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+
+ - MEMBERS' DAY
+
+[House Hearing, 109 Congress]
+[From the U.S. Government Publishing Office]
+
+
+
+ MEMBERS' DAY
+
+=======================================================================
+
+ HEARING
+
+ before the
+
+ COMMITTEE ON THE BUDGET
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED SEVENTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ HEARING HELD IN WASHINGTON, DC, MARCH 4, 2005
+
+ __________
+
+ Serial No. 109-6
+
+ __________
+
+ Printed for the use of the Committee on the Budget
+
+
+ Available on the Internet: http://www.access.gpo.gov/congress/house/
+ house04.html
+
+
+ ______
+
+ U.S. GOVERNMENT PRINTING OFFICE
+20-555 WASHINGTON : 2005
+_____________________________________________________________________________
+For Sale by the Superintendent of Documents, U.S. Government Printing Office
+Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
+Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
+
+ COMMITTEE ON THE BUDGET
+
+ JIM NUSSLE, Iowa, Chairman
+ROB PORTMAN, Ohio, JOHN M. SPRATT, Jr., South
+ Vice Chairman Carolina,
+JIM RYUN, Kansas Ranking Minority Member
+ANDER CRENSHAW, Florida DENNIS MOORE, Kansas
+ADAM H. PUTNAM, Florida RICHARD E. NEAL, Massachusetts
+ROGER F. WICKER, Mississippi ROSA L. DeLAURO, Connecticut
+KENNY C. HULSHOF, Missouri CHET EDWARDS, Texas
+JO BONNER, Alabama HAROLD E. FORD, Jr., Tennessee
+SCOTT GARRETT, New Jersey LOIS CAPPS, California
+J. GRESHAM BARRETT, South Carolina BRIAN BAIRD, Washington
+THADDEUS G. McCOTTER, Michigan JIM COOPER, Tennessee
+MARIO DIAZ-BALART, Florida ARTUR DAVIS, Alabama
+JEB HENSARLING, Texas WILLIAM J. JEFFERSON, Louisiana
+ILEANA ROS-LEHTINEN, Florida THOMAS H. ALLEN, Maine
+DANIEL E. LUNGREN, California ED CASE, Hawaii
+PETE SESSIONS, Texas CYNTHIA McKINNEY, Georgia
+PAUL RYAN, Wisconsin HENRY CUELLAR, Texas
+MICHAEL K. SIMPSON, Idaho ALLYSON Y. SCHWARTZ, Pennsylvania
+JEB BRADLEY, New Hampshire RON KIND, Wisconsin
+PATRICK T. McHENRY, North Carolina
+CONNIE MACK, Florida
+K. MICHAEL CONAWAY, Texas
+
+ Professional Staff
+
+ James T. Bates, Chief of Staff
+ Thomas S. Kahn, Minority Staff Director and Chief Counsel
+
+
+ C O N T E N T S
+
+ Page
+Hearing held in Washington, DC, March 4, 2005.................... 1
+Statement of:
+ Hon. Thomas E. Petri, a Repesentative in Congress from the
+ State of Wisconsin......................................... 24
+ Hon. Jim Gibbons, a Repesentative in Congress from the State
+ of Nevada.................................................. 28
+ Hon. Cathy McMorris, a Repesentative in Congress from the
+ State of Washington........................................ 32
+ Hon. Frank A. LoBiondo, a Repesentative in Congress from the
+ State of New Jersey........................................ 34
+ Hon. Shelley Berkley, a Repesentative in Congress from the
+ State of Nevada............................................ 39
+ Hon. Jeff Flake, a Repesentative in Congress from the State
+ of Arizona................................................. 43
+ Hon. C. L. ``Butch'' Otter, a Repesentative in Congress from
+ the State of Idaho......................................... 44
+ Hon. Rob Bishop, a Repesentative in Congress from the State
+ of Utah.................................................... 47
+ Hon. Chris Cannon, a Repesentative in Congress from the State
+ of Utah.................................................... 50
+ Hon. Jon C. Porter, a Repesentative in Congress from the
+ State of Nevada............................................ 54
+ Hon. Robert Simmons, a Repesentative in Congress from the
+ State of Connecticut....................................... 58
+ Hon. E. Clay Shaw, Jr., a Repesentative in Congress from the
+ State of Florida........................................... 65
+ Hon. Lane Evans, a Repesentative in Congress from the State
+ of Illinois................................................ 67
+ Ms. Berkley.................................................. 69
+ Hon. Stephanie Herseth, a Repesentative in Congress from the
+ State of South Dakota...................................... 73
+ Hon. Michael H. Michaud, a Repesentative in Congress from the
+ State of Maine............................................. 75
+ Hon. Madeleine Z. Bordallo, a Delegate in Congress from the
+ Territory of Guam.......................................... 80
+ Hon. Heather Wilson, a Repesentative in Congress from the
+ State of New Mexico........................................ 84
+ Hon. Brad Miller, a Repesentative in Congress from the State
+ of North Carolina.......................................... 90
+ Hon. Shelley Moore Capito, a Repesentative in Congress from
+ the State of West Virginia................................. 94
+ Hon. Robin Hayes, a Repesentative in Congress from the State
+ of North Carolina.......................................... 98
+ Hon. Maxine Waters, a Repesentative in Congress from the
+ State of California........................................ 102
+ Hon. Rush D. Holt, a Repesentative in Congress from the State
+ of New Jersey.............................................. 107
+ Hon. Randy Neugebauer, a Repesentative in Congress from the
+ State of Texas............................................. 112
+ Hon. Christopher Shays, a Repesentative in Congress from the
+ State of Connecticut....................................... 117
+ Hon. Diane E. Watson, a Repesentative in Congress from the
+ State of California........................................ 120
+ Hon. Linda T. Sanchez, a Repesentative in Congress from the
+ State of California........................................ 132
+ Hon. Timothy H. Bishop, a Repesentative in Congress from the
+ State of New York.......................................... 136
+ Hon. Barbara Lee, a Repesentative in Congress from the State
+ of California.............................................. 141
+Prepared statements, letters, extraneous material submitted by:
+ Hon. Joe Baca, a Repesentative in Congress from the State of
+ California................................................. 1
+ Hon. Ginny Brown-Waite, a Repesentative in Congress from the
+ State of Florida........................................... 3
+ Hon. Julia Carson, a Repesentative in Congress from the State
+ of Indiana................................................. 3
+ Hon. Lincoln Davis, a Repesentative in Congress from the
+ State of Tennessee......................................... 5
+ Hon. Vernon J. Ehlers, a Repesentative in Congress from the
+ State of Michigan.......................................... 6
+ Hon. Louie Gohmert, a Repesentative in Congress from the
+ State of Texas............................................. 8
+ Hon. Peter T. King, a Repesentative in Congress from the
+ State of New York, along with Mrs. Kelly, Messrs. Walsh,
+ McHugh, Kuhl, Sweeney...................................... 9
+ Hon. Jim McDermott, a Repesentative in Congress from the
+ State of Washington........................................ 10
+ Hon. George Miller, a Repesentative in Congress from the
+ State of California........................................ 10
+ Hon. Collin C. Peterson, a Repesentative in Congress from the
+ State of Minnesota......................................... 11
+ Hon. Tom Price, a Repesentative in Congress from the State of
+ Georgia.................................................... 12
+ Hon. Bennie G. Thompson, a Repesentative in Congress from the
+ State of Mississippi....................................... 12
+ Hon. Jerry Weller, a Repesentative in Congress from the State
+ of Illinois................................................ 22
+ Hon. Frank R. Wolf, a Repesentative in Congress from the
+ State of Virginia.......................................... 23
+ Mr. Petri.................................................... 26
+ Mr. Gibbons.................................................. 30
+ Miss McMorris................................................ 33
+ Mr. LoBiondo................................................. 37
+ Ms. Berkley.................................................. 41
+ Mr. Flake.................................................... 43
+ Mr. Otter.................................................... 46
+ Mr. Bishop of Utah........................................... 49
+ Mr. Cannon................................................... 51
+ Mr. Porter................................................... 55
+ Mr. Simmons of Connecticut................................... 60
+ Mr. Shaw..................................................... 66
+ Mr. Evans.................................................... 68
+ Ms. Berkley.................................................. 71
+ Ms. Herseth.................................................. 74
+ Hon. Ted Strickland, a Repesentative in Congress from the
+ State of Ohio.............................................. 75
+ Mr. Michaud.................................................. 77
+ Ms. Bordallo................................................. 82
+ Mrs. Wilson.................................................. 86
+ Mr. Miller of North Carolina................................. 92
+ Mrs. Capito.................................................. 96
+ Mr. Hayes.................................................... 99
+ Ms. Waters................................................... 104
+ Mr. Holt..................................................... 109
+ Mr. Neugebauer............................................... 114
+ Mr. Shays.................................................... 119
+ Ms. Watson................................................... 122
+ Ms. Linda T. Sanchez of California........................... 134
+ Mr. Bishop of New York....................................... 138
+ Ms. Lee...................................................... 143
+
+
+ MEMBERS' DAY
+
+ ----------
+
+
+ THURSDAY, MARCH 3, 2005
+
+ House of Representatives,
+ Committee on the Budget,
+ Washington, DC.
+ The committee met, pursuant to call, at 2:30 p.m., in room
+210, Cannon House Office Building, Hon. Rob Portman presiding.
+ Members present: Representatives Portman, Conaway, McHenry,
+Lungren, Cooper, Moore, Spratt, Cuellar, and Schwartz.
+ Mr. Portman. Good afternoon everyone, and welcome to the
+Budget Committee Members' Day hearing. This is a hearing we
+hold every year to hear from our colleagues. This hearing is
+directed by the Budget Act, and its intent is to bring about a
+forum in which Members can relay their priorities for their
+district, for their State, and indeed for our country. We are
+pleased to have a diverse group of Members from both sides of
+the aisle, and we look forward to receiving their testimony.
+ [Prepared statements of Representatives Baca, Brown-Waite,
+Carson, Davis of Tennessee, Ehlers, Gohmert, King of New York,
+McDermott, Miller of California, Peterson of Minnesota, Price
+of Georgia, Thompson of Mississippi, Weller, and Wolf follow:]
+
+Prepared Statement of Hon. Joe Baca, a Representative in Congress From
+ the State of California
+
+ Chairman Nussle, Ranking Member Spratt, and Members of the
+Committee on Budget, I am here today as the new Ranking Member of the
+Agriculture Subcommittee on Departmental Operations, Oversight,
+Nutrition, Dairy and Forestry to argue for significant changes to the
+President's budget for fiscal year 2006.
+ There are many programs that will be adversely affected by this
+budget, but as Ranking Member of the subcommittee with jurisdiction
+over the Food Stamp Program--I am obliged to make the protection of
+that program my top budget priority.
+ At best, this budget is harmful to core agriculture programs. At
+worst, the political maneuverings that are taking place to shift cuts
+from commodity programs to key anti-hunger initiatives like the Food
+Stamp Program are unforgivable.
+ The Food Stamp Program is one of this nation's most successful
+initiatives. Forty years ago, this country was plagued by malnutrition
+and hunger, especially among children.
+ Senators Bob Dole and George McGovern responded by creating a
+``vaccine'' against hunger in the form of a nationwide Food Stamp
+Program. Put simply, food stamps keep America from experiencing the
+kind of severe hunger we still see in much of the rest of the world.
+ In the United States, hunger and food insecurity affect 12.1
+million households, nearly 35 million individuals (12.5 percent of all
+Americans), and 13.1 million children.
+ It's true that many American families still struggle to pay their
+bills and have enough money for the nutritious food they need. But
+without Food Stamps even more families would struggle.
+ Mr. Chairman, this budget recommends structural changes that will
+affect the way people qualify for the food stamp program, and these
+changes will take food off the table for 300,000 American families.
+ Representatives Edwards, Hensarling, Cuellar, Sessions and Conway--
+the changes to the food stamp program contained in the budget mean
+that, according to some quick estimates, the State of Texas will lose
+$7.8 million in food stamp payments in FY07. This is an average of
+$243,250 per Congressional District.
+ Representatives Ryan and Kind--by rough estimates, the State of
+Wisconsin will lose $905,000 in food stamp payments in FY07. This is an
+average of $113,000 per Congressional District.
+ Representative McCotter--by rough estimate, the State of Michigan
+will lose $7.4 million in food stamp payments in FY07. This is an
+average of half a million per Congressional District.
+ While these are just quick estimates and the number will certainly
+change, it is an indisputable fact that this budget will hurt working
+class and poor families that depend on food stamps to put food on the
+table. Please don't let efficiency be used as an excuse to endanger one
+of our country's most effective programs to combat the symptoms of
+poverty.
+ What's more, the Food Stamp Program works better and better each
+year. The rate of mistaken payments has been declining for 6 years and
+hit an all-time low last year.
+ This efficiency is due in part to the conversion from paper coupons
+to debit cards, ordered by Congress in 1996. The new ``electronic
+benefit'' system now in place nationwide means food stamps are more
+efficient, more accountable, and user-friendly for consumers, grocers,
+and the government.
+ Food stamps have also been crucial during our nation's ongoing
+recovery from economic recession. Food stamps have been there for the
+greater numbers of people who lost their jobs in recent years and are
+earning less.
+ Now, nearly 24 million people receive an average of $86 in grocery
+store credit each month to purchase food. These Federal dollars are
+then quickly spent at grocery stores, where they support local economic
+growth.
+ So, with all of this good news about Food Stamps, why are we
+talking about cutting back one government program that's working on so
+many levels? Cuts to such an important program don't make sense for
+three key reasons:
+ First, cutting food stamps will not cut the deficit. Food Stamps
+and the people who depend on them did not create the deficit. Food
+stamp spending actually decreased in the late 1990's.
+ Overall, we've seen only about 1 percent average annual growth for
+the cost of the Food Stamp program for the past 10 years and less than
+2 percent average annual growth is projected for the next 10 years,
+according to the CBO.
+ These modest increases are due to more people needing help during
+hard times, and more eligible people connecting with food stamps. The
+increases in food prices play an important part as well.
+ Second, the cut the President has proposed targets working people
+with children--precisely those people who are not receiving welfare and
+who are playing by the rules, but still can't afford to feed their
+families.
+ Third, food stamps took an almost 20 percent hit in benefits for
+families the last time budget reconciliation instructions came our way.
+More than $28 billion was cut over 7 years, during welfare reform in
+1995 and 1996.
+ Since that time--thanks to collaborative leadership from both
+parties, from urban and rural members, and from Congress and the White
+House--about one-third of those cuts have been restored. Thankfully,
+Congress restored eligibility for immigrant children and legal
+permanent residents in the 2002 Farm Bill.
+ But, the bulk of those cuts continue to squeeze families and force
+them into the impossible choice each month of either paying the rent,
+filling prescriptions, keeping the lights on, or buying food.
+ Food stamps work to help American children, families, and seniors
+get the nutrition they need to learn, work hard, and stay healthy.
+ Put simply, the Food Stamp Program is government at its best.
+ Food stamps work to help boost food spending, which in turn helps
+farmers, grocers, and the entire food industry. And, food stamps work
+with minimal waste, fraud, and abuse.
+ I urge this Committee to reject cuts to our nation's #1 defense
+against hunger. This is certainly a time of tough choices for our
+nation, but taking food from families should not even be an option.
+ My message today is clear--any cuts, caps and other structural
+changes to the Food Stamp program will be met with strongest
+opposition.
+
+ U.S. Congress,
+ Washington, DC, March 2, 2005.
+Hon. Steve Buyer,
+Chairman, Committee on Veterans' Affairs, House of Representatives,
+ Washington, DC.
+
+ Dear Mr. Chairman: I submit this letter to express my concerns
+regarding the Committee on Veterans' Affairs recently proposed Budget
+Views and Estimates for FY 2006.
+ To be clear, there are several measures proposed by the Committee
+that I wholeheartedly support. First, I commend the Committee's
+endorsement of the Administration's proposal to eliminate co-pays for
+VA-provided hospice care. I strongly agree with the Committee's
+decision.
+ I am also pleased that the President's proposed increase for
+prescription drug co-pays was rejected. The Committee aptly recognized
+that a 100% increase in co-pays would be too steep an increase for
+veterans. The Committee further rejected the President's proposed cuts
+to VA sponsored long-term care in State nursing homes. VA reimbursement
+has been essential to State nursing home maintenance, and consistently
+costs less than VA run facilities. This is a valuable program that
+deserves the Committee's continued support.
+ However, I cannot support the Committee's proposal for an
+enrollment fee for Category 7 and 8 veterans. The new four-tiered
+system will be a monetary barrier and unnecessary burden to quality
+healthcare for veterans. Enrollment fees make VA care more expensive
+without making it better. TRWARE recipients pay fees and are guaranteed
+access to care, but veterans are being asked to pay enrollment with no
+such promise. I fundamentally disagree with the position that we, as
+policy makers, should be discouraging veterans from using the VA
+system. At the private meeting we had, I suggested that if there is a
+moderate enrollment fee for veterans, they should have improved access
+in return.
+ I am also displeased with the Committee's decision to reject the
+Administration's proposal for reimbursement of veterans' emergency care
+from non-VA facilities. Reimbursement of emergency fees encourages
+veterans to seek health care at the closest facility, so they are
+treated immediately. If a veteran is eligible for VA care but is closer
+to a non-VA hospital, reimbursement is a logical next step. Moreover,
+reimbursement can be a life or death matter for many veterans who need
+emergency care from a closer hospital but can only afford VA care.
+Additionally, most ambulance protocols require that in an emergency
+situation the patient must be taken to the nearest hospital. Hospital-
+owned ambulances are further obligated under The Emergency Treatment
+and Labor Act (EMTALA) to bring patients to the closest facility.
+Veterans should not be penalized with financial burdens for situations
+beyond their control. Unfortunately, the Committee did not include this
+proposal in the Views and Estimates and I cannot agree with this
+decision.
+ Finally, I am concerned that the Veterans' Committee ignored my
+express disapproval of the proposed Views and Estimates. A Majority
+view was submitted to the Budget Committee, despite the fact that my
+colleagues and I had no opportunity to sign this proposal or even to
+vote on it. My staff expressed in no uncertain language that I had no
+intention of signing the proposal until I had seen the final version,
+and they were told that the document would be ready for my perusal by
+5:30 pm on Wednesday, January 23. Instead, my office was notified of
+the finalized proposal for the first time in a Committee press release.
+ I ask that you note for the record my disapproval with these
+specific points in the Budget Views and Estimates. I look forward to
+working with the Committee in the future, but hope that deliberations
+will be more inclusive.
+ Sincerely,
+ Ginny Brown-Waite,
+ Member of Congress.
+
+ Prepared Statement of Hon. Julia Carson, a Representative in Congress
+ From the State of Indiana
+
+ Thank you for the opportunity to address the Committee today in
+support of restoring funding for Amtrak in the Budget Resolution for
+Fiscal Year 2006. In recent years Amtrak has demonstrated its continued
+value as a critical public resource unequivocally worthy of our Federal
+funds.
+ The past 3 years have been among the most successful in Amtrak's
+34-year history. Despite an overall downturn in the travel industry
+that has resulted in financial disaster for our airlines, Amtrak has
+been making great strides in efficiency while becoming an increasingly
+popular choice for consumers. It remains a vital component of our
+nation's infrastructure, providing an invaluable public service
+unmatched by other means of transportation.
+ Amtrak offers mobility to Americans living in small communities and
+areas without access to other transportation options, servicing 106
+cities that have no local access to airports.
+ It provides transportation opportunities to low-income Americans
+and people with disabilities across the country. About 42 percent of
+Amtrak users come from households earning less than $50,000 per year.
+An estimated 4 million Amtrak riders do not own cars and would be
+stranded without Amtrak service.
+ Amtrak remains our most environmentally friendly form of long-
+distance transportation. Passengers traveling by Amtrak save energy
+that would otherwise be expended through air and road travel, lowering
+fuel costs to consumers, reducing air pollution, and easing the strain
+on our already dangerously overcrowded highways.
+ Since 2002, our rail system has gone through an exceptional period
+of financial and operating stability. Amtrak has established new
+accounting and financial reporting systems, trimmed mail and express
+operations, truncated long-distance routes, and cut expenses, while
+raising ridership and engaging in the large-scale repair and
+restoration of an aged fleet. Last year the 640 employees of the Beech
+Grove heavy maintenance facility in my district repaired and returned
+to service 15 wrecked Superliners and locomotives, and completed
+overhauls on 30 Superliners, 46 locomotives, 36 baggage cars, and 62
+passenger cars.
+ Under the leadership of David Gunn, Amtrak employees continue to
+contribute to the development of a necessary and increasingly viable
+alternative to air and road travel. In the midst of an overall
+depressed travel industry, and in a year where natural disasters in
+Florida, California and elsewhere disrupted long-distance service,
+Amtrak has succeeded in cutting expenses while bringing rail ridership
+levels to an unprecedented 25 million passengers. When airlines were
+grounded during the tragedy of September 11, 2001, it was Amtrak that
+brought stranded Americans home to their families.
+ When Amtrak was established by an act of Congress in 1970 to take
+over for the money-losing private passenger rail systems in America,
+then-Secretary of Transportation John Volpe predicted that Amtrak could
+turn a profit, but only if the Federal Government provided enough
+capital to produce high-speed trains in profitable corridors. Yet
+according to the Congressional Research Service, Amtrak's fastest
+train, the Acela, averages 86 miles per hour in the New York to
+Washington corridor, only 6 mph faster than the Metroliner train that
+operated there before Amtrak's creation. Though we have known since its
+inception that further investment is the only key to financial
+independence, Congress has consistently declined to fund Amtrak at
+levels that would allow future self-sufficiency.
+ At the same time, Congress has proven more than willing to support
+other money-losing transportation sectors, both public and private.
+Over Amtrak's 34-year history Congress has spent roughly $1.9 trillion
+on airline and highway transportation subsidies, over 63 times the
+approximately $29 billion it has allocated to Amtrak. Rail
+transportation funds generally account for a mere 1.6 percent of the
+yearly budget of the Department of Transportation. Every component of
+our transportation infrastructure has required significant Federal
+investment and each is dependent on the security and operational
+support the Federal Government, but in contrast to our aviation and
+highway systems, passenger rail has no specific dedicated fund for the
+purposes of infrastructure development. This is a double standard that
+neglects to take into consideration the disproportionate social,
+environmental, and other benefits that rail transit provides to our
+nation.
+ The Amtrak Reform Council and the Department of Transportation
+Inspector General have recognized $1.5 billion as the funding level
+required to keep Amtrak financially viable. To fund Amtrak below this
+threshold would be reckless and irresponsible. Without proper financial
+support, control of our railroads would be surrendered to a bankruptcy
+trustee with legal responsibility to its creditors, not the American
+public.
+ President David Gunn and the 22,000 employees of Amtrak continue to
+overcome considerable obstacles to bring this public service to our
+nation. I can think of no greater acknowledgement of their hard work
+and service to the American public than to commit sufficient funding to
+realize the full promise and potential of Amtrak. I thank the Committee
+for this opportunity and ask for its support of this critical component
+of our national infrastructure.
+
+ U.S. Congress,
+ Washington, DC, March 3, 2005.
+Hon. Jim Nussle,
+Chairman, Committee on the Budget, House of Representatives,
+ Washington, DC.
+
+Hon. John Spratt, Jr.,
+Ranking Member, Committee on the Budget, House of Representatives,
+ Washington, DC.
+ Dear Chairman Nussle and Ranking Member Spratt: I am writing out of
+concern that the Administration's Fiscal Year 2006 Budget of the U.S.
+Government cuts or eliminates several programs that are vital to my
+rural constituency in Tennessee's Fourth Congressional District, as
+well as rural areas throughout the United States.
+ I am extremely troubled by the Administration's proposal to
+eliminate funding for the Edward Byrne Justice Assistance Grant (EBJAG)
+in the Fiscal Year 2006 Budget. The production and abuse of
+methamphetamine is a widespread problem in Tennessee and is quickly
+becoming a major issue for America. The Drug Enforcement Administration
+estimates for 2004 have Tennessee ranked third nationally for
+methamphetamine arrests and seizures. Methamphetamine production and
+abuse destroys lives, families, property, the surrounding environment,
+and is an incredible burden on local communities and law enforcement
+officials. Now is the time to fight this illicit drug, and all illegal
+substances head-on with increased man power and funding. Drug task
+forces in my district and state rely heavily on EBJAG to fight the
+local war on drugs. Eliminating this grant program gives the criminals
+an even greater advantage over our communities and law enforcement
+offices. Such an elimination of this valuable grant program puts the
+future of our children, families, and friends in grave danger. I
+believe this is completely unacceptable and ask the House Budget
+Committee to restore EBJAG funding to the FY'04 level of $659.1
+million.
+ Additionally, rural America has come to depend on the State and
+Local Homeland Security Grants to keep local and volunteer fire
+departments, as well as local law enforcement offices, functioning at
+full capacity. Without these grants many rural communities would not be
+able to fully staff their fire and police departments or provide them
+with updated equipment necessary to keep our communities safe. I was
+very dismayed to see the President's budget propose to cut this grant
+program by $420 million. Congress should not leave rural America
+unprotected and unprepared for day to day emergencies or future
+catastrophic attacks. It is my hope that the House Budget Committee
+will realize the importance of these grants to rural America and
+restore FY'06 funding for the State and Local Homeland Security Grants
+to the FY'05 level of $3.985 billion.
+ Another primary concern is the Administration's proposal to move
+the Community Development Block Grant (CDBG) program from the
+Department of Housing and Urban Development (HUD) to the Department of
+Commerce as part of the new ``Strengthening America's Communities''
+(SAC) initiative. CDBG has been very beneficial in my district and in
+over 3,000 rural communities as a part of HUD. In 2004 the town of
+Oneida, TN received $500,000 from the state of Tennessee through CDBG
+for water and sewer infrastructure development. Without these crucial
+funds the officials in Oneida would be forced to both raise taxes and
+utilities rates on an economically distressed community. Such a
+scenario would be a job killer for the town and greatly impede future
+economic development. That said, I request the House Budget Committee
+leave CDBG as a part of HUD and fund the program at the FY'05 level of
+$4.1 billion.
+ Veterans in my district are very apprehensive toward the proposed
+cuts to veterans' benefits. The President's budget proposal calls for
+Priority Group 7 and 8 veterans pay an annual enrollment fee of $250
+and an increase in prescription drug co-payments from $7 to $15 as part
+of their benefits. You may recall that the co-pay amount for these
+veterans was recently increased from $2-$7 in 2000. The Department of
+Veterans Affairs anticipates the new ``out-of-pocket costs'' will
+result in 1.1 million veterans choosing to leave the system. I ask the
+House Budget Committee to ignore this proposal, and additionally, to
+restore funding for state grants for extended care facilities.
+ Finally, my constituents and I are concerned about several
+eliminations in the Administration's proposed budget for education
+programs. The cuts in vocational education are particularly harmful for
+constituents in my district, many of whom are not able to attend
+traditional 4 year institutions of higher learning. Vocational training
+provides opportunities for employment in new and exciting fields that
+can lead to rewarding careers. I am sure the House Budget Committee
+will take a hard look at the Administration's proposal to eliminate
+vocational education and investigate which programs are truly wasteful,
+and which are truly necessary for ensuring rural Americans can continue
+to be a part of our country's well trained workforce.
+ While I understand the necessity of paying back our deficit and
+working toward a balanced budget, and commend the House Budget
+Committee on its efforts, I think it is wrong to do so at the expense
+of those who have defended our nation in times of war and those who
+have had the hardest lot in life. Veterans and the good people who make
+up rural America are not second class citizens, and they should not be
+treated as such in the President's proposed Fiscal Year 2006 Budget of
+the U.S. Government.
+ Sincerely,
+ Lincoln Davis,
+ Member of Congress.
+
+ Prepared Statement of Hon. Vernon J. Ehlers, a Representative in
+ Congress From the State of Michigan
+
+ Thank you, Mr. Chairman, for the opportunity to testify as the
+Committee considers a FY 2006 Budget Resolution. I know the Committee
+must weigh several pressing national priorities as you prepare the FY
+2006 Budget Resolution, including the continuing war on terrorism,
+facilitating economic stimulus, and maintaining fiscal responsibility.
+ Mr. Chairman, I very strongly support your determination to
+carefully scrutinize all discretionary spending, including the proposed
+increases in defense and homeland security funding, and to curb overall
+spending in this year's Budget Resolution. The Committee faces many
+difficult choices in order to balance these priorities, control the
+deficit and perhaps review our considerable mandatory and discretionary
+spending commitments within this year's austere budget environment.
+ In making these choices, we must not overlook the fact that
+scientific research and development underpins our economic and national
+security. Scientific research and development forms the foundation of
+increased innovation, economic vitality and national security.
+Scientific research is an investment that promises, and has
+historically delivered, significant returns on that investment. For the
+United States to remain a prosperous country, it must maintain its
+technological leadership in the world. As you begin the budget process,
+I strongly urge you to give high priority to scientific research and
+development and math and science education.
+ For the past several years, research and development funding for
+defense, weapons development and national security has increased while
+other areas of Federal research and development, especially basic
+research in the physical sciences, has remained flat or declined in
+real terms. The President's FY 2006 request of $132.3 billion for
+research and development continues this trend.
+ While our focus on immediate threats is certainly warranted, it is
+necessary for us also to consider longer-term threats to our national
+security. Basic research and science education are essential to
+advances in medicine, military applications and continued economic
+prosperity, including the development of cancer therapies, GPS- or
+laser-guided missiles, and the Internet. The diversity of the basic
+science research portfolio ensures discoveries that lay the foundation
+for biomedical advances and defense. Researchers at NIH and DOD depend
+on research and the human capital development that takes place at NSF
+to fuel their on-going work to improving the health and safety of our
+country. As a nation, we cannot afford to starve basic science research
+and education and need to make sure that we balance our funding between
+the medical and physical sciences. Historically, our investment in
+physical science research has been slipping, and our overall national
+investment in research and development is at a rate much slower when
+compared to other growing economies. Furthermore, while appropriators
+have often met the President's request for biomedical funding, Congress
+has actually reduced the appropriated funds for physical sciences at
+NSF in recent years, compared to the request.
+ With this in mind, I urge you to make the basic research components
+of function 250 a top priority in the FY 2006 budget. I want to
+particularly emphasize several basic science research and development
+programs that deserve Congress' utmost attention: the National Science
+Foundation, the National Institute of Standards and Technology, the
+Department of Energy's Office of Science, the National Aeronautics and
+Space Administration, and math and science education.
+ The National Science Foundation's FY 2006 budget request of $5.6
+billion is a 2.4 percent increase over FY 2005 appropriations; however,
+it is $2.9 billion below the authorized funding level necessary to
+complete the commitment Congress made to double NSF funding in 2002. I
+continue to support this doubling commitment, though I realize that in
+this austere budget environment it may not be immediately possible to
+fulfill this obligation. The increase is also tempered by the transfer
+of funds for ice-breaking operations from the Coast Guard budget,
+resulting in a corrected increase of 1.5 percent. Because NSF received
+a 3.1 percent ($180 million) cut in FY05, the overall request level for
+FY06 is approximately 1 percent below the FY04 level.
+ NSF is the only Federal agency dedicated solely to supporting basic
+scientific research. NSF funding accounts for one-fifth of all Federal
+support for basic research and 40 percent of physical science research
+at academic institutions. Nearly 90 percent of these awards are made
+through a competitive, merit-review process that ensures that excellent
+and innovative research is being supported. Furthermore, NSF
+consistently receives the highest rating from OMB for the efficiency
+and excellence of its programs.
+ The Foundation is also the primary Federal supporter of science and
+math education; it underwrites the development of the next generation
+of scientists and engineers. I am particularly concerned about the
+trend of the current budget request that reduces the Education and
+Human Resources (EHR) budget at the Foundation by more than $104
+million, or 12 percent. This dramatic decrease is unparalleled in other
+parts of the Federal science and technology portfolio, and, indeed
+other parts of the total budget. Decreasing awards in education, or
+eliminating any new awards entirely, seems very shortsighted when we
+are currently facing the challenge of adequately preparing our students
+to enter science and technology fields. I have worked very hard to
+maintain the Math and Science Partnership program at NSF, where grants
+are awarded on a peer-reviewed basis that complements the strengths of
+a research-based organization. The FY 2006 request for the Math and
+Science Partnerships of $60 million will only allow continued funding
+for the programs that were started in previous years, eliminating the
+future of an incredibly important program to determine how our students
+learn the subjects of math and science. I urge the Committee to provide
+NSF with the highest possible budget allocation this year, including
+the EHR budget.
+ Much of the technology we use every day can be tied to research
+done by scientists at the National Institute of Standards and
+Technology (NIST). For example, work at NIST's labs supports our
+nation's efforts to improve cybersecurity, building safety, and voting
+technology. NIST has a proven track record in research and development
+on standards and measurement techniques that help U.S. industries
+become more globally competitive and retain leadership in cutting-edge
+technologies. The President's FY 2006 request of $426 million for
+NIST's labs is a 12 percent increase over the levels enacted in FY
+2005, and I appreciate that.
+ I am particularly pleased that the request includes $19 million in
+funding for an Advanced Manufacturing research initiative. This
+initiative is aimed at speeding the development of industrial
+applications of nanotechnology and streamlining manufacturing
+standards. It will help small and medium-sized manufacturers and has
+goals very similar to the Manufacturing Technology Competitiveness Act
+which I passed through the House last Congress.
+ However, I am very concerned about other manufacturing programs at
+NIST. The President's FY 2006 budget request cuts the Manufacturing
+Extension Partnership (MEP) program by over 50 percent to $46.8
+million. I have worked very hard over the years to help my colleagues
+in Congress understand that MEP is vital to retaining American
+competitiveness and American jobs, and I believe they appreciate the
+value of this program. Yet each budget cycle the Administration
+proposes to significantly cut this program, which the Department of
+Commerce itself recognized as a valuable program in a 2004 report on
+manufacturing. Diminishing funding for MEP will devastate small and
+medium-sized manufacturers and in the long run severely hurt our
+competitive edge in the manufacturing sector. Furthermore, I continue
+to support the Advanced Technology Program (ATP) and am disappointed
+that the Administration has again included no funds for the program in
+the budget request.
+ The Department of Energy's Office of Science funds 40 percent of
+our nation's physical science research. Research in these areas has led
+to many new economic and medical advancements including, among others,
+new energy sources, the Internet, cell phones and laser surgery. To
+maintain our economic, technical, and military pre-eminence, the
+Federal Government must continue to support research in these areas.
+The FY 2006 budget request for the Office of Science is $3.46 billion--
+a decrease of almost 4 percent from the FY 2005 enacted level. I
+respectfully request that the Committee provide the Office of Science
+with a budget that reflects the critical role that it plays in
+maintaining our economic and military pre-eminence.
+ The National Aeronautics and Space Administration (NASA) is an
+agency in transition. In order to align the agency with the President's
+challenge to travel to the moon and Mars, NASA has reorganized and
+streamlined its structure. The proposed mission will be very costly and
+will pose significant technical obstacles that will only be solved
+through basic research. Although NASA's FY 2006 budget request of $16.5
+billion includes an increase of 2.4 percent, more than 40 percent of
+the budget will fund the return to flight of the Space Shuttle and the
+International Space Station. Because of the reorganization at the
+agency, it is difficult to compare from past years, but essentially,
+NASA research and development would increase by 4.9 percent to $11.5
+billion due to the funds freed up by the Space Shuttle's expected
+return to flight in the current year. This overall increase comes at a
+cost to basic scientific research at NASA. In order to shift resources
+toward solar system exploration and research and development focused on
+moon and Mars mission technologies, the budget request cuts aeronautics
+research by 6 percent, in addition to steep cuts in environmental,
+biological, and physical sciences research. Also absent from the budget
+is funding for the proposed repair mission to the Hubble space
+telescope, an instrument which has greatly enriched and expanded our
+limits of scientific discovery.
+ Basic science and engineering research underpin all of NASA's major
+accomplishments as well as many of the technologies you and I use
+everyday. Furthermore, basic research at NASA will support the future
+exploration endeavor; if we reduce basic research in the out-years, our
+astronauts will be working with outdated technology. I urge you to
+protect NASA's future by supporting its basic research accounts and
+making the function 250 budget a significant concern.
+ I realize that the fate of many of the programs I have highlighted
+in this testimony lies not with you, but with the appropriations
+committee. While the budget does not spell out exact funding for these
+programs, I believe that you can send a strong signal about their
+importance to the appropriations committee by making basic research
+funding in function 250 a top priority in the FY 2006 budget. Behind
+your lead, I, along with many colleagues who also support science
+funding, will fight for these programs throughout the budget process.
+When faced with the difficult choices you must make this year, I urge
+you to remember that we cannot afford to sacrifice the research and
+education which current and future generations need to ensure their
+economic prosperity and domestic security.
+ Thank you again for allowing me to testify.
+
+Prepared Statement of Hon. Louie Gohmert, a Representative in Congress
+ From the State of Texas
+
+ Mr. Chairman, thank you for allowing me to submit a statement today
+before you and the other Members of the Budget Committee about my views
+on the fiscal year 2006 budget resolution.
+ As a fiscal conservative I am a strong proponent of a balanced
+Federal budget. As you know, in fiscal year 1998, the Federal
+Government began operating in a surplus environment for the first time
+since 1969. Those surpluses continued through fiscal year 2001.
+Unfortunately, due to an economic recession and necessary increases in
+military/homeland security spending after the September 11, 2001
+terrorist attacks, the Federal Government is now operating in a deficit
+spending environment. I believe we need to work together to accomplish
+a balanced budget again as soon as possible.
+ I would like to briefly highlight two areas of the budget that are
+of serious concern: (1) the proposed cuts to and transfer of Community
+Development Block Grant (CDBG) funding from the Department of Housing
+and Urban Development (HUD) to the Commerce Department; and (2) the
+lack of funding for 2,000 Border Patrol Agents to be hired this year as
+required by Public Law 108-458.
+ While I am in favor of eliminating wasteful spending, there are a
+number of domestic programs that are quite efficient and essential to
+the livelihood of many low-income Americans that create opportunity and
+advancement. The proposed budget would greatly reduce the amount of
+CDBG program funding that have stimulated the economy and helped real
+people. The proposed budget would cut the CDBG program--the bulk of the
+community planning budget--by as much as 50 percent. Certain cities and
+counties in my district will be particularly hard-hit by these cuts. A
+few examples are: Rusk County, which received $327,660(Non-entitlement)
+in fiscal year 2005, Marshall, which received $473,095 in fiscal year
+2005, Nacogdoches County, which received $250,000(Non-entitlement) in
+fiscal year 2005, and Lindale, which received $365,000(Non-
+entitlement). These cities are making good use of this money to
+energize and redevelop their cities and economy, and any significant
+reduction of funds could result in economic disaster for cities
+struggling to stay afloat.
+ Last year, Congress passed and the President signed the National
+Intelligence Reform Act of 2004. This bill requires 10,000 new Border
+Patrol Agents to be hired over 5 years. The budget provides enough
+money for only 210 additional agents, falling dangerously short of the
+2,000 agents that are required by law to be hired this year. While I
+understand sacrifices must be made in order to achieve fiscal
+responsibility, this is also not an area where Congress can cut
+corners. I respectfully request that the will of Congress be honored
+and full funding be restored.
+ We must fight to make permanent the tax relief measures that were
+enacted in 2001 which, as you know, ensures a healthy national economy,
+which, combined with spending restraint, will help alleviate our
+national deficit. We should not jeopardize the future of our children
+and grandchildren by either unwise spending or unwise cuts. It is true
+cuts will need to be made; however, they should be made where they do
+not devastate economies which also decreases tax revenues.
+ In conclusion, the best course to a balanced budget is through both
+economic growth and spending discipline. This strategy will greatly
+assist my constituents of the First District of Texas in stimulating
+the economy, creating more jobs, and allowing Americans to keep more of
+their own money. I look forward to working with you and the other
+Members of the Budget Committee in ensuring that Congress moves toward
+achieving a balanced budget while allocating sufficient funding levels
+to meet our domestic and international needs in those programs that are
+actually providing a healthy return on the Federal Government's
+investment.
+
+ U.S. Congress,
+ Washington, DC, March 3, 2005.
+Hon. Jim Nussle,
+Chairman, Committee on the Budget, House of Representatives,
+ Washington, DC.
+ Chairman Nussle: As the Budget Committee prepares the House budget
+resolution we are concerned by the proposed reductions to the Medicaid
+program. We appreciate the opportunity to work with you to address our
+concerns.
+ New York State's Medicaid program has over time developed to cover
+a wider breath of individuals and ``optional'' services than most other
+states. Our state serves a higher proportion of elderly and disabled
+beneficiaries than other states on average. In fact, more than 25
+percent of New York's Medicaid recipients are elderly or disabled,
+accounting for nearly two-thirds of programmatic spending. Virtually
+all of these individuals are also Medicare recipients. At the same
+time, nearly half of New York's Medicaid recipients are children.
+ Despite the high number of Medicaid and Medicare beneficiaries in
+New York, our state is home to approximately 3 million uninsured
+individuals. New York's health care delivery system is strained, as
+providers fulfill their mission to care for all. New York hospitals and
+health systems alone provide $1.6 billion in uncompensated care a year.
+For the sixth year in a row, over half of New York's hospitals have
+lost money providing care to patients.
+ We agree that reform of the Medicaid program should be addressed
+and recommend a deliberative policy driven discussion to develop
+reforms. Medicaid is more than a budgetary issue. We support our
+colleague Representative Heather Wilson (R-NM) in calling for the
+establishment of a bipartisan commission to study the Medicaid program
+and make informed recommendations for its reform.
+ We urge the Budget Committee to refrain from proposing cuts to
+Medicaid spending at this time. We ask you further to protect Medicare
+program funding, as the benefits of each program are increasingly
+dependent upon the other. Additionally, we believe the new Medicare
+prescription drug program we all worked to establish needs to be given
+a chance to work.
+ Sincerely,
+ Peter T. King,
+ Member of Congress.
+
+ James T. Walsh,
+ Member of Congress.
+
+ John M. McHugh,
+ Member of Congress.
+
+ Sue W. Kelly,
+ Member of Congress.
+
+ John R. ``Randy'' Kuhl, Jr.,
+ Member of Congress.
+
+ John E. Sweeney,
+ Member of Congress.
+
+Prepared Statement of Hon. Jim McDermott, a Representative in Congress
+ From the State of Washington
+
+ Members of the Budget Committee, as a former member of the
+Committee, I have a special interest in the crafting of the budget
+resolution. Today I would like to share with you some brief thoughts on
+the Fiscal Year 2006 budget.
+ I guess the silver lining in all of this is that it seems that the
+President is finally feeling political pressure to acknowledge the
+Federal Government's ballooning deficit is a problem. Yet the
+President's budget and his proposed solutions are a farce.
+ When President Bush was inaugurated in 2001, he inherited a $5.6
+trillion surplus over 10 years (2002-2011), as projected by the
+Congressional Budget Office (CBO). At that time, CBO projected a $430
+billion surplus for Fiscal Year 2005. Since then, the fiscal health of
+the Federal Government has rapidly and alarmingly deteriorated. Now
+President Bush and his own accountants have projected a $427 billion
+deficit for Fiscal Year 2005.
+ Not only is the $427 billion deficit a reversal of more than $850
+billion from what CBO anticipated the Federal treasury would be holding
+right now; the President's projection also severely underestimates the
+actual deficit the government will run this year. The $427 billion
+projection does not include the $82 billion President Bush recently
+requested for Iraq, Afghanistan, and tsunami aid; it does not include
+the nearly $2 trillion that extending his tax cuts will cost over the
+next 10 years; it does not include the $754 billion that his Social
+Security privatization plan would cost over the next 10 years; and it
+assumes that Congress will go along with his draconian cuts in domestic
+spending.
+ On the President's chopping block are more than 150 domestic
+programs, including funding for first responders; health care for
+children; the elderly and people with disabilities; small businesses
+and manufacturers; vocational education; Amtrak; environmental
+protection; and after-school programs. To raise revenue, he proposes to
+raise healthcare co-payments for veterans, to raise electric rates in
+the Northwest and other areas from wholesale to market rates, and to
+drill in the Arctic National Wildlife Refuge. Out of a $2.57 trillion
+budget, all of these mean-spirited domestic cuts and revenue
+enhancements would save about a drop in the bucket.
+ To put the depth of the deficit problem in perspective, consider
+this: Even if the President completely shut down all Federal Government
+functions except for Social Security, Medicare, defense, and homeland
+security, the government would still run a deficit of $75 billion, not
+including the $82 billion for Iraq or the costs of extending the tax
+cuts and privatizing Social Security.
+ It is essential that Congress exercise fiscal discipline during the
+budget process. We all know the drastic consequences that long-term
+deficits have on the economy, including rising interest rates, and
+decreased capital investment and consumer spending. I urge this
+Committee to take into account the debt-ridden state of the Federal
+Government's finances, and to resist this President's misguided
+proposals.
+
+ U.S. Congress,
+ Washington, DC, March 3, 2005.
+Hon. Jim Nussle,
+Chairman, Committee on the Budget, House of Representatives,
+ Washington, DC.
+
+Hon. John Spratt, Jr.,
+Ranking Member, Committee on the Budget, House of Representatives,
+ Washington, DC.
+ Dear Chairman Nussle and Ranking Member Spratt: Thank you for this
+opportunity to submit testimony regarding the fiscal year 2006 budget
+resolution. I am writing to urge you to restore funding to the Land and
+Water Conservation Fund (LWCF). Reductions to LWCF would severely
+impact American families and children that use close-to-home parks and
+open spaces for recreation and physical activity. At a time, when we
+have an obesity crisis, investing in recreation is an investment in
+America's health. Furthermore, LWCF protects special places in our
+national wildlife refuges, parks, and forests, and preserves spaces for
+local communities.
+ The LWCF, established in 1964, is one of the greatest tools we have
+to address the increasingly severe problem of loss of open space,
+forests, and wildlife habitat by providing funding for acquisition of
+lands. The state-side portion of the fund (terminated in the
+Administration's budget recommendations) provides wide-ranging benefits
+by meeting citizens' needs for recreation and physical activity. The
+fund does so by acquiring land for recreation, developing new
+recreation facilities, and enhancing existing facilities.
+ The results in 2004 certainly demonstrate the importance and need
+for continuing and adequately funding the state-side LWCF:
+ 572 local and state park and recreation areas were
+enhanced with grants, and 420 of the sites benefited from entirely new
+recreational facilities;
+ 87 new parks and recreation areas were created, including
+picnic areas, fitness trails, playing fields to accommodate youth
+participation in baseball, basketball, football and soccer;
+ 645 locations helped by LWCF encouraged active
+participation to strengthen the health and vitality of Americans.
+ The President's budget request also woefully under-funds the
+Federal acquisition program for our national wildlife refuges, parks,
+forests, and monuments. The Natural Resources Inventory estimates 2.2
+million acres are lost to development each year; once lost, these lands
+can never be recovered. We must not lose our significant national
+historical and cultural heritage.
+ When Congress created the Land and Water Conservation Fund, its
+intent was to set aside $900 million in Federal funds for national and
+state parks, forests, and wildlife areas. The funding supply for these
+places was to have come from a portion of the proceeds of oil and gas
+leasing on publicly owned areas offshore.
+ The U.S. Treasury continues to divert these funds toward other
+Federal activities. At the very least, I urge the Budget Committee to
+restore the state-side of LWCF to $100 million and to provide adequate
+funds to purchase Federal projects as identified by the Department of
+the Interior and Agriculture.
+ The Federal Government must honor the provisions of the Land and
+Water Conservation Fund, and provide American families and children
+with an investment in their future by providing an unparalleled
+national portfolio of federal, state, and local parks and recreation
+spaces that are safe and accessible for all Americans.
+ Sincerely,
+ George Miller,
+ Member of Congress.
+
+ Prepared Statement of Hon. Collin C. Peterson, a Representative in
+ Congress From the State of Minnesota
+
+ Chairman Nussle and Members of the Committee, thank you for holding
+this hearing for Members to express their views on the Congressional
+Budget Resolution for Fiscal Year 2006 that you will write in the
+coming weeks.
+ I refer you to the Additional Views and accompanying letter from a
+coalition of agriculture, resource and conservation and nutrition
+interest groups that was submitted as part of the Committee on
+Agriculture's Views and Estimates. I will draw from these Views as part
+of my testimony.
+ First, I ask that your Committee recognize how fiscally sound the
+2002 Farm Bill has been. Following the enactment of the 1996 Farm Bill,
+Congress passed 4 years of ad hoc emergency assistance totaling $26
+billion to support farmers when prices fell. The 2002 Farm Bill was
+designed to remove the need for such assistance by structuring basic
+farm programs so that they aid farmers when need actually arises, as
+well as making important investments in conservation, nutrition, trade,
+rural development and energy programs.
+ The first 3 years of the 2002 Farm Bill. 2002-04, cost an average
+of $14 billion, which was 40 percent less than program and emergency
+assistance provided in the last 3 years of the 1996 Farm bill (1999-
+2001). Over the first 3 years, the 2002 Farm Bill has also cost $15
+billion less than was originally estimated by the Congressional Budget
+Office (CBO) at the time the Farm Bill was passed. The 2002 Farm Bill
+is designed to only pay out the assistance required to meet those
+levels of support set in the statute.
+ Farm Bill mandatory spending has, in fact, been reduced by $650
+million in FY 2004 and $1.4 billion in FY 2005 by limitations placed on
+conservation, rural development, research, trade and energy programs in
+appropriations acts. The President's FY 2006 Budget has proposed
+further reduction in these programs in addition to proposed changes to
+commodity, crop insurance, forestry and nutrition programs.
+ Second, the United States is currently engaged in multilateral
+trade negotiations that aspire to broadly open markets for U.S.
+agricultural products. Because of relatively low U.S. tariffs on
+agricultural goods, the greatest assets our negotiators have to offer
+are our domestic support programs. If Congress preemptively cuts
+domestic farm programs prior to the successful conclusion of the WTO
+Doha Round, U.S. farmers are likely to receive lesser concessions on
+market access and government support of competitors. That result could
+leave world market prices lower than otherwise might occur and with a
+commensurate increase in Federal spending under reduced levels of
+domestic support.
+ Third, I must ask if spending reductions are even necessary for the
+Agriculture Committee. The standard the President has set, cutting the
+deficit in half from FY 2004 to FY 2009, has already been met according
+to CBO's January 2005 Baseline Projections. These projections, which
+assume no new legislation, show the deficit declining from $412 billion
+in FY 2004 to $197 billion (excluding extension of the 2005 emergency
+supplemental) projected for FY 2009.
+ Relative to the Administration's 2004 Budget estimate of a $521
+billion deficit, CBO's 2009 projection is 24 percent below the
+President's target of $260 billion. As a percent of GDP, CBO's January
+2005 Baseline deficit falls by more than half, from 3.6 percent of GDP
+in 2004 to 1.4 percent of GDP in 2009. By this standard, no cuts in the
+Committee's jurisdiction are necessary.
+ Fourth, and most importantly, The Farm Security and Rural
+Investment Act of 2002 is a contract with American agriculture that
+provides the stability that investment and capital planning require.
+Changes to the Farm Bill, such as those proposed in the President's
+budget, would cause deep reductions in farmer income support, as much
+as 48 percent as reported by Iowa State University for Iowa corn
+growers. Most farmers operate on slim margins, and such changes would
+erase profit margins for many producers.
+ Farm families rely on the Farm Bill to make plans and contractual
+obligations for the future. Re-opening the Farm Bill's safety-net
+provisions would create more uncertainty for farmers who must already
+contend with market instability, unpredictable weather, and variable
+supply costs. Interrupting U.S. farm policy at random prevents farmers
+from being able to make long-term operation and investment decisions
+and prudent risk management actions.
+ Congress should fulfill its contract with American agriculture and
+its conservation, nutrition, and rural development interests; its
+expiration in 2007 will be soon enough to review and consider changes.
+
+Prepared Statement of Hon. Tom Price, a Representative in Congress From
+ the State of Georgia
+
+ Mr. Chairman, thank you very much for allowing me to submit this
+testimony to the Budget Committee today. I completely favor the
+Committee's efforts to balance the Federal budget.
+ Winning the global war on terrorism should be the highest priority
+of the United States. Maintaining and advancing our military
+capabilities is an essential goal for the protection of Americans at
+home and abroad. The strength of our nation's military relies on
+unparalleled, technologically advanced equipment.
+ Assuring our air superiority requires that we continue to support
+the F/A-22 Raptor made by Lockheed Martin in Cobb County. It is the
+most advanced fighter, and clearly no other fighter in the world can
+match the F/A-22 for quality and speed. Without it, our nation's
+defenses would soon be compromised. Yet, within the Defense Department,
+advisors to the Secretary of Defense and the President inappropriately
+recommend cutting $30 billion over the next 6 years from the F/A-22
+program.
+ The F/A-22 is the necessary successor to the F-15. Over thirty
+years ago the U.S. Air Force began looking at plans to replace the F-15
+fighter, an aircraft that served our nation well. This process resulted
+in requests for an Advanced Tactical Fighter in 1985, leading to the
+selection and orders for the F/A-22.
+ The apparent reason for this recommended cut was the erroneous
+perception that there were no threats to American security that would
+render the F-15 unable to ensure air superiority. However, recent
+studies reveal that the F-15 would lose 90 percent of the time during
+encounters with the newest generation of aircraft currently under
+development by potential enemies. With the F/A-22, however, we would
+gain an era of dominance in the air against both ground and air-based
+threats that would last well into the 21st century.
+ Finally, we all know that education and job training are vital
+components to our workforce. Certainly, budget restraint and a sound
+fiscal policy are important. I merely ask that any cuts to mandatory
+spending programs under reconciliation be done in a responsible and
+fair manner.
+
+ Prepared Statement of Hon. Bennie G. Thompson, a Representative in
+ Congress From the State of Mississippi
+
+ Thank you for affording me the opportunity to address the Budget
+Committee on some of my concerns about the budget as the Ranking Member
+of the House Committee on Homeland Security. As you prepare the budget
+resolution for Fiscal Year (FY) 2006, I believe there will be a lot of
+work to do to correct the security gaps created by the misplaced
+spending priorities in the President's proposed budget.
+ For example, the budget fails to fulfill numerous commitments made
+to the Border Patrol in the Intelligence Reform and Terrorism
+Prevention Act (P.L. 108-458), which was just signed by the President
+in December. The risk of terrorists crossing our southern border is one
+of the prime security gaps now, and the Border Patrol is on the front
+line of trying to correct the problem.
+ Below is my overall analysis of the funding shortages in the
+budget, as well as specific areas where the budget is wholly
+inadequate. I understand that the answer to securing the homeland
+security cannot just be a ``blank check,'' but there are priorities
+that we can focus on now to make America safer, protect our economy,
+and prepare for the worst.
+
+ OVERALL SPENDING LEVELS
+
+ For FY 2006, the Department of Homeland Security (DHS) requests
+$40.1 billion in total funding, representing a $48 million--or a one
+tenth of 1 percent--increase relative to the FY 2005 level of $41.0
+billion. After accounting for mandatory programs (such as the Coast
+Guard retirement fund, and disaster relief programs) and certain fee-
+funded accounts (such as those used by the Bureau of Immigration and
+Customs Enforcement for portions of their activities), the DHS' total
+discretionary request of $34.2 billion represents an increase of $2.2
+billion, or 7 percent, increase above current year funding. The
+majority of the $2.2 billion increase is due to a $3.00 increase in the
+Aviation Security Passenger Fee, up to a total of a $5.00 increase per
+trip, which is estimated to yield a $1.6 billion increase in revenues.
+If all fee-funded programs are accounted for, DHS' net discretionary
+request is $29.3 billion, representing a $343 million, or 1.2 percent
+increase, above the current year level--less than the rate of
+inflation.
+ I support additional resources for the DHS above current year
+levels. However, rectifying critical homeland security gaps that
+continue to exist throughout our nation will, in part, require
+additional resources above what is requested in the President's FY 2006
+Budget. For example, since the tragedy of September 11, our nation's
+first responders still lack the resources they need to ensure they are
+properly equipped and trained to protect our communities from a
+terrorist attack; radiation portal monitors that can detect the
+presence of a weapon of mass destruction are not yet installed at all
+ports of entry and related sites; robust air cargo systems are not yet
+deployed nationwide that can detect the presence of dangerous
+materials, and physical security at our nation's ports is inadequate
+relative to the security threats that exist.
+ While requested funds for FY 2006 will assist in closing these
+security gaps, no less than an additional $6.1 billion above the FY
+2006 President's request (not including the Coast Guard's project
+Deepwater) will be necessary to ensure that our homeland is as safe as
+it needs to be relative to the threats we face. If additional funds for
+the acceleration of Project Deepwater are included, no less than $7.0
+billion in additional resources is required.
+
+ THE ADMINISTRATION'S FISCAL POLICY AND HOMELAND SECURITY
+
+ While funding for homeland security has increased since the attacks
+of 9/11, the issue is not whether such funding as risen--the issue is
+whether sufficient resources have been devoted to homeland security
+since 9/11 to ensure that we are as safe as we need to be. By this
+standard, the Administration continues to fall short in its efforts to
+protect the country. Although the threat of renewed terrorist violence
+against our country is real--a fact confirmed a few weeks ago by CIA
+Director Porter Goss in testimony before Congress--the President's
+budget request for the Department of Homeland Security misses an
+opportunity to chart a new course to protect our homeland. Instead of
+tinkering at the margins, the Administration's budget should boldly
+boost funding levels for key DHS programs to provide a greater level of
+protection for Americans. The failure to do so places all of our
+citizens in greater jeopardy.
+ In part, the Administration's misguided fiscal policies of the last
+4 years have resulted in resources being channeled to the wrong
+priorities and have frustrated efforts to devote greater funds to
+homeland security. For example, last year the Administration provided
+tax cuts to the wealthiest 1 percent of Americans (those earning more
+than $1 million a year) totaling about $90 billion--three times the
+amount of discretionary funding devoted to the Department of Homeland
+Security. Such tax cuts come at a time when the Council on Foreign
+Relations has estimated that our nation's first responders, alone,
+require upwards of $100 billion to satisfy their critical needs.\1\ The
+President's FY 2006 Budget proposes to continue its tax cut policies,
+which will result, in part, in a projected deficit of $427 billion for
+the current fiscal year--the third year in a row that the deficit will
+reach a record level. While the Administration may take credit for
+increasing the homeland security discretionary budget for next fiscal
+year by 7 percent--or $2.2 billion--relative to the current year level,
+we will spend that amount in about 2 weeks in Iraq. While we must keep
+faith with our military personnel serving in harm's way overseas, we
+must also keep faith with the men and women of the Homeland Security
+Department as they serve on the front lines every day to protect us
+against terrorist and other threats. We must ensure that they--and our
+collective homeland security effort--receive the resources that are
+urgently needed to ensure the United States is as safe as it needs to
+be. We must get our priorities right.
+
+ FIRST RESPONDER GRANT PROGRAMS
+
+Office of State and Local Government Coordination (OSLGC)
+ The President's fiscal year 2006 Budget request for OSLGC-
+administered grants for our state and local first responders and
+related homeland security needs totals $3.6 billion, representing a
+$420 million--or nearly 11 percent--decrease from the amounts
+appropriated by Congress for fiscal year 2005. The President's proposal
+also seeks to increase the amount of discretionary grant funds to be
+distributed based on threats and vulnerabilities. Specifically, the
+President's Budget seeks to reduce the percentage guaranteed to each
+state as part of the State Homeland Security Grant Program from 0.75
+percent to 0.25 percent (the same percentage as currently guaranteed to
+all U.S. territories). Such a proposal is consistent with legislation
+supported by the Select Committee on Homeland Security, and enacted by
+the House as part of H.R. 10, during the 108th Congress.
+ In aggregate, however, the proposed reductions for FY 2005 for
+first responder funding, as compared to current year levels, are made
+at a time when outside expert panels, such as one assembled by the
+Council on Foreign Relations, note that our nation's first responders
+still lack the training, equipment, and other support required to
+ensure that they are full prepared to prevent or respond effectively to
+any possible terrorist attack. While significant resources have been
+devoted to first responders since September 11, there is a continuing
+need to increase their preparedness. Despite Administration plans in
+Homeland Security Presidential Directive 8 (HSPD-8) to tie the budget
+request to an assessment of first responder needs, HSPD-8 was not
+implemented in time for the budget submission, and funding levels
+requested in the President's budget do not reflect the actual needs of
+our nation's first responders. Given outstanding needs, I strongly
+believe that FY 2006 resources for state and local grant programs
+should be increased above levels proposed in the President's FY 2006
+Budget by at least $2.9 billion as described below.
+ The President's fiscal year 2006 request for DHS state and local
+grants proposes a number of changes to individual programs.
+
+Specifically:
+ The President's FY 2006 Budget proposes to reduce funding
+for the State Homeland Security Grant Program by nearly $300 million
+below the current year level. Such a decrease comes as the result of
+two actions: First, the FY 2006 requested level includes an $80 million
+decrease relative to the current year level; second, the President's
+budget stipulates that no less than 20 percent--which amounts to $204
+million--of funds for the FY 2006 State Homeland Security Grant Program
+must be allocated for ``terrorism prevention activities of law
+enforcement.'' The latter adjustment is similar to the stipulation
+placed on the Urban Area Security Initiative (see below), and is
+intended to offset the impact to law enforcement by the President's
+proposal to completely eliminate in FY 2006 the Law Enforcement
+Terrorism Prevention Grant program. Taken together, both adjustments
+will have the effect of reducing the amount of grant funding for
+distribution to states and territories for non-law enforcement-specific
+purposes by $284 million--a 26 percent decrease relative to the FY 2005
+amount. For this reason, I support an increase in funding for the State
+Homeland Security Grant Program to a level no lower than the FY 2005
+enacted level of $1.1 billion.
+ The President's request also makes significant cuts to the
+Assistance to Firefighters Grant Program (FIRE Grants). Specifically,
+the President's Budget requests $500 million, representing a cut of
+$215 million--or 30 percent--relative to the current year level. The
+FIRE Grant program was created before September 11 by Congress in order
+to meet basic, critical needs of the firefighting community, which a
+December 2002 study by the U.S. Fire Administration and the National
+Fire Protection Association found to be significant. Also, unlike the
+enacted FY 2005 amount, the President's FY 2006 Budget does not include
+any specific funding for the SAFER (Staffing for Adequate Fire and
+Emergency Response) program to reach the goal of hiring 10,000 new fire
+fighters and help communities attain 24-hour staffing to provide
+increased protection against fire and related hazards. The SAFER Act
+authorizes $7.7 billion over a 7-year period, to include $1 billion for
+FY 2006. For these reasons, I support an increase in funding for the
+FIRE grant program to a level no lower than the fully authorized amount
+of $750 million. Consistent with congressional intent, an additional $1
+billion is needed to support the goals of the SAFER Act.
+ The enhancement and acquisition of interoperable
+communications systems remain a critical need for the first responder
+community. However, the President's FY 2006 Budget requests no specific
+funds for grants to enhance interoperability, and eliminates the
+relatively modest $20 million for interoperability as part of DHS'
+Technical Assistance Program (similarly, the President's FY 2006
+request for the Justice Department proposes to eliminate $99 million
+for COPS Interoperable Communications Technology Grants). Additional
+funding to increase interoperability among our nation's first
+responders is urgently needed. In June 1998, the Public Safety Wireless
+Network program estimated that replacing communications systems
+nationwide to achieve interoperability could cost as much as $18.3
+billion.\2\ The Council on Foreign Relations has reported that, in
+virtually every major city and county in the United States, no
+interoperable communications system exists to support police, fire
+departments, and response personnel at all levels of government during
+a major emergency,\3\ and that a minimum, $6.8 billion over 5 years
+would be necessary to ensure dependable, interoperable communications
+for first responders.\4\ For these reasons, I support a dedicated down
+payment of at least $500 million in FY 2006 for first responder
+interoperability purposes.
+ The President's FY 2006 Budget proposes to eliminate the
+Law Enforcement Terrorism Prevention Grants, currently funded at $400
+million, as a separate grant program. Instead, grants to support
+terrorism-related law enforcement efforts will be funded as part of the
+State Homeland Security Grant program and the Urban Area Security
+Initiative regional grant program. While the Democrats fully supports
+the needs of law enforcement at the state and local level to prevent,
+prepare for, and respond to a terrorist attack, we believe that law
+enforcement officials should not have to compete for grant funds with--
+and at the potential expense of--other first responder entities. For
+this reason, I support funding for a dedicated Law Enforcement
+Terrorism Prevention Grant program at a level no lower than $400
+million.
+ The President's FY 2006 Budget also proposes to reduce
+funding for the Emergency Management Performance Grant program by $10
+million--or nearly 6 percent--relative to the current year level. A
+March 2002 survey by the National Emergency Management Association
+found that an additional 5,212 local emergency management positions are
+needed, with 3,960, or 76 percent, of those positions being fulltime
+directors needed to manage the programs. For this reason, I support
+funding for the Emergency Management Performance Grant to a level no
+lower than the enacted FY 2005 level of $180 million.
+ The President's FY 2006 Budget proposes to consolidate FY
+2005 sector-specific grants for port security, rail and transit
+security, trucking security, and intercity bus security into one $600
+million Targeted Infrastructure Protection grant program for next
+fiscal year. I have two concerns with the Administration's proposal:
+First, this grant program would force many critical infrastructure
+sectors to compete against one another for scarce resources, increasing
+the likelihood that these sectors will receive less funding than last
+year. On a related note, requesting the new Targeted Infrastructure
+Protection program as part of DHS' Urban Area Security Initiative
+raises the concern that funding for critical infrastructure
+improvements will not be channeled to non-urban area environments.
+Second, the Administration's $600 million request is woefully
+inadequate, especially given that port and rail systems have billions
+of dollars in funding needs. For example, to date, ports will receive
+$715 million in security grant funding, yet this amount is $410 million
+short of initial estimated needs and $4.7 billion short of the Coast
+Guard's $5.4 billion overall estimate of what owners and operators of
+port facilities believe will be needed to make themselves secure
+against a terrorist attack. Similarly, outstanding public rail and
+public transit needs total nearly $3 billion. I support grant programs
+that take advantage of the sector-specific expertise that exists, or is
+being developed, within the Department. Additionally, if the targeted
+infrastructure program is enacted as requested, I believe that
+additional resources for port and rail security totaling $1.6 billion
+above the President's request for FY 2006 will be required.
+ The FY 2006 President's Budget--similar to last year's
+proposal--includes no funding for the Metropolitan Medical Response
+System (MMRS). The primary focus of the MMRS, which was conceived after
+the 1995 terrorist release of sarin nerve gas in a Tokyo subway, is to
+develop or enhance existing emergency preparedness systems to
+effectively respond to a public health crisis, particularly an event
+involving a weapon of mass destruction (including a so-called ``dirty
+bomb'' which disperses harmful radiation). Through MMRS-sponsored
+preparation and coordination, local law enforcement, fire, hazardous
+material, emergency medical service, hospital, public health, and other
+first responder personnel plan will be more effective in responding in
+the first 48 hours to a public health crisis. Currently 125 municipal
+authorities in 43 states benefit from the program. I am not convinced
+that, consistent with the President's Budget, the goals of the MMRS
+program will be better supported by other, less specific, terrorism
+grant programs, and believes that the program should be funded at a
+level no less than the current year amount of $30 million.
+
+ DEPARTMENTAL OPERATIONS
+
+ The FY 2006 President's Budget requests $665 for Department
+Management and Operations, representing a $140 million--or 27 percent
+increase--above the FY 2005 enacted level. The requested amount
+includes nearly $50 million to support the establishment of a DHS
+nationwide regional structure; $26 million for continued development of
+the Department's headquarters in Washington, D.C., and $53 million for
+DHS' human resource system initiative, dubbed ``MAX HR,'' which will
+implement the Department's new personnel system that is slated to begin
+implementation later this year. It should be noted that DHS' concept of
+a future regional structure is not yet mature, nor has it been formally
+approved by DHS leadership, thus calling into question whether funds
+will be needed as requested in the President's budget. Regarding DHS'
+new personnel system, I remain concerned that it will erode the
+collective bargaining and employee appeal rights that have long
+protected government employees against unfair or arbitrary management
+practices, and replace the well-established civil service compensation
+program with a new, untested ``pay for performance'' system. I will
+continue to give close attention to this issue, and believes that the
+$53 million in requested funds would be better allocated to rectify
+specific homeland security gaps.
+
+ OFFICE OF THE INSPECTOR GENERAL
+
+ The FY 2006 President's Budget requests $83 million for the Office
+of the Inspector General (OIG), representing barely a 1-percent
+increase above the FY 2005 enacted level (less than the rate of
+inflation). Requested resources will be used to support a staff of 540
+employees, most of who will be engaged in audits, inspections, and
+investigations of various Departmental programs and activities. Given
+the vital importance of the Inspector General's office in probing and
+identifying programmatic inefficiencies and general waste, fraud, and
+abuse in a Department that encompasses over 180,000 employees for the
+benefit of Congress and DHS' leadership, I am concerned that additional
+resources may be needed above the level requested by the President to
+fully support the OIG's work.
+
+ BORDER AND TRANSPORTATION SECURITY
+
+Office of the Under Secretary for Border and Transportation Security;
+ United States Visitor and Immigrant Status Indicator Technology
+ (US-VISIT)
+ The President requests $390 million for the US-VISIT program for
+next fiscal year, an increase of approximately $50 million above the
+current year level. I continue to have concerns about the overall
+development and long-term vision of the US-VISIT program. Additionally,
+I remain concerned about the continued reliance of the US-VISIT system
+on rapidly aging Immigration and Naturalization Service (INS) legacy
+systems. I want to emphasize the need for continued oversight of the
+program, especially in such areas as the total future cost of the
+system, contractor performance, the effectiveness of US-VISIT as a
+counterterrorism tool, and the program's impact on the free flow of
+commerce at our nation's borders.
+
+ NEXUS/SENTRI
+
+ The FY 2006 Budget requests $21 million for the NEXUS and SENTRI
+(Secure Electronic Network for Travelers Rapid Network) programs. Both
+NEXUS and SENTRI are ``pre-enrollment'' frequent traveler screening
+programs designed to expedite border crossings for those individuals
+identified as posing a low risk of terrorism. I am concerned that the
+$21 million allocated for NEXUS and SENTRI may be insufficient to
+adequately fund enrollment centers in major population centers away
+from the border and to provide necessary maintenance for the technology
+used for the programs. Additionally, higher levels of funding may be
+needed above the President's request to promote greater participation
+in both programs, which would create the advantage of allowing border
+inspectors to devote more time to screen travelers judged to be ``high
+risk.'' For this reason, I will continue to exercise close oversight
+over the performance of, and resource levels for, the NEXUS and SENTRI
+programs.
+
+ OFFICE OF SCREENING COORDINATION AND OPERATIONS
+
+ The Department's FY 2006 proposal seeks to establish an Office of
+Screening Coordination and Operations (SCO) to coordinate, consolidate,
+and streamline various screening programs to facilitate both security
+and travel. I look forward to assessing precisely how the SCO will
+operate, DHS' rationale regarding which programs will be included as
+part of the new office, and how those programs will be managed.
+ As part of this effort, the Department of Homeland Security
+proposes to shift the US-VISIT program into this new office, along with
+several other Transportation Security Administration (TSA) or Customs
+and Border Protection (CBP) efforts. The Department seeks to exercise
+its existing authority to collect fees next fiscal year totaling $321
+million to fully recover the costs of the Secure Flight, Transportation
+Worker Identification Credential, Hazardous Material Drivers' License
+Endorsement, and the Alien Flight School Check programs. The new SCO
+office, or other appropriate entity in DHS, will likely need additional
+amounts made available for implementation of the new law enforcement
+officer travel credential, as mandated by the Intelligence Reform and
+Terrorism Prevention Act of 2004. Additionally, as part of the request
+for the new SCO office, the FY 2006 President's budget seeks $81
+million for the Secure Flight program. The Department of Homeland
+Security Appropriations Act for 2005 (Public Law 108-334 Sec. 522)
+prohibits TSA from deploying or implementing the Secure Flight program
+until the system is certified to meet a number of requirements as set
+forth by the Government Accountability Office (GAO). The GAO has not
+yet issued a report on Secure Flight, but has commented to Minority
+staff of the Homeland Security Committee that notable obstacles remain
+before the program can proceed. Given GAO's report, I question whether
+Secure Flight will be sufficiently developed by next fiscal year to
+require all of the resources requested for it within the President's FY
+2006 budget.
+
+ CUSTOMS AND BORDER PROTECTION (CBP)
+
+Construction
+ The President's FY 2006 Budget requests $93.4 million to maintain
+and construct CBP facilities nationwide. The President's budget makes
+clear that the entire construction budget is for the Border Patrol and
+not for our nation's ports-of-entry. While I support the infrastructure
+needs of a rapidly growing Border Patrol, we are concerned that the
+request will not meet the Border Patrol's current needs nor will it
+meet the needs of the workforce authorized in the Intelligence Reform
+and Terrorism Prevention Act of 2004. Additionally, providing border
+security without inhibiting trade requires a substantial investment in
+border infrastructure. This is especially true at our land ports of
+entry. While the General Services Administration is responsible for
+construction at our nation's ports of entry, CBP involvement is
+critical as will be the new Office of Screening Coordination and
+Operations. Layouts of inspection plazas, space limitations, limited
+number of inspection booths and lanes all affect the flow of traffic.
+Clogged borders with large traffic backups put pressure on inspectors
+to cut corners, thus reducing overall levels of security. The need for
+additional infrastructure investments is especially necessary given the
+implementation of US-VISIT and various pre-enrollment programs to
+separate high from low risk travelers. In a June, 2000 report, the
+former U.S. Customs Service estimated that an additional $784 million
+was needed to improve infrastructure and technology at our nation's
+ports of entry. Given that this estimate was made before the attacks of
+9/11, it did not take into account all of the current security-related
+costs that are now needed. Additionally, it did not include the costs
+of infrastructure needed to process travelers and goods leaving, as
+opposed to entering, the country. I believe that at least at additional
+$1 billion is urgently needed above the level requested by the
+President for border construction needs.
+
+CBP Personnel
+ The President's FY 2006 Budget requests $4.7 billion for CBP
+salaries and expenses, an increase of $197 million above the current
+year level to fund, in part, CBP personnel. Such personnel are critical
+in our national effort to prevent terrorists from gaining entry to the
+United States or using transportation and commercial supply chain
+systems to help carry out a terrorist attack. I am concerned, however,
+that several specific resource levels included in the FY 2006 Budget
+will be insufficient:
+ Border Patrol: The Intelligence Reform and Terrorism
+Prevention Act of 2004 authorized 2,000 additional Border Patrol
+personnel annually for deployment along the U.S. northern and southern
+border from FY 2006-2010. The President's FY 2006 Budget provides
+funding for only 210--or 1,790 Border Patrol agents short of
+Congressional intent. I understand that the 210 new agents will replace
+those from the southern border who have been relocated to the northern
+border. Resource levels included in the President's FY 2006 Budget will
+also not result in the necessary Border Patrol personnel required to
+reach levels authorized in the 2001 PATRIOT Act and the 2002 Enhanced
+Border Security and Visa Entry Reform Act. Currently, DHS is 728 Border
+Patrol agents short of the mandates in the latter two bills. If the 9/
+11 bill authorization levels are taken into consideration, the
+President's budget should fund 2,728 Border Patrol agents for FY 2006,
+which would result in over 13,500 agents defending our nation's
+borders. I believe that, at a minimum, an additional $87 million is
+necessary above the President's request to satisfy the Border Patrol
+level for next fiscal year included in the 9/11 reform bill. If all
+congressional mandates are to be honored, an additional $135 million
+would be needed above the President's request.
+ C-TPAT/CSI: The President's request includes an additional
+$8 million to pay for supply chain security validations of companies
+who participate in the Customs Trade Partnership Against Terrorism (C-
+TPAT) program. I am concerned that the Administration's request may not
+fix the personnel shortages associated with C-TPAT. C-TPAT membership
+has nearly doubled over the last year while the level of supply chain
+specialist has remained the same. This means that, without additional
+personnel, security validations will take years to complete.
+Simultaneously, lower than optimal personnel levels will allow
+companies to receive the benefit of reduced security inspections
+without ensuring they meet their security responsibilities. The FY 2006
+Budget also includes funding for an additional 14 positions in support
+of DHS' Container Security Initiative (CSI). While such an increase is
+a positive development, and mindful of past resource increases, I am
+concerned that it may not be sufficient to ensure effective
+implementation of the CSI program. The amount of new CSI inspectors,
+and their deployment schedule at overseas foreign ports, will need to
+be monitored closely to ensure that, in light of the program's goals,
+robust examination of cargo at foreign ports occurs before it travels
+to the United States. I will work to ensure sufficient resources are
+devoted to both programs.
+
+Non-Intrusive Inspection Technology
+ The President's FY 2006 Budget requests $125 million for the
+development, purchase, and installation of radiation portal monitors at
+our nation's major border crossings. Such portals are a type of non-
+intrusive inspection (NII) technology that can be used to detect the
+presence of radiological materials that could comprise a weapon of mass
+destruction. The $125 million would complete the installation of portal
+monitors on the southern border and 10 percent of air cargo facilities
+at international airports. Requested funds are in addition to the $279
+million previously provided by Congress to install portals at our 22
+largest sea ports, major northern border crossings, and international
+mail facilities. However, even if FY 2006 requested funds for NII
+technology are provided, I understand that CBP will still require an
+additional $92 million above the President's request (for a total of
+$496 million) to ensure that--consistent with its own plan--portal
+monitors are installed at air cargo facilities, rail border crossings,
+and smaller ports of entry. Additionally, no funds are requested in the
+FY 2006 for handheld isotope identifiers which identify the type of
+radiation present in a container, or additional VACIS machines which
+use x-rays to provide an image of the contents of a shipping container.
+I believe it is unacceptable for NII technology to be lacking at our
+ports of entry and other critical infrastructure sites over 3 years
+since September 11, and strongly supports additional resources of at
+least $92 million above the FY 2006 request to correct this deficiency.
+
+Immigration and Customs Enforcement
+ The President's FY 2006 Budget requests $4.4 billion for
+Immigration and Customs Enforcement (ICE), representing a $519 million,
+or 13 percent, increase above the FY 2005 amount. However, $94
+million--or nearly 20 percent--of the increase is dedicated to existing
+programs which are being shifted to ICE from other agencies. The
+continuing financial management problems at ICE, along with the ongoing
+baseline review of its budget, make it difficult to know with any
+precision whether the requested amount for next fiscal year will be
+adequate to support ICE's myriad missions. I remain concerned that
+ICE's financial problems will not be fully resolved until FY 2007 at
+the earliest, adversely effecting operations in the meantime. I will
+continue to monitor ICE's financial health closely to ensure it has the
+resources needed to perform its vital work.
+
+ICE Inspectors
+ The Intelligence Reform and Terrorism Prevention Act of 2004
+authorized 800 additional ICE investigators annually from FY 2006-2010
+to investigate immigration violations. The President's FY 2006 Budget
+provides funding for only 152 new investigators--or 648 investigators
+short of Congressional intent. I estimate that an additional $61
+million above the President's request would be needed to satisfy the FY
+2006 personnel level included in the Intelligence Reform and Terrorism
+Prevention Act of 2004.
+
+Detention and Removal Operations (DRO)
+ For next fiscal year, the President's budget includes approximately
+$1.7 billion for Detention and Removal Operations (DRO), including $90
+million for additional bed space to incarcerate removable aliens.
+According to the Department of Homeland Security, the requested $90
+million translates to 1,920 new beds--6,080 beds short of the amount
+included in the Intelligence Reform and Terrorism Prevention Act of
+2004. I am concerned that DRO may not be able to accommodate its
+current bed space needs; if additional funds are not provided in FY
+2005 to correct this shortfall, much, if not all, of the proposed FY
+2006 increase could be consumed by higher costs resulting in no new bed
+space. If DRO receives sufficient additional funds in FY 2005 to meet
+its current needs, then bringing the President's request up to the
+levels authorized in the Intelligence Reform and Terrorism Prevention
+Act of 2004 would require an additional $285 million above the level
+requested by the President.
+
+Federal Air Marshals
+ The President's FY 2006 Budget includes $689 million for the
+Federal Air Marshal Service (FAMS) within the Bureau of Immigration and
+Customs Enforcement, an increase of $25.9 million over the FY 2005
+enacted level. I support increased resources for FAMS, but believe that
+an additional $39.1 million is necessary for the Air Marshal Service to
+retain and hire sufficient personnel to fully reach authorized levels
+and ensure appropriate flight coverage.
+
+ TRANSPORTATION SECURITY ADMINISTRATION
+
+ The President's FY 2006 Budget includes $5.6 billion for the
+Transportation Security Administration (TSA), representing a net
+increase of $156 million over the current year level. The Department
+requests that the majority of TSA's FY 2006 budget--$ 4.1 billion, or
+nearly 75 percent--will be offset through the collection of passenger
+security and air carrier fees. Nearly 85 percent of TSA's request
+directly involves personnel and equipment costs for airport screening
+of passengers and baggage, with an additional 14 percent supporting
+aviation needs. Less than 1 percent of TSA's FY 2006 request is for
+surface transportation security efforts.
+
+Passenger Fee Increase
+ Of significant note in the President's FY 2006 Budget request is a
+proposal to increase the aviation security fee placed on passenger
+tickets by $3.00, to a maximum of $8.00. The Administration estimates
+that this increase will provide TSA with an additional $1.6 billion in
+revenue, for a total of $3.8 billion. Additionally, $350 million is
+proposed in the budget to be paid to TSA by air carriers, which would
+bring total fee-funded revenue to $4.1 billion--or 91 percent of the
+cost of providing aviation security screening. I am concerned that an
+increase in the fee levied on air tickets will have significant
+detrimental effects on the aviation industry, potentially resulting in
+the end of operations for multiple air carriers. More fundamentally, I
+believe that the cost of providing for aviation security in the post 9/
+11 environment should be financed primarily by the Federal Government,
+as opposed to passing this cost on to consumers in the form of an
+additional ``tax'' on airline tickets. I do not believe the President's
+Budget proposal is acceptable, and maintain that additional Federal
+funds, most likely in the form of discretionary appropriations, should
+be devoted to TSA in lieu of the proposed passenger security fee
+increase.
+
+Aviation Screeners
+ I am concerned that the current legislative mandate to limit TSA
+screeners to no more than 45,000 may be having a detrimental effect on
+aviation security, given the resulting staffing imbalances and
+shortfalls that exist at some of our nation's airports. I expect that
+TSA will soon complete its study of the number of screeners that are
+needed to fully implement security regulations at every airport,
+consistent with the Intelligence Reform and Terrorism Prevention Act of
+2004 and the Congress should provide the appropriate level of resources
+needed to support the number of screeners determined necessary.
+
+Private Aviation Screening
+ The President's FY 2006 Budget request continues funding for the
+five airports involved in the Private Screening Program (PP5) but does
+not include segregated funds for additional airports opting out of TSA
+screening under the Screening Partnership Program (SPP). I understand
+that TSA intends to fund screening costs for any SPP airports out of
+funds requested for TSA screener airports, and approves of this
+approach until more information is available on the number of SPP
+airports.
+
+Explosives Detection System (EDS)/Explosives Trace Detection (ETD)
+ Installation
+ The President's FY 2006 budget requests $367 million in
+discretionary appropriations, to be complemented by $250 million form
+the Aviation Security Capital Fund, for a total of $617 million for
+EDS/ETD purchase, installation, and maintenance at airports nationwide.
+This total is $33 million less than both the full amount made available
+to TSA for the current year, and the fully authorized amount for EDS
+installation as a result of the Intelligence Reform and Terrorism
+Prevention Act of 2004. Of the total amount, $241 million will be
+devoted to reimburse nine airports through eight Letters of Intent
+(LOI) for EDS/ETD equipment at a 75 percent reimbursement level for
+large airports. It should be noted that airports may require up to $4
+billion to install in-line EDS technology to protect the traveling
+public, and that additional resources above the level requested by the
+President are urgently needed--in part to save money in the long run.
+Regarding the nine airports that are currently covered by LOIs, the
+Government Accountability Office has noted that, ``According to TSA's
+analysis, in-line EDS systems would reduce by 78 percent the number of
+TSA baggage screeners and supervisors required to screen checked
+baggage at these nine airports, from 6,645 to 1,477.''\5\ For these
+reasons, I recommend funding for EDS installation to a level no lower
+than the fully authorized amount of $650 million.
+
+Air Cargo Security
+ The President requests $40 million for air cargo security,
+representing no change from the current year level and $160 million
+less than the fully authorized amount in the Intelligence Reform and
+Terrorism Prevention Act of 2004. I feel that such funding levels need
+to be revisited, given persistent threats to aviation security. I
+believe that TSA should take steps to ensure that 100 percent of air
+cargo is inspected and that security verifications for all companies
+participating in the ``known shipper'' program are completed. Given
+that the proposed FY 2005 budget does not provide sufficient resources
+for either of these goals, I strongly recommend funding for air cargo
+security efforts at a level no lower than the fully authorized amount
+of $200 million.
+
+ UNITED STATES COAST GUARD
+
+ The President's FY 2005 Budget requests $966 million for the
+Integrated Deepwater program, a $242 million increase over the current
+year level. The Deepwater program is designed to replace the Coast
+Guard's antiquated fleet of cutters and aircraft. Many of these assets
+are reaching the end of their service life and, as a result, suffer
+major mechanical casualties. These casualties have hampered the Coast
+Guard's ability to perform its vital homeland security and law
+enforcement missions. The FY 2006 request will modestly accelerate
+completion of the program from approximately 22 to 20 years. However, I
+am concerned that completing the Deepwater program in 20 years is too
+long to wait in light of the Coast Guard's significant homeland
+security missions. I believe that the Deepwater program should be
+accelerated to be completed in 10 years, and that an additional $926
+million to the Coast Guard's budget above the level of the President's
+request to achieve this objective. While this represents a large
+increase, such an acceleration would not only outfit the Coast Guard
+with a modern fleet of cutters and aircraft, but, as I understand it,
+would also results in $4 billion in savings over the life of the
+program.
+
+ SCIENCE AND TECHNOLOGY
+
+ The President's FY 2006 Budget requests $1.37 billion for the
+Science and Technology Directorate of DHS. I am pleased that the
+request reflects a consolidation throughout DHS of research and
+development activities within the Directorate and expects that this
+reprogramming will yield cost efficiencies and technology leveraging in
+the coming years.
+
+ MAN-PORTABLE AIR DEFENSE (MANPAD) SYSTEMS
+
+ The Minority notes the increase in the President's FY 2006 Budget
+request for the counter-MANPADs program to $110 million, an increase of
+$49 million. The Minority recognizes that the program is entering more
+costly development and testing stages, and--consistent with the
+program's current mandate to protect the American public against MANPAD
+systems--strongly urges the Department to provide to Congress an
+operational feasibility study for counter-MANPADs technology.
+
+ AVIATION SECURITY-RELATED RESEARCH & DEVELOPMENT
+
+ The Minority notes that the Intelligence Reform and Terrorism
+Prevention Act of 2004 authorizes $470 million for specific aviation
+security-related research and development (R&D) programs, to include:
+$100 million for air cargo research and development (R&D) work, $250
+million for aviation portal monitors for the detection of biological,
+radiological, chemical, and explosive materials, $100 million for R&D
+efforts to support improved explosive detection systems, and $20
+million to support the development of advanced biometric technology
+applications for aviation security. Unfortunately, however, the
+President's FY 2006 Budget only includes $52 million within DHS'
+Science and Technology Directorate to fund these critical efforts--$418
+short of amounts included in the 9/11 bill. Consistent with
+congressional intent, I recommend an additional $418 million to fund
+aviation security-related R&D efforts.
+
+ BIOLOGICAL COUNTERMEASURES AND AGRICULTURAL DEFENSE
+
+ The FY 2006 budget for the Department includes $362 million for
+research, development, testing, and evaluation of several biological
+countermeasures, including: support for threat awareness and risk
+assessment of biothreats ($46 million); detection systems for
+aerosolized bioagents ($109 million); automated sample collection
+technologies ($82 million); and development of animal vaccines and
+next-generation diagnostics for foreign animal diseases ($87 million).
+The President's FY 2006 budget for the Department also includes $23
+million to establish a new National Bio and Agrodefense Facility to
+strengthen detection and response capabilities to the intentional
+introduction of high consequence biological threats, such those
+targeted against animal livestock or the nation's food supply. Total
+funding for design and construction of the new Facility is estimated at
+$451 million for FY 2006-2010. While I applaud the Administration's
+recognition of the importance of detecting and preventing a bioterror
+attack, it notes that the total amount of funding requested for
+biological countermeasures is $35.4 million--or nearly 9 percent--below
+the FY 2005 enacted level. I will continue to exercise close oversight
+of the activities designed to boost capabilities to detect and respond
+to an attack using biological pathogens, including those pathogens used
+to attack crops or livestock, and recommends funding to a level no
+lower than the FY 2005 amount of $375 million.
+
+ INFORMATION ANALYSIS AND INFRASTRUCTURE PROTECTION
+
+ The FY 2006 President's Budget requests $873 million for the
+Department's Information Analysis and Infrastructure Protection (IAIP)
+Directorate, representing a $20.5 million, or 2 percent, decrease
+relative to the current year level. Funds are requested for IAIP
+Management and Administration, and Assessments and Evaluation.
+
+ ASSESSMENT & EVALUATIONS
+
+ The FY 2006 President's Budget requests $669 million for the
+Assessment and Evaluations account, representing a $92 million--or 12
+percent--decrease relative to the current year level. The overall
+reduction is due, in part, to the transfer of $50 million for Buffer
+Zone Protection Plans as part of the Administration's Targeted
+Infrastructure Protection grant program within the Office of State and
+Local Government Coordination, and $41.5 million to the DHS S&T
+Directorate for critical infrastructure emerging technology pilot
+projects. I note that an additional $6 million is requested for the
+Department's cyber security activities above the current year level of
+$67 million, which will aid in greater computer security preparedness
+and response to cyber attacks and incidents. Additionally, I am pleased
+with the $11 million requested for IAIP's National Biosurveillance
+Integration System, designed to improve the Federal Government's
+capability to rapidly identify and characterize a potential
+bioterrorist attack through the integration of information from other
+Federal agencies, such as the Department of Agriculture and the Centers
+for Disease Control. Overall, however, I will continue to exercise
+close scrutiny over the resource levels of the assessment and
+evaluation efforts of IAIP given its critical functions, in part, to
+complete a comprehensive National Critical Infrastructure Plan,
+consistent with Homeland Security Presidential Directive 7, and the
+creation of an associated national asset database.
+
+ MANAGEMENT AND ADMINISTRATION
+
+ The President's FY 2006 Budget requests $204 million for the
+Management and Administration account of the Information Analysis and
+Infrastructure Protection (IAIP) Directorate, representing a $72
+million, or 55 percent, increase over the FY 2005 level. Increases
+include $38 million for facilities enhancements to allow the IAIP
+workforce to function in a secure work environment (this is in addition
+to $26 million requested for enhancements to DHS' Homeland Security
+Operations Center); $19 million for the Homeland Security Data Network,
+and $11 million to hire 146 new information analysis, infrastructure
+vulnerability analysis, and cyber security operations. I want to
+emphasize the need for continued oversight in this important area of
+the DHS budget.
+
+ ENDNOTES
+
+ 1. Council on Foreign Relations, Report of an Independent Task
+Force Sponsored by the Council on Foreign Relations, Emergency
+Responders: Drastically Underfunded, Dangerously Unprepared (New York:
+Council on Foreign Relations, June 2003), 2.
+ 2. Public Safety Wireless Network, LMR Replacement Cost Study
+Report (Washington: Public Safety Wireless Network, June 1998), 5.
+ 3. Council on Foreign Relations, Report of an Independent Task
+Force Sponsored by the Council on Foreign Relations, America Still
+Unprepared, America Still in Danger (New York: Council on Foreign
+Relations, 2002), 14.
+ 4. Council on Foreign Relations, Report of an Independent Task
+Force Sponsored by the Council on Foreign Relations, Emergency
+Responders: Drastically Underfunded, Dangerously Unprepared (New York:
+Council on Foreign Relations, June 2003), 33.
+ 5. Government Accountability Office, ``Transportation Security:
+Systematic Planning Needed to Optimize Resources,'' GAO-05-357T,
+Tuesday, February 15, 2005, 9.
+
+ Prepared Statement of Hon. Jerry Weller, a Representative in Congress
+ From the State of Illinois
+
+ Mr. Chairman, thank you for the opportunity to submit my testimony
+to the House Budget Committee regarding the President's proposed FY
+2006 budget.
+ Mr. Chairman, our country continues to face challenges in the
+industry and manufacturing fields. Jobs are being lost overseas and
+many of our skilled worker will be retiring in the coming years leaving
+a critical shortage of qualified domestic applicants who possess the
+skills to operate in a multifaceted, technologically integrated
+environment.
+ Illinois educators and businesses are concerned with the
+President's FY 06 budget for education, and the proposed cuts to Career
+and Technical Education (CTE) funded under the Carl Perkins Act. As the
+Committee is well aware, this essential program has been zeroed out.
+The approximately $1.3 billion program supports career and technical
+education for high school and community college programs that lead to
+employment in high tech and high demand occupations such as health
+care, computer-related, manufacturing and business. Nationally, only 23
+percent of careers require a BA/BS or above according to United States
+Department of Labor (USDOL) data. Students in CTE programs are the
+``pipeline'' for business, industry and labor's needed workers. The CTE
+Federal budget leverages state dollars by its matching requirements, so
+that Illinois will lose not only the Federal CTE funds, but the
+corollary state funds as well. Federal education budget funds for
+Career and Technical Education should be increased or at the very
+minimum retained at current levels.
+ Research shows that Career and Technical Education (CTE)
+complements other Federal education legislation, particularly the No
+Child Left Behind Act goals for high school graduation and increased
+academic achievement. In Illinois, 95 percent of CTE concentrators
+graduate. Additionally, CTE reduces dropouts, promotes higher
+attendance rates, and a recent Chicago Public School System study (Nov.
+2004) shows that attendance rates, graduation rates and academic
+achievement in Chicago Public Schools increased in direct proportion to
+the number of CTE courses taken. National studies show 80 percent of
+CTE students complete the same number and type of science and math
+credits as their peers who take the academic program only. In math-
+enhanced CTE programs, students score as well or better in geometry and
+algebra 2; 60 percent of these go on to college (half of these in pre-
+baccalaureate technical programs).
+ Career and technical education represents a necessary and
+successful avenue for students to be prepared for the working world and
+find meaningful employment. In Illinois, CTE program data shows that 60
+percent of Illinois students took at least one CTE course and that 95
+percent of students who complete two or more CTE courses graduate.
+Finally, 52 percent of CTE students enroll in college after high
+school. It should also be noted that 38 percent of community college
+enrollments are CTE students.
+ Eliminating career and technical education funding will gravely
+harm the ability of the United States to remain competitive in the
+global market and will seriously hinder the success of students unable
+to attend a traditional 4-year college or university.
+ I urge the Committee and the Congress to fully fund CTE programs
+and continue our commitment to all forms of education.
+
+Prepared Statement of Hon. Frank R. Wolf, a Representative in Congress
+ From the State of Virginia
+
+ Mr. Chairman, thank you for the opportunity to submit a statement
+as the House Budget Committee meets to consider the House Budget
+Resolution for fiscal year 2006.
+ I urge your support for pay parity between military and civilian
+employees. There is no reason for either Congress of the Administration
+to support adjusting military and civilian pay by different amounts. It
+is only equitable that both military and civilian employees receive the
+same pay increase this year recommended at 3.1 percent in the
+President's budget.
+ As a former Federal employee, I am keenly aware of the invaluable
+contributions Federal employees make to our country. As we make
+decisions on the budget resolution, I believe we must ensure that our
+Federal workforce is treated with fairness and respect.
+ The Pentagon stated in the proposed regulations for the new
+National Security Personnel System that ``NSPS is essential to the
+department's efforts to create an environment in which the total force,
+uniformed personnel and civilians, think and operates as one cohesive
+unit.'' What kind of message does it send to those civilians if they
+receive disparate pay increases from their military colleagues?
+ A uniform pay increase is necessary to recruit and retain
+professional employees at a time when many Federal employees are
+eligible for retirement and new personnel systems are being
+implemented. The Federal Government is the nation's largest employer.
+We need to attract and retain the best and brightest for Federal
+service. What kind of message does it send to the Federal workforce
+about the jobs they do when we say fairness isn't a part of their pay
+plan?
+ Since 9/11 it has become ever more vital to have a thriving civil
+service. Now more than ever in our nation's history we must take action
+that reflects the contributions both our civilian and military
+employees are making--in the war on terrorism and as well as the daily
+operations of the Federal Government in providing the services upon
+which every American relies.
+ Federal employees are on the front lines of the war
+against terror.
+ The first American to die in Afghanistan was a CIA agent
+from my district.
+ Federal employees died in the terrorist attacks of
+September 11.
+ Federal employees are in Iraq helping the Iraqi people to
+build a free nation.
+ Throughout the world, America's civil servants are serving
+our government and our people, often in dangerous locations.
+ How can we tell them we will not give them a fair and equitable pay
+raise that recognizes their hard work, dedication, and sacrifice?
+ Closer to home, Federal employees are performing duties that
+deserve recognition with a pay raise equal to that provided for the
+military.
+ What do we tell the Federal employees who are cancer researchers at
+NIH? My parents died of cancer. We all know of individuals and families
+struck by cancer and other illnesses.
+ Don't we want to be able to recruit and keep researchers at places
+like NIH to improve health care and save lives? Pay parity is essential
+to allow places like NIH to be able to bring on board renown experts to
+find cures and treatment for diseases which touch everyone.
+ What do we tell Federal employees who are FBI agents? When a child
+is kidnaped, FBI agents are there to help find the missing child and
+bring the kidnappers to justice.
+ What do we tell the Federal employees who work to answer questions
+about Social Security benefits for our nation's seniors?
+ What do we tell border patrol agents, DEA agents, Federal prison
+guards, U.S. embassy staff, nurses at veterans hospitals, space center
+engineers, and the list goes on?
+ We are asking Federal employees to take on more and more
+responsibility every day. They are on the ground in the war on
+terrorism overseas and at home.
+ Immigration officials are working to keep those who wish us harm
+out of our country. FBI agents are investigating terrorists' cells, and
+TSA agents are screening passengers and baggage at airports. They are
+all playing a vital role in keeping us safe and deserve to be treated
+with respect and fairness.
+ Providing a pay raise for Federal employees that is equal to a pay
+raise for military employees does not increase the budget. Agencies
+manage pay increases through their regular budgets.
+ Congress has traditionally provided pay parity for America's
+military and civilian Federal employees. We have a long tradition in
+the Congress of recognizing the valuable contributions of our Federal
+employees in both the military service and in the civil service by
+providing fair and equitable pay adjustments. This is not the time to
+shirk our duty to the civil service.
+
+ Mr. Portman. Welcome, Mr. Petri.
+ I would like to turn to Mr. Spratt to see if he has any
+opening comments for this afternoon.
+ Mr. Spratt. Mr. Chairman, we look forward to the testimony
+of all of our colleagues. And I might simply say the
+temperature in the room should not be interpreted to mean we
+are giving you a chilly reception.
+ Mr. Petri. You are cutting the heating bill a little?
+ Mr. Portman. Mr. Petri will give us some good input. To our
+colleague, the floor is yours for 10 minutes.
+
+ STATEMENT OF THE HON. THOMAS E. PETRI, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF WISCONSIN
+
+ Mr. Petri. Thank you very much. And I am testifying on
+behalf of the Transportation and Infrastructure Committee, and
+I know I speak for my chairman, Don Young. Thank you for
+extending him, me and the committee this courtesy.
+ Enactment of H.R. 3, the Transportation Equity Act (TEA): A
+Legacy For Users, continues to be our committee's highest
+legislative priority for the upcoming year. Recently the
+committee unanimously approved its Views and Estimates for the
+2006 budget, including a recommendation that highway safety,
+motor carrier safety and transportation programs be funded at
+$46.6 billion for 2006. This is slightly higher than the
+administration's proposed funding level for 2006. But the
+committee's 6-year reauthorization proposal recently introduced
+as H.R. 3 is consistent with the administration's 6-year
+proposed funding level of $283.9 billion. The bill that is
+coming up next week we hope will be in line with the budget
+submission from the administration.
+ Although the administration's proposal is not sufficient to
+meet highway and transit investment needs as estimated by its
+own Department of Transportation, our committee considers the
+$283.9 billion level to be an adequate point at which to resume
+deliberations on the surface transportation reauthorization
+bill. So we have adopted this funding level for purposes of
+House passage of H.R. 3 and request that the budget resolution
+assume at least the H.R. 3 funding levels.
+ In addition, in order to preserve maximum flexibility in
+conference, we ask that a contingency procedure for surface
+transportation again be included in the budget resolution to
+allow spending to be increased to the extent such spending is
+offset by new receipts to the Highway Trust Fund. We remain
+committed to ensuring that the Highway Trust Fund revenues are
+adequate to meet investment needs and are made fully available
+for their intended purposes. And toward that end, one of the
+Transportation Committee's highest priorities is the
+continuation of the firewalls and guaranteed funding levels
+that were established in TEA 21, including the transit general
+fund guarantee. We appreciate your continued cooperation on
+these key components of the reauthorization effort.
+ In addition to the surface transportation issues I have
+already discussed, I would like to highlight the committee's
+recommendations regarding aviation funding. This year the
+number of air travelers is expected to return to and surpass
+the record high levels that were experienced prior to 9/11. In
+2000, we saw one in every four commercial flights delayed,
+canceled or diverted. Without improvements in the aviation
+system capacity, airline delays will quickly return to the
+levels experienced in 2000.
+ Under the President's budget, aviation capital programs
+would receive $5.45 billion, $1.2 billion less than the $6.65
+billion levels guaranteed by the Vision 100--Century of
+Aviation Reauthorization Act. This proposed reduction is
+extremely shortsighted and will only serve to accelerate the
+impending crisis of congestion and delays in our Nation's
+aviation system.
+ To ensure that our aviation system remains safe, reliable,
+and efficient, we recommend that aviation capital programs be
+funded at least at the $6.65 billion level guaranteed by Vision
+100. The $1.2 billion shortfall between the President's budget
+and the Vision 100 guaranteed level must be corrected in the
+budget year 2006 Transportation-Treasury-HUD appropriations
+bill, or the bill will be subject to the point of order that
+protects the Vision 100 authorization level. Therefore, for
+both substantive and procedural reasons, it is important that
+the budget resolution assume full funding of the aviation
+capital programs.
+ For more comprehensive information on the committee's
+recommendations, I refer you to the Views and Estimates adopted
+by the committee on February 16, 2005. These Views and
+Estimates demonstrate that we are significantly underfunding
+many of our transportation and infrastructure investments from
+surface transportation, aviation, to ports, inland waterways,
+clean water infrastructure, and public buildings. These needs
+exceed the revenues available.
+ Underinvestment in our Nation's transportation
+infrastructure needs is penny wise and pound foolish. Economic
+growth depends on a transportation system that moves people and
+goods efficiently. By allowing congestion to grow more and more
+each year, we are putting our economy, global competitiveness
+and our quality of life at risk.
+ While the costs may seem high, the costs of not meeting our
+Nation's transportation needs is greater still. So I urge your
+support for the Transportation and Infrastructure Committee's
+recommendations as you develop the 2006 budget resolution and
+ask unanimous consent that the full statement be included in
+the record of your proceedings.
+ [The prepared statement of Thomas E. Petri follows:]
+
+ Prepared Statement of Hon. Thomas E. Petri, a Representative in
+ Congress From the State of Wisconsin
+
+ Thank you Chairman Nussle and Ranking Member Spratt for allowing me
+to testify before you on behalf of the Transportation and
+Infrastructure Committee.
+ Enactment of H.R. 3, the ``transportation equity act: a legacy for
+users,'' continues to be the committee's highest legislative priority
+for the upcoming year.
+ Chairman Young and I appreciate your assistance during last year's
+surface transportation reauthorization process, and look forward to
+continuing to work cooperatively with you as this process moves forward
+again this year.
+ Recently, the Transportation and Infrastructure Committee
+unanimously approved its views and estimates for the 2006 budget,
+including a recommendation that highway, highway safety, motor carrier
+safety and transit programs be funded at $46.6 billion in 2006.
+ While this is slightly higher than the administration's proposed
+funding level for 2006, the committee's 6-year reauthorization
+proposal--recently introduced as H.R. 3--is consistent with the
+administration's 6-year proposed funding level of $283.9 billion.
+ Although the administration's proposal is not sufficient to meet
+highway and transit investment needs as estimated by the department of
+transportation, the committee considers the $283.9 billion level to be
+an adequate point at which to resume deliberations on the surface
+transportation reauthorization bill. Therefore, we have adopted this
+funding level for purposes of house passage of H.R. 3, and request that
+the budget resolution assume at least the H.R. 3 funding levels. In
+addition, in order to preserve maximum flexibility in conference, we
+ask that a contingency procedure for surface transportation again be
+included in the budget resolution to allow spending to be increased to
+the extent such spending is offset by new receipts to the highway trust
+fund.
+ We remain committed to ensuring that highway trust fund revenues
+are both adequate to meet highway and transit investment needs, and
+made fully available for their intended purposes. Toward that end, one
+of the transportation committee's highest priorities is the
+continuation of the firewalls and guaranteed funding levels that were
+established in TEA 21, including the transit general fund guarantee. We
+appreciate your continued cooperation on these key components of the
+reauthorization effort.
+ In addition to the surface transportation issues I have already
+discussed, I would like to highlight the committee's recommendation
+regarding aviation funding needs.
+ This year, the number of air travelers is expected to return to and
+surpass the record-high levels that were experienced in 2000, when one
+in every four commercial flights was delayed, cancelled, or diverted.
+Without improvements in aviation system capacity, airline delays will
+quickly return to the levels experienced in 2000.
+ Under the president's budget, aviation capital programs would
+receive $5.45 billion, $1.2 billion or 18 percent less than the $6.65
+billion level guaranteed by the vision 100--century of aviation
+reauthorization act.
+ This proposed reduction is extremely shortsighted and will only
+serve to accelerate the impending crisis of congestion and delays in
+our nation's aviation system. To ensure that our aviation system
+remains safe, reliable, efficient, and able to accommodate the
+increased number of passengers anticipated in the near future, the
+committee recommends that aviation capital programs be funded at least
+at the $6.65 billion level guaranteed by vision 100.
+ The aviation funding guarantees are enforced through points of
+order, most notably the ``capital priority'' point of order. This point
+of order was intended to ensure that aviation capital needs are not
+shortchanged in a budget process that tends to defer needed long-term
+investments while focusing on meeting more immediate needs.
+ The $1.2 billion shortfall between the President's budget and the
+vision 100 guaranteed level must be corrected in the FY 2006
+Transportation-Treasury-HUD appropriations bill or the entire bill will
+be subject to this point of order in both the House and the Senate.
+Therefore, for both substantive and procedural reasons, it is important
+that the budget resolution assume full funding of the aviation capital
+programs.
+ I would also like to draw your attention to several other
+transportation-related proposals in the President's budget that we
+believe are either politically unsustainable or unwise. If these
+proposals are assumed in the budget resolution, they will create a
+major shortfall in the Appropriations Committee's 302(a) allocation.
+ For example, a $1.9 billion shortfall will be created if the budget
+resolution assumes enactment of the administration's proposed increase
+in the aviation security fee. For reasons detailed in the views and
+estimates we submitted to you last week, we believe this fee increase
+places an unfair burden on air travelers. In addition, we believe it
+has little chance of enactment at this time, as U.S. Airlines enter
+their fifth consecutive year of multi-billion dollar losses.
+ Just as unrealistic is the administration's proposal to zero out
+Amtrak. Although Amtrak is a perennial favorite of budget cutters, its
+funding has been consistently restored during the appropriations
+process. This proposal has little chance of enactment. If the budget
+resolution assumes liquidation of Amtrak, but Amtrak funds are
+subsequently restored during the appropriations process, other
+important programs will have to be cut significantly in order to make
+up the difference.
+ In addition, the President's budget proposes to cut funding for the
+clean water state revolving fund and the army corps of engineers. While
+these proposals would produce smaller funding shortfalls, they are
+still of significant concern to the transportation and infrastructure
+committee.
+ For more comprehensive information on the committee's
+recommendations, I refer you to the views and estimates adopted by the
+committee on February 16, 2005. These views and estimates demonstrate
+that we are significantly under-funding many of our transportation and
+infrastructure investments, from surface transportation and aviation to
+ports, inland waterways, clean water infrastructure, and public
+buildings.
+ Under-investment in our nation's transportation and infrastructure
+needs is penny-wise and pound-foolish. Economic growth depends on a
+transportation system that moves people and goods efficiently. By
+allowing congestion to grow more and more each year, we are putting our
+economy, global competitiveness, and quality of life at risk.
+ While the cost of meeting our nation's transportation and
+infrastructure investment needs may seem high, the cost of not meeting
+them is greater still. I urge your support for the Transportation and
+Infrastructure Committee's recommendations as you develop the 2006
+budget resolution.
+
+ Mr. Portman. I thank our colleague from the Transportation
+Committee, and I appreciate your testimony today and commend
+you for the fact that you are patient and persistent in coming
+back again with a highway bill that we will be able to take up
+shortly in the House.
+ You indicated that the number will likely be the $283.9
+billion that the President had indicated was acceptable. Is
+that still your understanding, first of all, that that would be
+your number, and, second, that the administration would be
+amenable to that number?
+ Mr. Petri. Yes.
+ Mr. Portman. We appreciate the input on the aviation
+capital programs. Are you going to make changes in the trust
+fund in the process of this transportation bill?
+ Mr. Petri. No.
+ Mr. Portman. Again, thank you for testifying today before
+us and giving us your input. We look forward to having your
+full statement in the record.
+ Mr. Spratt, any questions?
+ Mr. Spratt. Mr. Petri, I don't have the information at my
+disposal. It is my recollection that the President requested a
+fairly substantial increase in fees to be applied to the
+Transportation Security Administration,
+ Mr. Petri. I believe that is right. That is obviously in
+another committee's jurisdiction.
+ Mr. Spratt. OK. Homeland Security?
+ Mr. Petri. Yes.
+ Mr. Spratt. Do you have any opinion, since aviation does
+fall within your purview, do you have the opinion of what the
+impact of those fees might be upon the commercial aviation
+industry?
+ Mr. Petri. We know there are bankruptcies there. There are
+significant tension issues. They have experienced significant
+increases in ticket fees and other charges in the past few
+years to fund at least security problems. So the impact cannot
+be good.
+ Mr. Spratt. Thank you very much.
+ Mr. Portman. Mr. Conaway.
+ Mr. Conaway. No questions.
+ Mr. Portman. Thank you, Chairman Petri. We appreciate your
+testimony.
+ And our next witness is Mr. Gibbons. Are you prepared?
+ Mr. Gibbons. I am indeed.
+ Mr. Portman. Move in the middle if you like. I know you had
+initially thought you might be joined by Mr. Bishop and Ms.
+McMorris. I assume they are not going to be joining you at the
+outset?
+ Mr. Gibbons. Mr. Otter is here as well.
+ Mr. Portman. Do you want to join us at the table, Mr.
+Otter?
+ And, Mr. Gibbons, we appreciate your testimony, and you
+have 10 minutes.
+
+STATEMENT OF THE HON. JIM GIBBONS, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF NEVADA
+
+ Mr. Gibbons. Thank you, Mr. Chairman, and I will make my
+comments fit within the time allotted there and would ask that
+my full statement be admitted into the record.
+ Mr. Portman. Without objection.
+ Mr. Gibbons. Mr. Chairman, I first want to thank you and
+the members of this committee for inviting us to testify today
+about issues that directly affect many Western States, but,
+most importantly, my home State of Nevada. And I understand the
+challenges that you face in crafting the 2006 budget
+resolution, and I am grateful that you have given us an
+opportunity to be involved in that process.
+ First and foremost, let me speak on a matter of direct
+importance to the State of Nevada. The President's budget
+proposal to redirect revenue from Southern Nevada Public Lands
+Management Act to the Federal Treasury is the issue at hand
+here. I stand united with the entire Nevada delegation in
+opposition to this proposal.
+ Revenues from the land sales in Nevada should stay in
+Nevada, just as the Southern Nevada Public Lands Management Act
+(SNPLMA) mandates and Congress intended when the act was
+passed. The funding Nevada receives under the Southern Nevada
+Public Lands Management Act is critically needed to support
+Nevada's general education fund, conservation efforts, habitat
+protection, and Lake Tahoe restoration. This revenue helps
+address the challenges facing Nevada due to the development
+that SNPLMA, the acronym we use, has allowed, such as the many
+new schools that must be built and the protection of sensitive
+lands near those new communities. This funding is even more
+critical when you consider that over 91 percent of the State of
+Nevada is owned and managed by the Federal Government and,
+therefore, removed from any property tax rolls.
+ Additionally, Nevada faces Federal tax share burdens which
+are unfairly high. For every dollar in Nevada taxes that goes
+to Washington, DC, Nevada receives only 70 cents back to our
+communities. The administration's proposal to divert the
+revenue from SNPLMA to the Federal Treasury means Nevada would
+be sending more money to Washington, DC. And getting even less
+back. This de facto tax adds insult to injury by robbing Peter
+to pay Paul with money generated by Nevadans in Nevada for
+Nevada. Therefore, I respectfully request that the Southern
+Nevada Public Lands Management Act funds remain in Nevada where
+they belong.
+ I must also express my strong opposition to the President's
+proposed funding levels for the Yucca Mountain nuclear waste
+repository. I would be remiss not to address that issue. And I
+realize that the United States needs to find a solution to the
+nuclear waste problem, and I am committed to that goal;
+however, Yucca Mountain is not the answer.
+ Every week that goes by, and with every dollar spent in an
+attempt to make Yucca Mountain feasible, additional flaws that
+would render the project unsuitable for licensing are exposed.
+Scientific, public safety, health, and environmental concerns
+surrounding the proposed waste repository are well documented.
+The future of nuclear power should not rely on a hole in the
+ground in the Nevada desert. Rather it should rely on sound
+science and new, innovative technologies. For the good of our
+entire Nation, the Budget Committee must reject the unnecessary
+and wasteful $651 million budgeted for Yucca Mountain, and
+under no circumstances should the funding for the project be
+taken off budget or removed from the tight fiscal control of
+Congress.
+ On a different topic, as Westerners, we have a very unique
+relationship with the Federal Government. In Nevada, the
+Federal Government owns about 65 million acres of land, which,
+as I mentioned, equates to over 91 percent of the State.
+Contrast that with the Chairman's home State of Iowa where
+close to 300,000 acres are owned by the Federal Government,
+equa less than 1 percent of Iowa's total land mass.
+ More often than not in the West, the Federal Government
+isn't just our neighbor, it is the entire neighborhood. With
+such a large Federal presence comes significant challenges,
+especially in our rural communities. The Payment in Lieu of
+Taxes Program (PILT) helps to compensate for the inability of
+our rural communities to generate tax revenues for schools and
+local infrastructure because of Federal land ownership. Since
+Nevada cannot raise revenue from over 91 percent of our State,
+PILT funding is vital, yet the program has never been
+adequately funded.
+ The President's proposal to decrease PILT funding by $26
+million will only exacerbate the current funding discrepancy,
+and the burden to our rural communities grows even greater. I
+find this disheartening and would encourage you to include full
+funding of PILT in your fiscal 2006 budget report.
+ Another discouraging aspect of the proposed budget is $154
+million earmark for land acquisition. In an era where we have
+to dedicate more resources to battling the war on terror, it is
+irresponsible, I believe, for the Federal Government to spend
+more money on further land acquisition. Land management
+agencies do not have enough money to manage the land they
+currently have. Additional land acquisition places a greater
+burden on the Federal agencies charged with management of these
+lands as well as the communities that lose that tax base. Land
+management agencies should focus on getting their Federal house
+in order prior to expanding their reach. If, as a Congress, we
+can get Federal land acquisition under control and fully fund
+Payment in Lieu of Taxes, we will make sincere progress in
+preventing a decrease in the quality of life in our rural
+communities.
+ Mr. Chairman, I hope during the next few weeks you can
+examine these important issues that negatively affect many
+people in the Western United States. And I want to thank you
+again for this opportunity to share my views, and I would yield
+back the balance of my time.
+ Mr. Portman. Thank you, Chairman Gibbons, and we appreciate
+your bringing these issues to our attention.
+ [The prepared statement of Jim Gibbons follows:]
+
+ Prepared Statement of Hon. Jim Gibbons, a Representative in Congress
+ From the State of Nevada
+
+ Mr. Chairman, I would like to first thank you and the members of
+this committee for inviting me to testify today about issues that
+directly impact my home state of Nevada. I understand the challenges
+that you face in crafting the 2006 Budget resolution, and I am grateful
+that you have given us the opportunity to be involved in that process.
+ First and foremost, let me speak on a matter of direct importance
+to the state of Nevada. The President's Budget proposed to redirect
+revenue from the Southern Nevada Public Lands Management Act (SNPLMA)
+to the Federal treasury. I stand united with the entire Nevada
+delegation in opposition to this proposal.
+ Revenues from land sales in Nevada should stay in Nevada, just as
+SNPLMA mandates and as Congress intended. The funding Nevada receives
+under SNPLMA is critically needed to support Nevada's general education
+fund, conservation efforts, habitat protection, and Lake Tahoe
+restoration. This revenue helps to address the challenges facing Nevada
+due to the development SNPLMA has allowed-such as the many new schools
+that must be built and the protection of sensitive lands near new
+communities. This funding is even more critical when you consider that
+over 91 percent of the state of Nevada is owned by the Federal
+Government and thereby removed from any property tax rolls.
+ Additionally, Nevada's Federal tax share burden is unfairly high.
+For every dollar in Nevada taxes that goes to Washington, DC, only 70
+cents goes back to our communities. The administration's proposal to
+divert revenue from SNPLMA to the Federal treasury means Nevada would
+be sending more money to Washington, DC and getting even less back.
+This defacto tax adds insult to injury by robbing Peter to pay Paul
+with money generated by Nevadans, in Nevada, for Nevada. Therefore, I
+respectfully request that SNPLMA funds remain in Nevada where they
+belong.
+ I must also express my strong opposition to the President's
+proposed funding levels for the Yucca Mountain nuclear waste repository
+site. I realize that the United States needs to find a solution to the
+nuclear waste problem * * * and I am committed to that goal. However,
+Yucca Mountain is not the answer.
+ With every week that goes by and with every dollar spent in an
+attempt to make Yucca mountain feasible, additional flaws that should
+render the project unsuitable for licensing are exposed. The
+scientific, public safety, health, and environmental concerns
+surrounding the proposed waste repository are well-documented. The
+future of nuclear power should not rely on a hole in the ground in the
+Nevada desert; rather it should rely on sound science and new,
+innovative technologies. For the good of our entire nation, the Budget
+Committee must reject the unnecessary and wasteful $651 million
+budgeted for Yucca Mountain. And under no circumstances should the
+funding for the Yucca Mountain Project be taken off-budget or removed
+from the tight fiscal control of Congress.
+ On a different topic, as westerners, we have a very unique
+relationship with the Federal Government. In Nevada, the Federal
+Government owns about 65 million acres of land, which as I mentioned
+earlier, equates to over 91 percent of the state. Contrast that with
+the Chairman's home state of Iowa, where close to 300,000 acres are
+owned by the Federal Government--equaling less than 1 percent of Iowa's
+total land mass.
+ More often than not, in the west, the Federal Government isn't just
+our neighbor, it's the entire neighborhood. With such a large Federal
+presence comes significant challenges, especially in our rural
+communities. The PILT (Payment in Lieu of Taxes) program helps to
+compensate for the inability of our rural communities to generate tax
+revenue for schools and local infrastructure because of Federal land
+ownership. Since Nevada cannot raise revenue from over 91 percent of
+our state, PILT funding is vital * * * yet, the program has never been
+adequately funded.
+ The President's proposal to decrease PILT funding by $26 million
+will only exacerbate the current funding discrepancy and burden our
+rural communities even more. I find this disheartening and would
+encourage you to include full funding of PILT in your FY'06 budget
+report.
+ Another discouraging aspect of the proposed Budget is the $154
+million earmark for land acquisitions. In an era where we have to
+dedicate more resources to battling the War on Terror, it is
+irresponsible for the Federal Government to spend more money on further
+land acquisition. Land management agencies do not have enough money to
+manage the land they currently have. Additional land acquisition places
+a greater burden on the Federal agencies charged with management of
+these lands as well as the communities that lose that tax base. Land
+management agencies should focus on getting the Federal house in order,
+prior to expanding their reach. If as a Congress we can get Federal
+land acquisition under control and fully fund PILT, we will make
+sincere progress in preserving the quality of life in our rural
+communities.
+ Mr. Chairman, I hope that during the next few weeks that you
+carefully examine these important issues that negatively impact many
+western states. Again, thank you for this opportunity to share my
+views.
+
+ Mr. Portman. You mentioned that Iowa had only 300,000
+acres. Ohio is probably similar.
+ Mr. Gibbons. It should be, I guess.
+ Mr. Portman. But probably a similar percentage, and these
+are not issues many of us who are not in Western States deal
+with everyday.
+ We appreciate the input on the Southern Nevada Public Lands
+Management Act, but also on Yucca Mountain and the PILT issue,
+which is one that most districts probably deal with in one way
+or another, and then the issue of future land acquisition.
+ I would like to request at this point before we turn it
+over to Mr. Spratt that Mr. Otter and Mr. Cannon have a chance
+to make comments within the time frame. You were going to share
+these 10 minutes. We have 3 minutes and 17 seconds remaining.
+You and Mr. Otter have 10 minutes separately. So if you would
+like to--Mr. Gibbons indicated you with were him on this
+testimony, but do you have different issues?
+ Mr. Otter. No. I will use those 3 minutes that he didn't
+and plus my own 10.
+ Mr. Portman. Why don't we do this. Let us turn it over to
+Mr. Spratt and Mr. Conaway and see if they have questions for
+Mr. Gibbons to allow him to leave, and then we will turn next
+to Mr. Cannon and Mr. Otter, assuming this is on the same
+general topic. And then we are going to go to Ms. Berkley and
+Mr. LoBiondo.
+ Mr. Spratt, any questions?
+ Mr. Spratt. Mr. Gibbons, just two questions. First of all,
+I listened carefully, but do you have anything to say about the
+change in pricing by the Power Marketing Administration? Does
+that affect Nevada?
+ Mr. Gibbons. I did not change that, but I will be happy to
+look into that to see if there is an impact on the people of
+the State of the Nevada, especially the rural communities that
+are affected. But power marketing was not part of my comment.
+ Mr. Spratt. Secondly, what would you support in the way of
+funding for Yucca Mountain?
+ Mr. Gibbons. Zero.
+ Mr. Spratt. That is a succinct answer. Thank you, sir.
+ Mr. Portman. Mr. Conaway.
+ Mr. Conaway. Mr. Gibbons, in Texas we have very little
+Federal lands, but we have school lands that support the
+educational process. You mentioned that the money from the land
+sales supports education in Nevada. Can you give me a sense of
+the percentage of that money?
+ Mr. Gibbons. Out of the Southern Nevada Public Lands
+Management Act, 5 percent goes to the Permanent Education Trust
+Fund in the State of Nevada; 10 percent goes for the Southern
+Nevada Water Authority; and the balance, 85 percent, is given
+to the Department of Interior budget to do with as they speak.
+And we are talking about $1.6 billion from the sale of land in
+the most recent years.
+ Mr. Conaway. This is the State department of interior or
+U.S.?
+ Mr. Gibbons. U.S.
+ Mr. Conaway. I don't have any other questions.
+ Mr. Portman. Mr. McHenry.
+ Mr. McHenry. No.
+ Mr. Portman. Do you all have any comments you would like to
+make? You have 1 minute and 14 seconds remaining.
+
+ STATEMENT OF THE HON. CATHY MCMORRIS, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF WASHINGTON
+
+ Miss McMorris. Thank you, Mr. Chairman.
+ I am Cathy McMorris from Washington State and really
+appreciate the time to share with you one concern. But first of
+all, I am very supportive of the effort to cut the deficit in
+half, and I appreciate we are going to have to be making some
+very difficult decisions, but like everyone else who is here, I
+have one issue that is especially concerning to Washington
+State and the Pacific Northwest, and it is related to what
+would amount to be significant rate increases for the
+Bonneville Power Administration (BPA), and this is on top of
+the fact that we had an energy crisis in early 2001.
+ We have lost a lot of jobs related to that impact. It
+amounted to a 36 percent increase in retail electric rates,
+increases during that time period, 1999 to 2002. And this would
+basically mean that we would be facing similar rate increases
+moving forward. During that time period, we lost 72,000 jobs.
+We saw unemployment go up from 5 to 7 percent. We lost 10
+aluminum smelters, and there are only 3 more that are partially
+operating today. And I am very concerned that if we faced more
+electric rate increases, that we would lose those aluminum
+smelters. Without a doubt, it would have significant impacts on
+our economy, and I also believe it would have significant
+impacts on our tax revenues.
+ Another piece of this proposal is counting Bonneville's
+third-party debt cap. The administration in its proposal is
+raising the debt cap by $200 million, and there is a lot of
+uncertainty as to what the impact of that would be, and the
+fact that it would also impact BPA's ability to expand the
+transmission system, mitigate for fish and wildlife, and
+acquire cost-effective conservation and renewable resources.
+ I recognize that we have some difficult decisions. I
+believe this part of the proposal would actually cost jobs and
+stifle economic growth, and I ask for your consideration in
+removing this part from the budget. Thank you.
+ [The information referred to follows:]
+
+Prepared Statement of Hon. Cathy McMorris, a Representative in Congress
+ From the State of Washington
+
+ Thank you for the opportunity to come before you.
+ I am here today to talk about the Administration's proposal to
+increase power rates in the Pacific Northwest.
+ The Pacific Northwest was hard hit by the Western electricity
+crisis of 2001, the economic recession and the technology slump.
+ I would like to take a moment to give some examples of what this
+increase will mean to the region should it be implemented.
+ The increase in retail electricity rates in the region between 1999
+and 2002 was 36 percent--the same order of magnitude as the expected
+impacts of the market-pricing proposal.
+ The region has been dramatically affected by the rising cost of
+energy. For example:
+ Between 2000 and 2003, the region lost 72,000 jobs.
+ Unemployment rates increased from 5 percent to more than 7 percent.
+In both 2002 and 2003, Oregon and Washington had the highest
+unemployment rates in the nation with the exception of Alaska.
+ The region's ten aluminum smelters shut down. Only three aluminum
+plants are partially operating today. Price increases caused by the
+Administration's proposal would certainly push even those plants over
+the edge, and a regional industry that recently provided half of the
+U.S. aluminum production and one-tenth of the world production would be
+gone.
+ Here is a summary of the effects of the increased Bonneville market
+rates:
+
+ CHANGE IN REGIONAL ELECTRICITY COSTS
+
+ $1.4 billion increase in cost of power from Bonneville
+ $300 million increase in cost of power to residential and
+ small farm IOU customers
+ $1.7 billion total increase (spread over 3 years)
+
+ EFFECT ON REGIONAL ECONOMY
+
+ $1.3 billion dollar decrease in personal income
+ 13,000 decrease in regional jobs
+ Additional effects on aluminum and other energy intensive
+ industry
+ Decreased income and jobs in other regions
+
+ EFFECT ON TAX REVENUES
+
+ $217 million dollar decrease in Federal personal income tax
+ revenues
+ Additional loss in Federal revenues corporate profits taxes
+ $59 million dollar decrease in state personal tax revenues
+ Additional loss in state revenues from corporate taxes
+
+ Another important component of the Administration's proposal is
+counting Bonneville's third party debt toward the cap on its borrowing
+authority. BPA's borrowing authority is raised by $200 million in the
+proposal, but the effects of the redefinition of debt are unclear. If
+BPA's ability to borrow is severely constrained, it will affect its
+ability to carry out much needed maintenance and expansion of the
+transmission system as well as fulfill its statutory responsibilities
+to mitigate for fish and wildlife impacts and acquire cost effective
+conservation and renewable resources.
+ I hope my testimony today demonstrates the negative effect this
+will have on the Pacific Northwest. I urge you to consider these
+examples. This proposal will cost jobs, cost consumers and stifle
+economic growth. Our region's economy was built on inexpensive hydro
+power from our dams and rivers. It is unfair to increase our region's
+power rates. We need to preserve the natural resources that sustain the
+economies of the Pacific Northwest.
+ Again, I thank the Chairman.
+
+ Mr. Portman. Thank you for your testimony. Mr. Spratt.
+ Mr. Spratt. I have none.
+ Mr. Portman. The Power Marketing Association issue is one
+which will be looked at in the individual committees of
+jurisdiction, and we appreciate your input today.
+ Mr. Conaway.
+ Mr. Conaway. With respect to the power problems, California
+chose to not build capacity to generate. Can you shed us
+Washington State's attitude toward additional power generation
+capacity for electricity during that time frame? Are you buying
+power from other places?
+ Miss McMorris. We have--the biggest challenges that are
+facing Washington State relates to transmission and getting the
+power after it is generated. We have had challenges in
+Washington State in actually generating new power, too.
+ At the State level we have been trying to work through some
+of the permitting issues, especially those that have caused us
+some difficulty, but the biggest challenge is relating to
+transmission issues, and this proposal would make it even more
+difficult because BPA oversees the power transmission system.
+ Mr. Conaway. There is some sense of recognition that
+additional generating capacity within the State would help?
+ Miss McMorris. Absolutely. And I would remind you that
+Washington State has many hydroelectric dams. They are--it has
+been the source of very low power rates in the past, and we
+have worked very hard to protect those dams and make sure we
+are generating electricity and adding to the system.
+ Mr. Portman. Thank you, Ms. McMorris.
+ Gentlemen, ladies, I am going to make a revision in our
+timing here, and I won't make Mr. Otter and Mr. Cannon very
+happy, but I am informed that Mr. LoBiondo was the next Member
+in line by the staff. He has a plane to catch. And then Ms.
+Berkley was next.
+ I was told by Mr. Gibbons that you all were together, so I
+mistakenly thought you were going to testify with him. If you
+two gentlemen would not mind being patient, we will let these
+other Members--so if it is with the indulgence of the
+committee, I would like to go in order of attendance here, and
+that is Mr. LoBiondo, then Ms. Berkley, Mr. Cannon and Mr.
+Otter together, and then Mr. Bishop. I know, Mr. Bishop, you
+were to be part of the earlier group. If you would like to
+testify at the end of the line, we would welcome your
+testimony. But we will go to Mr. LoBiondo for 10 minutes.
+
+ STATEMENT OF THE HON. FRANK A. LOBIONDO, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEW JERSEY
+
+ Mr. LoBiondo. Mr. Chairman, thanks very much for your
+consideration. I deeply appreciate it. I appreciate the
+opportunity to testify today on the 2006 budget. I certainly
+support the effort to reduce the deficit and move back to a
+balanced budget; however, I think we must do so in a very
+responsible way that fairly balances our priorities and
+provides for improved homeland and economic security for our
+country.
+ As the committee is aware, the President has requested an 8
+percent increase in the overall Coast Guard budget. I chair the
+Coast Guard and Maritime Subcommittee, and I just came from a
+hearing where we were reviewing the Service's budget request,
+and I can tell you that every penny of this modest increase is
+desperately needed. The Service continues to be tasked with
+doing more and more homeland security and homeland security
+responsibilities while struggling to maintain what are
+considered very traditional missions that have great
+significance to our Nation, and as their operation tempo
+continues to increase, and because of past increases, their
+aging assets are rapidly failing. Our Dolphin helicopter
+engines are literally failing in flight, and an alarming
+percentage of the cutter fleet are suffering from broken
+propulsion systems and breached hulls, a very serious condition
+which not only has resulted in fiscal year 2004 of 742 patrol
+days that were lost because of these asset failures, but, maybe
+more importantly, they are putting the lives of our Coast Guard
+men and women at serious risk.
+ Fortunately, the Deepwater program is working to replace
+the Service's aging fleet of ships and aircraft with more
+flexible assets able to meet the multimission challenges of
+today. Unfortunately, funding for the program has been
+insufficient to keep up with the original 20-year procurement
+schedule. We have slipped significantly, and Deepwater needs to
+be accelerated. Doing so would ensure that the Coast Guard is
+able to respond to terrorist threats and to maintain a high
+level of readiness to fulfill its other vital missions. And as
+a recently released congressional report found, acceleration
+will result in approximately $4 billion in overall savings to
+the taxpayer. It is a win-win situation.
+ The Coast Guard has provided my subcommittee with $920
+million in unfunded fiscal year 2006 priorities. Deepwater
+accounts for $700 million of that. I respectfully request the
+committee make every effort to at least--to accommodate the
+administration's request for the Coast Guard, but urge the
+committee to do more for the sake of our homeland security
+efforts.
+ In addition to homeland security and other national
+priorities is improving economic opportunity. A program now
+under way is helping to accomplish this goal in my district and
+across the country. As you know, empowerment zone initiatives
+provide Federal assistance to support the comprehensive
+revitalization of designated communities across the Nation.
+ In my district in Cumberland County, NJ, empowerment zone
+is a collaborative revitalization effort among the communities
+of Bridgeton, Millville, Vineland, and Port Norris. Cumberland
+has committed nearly 100 percent of the $25 million that has
+been made available by Housing and Urban Development so far.
+Over 360 jobs have been created to date, with an additional
+1,400 that we are just on the edge of being able to lock in on
+over the next 12 to 18 months if the Federal funding source
+continues. Over 166 housing units have been renovated and
+rehabilitated, and there has been construction for areas in EZ
+neighborhoods. A $4 million loan pool has been made available
+to be reinvested back into targeted communities. And one of the
+most telling features of this program and the positive
+partnership it is is that these projects are leveraged by a
+total of about $340 million in private, public and tax-exempt
+bond funding. Put plainly, this Cumberland EZ zone has
+leveraged nearly $12 in private investment for every $1 in
+public funding, yielding great results. I think this is a
+return that the Federal Government would love to see in a
+number of different areas.
+ The administration proposes to consolidate empowerment zone
+programs in 17 other economic development programs into the
+Strengthening America's Communities Initiative. While Congress
+has not seen the details of this proposal, I am very concerned
+that the initiative may not be effective as the empowerment
+zone program, and the success we have met in Cumberland County
+and other areas will be lost, and we will slide back. So until
+Congress has an opportunity to better review and consider the
+administration's proposal, I urge the committee to continue to
+accommodate full funding for empowerment zone.
+ Economic security is also dependent on providing our youth
+with the skills they will need to be successful as they move
+into the workforce. That is why I am very concerned the budget
+proposes to eliminate Federal funding for vocational education.
+The Perkins program is the only federally funded program for
+students who pursue vocational and technical education at the
+secondary and community college level. These institutions
+strive to prepare students for employment in the higher-paying
+skilled jobs of the future. The elimination of this funding
+would cost New Jersey nearly $30 million in direct career and
+technical assistance. Without these funds, vocational and
+technical schools in my State would not be able to effectively
+continue the professional development of their teaching core
+and support staff. And in my part of the State, which is a
+third of the State geographically, it is the rural part of the
+State, we lag behind a lot of other indicators in north Jersey,
+and because of infrastructure concerns and a lot of other
+components, we have an unemployment rate that is nearly double
+the rest of the State. We don't have the high-tech jobs that
+come into my part of the district, so vocational education
+takes on an added responsibility for kids who wouldn't have an
+opportunity otherwise.
+ I was very pleased to see the administration's budget
+include a request to increase the military death benefit from
+$12,000 to $100,000, but I would like to see this program
+expanded. Limiting the payout to only those killed on active
+duty is arbitrary and wrong. The proposal should cover all of
+our brave servicemembers who have made the ultimate sacrifice
+to defend our freedom, be it on the battlefield or in training.
+In my district we have lost five heroes in this war on
+terrorism, and there is never enough money to honor the
+sacrifice of these brave men and women and of their families.
+ I recognize we have significant budget restraints this
+year, but I strongly believe we must find the necessary
+resources to secure America's homeland and our economic future.
+I thank you for this opportunity to present my views.
+ [The prepared statement of Frank A. LoBiondo follows:]
+
+ Prepared Statement of Hon. Frank A. LoBiondo, a Representative in
+ Congress From the State of New Jersey
+
+ Mr. Chairman, thank you for the opportunity to testify on my
+priorities for the Fiscal Year 2006 Budget Resolution. I support the
+effort to reduce the deficit and move back to a balanced budget.
+However, we must do so in a responsible way that fairly balances our
+priorities and provides for improved homeland and economic security for
+our country.
+ As the Committee is well aware, the President requested an 8
+percent increase in the overall Coast Guard Budget. I just came from
+chairing a Coast Guard and Maritime Transportation Subcommittee hearing
+on the service's budget request and I can tell you that every penny of
+this modest increase is desperately needed. The service continues to be
+tasked with more and more homeland security responsibilities, while
+struggling to maintain their commitment to their traditional missions.
+And as their operations tempo increases, their aging assets are rapidly
+failing. Dolphin helicopter engines are literally failing in flight and
+an alarming percentage of the cutter fleet is suffering from broken
+propulsion systems and breached hulls. In fiscal year 2004, 742 patrol
+days were lost because of asset failures.
+ Fortunately, the Deepwater program is working to replace the
+service's aging fleet of ships and aircraft with more flexible assets
+able to meet the multimission challenges of today. Unfortunately,
+funding for the program has been insufficient to keep it to its
+original 20 year procurement schedule. Deepwater needs to be
+accelerated. Doing so would ensure the Coast Guard is able to respond
+to terrorist threats and maintain a high level of readiness to fulfill
+its other vital missions. And as a recently released Congressionally
+mandated report found, acceleration will result in approximately $4
+billion in overall savings to the taxpayer.
+ The Coast Guard has provided my subcommittee with $920 million in
+unfunded fiscal year 2006 priorities. Deepwater accounts for $700
+million of that. I respectfully request the Committee make every effort
+to at the very least accommodate the Administration's request for the
+Coast Guard, but I urge the Committee to do more.
+ In addition to homeland security, another national priority is
+improving economic opportunity. A program now underway is helping to
+accomplish this goal in my district and across the country. As you
+know, the Empowerment Zone initiative provides Federal assistance to
+support the comprehensive revitalization of designated communities
+across the country. It is a 10 year program that targets Federal grants
+to distressed communities for social services and community
+redevelopment and provides tax and regulatory relief to attract and
+retain businesses.
+ In my District, the Cumberland County Empowerment Zone is a
+collaborative revitalization effort among the communities of Bridgeton,
+Millville, Vineland and Port Norris. Cumberland has committed nearly
+100 percent of the $25 million that has been made available by HUD so
+far. Over 360 jobs have been created to date with an additional 1,400
+anticipated over the next 18 months, if the Federal funding source
+continues. Over 166 housing units have been renovated, rehabilitated,
+constructed or purchased in EZ neighborhoods and a $4 million loan pool
+is available to be reinvested back into the targeted communities.
+Cumberland County has funded over 120 initiatives through the EZ
+program. These projects are estimated to leverage a total of over $238
+million in private, public and tax exempt bond financing. Put plainly,
+the Cumberland EZ has leveraged nearly $12 in private investment for
+every one dollar of public funding, a remarkable achievement that
+demonstrates the success and promise of the Zone. The future success,
+viability and sustainability of the Empowerment Zone and more
+importantly, our communities, hinge on the ability to continue to
+attract and leverage private investment. It is imperative the existing
+Round II Empowerment Zones receive multi-year funding to facilitate the
+implementation of the long term strategy plan as required by each Zone.
+ The administration proposes to consolidate the Empowerment Zone
+program and 17 other economic development programs into the
+Strengthening Americas Communities Initiative. While Congress has not
+yet seen the details of the proposal, I am concerned the initiative may
+not be as effective as the Empowerment Zone program and the success we
+have met with in Cumberland County could be lost. Until Congress has an
+opportunity to better review and consider the Administration's
+proposal, I urge the committee to continue to accommodate full funding
+for the Empowerment Zone program.
+ Economic security is also dependent of providing our youth with the
+skills they will need to be successful as they move into the workforce.
+That is why I am very concerned the budget proposes to eliminate
+Federal funding for vocational education. The Perkins program is the
+only federally funded program for students who pursue vocational and
+technical education at the secondary and community college level. These
+institutions strive to prepare students for employment in the higher
+paying skilled jobs of the future. The elimination of this funding
+would cost New Jersey nearly $28 million in direct career and technical
+assistance. Without these funds, vocational and technical schools in my
+state would not be able to replace equipment needed to keep up with
+technology and workplace changes. They would not be able to implement
+programs to meet the challenges of this century, nor would they be able
+to effectively continue the professional development of their teaching
+corps and support staff. All of this translates into reduced
+opportunities for students as they move into the workforce. I urge the
+Committee to support funding for this program.
+ The Administration's budget proposes to slow the growth of Medicaid
+costs by $60 billion over the next 10 years. While I understand the
+need, especially now, to look carefully at all programs to ensure that
+they are being run cost effectively, I fear that cuts of this magnitude
+could adversely effect needed health care services for some of our most
+vulnerable citizens. We must remember that nearly 52 million children,
+poor, disabled and elderly individuals rely on Medicaid for their
+healthcare needs. Medicaid should be closely examined and policies
+developed to reform the program so it can be sustained over the long
+run.
+ I was very pleased to see the Administration's budget includes a
+request to increase the military death benefit from $12,000 to
+$100,000, but I would like to see the proposal expanded. Limiting the
+payout to only those killed on active duty is arbitrary and wrong. The
+proposal should cover all of our brave servicemembers who made the
+ultimate sacrifice to defend our freedom, be it on the battlefield or
+in training. New Jersey's Second District has lost five of it's sons in
+Operation Enduring Freedom and Operation Iraqi Freedom. No amount of
+money would is ever enough to honor the sacrifice of these and the rest
+of our servicemembers , but this proposal is a step in the right
+direction. I urge the Committee to accommodate an expanded proposal in
+the budget resolution.
+ I want to take a moment to stress the important work the Army Corps
+does to protect our coastal communities. As you know, the Army Corps
+works with state and local coastal communities to replenish eroded
+beaches and dunes to protect the residents and business owners from
+hurricane and storm damage. Building these projects has a true economic
+benefit for the Federal Government, as it reduces the amount we have to
+pay in flood insurance claims and disaster relief when storms hit these
+areas. Unfortunately, the administration has cut shore protection 60
+percent below the FY05 enacted levels and placed a series of new and
+arbitrary restrictions on funding for these projects. I strongly urge
+the Committee to reject the administration's budget request for the
+Army Corps shore protection program.
+ Finally, I respectfully request that as you prepare a new budget
+resolution, you not include an assumption of revenues from drilling in
+the Arctic National Wildlife Refuge. Revenue projections from drilling
+in the refuge are entirely speculative. Oil companies are currently
+focusing their investments on producing more oil from already developed
+fields in Alaska and in exploring areas to the west of these fields in
+the National Petroleum Reserve. As a result, it would be inappropriate
+to assume these companies would bid on refuge leases. We should not
+base our budget projects on such assumptions.
+ While I recognize that we have significant budget restraints this
+year, I strongly believe we must find the necessary resources to secure
+America's homeland and our economic future. I look forward to working
+with you to develop a budget that reflects these goals.
+
+ Mr. Portman. Thank you, Mr. LoBiondo. We appreciate your
+testimony, and with regard to all these issues, as you know,
+the Budget Committee is eager to hear your input. Ultimately
+these issues need to be resolved in your committee, at the
+Appropriations Committee level.
+ And on the Coast Guard, I will ask you one question. The
+President's budget has about a 3 percent increase for homeland
+security. I don't know how much of that the Coast Guard would
+benefit from. You indicated earlier it would be good to hold
+the President's number. Are you pleased with the President's
+policies and numbers and the budget on Coast Guard?
+ Mr. LoBiondo. I am very pleased with the President's
+policies and numbers considering what some other areas are
+suffering from, but the part I am trying to emphasize, while
+people are saying, why are you worried, you have an 8 percent
+increase there, we have to look at how their missions have been
+increased.
+ Homeland security and maritime antiterrorism with port
+security, we have only scratched the surface. The Coast Guard
+is tasked to undertake making all of our ports safe. And the
+maritime economy contributes about $750 billion to the gross
+domestic product (GDP). If we had a terrorist incident at one
+of our ports, it is likely to shut down all of our ports. The
+consequences would be dramatic. So therefore, while Coast Guard
+has an increase that we are pleased with, this is an absolute
+minimum we can consider based on the fact we have expanded what
+we are expecting them to do.
+ Mr. Portman. We appreciate your testimony on the enterprise
+zones, vocational education, and finally the expansion of the
+death benefit, and we look forward to working with you as this
+budget process unfolds.
+ Mr. Spratt.
+ Mr. Spratt. I listened to your testimony and read it more
+completely here, and I would encourage you to take a close look
+at the Democratic resolution. I think you will find a lot of
+accommodation of these points of view in the Democratic
+resolution, probably more than in the Republican resolution. So
+give us a fair shot. Empowerment zones, Coast Guard, vocational
+education, I think we will have a lot of those places covered.
+ Thank you for testifying.
+ Mr. Portman. Mr. Conaway.
+ Mr. Conaway. No.
+ Mr. Portman. With that, we will turn to Ms. Berkley, and
+thank you for your patience. You have 10 minutes. If you don't
+use it all, we will not be disappointed.
+
+ STATEMENT OF THE HON. SHELLEY BERKLEY, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEVADA
+
+ Ms. Berkley. I would like to thank you, Chairman Portman,
+and, of course, Ranking Member Spratt, for allowing me to share
+my concerns regarding the administration's budget. There are
+three issues that have a direct and negative impact on the
+State of Nevada, and I would like to share those three issues
+with you.
+ I would like to address a provision in the President's
+budget that the people of southern Nevada overwhelmingly
+oppose. The President has proposed taking 70 percent of the
+funds from the Southern Nevada Public Lands Management Act
+account to offset the deficit. This would deny Nevada at least
+$700 million a year which would be used for conservation,
+recreation, water, and education programs. I can assure you,
+Mr. Chairman, the Nevada delegation stands united against this
+proposal and will fight against this plan at every turn.
+ As Mr. Gibbons testified, almost 90 percent of the land in
+Nevada is federally owned. The Southern Nevada Public Lands
+Management Act is an innovative act that authorizes the
+proceeds from land sales in Nevada to be used to build parks
+and trails, acquire environmentally sensitive land, maintaining
+the Clark County multispecies habitat conservation plan, and
+improve the clarity of Lake Tahoe. Funds are also allocated for
+water infrastructure, always a problem in the Nevada desert,
+and education programs in the State of Nevada. The law has been
+highly successful, and Nevada residents and millions of our
+visitors have benefited from it.
+ The President should not be penalizing Nevada or seeking to
+gut this program. Rather he should be applauding Senators
+Ensign and Reid and former Senator Bryan for their ingenuity
+and honor the intent of the law. Interior Secretary Norton said
+during her many visits to the State of Nevada over the last
+several months that this is an extremely innovative program
+that should be used as an example for the rest of the Nation.
+This proposal is going to take Nevada's money, which is used
+for outstanding and important projects that would go unfunded,
+and it would go into the general fund where it would disappear,
+and nobody would benefit from this.
+ Second, I would like to address the President's proposal to
+fund the proposed nuclear waste dump site at Yucca Mountain.
+Multiple lawsuits have revealed that the proposed Yucca
+Mountain repository will not protect the health and safety of
+Americans. The Environmental Protection Agency blatantly
+disregarded the findings of the National Academy of Sciences
+that radiation levels will reach their peak levels--radiation
+levels will reach their peak in 300,000 years, and instead the
+EPA set up a 10,000-year radiation standard; the gap between
+the science and the EPA standard, a mere 290,000 years.
+ The findings have established that the storage cannisters
+that are proposed for Yucca Mountain will corrode. The study
+did not say they may corrode; it said they will corrode and
+release radioactive wastes into our groundwater, and there is
+an enormous terrorist threat and risk created by this project
+if waste is shipped across the Nation.
+ Despite the findings, the administration continues to push
+recklessly ahead with the Yucca Mountain project. The
+administration has proposed reclassifying contributions to the
+Nuclear Waste Trust Fund as offsetting collections. Not only
+does this budget gimmick funnel money to a project plagued with
+problems, it also bypasses budgetary rules that have been put
+in place to maintain the integrity of our appropriations
+process. With rapidly growing deficits, Congress must ensure
+that every dime of taxpayer money is spent responsibly. Given
+the overwhelming needs in our Nation and the limited resources
+at our disposal, it makes no sense to give special treatment to
+the Yucca Mountain project at the expense of millions of
+Americans' and our Nation's many pressing needs.
+ The President's budget also includes a provision that we
+are deeply troubled by and that directly affects the gaming
+industry. This provision requires gaming establishments to
+intercept winnings from customers who owe child support. Now,
+while I strongly support law enforcement's efforts to collect
+payments from individuals who have failed to fulfill their
+parental obligation, I oppose this provision. Under the
+proposal, a customer whose winnings exceed the threshold for
+filling out an Internal Revenue Service W2-G form would be
+subject to the Federal records check in the Child Support
+Federal Parent Locator Service. If the individual is listed in
+the system, the gaming establishment would be required to
+garnish the winnings.
+ This administration's proposal not only is very bad policy,
+it creates unreasonable demands on the gaming industry and the
+individual businesses, their employees, and sets alarming
+precedents. It forces gaming establishments to pry into
+sensitive personal information, creating obvious and serious
+invasions of privacy concerns. Gaming establishments would
+assume the investigatory and enforcement duties currently
+entrusted to law enforcement and government agencies, and the
+gaming establishments could be ultimately liable if any
+employee mistakes or misuses the information.
+ Finally, it establishes a precedent of requiring private
+businesses to directly apply the law to an individual. Should
+banks check the court records of customers making deposits and
+withdrawals? Must the car dealer invoke the same requirements
+against their customers? The answer is clearly no.
+ The administration's proposal will open the door to
+additional costly and unreasonable mandates on our business
+community, and by singling out the gaming industry I think is a
+huge mistake that starts us down a very slippery slope that we
+don't wish to go down. While the goal of this provision is
+laudable, the provision is imprudent and could lead to a myriad
+of unintended consequences. I urge the committee to reject this
+proposal. And I thank you for the opportunity that I have been
+given to testify before the committee.
+ [The prepared statement of Shelley Berkley follows:]
+
+ Prepared Statement of Hon. Shelley Berkley, a Representative in
+ Congress From the State of Nevada
+
+ I would like to thank Chairman Nussle and Ranking Member Spratt for
+allowing me to share my concerns regarding the Administration's Budget.
+ First, I would like to address a provision in the President's
+budget that the people of southern Nevada overwhelmingly oppose. The
+President has proposed taking seventy percent of the funds from the
+Southern Nevada Public Lands Management Act account to offset the
+deficit. This would deny Nevada at least $700 million a year, which
+would be used for conservation, recreation, water and education
+programs. I can assure you, Mr. Chairman, the Nevada delegation stands
+united against this proposal and will fight against this plan at every
+turn.
+ More than eighty percent of the land in Nevada is federally-owned.
+The Southern Nevada Public Lands Management Act was an innovative law
+that authorized the proceeds from land sales in Nevada to be used to
+build parks and trails, acquire environmentally sensitive land,
+maintain the Clark County Multi-Species Habitat Conservation Plan and
+improve the clarity of Lake Tahoe. Funds are also allocated for water
+infrastructure and education programs in the State of Nevada.
+ The law has been highly successful, and Nevada residents and
+millions of visitors have benefited. The President should not penalize
+Nevada or seek to gut the program. Rather, he should applaud Senators
+Ensign, Reid and former Senator Bryan for their ingenuity, and honor
+the intent of the law.
+ Second, I would like to address the President's proposal to fund
+the proposed nuclear waste dump at Yucca Mountain. Multiple lawsuits
+have revealed the proposed Yucca Mountain repository will not protect
+the health and safety of Americans. The Environmental Protection Agency
+blatantly disregarded the findings of the National Academy of Sciences
+that radiation levels will reach their peak in 300,000 years, and
+instead set a 10,000-year radiation standard. The gap between the
+science and EPA's standard? A mere 290,000 years!
+ More findings have established that the storage canisters at Yucca
+Mountain will corrode and release radioactive waste, and there are
+enormous terrorist risks created by this project if waste is shipped
+across the nation.
+ Despite these findings, the Administration continues to push
+recklessly ahead with the Yucca Mountain Project. The Administration
+has proposed reclassifying contributions to the Nuclear Waste Trust
+Fund as offsetting collections.
+ Not only does this budget gimmick recklessly funnel money into a
+project plagued with problems, it also bypasses budgetary rules that
+have been put in place to maintain the integrity of our appropriations
+process.
+ With rapidly growing deficits, Congress must ensure that every dime
+of taxpayer money is spent responsibly. Given the overwhelming needs in
+our nation and the limited resources at our disposal, it makes
+absolutely no sense to give special treatment to the Yucca Mountain
+project at the expense of millions of Americans and our nation's many
+pressing needs.
+ The President's budget also includes a provision that directly
+affects the gaming industry. This provision requires gaming
+establishments to intercept winnings from customers who owe child
+support.
+ While I strongly support law enforcement's efforts to collect
+payments from individuals who have failed to fulfill their parental
+obligations, I oppose this provision.
+ Under the proposal, a customer whose winnings exceed the threshold
+for filling out an Internal Revenue Service W2-G form would be subject
+to a Federal records check in the Child Support Federal Parent Locator
+Service. If the individual is listed in the system, the gaming
+establishment would be required to garnish the winnings.
+ This Administration's proposal is ill-conceived, creates
+unreasonable demands on gaming businesses and their employees, and sets
+alarming precedents.
+ It forces gaming establishments to pry into sensitive information,
+creating serious invasion of privacy concerns. Gaming establishments
+would assume the investigatory and enforcement duties currently
+entrusted to law enforcement and government agencies, and the
+establishments could be liable for any employee mistakes or misuse of
+information.
+ Finally, it establishes the precedent of requiring a private
+business to directly apply the law to an individual. Should banks check
+the court records of all customers making deposits or withdrawals? Must
+car dealers invoke the same requirements against their customers?
+ The answer is no, but the Administration's proposal will open the
+door to additional costly and unreasonable mandates on our business
+communities.
+ While the goal of the provision is laudable, the provision is
+imprudent and could lead to a myriad of unintended consequences, and I
+urge the Committee to reject this proposal.
+ Thank you for the opportunity to testify before the Committee.
+
+ Mr. Portman. Thank you, Ms. Berkley, and thank you for
+giving us a lot of information in a short period of time. We
+did hear earlier about the Southern Nevada Public Lands
+Management Act, $700 million a year.
+ Ms. Berkley. You will be hearing it again.
+ Mr. Portman. It sounds like I may be. And it is an issue
+that many of us in non-Western States would not be appreciating
+as you have explained it, so we appreciate that.
+ Yucca Mountain, we appreciate your input on that; and
+finally this additional burden on the gaming industry. Thank
+you so much for your testimony.
+ Mr. Spratt.
+ Mr. Spratt. No questions.
+ Mr. Portman. Mr. Conaway.
+ Mr. Conaway. No.
+ Mr. Moore. No questions.
+ Mr. Portman. Thank you, Ms. Berkley.
+ To the patient gentleman from Utah and his colleague from
+Idaho, I want to thank you for sticking with us and start the
+clock.
+ Mr. Cannon. Could we make an adjustment? Mr. Flake has time
+after us, and he has an airplane to catch. Could we put the
+time together and let him start, and we will let other people
+who need to go go more quickly, and stay within the parameters
+of your time.
+ Mr. Portman. With the indulgence of the committee. Without
+objection, we will do that. I want to commend you for your
+generosity. Mr. Bishop, is that acceptable to you?
+ Mr. Bishop of Utah. Anything you say will be acceptable.
+ Mr. Portman. Your testimony will be received. With that,
+Mr. Flake, welcome to the committee. The gentleman from
+Arizona, we look forward to your testimony.
+
+STATEMENT OF THE HON. JEFF FLAKE, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF ARIZONA
+
+ Mr. Flake. I thank my patient colleagues. I will be brief.
+ I came before the committee last year to ask the same thing
+I am going to ask this year, and the committee, I believe, did
+the right thing in putting language in that reflected our
+concerns. Our concern is every year the President has in his
+budget additional funding for land acquisition, hundreds of
+millions of dollars. When we use that, we create more Federal
+land, which puts our cities and counties at a disadvantage in
+terms of being able to fund schools and needed resources and
+services.
+ We have a program called Payment in Lieu of Taxes that is
+authorized at over $300 million and only funded at $200
+million, actually a decrease from last year. What we are
+advocating is taking land acquisition funding and applying it
+to Payment in Lieu of Taxes. The committee did this last year,
+reflected in language passed by the Budget Committee, and we
+would urge you to do the same thing this year. When you get
+more Federal land, it puts us in a deeper hole in terms of
+Payment in Lieu of Taxes, and so we are really in a bind.
+ I noted just a few weeks ago, the administration had seen
+the problem that we have here in the District of Columbia with
+the Federal Government owning some so much excess land, and it
+committed to sell off some of that land to get the District
+government in a better financial position. We have that problem
+in spades in the West: Arizona, with over half of its land
+Federal; Nevada is that way, and Utah is even worse. It is
+difficult for rural counties to make do.
+ And so we would ask again that we simply do the same thing
+we did last year: Make further reductions in land acquisition,
+apply that to PILT, and you would have additional money for
+deficit reduction. We are not asking for additional resources
+or money here; we are asking for less, far less, in Federal
+land acquisition, a little more toward PILT, and apply the rest
+to deficit reduction. I yield back.
+ [The prepared statement of Jeff Flake follows:]
+
+ Prepared Statement of Hon. Jeff Flake, a Representative in Congress
+ From the State of Arizona
+
+ Thank you for the chance to speak to you today on behalf of the
+Congressional Western Caucus, where I serve as Vice-Chairman.
+ The Budget Committee has a number of tough choices to make in the
+coming weeks. While I want to ensure that Western states have their
+concerns addressed by this Committee, as a fiscal conservative, I am
+not asking for something for nothing. Instead, I think we need to
+reallocate current appropriations in a way that better serves
+taxpayers.
+ Last year I talked to you about the need to fully fund the Payment-
+in-Lieu-of-Taxes program (PILT) by reducing Federal land acquisition
+funds. As you know, PILT funding goes to counties with high percentages
+of Federal land.
+ Because counties cannot draw tax revenue from these Federal lands,
+PILT funds provide the funding for schools, roads, and public safety
+programs that normally would be paid for through local tax revenues.
+ Unfortunately, I am here to talk to you again this year about the
+same funding issue. PILT is currently authorized at $340 million, yet
+the President's budget only allocates $200 million for FY '06, a
+reduction of $26.8 million from the current budget.
+ The Western Caucus firmly believes that this gap under funds the
+government's obligation to compensate these communities for the land
+held by the Federal Government.
+ At the same time, the President's budget continues to fund the
+purchase of additional Federal lands despite its inability to
+effectively manage the Federal lands that it currently administers. In
+this year's budget, $154 million is provided for new Federal land
+acquisition.
+ Last year, the Committee agreed that this inconsistency needed to
+be resolved. In its discussion of PILT in its budget resolution, the
+Committee said that the Federal budget could fully fund PILT, and that
+further reductions should be made in Federal land acquisition spending.
+I would ask that the Committee reaffirm its commitment to this
+principle by including this report language again in its budget
+resolution.
+ I continue to believe that we should fund PILT by reducing the
+amount of money appropriated to the purchase of new Federal lands. If
+we follow this Committee's own recommendations, we should significantly
+reduce this funding level. By committing these savings to PILT, we
+could fully fund the program and have money left over for deficit
+reduction.
+ Another source of funds better spent on PILT are EPA discretionary
+grants. The EPA has been widely and consistently criticized by the GAO,
+OMB, and others for the way it spends more than $300 million every
+year.
+ Often the funds from EPA simply free up other money that groups
+receiving the grants then spend to try and defeat political candidates.
+Subsidizing such political activity is not a wise use of tax dollars.
+ In summary, we in the Western Caucus are not asking for something
+for nothing. We are advocating that this Committee take a hard look at
+the money we spend, and allocate it more effectively to meet the
+important needs of our communities rather than increase the already
+inflated holdings of the Federal Government.
+ Again, I thank the Chairman.
+
+ Mr. Portman. Mr. Otter or Mr. Cannon.
+ Mr. Cannon. May we share time among ourselves? Is that
+acceptable?
+ Mr. Portman. Mr. Flake, thank you for your testimony.
+ Start the clock, Mr. Otter or Mr. Cannon.
+ Mr. Cannon. Can we have the chart up here, both charts?
+ I think what Mr. Flake has said we are going to try and
+reiterate. The picture here is worth 10 million words. You
+recall that the States can't tax land that is owned by the
+Federal Government, and that is why you have a Payment in Lieu
+of Taxes.
+ So to set the discussion, let me read you a quote from
+Ronald Reagan. I have a map, I wish everyone can see it. It is
+a map of the United States. And land owned by the government is
+in red, and the rest of the map is white. West of the
+Mississippi River, your first glance of the map, you think the
+whole thing is red, the government owns so much property. I
+don't know any other place than the Soviet Union where the
+government owns more land than ours does. And with that
+context, let me turn the time over to Butch, and we will go
+through several statements.
+
+STATEMENT OF THE HON. C.L. ``BUTCH'' OTTER, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF IDAHO
+
+ Mr. Otter. Thank you very much, Mr. Chairman, and thank
+you, Mr. Cannon.
+ Mr. Chairman, at the risk of repeating what has already
+been said, I would like to point out in the initial map that
+you saw, that was not a Presidential election map. That was, in
+fact, Federal ownership. And if you look at Idaho, Nevada,
+Utah, New Mexico, quite a bit of California, you will see that
+the tax base, which is white, is what supports our schools, it
+supports our first responders. If there is a crime in that red
+area, which is government land, police officers and sheriffs
+from the white area have to go into the red area at the cost to
+the tax base of the white area.
+ I think Mr. Flake said it best. We are getting $200 million
+of Payment in Lieu of Taxes funds. Congress authorized $350
+million. So we are getting $150 million less than was
+authorized. We have never since that authorization received the
+full funding of PILT. Obviously this was done for the purpose
+of being able to defray the costs of the Federal lands within
+the States.
+ Having said that, let me move on to a couple of other
+concerns that I have. And I just would mention, too, before I
+leave this whole lands issue, while we are being offered $26
+million in the Interior budget for Payment in Lieu of Taxes,
+the Federal Government agencies that can own land, the BLM, the
+Forest Service, the Bureau of Reclamation and National Parks,
+are getting $90 million to make that map even more red than it
+is right now. And the redder that map is, the less we have as a
+tax base.
+ I am very concerned about the administration's proposal to,
+we have heard before, the Power Marketing Administration's
+rates by 20 percent each year. What that means to the Pacific
+Northwest is an increase in our power rates of about $480
+million a year until we reach market price, which will then be
+a total increase of $2.5 billion.
+ I would like to remind you that the economies of
+Washington, Oregon, and Idaho, the Pacific Northwest as a
+whole, rely heavily on value-added industries, that are driven
+by the power we produce under our hydro projects.
+ Another area of concern for me is the administration's
+proposal in protecting the American borders. During my time in
+Congress, we have talked a lot about enhancing the national
+security; however, our inability to control our borders leaves
+our counties vulnerable to attack and promotes a blatant
+disregard for our laws.
+ Over and over again we have heard how national security
+requires communication, cooperation amongst all levels of law
+enforcement right down to the county sheriff. I find it
+particularly disturbing that the administration has completely
+eliminated funding for the State Criminal Alien Assistance
+Program. That is where we go and pick up an illegal alien and
+put them in our jail with our police officers, who feed them
+and take them until we are ready to turn them over to the INS
+for shipment or to the Federal Government for shipment back to
+the country from whence they came, or try them for the crime
+that they committed. All of those costs and the money that we
+used to get from the Federal Government have been eliminated
+from the President's budget.
+ Mr. Chairman, just one more mention that I want to make,
+and that is throughout the budget, I am alarmed at seeing where
+we are actually increasing administrative budgets while at the
+same time decreasing on the ground where we see the most good
+being done by the expenditure of the dollars. For instance, a
+constituent recently brought to my attention that the Small
+Business Administration's administrative budget is being
+increased in the President's budget by 20 percent this year,
+while proposing grant funding for the actual on-the-ground
+programs that are being cut, and that is really where we do the
+best job for our economy and the future businesses that we have
+in our economy. At the same time that we are cutting many
+domestic programs that are important, we are increasing our
+participation and our contributions to the betterment of
+foreign countries.
+ Mr. Chairman, with that, I yield back the balance of my
+time of my time.
+ [The prepared statement of C.L. ``Butch'' Otter follows:]
+
+ Prepared Statement of Hon. C. L. ``Butch'' Otter, a Representative in
+ Congress From the State of Idaho
+
+ Mr. Chairman, thank you for the opportunity to testify today. Let
+me begin by stating my strong support for the principles of budget
+discipline and fiscal responsibility. I represent a state where
+balancing the budget is a constitutional requirement, and we understand
+prioritizing needs and paying as we go. I applaud the President's
+efforts to rein in spending and his realization that what we spend here
+is not the government's money--it belongs to the individuals we serve.
+ With that said, I wish to express serious concerns with certain of
+the President's budget priorities, specifically as they pertain to
+meeting the legitimate obligations and commitments of government.
+ Mr. Chairman, I won't mince words. I am sorely disappointed with
+the Administration's budget request for Payment in Lieu of Taxes, or
+PILT. The authorized level for PILT funding is approximately $350
+million, yet the Fiscal Year 06 request is for only $200 million. That
+is $26.8 million less than was paid in Fiscal Year 05. In fact, the
+$200 million represents the funding level from 2001.
+ Clearly, that does not rise to the level of commitment that my
+constituents in Idaho or anyone in the West expect or deserve. We
+should be increasing PILT, moving closer to fulfilling our obligation
+to make local governments whole. Instead, we are moving in the wrong
+direction.
+ Almost two-thirds of my state's land mass is controlled by the
+Federal Government. Counties with high percentages of public lands have
+little tax base to support such essential functions as police and fire
+protection and the education of our children. It is simply unfair to
+ask rural citizens whose livelihoods and lifestyles so often suffer as
+the result of decisions by public land managers to fund the search-and-
+rescue, waste disposal, and court costs for those who come to play on
+those public lands. Congress realized this inequity and created PILT.
+It is time Congress remembers the commitment it made to rural
+communities and fully funds PILT.
+ I further suggest that the Federal Government seek to reduce its
+financial impact on local communities by reducing land acquisitions. It
+simply does not make sense for the Federal Government to continue
+acquiring land when it cannot--or WILL not--take care of what it
+already owns. If it really is in the best interest of the general
+public for more land to be added to the Federal domain, then I believe
+a similar amount of land should be removed from Federal management and
+returned to local tax rolls.
+ I also am very concerned with the Administration's proposal to
+increase Power Marketing Administration (PMA) rates by 20 percent each
+year until reaching ``market rates.'' Although the rate increases are
+described as ``gradual,'' the impact would be immediate and
+devastating. To put a dollar figure to it, this proposal would cost the
+Northwest $480 million next year and $2.5 billion over 3 years.
+ Such a drain on the region's resources will have a devastating
+impact on job creation and economic development, and indeed on
+businesses and communities large and small. The net result will be
+robbing Peter to pay Paul--increasing the short-term revenue for the
+Power Marketing Administration at the expense of the long-term economic
+health and revenue-generating potential of municipalities, industries
+and individuals throughout the Northwest.
+ Another area of concern for me in the Administration's budget
+proposal is protection of America's borders. During my time in Congress
+we have talked a lot about enhancing national security. However, our
+inability to control our borders leaves our country vulnerable to
+attack and promotes blatant disregard for our laws. Over and over again
+we have heard how national security requires communication and
+cooperation among all levels of law enforcement, right down to the
+county sheriff. I find it particularly disturbing, then, that the
+Administration again has completely eliminated funding for the State
+Criminal Alien Assistance Program, or SCAAP.
+ Each year law enforcement agencies at the state and local level
+incarcerate illegal aliens who have violated federal, state or local
+laws. They do so at their own expense, often relying on local property
+tax receipts to cover those costs. Through SCAPP they can be reimbursed
+for these imposed expenses. Providing adequate funding for the program
+helps ensure effective local law enforcement and fosters that ``team
+spirit'' that we so desperately need to succeed in protecting our
+national security. And yet, this successful program has been left
+unnoticed in the Administration's budget over the past few years.
+ What bothers me so much, Mr. Chairman, is that while such critical
+programs fall by the wayside in the name of fiscal responsibility, the
+Administration continues to irresponsibly increase funding for foreign
+aid. It is as though the right hand does not know what the left hand is
+doing. For example, a constituent recently brought it to my attention
+that the SBA's administrative budget has increased by 20 percent this
+year while proposed grant funding for actual on-the-ground programs--
+the ones that benefit our economy and the American people--is being
+reduced. The budget proposal is rife with similar examples.
+ As it pertains to foreign aid, I am particularly concerned that we
+continue offering financial assistance to countries with policies at
+odds with America's national interests. While I support the
+Administration's efforts in the Middle East, I am convinced that we
+undermine our success by doling out foreign aid indiscriminately to
+countries that actively work against us. How can we expect foreign
+governments to act responsibly in the broader world community if our
+own policy fails to hold them accountable even to us? The
+administration is dramatically increasing funding for some foreign
+assistance programs without evaluating their effectiveness or linking
+those payments to behavior consistent with America's goals.
+ Thank you again, Mr. Chairman, for the opportunity to address these
+critical issues of our government's responsibility to the people we
+serve.
+
+ Mr. Cannon. I think Mr. Bishop would like to speak to the
+effect of Payment of Lieu of Taxes and the failure to get
+funding on our schools.
+
+STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF UTAH
+
+ Mr. Bishop of Utah. Mr. Chairman, I assume you have the
+handout that we presented, I would hope, because we have
+pictures in there. The testimony will be riveting for you as
+you read that.
+ When Utah became a State back in 1896, the enabling act
+said the land, the red stuff, 67 percent of my State, would be
+deeded to the Federal Government until such time as the Federal
+Government shall, not if or might, but shall, dispose of the
+lands, and the schools were supposed to get 5 percent of the
+proceeds of that. It is historically typical of enabling acts
+during that particular period of time. This concept we have
+today that simply deals with the idea of recreational land-
+owned funds to all of us is a fairly modern change in the
+historical purpose for which that land was there.
+ If you could look at the pictures, and I am hoping you have
+these. We brought them here.
+ Mr. Portman. Here they are.
+ Mr. Bishop of Utah. There are more pictures.
+ Let me have you turn to the first one, and I am going to go
+through these quickly. Shows the percent change in projected
+enrollment, which simply means those of us west of the Rocky
+Mountains have all the kids. You guys don't. That presents the
+problem. You can see the same thing if you look at the map of
+the land there.
+ Go to the third one, with is pupil-per-teacher ratio, and
+you find out those in the West have larger classes than those
+of you in the East.
+ Percent change in expenditures per pupil. Those area where
+education is growing slowest happens to be in the West. If you
+want the bar graph right after it, our education funding is at
+28 percent. Those east of the Rockies is growing at 57 percent.
+ There happens to be a common denominator in all of these
+things. Go to the one that says Annual Property Taxes Lost to
+Public Education. If that red property were able to be taxed,
+my State would have $160 million more for the education budget
+each year. I have two kids in high school. The Federal
+Government is hurting my kids.
+ As you can see by all of these, the common denominator is
+the West, where there is massive amount of Federal lands, do
+not have as much money for education as the rest of the Nation
+does, even though as you keep looking through these, you will
+find out we have a higher tax burden and a higher commitment to
+education. It is--the bottom line deals with the amount of land
+that happens to be there.
+ We also have the problem, and I am glad the individual is
+not here, but one of the constituents of a committee member
+came to my State for recreation purposes on this public land.
+Now, anyone in Utah knows that you don't go into the black box
+area. He decided to go tubing in that area. Emery County had to
+retrieve the body of one of your constituents, and it spent our
+entire emergency funds for that one individual.
+ There are expenses incurred by Western States because of
+Federal land that supposedly belongs to all of us. The PILT
+issue goes right to the heart of this. If you look at the very
+last picture, it shows you what we have been paying in PILT.
+PILT is not welfare for the West. It is rent that is due by the
+Federal Government so we can maintain services that every other
+State has.
+ Actually there is one cute one you have to see. If you go
+partway in the middle, it is called Land Ownership. If you
+block out what you all own, you will see that the West is
+almost totally blocked out, and you can compare it to what the
+Federal Government owns in your particular States.
+ What we are asking for is the same thing. There needs to be
+full funding of PILT. Our children are being harmed and our
+citizens are being overtaxed because the Federal Government
+will not allow us to develop our land. If you want to give us
+the land back, we might work something out, but until that
+time, there is rent that is due with PILT.
+ Secondly, as Representative Flake said, there is $154
+million in additional funding for land acquisition. There is
+too much. There has already been 5 million acres identified by
+the BLM that needs to be eliminated, be vacated. And also there
+is EPA funding--that last page of my testimony that needs to be
+eliminated from the budget, looking at disposal lands that are
+excess.
+ With that, Mr. Chairman, as the third Ranking Member, let
+me say I am realizing I am the last as well, let me save
+whatever time I have to Representative Cannon. I am done.
+ [The prepared statement of Rob Bishop follows:]
+
+ Prepared Statement of Hon. Rob Bishop, a Representative in Congress
+ From the State of Utah
+
+ Mr. Chairman, thank you for providing time to individual members to
+testify on behalf of their priority issues before your committee. As a
+member of the Congressional Western Caucus, I appreciate your past
+interest in issues impacting the West. I am motivated to testify today
+due to several inadequacies in the Administration's FY06 budget.
+ For decades, the American West has borne the burden of the Federal
+Government's vast land holdings, resulting in less money available for
+education, law enforcement, healthcare, emergency services, etc. As
+I've looked through the Administration's FY06 budget, unfortunately I
+do not see this burden on the West lessening--I see it increasing.
+ Payment in Lieu of Taxes or PILT was created to help offset the
+tremendous cost to the counties from Federal ownership of lands. Sadly
+the Administration has reduced by $26 million this year's PILT
+allocation, referring to it as a non-priority in the budget--I am
+offended.
+ The Federal Government owns over 65 percent of the land in my home
+state of Utah. This disparity in ownership is the contributing factor
+to Utah and the West's poor showing in annual expenditures on public
+education when compared with the Eastern United States. Utah and most
+Western states have tax rates that are equal to or greater than most
+Eastern states. Additionally, Utah spends over 41 percent of its annual
+budget on public education. However when it comes to per pupil
+expenditures, we are close to the bottom. So what gives? Frankly, this
+is attributable to the Federal Government ripping off the West each
+year by under-funding PILT while still increasing its public lands
+portfolio. This is demonstrated well in this year's budget as the
+Federal Government's insatiable appetite to acquire more land is well
+funded at $154 million.
+ Mr. Chairman, the Administration's budget priorities, when it comes
+to public lands in the west, are perverse. I would argue their budget
+priorities actually harm the children in my state by shortchanging
+public education. By increasing Federal ownership of lands, they're
+reducing the amount of taxable land and increasing the burdens on our
+rural counties. I make no apologies when I say that, in effect, the
+Federal Government has become an absentee slumlord--zealously and
+unnecessarily holding onto ownership of public lands while squeezing
+off financial assistance to nearly broke Western counties. Western
+counties are increasingly finding themselves in the difficult situation
+of determining which critical services to fund and still fulfill the
+various Federal mandates placed upon them.
+ Some points to be made regarding PILT:
+ a. The proposed 2006 Budget only funds PILT at $200 million, a $26
+million decrease from last year and more than $140 million short of the
+fully authorized level.
+ b. The proposed FY 2006 budget ironically provides more than $154
+million for new Federal land acquisition, which would create an
+additional funding burden for the PILT program.
+ c. Over the past 10 years, the PILT program has always fallen short
+of the authorized level averaging $155 million, while over the same
+time period Federal land acquisitions funding has averaged more than
+$347 million.
+ The Federal Government owns more than 670 million acres, almost
+one-third of the land in the United States
+ As recently as April of 2004 the General Services Administration
+identified more than 5 million acres of Federal lands as ``vacant''
+with no Federal purpose.
+ As we consider the disparity in PILT funding and land acquisition
+funding let us remember President Bush has talked of creating an
+``Ownership Society.'' However, we live in a country where the Federal
+Government is the largest possessor of wealth and property rather than
+empowering our people with these gifts.
+ Absent a change in Administration policy, I encourage the following
+to restore equity to rural western counties:
+ Fully fund PILT.
+ Cut Federal funds for land acquisition and transfer them
+to PILT. The Federal Government should not be in the land acquisition
+business.
+ Eliminate EPA discretionary grants. These are
+controversial grants which should no longer be awarded.
+ Mr. Chairman, I am passionate about this issue. Again, I appreciate
+the opportunity to testify before your committee. As you draw up the
+parameters for the FY06 budget, I sincerely appreciate your favorable
+consideration of the remarks and statements made by me and my
+colleagues from the Congressional Western Caucus. With your help, we
+can reign in the unnecessary spending on further land acquisition,
+questionable Federal grants, and restore equity to the West. With that,
+I yield back the balance of my time.
+
+ STATEMENT OF THE HON. CHRIS CANNON, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF UTAH
+
+ Mr. Cannon. We will go ahead if you like, and I will be
+quick. Just a couple of points on PILT. You can tell there is
+some intensity here. The intensity is we are taxing our people
+all over the West and spending less on education than anybody
+else in the country. And the reason for that--and if you look
+to the charts, you will see the compelling case. And the reason
+for that is because of public lands. We have the Soviet-style
+red block in the Western United States. People want to move to
+rural parts of America. And so when I moved in my house 18
+years ago, we had about 3,000 people in my little town and lots
+of open spaces. Today there is no more open space after 15
+years, and the town is about 15,000 people.
+ We have a problem or an opportunity in America where people
+want to move to less urban areas. They want to have the
+opportunities that high tech and broadband give them, and they
+can do that today, and we need to make that attractive to them.
+You can't do that when the tax burden is such that your schools
+in these rural areas are underfunded and they have great
+difficulty.
+ The fact is most people think, and I have heard many of our
+Northeastern friends say, these public lands belong to all
+Americans, and the answer is that is right. Pay the fee.
+ I just have to say that this is a vitally important issue.
+There are other places for this money to come from, including
+the land acquisition, which I think is about $154 million. We
+don't need more land if we are not going to pay for it. And
+secondly, you have the EPA discretionary grants that total
+about $400 million.
+ If I might now shift gears to another issue, there is an
+organization called the Administrative Conference of the United
+States. It was the only program that was phased out in 1996, I
+think ignorantly so. We had in my committee, the Committee on
+Commercial and Administrative Law, a hearing at which both
+Justice Scalia and Justice Breyer attended. Both of them were
+remarkably supportive. I think this is the only time we got two
+Justices this century in the House in a hearing. They pointed
+out that this committee or this Conference has saved massive
+amounts of money. In one case, in one issue with the Social
+Security system, they saved $85 million.
+ This is a group that has been reauthorized last year to be
+a group of judges, private lawyers, and government regulatory
+lawyers who get together, people of high esteem like Justice
+Scalia and Justice Breyer--I think Justice Scalia was the
+Executive Director for a while--and they look at the system and
+say, how can we make the system work better?
+ We are looking for $3.1 million to fund that. Let me
+suggest that I don't think that we can spend that kind of money
+better anywhere on earth. We need to be dealing with science
+and how science is used in regulation.
+ We need to deal with the litigation that happens over
+permits. This group came up with the negotiated regulation
+process. We need them to come up with a negotiated permitting
+process so that we get people's views while we are looking at
+cutting timber, and not after the permit has been issued and
+tying it up in litigation for years.
+ If we want to have healthy forest initiates, it is a
+problem over the whole country. So we are hoping for that
+addition to PILT, which I cannot overstate the intensity of
+emotion on this issue for all the western Members. I chair the
+Western Caucus. That is a very large number of western
+Congressmen, and we are deeply concerned about that.
+ And in addition to that, all Americans in the Western
+Caucus in particular would like to see the Administrative
+Conference refunded. Now, it has been reauthorized. It needs to
+be funded so that we can get the benefit of the wisdom that
+those people give, by the way, for free. That $3.1 million is
+the cost of administering it. These are wonderful attorneys who
+contribute their time to that.
+ And with that, I yield.
+ [The prepared statement of Chris Cannon follows:]
+
+ Prepared Statement of Hon. Chris Cannon, a Representative in Congress
+ From the State of Utah
+
+ It is a pleasure to testify today before Chairman Nussle and the
+House Budget Committee. I am testifying today to ask your support in
+funding the recently enacted ``Federal Regulatory Improvement Act of
+2004'' at the authorized level of $3.1 million in the FY'06 House
+Budget Resolution as well as issue support for the full funding of
+Payment In Lieu of Taxes (PILT).
+ The Federal Regulatory Improvement Act, (Public Law 108-401)
+reauthorizes the Administrative Conference of the United States (ACUS).
+ACUS was originally established in 1964 as the government's advisor on
+administrative procedures, but was de-funded in 1996. Last year, the
+House Judiciary Committee held hearings on whether ACUS needed to be
+reauthorized. At two separate hearings, the Committee garnered
+unanimous support from those testifying as well as the Members of the
+Committee that the reconstituting of ACUS would inject efficiency and
+fairness into the regulatory process. With the investment of $3.1
+million ACUS would save, in some estimates, billions of dollars by
+streamlining the regulatory agencies and their decisions.
+ Over the course of its 28-year existence, the Conference issued
+more than 200 recommendations--some of which were government-wide and
+others that were agency-specific. It issued a series of recommendations
+eliminating a variety of technical impediments to the judicial review
+of agency action and encouraging less costly consensual alternatives to
+litigation. The fruits of these efforts include the enactment of the
+Administrative Dispute Resolution Act in 1990, which established a
+framework for the use of ADR.
+ In addition to this legislation, ACUS served as the key
+implementing agency for the Negotiated Rulemaking Act, the Equal Access
+to Justice Act, the Congressional Accountability Act, and the
+Magnusson-Moss Warranty-Federal Trade Commission Improvement Act. The
+Conference also made recommendations regarding implementation of the
+Congressional Accountability Act. Further, ACUS served as a resource
+for Members of Congress, Congressional Committees and the Executive
+Branch.
+ With respect to specific agencies, the Conference, for example,
+during the 1970's undertook an exhaustive study of the procedures of a
+single agency--the Internal Revenue Service--which resulted in 72
+proposals concerning the confidentiality of taxpayer information, IRS
+settlement procedures, and the handling of citizen complaints, among
+other matters. The IRS ultimately adopted 58 of these recommendations.
+ According to the Congressional Research Service, there are growing
+patterns of evasion among agencies with respect to notice and comment
+requirements. An increasing number of regulations are being
+successfully challenged in the courts. An informal study by CRS
+indicates that 51 percent of these rules were struck down by the
+courts. Needless litigation hurts everyone--it slows the rulemaking
+process, encourages agencies to try to circumvent public comment
+requirements, and costs taxpayers millions of dollars.
+ Another serious area of concern is the need to have a coherent
+approach among the agencies with respect to emerging issues and
+technologies. These areas include issues dealing with privacy, national
+security, public participation, the internet, and the Freedom of
+Information Act. There are also concerns about the need to have peer
+review and to have regulations based on sound science. Our people and
+business communities depend upon Federal agencies to promote scientific
+research and to develop science-based policies that protect the
+nation's health and welfare. Integral to the Federal regulatory process
+is the need to assess the safety, public health, and environmental
+impact of proposed regulations. Regulations lacking sound scientific
+support can present serious safety and health consequences as well as
+cause private industry to incur unnecessary and burdensome expenses to
+comply with such regulations.
+ Restoring the Conference would provide a cost-effective, yet highly
+valuable solution to these problems. It is my hope that the Budget
+Committee will support this request and move the government toward a
+more efficient regulatory system.
+ Another issue of importance to me is sustaining a vibrant western
+economy. This is a key priority for the Congressional Western Caucus of
+which I am the Chair.
+ I commend the President for providing funding for the Healthy
+Forests Initiative and Cooperative Conservation Programs.
+ However, I am deeply concerned about the Payment-in-Lieu-of-Taxes
+program, or PILT, which provides payments to local counties that are
+unable to draw tax revenue from Federal lands in their jurisdictions.
+PILT payments help to fund essential services such as environmental
+compliance, law enforcement, health care, education, firefighting, and
+search and rescue operations.
+ Twelve western states have more than 25 percent of their land owned
+by the Federal Government and four states are more than 60 percent
+federally owned. This creates a huge strain on Western economies
+because they do not have the same opportunity to earn tax revenues as
+other states do.
+ The PILT program is intended to make up for that shortfall in tax
+revenues however, over the past several years it has been grossly under
+funded. Although the PILT program has been authorized at $340 million,
+the President's budget only calls for $200 million in FY 2006. This is
+a decrease of $27 million from last year's appropriated level and more
+than 40 percent less than what is authorized.
+ Ironically, the President's budget provides more than $154 million
+for new Federal land acquisition, which would create an additional
+funding burden for the PILT program. If we can't make payments on the
+land we already own, why are we proposing to acquire more land? It
+seems to me, that the budget proposal submitted to Congress got this
+one wrong.
+ Making up the shortfall in the PILT program can and must be
+accomplished. I maintain that cutting Federal land acquisition funds as
+well as EPA discretionary grants could easily fund the difference.
+ Every year the EPA makes more than $400 million in grants to
+various non-profit and educational partners. However, over the last
+decade, EPA's grants program has been best known for mismanagement.
+ One illustrative example is the fact that under EPA's management,
+in FY 2004 more than $337 million in grants went to non-profits, some
+to environmental organizations that spent more than $18 million in
+political activities during the 2004 election cycle. Even worse, last
+year, the EPA's Inspector General noted that one group's grant funding
+allocated for work on projects under the Clean Air Act was spent by the
+group's lobbying organization--in direct violation of the law.
+ Given the current economic climate and the considerable amount of
+taxpayer dollars appropriated every year for the Environmental
+Protection Agency and the Departments of Agriculture and Interior, we
+must use utmost care to ensure that hardworking American dollars are
+wisely spent.
+ This request for PILT is consistent with language in last year's
+budget resolution where the Committee stated that the budget could
+accommodate full funding of the PILT program and that further
+reductions in Federal land acquisition should be made.
+ Again, I'd like to thank Chairman Nussle and the Committee for this
+opportunity to testify.
+
+ Mr. Portman [presiding]. Why don't we break here for
+questions for the group that just testified, and then we will
+start with Mr. Porter, who has separate time.
+ First of all, gentlemen, we appreciate your testimony. And,
+Mr. Cannon, you have explained the PILT issue well. You have
+been a real leader on this over the years. Basically, Mr. Flake
+and Mr. Otter's suggestions as well as yours, Mr. Cannon, on
+constructively coming up with an offset, which is basically
+consistent with your philosophy that we should not be putting
+more pressure on the schools, taking out of the acquisitions to
+fund the PILT adequately.
+ I know that Mr. Bishop is a former schoolteacher. I did not
+know that he also specialized in analysis and probability and
+statistics, but great charts. I mean this is a very impressive
+presentation of the issue in a stark visual way.
+ The question I would have for you all with regard to the
+Payment in Lieu of Taxes program is, if indeed it was funded to
+the extent of its authorization, would that solve the problem
+that you have laid out in your presentation?
+ Mr. Cannon. Let me just answer. There is never going to be
+enough money for these rural areas, because they are deprived
+of virtually everything by Federal ownership and Federal
+regulations. If you look at that chart, you will see that the
+Federal Government has committed in law many, many streams of
+funds to these people. PILT is only one of these streams of
+funds.
+ The full funding level of PILT is appropriated at this
+point in time. But clearly more money has to come to pay the
+costs imposed on those counties in the West. And frankly we
+would just love to see them sold and get the percentage of
+money that would come to the States when those lands are sold
+or otherwise diminished in size, diminished in dominance, so if
+they get sold the States get to tax them in addition to getting
+a percentage of the sales.
+ So the issue is complicated. There are several streams of
+funds that are directed. PILT, in our perception, is the first
+thing that we need to do, and we just absolutely need to do
+that one as a fix to the matter so that our counties can count
+on the revenue stream in the future, then if they have more
+money coming or more private land that is available to tax that
+that is good and well.
+ Mr. Bishop of Utah. Mr. Chairman, if I could also add, as
+far as the education component, if indeed the enabling acts
+were honored and the amount of money from a disposal were given
+to the States and/or they also had an ongoing revenue stream
+from the amount of money that would be on the lowest of the tax
+levels, you would see the disparity that is obvious between the
+West and the East disappear.
+ Obviously there is never enough money to do everything you
+want to do, but it would bring equity between those who are
+non-Federal land States and those who are Federal land States
+in the area of education if those two actions were taking
+place.
+ Mr. Portman. Thank you, Mr. Cannon. I would like to turn to
+Mr. Cueller for questions.
+ Mr. Cueller. I don't have any questions, but I do
+appreciate it. I understand, I used to do with budget for the
+State of Texas when I came to public education. I understand
+the difficulties if you do not have that particular resource.
+So I understand your argument. I agree with the arguments on
+that. Thank you.
+ Mr. Portman. Mr. Conaway.
+ Mr. Conaway. No.
+ Mr. Portman. Gentlemen, thank you very much for your
+testimony. We will now, in the order of which people came to
+the hearing today, we will go to Mr. Porter. Mr. Porter, it
+sounds like some of the issues you were planning to raise have
+already been raised. You did have separate time on our
+schedule. So you are entitled to it, and we look forward to
+your testimony.
+
+ STATEMENT OF THE HON. JON C. PORTER, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEVADA
+
+ Mr. Porter. Thank you, Mr. Chairman. I will concur with my
+colleagues from the West, and I will save the committee's time
+at this point on some of these issues. But I do agree with and
+appreciate their presentation.
+ I support the President and this Congress looking for ways
+to eliminate waste, fraud, and abuse. I think we can spend
+hours talking about areas where Federal dollars are being
+wasted, but we can save that for another time.
+ However, I do disagree with one of the proposals by the
+White House that has to do with the funds that are being
+received from the sale of public lands in Southern Nevada. My
+colleagues, Mr. Gibbons and Mrs. Berkley, touched upon it
+earlier.
+ According to the proposal, there may be a 70-percent
+reduction in the funds under the Southern Nevada Public Lands
+Management Act that will remain in Nevada. These are lands that
+are sold in Nevada. These funds were brought together in a
+collaborative effort by the Senate, both Democrats and
+Republicans in the House of Representatives, and all of the
+funds that are being appropriated and invested in our community
+are approved by the Secretary of the Interior and signed off
+based upon Federal standards and Federal laws.
+ And there is very little land left. This program has
+certainly been an asset for the State of Nevada, and the value
+of this land has increased substantially. That value has
+increased because of the investments that we have made, as a
+community and as a State, to improve our quality of life in
+Nevada.
+ The funds for these projects are substantial--global--and
+they impact every State in the Union. The funds from the sale
+of public lands in Nevada are going to protecting Lake Tahoe,
+which is a treasure for the country; Lake Mead, one of the
+largest national recreation areas in the country; Red Rock
+Canyon; Sloan Canyon; to make sure that we do things like
+protect Indian artifacts and Indian history, and to the
+implementation of the Endangered Species Act.
+ Yes, the funds are helping our community, but also helping
+the country as a whole. Although we are a State of about 2.2
+million people, we had about 40 million tourists last year, and
+visitors explore into our community from all over the country
+and world. Adding to that the fact, properties that are being
+sold--in some cases up to 2,000 acres at a time--and are
+creating communities the size of 70,000 or 80,000 new people a
+year.
+ Think about that, Mr. Chairman, new communities of 70,000
+to 80,000 new people a year.
+ With this growth comes major demands not only on our
+infrastructure, but also on our public facilities that are
+certainly a part of the Federal program. The fact that we are
+using Federal dollars from the land sales is actually saving
+the country money, because instead of us having to come to the
+House and to the Senate to ask for funds for some of our
+programs, for our natural historic resources that are federally
+controlled, we are using dollars that are generated in Nevada
+from the sale of lands in Nevada.
+ Mr. Chairman, I would ask that we find, and I know that our
+delegation will be happy to find areas of waste, areas of abuse
+where additional dollars may be available help this budget.
+However, this is an area that we are being penalized for being
+frugal.
+ We have spent our money wisely through the process that was
+established through regulation and through enactment of this
+House and the Senate, and I know that we also have additional
+programs that are budgeted based on these funds for future
+allocations. I would like to submit additional information, if
+you do not mind, Mr. Chairman, after I conclude my presentation
+so I can keep it brief.
+ Mr. Portman. Without objection.
+ Mr. Porter. I would also like to state that I remain
+adamantly opposed to Yucca Mountain. We want to make sure, as
+my colleagues have mentioned, that Congress retains control
+over the budgetary process in the oversight of Yucca Mountain.
+I know the question earlier was asked what we really wanted to
+do with Yucca. We would like to close it down, but we also want
+to make sure that Congress remains in constant oversight of the
+project.
+ So, Mr. Chairman, that is a brief overview. I will be
+submitting this information. But I think that this is a program
+that is a model for the country and a model for Washington on
+how funds are spent wisely to make sure that public facilities,
+Federal facilities are taken care of, and maintained and
+properties are protected in Nevada.
+ With that I say thank you, Mr. Chairman.
+ [The prepared statement of Jon C. Porter follows:]
+
+Prepared Statement of Hon. Jon C. Porter, a Representative in Congress
+ From the State of Nevada
+
+ Mr. Chairman, I would like to take a few minutes to speak today
+about issues of great concern to my constituents and me in Southern
+Nevada.
+ First, I would like to state that I am fully supportive of this
+Committee and President Bush in their efforts to reduce the Federal
+deficit. I am in lock-step with all of you in making sure that our
+taxpayers' dollars are used efficiently, and I am committed to helping
+you all in this effort.
+ However, in pursuing this ideal, I believe that within the 2005
+Budget was a grave error, which is why I am here speaking to the Budget
+Committee today.
+ In 1998, Senator Richard Bryan and Congressman John Ensign crafted
+a bipartisan and bicameral bill known as the Southern Nevada Public
+Lands Management Act (SNPLMA). When SNPLMA was signed into law, its
+intent was to allow for the disposal of public lands in Clark County,
+Nevada, and to provide for the acquisition of environmentally sensitive
+lands within the state. The money raised from these land sales is
+divided between the State of Nevada's General Education Fund (5
+percent), the Southern Nevada Water Authority (10 percent), and the
+remaining 85 percent is dedicated to a Federal account for
+environmental projects, such as development of parks and trails,
+conservation initiatives, land acquisition, and a multi-species habitat
+conservation plan in Clark County, Nevada.
+ Before going into how SNPLMA has benefited Southern Nevada, I want
+to take a moment to explain how the funding mechanism under SNPLMA
+works. Every year since being passed into law, local, state and the
+Federal agencies work together to determine which projects, sales, and
+acquisitions will occur. Once approved by all stakeholders, this list
+of projects is sent to the Secretary of Interior for approval. All
+funds generated from these projects and sales then go into a special
+fund to be used for Federal purposes within Nevada, as specified within
+the law.
+ The goal of SNPLMA is to protect and preserve Southern Nevada for
+future generations. Since being signed into law, SNPLMA has been
+amazingly beneficial in meeting Federal obligations in Clark County.
+Funds generated from SNPLMA have helped pay for capital improvements at
+Lake Mead National Recreation Area, Red Rock Canyon National
+Conservation Area, Spring Mountain National Recreation Area, Lake
+Tahoe, and other lands administered by the Department of Interior.
+These funds have paid for the development of much-needed parks and
+trails in this quickly-growing community, and SNPLMA funds have helped
+in building and maintaining visitor facilities in some of the most
+visited national parks and conservation areas in the nation. Further,
+some of these funds have already been committed for long-term use, such
+as $300 million going to Lake Tahoe over 10 years in order to help
+preserve and protect Lake Tahoe for future generations.
+ In the President's budget proposal exists a provision that could
+divert seventy percent of the funds generated under SNPLMA. As a Member
+of Congress who represents many of the people and lands that have
+benefited from SNPLMA, I am firmly opposed to this provision, because I
+believe that since these funds were generated in Southern Nevada, they
+should stay in Southern Nevada for federally beneficial projects.
+Although no one in the 106th Congress could have imagined how
+successful this program has been, Clark County has been able to use
+these much-needed funds to improve and conserve our lands for both
+locals and tourists alike. It was the Southern Nevada community that
+helped to increase the economic value of these lands, and I believe
+that Southern Nevadans should be able to help make sure that their
+children's children can enjoy areas like Red Rock Canyon, the Spring
+Mountains, Lake Mead, and Lake Tahoe someday. In other words, these
+funds are self-generated, as opposed to being derived from taxpayers'
+dollars, and do not add to the Federal deficit.
+ As a Congressman who represents a state with approximately ninety
+percent Federal land, I am here to say that SNPLMA, through the sale of
+Federal lands where revenue is dedicated to the Federal projects in
+this area, helps to ``free up'' Federal dollars for other areas, such
+as the Florida Everglades, Yosemite and Yellowstone National Parks, and
+our Grand Canyon. This law also allows Southern Nevada to use SNPLMA,
+as opposed to Federal, dollars to protect endangered or threatened
+species. We simply do not need to rely as strongly on other Federal
+funding sources to support all of the Federal lands we have in Southern
+Nevada. This bill is smart for both Nevadans, and every single person
+who uses our Federal parks and lands and enjoys its native species, as
+it helps to ensure that our Federal lands and species throughout the
+United States are protected.
+ It would be different if this bill was coming at the expense of the
+American taxpayer. However, SNPLMA is fiscally responsible, and
+environmentally friendly. Although I am in favor of reducing our
+Federal deficit, I believe that these cuts should come at the expense
+of wasteful programs, as opposed to SNPLMA.
+ Mr. Chairman, the entire delegation is united on this effort. I
+respectfully ask you to consider the benefits of SNPLMA, and the
+negative impacts this budget proposal will have, as we determine where
+our Federal dollars will go next year.
+ Another section in the President's Budget that I am concerned with
+is the so called ``deadbeat dads'' issue. This idea was first raised by
+the Clinton administration in 1994 and again in 2000. The Bush
+administration proposal would capture gaming winnings of non-custodial
+parents who have not paid their child support. Each time an
+individual's winnings triggered completion of an IRS W2G form,
+employees of gaming establishments, including casinos, horse and dog
+tracks, and locations where the lottery, jai alai and keno are played,
+would be required to check a Federal database to determine if the
+customer was delinquent in owing child support.
+ This ``deadbeat dads'' proposal has a commendable goal but uses
+dubious tactics. First and foremost, no one condemns any effort to
+avoid child support payments more than I do. But mandating the gaming
+industry to garnish winnings from those listed in a government database
+raises serious privacy questions. Additionally, the creation of what
+would amount to a new Federal bureaucracy to process this information
+would only seem to compound the potential for mistakes and misuse of
+sensitive information. Instead we should provide the individual states
+and localities with the resources they need to locate and penalize
+those who are delinquent on their child support payments.
+ Mr. Chairman, I would like to thank the Committee for the time and
+opportunity to allow me to speak on these issues that are so near and
+dear to my constituents and me. I am happy to answer any questions.
+
+ Mr. Portman. Thank you, Mr. Porter. We appreciate your
+leadership on the Yucca Mountain issues over the years, and
+also your leadership now on looking at these public lands
+issues, including the Southern Nevada Public Lands Management
+Act. Thank you for your testimony today. Mr. Cuellar.
+ Mr. Cuellar. No questions.
+ Mr. Conaway. Mr. Porter, help me understand Yucca Mountain.
+I am new to this process. What is Yucca Mountain other than
+dirt?
+ Mr. Porter. Mr. Chairman, I am not sure where we should
+begin here. Yucca Mountain, in a nutshell, is an area of
+disposal proposed for Nevada for all high-level nuclear waste.
+This waste is set to travel through your communities, and our
+communities, to a site about 100 miles north of Las Vegas where
+thousand and thousands of tons of high level nuclear waste to
+be stored at a facility that the State of Nevada is adamantly
+opposed to. But, unfortunately, there are a number of other
+States that would like to send their waste into our community,
+and we have been fighting, will continue to fight this. From a
+States' rights perspective, we are adamantly opposed, but also
+for safety reasons. It is an untested, unproven science;
+facilities that are being built have yet to be tested. So it is
+a major, major concern for us and has been for years, and we
+are adamantly opposed and will continue to be.
+ Mr. Conaway. It is underground storage?
+ Mr. Porter. Yes.
+ Mr. Conaway. There is a similar one in Carlsbad.
+ Mr. Porter. We would like to send the rest of the waste to
+Carlsbad. It is a different level of waste. These are spent
+nuclear rods from power generation, but also military grade
+nuclear waste. But we would love to send the balance of this
+waste into Carlsbad, and I would work with you on this.
+ Mr. Conaway. We have a low level one planned in Texas. I
+also understand that folks in Andrews see it as an economic
+development issue. They see the other side of the coin, that
+there is an opportunity here to grow jobs in Andrews, Texas,
+using safe science, using science as best we know to dispose of
+this stuff. But this is low level, an entirely different realm
+of risks than what you are talking about.
+ Mr. Porter. Thank you for your question. This is a science
+that is untested. Nevada is being used as that testing ground
+for storage, and we are concerned for our children, and for our
+families, with its transportation and burial. Thank you for
+asking.
+ Mr. Portman. And again, Mr. Porter, your full statement
+will be made part of the record. We have one final question
+from Mr. Cuellar.
+ Mr. Cuellar. Mr. Porter, just a question on your testimony.
+I just want to get your thoughts on the deadbeat dads. I think
+you are saying we agree with the goal, it is just the way you
+want or--I think you disagree with the system or the way it is
+supposed to be collected. That is the privacy issue.
+ Are you saying that this is pretty much a State issue
+instead of Federal issue, because I think we agree that we
+ought to do something about the deadbeat dads that we have out
+there. I just want to see if you can elaborate a little bit
+more on the procedure you want to follow.
+ Mr. Porter. Thank you. It is in my backup testimony. I
+appreciate your bringing it up. I think deadbeat dads should be
+busted and we should use every available means to make sure
+that they take care of their children and their families. It is
+unacceptable that we have deadbeat parents whom are not taking
+care of their responsibilities. Our concern is that the private
+sector in this instance would be asked to be the law
+enforcement agency.
+ I think that we should help and encourage local governments
+who are the experts at law enforcement, and do everything we
+can to encourage and to help them in the collection, whether it
+be technology driven through the court system. But when you get
+into the private sector, asking the private sector, again,
+whether it is a car dealership or a resort in Nevada or a
+resort in Ohio or Texas, it crosses into a whole other realm,
+where we think that we should help law enforcement as a
+Congress, we should help local government, but the private
+sector getting into collection and into law enforcement I don't
+think is an appropriate means. And then there is the privacy
+issue. But I think, more importantly, it is the issue that we
+should help local government do what they do best.
+ Mr. Portman. Thank you. Mr. Simmons, we look forward to
+your testimony. You have 10 minutes.
+
+ STATEMENT OF THE HON. ROBERT SIMMONS, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF CONNECTICUT
+
+ Mr. Simmons. Thank you, Mr. Chairman, and I thank Mr.
+Cuellar and Mr. Conaway for their attention and their interest
+in participating in these hearings, and I commend them on their
+endurance.
+ I come before you this afternoon as the new chairman of the
+Subcommittee on Intelligence, Information Sharing and Terrorism
+Risk Assessment of the new Homeland Security Committee, now an
+``A'' level permanent committee of the House of
+Representatives.
+ I would ask unanimous consent that my full testimony be
+inserted into the record as read, and then I would like to
+summarize it.
+ We all remember, Mr. Chairman, the events of 9/11,
+especially those of us who were here in this Capitol on that
+day, and we remember the terrible intelligence failures that
+resulted in the loss of over 3,000 innocent lives.
+ The 9/11 Commission report detailed these failures in great
+detail, and then called upon all of us to, ``create something
+positive, an America that is safer, stronger and wiser.'' I
+believe the creation of the Department of Homeland Security and
+a permanent committee of Congress to oversee that department is
+part of the effort to create something positive.
+ I also believe that intelligence reform is part of that
+effort, and the subcommittee which I chair will try to oversee
+the creation of an intelligence capability in the Department of
+Homeland Security that makes us ``safer, stronger and wiser.''
+ We all have a common goal. We want our homeland and our
+loved ones to be safe, but we also know that we can spend every
+dollar in the budget, we can search every traveler, we can
+inspect every shipping container and still fail to prevent
+another attack.
+ The Chinese built the Great Wall at great expense, but it
+failed to keep the Mongol hordes out of China. In the 1930s the
+French built the Maginot Line at great expense to exclude the
+Germans, but it also failed. So we have to be wise in our
+choices.
+ And good intelligence gathering and good intelligence
+sharing helps us to be wise. Before 9/11, we did not have the
+capacity to connect the dots because our sharing and our
+analysis and our reaction was inadequate. Since then we have
+made a lot of progress toward integrating our intelligence
+activities, sharing information, and focusing on the terrorist
+threat. And that threat is very real. It was real 3 years ago.
+It is real now.
+ Just last week the media reported on an intercepted
+communication between Osama bin Laden and Abu Musab al-Zarqawi,
+reiterating the desire of al-Qaeda to target the U.S. homeland,
+and that report coincided with Homeland Security Deputy
+Secretary Loy's testimony, ``al-Qaeda has considered using the
+southwestern border to infiltrate the United States.'' I note
+that two of our Members at the dais are from Texas, and that
+infiltration is a real risk and a real danger to you and to
+your people.
+ Good intelligence gives us the eyes and ears to see and
+hear those who would do us harm, and at the same time good
+intelligence allows us to preserve and protect the civil
+liberties of our people.
+ Now, moving quickly to the budget requests for the
+Information Analysis and Infrastructure Protection for fiscal
+year 2006, $873 million has been requested by the President.
+This represents a decrease of $20 million below the fiscal year
+2005 levels, but a substantial number of the activities within
+Information Analysis have increased. We simply have transfers
+of some activities and consolidation for savings.
+ But my point is this: It is essential that the Congress
+support the Department and support the administration in its
+request and not make any cuts so that information analysis can
+continue to expand its important work in this vital area.
+ We have requested and we support a request for an increase
+of $12 million in the homeland security operations center. This
+is the heart and soul of what we are trying to do in homeland
+security. We have $5.5 million for information sharing and
+collaboration. An additional $20 million for 173 full-time
+equivalent employees is also requested.
+ Do you realize that they are not fully staffed? Do you
+realize that our information analysis capabilities in the
+Department of Homeland Security are lacking literally hundreds
+of personnel and that when we identify people to hire it takes
+upwards of a year and maybe longer to clear them?
+ This is a huge problem, and this is something that we have
+to focus on very carefully. A lot of the offices downtown are
+empty, and this is inadequate to the task that we have before
+us.
+ We have also tried to spend the money smarter. The
+Information Analysis budget transfers $53 million in buffer
+zone protection plans to another agency to create a targeted
+infrastructure protection grants program which will result in a
+savings, and there are additional savings that we have been
+able to achieve through consolidation.
+ My bottom line is, Mr. Chairman, and the message of this
+testimony is that we have a new Homeland Security Committee,
+with new subcommittees, which include the Subcommittee on
+Intelligence. We are overseeing a new agency of government that
+has been created to deal with the new security challenges of
+terrorism in the American homeland. We think we are making
+progress in this regard. We think the moneys that have been
+requested are adequate, but we also know that we do not have
+all of the answers at this point in time. As our oversight
+activities continue throughout this spring and summer we have
+to be flexible, we have to be creative. We have to be diligent,
+because we may have to change course a little bit here and
+there to meet the task, and we hope that this committee will
+give us the resources that we need to perform this important
+mission.
+ I thank you for your attention. I would be happy to answer
+any questions.
+ [The prepared statement of Robert Simmons follows:]
+
+ Prepared Statement of Hon. Rob Simmons, a Representative in Congress
+ From the State of Connecticut
+
+ Chairman Nussle, Ranking Member Spratt, I thank you for allowing me
+to testify on the President's Fiscal Year 2006 Budget Submission to
+Congress.
+ As Chairman of the Homeland Security Committee's Subcommittee on
+Intelligence, Information Sharing and Terrorism Risk Assessment, I will
+focus on the Department of Homeland Security's intelligence and
+information sharing capabilities.
+ We all remember the tragic events of September 11th when terrible
+failures of our U.S. intelligence community resulted in the loss of
+over 3,000 innocent lives. The 9/11 Commission outlined those failures
+in great detail, and then called upon all of us to use that tragedy to
+``create something positive--an America that is safer, stronger and
+wiser.''
+ The creation of a new Department of Homeland Security, and a
+permanent committee of Congress to oversee it, is part of that effort
+to ``create something positive.'' Intelligence reform is also part of
+that effort, and the new Subcommittee which I chair will try to oversee
+the creation of an intelligence capability in the Department of
+Homeland Security that makes us ``safer, stronger and wiser.''
+ We all want our homeland and our loved ones to be safe. We also
+know that we can spend every dollar, search every traveler, inspect
+every shipping container and still fail to prevent another terrorist
+attack here at home.
+ The Chinese built the Great Wall of China at extraordinary expense
+to keep out the Mongol hoards, and it failed. In the 1930's, the French
+built the Maginot Line to exclude the Germans, and it failed. So we
+have to be ``wise'' in our choices. Good intelligence gathering and
+good intelligence sharing helps us to be wise.
+ Prior to 9/11, information was not being effectively shared,
+analyzed and acted upon. Because of this we were unable to ``connect
+the dots'' to prevent 9/11. Since then, we have made great progress
+toward integrating our intelligence activities, sharing information and
+focusing on the terrorist threat. It is vital that our activities and
+capabilities in this area continue to improve. The cost of failure is
+too high to consider.
+ The threat is real. Just last week the media reported on an
+intercepted communication between Osama bin Laden and Abu Musab al-
+Zarqawi reiterating the desire of al Qaeda to target the U.S. homeland.
+This report coincides with the testimony of Homeland Security Deputy
+Secretary, Admiral James Loy, that ``al Qaeda has considered using the
+southwestern border to infiltrate the United States.'' And we know that
+our enemies' ambitions do not stop there.
+ Good intelligence gives us ``the eyes and ears'' to see and hear
+those who would do us harm. At the same time, good intelligence allows
+us to preserve and protect the civil liberties of our people.
+ This being said, the President's Budget Request for the Information
+Analysis and Infrastructure Protection in FY06 totals just over $873
+million, a net decrease of $20.5 million below FY05 enacted levels.
+While this includes substantial increases for certain activities within
+the IAIP budget, it also involves the transfer of over $100 million out
+of the IAIP Directorate due to Department-wide consolidation efforts.
+In the coming weeks the Subcommittee will closely examine additional
+changes for IAIP because of the importance of its mission. The
+Subcommittee will pay particular attention to the intelligence and
+information-sharing functions of IAIP as well as the Open-Source
+Intelligence capabilities of the Department.
+ While we anticipate some changes to the IAIP budget, we believe
+that these changes can be accomplished within the top-line DHS budget,
+so we are not asking for an overall DHS increase at this time. But it
+is essential that Congress support the Department in this area and not
+make further cuts so IAIP can continue and expand its important work in
+information analysis.
+ The DHS Information Analysis and Infrastructure Protection
+Directorate (IAIP) has a unique role in the Federal Government. Not
+only does it serve as the ``eyes and ears'' of the department, focusing
+specifically on the threats and vulnerabilities of the U.S. homeland,
+but it also establishes vital partnerships with state, local, tribal
+and private sector authorities. To accomplish this task, the
+President's budget requests:
+ A $12.9 million increase for the Homeland Security
+Operations Center (HSOC), one of the major successes of the Department
+to date. Enhancing this capability will strengthen information sharing
+and coordination with Federal, state, local, and tribal partners as
+well as with the private sector.
+ $5.5 million for the Information Sharing and Collaboration
+program, which will help link together and coordinate information-
+sharing between IAIP, DHS operational elements and their state and
+local partners.
+ An increase of $20.5 million to support an additional 73
+Full Time Equivalent (FTE) in IAIP. These new hires will directly
+support the DHS statutory role of analyzing information and sharing
+information, issuing warnings and sharing assessments with Federal,
+state, local and private sector officials. It is vital that IAIP make
+hiring additional personnel a priority.
+ A $19.4 million increase for the construction of the
+Homeland Secure Data Network (HSDN), a secure, classified network for
+information sharing and collaboration.
+ In addition to these increases, the DHS budget also strives to
+spend smarter. For instance:
+ The IAIP budget transfers $53 million in Buffer Zone
+Protection Plans to the Office of State and Local Government
+Coordination and Preparedness (OSLGCP) to create a Targeted
+Infrastructure Protection (TIP) Grants program. This will result in a
+$3 million savings as a result of the consolidation in OSLGCP.
+ The IAIP budget also includes a $41.5 million decrease,
+transferring the Emerging Pilot and Technology Application Pilots to
+the Science and Technology Directorate as part of a broader DHS
+consolidation of Science and Technology funding.
+ These are important first steps to save money through
+consolidation. Over the course of this year, we can and will do more.
+ In closing, Mr. Chairman, it is important to reiterate that the
+Intelligence Subcommittee of the Homeland Security Committee is engaged
+in a new oversight role involving a new agency of government created to
+deal with the new security challenges of terrorism in the American
+homeland. We believe we are making progress in this vital mission. But
+we also know that these new challenges will require that we be creative
+and flexible in order to preserve and protect a free America that is
+``safer, stronger and wiser.''
+ Thank you. I am happy to respond to your questions.
+
+ Mr. Portman. Thank you, Mr. Simmons, for your testimony,
+and congratulations on your new chairmanship. Given your
+background in intelligence, you are the right person for the
+task and, as we can tell by your testimony today, you have a
+good grasp of some of the challenges.
+ I would ask you as a general matter whether you are pleased
+with the President's budget as to Homeland Security generally?
+He has an increase in funding, as you know, and within that
+makes priorities.
+ Obviously one of the priorities that you would like to see
+is not as high on the priority list as it was in the 2005
+budget, but can you give us a sense of what the overall budget
+looks like from your perspective?
+ Mr. Simmons. I will leave it to Chairman Cox to make a
+definitive statement. I have discussed this issue with him. We
+believe that the gross numbers are adequate. As long as there
+is an opportunity to move dollars around within those gross
+numbers, we can be successful. The administration has been very
+progressive in allowing increases in this budget. I think the
+Defense budget is the only other one that has experienced those
+increases.
+ So, again, we are not looking to spend a lot of money. That
+is why I mentioned the Great Wall of China and the Maginot
+Line. We are not looking to put a guard on every bridge. We are
+trying to be smarter about this. But to be smarter, you have to
+have good intelligence, and you will notice that the
+intelligence budget in the DHS budget is only about 3 percent
+of the total. About 3 percent of the total.
+ So it is my expectation that there may be some movement
+within the gross budget to move some of those figures around as
+we try to get our arms around the problem, as we try to get
+people hired, as we try to get some of the components of these
+22 agencies to work together better, even to sit together in
+the same buildings, which at this point they do not, as we try
+to conform some of the personnel systems, and this also is part
+of the problem.
+ So the quick answer is, we think the gross numbers are
+adequate. We would not like to see those reduced, but there may
+be some movement within those gross numbers to meet the
+requirements that we face.
+ Mr. Portman. Thank you. As you know, we will as a Congress
+have the ability to reallocate even within a number that we
+agree to, which is an aggregate number. I know you will be very
+involved in that process.
+ Mr. Cuellar. Thank you, Mr. Chairman. Mr. Chairman, again,
+congratulations on being a new chairman. I think it is--being
+from Laredo,Texas, right on the border, I understand those
+threats. I understand why it is so important to be wise or use
+the smart ways, because you cannot put an agent in every block
+or every bridge across. So it is very, very important that we
+do this.
+ But I want to just talk about one, your last paragraph,
+which is very important to me. That is, you are talking about
+your subcommittee is going to be doing a new type of oversight,
+and I think one of the things we need to do here in Congress is
+have the legislative body provide that oversight on how the
+agencies are working, whether they are spending the money
+correctly, whether we ought to shift some of those dollars
+around, have that flexibility, whether they are creating rules
+or regulations that are too burdensome or not working. And that
+is a role that we ought to play as Congressmen.
+ And my question to you is, what is your definition as the
+new chairman of Congressional oversight, especially when you
+talk about a new agency that just got created? I can understand
+how difficult it is, but what is your definition of legislative
+oversight?
+ Mr. Simmons. A good question. I would first of all say that
+I had an experience as a staff director of the Senate
+Intelligence Committee a number of years ago in the
+establishing and the managing of Congressional oversight of the
+intelligence community. It was particularly challenging because
+the activities of the intelligence community were secret.
+ We have a somewhat similar task today. Certain activities
+of the Department of Homeland Security must of necessity remain
+secret so they can remain effective, and at the same time we
+have an obligation that the people we represent in that
+oversight process, and the people are represented by us, by the
+Members of the Congress.
+ We have budget authority; in other words, we make budget
+decisions. That is what you are doing here today, and in the
+next few weeks, is what we do in our capacity as members of an
+authorization committee. But we also have a responsibility to
+get out in the field, to actually see who is working where and
+what they are doing, to see how effective they are, to see if
+these buildings are empty or if they are full, to see if people
+are talking, and if their communications systems are working,
+to see if they are connecting from a Federal level down to a
+county level, because the task of homeland security no longer
+involves just the Federal Government, it involves State
+governments, it involves county and municipal governments, it
+involves vertical and horizontal communication in a timely
+fashion.
+ And I have already made plans for some of these trips. I
+was in Mexico a week ago focusing on the cross border issues.
+And in particular, lack of work, lack of jobs, population
+pressures in Mexico are creating illegal methods of bringing
+people into this country illegally, and those same networks are
+available to the terrorists.
+ If somebody is willing to pay a ``coyote'' $10,000 to get
+him into this country or maybe $20,000 or $30,000, they will
+bring a terrorist into this country. So we have to look at
+those networks and try to examine what the best way is to deal
+with them.
+ It involves a partnership with the executive branch. But it
+also involves a focus on our civil liberties. In doing all of
+these things, we do not want to violate the liberties of our
+citizens in the name of terrorism or homeland security. So it
+is a balancing act as well.
+ It is a difficult challenge, but I think it is something
+that we must do.
+ Mr. Cuellar. I thank you. It is refreshing to see that type
+of definitional approach when it comes to legislative
+oversight, because I really think, Mr. Chairman, that we need
+to reassert that Congressional oversight at all levels, not
+only in the budget but in the committees because, keep in mind
+that we come and go, but some of institutional persons, the
+agencies sometimes have a longer life than we do. And I think
+it is very, very important that we provide that legislative
+oversight. Thank you.
+ I know you know the border when you start using words like
+coyote. Those are the terms and lingo that is used down there.
+ And the last thing, just to conclude on this, on the border
+where I live in Laredo, there have been about 26 Americans that
+have gone across and are missing, and we are starting to see
+some of those killings on this side of the border. And I am
+sure that Homeland Security, it will be your committee, or one
+of your committees will start looking at that, because it is a
+big problem. And I am worried about that overflow, because you
+got the MS-13 and some of those violent gangs are coming over
+the border, and we are starting to see them. I think just
+yesterday three men were shot in the head right on the U.S.-
+Mexico border. I am talking about on this side. So you are
+starting to see that violence coming over, and Homeland
+Security certainly needs to play a role in that.
+ Mr. Simmons. It may be that part of our oversight visit to
+the borders may involve you and your district.
+ Mr. Portman. Thank you. Mr. Conaway.
+ Mr. Conaway. Thank you, Mr. Simmons, appreciate your
+service and the background you bring to the tasks. Given the
+risks that should an event happen, you know, God forbid, the
+amount of criticism of all of us for having not spent immense
+amounts more on trying to protect ourselves, there will be no
+limit to that criticism.
+ So hearing you say that the top line budget as we
+understand the risks, as we understand the plans for protecting
+ourselves, that DHS should be able to function within that--and
+I do agree that if we wait until the terrorists get to the Rio
+Grande then we are sunk. And the role of intelligence gathering
+worldwide and us then going after the bad guys where they are
+hatching those plans, it is far better than waiting until they
+wade the Rio Grande River and come into this country illegally.
+ With all of that said, you mentioned two things. One,
+hundreds of jobs going unfilled, as well as the lengthy time it
+takes for us to vet or clear from a security standpoint those
+jobs. Could you speak to the length of time it takes? Is that
+inordinate to protect ourselves and make sure that we do not
+hire--and then also, having chaired a State regulatory agency
+for 7\1/2\ years, I know the bureaucrats, when they have empty
+slots they find someplace else to spend the money that was
+allocated for those salaries. And it is spent on one-time
+purchases during the timeframe that the slots are empty. That
+is one thing, but if they spend that money on ongoing programs
+and then come back to us and say, well, now I have got these
+empty slots that were empty, I have not filled them, I need
+more money to pay those folks, can you speak to us about how--
+your sense of that happening with these empty slots?
+ Mr. Simmons. First of all, you have a very solid grasp of
+bureaucratic politics. So I thank you for those insights. I
+think they are quite correct. The fact is that we have a new
+agency and a new mission, and something that Americans have
+really not had to worry about for a long period of time. The
+War of 1812 is the last time that we had enemy activity, here
+in Washington, DC. So for approximately 180 years, the two
+great oceans provided us with most of the security we needed.
+Now we have to look inward, and this is a new challenge and a
+new task. Cobbling together 22 organizations with different
+sets of rules and regulations is not easy.
+ Standing up a new intelligence capability means you have to
+get people, and the preexisting intelligence organizations of
+course have their own people, many of whom are happy with where
+they are. You can get some from other agencies, but you can't
+fill all of your slots that way. Assuming you are hiring people
+that are not cleared, the clearance process is taking upwards
+to a year, which is not unusual, but we need to set priorities
+to accelerate that. We do not want the clearance process to be
+degraded. We simply want it to be facilitated or speeded up.
+ And I think that can be done. I have had some experience
+with that over the last several years dealing with industrial
+clearances for shipbuilders in my district. I think we can work
+with OPM and with others to create those priorities. These are
+some of the things that I have learned over the last 2 weeks as
+the chairman, and these are some of the issues that I intend to
+focus on. If you need additional answers to your questions, we
+would be happy to submit them for the record.
+ Mr. Conaway. I appreciate your comment on the heads up on
+understanding the bureaucratic--at the end of the year spend
+all of the budget so you do not have to defend not having spent
+that on your committee is on point.
+ Mr. Simmons. I an am very familiar with the issue. I am not
+aware that that has taken place.
+ I am not making any accusations, but I have got a staff
+member behind me who is taking notes on that. So we will
+provide that for you.
+ Mr. Conaway. Thank you.
+ Mr. Portman. Thank you. Mr. Shaw, you are recognized for 10
+minutes. Welcome to the committee.
+
+ STATEMENT OF THE HON. E. CLAY SHAW, JR., A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF FLORIDA
+
+ Mr. Shaw. Thank you, Mr. Chairman, and I shall not take the
+full 10 minutes. I appreciate all of you on a get-away day that
+are with us. So glad to be before you and the members of the
+committee that are here.
+ I am here to talk about a subject that is near and dear to
+my heart. That is the subject of cancer and finding a cure for
+cancer. I am a lung cancer survivor. I might add here that
+there is not many of us. Lung cancer is the leading cancer
+killer among men and women. Lung cancer kills more people
+annually than breast cancer, prostate and colorectal cancer
+combined.
+ More than 50 percent of those newly diagnosed with lung
+cancer are former smokers or have never smoked before. I may
+say here that I haven't smoked for about 30 or 35 years, and
+when they took out and removed the upper left lobe of my lung
+the doctor said he could tell I was once a smoker. I think this
+goes to show that the damage that you do perhaps as a young
+person can certainly come back to haunt you in your adult life.
+ Overall, one in three women will be affected by cancer in
+their lifetime and one in every two men. So you can look to
+your left and to your right and you can find that somebody next
+to you is going to have cancer if it is not you yourself.
+ The National Cancer Institute estimates that over 570,000
+Americans will die from cancer this year. This equals 1,500
+Americans per day, or over 1 per minute. We must work together
+to turn these statistics around.
+ I formed, after my lung cancer, the 2015 Caucus with our
+colleague Colin Peterson from Minnesota. Both Colin and I had
+cancer operations during the same period of time over 2 years
+ago. This 2015 Coalition, they are Members of Congress who
+either are cancer survivors or have a close relative who
+battled cancer.
+ As you may know, the National Institutes of Health has
+established the goal of treating cancer as a manageable disease
+by 2015. I think we can do better than that. I think we can
+actually find a cure for cancer by 2015.
+ Congressman Peterson and I have written the President
+asking for his strong leadership in finding a cure by 2015. I
+am submitting a copy of the letter that I would appreciate and
+ask that it be made a part of the record.
+ Cancer research scientists are poised to make great
+breakthroughs in discovering a cure for cancer. Now is the time
+for the United States to be fully committed to this roadmap of
+discovery.
+ As you know, the President proposed $28.8 billion in
+funding for NIH for fiscal year 2006. Of this, he has proposed
+$4.8 billion in funding for the National Cancer Institute.
+While I appreciate the President's continued commitment to the
+NIH and NCI, I think now is the time to step up our Federal
+resources.
+ As we develop the fiscal year 2006 budget resolution, I
+hope you will give special consideration to NIH, to their
+budget, and to NCI and join with me in finding a cure for
+cancer by 2015.
+ Mr. Chairman, I can tell you there is no more frightening
+words that you can hear than you have cancer. I will never
+forget it. The doctor came out and he wouldn't even have eye
+contact. It was like a jury coming back with a guilty verdict.
+It is a frightening thing. But it is something that we can
+cure.
+ My early diagnosis, and I might say that because of the
+doctor insisting that I go have the necessary tests, is the
+only reason I am here today. And we can solve this for all
+Americans. It is time that we make this commitment, such as
+Kennedy did with making the commitment to flying a man to the
+Moon and bringing him home safely. We can find a cure for
+cancer by 2015. We need to get started on that process and get
+started now.
+ I thank you and I yield back.
+ [The prepared statement of E. Clay Shaw follows:]
+
+ Prepared Statement of Hon. E. Clay Shaw, Jr., a Representative in
+ Congress From the State of Florida
+
+ Chairman Nussle, Ranking Member Spratt and Members of the Budget
+Committee, thank you for this opportunity to express my thoughts about
+something very near and dear to my heart--finding a cure for cancer.
+ I am a lung cancer survivor. Lung cancer is the leading cancer
+killer among men and women. Lung cancer kills more people annually than
+breast, prostate and colorectal cancer combined. More than 50 percent
+of those newly diagnosed with lung cancer are former smokers or have
+never smoked before.
+ Overall, one in every three women will be affected by cancer in
+their lifetime and one in every two men will be affected by cancer in
+their lifetime. The National Cancer Institutes estimates that over
+570,000 Americans will die from cancer this year--this equates to 1,500
+Americans per day or more than one per minute.
+ We must work together to turn these statistics around.
+ I formed the 2015 Caucus, with our colleague Collin Peterson (D-
+MN), as a forum for members who are either cancer survivors or have a
+close relative who battled cancer. As you may know, the National
+Institutes of Health has established the goal of treating cancer as a
+manageable disease by 2015. I believe we can go one step further and
+find a cure for cancer by 2015.
+ Congressman Peterson and I have written the President, asking for
+his strong leadership in finding a cure by 2015. I am submitting a copy
+of this letter for the record. Cancer research scientists are poised to
+make a great breakthrough in discovering a cure for cancer. Now is the
+time for the United States to be fully commitment to this road map of
+discovery.
+ As you know, the President proposed $28.8 billion in funding for
+the NIH for fiscal year 2006. Of this, he has proposed $4.8 billion in
+funding for the National Cancer Institute. While I appreciate the
+President's continued commitment to the NIH and NCI, I think now is the
+time to step up our Federal resources.
+ As you develop the fiscal year 2006 budget resolution, I hope you
+will give special consideration to NIH budget and join with me in
+finding a cure for cancer by 2015. Thank you for your time.
+
+ Mr. Portman. Thank you, Mr. Shaw, for your personal
+commitment to this issue. I remember vividly when that cancer
+was discovered, and I remember you valiantly going through this
+with Emily, and as is the case with ever Member present here
+and anybody here in the audience, all of us have had a brush
+with it through our families one way or the other, having lost
+my mother and mother-in-law and having other family members
+suffer through cancer, but as survivors I certainly understand
+your commitment to this and we appreciate your specific
+suggestion.
+ With that, Mr. Cuellar.
+ Mr. Cuellar. No questions, except it is important to have
+somebody like you to talk about it. I think one of your last
+statements here, it is not even high ranking officials like you
+are immune. I think that is one of statements that you had. So
+I appreciate your courage. I know it is very difficult. I have
+known a lot of folks. This is one battle that we have to win,
+Mr. Shaw. Thank you.
+ Mr. Shaw. If I could comment, Rob, on what you had to say
+regarding family members. Emily lost her mother and her father
+and her sister with cancer. We were watching her very closely.
+And it came to me, which I have no known cancer in my family.
+So nobody is immune. It is something we all need to watch very,
+very carefully and have our checkups and do these things.
+ But I think it is incumbent upon us as Members of Congress
+to do what we can to seek out, properly fund and find a cure
+for this disease.
+ Mr. Conaway. No questions, Mr. Shaw, other than to just
+comment that my first wife battled Leukemia for 4 years, but
+lost.
+ Mr. Portman. Thank you for your testimony.
+ We now are pleased to have with us Mr. Evans. Lane, thank
+you for being here. And you are joined, I understand, by Mr.
+Michaud as well as Ms. Herseth. I appreciate your being here.
+And welcome to the committee and to Congress.
+ Mr. Evans, you have 10 minutes to divide as you wish. Then
+we will have an opportunity to ask you some questions as follow
+up. Welcome to the committee and look forward to your
+testimony.
+
+STATEMENT OF THE HON. LANE EVANS, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF ILLINOIS
+
+ Mr. Evans. Thank you, Mr. Chairman. The administration's
+fiscal year 2006 budget resolution for the Department of
+Veterans Affairs (VA) proposes flat-line funding that will
+severely weaken the system. It fails to adequately fund
+veterans health care and seeks to put the burden on veterans
+themselves to make up the shortfall.
+ The administration's budget would force the VA to deny care
+to thousands of additional veterans, cut programs for nurses
+within the system, abandon even more veterans who need VA
+nursing home care, and gut the successful programs of State
+nursing homes.
+ This is all at the time that we are in war, at the height
+of war. This is unconscionable.
+ For 2006, the administration has requested only one-half of
+1 percent more than Congress appropriated for the VA in fiscal
+year 2005. This will force the Department of Veterans Affairs
+to sustain and even broaden the practice of rationing care to
+veterans. What sort of message does it send to our returning
+troops, to those who might be considering military service, and
+you cannot get help when you need it--when you come back home?
+ Under the administration plan, without corrections, the VA
+programs would receive only a 0.4 percent increase over the
+funds appropriated for fiscal year 2005. This ignores the VA's
+own testimony that it needs 14 percent annually to maintain a
+current level of service. The bottom line is that this
+administration's proposal is at least $3 billion short in the
+health care funding just to keep the VA ship afloat. The way we
+keep it afloat is not by forcing one veteran to fight against
+the other, or by cutting critically needed professionals,
+needed by all veterans, working together to solve those
+problems.
+ I and my Democratic colleagues on the Veterans' Affairs
+Committee would submit for your consideration the views that
+represent, I believe, a realistic VA budget, based on our
+veterans views.
+ Thank you, Mr. Chairman, and I yield to the gentleman from
+Maine at this point.
+ [The prepared statement of Lane Evans follows:]
+
+ Prepared Statement of Hon. Lane Evans, a Representative in Congress
+ From the State of Illinois
+
+ Mr. Chairman and Ranking Member Spratt, the Administration's fiscal
+year 2006 budget submission for the Department of Veterans Affairs
+proposes flat-line funding that will severely weaken the system. It
+fails to adequately fund veterans' health care and seeks to put the
+burden on veterans themselves to make up the shortfall. The
+Administration's budget would force VA to deny care to thousands of
+additional veterans, cut thousands of nurses from the system, abandon
+even more veterans who need VA nursing home care, and gut the
+successful state nursing home program.
+ At any time, this would be wrong. At the height of a war, it is
+unconscionable.
+ For fiscal year 2006, the Administration has requested only one-
+half of 1-percent more than Congress appropriated for the VA in fiscal
+year 2005. This will force the Department of Veterans Affairs to
+sustain and even broaden a practice of rationing care to veterans. What
+sort of message is that to send to returning troops, to those who might
+be considering military service, and to all who have already honorably
+served?
+ Under the Administration plan, without collections, VA medical
+programs would receive only a 0.4 percent increase over the funds
+appropriated for fiscal year 2005. This ignores VA's own testimony that
+it needs 14 percent annually to maintain a current level of health
+services.
+ The Administration's budget calls for a staff reduction of 2
+percent in VA's medical care business line. That amounts to the removal
+of more than 3,000 health care employees, mostly nurses, at a time when
+there is, in fact, a nursing shortage in VA.
+ The bottom line is that the Administration's proposal is at least
+$3 billion short in health care funding just to keep the VA ship
+afloat. And the way to keep it afloat is not by forcing one veteran to
+pay for another veteran's care or by cutting critically needed health
+care professionals.
+ I and my Democratic colleagues on the Veterans' Affairs Committee
+have submitted for your consideration views & estimates that represent
+a realistic VA budget based on veterans' needs. Unlike the
+Administration's budget proposal, it takes into account the impact of
+thousands of returning troops from Iraq and Afghanistan who will need
+health care, including mental health services and other types of
+transition assistance.
+ For the third straight year, the President's budget recommends a
+$250 annual enrollment fee for medical care for Priority 7 and Priority
+8 veterans, and more than doubles the amount they pay for prescription
+drugs. These are veterans whose conditions are not service-connected
+and who have incomes above VA means-tested levels. According to the
+Administration's own figures, this will result in driving 213,000
+additional veterans out of the system.
+ But what is most appalling is the position of some that these
+veterans, Priority 7s and 8s, are not deserving of VA care because they
+are--and this is quite misleading--``higher income'' and might
+therefore have other health care options. This group of veterans, in
+fact, includes combat-decorated veterans and others who served
+honorably and whose annual incomes exceed $25,000 (single) to $36,000
+(four or more dependents). A significant number of them lack health
+insurance (in 2001, 6.4 percent, but likely more as the number of
+uninsured Americans continues to grow), and some are not eligible for
+Medicare.
+ In the private sector these veterans are not going to receive the
+veteran-sensitive, specialized treatment that VA can provide. Without
+VA, some will fall through the health care cracks altogether. Moreover,
+many in the veterans' affairs community have serious concerns that the
+VA health care system may not remain a viable independent system
+without these veterans as patients, so all veterans may be adversely
+affected by such policies. The Administration's push to oust deserving
+veterans from the system also endangers VA's other missions of
+educating the Nation's health care professionals, conducting research
+and serving as back-up to the Department of Defense in the event of
+war.
+ As troops return home from Operation Iraqi Freedom and Operation
+Enduring Freedom, VA will eventually become responsible for many of
+their health care needs, particularly for those with injuries that may
+last a lifetime. Many of these servicemembers will require ongoing
+rehabilitative care for their injuries--both mental and physical. As of
+December 2004, VA had treated 32,684 of the 210,000 veterans from these
+deployments. We agree with the Independent Budget on the necessity of a
+significant infusion of funds to ensure that veterans are able to
+receive the best sustaining care available for their problems.
+ Recent studies have shown that a significant number of returning
+troops (up to 17 percent or more) are demonstrating a need for post-
+deployment mental health intervention. Troops' mental health issues
+range from acute and transitory anxiety and readjustment disorders to
+more chronic and severe problems, even psychoses. We believe VA must
+stand ready to provide immediate relief to servicemembers who return
+requiring its services. Experts indicate that immediate intervention
+may be the surest remedy to preventing some long-term and chronic
+disorders.
+ The President's budget also cuts $9 million from VA's renowned
+medical and prosthetic research program, whose achievements have
+benefited veterans and non-veterans alike. As advocates are quick to
+point out, without appropriated research dollars, these programs fail
+to draw competitively based funding from private and other government
+sources. With continued cuts to its appropriated funding levels, the
+system continues to be challenged to fund merit-reviewed projects that
+could greatly benefit veterans and other Americans.
+ Mr. Chairman, we can and must do better for our veterans. We ask
+you to give serious consideration to the views & estimates put forward
+by those who join me on this panel today, and our other Democratic
+colleagues on the Veterans' Affairs Committee.
+ Thank you.
+
+ Mr. Michaud. Thank you, Mr. Chairman. I have a couple of my
+colleagues who actually have flight problems. I can yield to
+them first. So without objection I yield to my colleagues.
+
+ STATEMENT OF THE HON. SHELLEY BERKLEY, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEVADA
+
+ Ms. Berkley. Thank you again for giving me the opportunity
+to speak with you on an issue that is very important to me. I
+am here today to express my disappointment that the
+administration's budget does not, in my opinion, adequately
+address the needs of those veterans who have served our Nation,
+as well as current service members who will soon become
+veterans.
+ As many people are aware, I represent the district that has
+the fastest growing veterans population in the United States. I
+have almost 200,000 in the southern Nevada area. I work very
+closely with them. I am very well aware of their problems, and
+I would like to share those problems with you and how this
+budget does not help where it is needed the most.
+ First, the President's budget fails to recognize that more
+than 30,000 veterans have remanded claims which have been
+pending for years, and in some cases more than a decade. In
+Nevada and across the country, veterans who appealed decisions
+as long ago as 1994 still have not received a final decision on
+their claims.
+ I strongly urge the Budget Committee to use the temporary
+funding provided in the administration's budget to address the
+remanded claims problem. And Nevada has the fourth highest
+remand rate in the Nation. These veterans have been waiting
+years to have their claims addressed.
+ In fiscal year 2004, veterans filed almost 200,000 more
+disability rating claims than in fiscal year 2000. However, the
+VA rating staff has not increased proportionately. As a result
+the pending caseload of these claims has significantly
+increased since President Bush took office. Permanent funding
+is necessary for 113 additional employees so veterans can
+receive accurate and timely decisions on their claims.
+ Second, additional funding must be authorized for the Board
+of Veterans Appeals to prevent even longer delays in processing
+appeals. In my home State of Nevada, the number of pending
+appeals currently exceeds 1,200, which is up from 750 in the
+year 2001. It is unconscionable that veterans who are appealing
+decisions for benefits based on their service-connected
+disabilities are required to wait years for a decision from
+their own government.
+ Third, the President's budget is inadequate to continue the
+investment in improving the Nation's memorials and cemeteries
+that honor our veterans. I request additional funding to assure
+progress on the national shrine commitment so those who have
+paid the ultimate price can be laid to rest in dignified, well-
+maintained surroundings, and I can tell you without fear of
+contradiction when I was first running for office 7 years ago
+and met with the veterans organizations in my community this
+was the one thing they pointed out to me more than any other.
+ In addition, I would like to urge the committee to provide
+funding in the administration's fiscal year 2006 budget to
+construct a full-scale medical complex in Las Vegas. After
+going through an exhaustive CARES study, holding hearings
+across the United States, the administration has added $199
+million for a full service VA medical complex in southern
+Nevada.
+ We have, as I mentioned, the fastest growing veterans
+population in the country. We have no hospital, no outpatient
+clinic, no long-term care facility. The veterans in southern
+Nevada are relying on a string of temporary clinics scattered
+across the valley. There are times during the summer when it is
+115 degrees. I have 80-year-old veterans standing in the heat
+waiting for a shuttle to pick them up to take them to 1 of 10
+locations. So if they have to go and see a doctor for high
+blood pressure, they go to one facility. Then they have to get
+back on the bus, on the shuttle, go to another building in
+order to get a different service, and then they have to go
+somewhere else to get their prescription medication taken care
+of.
+ Almost 1,500 of southern Nevada veterans are sent to
+neighboring States hundreds of miles away because the services
+cannot be provided locally since we do not have a full service
+VA hospital for our veterans. They usually go to southern
+California. The problem with that is they tend to be older,
+they tend to--obviously, if they need the care, they are not in
+good physical shape, they have medical problems, and they are
+away from their families. This is an extremely stressful time,
+and we need to bring these facilities to southern Nevada where
+the veterans are located. The burden that these veterans and
+their families have because of the lack of facilities in Las
+Vegas is mind boggling and very sad to observe.
+ The proposed hospital outpatient clinic and long-term care
+facility, of which we have none, in Las Vegas will
+significantly improve health care access for the almost 200,000
+veterans in my community. That I would say is our number one
+priority, and since it has already been approved in the budget
+I ask you to look lovingly at that, and my veterans will thank
+you very much for that, as we should be thanking them.
+ I appreciate your time and sincerely hope that we can work
+together to ensure the highest quality of care and service for
+our Nation's veterans. There is not a group of Americans that
+deserves our care more than they do. Thank you very much.
+ [The prepared statement of Shelley Berkley follows:]
+
+ Prepared Statement of Hon. Shelley Berkley, a Representative in
+ Congress From the State of Nevada
+
+ Thank you, Mr. Chairman. I am here today to express my
+disappointment that the Administration's budget does not adequately
+address the needs of those veterans who have served our country, as
+well as the current servicemembers who will soon become veterans.
+ I agree with the positions expressed in the Views and Estimates of
+the Democratic Members of the Committee on Veterans' Affairs and today,
+I would like to focus on areas where funding for the VA is desperately
+needed.
+ First, the President's budget fails to recognize that more than
+30,000 veterans have remanded claims, which have been pending for years
+and in some cases more than a decade. Almost 75% of those who appealed
+VA regional office decisions in FY 2004 had those decisions remanded or
+reversed by the Board of Appeals. In Nevada, and across the country,
+veterans who appealed decisions as long ago as 1994 still have not
+received a final decision on their claim. I strongly urge the Budget
+Committee to use the temporary funding provided in the Administration's
+budget to address the remanded claims problem.
+ In FY 2004, veterans filed almost 200,000 more disability rating
+claims than in FY 2000. The number of veterans filing these claims for
+the first time has also increased by 83,000. However, VA rating staff
+has not increased proportionately. As a result, the pending caseload of
+these claims has increased from 278,334 when President Bush took office
+to 340,020 as of February 19, 2005. I cannot stress enough that
+permanent funding is necessary for the 113 additional employees so
+veterans can receive accurate and timely decisions on their claims.
+ Second, I agree with the majority that additional funding must be
+authorized for the Board of Veterans Appeals to prevent even longer
+delays in processing appeals. Veterans who are appealing decisions to
+the Board of Veterans Appeals can expect to see a dramatic increase in
+time to resolve their appeals. Since President Bush took office in
+2001, the number of pending appeals has increased from 87,291 to
+152,948 as of February 19, 2004. My home state of Nevada is no
+exception, with the number of pending appeals currently exceeding 1,200
+from 750 in 2001. This cannot continue.
+ Third, the President's budget is inadequate to continue the
+investment in improving the nation's memorials and cemeteries that
+honor our veterans. I request additional funding to assure progress on
+the national shrine commitment so those who have paid the ultimate
+price can be laid to rest in dignified, well-maintained surroundings.
+ In addition, I urge the Committee to provide the funding in the
+Administration's FY 2006 Budget to construct the full-scale medical
+complex in Las Vegas. Southern Nevada has one of the fastest-growing
+veterans' populations in the country and there is no hospital,
+outpatient clinic, or long-term care facility in sight.
+ The veterans in Southern Nevada are relying on a string of
+temporary clinics scattered across the Valley and my veterans are
+forced to shuffle between the clinics for their various health care
+needs. Hundreds of Southern Nevada veterans are sent to neighboring
+states, hundreds of miles away from their homes, because the services
+cannot be provided locally. This is an unfair burden on the veterans
+and their families. The proposed hospital, outpatient clinic, and long-
+term care facility in Las Vegas will significantly improve health care
+access for the 160,000 veterans in my community.
+ I appreciate your time and sincerely hope that we will work
+together to ensure the highest quality of care and service for our
+nation's veterans.
+
+ U.S. Congress,
+ Washington, DC, February 28, 2005.
+Hon. Jim Nussle,
+Chairman, Committee on the Budget, House of Representatives,
+ Washington, DC.
+
+Hon. John Spratt, Jr.,
+Ranking Member, Committee on the Budget, House of Representatives,
+ Washington, DC.
+ Dear Chairman Nussle and Ranking Member Spratt: We are writing to
+express our concern regarding a provision in the administration's FY
+2006 budget for the Department of Health and Human Services that would
+require gaming establishments to serve as Federal collection agents for
+overdue child support payments. While we adamantly support the efforts
+of state law enforcement agents to recover child support from parents
+who do not fulfill their parental obligations, this provision is
+imprudent and could lead to a myriad of unintended consequences.
+ Under the proposal, an individual whose legal winnings exceed the
+threshold for filling out an Internal Revenue Service W2-G form would
+be subject to a Federal records check. A civilian commercial casino
+employee would be tasked with searching for the name of the winning
+patron in the Child Support Federal Parent Locator Service to determine
+whether the winner is delinquent in his or her child support payments.
+Gaming establishments that fail to execute this function as mandated by
+the Federal Government would be subject to strict penalties.
+ Most commercial casinos operate 24 hours a day, 7 days a week.
+State law requires casinos to payout winnings when they are due and
+without delay. Therefore, to implement this proposal, thousands of
+gaming employees would need immediate access to accurate information at
+all times. These civilian workers,with no law enforcement background,
+would have access to sensitive, confidential information. Not only does
+this raise serious invasion of privacy concerns, casinos also could be
+liable for any employee misuse or mistakes.
+ Requiring a private business to directly apply the law to an
+individual would set a dangerous precedent, as well. It could open the
+door to requiring other cash handling industries to similarly assume
+the burden of law enforcement duties. Should banks check the court
+records of all customers making deposits or withdrawals? Must car
+dealers invoke the same requirements against their customers? The
+private sector should not be expected to bear the burden of costly and
+unreasonable mandates, such as the one proposed by the administration.
+ In conclusion, the intended goal of this provision is laudable, but
+it is the role of law enforcement to police decisions made in our court
+systems. This provision singles out the gaming industry, creating
+unreasonable demands on the employees of gaming establishments. We ask
+you to reject this proposal and not include this or similar language in
+the FY2006 Budget Resolution.
+ Thank you for your consideration.
+ Sincerely,
+ Shelley Berkley,
+ Member of Congress.
+
+ Jon. C. Porter,
+ Member of Congress.
+
+ Frank LoBiondo,
+ Member of Congress.
+
+ Jim Gibbons,
+ Member of Congress.
+
+ Bennie Thompson,
+ Member of Congress.
+
+ Carolyn Kilpatrick,
+ Member of Congress.
+
+ STATEMENT OF THE HON. STEPHANIE HERSETH, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF SOUTH DAKOTA
+
+ Ms. Herseth. Thank you, Mr. Chairman, Mr. Conaway, and
+thank you to my colleagues, Ranking Member Evans and Mr.
+Michaud, for yielding time. Thank you for giving me the
+opportunity to speak to you today.
+ As the ranking member of the Economic Opportunity
+Subcommittee, I am here to share my concerns regarding the
+President's fiscal year 2006 budget request and its impact on
+VA programs that are intended to provide service members,
+veterans and military families economic security and
+advancement.
+ Today, perhaps more than any time in our recent history,
+transition assistance, vocational rehabilitation and education
+programs for veterans are in need of adequate and timely
+funding. In my State of South Dakota, more than 2,500 National
+Guard soldiers have served in support of Operations Noble
+Eagle, Enduring Freedom and Iraqi Freedom. These returning
+soldiers, along with service members from across the country,
+deserve the best available service we can provide.
+ Unfortunately, the administration' budget does not reflect
+the need nor adequately provide funding for many of the
+valuable education, vocational rehabilitation and transition
+services promised to our Nation's veterans.
+ I want to take this opportunity to highlight two areas of
+particular concern for me and many of my colleagues on the
+committee. First, the President's fiscal year 2006 budget
+request would eliminate 14 full-time employee equivalents
+FTEEs, in the VA's Education Service. We agree with the
+majority on this budget issue in rejecting the administration's
+funding level and recommend an increase in resources of $1.1
+million to restore the projected FTEE cuts in VA's Education
+Service.
+ Education claims are expected to increase due to more
+veterans seeking to take advantage of Montgomery G.I. Bill
+education benefits, as well as a new National Guard and Reserve
+education program enacted last year as part of the National
+Defense Authorization Act of 2005. Moreover, a number of senior
+VA Education Service employees are eligible to retire in the
+near future. Additional resources are needed to address the
+expected increases in education claims and to hire new
+employees.
+ The second area I would like to highlight is that the
+President's fiscal year 2006 budget request provides no funding
+for additional FTEE designated to provide direct vocational
+rehabilitation and employment counseling services. Rather, the
+President's budget simply reflects a redistribution of
+management support personnel. Veterans applying for vocational
+rehabilitation and employment services increased dramatically
+over the last decade, roughly 75 percent increase. Demand for
+this service will certainly and surely continue due to the many
+injuries suffered by our troops serving in Iraq and
+Afghanistan.
+ Former Secretary Anthony Principi established a task force
+to review the vocational rehabilitation employment program,
+VR&E, from top to bottom. The VR&E task force issued a
+comprehensive report in May of last year. The report contained
+102 recommendations to improve the VR&E program and reform it
+to be responsive to 21st century needs of service connected
+disabled veterans.
+ The task force recommended increasing full-time staff
+positions in the VR&E program by approximately 200 FTEE,
+including 27 FTEE in headquarters, 112 in the regional offices
+to deliver direct services, 56 in the regional services for
+contracting and purchasing, and 8 quality assurance staff.
+ Consistent with the VR&E task force report, we recommend an
+increase of $5 million to provide for 57 additional FTEE, one
+full-time staff position in each regional office.
+ Again, I want to thank you for providing me the opportunity
+to speak today and encourage you to reconsider the President's
+budget request and provide adequate funding for veterans
+education, vocational rehabilitation, and transition programs.
+Thank you and I yield back.
+ [The prepared statement of Stephanie Herseth follows:]
+
+ Prepared Statement of Hon. Stephanie Herseth, a Representative in
+ Congress From the State of South Dakota
+
+ Thank you for giving me the opportunity to speak today. As the
+Ranking Member on the Economic Opportunity Subcommittee, I am here to
+share my concerns regarding the President's Fiscal Year 2006 budget
+request and its impact on VA programs that are intended to provide
+servicemembers, veterans, and military families economic security and
+advancement.
+ Today, perhaps more than any time in recent history, transition
+assistance, vocational rehabilitation, and education programs for
+veterans are in need of adequate and timely funding. In my state of
+South Dakota more than 2500 National Guard soldiers have served in
+support of operations Noble Eagle, Enduring Freedom, and Iraqi Freedom.
+These returning soldiers, along with servicemembers from across the
+country, deserve the best available service we can provide.
+Unfortunately, the Administration's budget does not reflect the need
+nor adequately provide funding for many of the valuable education,
+vocational rehabilitation, and transition services promised to our
+nation's veterans.
+ I want to take this opportunity to highlight two areas of concern
+that I have. First, the President's FY06' budget request would
+eliminate 14 Full Time Employee Equivalents (FTEE) in the VA's
+Education Service. We agree with the majority on this budget issue and
+reject the Administration's funding level and recommend an increase in
+resources of $1.1 million to restore the projected FTEE cuts in VA's
+Education Service. Education claims are expected to increase due to
+more veterans seeking to take advantage of Montgomery G.I. Bill
+education benefits, as well as the new Guard and Reserve education
+program enacted last year as part of the National Defense Authorization
+Act of 2005. Moreover, a number of senior VA Education Service
+employees are eligible to retire in the near future. Additional
+resources are needed to address the expected increases in education
+claims and hire new employees.
+ The second area I would like to highlight is that the President's
+FY06' budget request provides no funding for additional FTEE designated
+to provide direct vocational rehabilitation and employment counseling
+services. Rather, the President's budget simply reflects a
+redistribution of ``management support'' personnel. Veterans applying
+for vocational rehabilitation and employment services increased
+dramatically over the last decade--roughly 75 percent increase. Demand
+for this service will surely continue due to the many injuries suffered
+by our troops serving in Iraq and Afghanistan. Former Secretary Anthony
+J. Principi, established a task force to review the vocational
+rehabilitation and employment program (VR&E) from ``top-to-bottom.''
+The VR&E Task Force issued a comprehensive report in May of 2004. The
+report contained 102 recommendations to improve the VR&E program and
+reform it to be responsive to 21st Century needs of service-connected
+disabled veterans. The Task Force recommended increasing full-time
+staff positions in the VR&E program by approximately 200 FTEE;
+including 27 FTEE in headquarters; 112 in the regional offices to
+deliver direct services; 56 in the regional offices for contracting and
+purchasing; and 8 quality assurance staff. Consistent with the VR&E
+Task Force Report, we recommend an increase of $5 million to provide
+for 57 additional FTEE--one full time staff position in each regional
+office.
+ Again, I want to thank you for providing me with the opportunity to
+speak today, and encourage you to reconsider the President's budget
+request and provide adequate funding for veterans education, vocational
+rehabilitation, and transition programs.
+
+ Mr. Evans. I would like to yield to the Congressman from
+Maine for the remainder of our time.
+
+ STATEMENT OF THE HON. MICHAEL H. MICHAUD, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF MAINE
+
+ Mr. Michaud. Thank you very much, Ranking Member Evans.
+ Mr. Chairman, I was asked by a member of the Veterans'
+Committee, Mr. Strickland, if he could submit prepared remarks
+for the record.
+ Mr. Portman. Without objection.
+ [The prepared statement of Ted Strickland follows:]
+
+Prepared Statement of Hon. Ted Strickland, a Representative in Congress
+ From the State of Ohio
+
+ Thank you for hearing the oversight perspective regarding VA's
+unfounded claims of $4.34 billion in management efficiency-based
+savings and the proposed addition of new fees and co-pays on veterans
+seeking health care.
+ I would like to begin by thanking HVAC Chairman Buyer for boldly
+stating in his views and estimates that VA has ``overestimated''
+management efficiency savings. We fully agree. What we disagree on is
+the amount of net savings, if any.
+ In the budget submissions for fiscal years 2005 and 2006, VA uses
+only 79 words each year to account for claimed savings of about $1.2
+billion and 1.8 billion, respectively. All too often, their stated
+basis has never transpired, never been proven or has encountered
+serious management problems. Other unstated management problems may
+also offset claimed savings.
+ I have brought with me two IG reports to illustrate our point. This
+is by no means a comprehensive list of VA management deficiencies.
+ The first is an Inspector General review of the CoreFLS system--
+$249 million in government obligations for an automated management
+system that was never deployed because ``VA Management of the CoreFLS
+Project did not Protect the Interests of the Government'' and ``Senior
+Leadership did not Respond Adequately to SPD [supply, processing, and
+distribution] Warnings and did not Ensure Adequate Preparation for
+CoreFLS Testing.'' This does not sound like management efficiency. It
+did not sound like an efficiency to the Carnegie Mellon Independent
+Technical Assessment Team contracted to review the CoreFLS failure and
+which noted numerous technical and management related problems.
+ More recently, on February 16, 2005 the IG published a report
+titled, ``Evaluation of VHA Sole-Source Contracts with Medical Schools
+and Other Affiliated Institutions'' which indicates a myriad of
+problems with general contracting, contract pricing, and conflicts of
+interest.
+ One need only to go the VA IG website or review reports of the
+Government Accountability Office for a more complete picture, a picture
+that indicates a host of management problems at VA over the last 4
+years--many are associated with a cost to the government--and the
+taxpayer--because of VA management deficiencies. Nowhere in the budget
+submissions do we see a substantiated accounting of either the net
+losses or the net savings at VA. The two must be considered in balance.
+The result must be proved before we allow ``just anybody's guess'' to
+impact veterans' health care. For this reason, we must restore the
+offsets to veterans' health care based on VA's claims of management
+efficiencies until those efficiencies are proven and a net savings can
+be determined.
+ Perhaps one indicator that the claimed magnitude of VA management
+efficiencies is--as Mr. Buyer states, ``overestimated'', relates to
+VA's strident interest in the last 4 years to impose fees and co-pays
+on veterans.
+ VA recommendations for new fees and increased co-pays seem to pop
+up in rough approximation to the unfounded efficiency claims. Why? If
+all claims of management efficiency were real, would the fees and co-
+pays be necessary?
+ VA has built a house of cards on efficiency claims that are without
+substance, now they seek to correct for their management shortcomings
+by levying fees and co-pays on our veterans. This is wrong. We will not
+support it.
+ The newly proposed $250 enrollment fee is often compared by our new
+Chairman to TriCare for Life. Differences abound. Veterans usually do
+not have a choice of provider/physician at VA, family members are not
+usually eligible, and there is no fee for TriCare for Life.
+ Of course there is a threshold for the new VA fees and increased
+co-pays--in my District, someone making $26,000/yr is considered too
+wealthy for the exemption.
+ Following VA's budget savings ``exaggeration'' with an injustice in
+order to cover management deficiencies and balance the ledger is no way
+to treat veterans in this time of war. We will accept an offset to
+health care based on factual, provable net savings based on management
+efficiencies. We will not accept burdening those who have served with
+the cost associated with past management failures at VA.
+ I urge the Budget Committee to restore all claimed management
+efficiency savings for FY 2003-FY2006 until net savings are proven.
+
+ Mr. Michaud. Thanks for the opportunity to appear before
+your committee this afternoon. I agree with the remarks of
+Ranking Member Evans regarding the inadequacy of the
+administration's budget proposal. There is no doubt that there
+is a growing strain on the VA. We will not truly overcome this
+challenge with the policies that will decrease demand or ration
+care because the demands represent the needs of real veterans
+needing care.
+ Along with my colleagues here today, and along with the
+veterans of this country, I believe we should reject the
+proposed enrollment fees and increased copayments and provide
+the necessary resources to meet the demands on VA. I would like
+to draw your attention to the effects of the administration's
+budget as it affected the long-term care option for our
+veterans. The administration proposes to limit eligibility for
+nursing home care to all of its venues and to the mostly
+severely connected veterans.
+ That would be devastating. We do not believe that the VA
+should abandon its long-term care responsibility in any of its
+nursing care venues, particularly at a time when veterans'
+demands for such services is increasing and is at its peak.
+ Congress seemed to share these concerns when it passed
+Public Law 106-117, which required VA to maintain its in-house
+nursing home capacity at the level of the fiscal year 1998, but
+VA programs have continued to erode since that time. Rather
+than take action to address this erosion, VA continues to
+propose to do away with the requirement and find ways to reduce
+its institutional long-term care capacity.
+ For example, the President's budget would revise the
+eligibility requirement for the State veterans homes so that
+the vast majority of veterans who reside in State veterans
+homes would suddenly be ruled ineligible for per diem benefits.
+The National Association of State Veterans Homes estimated that
+in many States this change will eliminate VA per diem for at
+least 80 percent of State home residents.
+ The impact would not only be felt by those who would no
+longer qualify under this proposal, in fact this change would
+jeopardize the future of State home systems all together. The
+proposal will cost the State of Maine Veterans Homes $4.7
+million per year. By excluding so many veterans it would have a
+similar impact on the Iowa State Home, in Marshalltown and two
+homes in South Carolina, and the State Veterans Homes all
+across the country. I understand that 75 percent or more of the
+State homes could go bankrupt under this plan. Indeed, it is
+unclear what all of the impacts of such a plan would be, other
+than to drastically decrease the current workload in funding
+availability to State homes, thereby threatening the overall
+ability to the existence of these homes.
+ To that end, the minority members of the committee are
+recommending funding to restore the 1998 baseline of services
+in VA nursing homes, and to enhance State home capability. Mr.
+Chairman, I would ask that the proposals within the
+administration budget, the proposals that would jeopardize the
+care of thousands of aging veterans, be rejected, and that we
+do not abandon our commitment to the long-term care of our
+Nation's veterans.
+ Thank you very much, Mr. Chairman.
+ [The prepared statement of Michael H. Michaud follows:]
+
+ Prepared Statement of Hon. Michael H. Michaud, a Representative in
+ Congress From the State of California
+
+ Mr. Chairman, thank you for the opportunity to appear before your
+committee.
+ I would like to associate myself with the statement made by Ranking
+Member Evans regarding the inadequacy of the Administration's budget
+proposal. We should not force those who have sacrificed so much for our
+country to sacrifice again. There is no doubt that there is a growing
+strain on the VA. We will not truly overcome this challenge with
+policies that decrease demand or ration care--because that demand
+represents the needs of real veterans needing real care. Along with my
+colleagues here today, and along with the veterans of this country, I
+believe we should reject the proposed enrollment fee and increased
+copayments, and provide the necessary resources to meet the demand on
+the VA.
+ I would now like to draw your attention to the devastating effects
+the Administration's budget would have on long-term care options for
+our veterans. The Administration proposes to limit eligibility for
+nursing home care in all of its venues--VA--community--and state--to
+only the most highly service-connected veterans and those with short-
+term needs. We do not believe that the VA should abandon its long-term
+care responsibilities in any of its nursing care venues, particularly
+at a time when veterans' demand for such services--the demand of the
+``greatest generation''--is at its peak.
+ Congress seemed to share this concern when it passed Public Law
+106-117, which requires VA to maintain its in-house nursing home
+capacity at the level that existed in fiscal year 1998. But VA's
+programs have continued to erode since that time. Rather than take
+actions to redress this erosion, VA continues to propose to do away
+with the requirement and find ways to reduce its institutional long-
+term care capacity.
+ For example, the President's budget would revise the eligibility
+requirements for the State Veterans Homes so that the vast majority of
+veterans who reside in State Veterans Homes would suddenly be ruled
+ineligible for per diem benefits. The National Association of State
+Veterans Homes estimates that in many states, this change will
+eliminate VA per diems for at least 80 percent of State Home residents.
+ The impact would not only be felt by those who would no longer
+qualify under this proposal. In fact, this change would jeopardize the
+future of the State Homes system altogether. This proposal would cost
+the Maine State Veterans Homes $4.7 million per year. By excluding so
+many veterans, it would have a similar impact on the Iowa State Home in
+Marshalltown, the two homes in South Carolina, and State Veterans Homes
+across the country. I understand that 75 percent or more of the state
+homes could go bankrupt under the plan. Indeed, it is unclear what all
+of the impacts of such a plan would be, other than to drastically
+decrease the current workload and funding available to state homes,
+thereby threatening their overall ability to exist.
+ In contrast to the President's budget and VA's recent history, the
+Federal Advisory Committee on the Future of VA Long-Term Care
+recommended that VA should:
+ Maintain its bed capacity
+ Increase capacity in the state homes
+ And double or triple capacity in its non-institutional
+long-term care settings.
+ To that end, the minority Members of the Committee are recommending
+funding to restore the 1998 baseline of services in VA nursing homes
+and to enhance state home capacity. Mr. Chairman, I ask that the
+proposals within the Administration's budget--proposals that would
+jeopardize the care of thousands of aging veterans--be rejected and
+that we do not abandon our commitment to the long term care of our
+nation's veterans.
+ Thank you Mr. Chairman.
+
+ Mr. Portman. Thank you, Mr. Michaud, we appreciate your
+testimony. And Mr. Evans, thank you for your testimony.
+ I just want to correct the record, if I could. Ms. Herseth
+said that she would urge this committee to reconsider the
+President's request, and there was kind of an implicit
+assumption in some of the testimony that this committee would
+be deciding on what the veterans programs will be. That is not
+the case.
+ This committee does establish the broad blueprint for our
+budget. In the case of the veterans programs, of course, these
+are both mandatory and discretionary, and we come up with two
+numbers. One is on the discretionary side, which will be an
+overall number. Within that the Congress, through its committee
+process, the Appropriations Committee, which Mr. Evans works
+with, would choose how to spend that money, both in terms of
+its overall allocation to veterans or not, and then within the
+veterans program, and the other case there is a broad number
+for mandatory spending, and the same would apply. So Congress
+controls the purse strings and we will have the ability to look
+at all of those programs.
+ Second, I know you all know this, over the last 5 years
+veterans health care has been increased by 42 percent. We do
+have an increase, not adequate, for Mr. Evans' opinion and the
+other Members who testified, but again that is something to
+keep in mind. This is a tough year because we do have needs
+that throughout our various communities are tough to meet.
+ VA, Mr. Evans, you said would like a 14 percent increase in
+health care. That is a pretty steep increase to just do year
+after year after year, and the question is, are there ways in
+which we can reform the system to make it work better and not
+have these double digit increases. The veterans in my community
+are not happy with the care that they receive for the most
+part. Some are and some aren't, but certainly our veterans
+system is far from perfect.
+ But Congress as they look at this will look at the numbers,
+but also at the substance and some of the reforms, ideas that
+have been proposed to improve the health care and make it work
+better for our veterans. Mr. Conaway.
+ Mr. Conaway. Thank you for your testimony. I appreciate it.
+ One is a comment anecdotally. A veteran from our community
+from Odessa had a wrist injury, held over from Vietnam, and
+needed to be taken care of. He was required to go to
+Albuquerque, New Mexico for assessment and come home. He was
+required to go back to Albuquerque for the surgery and go home
+and then go back to Albuquerque--and this is an 8-hour trip--
+for post-op care. There is no shortage of doctors in Odessa,
+Texas who could have provided that service and he could have
+stayed there. The commitments for veterans health care is
+there. We are going to meet that.
+ What I would encourage the committee to look at is the idea
+that, you know, the system was set up in 1950, late 40s, to
+address the millions of World War II veterans at a time when
+our medical system was much, much different than it is today,
+and maybe there is a better way we can meet the needs of all
+veterans that would be easier on them and cheaper.
+ I had another veteran, a Vietnam vet suffering from post-
+traumatic stress syndrome, tell me at a town hall meeting last
+Friday in Odessa, that he was transported from Odessa to
+Temple, another 8-hour drive in an ambulance, for $2,300. And
+when they got him ready for discharge, they gave him a $35
+voucher for a bus ride home that got him halfway. A system that
+works like that way is just nonsense.
+ I think we can keep these promises. And I have a father who
+is a veteran of Korea and World War II and goes to a veterans
+hospital for treatment of diabetes. And we want to keep those
+promises to him. But I think we can do it better and cheaper.
+It makes it easier on the veterans.
+ I am also a veteran. I am a beneficiary of the GI bill. So
+I have some skin in the game as well.
+ One other thing, and I just appreciate you listening to
+this. One of the other witnesses mentioned a caseload at VA for
+determining disabilities and the appeals. Again, harkening back
+to the 7 years I spent on a regulatory agency board in Texas,
+we tracked opened cases from start to finish. And every year we
+went from a legislative oversight board, with our little chart
+in hand, that said here is somebody that we opened and somebody
+we closed. Here is what we have pending, the average length of
+time it took us to fix that. I would hope that the VA tracks
+that and the committee is holding their feet to the fire. She
+said years on determinations. That is awful, I mean, for the
+lack of a phrase, that your committee doesn't hold their feet
+to the fire to get the work done.
+ Thank you for your service. This is a tough environment. We
+have veterans we are creating every day with problems. I am
+going to go to Bethesda on Monday to visit with injured troops,
+to look them in the eye and tell them thank you. We have to
+keep promises, but we also can't break the bank as the Vice
+Chairman said. We have had significant increases in VA funding
+and we have to continue to work together to make sure we keep
+those promises. Thank you for your testimony.
+ Mr. Evans. I believe we can work together to see what we
+can do. For all of us who have rural counties in their
+district, it is a tremendous problem for veterans to get a
+ride, much less a reimbursement for the gas to get to VA
+medical centers. So it is something I would like to work on.
+ And, you know, all these problems we bring up about the VA
+is the reason veterans are doing so well. But by and large, we
+are going to see an increase in the need for funding veterans
+of the Persian Gulf wars, and there is an indication that the
+current level of services should be extended. Most people think
+we are slowing down the defense spending and slowing down
+veterans spending and that we don't need them anymore. This one
+time we need funding increases in both.
+ So thank you very much, and I appreciate you and the
+Chairman's assistance.
+ Mr. Portman [presiding]. Thank you, Mr. Evans. Appreciate
+you coming before us today and your longtime concern for our
+veterans.
+ And, Mr. Michaud, thank you for your testimony.
+ Mr. Portman. Ms. Bordallo, thank you for your patience. I
+see you over there and we appreciate you being here. We look
+forward to your testimony. Any statement you have may be made
+part of the record and you are welcome to testify up to 10
+minutes.
+
+ STATEMENT OF THE HON. MADELEINE Z. BORDALLO, A DELEGATE IN
+ CONGRESS FROM THE TERRITORY OF GUAM
+
+ Ms. Bordallo. Thank, you Mr. Chairman, and members of the
+House Budget Committee. I thank you very much for the
+opportunity to testify today. There are several priorities for
+Guam that I feel merit consideration for inclusion in the
+Fiscal Year 2006 Budget Resolution. I respectfully request your
+assistance with ensuring that the budget provide sufficient
+overhead to cover the costs of these important programs and
+initiatives.
+ There are four specific items, Mr. Chairman, that I would
+like to discuss today very briefly.
+ The first item I wish to discuss involves the forgiving of
+debts owed by the Government of Guam to the Department of
+Agriculture's Rural Utility Service loan program. In enacting
+Public Law 108-188, the reauthorization of the Compact of Free
+Association between the United States, the Republic of the
+Marshall Islands (RMI), and the Federated States of Micronesia
+(FSM), Congress and the administration recognized the adverse
+financial impact shouldered by the Government of Guam of
+providing unreimbursed services to the citizens of these Freely
+Associated States. Under the Compact of Free Association,
+citizens of the RMI and the FSM may travel to the United States
+and utilize any social services without having to pay taxes to
+U.S. jurisdictions. And because of the geographic proximity,
+many of the FAS migrants choose Guam as their destination.
+ In addition to increasing direct Federal assistance to Guam
+and other U.S. jurisdictions in the Pacific region, the Compact
+Reauthorization included provisions of a bill that I introduced
+as the Compact-Impact Debt Reconciliation Act. This act granted
+the administration authority to reimburse Guam for past
+unreimbursed costs associated with the FAS migrants by
+forgiving debts owed by the Government of Guam to the Federal
+Government. Unfortunately, the administration has declined to
+exercise its authority to provide such debt relief in fiscal
+year 2005, citing the need for a congressional appropriation.
+So I am requesting that Congress appropriate debt relief for
+$105 million in outstanding RUS loans and respectfully request
+that the Budget Committee provide sufficient head room to cover
+this appropriation.
+ The second item, Mr. Chairman, I wish to discuss concerns
+coordinating the payment of the Earned Income Credit in Guam
+and the Virgin Islands. As you are aware, the tax codes of Guam
+and the Virgin Islands mirror that of the Internal Revenue
+Code, and we must provide our citizens with the same tax credit
+as individuals receive in the 50 States and the District of
+Columbia. However, the payment of refundable tax credits such
+as the EIC constitutes an unfunded Federal mandate. The
+refundable portion of this tax credit, which is the amount that
+exceeds an individual taxpayer's total tax liability, is meant
+to offset the impact of FICA taxes on low-income individuals.
+While citizens of Guam and the Virgin Islands pay their FICA
+taxes to the U.S. Treasury, the territorial treasuries are
+tasked with covering the costs of the refundable portion of
+this credit out of our local revenues.
+ Congresswoman Christensen of the Virgin Islands and I have,
+over the years, proposed various solutions to this issue. On
+different occasions, Senate Finance Chairman Grassley and House
+Ways and Means Committee Chairman Thomas have engaged in
+colloquies expressing their willingness to work with us to
+resolve this matter, and we are hopeful for a consensus on a
+resolution this year. The Joint Committee on Taxation scored my
+most recent proposed legislation solution at $39 million for
+fiscal year 2006. I respectfully request that the Budget
+Committee include this figure in the 2006 budget resolution.
+ As my third item for discussion, I respectfully request
+that the Budget Committee provide $8 million in head room for
+additional Medicaid appropriations to Guam and the small
+territories. Last year, I introduced a floor amendment to the
+Departments of Labor, Health and Human Services, and Education
+Appropriations Act for Fiscal Year 2005 that would have
+increased Medicaid funding to Guam and the small territories
+above current section 1108 funding limitations. Section 1108 of
+the Social Security Act limits the amount of funding that the
+territories may receive in Federal Medicaid matching grants. I
+agreed to withdraw my amendment at the request of House Energy
+and Commerce Chairman Barton upon learning of his interest to
+work with me to address this matter through the program's
+authorizing committee. I am pleased with the Chairman's
+understanding of the adverse impact of section 1108 on the
+territories and his willingness to help us identify additional
+resources.
+ Last year, the House Government Reform Subcommittee on
+Human Rights and Wellness held a hearing which highlighted
+continuing health disparities in the territories, coupled with
+disproportionately high rates of unemployment and low rates of
+economic growth. Health care financing in the territories has
+reached, Mr. Chairman, a state of crisis. In this week's
+meeting of the Interagency Group on Insular Areas a couple of
+days ago, which was chaired by the Secretary of the Interior,
+Governors and Delegates of the small territories each
+highlighted the extent of this crisis. With both the
+administration and congressional leadership aware of the need
+to provide additional Federal funding for health services in
+the territories, I respectfully request that the Budget
+Committee include $8 million to cover the cost of my proposed
+increase in section 1108 limitation levels to help address this
+issue.
+ Lastly, Mr. Chairman, I wish to raise the issue of Guam war
+claims. It has been over 60 years since Guam was liberated from
+the Imperial Japanese forces by the U.S. Armed Forces in World
+War II. During 3 years of brutal occupation, the citizens of
+Guam endured internment, personal injury, forced labor, rape,
+and numerous other violations of human rights. Hundreds of
+Chamorros, the indigenous people of Guam, were killed. Although
+Congress passed the Guam Meritorious Claims Act of 1945 to
+provide immediate relief to the people of Guam, the goal of the
+act was not realized, due to the complete chaos of postwar Guam
+and the inaccurate dissemination of information.
+ The Guam War Claims Review Commission was established under
+Public Law 107-333 to determine whether there was parity in the
+treatment of residents of Guam in the war claims process when
+compared to other war claims programs afforded to other
+similarly situated Americans. After an extensive review, the
+War Review Commission found a lack of parity and recommended
+additional compensation for eligible individuals. Legislation
+to implement these recommendations will be introduced shortly
+and I am hopeful for swift congressional consideration. The
+Review Commission estimates, at minimum, a total of $126
+million to be necessary to pay these claims. I respectfully
+request that the Fiscal Year 2006 Budget Resolution account for
+these costs.
+ Mr. Chairman, this would be the last group of U.S. citizens
+that have not been recognized or compensated for war claims,
+and we are looking at 60 years ago.
+ Mr. Chairman, I hope that members of the committee will be
+on the lookout for fair treatment of the U.S. territories. And,
+again, I thank you for this opportunity to present the
+priorities of the citizens of Guam with respect to the Fiscal
+Year 2006 Budget Resolution. Thank you.
+ [The prepared statement of Madeleine Bordallo follows:]
+
+ Prepared Statement of Hon. Madeleine Z. Bordallo, a Delegate in
+ Congress From the Territory of Guam
+
+ Chairman Nussle, Ranking Member Spratt, and members of the House
+Budget Committee, thank you for the opportunity to testify today. There
+are several priorities for Guam that I feel merit consideration for
+inclusion in the Fiscal Year 2006 Budget Resolution. I respectfully
+request your assistance with ensuring that the Fiscal Year 2006 Budget
+provides sufficient overhead to cover the costs of these important
+programs and initiatives. There are four specific items that I would
+like to discuss today, and I look forward to working with you to ensure
+their inclusion in the Budget Resolution. Included among these requests
+are funding for Guam debt-relief, the Earned Income Credit in Guam and
+the Virgin Islands, Medicaid reimbursement to the governments of Guam
+and the small territories, and Guam War Claims.
+
+ GUAM DEBT RELIEF
+
+ The first item I wish to discuss involves the forgiving of debts
+owed by the Government of Guam to the Department of Agriculture's Rural
+Utilities Service (RUS) loan program. In enacting Public Law 108-188,
+the Reauthorization of the Compact of Free Association between the
+United States and the Republic of the Marshall Islands (RMI) and the
+Federated States of Micronesia (FSM), Congress and the Administration
+recognized the adverse financial impact shouldered by the Government of
+Guam of providing unreimbursed services to citizens of these Freely
+Associated States (FAS). Under the Compact of Free Association,
+citizens of the RMI and FSM may travel to the United States and utilize
+any social services without having to pay taxes to U.S. jurisdictions.
+Because of geographic proximity, the preponderance of FAS migrants
+chose Guam as their destination.
+ In addition to increasing direct Federal assistance to Guam and
+other U.S. jurisdictions in the Pacific Region, the Compact
+Reauthorization included provisions of a bill I introduced as the
+Compact-Impact Debt Reconciliation Act. This Act granted the
+Administration authority to reimburse Guam for past unreimbursed costs
+associated with FAS migrants by forgiving debts owed by the Government
+of Guam to the Federal Government. Unfortunately, the Administration
+has declined to exercise its authority to provide such debt relief in
+Fiscal Year 2005, citing the need for a Congressional appropriation. I
+am requesting that Congress appropriate debt relief for $105 million in
+outstanding RUS loans, and I respectfully request that the Budget
+Committee provide sufficient head room to cover this appropriation.
+
+ EARNED INCOME CREDIT
+
+ The second item I wish to discuss concerns coordinating the payment
+of the Earned Income Credit (EIC) in Guam and the Virgin Islands. As
+you are aware, the tax codes of Guam and the Virgin Islands mirror that
+of the Internal Revenue Code, and we must provide our citizens with the
+same tax credits as individuals receive in the 50 States and the
+District of Columbia. However, the payment of ``refundable'' tax
+credits such as the EIC constitutes an unfunded Federal mandate. The
+``refundable'' portion of this tax credit, which is the amount that
+exceeds an individual taxpayer's total tax liability, is meant to
+offset the impact of FICA taxes on low-income individuals. While
+citizens of Guam and Virgin Islands pay their FICA taxes to the U.S.
+Treasury, the territorial treasuries are tasked with covering the cost
+of the ``refundable'' portion of this credit out of local revenues.
+ Congresswoman Christensen and I have, over the years, proposed
+various solutions to this issue. On different occasions Senate Finance
+Chairman Grassley and House Ways and Means Committee Chairman Thomas
+have engaged in colloquies expressing their willingness to work with us
+to resolve this matter, and we are hopeful for a consensus on a
+resolution this year. The Joint Committee on Taxation scored my most
+recent proposed legislative solution at $39 million for Fiscal Year
+2006. I respectfully request that the Budget Committee include this
+figure in the Fiscal Year 2006 Budget Resolution.
+
+ MEDICAID
+
+ As my third item for discussion, I respectfully request that the
+Budget Committee provide $8 million in head room for additional
+Medicaid appropriations to Guam and the small territories. Last year, I
+introduced a floor amendment to the Departments of Labor, Health and
+Human Services, and Education Appropriations Act for Fiscal Year 2005
+that would have increased Medicaid funding to Guam and the small
+territories above current Section 1108 funding limitations. Section
+1108 of the Social Security Act limits the amount of funding that the
+territories may receive in Federal Medicaid matching grants. I agreed
+to withdraw my amendment at the request of House Energy and Commerce
+Chairman Barton upon learning of his interest to work with me to
+address this matter through the program's authorizing committee. I am
+pleased with the Chairman's understanding of the adverse impact of
+Section 1108 on the territories and his willingness to help us identify
+additional resources.
+ Last year, the House Government Reform Subcommittee on Human Rights
+and Wellness held a hearing which highlighted continuing health
+disparities in the territories. Coupled with disproportionately high
+rates of unemployment and low rates of economic growth, health care
+financing in the territories has reached a state of crisis. In this
+week's meeting of the Interagency Group on Insular Areas, which is
+chaired by the Secretary of the Interior, Governors and Delegates of
+the small territories each highlighted the extent of this crisis. With
+both the Administration and Congressional leadership aware of the need
+to provide additional Federal funding for health services in the
+territories, I respectfully request that the Budget Committee include
+$8 million to cover the cost of my proposed increase in Section 1108
+limitation levels to help address this issue.
+
+ GUAM WAR CLAIMS
+
+ Lastly, I wish to raise the issue of Guam war claims. It has been
+over 60 years since Guam was liberated from Imperial Japanese forces by
+U.S. Armed Forces in World War II. During 3 years of brutal occupation,
+the citizens of Guam endured internment, personal injury, forced labor
+and numerous other violations of human rights. Hundreds of Chamorros,
+the indigenous people of Guam, were killed. Although Congress passed
+the Guam Meritorious Claims Act of 1945 to provide immediate relief to
+the people of Guam, the goal of the Act was not realized due to the
+chaos of post-war Guam and the inaccurate dissemination of information.
+ The Guam War Claims Review Commission was established under Public
+Law 107-333 to determine whether there was parity in the treatment of
+residents of Guam in the war claims process when compared to other war
+claims programs afforded to other similarly situated Americans. After
+an extensive review, the Review Commission found a lack of parity and
+recommended additional compensation for eligible individuals.
+Legislation to implement these recommendations will be introduced
+shortly, and I am hopeful for swift Congressional consideration. The
+Review Commission estimates, at minimum, a total of $126 million will
+be necessary to pay these claims. I respectfully request that the
+Fiscal Year 2006 Budget Resolution account for these costs.
+ Thank you for the opportunity to present the priorities of the
+citizens of Guam with respect to the Fiscal Year 2006 Budget
+Resolution. I look forward to working with members of the Committee to
+ensure inclusion of these items in the Budget, and I look forward to
+answering any questions you may have regarding these requests.
+
+ Mr. Portman. Thank you, Ms. Bordallo. We will think no less
+of you for the fact you only took 8 minutes. Thank you.
+Appreciate your testimony on the debt relief issues, earned
+income tax credit and the Medicaid issues, as well as the Guam
+war claims. Good education for us those of us on the committee
+who don't deal with those issues day to day.
+ Mr. Conaway.
+ Mr. Conaway. I just had one question--historical, of
+background--the compact that was signed that creates this
+problem that you have got with the unreimbursed----
+ Ms. Bordallo. The debt relief.
+ Mr. Conaway. When did that start?
+ Ms. Bordallo. In the 108th.
+ Mr. Conaway. Four years ago. No other questions.
+ Mr. Portman. We are now pleased to have before the
+committee Ms. Wilson from New Mexico. Ms. Wilson, you have 10
+minutes for your testimony. And any written statement you have
+will be made part of the record.
+
+ STATEMENT OF THE HON. HEATHER WILSON, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEW MEXICO
+
+ Mrs. Wilson. Thank you Mr. Chairman. I appreciate your
+putting my full statement in the record. What I would like to
+do is summarize. I appreciate your patience for staying so long
+on go-home day.
+ What I want to talk to the committee about is Medicaid. In
+the President's budget there is about $60 million in reductions
+in Medicaid spending over 10 years and new initiatives
+amounting to about $16.5 billion, for a net reduction of $43.6
+billion. A lot of the proposals for the reductions are what are
+called ``program integrity.'' and I believe some, if not all,
+of those proposals have merit, and they would make for
+significant needed improvements in the Medicaid program. But I
+believe that these ideas need to be evaluated as part of a
+comprehensive effort to reform the Medicaid program and bring
+it into line with 21st century medicine.
+ When you look at these ideas, even though they are
+aggressive in many ways, they may not go far enough to reform
+the program. Medicaid is set up to pay claims. It is not set up
+to improve anyone's health. And real Medicaid reform goes far
+beyond what has been proposed in the fiscal year 06 budget. But
+there are some States who have used the matching Federal
+structure of Medicaid to inappropriately draw down Federal
+funds to pay for nonhealth expenses. The most obvious of these
+is something called the intergovernmental transfer, where money
+is moved into accounts to draw down Federal match, and then the
+State or local money is moved back to another completely
+nonhealth-related purpose.
+ There are legitimate and illegitimate intergovernmental
+transfers. We need to make sure that we don't dry up the
+ability of a county hospital's funds to be used as local match
+for Medicaid when we try to end some of the more creative
+financing schemes that State governments have participated in.
+ The administration estimates that they will save $10.9
+billion in 10 years by restricting these intergovernmental
+transfers. We have to accept and understand that that cost will
+be shifted to the States and will result in reduced benefits or
+reduced payments to health care providers and will have a
+significant impact on low-income Americans.
+ There is another initiative in the budget on Medicaid that
+deals with administrative costs, a proposed cap on the current
+50 percent Federal match for administrative costs. Most of the
+administrative costs that States use for Medicaid are used for
+computer systems and to fight fraud, track quality, and collect
+and disseminate data.
+ The Medicaid program has not done very well on fraud
+recoveries compared to Medicare. And one of the reasons for
+that is the way the program is set up and the way the
+reimbursements are done. I am concerned that if we reduce
+further the Federal match for Medicaid administrative costs, we
+are going to see even fewer recoveries and less attention to
+fraud, waste and abuse in Medicaid, which is all investigated
+by the States. So we have to be very careful about the
+unintended consequences of some of these so-called
+administrative cost constraints. While the initiatives in the
+President's budget may have merit, I don't think they
+constitute Medicaid reform.
+ I chaired a task force in the 108th Congress on Medicaid,
+and we looked at the entire program and we identified several
+areas where Medicaid should be improved or modernized to bring
+it up to date. It is increasingly clear to me that we need a
+national strategy on long-term care. Thirty percent of the
+costs of health care under Medicaid goes to seniors, and
+seniors are only 16 percent of the people who are enrolled in
+Medicaid; 7 out of 10 nursing home beds in this country are
+paid for by Medicaid. And this is going to triple over the next
+10 years, from about $50 billion in costs to $140 billion in
+costs. We have a looming challenge on the horizon as baby
+boomers retire, live longer, and more people are drawing down
+Medicaid.
+ There are some proposals in the budget to strengthen
+existing asset transfer rules, and I think that will probably
+help. But I think more fundamental reforms and initiatives are
+going to be needed to get private funding into the system and
+relieve the burden on Medicaid.
+ We have 56 different systems for determining eligibility
+for long-term care, and it is very difficult to do things like
+reverse mortgages. We have some States that have partnerships
+for long-term care insurance, but not enough of them. And all
+of us know that there is a subspecialty of the bar that
+specializes in qualifying mom and dad for Medicaid while you
+protect your inheritance. We can't afford for middle- and
+upper-income Americans to give away their assets so Medicaid
+can pay for their nursing home care.
+ Medicaid is administered by the States with a joint State-
+Federal funding mechanism that I think would make Rube Goldberg
+proud. In fact, some days, I think it is only held together by
+bailing wire and duct tape.
+ There are 47 different eligibility pathways for Medicaid in
+the State of New Mexico. In most States, it is comparable.
+Medicaid pays claims, but it doesn't pay to improve anybody's
+health. In fact, we have had testimony in the Energy and
+Commerce Committee and asked State Medicaid directors what do
+you track to see whether you are improving the health status of
+low-income individuals in your State. And they look at you like
+you are from Mars.
+ Medicaid wasn't set up to improve anybody's health. We will
+pay a hospital $28,000 to amputate the legs of a diabetic. That
+is authorized under Medicaid. But you need a waiver from the
+Federal program to teach a diabetic how to monitor their own
+blood sugar.
+ This is a program that is in need of comprehensive reform.
+It is a one-size-fits-all program. And we are now in a world of
+health care that demands choices. I think that implementing
+piecemeal changes, as we are really doing, and we do every year
+in Medicaid, doesn't really allow us to do the reform that is
+needed. And setting an arbitrary budget number lets budget
+drive policy instead of the other way around. We have to get
+our arms around this program for the long term.
+ About 10 days ago, I introduced legislation to create a
+bipartisan commission on Medicaid to make recommendations for
+improvements that would strengthen and modernize the program.
+It already has the support of 97 of our colleagues in the House
+and 22 in the Senate. There are 32 groups that have endorsed
+the legislation, including the American Hospital Association,
+the OB-GYNs, the National Association of Counties, and a whole
+lot of others.
+ Even more than Medicare, Medicaid is an extremely
+complicated program and we need a real concerted effort to
+light the way toward substantial reform. Mr. Chairman, there
+are 2,500 approved waivers to the Medicaid program. Any Federal
+program that is given 2,500 exceptions to the rules needs to
+take a hard look at changing the rules.
+ I would ask the Budget Committee to include funds in the
+budget resolution for a bipartisan commission on Medicaid. We
+are going to have to do some things in reconciliation this
+year. You all have talked about it, and so have others. But we
+need to stop doing this year by year and let policy drive the
+budget and not the budget drive policy.
+ I thank you for your consideration of this request and I
+would be happy to answer any questions.
+ [The prepared statement of Heather Wilson follows:]
+
+Prepared Statement of Hon. Heather Wilson, a Representative in Congress
+ From the State of New Mexico
+
+ Thank you, Mr. Chairman, for allowing me to submit testimony on the
+Fiscal Year 2006 Budget Resolution.
+ Mr. Chairman, I have some concerns about this budget in the area of
+Medicaid. President Bush has submitted a budget proposal that would
+reduce Federal Medicaid spending by $60.1 billion over 10 years. The
+budget also proposes new initiatives that would increase Federal
+Medicaid spending by $16.5 billion over 10 years, for a net reduction
+of $43.6 billion.
+ To achieve these savings, the budget proposes specific initiatives
+that the Administration calls ``program integrity.'' I believe some of
+these proposals have merit and would make needed improvements to the
+Medicaid program. But these proposals must be evaluated as part of
+comprehensive reform and its overall impact on the Medicaid program. If
+there are savings associated with implementing these proposals, the
+savings should be reinvested in the Medicaid program to enhance
+programs that will improve the health of those who depend on Medicaid.
+I believe implementing these initiatives on their own may endanger the
+ability of the program to provide access to services for the more than
+50 million low-income children, pregnant women, elderly, and disabled
+covered by Medicaid, including more than 420,000 people in New Mexico.
+ At the same time, this collection of ideas for change contained in
+the budget may not go far enough to reform the program. Medicaid is set
+up to pay claims, not to improve anyone's health. Real Medicaid reform
+goes far beyond the proposals in this budget.
+ Some states have used the Federal matching structure of Medicaid to
+inappropriately draw down Federal funds to pay for non-health expenses.
+This is often done through complicated financing mechanisms that
+require taxing or transferring dollars from counties, public providers,
+or in some cases beneficiaries and then returning the funds to the
+borrower. This allows states to avoid putting up their share while
+still drawing Federal dollars. These techniques, however, are sometimes
+used legitimately within the guidelines established in the Medicaid
+statute and are a vital tool states use to fund health care for low-
+income Medicaid patients. While fraudulent mechanisms that allow states
+to use Federal Medicaid dollars inappropriately should be ended, a
+distinction should be mode between legitimate and illegitimate
+intergovernmental transfers. If a county hospital funds care for low-
+income people eligible for Medicaid, a state should be able to use that
+local contribution as part of its ``match,'' for example. While the
+Administration estimates savings of $10.9 billion over 10 years by
+restricting intergovernmental transfers, this cost will be shifted to
+the states. States will not simply absorb this cost, but will take
+actions to reduce eligibility, reduce benefits, or reduce payments to
+health care providers. These decisions have consequences for those who
+depend' on Medicaid.
+ Under another initiative, the Federal Government would cap the
+funding states could receive for administrative costs. States use the
+50 percent Federal administrative match to invest in computer systems
+that identify and fight fraud, track quality, and collect and
+disseminate data. Reducing the ability of states to prevent Medicaid
+fraud and abuse and conduct outreach to eligible beneficiaries would
+appear to be antithetical to the goals outlined in the President's
+budget and may be ill-advised without further explanation and review.
+ While some of the initiatives in the President's budget may have
+merit, they do not constitute Medicaid reform. I chaired a Medicaid
+Task Force in the Energy and Commerce Committee during the 108th
+Congress that comprehensively studied the challenges facing Medicaid.
+We identified several areas where Medicaid should be improved and/or
+modernized to bring the program in line with 21st Century medicine. It
+is increasingly clear to me that we need a national strategy for long-
+term care. While only, 16 percent of the people enrolled in Medicaid
+are seniors, they account for 30 percent of the cost. Much of that cost
+is spent on long-term care. Medicaid pays for more than seven out of
+ten nursing home beds in this country. We are living longer and the
+baby boom generation will put burdens on the system that Medicaid is
+not designed to carry. Federal Medicaid spending for long-term care is
+projected to nearly triple over the next 10 years, from $50 billion to
+$140 billion. The growth in long-term care spending alone will take
+away from Medicaid's ability to continue to provide health care
+services to children, such as early periodic screening and development
+tests. While enforcing and strengthening existing asset transfer rules
+will help, more fundamental reforms and incentives will be needed to
+get more private funding into the system and relieve the burden on
+Medicaid.
+ A national strategy on long-term care will make it easier for
+seniors to get reverse mortgages, promote long-term care insurance, and
+make sure high quality care is available for low-income seniors by
+expecting people who can afford to pay for themselves to do so.
+ There is a subgroup of the bar that specializes in qualifying Mom
+and Dad for Medicaid while you protect your inheritance. We cannot
+afford for middle- and upperincome Americans to give away their assets
+so that Medicaid can pay for their care.
+ Medicaid is administered by the states with joint federal-state
+financing mechanisms that would make Rube Goldberg proud. Many
+eligibility pathways are tied to the old Aid to Families with Dependent
+Children welfare program, which was replaced with the Temporary
+Assistance to Needy Families Program nearly a decade ago. In New
+Mexico, there are 47 different eligibility pathways for Medicaid.
+Medicaid reimbursement to providers often lags significantly behind
+Medicare and private insurers, leading to access problems for Medicaid
+beneficiaries. Medicaid pays claims, but it doesn't pay to improve
+anyone's health. States need a waiver from the Federal Government to
+implement programs that teach people who to manage chronic disease, and
+waivers can take more than 2 years to be approved. With very few
+exceptions, Medicaid is an inflexible, one-size-fits-all program in a
+world that demands choices.
+ We need real Medicaid reform that addresses these challenges.
+Implementing piecemeal changes that allow us to meet an arbitrary
+budget number is not real reform. In fact, addressing these issues now
+through the budget process may inhibit our effort at making more
+needed, fundamental reforms in the near future. I do not believe the
+budget process should drive Medicaid reform or impede our ability to
+improve it. Policy should drive the budget, not the other way around.
+ I have introduced legislation to create a Bipartisan Commission on
+Medicaid to make recommendations for improvements that would strengthen
+and modernize the program. The legislation outlines specific areas the
+Commission would examine and directs the Commission to issue a report
+to Congress, the President, and the public within 18 months. This
+legislation, introduced less than 2 weeks ago, already has the support
+of 97 of our colleagues in the House and 22 Senators. Thirty-two groups
+have endorsed the legislation because they realize that any changes to
+the Medicaid program have consequences for the populations served and
+for the providers who administer the Medicaid program. (See addendum).
+Even more than Medicare, Medicaid is a very complicated program. We
+need a concerted effort to light the way to real reform. The commission
+would provide the right forum to carefully deliberate needed policy
+changes to ensure the long-term financial stability of the program
+while maintaining Medicaid as a safety net program for low-income
+children, pregnant women, elderly and disabled Americans.
+ Mr. Chairman, there are 2,500 approved waivers for the Federal
+Medicaid program. In fact, the only reason this program is working at
+all is because of these waivers. Any Federal program that has given
+2,500 exceptions is overdue for fundamental reform to change the rules
+and the program.
+ I respectfully request that the Budget Committee include $1.5
+million in the FY 2006 Budget Resolution for the Bipartisan Commission
+on Medicaid. Including funding for the Commission in the FY 2006 Budget
+Resolution will ensure that the work of the Commission begins quickly
+after its enactment so that Medicaid modernization efforts will not be
+delayed.
+ Thank you, Mr. Chairman, for your consideration of this request and
+I appreciate the opportunity to submit this testimony to your
+committee.
+
+ Mr. Conaway [presiding]. Thank you for that testimony. I
+think most of us share the common concern that the looming
+issue with Medicaid and Medicare and how we continue to fund
+that and meet those needs is one that is going to dwarf the
+current efforts to retool Social Security. And you are serving
+on the right committee, obviously, that is going to be the one
+to look at the overall numbers.
+ I don't have any other questions other than to say good
+luck with the efforts. And you are going to be on the leading
+edge of what we have to face in the near future.
+ Mr. Portman. First I ought to thank you for your
+willingness to take on this task and your passion for it. This
+is a critical issue and I am going to go out on a big limb here
+and tell you we would be happy to cosponsor your legislation.
+ I see one of my staff members looking up and saying, wait a
+minute. You haven't asked us yet. In this case, I know it is
+the right thing to do. I would like to be on the legislation. I
+think short of a commission, it is difficult to see how we can
+get at some of these underlying problems. And we have done this
+with Internal Revenue Service and with Medicare, which was
+somewhat successful. And I think this is an example of our
+inability as Members of Congress year to year to make the
+fundamental reforms that are needed to provide health care that
+is appropriate to our poor citizens, rather than go through the
+bureaucratic process of simply delivering a payment.
+ I am particularly interested in the issue of seniors. And I
+know in my own State, there is an increasing reliance on
+Medicaid. This is an effect the States feel as well, because in
+Ohio the States pick up 40 percent of that. And I think that is
+probably a leading issue that might get us to the point of
+setting up a commission once we do that.
+ As you indicate there are so many other issues we need to
+look at.
+ I have one simple question for you and this is premature
+and has to do with reform. Do you feel that there is an
+inherent conflict in the way in which the program is set up
+because of the match that neither the Federal Government nor
+the State government has an alignment of the responsibility for
+the full payment of the program and thus the accountability
+that would go with that?
+ Mrs. Wilson. I think there are fundamental problems with
+the way we finance this program and it is not only in the
+mechanisms between the States and the Feds, but it forces every
+State official that is going after the marginal penny on the
+dollar for Federal match. They are not thinking about the
+patients.
+ In my previous life I was the Cabinet secretary for
+children's programs in New Mexico. Here is an illustration,
+just a story, but I think it tells something. Shortly before I
+became the Cabinet secretary, we had a lot of kids in group
+homes. If you are a teenager in foster care, you are not going
+to have a family of your own until you have one yourself. Most
+of us can't even stand our own teenagers, let alone one that is
+abused and neglected. We figured out that, you know, if we
+could get these group homes eligible as residential treatment
+centers under Medicaid, we could draw down $0.75 on the dollar
+in Federal match. Most of these kids have diagnoses,
+medicalized them, added in behavioral health specialists and
+psychiatrists and everything else. The costs went up, but for
+the State, it was only $0.25 on the dollar. The general fund
+cost to the State went down. We qualified all of these group
+homes as residential treatment centers, gave every one of these
+kids a label as mentally ill. You know the one thing they
+didn't get? They didn't get parents.
+ What would you have done with that money to support a
+foster family and give them the training and the support they
+needed to take a troubled kid? We were doing the wrong thing
+for the kid, and every one of those kids, because we were
+following the Federal match.
+ And there are a thousand decisions like that that are made
+every day in every State in this Nation and that is why we need
+to change this program.
+ Mr. Portman. Good example. And I thank you for your ongoing
+efforts and appreciate you being here today.
+ Mr. Conaway. Ms. Wilson, you mentioned waste, fraud and
+abuse within the system. It is my understanding that States are
+supposed to have units that--are they doing their job? Does
+that need to be restructured as well?
+ Mrs. Wilson. I think it does. Even if you go to a 90
+percent match, States are very reluctant to invest in computer
+systems and information investigatory systems that go after
+Medicaid fraud. And one of the reasons is that they don't get
+much from the recovery until it is all over and then they only
+get very little. And so the motivation isn't there as it is
+under Medicare. So we don't have anywhere near the recoveries
+for fraud and waste under Medicaid that we do under Medicare.
+ Mr. Conaway. We have been joined by Mr. Cooper.
+ Mr. Cooper. Nothing.
+ Mr. Conaway. Mrs. Wilson, thank you very much for your
+passion on this issue. Like I said, you have been the center of
+the storm on an issue that is going to face this Congress and
+this Nation over the next several years.
+ Mr. Conaway. Mr. Miller is next on the list. Ten minutes.
+Thank you for being here today.
+
+STATEMENT OF THE HON. BRAD MILLER, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF NORTH CAROLINA
+
+ Mr. Miller of North Carolina. Thank you Mr. Chairman. Thank
+you for this opportunity to address the priorities that I think
+should be reflected in this year's budget to assure our Nation
+a prosperous future.
+ My State faces a difficult economic transition. The
+industries that North Carolinians have relied upon for their
+livelihood--textiles, tobacco, furniture--have suffered one
+layoff after another. Most of the plants that have closed will
+never reopen. North Carolina has lost more than 190,000
+manufacturing jobs in the last 4 years. And the textile
+industry is bracing for more bad news shortly.
+ Mr. Chairman, those statistics on job loss are not just
+economic statistics to me. I can close my eyes and see the
+faces of workers who have lost their jobs and don't know how
+they are going to support themselves or their families.
+ North Carolina's experience is hardly unique. The Nation
+has suffered a net loss of 2.8 million manufacturing jobs in
+the last 4 years. Those are jobs with decent wages and
+benefits, jobs a family can build a future around. The current
+administration now predicts our economy will slow for the next
+generation and beyond to a growth rate of about half of what
+our parents and grandparents experienced. And my generation in
+particular needs to scale back our expectations of what life
+will be like after we retire from the workforce.
+ Mr. Chairman, I refuse to accept that, though we have to do
+better than the President's proposed budget. We can and should
+be the most innovative and productive economy in the world. Our
+great strength is the American people, the American worker, the
+American entrepreneur and the American scientist. The proposed
+budget cheats them all of the help they need and deserve.
+ First, our standard of living depends upon having the most
+skilled workforce in the world. Chairman Alan Greenspan, in his
+testimony last week to the Financial Services Committee,
+stressed the need for both full education and on-the-job
+training. But the proposed budget cuts $1.3 billion from
+technical and vocational education programs, including all
+funding for national and State grants, tech prep education
+grants, and tech prep demonstration projects. The budget cuts
+adult education, including adult literacy programs, by $370
+million.
+ Mr. Chairman, to give you one example, Rockingham County in
+my district has the highest percentage of the workforce in
+manufacturing in the State. Forty-five percent of the adult
+population of Rockingham County does not have a high school
+diploma or GED. Folks went straight from high school to the
+mill, like their parents did before them. It didn't matter if
+they didn't have a high school diploma. Now they are middle
+aged, my age, they have to find new work, and they have to go
+back and get a GED to do it. Cutting $370 million from adult
+literacy programs betrays those workers of what they need.
+ The budget eliminates funding for education and technology
+programs, including the Education and Technology State Grants.
+In North Carolina, the budget would mean $21 million less for
+vocational education in the public schools and $12 million less
+for job training programs for our community colleges.
+ Second, our economic future depends on our economy
+remaining the world's most agile economy. The entrepreneurial
+talent of Americans is astounding. Small businesses spot
+economic niches, even new industries, remarkably quickly and
+have made our economy the most vibrant economy in the world. We
+count on small businesses to grow our economy. Half our gross
+domestic product is generated by small business. Even more
+important, small businesses create 75 percent of new jobs. But
+even in the face of our current economic challenges, the
+proposed budget would cut funding for small business programs
+by 62 percent.
+ The $6.1 billion in cuts to programs that provide technical
+assistance, incentives or capital to small business amounts to
+only one-quarter of 1 percent of the overall 2006 budget. Those
+cuts do very little to help the deficit and they stifle the
+ability of new entrepreneurs to start and grow their own
+businesses. Many of the programs cut have a proven track
+record. Many of them make more money on return investment than
+they cost. For example, the proposed budget once again would
+raise fees for 7(a) loan program participants, making the
+program less accessible and more costly. The microloan program
+run through the Small Business Administration would be
+eliminated. Programs that help small businesses access
+technology, such as Community Technology Centers and Technology
+Opportunities Program, receive no funding. Despite a record
+deficit and trade deficit, the President's budget was proposed
+cutting all funding for the U.S. Export Assistance Center which
+helps small businesses sell their products in the global
+marketplace. The budget would cut by 56.5 percent the funding
+for the Manufacturing Extension Partnership (MEP) which helps
+small businesses, primarily small manufacturers, adopt advanced
+manufacturing technologies and business practices. In 2002
+alone, North Carolina's MEP helped North Carolina companies
+save $85.6 million, a critical competitive advantage in a
+ruthless world economy.
+ Third, our future prosperity depends on remaining the most
+innovative economy in the world. Our research universities are
+the envy of the world, and our Nation has led the world in
+developing new products and new production technologies from
+research. But the proposed budget for research again fails to
+even keep pace with the rate of inflation.
+ The Advanced Technology Program (ATP) is the only source of
+``patient capital'' for many innovative small companies and has
+helped many businesses cross the valley of death from an idea
+in the lab to product in the marketplace, a difficult and
+expensive journey. The proposed budget eliminates all funding
+for the ATP.
+ Mr. Chairman, I hope this committee will look at the
+economic challenges our economy and Nation faces and not accept
+meekly that our Nation's economy will not lead the world in the
+future as it has in the past. We can continue to lead the
+world, but not with the priorities of this budget. Thank you
+Mr. Chairman.
+ [The prepared statement of Brad Miller follows:]
+
+ Prepared Statement of Hon. Brad Miller, a Representative in Congress
+ From the State of North Carolina
+
+ Mr. Chairman, thank you for this opportunity to address the
+priorities that I think should be reflected in this year's budget to
+assure our nation a prosperous future.
+ My state faces a difficult economic transition. The industries that
+North Carolinians have relied upon for their livelihood--textiles,
+tobacco, furniture--have suffered one layoff after another. Most of the
+plants that have closed will never reopen. North Carolina has lost more
+than 190,000 manufacturing jobs in the last 4 years, and the textile
+industry, in particular, is bracing for more bad news shortly.
+ North Carolina's experience is hardly unique. The nation has
+suffered a net loss of 2.8 million manufacturing jobs in the last 4
+years. Those are jobs with decent wages and benefits, jobs a family can
+build a future around.
+ The current administration now predicts that our economy will slow
+for the next generation and beyond to a growth rate of about half what
+our parents and grandparents experienced, and that my generation, in
+particular, needs to scale back our expectations of what life will be
+like after we retire from the workforce.
+ Mr. Chairman, I refuse to accept that. But we have to do better
+than the President's proposed budget.
+ We can and should be the most innovative and productive economy in
+the world. Our great strength is the American people--the American
+worker, the American entrepreneur, the American scientist. The proposed
+budget cheats them all of the help they need and deserve.
+ First, our standard of living depends on having the most skilled
+workforce in the world. Chairman Alan Greenspan, in his testimony to
+the Financial Services Committee last week, stressed the need for both
+formal education and on-the-job training.
+ But the proposed budget cuts $1.3 billion from technical and
+vocational education programs, including all funding for national and
+state grants, tech-prep education grants and tech-prep demonstration
+programs.
+ The budget cuts adult education, including adult literacy programs,
+by $370 million.
+ The budget eliminates funding for education and technology
+programs, including the Education Technology State Grants.
+ In North Carolina, the budget would mean $21 million less for
+vocation education in the public schools and $12 million less for job
+training programs through our community colleges.
+ Second, our economic future depends on our economy remaining the
+world's most agile economy.
+ The entrepreneurial talent of Americans is astounding. Small
+businesses spot economic niches, even new industries, remarkably
+quickly, and have made our economy the most vibrant economy in the
+world. We count on small businesses to grow our economy. Half of the
+American economy, our gross domestic product, is generated by small
+businesses. Even more important, small businesses create 75 percent of
+new jobs.
+ But even in the face of our current economic challenges, the Bush
+budget proposal would cut funding for small business programs by 62
+percent. The $6.1 billion in cuts to programs that provide technical
+assistance, incentives, or capital to small businesses, amounts to only
+one quarter of 1 percent of the overall 2006 budget. These cuts do
+little to help the deficit, and they stifle the ability of new
+entrepreneurs to start and grow their own business.
+ Many of the programs cut have a proven track record. Many of them
+make more money in returned investment than they cost.
+ For example:
+ The purposed budget once again would raise fees for 7(a)
+loan program participants, making the program less accessible and more
+costly.
+ The Microloan program run through the Small Business
+Administration would be eliminated.
+ Programs that help small businesses access technology such
+as Community Technology Centers (CTC) and the Technology Opportunities
+Program (TOP) receive no funding.
+ Despite a record trade deficit, the President's budget
+purposes cuts all funding for U.S. Export Assistance Centers, which
+help small businesses sell their products in the global marketplace.
+ The budget would cut by 56.5 percent the funding for the
+Manufacturing Extension Partnership, which helps small businesses,
+primarily small manufacturers, adopt advanced manufacturing
+technologies and business practices. In 2002 alone, North Carolina's
+MEP helped North Carolina companies save $85.6 million, a critical
+competitive advantage in a ruthless world economy.
+ Third, our future prosperity depends on our remaining the most
+innovative economy in the world. Our research universities are the envy
+of the world, and our nation has led the world in developing new
+products and new production technologies from research. But the
+proposed budget for research again fails even to keep pace with the
+rate of inflation.
+ The Advanced Technology Program is the only source of ``patient
+capital'' for many innovative small companies, and has helped many
+businesses cross the ``valley of death'' from idea in the lab to
+product in the marketplace, a long and expensive journey. The proposed
+budget eliminates funding for the ATP.
+ Mr. Chairman, I hope this committee will look at the economic
+challenges our nation faces, and not accept meekly that our nation's
+economy will not lead the world in the future as it has in the past. We
+can continue to lead the world, but not with the priorities of this
+budget.
+
+ Mr. Conaway. I appreciate those comments. Mr. Cooper, any
+questions?
+ Mr. Cooper. I just would like to thank my friend from North
+Carolina because I think he has gone the extra mile to not only
+represent his constituents but protect his constituents,
+because these budget cuts can and will be devastating to his
+constituents and people like that around the country.
+ I think North Carolina is a great example of a State that
+has done all it could locally to have an excellent education
+system, but they need a little Federal help. And to abandon
+vocational education, it is almost unthinkable. You wonder who
+on Earth suggested this to the President, and hopefully cuts
+will not remain in the final budget product. But North Carolina
+is going through a very difficult transition, perhaps the most
+difficult transition of any State, due to losses of tobacco,
+textiles, and general manufacturing. My heart goes out to the
+gentleman, but at least your constituents are well represented.
+ Mr. Miller of North Carolina. Thank you, Mr. Cooper. And
+you know well how important our community college system is.
+Mr. Cooper, like me, graduated from the University of North
+Carolina, Chapel Hill. And although he is from Tennessee, I
+think he knows my State pretty well and understands that we
+were the leader in community colleges. And they are a
+remarkable asset to our State. Something like one North
+Carolina adult in six attends or is enrolled in a community
+college course in any given year. That is a remarkable
+statistic. Our State is remarkably dependent upon them.
+ I gave a statistic of 45 percent of the adult population in
+Rockingham County not having a high school diploma or GED. But
+for most of North Carolina's rural counties, the number is in
+the high 30s, and the community colleges are where folks go to
+get a GED. They go to workplaces where the employer will help
+out by letting their employees take courses at their workplace.
+They are a prize.
+ And cutting funding for adult education and cutting funding
+vocational education really cheats the people of my State and
+workers of my State of the help they need to create an economic
+future for themselves as we face--North Carolina faces a very
+difficult economic transition.
+ Mr. Conaway. We have some difficult choices ahead as the
+authorizing committees and the appropriations committees deal
+with the details and assess each one of the President's
+recommendations. So thank you for your testimony today. Thank
+you, sir. Appreciate you being here.
+ Mr. Conaway. We will turn to Ms. Capito.
+
+STATEMENT OF THE HON. SHELLEY MOORE CAPITO, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF WEST VIRGINIA
+
+ Mrs. Capito. Thank you, Mr. Chairman and Mr. Cooper. Thank
+you for the opportunity to testify before the committee. I
+appreciate the opportunity to address items in the budget that
+I feel are important to West Virginians.
+ I want to applaud the efforts of the President and the
+Budget Committee as it moves through the effort to control
+Federal spending. I think it is important to the Nation's long-
+term financial health that we try to accomplish the President's
+goal of cutting the deficit in half by fiscal year 2009.
+ I would like to address some areas of concern that I have
+with the President's budget proposal. The budget proposes a New
+Communities Initiative which combines 18 economic development
+programs into a single program under the Department of
+Commerce. The President's budget proposes $3.71 billion for the
+new program, a significant decrease from the $5.31 billion the
+18 programs combined received in last year's appropriation
+cycle. I support efforts to become more efficient in the
+Federal Economic Development programs, but I am concerned. I am
+concerned, however, the funding cuts will do substantial harm
+to economic development activities in areas like my rural
+district that greatly needs these resources.
+ I was interested to hear the discussion of North Carolina,
+who is in transition. If anybody knows the State of West
+Virginia well, we want to get to the point where we can
+transition. We have had always difficult economic problems.
+ Of grave concern to me is the shift of the Community
+Development Block Grant (CDBG) program, which itself received
+more than $4 billion last year from the Department of Housing
+and Urban Development to the Department of Commerce. Community
+development block grants provide the resources for economic
+activities across West Virginia. Cities like Charleston and
+Martinsburg in my district could see significant reductions of
+economic development aid if we accept the reconfiguration of
+the CDBG program. These cities have experienced cuts last year
+in the CDBG money and further cuts could hinder the city's
+ability to provide important services and bring jobs to the
+communities. Rural areas such as West Virginia would be harmed
+by the CDBG reductions. CDBG money provides funding to West
+Virginia's Small Cities Grant program that sends development
+aid to communities across the State. I know that smaller sums
+of money to States like mine can do enormous and make enormous
+progress. So any cut is felt in a very significant way.
+ Planning funds from the programs provide resources to
+regional councils such as the Region VII Development Council
+that helps match Federal, State, and local dollars with private
+investment to bring jobs to Randolph, Upshur, Lewis, and
+Braxton counties in my district. Some of these counties have
+unemployment in the 13, 14 percent range. Funds for these
+planning activities come not just from the CDBG program but
+also from the Economic Development Administration, another
+program consolidated under the Communities Initiative. Rural
+enterprise communities like the Upper Kanawha Valley Enterprise
+Community would also be at risk for funding reductions under
+this proposal.
+ I ask the committee as you consider the President's
+Communities Initiative to ensure that adequate money is
+provided to continue to support funding at last year's level
+for development activities in cities and regional planning
+organizations.
+ I am also concerned, as my colleague from North Carolina,
+with the proposed changes in high school education funding and
+the vocational technical. The President's budget proposes $1.24
+billion High School Intervention Initiative that consolidates
+the funding for Perkins Vocational Education, the TRIO Upward
+Bound, and TRIO Talent Search programs. These programs combined
+received $1.925 billion last year. These programs are crucial
+to the success of at-risk students and for those careers of
+those who do not attend college. In West Virginia, we have one
+of the lower college-going rates. These programs are essential
+to not only the training but to the future of these young men
+and women as they seek their futures. States should be held
+accountable for student achievement certainly, but we must
+ensure that school districts are given the resources to
+succeed.
+ We owe a debt of gratitude to all the men and women who
+have served in our Armed Forces. It is important we provide
+those resources to care for our veterans, from the aging
+members of the World War II generation to those who are
+returning injured from the war against terror. While I am proud
+that the budget for veterans health is 47 percent higher than
+it was in 2001, this year's budget proposal increases funding
+for veterans by less than one-half of 1 percent. I urge the
+committee to provide sufficient resources to provide the
+highest-quality health care for our veterans.
+ I want to commend the President for including $283.9
+billion for the reauthorization of SAFETEA through 2009 in the
+budget proposal. This funding level will provide the funds
+necessary for crucial construction projects across this Nation.
+Making U.S. Route 35 in my district a four-lane highway in
+Putnam and Mason County is a crucial project that will benefit
+from this reauthorization.
+ Medicaid and SCHIP programs are critical programs that
+provide basic health care to low-income children and families.
+Medicaid--and we have discussed this, Mrs. Wilson--Medicaid is
+in a looming financial crisis for both the Federal and State
+governments. It is important that as we work to reduce our
+Federal deficits, we work with States to ensure that Medicaid
+programs are adequately funded and that the burden of the
+program is not shifted to the States.
+ I commend the administration for proposing Cover the Kids
+Initiative that will provide $1 billion in grants to promote
+SCHIP and ensure that parents whose children could benefit know
+about this program. I ask that the committee provide the
+resources for this new program.
+ I also want to say that the President's Community Health
+Centers Initiative has done wonders for the State of West
+Virginia in delivery and accessing quality of rural health
+care. These centers, like the Minnie Hamilton Health Center in
+Calhoun County in West Virginia, reduce the costs of health
+care by cutting down unnecessary emergency room visits while
+providing important preventive care. The proposed budget
+recommends $2 billion for Community Health Centers, and I ask
+that the committee fully fund the President's request.
+ In closing, thank you for the opportunity to appear before
+the committee today for issues that I believe are important to
+West Virginia. I look forward to working with the committee as
+this budget resolution moves through our House.
+ [The prepared statement of Shelley Moore Capito follows:]
+
+ Prepared Statement of Hon. Shelley Moore Capito, a Representative in
+ Congress From the State of West Virginia
+
+ Mr. Chairman, Mr. Ranking Member, and Members of the Budget
+Committee,
+ Thank you for the opportunity to testify before the committee. I
+appreciate the opportunity to address items in the budget that are
+important to West Virginians.
+ First, I applaud the efforts of the President and the Budget
+Committee to control Federal spending. It is important to the nation's
+long term financial health that we accomplish the President's goal of
+cutting the deficit in half by Fiscal Year 2009. I am pleased that this
+goal will be accomplished while extending the tax cuts we passed in
+2001 and 2003 that have brought over 2 million jobs to our nation in
+the past year.
+
+ COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
+
+ I would like to address some areas of concern that I have with the
+President's budget proposal. The budget proposes a new Communities'
+initiative which combines 18 Economic Development programs into a
+single program under the Department of Commerce. The President's budget
+proposes $3.71 billion for the new program, a significant decrease from
+$5.31 billion the 18 programs combined received in last year's
+appropriations cycle.
+ I support efforts to bring more efficiency to Federal economic
+development programs. I am concerned; however, the funding cuts will do
+substantial harm to economic development activities in areas like my
+rural district that greatly need these resources.
+ Of greatest concern is the shift of the Community Development Block
+Grant program, which itself received more than $4 billion last year,
+from the Department of Housing and Urban Development to the Department
+of Commerce. Community Development Block Grants provide the resources
+for economic activity across West Virginia.
+ Cities like Charleston and Martinsburg in my district could see
+significant reductions in economic development aid if we accept the
+reconfiguration of the CDBG program. These cities already experienced
+cuts in CDBG money last year, and further cuts could hinder the cities'
+ability to provide important services and bring jobs to the community.
+ Rural areas would also be harmed by CDBG reductions. CDBG money
+provides funding to West Virginia's Small Cities Grant Program that
+sends development aid to communities across the state. Planning funds
+from the program provide resources to regional councils, such as the
+Region VII Development Council that helps match federal, state, and
+local dollars with private investment to bring jobs to Randolph,
+Upshur, Lewis, and Braxton counties in my district. Funds for these
+planning activities come not just from the CDBG program, but also from
+the Economic Development Administration, another program consolidated
+under the communities' initiative. Rural Enterprise Communities, like
+the Upper Kanawha Valley Enterprise Community would also be at risk for
+funding reductions under the proposal.
+ I ask the committee as you consider the President's Communities
+Initiative to ensure that adequate money is provided to continue to
+support funding at last year's level for development activities in
+cities and regional planning organizations.
+
+ VOCATIONAL EDUCATION
+
+ I am also concerned with proposed changes in high school education
+funding. The President's budget proposes a $1.24 billion high school
+intervention initiative that consolidates the funding for Perkins
+Vocational Education, TRIO Upward Bound, and TRIO Talent Search
+programs. These programs combined received $1.925 billion last year.
+These programs are crucial to the success of at-risk students and the
+careers of those who do not attend college. States should be held
+accountable for student achievement, but we must ensure that school
+districts are given the resources to succeed.
+
+ VETERANS
+
+ We owe a debt of gratitude to all the men and women who have served
+in our Armed Forces. It is important that we provide the resources to
+care for our veterans--from the aging members of the World War Two
+generation to those who are returning injured from the War against
+Terror.
+ While I am proud that the budget for veteran's health care is 47
+percent higher today than it was in 2001, this year's budget proposal
+increases funding for veterans medical programs by less than half of 1
+percent. I urge the committee to provide sufficient resources to
+provide the highest quality healthcare for our veterans.
+
+ TRANSPORTATION
+
+ I want to commend the President for including $283.9 billion for
+the reauthorization of SAFETEA through 2009 in the budget proposal.
+This funding level will provide the funds necessary for crucial
+construction projects across the nation. Making US Route 35 a four lane
+highway in Putnam and Mason counties in my district is a crucial
+project that will benefit from this reauthorization level. I urge the
+committee to include at least the $283.9 billion proposed by the
+President in the final budget resolution.
+
+ MEDICAID
+
+ Medicaid and SCHIP are critical programs that provide basic health
+care to low income children and families. Medicaid is also a looming
+financial crisis for both the Federal Government and for state
+governments. It is important that as we work to reduce our Federal
+deficit, we work with states to ensure that Medicaid programs are
+adequately funded and that the burden of the program is not shifted to
+the states.
+ I commend the administration for proposing the Cover the Kids
+initiative that will provide up to $1 billion in grants to promote S-
+CHIP and ensure that parents whose children could benefit from S-CHIP
+know about the program. I ask that the committee provide resources for
+this important new program.
+ I also commend the President on his Community Health Centers
+Initiative that would open rural health centers in every low income
+county that can support one. These centers, like the Minnie Hamilton
+Health Center in Calhoun County, West Virginia, reduce the cost of
+health care by cutting down on unnecessary emergency room visits, while
+providing important preventative care. The proposed budget recommends
+$2 billion for community health centers and I ask that the committee
+fully fund the President's request.
+
+ CLOSING
+
+ Again, thank you for the opportunity to appear before the committee
+today to present issues important to the people of West Virginia. I
+look forward to continuing to work with the committee on a budget
+resolution that reflects our national priorities.
+
+ Mr. Conaway. Mr. Cooper, do you have any questions?
+ Mr. Cooper. Just briefly, I would like to ask the
+gentlelady from West Virginia, it is my understanding we could
+save a lot of money in the CDBG program if we means-tested it.
+In other words, if wealthy communities were no longer eligible
+for benefits. And my guess is that means test would still
+enable communities in West Virginia to receive the funds.
+ Mrs. Capito. Certainly in the State of West Virginia, we
+welcome all means testing because, unfortunately, our means are
+not in certain pockets. We do have some areas of growth. But
+generally speaking, we are in the low-income areas. We are a
+member of the Appalachian Regional Commission. All 55 counties
+belong to that. Of that, over half of those counties were
+considered economically distressed.
+ And I believe you bring up an excellent point. If we target
+our resources to those who are more economically distressed for
+whatever reason, historically or because of a loss of
+manufacturing jobs in certain industries, it will create a
+rising tide for all of our communities, and certainly those
+that haven't been able to enjoy any of the economic growth that
+has cascaded across the Nation in the last couple of decades.
+ Mr. Cooper. I would just encourage you to influence your
+friends who serve on the committee, because it is usually a
+party-line vote, and I don't know what they are going to do
+with CDBG grants. But if you could persuade just two or three
+of your fellow Republicans, we may be able to save a good bit
+of this program. But it is going to take Republicans breaking
+rank on this committee in order to do. I have only served 3
+years on the committee and I never seen that happen. Good luck
+in your efforts to persuade them to think independently on this
+important issue.
+ Mr. Conaway. Thank you for your testimony. And I appreciate
+that.
+ During the Presidents Day break, I had the opportunity to
+visit a technical school and had it pointed out they used their
+Perkins grant money to buy equipment that was training people
+for $40,000- to $50,000-a-year jobs. So that was helpful to
+understand how the money is used in a real way. Thank you for
+your comments today.
+ Mr. Conaway. The Chair now recognizes Mr. Robin Hayes for
+10 minutes.
+
+STATEMENT OF THE HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF NORTH CAROLINA
+
+ Mr. Hayes. Thank you, Chairman Conaway, and Ranking Member
+Cooper. I would ask your permission and unanimous consent to
+submit the complete statement for the record and highlight the
+issues that I am sure you have heard before, if that would be
+OK with the committee.
+ Mr. Conaway. Without objection.
+ Mr. Hayes. Thank you for the opportunity to testify today.
+The Eighth District of North Carolina is vitally important to
+me and others of us who serve. Obviously we are concerned with
+veterans programs. They are the heroes of the present and past
+battles. We want to make sure we sustain and increase the
+services that we provide for veterans, and the President's
+budget needs a little help there. We got a 2.7 percent increase
+in discretionary funds. And we want to make sure we increase
+veterans health care funding and other services and not have
+anything other than that.
+ Everything in your power I would ask that you do to
+adequately fund our Nation's veterans. Quality, affordable,
+accessible health care service, are a critical priority.
+ The next item, Mr. Chairman, is impact aid. Impact aid for
+our military communities such as Cumberland County and
+surrounding counties at Fort Bragg is important to education
+and local school systems in order to replace revenues that are
+lost because of the very large, very important, much
+appreciated military presence there. The President's budget
+puts impact aid at level funding, which unfortunately in this
+climate, because of the way that the program is structured. The
+cost-of-living adjustment is triggered by the impact aid
+formula, and school districts will receive less money. So I
+would respectfully request a 3 percent increase in the impact
+aid funding.
+ Another vitally important issue here to our constituents,
+hopefully we would take money that has been proposed for
+funding foreign aid and other operations that could not--we
+need to do things at home before we spend that money abroad. So
+I would ask the committee to do what they can in that regard.
+ The community college presence, our technical colleges,
+those schools that provide retraining for jobs that we lost in
+manufacturing and other areas are so vitally important. Perkins
+funding. I would ask the committee do everything they can to
+take care of Perkins programs and increase the ability for
+people to be retrained and reenter the workforce. Economic
+development and workforce education are so important in mine
+and other districts.
+ Other important issues, the agriculture budget; cannot
+stress enough how much our producer communities depend on a
+strong agricultural economy. Based on present programming,
+there has been a $16 billion savings compared to the March 2002
+cost estimate. Farmers need to plan just like other businesses.
+I would like to keep those programs intact because they are
+working in an environment where internationally we are subject
+to so many foreign subsidies and artificial tariff barriers. We
+need to be sure our farmers can be competitive. A
+disproportionate burden of debt reduction at the present seems
+to be falling on the shoulders of our farmers.
+ Conservation initiatives, vitally important. They are doing
+a great job in addressing the environmental issues in a
+commonsense and in a very results-oriented way.
+ Community block grants, as Ms. Capito mentioned are
+important to my rural district. I hope you will be able to find
+a way to deal with that.
+ Mr. Chairman, thank you for the opportunity to testify
+before your committee. I appreciate your consideration.
+Everyone wants to cut the budget. There is no disagreement
+there. It is just when you get into where the cuts come is
+there some discussion. I appreciate your time and attention and
+would be glad to answer any questions.
+ [The prepared statement of Robin Hayes follows:]
+
+ Prepared Statement of Hon. Robin Hayes, a Representative in Congress
+ From the State of North Carolina
+
+ Mr. Chairman, thank you for the opportunity of allowing me to
+testify before the Committee today. There are several topics I would
+like to highlight: funding for Veteran's health care, Impact Aid,
+Department of Agriculture programs, and Community Development Block
+Grants.
+ Mr. Chairman, our veterans are the heroes who helped define our
+American heritage. They are living evidence that freedom is never free.
+As we continue to sustain operations in support of the Global War on
+Terrorism, it is imperative we send a strong signal to these active
+duty forces that our nation will indeed care for them when they return
+home.
+ As you know, the President's FY 2006 budget proposal totals $70.8
+billion-$37.4 billion for mandatory programs and $33.4 in discretionary
+programs. This represents a 2.7 percent increase in discretionary funds
+over the enacted level of 2005. From 2001 to 2005, veterans health care
+funding has increased 47 percent. As you and your committee begin
+assembling the budget resolution for Fiscal Year 2006, I ask that you
+do everything in your power to adequately fund programs for our
+nation's veterans.
+ Providing quality, affordable, and accessible health care services
+to our nations' veterans must be a priority. In my district in North
+Carolina, we have been working on establishing a Community Based
+Outpatient Clinic and must have the funds to do so. We must adequately
+care for our nation's heroes. During this time when we are calling on
+our military to do so much, it sends a strong message that we will take
+care of them to adequately fund veterans programs.
+ As you craft the budget resolution for Fiscal Year 2006, there are
+a many challenges to overcome. Funding the Global War on Terrorism,
+reducing the deficit, providing for our men and women in uniform and
+taking care of our domestic needs all must be priorities. In balancing
+these priorities, I ask that you consider reducing the funding for
+foreign operations. Sending hard-earned American taxpayer dollars
+overseas to fund programs in other countries and international
+organizations should not be a top priority when we must meet so many
+needs here at home first. I urge you to increase funding for veterans
+programs and fully fund our military requirements before allocating
+money toward foreign programs.
+ To further support our nation's military; we must adequately fund
+Impact Aid. This program began in 1950 when the Federal Government
+acknowledged that it has a responsibility to reimburse local public
+school districts for local tax revenue lost due to a Federal presence--
+such as a military base. Impact Aid funds are sent directly to the
+local school districts making Impact Aid one of the most efficient
+programs that the Department of Education administers.
+ Students in the 8th District of North Carolina depend on this
+funding, as do the teachers and administrators in the school systems
+adjacent to Ft. Bragg. As you know, Cumberland County, NC is the proud
+home Ft. Bragg, one of the largest military installations in the world.
+Impact Aid literally funds the school system. It takes the place of
+local tax revenue that otherwise would flow to the school system if
+Uncle Sam wasn't the primary presence in the County.
+ This year the President's Budget proposal funds Impact Aid. In
+tight budget times, this doesn't sound so bad. However, federally
+impacted school systems know that level funding actually means a loss.
+Due to a cost of living adjustment that is automatically triggered by
+the Impact Aid formula, many school districts actually receive less
+money in real dollars as a result of level funding for the program.
+ The House Impact Aid Coalition was formed in 1995 to promote and
+improve the Impact Aid Program. Our coalition has grown from just
+twelve Members of Congress in 1995, to its current membership of 129.
+As a Coalition Co-Chair, I join my colleagues to support our goal to
+increase funding for the Impact Aid Program to $1.281 billion, a 3
+percent increase over last year's conference report funding level. At
+this level, school systems would be able to maintain their vital
+programs and Congress would affirm its commitment to the program.
+ Further helping strengthen our Nation's education system, many of
+my constituents, college students and Community College Presidents,
+have contacted me with their concerns regarding Perkins funding. The
+Carl D. Perkins Vocational and Technical Education Act funding is vital
+to my district, and to the entire North Carolina Community College
+System. As Congress looks for ways to improve the Perkins program, I
+urge this Committee to recognize that we must not compromise the
+success of those that look to Community Colleges for workforce
+training. We want our young people and those seeking retraining to be
+prepared for the 21st Century workforce. By eliminating Perkins funding
+altogether, I fear we would working against our own goal of helping
+those institutions that are so vital to the economic development and
+workforce education of my district.
+ Mr. Chairman, I also want to let you know that I have heard many
+concerns from farmers in my district regarding the President's budget
+proposal. My district is very rural and composed of many small to large
+farms through out the region. I cannot stress to you enough how many
+producers and communities depend upon a strong agricultural economy.
+ It is important to consider what U.S. farm policy has already
+contributed to deficit reduction. U.S. farm policy for commodities has
+already achieved $16 billion in savings compared to the March 2002 CBO
+cost estimate. Meanwhile, mandatory funding for conservation, rural
+development, trade promotion, research, renewable energy, and forestry
+initiatives have all sustained cuts in the last 2 years totaling more
+than $2 billion. The recently proposed cuts to U.S. farm policy, when
+added to the mandatory savings already achieved, bring to rest a
+disproportionate burden of deficit reduction on the shoulders of our
+nation's producers and rural communities.
+ As you know, producers have made long-term business plans based
+upon the programs currently available in the Farm Bill. Taking away or
+altering these programs brings uncertainty to the farming assistance.
+ U.S. farm policy is also about our producers being competitive
+globally when many countries all over the world already have much
+higher price support systems than the U.S. Foreign subsidies and
+tariffs are 5 and 6 times higher than our own. It is important that we
+do not inadvertently make our farmers less competitive and hurt our
+much-needed agricultural exports.
+ I would also like to stress my support for funding our agriculture
+conservation initiatives. I've seen first hand how incentive based
+conservation initiatives, such as EQIP and CRP, have been a major
+success in rehabilitating wildlife and wildlife habitat and improving
+air and water quality. I am hopeful that you will continue to support
+farming programs that have a high rate of success and that are
+extremely important to 8th District farmers.
+ Finally, Mr. Chairman I would like to address the proposed cuts in
+funding to the Community Development Block Grant Program (CDBG's). The
+CDBG program provides local municipalities the opportunity to create
+jobs, build and improve much needed infrastructure, provide safe and
+affordable housing and leverage considerable private sector investment
+in communities.
+ In my district, which has been hit particularly hard by the loss of
+textile and manufacturing businesses, the CDBG program has provided
+over $13 million in assistance to help keep these towns on their feet.
+ CDBGs allow our local governments the flexibility to design
+programs that are most effective to meet their specific needs. I urge
+that the Committee make every effort to keep this important Program
+funded at or above Fiscal Year 2005's level.
+ Mr. Chairman, thank you for the opportunity to testify before your
+Committee about these important programs. I appreciate your
+consideration and look forward to working with you on the Fiscal Year
+2006 budget.
+
+ Mr. Conaway. Thank you, Mr. Hayes. Mr. Cooper.
+ Mr. Cooper. No.
+ Mr. Conaway. Several witnesses have talked about the impact
+that reducing Community Development Block Grant moneys has. Is
+there a way that we can quantify that? Any time you cut moneys,
+everybody says that has a bad effect on programs. But it might
+be helpful if there is some way we can say, given these grants,
+you know, to fix things--in my community it is used for curbs
+and gutters and sewers and infrastructure and those kinds of
+things that, once it is done it is done. And if we didn't have
+that money next year, we wouldn't do what we did this past
+year. Is there some way we can look ahead and see what impact
+these actual cuts will have instead of just saying that it is
+going to have a bad impact?
+ Mr. Hayes. Absolutely. Those actions are underway. And at
+the same time, folks back home, I say to them, best thing we
+can do is cut your taxes. Don't send the money to Washington,
+because by the time we take our portion out of it and what you
+get back is not as good as if you kept it here. There are some
+funds that are going to be increased in other areas that would
+hopefully take some of that impact away and again give a
+positive impact.
+ I think the idea of putting it in commerce is to use it for
+economic development, infrastructure, and things like that that
+is going to grow the economy and create more jobs, which is so
+important.
+ Mr. Conaway. Thank you, sir. Appreciate your comments
+today.
+ The gentlewoman, Ms. Waters. You are recognized.
+
+ STATEMENT OF THE HON. MAXINE WATERS, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF CALIFORNIA
+
+ Ms. Waters. Thank you very much, Mr. Chairman. The
+President's proposed funding year budget 2006 will create a
+tremendous hardship on our Nation's low-income families, senior
+citizens, disabled persons, veterans, those seeking to improve
+their lives through education and job training.
+ As the ranking member of the Housing Subcommittee of the
+Financial Services Committee, I am here to urge the committee
+to reject the disastrous budget cuts and program transfers in
+the U.S. Department of Housing and Urban Development (HUD)
+budget that the administration has proposed. If the President's
+budget were enacted, HUD would suffer a whopping 12 percent
+budget cut, the largest of any Cabinet department.
+ As I said to HUD Secretary Jackson when he appeared before
+the Financial Services Committee yesterday, I am very
+disappointed by the huge budgets cuts and the massive program
+transfers away from HUD that the administration has proposed in
+its fiscal year 2006 budget. The HUD budget accelerates a 4-
+year effort by the administration to dismantle critical HUD
+programs, to make deep funding cuts in these programs and,
+regretfully, to target these cuts to our most vulnerable low-
+income families, seniors and disabled persons.
+ The proposed elimination of the Community Development Block
+Grant and the 50 percent cut in the Disabled Housing funding
+are just two of the most noteworthy examples. We have an
+affordable housing crisis in much of this country. Just 2 weeks
+ago, the Los Angeles Times reported that police had to disperse
+a crowd of about 3,000 people vying for 150 low-income housing
+applications in Hollywood, CA. When some people rushed the
+line, a riot ensued.
+ You could find a similar scene in many, many communities.
+As the National Low Income Housing Coalition regularly reports,
+there is not a single metropolitan area where an extremely low-
+income family can be assured of finding a modest two-bedroom
+rental home that is affordable. There are literally millions of
+people who are homeless.
+ Mr. Chairman, it is stunning to me at a time when the
+administration seeks $82 billion in a supplemental
+appropriation for Iraq, Secretary Jackson told us that HUD has
+to prioritize by cutting affordable housing programs because
+the Department's proposed budget will not permit these programs
+to be funded.
+ The President's proposed budget would eviscerate CDGB to
+States and localities, thereby resulting in a loss of
+affordable housing investments of $1.16 billion; cut the
+disabled housing budget by 50 percent; continue an assault on
+the rental housing assistance safety net programs, that is
+Section 8 and public housing; eliminate future funding for the
+HOPE VI program; rescind $143 million in funding for 2005 HOPE
+VI funding that was only appropriated a few months ago; and cut
+funding for housing programs for Native Americans by 16
+percent. Funding for critically needed capital repair of
+housing units is cut another $252 million, and operating
+assistance is cut by $17 million.
+ The overall fiscal year 2006 budget housing request is 9
+percent below last year's level, and 30 percent below the level
+when the administration took office after adjusting for
+inflation. Home block grants and the Housing for People with
+AIDS program, the HOPWA program, also cut. Even funding for
+housing counseling and for fair housing enforcement would be
+cut from the current funding levels.
+ All these programs play a vital role in providing safe,
+decent, affordable housing for low-income families, and I am
+hopeful that we can join together from both sides of the aisle
+to keep from cutting these programs.
+ I want to really put my attention at CDBG, the costs. CDBG
+is that block grant funding program that goes to the cities and
+the States to be disseminated among some small towns, that is a
+last-stand effort by the Federal Government to really give some
+assistance to the cities with critical problems that their
+budgets just won't meet.
+ I was pleased to hear you mention that in your area, the
+cities and towns use this money for infrastructure. I, too,
+have five cities in my district, and they are small cities.
+Without CDBG they would not be able to support the needed
+repairs to the infrastructure that are so desperately needed
+all over the country. So it is not simply a matter of money
+that is going to follow 101(c)3 nonprofit organizations that
+are working with at-risk youth and with seniors and with other
+very, very needed areas in our cities, it is about support for
+these towns and cities that they could not get anyplace else.
+No, Mr. Chairman, they just don't have the budgets.
+ This CDBG budget proposes to slashcommunity development by
+$1.9 billion, a cut of 35 percent from the $5.6 billion level
+at which these programs were funded in fiscal year 2005.
+ The President is also proposing a major reorganization of
+community development programs under which nearly all of the
+programs that comprise a community development fund, including
+the Community Development Block Grant, would be moved out to
+the Department of Commerce. Now, I don't know what this is all
+about. When we talked with Secretary Jackson about this, they
+talked about taking 18 programs and transferring them over to
+Department of Commerce. I understand what the Department of
+Commerce does, and I support economic development in a very,
+very strong way, and there may be some programs like Section
+108 Loan Guarantee Program that is maybe better situated, even
+though, you know, this particular program is supported by the
+CDBG funds that would be over in HUD. But these are moneys that
+are used for the larger project developments in cities, like
+the development of old towns and big industries that will
+create a lot of jobs.
+ So maybe there is some way that something like that could
+be worked out, but to have these other programs, what do you
+do? Do you release all of the people in HUD and bring in new
+people who have long years of experience? I mean, release the
+people in Commerce, bring in people from HUD, you transfer
+personnel, you train new personnel, you set up new departments?
+I don't know how this is done. If you are saying that the
+people who are there now were responsible for the Department of
+Commerce programs will then somehow magically all of a sudden
+know what to do with CDBG, I don't think so. So I don't
+understand why that is being done.
+ Among the programs slated not to be funded under the
+President's proposals are Brownfields, Empowerment Zones/
+Enterprise Communities, and the Rural Housing and Economic
+Development Program. Well, for those people who think that it
+is important to have economic development in the cities so that
+we won't continue forever to have to fund 501(c)(3)s because we
+don't have the kind of businesses and programs that can
+generate its own funding, it is a mistake to go into their
+empowerment zones that were set up for economic development and
+employment and all of a sudden get rid of them. We haven't
+finished the work yet. The same thing with, well, Empowerment
+Zones/Enterprise and economic development.
+ I won't bore you with the rest of this testimony. I know
+you have been here for a long time, and you have still got
+Members to go. I have submitted 50 copies as required by the
+committee. I am very, very hopeful that we will all, Democrats
+and Republicans alike, see the value in CDBG and HUD and not
+allow it to be slashed in the way that is being proposed.
+ Thank you.
+ [The prepared statement of Maxine Waters follows:]
+
+Prepared Statement of Hon. Maxine Waters, a Representative in Congress
+ From the State of California
+
+ Chairman Nussle, Ranking Member Spratt, Members of the Committee,
+thank you for the opportunity to testify before you today.
+ Mr. Chairman, the President's proposed FY 2006 budget will create a
+tremendous hardship on our nation's low-income families, senior
+citizens, disabled persons, veterans, those seeking to improve their
+lives through education and job training, and many other groups.
+ As the Ranking Member of the Housing Subcommittee of the Financial
+Services Committee, I am here to urge this Committee to reject the
+disastrous budget cuts and program transfers in the HUD budget that the
+Administration has proposed. If the President's Budget were enacted,
+HUD would suffer a 12 percent budget cut, the largest of any Cabinet
+Department.
+
+ HUD BUDGET
+
+ Mr. Chairman, as I told HUD Secretary Jackson when he appeared
+before the Financial Services Committee yesterday, I am very
+disappointed by the huge budget cuts and the massive program transfers
+away from HUD that the Administration has proposed in its FY 2006
+Budget. The FY 2006 HUD budget accelerates a 4-year effort by the Bush
+Administration to dismantle critical HUD programs, to make deep funding
+cuts in these programs, and regretfully, to target these cuts to our
+most vulnerable low-income families, seniors, and disabled persons. The
+proposed elimination of the Community Development Block Grant Program,
+and the 50 percent cut in disabled housing funding are just two of the
+most noteworthy examples.
+ Mr. Chairman, we have an affordable housing crisis in much of this
+country. Just 2 weeks ago, the Los Angeles Times reported that police
+had to disperse a crowd of about 3,000 people vying for 150 low-income
+housing applications in Hollywood, California, when some people rushed
+the line and a riot ensued. You could find a similar scene in many,
+many communities.
+ As the National Low Income Housing Coalition regularly reports,
+there is not a single metropolitan area where an extremely low-income
+family can be assured of finding a modest two bedroom rental home that
+is affordable. Moreover, there are literally millions of people who are
+homeless.
+ Mr. Chairman, it is stunning to me, at a time when the
+Administration seeks almost $82 billion dollars in Supplemental
+Appropriations, principally for the War in Iraq, Secretary Jackson
+would tell us that HUD has to ``prioritize'', by cutting affordable
+housing programs, because the Department's proposed budget will not
+permit these programs to be funded.
+ The President's proposed budget would eviscerate CDBG flexible
+block grants to states and localities thereby resulting in a loss of
+affordable housing investments of $1.16 billion dollars; cut the
+disabled housing budget by 50 percent; continue an assault on the
+rental housing assistance safety net programs (Section 8 and public
+housing); eliminate future funding for the HOPE VI program; rescind
+$143 million dollars in FY 2005 HOPE VI funding that was only
+appropriated a few months ago; and cut funding for housing programs for
+Native Americans by 16 percent.
+ Funding for critically needed capital repair of public housing
+units is cut another $252 million, and operating assistance is cut by
+$17 million. The overall FY 2006 public housing request is 9 percent
+below last year's level, and 30 percent below the level when the
+Administration took office, after adjusting for inflation. HOME block
+cuts and the Housing for People with AIDS program (HOPWA) also are cut.
+Even funding for housing counseling and for fair housing enforcement
+would be cut from their current funding levels! All these programs play
+a vital role in providing safe, decent, affordable housing for low-
+income families. We must not cut these programs.
+ The HUD budget will cut 50 percent of the funding for the Section
+811 program for disabled housing. It is inexcusable for this program to
+be cut, let alone singled out for a cut of this magnitude. The
+Administration budget also proposes to turn Section 811 into a rental
+assistance program only, ending the longstanding Federal role in
+funding the cost of construction of new affordable housing for the
+disabled.
+
+ CDBG
+
+ Now let me turn to CDBG. The Bush FY 2006 budget proposes to slash
+community development funding by $1.9 billion dollars, a cut of 35
+percent from the $5.6 billion dollar level at which these programs were
+funded in FY 2005. The President also is proposing a major
+reorganization of community development programs under which nearly all
+of the programs that comprised the Community Development Fund,
+including the Community Development Block Grant program (CDBG) would be
+moved out of the Department of Housing and Urban Development (HUD) and
+into the Commerce Department.
+ Among the programs slated not to be funded under the President's
+proposal are Brownfields, Empowerment Zones/Enterprise Communities, and
+the Rural Housing and Economic Development Program. The
+Administration's proposal also eliminates Section 108 CDBG loans which
+have successfully been used by localities to leverage private sector
+capital for critical community development projects, and, thus, would
+throw into jeopardy the funding stream, the collateral, for Section 108
+CDBG loan guarantees already outstanding.
+ These cuts would have a devastating impact on housing, neighborhood
+improvements, and social services for the elderly, the disabled,
+families with children, and the homeless. You can't shoehorn $5.6
+billion dollars in community development programs into a $3.71 billion
+dollar economic development program without many people being hurt.
+ Mr. Chairman, as all of us know, CDBG funds are among the most
+flexible Federal funds available to cities, states, and community-based
+organizations. Funds can be used for a wide array of activities,
+including housing rehabilitation (loans and grants to homeowners,
+landlords, nonprofits, and developers), new housing construction,
+downpayment assistance and other help for first-time homebuyers, lead-
+based paint detection and removal, the purchase of land and buildings,
+the construction or rehabilitation of ``public facilities'' such as
+shelters for people experiencing homelessness or victims of domestic
+violence, making buildings accessible to the elderly and disabled,
+``public services'' such as job training, transportation, health care,
+and child care (public services are capped at 15 percent of a
+jurisdiction's CDBG funds), capacity building for non-profits,
+rehabilitating commercial or industrial buildings, and loans or grants
+to businesses.
+ The proposed CDBG cuts, if enacted, would have a devastating impact
+on housing, neighborhood improvements, and social services for the
+elderly, the disabled, families with children, and the homeless. The
+proposed transfer of community development programs, while requiring
+legislative action, is extremely ill-advised. The proposal also would
+reorient CDBG away from its traditional HUD focus of affordable housing
+and community development, to a Commerce Department whose focus is on
+economic development, and which caters to business interests.
+ All of these community development programs play an important role
+in helping local governments improve their neighborhoods. If the
+proposed cuts were to be enacted, they would severely damage these
+communities' efforts to improve safety in their neighborhoods, create
+jobs, provide affordable housing and social services for their
+residents, and create a huge funding hole that States and localities
+cannot possibly fill.
+ Mr. Chairman, I am also very troubled by the effects that the cuts
+to CDBG will have on affordable housing. Last year, $1.16 billion in
+CDBG funds were used for housing, resulting in 112,000 homeowners
+receiving funds for housing rehabilitation, 11,000 families receiving
+assistance to become 1st-time homeowners, and 19,000 rental housing
+units being rehabilitated. The proposed elimination of CDBG would
+result in a $1.16 billion cut in affordable housing funding.
+ Finally, it appears that the Administration believes that community
+development funding should only be available in communities with
+poverty rates that exceed the average poverty rate. A proposal to limit
+funding to only the most distressed communities would effectively
+abandon efforts to help the millions of low-income persons living in
+middle income and economically diverse communities. Instead of carrying
+out the existing Federal policy objective of de-concentrating low-
+income families, the proposal would further concentrate them in the
+poorest communities, and potentially further stratify society along
+economic and racial lines. CDBG funds should continue to be available
+to serve poor people wherever they happen to reside.
+
+ CONCLUSION
+
+ Mr. Chairman, the President's misguided budget proposals do not
+meet the needs of the American people. I urge you to reject the
+President's proposals and substantially improve funding for affordable
+housing and community development as you write the FY 2006 budget
+resolution.
+
+ Mr. Conaway. Thank you, Ms. Waters.
+ Mr. Cooper, any questions or comments?
+ Mr. Cooper. I would just like to thank the gentlelady. You
+do a terrific job not only representing your constituents, but
+also your voice for the voiceless all across this great country
+of ours.
+ I know I have heard a tremendous amount of concern over the
+HUD cuts in my district. They can be devastating to folks. The
+CDBG cuts are bad. There are lots of things that we need to
+look at in this budget and correct, because there are some
+terrible mistakes made in the President's budget. I thank the
+gentlelady.
+ Ms. Waters. You are certainly welcome.
+ Mr. Conaway. Ms. Waters, thank you very much for coming
+today. I appreciate your testimony.
+ Not to be argumentative, but I am a CPA, and I don't
+automatically subscribe to budget increases in programs to
+being our best interests. Conversely, I don't automatically
+subscribe to the idea that budget cuts or reduced funding in
+certain areas is bad.
+ You said every single program that you mentioned today was
+getting cuts. You have very dire predictions as to what would
+happen if those happen. We have tough choices to make. We have
+limited resources to spread across an almost seemingly
+unlimited need across this great country, and look forward to
+working with you as we try to somehow try to reconcile between
+those two. So thank you for coming this afternoon.
+ Ms. Waters. You are welcome, Mr. Chairman. Let me just say
+as I close and I leave, one of the good things about CDBG is
+the community is involved in the entire planning process as
+mandated by Federal law. Not only do they have to put the
+notices out so that the community comes together to go over and
+review what the city is doing, they, too, have the opportunity
+to suggest to the city where the money is best spent, and the
+process is one of the best ones that I have ever seen for
+planning. I am hopeful that we will take that into
+consideration as we look at this.
+ Mr. Conaway. Thank you. I have got experience with my local
+United Way over a long time and have seen the good that this
+program does work and the good process that it has to go
+through, the annual scrubbing and competition, in effect.
+ Ms. Waters. Yes.
+ Mr. Conaway. So that we do have the money spent on the most
+important needs within the community.
+ Thank you very much for your testimony this afternoon.
+ Ms. Waters. Thank you.
+ Mr. Conaway. Mr. Holt from New Jersey. You are recognized
+for 10 minutes.
+
+ STATEMENT OF THE HON. RUSH D. HOLT, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEW JERSEY
+
+ Mr. Holt. Mr. Conaway, Mr. Cooper, thank you very much. I
+appreciate the opportunity to be here today. I would certainly
+concur in the remarks of Ms. Waters, Ms. Capito, Mr. Hayes, all
+important points. No doubt all day today you have heard about
+what we can do to meet the needs of the people of the United
+States, whether we are talking about food on the table or
+housing.
+ Let me tell you, if we are economically going to be able to
+meet those needs, we must invest in innovation. It is the
+engine that drives our economy. Science and technology
+leadership must not be taken for granted. Excellence in science
+and technology requires sustained, appropriately funded
+research in a broad range of fields. This is not a luxury. It
+is not welfare for people in lab coats. It is our future well-
+being. It is the quality of life of Americans, maybe not this
+year's research for next year's food on the table or next
+year's housing, but in a very real way it is our future.
+ The President has proposed that the overall U.S. research
+and development budget increase by about 0.6 percent in fiscal
+year 2006 to $132.3 billion. Looked at one way, you would say
+the Federal investment in research and development has been
+increasing, but it is a little bit deceptive.
+ If we put aside the development part of the research and
+development budget, and this is primarily for defense and
+homeland security development projects, important as they are--
+but if we put that aside, the Federal science and technology
+budget, which would be the real research part, the proposed
+spending would be about $60 billion, down by 1.5 percent from
+2005 spending.
+ Now, if the U.S. standing in science and technology were
+secure, we might be able to tolerate this, but our leadership
+in science and technology is not secure. If we were concerned
+about jobs going overseas or just meeting our needs here at
+home, we must be the innovation leaders in the world. As it is,
+other countries are spending significantly in science and
+technology, in research and development. More and more of the
+best patents are foreign, more and more of the best scientific
+papers are written in other countries, more and more graduate
+students are choosing to stay in their own countries or go to
+other places other than United States universities for a first-
+rate education.
+ Now, these unprecedented advances in worldwide science and
+engineering are great news for the world and for humankind at
+large. Scientists and engineers around the world no doubt will
+be making important discoveries in innovation. But this is not
+great news for the United States as a country. The United
+States is at best treading water.
+ We can't do that forever. We are living off much of the
+innovation that came from the 1960s and 1970s. We are overdue
+for a real significant investment in research and development.
+As a percentage of GDP, the funding for physical science
+research has been in a 30-year decline.
+ Now, Mr. Conaway, Ms. Schwartz, as I would, or any other
+Member of Congress, you would like to be introduced to the next
+Rotary Club meeting as a future-oriented Member of Congress. It
+can't be just words. If we don't actually make this investment
+in science and technology and research and development, we
+cannot call ourselves future-oriented.
+ Let me focus on the National Science Foundation (NSF). The
+NSF isn't the only part of the Federal R&D effort that requires
+more support, but it is key to our infrastructure. We have in
+recent years doubled the funding for the National Institutes of
+Health (NIH). We have made large increases in the last few
+years, as I made reference to, in development in the Department
+of Defense (DOD).
+ The NIH and the DOD research and development will not be
+able to use these funds well if we don't make a concurrent
+investment in the National Science Foundation. It is from the
+National Science Foundation that the scientists are trained. It
+is from the National Science Foundation that the
+instrumentation and methodology is developed so that we can
+actually get good results from our huge investments that we
+have, I think, wisely made at NIH and in DOD.
+ In 2002, the President signed into law the NSF
+Authorization Act that authorized a doubling in the budget of
+the NSF by fiscal year 2007. We are not keeping at even one-
+quarter of that rate. In other words, NSF is not on a doubling
+path. If we don't put it back on a doubling path, we will be
+squandering the many billions of dollars that we are putting
+into NIH, DOD, and elsewhere.
+ This is just one example of the attention that I believe
+this committee needs to devote to research and development.
+There are other things. Let me just make brief mention of the
+Hubble Space Telescope.
+ The Hubble Space Telescope is one of the most productive
+scientific instruments in the world's history. Its best work is
+perhaps yet to come. It is expanding our understanding of the
+universe and where we are in the universe. Prematurely ending
+its mission would be, well, a shame and a disgrace.
+ Another example I would point to is fusion energy research,
+supported by the Department of Energy, Office of Science. The
+administration proposes that we make severe cuts to the U.S.-
+based research so that we can fund the International
+Thermonuclear Experimental Reactor (ITER). This could be based
+in Europe or Japan.
+ Now, I think supporting ITER is a good idea, but supporting
+ITER must be in addition to, not instead of, a U.S.-based
+program. If we don't invest in the United States, the United
+States will not have the capacity to use the results in the
+international reactor or to contribute significantly to the
+international reactor or, what really counts, to be able to
+develop fusion energy as a marketable energy source in years to
+come.
+ A good science budget is within our reach. In the scheme of
+things, we are talking about seed corn, which is a small
+fraction of our harvest. A good budget for science can be
+achieved. I recognize that there are immediate needs, social
+needs, human needs, but the science is our future.
+ I hope I have made the case, I have tried to make it as
+strongly as I can, that not to make a significant investment--
+for example, not to put NSF on the funding doubling path that
+we in Congress authorized just a few years ago--would be to put
+the future and perhaps ourselves in jeopardy. Thank you.
+ [The prepared statement of Rush Holt follows:]
+
+ Prepared Statement of Hon. Rush D. Holt, a Representative in Congress
+ From the State of New Jersey
+
+ Mr. Chairman, thank you for the opportunity to testify today on
+President Bush's Fiscal Year 2006 budget submission to Congress. I want
+to use this opportunity to address Federal support for science.
+ Innovation is the engine that drives our economy. The United
+States' leadership in science and technology is the basis of our global
+economic and political leadership.
+ Our science and technology leadership must not be taken for
+granted. Excellence in science and technology requires well conceived,
+sustained, and appropriately funded research in a broad range of
+fields. We need to advance our understanding of the structure of the
+universe, of the laws governing matter and energy, of the properties of
+materials, and of the building blocks of life. We need to develop new
+and better ways to serve human needs with new materials, processes,
+devices, and systems. To achieve this we need a very well conceived and
+adequately funded budget for research.
+ President Bush has proposed that the overall U.S. Research and
+Development budget increase by only 0.56 percent in FY 2006, to $132.3
+billion. I am pleased that in recent years, including this year, the
+Federal investment in R&D has been increasing. But this increase is
+largely due to significant increases for weapons research and
+development, for the creation of new homeland security R&D programs,
+and for the now-complete campaign to double the National Institutes of
+Health (NIH) budget. If we put aside the ``development'' part of the
+R&D budget, which is primarily for defense and homeland security
+development projects and which has grown to more than half of the R&D
+budget, and look at the remaining part, called the ``Federal S&T
+budget'', the proposed spending would be $60.8 billion, down 1.4
+percent from FY2005 spending.
+ If the U.S. standing in science and technology were secure, a 1.4
+percent cut in this time of tight budgets might be appropriate. If U.S.
+science were in a secure position, we could rest on our laurels, make
+some economies, and cut back a bit on science in order to make it a
+tiny bit easier to cover the huge deficits that have been built up by
+the current Bush administration.
+ But our leadership in science and technology is not secure. The
+United States is still the world leader in science and technology, but
+other countries are catching up. Other countries are significantly
+increasing their spending on science and technology, and they are
+getting results. More and more of the best patents are foreign. More
+and more of the best scientific papers are written in other countries.
+More and more of the world's best graduate students are choosing to
+stay in their own countries for graduate school rather than coming to
+the great universities of the United States, because their universities
+increasingly provide a first-rate education.
+ These unprecedented advances in worldwide science and engineering
+capacity are great news for the world. Scientists and engineers in
+other countries will undoubtedly make important discoveries and
+innovations, and they will build new industries that will benefit us
+all.
+ While other countries have been surging ahead, the United States
+has been treading water. Federal funding of basic research in
+engineering and the physical sciences has experienced little to no
+growth over the last thirty years. As a percentage of GDP, funding for
+physical science research has been in a thirty year decline.
+ The United States absolutely cannot afford to lose its lead in
+science. We have to innovate faster and better than anyone else, or we
+will eventually be second-rate. In every generation since World War II,
+there have been dire warnings that the United States is loosing its
+economic and technological edge. Somehow we have always managed to
+regain our leadership position. But if you look back, you can see that
+each time, we have regained our edge because of research and innovation
+that has received substantial Federal support.
+ Probably every Member of Congress would like to be introduced at
+their next Rotary meeting as a future-oriented Member of Congress.
+Science, technology, and education are the future of America.
+ Today I want to focus my recommendations on the budget for the
+National Science Foundation (NSF). NSF is not the only part of the
+Federal R&D effort that requires more support. But NSF is key to our
+scientific infrastructure. If NSF is not strongly supported, U.S. basic
+research is in trouble.
+ In 2002, President Bush signed into law the NSF Authorization Act
+(P.L. 107-368). This authorized a doubling of the budget for the NSF by
+FY 2007, to $9.8 billion, through annual 15 percent increases. In fact,
+it has taken 4 years for NSF to receive an overall increase of 15
+percent, from $4.8 billion in FY 2002 to the President's proposed $5.6
+billion in FY 2006. We need to get back on track toward an NSF budget
+of $10 billion. We can achieve this for NSF through annual 15 percent
+increases over the next 4 years. For FY 2006, the NSF appropriation
+should be $6.3 billion, a 15 percent increase over FY 2005.
+ There are other ways that the budget needs to be revised to support
+science. An important example is the Hubble Space Telescope. Hubble is
+one of the world's most productive scientific instruments. It has
+expanded our understanding of the life and death of stars. It has shown
+us the accelerating expansion of the universe and the existence of
+black holes. It is the most successful science project in NASA history.
+The President proposes to cancel servicing of the Hubble Space
+Telescope, prematurely ending its mission. We need to restore this
+funding.
+ Another example is fusion energy science, supported by the DOE
+Office of Science. The Administration proposes that we make severe cuts
+in U.S.-based research, so that we can fund the International
+Thermonuclear Experimental Reactor (ITER) fusion project, which will be
+based in Europe or Japan. We should definitely support and participate
+in ITER. But to benefit the United States, supporting ITER must be in
+addition to, not instead of, having a U.S.-based program. Otherwise the
+United States will not have the capacity to develop fusion energy;
+technology leadership will go to Europe and Japan.
+ This year marks the 100th anniversary of Einstein's first
+revolutionary papers. Einstein's science transformed our understanding
+of the physical world, from the sub-atomic structure of matter and
+energy to the dynamics of the universe. The discoveries of Einstein and
+many other scientists in the twentieth century have led to innovations
+that have powered the U.S. economy. Now, in the twenty-first century,
+we need to support basic science, to ensure that America has a strong
+scientific foundation for the future.
+ Scientists are creative, disciplined, and work hard. As Members of
+Congress, we too need to be creative and disciplined, to provide the
+support necessary to enable U.S. scientists to make new and as yet
+unimagined discoveries. A good budget for science is within our reach.
+Yes, the United States has immediate needs that must be accommodated in
+the overall budget. But science is our future, and it must be
+appropriately supported.
+
+ Mr. Conaway. Mr. Holt, thank you for those comments.
+ Ms. Schwartz, do you have any comments for the gentleman
+from New Jersey?
+ Ms. Schwartz. Thank you, Mr. Chairman.
+ Thank you, Mr. Holt. I just want to appreciate, certainly,
+your own expertise as a scientist, that you would bring this to
+our attention, and I think that you point out really very
+correctly that we had already made a commitment, that Congress
+had made a commitment--not me, I wasn't here at the time--but
+that the Congress had made that commitment in 2002. It seems we
+are reneging on that commitment.
+ You point out that these are--it is a difficult budget,
+there isn't--there are choices to be made. There is certainly
+the issue of priorities that have to be made.
+ My question to you really is to what degree do you think
+this is isolated to an area? I mean, you are from New Jersey.
+Obviously, you mentioned Mr. Einstein and some of the rich
+scientific community in New Jersey. Being from the southeastern
+part of Pennsylvania, I have been very involved in promoting
+biotechnology as one of the advances that we ought to make our
+investment in. But I understand as well we have to step back a
+bit and really look at basic science and scientific research
+that really leads people to consider it.
+ I wonder if you could speak at all about any particular
+parts of the National Science Foundation funding that would be
+dramatically hurt, that might hurt in particular either
+geographic areas or scientific communities or populations you
+think we are going to cut out. Will they cut funding for young
+people and some of the National Science Foundation scholarships
+that are provided and other things in particular?
+ Mr. Holt. Yes, Ms. Schwartz, thanks for the question. It
+does appear that education might suffer disproportionately in
+these budget cuts. But the point I want to make is this is not
+isolated to any geographic area or to a subject area. It is the
+source of our productivity and economic vitality in every State
+in this country, really, in every town and village. Our
+previous investment in science and technology over the decades
+is why we are the global, economic, political and, I would say,
+military leader. It makes possible our discussing CDBG and all
+of the HUD programs and all of the other things we are talking
+about here. We would not have a $12 trillion economy had it not
+been for the investments in transistors, lasers, medical
+technology, which came from basic research.
+ The National Science Foundation looks at new materials and
+processes and devices and systems. It looks at information
+technology and computer sciences, which are not applicable to
+just one area, but all areas. We went through, over a 6-year
+period, a doubling of the National Institutes of Health, up to
+several tens of billions of dollars now, and I think that was
+wise. There is a lot of good research coming out of that, but
+we can't sustain that research unless we are producing the
+scientists, the methodology, the instrumentation, that is used
+for this NIH research, and much of that comes from the NSF.
+That is why the decision was made to put NSF on a doubling
+path.
+ Doubling NSF, by the way, would still make it only a small
+fraction of the budget of NIH. We are not talking about, you
+know, massive spending. Yes, it is billions of dollars, but it
+is relatively small in the scheme of things.
+ Ms. Schwartz. OK. Just one last question, or almost a maybe
+comment, is that it is both the really hard, serious dollars
+that we need to do this research. But do you think it is also a
+message that we don't care about science at a time when we, as
+you point out, need to be really clear to our young people that
+science matters, and also to our global competitors, if you
+will, that science matters, that we will be making that
+investment in science, because I think otherwise, as you point
+out, they are already getting ahead--and while I am not sure
+the sort of space race that we were engaged in many, many years
+ago, but did compel a lot of young people to think about
+science as a career, that I am not sure we are doing it, if we
+are actually cutting science funding as you point out, a
+National Science Foundation funding.
+ Do you think it is not just the hard dollars on the actual
+science that gets done, but the message as well?
+ Mr. Holt. Well, Representative Schwartz, as you know, this
+is a topic for a lengthy discussion at another time. But a
+failing of our education system is that we have told 80 percent
+of Americans that science is for scientists. Consequently, most
+people think that spending at the National Science Foundation
+is for scientists. No, it is for every man, woman and child in
+America. Science is for all of us, not just the scientists.
+ Ms. Schwartz. OK. Thank you very much, Mr. Holt.
+ Mr. Conaway. Mr. Holt, thank you. I think it might help put
+some additional meat on the bones for your arguments if you
+would include in your presentation as an example the number of
+engineers being produced by China today versus in America. I
+know that is just one segment of the scientific community, but
+it is a factor of, I think--I could be corrected on this, but I
+think it is like eight times the number of engineers being
+produced in China each year than in America, so that it has
+dramatic ability not just on our dollars, but on our ability to
+compete in the world.
+ So thank you for your testimony today. I appreciate that.
+ Mr. Holt. Thank you, Mr. Conaway.
+ Mr. Conaway. It is now my high pleasure to welcome my
+neighboring Congressman from Lubbock, Texas, Mr. Randy
+Neugebauer. Mr. Neugebauer, 10 minutes.
+
+ STATEMENT OF THE HON. RANDY NEUGEBAUER, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF TEXAS
+
+ Mr. Neugebauer. Thank you, Mr. Conaway and Ms. Schwartz,
+for conducting these hearings.
+ Mr. Conaway. I was hoping you would say Mr. Chairman. I
+would really like to hear that.
+ Mr. Neugebauer. Thank you, Mr. Chairman. In fact, I ask
+unanimous consent to revise my remarks and make my written
+remarks part of the record.
+ Mr. Conaway. Without objection, sir.
+ Mr. Neugebauer. Thank you, sir. I know you have heard a lot
+of testimony, and the hour is drawing close to the evening, but
+I wanted to make a few points.
+ I just finished about 13 or 14 town hall meetings all
+throughout my district, and I think there is a consensus of the
+people in the 19th District of Texas that $2.57 trillion is
+enough to spend for our budget. In fact, they agree with me
+when I say that Congress doesn't have an income problem, it has
+a spending problem, and it is incumbent upon us, as Members of
+Congress, to tackle this problem to begin to reduce these
+deficits so that we do not leave our children and our
+grandchildren with this huge debt.
+ As we look forward to our budget, I think one of the things
+that I want to encourage you is that I think that the President
+sent over a good target, $2.57 trillion. But you know if we can
+do better than $2.57 trillion, then I think the taxpayers get
+an extra dividend. So as we put this budget together, I don't
+want us to work toward one mark, but work toward a budget that
+is fiscally responsible and that spends American taxpayers'
+money wisely.
+ If you recall, the President during his State of the Union
+message said, you know, if we can't spend the American
+taxpayers' money wisely, we shouldn't spend it at all. And I
+think we all agree that that is exactly what we should be
+doing.
+ One of the things that I think is important about this
+budget process is that we make this budget document flexible,
+so that our authorizing committees and our appropriation
+committees can go and do the work that they have been
+challenged to do. Let them go through the budget and look for
+ways that we can save, look for programs to eliminate. The
+President sent over a list of about 150 programs that he
+believed that we could consolidate or eliminate. You know, I
+call that a good start. So I think we should not just limit our
+look to those 150 programs that the President sent over, but
+certainly look at other programs.
+ We tend to focus, when we go through this budgetary
+process--and last year we did reduce nondefense, nonhomeland
+security discretionary spending, but that is such a small
+portion of the budget that I think we have to look through the
+entire budget document. And I think we have to look at
+mandatory spending.
+ Mr. Chairman, I am going to quote you, as I heard you say
+earlier in the week last week, that if you are going to go duck
+hunting, that you have got to go where the ducks are. As I
+think we go through this budget, I think that all mandatory
+spending should be up for a look and not just some parts of
+mandatory spending and the discretionary spending, because we
+do know that the fastest-growing part of the budget where we
+have seen the most increases is, in fact, in the mandatory side
+of the budget.
+ As it is--we look at these programs, particularly we look
+in the agricultural program, I know in the President's budget,
+he pointed out that he wanted to look at taking some of the
+cuts from the farm programs.
+ As you know, when you look at the total USDA budget, that
+over 50 percent of that budget is mandatory spending on not
+really farm-related expenditures, being nutritional programs. I
+think if we are going to give a scrub to the USDA budget, the
+agricultural budget, that we need to look through the entire
+mandatory spending part of that.
+ One of the things that concerns me is that coming from the
+small business world, I have watched government over the years
+in making policies 1 year and changing the policy the next.
+When you are out and making investments and taking risks and
+borrowing money, that makes it very difficult for our small
+business people. It makes it very difficult for farmers and
+ranchers across America.
+ And so we, in 2002, we passed a farm bill. What we said to
+the producers and--in America, you know, here is a multiyear
+policy for farm programs in this country over the next 5 or 6
+years. You know what those farmers and ranchers did? They went
+out and they leased land. They went to their banker. They
+showed him a 5- or 6-year business plan where they were going
+to buy new machinery and equipment to be able to farm more
+effectively and efficiently.
+ Quite honestly, what makes American producers to be able to
+compete in this economy on an unlevel playing field when it
+comes to trade is the fact that our farmers and ranchers have
+developed a great deal of efficiency through technology and
+productivity. The productivity has really come from getting
+larger. So the family farm in my district that used to be a
+half section or a section is now a family farm that is farming
+4,000 or 5,000 acres of land, and it is through that efficiency
+that they have been able to compete in a global economy where
+they are competing with not really other producers in other
+countries, but literally competing against those countries,
+because those countries are subsidizing their producers at
+larger rates than our current farm policy.
+ You know what else is good about the farm program is we did
+a multiyear program, but we also put together a farm program
+that is working. It was designed to be a safety net. In fact,
+in the first 3 years, it really only cost us what we had
+projected for 2 years, some $17 billion less than what we had
+projected for those farm programs to cost.
+ So it is just not good policy to change the rules in the
+middle of the stream. I think particularly for agriculture
+right now it is important, because there are a lot of things
+that are going on that we are doing on multiple fronts for our
+producers in our country.
+ We are at the table right now with the WTO. What we have
+said in that framework is we have asked those other countries
+to put their subsidies and their tariffs on the table, and we
+have agreed to do the same thing. I think it would be premature
+for us to start taking some of our negotiating chips off of the
+table from a policy standpoint until we have concluded those
+negotiations.
+ Just today we got a ruling where Brazil won a ruling
+against the United States, saying that the current farm policy
+in America violates the WTO. All of us know that we are in
+compliance with the WTO ruling, but, again, that is just
+another one of those issues that we are going to have to
+negotiate, and we are on the tail end of this farm--current
+farm bill and on the beginning of a new farm bill. I think that
+is the appropriate time for us to begin to address some of the
+issues that are brought up about how we are going to provide a
+safety net for producers in the future.
+ I feel very confident, and as I talked through with
+producer groups all throughout my district, the agricultural
+committee wants to be a player, they want to be a partner in
+reducing this Federal deficit, but we have to do it in a smart
+and wise way, a way that is a win/win for America. We have to
+do it in a way that is fair to agriculture and fair to other
+areas of our budget.
+ So I hope, Mr. Chairman, as we go through this budget
+process, I am ready to roll up my sleeves and help bring this
+number in, hopefully less than $2.57 trillion. I think that
+would be a real plus. I think it is a doable thing, but I hope
+as we do that, that we will make sure that we do it in a way
+that we are making good policy for America while at the same
+time trying to bring home a dividend of less spending for the
+American people.
+ Thank you, and thanks for your time.
+ [The prepared statement of Randy Neugebauer follows:]
+
+ Prepared Statement of Hon. Randy Neugebauer, a Representative in
+ Congress From the State of Texas
+
+ Chairman Nussle and members of the House Budget Committee, thank
+you for the opportunity to present my views on the 2006 Budget
+Resolution.
+ I think many of us agree that a Federal budget of more than $2.5
+trillion dollars provides enough resources for the government. As I
+tell my constituents, we don't have an income problem here in
+Washington; we have a spending problem. As you put together this year's
+resolution, I ask that you keep our budget total at or below the total
+recommended by President Bush.
+ Even with the recent economic growth and growth in revenues, we
+continue to spend more than we take in. I commend the Committee's
+effort last year to slow the increase in non-defense discretionary
+spending, which we ultimately managed to keep to 1.4 percent. Holding
+down or decreasing discretionary spending, however, is not going to be
+enough to reduce the deficit when this spending is less than 20 percent
+of the budget.
+ When meeting with constituents last week in my district, I used the
+analogy that if you are going duck hunting, you go where the ducks are.
+Well, if we are going to reduce the deficit, we have to go where the
+spending is.
+ We are at war, so funding for defense and security must remain a
+priority. However, there are certainly non-defense discretionary
+programs that can be reduced, consolidated or eliminated, and we must
+address mandatory spending in order to continue down the path toward
+deficit elimination. When the rate of growth in mandatory programs far
+exceeds the rate of growth in the economy, these programs simply are
+not sustainable.
+ I encourage the Budget Committee to set reconciliation targets for
+mandatory spending, and I also ask that you give the authorizing
+committees full discretion to determine how we meet those targets. We
+know this won't be an easy process, but it is our responsibility to
+address the unsustainable spending growth in order to maintain
+important programs and services for the future.
+ One area I want to address in a bit more detail with you is
+agriculture. Mr. Chairman, my constituents and I appreciated your
+remarks last month during a C-SPAN interview. I agree with you that we
+need to look at all the mandatory spending within USDA, not just farm
+programs, which comprise just one-half percent of the Federal budget.
+ The 19th district of Texas is heavily dependent on its agricultural
+economy. Farmers, lenders and input providers have made investment
+decisions based on a multi-year farm policy, which will be reauthorized
+within the next 2 years. The 2002 Farm Bill has proven to be a very
+effective safety net for our producers, providing support in times of
+lower prices, and reducing support when it is not needed.
+ During the first 3 years of this policy, farm programs have cost
+$14 billion less than the Congressional Budget Office predicted when
+the legislation passed. Even though spending will increase somewhat
+this year due to lower prices, total spending over the life of this
+Farm Bill is still projected to be less than was predicted. Changing
+the rules of the game now, and then again in 2 years, is not sound
+policy.
+ Budget decisions we make in agriculture today will not only affect
+the 2007 Farm Bill, but they will also affect our negotiating position
+in the World Trade Organization. If we take all of our chips off the
+table now, we will not have anything left to negotiate with as our
+trade representatives continue efforts to open new markets and reduce
+other barriers to U.S. products.
+ During meetings with constituents throughout my district last week,
+farmers understood the importance of balancing the budget, and they are
+willing to do their part to reduce the deficit. However, they do not
+support agriculture bearing a disproportionate share of the burden.
+Neither do I, Mr. Chairman.
+ As you write the House budget resolution, I ask that you fairly
+distribute reconciliation instructions across areas of mandatory
+spending, basing them on shares of the budget and contributions already
+made to budget savings. I also ask that the budget does not restrict
+flexibility of the authorizing committees in writing reconciliation
+legislation.
+ Our constituents are looking to us to make responsible decisions
+about the use of their hard-earned tax dollars. They are counting on us
+to set the right priorities and follow thorough on past commitments.
+Thank you for your work on the first step in our budget and spending
+process. Mr. Chairman, I appreciate your efforts to ensure that our
+most important needs are met and that deficit reduction is shared
+proportionally.
+
+ Mr. Conaway. Thank you, Mr. Neugebauer. I appreciate those
+comments.
+ The thing you did point out is the wisdom of this process
+in that the Budget Committee simply sets, to use Chairman
+Nussle's phrase, the fence around it, around this, the number
+of dollars that we are going to spend, and the folks who know
+that--the most about various programs you authorize, the
+committees and the appropriation committees, will be charged
+then with doing the heavy lifting of deciding how much that
+money is spent and where. So I think there is great wisdom in
+that.
+ Ms. Schwartz, do you have comments?
+ Ms. Schwartz. Thank you. Maybe just to ask you if you had
+any additional suggestions for us, as we sit on the Budget
+Committee, and while it is just parameters, you make a pretty
+strong point that $2.5 trillion is plenty of money, that we
+should look for additional programs to cut, additional spending
+to cut.
+ Of course, this particular budget anticipates a certain
+amount of deficit, adding a certain amount to the deficit of
+$427 billion. You didn't mention that, whether you actually
+have some concerns about that in addition, or whether you would
+set that as a parameter to--and if you have any specific
+suggestions about where we could cut another $400, $500 billion
+from the budget, where you would cut in that spending, what
+programs you would target, whether you would want that all to
+come out of the health spending; you suggest the mandatory
+program. So I assume you are talking about cutting some of the
+health programs that are available to seniors or health
+benefits available to--where would you cut?
+ Mr. Neugebauer. That is a very good point.
+ Ms. Schwartz. What would your suggestion be in terms of
+additional hot spending cuts that you would want to make; what
+other programs in addition to your support for cutting the 150
+programs already? Inherent in your statement is to cut that,
+but I assume you don't think we should be adding to the deficit
+either. Many of us don't think we should be adding to the
+deficit. But where would you cut?
+ Mr. Neugebauer. Well, thank you for that question.
+ First of all, I think the overall goal as to what would I
+like to see the deficit be, I would like to see the deficit be
+zero. I would like to see a surplus. But the way we are going
+to eventually get there is for us to slow the rate of growth in
+government down to the same rate of the growth in our economy.
+ Our economy is not growing at the same rate of government
+spending, so you are never going to be able to fix the deficit
+problem until you get the rate of growth in government spending
+in line with the rate of growth in our economy.
+ What we have already seen is we have stimulated the economy
+last year, and as you recall, we thought that the deficit was
+going to be actually about $100 billion more than what it
+actually was, and how did we do that? Well, we started growing
+the economy at a very rapid rate, and I think the last figures
+that came out just last week is we are growing our economy
+right now at 3.8 percent. Unfortunately, the rate of growth in
+the government has been in the 4 percent and nearly 5 percent
+area.
+ Ms. Schwartz. So you don't have any hope that we might be
+able to grow the economy. You feel like it is pretty strong.
+ Mr. Neugebauer. I think even Chairman Greenspan when he
+comes up to the Hill would tell you that this is pretty strong
+growth. So we were able to do that by leaving more taxpayers'
+money in their hands. So when I said we don't have an income
+problem, we have a spending problem, that is what I mean. I
+don't think we need to do anything on the income side.
+ As it comes to programs, one of the first areas I think we
+need to look at is tighten up the waste, fraud and abuse. For
+example, one of the examples in the USDA budget is food stamps.
+We know that USDA is now bragging that their waste, fraud and
+abuse is now less than 10 percent, but I think at one time it
+was 10, 11, or 12 percent.
+ Unfortunately in that budget, that is in real money so to
+the extent possible, I think we have to look at it in the areas
+of tightening up some of these programs.
+ We also have people that have been on these programs for a
+number of years. The question is are their ways to be able to
+transition these people into a work environment and get off of
+some of these programs?
+ So I think as we go through all of the budgets, I think we
+have to tighten up the strengths and say, you know, make sure
+that we have deserving people on these programs, evaluate how
+we are administering these programs, if there are ways to say
+to those agencies, look, you know, an 8 percent or 9 percent
+fraud rate in your budget is unacceptable. You are going to
+have to get that number down by this amount, and the way we are
+going to help you get there is we are going to cut your program
+by about half of that fraud rate or three-fourths of that fraud
+rate and really get serious about that.
+ I think the only way we are going to get there is to put
+some fairly measured constraints in this budget process on
+these agencies to make sure that if we are going to send those
+dollars out, that we are sending them out to the people that
+need them and serve them and not to folks that are just
+maneuvering through the system.
+ Ms. Schwartz. Thank you.
+ Mr. Neugebauer. Thank you.
+ Mr. Lungren [presiding]. Thank you. Thank you very much,
+Congressman Neugebauer. We appreciate it very much.
+ Mr. Neugebauer. Thank you.
+ Mr. Lungren. Next up is Congressman Christopher Shays, but
+before----
+ Mr. Shays. Well----
+ Ms. Watson. I am waiting on someone.
+ Mr. Lungren. Before you do, if I could put one thing in the
+record, I would ask unanimous consent that all Members of
+Congress be allowed 7 days to submit statements for the record.
+Without objection, so ordered.
+ Congressman Shays.
+
+ STATEMENT OF THE HON. CHRISTOPHER SHAYS, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF CONNECTICUT
+
+ Mr. Shays. Thank you, Mr. Chairman. I would like my full
+statement to be submitted in the record, and would want to say
+as a member of the Budget Committee for 12 years, I have deep
+respect for the work that you and your Ranking Member and
+others need to do to help get our country's financial house in
+order, and I am grateful that I don't play the same role that I
+used to. I am happy not to be on the committee. It is a tough
+job, and happy to be working on other issues, but eager to help
+you.
+ I do want to say that I do agree with the previous speaker
+that ultimately the key is slowing the growth of spending so
+that the budget grows close to the natural growth of revenue.
+So if we are seeing a 4 percent growth in our economy, it is
+one thing to see spending growth that way, but when you see
+spending grow higher than that, it is not surprising that you
+end up with deficits.
+ I want to speak to the fact that in this process of your
+debating what to do, I think you have to look at both
+discretionary and mandatory cuts, but I am particularly amazed,
+frankly, that the administration has sought to consolidate a
+number of grants into a block grant, particularly the CDBG
+grant in HUD and the HHS Community Services Block Grant. In the
+HUD, in the CDBG grant, it is $4.1 billion, and the Community
+Service Block Grant used by our CAP agency is about $631
+million.
+ Republicans established these programs, and the logic was
+they would be there to allow for local communities to design
+programs, not in one big cookie cutter designed by the Federal
+Government, but designed by them. And our argument was give
+them the capability to determine their needs in their local
+community using a block grant program.
+ Regretfully my own party gives block grants a bad name,
+because what we then do is we take 16 grants and put them into
+one grant. We take $5.6 billion--or some said it is not $5.6
+billion, it is $5.3 billion, whatever--and we combine it into a
+program with $3.7 billion, and then we say, OK, now you have
+the discretion. It just seems to me the way we are using block
+grants is to disguise cuts and then say to someone else they
+have to make these cuts.
+ So I just really hope that in the process of your debating
+this issue that you don't take the programs that seem to me to
+be so advantageous to particularly the urban areas and just
+slash and not look at the whole host of areas throughout the
+Federal budget, including our health care plans and so on that
+we are--discussed earlier.
+ We are going to see growth in Medicare and Medicaid. The
+question is should they be growing at the rate they are
+growing. I will tell you when we were on the Budget Committee
+in the late 1990s, we balanced the budget even sooner than the
+President thought, but we balanced it by allowing for a 1
+percent growth in entitlements. Then every year after that, our
+budgets were growing off of a lower base, and we balanced the
+budget doing that. It would be an amazing advantage if we
+returned to that concept.
+ I also want to say this evening that whatever you do as a
+Budget Committee, if you don't have budget enforcement as a
+part of it, you simply aren't going to achieve what you need
+to. Whatever you decide to have as your budget, you have got to
+ultimately agree that it is going to be enforced. Without the
+enforcement capability, we never would have balanced the budget
+in the 1990s.
+ So I want you to look at the entire budget, mandatory as
+well as discretionary spending; argue that you should look at
+the mandatory and say to all recipients, you know, we are going
+to have 1 year where we are not going to have growth, and then
+say to them from then on, let it grow at the natural rate
+again. But particularly of all the things to cut, I am
+surprised that we would look at Community Development Block
+Grants as one of the things to cut.
+ So I thank you for that opportunity to address you, and I
+notice the full Ranking Member here, and I don't know why he is
+such a glutton for punishment that he would come back at 6.
+ Thank you, Mr. Chairman.
+ [The prepared statement of Christopher Shays follows:]
+
+ Prepared Statement of Hon. Christopher Shays, a Representative in
+ Congress From the State of Connecticut
+
+ I appreciate the opportunity to testify before you today. As a
+member of the Budget Committee for 12 years, I have deep respect for
+the difficult work the Committee does.
+ The need for affordable and quality housing in Connecticut's Fourth
+Congressional district cannot be overstated, and I am here to speak
+with you about proposed cuts to some of our most effective block grant
+programs. Specifically, Mr. Chairman, I request the Committee not
+include in the Budget Resolution the proposal to cut funding for the
+Community Development Block Grant (CDBG) and Community Services Block
+Grant (CSBG) programs and to transfer them to the Department of
+Commerce.
+ I fully support the Administration's goal of halving the deficit by
+2009, but am deeply concerned some cuts to domestic spending will be to
+the detriment of our urban areas. It is critical we not give our cities
+the short end of the stick.
+ The President's Budget includes a proposal to consolidate 18
+programs, including CDBG and CSBG, into a new program to be operated by
+the Department of Commerce. Proposed funding for this consolidated
+program would be 35 percent lower than the combined FY 2005
+appropriated level for these 18 programs. The pro rata reduction for
+CDBG alone would be $1.42 billion.
+ This funding reduction would have a significant negative impact on
+the ability of states and localities to address local housing and
+community development needs. Housing would be particularly hard hit.
+Last year, $1.16 billion of CDBG funds were used for housing, resulting
+in 112,000 homeowners receiving assistance to rehabilitate their homes,
+11,000 families becoming first-time homebuyers, and 19,000 rental
+housing units being rehabilitated.
+ I am also concerned that adoption of this proposal could eliminate
+funding for communities in Connecticut's Fourth Congressional district
+and around the state. Although the proposal does not include a detailed
+funding formula for the new program, it states that it ``targets
+resources only to communities that need assistance, based on poverty
+and job loss,'' further noting that only ``38 percent of CDBG funds
+currently go to States and communities with poverty rates that are
+lower than the national average.'' A dramatic narrowing of funding
+eligibility would jeopardize the ability of countless moderate and
+higher-income communities, like those I represent, to create jobs and
+affordable housing opportunities for lower income working families. The
+jobs are an important part of the region's economic engine.
+ The CDBG program is based on the concept that local communities and
+states can best determine priority community development needs and then
+develop strategies and programs to address those needs. I couldn't
+agree more. The proposed changes to CDBG would jeopardize the
+flexibility and local control that are the hallmark of the program.
+ CDBG is a program that works, and I support fully funding it. I am
+a member of the Financial Services Committee, which I expect will hold
+hearings on the Administration's proposal as committee of jurisdiction.
+I hope the budget resolution will not tie the hands of Financial
+Services and other authorizing committees in considering the future of
+this critical program.
+
+ Mr. Lungren. Thank you, Mr. Shays.
+ I think he came back because you and Congresswoman Watson
+were here, and he was looking for the magic pills that we could
+swallow so that we can get this deficit down.
+ I don't want to keep you too long, but just one quick
+question. You said that we need to enforce the budget, whatever
+we decide, specifically----
+ Mr. Shays. I believe in pay-go, and I believe that,
+candidly, that pay-go should apply to the spending side and the
+revenue side, the entitlement side, mandatory, and the
+discretionary side. If our argument is that tax cuts are a good
+thing, then let us pay for it with spending cuts somewhere
+else. I think that is what we need to do.
+ Mr. Lungren. Mr. Spratt.
+ Mr. Spratt. Mr. Shays, I will state so I can tell you what
+I told Representative LoBiondo earlier after I listened to his
+testimony.
+ Mr. Shays. What is that?
+ Mr. Spratt. Asking for CDBG, Corps of Engineers, a number
+of different things, I told him, take a good look at the
+Democratic resolution when it comes forward because I think it
+will cover a lot of the bases that are of concern to you.
+ Give us a chance, and we will do a double-edged pay-go. I
+absolutely agree with you. It is effective. And no less a
+person than Alan Greenspan sat that three times and said I was
+a cynic, I was a skeptic to start with, but the budget process
+rules made a difference in the 1990s, and this one in
+particular should be extended.
+ Mr. Shays. Now that I am no longer vice chairman of the
+Budget Committee, I have a little more flexibility, Mr. Spratt.
+I intend to vote for pay-go that looks at both sides of the
+equation.
+ Now, if you combine it with a lot of other things that I
+don't like, you make it difficult, but if you provide us some
+opportunities to isolate some of these votes, not only would it
+be very hard to vote against, I would be frankly eager to
+support them.
+ Thank you. Thank you very much.
+ Mr. Lungren. Thank you, Mr. Shays.
+ Congresswoman Watson, You have 10 minutes.
+
+ STATEMENT OF THE HON. DIANE E. WATSON, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF CALIFORNIA
+
+ Ms. Watson. Yes, and thank you very much. I, too, thank
+you, appreciate that allotment of time, and I want to thank you
+and the Members for permitting the testimony here today about
+the same issue, Community Development Block Grant programs,
+because I am deeply concerned about the cuts that the
+President's budget imposes on a community--on community
+development programs, particularly the Community Block Grant
+Program, or CDBG, which I will refer to as that. I am further
+troubled by the proposal to move a number of HUD programs,
+including CDBG, to the Department of Commerce.
+ The Community Development Block Grant program is our
+Nation's source of Federal funds for local community and
+economic development. Unlike most of what comes out of
+Washington, Community Development Block Grants permit local
+community groups, as was said before, to design and carry out
+programs tailored to the specific local needs of our
+neighborhoods. For 30 years, the CDBG program has empowered
+local groups to revitalize their communities and create
+economic opportunities.
+ CDBG funds are at work in neighborhoods all across my
+hometown of Los Angeles. For instance, in Hollywood, the Public
+Health Foundation Enterprise's ``Aztecs Fire Fuels Crew''
+trains ex-gang members how to become firefighters. In south Los
+Angeles, the Unity Collaborative, an alliance of community-
+based organizations, has worked to mediate peace agreements
+between violent gangs in south Los Angeles, on the west side in
+Watts and in Baldwin Village. Along the Crenshaw Corridor, the
+Marlton Square Project is seeking to reinvigorate a decades-old
+shopping center with new housing and retail development, and
+the project will create jobs and offer more housing
+opportunities.
+ The Los Angeles County Community Development Commission
+uses CDBG funds to operate its business technology center,
+California's largest business high-tech incubator, creating
+high-tech jobs for an impoverished neighborhood. The BTC
+currently serves 39 tenant and affiliate firms with high-tech
+specialties.
+ CDBG is not a government hand-out; rather, it is one of the
+most effective tools cities and neighborhoods have to fight
+economic distress and to create jobs and to lead to creating
+wealth. Part of what makes CDBG such a powerful tool is that
+local governments have used CDBG funds effectively to leverage
+private sector dollars.
+ Unfortunately, the President's budget for HUD effectively
+eliminates the Community Development Block Grant Program. The
+President's budget includes a proposal to consolidate 18
+programs, including CDBG, into a new program to be administered
+by the Department of Commerce. Proposed funding for this
+consolidated program would be 35 percent lower than the
+combined fiscal year 2005 appropriated level for these 18
+programs. The pro rata reduction for CDBG alone would be $1.42
+billion. But what is even more troubling is that this change is
+being put forward before the relevant committees here in
+Congress have a chance to hold hearings to judge the impact or
+the efficacy of these changes.
+ For example, last year, $1.16 billion of CDBG funds were
+used for housing, resulting in 112,000 homeowners receiving
+assistance to rehabilitate their homes, 11,000 families
+becoming first-time homebuyers and 19,000 rental housing units
+being rehabilitated. But one might assume that after moving to
+the Commerce Department, these funds would not be eligible for
+use on housing. This would cripple local affordability housing
+efforts at a time when housing prices are skyrocketing. In Los
+Angeles, half of all families rent, and local fair market rents
+already are out of reach for more than half of these renting
+families.
+ Another cause for concern is the President's replacement of
+CDBG's existing funding formula. The President's proposal notes
+that CDBG funds currently go to many communities with lower
+poverty rates, but simply because the community is not
+overwhelmingly poor does not mean it is not home to poor
+people. Changing the funding formula in the way suggested by
+the proposal could kneecap the effort of moderate-income
+communities to bring their poorer and excluded residents into
+the economic mainstream.
+ While the President's goal of balancing the budget is
+laudable, it is shortsighted to do it by cutting a program that
+has been as successful as CDBG. As you draft the budget for
+fiscal year 2006, I urge you to restore full funding for the
+Community Development Block Grant programs and keep it at HUD.
+ So, again, Mr. Chairman and Members, I would like to thank
+you so much for giving me this time, and I would like at this
+particular point to yield to Ms. Sanchez.
+ I do have, Mr. Chairman, some supporting documents to be
+included in the record, and I have a list of those, and I will
+present it to staff.
+ Mr. Lungren. They will be included in the record.
+ [The prepared statement of Diane E. Watson follows:]
+
+ Prepared Statement of Hon. Diane E. Watson, a Representative in
+ Congress From the State of California
+
+ Thank you, Mr. Chairman, and members of the committee, for
+permitting us to testify here today about the Community Development
+Block Grant program. I am deeply concerned about the cuts the
+President's budget imposes on community development programs,
+particularly the Community Development Block Grant program, or CDBG. I
+am further troubled by the President's proposal to move a number of HUD
+programs, including CDBG, to the Department of Commerce.
+ The Community Development Block Grant program is our nation's
+largest source of Federal funds for local community and economic
+development. Unlike most of what comes out of Washington, Community
+Development Block Grants, or ``CDBGs,'' permit local community groups
+to design and carry out programs tailored to the specific local need of
+our neighborhoods.
+ For thirty years, the CDBG program has empowered local groups to
+revitalize their communities and create economic opportunity. CDBG
+funds are at work in neighborhoods all across my hometown of Los
+Angeles:
+ In Hollywood, the Public Health Foundation Enterprise's ``Aztecs
+Fire Fuels Crew'' trains ex-gang members how to become firefighters.
+ In South Los Angeles, the Unity Collaborative, an alliance of
+community-based organizations, has worked to mediate peace agreements
+between violent gangs in South Los Angeles, on the Westside, in Watts,
+and in Baldwin Village.
+ Along the Crenshaw Corridor, the Marlton Square project is seeking
+to reinvigorate a decades-old shopping center with new housing and
+retail development. The project will create jobs and improve local
+housing opportunities.
+ The LA County Community Development Commission uses CDBG funds to
+operate its Business Technology Center, California's largest high-tech
+business incubator, creating high tech jobs for an impoverished
+neighborhood. The BTC currently serves 39 tenant and affiliate firms
+with high-tech specialties.
+ CDBG is not a government handout rather, it is one of the most
+effective tools cities and neighborhoods have to fight economic
+distress and create jobs and wealth. Part of what makes CDBG such a
+powerful tool is that local governments have it used CDBG funds so
+effectively to leverage private sector dollars.
+ Unfortunately, the President's budget for HUD effectively
+eliminates the Community Development Block Grant program. The
+President's budget includes a proposal to consolidate 18 programs,
+including CDBG, into a new program to be administered by the Department
+of Commerce. Proposed funding for this consolidated program would be 35
+percent lower than the combined FY 2005 appropriated level for these 18
+programs. The pro rata reduction for CDBG alone would be $1.42 billion.
+ But what is even more troubling is that this change is being put
+forward before the relevant committees here in Congress have had a
+chance to hold hearings to judge the impact or efficacy of these
+changes. For example, last year, $1.16 billion of CDBG funds were used
+for housing, resulting in 112,000 homeowners receiving assistance to
+rehabilitate their homes, 11,000 families becoming first-time
+homebuyers, and 19,000 rental housing units being rehabilitated. But
+one might assume that, after moving to the Commerce Department, these
+funds would not be eligible for use on housing. This would cripple
+local affordable housing efforts at a time when housing prices are
+skyrocketing. In Los Angeles, half of all families rent, and local fair
+market rents already are out of reach for more than half of these
+renting families.
+ Another cause for concern is the President's replacement of CDBG's
+existing funding formula. The President's proposal notes that CDBG
+funds currently go to many communities with lower poverty rates. But
+simply because a community is not overwhelmingly poor does not mean it
+is not home to poor people. Changing the funding formula in the ways
+suggested by the President's proposal could kneecap the effort of
+moderate income communities to bring their poorer and excluded
+residents into the economic mainstream.
+ While the President's goal of balancing the budget is laudable, it
+is short-sighted to do it by cutting a program as successful as CDBG.
+As you draft the budget for FY2006, I urge you to restore full funding
+for Community Development Block Grant program and keep it at HUD.
+ Thank you again, Mr. Chairman and members, and before I yield to
+Ms. S nchez, I'd just like to ask that some supporting documents be
+included in the record. I have here:
+ a letter from the Mayor of Los Angeles, Jim Hahn;
+ a one-pager from Los Angeles County on how these cuts will
+impact them;
+ a resolution passed by the National League of Cities,
+which represents 478 cities in California alone, opposing the community
+development cuts;
+ testimony from Jim Hunt, a councilman and former mayor of
+Clarksburg, West Virginia, who is currently in the leadership of the
+League of Cities;
+ and testimony from Donald Plusquellic, the Mayor of Akron,
+Ohio, and President of the United States Conference of Mayors, as well
+as an additional statement from the Conference.
+ Thank you, and I yield to Ms. Sanchez.
+
+ELIMINATION OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: IMPACT ON
+ 33RD DISTRICT
+
+ The following are sample projects funded in the unincorporated
+areas of the First, Second and Third Supervisorial Districts which
+provide services to residents in the 33rd Congressional District:
+ Big Brothers Big Sisters of Greater Los Angeles--Mentor Outreach
+Project: Provides funding for big and little sister matches and case
+management services through an intensive outreach campaign to recruit
+mentors; girls to be matched are at-risk for teenage pregnancy, gang
+membership and drug/alcohol abuse.
+ Community Development Commission--Single Family Grant Program:
+Provides funds for safety repairs to families, seniors and the disabled
+for single-family residential units.
+ Foundation for the Junior Blind--Infant Family Project: Provides
+home-based early intervention services for infants and toddlers from
+birth to 3 years of age who are visually impaired and have multiple
+disabilities.
+ Los Angeles County Department of Consumer Affairs--Homeowners Fraud
+Prevention Project: Provides assistance to low- to moderate- income
+homeowners from being victims of fraud in the purchase of a home, home
+equity transactions including identity theft, and the purchase of
+household goods and services.
+ Additionally, the participating city of Culver City received a FFY
+2004 CDBG allocation to provide services to benefit the residents of
+its city. Below are a sample of some of those projects:
+City of Culver City
+ Citywide Curb Cut Project Phase III--Provides for the construction
+of 40 curb cuts for disabled access, citywide.
+ Coordinator of Services to the Disabled--Provides funding for staff
+support for programs, assistance and referral services to low- and
+moderate-income, severely disabled residents.
+ Washington Boulevard Streetlight Replacement Project-- Provides for
+the upgrade and installation of eight streetlights and the lighting
+conduit systems in the city's Redevelopment Project Area.
+ Los Angeles Urban County Community Development Block Grant Program.
+
+ELIMINATION OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM: IMPACT ON
+ LOS ANGELES COUNTY
+
+Background
+ The Community Development Block Grant (CDBG) program funds a broad
+range of housing revitalization, community and economic development
+activities, job creation, and public services, primarily for the
+benefit of low- and moderate-income persons. Except for set-asides,
+CDBG funds are allocated by formula to state and local governments.
+Total CDBG funding was cut from $4.93 billion in FY 2004 to $4.85
+billion in FY 2005 with formula grant funding decreasing from $4.33
+billion to $4.11 billion. Total CDBG formula grant funding for state
+and local governments in California fell from $555 million in FY 2004
+to $526 million in FY 2005. The President's FY 2006 Budget proposes to
+eliminate the CDBG program.
+
+Impact on Los Angeles County
+ The President's proposal to eliminate the CDBG program would hurt
+the County's economically disadvantaged residents, who are main
+beneficiaries of CDBG-funded services. According to 2000 Census data,
+17.9 percent of all Los Angeles County residents had incomes below the
+poverty level, a far higher poverty rate than the 12.4 percent national
+average. In fact, the County had more poor residents than any single
+state, except for New York, Texas, and California.
+ In FY 2005, a combined total of $184.3 million in CDBG formula
+grants have been allotted to local governments in Los Angeles County,
+including $34.6 million to the County of Los Angeles, which operates
+the nation's largest Urban County CDBG program. The County administers
+CDBG funds for unincorporated areas and 48 of the 88 cities in Los
+Angeles County.
+ Over the past 4 years, CDBG funds have assisted Los Angeles County
+residents by:
+ Providing nearly 2 million units of services through
+after-school and recreation programs to over 156,000 youth;
+ Providing over 800,000 services, including meals, case
+management, and other needed services to over 67,000 seniors;
+ Rehabilitating close to 7,000 homes;
+ Developing almost 9,000 affordable housing units; and
+ Creating or preserving over 2,000 jobs.
+ Eliminating the CDBG program would result in the curtailment of
+such needed services as well as the many community and economic
+development projects and public infrastructure improvements that have
+been funded by CDBG. In addition, its elimination could lead to
+defaults on existing loans for community and economic development
+projects that are being repaid using CDBG funds.
+
+ Resolution by the Board of Directors, League of California Cities
+
+ COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
+
+ WHEREAS, for thirty years America's cities, including both large
+and small cities in California, have used Community Development Block
+Grant (CDBG) grants to create jobs, provide affordable housing,
+eliminate blight and generate new economic investment; and
+ WHEREAS, CDBG funds have played a critical role in community and
+economic development in California; and
+ WHEREAS, CDBG funds have been a powerful economic engine and a job
+creator, allowing California cities to leverage private investment in
+numerous business projects that create new employment opportunities and
+attract equity investment; and
+ WHEREAS, CDBG funds represent a catalyst for creating more
+affordable housing, helping cities to leverage the private investment
+needed to build new rental housing units, revitalize single-family
+homes. CDBG funds also allow additional homes to be hooked up to sewer
+lines. All of these endeavors help to provide California families with
+clean, decent, affordable housing; and
+ WHEREAS, the CDBG program offers a mechanism for building public
+infrastructure, helping California cities to redesign roads, build
+sewerage systems and other much-needed infrastructure improvements; and
+ WHEREAS, the CDBG program is helping California cities remove
+blight, reduce drug trafficking and other crime, and thereby enhance
+the quality of life in California; and
+ WHEREAS, the President has proposed a new ``Strengthening America's
+Communities Initiative'' which combines 18 direct grant programs,
+including CDBG, into one within the Economic Development Administration
+(EDA); and
+ WHEREAS, at $3.71 billion, the new program (which combines 18
+programs) is nearly $1 billion less the current CDBG program alone; and
+ WHEREAS, without proper funding for CDBG, we risk undermining the
+economic well being of our communities, the future generations that
+live there, and the nation as a whole.
+ NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
+LEAGUE OF CALIFORNIA CITIES that we hereby request Congress to enact a
+FY 2006 budget and appropriations package that funds CDBG formula
+grants at no less than $4.355 billion, which is level with FY 2005
+allocations; and
+ RESOLVED FURTHER, that Congress maintain the CDBG as a separate and
+distinct program from other economic development programs that provides
+a direct and flexible source of funding to local governments; and
+ RESOLVED FURTHER, that Congress maintain the current ``dual
+formula'' system where 70 percent of CDBG funds go to entitlement
+communities based on population; and
+ RESOLVED FURTHER, that we will send copies of this resolution to
+all members of the California Congressional Delegation.
+ ADOPTED by the board of directors of the League of California
+Cities this 28th day of February 2005.
+ Pat Eklund,
+ President and Council Member, Novato.
+
+ Chris McKenzie,
+ Executive Director.
+
+Comments by Donald L. Plusquellic, Mayor of Akron, President, the U.S.
+Conference of Mayors, to the House Subcommittee on Federalism, March 1,
+ 2005
+
+ Good morning. Chairman Turner, I would like to thank you and the
+members of the Subcommittee for inviting the Conference of Mayors to
+share our thoughts on the Administration's proposal to eliminate the
+Community Development Block Grant.
+ You were a strong leader within the Conference when you served as
+Mayor of Dayton, and we appreciate your continued leadership now in
+Congress.
+ I am also very pleased to be here with my local government
+colleagues with whom we are united.
+ The Conference of Mayors is 100 percent opposed to the budget
+proposal that would eliminate the CDBG program by merging it with 17
+other programs, moving the function to the Commerce Department, and
+cutting overall funding.
+ We stated this position when the proposal was first announced--an
+announcement that came without prior consultation with us--and
+unanimously reaffirmed this position during our Winter Leadership
+Meeting this past weekend when we met with Dr. Sampson and told him
+directly of our opposition.
+ CDBG has been successful for 30 years, and based on this success,
+the nation's mayors urge Congress to continue the program's present
+funding level of $4.7 billion and to keep it at the Department of
+Housing and Urban Development.
+ Our written statement, submitted by both elected and appointed
+officials, is replete with data which show clearly the outstanding
+performance of CDBG over the past 30 years.
+ In 2004, using CDBG funds:
+ more than 78,000 jobs were created or maintained;
+ nearly 160,000 households received housing assistance, and
+of that amount 11,000 become new homeowners;
+ 9 million persons were served by new or reconstructed
+public facilities and infrastructure;
+ 13 million persons received assistance from CDBG-funded
+public services; and
+ CDBG provided loans to businesses in distressed
+neighborhoods, with more than a quarter of these loans made to minority
+businesses.
+ These statistics and many more specific success stories are proudly
+displayed on the HUD website I would note.
+ In my city * * * (if you want)
+ In your cities * * * (see attachment for cities)
+ Much has been said about OMB's rating of CDBG and the perceived
+lack of performance outcome measures. Let me make two points on this
+issue.
+ First, I know that national organizations representing appointed
+officials worked for a year with OMB to develop a new performance
+outcome measurement system. We are very disappointed that OMB turned
+aside an agreed-upon framework of sound performance measures and
+instead proposed the elimination of CDBG.
+ Second, I believe it is unfair to compare performance results
+between programs like CDBG with much smaller programs like EDA at
+Commerce. To me, this is like comparing the results of a doctor who
+treats older, less healthy persons with a doctor who treats fairly
+healthy young people.
+ Simply stated, CDBG is targeted at some of the toughest problems
+our cities face, and some of the most distressed pockets of poverty and
+blight.
+ I believe that the positive leveraging results mayors and local
+leaders have demonstrated using CDBG should be credited not degraded.
+ OMB contends that 38 percent of the communities receiving CDBG have
+less poverty than the national average, and that this statistic is
+another reason for eliminating the program.
+ The implication from the misleading OMB statistic is that somehow
+wealthy people are benefiting from CDBG. This is a gross distortion of
+the truth.
+ The program's funds are targeted to those ``pockets of poverty'' or
+places in a city or county where there is blight, housing needs, or
+serious economic development needs.
+ In addition, positively addressing blight and distress helps
+communities prevent the spread of these conditions to neighboring
+areas.
+ Business leaders representing groups such as the Real Estate
+Roundtable and International Council of Shopping Centers are standing
+with us. These business leaders have said that CDBG is a cornerstone
+for the type of public-private partnerships that have led to the
+renaissance that has occurred in many of our cities in recent years.
+ As perhaps the most accountable elected officials in the nation,
+mayors are always open to improving government performance and
+providing better service to our constituents.
+ I want this subcommittee to know that once we secure a commitment
+to fully fund CDBG at $4.7 billion and keep it at HUD, we would be
+happy to discuss possible improvements to this highly-successful
+program.
+ Thank you for this opportunity to testify and look forward to the
+comments from my colleagues and to our discussion this morning.
+
+ Testimony of Hon. James C. Hunt, City Councilor, Clarksburg, WV, Vice
+ President, National League of Cities, Before House Government Reform
+ Committee, March 1, 2005
+
+ Chairman Turner, Ranking Member Clay and members of the
+subcommittee, thank you for the opportunity to appear before you today
+to discuss the Administration's proposed shift of Community Development
+Block Grant (CDBG) program to the Department of Commerce. My name is
+Jim Hunt. I am City Councilman and former Mayor of Clarksburg, West
+Virginia and am appearing before you today as First Vice President of
+the National League of Cities.
+ The National League of Cities, the nation's oldest and largest
+organization for municipalities, represents 18,000 cities and towns and
+over 140,000 local elected officials. Its mission is to strengthen and
+promote cities as centers of opportunity, leadership, and governance,
+and to serve as a national resource and advocate for the
+ municipal governments it represents. No matter the size of city,
+programs like the Community Development Block Grant (CDBG) program have
+played a critical role in rejuvenating distressed communities and
+alleviating economic decline throughout our nation's cities.
+ CDBG has played a critical role in rejuvenating distressed
+neighborhoods and alleviating economic decline in all types of
+communities. It is one of the best and only tools currently available
+to spur economic growth. However, CDBG is not just a jobs creator or
+economic development incubator, it is also a catalyst for affordable
+housing and new public infrastructure.
+ Take my city of Clarksburg, West Virginia, as an example. Using
+CDBG grant funds, Clarksburg recently constructed a new water line that
+serves the FBI's new Criminal Justice Information Services Division
+building. The facility employs over 2,700 people in and around my
+community.
+ This project also opened up hundreds of acres of land that are now
+a hotbed of economic development activity. Before the project, these
+properties were either blighted or idle because they had no reliable
+access to water. Today, these lands generate jobs, spur economic
+activity, and provide housing and green space. They also generate new
+revenue for the city, the state, and ultimately, the Federal
+Government.
+ This story is echoed in cities across America:
+ Tuscaloosa, Alabama used $2 million in CDBG funds to
+renovate an area near the University of Alabama. The project helped
+create more than 100 new jobs and retained many more.
+ Milwaukee, Wisconsin used the program to rehabilitate or
+construct more than 700 affordable housing units--and help more than
+250 low income, first-time home buyers live out the American dream.
+ Unfortunately, the Administration is proposing to eviscerate the
+CDBG program by shifting its funding to a new and significantly smaller
+program within the Department of Commerce. For reasons to be outlined
+shortly, NLC urges you to reject the Administration's proposal and to
+maintain CDBG as a distinct and separate program within the Department
+of Housing and Urban Development (HUD).
+ A. The Administration's Strengthening America's Communities
+Initiative (SAC) Would Not Serve the President's Goal of Supporting
+Economic Development.
+ The Administration's Strengthening America's Communities Initiative
+(SAC) will have a tremendous impact on the way the Federal Government
+allocates community development funds. Unfortunately, it has offered
+little in the way of details to the various stakeholders. Therefore, it
+is difficult to quantify one's concerns without knowing the specifics.
+However, based on the documents released by the Administration in
+support of the proposal, local governments have these initial concerns
+ Specifically:
+ 1. The proposal would drastically reduce community development
+funding by roughly $2 billion--funding local governments will not be
+able replace.
+ 2. The proposal would significantly alter eligibility requirements
+to the disadvantage of some low- and moderate- income communities.
+ 3. The proposal would narrow the performance standards from that of
+the current CDBG program to only economic criteria, a step that would
+drastically reduce the flexibility and effectiveness of community
+development moneys.
+ 1. The Administration's SAC Program Would Drastically Reduce
+Funding for Community Development Programs That Cannot Be Recovered.
+ The Administration's SAC proposal collapses 18 current programs,
+whose combined fiscal year 2005 budgets total approximately $5.5
+billion, into a single grant program funded at $3.7 billion. The
+Administration's proposed budget for SAC grants represents a funding
+cut of nearly 35 percent from what Congress allocated in fiscal year
+2005 for all 18 programs. This cut disproportionately harms CDBG
+funding because CDBG's fiscal year 2005 funding level of $4.7 billion
+represents nearly 80 percent of the $5.5 billion of combined funding.
+Moreover, the proposed $3.7 billion for SAC grants is $1 billion short
+of CDBG's current funding level.
+ The Administration claims that it is seeking to ``retarget and
+refocus'' these funds to create new program efficiencies. However, from
+a practical standpoint, NLC questions whether moving the programs from
+HUD, where administrative and professional infrastructures already
+exist and function well, to the Department of Commerce will generate
+any real savings because building the agency's capacity to administer
+the programs alone would likely consume any cost savings derived from
+consolidating these programs.
+ 2. The Administration's New Eligibility Criteria Would Ignore the
+Needs of Many Low- and Moderate--Income Communities.
+ The Office of Management and Budget claims that SAC will better
+fund communities most in ``need of assistance'' by creating new
+eligibility criteria around national job loss, unemployment, and
+poverty rates. Too many communities, it says, receive funding that they
+no longer need, even though many of these communities have poverty
+rates below the national average.
+ The details are still unclear as to which communities will be
+eligible for SAC grants, but it seems clear that they must, at the very
+least, have poverty and job loss rates above the national average. If
+this is so, then Administration has made the mistaken assumption that
+impoverished neighborhoods no longer exist in communities ranking above
+the national average on the poverty and job loss index. We at the local
+level know however, that this is far from reality.
+ Using national averages to measure assistance needs ignores the
+reality that our nation is comprised of local economic regions that are
+unique. For example, the majority of families who earn below the
+regional median household income in the greater Washington, D.C.--
+Baltimore metropolitan area may earn more than the national poverty
+rate, but they are just as much in need of assistance because the cost-
+of-living in this region is significantly higher than the national
+average.
+ Throughout West Virginia, when you travel to virtually every city,
+from large to small, you don't have to drive very far to find the areas
+of our cities and towns that have been forgotten; where poverty and
+despair reign. This one-size-fits-all approach proposed by the
+Administration will likely stifle the flexibility and effectiveness
+currently found in CDBG. The result will be that many cities and towns
+will still be forgotten and poverty and despair will continue to reign.
+ 3. The Administration's Proposal Would Narrow Performance
+Standards, Drastically Reducing the Flexibility and Effectiveness of
+Community Development Moneys.
+ The Office of Management and Budget claims that programs like CDBG
+have no measurable results. The Administration's proposal suggests new
+performance standards like job creation, new business formation rates,
+commercial development and private sector investment as tools to
+determine whether communities receiving SAC funds are achieving results
+and thus, their eligibility to retain funds or to earn bonus grants.
+ Unfortunately, measuring results by these criteria makes little
+sense for communities that are chronically impoverished, have little to
+offer in the way of resources, and are unlikely to show significant
+progress over relatively short periods. In short, these communities are
+being set up to fail.
+ For example, Clarksburg recently used a $250,000 CDBG grant to
+demolish vacant and dilapidated buildings in certain neighborhoods
+throughout our city. These structures were havens for crime, targets
+for vandalism and fires, and an attractive nuisance for our children.
+The city used the vacant lots created by the project to expand
+businesses as well as create space for larger yards and garages for our
+residents.
+ Unfortunately, it is very difficult to assess the impact of
+removing a drug den from a neighborhood using economic criteria alone.
+Moreover, it is difficult to assess economic impact in relation to this
+type of project over a short period. Yet, the Administration's proposed
+criteria would try to do just that. Closing down a drug den may not
+immediately create job growth, spur new business formation, or
+encourage new commercial and residential development. However, it will
+immediately increase the quality-of-life of its neighbors. That is
+measurable and is the foundational beginning for any plan to attract
+new commercial and residential development in the future.
+ Since its creation in 1974, CDBG has had a three-pronged mission
+to: (1) benefit low- and moderate-income individuals and households;
+(2) eliminate slums and blight; and (3) address the urgent needs of
+communities faced with a serious and immediate economic or health
+threat. These goals have allowed local government broad latitude in how
+it uses grant funds, and whether that use is for the creation of new
+economic development opportunities, affordable housing, public
+facilities, or services. Ultimately, these goals have given cities the
+latitude to address ``urgent needs'' like eliminating drug dens and
+other cancers on our communities--latitude not found with other
+programs. It is because of CDBG's flexibility and autonomy of local
+control that the CDBG program has become, from the local government
+perspective, the most effective form of Federal assistance currently
+available.
+ If the Congress alters the CDBG program as proposed, however, we in
+West Virginia fear that the state's entitlement cities will be placed
+in direct competition with non-entitlement cities as well as with
+larger municipalities located across the nation. CDBG communities have
+already faced reduced funds from the program. This problem does not
+necessarily stem from huge cuts in CDBG funding. Instead, it is the
+result of a continued and growing need. More simply put, more
+communities have been competing for a static or slightly decreasing pot
+of money. Now the Administration proposes to cut that scarce funding by
+a total of nearly $1 billion ($2 billion if one includes the other 17
+community development programs). This cut can only exacerbate the
+problem and increase competition among localities. To say that the SAC
+proposal is a compassionate attempt to bring more money to distressed
+areas like those in West Virginia is to deny the reality that there
+will be less funding for an ever-larger universe of need.
+ B. The CDBG Program Should Remain Flexible and Distinct from Other
+Community Development and Economic Development Programs and Should Be
+Level Funded for FY 2005.
+ The long-standing goal of community development has been to improve
+the physical, economic, cultural and social conditions and
+opportunities a community offers its residents. For this reason, NLC
+urges the Congress to work with state and local governments as a full
+partners in achieving this goal. Over the last 30 years, the CDBG
+program has served as an excellent example of a successful Federal and
+local community development partnership. For this reason, NLC will
+continue to advocate in Congress for a fully-funded CDBG program at the
+Department of Housing and Urban Development that is distinct and
+separate from other economic and community development programs.
+ NLC will strongly support legislation that funds CDBG formula
+grants at no less than $4.35 billion and the overall program at $4.7
+billion. Moreover, NLC will support legislation that keeps the CDBG
+program within the HUD account and provides a direct, flexible and
+reliable source of funding to local government. Lastly, NLC will seek
+to maintain the current ``dual formula'' system where at least 70
+percent of CDBG formula funds go directly to cities.
+
+ Statement by U.S. Conference of Mayors; National Association of
+ Counties; National League of Cities; National Association of Local
+Housing Finance Agencies; National Association for County Community and
+ Economic Development; National Community Development Association;
+National Association of Housing and Redevelopment Officials; Council of
+ State Community Development Agencies to the House Subcommittee on
+ Federalism, March 1, 2005
+
+ The U.S. Conference of Mayors (USCM), National Association of
+Counties (NACo), National League of Cities (NLC), National Association
+of Local Housing Finance Agencies (NALHFA), National Association for
+County Community and Economic Development (NACCED), National Community
+Development Association (NCDA), National Association of Housing and
+Redevelopment Officials (NAHRO), and the Council of State Community
+Development Agencies (COSCDA) appreciate the opportunity to present
+this statement to the House Subcommittee on Federalism and the Census.
+We offer this testimony in strong support of the Community Development
+Block Grant Program (CDBG) and in equally strong opposition to the
+Administration's ``Strengthening America's Communities Initiative.''
+ The Administration's FY 2006 budget proposes the total elimination
+of CDBG. In CDBG's place, the Administration is proposing the creation
+of a smaller program within the Department of Commerce that will focus
+solely on economic development. We strongly oppose this substantive
+policy change for several reasons. First, CDBG is the nation's premier
+community development program with a long record of success. Second,
+the Department of Housing and Urban Development (HUD) and the
+Department of Commerce each play an important role in an
+intergovernmental partnership with respect to community and economic
+development. These roles must be preserved. Overall there is no reason
+to eliminate CDBG or create a new program within the Department of
+Commerce to administer Federal community development funds.
+ CDBG was signed into law by President Gerald Ford in 1974. Now in
+its 30th year, CDBG is arguably the Federal Government's most
+successful domestic program. The CDBG program's success stems from its
+utility i.e., providing cities, counties and states with flexibility to
+address their unique affordable housing and neighborhood revitalization
+needs. Based on HUD's most recent data, in FY 2004 alone the CDBG
+program assisted over 23 million persons and households.
+
+ CDBG HAS POSITIVE IMPACT
+
+ HUD, OMB and grantees celebrated CDBG's anniversary last September
+under the theme ``Performance Counts.'' This was entirely appropriate
+because CDBG has been performing at a high level for 30 years, and it
+continues to produce results. In fact, according to HUD, more than
+78,000 jobs were created or retained by CDBG in FY 2004. In addition,
+in FY 2004, 159,703 households received housing assistance from CDBG.
+Of this amount 11,000 became new homeowners, 19,000 rental housing
+units were rehabilitated and 112,000 owner occupied homes were
+rehabilitated. In FY 2004, over 9 million persons were served by new or
+reconstructed public facilities and infrastructure, including new or
+improved roads, fire stations, libraries, water and sewer systems, and
+centers for youth, seniors and persons with disabilities from CDBG
+funds. In addition, more than 13 million persons received assistance
+from CDBG-funded public services in FY 2004, including employment
+training, child care, assistance to battered and abused spouses,
+transportation services, crime awareness, and services for seniors, the
+disabled, and youth. In addition, over time grantees provide CDBG-
+funded loans to businesses located in distressed neighborhoods, with
+minority businesses receiving approximately 25 percent of the loans.
+ CDBG has been achieving results like this throughout it history. An
+analysis performed by Professor Stephen Fuller of George Mason
+University in 2001 shows that over the first 25 years of the CDBG
+program CDBG-funded projects created 2 million jobs and contributed
+over $129 billion to the Gross Domestic Product (GDP).
+
+ EXAMPLES OF CDBG AT WORK
+
+ Consider the following examples of CDBG at work in the community.
+These projects were all award winners at last September's 30th
+Anniversary Celebration of the CDBG program.
+ The City of Jacksonville-Duval County, FL has invested more than
+$20 million to revitalize the Royal Terrance neighborhood, one of its
+oldest and poorest. The improvements included extensive drainage,
+sewer, paving and curbs and gutter improvements. Since 1998, CDBG,
+together with HOME funds, has been expended to rehabilitate the homes
+of 72 low- and moderate-income residents. In addition, CDBG funded-
+rehabilitation has resulted in 75 homes of low- and moderate-income
+persons being hooked up to sewer lines. A $700,000 Section 108 loan
+guarantee assisted with the rehabilitation of a 200-unit apartment
+complex where all of the residents receive
+ Section-8 rent subsidies. A private investor contributed $4.5
+million to the rehabilitation. CDBG funds also addressed part of the
+rehabilitation of vacant buildings in the Royal Terrance neighborhood
+that have now been converted into commercial facilities that house
+businesses.
+ Los Angeles County used CDBG funds to develop its Business
+Technology Center, the largest high-tech business incubator in
+California. Opened in 1998, the BTC is a 40,000 square-foot facility in
+a minority community that was developed with CDBG funds ($3.5 million)
+and Economic Development Administration funds ($2 million). This is a
+good example of the programs of the two agencies complementing each
+other. Development of the facility removed a blighted structure,
+provided an anchor to revitalize a commercial corridor, and used
+technology to jump-start a disadvantaged community. Today, the BTC
+serves 39 tenant and affiliate firms with specialties ranging from fuel
+cells to biometric software to make DNA micro arrays more effective.
+Over 45 percent of the BTC firms have received more than $65 million in
+equity investment and created more than 475 jobs.
+ The City of Portland, Oregon's Rosemont project involved the
+redevelopment of an eight-acre site to preserve the historic Villa St.
+Rose School and Convent while creating a range of affordable
+homeownership and rental housing opportunities. Completed in 2002,
+Rosemont integrates several different housing types, provides a
+spectrum of affordability, and includes much-needed community services.
+There are 100 units of senior rental housing in the preserved and
+expanded Villa St. Rose Convent building. There are 18 new family
+rental units, 17 affordable homes for first-time homebuyers, 30 town
+homes, several single-family homes for sale at market rate, and a Head
+Start facility that will have five classrooms and administrative
+offices. The City provided $3.9 million in permanent CDBG financing to
+develop the senior housing, helped with the site planning, made street
+and other public improvements, and provided homebuyer assistance.
+ Yuma, Arizona's historic Carver Park Neighborhood is a 22-block
+area that is 73 percent Hispanic and has a high rate of unemployment
+with nearly half of its residents living in poverty. The City
+designated it a Neighborhood Revitalization Strategy Area under the
+CDBG program in 2000. As a result, significant improvements and
+additions have been made to the neighborhood's housing stock. Thirty-
+six town homes and 89 units of new rental housing (constructed with
+Low-Income Housing Tax Credits) have been built. An additional 40 units
+of private single-family units have been added to the housing stock,
+53-units have been rehabilitated, and two homes were reconstructed. HUD
+also approved a Section 108 loan guaranteed for homeownership
+activities. The neighborhood just celebrated the opening of the Dr.
+Martin Luther King Neighborhood Community Center, a safe place for
+youth to gather. The improvements made in this neighborhood demonstrate
+the impressive leveraging of public and private funds and programs to
+maximize CDBG funding. To date a total of $27.5 million in additional
+investment has been leveraged for neighborhood revitalization from a
+total CDBG investment of $4.1 million.
+ The City of Dayton, Ohio has focused its community development
+efforts on eradicating blight from its neighborhoods and making large
+abandoned commercial sites available for re-use and redevelopment in
+order to create jobs. From 2000 to 2003, the city spent $3.8 million to
+clear 61 acres of blighted commercial properties in order to make these
+brownfields sites available for business re-use. Of the 61 acres, 10
+have been developed for a new business incubator and the expansion of
+Select Tool, a Dayton manufacturing firm that retained 55 jobs and will
+create 100 new jobs. In addition to brownfields redevelopment, the City
+spent over $600,000 for business loans and grants to 29 businesses,
+resulting in the creation of over 56 jobs for low- and moderate-income
+residents. In addition, from 2000 to 2003, the City spent over $350,000
+in workforce development programs and partnered with such local
+agencies as the home builder's association to equip under- and
+unemployed residents in accessing living wage jobs. Over 800 low-
+income residents were served through the City's workforce development
+partners and 172 were placed in full-time, living wage jobs. Overall,
+from 2000 to 2003, the City leveraged $61 million in additional private
+and public funds for every CDBG dollar it allocated.
+ When disaster strikes, Congress usually turns to the CDBG program
+to help provide relief as it did for Florida in the wake of last year's
+devastating hurricane season. CDBG has also been an effective resource
+in helping New York City rebuild after the September 11th tragedy. HUD
+has provided New York with $3.483 billion in CDBG funds to be
+administered by the Empire State Development Corporation (ESDC) and its
+subsidiary the Lower Manhattan Development Corporation (LMDC). Of that
+amount, $700 million has been committed to ESDC and $350 million to
+LMDC for business retention/attraction and economic loss compensation.
+An additional $305 million is being used by LMDC for a residential
+incentive program, training assistance and administrative costs. The
+process of designating the balance of the funds continues, and CDBG
+will continue to play a critical role in the City's recovery.
+ The Self Help Virginia water and sewer program is able to bring
+centralized water or sewer service (and often both) to remote,
+undeserved, low-income rural communities where conventional
+infrastructure financing (loans or grants) would not be economically
+feasible. The program takes advantage of local volunteer labor to
+provide water and sewer services where those services would be
+difficult or unaffordable to provide through conventional needs,
+particularly in the state's Appalachian counties. In the past 6 year's
+the state has provided over $6.1 million in CDBG funds to assist 30
+projects. Over 100 miles of pipe have been laid. Over 2,800 people now
+have (or will soon have) reliable water and sewer service. The state
+has further supported revitalization in these areas with housing
+rehabilitation grants and other community development investments. The
+state has stretched its dollars by combining CDBG funds with
+Appalachian Regional Commission funds and local dollars. The state
+estimates the cost savings from this program to be $10 million (a 62
+percent reduction from the estimated ``retail cost'' of these projects
+if they had been contracted out).
+
+ CDBG WORKS, WHY ELIMINATE IT?
+
+ CDBG is popular on both sides of the aisle, and the private sector
+recognizes its value as well. Senator George Voinovich (R-OH) said
+recently at the U.S. Conference of Mayors Winter Meeting that ``CDBG is
+the finest Federal program ever to impact cities * * * [it] should be
+increased, not decreased.'' The President of the Mortgage Bankers
+Association of America, Michael Petrie, was quoted at the same meeting
+as stating ``we need to work together to preserve funding for HUD
+programs such as CDBG.'' Senator Christopher Bond, Chair of the Senate
+HUD Appropriation's Subcommittee, and someone who has considerable
+experience with CDBG as a former governor and as chair, was quoted in
+the February 8th edition of the Washington Post as saying that the
+proposal ``makes no sense.''
+ We are frankly puzzled that the Administration offered this
+sweeping proposal. In late January, HUD Secretary Alfonso Jackson told
+the Winter Meeting of the U.S. Conference of Mayors that the Bush
+Administration is `` * * * committed to the CDBG program. He said that
+CDBG `` * * *is a good program and the Administration is committed to
+seeing that it meets its responsibilities.'' He said that the FY 2006
+budget `` * * * would be fiscally conservative but it will allow you
+[mayors] to carry out your responsibilities.'' What a remarkable turn
+of events to see that the FY 2006 budget completely eliminates the CDBG
+program.
+ The organizations represented by this testimony do not agree with
+the poor rating the program received by the Office of Management and
+Budget (OMB) as part of its Performance Assessment Rating Tools (PART)
+process. Our analysis of the PART suggests that it is an inappropriate
+measure of a block grant program's performance. Instead, it lends
+itself to an assessment of categorical programs. As described above,
+contrary to the results of this inappropriate rating tool, the program
+does work well. Since its enactment in 1974, the program has been, and
+continues to be, a critical affordable housing and neighborhood
+revitalization tool for communities. While providing essential services
+to citizens nationwide, CDBG also acts as an engine of economic growth.
+It creates jobs and retains business, and it provides communities with
+the tools to make needed infrastructure improvements, all with t a
+focus on low- and moderate income persons and their neighborhoods.
+ The PART review of CDBG states that the program lacks performance
+outcome measures. NCDA, NACCED, NAHRO, and COSCDA worked with OMB and
+HUD for nearly a year on performance outcome measures for HUD's four
+formula grant program: CDBG, HOME Investment Partnerships Program,
+Emergency Shelter Grants (ESG) and Housing Opportunities for Persons
+with AIDS (HOWPA). Through a consensus, the group has developed a
+framework and specific outcome measures to evaluate the effectiveness
+of these programs. OMB helped develop this and has signed off on the
+framework and the outcome measures. HUD is in the process of
+implementing it. We worked in good faith with OMB and HUD in developing
+sound performance measures for CDBG; all parties supported the existing
+program. Why suddenly has OMB shifted its support of the program? Why
+did it develop a whole new ``Strengthening America's Communities''
+(SAC) Initiative to replace CDBG when all parties agreed that CDBG had
+great accomplishments that could now be reported through our newly
+created Performance Measures system?
+
+ ADMINISTRATION'S ``STRENGTHENING AMERICA'S COMMUNITIES'' PROPOSAL
+
+ It has been reported that a ``Cross Cutting Working Group'' of
+senior staff from Federal agencies recommended these changes and that
+is the genesis of the Strengthening America's Communities Proposal.
+This is patently untrue. That group met last year to develop common
+outcome measures for certain Federal programs. The work of that group
+was to collect information in a common way about programs that helped
+communities. However, each of the Federal programs proposed to be
+eliminated plays a different role, and each is still very much needed.
+ It is difficult for us to comment on the Administration's proposal
+without knowing the full details. The Initiative is undefined and
+unknown at this point. What is clear is that 18 programs that touch on
+urban and rural economic development, at an FY 2005 funding level of
+$5.5 billion, are proposed to be turned over to the Department of
+Commerce and reemerge as a new program whose funding level is proposed
+at $3.71 billion, a reduction of nearly $2 billion. We do not support
+such an initiative. We do not support the elimination of the CDBG
+program in any form nor do we support the transfer of its funding or
+the funding of any other HUD program to the Department of Commerce.
+ With the creation of this Initiative, the Administration seems to
+be suggesting that CDBG is only an economic development program. In FY
+2004, 25 percent or $1+ billion in CDBG funds went to housing
+activities--assistance to first-time homebuyers, and single- and multi-
+family housing rehabilitation. Another 40 percent of the funds went to
+support public infrastructure--water and sewer facilities, streets and
+sidewalks, fire stations, and community centers, all in low- and
+moderate-income neighborhoods.
+ It is also reasonable to question whether the Commerce Department
+has the capacity to administer a multi-billion dollar program. Its
+$257.4 million economic development grant and loan programs are dwarfed
+by HUD's $4.7 billion CDBG program. HUD, together with its more than
+1100 urban, suburban and rural CDBG grantees, constitutes an effective
+infrastructure for program administration. State and local grantees are
+intimately familiar with the CDBG statute and implementing regulations.
+It begs the question, why not move Commerce's economic development
+programs to HUD for it to administer?
+ Moreover, programs currently located within the Department of
+Commerce's Economic Development Administration (EDA) portfolio already
+address several of the issues contemplated by the new initiative. EDA's
+grant and loan programs are utilized by local governments to stimulate
+private sector job growth, ease sudden and severe economic distress and
+promote long-term economic development planning. They are critical to
+the nation's distressed areas across the country. EDA's programs were
+reauthorized last year through FY 2008, a move strongly supported by
+local governments. The severe impact created by the loss of these
+important resources cannot be understated.
+ In addition, a major concern for us, and the communities we serve,
+is the issue of repayment of Section 108 guaranteed loans. Section 108
+is a component of CDBG and allows communities to fund large scale
+projects pledging future CDBG allocations to repay these loans. Many
+communities across the country have undertaken projects financed by
+Section 108 guaranteed loans and depend on their CDBG allocations for
+repayment. Without CDBG, these communities would be forced to repay
+these loans with their own funds. This would put many communities at
+risk of repayment and/or reduce already diminishing local general
+revenues.
+
+ SUMMARY
+
+ In summary, we find this new proposal totally unacceptable, and we
+are extremely disappointed that this tactic is being used as an excuse
+to eliminate CDBG and cut much needed resources to communities. A key
+priority of the Bush Administration is stimulating the domestic economy
+by creating jobs and expanding homeownership, and that is exactly what
+CDBG does. CDBG is good business and is the foundation of our nation's
+communities.
+ The fact is, CDBG is working, and it will work even better once HUD
+implements the new performance outcome measurement system. It needs to
+remain at the Department of Housing and Urban Development and funded in
+FY 2006 at a funding level of at least $4.7 billion, with no less than
+$4.35 billion in formula funding. This funding level approximates the
+FY 2004 funding level and the amount requested by the President in his
+FY 2005 budget.
+
+ Mr. Lungren. Now, Ms. Sanchez.
+
+ STATEMENT OF THE HON. LINDA T. SANCHEZ, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF CALIFORNIA
+
+ Ms. Sanchez. Thank you. I would like to thank acting
+Chairman Lungren and Ranking Member Spratt for allowing me to
+speak today. I will talk about an issue today that transcends
+community and party boundaries, and that is the possible
+gutting of Community Development Block Grants in the
+President's 2006 budget.
+ Community Development Block Grants, or CDBGs, can be used
+for a seemingly endless variety of projects aimed at improving
+the quality of life in needy areas around our country. Let me
+share with you some stories and statistics from cities that
+will be affected by CDBG cuts.
+ One of the cities that has expressed grave concern over the
+loss of funding is the city of La Mirada in my district. The
+mayor over there, Susan Tripp, took the time to explain to me
+just how much her city would be injured with the potential
+cuts.
+ The pride of the city of La Mirada is the Community Senior
+Center, which was completed in 2001. More than $1.8 million of
+the center's $3.2 million cost came from CDBG, or Community
+Development Block Grants. That is more than half of the
+funding. The Senior Center now serves as a hub where La
+Mirada's large, elderly population benefits from computer
+literacy classes, nutrition programs and health screenings.
+Without CDBG funding, the construction could have been delayed
+for years.
+ La Mirada also uses CDBG funning to enact a loan program
+for needy families. The repayment of the principal and interest
+is then put back into the loan system. There is more than $1
+million circulating in the loan program, creating and
+sustaining opportunity.
+ In the city of Whittier, which is also in my district, CDBG
+moneys are used to fund the Salvation Army, the Interfaith Food
+Center, the Southeast Area Social Services Funding Authority
+and the Social Service Commission Scholarship Program. These
+programs fund an emergency shelter, food for low-income
+families, services for seniors, and recreational scholarships
+for needy children. The total cost to do all of this in
+Whittier with CDBG funds is less than $65,000. I honestly
+cannot imagine a more efficient use of Federal money.
+ The final city that I would like to talk about is Long
+Beach, CA. I believe the numbers speak for themselves on what
+an impact CDBG has for the community. Long Beach received $10.6
+million for fiscal year 2004-2005. That money was used to
+remove 109,000 graffiti tags from more than 34,000 sites. It
+was used to improve more than 1,200 housing units. It was used
+to provide services for 23,000 homeless persons. I think most
+impressively, CDBG funds were used to serve 95,031 youth with
+after-school and weekend recreation activities.
+ I hope that these examples have helped demonstrate to the
+committee here today that these funds play an enormous and
+important role in the day-to-day survival and successes of our
+cities.
+ I would like to close my testimony with a quote from a
+local official: ``A key priority of this administration is
+stimulating the domestic economy by creating jobs and expanding
+home ownership. One of the best tools that mayors of cities
+across America use to achieve these and other important goals
+is the Community Development Block Grant program. At a time
+when city budgets are severely challenged and have significant
+community and economic development needs, this cut and
+realignment will have a devastating impact on local
+governments' ability to provide resources to those communities
+and neighborhoods most in need.''
+ This quote eloquently captures the vital nature of CDBG
+programs in our cities. Mr. Chairman, this quote did not come
+from a Democratic colleague or anyone here in Washington. It is
+from the mayor of Long Beach, CA, and vice president of the
+U.S. Conference of Mayors, Beverly O'Neill, a local leader who
+knows what the effect of these cuts would be.
+ Community Development Block Grants work, and they are
+efficient. They are supported across the board by local
+community leaders regardless of their party affiliation. I
+strongly urge that CDBG funding be kept at the current level
+and that it be kept as a separate and distinct program. I thank
+you for your indulgence and yield back.
+ [The prepared statement of Linda T. Sanchez follows:]
+
+ Prepared Statement of Hon. Linda T. Sanchez, a Representative in
+ Congress From the State of California
+
+ I would like to thank Chairman Nussle and Ranking Member Spratt for
+allowing us to speak today.
+ I'm going to talk today about an issue today that transcends
+community and party boundaries--the possible gutting of Community
+Development Block Grants in the President's 2006 Budget.
+ Community Development Block Grants can be used for a seemingly
+endless variety of projects aimed at improving the quality of life in
+needy areas around our country.
+ Let me share with you stories and statistics from cities that will
+be affected by CDBG cuts.
+ One of the cities that has expressed great concern over the loss of
+funding is the City of La Mirada. Mayor Susan Tripp took the time to
+explain to me just how much her city would be injured.
+ The pride of La Mirada is the Community Senior Center, which was
+completed in 2001. More than $1.8 million of the center's $3.2 million
+cost came from Community Development Block Grants. That's more than
+half.
+ The Senior Center now serves as a hub where La Mirada's large
+elderly population benefits from computer literacy classes, nutrition
+programs, and health screenings.
+ Without CDBG funding the construction could have been delayed for
+years.
+ La Mirada also uses CDBG funding to enact a loan program for needy
+families. The repayment of the principal and the interest is then put
+back into the loan system.
+ There are more than 1 million dollars circulating in this loan
+program--creating and sustaining opportunity.
+ In the City of Whittier, in my district, CDBG moneys are used to
+fund the Salvation Army, the Interfaith Food Center, the Southeast Area
+Social Services Funding Authority, and the Social Service Commission
+Scholarship Program.
+ These programs fund an emergency shelter, food for low income
+families, services for seniors, and recreational scholarships for needy
+children.
+ The total cost to do all of this in Whittier with CDBG funds is
+less than $65,000. I honestly can not imagine a more efficient use of
+Federal money.
+ In the final city I would like to talk about, Long Beach,
+California, I believe the numbers speak for themselves on what an
+impact CDBG has for the community.
+ Long Beach received $10.6 million for Fiscal Year '04-05.
+ The money was used to remove 109,000 graffiti tags from more than
+34,000 sites.
+ It was used to improve more than 1,200 housing units.
+ It was used to provide services for 23,000 homeless persons.
+ And, I think most impressively, CDBG funds were used to serve
+95,031 youth with after school and weekend recreation activities.
+ I hope that I have helped demonstrate to the Committee here today
+that these funds play an enormous and important role in the day to day
+survival and success of our cities.
+ I would like to close with a quote from a local official:
+ ``A key priority of this Administration is stimulating the domestic
+economy by creating jobs and expanding home ownership. One of the best
+tools that mayors of cities across America use to achieve these and
+other important goals is the Community Development Block Grant
+program,''
+ ``At a time when city budgets are severely challenged and have
+significant community and economic development needs, this cut and
+realignment will have a devastating impact on local governments'
+ability to provide resources to those communities and neighborhoods
+most in need.''
+ This quote eloquently captures the vital nature of CDBG programs in
+our cities.
+ Mr. Chairman, this quote did not come from a Democratic Colleague
+or anyone here in Washington. It is from The Mayor of Long Beach,
+California, and Vice -President of the U.S. Conference of Mayors,
+Beverly O'Neill--a local leader who will feel the effects of these
+cuts.
+ Mr. Chairman, Community Development Block Grants work and they are
+efficient. They are supported across the board by local community
+leaders regardless of party affiliation.
+ I strongly urge that CDBG funding be kept at the current level and
+that it be kept as a separate and distinct program.
+ I thank the Committee for its time.
+
+ Mr. Lungren. Thank you for the testimony of both of you. I
+don't know how timely it could have been, Congresswoman
+Sanchez, but Beverly O'Neill is an old friend of the family. My
+dad was a doctor of her family for years and years. I don't
+know if you knew that and put that in at the very end to get
+me, but you got me.
+ Ms. Watson. I just want you to know, Mr. Chairman, she
+bears my family, my mother's maiden name, too, O'Neill, so I
+feel like she is in the family as well.
+ Mr. Lungren. I know it is late, and I know people want to
+get moving, but just let me ask the two of you one simple
+question. That is we are charged with the responsibilities of
+trying to bring down this deficit, trying to bring some
+restraint in government, trying to give the appropriating and
+authorizing committees as much flexibility as possible without
+telling them exactly what to do, but without telling them what
+targets to hit. If, in fact, we would not do what the President
+wants to do with CDBG grants, where would you suggest we look
+for that money in the area of HUD?
+ Ms. Watson. What I would suggest is that you don't look
+here. I have participated in a press conference with my mayor,
+Jimmy Hahn, I think you know Jimmy, and with agency directors
+and the people who receive services from those agencies. We
+have been able to improve in really a minor way the conditions
+of life in our city by removing some homeless, by putting up
+affordable housing.
+ I have been working with the city leadership on the Marlton
+project for over 20 years now. I have worked with the former,
+now deceased, Mayor Tom Bradley. We got our first project done.
+ There are two projects back to back, and this is the second
+one. The proprietors of the shops in that area had been waiting
+years and years and years to move out and to move on so we can
+do 240 units of affordable housing and upscale and up-end shops
+to be able to bring the revenues and cycle them through that
+community.
+ So, you know, it is a matter of whose ox is being gored. I
+would not want to say cut this program, but save ours, but what
+I wanted to do is look at the programs that are really
+effective in terms of the needs of our urban cities and then
+look at other programs that are distant, removed and consider
+those, because ours certainly has been effective in Los
+Angeles.
+ Thank you, Mr. Chairman.
+ Ms. Sanchez. If I might respond briefly. I am mindful that
+Congress has a very big task in trying to set a path of fiscal
+responsibility and to try to spend moneys wisely, and I don't
+pretend to be an expert. That is what this committee is charged
+with doing. I do want to say that. But a huge cut, like the
+cuts that are anticipated as a third of the funding of CDBG,
+would be extraordinarily severe for a project that has so much
+benefit to local communities and has the type of flexibility
+that cities rely on to try to improve quality of life in each
+of the local communities.
+ So although I can't say specifically where the money might
+come from, I would advocate that perhaps if there are cuts that
+need to be made, you look at making them in smaller increments
+across the board in many different programs rather than gutting
+one of, again, the most successful programs that cities have
+for serving their local communities.
+ Mr. Lungren. I appreciate your comments. This goes back to
+what Alan Greenspan said yesterday. He said he didn't want to
+be in our shoes, because he knew that we had to make decisions
+among values; that all of these programs are valuable. I am one
+who believes that you can't get to where we want to go merely
+by getting rid of waste, fraud and abuse, because, frankly, we
+probably have to figure out which are more valuable given the
+fact that probably all of them have value.
+ So I appreciate your representation of support for these
+particular programs.
+ Mr. Spratt.
+ Mr. Spratt. Let me simply say that we will do everything we
+possibly can to answer your concerns in the Democratic budget
+resolution. I am a firm believer in the CDBG in my district,
+which is mainly small towns and rural areas. This has been a
+very, very, very effective Federal program. It stood the test
+of time. While the other grants made were going, the CDBG has
+lasted simply because people can point to demonstrable results
+of the program, and I hope we can save it intact and fully
+funded.
+ Mr. Lungren. Thank you very much, Ms. Watson and Ms.
+Sanchez.
+ Now Congressman Bishop is recognized for 10 minutes.
+
+ STATEMENT OF THE HON. TIMOTHY H. BISHOP, A REPRESENTATIVE IN
+ CONGRESS FROM THE STATE OF NEW YORK
+
+ Mr. Bishop of New York. Thank you, Mr. Chairman. I want to
+thank you and Ranking Member Spratt for this opportunity to
+testify on the upcoming fiscal year 2006 budget. In my view,
+the President's recent spending requests do not accurately
+balance America's priorities, and I intend to touch on some of
+the more problematic areas in the budget. I will also convey
+some of the specific concerns that my constituents on Long
+Island have with the proposed budget.
+ The administration's proposal forces working families, in
+my view, to pay for short-sighted spending choices at the
+Federal level in the form of a reduced return on their tax
+dollars for government services, combined with higher State and
+local taxes. The President's budget for fiscal year 2006
+contains drastic cuts which he says are necessary to cut the
+deficit in half in 5 years.
+ There are several things wrong with this claim, not the
+least of which that it simply isn't true. The administration's
+5-year budget projections omit such significant costs as the
+continuing presence of our troops in Iraq and Afghanistan, the
+enormous cost of privatizing Social Security as the President
+proposes, and no corresponding growth in interest costs, even
+though these activities would be funded entirely by additional
+borrowing.
+ As a former college administrator, and as a member of the
+House Committee on Education and the Workforce, I am keenly
+sensitive to the needs of our students. The President's budget
+reduces overall education funding by nearly 1 percent below
+last year's level, which is a more pronounced decline when
+compared to current authorized levels. In addition, the
+administration's proposal cuts the overall education budget for
+the first time in more than a decade and proposes to eliminate
+funding for 48 programs such as vocational education, teacher
+quality and training, TRIO and the Safe and Drug-Free Schools
+Program.
+ I want to just focus on one part of the President's budget
+that I find particularly troubling. The budget does a
+disservice to both colleges and college students by calling for
+the recall of the Federal share of institutions involving loan
+funds for Perkins loans. These funds are made up of Federal
+capital contribution, institutional matches and repaid Perkins
+loans and up until now have been used to make new loans to
+students from low- and middle-income families.
+ In 2004, colleges made over $1.2 billion in these types of
+loans. They averaged $1,875; went to 673,000 needy college
+students. The recall of the Federal share of Perkins loans will
+amount to a recall of more than $7 billion over 10 years, with
+$6 billion of the amount collected going toward deficit
+reduction, not to the current practice of investing that money
+back into Federal financial aid.
+ The President's tax cuts and deficit spending have pushed
+us over the precipice of fiscal balance into a budget climate
+that supports cutting back aid for disadvantaged students to
+pay for misplaced priorities and tax cuts for people whose
+children will never need a Perkins loan.
+ The President's proposal specifically targets my district
+on Long Island by nearly eliminating funding for programs that
+directly benefit the people I represent.
+ My district includes over 300 miles of shoreline, and the
+local economies of Long Island depend on a clean, a hospitable
+ocean environment and welcoming local waterways to spur tourism
+throughout the region.
+ The integral relationship between coastal health and local
+economies appears to have been overlooked during consideration
+of many agency budget proposals. The administration
+consistently supports the idea of regional partnerships between
+the EPA and local governments, but even as Federal officials
+are discussing those efforts the President's budget tells a
+different story.
+ Regional programs designed to serve local areas are
+eviscerated under the 2006 budget. The Long Island Sound study,
+for example, which last year received nearly $7 million, is an
+entirely regional program designed to clean up a long neglected
+body of water bordering both New York and Connecticut. Under
+the current budget, if enacted as is, the worthwhile regional
+program would be gutted and only receive $477,000, a 94 percent
+cut.
+ Similarly, the Fire Island to Montauk Point study will
+allow the Army Corps of Engineers to complete a multiple decade
+study of 83 miles of coastline in my district, allowing for a
+comprehensive plan to alleviate environmental concerns and
+guarantee the safe passage of commercial and recreational
+fisherman.
+ Long Islanders are eagerly anticipating the economic and
+quality of life benefits to finish this study, and the
+President proposes no funding for its completion. There seems
+to be no conceivable reason to eliminate funding for a 20-year
+project that is only a year and a half from completion,
+particularly when completion will only cost $1.7 million.
+ As we continue our military conflict overseas, we are
+experiencing an increasing number of returning soldiers who are
+maimed or incapacitated as a result of injuries sustained in
+battle. Even as our current troops are in harm's way, the
+proposed budget contains egregious cuts and taxes for the men
+and women who came before the currently returning troops.
+ These members of the greatest generation now rely on a
+health care system that is under attack by misguided budgeting.
+As was the case in previous years, the President submitted a
+budget calling for a $250 veterans health care tax and an
+increase in prescription copayments of more than 100 percent.
+ Congress rightfully rejected those proposals over the last
+few years, and I am hopeful that this will again be the case.
+But there is now a new attack on the health of our older
+veterans. Many providers of long-term care for veterans, most
+notably State veterans homes, are faced with the sobering
+prospect that their ability to provide care for deserving vets
+will plummet by over 60 percent from the current year, forcing
+veterans already in State veterans homes to find other options.
+ This is not a way to treat Americas heroes, and our
+veterans deserve the care that they have earned. Let's just
+reflect on this. We give millionaires 6-figure tax breaks and
+we take away nursing home care for World War II veterans. I do
+not see any how reasonable person can justify that.
+ I urge this committee to take a hard look at the issues I
+have raised and to work to address the country's need for a
+sound fiscal policy and the tendency to abandon positive
+programs benefiting both the Nation and Long Island.
+ I thank the Chairman and I thank Ranking Member Spratt, and
+I look forward to working with you as these issues move
+forward. Thank you.
+ [The prepared statement of Timothy Bishop follows:]
+
+ Prepared Statement of Hon. Tomothy H. Bishop, a Representative in
+ Congress From the State of New York
+
+ I want to thank Chairman Nussle, Ranking Member Spratt and all of
+the members of the Budget Committee for allowing me the opportunity to
+testify on the upcoming fiscal year 2006 budget. During this time of
+conflict in the world it is imperative to support America's operations
+overseas, while making domestic spending choices that enhance the
+greater good.
+ In my view, the President's recent spending requests do not
+accurately balance America's priorities, and I intend to touch on some
+of the more problematic proposals in the budget. I also will convey
+some of the specific concerns that my constituents on Long Island have
+with the proposed budget.
+ The administration's proposal forces working families to pay for
+shortsighted spending choices at the Federal level in the form of a
+reduced return on their tax dollars for government services, combined
+with higher state and local taxes.
+ The President's budget for fiscal year 2006 contains drastic cuts,
+which he justifies as necessary to cut the deficit in half in 5 years.
+There are several things wrong with this claim, not the least of which
+is that it is simply not true. The administration's 5-year budget
+projections omit such significant costs as the continuing presence of
+our troops in Iraq, the enormous costs of privatizing Social Security
+as the president proposes, and no growth in interest costs, even though
+these activities, as well as a great many others, would be funded
+entirely by additional borrowing.
+ As a former college administrator, and a Member of the House
+Committee on Education and the Workforce, I am keenly sensitive to the
+needs of our students. The President's budget reduces overall education
+funding by nearly 1 percent below last year's level, which is a more
+pronounced decline when compared to current authorized levels. In
+addition, the Administration's proposal cuts the overall education
+budget for the first time in more than a decade and proposes to
+eliminate funding for 48 programs such as vocational education, teacher
+quality and training, TRIO and the Safe and Drug Free Schools program.
+ The President's budget does a disservice to both schools and
+students by calling for the recall of the Federal share of
+institutions' revolving loan funds for Perkins loans. The funds, which
+are made up of Federal capital contributions, institutional matches,
+and repaid Perkins loans, are used to make new loans to students from
+low and middle-income families.
+ In 2004, colleges made $1.263 billion in loans, which averaged
+$1,875 to 673,000 borrowers through the Perkins program. The recall of
+the Federal share of Perkins loans will amount to more than $7 billion
+over 10 years, with $6 billion of the amount collected going toward
+deficit reduction, not to the current practice of investing that money
+back into Federal financial aid. The President's tax cuts and deficit
+spending have pushed us over the precipice of fiscal balance into a
+budget climate that supports cutting back aid for disadvantaged
+students to pay for misplaced priorities and tax cuts for the wealthy;
+people whose children will never need a Perkins Loan.
+ The President's proposal specifically targets my district on Long
+Island by nearly eliminating funding for programs that directly benefit
+the people I represent. There are over 300 miles of shoreline in my
+district and the local economies on Long Island depend on a clean,
+hospitable ocean environment, and welcoming local waterways to spur
+tourism throughout the region. The integral relationship between
+coastal health and local economies appears to have been overlooked
+during consideration of many agency budget proposals.
+ The Administration consistently supports the idea of regional
+partnerships between the EPA and local governments, and as Federal
+officials are discussing these efforts, the President's budget tells a
+different story. Overtly regional programs, designed to serve local
+areas, are eviscerated under the fiscal year 2006 budget proposal. The
+Long Island Sound Study, which received nearly $7 million last year, is
+an entirely regional program designed to clean up a long neglected body
+of water bordering New York and Connecticut. If the current budget were
+enacted as drafted, this worthwhile regional program would be gutted
+and only receive $477,000.
+ The Fire Island to Montauk Point Study will allow the Army Corps of
+Engineers to complete a multiple decade study of 83 miles of coastline
+in my district, allowing for a comprehensive plan to alleviate
+environmental concerns and guarantee the safe passage of commercial and
+recreational fisherman. Long Islanders are eagerly anticipating the
+economic and quality of life benefits to finish this study, and the
+President proposed no funding for its completion. There seems to be no
+conceivable reason to eliminate funding for a 20-year project that is
+only a year and a half from completion, particularly when completion
+will only cost $1.7 million.
+ As we continue our military conflicts overseas, we are experiencing
+an increasing number of returning soldiers who are maimed or
+incapacitated as a result of injuries sustained in battle. Even as our
+current troops are in harm's way, The proposed budget contains
+egregious cuts and taxes for the men and women who came before the
+current returning troops. These members of the greatest generation now
+rely on a health care system that is under attack by misguided
+budgeting.
+ As was the case in previous years, the President submitted a budget
+calling for a $250 veterans' health care tax and an increase in
+prescription co-payments of more than 100 percent. Congress rightfully
+rejected these proposals over the last few years and I am hopeful that
+this will again be the case. There is now a new attack on the health of
+our older veterans. Many providers of long-term care for veterans, most
+notably state veterans' homes, are faced with the sobering prospect
+that their ability to provide care for deserving vets will plummet by
+over 60 percent from the current year, forcing veterans already in
+state veterans' homes to find other options. This is not the way to
+treat America's heroes, there is no expiration date for valor, and our
+veterans deserve the care they have earned. Let's reflect on this: we
+give millionaires six figure tax breaks and we take away nursing home
+care from World War II veterans. No reasonable person could justify
+this.
+ I urge this committee to take a hard look at the issues I have
+raised, and work to address the country's need for sound fiscal policy
+and the tendency to abandon positive programs benefiting Long Island
+and the nation. Thank you Mr. Chairman and Ranking Member Spratt, I
+look forward to working with you on these issues as we move forward.
+
+ Mr. Lungren [presiding]. Thank you, Congressman Bishop.
+Something you said intrigued me to ask a question which is on
+my mind. I think it is directed toward the comments you made,
+and that is your discussion on education funds.
+ And it is my observation that no matter what the Federal
+Government does by way of support for higher education, whether
+it is grants, whether it is loans, et cetera, there is an
+inexorable rise in tuition charged by institutions, both
+private and public, that far exceeds anything else perhaps
+except medical costs, and I have always been at a loss to
+figure out why that is the case. Frankly, it doesn't matter, it
+appears to me, in the budget whether we add more money or don't
+add more money, the colleges just seem to charge more and more
+and more for both private and public institutions.
+ I just wonder if you could give me a little----
+ Mr. Bishop of New York. I can give some--at least my own
+insight on that. I was a senior administrator of a college, and
+I was in fact responsible for maintaining and developing the
+institutional budget where I was for about 20 years, and I
+would make a couple of comments. One, increases in tuition at
+State supported schools are largely the result of reduced State
+appropriations to subvent the cost of the students who are at
+those schools. At private schools, the increases roughly have
+been about double the Consumer Price Index dating back to the
+early 1980s, but they have pretty much tracked something called
+the HEPI, the Higher Education Price Index, which is a market
+basket of costs that are driven largely by wage costs, by
+fringe benefit costs. About 60 percent to 70 percent of total
+expenses at a private college are in salary and fringe.
+ The other costs that colleges encounter that rise at a rate
+more rapid than the Consumer Price Index are keeping pace with
+instructional technology, keeping pace with library resources.
+And then for private colleges, a huge area of growth is
+essentially discounted tuition. Colleges, particularly
+unendowed colleges, take in tuition and then give it back in
+the form of unfunded student aid, the consequence of which is
+that student prices go up.
+ Mr. Lungren. Does it have anything to do with lower
+classloads with faculty? I have at least observed that both at
+private institutions and public institutions, other than our
+community colleges, where I see faculty maintaining rather
+heavy classloads.
+ Mr. Bishop of New York. Yes. An issue, particularly for the
+more research-oriented institutions, is lower teaching loads
+for the faculty, which is generally covered by adjunct
+instruction as opposed to the hiring of more full-time faculty.
+ I think most, again most underendowed or unendowed private
+colleges are at a 12-hour load, most community colleges are at
+a 12- or 15-hour load, although the heavily endowed research
+oriented institutions some have faculty teaching loads as low
+as 6 hours.
+ Mr. Lungren. Thank you very much. Mr. Spratt.
+ Mr. Spratt. Mr. Bishop, Mr. Lungren and I both served here
+with Carl Perkins, and in my State in particular technical
+education has been a huge success. It has been the underpinning
+for the industrial development that we have been able to
+achieve in South Carolina as we move from an agrarian State to
+an industrial State, and the Perkins loans have been an
+integral part of financing all of that.
+ And for that little bit of money and the great good it
+does, I simply cannot see requiring the repayment of the
+Perkins fund loans. It is going to leave these schools with
+nowhere to turn, at least in the short term.
+ Mr. Bishop of New York. And the thing that I find so
+frustrating is I applaud the President's effort to increase or
+proposal to increase the Pell Grant maximum by $100 a year for
+5 years so it will go up by $500. But it is completely offset
+by taking away Perkins loan funds, which averaged $1,800 per
+student. We are giving with one hand and taking away rather
+heavily with the other.
+ Mr. Spratt. Thanks for your testimony. It is clear that you
+know of what you speak.
+ Mr. Lungren. Thank you very much.
+ Mr. Bishop of New York. Thank you.
+ Mr. Lungren. Now, we have Congresswoman Barbara Lee, who is
+here for her 10 minutes of presentation. Thank you.
+
+STATEMENT OF THE HON. BARBARA LEE, A REPRESENTATIVE IN CONGRESS
+ FROM THE STATE OF CALIFORNIA
+
+ Ms. Lee. Thank you, Mr. Chairman. Good to see you. Thank
+you, Ranking Member Spratt, for this opportunity to take the
+time to listen and hopefully incorporate some of these ideas
+into your budget deliberations.
+ How the President chooses priorities for his budget each
+year really does define, our commitment as a Nation to what our
+priorities are, and I believe unfortunately that this budget
+falls way short of what our commitment should be. Especially in
+a time of war, everyone agrees, myself included, that spending
+on national security and defense is a priority. Yet the
+President's fiscal 2006 budget in terms of homeland security,
+for example, is cut by about 18.1 percent. So as a Member
+representing one of the largest ports in the country it is
+clear to me that, our national security priority funding list
+should include at the top a significant increase, not a
+decrease in port security funding.
+ However, the President's budget also eliminates the
+Department of Homeland Security's Port Security Grant Program
+by combining it with other transportation security programs.
+This move I believe unwisely sets up a competition between
+different types of transportation security priorities from
+really the same pool of funds.
+ And at the same time that we discuss national security, we
+must also include the importance of economic security for all
+Americans. If our country is to be secure from within, our
+citizens must not feel vulnerable, should feel secure, should
+be strong within our own America, and unfortunately, I believe
+that the President's budget underfunds critical programs that
+ensure this economic security for all Americans in terms of
+their access to affordable health, housing, education, and
+other vital types of programs and issues and services.
+ I serve on the Housing and Community Opportunity
+Subcommittee of the Financial Services Committee, and we heard
+the budget presentation this week by the Secretary.
+ Consider the fact that in this budget, for example, the
+Community Development Block Grant program is really eliminated.
+Even though it is transferred into Commerce it is for the most
+part gone. This program provides formula grants and other
+financial assistance toward improving housing and economic
+conditions in low and moderate income neighborhoods. In 2005
+this represents crucial funding of about $4.6 billion. The
+President's budget slashes by nearly, I think it is about 10
+percent, $250 million funds for our local public housing
+authorities, for capital repairs, improvements for housing
+stock. Housing for the disabled, I was really quite shocked to
+see that has been cut by 50 percent from 2005 levels. The
+brownfields redevelopment programs which provide incentives for
+hazardous site cleanup and redevelopment; that is eliminated.
+ I asked the Secretary during our hearing, what about the
+disabled? What about senior citizens? What about children who
+will be affected now because the lead grant programs have been
+cut? Children will get sick as a result of this. And the
+Secretary responded there just wasn't enough money and he had
+to prioritize the budget he had.
+ And, of course, I was concerned because it didn't appear,
+and I asked him if he fought for additional resources. And his
+response was he had to prioritize within the deck he was dealt,
+in essence.
+ The President's budget also does not go far enough in
+funding HIV/AIDS programs, and we all know that the President
+in his State of the Union speech mentioned the glaring
+escalation in HIV/AIDS rates in the African American community,
+especially with African American woman.
+ The Ryan White Care Act is underfunded by $500 million, and
+this is just what it takes to keep people off the waiting list
+for life-saving drugs, in terms of just the money that we would
+need just to do that, and that does not even deal with
+prevention and education. So we need $500 million just to get
+people off of the waiting list.
+ The Minority Aids Initiative has been flat funded yet
+again, no additional resources. Yet the problem is getting
+greater. Essentially this is a cut, as each year more and more
+people are infected, and again people of color, African
+Americans primarily.
+ The President's budget even cuts funding, and again this
+goes under the HUD budget, but the funding for people living
+with AIDS. It is called HOPWA. That is cut this year by about 5
+percent. Again, the Secretary said that it is about priorities.
+Cuts like those to HOPWA really punish people, by making them
+choose between their health care needs and their housing needs.
+ And, sadly, I think this overall budget is filled with
+similarly unfair examples. And still the standard response to
+anyone who questions the administration's priorities is that
+there are not enough funds. As Secretary Alphonso Jackson said,
+there are just not funds to ensure this economic security for
+all Americans.
+ But I beg to differ. We can ensure that components of our
+national security, including economic security, are fully
+funded if we rein in the billions of dollars in waste, fraud
+and abuse at the Defense Department.
+ In fact, and I reference this January 2005 GAO report. It
+notes, and let me quote from that report. It said the lack of
+adequate transparency and accountability across DOD major
+business areas results in billions of dollars of wasted
+resources annually.
+ The reports of waste, fraud and abuse at DOD are
+staggering. Consider these two examples, for example. In 2003,
+GAO uncovered that the Army lost track of 56 planes, 32 tanks,
+36 Javelin missile command launch units. This represents more
+than $1 trillion in taxpayer money.
+ In 2002, the GAO documented that the DOD database system
+for tracking billing and financial operations is so duplicative
+across the Department that it wastes about $18 billion
+annually. The President could help reach the funding goals of
+nearly all of our essential national and economic security
+programs if only he began by eliminating unnecessary waste and
+fraud in programs at DOD.
+ The Center For Defense Information estimates that the
+President's budget could free up $41 billion by defunding cold
+war era weapons systems like Missile Defense Initiative and the
+B-2 bomber.
+ Mr. Chairman, Ranking Member, the President's budget I
+believe erodes our economic security, it weakens our
+communities, and it leaves our infrastructure crumbling. The
+President's support of outdated weapons systems and wasteful
+defense programs relegates economic security priorities really
+to the back burner, and it should not be.
+ So I urge you to take into account these economic security
+concerns as you work to develop a Congressional budget
+resolution. I look forward to assisting you with this task, and
+I thank you for your time.
+ [The prepared statement of Barbara Lee follows:]
+
+ Prepared Statement of Hon. Barbara Lee, a Representative in Congress
+ From the State of California
+
+ Chairman Nussle and Ranking Member Spratt, thank you for taking the
+time to listen, and hopefully incorporate some of these ideas into your
+budget deliberations.
+ How the President chooses priorities for his budget each year
+defines our commitment as a nation to the issues. Unfortunately, the
+President's FY06 budget falls short.
+ Especially at a time of war, everyone agrees that spending on
+national security and defense is a priority. Yet, the President's
+fiscal year 2006 (FY06) Department of Homeland Security budget is cut
+by 18.1 percent.
+ As a Member representing one of the largest ports in the country,
+it is clear to me that topping our national security priority list must
+be significant increases in port security funding. However, the
+President's budget eliminates the Department of Homeland Security's
+Port Security Grant Program by combining it with other transportation
+security programs. This move unwisely sets up a competition between
+different types of transportation security priorities from the same
+pool of funds.
+ At the same time, any discussion of national security for all
+Americans must include the important component of economic security for
+all Americans. Unfortunately, the President's budget underfunds
+critical programs that ensure all Americans have access to affordable
+housing, health care, education, and other vital services.
+ Consider the fact that the President's budget eliminates the
+Community Development Block Grant (CSBG) program. This program provides
+formula grants and other financial assistance toward improving housing
+and economic conditions in low- and moderate-income neighborhoods. In
+2005, this represents crucial funding of $4.6 billion. The President's
+budget slashes by nearly 10 percent (or $252 million) funds for local
+public housing authorities for capital repairs and improvements for
+housing stock. Housing for the disabled is cut by 50 percent from the
+2005 levels. The Brownfields Redevelopment programs, which provide
+incentives for hazardous site clean-up and redevelopment is eliminated.
+ The President's budget also does not go far enough in funding
+important HIV/AIDS programs. The Ryan White CARE Act is underfunded by
+$500 million; and this just represents how much it would take to keep
+people off the waiting list for live-saving drugs. The Minority AIDS
+initiative has been flat funded yet again. Essentially, this is a cut
+as each year more people of color are infected. The President's budget
+even cuts funding for Housing for People with AIDS (HOPWA) by 5
+percent. Mr. Chairman, cuts like those to HOPWA punish people by making
+them choose between their health and housing. Sadly, this budget is
+filled with similarly unfair examples.
+ Still, the standard response to anyone who questions the
+administration's priorities is that there are not enough funds to
+ensure economic security for all Americans.
+ Mr. Chairman, I beg to differ. We can help ensure that components
+of our national security, including economic security, are fully funded
+if we rein in the billions of dollars in waste, fraud, abuse at the
+Department of Defense (DoD).
+ In fact, a January 2005 U.S. General Accounting Office (GAO) report
+notes that 'the lack of adequate transparency and acoountability across
+DoD's major business areas results in billions of dollars of wasted
+resources annually.'"
+ The reports of waste, fraud, and abuse at the DoD are staggering.
+Consider these two examples:
+ 1. In 2003, the GAO uncovered that the Army lost track of 56
+planes, 32 tanks, and 36 Javelin missile command launch units. This
+represents more than $1 trillion in taxpayer money.
+ 2. In 2002, the GAO documented that the DoD database system for
+tracking billing and financial operations is so duplicative across the
+Department, it wastes the DoD $18 billion annually.
+ The President could help reach the funding goals of nearly all the
+essential national and economic security programs if only he began by
+eliminating unnecessary programs at DoD. The Center for Defense
+Information estimates that the President's budget could free up nearly
+$41 billion by defunding Cold War era weapons systems like missile
+defense initiatives and the B-2 bomber.
+ Mr. Chairman, the President's budget erodes our economic security,
+weakens our communities, and leaves our infrastructure crumbling. The
+President's support of outdated weapons systems and wasteful defense
+programs relegates economic security priorities to the back burner.
+ I urge you, Mr. Chairman, to take into account economic security
+concerns as you work to develop a congressional budget resolution. I
+look forward to assisting you with this task. Thank you for your time.
+
+ Mr. Lungren. Thank you, Congresswoman Lee. I have asked
+some others that in the categories where they have suggested we
+should not cut, tell us where they would cut instead. And I
+take it from your comments that instead of, for instance,
+finding cuts to offset the ones suggested by the administration
+in HUD for the CDBG program, you would suggest that we actually
+can achieve savings in waste, fraud and abuse in the Department
+of Defense and take care of the cuts that you object to in the
+other departments. Is that correct?
+ Ms. Lee. That is exactly it, Mr. Chairman, and I think we
+would be better for it as a country, and I would think we could
+achieve some bipartisan support for it. I don't think the
+American people want to see their tax dollars being wasted, and
+that is what is going on. I think they would rather see real
+economic and national security efforts being paid for.
+ Mr. Lungren. But you would also include Missile Defense
+Initiative and B-2 bomber in that category, correct?
+ Ms. Lee. I would definitely include B-2 bomber. I
+personally, there is a lot of debate about the effectiveness of
+missile defense, but I certainly would include missile defense
+in that category. But even if you do not include missile
+defense, there is still billions of dollars in the waste,
+fraud, and abuse.
+ Mr. Lungren. Mr. Spratt.
+ Mr. Spratt. Thank you for your testimony. I can assure you
+we will take your concerns into account when we put together
+the Democratic budget resolution.
+ Mr. Lungren. Thank you, Congresswoman Lee. And you being
+the last member I see in attendance, the hearing is now
+adjourned.
+ [Whereupon, at 6:50 p.m., the committee was adjourned.]
+
+
+
+