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	<title> - CHALLENGES AND OPPORTUNITIES FACING AMERICA'S SCHOOLS AND WORKPLACES</title>
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	[House Hearing, 113 Congress]
	[From the U.S. Government Publishing Office]




	CHALLENGES AND OPPORTUNITIES FACING AMERICA'S SCHOOLS AND WORKPLACES

	=======================================================================

	HEARING

	before the

	COMMITTEE ON EDUCATION
	AND THE WORKFORCE
	U.S. HOUSE OF REPRESENTATIVES

	ONE HUNDRED THIRTEENTH CONGRESS

	FIRST SESSION

	__________

	HEARING HELD IN WASHINGTON, DC, FEBRUARY 5, 2013

	__________

	Serial No. 113-1

	__________

	Printed for the use of the Committee on Education and the Workforce


	Available via the World Wide Web:
	www.gpo.gov/fdsys/browse/
	committee.action?chamber=house&committee=education
	or
	Committee address: http://edworkforce.house.gov



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	COMMITTEE ON EDUCATION AND THE WORKFORCE

	JOHN KLINE, Minnesota, Chairman

	Thomas E. Petri, Wisconsin George Miller, California,
	Howard P. ``Buck'' McKeon, Senior Democratic Member
	California Robert E. Andrews, New Jersey
	Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
	Virginia Foxx, North Carolina Virginia
	Tom Price, Georgia Ruben Hinojosa, Texas
	Kenny Marchant, Texas Carolyn McCarthy, New York
	Duncan Hunter, California John F. Tierney, Massachusetts
	David P. Roe, Tennessee Rush Holt, New Jersey
	Glenn Thompson, Pennsylvania Susan A. Davis, California
	Tim Walberg, Michigan Raul M. Grijalva, Arizona
	Matt Salmon, Arizona Timothy H. Bishop, New York
	Brett Guthrie, Kentucky David Loebsack, Iowa
	Scott DesJarlais, Tennessee Joe Courtney, Connecticut
	Todd Rokita, Indiana Marcia L. Fudge, Ohio
	Larry Bucshon, Indiana Jared Polis, Colorado
	Trey Gowdy, South Carolina Gregorio Kilili Camacho Sablan,
	Lou Barletta, Pennsylvania Northern Mariana Islands
	Martha Roby, Alabama John A. Yarmuth, Kentucky
	Joseph J. Heck, Nevada Frederica S. Wilson, Florida
	Susan W. Brooks, Indiana Suzanne Bonamici, Oregon
	Richard Hudson, North Carolina
	Luke Messer, Indiana

	Barrett Karr, Staff Director
	Jody Calemine, Minority Staff Director


	C O N T E N T S

	----------
	Page

	Hearing held on February 5, 2013................................. 1

	Statement of Members:
	Kline, Hon. John, Chairman, Committee on Education and the
	Workforce.................................................. 2
	Prepared statement of.................................... 3
	Miller, Hon. George, senior Democratic member, Committee on
	Education and the Workforce................................ 3
	Prepared statement of.................................... 6

	Statement of Witnesses:
	Bernstein, Jared, senior fellow, Center on Budget and Policy
	Priorities................................................. 16
	Prepared statement of.................................... 17
	Fornash, Hon. Laura W., secretary of education, Commonwealth
	of Virginia................................................ 11
	Prepared statement of.................................... 13
	Herbert, Hon. Gary R., Governor, State of Utah............... 8
	Prepared statement of.................................... 10
	Timmons, Jay, president & CEO, National Association of
	Manufacturers.............................................. 22
	Prepared statement of.................................... 24

	Additional Submissions:
	Davis, Hon. Susan A., a Representative in Congress from the
	State of California, article dated Nov. 20, 2012, from the
	New York Times, ``Skills Don't Pay the Bills''............. 53
	Ms. Fornash:
	Report, ``The American Dream 2.0: How Financial Aid Can
	Help Improve College Access, Affordability, and
	Completion,'' Internet address to...................... 64
	Response to questions submitted for the record........... 61
	Governor Herbert, addendum to testimony...................... 65
	Messer, Hon. Luke, a Representative in Congress from the
	State of Indiana, questions submitted for the record to:
	Ms. Fornash.............................................. 60
	Mr. Timmons.............................................. 62
	Mr. Miller, prepared statement of the National Disability
	Rights Network (NDRN)...................................... 63
	Rokita, Hon. Todd, a Representative in Congress from the
	State of Indiana, document, ``Why Utah''................... 39
	Mr. Timmons, response to questions submitted for the record.. 62


	CHALLENGES AND OPPORTUNITIES FACING AMERICA'S SCHOOLS AND WORKPLACES

	----------


	Tuesday, February 5, 2013

	U.S. House of Representatives

	Committee on Education and the Workforce

	Washington, DC

	----------

	The committee met, pursuant to call, at 10:05 a.m., in room
	2175, Rayburn House Office Building, Hon. John Kline [chairman
	of the committee] presiding.
	Present: Representatives Kline, Wilson of South Carolina,
	Foxx, Thompson, Salmon, DesJarlais, Rokita, Bucshon, Barletta,
	Roby, Heck, Brooks, Hudson, Messer, Miller, Andrews, Scott,
	Hinojosa, McCarthy, Tierney, Holt, Davis, Courtney, Fudge,
	Polis, Yarmuth, Wilson of Florida, and Bonamici.
	Staff Present: Katherine Bathgate, Deputy Press Secretary;
	James Bergeron, Director of Education and Human Services
	Policy; Casey Buboltz, Coalitions and Member Services
	Coordinator; Owen Caine, Legislative Assistant; Theresa Gambo,
	Office Administrator; Ed Gilroy, Director of Workforce Policy;
	Benjamin Hoog, Legislative Assistant; Amy Jones, Education
	Policy Counsel and Senior Advisor; Marvin Kaplan, Workforce
	Policy Counsel; Barrett Karr, Staff Director; Rosemary Lahasky,
	Professional Staff Member; Nancy Locke, Chief Clerk; Brian
	Melnyk, Professional Staff Member; Brian Newell, Deputy
	Communications Director; Krisann Pearce, General Counsel; Molly
	McLaughlin Salmi, Deputy Director of Workforce Policy; Emily
	Slack, Legislative Assistant; Alexandra Sollberger,
	Communications Director; Brad Thomas, Senior Education Policy
	Advisor; Joseph Wheeler, Professional Staff Member; Aaron
	Albright, Minority Communications Director for Labor; Tylease
	Alli, Minority Clerk; Jeremy Ayers, Minority Education Policy
	Advisor; Kelly Broughan, Minority Education Policy Associate;
	Jody Calemine, Minority Staff Director; John D'Elia, Minority
	Labor Policy Associate; Jamie Fasteau, Minority Director of
	Education Policy; Daniel Foster, Minority Fellow, Labor; Daniel
	Hervig, Minority Fellow, Labor; Livia Lam, Minority Senior
	Labor Policy Advisor; Brian Levin, Deputy Press Secretary/New
	Media Coordinator; Celine McNicholas, Minority Labor Counsel;
	Richard Miller, Minority Senior Labor Policy Advisor; Megan
	O'Reilly, Minority General Counsel; Michele Varnhagen, Minority
	Chief Policy Advisor/Labor Policy Director; Rich Williams,
	Minority Education Policy Advisor; and Michael Zola, Minority
	Senior Counsel.
	Chairman Kline. A quorum being present, the committee will
	come to order. Good morning and welcome to the first hearing of
	the 113th Congress. I would like to thank our witnesses for
	being with us today. I would like to extend a special welcome
	to Governor Herbert, who traveled out from Utah, some distance.
	The subject of today's hearing has become somewhat of a
	tradition for the Education and the Workforce Committee. It is
	important to start a new Congress with a fresh look at the
	challenges and opportunities confronting America's schools and
	workplaces. We have been fortunate over the years to have
	governors and education and business leaders share their views
	on the issues facing the country, and I am pleased they are
	represented today as well.
	During his inaugural address President Obama noted, quote,
	``This generation of Americans has been tested by crises that
	steeled our resolve and proved our resilience,'' close quote.
	Our Nation has always shown its true greatness in the most
	difficult of circumstances. This certainly defines the last
	recession and the challenges we continue to face. In our
	classrooms, one out of four students will drop out of high
	school before they have earned a diploma. Students and families
	across the country are being buried under a mountain of college
	debt that now exceeds a trillion dollars. Meanwhile, confusion
	and uncertainty surrounding the direction of the Nation's
	education system has only been exacerbated by the
	administration's convoluted waiver scheme. Those who complete
	their education are finding a difficult academic climate has
	been replaced by an even more difficult job market. Roughly 8
	million workers have been forced to accept part-time work when
	what they need is a full-time job.
	The cost of a family health care plan is expected to
	increase this year by $992, and let us not forget the more than
	12 million Americans who remain unemployed and searching for
	work, now close to 4 years since the recession officially
	ended. Some say we are currently stuck in a jobless recovery.
	Others suggest this is the worst recovery since the Great
	Depression. And following reports of negative economic growth
	in the final months of 2012 and a new uptick in unemployment,
	new concerns have emerged about whether we remain in a recovery
	at all.
	No one questions the ability of the American people to rise
	above these tough times and work toward a brighter future. The
	question is whether their elected government can do so as well.
	As policymakers, we have a lot of work ahead of us. Several key
	laws have expired and are in desperate need of reform, Federal
	deficits and debt continue to spiral out of control,
	undermining our economic growth and threatening the prosperity
	of future generations. Programs that serve our most vulnerable
	are on the path to bankruptcy, and the public's confidence in
	our ability to tackle these tough issues continues to fall.
	I hope in this new year we can begin a new era of reform. A
	critical part of that effort will be led by our State leaders
	and local officials, the men and women who remain constantly
	engaged in America's workers and job creators. Their ideas,
	expertise, and common sense are imperative as we work to
	advance responsible solutions that will serve the best
	interests of the country today and in the future.
	I know there are sharp differences on the committee, in the
	Congress, and across the capital city. Despite these
	differences, I am hopeful our vigorous debates will lead to
	meaningful action.
	Again, I would like to thank our witnesses for joining us,
	and I will now recognize my distinguished colleague, George
	Miller, the senior Democratic member of the committee, for his
	opening remarks.
	[The statement of Chairman Kline follows:]

	Prepared Statement of Hon. John Kline, Chairman,
	Committee on Education and the Workforce

	The subject of today's hearing has become somewhat of a tradition
	for the Education and the Workforce Committee. It's important to start
	a new Congress with a fresh look at the challenges and opportunities
	confronting America's schools and workplaces. We've been fortunate over
	the years to have governors and education and business leaders share
	their views on the issues facing the country, and I am pleased they are
	represented today as well.
	During his inaugural address, President Obama noted, ``This
	generation of Americans has been tested by crises that steeled our
	resolve and proved our resilience.'' Our nation has always shown its
	true greatness in the most difficult of circumstances. This certainly
	defines the last recession and the challenges we continue to face.
	In our classrooms, one out of four students will drop out of high
	school before they've earned a diploma. Students and families across
	the country are being buried under a mountain of college debt that now
	exceeds $1 trillion. Meanwhile, confusion and uncertainty surrounding
	the direction of the nation's education system has only been
	exacerbated by the administration's convoluted waiver scheme.
	Those who complete their education are finding a difficult academic
	climate has been replaced by an even more difficult job market. Roughly
	eight million workers have been forced to accept part-time work when
	what they need is a full-time job. The cost of a family health care
	plan is expected to increase this year by 992 dollars. And let us not
	forget the more than 12 million Americans who remain unemployed and
	searching for work--now close to four years since the recession
	officially ended.
	Some say we are currently stuck in a ``jobless recovery.'' Others
	suggest this is the worst recovery since the Great Depression. And
	following reports of negative economic growth in the final months of
	2012 and a new uptick in unemployment, new concerns have emerged about
	whether we remain in a recovery at all.
	No one questions the ability of the American people to rise above
	these tough times and work toward a brighter future. The question is
	whether their elected government can do so as well.
	As policymakers, we have a lot of work ahead of us. Several key
	laws have expired and are in desperate need of reform. Federal deficits
	and debt continue to spiral out of control, undermining our economic
	growth and threatening the prosperity of future generations. Programs
	that serve our most vulnerable are on the path to bankruptcy. And the
	public's confidence in our ability to tackle these tough issues
	continues to fall.
	I hope in this new year we can begin a new era of reform. A
	critical part of that effort will be led by our state leaders and local
	officials--the men and women who remain constantly engaged with
	America's workers and job creators. Their ideas, expertise, and common
	sense are imperative as we work to advance responsible solutions that
	will serve the best interests of the country today and into the future.
	I know there are sharp differences on the committee, in the
	Congress, and across the capital city. Despite these differences, I am
	hopeful our vigorous debates will lead to meaningful action.
	______

	Mr. Miller. Thank you, Mr. Chairman. And thank you for
	convening this hearing this morning for this overview. And I
	want to thank all of the witnesses for agreeing to join our
	panel. I would like to welcome Governor Herbert for traveling
	here also.
	I tried to travel to your State last week. I saw a lot of
	Colorado Springs Airport and a little bit of Salt Lake City
	Airport and none of the elementary schools I was going to
	visit, so we will talk later. It was a wonderful experience.
	But anyway, I am glad you came this way free of trouble.
	By any measures, the American economy has been slowly but
	surely recovering from the great recession. Corporate profits
	are up, the Dow Jones is booming, and we have seen the average
	of 180,000 jobs created each month last year. Nevertheless,
	many working families continue to struggle with unemployment
	and stagnant wages. I hope that we can all agree that a fair
	and sustainable recovery is one that is broadly shared, that
	helps all of those who have created it.
	On that front, we still have much work to do. We in
	Congress, and this committee in particular, have a role to
	play. If we want to help this recovery along and to build for
	the future, there are some things that we need to be doing.
	First, we need to make and protect the critical investments
	in people. I am talking about the sorts of investments that put
	the American dream within the reach of every individual. This
	begins with reforming our education system so that every child,
	regardless of their background, has the opportunity to succeed.
	From a child's earliest years all the way to higher education,
	quality instruction with high standards pays off both in
	economic and social terms.
	But at this time States and school districts and teachers
	are being held back by the failure of this Congress to rewrite
	No Child Left Behind. The Department of Education's waiver
	program has provided important breathing room for States, but
	cannot be a substitute for the Congress updating the law to
	meet the high skills and critical thinking demands of this
	recovery and of a new economy. Additionally, we must maintain a
	laser-like focus on equity to ensure that our education system
	remains an economic driver, and we need to invest in rebuilding
	and modernizing our schools and community colleges. An
	investment like that will create good jobs in construction
	right now, while providing American students with modern
	learning environments for the long run.
	We also know that a strong economy depends on whether or
	not we are giving all Americans access to higher education or
	job training necessary to compete in a global economy. The
	share of American jobs that require a postsecondary education
	will increase to 63 percent by 2018, not even a decade from
	now, and I think the Governor speaks to that point in his
	testimony. But college tuition continues to grow faster than
	the economy, community colleges are oversubscribed and
	underfunded.
	Addressing access and affordability needs, needs to be a
	priority, just as a complete rewriting of the Workforce
	Investment Act. Both sides of the aisle agree that workforce
	training programs should be better aligned to meet worker and
	employer needs. If we agree, then let's do something about it.
	Let's make sure that there is a seamless partnership among
	workforce boards, local community colleges, businesses, and
	workers. Let's make sure that there is a real accountability
	for these programs and ensure that all stakeholders can
	participate, and let's make sure that there are sufficient
	resources available so these programs work.
	Better educational and training opportunities will help
	rebuild inequalities in the economy, but creating those
	opportunities are insufficient by themselves. That is why the
	Congress must address the growing gap between working people's
	wages and corporate profits, between rising productivity and
	falling compensation. For decades when workers' productivity
	rose, so did their wages, creating and sustaining the American
	middle class, but that link has been broken over the last few
	decades. Working people are not sharing in the prosperity that
	they helped to create.
	Today those who suffered the least during the great
	recession are the ones benefiting the most. Wages of the top 1
	percent have grown by 8.2 percent during 2009 to 2011 recovery,
	but the wages of the 90 percent fell 1.2 percent over that same
	time. This is not sustainable. A vibrant economy and a
	democracy cannot survive if all of the economic gains go to a
	very few at the very top.
	Finally, Congress must end this whole notion of governing
	by fiscal cliff to fiscal cliff. Governing from one
	artificially created crisis to another is no way to instill
	certainty for business or the confidence of consumers. Instead,
	it has done great harm to our Nation's recovery. It started
	with the brinksmanship during the 2011 debt ceiling debacle.
	Consumer confidence plummeted by 25 percent in August 2011,
	economic growth and job growth slowed to almost half, and the
	debate resulted in America's credit rating being lowered for
	the first time in history.
	Then, as last year's fiscal cliff loomed, we saw similar
	pullbacks. The National Association of Business Economics
	recently reported that uncertainty surrounding the fiscal cliff
	led to postponing hiring and capital spending in the last 3
	months of 2012. More than a quarter of the businesses reported
	that they postponed some or all hiring in the fourth quarter.
	Even worse, the artificial crises were designed to force an
	agenda of austerity on the country, and at that time our
	economy can ill afford it. The policy of leaping from fiscal
	cliff to fiscal cliff is holding the jobs and the American
	economy hostage to that political decision.
	In Great Britain we can see the results of a hardheaded
	austerity agenda. They are heading for a triple-dip recession,
	and their debt problems are only getting worse. Despite the
	drastic cuts, their debt levels have risen from 61 percent to
	GDP to 84 percent of GDP. What America's economy needs is
	growth and not manufactured double-dip and triple-dip
	recessions. Growth will both create good jobs and reduce the
	deficit, growth that encourages a fair and sustainable
	recovery, that builds the ladders of opportunity for every
	American.
	I understand that there are real policy differences
	regarding the challenges I mentioned earlier, but the
	bipartisan consensus on some of these issues should still be
	possible. The American people expect this body to try and to
	find common ground. This committee should be in the business of
	advancing policy that becomes law and that makes a real
	difference in working families' lives. I hope that our
	witnesses will help us to identify the challenges and the
	opportunities that present themselves where we can work
	together to make a difference.
	And I thank you very much and I yield back the balance of
	my time.
	Chairman Kline. I thank the gentleman.
	[The statement of Mr. Miller follows:]

	Prepared Statement of Hon. George Miller, Senior Democratic Member,
	Committee on Education and the Workforce

	Good morning, Chairman Kline. Thank you for holding this hearing.
	I would like to welcome Governor Herbert and all of our witnesses
	to the committee. I'm looking forward to your testimony.
	By many measures, the American economy has been slowly but surely
	recovering from the Great Recession.
	Corporate profits are up. The Dow Jones is booming. We've seen an
	average of 180,000 jobs created each month last year.
	Nevertheless, many working families continue to struggle with
	unemployment or stagnant wages.
	I hope we can all agree that a fair and sustainable recovery is one
	that is broadly shared by those who help to create it.
	On that front, we still have much work to do.
	We in Congress--and on this committee in particular--have a role to
	play. If we want to help this recovery along and build for the future,
	there are some things we need to be doing.
	First, we need to make and protect critical investments in people.
	I'm talking about the sorts of investments that put the American Dream
	within reach of every individual.
	This begins with reforming our education system so that every child
	regardless of their background has the opportunity to succeed.
	From a child's earliest years all the way to higher education,
	quality instruction with high standards pays off in both economic and
	social terms.
	But at this time, states, school districts and teachers are being
	held back by the failure of this Congress to rewrite No Child Left
	Behind.
	The Department of Education's waiver program has provided important
	breathing room for states but cannot be the substitute for Congress
	updating the law to meet the high skill and critical thinking demands
	of the new economy.
	Additionally, we must maintain a laser-like focus on equity to
	ensure our education system remains an economic driver.
	And we need to invest in rebuilding and modernizing our schools and
	community colleges. An investment like that will create good jobs in
	construction right now, while providing American students with modern
	learning environments for the long-run.
	We also know that a strong economy depends on whether we are giving
	all Americans access to the higher education or job training necessary
	to compete in the global economy.
	The share of American jobs that require some postsecondary
	education will increase to 63 percent by 2018, not even a decade from
	now.
	But college tuition continues to grow faster than the economy.
	Community colleges are oversubscribed and underfunded.
	Addressing access and affordability needs to be a priority, just as
	completing a rewrite of the Workforce Investment Act.
	Both sides of the aisle agree that workforce training programs
	should be better aligned to meet worker and employer needs.
	If we agree, then let's do something about it.
	Let's make sure there is a seamless partnership among workforce
	boards, local community colleges, businesses and workers.
	Let's make sure that there is real accountability for these
	programs and ensure that all stakeholders can participate.
	And let's make sure there are sufficient resources available so
	that these programs work.
	Better educational and training opportunities will help to reduce
	inequalities in the economy. But creating those opportunities are
	insufficient by themselves.
	That's why Congress must address the growing gap between working
	peoples' wages and corporate profits, between rising productivity and
	falling compensation.
	For decades, when workers' productivity rose, so did their wages,
	creating and sustaining the American middle class.
	But that link was broken over the last few decades. Working people
	are not sharing in the prosperity they help to create.
	Today, those who suffered the least during the Great Recession are
	the ones benefitting from the most.
	Wages for the top one percent have grown by 8.2 percent during the
	2009 to 2011 recovery. But, wages for the 90 percent fell 1.2 percent
	over the same time.
	This is not sustainable. A vibrant economy and a strong democracy
	cannot survive if all the economic gains go to the very few at the very
	top.
	Finally, Congress must end this whole notion of governing fiscal
	cliff to fiscal cliff.
	Governing from one artificially created crisis to another is no way
	to instill certainty for businesses or confidence for consumers.
	Instead, it has done great harm to the nation's recovery.
	It started with the brinksmanship during the 2011 debt ceiling
	debacle.
	Consumer confidence plummeted by 25 percent in August 2011.
	Economic growth and job growth slowed by almost half.
	And the debate resulted in America's credit rating being lowered
	for the first time in history.
	Then, as last year's fiscal cliff loomed, we saw similar pullbacks.
	The National Association of Business Economics recently reported that
	``uncertainties surrounding the fiscal cliff led to postponed hiring
	and capital spending in the last three months of 2012.''
	More than a quarter of businesses reported that they ``postponed
	some or all hiring in the 4th quarter.''
	The proof is in the pudding. Governing by crisis hurts our economy.
	Even worse, the artificial crises are designed to force an agenda
	of austerity on the country, at a time that our economy can ill afford
	it.
	In Great Britain, we can see the results of a hard-headed austerity
	agenda.
	They are heading for a triple-dip recession, and their debt
	problems are only getting worse. Despite the drastic cuts, their debt
	level has risen from 61 percent of GDP to 84 percent of GDP.
	What America needs is growth, not a double-dip or triple-dip
	recession.
	<bullet> Growth that will both create good jobs and reduce the
	deficit;
	<bullet> Growth that encourages a fair and sustainable recovery
	that rebuilds the ladders of opportunity for every American.
	The American people aren't interested in another year of artificial
	crisis after artificial crisis. I'm not interested either.
	I understand there are real policy differences regarding the
	challenges I mentioned earlier. But bipartisan consensus on some of
	these issues should be possible.
	The American people expect this body to try to find that common
	ground.
	This committee should be in the business of advancing policy that
	becomes law and makes a real difference in working families' lives.
	I hope our witnesses will help us identify where the challenges and
	opportunities lie, where we can work together to make that difference.
	Thank you and I yield back.
	______

	Chairman Kline. Pursuant to committee rule 7(c), all
	committee members will be permitted to submit written
	statements to be included in the permanent hearing record.
	Without objection, the hearing record will remain open for 14
	days to allow statements, questions for the record, and other
	extraneous material referenced during the hearing to be
	submitted in the official hearing record.
	Well, we have a terrific panel of witnesses here today to
	help us get started. Many of them known to members of this
	committee for a long time. We have the Honorable Gary R.
	Herbert, 17th Governor of the State of Utah. He was sworn in on
	August 11, 2009. The Honorable Laura W. Fornash is the
	Secretary of Education for the Commonwealth of Virginia; Dr.
	Jared Bernstein is senior fellow at the Center on Budget and
	Policy Priorities in Washington, D.C., and Mr. Jay Timmons is
	president and CEO of the National Association of Manufacturers
	here in Washington, D.C.
	Welcome to you all.
	Before I recognize you to provide your testimony, let me
	briefly explain our lighting system. It is not really very high
	tech. You each will have 5 minutes to present your testimony.
	When you begin, the light in front of you will turn green. When
	1 minute is left, the light will turn yellow, and when your
	time has expired the light will turn red, at which point I ask
	that you wrap up your remarks as best you are able. I am a
	little reluctant to gavel down witnesses, any witnesses,
	particularly a panel as distinguished as this, but we do need
	to keep it moving. After everyone has testified, members will
	each have 5 minutes to ask questions, and I will be much more
	prompt in dropping the gavel for members.
	So let's get started. Governor Herbert, you are recognized.

	STATEMENT OF HON. GARY HERBERT, GOVERNOR OF UTAH

	Governor Herbert. Thank you, Mr. Chairman, and members of
	the committee, I am honored to be here with you today, and
	thank you for the opportunity to address you.
	Never in recent history has workforce development and the
	work of this committee been more important. My number one
	priority as Governor of Utah is to foster an environment where
	the private sector can create jobs. Utah's focus on building a
	strong economy has yielded accolade after accolade, including
	Forbes magazine naming us the best State for business and
	careers for the third year in a row.
	Utah achieves this success because we focus on a growing
	economy and a recognition of the importance of education. These
	two priorities are inextricably linked. Utah's economy demands
	an educated, skilled workforce, and I am sure the same is true
	for all States. Software giant Adobe recently finished building
	a massive facility in Utah's high-tech corridor, and it is just
	part one of a three-phase project. They were drawn to our State
	in part because of our highly educated workforce and proximity
	to more than 100,000 students at nearby institutions of higher
	learning. We have five universities within a 25-mile radius.
	As more companies like Adobe continue to move and to expand
	in Utah, we recognize the economic imperative to align what
	business needs from the workforce with the skills and degrees
	our education system is producing. So in my remarks today, I
	want to focus on three major initiatives that we are pursuing
	in Utah.
	The first initiative is what we call 66 by 2020. Based on a
	comprehensive study by Georgetown University's Center on
	Education and Workforce, two-thirds of the jobs in Utah will
	require some form of postsecondary education by the year 2020.
	Right now only 43 percent of Utah's workforce meets this
	education standard. The infusion of technology in both the
	workplace and career sectors will drive this Nation's economic
	transformation. Across all industries and economic sectors,
	market demand for college-educated workers will outpace supply
	by 300,000 employees annually. If nothing changes by 2018, the
	Nation's postsecondary system will have produced 3 million
	fewer college graduates than the labor market needs. As the
	Georgetown study put it, ``In short, the economic history of
	the United States is one of lockstep progression between
	technology and educational attainment.''
	Utah is looking ahead and taking the steps now to ensure
	our workforce has the right education level for the future
	demands of the private sector. We have proactively engaged all
	major stakeholders and leaders on every front, including
	education and business, to unite behind and to commit to our
	goal of 66 by 2020.
	The second initiative is pursuing its STEM education. More
	than simply having an education, Utahans must have the right
	kind of education, in areas that are valued in the marketplace.
	Much like hockey great Wayne Gretzky, who said the key to his
	success was that he would skate to where the puck would be,
	Utah is educating for where the jobs will be. With the rise of
	a technology-oriented economy, Utah has a renewed focus on STEM
	education--science, technology, engineering, and math--because
	that is where the jobs will be. Sound analysis demonstrates
	that in our future economy the most intense concentrations of
	postsecondary workers will be in five main sectors and
	represent more than 30 percent of total occupational employment
	and about 45 percent of all jobs for postsecondary workers.
	It is no coincidence that these five sectors, as they tap
	into our new knowledge economy, are also the fast-growing areas
	of our labor market. STEM-related jobs are a top tier priority
	in Utah's entire education system now, K-16.
	The third initiative I wish to highlight today is Utah's
	expansion of dual-immersion education. Utah's dual-immersion
	programs in Spanish, French, and Chinese teach our students
	cultural literacy and prepare them for the global economy.
	Dual-immersion students also perform better on standardized
	testing, they show improved memory skills, better attention
	control, and higher problem-solving ability. Utah is a leader
	in foreign language classes. In fact, one-third of all Mandarin
	Chinese classes taught in the entire United States are taught
	in Utah.
	You may be surprised to know that there are 658 languages
	spoken in Utah. A large component of that is our culture. We
	have many residents who serve as missionaries for the Church of
	Jesus Christ of Latter Day Saints, the Mormon church around the
	world, and they often gain language skills abroad. Our
	multilingual students become a key part of our workforce, and
	that attracts business to our State, such as Goldman Sachs,
	whose office now is the second largest in the Americas and the
	fastest growing in the world.
	It is clear that States are leading the way to economic
	recovery. For example, Utah's economy is growing at twice the
	national average. Our unemployment rate is 5.2 percent, far
	below the national average of 7.8 percent. Despite our success,
	Federal policies complicate Utah's ability to grow and align a
	workforce with market demands. Governors no longer have access
	to the Workforce Investment Act's discretionary funds that we
	were able to cater for unique solutions for our States. Now all
	workforce investment money either covers administrative costs
	or goes directly to the grant programs.
	Because we no longer have flexibility and access to this
	money, the State of Utah has had to apply for individual grants
	through the Workforce Innovation Fund. As of last April, Utah
	spent more than 4 months, 550 staff hours, and $48,000 just to
	apply for the grant. Now, I fully support oversight and
	accountability, but I do not support excessive bureaucratic red
	tape that limits my State's ability to invest funds in the most
	effective way.
	In conclusion, if States are to optimize alignment between
	our future educational outcomes and the labor demands of the
	market, it is essential that Congress now provide States
	maximum flexibility to implement programs and tailor solutions
	in a way that they see fit. No one understands State challenges
	and demographics better than the people who reside and govern
	there. No one is more committed to the most effective use of
	limited resources for the best possible outcome for both our
	students and our employers. And no one is more committed to
	growing local economies, thus ensuring economic recovery,
	prosperity, and job growth.
	I thank you for the opportunity to be with you here today.
	Chairman Kline. Thank you, Governor.
	[The statement of Governor Herbert follows:]

	Prepared Statement of Hon. Gary R. Herbert,
	Governor, State of Utah

	Members of the committee, thank you for the opportunity to address
	you today. Never in recent history has workforce development, and the
	work of this committee, been more important.
	My number one priority as Governor of Utah is to foster an
	environment where the private sector can create jobs. Utah's focus on
	building a strong economy has yielded accolade after accolade,
	including Forbes Magazine naming us the best state for business and
	careers for the third year in a row.
	Utah achieves this success because we focus on growing the economy
	and investing in education. Those two priorities are inextricably
	linked. Utah's economy demands an educated, skilled workforce, and I'm
	sure the same is true for all states.
	Software giant Adobe recently finished building a massive facility
	in Utah's high tech corridor, and it's just part one of a three-phase
	project. They were drawn to our state in part because of our highly
	educated workforce and proximity to more than 100,000 students at
	nearby institutions of higher learning.
	As more companies like Adobe continue to move to and expand in
	Utah, we recognize the economic imperative to align what business needs
	from the workforce, with the skills and degrees our education system is
	producing.
	So in my remarks today, I want to focus on three major initiatives
	we are pursuing in Utah. The first initiative is what we call 66% by
	2020.
	Based on a comprehensive study by Georgetown University's Center on
	Education and Workforce, two-thirds of the jobs in Utah will require
	some form of post-secondary education by the year 2020. Right now only
	43% of Utah's workforce meets this education standard.
	The infusion of technology in both the workplace and career sectors
	will drive this nation's economic transformation. Across all industries
	and economic sectors, market demand for college-educated workers will
	outpace supply by 300,000 employees annually.
	If nothing changes, by 2018 the nation's post-secondary system will
	have produced three million fewer college graduates than the labor
	market needs.
	As the Georgetown study put it, ``In short, the economic history of
	the United States is one of lock-step progression between technology
	and educational attainment.''
	Utah is looking ahead and taking the steps now to ensure our
	workforce has the right education level for the future demands of the
	private sector. We have proactively engaged all major stakeholders and
	leaders on every front, including education and business, to unite
	behind and commit to our goal of 66% by 2020.
	The second initiative Utah is pursuing is STEM education.
	More than simply having an education, Utahns must get the right
	kind of education in areas that are valued in the marketplace. Much
	like hockey great Wayne Gretzky said he would skate to where the puck
	will be, Utah is educating for where the jobs will be.
	With the rise of a technologically-oriented economy, Utah has a
	renewed focus on STEM education: science, technology, engineering, and
	math, because that is where the jobs will be.
	Sound analysis demonstrates that, in our future economy, the most
	intense concentrations of post-secondary workers will be in five main
	sectors, and represent more than 30% of total occupational employment
	and about 45% of all jobs for post-secondary workers. It's no
	coincidence that these five sectors, as they tap into our new knowledge
	economy, are also the fast growing areas of our labor market.
	STEM-related jobs are a top tier priority in Utah's entire
	education system, K-16.
	The third initiative I wish to highlight today is Utah's expansion
	of dual immersion education. Utah's dual immersion programs in Spanish,
	French, and Chinese teach our students cultural literacy and prepare
	them for a global economy. Dual immersion students also perform better
	on standardized testing. They show improved memory skills, better
	attention-control, and higher problem-solving ability.
	Utah is a leader in foreign language classes. In fact, one third of
	all Mandarin Chinese classes taught in the entire United States are
	taught in Utah. You may be surprised to know that there are 658
	languages spoken in Utah. A large component of that is our culture; we
	have many residents who serve a Mormon mission for the LDS Church and
	they often gain language skills abroad.
	Our multi-lingual students become a key part of our workforce, and
	that attracts business to our state, including Goldman Sachs, whose
	Utah office is its second largest in the America's and fastest growing
	in the world.
	It is clear that states are leading the way to economic recovery.
	For example, Utah's economy is growing at more than twice the national
	average. Our unemployment rate is 5.2%, far below the national average
	of 7.8%.
	Despite our success, federal policies complicate Utah's ability to
	grow and align our workforce with market demands.
	Governors no longer have access to the Workforce Investment Act's
	discretionary funds that we were able to tailor for unique solutions
	for our states. Now, all workforce investment money either covers
	administrative costs, or goes directly to the grant programs.
	Because we no longer have flexibility with this money, the State of
	Utah had to apply for an individual grant through the Workforce
	Innovation Fund. As of last April, Utah spent more than four months,
	550 staff hours, and $48,000 dollars just to apply for the grant.
	Now, I fully support oversight and accountability. But I do not
	support excessive bureaucratic red tape that limits my state's ability
	to invest funds in the most effective way. If states are to optimize
	alignment between our future educational outcomes and the labor demands
	of the market, it is essential that Congress now provide states maximum
	flexibility to implement programs and tailor solutions in the way we
	see fit.
	No one understands state challenges and demographics better than
	the people who reside and govern there. No one is more committed to the
	most effective use of limited resources for the best possible outcome,
	for both our students and our employers. And no one is more committed
	to growing local economies, thus ensuring economic recovery, prosperity
	and job growth.
	Thank you for the opportunity to be with you today.
	______

	Chairman Kline. Secretary Fornash, you are recognized.

	STATEMENT OF HON. LAURA FORNASH, SECRETARY OF EDUCATION,
	COMMONWEALTH OF VIRGINIA

	Ms. Fornash. Good morning, Chairman Kline and members of
	the committee. Thank you for the opportunity to join you today
	to talk about the education reform efforts that the
	Commonwealth has taken under the leadership of Governor Bob
	McDonnell. I think you will hear many similar themes as to
	those that were just presented by Governor Herbert.
	Since taking office in January of 2010, the Governor has
	made education and education reform a top priority of his
	administration, with a laser focus on college and career
	readiness. We are raising standards, focusing on literacy,
	strengthening our high school diploma requirements, and
	ensuring access to dual-enrollment classes that lead to
	credentials which transfer to our public and private 4-year
	institutions.
	Beginning in March of 2010, the Governor issued an
	executive order establishing a Governor's Commission on Higher
	Education, Reform, Innovation and Investment. The commission,
	comprised of business, education, community leaders from across
	the Commonwealth, helped to develop a strategic vision and
	recommendations that turned into the Virginia Higher Education
	Opportunity Act of 2011 or the Top Jobs for the 21st Century
	higher education legislation. This landmark reform legislation
	provides a roadmap to ensure the college dream is affordable
	and accessible for all Virginians. Our bold statutory goal of
	100,000 new degrees over the next 15 years with a focus on
	STEM-H degrees is supported by over $350 million the last 3
	years, which has been proposed by Governor Bob McDonnell and
	supported by the Virginia General Assembly. Additionally, we
	are using a points-based performance funding model to
	incentivize our institutions in a variety of areas, including
	increased associate and bachelor's degree production,
	especially for underrepresented populations, increased growth
	of STEM-H degrees, and accelerated time to degree programs.
	Our institutions are rising to the challenge of these
	goals, and our reforms are working. Over the past 2 years we
	have added an additional 3,800 slots for undergraduate in-state
	students, and last year we recorded the lowest average yearly
	tuition increase of 4 percent at our public colleges and
	universities in over a decade. In Virginia we believe more
	diplomas mean a stronger economy and more jobs, and we are
	implementing policies to strengthen this connection.
	We have also been working collaboratively with our K-12
	higher education and workforce partners to develop and
	implement the Virginia Longitudinal Data System. This system
	allows for integrated student-teacher reporting that matches
	individual teachers to students and will soon be able to link
	teachers to their preparation programs and student outcomes.
	This past October, Virginia became one of only a handful of
	States to release wage outcomes data on college graduates down
	to the level of individual major and institution. By August,
	the Commonwealth will include within these reports associated
	statistics on education debt, also down to the level of major
	and institution.
	For the first time, students and families will be able to
	use specific information about the full cost, associated debt,
	and early career wages to make informed choices about
	postsecondary education. We have also used this data to create
	a workforce report card to benchmark program outcomes and
	eventually evaluate program effectiveness.
	Great teachers in great schools make great students and
	citizens. A great teacher makes all the difference in the life
	of a young person. We are working hard to recruit, incentivize,
	retain, and reward excellent teachers and treat them like the
	professionals they are.
	This year the Governor introduced the Educator Fairness Act
	that will streamline the bureaucratic grievance procedure to
	benefit teachers, principals, and ultimately students. This
	legislation extends the probationary period for new teachers to
	between 3 and 5 years and requires a satisfactory performance
	rating as demonstrated through our new performance evaluation
	system, which includes a component on student academic process
	to keep a continuing contract.
	Further, we want to incentivize our very best teachers to
	excel in the classroom. The Governor proposed $15 million for
	school districts to reward well-performing educators by
	establishing the Strategic Compensation Grant Fund. We want to
	reward the teachers who mentor others, work in hard-to-staff
	schools and subjects, and show significant academic progress
	with their students. This will allow for additional
	compensation for many of our great teachers who go above and
	beyond every day.
	In the Commonwealth we equip low-performing schools with
	turnaround specialists and additional resources from the State
	and private sector. If our schools haven't improved, that is
	unacceptable. Therefore, the Governor has proposed a bold
	initiative to establish a statewide Opportunity Education
	Institution to provide a high-quality alternative for children
	attending any chronically underperforming public elementary or
	secondary school.
	The Opportunity Education Institution will create a new
	statewide school division to turn around our failing schools.
	If a school is consistently failing, the Opportunity Education
	will step in to manage it. The model is working in Louisiana
	and Tennessee, where recovery and achievement districts were
	created and are producing positive results. For a very small
	subset of schools that are failing students, we have no other
	option.
	Our school choice alternatives have focused in the
	Commonwealth on the development of college lab preparatory
	schools, virtual school programs, and public charter schools.
	The Governor has introduced several pieces of legislation to
	strengthen our charter school law and encourage local community
	leaders and charter management organizations to look to the
	Commonwealth for growth. Currently, Virginia only has four
	public charter schools. We will continue to look for ways to
	expand high quality public charter schools to provide families
	with options for their children.
	In the absence of congressional reauthorization of the
	Elementary and Secondary Education Act, Virginia has joined a
	number of States and responded to Secretary Duncan's offer to
	grant flexibility in implementing certain provisions of the No
	Child Left Behind Act of 2001. While Virginia appreciates the
	flexibility afforded States by the Secretary, granting
	temporary waivers of prescriptive No Child Left Behind
	requirements is no substitute for a comprehensive update of the
	law. We believe Congress, not the U.S. Department of Education,
	should make these important decisions that affect every State
	and all public school students.
	As the mother of three young children, Carter, Grace, and
	Wynn, I know the importance of a good education. We must
	continue to raise the bar and end failure, we must continue to
	bring more innovation, accountability, and choices to our
	public school system. An educated workforce helps the
	Commonwealth attract and retain job-creating businesses. With
	these bold initiatives, we will not only strengthen our
	education system but also strengthen and grow our economy and
	help our citizens find the good-paying and rewarding jobs they
	need and deserve. Thank you for the opportunity to speak with
	you today.
	Chairman Kline. Thank you.
	[The statement of Ms. Fornash follows:]

	Prepared Statement of Hon. Laura W. Fornash, Secretary of Education,
	Commonwealth of Virginia

	Chairman Kline, members of the committee. I am Laura Fornash,
	Secretary of Education for the Commonwealth of Virginia. In my
	Secretariat, I assist Virginia Governor Bob McDonnell in the
	development and implementation of the state's education and workforce
	policy and oversee Virginia's 16 public universities, the Virginia
	Community College System, five higher education and research centers,
	the Virginia Department of Education, and the state-supported museums.
	Thank you for the opportunity to join you today to talk about the
	education reform efforts that the Commonwealth has taken under the
	leadership of Governor Bob McDonnell.
	Since taking office in January of 2010, the Governor has made
	education and education reform a top priority of his administration,
	with a laser focus on college and career readiness. We are raising
	standards, focusing on literacy, strengthening our high school diploma
	requirements, and ensuring access to dual enrollment classes through
	the local community colleges which leads to credentials that transfer
	to our public and private four year institutions.
	Beginning in March of 2010, the Governor issued an executive order
	establishing the Governor's Commission on Higher Education Reform,
	Innovation and Investment. This commission, comprised of business,
	education and community leaders from across the Commonwealth, helped to
	develop a strategic vision and recommendations that turned into the
	Virginia Higher Education Opportunity Act of 2011 or the ``Top Jobs for
	the 21st Century'' higher education legislation. This landmark reform
	legislation provides a road map to ensure the college dream is
	affordable and accessible for Virginians. Our bold statutory goal of
	100,000 new degrees over the next 15 years, with a focus on STEM-H
	degrees, is supported by more than $350 million over the last three
	years that was proposed by Governor McDonnell and endorsed by the
	Virginia General Assembly. Additionally, we are using a points based
	performance funding model to incentivize our institutions in a variety
	of areas including increased associate's and bachelor's degree
	production especially for underrepresented populations, increased
	growth of STEM-H degrees and accelerated time-to-degree programs. The
	model was developed by policy makers, the business community and
	leadership from our higher education institutions to provide financial
	incentives for outcomes-primarily increased graduates. Our institutions
	are rising to the challenge of these goals and our reforms are working.
	Over the past two years we've added over 3,800 slots for undergraduate
	in-state students, and last year we recorded the lowest average yearly
	tuition increase of 4% at our public college and universities in over a
	decade. In Virginia, we believe that more diplomas mean a stronger
	economy and more jobs and we are implementing policies to strengthen
	this connection.
	States rely on the federal government to assist with higher
	education access through various federal financial aid programs. You
	have made some reforms but more must be done to maximize these federal
	dollars and ensure those who enter our higher education institutions
	exit with employable credentials. As the federal government continues
	to reform its' financial aid programs, I encourage you to review the
	recently released report, ``The American Dream 2.0: How Financial Aid
	Can Help Improve College Access, Affordability, and Completion''
	supported by a grant from the Bill & Melinda Gates Foundation. It
	provides three key recommendations to help ensure these dollars provide
	student success and completion:
	<bullet> Make aid simpler and more transparent;
	<bullet> Spur innovations in higher education that can lower costs
	and meet the needs of today's students; and
	<bullet> Ask institutions, states, and students to share
	responsibility for producing more graduates without compromising access
	and affordability.
	We have also been working collaboratively with our K-12, higher
	education and workforce partners to develop and implement the Virginia
	Longitudinal Data System. The system allows for integrated student-
	teacher reporting that matches individual teachers to students and
	provides certain teachers with estimates of student growth and will
	soon be also able to link teachers to their preparation programs and
	student outcomes.
	This past October, Virginia become one of only a handful of states
	to release wage outcomes data on college graduates, down to the level
	of individual major and institution. By August 2013, the Commonwealth
	will include within these reports associated statistics on education
	debt, also down to the level of major and institution. For the first
	time, students and families will be able to use specific information
	about the full costs, associated debt, and early career wages to make
	informed choices about postsecondary education. We've also used this
	data to create a workforce report card to benchmark program outcomes
	and eventually evaluate program effectiveness.
	We also believe that in order to get a good job and good college
	education, our youth must be prepared for our highly-skilled, highly-
	technical workforce and the rigor of postsecondary education
	coursework. Three areas of focus for us in K-12 education reform
	include expanding educational opportunity, ensuring excellence in the
	classroom and increasing innovation and accountability. Through
	legislative and budget proposals, we have increased the percentage of
	K-12 funding going into the classroom from 62% to 64%. We have focused
	on ensuring students can read before being promoted to the fourth
	grade, funded incentives for STEM teachers to keep them in the
	classroom and removed mandates to give local school divisions greater
	flexibility. Even with these initiatives, we continue to look for ways
	to ensure excellence in the classroom and opportunity for our students.
	Great teachers in great schools make great students and citizens. A
	great teacher makes all the difference in the life of a young person.
	We are working to recruit, incentivize, retain and reward excellent
	teachers and treat them like the professionals that they are. This
	year, the governor introduced The Educator Fairness Act that will
	streamline the bureaucratic grievance procedure to benefit teachers,
	principals, ultimately students. This legislation extends the
	probationary period for new teachers to between three to five years,
	and requires a satisfactory performance rating as demonstrated through
	a new performance evaluation system, which includes student academic
	progress as a significant component, to keep a continuing contract.
	Last week this proposal passed the floor of the House of Delegates
	with a bi-partisan vote and unanimously passed from the Senate
	Education and Health committee.
	Further, we want to incentivize our very best teachers to excel in
	the classroom. The governor proposed $15 million for school districts
	to reward well-performing educators by establishing the Strategic
	Compensation Grant Fund. This strategic compensation plan, based on a
	model developed by a local Virginia school system, will be implemented
	through local guidelines that best fit each school division's unique
	characteristics and mission. We want to reward the teachers who mentor
	others, work in hard-to-staff schools and subjects, and show
	significant academic progress with their students. This will allow for
	additional compensation for many of our great teachers who go above and
	beyond every day.
	In the Commonwealth, we equip low performing schools with
	turnaround specialists and additional resources from the state and
	private sector. If our schools haven't improved that's unacceptable.
	Therefore, the governor has proposed a bold initiative to establish a
	statewide Opportunity Educational Institution to provide a high quality
	education alternative for children attending any chronically
	underperforming public elementary or secondary school. The Opportunity
	Educational Institution will create a new statewide school division to
	turnaround our failing schools. If a school is consistently failing,
	the Opportunity Educational Institution will step in to manage it. If
	the school has failed for three years, the Institution can take it over
	and provide a brand new approach to a broken system. This model is
	proven nationally. Louisiana and Tennessee have created Recovery and
	Achievement districts, and their results are positive.
	For the very small subset of schools that are failing Virginia's
	students, we have no other option.
	Other school choice initiatives that we have focused on in the
	Commonwealth include the development of College Partnership Laboratory
	School, Virtual School Programs and Public Charter Schools. During the
	McDonnell administration, the governor has introduced several pieces of
	legislation to strengthen our charter school law and encourage local
	community leaders and charter management organizations to look to the
	Commonwealth for growth. Currently, Virginia only has 4 public charter
	schools. We will continue to look for ways to expand high-quality
	public charter schools to provide families with options for their
	children.
	In the absence of Congressional reauthorization of the Elementary
	and Secondary Education Act (ESEA), Virginia has joined a number of
	states and responded to Secretary Duncan's offer to grant flexibility
	in implementing certain provisions of the No Child Left Behind Act of
	2001. While Virginia appreciates the flexibility afforded states by the
	Secretary, granting temporary waivers of prescriptive NCLB requirements
	is no substitute for a comprehensive update of the law. We believe
	Congress, not the U.S. Department of Education, should make those
	important decisions that affect every state and all public school
	students.
	As the mother of three young children, Carter, Grace and Wynn, I
	know the importance of a good education. We must continue to raise the
	bar and end failure. We must continue to bring more innovation,
	accountability and choices to our public education system. Excellent
	education demands having the courage to try new approaches and the
	Commonwealth is working to implement bold initiatives to ensure a high-
	quality education for all students. An educated workforce helps the
	Commonwealth attract and retain job-creating businesses. With these
	bold initiatives we will not only strengthen our education system, but
	also strengthen and grow our economy and help our citizens find the
	good-paying and rewarding jobs they need and deserve.
	Thank you for the opportunity to speak with you today and I am
	happy to take any questions.
	______

	Chairman Kline. Dr. Bernstein.

	STATEMENT OF JARED BERNSTEIN, SENIOR FELLOW,
	CENTER ON BUDGET AND POLICY PRIORITIES

	Mr. Bernstein. Chairman Kline, Ranking Member Miller, thank
	you for inviting me to testify today.
	From the perspective of working families, the current
	economy is highly imbalanced. The stock market just hit new
	highs last week, boosted by historically high corporate
	profitability, yet as my first chart shows, middle- and low-
	wage workers continue to fall behind. In 2012, the real weekly
	earnings of full-time workers were down about 2 percent for
	those at the bottom of the pay scale, flat in the middle, and
	up 2 percent for those at the top.
	Now, greater educational attainment has often been put
	forth as a policy solution to this problem of stagnant earnings
	and inequality, and for a good reason. People with higher
	levels of education enjoy lower unemployment, there is a
	significant wage premium for workers with higher levels of
	education, one that has consistently grown over time, and
	clearly the education of its citizens is a time honored role of
	government, a, quote, ``public good'' that is essential to
	building a strong competitive economy.
	However, an objective observer of today's politics would, I
	fear, be hard pressed to see these concerns reflected in our
	political agenda or our policies. It is hard to see how
	careening from crisis to crisis, from fiscal cliff to debt
	ceiling to sequester, supports the private sector need for both
	a well-educated workforce on the supply side and a stable
	climate of demand for the goods and services they produce.
	In particular, an exclusive focus on deficit reduction
	appears to have wholly crowded out policies devoted to
	educational opportunity or job creation. Worse, spending cuts
	are threatening to reduce the government's commitment to
	supporting education and training while austerity economics is
	hurting a fragile recovery.
	As this committee well knows, spending cuts agreed to so
	far have been almost exclusively from the discretionary side of
	the budget. Within the nondefense discretionary budget, some
	key education programs are already at risk. For example, if the
	Pell Grant appropriation grows only with inflation from its
	2012 funding level, the program will face a funding shortfall
	of about $50 billion over the next decade. Any further cuts to
	this part of the budget will exacerbate this shortfall.
	Still, while these programs must be protected, it would be
	a mistake to think that higher educational attainment alone
	would help ameliorate the economic squeeze so many families
	face. The supply of labor, even of so-called skilled labor, is
	not what is holding back job growth right now. It is inadequate
	labor demand, not enough jobs to meet the supply of workers,
	that has been far more the pressing factor in recent years.
	Our slack demand labor market has hurt even college-
	educated workers. I suspect the trend shown in the second
	figure of my testimony will surprise some of the members of the
	committee. It shows that even the wages of workers with a
	bachelor's degree have been losing ground in real terms, and
	not just over the recession, but over the prior expansion as
	well. Yet despite the fact that so many families continue to
	struggle, Congress' sole focus appears to be deficit reduction.
	Now, it is essential to stabilize the growth of the debt in
	the medium term, but a few factors should be considered. First,
	based on the $2.3 trillion in 10-year spending cuts and tax
	increases enacted since 2011, we are $1.2 trillion in further
	policy changes away from stabilizing the debt as a share of GDP
	by 2022. So Congress and the administration have already made
	important progress in this regard.
	Our most pressing near-term economic problem is not the
	budget deficit, it is the jobs deficit. In fact, as I travel
	around the Nation discussing these matters with audiences from
	all walks of life, I constantly hear one refrain: Why isn't
	Washington doing anything about our jobs and our paychecks? So
	in closing out my testimony, I would like to provide the
	committee with a brief and very lightly annotated list of ideas
	that I would urge you to consider.
	Infrastructure investment. Our national stock of public
	goods is in significant disrepair with significant costs to
	productivity and growth. Manufacturing policies. Both offense,
	that is forward-looking investments in areas like clean energy
	where private investment will be undersupplied, and defense,
	fighting back against nontariff barriers, like currency
	manipulation that disadvantage our exports. Helping unions by
	creating a more level playing field for them to organize.
	Minimum wage. Ranking Member Miller has proposed a useful
	increase in the wage floor that would help lift the earnings of
	our lowest wage workers by 85 cents a year for 3 years. More
	rigorous application of labor standards, including overtime
	rules, correct worker classification, and the prosecution of
	wage theft. Strong work supports, both in terms of wage
	subsidies for low-income workers, like the earned income or the
	child tax credits, and assistance with the costs of employment,
	including child care and transportation.
	And finally, better oversight of financial markets. While
	this may seem tangential to jobs for the middle class, it is in
	fact highly relevant. Today's high unemployment rate, even
	years into a GDP recovery, is widely viewed as one consequence
	of the housing bubble, itself inflated by severely
	underregulated financial markets. Not only would action on some
	subset of these policy ideas help to provide desperately needed
	opportunities for working families, but I think they provide an
	excellent answer to the question of, What is Washington doing
	to help? Thank you.
	Chairman Kline. Thank you.
	[The statement of Mr. Bernstein follows:]

	Prepared Statement of Jared Bernstein, Senior Fellow,
	Center on Budget and Policy Priorities

	Chairman Kline and ranking member Miller, I thank you for inviting
	me to testify today on issues directly in the wheelhouse of this
	committee: education, skills, and jobs.
	My testimony begins by looking at the current jobs situation with
	an emphasis on educational investments. I then discuss ways in which
	recent budget cuts are threatening the educational support critical to
	a productive workforce. Finally, I specify a range of policy ideas that
	I urge the committee to consider in the interest of boosting future job
	growth.
	Education Investments and the Current Job Market
	From the perspective of working families, the current economy is
	highly imbalanced. The stock market just hit new highs last week,
	boosted in part by historically high corporate profitability. Yet,
	middle- and low-wage workers continue to fall behind. As shown in my
	first chart, in 2012, the real weekly earnings of full-time workers
	were down about 2% for those at the bottom of the pay scale, flat for
	those in the middle, and up 2% for those at the top.

	<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

	The ``staircase'' pattern of growth shown in the figure is
	characteristic of the income inequality that has been increasing
	prevalent in our economy for decades now. Inequality has served as a
	kind of a wedge in the U.S. economy, such that the benefits of growth
	no longer accrue to working families the way they used to. This
	divergence of compensation and productivity is well-documented and is a
	central reason why even in macroeconomic good times--in the absence of
	the output gaps that remain large today--middle-class families have
	faced challenging economic times since well before the bursting of the
	housing bubble and the Great Recession that then ensued.
	Education has often been put forth as a policy solution to this
	problem of stagnant earnings and inequality, and for good reason. In
	the most recent jobs report, for example, the unemployment rate last
	month was shown to be 3.7% for college graduates, 8.1% for high-school
	grads, and 12% for high-school dropouts. And there is, of course, a
	significant wage premium for workers with higher levels of education,
	one that has grown considerably over time.
	In this regard, a significant message from my testimony is that
	members of this committee need to be aware of the forthcoming budgetary
	constraints on programs that help support education, both at the
	federal and sub-federal levels, and particularly as regards educational
	access and affordability for the least advantaged among us.
	But especially at times like the present, it would be a mistake to
	think that higher educational attainment alone would help ameliorate
	the economic squeeze so many families face. The supply of labor, even
	of so-called ``skilled'' labor, is not what's holding back job growth
	right now. Inadequate labor demand--not enough jobs to meet the supply
	of workers--has been by far the more pressing factor in recent years.
	Our slack-demand job market has hurt even college-educated workers.
	I suspect the trend shown in my second figure, using the same data
	source as the first figure (BLS weekly earnings) will surprise some
	members on the committee. It shows that even the wages of workers with
	a bachelor's degree have been losing ground in real terms, and not just
	over the recession, but over the prior expansion as well.

	<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

	Trends like these should serve to remind policymakers and
	economists that we need to worry about both sides of the supply/demand
	equation. Yes, we need to ensure that policies are in place to help
	future workers achieve their academic potential. This role for policy
	is especially important when persistently high levels of income
	inequality block educational opportunity for children from economically
	disadvantaged backgrounds. But, in periods like the present
	characterized by persistent labor-market slack, we also need to be
	concerned that there will be jobs for them after their course of
	schooling is successfully completed.
	Budget Cuts at the National and State Levels
	Clearly, the education of its citizens is time-honored role of
	government--a ``public good'' that is essential to building a strong,
	competitive economy. It is widely accepted by economists of all
	political stripes that absent a public role, the nation's citizenry
	would be under-educated, damaging both individual and national
	potential.
	However, an objective observer of today's politics would, I fear,
	be hard-pressed to see these concerns reflected in our political agenda
	or our policies. It is extremely hard to see how careening from crisis-
	to-crisis--from fiscal cliff to debt ceiling to sequester--supports the
	private sector need for both a well-educated labor force on the supply
	side and a stable climate of demand for the goods and services they
	produce.
	In particular, an exclusive focus on deficit reduction appears to
	have wholly crowded out policies devoted to educational opportunity or
	job creation. Worse, spending cuts are threatening to reduce the
	government's commitment to supporting education and training while
	austerity economics is hurting the fragile recovery.
	As this committee well knows, spending cuts agreed to so far have
	been almost exclusively from the discretionary side of the budget.
	Within the non-defense discretionary (NDD) budget, some key education
	programs are at already at risk. For example, my Center on Budget and
	Policy Priorities colleague Richard Kogan points out that if the Pell
	Grant appropriation grows only with inflation from its 2012 funding
	level, ``the program will face a funding shortfall of about $50 billion
	over the next decade. In other words, an additional $50 billion will be
	needed to maintain Pell Grant award levels without cutting students
	from the program.''
	Kogan's analysis is based on the lower NDD spending caps already
	legislated, largely through the Budget Control Act. Thus, any further
	cuts to this part of the budget will exacerbate this shortfall.
	About one-third of NDD spending provides grants to states and
	localities to support services including education, to which is
	allocated about 25% of those grants, or around $40 billion this year.
	According to Leachman et al:
	These funds mostly end up with elementary and high schools,
	primarily to help them educate children from low-income families and
	children with learning disorders and other types of disabilities. The
	funds also go to agencies that provide preschool education to low-
	income children through the Head Start program, and to school districts
	to help them train better teachers and reduce class sizes.
	These same authors report the results of a 2012 survey of education
	administrators of K-12 public schools, wherein majorities say that
	``sequestration cuts would mean `reducing professional development
	(69.4 percent), reducing academic programs (58.1 percent), eliminating
	personnel (56.6 percent) and increasing class size (54.9 percent).' ''
	Invariably, today's budget discussions take place at a level high
	above the programmatic implications of the cuts being considered. But
	many of the programs that will be targeted by NDD cuts already enacted
	are well known to this committee, such as high poverty schools that get
	assistance through Title 1, special education through the Individuals
	with Disabilities Education Act, Head Start, and teacher quality
	improvement grants.
	Finally, while NDD spending has taken a hit with significant
	implications for K-12, the recession and slow recovery has had at least
	two other negative consequences for the provision of educational
	quality and opportunity: a) job losses for teachers and other
	educational workers, and b) higher costs of attendance at public
	universities.
	State budget constraints have led to significant service cuts at
	the state and local level, and public education has of course been a
	central target. Recovery Act funds helped to temporarily offset some of
	these localized budget pressure, but Figure 3 shows the extent to which
	the budget cuts forced layoffs in local education since its peak in
	early 2008. Since then, jobs in that sector are down about 360,000.
	Meanwhile, both enrollments and costs are rising, so spending per pupil
	is down in most states.

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	Another consequence of state budget cuts has been diminished
	support of their public university systems. Figure 4 plots state
	appropriations for higher education, both in total and per full-time
	equivalent student, against enrollments. The number of students going
	to public colleges rose significantly in the downturn, in part because
	returning to school can be a smart option during a period when the
	labor market is particularly unwelcoming. But as can be seen, the gap
	between enrollment and appropriations was wider in recent years than in
	any time covered by these data (from the College Board).

	<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

	As state contributions to higher education decline, tuitions
	typically must pick up the difference, and of course, over the
	recessionary period, this means rising prices (and greater demand) for
	higher ed while most households' incomes were falling. In fact, between
	the 2007-08 school year and now, tuitions and fees for private four-
	year colleges rose about 13% compared to a 27% rise for public higher
	education. Of course, there are still large differences in the tuition
	levels between private and public institutions of higher education,
	with private tuition and fees about $30,000 per year in 2012-13 and
	public at about $9,000. But the large differential in the growth of
	tuition and fees between the two sectors means this gap is shrinking.
	Fighting the Jobs Deficit
	As stressed above, when it comes to economic policy, despite the
	fact that so many families continue to struggle, Congress's sole focus
	appears to be deficit reduction. While it is essential to stabilize the
	growth of the debt in the medium term, a few factors should be
	considered. First, based on about $2.3 trillion in spending cuts and
	tax increases enacted since 2011, we are $1.2 trillion in further
	policy changes (that would save another $200 billion in interest
	payments) away from stabilizing the debt as a share of GDP by 2022.\1\
	So Congress and the administration have already made important progress
	in this regard.
	---------------------------------------------------------------------------
	\1\ This figure may be modified up or down as a result of the
	forthcoming CBO forecast, to be released at 1:00 p.m. today. See http:/
	/www.cbo.gov/content/43858.
	---------------------------------------------------------------------------
	Second, the most pressing near-term economic problem is not the
	budget deficit, it's the jobs deficit. This is clear in relevant
	indicators of both: we have high unemployment and low interest rates.
	Were the budget deficit a near-term problem, in the sense of
	crowding out private borrowing, we'd see this in debt markets through
	higher rates of interest, but instead we see the opposite, with
	Treasury yields at historic lows. Yet the unemployment rate has been
	stuck around 8% for the past year.
	In fact, as I travel around the nation discussing these matters
	with audiences from all walks of life, I constantly hear one refrain:
	``Why isn't Washington doing anything about jobs and paychecks?''
	So in closing out my testimony, I'd like to provide the committee
	with a brief and very lightly annotated list of ideas that I'd urge you
	to consider.
	<bullet> Infrastructure investment: Our national stock of public
	goods is in significant disrepair, with significant costs to
	productivity and growth. With high unemployment and low borrowing
	costs, this is an excellent time to make such investments. One specific
	idea to consider here is the FAST! (Fix America's Schools Today) bill
	introduced in the last Congress to repair the nation's public schools,
	with an emphasis on energy-efficient retrofits.
	<bullet> Manufacturing policies: Both offense (forward looking
	investments in areas like clean energy where private investment will be
	undersupplied) and defense (fighting back against non-tariff barriers
	like currency manipulation that disadvantage our exports).
	<bullet> Helping Unions: Creating a more level playing field for
	unions to organize.
	<bullet> Minimum wage: Ranking member Miller has proposed a useful
	increase in the wage floor that would help lift the earnings of our
	lowest wage workers by 85 cents a year for three years, bring the
	federal minimum from $7.25 to $9.80 and then indexing it to inflation.
	Such an increase in the minimum wage would lift year-round earnings
	from around $15,000 to around $20,000, and potentially lift the
	earnings of 30 million low-wage workers, with little or no negative
	impact on the employment of affected workers.
	<bullet> More rigorous application of labor standards, including
	overtime rules, correct worker classification, and prosecuting wage
	theft.
	<bullet> Strong work supports both in terms of wage subsidies for
	low-income workers like the Earned Income or Child Tax credits, and
	assistance with the costs of employment, including child care and
	transportation.
	<bullet> Guaranteed health insurance coverage: While lower-income
	jobs obviously tighten family budget constraints, if that family has
	affordable and reliable health insurance coverage, they are far more
	likely to be able to make ends meet and achieve a level of security
	that all working families deserve.
	<bullet> Better oversight of financial markets: While this may seem
	tangential to jobs for the middle class, it is in fact highly relevant.
	Today's high unemployment rate, even years into a GDP recovery, is
	widely viewed as one consequence of the housing bubble, itself inflated
	by severely under-regulated financial markets. And while the Dodd-Frank
	financial reform bill has much to recommend it, Congress must
	accelerate its lagging implementation.
	Not only would action on some subset of these policy ideas help to
	provide desperately needed opportunities to working families, but they
	would provide an excellent answer to the question of ``what's
	Washington doing to help?''
	Finally, an amply funded government sector is essential to
	accomplish the above agenda, both in terms of educational access and
	jobs for the middle class. This will require future budget deals
	involving revenue increases and spending cuts, not solely in the
	interest of debt stabilization, but to support economic security and
	opportunity, financial market oversight, and work.
	Thank you.
	______

	Chairman Kline. Mr. Timmons, you are recognized.

	STATEMENT OF JAY TIMMONS, PRESIDENT AND CEO,
	NATIONAL ASSOCIATION OF MANUFACTURERS

	Mr. Timmons. Chairman Kline, Ranking Member Miller, and
	members of the committee, thank you so much for inviting me to
	offer a perspective on the critical workplace issues facing
	manufacturers as a new session of Congress gets underway. In
	the coming months, manufacturers urge the committee to focus on
	our Nation's ability to compete with other Nations and address
	the many challenges that our sector face here at home. Today it
	is actually 20 percent more expensive to manufacture in the
	United States compared to our major trading partners, and that
	figure excludes the cost of labor. Although the committee
	cannot address every factor that goes into that number, it can
	provide assistance in other areas.
	My written testimony highlights some of the barriers to
	competitiveness for manufacturers. For example, the National
	Labor Relations Board's overreach is making workplace relations
	needlessly adversarial. The Board's aggressive agenda is
	undoing the time-tested balance in our labor system, one on
	which employers and employees have come to rely. But I would
	like to use my time today to highlight two issues in two areas
	where I believe Congress has an opportunity to make significant
	advances, and both of these issues focus on the manufacturing
	workforce and I believe have the opportunity for bipartisan
	solutions.
	Over 600,000 manufacturing jobs are unfilled today because
	workers don't possess the right skills. Manufacturers are
	working to close this skills gap through initiatives like the
	NAM's military badge program and our skills certification
	program, both of which facilitate entry and advancement into
	the manufacturing workforce. There are many Federal programs,
	as you know, that aim to provide worker training, but quite
	candidly they are just not getting the job done.
	Federal resources aren't being used effectively. For
	example, programs authorized by the Workforce Investment Act
	are overly bureaucratic, which prevents workforce training
	dollars from getting to the workers who actually need them. We
	believe Congress should streamline the program and direct the
	focus, direct its focus to training workers with skills that
	are in demand and for jobs that actually exist. The AMERICA
	Works Act, which Congressmen Barletta and Schneider introduced
	this morning, achieves exactly that goal. Manufacturers
	appreciate Congressman Barletta's work on this legislation, and
	we urge members of the committee to cosponsor this bill.
	We can begin closing the skills gap through better
	education and better training programs, but that is going to
	take time. Manufacturers also need access to the people who
	will invent, who will innovate, who will create, and who will
	build, regardless of where they are born. And so manufacturers
	are encouraging Congress to move forward with comprehensive
	immigration reform that will allow us to meet our current and
	future workforce needs. Manufacturers need to be able to hire
	the right person, with the right skills, at the right time.
	Without major reforms, we will be ceding talent to our
	competitors and turning away a future generation of
	entrepreneurs.
	Consider this inspirational finding of a study by the
	Partnership for a New American Economy. It found that over 40
	percent--over 40 percent--of Fortune 500 companies were either
	started by an immigrant or by the child of an immigrant.
	American manufacturing enterprises founded by immigrants span
	all sectors, from technology, to steel, to chemicals, to
	medical devices, and many others. All told, major companies
	founded by immigrants or children of immigrants have an
	economic impact larger than the entire economies of all but two
	of our competitors--Japan and China--according to the report.
	We also have to recognize reality. In addition to border
	security, structural reforms, and verification issues,
	immigration reform must address the millions of undocumented
	individuals who currently live in the United States. We need to
	provide a solution for these men, women, and children who seek
	freedom and opportunity and who can help us build a stronger
	country.
	So thank you again for giving me this opportunity to
	provide a perspective from manufacturers. We look forward to
	working with you, with all of you to achieve our shared goal of
	a more vibrant economy that leads to investment and jobs in
	America.
	[The statement of Mr. Timmons follows:]

	Prepared Statement of Jay Timmons, President & CEO,
	National Association of Manufacturers

	Chairman Kline, Ranking Member Miller and Members of the Committee,
	thank you for the opportunity to appear today to testify on behalf of
	our nation's manufacturers at this hearing on the ``Challenges Facing
	America's Workplaces and Classrooms.''
	My name is Jay Timmons, and I am the President and CEO of the
	National Association of Manufacturers, the nation's largest industrial
	trade association, representing small and large manufacturers in every
	industrial sector, in all 50 states. And we are the voice of 12 million
	manufacturing workers in America. I am pleased to testify on behalf of
	our nation's manufacturers and all those who wish to preserve our
	nation's competitiveness and prosperity, on the critical issues of
	education and workforce development.
	Before I begin, I would like to let you know that the Manufacturing
	Institute, the non-profit affiliate of the National Association of
	Manufacturers, is honoring 120 women tonight from across the country
	for their leadership in Manufacturing. We applaud all of these women
	for their hard work, dedication and commitment to the success of
	American manufacturing.
	Manufacturing remains an important economic force across the
	country. To retain that strength we need to address the fact that it is
	now 20 percent more expensive to manufacture in the United States
	compared to our competitors, and that figure excludes the cost of
	labor. As manufacturers, we have identified four goals to keep
	manufacturing as leading economic driver.
	1. The United States will be the best place in the world to
	manufacture and attract direct foreign investment.
	2. Manufacturers in the United States will be the world's leading
	innovators.
	3. The United States will expand access to global markets to enable
	manufacturers to reach the 95 percent of consumers who live outside our
	borders.
	4. Manufacturers in the United States will have access to the
	workforce that the 21st-century economy demands.
	These goals are our vision for manufacturing. There are however,
	also very specific challenges we are facing in labor policy, workforce
	development and immigration that make it difficult to achieve these
	objectives.
	Labor Policy
	The National Labor Relations Board's (NLRB) aggressive agenda
	threatens jobs and undermines employer--employee relations. The NAM is
	committed to defending the rights of manufacturers and their employees
	and stopping this bureaucratic overreach. We need to maintain the time-
	tested balance between labor unions and employers. This balance is
	critical to economic growth and job creation.
	The current National Labor Relations Board and the Department of
	Labor continue to churn out troubling regulations and case decisions,
	often overturning decades of established and accepted labor practice.
	At times it appears these agencies are proposing old-economy ideas to
	solve problems that simply do not exist in a modern workplace. Based on
	press accounts, we are likely to see an expansion in the amount of
	personal information employers will be required to share with union
	representatives, including personal emails. It is also likely the Board
	will seek to allow for electronic voting during a unionization campaign
	election. Both of these initiatives, along with the ambush election
	rule, and the Employee Free Choice Act, purport to make it easier for
	unions to hold representation elections, but it is rather interesting
	when you look at the NLRB's own data about union representation
	elections and how the Board is dead set on fixing a problem that the
	numbers continue to show doesn't exist.
	This is a pattern with the Board. For example, the Acting General
	Counsel's Summary of Operations Memorandum for 2012 shows 93.9 percent
	of union elections were conducted in 56 days or less from the time the
	representation petition was filed. This rate is above the Board's goal
	of 90 percent and the 12th straight year the NLRB has exceeded its
	stated goal. Keep in mind, the ambush election rule that would speed up
	representation elections never went into effect last year due to
	litigation the NAM supported. The regulation was invalidated by the
	District Court last year and is before the DC Circuit Court of Appeals
	right now. We've been asking the same questions and have yet to receive
	credible answers from this Board.
	What is even more telling however, is despite the U.S. Court of
	Appeals for the D. C. Circuit recent decision that two of the three
	current members of the Board were improperly appointed by the
	President--effectively reducing the Board to one member, the Chairman
	of the NLRB, Mark Pearce, has stated the Board ``will continue to
	perform our statutory duties and issue decisions.''
	The result is rather than being focused on hiring new employees and
	creating new opportunities for employees, employers are shifting focus
	to educating themselves on multiple union representation elections,
	questioning whether or not they should consult with their attorney over
	representation elections and facing challenges to comply with the
	shifting landscape of regulations. We anticipate this current focus to
	continue over the next several years, not just with the NLRB, but as
	also evidenced by the most recent Regulatory Agenda released by the
	Department of Labor this past December. Employers will be trying to
	decipher hundreds of pages of proposed regulations from the
	Occupational Safety and Health Administration (OSHA), the Office of
	Federal Contract Compliance Programs, NLRB, and other agencies rather
	than focusing on the reason they exist in the first place.
	Alignment of Education and Workforce Needs
	While these challenges are of serious concern by themselves, there
	is also a long-growing and looming problem for manufactures. Our most
	recent Skills Gap survey identified approximately 600,000 positions
	going unfilled due to the lack of qualified applicants. In fact, 82
	percent of manufacturers reported a moderate-to-serious shortage in
	skilled production labor.
	The U.S. is betting its entire economic future on our ability to
	produce leading-edge products. Whether it's in IT, biotech, aerospace
	or construction * * * it doesn't matter. Manufacturers will be the ones
	to consistently create new and better things. This future promises to
	be bright, but only if we have the workforce capable of pushing that
	leading-edge. And right now, that doesn't look like a very good bet.
	We have created an education system that is almost completely
	divorced from the economy at large. The only way to address this
	monumental challenge and support the economic recovery is to align
	education, economic development, workforce and business agendas to work
	in concert and develop the talent necessary for success in the global
	economy.
	It is our belief that we do not need another government program to
	solve these problems. We should, however, make sure the ones we
	currently have are actually addressing the problems we face. If they
	are failing to meet the needs of employees and employers, we shouldn't
	be afraid to change them. As representatives of the manufacturing
	industry, we think we've found a solution that fits the needs of our
	businesses and our labor force while working within the existing
	secondary and postsecondary education structure.
	The solution, called the NAM-Endorsed Manufacturing Skills
	Certification System, is grounded in the basic set of skills identified
	by manufacturers--the employers themselves--as required to work in any
	sector across the manufacturing industry.
	The system is a series of nationally portable, industry-recognized
	credentials based specifically on those employer-identified skills.
	These credentials, and the training required to obtain them, certify
	that an individual possesses the basic skills necessary for a career in
	manufacturing and ensures that they are useful nationwide and across
	multiple manufacturing sectors. A realignment of this kind would be
	tangible for our nation and its workforce.
	While on its face, the idea of a skills certification system may
	not seem transformational, it is in fact reforming education and the
	way we think about it. For too long, any programs that were ``career or
	technical'' were pushed off into the non-credit side of academic
	institutions. This attitude sends a loud and clear message to students
	and parents about the value colleges and universities place on these
	types of programs. Yet, it is these very skills and certifications that
	will lead to a job or career that actually exists.
	We are working to integrate credentials into the for-credit side of
	colleges, so even if a student takes only three or four courses to
	achieve a certification and heads into the workforce, they have
	``banked'' those credits. Under this system, the individual knows that
	when they return to achieve the next level certification, they will
	also be working toward a degree as well.
	This approach creates more on and off ramps in education, which
	facilitates individuals' ability to obtain schooling when their
	professional career requires it, and positions them to earn while they
	learn, applying what they learn in class at night on the job the next
	day. In fact, I know the Manufacturing Institute has worked closely and
	successfully with Congresswoman Brooks' former employer, Ivy Tech,
	which is a national leader in quality manufacturing training. These are
	the partnerships we embrace and hope to replicate.
	For many years, postsecondary success has been defined as a four-
	year degree. This is unfortunate when a valid, industry-based
	credential can provide the knowledge and skills for a well-paying job
	and a solid foundation on which to build a future.
	Acquiring skills that are in demand by employers is probably the
	soundest investment individuals can make in themselves and as I said
	earlier, the federal government does not need to spend more money to
	facilitate these investments--but there are things Congress and the
	President must do in order for this approach to have the greatest
	impact over the long-term.
	In addition to private-sector alignments, we need to look at
	federal workforce training programs that often do not address the
	skills that are in demand by employers. For example, programs such as
	the Workforce Investment Act that have not been reauthorized for decade
	need to be seriously addressed. WIA can be beneficial to employers, but
	the program is overly bureaucratic and inefficient which prevents
	workforce training dollars from getting to the workers who need them.
	The program should not only be streamlined but also focused on the goal
	of training workers to credentials that are in demand in the private
	sector and to jobs that actually exist.
	That is why manufacturers support the America Works Act,
	legislation introduced this morning by Congressmen Barletta and
	Schneider. The legislation creates this prioritization in WIA but also
	in TAA and Perkins. For employers, an emphasis on a nationally-
	portable, industry-recognized credentialing system provides a level of
	quality in potential hires that does not exist today. For employees, it
	ensures they are obtaining the skills in demand in the workplace and
	can work in multiple sectors. For government, it ensures that federal
	funds allocated to worker training are used more efficiently and
	effectively. I want to thank Congressman Barletta for working with us
	on this piece of legislation that is of utmost importance to
	manufacturers.
	For too many years, anything that looked or sounded like skills
	development was classified into a lesser accepted form of education. It
	was defined simply as job training, non-creditable courses or career
	and technical education. In other words, it wasn't considered real
	education. Skill certifications can and should be part of a traditional
	education system, but a wall has been built between education and job
	training by institutions on both sides of that divide. The NAM and the
	Manufacturing Institute are working to break down that wall. The result
	will be more individuals gaining the skills they need to build a career
	and more employers finding and hiring qualified workers.
	Immigration
	Employers are investing in workforce development that is essential
	for the future of manufacturers. We have committed to and are invested
	in reducing the skills gap and will work to find future solutions to
	support substantive changes and investments in the education system,
	especially in the areas of Science, Technology, Engineering and Math,
	but right now there is a skills gap across the country in many sectors.
	Employers cannot find the workers they need to get the job done. We
	need access to the people who will invent, innovate, create and build
	and many of these people are born outside of the United States. The
	broken immigration system is making it more difficult to hire the right
	person with the right skills at the right time.
	We fully understand the need and support efforts to address the
	millions of undocumented and falsely-documented people currently
	residing in the United States. Whether it is politically popular or
	not, many of these individuals were born here and many others have
	lived here for years. This is a serious concern and should be addressed
	in a thoughtful manner in conjunction with border security and
	enforcement measures. The NAM supports resolving these issues and looks
	forward to working with Congress, the President and anyone else willing
	to work together on a solution.
	Just as important, however, is reform of the employment-based
	immigration system, which in its existing state is hindering economic
	growth. Manufacturers need a functional legal immigration system that
	efficiently deals with the lack of necessary green cards and visas.
	American companies cannot hire the employees they need and will either
	not hire at all or move jobs abroad if the workers are not available
	domestically. Put simply, we need to raise the caps on the number of
	green cards and visas and create a functional system for hiring
	employees in order for reform to be a workable solution for
	manufacturers.
	A few years ago, a study by the Partnership for a New American
	Economy, a group of business and civic leaders, found that over 40
	percent of Fortune 500 companies were either started by an immigrant or
	the child of an immigrant. Manufacturers are well represented in this
	group.
	American manufacturing enterprises founded by immigrants span all
	sectors, from technology, to steel, to chemicals, to medical devices,
	to many others. All told, the study concluded, major companies founded
	by immigrants or children of immigrants have an economic impact larger
	than all but two of our competitors, Japan and China.
	Every year, even during the economic downturn, the H-1B visa cap is
	reached, leaving companies without any access to necessary employees.
	In addition, the wait time for a green card can be up to ten years,
	leaving employers and employees frustrated and searching for alternate
	solutions.
	During the next ten years, STEM jobs are expected to grow by 17
	percent, compared to a 9.8 percent-growth in non-STEM jobs. In 2008,
	just four percent of all bachelor's degrees were awarded in
	engineering. In China, 31 percent of all bachelor's degrees were in
	engineering and throughout all of Asia the percentage was 19 percent.
	We need these individuals now, but we also need to firm up our
	pipeline.
	But it is not just the education pipeline that needs to be
	addressed. Comprehensive reform should look to create a program to
	address the future needs of the workforce. Without creation of a
	functional, legal system we will be looking back at ourselves in 20
	years trying to determine how to manage the next generation of 12
	million undocumented people residing in the United States. Hand in hand
	with the need to address the next generation workforce is the need to
	have a verification system that is fair and reliable.
	Make no mistake; immigration reform and the access to foreign-born
	talent is not an excuse for American manufacturers to neglect the STEM
	pipeline. These two issues are inextricably linked. We will continue to
	work on building skills for the shop floor and for the laboratory. Visa
	and green card funding should be dedicated to building this pipeline
	and we look forward to working with you to create a more robust
	program.
	Conclusion
	Mr. Chairman, we need access to workers with the skills that will
	allow American manufacturers to grow and succeed. We have invested in
	developing those skills here in the United States, but we also need
	access to foreign-born workers whose skills, talents and vision
	complement those of the American workforce.
	Thank you for the opportunity to testify today. I look forward to
	working with you to build the next generation of manufacturers.
	______

	Chairman Kline. Thank you. I thank all the witnesses. We
	are going to start questions, and I will start. I am going to
	limit myself and all members to 5 minutes--remind me to gavel
	myself down if we get going here--so that all members will have
	a chance to ask questions.
	Let me start with you, Governor. You talked about red tape
	and bureaucracy getting in the way of workforce training. We
	are going to again, Mr. Miller mentioned it in his remarks, we
	are going to again take up the Workforce Investment Act. We had
	legislation in the last Congress, we will probably move it
	around a little bit and bring it back up because we believe, I
	believe that the current workforce investment, the workforce
	training system is not helping. So you brought it up. What is
	it that you are doing in Utah that you think we could pick up
	in Federal legislation that would be helpful?
	Governor Herbert. Well, thank you, Mr. Chairman. I think
	all of us recognize in the marketplace that regulation
	sometimes gets in the way of production, and as I get around
	the State of Utah and other places, the most common lament that
	I hear from the business community is the regulation sometimes
	that don't make sense to them, and particularly Federal
	regulation.
	In Utah we have taken an approach of going back and
	actually counting and reviewing the numbers of regulations that
	we have in our State, and last year we challenged our
	departments, our cabinet members to go back and count the
	regulations that we have on our books, and we found out we had
	1,969. Who knew? And we found out that we had 368 of those that
	had no public purpose, meaning they didn't level the playing
	field, they didn't protect the public. They were just a drag on
	the economy. And so we did what would be sensible, I think, and
	that was we eliminated or modified them to allow the
	marketplace to not have that drag.
	That has been a shot in the arm for our business community.
	And so, again, we are now taking it one step further. Now, this
	year, we will be working with our local governments and their
	regulations to make sure that they are appropriate and they
	actually have a purpose out there in either leveling playing
	fields or protecting the public. But I think regulation reform
	is something that ought to be viewed by every State and
	certainly ought to be viewed here in Washington, and count them
	up, see how many you have got and see what you can eliminate or
	modify.
	Chairman Kline. I can't even guess what that number would
	be.
	Governor Herbert. That is part of the problem.
	Chairman Kline. Very, very large. Exactly. Many thousands
	of pages, no doubt. I think we are up to something like 13,000
	pages of regulations on the Affordable Care Act already.
	Mr. Timmons, let me pick up again on the workforce training
	and the Workforce Investment Act. You have been following what
	we have been doing here. What do you think would be most
	helpful in making sure that businesses are able to convey what
	jobs are available and what training needs to be done?
	Mr. Timmons. Well, I think there are several factors, Mr.
	Chairman. From a Federal perspective, obviously, ease of being
	able to access training funds and having those funds
	consolidated into programs that are focused on developing those
	with the skills that are necessary for the manufacturing
	workforce. As I mentioned, 600,000 jobs in manufacturing go
	unfilled. It is one of the reasons that the organization, the
	Manufacturing Institute, which is an arm of the NAM, has been
	focused on skill certification programs, that is partnerships
	with community colleges, to help us certify manufacturing
	workers with a portable set of skills that they can use across
	State lines or in other communities.
	We have also been working on our military badge program
	that allows us to access the skills that our returning military
	personnel have that they may not know can translate into real
	life experiences in the manufacturing sector. The military
	badge program acts as a translator for skills that our military
	personnel have acquired while they are on mission in the
	military and translate those skills into real life
	manufacturing jobs here at home.
	Chairman Kline. So you are saying in the manufacturing
	field alone there are 600,000 job openings and you don't have
	the people.
	Mr. Timmons. That is right, sir, about 5 percent of the
	manufacturing workforce is vacant today. Even with 8 percent
	unemployment, manufacturers are always trying to find workers
	that have the skills necessary. Some of those are the high-end
	positions, the STEM fields, and some of them are more basic
	skills that require some basic sets of training activities.
	Chairman Kline. So the 47 programs across nine agencies or
	whatever is not getting it done. Okay.
	Mr. Timmons. I think they are well intentioned.
	Chairman Kline. My time has expired.
	Mr. Miller.
	Mr. Miller. Thank you.
	On this same subject, Jared, one of my concerns in my
	opening statement was this, as I say, leaping from fiscal cliff
	to fiscal cliff. And one of the things I think we see or is
	talked about in the unemployment market, after people are
	unemployed 6 months or more, they start to lose proficiency,
	they are not in the environment to pick up new requirements,
	skills that are necessary or information. And my concern is,
	you know, as I pointed out, what we saw happen in 2011 was this
	dramatic drop. I think FedEx testified it was the largest drop
	in business in the history of the company, larger than after 9/
	11. That is what happened when we fooled with the debt limit
	then.
	We saw this report recently suggesting that people just
	stopped hiring in the fourth quarter because they didn't know
	if we were going to go over the cliff, due to the debt limit,
	what have you. And it seems to me that has to be resolved so
	that employers have a clear picture of where they are going so
	that then we can backfill with the kinds of programs undertaken
	by the Governor, the kinds of programs suggested here by the
	manufacturers, but people have to have a vision that is longer
	than 90 days. I mean, we are running this government on a 90-
	day leash. That is long term, when we go 90 days. We have done
	30 days. And I just don't see how you get this economy really
	taking advantage of everything we need to get stronger and
	stronger if you have this continued bashing around here inside
	the Beltway.
	Mr. Bernstein. Well, yeah, I couldn't agree more. And I
	suspect when the Governor talks about, you know, regulatory
	uncertainty, he is probably also talking about general economic
	uncertainty. That is certainly something that I hear a lot from
	business people. But the problem that most folks talk about
	nowadays is not so much uncertainty from a regulatory agenda,
	but uncertainty from precisely the kind of jumping from cliff
	to ceiling to sequester that you are describing, Congressman,
	and what is I think unfortunately ironic there is that this is
	an uncertainty that is being generated by the very Congress who
	could do something about it.
	Let me make one comment about these unemployed, these slots
	allegedly open in manufacturing. I am not questioning Mr.
	Timmons, who is an expert in that field. I will say, among
	economists it has been widely argued whether unemployment now
	is structural, mostly structural, or mostly cyclical, meaning
	that it is mostly cyclical coming from a demand phenomena, the
	kind of job creation problems you have when the unemployment
	rate is so high and you are still working through the residuals
	of the great recession. So a lack of available jobs, or is it
	structural, a lack of enough skilled workers? And the consensus
	among economists, conservative and liberal, this is across the
	board, is that this is a cyclical unemployment problem, not a
	structural one, so that if we had more employment growth, a lot
	of the unemployment problems you are hearing described would go
	away.
	Now, that doesn't mean that we have adequately trained
	workers for every job slot in the economy. We don't. And I very
	much endorse some of the ideas I have heard from my colleagues.
	But the problem writ large is a cyclical problem associated
	with labor demand, not enough job growth, not a skills-based
	problem right now in the near term.
	Mr. Miller. Thank you.
	Now, we are all hoping, Mr. Timmons, we are hoping to
	reauthorize the workforce investment program here, and there
	has been a lot of suggestions and there has been a lot of
	effort on both sides of the aisle put into this effort. You
	know, we try to come together, but one of the things that was
	suggested in the markup last year by the bill presented by my
	colleagues on the other side of the aisle was that the labor
	unions would not be allowed to participate in the workforce
	investment boards in an area such as large manufacturing,
	DuPont, Dow, Chevron, Exxon, they are all there, United States
	Steel. And as we transition, we find jobs, new jobs, in my area
	the labor unions have been very helpful in providing the
	workforce for the expansions at Chevron, the labor unions have
	been very helpful in providing skilled workers for the internal
	workings of the refineries. When both Dow and DuPont came up
	with new manufacturing procedures, the community colleges and
	the labor unions, the Chemical Workers put together the
	programs to train those people so they would be ready when the
	construction was done. And so I just want to have your opinion,
	is this critical that labor unions not be allowed to
	participate in these boards that are made up of employers,
	employees, educators, small businesses, large businesses in our
	communities?
	Mr. Timmons. Well, you know, I come from a little different
	perspective. My grandfather was a 40-year labor union member
	with Mead Paper Company.
	Mr. Miller. I have got more people here come out of labor
	families, okay? So I am long on people who aren't happy with
	labor unions that came out of labor families.
	Mr. Timmons. Right. So, you know, I think I will let you
	all work that out.
	Mr. Miller. Is this a critical question because this goes
	to how this bill----
	Mr. Timmons. This is not a critical question for the NAM.
	Mr. Miller. Is this a make-or-break issue for you?
	Mr. Timmons. Not for the NAM, but I can tell you that I
	think----
	Mr. Miller. Appreciate that.
	Mr. Timmons [continuing]. It is important for us to really
	focus on getting it done one way or the other.
	Mr. Miller. We may not be working very well together in
	Washington, but all over this country they seem to be working
	together in various communities to try to create the atmosphere
	for these new jobs, new processes that are responding to the
	changes in the economy. Thank you.
	Chairman Kline. Thank the gentleman.
	Mr. Wilson.
	Mr. Wilson of South Carolina. Thank you, Mr. Chairman, and
	thank you, in fact, for promoting an effort to promote an
	atmosphere, as Mr. Miller indicated, to create jobs. I am very
	concerned about the contraction of the economy. I think it
	directly relates to higher taxes. We already know right here in
	this room that the NFIB projected that the government takeover
	of health care would result higher taxes providing for the
	destruction of jobs. In fact, 1.6 million jobs. And so we need
	to certainly make every effort. Mr. Chairman, I appreciate your
	efforts.
	And, Secretary Fornash, I am honored to be here with you.
	My mother's family is from Richmond. I graduated from
	Washington and Lee at Lexington, and I have a son who is a
	doctor in Portsmouth, so we cover the Commonwealth.
	With that, you indicated a need to reauthorize No Child
	Left Behind. This brings up a huge issue, and that is what is
	the proper role of the Federal government and what should be
	the primary function of State government, which is to provide
	for public education, and I believe it should be led by local
	elected school boards. So what should be the Federal role?
	Ms. Fornash. Well, thank you, Mr. Wilson. It is nice to
	know your strong ties to Virginia. Appreciate that.
	I think the role of the Federal government is really to
	focus on that supplemental funding to States, that helping
	disadvantaged children progress academically. We know these at-
	risk students need greater access to resources, and the Federal
	government is doing that. I think the challenge is obviously
	the accountability for those Federal dollars and really
	ensuring that States have the flexibility at the local level to
	focus on raising rigor with standards to focus on closing the
	achievement gap. And in many times those strategies take
	innovation and creativity that Federal dollars don't always
	allow for. So it is important going forward that we make sure
	those resources do have greater flexibility in order to be able
	to respond to some of the innovative programs that are being
	successful throughout the Nation. And in Virginia we are very
	much focused on raising our standards and ensuring that all
	young people are college or career ready when they leave high
	school.
	Mr. Wilson of South Carolina. Well, your input can be very
	helpful because I certainly, I have faith in professional
	educators. My wife is a retired teacher. So that is who we need
	to be counting on to provide for the young people of our
	country.
	Mr. Timmons, I appreciate your reference about the National
	Labor Relations Board. South Carolina was the poster child, the
	NLRB overreach, as you indicated. Boeing built a plant, 1.1
	million square feet, hired a thousand employees, and then out
	of the blue NLRB intervened and said that it couldn't open.
	Thank goodness Governor Nikki Haley, Attorney General Alan
	Wilson responded quickly, we were able to settle this, and now
	thousands of people are employed and 787 Dreamliners are being
	built. What other examples of overreach have you detected that
	destroy jobs by NLRB?
	Mr. Timmons. I think a few examples of creating an
	unnecessarily adversarial relationship involve quick snap
	elections, the specialty health care bill, which creates--
	regulation, pardon me--that creates micro unions, small
	bargaining units, smaller bargaining units. I think the poster
	rule that was required by the NLRB, which is now on hold, are a
	few examples of those.
	Unfortunately, I think that well-intentioned, oftentimes by
	regulators, well-intentioned actions have adverse results, and
	actions do have consequences, and creating an environment where
	employers and employees who have had 70 years of settled labor
	law, creating a situation that is not as harmonious as it once
	was is very unfortunate, particularly in an economy like we
	face right now.
	Mr. Wilson of South Carolina. Well, we certainly look
	forward to your input.
	And, Governor Herbert, congratulations. Forbes has named
	Utah as the best State for business for 3 years in a row. And
	the reduction in unemployment from 8.3 to 5.2, that is huge,
	and I want to congratulate you. We look forward to seeing what
	you did. I know one thing, the benefits of being a right-to-
	work State. Could you tell us how you have seen this and how
	this is reflected in creating jobs?
	Governor Herbert. Well, thank you. We are pleased with the
	growth we have seen, and it has been a difficult time for all
	of us, all the States going through the great recession. But my
	father was an old Idaho farm boy, and I didn't grow up on a
	farm, but we always had an acre, and acre and a half of garden,
	and what my dad taught me was it didn't matter how good the
	seeds were you planted if you didn't have a good soil to plant
	them in. And so as a metaphor for what we have tried to do in
	Utah, we have tried to create an environment of a fertile
	field, a fertile soil where entrepreneurs can come down and
	throw their seeds and grow them. If they work hard, weed,
	water, and fertilize, there will come a harvest.
	And in Utah we have an environment that is conducive to
	risk-reward of a free market system, and we don't have the
	shackles sometimes of a labor union that has a hard
	negotiation. We are a right-to-work State, and I think that
	gives us competitive advantage. I believe in free markets and
	the ability for the entrepreneur to go where they want and set
	up what they want and risk and try to have a profitable outcome
	in that environment. Our success in Utah is one of
	predictability and certainty and an environment that attracts
	the entrepreneur to come and invest in our soil, which as
	Forbes has mentioned is the best climate in America right now.
	Mr. Wilson of South Carolina. Congratulations. Thank you.
	Chairman Kline. The gentleman's time has expired.
	Mr. Andrews.
	Mr. Andrews. Thank you, Mr. Chairman.
	Mr. Timmons, I welcome your support for immigration reform.
	I thank you for it. Hope you are part of a broad and successful
	coalition to get that done.
	Mr. Timmons. We do, too.
	Mr. Andrews. The NAM is a member of something called the
	Coalition for a Democratic Workplace. Is that correct?
	Mr. Timmons. That is right.
	Mr. Andrews. And my understanding is the Coalition for a
	Democratic Workplace filed a petition to intervene in the Noel
	Canning decision that invalidated the NLRB appointments. Is
	that correct?
	Mr. Timmons. I am sorry, invalidate which?
	Mr. Andrews. In the Noel case, which is the one that
	invalidated the recess appointments on the NLRB.
	Mr. Timmons. I think the coalition did, but I am not sure.
	Mr. Andrews. Here it is.
	Mr. Timmons. Okay.
	Mr. Andrews. So I assume that you agree with the assessment
	that the intra-session recess appointments President Obama made
	are unconstitutional?
	Mr. Timmons. Well, the coalition filed that, and obviously
	we are a part of the coalition. The NAM did not. We weren't
	part of that particular decision.
	Mr. Andrews. Do you support what the coalition did, though?
	Mr. Timmons. But at this point the courts have at least
	ruled. Right now we are waiting for an appeal----
	Mr. Andrews. But you support what the coalition did in
	intervening in the case?
	Mr. Timmons. And I think we need to----
	Mr. Andrews. Okay.
	Mr. Timmons. Basically I think we need to listen to the
	courts.
	Mr. Andrews. On August 31st of 2001, President George W.
	Bush appointed Peter Hurtgen to the NLRB in an intra-session
	recess appointment, exactly the same facts as these. Did you
	intervene and oppose that appointment?
	Mr. Timmons. Not that I am aware of.
	Mr. Andrews. On August 31st of 2005 President Bush
	appointed Peter Schaumber to the NLRB in an intra-session
	recess appointment. Did you oppose that appointment?
	Mr. Timmons. Not that I am aware of.
	Mr. Andrews. On January 4th of 2006 President Bush
	appointed Peter Kirsanow to the NLRB on an intra-session NLRB
	appointment. Did you oppose that?
	Mr. Timmons. You know, this is an interesting line of
	questions, but quite frankly I think the courts are the ones
	that have to decide this. This is not an issue for us.
	Mr. Andrews. Well, but you didn't seem to think the courts
	had to decide it when President Bush appointed four members of
	the NLRB using exactly the legal basis President Obama did. Why
	didn't you challenge those appointments?
	Mr. Timmons. Well, thank you for your confidence in my
	constitutional abilities. I have been president of the NAM for
	2 years, so I think you probably have to talk to some of my
	predecessors. I do think the bottom line, though, Congressman,
	is the courts have made a decision on this, and I think we are
	going to have to listen to the courts.
	Mr. Andrews. Well, but evidently your coalition did not
	think that President Bush's appointments of Mr. Hurtgen and Mr.
	Schaumber, Mr. Kirsanow, Mr. Dennis Walsh on January 7th of
	2006 were problematic. Why is all of a sudden these
	appointments in intra-session recesses, what is so different
	about them that make them challengeable in court when you
	didn't challenge the other four by President Bush?
	Mr. Timmons. Again, I think you are going to have to ask
	the courts why they think that that is the case.
	Mr. Andrews. I will tell you why I think it is the case. I
	think that there is no question that there has to be some
	limitation on the appointment power of the President of the
	United States, there is no question about that. Although I
	would point out that on 303 occasions since President Reagan
	took office Presidents have used the intra-session recess
	appointment to appoint people. Jeane Kirkpatrick was appointed
	by President Reagan, Alan Greenspan was appointed by President
	Reagan during this time. Presidents sometimes felt they needed
	to do this.
	This problem has been heightened in recent years because
	the Senate, in my opinion, has used its constitutional
	prerogative to advise and consent as a constitutional bludgeon
	to paralyze the operation of the executive branch. President
	Obama made these appointments because the Senate refused to act
	on his nominees so that the Board could not act.
	The power to advise and consent is not the power to
	paralyze. Presidents who are confronted with this, 72 times by
	President Reagan, 37 times by President George H.W. Bush, 53
	times by President Clinton, and the champion, 141 times by
	President George W. Bush, made intra-session recess
	appointments, but your coalition, your organization never
	challenged any of them, including four appointments, four
	appointments to the National Labor Relations Board in the
	George W. Bush years.
	So I understand we have to leave this to the courts. I am
	hopeful the court will reach a decision which avoids paralysis
	of the executive branch for ideological reasons. But I find it,
	frankly, disconcerting that on four occasions when President
	George W. Bush appointed people to the NLRB using exactly the
	same constitutional arguments President Obama did, your
	organization was quiet about it.
	I yield back the balance of my time.
	Chairman Kline. I thank the gentleman.
	Dr. DesJarlais.
	Mr. DesJarlais. Good morning, and thank you all for being
	here today. I want to focus a little bit on the higher
	education aspect and the challenges we face. Governor and
	Secretary, I wanted to get your perspectives on a couple of
	things. Just like anything coming out of Washington right now,
	the deficit and spending issues are driving a lot of our
	challenges.
	But also, it seems like we are having more and more
	difficulty getting kids to graduate college in a punctual
	fashion. The days of 4-year colleges seem to be stretched to 6
	years, and costs continue to increase. And over the past
	decade, for public 4-year colleges I think we have seen about a
	66 percent increase in cost, 47 percent per 2-year public
	institutions, and about a 26 to 27 percent increase for 4-year
	private institutions. Yet over the same decade, Federal
	subsidies for higher education has gone up about 140 percent.
	We know that in fiscal year 2012 Pell Grant spending was about
	$41.5 billion compared to $13.7 billion in 2006. And looking
	back to the 2003-2004 school year for 4-year institutions,
	about 50 percent of students are obtaining a bachelor degree
	after 6 years.
	So when we look at these numbers, they are kind of
	alarming. And to think, unless the numbers have changed,
	student loan debt in this country surpasses all credit card
	debt and all auto loan debt combined. So we have a lot of money
	being poured in by the Federal government, but we are not
	getting a good return on our investment.
	So, Governor Herbert, I would ask you first, what do we do
	to make colleges not only more affordable, but what do we do to
	incentivize students to graduate in a timely fashion? And then
	how do we make it more conducive for full-time employment for
	these kids after they graduate?
	Governor Herbert. Well, after I get through answering that
	question, I can work on world peace.
	Mr. DesJarlais. Exactly.
	Governor Herbert. You know, Steve Forbes made an
	interesting observation, where he said that when the Federal
	government got involved in the 1970s in putting more money into
	higher education, it actually had the phenomenon of rising
	costs for students. Our loans have gone up. The costs of
	education have gone up. And so you wonder if there is a cause-
	and-effect relationship there.
	We have an emphasis in Utah to see if we can make sure that
	we get through the process quicker, saving time. Most college
	students take 6 years to get a 4-year degree. We in Utah are
	trying to embrace more use of technology, concurrent enrollment
	in K-12 so that people are better prepared when they get to
	college education experience to in fact get a leg up on the
	challenge they have there. We find there is too much remedial
	work, where people have to be retrained when they leave high
	school and get into college. That costs time and money.
	We have got colleges now within their own budgets that are
	trying to restructure and reprioritize their own budgets to
	make sure that we in fact get away from what some have referred
	to as degrees to nowhere. Again, all education has value, but
	right now in the marketplace, for example, the STEM educations
	have more value and better reward.
	So we are trying to find ways to streamline, to use more
	technology, remote learning, concurrent enrollment, online
	courses, which will help us in fact reduce costs. We also have
	a significant effort to have private support and help with
	donors to help reduce costs so there is not just a burden on
	the taxpayer. And I think if you will find and compare, you
	will find that Utah's higher education is at the lower one-
	third when it comes to tuition costs and the overall costs to
	get a degree in Utah.
	Mr. DesJarlais. Thank you, Governor.
	Secretary.
	Ms. Fornash. Great. Thank you for the opportunity. Governor
	McDonnell has been very focused on access and affordability to
	higher education and really focused on tuition increases
	because of the growing debt, college debt, that students are
	experiencing. And so we have had a real push on trying to
	incentivize our institutions to do certain things, and part of
	that is the 4-year graduation rate. And we have got this
	points-based performance funding model where we are trying to
	push new resources to those institutions who are graduating
	more students in a timely manner. We are also looking at
	greater use of technology to help students complete in a timely
	manner. We also do want to promote dual enrollment. We have
	legislation that was passed that requires all local school
	divisions to provide associate and 2-year opportunities at the
	high school levels to ensure greater access and affordability.
	And we are also promoting year-round use of facilities. As
	you know, many of our higher education facilities are only used
	9 and 10 months throughout the year. So how do we use those
	other months and those break times to provide credit to
	students so they can complete in a timely manner.
	Mr. DesJarlais. Well, I think that sounds spot-on. And I
	will be anxious to hear the numbers, how that turns out, how
	that is working for you because I think that is the model that
	we need. And I look forward to hearing how that turns out.
	Thank you for your time.
	I yield back.
	Chairman Kline. The gentleman's time has expired.
	Mr. Scott.
	Mr. Scott. Thank you, Mr. Chairman. I want to thank all the
	panelists, particularly those from Virginia. I have known
	Secretary Fornash and Mr. Timmons, who worked with Governor,
	Senator, and Congressman Allen. So it is good to see you all.
	Secretary Fornash, there was a great controversy a little
	while ago when targets under the annual measurable objectives
	were set for minority students at a very low level, and there
	was criticism of that target. Can you tell me whether or not
	the future targets anticipate eliminating the achievement gap?
	And if so, how long will it take, and are we on track?
	Ms. Fornash. Yes, sir. Thank you for the question,
	Congressman Scott.
	What happened occurred last summer when our waiver was
	approved and the methodology was approved from the U.S.
	Department of Education. At that time we did not have the
	results back from our mathematics tests. When the results came
	back it did produce uneven results for the annual measurable
	objectives. We quickly responded to that situation and
	developed a new methodology that would ensure all students
	would obtain the same goal within the 6-year period. And so
	that has been our focus currently.
	Mr. Scott. Do you anticipate eliminating the achievement
	gap?
	Ms. Fornash. We are working very hard to do so. Yes, sir.
	Mr. Scott. Are we on track? Are we on track to eliminating
	the achievement gap?
	Ms. Fornash. We have a 6-year plan to do that. You also
	heard me mention the Opportunity Education Institution, which
	would specifically target those failing schools in the
	Commonwealth and step in with a very aggressive plan to manage
	those schools and make sure that they are receiving
	accreditation.
	Mr. Scott. So notwithstanding the low start, you expect
	within 6 years to be able to eliminate the achievement gap for
	minority students?
	Ms. Fornash. That is definitely the goal that we are
	working towards. Yes, sir.
	Mr. Scott. Thank you.
	Dr. Bernstein, is it true that the sequester is expected to
	be--if enacted, if allowed to go into effect--would be a drag
	on the economy? And if so, if we replaced it with an
	alternative $1.2 trillion in cuts, why would that not be an
	equal drag on the economy?
	Mr. Bernstein. Well, it would be, yes. The sequester
	amounts to about $85 billion of spending cuts in 2013. And
	according to independent analysis--I believe it is the firm
	Macro Advisers--this would reduce growth by 0.7 of a percent,
	GDP growth by 0.7 of a percent. Now, GDP growth in the most
	recent report was actually slightly negative. I think that that
	was anomalous. I think if you take a longer-term view, just to
	say look at year over year instead of quarter over quarter, you
	will find that the economy is expanding somewhere in the range
	of 1.5 to 2 percent a year.
	That is already too slow, as can be demonstrably seen by an
	unemployment rate that has been stuck at 8 percent. So you have
	to grow faster than that in order to bring the unemployment
	rate down. But if the sequester should kick in--or, for that
	matter, a sequester replaced by any other set of cuts should
	kick in--you would grow even slower, the unemployment rate
	would probably rise. That is certainly the prediction among
	macroeconomists.
	Mr. Scott. Your first chart shows how those at the bottom
	aren't doing particularly well. What can we do to fix that?
	Mr. Bernstein. Well, I think, of the suggestions I made
	toward the end of my testimony, there are some that I think are
	most relevant to folks at the lower end of the pay scale. I
	mean I think do no harm is probably one of the best things you
	can do for lower-income people because if the unemployment rate
	ticks up a little bit, it goes up a lot for them. So avoiding
	the sequester in the context of my last remarks are critical in
	this regard.
	But I know that an increase in the minimum wage, in fact
	just this morning there is an editorial in The New York Times
	endorsing that idea for the same reason, the fact that low-
	income workers haven't seen a minimum wage increase in a while
	and have been falling behind. I think this idea of making sure
	work supports remain strong for low-wage people. Even if you
	are someone at the lower end of the pay scale, if your wage is
	boosted by a robust earned income or child tax credit, that
	helps a lot at the end of the day. Finally I also noted
	assistance with the costs of going to work, transportation
	costs, child care costs, a huge burden for many low-income
	families trying to do the right thing, trying to go to work.
	Mr. Scott. Dr. Fornash, can you say a word about what
	budget cuts are doing for your ability to provide quality
	education in Virginia in terms of class size and ability to
	attract and retain quality teachers? What effect budget cuts
	are having?
	Ms. Fornash. Well, the Governor has tried to restore
	funding to both higher education as well as K-12 in order to
	ensure that we do have adequate educational resources for our
	students and programs in place for teacher training.
	Chairman Kline. The gentleman's time has expired.
	Mr. Bernstein. Mr. Chairman, could I inject one point on
	that point? Is that okay?
	Chairman Kline. Not right now. We will get back to you.
	Mr. Rokita.
	Mr. Rokita. Thank the chairman. I would like to say good
	morning to all the witnesses and thank you for your testimony.
	It has been very helpful.
	Governor Herbert, can I ask you a question real quick? Is
	that your family behind you or no?
	Governor Herbert. Family behind me?
	Mr. Rokita. That is your family. Okay. Well, I could tell.
	They seem to be very proud of both of you. Would you mind
	introducing them for the record, because I know you must be
	very proud of them.
	Ms. Fornash. Oh, I would be delighted. Thank you so much.
	This is my son Carter Fornash. He is in the fourth grade. He
	will be back to see you on a class field trip in April. My
	niece Natalie Daniel and my sister-in-law Martha Daniel.
	Mr. Rokita. Thank you very much. I appreciate that.
	I will start with you, Secretary, then, if you don't mind.
	I am very interested in your public charter schools and really
	your whole charter school program. Indiana has an ever-
	increasing robust program in that regard. I know you said you
	only had four. But there are all different kinds. There is the
	public charter school and then you said there was a science lab
	college prep charter school program, something like that. Could
	you confirm that?
	Ms. Fornash. We currently have four public charter schools
	in the Commonwealth of Virginia and those were all created by
	local school divisions. We have a real challenge at bringing in
	charter management organizations to the Commonwealth basically
	because of the restriction that we have on approving charter
	schools. Those can only be approved by the local school board.
	We do have an innovative concept that I believe you read
	about in my testimony and that are STEM academies. And these
	are public-private partnerships that are created throughout the
	Commonwealth. We have 16 of them. And they really take on a
	different flavor depending upon the business community. And
	this is a strategy that I would recommend as a way to really
	expose young people to careers in the STEM fields, as well as
	provide them with the skills to be able to be college- and
	career-ready.
	Mr. Rokita. How do you plan on measuring success? I mean,
	in Indiana we have charter schools where 25 percent of the
	kids, their sole source of food--I don't think this is
	different from other parts of the country--their sole source of
	food is the school. Charter schools where they are buying shoes
	for the kids. And then we have advanced learning charter
	schools as well. And seemingly, from someone who is still a
	little bit on the outside of it, that is all graded on the same
	scale. Is that going to be your plan, too? Or how are you going
	to measure success in these very different environments?
	Ms. Fornash. Sure. Well, the initial measure of success for
	us is third-grade reading. I mean, that has really been our
	focus in the Commonwealth over the past 2 years, is putting a
	focus, whether it is resources or reading specialists, on
	third-grade reading and ensuring that young people are able to
	read because we know that is the best predictor of success in
	high school and in graduation.
	So our focus has been third-grade reading, but also an
	interest in ensuring that young people are college- and career-
	ready. And so that is evident through the graduation rate. We
	have also changed our diploma requirements to provide young
	people to earn an industry certification as part of their high
	school diploma requirements, so ensuring that when you graduate
	from high school you are either college- or career-ready.
	Mr. Rokita. Okay. Thank you.
	And, Governor, thank you again for being here. Our paths
	crossed back when you were lieutenant governor and you caucused
	with the Nation's secretaries of state.
	Governor Herbert. The good old days.
	Mr. Rokita. The good old days. You were excellent. And that
	is why I don't doubt any of your testimony and see the great
	things that Utah is doing. I know from our work together during
	that time that that would be the case.
	I would like to enter into the record this document that
	says, ``Why Utah.''
	Chairman Kline. Without objection.
	[The information follows:]

	<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

	------

	Mr. Rokita. I am not sure if this was made for us today or
	you use this for other purposes or not.
	Governor Herbert. Somebody made it for you.
	Mr. Rokita. It says, quote, ``And we have reduced the size
	of government while all other employment sectors have grown.''
	And if you said this in your testimony I apologize. But can you
	put some numbers to that or some specificity to reducing the
	size of government, what that meant?
	Governor Herbert. Well, thank you. You know, we have talked
	a lot about certainty and predictability and people want to
	build on a solid foundation. And I believe that comes with
	fiscal prudence. We are one of only seven States right now that
	has a AAA bond rating from all rating agencies on Wall Street,
	and that says something about Utah, says something about the
	rest of the country and the challenges that they are facing. We
	have had a growth that has been pretty good. We are about 3
	percent growth rate now, back to our historical norms. And so
	that expansion of job creation has been healthy.
	Mr. Rokita. But reduce size of government.
	Governor Herbert. Yeah. Our personal income has grown at
	about 5 percent. Every sector of our economy is growing again
	except for government. And we have gone through to find ways to
	streamline and find efficiencies. Again, some of it is
	technology. Sometimes it is better process. But it is
	interesting to know that we have about 22,560 employees in the
	State today. You have to go back to the year 2001 to find a
	smaller number. As we all know, government is labor intensive,
	and we have actually reduced our labor and found more
	efficiencies.
	At the same time, Utah, which is also one of the fastest
	growing States in America, has increased its population by over
	600,000 people. So our ratio has gone from one State employee
	in 112 or 113 to now it is one State employee for 139. Again,
	as we save taxpayers' dollars proportionally, it allows us to
	redirect moneys where it needs to go and in fact empower the
	private sector because we are not taking as much of their
	revenue and their capital. They can reinvest and grow the
	economy. And, frankly, that ought to be the focus of all of us.
	If we get the economy growing right, everything else kind of
	falls into place. And that is the formula we have done in Utah,
	and it is working very well for us.
	Mr. Rokita. Chairman, my time has expired. Thank you.
	Chairman Kline. Mr. Hinojosa.
	Mr. Hinojosa. Thank you, Mr. Chairman. I wish to also thank
	Governor Herbert and the other three distinguished panelists
	for your participation at our congressional hearing on
	Education and Workforce Committee.
	My first question is for Dr. Jared Bernstein. Between the
	years 1973 and 2008, the share of jobs in the U.S. economy
	which required postsecondary education increased from 28 to 59
	percent. According to the Georgetown University Center on
	Education and Workforce, the share of postsecondary jobs will
	increase from 59 to 63 percent over this next decade.
	In your view, what will the jobs of the future look like?
	What can Congress do to prepare the least educated and
	underrepresented minority groups for the jobs of the future as
	you see it? And how can we continue to lower unemployment rates
	for these populations?
	Mr. Bernstein. Well, I should look more carefully, the
	numbers I have in my head don't quite match the numbers you are
	citing, although there is no question that over time the
	demands for more highly skilled workers increases. But it
	increases at a fairly secular, steady pace. There hasn't been
	any evidence of an acceleration in the increase of employers'
	needs for particularly highly skilled workers. And in fact if
	you look at the Bureau of Labor Statistics' projections for new
	jobs, the share with, say, college educated goes up a couple of
	percentage points over the next 10 years, not that big a deal.
	And if you then look at the occupations creating the most
	jobs, you will find that many of those jobs are for home health
	aides, for child care workers, for workers in the retail
	sector, for security guards, for health technicians. Did I say
	home health aides? That is one of the top ones. So while I
	think it is very important to be sure that we have the skilled
	workforce, continue to have the skilled workforce we need--and
	for that, I will speak specifically to some policy ideas--I
	think it is also very important that we be mindful that that is
	not the only sector that is going to be adding jobs. We are
	going to be adding a lot of jobs the middle and the low end of
	the pay scale as well. And being mindful of the job quality
	issues there, as I was mentioning to Mr. Scott and Mr. Miller
	earlier, low unemployment, robust work supports, a high enough
	minimum wage, guaranteed health care insurance, the ability to
	collectively bargain, if that is what you want to do, those are
	all really important.
	This is the point I actually wanted to make earlier. It
	does speak to the issue of your question, how can we help
	support the need for more highly and, for that matter, more
	successfully educated people across the educational scale? And
	that has to do with these funding cuts I mentioned earlier. In
	my spoken testimony, I talked about how the cuts are impacting
	education. Well, the nondefense discretionary part of the
	budget--and of course the discretionary part of the budget is
	where all the cuts thus far have taken place--on the
	nondiscretionary part, one-third of that spending goes to
	States and localities for the kinds of things Secretary Fornash
	was talking about a few minutes ago and endorsing as very
	important to her State and I am sure every other State as well.
	Well, of the one-third of this nondefense discretionary
	spending that goes to States and localities to support
	services, including education, about 25 percent of that, or $40
	billion this year goes to education. And that is precisely the
	kinds of programs that Secretary Fornash was talking about.
	These are things that target low-income kids, kids with
	learning disorders, kids with disabilities. They go to Head
	Start. They go to districts to train better teachers and reduce
	class sizes. Any further cuts to the discretionary side of the
	budget, any shift from defense cuts to the nondefense
	discretionary side of the budget will cut directly into the
	kinds of the programs that I am talking about, that third of
	NDD spending that goes to States to help them with their
	educational services; with their services writ large, of which
	education is a part.
	Mr. Hinojosa. Thank you for that response. And that leads
	me to the question for Secretary Fornash.
	In your testimony, you mentioned the success of Virginia's
	point-based performance funding model in incentivizing
	institutions to increase the production of the college
	associate's degrees and bachelor's degrees. Can you explain how
	that performance funding model works as well as its impact on
	the graduation rates for the underrepresented populations that
	I am concerned about?
	Ms. Fornash. Yes, sir. It is a relatively new performance-
	based funding formula. We just actually provided funding----
	Mr. Hinojosa. Is your microphone on?
	Ms. Fornash. I am sorry. This is a relatively new
	performance funding model that was just implemented in 2011. It
	was developed with the business community policymakers and
	higher education policy analysts. And what the performance
	funding model does is give institutions certain points for
	graduating students in 4 years, STEM-H majors, as well as
	graduating more underrepresented populations.
	So we have only been able to provide funding to that
	performance-based incentive funding for the past 2 years. So at
	this point we don't have any data to report as it would relate
	to graduation and retention of underrepresented populations.
	But I do think it is important to note that we are
	incentivizing institutions to look to those populations. We
	know that if we want to increase the number of degrees in the
	Commonwealth and elsewhere, we are going to have to look to
	underrepresented populations and we need to have our
	institutions focused on ensuring those students graduate.
	Mr. Hinojosa. My time has run out. I yield back.
	Chairman Kline. I thank the gentleman.
	Mr. Thompson.
	Mr. Thompson. Thank you, Chairman.
	Thanks to the panel for bringing your expertise to all the
	issues we are dealing with here.
	Mr. Timmons, I want to start with you. With so many
	Americans suffering under unemployment and underemployment and
	manufacturing struggling to fill vacancies--and that is what I
	have seen traveling around my congressional district--unable to
	find qualified and trained workers for these positions sitting
	open, and quite frankly, on top of that, the risk of America's
	future competitiveness, given both of those things, what
	recommendations would you have for secondary education,
	including career and technical education, if it is applicable,
	in filling what I would call the skills gap?
	Mr. Timmons. Well, Congressman, I think there are certainly
	many things that we can look at with regard to the education
	system. You know, one thing I would say that hasn't been
	mentioned here today is that all manufacturing jobs do not
	require a 4-year degree. And, you know, that is the bright
	spot. We have been encouraged with the work of the
	administration on their support of our skills certification
	program. That is postsecondary, but in work with community
	colleges it has certainly been a benefit to helping train
	future manufacturing workers.
	In the secondary area, our Manufacturing Institute has also
	created a program, and it is I guess about 6 years old, called
	Dream It, Do It. I describe it as a cross between kind of the
	old shop class that many of us remember and junior achievement.
	And it gives young people an opportunity to really imagine
	their future in the world of manufacturing. We have gotten away
	over the course of the last several decades from encouraging
	our children and future generations to be involved in the
	manufacturing workforce because of a perception of what
	manufacturing used to be. Manufacturing today is sleek. It is
	innovative. It is clean. It is technology driven. You know,
	when I am speaking to students, I say it is a sexy field to go
	into. And the Dream It, Do It campaign or the Dream It, Do It
	effort helps young people kind of imagine their future in this
	field.
	So that is what we are doing from the private sector
	vantage point. We have partners in many States. Some States,
	the Governors have taken it on as kind of their main focus for
	advancing some interest in manufacturing, and we have
	appreciated that partnership as well.
	Mr. Thompson. Thank you. I think we have done a tremendous
	disservice to a lot of our youth, our kids. You know, many of
	them go right into the workforce. And I am a supporter of
	higher education. No doubt about that. I want to work to make
	that affordable and accessible. But I believe there are many
	different pathways to success in life, and if we don't honor
	all those and reduce the burdens on all those pathways, we
	really haven't served our children well.
	Governor, as you know, last week it was reported that the
	gross domestic product dropped during the last 3 months of 2012
	resulting in a 0.1 percent of negative growth for the fourth
	quarter. Now, this is the first contraction since the spring of
	2009. As you have looked at that and have heard that reported,
	what factors do you believe led to that loss? And what policies
	do you believe should we take to put the U.S. economy back on
	track?
	Governor Herbert. Well, that is a great question. I think
	there are a number of factors that, at least in my opinion,
	that caused it. I think some of it is cyclical, the ups and
	downs of the business cycle, and some of it may be seasonal.
	But clearly the fact that there is concern and uncertainty in
	the marketplace caused by either regulation, the fiscal cliff
	so-called, sequestration, tax hikes all cause the entrepreneur
	to sit on the sidelines and say, Gee, I don't know what the
	rules are. It is estimated by many economists that there is $2
	trillion of capital sitting on the sidelines not willing to
	invest, waiting for some kind of certainty to occur so they can
	feel like, We know what the rules are, if we know what the
	rules are we can play by them, and we will have an opportunity
	to have a return on our investment. I think that uncertainty is
	the biggest cause for the constriction.
	Again, without belaboring the point, in Utah we have tried
	to in fact provide certainty and predictability. We have not
	had a tax increase for 15 years. We actually lowered our taxes
	and flattened the rate. We have had regulation reform. We in
	fact do everything we can to empower the private sector to do
	what they do best, which is innovate and create and find new
	ways to solve the problems and find solutions to the challenges
	that the marketplace and the public wants. And in doing so, we
	have created an opportunity where venture capital is coming to
	Utah. Businesses are locating. We actually have research and
	development's occurring and concentrating in Utah. Actually
	reshoring, bringing people from outside of our country. They
	are coming back to a favorable environment. Lower cost energy.
	Those kinds of things are attracting manufacturing to Utah.
	Procter & Gamble opened up their first manufacturing plant in
	North America in 40 years in Utah here just a couple of years
	ago because of those kinds of things. So absent certainty and
	predictability, the marketplace is hesitating.
	Mr. Thompson. Thank you, Mr. Chairman.
	Chairman Kline. The gentleman's time has expired.
	Mr. Tierney.
	Mr. Tierney. Thank you.
	Dr. Bernstein, I won't ask the Governor this because it
	would put him on the spot, but I will ask you. The uncertainty
	of which the Governor speaks, can you give us a couple of
	comments on how that arose or what is causing that uncertainty
	over the last quarter?
	Mr. Bernstein. I think there is actually considerable
	evidence that right now uncertainty is very much a function of
	fiscal policy and jumping from fiscal cliff to fiscal ceiling
	to potential sequester. It is very hard for businesses, many of
	whom depend on government contracts--the government lets $0.5
	trillion in contracts per year all throughout the economy--to
	plan ahead with that kind of uncertainty. So this lurching from
	crisis to crisis--and I think I am corroborating things the
	Governor himself said a minute ago--very much doesn't help.
	Mr. Tierney. It is rather asymmetric. I would just point
	out, the uncertainty is caused of course by our friends who
	won't come to a reasonable balanced approach to taking care of
	our fiscal problems. But be that as it may.
	Let me ask you again, Dr. Bernstein, talk to me, if you
	will, about the lack of demand in the economy and its effect on
	our situation.
	Mr. Bernstein. Sure. It is very important in the context of
	a hearing that has been largely about--and appropriately so, of
	course, given the committee's mandate--on education and making
	sure that we have an adequate supply of skilled workers. But
	absent enough jobs for the workforce, a skilled worker is
	essentially all dressed up with nowhere to go. That is, simply
	training somebody does not create a job for them.
	We have a widely agreed upon--again, by economists of all
	stripes--large output gaps in our economy. The economy has
	never grown quickly enough to restore the growth lost in the
	depth of the great recession. The unemployment rate has been
	elevated for years now. The current unemployment rate is just
	below 8 percent. Most economists consider full employment
	somewhere slightly north of 5 percent.
	So those factors are not just hurting the unemployed--and
	this is important--they also hurt the employed. I showed in my
	first chart the loss of earnings for middle-income workers and
	low-income workers, real losses once you factor in inflation.
	These are for full-time workers. These are for full-time
	workers.
	Mr. Tierney. So the stagnation of wages is the second
	element of that.
	Mr. Bernstein. The stagnation of wages is closely related
	to the persistent lack of demand or weakness in the labor
	market.
	Mr. Tierney. Governor, on that point alone I notice that in
	your fiscal year 2014 budget, you allow for a 1.6 percent
	increase, I guess, in education, right?
	Governor Herbert. Yes. But again, we have about a 2 percent
	growth rate in our student population.
	Mr. Tierney. But it is a 1.6 percent increase in your
	budget for that year. And I think that allocates resources to
	give a cost of living raise to your higher education
	professionals, right?
	Governor Herbert. We have provided salary increases for
	higher education and also for public education.
	Mr. Tierney. Well, you didn't for K-12, right? I mean, they
	have not had a raise for 4 years. And let me guess, you had a
	Utah State Board of Education and your own Education Excellence
	Commission both recommended you give a 2 percent increase in
	education. You gave a 1.6 percent, and the difference is that
	you didn't give a cost of living raise to your K-12 teachers,
	right?
	Governor Herbert. Well, again, our formula we have there is
	taking care of the health care costs in the benefit package.
	Mr. Tierney. Right. But I guess my real question focuses on
	whether or not you gave a cost of living increase to your K-12
	teachers.
	Governor Herbert. We did. We did. It depends on how they
	decide to spend it at the local district level. They have
	flexibility. We covered the benefit package. They can either
	take a reduction in their benefit or they can have a cost of
	living on their salary and take home.
	Mr. Tierney. So they got a choice in poison, but they
	didn't really get an increase.
	Governor Herbert. The choice is, the local districts, how
	they want to spend the moneys.
	Mr. Tierney. So they want to cut the teachers back in one
	area or another. But it is not a question of----
	Governor Herbert. I would answer it this way, Congressman.
	I remember as a young man I was able to go out and buy an
	automobile. When I asked my father if it was okay for me to do
	that he said, You can buy it if you can afford it. There are
	limited amounts of money that we have available to spend. We
	are putting $300 million this year----
	Mr. Tierney. So, Governor, if I could interrupt you. You
	chose to make your reduction in the K-12 people by not giving
	them the same cost of living increase that you gave to other
	areas, including higher education.
	Governor Herbert. We made the proposal, then worked with
	the legislature to make sure that--our original proposal was
	for last year. If you are talking about last year's budget----
	Mr. Tierney. I am talking about 2014 projections on that.
	And I guess, Dr. Bernstein, is that failure to give raises for
	4 years and then failure to give a cost of living increase this
	year obviously has an impact on the overall economy of that
	area, right?
	Mr. Bernstein. And there is no question that Utah has done
	absolutely better on many of the indicators that the Governor
	was talking about today and I don't doubt that at all. But it
	is the case that from the late 1990s to the mid-2000s, the real
	income of Utah households in the bottom fifth of the pay scale
	fell 11 percent, fell 11 percent in real terms. Over that same
	period middle-income households--that is from the late 1990s to
	the mid-2000s--only went up less than 2 percent. So there is
	the same type of pay squeeze, of income squeeze, of
	difficulties facing middle-wage and low-wage workers exists
	there as well.
	Chairman Kline. The gentleman's time has expired.
	Mr. Messer.
	Mr. Messer. Thank you, Mr. Chairman. I have a formal
	statement. But in the interest of time I would like to, with
	your permission, submit that statement and then try to get to
	the essence of my question. Thank you, Mr. Chairman.
	I am sure there has been some dialogue earlier about the
	Affordable Care Act and its sometimes intended and unintended
	consequences on our economy. I think the chairman mentioned
	there are already 13,000 pages of regulations associated with
	that bill. This week the superintendent of a school system in
	my district came to me--his name is Dave Adams at the
	Shelbyville Central School System--and raised the issue with me
	that the challenges the school system is having and the
	calculation of what a full-time employee is and how that might
	impact their budgets and specifically how that might impact
	teachers aides, people who work between 30 or 40 hours a week
	but do that 9 months a year. His estimate is that under the
	proposed definitions in the act it would cost this school
	system, a town of about 15,000 people, $794,000 in a time where
	they are very strapped with budgets.
	This, of course, is not something that just impacts
	schools. And I would like to raise my first question to Mr.
	Timmons, if I could. How will the affordable health care law's
	mandates and penalties impact employers and their employees?
	And what steps are employers taking to mitigate the potential
	harm from these provisions?
	Mr. Timmons. Well, I am only on page 4,692 of the
	regulations. So I can't give you a direct answer to that. But
	just suffice it to say that manufacturers were fairly
	disappointed with the outcome of the Affordable Care Act. We
	supported the goals of reducing the cost of health care and we
	supported the goal of increased access. And, unfortunately,
	there were a lot of other things added to that bill that made
	it quite expensive.
	Manufacturers, 97 percent of manufacturers provide very
	robust health care benefits for their employees. So for us, it
	was not that large of an issue or a change. And I can't answer
	your question because I think manufacturers are looking at the
	cost-benefit ratio of the law and what they are going to be
	required to do to keep the plans that they have in place right
	now versus moving away from employer-provided care and into the
	new system.
	I can say that manufacturers would prefer to be able to
	provide these benefits to their employees. I mean, it is
	something that we are very proud of. It is something that
	employees appreciate. And, you know, it is part of that good
	healthy working relationship that employer and employees have
	in the manufacturing community. So I have to, unfortunately,
	get back to you on what they are planning to do, but I can tell
	you that they are evaluating it.
	Mr. Messer. Okay. Well, I appreciate that.
	And very quickly, Secretary Fornash, appreciate your
	testimony. And you were very eloquent about the successes in
	Virginia. I just wanted to ask the question, is this an issue
	that you are aware of? Do you have any thoughts on the impact
	of the requirements and penalties of the Affordable Care Act on
	education institutions in Virginia or elsewhere?
	Ms. Fornash. Sure. We are still evaluating the implications
	of the Affordable Care Act as it relates to education and in
	the process are working on some guidance to our State agencies.
	In the Education Secretariat also have our higher education
	institutions, which employ a tremendous amount of part-time
	staff, as you can imagine, on the auxiliary side, student
	affairs, residence life, dining, those types of things. So that
	is obviously a concern for the employees of those operations,
	as well as our State-operated museums who hire a lot of wage,
	part-time, seasonal employment. So these are definitely issues
	that we are in the process of evaluating and working on some
	guidance to better understand and issue to our State agencies
	and institutions of higher education.
	Mr. Messer. Well, thank you.
	Mr. Chairman, clearly at a time when schools are strapped
	for cash and we just had a dialogue just a second ago about the
	challenges they face, I think this is one more challenge that
	is being piled on schools. Thank you.
	Chairman Kline. The gentleman yields back.
	Mr. Courtney.
	Mr. Courtney. Thank you, Mr. Chairman. And thank you to the
	witnesses for your outstanding testimony today. Again, I
	appreciated the input regarding the skills gap and the 600,000
	job openings, which again I think we are all hearing that in
	our districts. In Connecticut, Governor Malloy has initiated an
	advanced manufacturing program using community colleges with 1-
	year or 2-year degrees. The hiring rate is almost 100 percent
	in those programs.
	So, you know, there is actually I think a lot of good work
	this committee can do with the Workforce Investment Act to try
	and make sure the structural unemployment doesn't add to the
	pain that is out there right now. But again, I have to say, the
	fiscal uncertainty that is out there right now is what I am
	hearing when I am back home. And I am going to use a very
	specific example, which is that if sequestration and the CR, by
	the way, go into effect, the impact in terms of the Navy's
	budget for repair and maintenance, which will affect shipyards
	in Virginia as well as Connecticut, California, Hawaii, means
	that 23 ship repair and availabilities are going to be
	canceled. And those are real jobs. Those are exactly the high-
	value jobs in manufacturing that people are pulling their hair
	out right now, they just cannot believe that that is not
	something that we are focused on right now 22 days away roughly
	from sequestration from kicking in.
	And the solutions that the majority party has put forward
	to protect defense cuts would basically shift all the cuts to
	discretionary domestic spending, which is Title I, which is
	Head Start. Again, my largest school district is going to lose
	two Head Start programs if the domestic discretionary cuts go
	into effect. So that is not a solution. I mean that is just not
	an answer for dealing with what again is about an inch from our
	nose as we are standing here right now.
	The Bipartisan Policy Center, which is the group that was
	founded by Senator Dole and Senator Daschle, came out with a
	report on sequestration which again a million jobs will be lost
	if we don't deal with this right now. And I just wonder if you
	have reviewed those findings, Dr. Bernstein, and have any
	comment.
	Mr. Bernstein. Well, it is precisely related to the kinds
	of comments that I was referring to earlier. And in fact you
	gave the microeconomic foundations for exactly what we are
	talking about. Many of these outlays find their way into the
	economy quickly. Think of it as sort of the opposite of
	stimulus. Right? It is instead of an infrastructure program
	that creates a job, this is pulling out funding resources that
	are actively creating jobs now, and those jobs will be lost if
	those spending cuts occur as planned in the sequestration.
	I mean you will recall that many economists, and I think
	Members of this body, were very much worried about the impact
	of the fiscal cliff on the economy. Ben Bernanke warned about
	it. I don't recall the CBO ever projecting a recession before.
	They projected that if the fiscal cliff occurred, there would
	be a recession. This is a microcosm of that. And if you thought
	the fiscal cliff was bad for the economy, this is a microcosm
	of the fiscal cliff. Works the same way, by slowing GDP growth,
	slowing employment growth, slowing consumer demand, slowing
	investor demand, pulling funding out of the very kinds of
	productive processes you are describing.
	Mr. Courtney. And the positive outcome of the fiscal cliff,
	which was basically to get some certainty into tax rates,
	estate tax rates, again, not everybody was thrilled with where
	the cutoffs were in terms of the rates, but at least now we are
	not looking in those two areas. In AMT, no more AMT patches. We
	are not looking at any sunset dates. We are not looking at any
	automatic expiration dates or shelf life dates.
	And, frankly, you know, your organization and your members,
	by the way, it is not just the big OEMs that are worried about
	the sequestration, it is the supply chain of metal finishers,
	valve manufacturers. These are the guys that, frankly, are
	going to feel because they have no reserves that they can fall
	back on. And the absence of any reference to what is staring
	manufacturers, particularly defense manufacturers in the face
	right now, literally about 3 weeks away, is kind of astonishing
	to me, Mr. Timmons.
	Mr. Timmons. Well, it shouldn't be too astonishing because
	we are talking about it all the time. And you are exactly
	right, our study actually shows that there will be a 12.8
	percent contraction in GDP between now and the end of 2015 if
	sequestration is allowed to proceed. And it could ultimately
	result in another decade to get back to where we have just come
	from.
	So for us, it really is a very vital issue. You know, 67
	percent of manufacturers say that there is too much uncertainty
	right now to expand, to hire, to grow; 55 percent of
	manufacturers say they would not start their business today if
	they knew what they know now and in this current environment.
	So manufacturers are very concerned about sequestration. As Dr.
	Bernstein mentioned and our study confirms that, a million jobs
	at stake in the manufacturing sector if sequestration,
	particularly in defense manufacturing, is allowed to continue
	as it is currently scheduled to do. And we would love to work
	with all Members of Congress on both sides of the aisle to
	resolve this problem.
	Mr. Courtney. Thank you. I yield back.
	Chairman Kline. The gentleman's time has expired.
	Mrs. Brooks.
	Mrs. Brooks. Thank you, Mr. Chairman.
	Mr. Timmons, as you might know, I was previously a senior
	vice president with workforce training at Ivy Tech Community
	College and general counsel for the college. And you have
	talked about the skills gap and the 600,000 jobs that have gone
	unfilled. Can you talk a little bit more specifically about the
	Manufacturing Institute work that you all do, what you have
	done with Ivy Tech, and why you think community and technical
	colleges are really the right forum for this type of training?
	And then secondly, I was on shop floors last week at Roche
	Diagnostic and Rolls-Royce in Indiana, and you are right, they
	are sleek, innovative, high-tech factory shop floors. And I
	think a lot of people don't understand the appreciation or the
	importance of the skill certification that you have mentioned.
	Can you talk about how the Manufacturing Institute is working
	with the community colleges on the skill certifications?
	Mr. Timmons. Well, I would be happy to do that. And thank
	you for the question.
	The Manufacturing Institute has really taken the skills
	issue to a new level. I mentioned earlier the Dream It, Do It
	campaign that the Manufacturing Institute kicked off several
	years ago, and one of the things that we want young people to
	understand is the ability to have a much higher income than
	they might otherwise. Twenty-seven percent higher income than
	the rest of the economy is what the average is for
	manufacturing workers.
	The institute has implemented, as I mentioned in my
	testimony, a skill certification system by working with
	community colleges throughout this country to enact a portable
	set of skills that can be applied to manufacturing facilities
	anywhere. It is a basic skill set that tells a manufacturer
	that these individuals are skills-ready to enter the
	manufacturing workforce. It doesn't mean that there won't be
	additional training that is required at a particular company
	for a particular industry, but it is an effort to try to
	provide that pipeline for the workforce that manufacturers so
	desperately need.
	I also want to point out again--and I mentioned it earlier
	but I think it is very important to mention this particular
	program--and it is the military badge program that the
	institute has kicked off with several of our members throughout
	the country. And the military badge program really acts as a
	translation device, if you will, for skills that military
	personnel may have acquired in their service to our country.
	For instance, if you are talking to somebody who is just
	returning from Afghanistan and you say, Well, what skills do
	you think you could apply to the manufacturing workforce? And
	they shrug their shoulders and say, I don't know, I drove a
	tank. Well, the military badge program will help them identify
	the skills that would be very vital to a manufacturing career.
	It might be hydraulics. It might be electronics. It might be
	logistics. Those skills can be then applied to a manufacturing
	position.
	If they have a skill set that is ready to go, we help them
	enroll in an online database to match them with openings in the
	manufacturing community. If their skills might need a little
	tweaking, we work with a group called Right Skills Now to get
	them the additional training that they will need and then we
	get them into this electronic database.
	So the Manufacturing Institute, you know, I have to say
	that they have about six people on their staff and they are
	running quite an amazing program to help fill this 600,000
	deficit in our workforce.
	Mrs. Brooks. Thank you, Mr. Chairman. I yield back.
	Chairman Kline. Thank the gentlelady.
	Ms. Bonamici.
	Ms. Bonamici. Thank you very much, Mr. Chairman and Ranking
	Member Miller, for holding the hearing today. And thank you to
	the witnesses. I want to start by concurring with some of the
	comments that were made today.
	Governor Herbert, thank you for bringing up the importance
	and the benefits of language immersion and preparing students
	for a global marketplace.
	Secretary Fornash, thank you for emphasizing the importance
	of increasing innovation.
	Dr. Bernstein, I appreciate your discussion about the role
	of investment in education as an important way to address
	income inequality.
	And, Mr. Timmons, this has been a great discussion about
	the skills gap and workforce training, something that I have
	met with community colleges and businesses in my home State of
	Oregon about. I am actually working on developing some
	legislation that will help to pair the local employers with
	workforce training and help address that skills gap.
	I want to follow up, especially with Dr. Bernstein, about
	something that my constituents are emphasizing, and that is the
	importance of investment in early childhood education programs,
	like Head Start and the difference that they make for students,
	especially in the long term. And I know, Dr. Bernstein, you
	mentioned the importance of higher education to helping
	Americans find jobs and earn good wages. But you also talked
	about the dramatic effects that cuts in the nondefense
	discretionary budget would cause, including programs like Head
	Start and early childhood education.
	The University of Oregon, my alma mater, has a new
	president, and he has an interesting background for a college
	president. He was a criminologist. And he said one of the best
	investments we can make in crime prevention is an early
	childhood education. So can you elaborate in not only the
	importance of investing in early childhood education to ensure
	that we have the workforce needs for the future, but also,
	conversely, how budget cuts and cutting those programs could
	negatively impact everything from a prepared workforce to
	graduation rates and even criminal justice laws?
	Mr. Bernstein. By the way, I was out at the University of
	Oregon last week giving a couple of talks. Go Ducks, is I think
	what you say out there.
	Ms. Bonamici. Thank you.
	Mr. Bernstein. The idea that we would under-invest in
	preschool, including Head Start, particularly for disadvantaged
	kids whose parents far more often than not are unable to afford
	the investments that more affluent parents make all the time,
	is unquestionably cutting off our nose to spite our face,
	whether it is concerns about our fiscal future, whether it is
	concerns about the issues discussed here today, whether it is
	concerns about those children realizing their potential. This
	is something that is widely agreed upon, again, by economists
	of all stripes. It is not a liberal idea. It is not a
	conservative idea. In fact, a renowned Nobel laureate economist
	named Jim Heckman, who is I think typically associated with
	Republicans, has written many memos to Members of Congress and
	the administration just deeply urging that we pursue this kind
	of funding more deeply--again, particularly as regards kids in
	the bottom half of the income scale who typically are left
	behind in this regard.
	Things like small class sizes have been shown, we now have
	decades of longitudinal data on this, so there are very good
	controlled studies that show if a kid gets to go to a smaller
	class, which is often associated with the kinds of funding
	within the NDD budget, that kid will have a higher likelihood
	of completing college. Same thing if you look at the kinds of
	educational experiences, parental investments that kids in the
	bottom fifth of the income scale face versus kids in the top
	fifth, they are highly disadvantaged at the starting gate. So
	both in terms of public savings down the road and helping these
	kids achieve their potential, these are obviously very smart
	investments.
	Ms. Bonamici. Thank you. And I know that my colleagues and
	I all listen to our concerns of our constituents when we are in
	our districts and we will be doing what we can to make sure
	that we don't have these detrimental cuts that our local school
	districts will not be able to make up if these important
	investments, like Title I, Head Start, IDEA are cut. So thank
	you for your testimony.
	And thank you again for this hearing.
	Chairman Kline. I thank the gentlelady yielding back.
	Ms. Foxx.
	Ms. Foxx. Thank you, Mr. Chairman.
	Ms. Fornash, in your testimony you discuss Virginia's
	Longitudinal Data System. Could you tell us what steps you are
	taking to secure student and teacher performance data and
	protect students' privacy? And with respect to the linkage
	between teachers and their preparation programs, how do you
	hope to use that information?
	Ms. Fornash. Yes, ma'am. Thank you, Congresswoman Foxx. We
	are very proud of Virginia's longitudinal database system
	because it is providing a way where we can come together with
	the State agencies, within the Department of Education, the
	State Council of Higher Education/Virginia, as well as a number
	of other State agencies, one of which is the Virginia
	Information Technology Association. And so they have been a
	critical partner in ensuring the safety and security of those
	records since that is foremost important to us in the
	Commonwealth, is protecting those records.
	We also see it as a vital tool in order to be able to
	evaluate program effectiveness. And so right now we are in the
	process of, as I mentioned earlier, being able to look at wage
	outcome data for our graduates of our both public, as well as
	private higher education institutions. But we also have
	interest in using that data in better understanding the
	outcomes of our teachers and understanding how they impact
	young people and students.
	And so we have really developed a very robust system that
	is going to allow us to look at teachers, their preparation at
	our 4-year public and private institutions, and then ultimately
	the outcomes of students and what types of things do we need to
	be thinking about in the future. As it relates to preparation
	of teachers, what changes do we need to make in our teacher
	preparation programs to really ensure that they are prepared to
	handle the challenges of the student in the 21st century.
	Ms. Foxx. A little quick follow-up, and maybe you can get
	me some information outside of today's hearing.
	But one of the things we are all concerned about is the
	issue of transparency and making sure that people have the kind
	of information that you are gathering. So in 25 words or less,
	could you say how you are going to make sure that people
	understand what the results are of your data gathering?
	Ms. Fornash. Sure. And that really is a challenge. Right
	now we have used the resources to really build the
	infrastructure for the system and we are working closely with
	our higher education institutions' research faculty to make
	them more aware of the system and the capacity of the system.
	Much of what is currently available in the database you are
	able to query through the Department of Education's Web site at
	the State level or the State Council of Higher Education's Web
	site at the State level. These, again, are on protective
	servers. But we do make that information available to the
	public and try to do so in a very simple and easy to find
	manner.
	Ms. Foxx. Well, thank you very much.
	Mr. Timmons, I apologize that I have had to be in and out
	of the hearing today, but I know that you all have shared some
	really good information. And I can tell by the questions that
	my colleagues have asked that you are presenting very good
	information.
	You mentioned that you are, quote, working to integrate
	credentials in the for-credit side of the colleges so
	individuals will have the opportunity to get college credit and
	work toward a degree. Could you say a little bit more about--
	and you talked about this just a little bit ago--but can you
	talk about how well the colleges are working with you, how they
	have been enthusiastic about better aligning their course work
	with business needs, and anything else that you might have
	wanted to have said along those lines that you didn't get a
	chance to say before?
	Mr. Timmons. Well, I have a minute and three seconds, so I
	am not sure I can get to all that. But to your specific
	question, Congresswoman, we have been very pleased with the
	response from communities and institutions of higher education,
	both at the community college level and the 4-year level,
	because, quite frankly, everybody is talking about
	manufacturing. It really doesn't matter what political party
	you belong to, it doesn't matter where you live, folks
	understand that manufacturing is really the heart of a thriving
	economy. And it has the highest multiplier effect of any other
	sector of the economy in terms of investment in jobs, so
	everybody wants to see manufacturing succeed, and obviously we
	are thrilled with that.
	Community colleges and higher education institutions have
	been very responsive to our call for creating a set of portable
	skills. We have worked very closely with the administration on
	this particular project, and I have to say that it has received
	a lot of bipartisan support, as well as community support. So
	we are thrilled with the reaction that we have gotten.
	Ms. Foxx. I yield back.
	Chairman Kline. Thank the gentlelady.
	Ms. Davis.
	Mrs. Davis. Thank you, Mr. Chairman.
	Thank you all for being here. I wanted to go back to the
	skills gap issue, and I know we have talked a lot about that
	today, and just bring in a question from the New York Times
	article.
	And I will submit that for the record, Mr. Chairman.
	Chairman Kline. Without objection.
	[The New York Times article follows:]

	From the New York Times, Nov. 20, 2012

	Skills Don't Pay the Bills

	By Adam Davidson

	Earlier this month, hoping to understand the future of the moribund
	manufacturing job market, I visited the engineering technology program
	at Queensborough Community College in New York City. I knew that
	advanced manufacturing had become reliant on computers, yet the
	classroom I visited had nothing but computers. As the instructor Joseph
	Goldenberg explained, today's skilled factory worker is really a hybrid
	of an old-school machinist and a computer programmer. Goldenberg's
	intro class starts with the basics of how to use cutting tools to shape
	a raw piece of metal. Then the real work begins: students learn to
	write the computer code that tells a machine how to do it much faster.
	Nearly six million factory jobs, almost a third of the entire
	manufacturing industry, have disappeared since 2000. And while many of
	these jobs were lost to competition with low-wage countries, even more
	vanished because of computer-driven machinery that can do the work of
	10, or in some cases, 100 workers. Those jobs are not coming back, but
	many believe that the industry's future (and, to some extent, the
	future of the American economy) lies in training a new generation for
	highly skilled manufacturing jobs--the ones that require people who
	know how to run the computer that runs the machine.
	This is partly because advanced manufacturing is really
	complicated. Running these machines requires a basic understanding of
	metallurgy, physics, chemistry, pneumatics, electrical wiring and
	computer code. It also requires a worker with the ability to figure out
	what's going on when the machine isn't working properly. And aspiring
	workers often need to spend a considerable amount of time and money
	taking classes like Goldenberg's to even be considered. Every one of
	Goldenberg's students, he says, will probably have a job for as long as
	he or she wants one.
	And yet, even as classes like Goldenberg's are filled to capacity
	all over America, hundreds of thousands of U.S. factories are starving
	for skilled workers. Throughout the campaign, President Obama lamented
	the so-called skills gap and referenced a study claiming that nearly 80
	percent of manufacturers have jobs they can't fill. Mitt Romney made
	similar claims. The National Association of Manufacturers estimates
	that there are roughly 600,000 jobs available for whoever has the right
	set of advanced skills.
	Eric Isbister, the C.E.O. of GenMet, a metal-fabricating
	manufacturer outside Milwaukee, told me that he would hire as many
	skilled workers as show up at his door. Last year, he received 1,051
	applications and found only 25 people who were qualified. He hired all
	of them, but soon had to fire 15. Part of Isbister's pickiness, he
	says, comes from an avoidance of workers with experience in a ``union-
	type job.'' Isbister, after all, doesn't abide by strict work rules and
	$30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those
	with an associate degree can make $15, which can rise to $18 an hour
	after several years of good performance. From what I understand, a new
	shift manager at a nearby McDonald's can earn around $14 an hour.
	The secret behind this skills gap is that it's not a skills gap at
	all. I spoke to several other factory managers who also confessed that
	they had a hard time recruiting in-demand workers for $10-an-hour jobs.
	``It's hard not to break out laughing,'' says Mark Price, a labor
	economist at the Keystone Research Center, referring to manufacturers
	complaining about the shortage of skilled workers. ``If there's a skill
	shortage, there has to be rises in wages,'' he says. ``It's basic
	economics.'' After all, according to supply and demand, a shortage of
	workers with valuable skills should push wages up. Yet according to the
	Bureau of Labor Statistics, the number of skilled jobs has fallen and
	so have their wages.
	In a recent study, the Boston Consulting Group noted that, outside
	a few small cities that rely on the oil industry, there weren't many
	places where manufacturing wages were going up and employers still
	couldn't find enough workers. ``Trying to hire high-skilled workers at
	rock-bottom rates,'' the Boston Group study asserted, ``is not a skills
	gap.'' The study's conclusion, however, was scarier. Many skilled
	workers have simply chosen to apply their skills elsewhere rather than
	work for less, and few young people choose to invest in training for
	jobs that pay fast-food wages. As a result, the United States may soon
	have a hard time competing in the global economy. The average age of a
	highly skilled factory worker in the U.S. is now 56. ``That's
	average,'' says Hal Sirkin, the lead author of the study. ``That means
	there's a lot who are in their 60s. They're going to retire soon.'' And
	there are not enough trainees in the pipeline, he said, to replace
	them.
	One result, Sirkin suggests, is that the fake skills gap is
	threatening to create a real skills gap. Goldenberg, who has taught for
	more than 20 years, is already seeing it up close. Few of his top
	students want to work in factories for current wages.
	Isbister is seeing the other side of this decision making. He was
	deeply frustrated when his company participated in a recent high-school
	career fair. Any time a student expressed interest in manufacturing, he
	said, ``the parents came over and asked: `Are you going to outsource?
	Move the jobs to China?' '' While Isbister says he thinks that his
	industry suffers from a reputation problem, he also admitted that his
	answer to a nervous parent's question is not reassuring. The industry
	is inevitably going to move some of these jobs to China, or it's going
	to replace them with machines. If it doesn't, it can't compete on a
	global level.
	It's easy to understand every perspective in this drama.
	Manufacturers, who face increasing competition from low-wage countries,
	feel they can't afford to pay higher wages. Potential workers choose
	more promising career paths. ``It's individually rational,'' says
	Howard Wial, an economist at the Brookings Institution who specializes
	in manufacturing employment. ``But it's not socially optimal.'' In
	earlier decades, Wial says, manufacturing workers could expect decent-
	paying jobs that would last a long time, and it was easy to match
	worker supply and demand. Since then, with the confluence of computers,
	increased trade and weakened unions, the social contract has collapsed,
	and worker-employer matches have become harder to make. Now workers and
	manufacturers ``need to recreate a system''--a new social contract--in
	which their incentives are aligned.
	In retrospect, the post-World War II industrial model did a
	remarkably good job of supporting a system in which an 18-year-old had
	access to on-the-job training that was nearly certain to pay off over a
	long career. That system had its flaws--especially a shared complacency
	that left manufacturers and laborers unprepared for global trade and
	technological change. Manufacturers, of course, have responded over the
	past 20 years by dismantling it. Yet Isbister's complaint suggests some
	hope--that there's a lack of skilled workers; that factory layoffs
	overshot, and now need a reversal. As we talked, it became clear that
	Isbister's problem is part of a larger one. Isbister told me that he's
	ready to offer training to high-school graduates, some of whom, he
	says, will eventually make good money. The problem, he finds, is that
	far too few graduate high school with the basic math and science skills
	that his company needs to compete. As he spoke, I realized that this
	isn't a narrow problem facing the manufacturing industry. The so-called
	skills gap is really a gap in education, and that affects all of us.

	Adam Davidson is co-founder of NPR's ``Planet Money,'' a podcast
	and blog.
	______

	Mrs. Davis. Thank you.
	The question really is raised whether or not it is so much
	a skills gap in all cases but rather a wage gap, because many,
	many manufacturers are only offering about $10-an-hour jobs. So
	the incentive for young people to go into those jobs when there
	might be--I mean, they could flip hamburgers probably for more
	than that--is that part of the problem? I am certain that in
	all cases this is not necessarily true, but I wonder, Dr.
	Bernstein, if you want to comment on that, that in many cases,
	and the article cites, you know, it may be entry at $10 and
	maybe you go up to $16.
	Mr. Bernstein. Yeah, I think the wage gap right now is very
	pronounced, and as I have tried to explain in my testimony, in
	the very near term, more pressing than the skills gap, which is
	a longer-term problem and a very real one. But if you look at
	my figure 2, for example, I show that--and, again, I think
	members would be surprised--I mean, you have heard a lot of
	talk today about how the demand for workers with high levels of
	skill is being unmet. Well, if that is true, we should
	definitely see their wages going up. I mean, that is very
	simple economics. If the demand for something is unmet by
	employers, employers should be bidding those wages up, and we
	don't. In fact, what we saw, as I pointed out, was a decline in
	the real pay of college graduates.
	Now, college graduates have much lower unemployment rates,
	they have much higher levels of pay. It is a great idea for--I
	know your kids are here today--it is a great idea for anyone to
	get all the skills they can because it makes a big difference
	in their earnings potential and in their success in life, no
	question about that. But economy large, this lack of demand,
	persistently high unemployment rate has been hammering away at
	wages across the pay scale, not just at the very bottom.
	Mrs. Davis. So if we really see manufacturing as the heart
	of a thriving economy, obviously that is a very important place
	to be able to put those resources. It is understandable if
	there were so many people out there looking for jobs that
	employers wouldn't feel a need to raise that salary, but that
	doesn't seem to be working in terms of filling those jobs.
	Mr. Bernstein. I think in terms of manufacturing, the thing
	that economists have found is that historically there has
	been--and I believe Mr. Timmons referenced this earlier--
	historically there has been a large and significant wage
	premium in the manufacturing sector, and that is obvious
	because it is a high value-added sector, so you would expect
	that kind of a wage premium. But what we have seen, however, is
	that that premium has consistently slid. It has come down a
	lot. Now, it has not gone to zero. Some people say it has. My
	work suggests it is still somewhere in the, say, 5 to 10
	percent range, but it used to be in the 20 percent range. By
	the way, it is a larger premium if you include compensation
	because manufacturers tend to provide better compensation
	packages relative to just the wage package.
	Mrs. Davis. Thank you.
	Certainly I wanted to just comment, Mr. Timmons, on the
	issue around the military and the military badge. And I know
	that we are working with that across the country and with the
	Labor Department to try and help translate those skills better.
	Part of the problem that the military has is they need to at
	least provide something in the neighborhood of about 90 days of
	preparation to make that transition smooth, and of course that
	is a real problem that we have.
	I wanted to just turn to you, Madam Secretary Fornash, for
	the issues that we all face and we look at colleges and the
	fact that we have a high enrollment rate in our universities
	probably globally, you know, we do quite well in that area, but
	when it comes to actual graduation we are at the bottom. That
	must frustrate you. It certainly frustrates everybody that
	looks at this issue. In addition, I guess it is an education
	gap, kids are not graduating from high school with what they
	need to be successful in college. What do you think needs to be
	done about that?
	Ms. Fornash. One of the primary issues, I think, that
	relates to graduation and retention rates is remediation, and
	so many of our 4-year institutions are providing remediation
	services when that really should be done at the high school
	level or at the community college level. And in Virginia I
	think we can say we are very proud of Virginia's community
	college system because they have taken a very innovative
	approach to remediation as it relates to math and reading, and
	they have actually broken it down into components and created
	an online opportunity for students to gain those skills that
	they really need specific to the academic program that they are
	interested in studying. And so to me that is one of the largest
	challenges we face in higher education, is really ensuring that
	a young person is prepared for postsecondary education and
	ensuring that that is done in a way that won't slow down the
	process and hamper them from getting those credentials they
	need to be successful.
	Chairman Kline. The gentlelady's time has expired.
	I think all members have had a chance to ask questions. And
	Mr. Miller, I think, had a follow-up question, and I will yield
	to him for that question and any closing remarks he might have.
	Mr. Miller. Thank you.
	By way of question, in Virginia, can you tell me where you
	are now in terms of State support for your public higher
	education institutions? I think in California we drifted down
	to almost 20 percent from a high of 70, years ago, down to
	around 20. I think we are around 22, somewhere in that. Do you
	know where you are?
	Governor Herbert. I do. Our State budget, 50 percent goes
	to public education, another 15 percent goes to higher
	education, so a total of our State budget that we dedicate to
	education.
	Mr. Miller. That supplies what level of support, that is
	what percentage of the budget of those public institutions?
	Governor Herbert. It is about $3.7 billion of about a $6
	billion State budget.
	Mr. Miller. Of the 100 percent that is being spent by those
	institutions, the State is supplying, in California I think we
	are supplying about 20 percent of their budget down from a high
	of 70, and I just wondered what it is in Virginia and in Utah.
	Governor Herbert. Well, for Utah, again, our State portion
	of the budget, this is not the stuff we partner with, with the
	Federal government, we put about 65 percent of our State
	revenues go to education.
	Ms. Fornash. In higher education we have about 10 percent
	of our general fund goes to our higher education institutions.
	Mr. Miller. But you don't know what percentage of the
	institutional budget that provides? I mean, I think in Michigan
	it was drifting down to 6 percent.
	Governor Herbert. For the individual institutions
	themselves?
	Mr. Miller. Yes.
	Governor Herbert. It varies depending on the institution.
	We have eight institutions of higher learning, we have seven
	applied technology colleges which we are putting significant
	revenue into. It probably is a portion of probably 20, 25
	percent of the overall budget comes from tax dollars. And it
	varies.
	Mr. Miller. Okay. I may not have phrased the question
	right, but I will find the answer somewhere. Thank you.
	Ms. Fornash, let me thank you for raising this issue of
	remediation. I think in my State 30 percent of the students are
	going to institutions of higher education to get remediation. I
	can't think of a more expensive way to provide remediation than
	to do it on the campus of a State college or university, and
	especially when students are borrowing money. It just simply
	has to stop. I mean, you want to talk about, you know, the
	right allocation of resources and debt and what have you, I
	think you make a very important point and I hope other States.
	On the question of college, I think we have done here a
	relatively good job of helping with the affordability of
	college with interest rates and things to try to get through
	the recession, and student loans and the direct loans, I think,
	are all helpful. But the cost of college just continues.
	Looking at it from this side of the dais, there is not a lot of
	answers at the Federal level. We can strain, but really the
	cost of college is better dealt with. And some of the things I
	just want to say that you have mentioned institutionally in
	Virginia and Utah really have got to examine how this money is
	being spent in the institutions and what is the allocation of
	urgent resources and sort of non-urgent resources. I know there
	is turmoil in California because some lifetime learning classes
	will be dropped from community colleges. We had 5 million
	people show up for the community colleges across this country
	that we never saw before, and they are trying to get a job. And
	I think that kind of urgency, that kind of triage, it offends
	the liberal arts major that we would consider this, but the
	fact is the person that did your study, Tony Carnevale at
	Georgetown, will tell you whether they go to Georgetown or
	whether they go to San Jose State or community college, 80
	percent of them are going there to get a job. And the
	allocation of these resources and the cost of college, we have
	really strained at the Federal level to try to make it
	affordable with income-determinant repayments, with forgiveness
	so people could enter these careers. But this cost issue is
	something that we don't have a lot of say. We are sort of
	paying the bills. We really have a sense of urgency about that
	overall cost of college for us.
	And my final comment just, Mr. Timmons, is I think the
	badges are really a way for a lot of people to see a way into
	manufacturing that they couldn't envision. When I grew up, it
	was passed on from your uncle or your brother, what have you.
	Now they are not quite sure what is going on in that facility,
	and the idea that they would bring some competencies, whether
	it is from military service or elsewhere, to start that process
	I think is really an encouraging approach to students making a
	decision about how can they benefit from, you know, higher
	education, how can they benefit from training programs, what do
	they bring back from military service. That is a conversation a
	long time coming, and I really appreciate the leadership of the
	manufacturers in that one.
	Let me just close with this. We go back and forth. I don't
	know where these people are that have these skills, maybe they
	are just not in the United States, but regionally it sounds
	like everybody has 600,000 people that are looking for these
	skills, especially in California. But we do see manufacturing.
	I mean, there has been a lot of front page cover story
	magazines talking about manufacturing coming back to the United
	States, whether it is turmoil in China with the processes and
	the wages and the changes, and we saw that Foxconn just got
	their first independent union. Who knows what the hell that
	means? But if I remember, if I looked at the press over the
	last 8 or 9 months, you see commitments of foreign investment
	in manufacturing in the United States, much of it suggests that
	it is energy related to natural gas and what have you, in the
	Southeast, the Midwest, I would say 7, 8, 9 billion dollars in
	new facilities, some in chemicals, some in fertilizers and some
	of it in other related manufacturing where energy is a major
	input.
	So, I mean, some of this is coming back to the shores for
	other reasons. And I don't say that that is the end-all, and we
	can just sit back and watch it come because that doesn't
	happen, but there are some positive developments in terms of
	people repatriating businesses. They sort of left through
	Mexico, and there is some suggestion that some of them are
	coming back through Mexico, you know, they are pausing for a
	moment in Mexico while they take a look here. So what is your
	sense of that?
	Mr. Timmons. There are definitely some positive signs. We
	would like to see more positive signs, to be frank about it.
	Mr. Miller. I am not suggesting we are home free.
	Mr. Timmons. That is right. You mentioned energy and the
	cost of energy. In my opening statement I mentioned the 20
	percent cost disadvantage that manufacturers in the United
	States face compared to our major trading partners, and there
	is a lot of factors that go into that, taxes, regulation.
	Energy is one of those input costs, but for the first time in
	our survey, and we have been doing this for about a decade,
	energy costs are actually a slight net positive for
	manufacturers. So I think that companies are starting to look
	at that trend and say, Hey, you know, this can be very helpful
	to their ability to compete and succeed.
	So we are encouraged by the development, for instance, of
	shale gas and other forms of energy. And as you probably know,
	we are an advocate for an all-of-the-above energy strategy,
	everything from traditional oil and coal and natural gas to
	alternatives, including wind and solar and other types of
	energy, and that is a very, very important part of the
	manufacturing process and a huge cost driver for most
	manufacturers.
	Mr. Miller. Jared, just quickly, you know, the last of the
	stimulus certainly with respect to schools is running out, the
	sands have gone through, just about done to the extent that it
	held up either jobs or the wages of the people in those jobs,
	certainly in schools. And now these cuts, I mean, when we
	looked at where these cuts are going to fall should
	sequestration take place, the target may be the Federal
	government, but the victim is going to be local government, it
	is going to be schools, higher education, K-12, and whatever
	extent cities had some of this for law enforcement, what have
	you. That is where it is going here. You know, Federal
	employment has dropped even more dramatically in many
	instances.
	Mr. Bernstein. My analysis very much supports that. I show
	in my testimony a loss of about 360,000 local education jobs
	already over the last few years.
	Mr. Miller. That is with the stimulus.
	Mr. Bernstein. That is from when the stimulus began until
	now. So that is likely to accelerate. Remember States have to
	balance their budgets, so they are much more likely to cut
	services than raise taxes at a time like this. And that is, as
	we have heard from these statistics, that is where their
	services tend to lie.
	It has had problematic effects, as I document, at the K-12
	level, but also at the public university level where
	appropriations from the State have lagged exactly when
	enrollments have gone up, because it is actually a smart thing,
	to go back to school--I am talking about post, you know,
	college--it is actually a smart thing to do to go back to
	school when the economy is in a weak place because it can have
	lasting, damaging effects on your career trajectory if you
	enter the job market during a recession. So just when we have
	had greater demands for enrollment in community college, higher
	education, as well as, of course, enrollment continues to go up
	in K-12, we are having these cutbacks. And as I mentioned, if
	you shift discretionary spending cuts from the defense side on
	to the nondefense side, these cuts will be all that much
	deeper.
	Mr. Miller. Thank you, Mr. Chairman.
	Chairman Kline. Thank the gentleman. Just take a couple
	minutes for a few closing remarks myself and then let the
	Governor head back to Utah and everybody get back to work.
	We had a pretty wide-ranging discussion here today. There
	was some discussion about recess appointments and court
	decisions and quite an exchange between Mr. Timmons and Mr.
	Andrews. Of course, Mr. Andrews is on to other things, but
	obviously there were some differences in these recess
	appointments, and the whole question was whether or not the
	Senate was in recess. I thought that was the question, and the
	court came up with yet another ruling based on their
	interpretation of exact language in the Constitution. But I
	think it is undeniable that that has added to uncertainty out
	there. The question of NLRB rulings now is wide open, it is
	always subject to appeal, but I would argue subject to
	litigation, and that hasn't helped the certainty issue which a
	number of you have talked about.
	Mr. Miller talked about in the Workforce Investment
	Improvement Act that we were working in the last Congress that
	unions were prohibited from being on the Board. That language
	is actually not there. The language in our bill encouraged
	greater participation from employers but doesn't prohibit
	unions, and what the language will look like when we take that
	rascal up again, I am sure Mr. Miller has some input for that.
	Clearly, we have work to do here. Again, I just can't thank
	you enough for your taking the time, the witnesses, to be here
	today and offer your testimony and field our questions. It
	really is very helpful to us, and I want to thank you all.
	There being no further business for the committee,
	committee is adjourned.
	[Questions submitted for the record and their responses
	follow:]

	U.S. Congress,
	Washington, DC, May 08, 2013.
	Hon. Laura Fornash, Secretary of Education,
	Commonwealth of Virginia, P.O. Box 1475, Richmond, VA 23218.
	Dear Secretary Fornash: Thank you for testifying at the Committee
	on Education and the Workforce's February 5, 2013 hearing entitled,
	``Challenges and Opportunities Facing America's Schools and
	Workplaces.'' I appreciate your participation.
	Enclosed are additional questions submitted by committee members
	following the hearing. Please provide written responses that answer the
	questions posed no later than May 22, 2013 for inclusion in the
	official hearing record. Responses should be sent to Benjamin Hoog of
	the committee staff, who can be contacted at (202) 225-4527.
	Thank you again for your contribution to the work of the committee.
	Sincerely,
	John Kline,
	Chairman.

	Enclosures
	questions for the record from mr. messer
	I believe one of the biggest challenges facing our schools and
	workplaces is the numerous insurance mandates and hundreds of billions
	of dollars in new taxes on employers in the Affordable Care Act. These
	requirements and penalties likely will raise the cost of coverage and
	increase financial pressures on employers who are struggling to grow
	their businesses and create jobs, the last thing we want to do given
	our sputtering economy.
	I recently met with Dave Adams, the Superintendent of Shelbyville
	Central Schools, who like most employers is concerned about the
	proposed standard measurement period for determining whether an
	individual qualifies as a full-time employee for penalty purposes under
	the health care law. He is especially concerned about how educational
	organizations will calculate hours worked during this standard
	measurement period since they may be prohibited from including actual
	hours of service worked by school employees during educational breaks.
	He tells me this could cost Shelbyville schools $794,000 next year
	alone and lead to fewer hours for some school system employees.
	I share his concern about the impact this tax will have on the
	quality of education provided to students in Shelby County and
	elsewhere, and the potential for job losses and program cut-backs as a
	result. It is unconscionable that the Federal government will be taxing
	schools and employers to the point where student instruction may
	suffer, jobs may be lost, and hours may be limited simply to pay for
	the President's health care law.
	I have several questions about this issue:
	A. Secretary Fornash, what challenges do these requirements and
	penalties pose for educational organizations?
	B. Secretary Fornash, do you have concerns about the potential
	impact of these provisions on school systems, student instruction and
	the education workforce?
	______

	Commonwealth of Virginia,
	Office of the Governor,
	May 22, 2013.
	Hon. John Kline, Chairman,
	Committee on Education and the Workforce, U.S. House of
	Representatives, 2181 Rayburn House Office Building Washington,
	DC 20515.
	Chairman Kline, Congressman Messer, and Members of the Committee:
	The Affordable Care Act poses many challenges for education
	organizations. Part time wage employees are an important staffing tool
	for colleges and universities as well as for our elementary and
	secondary schools.
	The federal Affordable Care Act includes a provision stating that
	employees, who work 30 hours per week or more, shall be eligible for
	health care coverage. The average annual cost of providing health care
	is currently $13,249 per Virginia state employee. Providing health
	insurance to all Virginia's wage employees is not financially feasible.
	Initial estimates exceed $100 million to expand health insurance to
	these employees.
	Mindful of the financial implications of complying with the
	Affordable Care Act, the Virginia General Assembly and Governor Bob
	McDonnell agreed that the Commonwealth's wage employees can work no
	more than an average 29 hours per week. The Virginia Community College
	System and its stakeholders will be hit the hardest with an estimated
	4,300 wage staff members across Virginia's 23 community colleges and
	the system office. It will also impact more than 9,100 adjunct teaching
	faculty who are hired and compensated by academic hours taught, not
	clock hours worked. Wage employees are crucial to Virginia's Community
	Colleges and the people they serve; offering Virginia a lean and
	productive operation that plays a crucial role in their ability to
	offer families affordable access to a college education. Adjunct
	faculty provide Virginia's students with real world experience in a
	vast array of professions.
	This spring, the Chancellor of Virginia Community College System
	created a policy that adjunct instructors cannot teach more than seven
	credit hours in the summer semester; ten credit hours in the fall
	semester; and ten credit hours in the spring semester. This mandated
	credit load limitation creates tremendous challenges. Reduced teaching
	loads may reduce course offerings and will not be easy for some of
	instructors who are striving to build their career and pay their bills.
	K-12 schools are also hurting. Public schools rely on wage workers
	to help keep their facilities up-to-date and safe for our children.
	Long-term substitute teachers will also be affected. When teachers use
	their time off, for surgeries, maternity leave or other long-term
	commitments, we owe it to the children to provide qualified
	replacement. To have a new substitute every day is disruptive to the
	learning environment and doesn't provide consistency for our children.
	The extension of health-care coverage for wage employees--including
	bus drivers, cafeteria workers and substitute teachers--is a key issue
	in many Virginia school divisions this spring as local school boards
	and governing bodies struggle to approve budgets. In Loudoun County,
	for example, the school board this month voted to eliminate coverage
	for all new wage employees working fewer than 20 hours a week.
	School boards also are increasing deductibles and asking employees
	to pay a higher share of their premiums. And in divisions where
	teachers and other employees are not being asked to pay more this year,
	school boards have had to repurpose funds that otherwise could have
	been spent on textbooks, new technology or other instructional needs.
	My concerns about the Affordable Care Act stem from a desire to see
	Virginia's students achieve their full potential. Part time wage
	employees play a critical role in our school systems and on our college
	and university campuses. They are a flexible staffing tool allowing
	programs to expand and contract quickly as demand changes. I do not
	want to see the quality of a Virginia education reduced because
	institutions can't respond to the needs of students and the
	marketplace.
	Thank you for asking me to comment on the Affordable Care Act.
	Sincerely,
	Laura W. Fornash,
	Secretary of Education.
	______

	U.S. Congress,
	Washington, DC, May 08, 2013.
	Mr. Jay Timmons, President and CEO,
	National Association of Manufacturers, 733 10th Street NW, Suite 700,
	Washington, DC 20001.
	Dear Mr. Timmons: Thank you for testifying at the Committee on
	Education and the Workforce's February 5, 2013 hearing entitled,
	``Challenges and Opportunities Facing America's Schools and
	Workplaces.'' I appreciate your participation.
	Enclosed are additional questions submitted by committee members
	following the hearing. Please provide written responses that answer the
	questions posed no later than May 22, 2013 for inclusion in the
	official hearing record. Responses should be sent to Benjamin Hoog of
	the committee staff, who can be contacted at (202) 225-4527.
	Thank you again for your contribution to the work of the committee.
	Sincerely,
	John Kline,
	Chairman.

	Enclosures
	questions for the record from mr. messer
	I believe one of the biggest challenges facing our schools and
	workplaces is the numerous insurance mandates and hundreds of billions
	of dollars in new taxes on employers in the Affordable Care Act. These
	requirements and penalties likely will raise the cost of coverage and
	increase financial pressures on employers who are struggling to grow
	their businesses and create jobs, the last thing we want to do given
	our sputtering economy.
	I recently met with Dave Adams, the Superintendent of Shelbyville
	Central Schools, who like most employers is concerned about the
	proposed standard measurement period for determining whether an
	individual qualifies as a full-time employee for penalty purposes under
	the health care law. He is especially concerned about how educational
	organizations will calculate hours worked during this standard
	measurement period since they may be prohibited from including actual
	hours of service worked by school employees during educational breaks.
	He tells me this could cost Shelbyville schools $794,000 next year
	alone and lead to fewer hours for some school system employees.
	I share his concern about the impact this tax will have on the
	quality of education provided to students in Shelby County and
	elsewhere, and the potential for job losses and program cut-backs as a
	result. It is unconscionable that the Federal government will be taxing
	schools and employers to the point where student instruction may
	suffer, jobs may be lost, and hours may be limited simply to pay for
	the President's health care law.
	A. Mr. Timmons, how will the health care law's mandates and
	penalties impact employers and their employees? What steps are
	employers taking to mitigate the potential harm from these provisions?
	______

	Jay Timmons,
	President and CEO,
	May 22, 2013.
	Hon. John Kline, Chairman; Hon. George Miller, Ranking Member,
	House Education & Workforce Committee, 2181 Rayburn House Office
	Building, Washington, DC 20512.
	Dear Chairman Kline and Ranking Member Miller: Thank you for giving
	me the opportunity to testify before the Education and Workforce
	Committee on February 5, 2013 at your hearing entitled, ``Challenges
	and Opportunities Facing America's Schools and Workplaces.'' As you may
	recall, I testified about a number of challenges facing manufacturers,
	including the Affordable Care Act.
	The purpose of this letter is to respond to a question for the
	record submitted by Congressman Luke Messer. Congressman Messer's
	question was, ``Mr. Timmons, how will the health care law's mandates
	and penalties impact employers and their employees? What steps are
	employers taking to mitigate the potential harm from these
	provisions?''
	Response
	As the Committee is aware, the Affordable Care Act contains many
	mandates, penalties, taxes, fees and surcharges that businesses will
	have to absorb, pay, comply or otherwise adapt to whether or not they
	provide health insurance for their employees. Clearly, employers who
	provide health insurance are concerned about the cost of providing it,
	but they are also interested in making sure the coverage makes sense
	for their employees. Employers are looking for clarity, of which there
	has been little over the last three years. Manufacturers are looking
	for predictability, of which the lack of clarity makes impossible. In
	short, manufacturers know they will have to react and adapt, but they
	are unsure of the best course of action to take right now. How
	businesses choose to mitigate the impact of harmful provisions of the
	law depends a great deal on their particular industry, size and
	structure.
	Again, I would like to thank you for the opportunity to provide the
	view of our nation's manufacturers to the Committee.
	Sincerely,
	Jay Timmons.
	______

	[Additional submission of Mr. Miller follows:]

	Prepared Statement of the National Disability Rights Network (NDRN)

	As the nonprofit membership organization for the federally mandated
	Protection and Advocacy Systems (P&As) and Client Assistance Programs
	(CAPs) for people with disabilities, the National Disability Rights
	Network (NDRN) would like to thank Chairman Kline, Ranking Member
	Miller and the House Committee on Education and the Workforce for
	holding the hearing. NDRN would specifically like to comment on the
	critical need for employment services for people with disabilities and
	the need for a bipartisan reauthorization of the Workforce Investment
	Act and Rehabilitation Act.
	The P&A/CAP Network was established by the United States Congress
	through eight separate programs to protect the rights of people with
	disabilities and their families through legal support, advocacy,
	referral, and education. P&As and CAPs are in all 50 states, the
	District of Columbia, Puerto Rico, and the U.S. Territories (American
	Samoa, Guam, Northern Mariana Islands, and the US Virgin Islands), and
	there is a P&A affiliated with the Native American Consortium which
	includes the Hopi, Navaho and Piute Nations in the Four Corners region
	of the Southwest. Collectively, the P&A/CAP Network is the largest
	provider of legally based advocacy services to people with disabilities
	in the United States.
	Unemployment among people with disabilities is a severe and endemic
	problem. The unemployment rate among people with disabilities is around
	13.7%, significantly higher than that of the general population. In
	addition, the workforce participation rate for people with disabilities
	is approximately 21%, less than one third of the participation rate for
	people without a disability. Although the economic recovery has added
	many jobs to the economy over the past three years, the effects of the
	recovery have been much slower for people with disabilities, and the
	participation rate for people with disabilities has decreased while the
	unemployment rate for people with disabilities has increased since
	2010. Full integrated employment for people with disabilities is an
	important component in the fight for full community integration.
	Employment is a critical part of independence, as it allows people to
	earn a living wage and meet their needs. The P&A/CAP Network has been
	advocating for service providers and local governments to prioritize
	employment as a basic need for people with disabilities, and to ensure
	that people with disabilities receive the range of services that they
	need to be able to work. NDRN supports legislative changes that support
	employment services for people with disabilities, and make it easier
	for people with disabilities to obtain, maintain or advance in
	employment.
	Specifically, there are a number of changes to the Rehabilitation
	Act that would facilitate the work of the P&A/CAP Network in advocating
	for people with disabilities:
	1. Clarify language to allow for a Native American CAP program.
	Currently, the Native American Consortium, which provides a range of
	services to Native Americans with disabilities in the Four Corners
	region, does not have a Client Assistance Program. The law should be
	clarified to indicate that the Native American Consortium can designate
	a CAP program to receive funds and provide services to people with
	disabilities as like other P&A agencies.
	2. Provide language for a dedicated source of training and
	technical assistance when CAP appropriations reach an appropriate
	trigger amount. Training and technical assistance has proven to be
	effective in ensuring that the CAP Network is up-to-date on current
	law, regulations and procedures. Training and technical assistance
	should be a required component of the CAP funding.
	3. Allow expenditure of program income received by P&A and CAP
	grantees to occur over an indefinite time frame instead of requiring
	program income to be expended by the end of the second fiscal year
	after it is received. Grantees have occasionally had to spend program
	income based on several years' worth of case work in a very limited
	time, limiting their ability to use those funds to most effectively and
	efficiently benefit people with disabilities.
	4. Clarify that the authority of the PAIR program is the same as
	the Protection and Advocacy for Individuals with Developmental
	Disabilities (PADD) program. Also, clarify that P&A agencies have the
	ability to use the courts to enforce their access authority to records,
	individuals, and facilities to advocate and protect the rights of
	individuals with a disability.
	NDRN also supports the following changes to the Vocational
	Rehabilitation programs, which would help ensure that people with
	disabilities have more opportunities to obtain employment:
	1. Create a requirement that Vocational Rehabilitation agencies
	develop Individualized Plans for Employment (IPE) within ninety days
	after the date of determination of eligibility. CAP agencies have had
	difficulty advocating for their clients when the IPE is not completed
	in a timely fashion. Additionally, allow the client to request
	mediation and an impartial due process hearing if the IPE is not
	completed within that timeframe.
	2. Clarify that a Vocational Rehabilitation agency must provide
	notification to its clients whenever the client has the right to appeal
	a decision or to request mediation. CAP agencies have encountered many
	situations where individuals attempting to access Vocational
	Rehabilitation services have been provided confusing and/or
	contradictory information.
	3. Provide that each due process hearing shall be conducted by an
	impartial Hearing Officer who is fully trained on the requirements of
	the Rehabilitation Act as well as the approved State plan. CAP agencies
	have encountered situations where an impartial Hearing Officer is
	unsure of his or her ability to take certain actions, and adequate
	training is critical.
	4. Provide that the opportunity for mediation is available whenever
	a client receives an unfavorable determination from a Vocational
	Rehabilitation agency. Currently, Vocational Rehabilitation agencies
	interpret the law to require that individuals who wish to dispute
	Vocational Rehabilitation decisions must request a hearing before the
	agency will consider a request for mediation. The statute should be
	clarified to allow for mediation even when the individual does not wish
	to have a fair hearing.
	5. Clarify the burden of proof for an individual to obtain
	Vocational Rehabilitation services. The language of the statute should
	include clear language that a Vocational Rehabilitation agency must
	find clear and convincing evidence to determine ineligibility.
	6. Include provisions to limit the ability of Vocational
	Rehabilitation agencies and other service providers to place people
	with disabilities in segregated workplaces or to receive subminimum
	wage for their work. Require that people with disabilities be able to
	pursue an employment goal for 24 months before entering subminimum wage
	employment, or for up to 48 months for people with significant
	disabilities. Require face-to-face regular employment counseling for
	people working at subminimum wage jobs.
	These issues call out for Congress to address in a bipartisan
	fashion. NDRN and the P&A/CAP Network hope that the House and Senate
	can work together to pass legislation that will improve employment
	services for people with disabilities and support greater transition to
	competitive, integrated employment. Taking these steps will help
	achieve our goal of reducing unemployment of people with disabilities
	and increasing the participation of people with disabilities in the
	workforce.
	______

	[Additional submission of Mr. Fornash: report, ``The
	American Dream 2.0: How Financial Aid Can Help Improve College
	Access, Affordability, and Completion,'' may be accessed at the
	following Internet address:]

	http://www.hcmstrategists.com/content/
	FINAL_Steering_Committee_Report.pdf

	______

	[Additional submission of Governor Herbert follows:]

	Addendum to Testimony From Gov. Gary R. Herbert

	Rep. John Tierney of Massachusetts asked about funding levels for
	teachers in the Gov. Herbert's budget. Below is Gov. Herbert's
	response.
	In my proposed budget this year, I recommended an increase of 1.16%
	or $26 million for public education compensation. This percentage was
	more than the one percent that was recommended to higher education
	institutions. This would be flexible and can be used in conjunction
	with other sources of revenue to apply to compensation and benefits on
	an as-needed basis.
	Last year, the Utah State Legislature also provided 1.16% during
	the 2012 General Session for compensation.
	National data shows that teacher average salary increased by 7.03
	percent in 2008 but when the recession hit in 2009 the average salary
	dropped by 7.82 percent. The data also indicates an increase in average
	teacher salary of 9.1 percent from 2005 to 2010.\1\ Utah State Office
	of Education data shows teacher salaries increasing 21.01 percent from
	2006 to 2012 for an average of 3.5 percent per year.\2\
	---------------------------------------------------------------------------
	\1\ Source: National Education Association, Estimates of School
	Statistics, 1969-70 through 2009-10.
	\2\ Source: Utah State Office of Education, Finance and Statistics.
	---------------------------------------------------------------------------
	We are aggressively focused on funding many different initiatives
	that will yield the best outcomes in our education system. Part of that
	includes increasing compensation so we can attract the best and
	brightest teachers.
	Rep. George Miller of California asked about the percentage of
	higher education funds that are provided by the state. Below is Gov.
	Herbert's response.
	On average, Utah's state institutions of higher education receive
	49% of their operational funding from the state, with the remainder
	coming from student tuition and fees.
	During the Great Recession, the state could not provide funding to
	match the growth in enrollment at Utah's higher education institutions.
	This left a great imbalance in state support as some institutions
	raised tuition higher than others to provide much needed funding for
	instruction. As a result, some institutions have a lower percentage of
	State funding to tuition than others.
	______

	[Whereupon, at 12:18 p.m., the committee was adjourned.]

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