says, well, the White House is way up 
there, maybe with 1,000, whatever they are. Rank 1,000, 2,000, 
maybe. And you are about, you know, maybe 8,000 or 5,000. And 
we are about like 10,000. And the inspector general is like 2 
million or something. So it seemed that there is interest in 
getting this information.
    And how to develop that in a way that is useable over time 
and encourages the average American to find out, I think that 
is a big project. And I think it will require a lot of 
experiment back and fourth, and I think, as I said, you are in 
it as much as we are.
    Mr. Womack. No question.
    Justice Kennedy. I think also, Congressman, it is just 
anecdotal, it is only a tentative hypothesis. But I think 
electronic information has reduced the number of appeals that 
we have because lawyers who are trying a case can just push in 
Batson rule, who has presumption, and immediately comes up an 
answer, the latest cases. If there is a conflict, it comes up. 
I think that this is easier for lawyers and judges to find the 
law.
    Mr. Womack. With the time that I have remaining, and I know 
I am about out of time, at the risk of getting into a 
philosophical discussion, I have some very strong feelings 
about our capacity to deal with people given our current prison 
and local jail overcrowding. It goes all the way from our 
county levels to the Federal system, and it seems to me that 
our country continues to struggle with what to do and how to 
manage--you just can't build enough incarcerating facilities to 
deal with the population. It is such an expensive thing. I was 
at an event Saturday night in my own district and one of the 
county judges remarked to me that there is a chance that their 
jail is going to be shut down. The opportunities or the 
solutions to these problems seem to be fewer and fewer. So I 
kind of consider myself in the camp of we are going to have to 
start prioritizing how we deal with this.
    And the supervised piece that you spoke of, Justice 
Kennedy, about the probations and those kinds of programs is 
just a very invaluable tool to our country in helping manage 
just how many people we have behind bars at a given time. So I 
will just throw it out on the table and yield back my time.
    Justice Kennedy. I think, Mr. Chairman, that the 
corrections system is one of the most overlooked, misunderstood 
institutions and functions that we have in our entire 
government.
    In law school, I never heard about corrections. Lawyers are 
fascinated with the guilt/innocence/adjudication process, and 
once the adjudication process is over, we have no interest in 
corrections. Doctors know more about the correction system--and 
psychiatrists--than we do. Nobody looks at it.
    California, my home State, had 187,000 people in jail at a 
cost of over $30,000 a prisoner. Compare the amount that they 
gave to schoolchildren, it was about $3,500 a year. Now, it is 
a difference. This is 24-hour care, and so this is apples and 
oranges in a way.
    And this idea of total incarceration just is not working. 
And it is not humane. The Federal Government built--what do 
they call them--supermax prisons with isolation cells. 
Prisoners--we had a case come before our court a few weeks ago, 
the prisoner had been in an isolation cell, according to the 
attorney--I haven't checked it out--for 25 years. Solitary 
confinement literally drives men mad. Even Dr. Manette had his 
workbench and his cobbler's tools in Tower 105 North--and even 
he lost his mind. And we simply have to look at this system 
that we have.
    The Europeans have systems for difficult, recalcitrant 
prisoners in which they have them in a group of three or four. 
And they can stay together as a group of three or four, and 
they have human contact. And it seems to work much better, but 
we haven't given nearly enough study, nearly enough thought, 
nearly enough investigative resources to looking at our 
corrections system. In many respects, I think it is broken.
    Justice Breyer. Just one thing because I want to focus on 
one word that I think you said, which to my mind is the 
direction of an answer, and that is the word ``prioritize.'' 
Fine. Who will do the prioritizing? Do you think you can do it 
here? You proceed crime by crime. I mean, no matter what crime 
you chose, you will find individuals who committed it in a way 
that seems to deserve little and some maybe who deserve a lot. 
And you can't look at it individually.
    You want to have mandatory minimums? I have said publicly 
many times that I think that is a terrible idea. And I have 
given reasons, which I will spare you. If you want individual 
judges to do it--always, completely--you run the risk of non-
uniformity. And, therefore, we have set up rule commissions, 
sentencing commissions, and then mandatory minimums.
    So it a huge topic. And is it worth your time and effort or 
mine to try to work out ways of prioritizing? I think it is. I 
think it is a big problem for the country. And so I can't do 
anything more in the next minute or 30 seconds or 2 seconds, 
than just say I like the word ``prioritize.'' I hope you follow 
up it up, and I hope you do examine the variety of ways that 
there are of trying to prioritize and then work out one that is 
pretty good.
    Mr. Womack. I thank the gentlemen.
    Mr. Crenshaw. Thank you.
    Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.
    And, Justices, I join my colleagues, all of my colleagues 
in expressing our appreciation for the work that you do, for 
serving on the Court, and for your being here today. This is 
going into my fifth year serving in the House of 
Representatives. It is my first year on Appropriations. And, 
really, to have seen this on my calendar and to know this was 
coming up, I considered it, as Mr. Womack said, just an honor 
to be here and have you here with us today.
    I would like to visit the topic of the electronic case 
filing system. I would suppose, now, I am not familiar with it, 
but if we are going to electronic, that that would mean that at 
present it is a physical document that is being received by the 
Court? You can elaborate on that if you would like, but then 
was any of this commercially available? Or was this like 
written exclusively for the Supreme Court, the software that we 
will be pivoting to? Justice Kennedy?
    Justice Kennedy. I can not answer that. The lawyers have 
available to them commercial systems for filing their--for 
filing their briefs and so forth. So they are out there, and 
there is some competition. There is some competition there.
    So far as the court side, how does the court manage it, I 
am not sure that there were outside contractors or not.
    Justice Breyer. I just learned from Jeff Minear, he said we 
developed it all in-house.
    Mr. Rigell. Okay. All right. That is helpful.
    Justice Breyer, I noted and was intrigued and appreciative 
of your comments discussing your desire and really the Court's 
desire to get the work of the Court out to the American people 
and to engage them in this.
    Is there a designated effort, a continued effort, and to 
the extent that you are familiar with it--and, by the way, I 
actually thought it would be your staff--some of your staff 
would actually--and I see that they are here with us--but to 
see the two of you actually engaging the committee, I think, is 
laudable. I respect and appreciate that.
    You may not be dialed in on all the nuances of it, but the 
effort to revisit the Web site to keep it fresh and perhaps, to 
use the term that is so often being used now, to develop an 
app, you know, for the Supreme Court, and maybe there is one 
and I just need to be educated about it, but this idea of 
engaging the American public, I applaud you for this. It needs 
to be done because we only have a healthy republic if our 
fellow citizens are engaged and knowledgeable about what is 
taking place.
    So could you comment on that just a little bit? And you can 
run with it if you would like to. Either one of you.
    Justice Breyer. Well, I mean, it is my favorite topic.
    Mr. Rigell. Okay.
    Justice Breyer. But it is particularly hard for us. You at 
least can say, you know, we disagree about a lot of stuff in 
Congress, but there are elections to resolve it. We have to 
say, why should nine unelected people be making decisions that 
affect you in an important way? And, by the way, half the time 
we are divided; half the time we are unanimous. But when we are 
divided, say, 5/4, 20 percent of the time, somebody is wrong. 
So these decisions might not be right, and they affect you, and 
they are important. Why should you support an institution like 
that? We have answers, and so did James Madison. So did 
Alexander Hamilton. So did John Marshall. Okay? So there are 
answers, but people are busy, and will they take the time to 
listen? Okay.
    Annenberg Foundation has a whole series of films and 
teaching devices. Justice Kennedy gave a speech about this 
years ago which, in part, led to Justice O'Connor developing 
iCivics, and iCivics has millions of hits and is trying to do 
the same thing. They are trying to, in Boston, at this moment--
well, in one week--they will open Senator Kennedy's Institute. 
And what that is is a model of the Senate. And there are little 
handheld computers, which will make you the Senator, if you are 
a school kid, and will then give you problems, and you will 
learn how the Senate works. And maybe that will go out over the 
Internet to classrooms, and they need one for the House.
    Mr. Rigell. Outstanding.
    Justice Breyer. And so, gradually, I think, and am very 
enthusiastic, that it is possible to use the devices that we 
have now----
    Mr. Rigell. Oh, yes.
    Justice Breyer [continuing]. To teach. When Antonin Scalia 
and I have, as we have done, go to Texas and talk to a large 
number of school kids and they get interested and they see that 
we have differences of opinion that are not personal, and they 
see that the agreement is more important than the differences, 
fabulous.
    Mr. Rigell. Yes.
    Justice Breyer. And so there you see the enthusiasm in my 
voice, but----
    Mr. Rigell. I love seeing the passion.
    Justice Breyer. I think it is a great and necessary task.
    Justice Kennedy. One of the things we found, Congressman, 
is that the information revolution has put law professors back 
into the fore. It used to be that we relied on law reviews to 
comment on cases. And the law review would take about a year 
for the law review article to come out.
    But now we have commentary within 24, 48, 72 hours of a 
Supreme Court case by experts in cybersecurity law, in criminal 
law, in constitutional law. And these are available, first of 
all, to the legal profession and the academy, but, second, to 
people that are generally interested. There are blogs on the 
Supreme Court. And there are, as I indicated, blogs on 
different subjects. They are quite detailed. They are quite 
interesting. My law clerks read them a lot. I, frankly, don't 
read them, but the availability of information, and, as Justice 
Breyer indicated, the interest of the citizen and the ability 
of the citizen to get it is really increasing remarkable 
because of the information revolution.
    Mr. Rigell. Yes. Thank you both. Mr. Chairman.
    Mr. Crenshaw. Well, thank you.
    You know, when you talked about educating the public, the 
question always comes up, people suggest that maybe the Court 
should televise oral arguments. That people could see firsthand 
what goes on. And I know the Court has historically rejected 
that. I think it was Justice Sotomayor, before she went on the 
Bench, thought it would be a good idea to televise oral 
arguments. And then, once she was on the Bench, she changed her 
mind and thinks it is not a good idea.
    So I just wondered, do you sense any change? Do you think 
there will be a day when oral arguments will be on the 
television? Do you think that is good or that is not good in 
the context of educating the folks? Could you all comment on 
that.
    Justice Kennedy. The question, do I think there will be the 
day, it sounds as if we are more or less behind the times.
    Mr. Crenshaw. No. It is just a matter of, you know, 
history. I mean, today you would probably reject that.
    Justice Kennedy. If you had English-style debating, debate 
and you were handed the topic and you had to be either pro or 
con, you could make a lot of good arguments for television in 
the courtroom. Number one, it teaches. We teach. We teach what 
the Constitution is. We teach what rights are. We teach what 
responsibilities are. We are teachers. So why don't we go on 
the television?
    And it would be very good for lawyers who are preparing 
to--have not been before us before, who want to see the dynamic 
of an argument.
    And it is open. The public could see that we spend a lot of 
time on patent cases and railroad reorganization cases and so 
forth and so that we have a technical commitment. And they 
could see, we hope, an argument that is rational and 
respectful.
    When we are in disagreement, our institution--our 
institutional tradition--is not to make our colleagues look 
bad. It is to make the institution look good. And part of that 
is the way we conduct oral arguments. We are concerned that the 
presence of a TV camera, the knowledge that we are going to be 
on TV, would affect the way that we behave. And it is an 
insidious dynamic for me to think that one of my colleagues has 
asked a question just so that he or she could look good on TV. 
I don't want that dynamic. We would prefer the dynamic where we 
have a discussion in which we are listening to each other, in 
which we are listening to counsel, and we think the television 
would detract from that.
    So you could make good arguments either way, but we--I 
think I can speak for most of my colleagues--do not think 
television should be in the courtroom. We have audio available, 
and the transcripts are available.
    The press does a very good job of covering us. The press 
has the advantage. They know 3, 4, 6 months in advance what the 
issues are. They can prepare the background. They can have 
pictures of the litigants and so forth. And then they are all 
ready to write the story depending on what we write. So we have 
good press coverage as well, but I think the cameras in the 
courtroom are not a good idea.
    Mr. Crenshaw. Justice Breyer?
    Justice Breyer. No. He states the problem. But, by the way, 
the oral argument is like 2 percent. I mean, most of what we 
take in and most of the decisionmaking is on the basis of 
written briefs. Now, the first thing that if the public saw 
that on television, they would think that was the whole story. 
It is not. It is a tiny part.
    Second thing they would think--and because it is true of 
human nature and it is a good thing about human nature--we 
relate to people we see. We relate to them more than a word on 
paper or a statistic. That is nice. It is good. But in the two 
people who are having their case in the Court, there isn't like 
one is a bad one; one is a good one. And we are not deciding, 
really, on the basis for them. We are deciding a rule of law 
that applies to 300 million people who aren't in the courtroom. 
That is invisible on television.
    But then when you come down to it, I am fairly, I guess, 
impervious to making myself look ridiculous to getting an 
answer to a question that I can best focus by giving some 
ridiculous example. And he knows that I do, he is saying. All 
right, and they do, and the reporters are used to it, and they 
say, Oh, God, but nonetheless, I will do it.
    Now, my friends in the press, some of them tell me, You see 
if you do that the first time that somebody takes that 
ridiculous thing out of context and puts it on the evening 
news, particularly someone who is not one of our regulars and 
doesn't really understand what is going on.
    Now, all of that kind of thing is the kind of thing, 
despite the good arguments the other way, that make us cautious 
and that make us conservative a small ``c.'' We are trustees 
for an institution that had a long existence before us, and we 
sincerely hope will have a long existence after. And the worst 
thing that any of us feels he or she could do is to hurt that 
institution, and that makes us awfully cautious.
    Now, all that is the psychology at play. And you say, will 
it eventually happen? Yeah. Sure. Because a generation will 
grow up that just, unlike me and unlike him, doesn't even know 
what it was like before things like that took place, but I 
think that is the best explanation that is in my mind as we 
both----
    Mr. Crenshaw. Well, thank you for that. And I am not one 
who has called for having TVs in the courtroom, but I know 
somebody wanted to ask that question. So I thought I would just 
ask it.
    But let me ask you about the Web site just real quick. You 
mentioned all those hits that you are getting, and I know when 
you had the healthcare arguments, I understand there was just a 
whole lot of interest in that. Did the Web site hold up pretty 
well? Did it ever crash like some of these other Web sites from 
time to time?
    Justice Breyer. Just as we have occasional problems like 
anyone does, but they are not that many, and they are few and 
far between.
    Mr. Crenshaw. Thank you.
    Mr. Bishop.
    Mr. Bishop. Thank you very much. Thank you, Mr. Chairman, 
for asking the question that I wanted to ask about transparency 
in the Court and televising the proceedings, and I appreciate 
your answer very much.
    As in past years, our ranking member Mr. Serrano and I 
continue to be interested in the increase in the number of 
minorities that are selected for Supreme Court clerkships. 
Those are prized positions for youngsters coming out of law 
school. I know that there has been an initiative in place at 
the Federal judiciary to help recruit minorities into clerkship 
positions. Do you think that those efforts are beginning to 
bear fruit at the district and appellate levels? And are there 
similar efforts under way at the Supreme Court?
    Justice Kennedy. I think they are beginning to bear fruit, 
and we are conscious of it. The district courts and the courts 
of appeals are a little bit more open in part because they are 
around the country and they take from local schools. Some of us 
tend to take from the Ivy League schools. And not that they are 
without their pool of----
    Mr. Bishop. Minorities.
    Justice Kennedy [continuing]. Of minority applicants, but 
we are conscious of it. And it is important, and it is a valid, 
valid question.
    Justice Breyer. When I started on the Court, I don't know 
the figures in lower courts, but, I mean, in my own case, it 
might have started out that I had to look, you know, especially 
hard. I don't now. I mean, it is just--it is not a problem. I 
don't think it is--I mean, at least in my case. Maybe that has 
been luck. I don't know, but it seems to me if it is at all--if 
I am at all typical, the problem has diminished significantly, 
really significantly. And I could try to do some counting, but 
I can't in my head. You know, I think of the individual people.
    Justice Kennedy. In 2014, we had 15 percent minority clerks 
on the Supreme Court.
    Mr. Bishop. Thank you.
    Let me move to another subject area. I know that, at 
previous hearings, we have discussed the possibility of 
applying the Judicial Conferences Code of Judicial Conduct to 
the Supreme Court Justices to make recusal decisions by the 
Justices more transparent for the public.
    Currently the Code of Judicial Conduct applies to all of 
the Federal judges but is only advisory for Supreme Court 
Justices.
    Do you have any thoughts on the proposals for changes to 
that since we last discussed the issue, I think last year? Do 
you believe that the Code of Judicial Conduct should apply to 
Supreme Court Justices and that recusals should be more 
transparent?
    Justice Kennedy. You prompt me to go back and do some 
research, but my first response to your question is that 
recusals are largely governed by statute and by principles that 
are not necessarily part of the Code of Conduct.
    Now, there is an argument that the reason for recusals 
should be more apparent. I am not sure about that. In the rare 
cases when I recuse, I never tell my colleagues, Oh, I am 
recusing because my son works for this company, and it is a 
very important case for my son. Well, why should I say that? 
That is almost like lobbying. So, in my view, the reason for 
recusal should never be discussed. It is obvious sometimes when 
company A is before the Court and our financial disclosure 
indicates that a Judge owns a stock in company A, and so that 
is fairly obvious.
    Justice Breyer. Add one thing--two things.
    One is, we all have or access to the volumes of the 
Judicial Code of Ethics. And having been there for some time 
now, 20 years, I would say I have not seen an instance of 
recusal by me or anybody else where the Judge doesn't make sure 
it is consistent with the--you know, the problem is consistent 
with the Judicial Code of Ethics. So it did say--well, it is 
advisory as opposed to compulsory is words. It doesn't really 
show--make a difference in practice. Now, well, why not? What 
is it I am nervous about? Why not just say, Hey? I am nervous 
about this: The Supreme Court is different from a court of 
appeals and a district court, and that is true, by the way, 
with television, too, interestingly enough. Why is it different 
here? Because in the court of appeals, if I recuse myself--or 
in the district court--they can get another judge. Judges are 
fungible. They are not in the Supreme Court. You can't get a 
substitute. And I wouldn't say there is any lawyer in the 
country who would do this, but it is logically conceivable that 
a lawyer might sometime think of the idea of bringing up an 
issue in order to have a panel that is more favorable. I know 
no such lawyer. But it is conceivable. And, therefore, I think 
we have to be careful because, unlike those in the lower 
courts, I can't think, Well, in case of doubt, just recuse 
yourself if it is a close case. No. I have a duty to sit as 
well as a duty not to sit.
    And, moreover, I have a lot on my schedule. I have a lot to 
do, as do you, as do others, and trying to make this into some 
kind of big issue I would prefer not because, I mean, I would 
think no is the answer. I have to make those decisions. I will 
make them as best I can. I will do it according to the code of 
ethics. And, so far, I have been able to that, and I don't want 
it to become an issue. And all that leads me to say, No, I 
don't want to have to give my answers if I don't want to, and I 
have to--it is a personal decision. I will follow the code and 
that, I think, is the best way to run this institution.
    Mr. Bishop. Thank you.
    Mr. Crenshaw. Thank you.
    Mr. Womack.
    Mr. Womack. Only one more question, looking for insight 
here.
    To the credit of the Justices, they get out in our country 
and they speak quite frequently to different organizations. I 
know Justice Scalia has been in my district once already this 
year and I think he is coming back in a month for another 
presentation as a guest lecturer.
    In many cases, you gentlemen are talking to law students 
and people that aspire someday maybe to sit where you sit. What 
trends are you seeing? In the medical community, I understand 
that we are having trouble finding private care physicians, 
just the general type of family practice physician. Most 
medical students now are specializing, because that is where a 
lot of the money is. But what trends are you seeing in our law 
schools with regard to the new lawyer as it were? Is the legal 
community blessed with a pretty good crop of young talented 
minds, or are there any trends there that you can share with me 
that would raise any concerns?
    Justice Kennedy. I am not sure. My own background was 
private practice in a small town, which I found immensely 
rewarding. Now the paradigm for most law students is they think 
of their career as a huge firm where they specialize, and the 
idea of counseling and meeting with clients and taking 
individual cases one by one is no longer the paradigm that they 
look forward to.
    I sense a change in this. The law schools are concerned 
about costs. There is a big argument whether there should be 3 
years of law school; maybe cut it back to 2 years, which I 
would not applaud. I think that would be a bad idea. But there 
is a real cost factor. And I try to tell students that law can 
be immensely rewarding as an ethical undertaking, not just as a 
way to make a living. And I think these young students are 
beginning to be conscious of that. I hope.
    Mr. Womack. Any insights, Justice Breyer?
    Justice Breyer. I don't have a lot of insight into that. 
You have to ask the dean of the law school.
    Judging from my law clerks, there is no deterioration of 
quality. I mean, they are great, and I hear the same complaints 
from the deans that Justice Kennedy does. Money. Suddenly, 
maybe in certain areas, they price themselves out of the 
market. And maybe that means that you have fewer people who are 
applying, and overall things like that adjust over time.
    Specialization, major problem. Major. It is so complicated.
    When my dad went to law school, he studied contracts, 
torts, property. You know, the five traditional subjects, and 
they may have added tax and con law by the time I got there. 
And now they have everything under the sun, and that is because 
there is a demand for everything under the sun. So there we 
are. How do we do that? Luckily, I do not have the difficult 
job of being a dean of a law school. I have probably what is an 
easier job.
    Justice Kennedy. One of the things that is happening in law 
schools is they do have almost custom-made programs, so that 
you can take a degree in law and astronomy, law and medicine, 
law and the press, law and music, law and the performing arts. 
And this is good. This enables other disciplines to influence 
what is being taught in the law school, but it is a complicated 
world out there.
    Justice Breyer. I mean, I say personally, because having 
now grandchildren, I mean, the cost of this stuff is amazing. 
And what are we going do about that? I don't know. I don't 
know. It is a problem.
    Mr. Womack. Finally, Mr. Chairman, I think I say this every 
year these two gentleman are before us, but having a wife that 
has been a trial court assistant at the state level for 30, 
gosh, I don't know, 34, 35 years now, I have a great amount of 
respect for the enterprise that these gentlemen represent.
    And once again it is a great honor to have you back before 
us here today.
    And I yield back.
    Mr. Crenshaw. Thank you.
    Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.
    And my final question, I am going to take us back just a 
little bit. Justice Kennedy, I was intrigued by your remarks 
early on, and you referenced, I am not sure if it is an 
organization or a process like a dinner that has really had an 
impact perhaps on the staff or the Court itself or those who 
are around the Court, and I don't know anything about it.
    But I do know that where we are as a Nation that in some 
ways we are off the track, and as much as caustic tone often 
has overtaken the public square, and it makes it difficult to 
discern and identify the facts, and then to come to some common 
solutions for some of these challenges that we face as a 
country.
    You seemed excited about it, and I would like to hear more 
about it. Civility is not weakness. And so I would like to hear 
more about it because you are really bullish on it.
    Justice Kennedy. The Inns of Court were the specific 
subject that the chairman had mentioned, and these exist in 
most major cities and small towns around the country, and they 
consist of a group of lawyers, judges, law students, law 
professors. They get together and they put on programs, how to 
cross-examine an expert, a medical expert, how to give a 
closing argument in a criminal case, and so forth; how to make 
an argument to a court of appeals.
    And then the judges and the attorneys and the law 
professors and the students sit down and have dinner together, 
so the judge isn't some remote person. He is telling the 
attorneys how they can do a better job. The attorneys are 
telling the judge how the judge can do a better job
    Mr. Rigell. Okay.
    Justice Kennedy. And it has been a remarkable influence for 
more civility in our profession.
    Mr. Rigell. Is this a relatively recent development or has 
it been around decades and decades?
    Justice Kennedy. I would say 30 years. I would say for 30 
years. When Chief Justice Burger mentioned it I thought, well, 
it is a good idea, a little bit visionary. But it took off like 
a rocket. He was right.
    But this whole idea of civility. We are judged around the 
world as the guardians and the trustees of freedom, and the 
verdict of freedom is still out. People are looking at us. They 
are looking at our democracy. They are looking at our civic 
discourse. They are looking at our commitment to rationality 
and to progress. And I am not sure they always see the right 
thing.
    Mr. Rigell. I share that.
    Justice Kennedy. The Athenians, ancient Athens, Periclean 
Athens, took an oath, Athenian citizens took an oath. And the 
oath was that they would participate in civic affairs in a 
rational way so that Athens will be more beautiful, more 
splendid, and more free for our children than it is for us. And 
Athens failed because they failed to obey that oath.
    Mr. Rigell. It is instructive.
    Justice Breyer. One, I have been there for a period of 20 
years. I have probably attended an awful lot of Conferences of 
the Court, and we have had some pretty controversial cases, and 
I will tell the law students, whoever listens, I would say in 
that time, I have never once, never once heard a voice raised 
in anger in that Conference. I have never once heard any judge 
in that Conference say something mean or denigrating of 
somebody else. It is highly professional.
    I say to law student, ``We get on well personally, and we 
disagree about things. So you want to win your case, don't get 
emotional.''
    ``Oh, why not?''
    ``Why not? You will lose it, you know.''
    People say, ``Oh, how emotional you are.'' But that is the 
law. That is lawyers. And maybe it actually works better when 
you treat people as individuals who have different ideas.
    Okay. So that is the general. Then the question is, how do 
you get that across? How do you get that across? Well, if you 
are being very practical, I have already said, we have 
Annenberg trying to do that through storage, we have iCivics, 
we have the Carnegie Institute for Education, we have the 
Kennedy Institute, we have probably dozens of others. So you 
get behind them.
    And what can you do with those films? Get Ken Burns. Say, 
Ken Burns, why don't we have a set of 10 films, and the first 
is the story of the Cherokee Indians where, contrary to law, 
they are driven into Georgia, out of Georgia and into Oklahoma, 
the President of the United States doing that despite the 
Supreme Court.
    Let's have General Eisenhower, President of the United 
States at that moment, taking those 1,000 paratroopers from 
Fort Bragg and flying them into Little Rock so those black 
children can go into that white school.
    Let's go through a few cases that illustrate very 
dramatically and visually what it means to live in a society of 
310 million different people who help stick together because 
they believe in a rule of law. And a rule of law means the 
opposite of the arbitrary. And you are part of that just as 
much as we, all right, and so are they. You say part, yes, all 
right.
    So there is a lot that can be said, and there is a lot that 
can be done, and I could not agree with you more on the 
importance of doing it.
    Mr. Rigell. I thank you both.
    My time has expired.
    Justice Kennedy. We tell people----
    Mr. Rigell. Yes.
    Justice Kennedy [continuing]. Congressman, when Justice 
Breyer and my colleagues go to events with students, we say, 
``Look, the Constitution doesn't belong to a bunch of judges 
and lawyers and law professors. It is yours. It is yours.'' 
Some of the great Presidents weren't lawyers. They were great 
guardians of the Constitution.
    And institutions have to remember this. Institutions have 
their own visibility, their own reputation, their own duty to 
inspire others to believe in the system of democracy, these 
three branches of government we have. And as my remarks 
indicated earlier, when we have disagreements in difficult 
cases our mission is to make the court look good, not to make 
our colleagues look bad.
    Mr. Rigell. Thank you very much. I do appreciate the 
comments.
    And, Mr. Chairman, I yield back.
    Mr. Crenshaw. It reminds me of what Benjamin Franklin 
supposedly said after the meetings were taking place as our 
country was getting started. And I understand a lady asked, 
``Sir, what have you given us?'' And Benjamin Franklin said, 
``I have given you a republic, if you can keep it.'' And here 
we are 200 years later.
    Let me ask a quick question. I have read, Justice Kennedy, 
from time to time, and I don't know if it is still the case, 
but you had expressed some concern about the increasingly 
politically charged issues that are now being heard and decided 
by the Supreme Court. Can you explain what that concern is? And 
does Justice Breyer share that concern?
    Justice Kennedy. It is not novel or new for Justices to be 
concerned that they are making so many decisions that affect a 
democracy. And we think a responsible, efficient, responsive 
legislative and executive branch in the political system will 
alleviate some of that pressure.
    We routinely decide cases involving federal statutes, and 
we say, ``Well, if this is wrong, the Congress will fix it.'' 
But then we hear that Congress can't pass a bill one way or the 
other, that there is gridlock.
    And some people say, ``Well, that should affect the way we 
interpret the statutes.'' That seems to me a wrong proposition. 
We have to assume that we have three fully functioning branches 
of the government that are committed to proceed in good faith 
and with good will toward one another to resolve the problems 
of this Republic.
    Mr. Crenshaw. Kind of the same thing.
    Mr. Bishop, you have another question.
    Mr. Bishop. Thank you very much, Mr. Chairman. I will be 
brief.
    I notice that the Court's caseload is much lower compared 
to previous years. The current range of cases is literally half 
of what it was 10 years ago. Does the Court have a target 
number of cases that you target each year?
    And let me just go back to another subject. You talked 
about the new crop of young lawyers coming out of law school. I 
went to law school because I saw the law as an effective way of 
promoting social change. I came out of law school in 1971, and 
I was a part of the civil rights movement in interpreting the 
Civil Rights Act of 1964. And so I am very sensitive to the way 
that the law can be used to perfect social change and has been 
in the way the Constitution has evolved.
    But there are reports from judges all across the country 
that the recession has not only caused a spike in the number of 
pro se litigants in civil cases, but has negatively affected 
the parties themselves and the courts.
    Do you believe that our justice system loses its 
effectiveness when citizens are unable to afford legal counsel 
in cases with stakes involving family, shelter, and livelihood? 
If so, can you perhaps give us some thoughts of how the problem 
can be remedied with more resources being allocated to pro bono 
or to legal aid services?
    My major piece of litigation of civil rights was on behalf 
of 6,000 African American inmates in the Georgia State Prison 
who were in a desegregated system occupying the same space as 
4,000 white inmates, and it was certified as a Rule 23 class 
action case. Judge Alaimo decided it in the Southern District 
of Georgia back in the 1970s, which resulted in a total change 
of the criminal justice housing system and the system as a 
whole, relieving overcrowding.
    It was brought pro se, and I happened to be a cooperating 
attorney associated with the NAACP Legal Defense Fund. I 
handled that case, and the NAACP Legal Defense Fund, as a pro 
bono firm, backed it up. So it was at no charge to the 
litigants. But there are not that many of those kinds of 
opportunities in there with the economic recession and with pro 
se litigants, particularly on civil cases.
    How do we deal with that in terms of making sure that our 
justice system really is not turning on the capacity and the 
financial resources of the litigants?
    Justice Kennedy. As to just number of cases, the first part 
of your question, is there an optimal amount that we strive 
for. We take the cases where we think our guidance is needed. 
As you know, we wait for courts of appeals or state supreme 
courts to be in conflict. And optimally we probably should have 
about 100 cases a year. When I first came, we had something, 
160, 180. It was just far too many.
    The cases we do get now, I think anecdotally, I haven't 
seen studies on it, are somewhat more difficult. Patent cases, 
we had a case, I think it was two terms ago, on the 
patentability of DNA. I read all summer long about it to try to 
understand it. It ended up Justice Thomas wrote the opinion, a 
very good opinion.
    So I think our cases are more technical. And the 78 cases 
that we had last year exhausted us. But optimally we could 
handle, I think, about 100. But we wait, because we wait until 
our guidance is needed.
    On the broader question of representation in civil cases, I 
saw some numbers in which the number of unrepresented parties 
in civil litigation is actually increasing because of some of 
the factors you mentioned. The Congress has enacted bankruptcy 
laws which are, I think, well suited to a modern society. The 
bankruptcy reform statutes are good. And so I don't think there 
is any real problem in the bankruptcy area. Our bankruptcy 
judges are just very, very good. So that system, I think, is 
working.
    But in the area of standard civil litigation, I think there 
is a problem with unrepresented parties, and law schools can 
and probably should do more, and they should focus again on the 
small cases, not big firm stuff.
    Justice Breyer. I had a couple of things.
    On the number of cases, there is a big decline beginning 
really in the late 1980s. Now, the way we select cases, almost, 
almost entirely, almost, not completely, but almost entirely is 
you look to see if the lower courts have come to different 
conclusions on the same question of federal law. Now, they do 
or they don't. And if they do, we will probably hear it. And if 
they are not, we probably won't.
    Now, there are other things, holding a law 
unconstitutional, et cetera, but that is the main thing. So I 
have not noticed any tendency whatsoever to try not to take 
cases. Rather, Sandra used to sit there, O'Connor, and say, 
``We have got to take cases.'' Now he does it, ``Can't we take 
some more cases?''
    So the conflicts are less. Now, why? And my own 
explanation, which has no particular validity, is that you have 
seen in the 1970s and 1980s, what you saw, from the 1960s when 
I was a law clerk, 1960s, 1970s, 1980s, on, tremendous civil 
rights laws, statutes of all kinds, Title VII, a civil rights 
revolution, a revolution beyond that in the way that the first 
10 Amendments apply to the States.
    Well, for a lawyer every word in a statute and every new 
major case is a subject of new argument. You pass statutes with 
50,000 words, you will get 50,000 cases.
    Now, suddenly there has been in Congress a kind of 
increased legislation and major statutes, and those statutes 
are long and they have many words. So we can predict whether I 
am right or not, because if I am right--there is a lag, you see 
there is a lag because they all have to--5 years, 7 years from 
now we will see the number of cases in the Supreme Court 
growing because those words will be capable of different 
definitions and judges will have reached different conclusions. 
Now, I don't know if that is right. It is a theory, okay.
    On the representation, I did look at some numbers a few 
years ago. We are way behind compared, say, to England or to 
France. And part of it is in England there is an appropriation, 
and I don't know where it is on your list, and that is a 
problem. And in England, by the way, where they had a very good 
legal representation system in civil matters, they are running 
under budget pressure, and the lawyers who are in this field 
are all worried that there are cuts, and there are.
    In France, they have a different idea, which is sort of 
interesting. The bar itself provides a lot more free 
representation than here, but there is a price to be paid. The 
price to be paid is that the individual lawyers and the bar 
will be ruthless in segregating the sheep from the goats.
    So if you go to a lawyer you will get your free 
representation if you can't afford it at the cost of having him 
and/or her and his colleagues, you see, going through your case 
and making a ruthless decision about whether they think they 
really can win it. But the result of that is the people they 
think they have a good shot, they will get the free 
representation, much more even than in England.
    Mr. Bishop. Thank you.
    Mr. Crenshaw. Well, thank you.
    And I think it is important to recognize that the 
significance of the work that you all do is certainly not 
proportionate to the budget that you submit every year. But we 
do thank you for the work that you do to make sure that you are 
spending the money wisely.
    And thank you for being here. I think we all appreciate 
your wisdom and your insight. I know I always learn something.
    And on a personal note, I want to thank you publicly. A 
couple of years ago, when we had concluded most of the 
business, I was troubled by a quote that I had read in law 
school that I didn't know who the author of the statement. It 
always struck me as interesting because it went like this: 
Versatility of circumstance often mocks a natural desire for 
definitiveness.
    And I asked, since we didn't have anything else to do, I 
asked you two gentlemen who said that and where, and I think 
Justice Breyer said, ``Why don't you google it?'' And I said, 
``I already did.''
    But when you think about that statement, I think Bob Dylan 
might have said it differently. He wrote a song called, 
``Things Have Changed,'' and I can understand that a little 
better.
    But the good news is that because of the cooperation of you 
two gentlemen, I now know that Felix Frankfurter said that, and 
he said in the case called Wiener v. U.S. or U.S. v. Wiener. 
That was interesting because I think President Eisenhower was 
the President and he wasn't supposed to do something, but he 
did it anyway, and therefore Felix Frankfurter said that 
versatility of circumstance often mocks a natural desire. So he 
did what he wasn't supposed to do, and Justice Frankfurter said 
it very well, things have changed.
    So I always learn something. We thank you so much. It is an 
honor for us to have you before us. Thank you for the work that 
you do for this country. And this meeting is now adjourned.

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                                         Wednesday, March 25, 2015.

                             THE JUDICIARY

                               WITNESSES

HON. JULIA S. GIBBONS, CHAIR, COMMITTEE ON THE BUDGET, JUDICIAL 
    CONFERENCE OF THE UNITED STATES
HON. JAMES C. DUFF, DIRECTOR, ADMINISTRATIVE OFFICE OF THE UNITED 
    STATES COURTS

                 Chairman Crenshaw's Opening Statement

    Mr. Crenshaw. The hearing will come to order.
    And, first, let me welcome some judges and managers from 
the court units around the country, sitting out back there 
somewhere. You are here, and we appreciate you all being here.
    And I will announce to our witnesses today that I have 
spent some time in Jacksonville, Florida, with some of your 
colleagues on the Federal court, so they paved the way for your 
testimony today, and we look forward to that.
    But let me just say good morning to Judge Gibbons, good 
morning to Director Duff, and thank you for appearing before 
the subcommittee today.
    Mr. Serrano. Mr. Chairman?
    Mr. Crenshaw. Go ahead.
    Mr. Serrano. I also want to join you in welcoming the 
judges, because I understand there is one here from the Eastern 
District of New York, Judge Italiano. Incredible name for a 
Puerto Rican, ``Italiano.'' But I just wanted to say hello.
    Mr. Crenshaw. Great. Great.
    Judge Gibbons, this is the 11th time that you have appeared 
before this subcommittee. That is an impressive batting 
average, and we appreciate your service and willingness to meet 
with us.
    Now, Director Duff, welcome back to you. This is your 
second stint as Director of the Administrative Office of the 
U.S. Courts, but this is your first appearance before the 
subcommittee since your appointment in January.
    So we are glad you are both here, and we thank you for 
being here.
    The work of the judiciary is critical to the preservation 
of our Nation's fabric, where each of the three branches have 
different responsibilities and checks on each other. Americans 
depend on an open, accessible, well-functioning Federal court 
system to resolve criminal, civil, and bankruptcy disputes. 
Now, the courts must have the trust and respect of the citizens 
of our country; that is the way the Founding Fathers set it up.
    In addition to the judiciary's other work, you have 
probation and pretrial officers. They are performing critical 
public safety missions by supervising more than 200,000 
offenders that are living in our communities and defendants as 
well.
    As you know, the Federal Government continues to operate in 
an environment of limited resources. However, we will try to 
ensure you have the resources needed to accomplish your 
important mission. Over the past few years, you and your staff 
have worked closely with us to make sure that the judiciary 
receives increases to address only your most critical needs. 
And I thank you for your efforts to reduce costs during these 
challenging financial times.
    The judiciary's fiscal year 2016 budget request proposes a 
discretionary spending increase of $264 million. That is a 
little less than 4 percent. And I can tell you, that is a whole 
lot less than the IRS when they ask for 18 percent or GSA when 
they ask for 12 percent. So we appreciate your stewardship.
    But the budget resolution reported by the House Budget 
Committee just last week only contemplates about a one-quarter-
of-1-percent increase in total discretionary spending. But that 
is the job of the Appropriations Committee, to take the money 
we have and make the right choices, right priorities. So we 
want to work with you, want to work with the Ranking Member 
Serrano to make sure that we can identify any savings and then 
still provide you with the resources you need to fulfill your 
constitutional duties.
    So I appreciate the important work that you do. Glad you 
are here today.
    And now I would like to recognize my good friend, the 
ranking member, Mr. Serrano, for any comments he might have.

               Ranking Member Serrano's Opening Statement

    Mr. Serrano. Thank you, Mr. Chairman.
    I would like to join you in welcoming Judge Gibbons and 
Director Duff back before the subcommittee. As you said, Judge 
Gibbons may hold the record for appearing before us or any 
subcommittee in Congress. And while Director Duff was away for 
a while, he couldn't stay away. We just drew him back, and here 
he is again.
    So welcome back to both of you.
    The Federal judiciary as a third branch is an integral part 
of our constitutional democracy, but it cannot properly 
function without the support of this committee. We have all 
seen the problems that sequestration caused for our Federal 
court system, our pretrial and post-release probationary 
services, and for our Federal defenders, among others.
    Thankfully, Members of both sides of the aisle have 
realized this and have worked to restore the services and 
personnel lost by the Federal judiciary due to sequestration. 
Last year's appropriations bill, for instance, included an 
increase of $182 million over the prior year's appropriations. 
And your budget request for fiscal year 2016 continues to work 
to rebuild and invest in the future of our court system.
    However, as we consider this request, we are confronted 
with the same problem which caused such difficulties for the 
Federal judiciary just a few years ago: sequestration. It is in 
the best interest of the Federal court system, the American 
public, and our constitutional protections that we avoid 
repeating the damaging impact it had.
    As you know, I am also interested in ensuring that our 
Federal defenders have sufficient funding to perform their 
important constitutional role that has been assigned to them. 
Most defendants in Federal criminal trials depend upon the 
assistance of Federal defenders, but the FD offices were highly 
impacted by the last round of sequestration, with numerous days 
off and staffing cuts. I understand that the Federal judiciary 
has been in the process of reviewing the appropriate funding 
levels for our defenders, and I hope that we will see the 
results of that analysis soon.
    I am a strong believer in the procedural guarantees that 
our Constitution provides: access to a fair and speedy trial 
and the availability of counsel in criminal cases for those 
unable to afford it, to mention just two. But beyond that, the 
Federal judiciary plays an important role in pretrial services, 
in determining sentencing guidelines, and in reducing 
recidivism through probationary services. It is up to this 
committee to ensure these promises and protections, 
constitutional and statutory, have meaning.
    Once again, we welcome you, and I look forward to your 
testimony.
    And let me just ask you to consider this. Since I played a 
judge on ``Law and Order'' once, am I a member of the bar now 
or--okay. Don't answer.
    Mr. Crenshaw. You are not eligible for the pension. I know 
that.
    Mr. Serrano. I am not sure I am eligible for this pension 
either.
    Thank you, Mr. Chair.
    Mr. Crenshaw. Thank you, Mr. Serrano.
    And now, Judge Gibbons, we will turn to you for your 
opening statement. If you could keep it in the range of 5 
minutes, that will give us some time for questions. The floor 
is yours.

                    Judge Gibbons' Opening Statement

    Judge Gibbons. Chairman Crenshaw, Representative Serrano, 
Representative Bishop, in view of the scheduled votes and 
limited time availability today, I think I can do better than 5 
minutes. I am going to dispense with a conventional opening 
statement and give you more of a laundry list of priorities for 
2016 and the high points of ongoing cost-containment efforts.
    Thank you for recognizing the group of court executives 
here today for a meeting of the Budget and Finance Advisory 
Council. They make budget recommendations to the Director, and 
back home they do a great job of running the courts smoothly.
    I also want to say a big thank you for the 2.8 percent 
increase we received for 2015, one that is enabling us to put 
the effects of sequestration behind us.
    For 2016, we ask for a 3.9 percent increase. A 3.2 percent 
increase is required to maintain current services. The rest of 
the request is for limited, targeted enhancements that will 
help us contain costs down the road or meet other important 
judiciary and public goals.
    We strongly endorse GSA's requests for $181.5 million to 
build a new courthouse in Nashville, the judiciary's top space 
priority, and $20 million for the Capital Security Program.
    Among our ongoing cost-containment efforts are space 
reduction that will reduce our space footprint 3 percent by the 
end of 2018, our progress in promoting shared administrative 
services in the courts, and certain ongoing IT efforts.
    Our requested enhancements include $19 million to pursue 
national hosting of IT systems that should save local courts 
money. Enhancements that serve the public good include a $6-
per-hour rate increase for panel attorneys representing 
indigent defendants and $15 million to enhance public safety by 
training more probation officers in evidence-based practices.
    In conclusion, as always, I emphasize to the Committee the 
unique constitutional role of the courts in our free society 
and that all of our duties are derived from the Constitution 
and statute.
    I ask that you make part of the record the statements of 
other judiciary entities on whose behalf we submit budget 
requests.
    I look forward to answering your questions.
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    Mr. Crenshaw. Thank you very much.
    Director Duff, the floor is yours.

                   Director Duff's Opening Statement

    Mr. Duff. Thank you, Chairman Crenshaw, Representative 
Serrano, Congressman Bishop. I, too, will provide very brief 
opening remarks in light of the time constraints. Our extended 
remarks we would submit for the record, please.
    In January, I did return to be Director of the 
Administrative Office. I want to publicly thank Chief Justice 
Roberts for the privilege of working with our Federal judiciary 
again and the privilege of working with you again on the 
problems and the challenges that confront the judiciary.
    The Administrative Office of the U.S. Courts was created by 
Congress in 1939, and it was created to assist the Federal 
courts in fulfilling their mission to provide equal justice 
under the law. The AO provides support to the Judicial 
Conference and its 25 committees as well as to more than 30,000 
judicial officers and court employees, some of whom are in the 
audience here today.
    I join Judge Gibbons in thanking the committee for the 2.8 
percent appropriations increase we received in 2015.
    We are also very appreciative that the 2015 omnibus bill 
included 1-year extensions for 10 temporary district judgeships 
whose authorizations expired in 2015. If Congress does not take 
action on the judiciary's comprehensive judgeship needs, we 
urge you once again to include 1-year extensions for these 
temporary judgeships in your 2016 bill.
    I echo Judge Gibbons' support for funding that is included 
in GSA's 2016 request for a new courthouse in Nashville and $20 
million for the Judiciary Capital Security Program.
    Cost containment continues to be a primary focus of the 
judiciary. We are very grateful that your committee recognized 
the judiciary's efforts in that regard in last year's 
appropriations, and we hope you will recognize it again this 
year.
    Some cost-containment initiatives, however, do require 
changes to existing law, which we have suggested, and we 
appreciate that the 2015 omnibus bill included one of those 
provisions. There are several additional reforms--perhaps we 
will address some of those in questions this afternoon--that 
have been endorsed by the Judicial Conference, as well, that, 
if enacted, would produce additional savings in the long run.
    For 2016, the Administrative Office's appropriation request 
totals $87.6 million, which is a 3.8 percent increase over 
2015. This represents a current services budget only. There are 
no additional staff or program increases requested by the 
Administrative Office of the U.S. Courts.
    That concludes my opening remarks, and we would be happy to 
answer any questions that you may have.
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    Mr. Crenshaw. Well, thank you very much.

                            SPACE REDUCTION

    Thank you all for your sensitivity to the timing of the 
votes that may occur. Please don't let the lack of attendance 
here reflect on the importance of the work that you do. This is 
a very, very busy time, and there are lots of committee 
meetings going on at the same time.
    I think you do such a good job of preparing your budget and 
dealing with some of the fiscal issues and the cost 
containment, that you don't generate a whole lot of 
controversy. You should have been here yesterday when the 
Federal Communications Commission was here, and it was a very 
lively discussion, a lot of controversy. I think they should 
take it on the road and sign up with MSNBC and probably 
increase their ratings, you know, after yesterday.
    But the Supreme Court was here earlier this week, and I 
complimented them, we all did, because they submitted a request 
that is less than last year's. And I told them, we don't often 
get people requesting less than they got the year before. We 
also don't get that many witnesses that are clear and concise 
in their answers. So I think you fall in that category, as 
well. And so I think this could be certainly a very important 
hearing, but we appreciate the work that you have done ahead of 
time.
    So let me just start talking about the rent. I think it is 
a billion dollars that you have to pay in rent. I had a 
conversation with the folks in Jacksonville, and they have a 
Federal building, courthouse that was built for $84 million. 
And times have changed, and now a new courthouse costs almost 
three times that much.
    But they are working on their space reduction, and you are 
doing it, as well. Give us an idea of some of the things you 
are doing to kind of decrease the need for all that space.
    Judge Gibbons. Well, currently, we have a national policy 
in place. It is a 3 percent space reduction goal by the end of 
2018. At the end of the first year of that, we are basically on 
target to meet our goal.
    Mr. Crenshaw. Now, how do you achieve that? How do you make 
that happen?
    Judge Gibbons. Well, the other part of our national policy 
is a ``no-net-new'' rule. In other words, if you acquire space, 
you have to give up space. That doesn't apply to something like 
a new courthouse, but it applies otherwise.
    Third, each circuit has had to submit a plan for space 
reduction. They have all done that. That is the blueprint for 
how each circuit is going to get to the reduction goal.
    We are mindful, of course, that at the same time we are 
reducing space our rent goes up. So where we end up at the end 
of the day is a bit uncertain. But we will be better off than 
we would have been if we hadn't done it.
    There are many things that a court or a circuit might 
identify as ways in which it could reduce its rent bill. One is 
through the Integrated Workplace Initiative, which really 
designs new workplaces that occupy less space and that take 
advantage of the reality of technology and the reality of 
telecommuting. Probation and pretrial services officers, for 
example, can use technology and be away from the office much 
more than they used to be.
    Courts have done some creative things. I am really proud of 
the fact that, in my circuit, the library gave up all its space 
and moved into space that the clerk of court had previously 
occupied, which was vacated due to electronic filing. As it 
worked out, the floors were already reinforced because of all 
those heavy files that they used to hold.
    That is just an example of all the creative kinds of things 
courts are doing. They have been unbelievably cooperative. We 
are really fortunate that everybody appears to be on board and 
working toward a common goal.
    Mr. Crenshaw. Well, that is great to hear. And we oversee 
and fund the GSA, so maybe we will talk to them about the high 
rent that they have been charging you, see if we can help you 
there.

       BUDGET DRIVERS AND COST CONTAINMENT FOR DEFENDER SERVICES

    One other quick question, on defender services. I know that 
is expensive, and there is a $41 million increase there. Tell 
us, why does that--I mean, there has always been an increase 
there--why does that happen? And are there things that we can 
do, you all can do to kind of save in that area?
    Judge Gibbons. We are working on some things. The increase 
in the Defender Services account is really based on the same 
things, for the most part, that drive the increase in the 
Salaries and Expenses account: rent, increased benefit costs, 
COLAs if there is a COLA for the executive branch, general 
inflation, just all the things that are cost drivers.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Judge Gibbons 
provided the following additional information:]

    The fiscal year 2016 appropriations request for Defender Services 
is a net increase of $41.1 million over the fiscal year 2015 
appropriated level. The increase is composed of two elements: a $1.8 
million program increase to raise the non-capital panel attorney hourly 
rate by $6 per hour and a net increase of $39.3 million for various 
adjustments to base needed to maintain current services. The 
adjustments to base can be further broken down into the following 
components:
           +$15.8 million for standard adjustments to pay and 
        benefits;
           +$3.2 million for increases in space rental costs 
        and other inflationary adjustments;
           +$5.0 million for high threat trial requirements;
           +$40.0 million needed to maintain FY 2015 service 
        levels due to an anticipated decline in non-appropriated 
        funding (i.e., unobligated balances); and
           -$24.7 million to reflect a small increase in 
        projected federal defender organization caseload and a larger 
        decrease in projected panel attorney caseload.

    Of course, if there is a panel rate increase, that would 
increase the cost in that area. But panel attorney 
representations are projected to decline. Caseload affects 
defenders and will affect them more so when the new work 
measurement formula is in place.
    In terms of things we are trying to do in that area to 
contain costs, we are implementing electronic vouchering, which 
ought to really enable us to keep a better handle on requests 
for panel attorney payments. We are encouraging the defenders 
to do some of the same sorts of things we are encouraging 
courts to do, such as look at space reduction, shared services, 
and those kinds of things.
    They have done some things independently that involve 
working with the Justice Department to decrease the cost of 
electronically maintained discovery. We have case budgeting 
positions, and we will have them pretty soon in nine of the 
circuits. They help with budgeting on mega cases, but, in my 
circuit, our case budgeting attorney is also enormously helpful 
in reviewing vouchers that aren't mega cases but just seem kind 
of high for one reason or another.
    So those are some of the things that we are doing in that 
area.
    Mr. Crenshaw. Great. Well, thank you very much.
    Mr. Serrano.

                IMPACT OF SEQUESTRATION ON THE JUDICIARY

    Mr. Serrano. Thank you, Mr. Chairman.
    I was taken by your comments about taking the FCC show on 
the road. I can tell you, as a strong supporter of net 
neutrality, that it may be playing at a court near you pretty 
soon, you know. I suspect that it will be taken up that way.
    As brief as you can because of the time restraints--first 
of all, let me say that what you saw last year is the respect 
that we have for the third branch. We may disagree on things, 
but when it comes to the judiciary, I believe both parties 
understand the constitutional role you play and how you have to 
be protected and helped in every way to accomplish that role.
    Judge Gibbons. We are deeply appreciative of that and the 
support both of you have given.
    Mr. Serrano. That is why I said it, so you could say that 
again.
    Judge Gibbons. We are deeply appreciative.
    Mr. Duff. I echo Judge Gibbons' comment.
    Mr. Serrano. Next year she will say it in Spanish too.
    Very briefly, the hit that everyone took with 
sequestration, notwithstanding what happened last year, if 
sequestration stays around, what effect did it have, very 
briefly, and what effect will it have?
    Judge Gibbons. If sequestration occurs again, of course, we 
are not sure at what level it would be, but let's assume a 
level that is commensurate with the 2013 levels. I have some 
figures here that tell us what the impact would be.
    We would have to reduce staffing by 520 positions, or a 
total of 260 FTE. We would have to defer paying panel attorneys 
for a month. We would have to defer about half of our equipment 
purchases that we would make for court security. That would be 
a reduction of about $22 million. There is another cost in the 
court security account, which I am a little fuzzy on right now. 
It must have to do with reducing court security officer hours.
    So those are some of the things that would occur. We could 
continue to pay fees of jurors, we believe.
    The reason it is so devastating is because we need 3.2 
percent for current services. If you take us back not only to a 
hard freeze but back beyond that, the effect is pretty quickly 
devastating.
    Mr. Serrano. Uh-huh.
    Mr. Duff. I would just add, Congressman Serrano, that the 
courts perform extraordinarily well in a crisis. They respond 
to crisis very well. We are very well equipped to do that. But 
a sequestration impact has the effect of a constant crisis. I 
don't think the courts really could sustain the workload that 
would be imposed on them under those kinds of annual 
constraints.
    Judge Gibbons. Actually, Representative Serrano, I think it 
would be even worse than I just told you because I think what I 
just gave you were the hard freeze figures, not the 
sequestration figures.
    So, we are talking about funding levels way below a hard 
freeze. I think it would be something like $700 million in 
total below a 2016 current services appropriation, which 
doesn't give you the specific account figures.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Judge Gibbons 
provided the following additional information:]

    As indicated in the transcript, the impacts cited in Judge Gibbons' 
remarks are those associated with freezing fiscal year 2016 funding at 
the fiscal year 2015 level. A return to the fiscal year 2013 post-
sequestration funding level would represent a cut of $500 million (7.4 
percent) below the judiciary's fiscal year 2015 enacted level and a cut 
of $700 million (10.2 percent) below a fiscal year 2016 current 
services level.
    The Salaries and Expenses account would be reduced by $552 million 
(11 percent) below a current services level, resulting in the projected 
loss of 5,000 judiciary employees--25 percent of current on-board 
staff--in clerks of court and probation and pretrial services offices, 
or the furlough of employees in those offices for 63 days per person 
(or some combination of both). Further, non-salary operating costs 
would be slashed 33 percent.
    The Defender Services account would be cut by $70 million (6.6 
percent) below a current services level, forcing the judiciary to defer 
panel attorney payments for approximately two months.
    The Court Security account would be cut by $62 million (11.6 
percent) below a current services level, resulting in cuts of $22 
million (50 percent) to security systems and equipment and $40 million 
to contract guard services, equal to a reduction of 26 work days per 
court security officer position.

            IMPACT OF FISCAL YEAR 2015 FUNDING ON DEFENDERS

    Mr. Serrano. Let me briefly, just because my time is going 
to run out--on the public defenders, one of my favorite folks 
that I talk about, how much did the 2015 budget make up some of 
the pain they have suffered before?
    Judge Gibbons. They have not hired this many, but we have 
the funds for them to hire within a few employees of the number 
they had at the end of 2012. They had something like 2,763 FTE, 
and we can get them back to 2,713, I think.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Judge Gibbons 
provided the following additional information:]

    Federal Public Defender Organizations (FPDOs) ended fiscal year 
2012 with 2,764 FTE. Then sequestration occurred, and FPDOs lost about 
400 FTE as a result. There were substantial additional losses among the 
grantees in the Community Defender Organizations (CDOs).
    Since reaching their lowest staffing level of 2,358 FTE in March 
2014, FPDOs have hired a net increase of 198 FTE, reaching a total of 
2,556 FTE as of March 8, 2015. While this is still below the staffing 
levels assumed in the fiscal year 2015 financial plan, hiring will 
continue throughout the fiscal year and FTE levels will continue to 
increase accordingly. The financial plan assumes that FPDOs will 
utilize 2,713 FTE in fiscal year 2015.
    Funding provided by Congress in fiscal years 2014 and 2015 made 
these staffing increases possible (as well as staffing increases at the 
CDOs). In addition, new funding has allowed the judiciary to avoid 
deferrals of panel attorney payments and to discontinue the temporary, 
emergency panel attorney rate cut that went into effect after 
sequestration.

    Mr. Serrano. Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Bishop is recognized.
    Mr. Bishop. Thank you very much.

               COOPERATION BETWEEN THE JUDICIARY AND GSA

    The President's budget requests $181.5 million for a new 
courthouse in Nashville. It is only the second time in 6 years 
that the President's budget has included funding for a project 
in the Judicial Conference's 5-year courthouse construction 
plan. The Nashville project has been on the 5-year plan for 
nearly 20 years, and there seems to be a disconnect between the 
judiciary and the executive branch in this regard.
    How does the judiciary work with GSA to identify funding 
priorities and to ensure that these funds are requested and, if 
appropriated, are utilized in the most reasonable and efficient 
manner? Does there need to be a shift in jurisdiction to ensure 
maximum effectiveness and efficiency in that regard?
    Judge Gibbons. Well, I think if you asked most judges if 
they think the current system is an ideal one for good 
government, the answer would be no. On the other hand, we do 
work well with GSA on a day-to-day basis on many, many fronts. 
We have to. They have to work well with us.
    But it is sometimes hard to get our priorities to the top 
of the list of their priorities because they have many other 
priorities. It took a great deal of effort and a great deal of 
working together to get the Nashville courthouse as the first 
courthouse construction project requested since 2010.
    So there would have been a time when we might have answered 
your question about restructuring with, ``Oh, yes, we would 
like to have authority to build and maintain our own 
courthouses.'' We are smart enough today to know that, with 
limited resources and with the fact that we don't have 
personnel or other capabilities to go into the building 
management business, restructuring it is just not realistic for 
anybody in light of the circumstances.
    Mr. Bishop. Thank you.

                        CAPITAL SECURITY PROGRAM

    In my district, the Federal courthouse in Columbus, 
Georgia, has been ranked one of the worst Federal courthouses 
with respect to safety over the past several years. In fiscal 
year 2015, $20 million was appropriated to fund the Judiciary 
Court Security Program. I understand that this funding will 
support projects in Columbus as well as in Monroe, Louisiana, 
and Texarkana in Texas and Arkansas.
    When are these projects expected to be completed? Can you 
elaborate on the progress that has already been made on 
improving the security at some of our older courthouses using 
this funding? What do you expect to accomplish in this area 
over the next year? How will you prioritize the projects in 
order to make the best use of the appropriated funds?
    Mr. Duff. In part, the security initiatives that we have 
undertaken have been in recognition that courthouse 
construction is going to be limited in these times of budget 
constraints.
    Recognizing that some courthouses face security challenges 
that need to be addressed whether or not a new courthouse can 
be constructed, we have reprioritized and carved out instances, 
such as the courthouse in Columbus, Georgia, for special 
attention on security needs. We are working very closely with 
GSA to identify those courthouses that have security needs 
above and beyond new courthouse construction needs.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Director Duff 
provided the following additional information:]

    Security deficiencies at court occupied facilities are identified 
as part of the judiciary's Asset Management Planning process and also 
through security evaluation site visits conducted by AO staff.
    AO staff develops a preliminary list of court occupied facilities 
where alterations and construction of building-specific security items 
in a Capital Security Program (CSP) project would improve the level of 
security provided for judges, employees, and the public. A Capital 
Security Study that identifies possible solutions to address those 
security needs is then developed in coordination with GSA and the U.S. 
Marshals Service. A Capital Security Study provides the preferred 
security improvement plan and a cost estimate for the project. Funding 
for approved projects is provided through the GSA budget.
    While the CSP may address the security deficiencies in a building, 
it does not address situations where a facility has both security 
deficiencies and insufficient functional operational space. In those 
circumstances, the only resolution is to build a new courthouse or 
annex that satisfies the court's needs.

    Again, I will reiterate that we are very pleased that the 
President included in his budget funding for the construction 
of the Nashville courthouse. That is needed on every front.
    But the security challenges that are faced in specific 
courthouses are being addressed in a prioritized way. We are 
fairly pleased with the progress that is being made on 
renovations to improve security. We have worked closely with 
GSA in that regard.
    Judge Gibbons. Representative Bishop, my information shows 
that the Columbus courthouse, in particular, is a project for 
this fiscal year. It is to cost $6.7 million. The security 
deficiencies that would be addressed have to do with enclosing 
a sally port, adding elevators for prisoners and judges, and 
reconfiguring and constructing new corridors.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Judge Gibbons. Before a project like this is approved, we 
do a study to determine the most feasible alternative and the 
preferred plan and cost. We do a prioritization, working 
closely with GSA and the Marshals.
    Mr. Bishop. Thank you.
    I think my time has expired, Mr. Chairman.
    Mr. Crenshaw. Mr. Serrano has a quick comment.
    Mr. Serrano. Yes, Mr. Chairman. I want to clarify 
something. I can't believe that I misread the note in front of 
me that was given to me, and they were talking about Judge 
Vitaliano, who is a person that I have known all 41 years that 
I have been in public office. And I wanted to make sure that he 
understood that, when I saw the face, I said, oh, my God, it is 
my friend from 41 years ago.
    Thank you.
    Mr. Crenshaw. Now Mr. Yoder is recognized.
    Do you see any friendly faces out there?
    Mr. Yoder. Thank you, Mr. Chairman. I appreciate the 
latitude.
    Mr. Serrano. I don't think he is 41 himself.

                          TEMPORARY JUDGESHIPS

    Mr. Yoder. I wanted to highlight--first of all, thank you 
for coming to the committee.
    Good to see Judge Gibbons. I know you have been before us a 
number of times.
    Administrator Duff, thank you for being here, as well.
    Each year, we deal with the issue related to temporary 
judgeships. And I noted in your testimony you highlighted this 
issue again. One of these temporary judgeships happens to be in 
my district, and so we are always watchful and concerned and 
worried and making sure that the committee and chairman and 
everyone is aware of the importance of these temporary 
judgeships.
    And should we not extend them in the appropriations bill 
and a vacancy were to occur, the position would evaporate. The 
caseload wouldn't evaporate, the workload wouldn't evaporate, 
but the position would overnight. And so it is a tenuous 
situation to be in.
    And I note there are maybe nine districts total, positions 
like that, that are around. You might clarify. But I just think 
it is a tremendous stress to put on these folks to have to 
worry about this and to come up each year and for our committee 
to keep doing this work.
    And so I thought if you might just expound upon that point 
a bit--I wanted to highlight it for the committee; I know it 
was in your testimony--and maybe suggest what probably is an 
obvious long-term solution to this issue.
    Mr. Duff. Well, the ultimate long-term solution is the 
creation of a new judgeship. Where we have temporary 
judgeships, we have asked for permanent judgeships in 9 of 
those 10 districts.
    We also recognize the budget constraints that accompany the 
creation of a new judgeship. So, in the short term, what we 
would ask the Committee is, if the funding is not available for 
the creation of new judgeships where our statistics demonstrate 
they are clearly justified, that the temporary judgeships be 
extended. Because, as you pointed out correctly, if they are 
not extended, the workload doesn't go away. It just doubles up 
the work for the other judges in that particular district.
    So, in 9 of the 10 districts with temporary judgeships, we 
have asked for permanent judgeships. By ``we,'' I mean the 
Judicial Conference of the United States at its March 
conference, just a couple of weeks ago. If permanent judgeships 
can't be created, we would ask that the temporary judgeships be 
extended.
    You also correctly point out that it is difficult for staff 
to wonder what is going to happen. So for planning purposes, it 
is good to know whether these temporary judgeships are going to 
be extended as soon as we can.
    Mr. Yoder. It seems to me that the only reason we haven't 
been able to fix this is internal scoring rules that Congress 
uses that would say if you extend them permanently, now it has 
a 10-year budget impact, but if you extend it year to year, it 
only has a 1-year impact, which is a budgetary gimmick that 
occurs in Washington that has little relevance to people 
outside of these rooms that we debate policy in, and it does 
have an impact on people who are doing the work back home. So 
it has a negative impact on people at home, and it has no 
benefit here, other than a scoring issue, which is created by 
our own interior rules.
    So I would love to see those extended. And I believe the 
committee will keep extending the temporary ones, therefore 
having the same budget impact if we made them permanent anyway.

                  COSTS OF LITIGATING NEW LEGISLATION

    The other issue I wanted to raise is one that sort of came 
up yesterday. And my good friend of at least 39 years, Mr. 
Serrano--I am 39 years old--brought up earlier that he is a 
strong proponent of net neutrality. And one of the issues that 
came up yesterday is the cost to government and the system to 
defend net neutrality and an estimate of what that might be, 
litigation costs.
    And I just wonder, you know, we have had Dodd-Frank, we 
have had the Affordable Care Act, we have had a number of bills 
that are being litigated extensively in the courts. And I 
wondered if the court ever looks at the cost of litigating a 
new law and if we could estimate how much traffic we create 
with legislation that either isn't written properly or isn't, 
you know, well established or just has a lot of things that 
need to be sorted out by the courts.
    Judge Gibbons. We do, of course, look at workload figures 
and weighted caseloads, and we, of course, know that certain 
kinds of litigation create a great deal of work for the courts.
    Some legislation we do get involved in opposing if it has a 
direct impact on us. For example, we have a position with 
respect to immigration reform legislation, in that we don't 
want additional resources given to the Department of Justice 
that will impose many additional burdens on the judiciary.
    But for legislation where the impact is less apparent, we 
don't want to involve ourselves politically by saying, this is 
going to cause us a lot of hassle. Another area we have had 
some thoughts is sentencing reform.
    We are affected by whatever litigation occurs, but we don't 
get involved on that basis. It is very selective. It tends to 
be legislation that we could take a position on appropriately.
    Mr. Duff. I would add, Congressman Yoder, that I was here 
40 years ago, when I first started working in Chief Justice 
Burger's office. It is hard for me to believe it has been that 
long. But Chief Justice Burger at one time proposed a judiciary 
impact statement so that every law passed by Congress--much 
like an environmental impact statement--had to be accompanied 
by a judiciary impact statement just to show the budget impacts 
of new laws on the courts. I don't think it was embraced, but 
it is a good idea.
    I appreciate your mindfulness about it, because legislation 
does have an impact on the courts and it affects our budgets in 
the long run. But Judge Gibbons is right as to our own analysis 
of that.
    Mr. Yoder. Well said. I appreciate your testimony.
    Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Serrano. 39? I have ties older than you.
    Mr. Yoder. I didn't get a birthday card from you this year 
either, so----

 ROLE OF THE JUDICIARY COMMITTEE IN JUDGESHIP CREATIONS AND EXTENSIONS

    Mr. Crenshaw. Mr. Rigell is gathering his thoughts.
    Let me point out one thing is, in terms of temporary 
judgeships, we typically fund those, and we are from time to 
time criticized. That is kind of an authorizing issue. 
Ultimately, to create new judgeships, we have something called 
a Judiciary Committee, and they are the ones that have the 
jurisdiction to create those. And so those that think we need 
more judges, you direct your thoughts to them.
    I think there is also the question of the confirmation of 
Federal judges that linger from time to time, and what that 
means is people that are there are doing a whole lot more work.
    But I think that the temporary judgeships we recognize are 
important, and I think historically we have funded them on this 
committee. But to create those new ones, the Judiciary 
Committee is going to have to step up.

                  PRIORITIZATION OF SECURITY UPGRADES

    Let me ask, we talked a little bit about security in the 
context of new courthouses, but there is $20 million in your 
budget for security. And that is obviously very important. In 
today's world, you know, no telling who is watching on TV and 
decides they don't like one of the Federal judges.
    But around the courthouses, the security that you put in, 
not so much a new courthouse, but if you are going to upgrade 
security, how do you go about deciding that? Because it is 
important. But do you look at that really closely to say these 
are things that we really need to do to make sure we have the 
security that we need?
    Judge Gibbons. When there is a capital security project, 
first, the Administrative Office identifies a list of needs 
based on surveys it has done of the courts. Then there is a 
plan that is done, an architectural and engineering plan, that 
shows the feasibility of using a smaller, less costly plan as 
opposed to building a new courthouse or an annex or something 
to take care of a problem.
    They look at feasibility, how we go about doing it, and 
cost. Then there is a decision made about whether to implement 
that, and that is made by the judiciary in combination with GSA 
and recommendations of the Marshals. We have a list of the 
projects. The Columbus project that Representative Bishop 
referred to is one of those for 2015.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Judge Gibbons 
provided the following additional information:]

    Security at federal courthouses is governed by a number of guidance 
documents and standards. For security systems and equipment, the U.S. 
Courts Design Guide and the U.S. Marshals Service Requirements and 
Specifications for Special Purpose and Support Space Manual discuss the 
planning and design of courthouse security and describe the types of 
security equipment that are necessary and appropriate for court 
facilities. For court security officers (CSOs), the Marshals Service 
maintains a CSO staffing standard that is the basis for determining how 
many CSOs a district needs and the specific guard posts that should be 
staffed in a facility. Within these guidelines and the available 
financial resources, the Marshals Service has the responsibility to 
prioritize requirements and make operational decisions about the 
adequate level of security at each federal court facility.

    Mr. Crenshaw. Gotcha. And I notice in the budget request 
there is $7 million for, I guess, security systems, and there 
was a $2 million savings that you all had kind of realized, 
which helps a lot. And, again, we appreciate your efforts to be 
effective and efficient.

                          GSA RENT VALIDATION

    Let me ask you, we kidded about the GSA; you know, they 
charge you rent. You are one of the biggest tenants that GSA 
has. Do you ever kind of wonder how they decide what the rent 
is? How do you see that relationship with GSA in terms of what 
they charge you?
    Judge Gibbons. This is not the product of a formal 
Conference position. It is not the product of anything the 
Budget Committee has formally considered.
    Many within the judiciary do question whether the rates 
charged by GSA are not far above market rates, and----
    Mr. Crenshaw. Do people actually do market studies from 
time to time and say, gee----
    Judge Gibbons. We may have done some. Jim would be aware of 
that.
    I will say we, from time to time, move people into leased 
space, partly because of cost. Now, as we are vacating space in 
courthouses, we are seeking to move some people from leased 
space back into courthouses. But I am not sure whether the 
savings comes from the lesser rent or from the fact that we are 
reducing the space.
    Director Duff can probably tell you more about the----
    Mr. Crenshaw. Well, and, also, how do they deal with you 
all? Do they explain--I mean, you have to prepare your budget, 
and you have to know what your rent is going to be. Are they 
good about communicating with you in terms of what is going on 
from day to day?
    Mr. Duff. Mr. Chairman, we have developed much-improved 
relations with GSA over this very issue, because we did expose 
what we thought were overcharges. GSA admitted to those on 
further reflection and study. They are cooperating with us 
right now on an overall review of rents charged to make sure 
that they are indeed market rate and not inflated rates over 
the market rate.
    So we have come a long way on those very issues. We did 
expose some overcharges, frankly, which they graciously 
admitted, and we are working better with them now.
    Mr. Crenshaw. Well, keep it up, because we want you to get 
your money's worth.
    Judge Gibbons. One of our early cost containment efforts on 
space was our rent validation effort. We are now doing a much 
broader effort in full cooperation with GSA to validate 
services in every area. It is going very well.
    Mr. Crenshaw. Great.
    Mr. Serrano.
    Mr. Serrano. Mr. Chairman, that is a great point you bring 
up. And I had a personal experience where I wanted to lower my 
district office rent so I thought of moving to a GSA building. 
They were going to charge me more than I was paying where I am, 
so I didn't move. And I had no way of arguing with them.

                    STUDIES OF THE DEFENDERS PROGRAM

    On the issue, again, of defender services, I also 
understand that you are undertaking a study of the defender 
system and developing a rigorous database assessment of 
staffing needs. Is there a timeline for the release of that 
analysis?
    I assume that you will support any needed funding to 
implement the recommendations of the staffing study so that 
whatever the data requires can be employed properly.
    Judge Gibbons. That really encompasses two things: one, the 
work measurement study that is underway, and two, a larger 
study we are undertaking of all programs under the Criminal 
Justice Act.
    As for work measurement, the study will be complete this 
summer. This is the only information we have at this time, but 
initial indications are that it will not reflect that staff 
would need to be reduced nationally.
    When the Judicial Resources Committee is ready to take it 
up in June, they will figure out what to do about 
implementation and what their recommendation will be. That will 
be approved by the Judicial Conference in September.
    We will have to make a decision in July about whether the 
new formula should be incorporated into the 2017 budget 
request. That is also subject to conference approval. Then the 
Executive Committee of the conference, which approves the 
financial plan, will have to make a decision whenever an annual 
budget is enacted about how, if at all, to incorporate the new 
formula.
    So that is where we are on that. I would expect that we 
will use the new formula, but it is premature to say exactly 
how the implementation will play out or what the full results 
will be.
    Jim can address the study.
    Mr. Duff. The second part of this is a Criminal Justice Act 
review that we are undertaking. The last such review of the 
Criminal Justice Act was conducted between 1991 and 1993, so it 
has been quite a while since we have done this.
    The Chief Justice is appointing a committee, and it will be 
composed of judges, defenders, and criminal justice attorneys. 
That committee is being assembled right now, as a matter of 
fact, to take a full review of how we might make improvements 
or suggest improvements to be made in defender services. 
Defenders are going to be very involved in this study.
    That has a 2-year timeframe built into it. We hope to have 
conclusions and recommendations to the Congress at the end of 2 
years.
    Mr. Serrano. Okay. Thank you.

               THREATS AGAINST JUDGES AND COURT PERSONNEL

    Let me take a little time here. When I was chairman of this 
committee, when my party was in the majority--it seems like a 
million years ago. And we have a great chairman now. We get 
along very well.
    One of the big issues that he brought up was the security 
issue. I would like to take that to another step. At that time, 
there seemed to be a lot of threats going on and so on. Has 
that decreased? Has it remained the same, the threats against 
judges or attacks on court personnel which were taking place in 
those days? I mean, it wasn't a very safe place to be, in many 
places, for the judiciary.
    Mr. Duff. We are always mindful of security, and we are not 
immune to attacks. We are, I think, in the same category as 
Members of Congress and other high-profile public figures. We 
have taken steps. We have coordinated very carefully with all 
relevant security agencies. We are doing the best we can with 
the funds that we have and----
    Mr. Serrano. But if we were to ask you, give us a report, 
you know, a written statement on what the conditions are, are 
there more threats now? Are there more attacks by people who, 
you know, are angry in a courthouse or something?
    Judge Gibbons. The U.S. Marshals could tell us that. I 
think they keep up with it. It seems to me, during the 30-plus 
years I have been a Federal judge, that it has been pretty much 
constant that there are some threats. I don't know if I could 
identify a time when I feel like the threats have been more or 
less, but the Marshals might have a different view.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Judge Gibbons 
provided the following additional information:]

    Threats against federal judges are addressed by the U.S. Marshals 
Service. As a result, the judiciary does not maintain its own data on 
such threats and cannot draw independent conclusions about trends in 
the threat level over time.
    Upon request, the Marshals Service reviewed the threat environment 
over the last five years and reported that, in its assessment, threats 
against Marshals-protected judges have remained stable over that 
period.

    Mr. Serrano. All right.
    Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you.
    Mr. Rigell.
    Mr. Rigell. Thank you, Mr. Chairman.

          CHOOSING BETWEEN GSA SPACE AND THE COMMERCIAL MARKET

    Judge Gibbons, Mr. Duff, thank you very much for being here 
today. And, you know, our judicial branch is widely respected, 
certainly far more than the institution that I am privileged to 
serve in and even, indeed, the Executive branch. So I 
appreciate the good work that you are doing.
    And I was a bit late here today, but I had five Gold Star 
Moms come by my office. And they were invited by House 
leadership because the President of Afghanistan was here and 
these mothers lost their sons in Afghanistan.
    And so it was just a poignant reminder to me, of course, of 
the heavy price that has been paid for our freedom and just 
really the privilege that we have to be here today and to work 
out our differences and try to resolve these problems in our 
representative republic here.
    So I thank you for being here and for your testimony.
    Now, to the point, let's pick up on the commercial real 
estate. Do you feel like, Mr. Duff, that you have the running 
room that you need, the flexibility to choose GSA space or to 
go outside into the commercial market? And could you walk us 
through that concisely and let us know if you got the type of 
decisionmaking authority that you need?
    Mr. Duff. I think our relations with GSA are improving. I 
think the leadership within GSA is working hard with us to 
recognize where we have difficulties and challenges.
    We are undertaking, as Judge Gibbons testified earlier, 
space reduction initiatives to reduce our rent. If you look at 
our overall budget of approximately $7 billion, about $1 
billion of that is in rent. If the trends continue on rent 
increases, that is going to eat up more of our budget.
    Mr. Rigell. Right.
    Mr. Duff. We are trying to avoid that happening, and that 
is really what is driving our initiatives to reduce our 
footprint within the buildings.
    We have looked elsewhere, where we have needed to and where 
we think it is untenable or unsustainable to work under the GSA 
rent configurations.
    [The information follows:]
    [Clerk's note.--Subsequent to the hearing, Director Duff 
provided the following additional information:]

    Under the terms of the Public Buildings Act, GSA has the authority 
to lease space on behalf of the judiciary. As a result, the judiciary 
does not and cannot lease space independently in the commercial market.

    In terms of flexibility, I would say it is fine for now, 
given the improving relations with GSA. That wasn't the case in 
my first tenure, although we worked on it.
    Mr. Rigell. I am encouraged to hear this, and I applaud--I 
am sure it is a result, in part at least, of constructive 
engagement with them and talking to them, communication, right?
    Mr. Duff. Exactly right.
    Mr. Rigell. Okay.
    Mr. Duff. I think that the key to successful government, 
frankly, is communication.
    Mr. Rigell. Right. And so I applaud that.
    And I know this is a shared value of the ranking member and 
others, and so if we can make a dollar go further and help you 
out in any practical way, please let us know.

                           SENTENCING REFORM

    I want to transition to Judge Gibbons, and I am actually 
going to toss you a softball here. And it is not for lack of 
preparation, it is not, but it is more to really understand how 
we might make some constructive changes here in Washington that 
will help us to be a safe society and, at the same time, not 
incarcerate any more people for any 1 day longer than we need 
to.
    And it is a wide topic with the time that I have remaining, 
but if you would, just--and I am sure you have some thoughts on 
this. What would you want us to consider on these larger issues 
about corrections generally, which, of course, don't get the 
attention generally that is needed? Please. I think you 
understand the question. I hope so.
    Judge Gibbons. Well, I gather that what you are asking goes 
really to the various proposals about sentencing reform----
    Mr. Rigell. Yes.
    Judge Gibbons [continuing]. And correctional policy.
    The judiciary has positions on a number of the various 
proposals that have been introduced. There is a group of 
initiatives we support, coupled with some we oppose, plus a set 
of resource concerns. I am going to try to run through those 
quickly.
    Mr. Rigell. And let me know if there is one on there that 
you really like.
    Judge Gibbons. Well----
    Mr. Rigell. I mean that. It would be helpful to me.
    Judge Gibbons. Well, the judiciary has for a long time 
strongly supported the elimination or reduction of mandatory 
minimum sentences. We have supported a modest expansion of the 
safety valve, which provides the ability to go below a 
mandatory minimum in certain situations.
    We have supported the reduction of the difference between 
the way crack and powder cocaine are treated, and we have 
supported retroactivity of that change.
    Mr. Rigell. Let me pause for a moment.
    Judge Gibbons. Okay.
    Mr. Rigell. The crack and powdered issue. Now, I thought 
that we had done some work----
    Judge Gibbons. You have.
    Mr. Rigell. Okay.
    Judge Gibbons. And we supported that.
    Mr. Rigell. Is that not enough?
    Judge Gibbons. Well, there is a retroactivity bill that I 
don't think has passed, and so that is still a remaining issue.
    Mr. Rigell. Are you willing to kind of go out there and let 
us know what your personal view is on that? I am going to press 
you just a little bit, but if you are willing.
    Judge Gibbons. I am not one of the judges who chafes most 
at a deprivation of some discretion in sentencing. It is up to 
Congress to make the rules. But I think it has been 
demonstrated over a period of time that the original 
congressional assessment of the adverse impact of crack cocaine 
as opposed to powder just didn't turn out the way Congress 
thought.
    Mr. Rigell. And I share that view. Okay.
    Judge Gibbons. So that is my personal take on it.
    Mr. Rigell. Okay. So that might lead us to at least 
reconsider with maybe a bias in favor of this legislation and--
--
    Judge Gibbons. You have already reduced the crack-powder 
disparity to some extent.
    Mr. Rigell. That is right.
    Judge Gibbons. Whether there would be another reduction 
appropriate, I am not really prepared to say without reviewing 
the issue again. In terms of applying the reduction 
retroactively, the Judicial Conference has supported 
retroactivity.
    Mr. Rigell. Thank you.
    Judge Gibbons. The final thing we support is the amendment 
that precludes stacking of Title 18, Section 924(c) violations. 
That is carrying or using a firearm during or in connection 
with a drug trafficking crime or a crime of violence.
    Mr. Rigell. Okay. You have answered my question directly, 
and I appreciate it. And you have given me enough that I can 
wrestle with this on my own privately and perhaps, you know, 
with some followup to your offices.
    [The information follows:]
   
   
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    Judge Gibbons. Well----
    Mr. Rigell. But I think that there is a sense within 
Congress just generally--it is not the top of the list. We have 
the budget and other things that we are struggling with, but 
something has to give here, I think, in a constructive way. I 
mean, thoughtful and wise reform on the corrections side. And I 
think that at least the Members that I know are open to this 
conversation. So what you have shared with me today has been 
helpful.
    Mr. Chairman, I see a red light over there, so I thank you, 
and I yield back what time I don't have. Thank you.
    Mr. Crenshaw. Thank you.

                           CONCLUDING REMARKS

    We are getting ready to vote, but because of the clear and 
concise answers as well as the clear and concise questions, we 
are able to finish our work here today.
    Let me thank you all for being here. And a special word of 
thanks to the folks that are here for the Budget and Financial 
Advisory meeting. You are doing a good job of advising these 
folks, because you have been very efficient and effective. We 
all know that government needs money to provide services, but 
right now being efficient is more important than ever before.
    So thank you for what you all do as an advisory group. 
Thank you for bringing that message to us and the work that you 
do. It is very, very important.
    And I know Mr. Serrano wants to say goodbye to somebody.
    Mr. Serrano. No.
    I just want to thank you for the work that you do, for 
coming here, all of you for the work that you do.
    But I did hear something today, Mr. Chairman, that I can't 
end the hearing without saying that it troubles me a little 
bit. I don't think we, as Members of Congress, should legislate 
with any concern about how much litigation may cost. Our role 
is to legislate, and if people don't like it, then they can 
sue. Or you can go along with the President's program and don't 
sue on anything, which is not going to happen.
    But I think it may have a chilling effect. To give you an 
example, we have a rule, as you know, in the House that says 
that when you put in a bill you have to say what part of the 
Constitution that bill will affect. I was tempted once to write 
``that part that says that I am a legislator, and I can 
legislate,'' but that would have been sarcastic to some people.
    So I appreciate what the courts go through. I appreciate 
that lately a lot of what has been legislated will be 
litigated. But let's be thankful that we live in a democracy 
where I can legislate and then the courts can decide whether it 
is right or wrong. That makes sense, rather than say, it is 
going to cost too much, so don't do that.
    But thank you so much.
    Thank you, Mr. Chairman.
    Mr. Crenshaw. Thank you all.
    This hearing is adjourned.
    

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                          W I T N E S S E S

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Breyer, Hon. Stephen G., Associate Justice of the Supreme Court..   107
Donovan, Hon. Shaun..............................................     1
Kennedy, Hon. Anthony M., Associate Justice of the Supreme Court.   107
Roth, Denise, Turner.............................................    55
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